Welcome to the second episode of business Books and Company. Our book this month is my life and the principles for success by Ross Perot. David Molson, introduce yourselves.

Hi, I'm David Short. I'm a yemenite product manager and former consultant.

I'm Olson Hart and I'm an entrepreneur.

And I'm David Kopeck and I'm an assistant professor of computer science. So let's start out by talking about the author, who was Ross Perot.

So Ross Perot was born in Texas in 1930. He mentions in the book it was 117 degree day, which, having grown up in Texas, I would say is actually still quite abnormal. His father was a cowboy turned cotton broker. Henry Ray was his mother's father. And Ross ultimately changed his name to Ross to honor his father. And there's like some debate about it. He had an older brother who died at three who also had the name Ross. Anyway, he ultimately became a salesman at IBM for a couple of years before founding Eds, which was, I think they essentially sold making computers work for companies to companies like. So people knew there were computers and they didn't really know what to do. And so EDS was like, we'll give you software, we'll give you engineers to make the software work for you, and we'll give you functioning computers. It was actually an idea he tried to bring to IBM and that they'd rejected. Ultimately, he sold EDS to GM and became the largest shareholder of GM, then founded Perot Systems, which I think seems to be basically just an EDS knockoff, which ultimately sold to Dell. So he actually founded multiple billion dollar companies. He was also a philanthropist. He donated the symphony hall in Dallas, but interestingly, actually named it after his partner, Mort Meyerson, the former president of EDS and CEO of Perot Systems. So he was very humble in a lot of ways, although he ultimately ran for president, which is probably what most people know him for most. So in both 1992 and 1996, he ran for president. And honestly, as I was reading this, it felt to a significant degree like this was essentially propaganda for the campaign. But I also thought there were a lot of great insights, especially in the second part.

Right. We should note that the original edition of this book came out in 1996, which coincided with his second presidential run. And in the first presidential run, he actually did quite well. He got 19% of the vote, which was the largest third party vote in a very, very long time. So he actually might have swung that election, the 92 election. In the 96 election, he didn't do well enough to probably have a huge impact on the ultimate outcome, but he still got, I think it was around 8% of the vote, which is significant for a third party, for sure.

Well, and they changed the rules on him, so he wasn't able to get into the debates, which is arguably why he performed so much.

That makes total sense. One question we have to ask ourselves, because this is partially a political book that came out during a political campaign, is how reliable is Ross Perot as a narrator? So is he really giving us the real deal about his life, or is it kind of tainted by the fact that he was running for president?

It's hard to take everything you wrote seriously because it seems like every other page, he was just like, okay, I met this guy, and he was fantastic, and he was wonderful. Or, this is my grandma. She was perfect in every way. Or it seems like his entire description of his childhood was just him continuously praising others. And throughout the entire book, I don't think he said anything negative about a single person. You know, while that's a good way to kind of live your life, it's difficult for me to imagine that he went through his entire life without running into some bad people.

Right? Absolutely. It seems like he just continually is trying to name drop. At least that's how I felt. Did you feel that?

I don't know if name Drop is the way I would put it, but he definitely is presenting his life through rose tinted lens. He doesn't speak negatively about GM at all, which there's tons of quotes about him from the time where I forget what the exact quote is, but something along the lines of, if I see a snake in my warehouse, I'm gonna kill it at GM. If they see a snake, they decide to form a committee to discuss the snake, and then they decide to hire a team of consultants to tell them how the snake should be dealt with and what different kinds of snakes they might need to worry about in the future. And before you know it, that's killed everyone in the warehouse, and they still haven't done anything about the snake. So the fact that he just glosses over being the largest shareholder and all of the sort of drama that came with that seems like he wasn't looking to burn any bridges as he was writing this book, which, fair enough, he didn't need to, but certainly makes me take a lot of this with a grain of salt.

Kind of felt like a thank you guard. Like, he would bring someone up, he would talk about the good things that they did for him, and then he would, like, thank them and say that they were an amazing person. And then the next paragraph would just be another person, just like that. It was really odd.

Right? And we should really note that this book is not a tell all. For example, he doesn't go into politics at all and he doesn't go into even the significant role that he played in freeing hostages in Iran. So this is not a complete telling of his whole life. In fact, the book is broken up into two parts. The first part covers his autobiography about into his mid thirties, and then the second part is really a business advice section that goes into a lot of different topics about running a business. And we'll get into both parts, but let's start with part one. So what was Ross Perot's childhood like? What were some of the key experiences that he notes that you think shaped him later on as a business person?

Just in general, I think a lot about nature and nurture, and I don't know if nurture is what creates the person that you later become in life, but he seems to think that he was nurture. And one of the things that he talks a lot about is how his father, and this was salient for me, would have him break horses. I don't really know what that means, but it seemed like his father would put him on top of a horse and then the horse would like throw him off and then his young Rossboro would get a concussion and then he would like throw up and his father would put him under a faucet and wake him up and put him back on a horse. And I guess if you believe in nurture, maybe that's what instinctively instilled in him, like some degree of resilience, which he later explains in the second part of the book is pretty essential in order to be successful in business.

Yeah, I'd say that what we really see from his whole childhood is just persistence and like hard work. And that's what he really focuses on. Being from Texas, I do know that breaking a horse is taking a wild horse and taming it essentially so that a normal person can ride it. And yeah, he got concussions multiple times. He broke his nose. He talks about, that's why his nose looks so weird. It broke it so many times, times while breaking horses. And then he takes on a bunch of small businesses at a very young age. I think he mentions that at six he was selling Christmas cards and that was seasonal. And so then he added garden seeds. Now he had two seasonal businesses, which taught him for the future that he didn't want businesses that weren't, that had seasonality. Then he got a newspaper route at 14, where he managed to convince them to flip the ratio so he would get 17.5 cents per week instead of seven and a half cents, which is what, you know, the newspaper made twenty five cents per. And because he took on new territory, they let him flip the ratio, and he had all this new territory, and he was basically going into poor neighborhoods that no one wanted to operate in previously, but that those people were really great to him, and they paid him every time. And when they saw him sweating for the money to come out and ask for it, they would definitely give it to him. So he had a lot of entrepreneurial experiences at a very young age, which I think is pretty surprising. He also, as a Boy scout, claims to have made it to Eagle Scout in 13 months, which would be impossible now. But I'm not sure if probably there were different regulations at the time, but just in terms of the leadership time you have to spend, it's at least two years. I think, from my own experiences.

He had a lot of mentors growing up in the business world as well. There were a lot of local businessmen who would have talks with him on a regular basis. And his father. Right. His father was, in fact, a trader in cotton, I believe, and had a major impact. What was his relationship like with his father?

He would take him to horse races and tell him stories and taught him how to treat people. Right. One example he gave his father as a cotton trader, never, you know, even if he had an opportunity to, if a farmer was bringing cotton to his father's business, he always paired him, paid him a fair amount. And he did this not only because it was a good thing to do, but because it kind of guaranteed that the farmer would bring you his cotton again in the future. You know, he just emphasizes a lot all the good his father did for him.

He says that he was somewhat poor growing up at the beginning, but they became more prosperous over time, and that his father really instilled thrift and a passion for business within him.

Yeah, he also mentions that he actually personally buried his father, which was a. That was awesome, interesting. And frankly, something I've never heard of outside of sort of like an old west story or something, but that he and his friend Henry Phillips, literally, you know, dug the grave for his father.

Yeah, that was very impactful. So after he graduates from high school, he goes to the naval academy. What kind of impact did being in the military have on Rossborough?

So actually, he tried three times to go to the naval academy, so he stayed in community college and kept reapplying every year, and I think he ultimately then graduated at, like, 23 or something like that, because I think he still had to start as a freshman effectively when he was probably 19 or 20. But he was incredibly successful at the naval academy. I think he sort of mentions winning a lot of awards. He ultimately got to give, I forget which president was Truman. I think a tour of the academy at the time he was won all the leadership positions, and he attributes, I think, a lot of his success to the Naval Academy and the military. And ultimately his son spent a significant amount of his early career in the Air Force, and then his grandson as well, that I went to high school with ended up joining the Air Force as well. So I think they really do view that military experience as a way to truly understand leadership in a very practical way.

So how did he end up at IBM after the Naval Academy?

I think some guy was just like, on the naval boat with him, was like, hey, dude, do you want a job? He was like, okay, what's your company do? Oh, we sell computers. He's like, what's a computer? I'm paraphrasing poorly. And the guy told him, and then he was like, oh, wow, that's really great. No one's ever offered me a job before. I'll take it.

I don't think it was someone on the ship with him, necessarily. It was like a former naval guy who came onto the ship for some kind of presentation. Again, he'd been successful in his junior career in the navy, and that man, I don't remember his name either, but did offer him the job, but he was. It's interesting, again, going back to our sort of talk about how he only speaks positively. He left pretty rapidly, and he talks about how they had cut his commissions and stopped letting him make as much money as he should. He sold, like, a million dollar computer to an insurance company. It was the first time someone had done that, at least the way he talks about it, that everyone was just leasing time from IBM, and he sold the actual machine, and he met his annual sales quota in 19 days at one point. So I get the feeling that he left IBM because he was very successful and whatever. He had some middle manager or something that really wasn't appreciative of his work and probably afraid of, what is it, the a players hire a players and b players hire c players kind of thing. But ultimately, he brought the idea for eds to IBM, and again, they declined. And so ultimately he left and started the company himself.

Didn't I say at one point that he asked IBM to reduce his commissions because he was selling so much that it was like somehow unfair to the company or unfair to his fellow salesmen.

So they were going to shrink his territory, and he suggested that they instead keep the territory, but cut his salary because he said he would be bored if he didn't have new business to be constantly going after. He claims that he asked them to cut his commission. I mean, relative to losing territory.

Absolutely. And one quick correction. It was Dwight Eisenhower, not Harry Truman, that he gave a tour of the naval academy. So when he's at IBM, what is it that makes him dissatisfied enough that he actually wants to go and start eds?

I'm not even like David says, the other David, David Short. I'm not even sure he explains it. Am I wrong?

I'm not even sure I phrased the question well, because it's not necessarily so much I think that he was dissatisfied. It was that they didn't share his vision for how the business might expand.

Yeah. So he came to them and he said, customers want a system that works. They don't just want hardware. IBM was making 80% of the revenue from hardware, and so they just didn't really care about the other side of the business. And so they rejected the plan. But he felt like it was compelling enough that he would go off and do it himself.

Yeah. His key insight was seeing that software was actually going to eventually become as important, if not more important, than hardware, which would eventually become a commodity. And so he had that insight back in the 1960s, which made him really ahead of his time.

I like the part where he, like, keeps skiing a fail or something like that. And then Tom Watson, who I guess is the founder of IBM, is like, oh, there's the guy who got away.

Yeah, yeah, that was Tom Watson Junior, I think, the son of the founder.

Do you think that he had the insight that software, I'm not sure he had that, like, Bill Gates, Paul Allen, Microsoft insight that software was the future so much as he just, like, kind of saw that his customers needed a little bit of handholding with the computer. And I'm not totally sure what EDS did, but it seems like they just kind of provided consulting systems along with the hardware, and then that's kind of like, more consistent with the second half of the book where he's like, oh, you gotta always talk to your salesman. You gotta talk to your customers. What do they need? What do they need? I don't think he was coming at it from like, this. Brilliant software is eating the world. And it's gonna prevail over hardware angle.

I think that's exactly right. He even explicitly says, when he mentions it, he's like, I didn't have this brilliant insight that software would become huge. I just thought, this is what my customers want.

Right. And he talks about it as selling solutions. So they were basically customizing a combination of software and hardware for a particular client. And IBM wasn't as much into this custom business at that time. And actually, later on in the 1990s, one of the ways that IBM turned itself around in the nineties was by getting more into building custom solutions and doing a kind of high level consulting. Talk about when he started Eds. What was that experience like for him? How did he go about founding the company?

So he started it on his 32nd birthday, and he began by selling excess capacity on the IBM he had sold to that life insurance company. He called 77 different people, and he couldn't. And he finally made his first sale, which made $100,000. And so based off of that, he could then start hiring engineers and additional staff. And his whole model was that he wanted two years of salary in the bank or sign two year contracts for each additional systems engineer that he hired.

Right. So he's really starting on a shoestring budget, and I don't want to say fake it till you make it, but he's basically getting sales before he necessarily had enough staff to fulfill those sales. Is that fair?

Yeah, I mean, I think he did have one engineer, so I guess he would say he could fulfill one with that, but then he's selling another one before he's actually hired the people to be able to fulfill that role. For sure.

He doesn't go very far into Eds in this book. He basically ends the narrative in the early 1970s. So we don't really get to see Eds become a billion dollar company, unfortunately, which I think is a real shortcoming of the book. That's probably the juiciest part of his business career, and he stops right before it. What do we learn from him founding eds? What insights do we get from his founding of eds?

Me? Almost nothing. I mean, that's my major problem with this book. Who writes a book called, like, my life, and then, like, halfway through it puts pictures like, oh, yeah, this is when I came back from Iran, when I, like, saved one of my employees during some sort of weird iranian, like, hostage crisis. But, like, I'm not gonna tell you about that. I don't know. I just. It's such an odd book. I don't know. Maybe David, he probably has a better memory for how the book went and stuff like that, but I didn't really, I gained almost nothing from his description of eds.

So I think the only thing that you really gain is kind of what we talked about before. He just really focuses on people. He just says, bring me people who are smart, tough and self reliant. Bring me people who have a history of success since childhood. Bring me people who love to win. And I think that is actually pretty good advice and a good way to think about hiring. But yeah, I feel like there's a lot of fascinating stuff about the eds story, especially the on Eagle's wings, you know, hiring private military contractors to go into Iran and free his employees, along with, I mean, they basically just broke open a jail. So I think hundreds of other political prisoners escaped as well. I don't actually know that much about the details there as to whether there were, you know, non political prisoners that he also let free into Iran. But his life is just so fascinating. It seems like instead he focused on the ah shucks, you know, I'm just a Texas cowboy sort of story, which again feels compelling when you're trying to run for president, but not as compelling for the principles for success, which I guess he thinks that's probably just the second part of the book, essentially. So there's really two books. There's the first part where he tells a lot about his early life, very little about his actual business life, and then the second part, which evidently was written for his son on college graduation. So that's why it's bullet points and stuff like that. It wasn't intended to be published. It was literally just, you know, my advice on success to his son, Ross Breaux Junior, when he graduated from Vanderbilt.

Here's how he should have written this book. It's really simple. You should have taken this thing that he sent to his son, which is in bullet points, which is like never ask is it legal or illegal? Ask is it right or wrong? He should have taken that and he should have written down some sort of story which explains how he came to learn that. All right, that's not the best example. But when he says something like, alright, you gotta make sure that your salesman all their time is accounted for so they're not slacking off, which is something that you don't typically hear, which was interesting. He should have explained how he had a salesman at one point he was slacking off and then he had the guy like, you know, account for his time and then sales went up like ten times. That would have been the better way to write the book instead of just being like, hey, be resilient. I got back on the horse. He should have, like, explained how that tied into the story of him flying to Iran or how he had struggles with eds and how the first 76 calls failed. It was the 77th one that, you know, got him that 100K deal, and most people would have given up before that.

Right? I agree with both of you. It's not really an autobiography because it ends at like age 35, and he's writing this book when he's in his late sixties. How is that an accurate description to call it my life when you leave the parts of your life out that people are most interested in? So I think we have to ask then. Okay, did he just run out of time? Did he feel like covering the rest of his life would just not be helpful to him in the campaign, which this book was ostensibly written for? Or did he really feel like the early part of his life was more impactful on what made him successful than the rest of it was? I think it's hard to know that without having read a detailed description of the rest of his life.

I've got a question for David Short. When you read this book and his account of it, did you feel like it was very Dallas like to me? Just kind of like constantly talking positively about people, always emphasizing the positive side, talking about God endlessly and how, aw shucks, you know, you don't have a Rolls Royce or you just live humbly when it's not exactly true. Felt like very Dallas culture to me.

So I didn't really get a big Dallas feeling from it or it didn't occur to me. But as you mentioned it, that totally makes sense to me. The thing that really resonated for me is I actually have met Ross a few times. He went to the grandparents day at my high school multiple times because his grandson, Ross Perot the third hill, was in my class. And so I don't know him well at all, and obviously just was in awe of this person who had run for president, and everyone in the country knew kind of that would show up to grandparents day and have a very texas accent and things like that, which, frankly, Dallas doesn't really have now. So it was an interesting take on. He feels very Texas to me. I would say much more so than Dallas.

What was he like in person?

He was very friendly, was always cracking jokes, and really clearly didn't care also. So he literally in the middle of a class at one point, he just like stood up and walked out because grandparents would be watching. But he had, you know, another grandson that was at the, at the school. And so he didn't say anything, didn't apologize, just stood up in the middle of class and walked out while everyone else was still going through the, you know, the motions of grandparents day. So could certainly see how he would have run for president. Very gregarious, you know, shaking hands with everyone. Always had a story to tell, that kind of thing.

That's the story I wanted to hear being like, oh, I don't want to be a grandparents day. I'm going to go fly to Iran. You know, I'm a badass.

Okay, so let's transition to the second half of the book, or as he calls it, book two, about some of his business principles. Looking at them at a high level, what were the key business takeaways that you got from this book?

So his first one is, and it kind of is a refrain throughout, success is doing something you enjoy and doing it well. So I thought that was a good indicator. He makes a big deal about money not really mattering, and instead sort of focus on delivering a good product, meeting your customers needs, and the money will kind of take care of itself, which personally, I think that's a good way to look at your business. But I think it's a little bit ridiculous to also say, like, the money just takes care of itself. There are a lot of startups now that are making good products that customers really love, but that have no clear path to profitability. Some of those have worked out really well, but I don't think all of them necessarily will.

Absolutely. What about you, Molson?

So kind of the way I look at these, these lists of advice is like, you gravitate to the advice that you already think is true and you ignore the stuff that you don't already know, and I don't know. Do you guys feel the same way?

Yeah, sure. Unless you see some unconventional advice. When I saw something that I had never thought of before, that stuck with me. One of the things that stuck with me was when he said, when you're hiring somebody, look for somebody who's been successful since childhood. That's actually not what I usually hear about. I usually hear about if somebody actually improved a lot that says something big about them. So if they actually had, like, weren't doing so well as a child and then as an adult, they've really turned things around that that might actually be more impressive than somebody who has continually been successful. But he says you should really look for people who've shown continued success their whole lives.

He also talks about how you want to hire people who've overcome adversity. Am I remembering that correct?

Yes. No, he did. And I don't think those two things are contradictory. Right. You can be successful and overcome adversity at the same time.

If you're successful and you didn't overcome adversity, that's probably not a positive signal for hire, right?

Absolutely. I think he really emphasizes throughout the book, both actually the first section and the second section, how important people are and that you need to treat them with a lot of respect and be an ethical manager. A few things that he said that I really took away was that you should give everyone in the company the same benefits. You should have a single cafeteria where everybody congregates each day. You should make yourself as a manager available to everyone below you anytime they need to chat about a business issue. You should make yourself personally available. And that he even says you should take care of their families as if they were your own. So if one of your colleagues is sick, you make sure that they get the care that they need. And I've heard stories about Steve jobs doing things like that for some of the other executives at Apple. So I guess that advice goes beyond Ross. But it was also something that I found very touching.

I had a counterpoint to that last thing you said. So recently, Amazon switched from, if I'm not mistaken, offering stock options to its warehouse employees. They switched from that to just like a $15 flat minimum wage. Whereas I think, like office workers and their engineers and like the higher end people, they can buy stock options. Now, Ross basically says that this is a bad idea, that Amazon made the switch away from Ross's original idea to what they're doing now, good or bad idea? Why is there something different? Is eds a different company from Amazon? What do you guys think?

Well, I think Amazon's warehouses had a lot of political pressure on them to raise the minimum wage. And so I think it's kind of not that great of them that they did that, and then they took away a different benefit. And I think working in an Amazon warehouse is really tough. I think there's been a lot of exposes on this in the media, and they were arguably underpaying them for the difficulty and physical nature of the job. And so it's great that they're offering them a $15 minimum wage, but it sounds to me like typical corporate greed, cutting other benefits when you give them that $15 minimum wage. That's my take.

It's interesting, though, because he did say give everyone the same benefits. Everyone's just as important, from the third shift entry level to senior executives. Give stock options to everyone, I think actually, he says, or at least the possibility to earn them. So I think he has some kind of, after a couple of years, or you meet some performance metric, then you get the chance for stock options. And I think that's probably what Amazon should do as well. You don't need to give stock options necessarily to someone who just came in for the dollar 15 an hour job, but if they've been there for multiple years, give them the opportunity to get some stake in the game on the success of the business. But he also mentioned that it should vest over five to ten years, which more than five years would be illegal at this point, I believe. I think five years is actually the legal maximum. So I think a lot of it was. Also, he really cared about getting the best people and keeping them forever. So, you know, that loyalty, that just doesn't happen too much these days. He also specifically calls out Ivy League graduates and top business school graduates as terrible hires. And he says that you shouldn't hire people when they're straight out of those programs because they're going to be flighty, they're only going to care about themselves and they're going to be just focused on their career, not dedicated to the company. But that after five years, that subsides a little bit and then maybe you can hire them. But it was a, it was an interesting perspective because I think it's incredibly accurate, both of myself and, you know, lots of other people that we went to school with.

I love that. Do you think he's right, that after about four or five years, they, like, leave Harvard Business School and they're like, wait, I'm not God's gift to this earth. And at that point, they become hireable.

I mean, I think people get some humility in their careers over that time. Honestly, with the time when he was writing this, probably families and whatnot are a big part of it as well, that once you do have children, you become a lot more tied to staying in one place and staying with one job.

That makes a ton of sense. Good point.

That's a good segue to talk more about his principles of recruiting. And he really talks a lot about this, about the importance of having a really robust program for recruiting. What were some of the principles about recruiting that you thought were most important?

That he expressed so he's well known for always saying, eagles don't flock. You have to find them one at a time. And so he really kind of says you shouldn't have a formula, that there's not one perfect way to do it, that if you find a talented person with no college education, hire them. That you should stop growing before you hire a bad employee, and that you can even develop your own training program to sort of create the people that you need. So he seemed to note, think there was like one size fits all. But the one thing he really focuses on is ethics and sort of a gut feeling that if you had any sort of inkling that this person wasn't going to be ethical and honest, that that is an immediate no right.

And he had a lot of specific things to look for. I mentioned before that he said you should have a record of success since childhood. He also feels people should have a strong competitive spirit, that you always want to win, and if you don't want to win, at least you really feel like you don't want to lose. He says that you should really avoid people who do drugs, alcohol or dishonest. I mean, that's pretty common wisdom, of course. And that you should also hire resilient people, people who have had some failure and have been able to bounce back from it. A few people he says to avoid also are those who are corporate politicians, as he calls it. He said people who are kind of in there to step on top of other people, to climb the corporate ladder, that those you have to avoid like the plague. Again, probably pretty common sense advice.

Here's a good one. The smartest people may be the least practical, have very little common sense, be poor leaders and ineffective in dealing with other people. Leading extremely bright people with these limitations can be challenging because they get frustrated over being so intelligent, yet ineffective in working with others. Agree or disagree?

Well, totally agree. In the software industry, there's been a big debate recently about whether or not there are ten X engineers. And if there are, if they're actually beneficial to have on a team. Reason being they might be better programmers than everybody else, but they're also often very hard to work with. And so if you are in a business that requires a lot of teamwork and communication, which software development does, then you probably don't want somebody on the team who has a really big head and who wants to always do things their way because they might actually be smarter than everyone else, but because of that, has trouble working with everyone else who's a lesser programmer.

He's a ten X engineer and 100 x jerk.

Right? Exactly.

If you have a ten X engineer. Maybe you just put him on his own team, just have him work solo and then have all like your two X engineers like work together? Yeah, I don't know if that would work. I feel like it kind of would. Like, didn't Linus Torvalds just like write Linux?

Yeah, I mean, he got a lot of help from other people, but he wrote the initial starting part himself over the course of about six months, living alone in his mom's closet, like literally. So he did do a lot of himself. I think ten X engineers, I don't know if they really exist. I think people who are significantly better than the average certainly exist in all fields and I think that working with them can be difficult. I've had that experience myself working even sometimes with another professor who may be a lot smarter than me, but maybe not as good of a team player. And that can be a real challenge.

Yeah, I'd say I've experienced both really great engineers who are also culturally competent and able to have a conversation and able to meet with people in the sort of business roles and actually understand needs, not just technical requirements, and then also dealt with people that maybe have, you know, very restricted social skills and you can still get productivity out of those people, but it definitely is a lot more work than it might otherwise be. So maybe to some extent it's easier to have the two X engineer who can at least show up to meetings and ask appropriate questions and see the customer need and not just focus on, well, the requirements said this and I got this done in ten minutes. So, you know, what? What's your problem?

I guess another way of putting all this is that you should hire people with people skills, right?

Yeah, depends on the position maybe.

Sure, sure. One other thing he talks about is that he hasn't found aptitude tests to be very effective when doing recruiting, to actually predict if somebody will be successful, that he thinks team interviews are better than aptitude tests. Have you found that to be true in your industries?

I have administered aptitude tests and gotten burned as a result of it. So not exactly aptitude tests, but basically tests that measured the applicant's aptitude in the work that they were going to do later. And the way that I responded to me getting burned to was to not just accept the results of the test. Okay, did they get this right? Are they smart? Whatever, but to ingrading the test, grade it with them. So like, do a conversation with them, talk to them about it, and then you can kind of measure their people skills at the same time. And so far that's been a huge improvement.

So, Molson, that sounds like a pretty great way to try to hire people, but I think what Ross was talking about was very, like, straight up sat type engineering tests that I just have no idea, having not personally really been involved, but I've heard very inconsistent performance from my engineering team on. You know, there will be people that fail the test but are great in interviews that they really want to hire and the company won't let them. And then there are other people that, you know, aced all the tests, and they still, you know, didn't seem like good fits.

Right? In computer science, we talk a lot about these whiteboarding interviews where somebody's going in for a role as a software developer and they have to answer some data structures and algorithms question in 30 minutes on a whiteboard. And there's a lot of stigma around that. But a lot of the huge companies, the FAANG companies, Google, Apple, Facebook, do that. They actually make you answer these very academic problems. And the issue with it is that, first of all, there's a lot of pressure. And of course, all jobs have pressure, but you're not necessarily, when you're at the most pressure in an interview setting, going to actually perform at your normal level. But number two, it's not necessarily similar to the work they'll actually be doing. As a software developer, sure, it's important to know data structures and algorithms. In fact, I've written a couple books helping people learn them. So I think they are important. But most people, as software developers, what they really do is what we call API plumbing. They're kind of just learning to use some libraries really well and kind of put some functions from multiple libraries together. They're not usually writing very advanced algorithms from scratch. They're usually using and building off of a base of software that already has implementations of those algorithms. So as an aptitude test in software development, I think there's a lot of people who feel whiteboard interviews are not as good as doing team interviews and then also looking at, let's say, an actual work sample instead of doing an aptitude test.

This is a little bit off topic, but we all graduated from college ten years ago, and I feel like the most successful people are not the people with, with the greatest aptitude, but are instead the people who are, like, most flexible and willing to learn paired with some work ethic.

I would agree with that.

Our valedictorians, I have no idea what they're up to, but they're probably like doctors and academics. I don't think that they're successful business executives. They're certainly doing well in their lives, I'm sure, but I don't think that they're necessarily the. Well, if money is the indicator, I would be very surprised if they're anywhere near the top there. Although a lot of people from Dartmouth end up going into finance and whatnot, do make quite a bit of money, but different from sort of starting the next unicorn.

Of course, everything we're talking about is anecdotal, but when you think about some of the most successful CEO's of all time, of course, several of them were either college dropouts or immigrants who never got a college degree. So there's certainly some evidence at the very, very top that you can be very successful without having necessarily traditional aptitude skills. Okay, why don't we talk more about some of the other ideas in the second half? So what are some traits that you should look for in a leader in a company that Ross Perot emphasizes integrity.

Leading the troops into battle. They have to be the hardest worker on the team.

He actually misquotes the scout law. So a scout is trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent. He actually added honest and forgot about clean and obedient, which are not that surprising because, I mean, you certainly do want your leaders to be clean, but probably you would want there to be. It's not something you're really focused on. Right. If that's the problem there, they're not anywhere up to that question. One of my favorite quotes from him was, leaders must expect continual improvements in their subordinates based on new knowledge and experiences. I think he was actually quoting something about Attila the Hun there, but I. I think that's actually just a really great way to think about things. I have a couple of employees now, and I do review them on a, every six month basis, and I certainly do expect continual improvements, but I don't know that I necessarily thought about it that way or have even told them that, which I think I should, just like. I expect that of myself, and I would expect that of anyone that's reporting to me as well. Continuous improvement.

He. I'm not sure this was in the leadership section, but it was definitely in the book. He talks a lot about how you need to understand you're not that great and that the people around you are actually pretty great and they're what is going to drive your business forward. And I agree with that wholeheartedly.

He also talks about never penalizing people for honest mistakes, which I thought was a really good one because I've been yelled at by a boss for, you know, a mistake, but certainly not something I in any way intended to have happened. And it was really miserable. I worked for that guy for a long time after that, and he never yelled at me again. And so I guess I did learn a lesson to some extent, but I think I would have preferred the Ross Perot advice that instead you don't chew them out. You bear hug them and tell them about your own honest mistakes. And I think that that's really necessary for encouraging risk taking and being able to get, you know, real positive outcomes out of people. If you're yelling at them every time they make a mistake, then people are just going to do the minimum to meet the requirements, but they're not going to stick their neck out because they know it's going to get chopped or.

They'Re going to hide it, right?

Yeah, exactly. Cover it up.

And he emphasizes throughout the importance of ethics, no matter what he's talking about. So, for example, when he says that you're in a situation that you're looking for a business partner, if in the negotiations you learn anything that causes you to question that person's ethics, you should drop it immediately. There's almost like a moralistic undertone to the whole book, and I wonder if that's really his worldview or if that was added a little bit to make this more palatable to certain people in the political race. But there's certainly a lot about ethics, which I think is refreshing because we don't always hear that in business biographies, such an emphasis on ethics. On the other hand, it was so over the top at points that it almost felt like there was something political almost in the including it.

Honestly, I think that what this book really needed was an editor, and I think it literally didn't have one. I don't think anyone read this before he published it because there are just, you know, typos, there are grammatical mistakes, there's a lot of redundancy, and it's a really short book, so to use the same sentences multiple times, and it's not like, you know, a refrain that you would, you know, there are some things that I could understand, but it seems like he just forgot that he wrote about it earlier on in the book, or he wrote one part and then wrote the other part and didn't think about it. So I agree. The ethics stuff, I thought was really great, but the real problem here was just Ross Perot wrote down whatever came into his head and then published it. And, you know, it's interesting. I'm really glad I read it. But at the same time, I think it could have been, frankly, a blog post of the part two of the book, structured in a more efficient way. Again, to your point, Molson, a lot more stories about where that insight came from would have been great and would have necessitated a full book. But the way this book is written, they even keep blank pages at the end of chapters. So it's not even really 162 pages. It's probably like 140 pages, and there's like a bunch of pages of pictures, too. So I don't know, it's. It's sort of a funny commentary that I think you're right. It's just a lot of it has to do with that political campaign. He needed to get it out quickly, and it was really related to that.

Literally, in my book, within, like, the COVID page, I'm not sure what to call this area is a. Is some sort of, like, thing that I can mail to his campaign that asks for money. Another part of the book that really sucked, possibly the worst, even worse than that request for money, is that, like, weird award section. Did you guys see that award section? I took a look at that and I was like, man, I'm out. I'm not gonna read this. This is stupid. It was just four pages of every award that he's won. It was just so bizarre.

It's very weird, too, because he talks in other sections about, you know, not measuring yourself based off of those types of things, and that he literally has a section in the book that's just like, here's all these different organizations that think I'm great. Like, doesn't mention whether he gave them money or what, you know, I mean, he is obviously an incredibly successful guy, and I'm very impressed by him, but it just felt like a completely unnecessary addendum.

Again, I think it was totally political. I read the whole book through the lens of politics, and I think that that section was included because it speaks to a lot of different constituencies. If you're a fan of Winston Churchill, he won the Winston Churchill award. If you're a fan of Dwight D. Eisenhower, he won the Dwight D. Eisenhower medal. So, you know, I really think that was a political move.

Well, it only speaks to those constituencies if they, like, listen to him speaking. And I don't think anyone read that.

Part of the book that's true.

One thing I did really like in the leadership section, before we move on from there, was he mentions recognizing outstanding achievements the day it occurs with raises, bonuses, stock options. I thought this is a really great idea and something that I've never seen at companies I've worked at. We tend to have very structured review processes where you're going to get promoted or reviewed every six months or once a year or something along those lines. And so the idea that when that sales guy makes the big sale, he immediately gets recognized in front of the whole company, I think is a really great idea. Obviously, sales positions, I'm sure, have commissions and whatnot, where people are getting, getting money immediately. But I thought that was something I would, I would definitely take with myself to try and do that, you know, same day recognition, when people really accomplish.

Something, same day recognition. But you don't have to give the raise that day. I agree that you definitely want to praise that person in public the moment it happens, and you want to get on a loudspeaker and you want to yell that as loud as possible. So all the other employees know that you recognize nice, positive achievement. And so that employee who accomplished something good can feel really good about it. But you don't need to give that person a raise there and then. And I would recommend that you not do that unless you know, off the top of your head, exactly the type of raise that's going to motivate that person to continue to succeed in your company. You really got to think long and hard about that kind of stuff.

So Perot got his start in sales, and he emphasizes the importance of having a great sales force. What does he look for in a salesperson?

He says it needs to be a proven sales leader in your industry. So that's at least in terms of the sort of sales executive, the person who's going to lead the team. And I thought that was interesting, too, because, I mean, it seems a little bit obvious, but at the same time, I can imagine trying to hire someone, see that someone was really successful as a salesman at an adjacent industry and thinking, just bring them in and they'll be able to figure it out. But he's saying that he had a lot of, you know, negative experiences in that particular realm, that they need the specific, you know, in his case, software sales experience in order to come in and be successful.

So I recently read the book sell it like Sirhan by Ryan Sirhan, who's a successful real estate agent. And he emphasizes that sales skills are transferable between industries. But I think that in Perot's case, he was in such a specialized industry that that is not necessarily as true. I mean, I think when you're working in computing, there's a lot of technical details and questions that you're going to get. And if you don't really understand those details, you're going to look like a fool in a sales call. Whereas I don't think that can happen the same way if you're selling encyclopedias or you're selling, let's say, a cleaning product or something like that. I think another industry where you probably need a lot of technical knowledge is if you're a car salesman, because there's going to be people who ask you about various mechanical components. There's going to be people who ask you comparing those mechanical components to other cars. So I think it really depends on the industry. I think in his industry you need a lot of specialized knowledge, although I.

Wonder at the time that he created eds, was it basically just IBM people that he could hire them? I guess I don't even know what the other competitive software providers he could have been scooping people up from.

Well, in the 1960s there were a bunch of other major computer companies, I forgot, I think they call it IBM and the nine dwarfs or something, because there were nine smaller computer companies, it was either seven or nine that were competing with IBM and were actually significant players. Just IBM was so much larger than any of them individually. So I'm sure you could have recruited from any of those.

The other thing you talked about with marketing was just that sales should never write the contract, which I thought was a really good tangible piece of advice. Again, something I just wouldn't really have thought of necessarily. I think I probably would have had lawyers writing contracts regardless. But I'm sure you can get into a position where the sales guy is like, hey, I can close this deal, let me do this, and just don't give him that capability to actually write the contract. And when you do, make sure that commissions are based on profitable business. So make sure you structure your commissions in a way that the sales guy isn't just going to sell a bunch of stuff that you can't actually fulfill.

Neither. You actually don't want the salesman or the lawyer to liar, freudian slip lawyer to write the contract. And I can explain why that is like to your point earlier and to Ross Perot's point, the salesman is just going to make any modification necessary in order to close the deal. And in some cases they'll make any modification of the contract necessary in order to get a commission. That's how they think. By and large, lawyers will write contracts that will scale, scare away all your customers, and which I think is one of the major reasons why Ross Perot writes in a separate section how all your contracts need to be written in clear and simple, plain English, not in legalese. I have a lot of experience with this in particular, and for sure, that is right if you want to close any deal. Salesmen can't write contracts, by and large, anyway.

That makes a lot of sense. Okay, before we get into kind of some summary questions about the book, are there any other specific takeaways from the second half that you want to bring up?

Just to follow up on what Molson was just talking about, there are a couple other tangible pieces of advice on contracts, which were that on major transactions, always draw it up yourself. So one, outline it yourself. Hire your own lawyers, have them write it into a full contract. Then have someone that's really detail oriented on your side of the business. Write a summary that hopefully aligns with your outline, and then read it again yourself. And make sure everything that was in your outline is there and make sure that there's nothing in there that you weren't really expecting. And then he also says, really, you should just have standard contracts. So avoid needing to create specific contracts for specific deals and instead have something standard that you know is going to work regularly. And that when you're working with the lawyers, you should use them for advice and options, but don't expect them to tell you what to do. So even use different firms so that you'll have competing priorities and that basically the bill will be complete nonsense. So you need to have some competition among the different firms to keep them from overbilling you.

That makes sense. Okay. Thinking about the book in the big picture, who should read it? Who would you recommend this to?

No one. Just get the second half of the book. And I'm not even sure the second half of the book is that good because it's not attached to any kind of story, and he doesn't really explain why it's true. If it's not attached to a story, it's really difficult to remember. And if he doesn't explain why it's true, it's really difficult to, like, kind of learn it. So, yeah, there are some nuggets of wisdom, but like Dave Short said, just this should be a blog post, and maybe you can scan the points and be like, oh, that's interesting. I never thought of that before. I'll dig into that and figure out why that might be true. But just in general, I mean, Ross Perot was like a person. I could recommend other people studying if there were good course material out there. But this book sucks.

Yeah. I mean, I do think that there was a lot of value in the, in book two, so I would defend that side of it. I think that book one is frankly just interesting if you really care about Ross Perot and want to hear about him breaking horses and his nose and the naval academy and all that kind of stuff. But the second part, I thought had a lot of, frankly, universal wisdom that I've read in a lot of other business books. But some of it, as we've gone through, was very specific. To be fair, I do think this podcast, we probably covered almost all of the really valuable insights that I hadn't seen somewhere else. So maybe you just need to listen to this podcast and not necessarily read the second half of the book.

That's fair. And I'll say myself, like we've talked about, I don't think it was a very well written book. I think it was really disappointing that he didn't cover the most interesting part of his career nor his political life. So I wouldn't really call it a true autobiography. And I think the leadership section could have used a lot of editing to its benefit. I mean, it is only 160 pages, so it's a short read. And if you're interested in some of the topics we talked about, you could certainly just turn to those parts of the leadership section and just read those few pages and get the insight because it's so condensed.

I would also add that it was incredibly difficult to get this book because it's out of print. So I spent $54 on this. So almost thirty cents a page or something like that. Probably more given all the blank pages. So if anyone needs a copy, just reach out to me. I don't think you should try and buy it for $54 on Amazon.

Yeah, you can also rent it from archive.org if, if you're interested in doing that. Okay, so let's look forward to next month. What book do the two of you want to read next month?

Setting the table by Danny Meyer, in part because I've already read it and much more significantly because I thought it was like a perfect pairing to high output management, which is the book we read last month.

Okay.

I'm interested in reading lean startup by Eric Reese. It's highly regarded throughout the industry, and I think it, I mean, the big focus is on pivoting quickly and doing quick experiments so that you know whether or not you're going towards something that has value. And that's something that I'm trying to focus on in my own career right now.

Okay. And just to make things even more controversial, I'm going to propose we read trillion dollar coach, the leadership playbook of Silicon Valley's Bill Campbell. Bill Campbell was an incredible advisor to companies like Google and Apple and was a CEO in his own right at a couple tech companies. And he just had an incredible career. So I'd be very interested in learning more about him.

Oh, I actually hadn't heard about that. Yeah, I've heard a lot of great things about Bill Campbell, so I could definitely be convinced that way. Molson, what do you think?

I would read trillion dollar coach. I'm pretty interested in Bill Campbell, too.

Well, okay. If we're all amenable to it, then it just came out. So it's super recent and relevant. So maybe let's do that next. Was that sound okay?

Yeah, sounds great.

Great.

I'm down.

Okay. And I think we should dedicate this episode to the memory of Ross Perot, because he did just pass away last month. Very sadly, although he lived a great life and he offered a lot of great wisdom to many, many people, so very appreciative of that.

Yeah, thanks, David. That's a great point. And we were a little bit negative towards the end. I want to be clear that we are all incredible fans of Ross Perot in general. This book has, you know, a few issues, but his life was amazing. The businesses that he built as well as just the incredible action he took in Iran and things like that are just really awe inspiring. So definitely think it's a great idea to dedicate it to him.

I love, you know, just echoing what the other two guys said, but I love that he buried his father. I think that's all you need to know about the Mandev.

Yeah. Really had a lot of character. Really incredible, man. Okay, how can our listeners get in touch with the two of you? And is there anything you want to plug this month?

This is David Short. You can find me on Twitter avidg short.

Send me money. No, nothing to plug. You can find me on Twitter molson, like the canadian beer underscore heart Hart.

And I'm avekopeck. D a v e k o p e c on twitter. Always love to hear from listeners. And don't forget to leave us a review on iTunes or your podcast player of choice, which will absolutely help us as a podcast more than anything else. Thanks so much for listening. We'll see you next month.