Please enjoy this transcript of my interview with Aryeh Bourkoff (@aryehbourkoff), the chairman and CEO of LionTree, an independent investment and merchant bank advising and investing in transformational CEOs and the companies they lead. Aryeh founded LionTree in 2012 during a time of unprecedented disruption, and since then, LionTree has supported an expanding number of industries as they capture opportunity in an evolving digital economy.
Aryeh is also the founder of Kindred Media, a digital media and podcasting company powered by LionTree, and serves on the boards of Yahoo and Carnegie Hall. Before founding LionTree, Aryeh spent 13 years at UBS, closing his tenure as vice chairman and Head of Americas Investment Banking. Before UBS, Aryeh was a high-yield research analyst and ranked as the #1 cable and satellite analyst by Institutional Investor for seven consecutive years.
Aryeh is a graduate of the University of California at San Diego and resides in New York City with his family.
Transcripts may contain a few typos. With many episodes lasting 2+ hours, it can be difficult to catch minor errors. Enjoy!
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Tim Ferriss: Hello, boys and girls, ladies and germs. This is Tim Ferriss. Welcome to another episode of The Tim Ferriss Show. I’m going to keep my preamble short so we can get to the meat of this conversation with my guest today, Aryeh B. Bourkoff. He is the chairman and CEO of LionTree, an independent investment and merchant bank, advising and investing in transformational CEOs and the companies they lead. Aryeh founded LionTree in 2012, during a time of unprecedented disruption. And since then, LionTree has supported an expanding number of industries as they capture opportunity in an evolving digital economy. We’re going to touch on a lot of those points.
Aryeh is also the founder of Kindred Media, a digital media and podcasting company powered by LionTree, and serves on the boards of Yahoo and Carnegie Hall. Before founding LionTree, Aryeh spent 13 years at UBS, closing his tenure as vice chairman and head of Americas Investment Banking. Before UBS, Aryeh was a high-yield research analyst and ranked as the number one cable and satellite analyst by Institutional Investor for seven consecutive years. Aryeh is a graduate of the University of California at San Diego and resides in New York City with his family. You can find LionTree at liontree.com. And on Instagram you can find a number of accounts @aryehbourkoff. That’s spelled A-R-Y-E-H B-O-U-R-K-O-F-F, @liontree_llc and @kindredpodcast. Aryeh, welcome to the show. Nice to see you.
Aryeh Bourkoff: Thanks, Tim. Great to see you. Thanks for having me.
Tim Ferriss: Of course. Of course. I’ve been looking forward to this. And I wanted to start with, actually, a mention in your bio. So, ranked as the number one cable and satellite analyst by Institutional Investor for seven consecutive years. What makes a good analyst? Or what made you a good analyst, and what are common mistakes that analysts make?
Aryeh Bourkoff: Well, it takes me back. A career has different chapters to it. Right? I actually think those chapters should be related to one another and foundational in nature. But I don’t like to hover in one place for too often, and I also don’t like to think about the zero-sum game. So things I’m doing today have no relationship with things I did before. But I’m glad you brought up this analyst job, because I think a lot of people forget about that part of my life. But it was so core in training and also in the relationships and the understanding of how to be not only a good purveyor of companies, but also of my own emotional stability, I would say.
And so, the way I would say that is, “analyst” is often thrown around, but it could be like a therapist, an analyst, but in this case a research analyst, which I was, as someone that really looked at securities or stocks or bonds in a particular industry. So for me, the industries were always media, cable, telecoms, technology, consumer-driven companies. And at first, I looked at those companies from a bond perspective, junk bonds, high-yield bonds, and then equities, stocks.
And covering those stocks in those same industries allowed me to, ultimately, get to a goal of helping investors make money with those recommendations. Now, how you do that is understanding the company, its fundamental picture and, ultimately, where it’s going in the future, because everything today should be understood, and everything tomorrow should have a lot of uncertainty around it. So pattern recognition, how to predict the future, is the first thing that you really are supposed to be learning as an analyst, in order to help inform the masses of which investments to make. But then, the emotional stability part of it comes into play, when you get out in front of everybody and say, with some boldness and some prose and some analysis, “Here’s my view. I think I’m right.” More often than not, you’re wrong.
Tim Ferriss: Yeah.
Aryeh Bourkoff: And it’s like watching two kids in a schoolyard, when you were growing up, getting into an argument. And you watched one of them clearly lose that argument and then count down until you saw that they recognized, that they would have the confidence to admit that they lost the argument. And there’s always a lag. It could be 10 seconds. It could be weeks, could be years. And that’s all about capitulation.
And so the first thing I learned was when I was wrong, and I thought that I would be right, to quickly recognize that I didn’t have anything that was that interesting or different to say in front of everybody. And by doing that, it was very embarrassing. And these could even be minor things. But it built so much credibility later that when you are right, it counted so much more and for so much more. And then it built your own self-confidence that you really did have something. And then, if you’re really lucky… and that’s where the rankings coming into play… when you say something that’s different than the masses, and you have the confidence to say, going against the grain, to predict the future, then the markets will go with you. The investors will go with you. People will be profitable based on your recommendation. People will make money based on what you say, and you build a reputation. And that was a process.
Tim Ferriss: This raises a number of secondary questions. Well, the first, just for clarification, when you’re talking about taking a public stance and promoting or publishing an opinion, what form does that take? Is it a ranking system? Is it a general sort of binary buy or sell recommendation? Just for folks who are listening, to have a more discrete understanding of what that opinion looks like. What form does that take?
Aryeh Bourkoff: Oh, it has to be a published report that has to have an initiation report. It could be a report on the industry. So it has to have some perspective, some thematic, and within it, some specific company recommendation. So let’s just say I want to write a report on the movie studios. And then within that report I would say, “Here’s my view of the movie studios” and specifically my recommendation on Disney, and Warner Brothers, and Viacom at the time, and Fox at the time. And then you said, “Within these, these are my recommendations. Buy, hold, sell,” and supportive documents. And then, because you knew that no one would actually go and read a hundred pages, you’d have to summarize it in a perfectly synthesized, four-bullet point cover page.
And before any of that stuff happened, you have to go through internal processes to defend your arguments, where people internally have the right to say, “We don’t really think that works.” But more often than not, they would let you go, and let the public be your ultimate judge and juror, because that public embarrassment would be much, far more damaging to you, and far more self-correcting, than anything they would say internally. But they have, obviously, institutions to protect. But those documents were full of analysis and thematics and context, both context of the here and now, and the past versus the future. But the ultimate goal is predicting the future.
If I said to you, Tim, today is, let’s say Monday. And by Friday, I was going to tell you, based on a certain pattern recognition, what was going to happen to these stocks, based on my analysis, or, maybe better, a year from now, and you believed me because of my credibility and our relationship, and we had a track record together, and that conviction level was high, then you may invest, just based on my word. But at the beginning, you’d say, “I need to do my own research. I’m going to read your report. Then I’m going to check it with other people’s reports, my own conviction level.”
Maybe I’m a counter-indicator sometimes. But hopefully, you are the indicator. And then, obviously over time, if you’re right, more often than not, you just start investing for yourself. You may not give it to everybody else as a service. That’s the motion of a career, right?
Tim Ferriss: That is your evolution. It’s not always evolution. Right? Playing with your own chips, and taking that responsibility to make direct bets in that way, is not a leap that everyone makes. And I want to take a step back for a second just to read a fantastic headline. This is a piece from The Hollywood Reporter. So, “How Aryeh Bourkoff Became Media’s Hottest Dealmaker.” So some of the groundwork that we’re laying right now is going to lead into that. But I wanted to mention that because it is an exceptional piece. I thought it was a very entertaining piece also that people should check out. Let’s rewind to Alan Ginsberg. Not the poet. Different Alan Ginsberg. Who is Alan Ginsberg, and what are some of the lessons that you learned from him?
Aryeh Bourkoff: Alan Ginsberg gave me a shot. And he was a mentor and the person that first hired me into this thing called Wall Street in New York. And remember, I came from California, had no reason to be anywhere near this industry or Wall Street, didn’t know anything, really, of substance, coming out of university, except what everyone else knows, which is how to communicate, look for a job, maybe how to write a little bit. Other people maybe have much more vocational expertise in engineering and medicine than I did. I was a generalist, coming out. So, coming to New York, didn’t know a soul, and basically put resumes under windshield wipers, so like, yeah, “Here’s my flyer. I have an interest in being here. I’ll hustle, and I’ll earn it.” And then you have to convince people to give you a shot. And Alan Ginsberg gave me that first shot.
And when I interviewed with Alan, who himself was, and is… We’re still in touch… a creative person in finance, because Alan’s background, even though he was a lawyer and a financier and so on, he also wrote for Rolling Stone magazine. He liked writing. He liked the way the world worked. And he wasn’t a traditional person you think of as a Gordon Gekko, Wall Street type. And so maybe that’s why we took an interest in each other, because we talked about how the world worked, and he gave me a chance. And so Alan hired me, and he said, I remember he said, “You’re going to be the first person that works for us in the high-yield bond group at Smith Barney.” And Alan ran the Smith Barney research group, having come from Bear Stearns before that. And I think before that, he was immediately at Drexel Burnham in Los Angeles, the Michael Milken high-yield bond shop.
And I said, “Okay, great. I’m going to work for you. What do I do?” And he said, “You’re going to help me cover the industries that I focus on.” And I said, “Which of those industries?” And he said, “It’s media. It’s telecom. It’s technology. It’s food. And it’s restaurants.” And I said, “I have no idea what you just said, but I like to eat and like to go out to eat in restaurants. So that sounds good.” Eventually those fell away, and I kept going with those media and communications and technology industries from day one. And then I just decided to get that competitive streak to be better than the rest and to work at it. And I eventually got the bug. But I remember thinking to myself, watching him in action, “I will never be able to be as good at communicating as he is or as good at analyzing companies as he is.” And you just kept going at it until you eventually get the groove.
Tim Ferriss: So, two questions related to what you just shared. The first is, why go from California, backpack in hand, to Wall Street and even make the attempt? What was the draw or the reasoning there? And then secondly, why do you think Alan gave you a shot? Why would he say yes? Why would he take that ostensible risk?
Aryeh Bourkoff: I was in California at the University of California in San Diego, as you mentioned, and I knew, as I was graduating, that I wanted to get into the center of finance. I didn’t want to stay in the periphery. If you’re going to go into an industry, go to the heart of it. Don’t plan around the edges.
Tim Ferriss: Why the interest in finance, also? Why finance at all?
Aryeh Bourkoff: This is the way I described it to my parents, who are academics and looked at finance, I could tell, in a disdainful way, like, “That’s not a way to live your life.” Maybe a lot of your listeners think the same way. And I thought to myself, “Okay, I have to present this to them.” And I remember going to travel to see my mother, and I said, “I’m going to go into finance, and this is the way that I think it’s a worthwhile way to live your life,” because they were academics and professors and so on. And I said, “Entrepreneurs, people have hopes and dreams that sometimes take the shape and form of businesses. And those businesses need money, capital, to see the light of day, to realize their dreams. And that’s finance. And if I can play a role in helping those individuals get capital and have their dreams realized, that is a worthwhile life to live.” Sounds like a good pitch, right? But I don’t know if I really believe-
Tim Ferriss: Yeah. Sounds like a good pitch.
Aryeh Bourkoff: Good pitch, but I mean, that landed well, and I mean, I got the blessing. Plus I was rehearsing, probably practicing my interviews. But that’s really what I believed and believe to this day. And that’s kind of what makes it interesting. You see the energy in someone else, that you’re able to recast a problem as a solution that is based on someone’s real idea. And it’s not just about moving pieces around. It’s about creating something new. And I think that that wasn’t enough. It was enough for my parents, but it wasn’t enough in New York, because a lot of people have that pitch, I think.
Almost like I remember when I was in the college, I went to some of these parties, and you would walk in with your friends, and the vibe would happen. And I remember walking in with one of my college friends. And he couldn’t get any women to pay attention to him. I remember he said to me one day, he goes, “I don’t know. My mother always says I’m attractive.” I remember thinking to myself, “I passed the test with my mother about my pitch, but when I got to New York, it didn’t really land as well.” It may have landed, but it was in competition with a lot of other people.
And so it took me about four months in New York to get to Alan, because the day I moved to New York was because of a job interview. And I thought I hit the jackpot, one of one. The day I graduated was a Sunday, and I think Monday or Tuesday, I had an interview set up with a guy named Paul Ting… I don’t mind saying it now. He’s probably out there somewhere at Oppenheimer… And he covered the oil and gas industry. The oil and gas industry. I told myself I wasn’t going to choose the industry. Whoever hired me first, I would just be loyal to that industry for the rest of my life —
Tim Ferriss: Wow.
Aryeh Bourkoff: — and I could build a specialty.
And so I went and, incredibly, I got this interview, and I had a meeting like this day, day two in New York, downtown, the big city. It was 1995. Yeah, 1995. And I thought the interview was great, and I was going to be a research analyst working for Paul Ting, oil and gas, Oppenheimer. And at the end, I was starting to strut out of the office and said, “Okay. Next step? When do I start?” This is like the same interview I had with my mother. It’s landing well.
And he goes, “By the way, one more question.” He goes, “Do you know the programming language Visual Basic?” Like, “C+, Visual Basic.” And I said, “No.” And he said, “Well, I kind of need you to know that if you’re going to be on the team.” These days, they call it a doorknob negotiation. On the way out, as you’re holding the doorknob and turn back and say, “By the way, one more thing.” That’s the whole negotiation, at the doorknob.
Tim Ferriss: Yeah. Right.
Aryeh Bourkoff: So, that’s what he said. “By the way, one more thing. Do you know Visual Basic?” I said, “No.” And he said, “Well, you’re going to need to know that for me to hire you.” I said, “Well, what if I learn it and master it? Will then you hire me?” He goes, “Yeah, yeah, yeah. Then we’re good.” That’s New York City. I was like, “Great.” I left, bought Visual Basic for Dummies, bought a laptop, drained my account, and got subletted an apartment, started learning the thing. Two weeks later, I felt comfortable. “This is the world as it should be.” Called them. And I never got a return phone call.
Tim Ferriss: Oh, man.
Aryeh Bourkoff: And I was like, “Well, what do I do now? What I do now?” By the way, while I was at UBS in a senior position in research, I did see across the tape, probably, I don’t know, 15 years later, that we hired a guy named Paul Ting at Oppenheimer to do oil and gas for UBS, when I was there doing media. And I waited till he started, and I went down the hallway. I knocked on door. I said, “By the way, Paul, you may or may not remember me. I want to welcome you to UBS.” At this point, I was an established senior person doing media stocks, really well-established at UBS. And I said, “I just want to welcome you. And I want to tell you that I mastered that fucking Visual Basic programming language and I wish you luck here, buddy.” You’re really putting on the other side one of your philosophies in life. “The toe you step on today could be connected to the ass you’re going to kiss tomorrow.” File away. And I still know him.
Tim Ferriss: Yeah, good. Good mantra.
Aryeh Bourkoff: So yeah. Four months later, left in New York, I became a professional job seeker. And I would basically walk to different buildings that looked like hitter buildings. And I looked at the directory at the basement, at the lobby level, looked for what looked like Wall Street firms, the ones I recognized, obviously. And then others I didn’t recognize. And I would go up. This is pre-9/11. They didn’t check IDs. I would go up to the HR floor, and I would hand in my resume. And I would choose a different location in Manhattan every week to tackle. The downtown, the midtown.
And then one day, I stumbled upon Smith Barney. It was still on Greenwich Street downtown, right across from the Greenwich Hotel. This is now an amazing, hot area. Back then, it was away from Wall Street and away from the action. And Karine Krenik, to her credit, since I’m naming names, was the HR person that let me through the door and gave me a shot, wherever she is, and introduced me to Alan Ginsberg. And by that point, I was pretty good on the pitch and also self-corrective, knowing what didn’t land and what landed. And Alan gave me a shot. And I think he liked the hustle. He liked the hustle, liked the background probably, and also a little bit of luck. But he also called me out for bullshit. The proverbial question in interview is, “What’s your weakness?”
Tim Ferriss: Yeah.
Aryeh Bourkoff: Remember, that’s when I was practiced. So I said, “My penmanship.” And I thought that was pretty clever. And he said, “That’s a bullshit answer.” He went, “Try again.” So then I had to figure that out. I stumbled through it. But we both chuckled. And I forgot what I said exactly, but I’m sure I said something that was more sensitive. But he called me out on it.
Tim Ferriss: Yeah. Amazing. Well, it seems like perhaps a blessing in disguise, life saving you from what you wanted with Paul and the oil and gas. But who’s to say, I suppose, in retrospect? I want to take a closer look at Alan teaching you how the world worked. And I’m looking at a Kindred Media piece on Medium, and there’s a mention of Alan. And I’ll just read part of it, which is, “One day, Ginsburg asked him…” (that’s asking you) “…if he read the paper. ‘Thinking, “What deal did I miss? What happened? Did I miss a number?”‘ Aryeh reminisced. ‘[Ginsburg] goes, “No, no, no, no. Forget the numbers. The Opera House burned down in Florence. You didn’t read that?” And I said, “I didn’t even think to read that.” And he said, “You’re going to have to be a little more open-minded about this.”‘”
And the reason I bring this up is that, observing you in person, and also doing research in preparation for this conversation, you, more than almost anyone I’ve ever met, tie together many, many, many, many disparate worlds. And you seem to have pattern recognition not just in one sector, but across sectors. Was there any other world educating that comes to mind, and that could be through direct teaching or osmosis, observation, that came to you from Alan or other mentors?
Aryeh Bourkoff: Yeah. I appreciate that you said that because it’s much easier in life to stay in a box and a blanket, a compartment of the whole ecosystem. And by the way, there are places for people to be in those boxes and to thrive in those boxes. When you start to move outside of that box, or in the corners of that box, or the edge of that box, or outside of that box, and draw outside the line, so to speak, it is a beautiful place to live. And it is also a dangerous place to live because it’s full of unknowns and uncomfortable, maybe groundbreaking, things. It reminds me of another philosophical line of, “Conventional thinking is typically right, but seldom profitable.”
Tim Ferriss: That’s great.
Aryeh Bourkoff: It feels good to think like everybody else and to be moving with a herd, but you’re not going to make a difference. You could be wrong, but you may never really be right in an outsized way if you don’t really stretch into the unknown. And some people are not comfortable with that. But where do I get that from? I mean, I get that from everybody, but it really goes back to self-work. Ultimately, you have to have a strong core to be able to do that, because if you just move with the wind outside the box, then you don’t really know who you are.
Tim Ferriss: So, just to interrupt for a second, so, by having clarity on that core or a solid core, is that… If you wouldn’t mind, sorry to interrupt, but just expanding that for a second, is that a core set of values, a clear idea of what you will or will not do, so that you don’t end up conforming to whatever winds happen to be blowing at that moment?
Aryeh Bourkoff: Yes. Yes. It reminds me of the scene in Raiders of the Lost Ark, that last scene where the evil spirit comes into the warehouse, and Indiana Jones and his compatriot or his partner, his girlfriend, whatever… At that point, they’re all intermingled… are hanging on to a foundational pole with their eyes closed. But yet this spirit comes in and completely destroys everything else and kills everyone’s faces. And it’s a horror scene. Right? But they survive. Right? And they survive because of hanging on to this pole, hanging on to each other, and keeping their eyes closed, and just hoping their way through it. And obviously, the metaphor is they’re good, and everyone else is evil, and that spirit recognizes it. Right? But I think about that like, you have to hold on to a few poles. You can’t just be floating around. You have to have a few poles of foundational strength that you believe in, that are making up your core. And those are tried and true, but at the same time, that allows you to be curious, self-adjusting, self-corrective, migrational around other areas, and being comfortable with many different types of people that are not like you at all because you have that core, and that creates a very balanced and textured life and existence, and a way to build pattern recognition and perspective that most people would be locked in pursuing. And by the way, I’m blocked in my own way too. Everyone has certain blocks. But the more of that exercise that you can do the more of a perspective you can get of where the world’s going and where it looks like to be different cultures while you’re living in your own foundational strength and values. And I think to me, that all goes back to the basic foundation of self-awareness, self-work, self-correction, self-growth. And once you have that, you’re a member of society that’s valuable.
And then you look for that in others and run away from people that are ignorant or biased or morose or also maybe a nicer version of that is just want to go with the flow everywhere and don’t feel comfortable with some out of the box thinking because it’s threatening to those foundational values. A way to say that from a finance perspective is when I was a research analyst, I wouldn’t feel comfortable putting a buy recommendation on a stock before I’d hit the send button until I both felt the conviction of the buy and the rejection of the sell. So I had to live with the sell recommendation inside of me first for a little while to see if it felt comfortable or uncomfortable and let it in. Let the poison inside for a while. If that felt too comfortable for me, I couldn’t in good conscience go to the buy. So I had to have a buy and the rejection of the sell because the buy to me could have been a passive recommendation, not an active recommendation.
So you have to ask yourself, are you comfortable going into a controversial scenario or do you want to just live in the non-controversial?
Tim Ferriss: One more question on this core. Is this a, let’s just call it a general imperturbability or a solidity that was more a felt sense for you? Or was it something that you, at that time, codified in some way where you’re like, “I prioritize these five things” or “I resolve to follow these following values?” Was it codified or was it more of a felt sense of stability and solidity for you at that time?
Aryeh Bourkoff: Excellent question. Both, they’re interrelated. So the first time I remember feeling that sensibility was probably in grade school being popular kid with the friends, everything. Not an outcast with the group, but a little bit different and feeling inside a little different. And then the question is, do you feel bad about being different or does it start to empower you or both? And I, felt like, well, let’s test it out. And I remember thinking, I am very happily situated where I was in eighth grade, but let me leave that to go to a new ninth grade school that was an unknown, away from all my friends. And let’s see if friends were the thing that made me feel great or the inside was the thing that I could apply to new friends and keep that train going. And I chose to apply it to the unknown and chose a brand new place and left behind what I had before.
Now, I wouldn’t do that with family or a very close relationship, but I had felt very comfortable doing it with the environment I was in, to get myself in a new environment and knowing that it’s me that can adjust and apply my skills to different areas and not the environment around me that defined who I was. I could be more proactive defining environments versus having it defined for me. I remember that back then and it’s happened a few different times in my life, whether it’s moving different places or feeling comfortable, I always say I feel comfortable everywhere but belong nowhere. That’s a geographic comment. And that’s true by and large.
But I also have done that in my careers where I feel after a certain amount of time in one area, move. Take these strong parts of what it’s applicable, maybe the industry knowledge into new areas, but learn areas then I didn’t know before. And see if you can reconcile those two things. And then that builds that core with the unknown together. That’s a life of curiosity and creativity, but also life of foundation and strength and contribution on the other hand. And that I call that the gray area, like you are comfortable in the gray area. And I feel like that’s a competitive advantage for me. I can hang out in that gray area longer than most people in the world, very comfortably, until I see the optimal scenario to pass on.
Tim Ferriss: Let’s talk about perhaps that gray area, and maybe misapplying that term to what I’m going to ask. But this relates to a story you told me last winter, and if you don’t want to discuss this, I can imagine it’s sensitive, but we can also cut it afterwards. But I think it came about because of the title of my first book, 4-Hour Workweek, and someone said, “Oh, you should talk to Aryeh because that is probably not going to be a driving philosophy,” or something along those lines. Although I do think we have some similarities as well in terms of per hour output and thinking about various things. And you told me a story, I’m going to get some of the details wrong, so I’d like you to correct it, but about at one point realizing that many meetings were being declined because your calendar was full and then deciding to take an entire year to block out every Wednesday, I can’t remember, from six to 10:00 p.m. or something, to take all of those overflow meetings that were being canceled. Could you retell that story if you wouldn’t mind?
Aryeh Bourkoff: Sure, so it all starts with the concept of rejecting constraints on one hand. On the other hand, problem solving, which is probably one of these terms that are thrown around so many times, problem solving. I’m a problem solver. I run a company on solving problems. And there’s probably like, but who actually does that? I mean, put yourself in a situation where you actually solve a problem that seems insurmountable. And so one of those problems were time. I don’t have enough time. Time being the constraint, just tackle solving that problem because everyone just talks about that all the time. And the other part of the story is the passive or active conscious or subconscious deprioritization of people that are, let’s say, not as important to you as your kindness team wants them to be. But you’re really not going to put them on your calendar in the prime spots.
So you deprioritize them. And even if you are prioritizing them in your mind and your heart and your body and your soul, your office will deprioritize them for you. And people have become an expert at these things right. Now over time, you build a luxury in life of being able to do that and be more selective because as you mature, you want to spend time with only things that are essential. Maybe you’re running out of time. But when you first start a company, and we first started a company with relationships at its core and with reputation, that’s really important to define the company, the concept of rejecting people or those relationships in any form, is out of the question. So what would happen at the beginning of the firm some 10 years ago was, I recognize that I was a funnel. People would want to figure out what was going on at one point in time. There are very few things in your life that light up all your contacts at one time.
Let’s say your wedding, your funeral, God forbid, maybe a big job movement, a big news item. Imagine, and all of a sudden your phone lights up. But most of the time it just smooths out. Certain people won’t care about different things. When you start a company, it will light up everything on your contacts, hopefully. Or if it doesn’t, you have a bigger problem. And so this was a company starting, based on all of the relationships in my contact base and a place to put them and to cultivate them, to build a skyscraper. But at the beginning it was just me and the relationships and an assistant. And so I started to get wind of the fact that certain people couldn’t get on my calendar, which is obviously natural because you can’t put every single one of your contacts on your calendar at the moment you announce a new company, even if it’s a few weeks out, people are going to say, “Sorry, I can’t make it.”
But imagine how that feels for somebody else. I want to support this new LionTree venture and what Aryeh is doing, but you can’t see me. What a horrible way to start a company. I don’t care who you are. So after a while of reading and hearing people sending me notes or emails, I recognize that there are certain category of people that they were, because obviously the office knew enough to give them credit to prioritize the Tim Ferrisses of the world right away, or they maybe prioritize things that would be immediately like dollars oriented or transactional, which is also not the philosophy of the company, but they wouldn’t prioritize things that would be career advice or people that wanted to work with the company as a vendor or business partner, things like that, that they wouldn’t even know, but I would know. So I brought my assistant into the office and I said, “So what is this thing we’re rejecting people?”
They said, “Well, you don’t have time.” I said, “Yeah, but you get paid to say yes. I can say no.” That’s the job of the assistant to figure out a way to say yes. And they said, “But yes, but Aryeh, you don’t have the time on your calendar.” And I said, “Well, that’s the question. Let’s figure out the problem solving of time now. What if I created a whole extra day in the week? Would that unlock the potential for filling in all these second tier like requests, so to speak?” And they say “Yeah, hypothetically, if you had an extra day, we probably have a lot more to work with.” I said, “Okay, let me think about it. I got it. Wednesday nights. You were right. Wednesday nights. But the hours are different. From 10:00 p.m. till 2:00 a.m.”
Tim Ferriss: Oh, gosh.
Aryeh Bourkoff: From year one of the company, I will do office hours. But no internal bitch sessions. There’s no suggestion box. This is an external session. If people really want it that bad, I’ll be here. No one else internally has to be here. Just leave me a little food, a little drink, and let’s see who wants to be here. I’ll be here and then I’ll start the next day at the same time, seven in the morning, eight in the morning, whatever. I’ll eat it on my end for year and I think it’ll unclog the situation. And we’ve created what you viewed as a constraint of time. I created time by eating into my sleep hours. So your 4-Hour Workweek is really a four-hour sleep week for me.
But anyway, but it worked. People showed up for a year till two in the morning and it was the most interesting, grateful conversations. And it’s just New York City at its finest. In the office, you’re talking about life and career and that paid dividends. Not business dividends, but reputational benefits and humanity benefits. Who are you? What do you want to be at the end of the day? And I’m happy we did it. I don’t regret for a second. Now I don’t do that now. I would love for someone else in the company to do that now because I’m in motion still and I want to be more selective and deep with relationships versus volume-oriented right now. And I almost want people to compete for the depth of those relationships with me versus the masses. But that’s what the firm is supposed to be to understand what is selective versus, but the firm needed that at the beginning to really understand what we’re about.
Tim Ferriss: Yeah, amazing story. Wow. 10:00 p.m. to 2:00 a.m. So two questions. How did you choose 10:00 p.m. to 2:00 a.m.? Was that just to separate the casual inquiries from the true believers? That’s question one. How did you choose 10:00 p.m. to 2:00 a.m.? And then the second, you mentioned something that I think probably caused a number of people to perk up because it would be the opposite of what many would perhaps say. And that is the assistance job is to say yes. You can always say no. I think assistance are viewed by many folks as a protective layer, maybe a flack jacket to deflect as much incoming as possible. So I’d love to hear you just explain why 10:00 p.m. to 2:00 a.m. and elaborate on the assistance job being to find a way to say yes.
Aryeh Bourkoff: Well, 10:00 p.m. to 2:00 a.m. is easy because I want to leave room for dinner. Not dinner, God forbid, like a personal dinner. A client dinner, a dinner outside. Business and life for me are very well integrated. So it would be used the city, go to dinner, and then after dinner I come back. Some people still bring this up. People see me on the street, they say, “Aryeh, are you still doing three dinners a night?” And I’m like, “That may have happened one time, maybe 10 times.” But then two times I would do dinner, I would go to two dinners a night. I was just try to get it all in and not eat as much at each dinner and move around. And probably in retrospect, was it the best thing to convey to people. But except for the fact that I was working hard and try to make sure everyone was happy and that I would get it all in.
But at this 10:00 to 2:00 was about making sure that that night I would have room for my dinner meeting or out of the office, using New York, great city to do that. And then came back to the office, enough time and then starting 10:00 p.m. and then I wanted to have enough time. There’s this great song, I think it’s You Too song that has a line that says the magic hours are when it’s not yet the morning, but it’s still night, but it’s not really nighttime. And so you haven’t yet figured out that it’s morning time. You haven’t started thinking about your next day yet, but it’s past normal nighttime for everybody else.
So you really can’t be bothered. And none of us really live that way, I think day to day. But that must be where a lot of magic happens. And then you get to a point where you start thinking, Oh, my gosh, tomorrow morning my calendar is this and that. That, to me, starts around two in the morning. And so if I went past two, I’d start eating into what I have to start doing the next day. Yeah, I’ll remember the song. I’ll remember the song. I just listened to the on the internet for the first time again.
Tim Ferriss: No problem. Could put in the show notes too.
Aryeh Bourkoff: Yeah, yeah. That’s a great song. Oh, yeah. “When the night has no end and the day yet to begin, when the room spins around, I need your love.” It’s “Hawkmoon Rising,” Rattle and Hum. YouTube on the Rattle and Hum album was the only place you could find, I think. Rattle and Hum, YouTube, “Hawkmoon.”
Tim Ferriss: Good memory.
Aryeh Bourkoff: There you go.
Tim Ferriss: And the assistant.
Aryeh Bourkoff: The assistant. The complexity of the job of an assistant, particularly for me or for anyone in a relationship business where it’s meaningful and there’s a long bill to it and a long tail to it, and genuinely is probably the most complex, respected job in the company. And it is a puzzle piece that is, I always think of it as those images of broadcast television when you’re like, “Okay, I have Thursday night, must see TV, and what’s going to be the six o’clock hour? What’s going to be the seven o’clock hour? What’s going to be eight o’clock hour? And how’s one going to lead into the other? And how’s it going to fit in? Are people going to be still botched at 10 o’clock when it’s over? And what’s going to be the show after the Super Bowl that you promote?”
How the calendar flows and behaves is a living, breathing animal with a soul and a brain and everything else. And the people that have to construct that every single day, today and into the future. The assistant, I think is, I respect that brain power and that knowledge more than anything, in some cases, including my role.
So if you start with no, instead of yes, then you’ve stopped playing the puzzle. You’ve said, I can’t fit the puzzle piece, so it’s not going to fit somewhere. But if you say yes, then the puzzle keeps expanding. And the calendar has to mimic the strategy of the firm where I want to be going, the changes in the development of the firm, the changes in the people I want to play with, work with, experience life with. And the understanding of that has to mimic one another. And so it’s not, they say yes, I say no. It is much more of we understand where we’re going and the calendar has to reflect the vision of what’s going on in my head, and therefore has to be communicated that way. And then it has to have a yes around it somewhere.
Tim Ferriss: I dig it. Yeah. Thematically, makes sense. I want to hop to UBS here, and-
Aryeh Bourkoff: I’ll tell you one more thing about the calendar, by the way, because I talk about it a lot. If you boil it down, internal meetings, everyone has a ratio. So if you did nothing because of your reputation and your brand and your substance, your calendar is going to be full. People are going to want to get on your calendar all the time, without you even choosing who you want to see. That’s what I call defense. And if put that aside for a second and then you had a blank sheet paper and said, “Forget that calendar. I, Tim, want to choose exactly who I want to see.” And that may not fill the whole calendar every single day, but it’ll be proactive, it’ll be offense.
So what’s defense and what’s offense? How everyone has to create a balance of those two things in their calendar. Who wants to see them and who do you want to see? And that mix. And then there’s the internal versus the external. And there’s no way around the fact that internal meetings are cost or investment. Doesn’t have to be negative, could be, but they’re necessary investments in the company or cost and external meetings should be revenue or potentially for future revenue. So one’s revenue, one’s cost. If your calendar is 50/50, offense, defense or external, internal or revenue, cost, you haven’t done anything.
Tim Ferriss: Yeah.
Aryeh Bourkoff: You’re running in place. And so I’m very cognizant of, “What’s the ratio? What’s the ratio?” And so I’ve figured out a lot time I go, I really would love the ratio to be like 70/30 external versus internal or maybe 80/20. And then you could start thinking to yourself, “Okay, well that builds a good margin. And then you start, and then different times of the year have different moments. Obviously if you’re paying bonuses, you’re doing reviews, maybe there’s a little more internal, but by and large, the internal should be more predictable. If you’re managing a good organization, you could probably put the internal on your calendar for the entire year. Otherwise, there’s surprises going on. And if there’s more surprises going on, the less well managed the company is.
So you should be able to pretty much put the internal on your calendar right now for the whole year. And then the external, you’d be surprised at how much external you can put in your calendar in advance also. “I’ll meet you at Formula 1 in Austin, Tim. Do you want to go again this year?” This is a date, or this conference or this event or this holiday.
And you could probably put the tent poles of your external on the calendar. You’d be surprised how little room that leaves for the spontaneity and the serendipity of life, which it must. So something has to then give absent sleeping hours. And so that’s what you’re playing with. You’re playing with these marginal slivers of space that is growth, that is a choice, that is what’s different today versus last year. And that will represent who you are today versus last year and what you want to be in the future. And whether the best companies in the world is going to stay exactly where they were or evolve. There’s no accident that most companies don’t evolve. You really have to work at it, a constant build. You’re dealing with slivers of space and time to make that happen.
Tim Ferriss: I’m glad you added that. I’m taking a number of notes for myself, so that’s why I’m scribbling furiously over here. You mentioned briefly-
Aryeh Bourkoff: I would cancel all internal meetings for you, by the way. To see you, I would take my internal meetings off this. I would just, on a moment’s notice, I would go fly and see you. That would be like, that’s the sign of true respect.
Tim Ferriss: Oh, well thank you for saying that. And I look forward to the next time we’re able to spend some time in person. And I’m very much enjoying this entire conversation. I’ve been looking forward to this and bonuses. You mentioned bonuses, and I think this will tie a number of threads together, some of which are yet to come, but we’re skipping ahead a bit. But you ran investment banking, or certainly you ran investment banking in the Americas for UBS and had something like 1,500 people reporting to you. When people came to you or bankers came to you, talk to you about annual bonuses, as I understand it from the Hollywood Reporter piece, you would ask, “What is your edge?” And I would love to hear you just elaborate on the function of that question and what you mean by that.
Aryeh Bourkoff: It goes back to how you’re judged. Ideally, you’re judging yourself every single day. Everyone’s making their own adjustments every single day. And then you have external factors which remind you how you’re doing, every single day. And there’s a lot of haphazard activity, and not everything’s logic, based on logic and reason. But if you’re running a business, you’d have a daily profit and loss statement, which tells you how you’re doing. If you own a restaurant, tells you what you’re doing, if you run a investment fund, tells what you’re doing, that all those things contribute to your own humility and self correctness.
If you’re paying somebody a bonus or a compensation at the end of the year, you are the one that’s creating that self-awareness in that person. I’ve never seen anybody come into a conversation around compensation and feel as an employee that their boss has synced up exactly with what they think that they’re worth. I’ve never seen it. So within that, there’s a chasm of misunderstanding or emotion of what you think you’re worth versus what they think you’re worth, on a given year. Okay. And that’s normal life. Ideally, you’d like to have some daily metric that just defines that, that daily P and L. So at the end of the year, there’s no one big event. So what I was trying to do is to try to build in as much of that narrowing of that chasm as possible before the conversation because it is a negotiating strategy, or you could call it a real effort to just build awareness, saying… The best way to do that is to ask someone to define who they are, you’d be surprised when you’d ask them to talk about themselves how passive they will be and either how little they will value themselves in the right way, and how much they over-value themselves in the wrong way. So I feel like people always say, “What is your superpower?” and maybe those things are thrown around too often these days. What’s your competitive advantage? What’s your edge? In a certain defined role like the role of finance or the role of banking, I said, “The edge really comes into play of do you have a unique idea, do you bring unique capital, or do you have a unique relationship?”
But I wouldn’t give them the answer. I was trying to figure out if they could get to it. If someone says, “I work harder than everybody else,” okay. Imagine telling an NFL player or NBA player, “I work harder.” Is that really an edge these days? I mean, one of these we hear like, “I’m doing the best I can,” I’m like, “Okay. Well, then you get out of bed, and then what happens?” I’m assuming everyone’s doing the best they can. Whenever anyone says, “Life is too short,” I’m like, “Well, life is the longest thing you know. You don’t know anything longer than life.” So I’m like, “Let’s just live it to the fullest as much as you can.” You know?
Tim Ferriss: Yeah, yeah.
Aryeh Bourkoff: But then do better than that. So when you ask someone to define their edge or their advantage, they’ll learn a lot about themselves.
Tim Ferriss: So was this conversation then… It was preceding the official performance review/decision on the bonus? This would be a precursor, sort of setting the table months or weeks or whatever timeframe prior to the actual conversation?
Aryeh Bourkoff: Yes. You would see people, and I would rarely even initiate it, you would see people… Oh, I had one this morning, today, actually, and people wanted to get a sense of where they stand or how they’re valued, or what their opportunity is in the future. All those are codewords for, “How am I going to get paid?” It’s fine. It is what it is. Again, it would be better for those things to happen on a day-to-day basis that define that instead of my… I mean, well, who am I? Why am I telling you how you’re going to get paid? You tell me how you’re going to get paid based on what your edge and what your opportunity is, and my job is to provide the platform for you to optimize that better than anywhere else, and your job is to optimize it here and have the free market to choose somewhere else if you can’t do that or I can’t do that, and the bet with all of those solutions or scenarios is maybe some biases or some lack of self-awareness, or my mistakes of not building the right platform or not managing correctly. All right?
So, maybe as a manager my job is really to throw the penalty flags around versus manage and tell you exactly what you’re worth before I have to. One’s entrepreneurial and one’s needing to be secure, but where does that security come from, self, inside, or outside? When you’re a parent to a child, you have to provide that security, but at some point they have to then get unlocked. So I just think it’s about not everyone has to be entrepreneurial all the way, but there are certain responsibilities that I have to build the business for people to thrive and make sure it’s that kind of environment, mission-driven and opportunistic and a meritocracy around that, and certain responsibilities that people have within it to then take it competitively better than the best they can, and the risk I take is that they could do it somewhere else better than here. But I own that risk every single day. What risk do they own?
Tim Ferriss: Yeah. Yeah. Well said. So, for people listening, I want to add a bit of color and then ask about a specific instance. So, you have been part of and a driving force behind some of the largest deals the world has ever seen, certainly in media, and people might be listening and thinking, “My god. This guy doesn’t sleep. He has endless energy. It’s just a home run every time he steps up to the plate,” which may in part be true, but could you please… I’m going to get the name wrong. I don’t know how to pronounce this properly, but can you please tell the deck of cards story with Joe Ianniello? Is that how you say that name correctly?
Aryeh Bourkoff: Ianniello.
Tim Ferriss: I knew I wasn’t going to get that right. All right.
Aryeh Bourkoff: The fact that you got my name right and not Joe’s is a real sign of growth in the industry. I appreciate it. Well, obviously, what appears to be a home run every time is not. I mean, first of all, every day is full of happiness and successes and frustrations and consternations and irritations about what we could be doing better, what I could be doing better, frankly, all the time. I do try to… I’m as much an introvert as I am an extrovert, by the way. I think the biggest misnomer is I’m always out and about. I get a lot of energy from being out and about partially because of other people’s energy, not just my own, but I also really enjoy some thinking time with music and some reading time, and kind of a chance to reenergize and go deeper than just bouncing around, and that you just don’t Instagram out the periods we’re you’re sitting alone.
Tim Ferriss: Yeah.
Aryeh Bourkoff: So people only see you do the things that you’re like where you’re bouncing around. They don’t see the moments where you’re just happily sitting alone or reading a book or listening, unless you’re really not focusing on it. You know?
Tim Ferriss: Yeah.
Aryeh Bourkoff: So I think the appearances are a bit misleading, but it’s the texture of all of the above, and some of that thoughtfulness is where you really come into strategizing around what the future could be for you, for your loved ones, and also for the deal making in the future. But in that particular story, it all goes back to this element of what you know, what you don’t know, and we were doing a deal, I think in 2007, for a company called Sundance Channel, which was owned by NBC, CBS, and Robert Redford, and we were selling the company on behalf of the owners. I was at UBS, and we really did a good job, I have to say. We did a good job selling the company. It was not an easy sale. Eventually, the Dolans bought it, actually. The company that owned IFC, Cablevision, and the Knicks bought the Sundance Channel for $500 million.
I thought we did a good job, and I remember in those days, and in some cases also today, when the job is done, then you start to think about, “Well, how much am I going to be paid for the services?” Now, sometimes you can get that figured out at the beginning. In this case, you figure it out at the end. We were thinking that would work to our benefit because it was such a home run deal, and I thought we did such a good job that they would want to pay us more, whereas if we agreed at the beginning, we probably would’ve undersold ourselves. Robert Redford did really well in that deal, I remember. I think he probably made more money in that deal than all of his acting years combined, but he was a pleasure to work with.
But CBS’s CFO, or I think it was the treasurer at the time, was Joe Ianniello. He rose through the rank of even being the CEO for a while after that, and Joe was a tough negotiator, but we were on the same side of the table. So, afterwards I was told by my bosses at UBS, “Okay, Aryeh, great job on the deal. Now go get us a good fee,” and I said, “Okay. I have to do that too? All right.” He said, “Yeah, yeah. That’s what it takes,” and I said, “Okay.” So, I went over to… Joe was appointed as a person that had to negotiate our fee, and I thought it would be like one of these great kumbaya conversations, we all did a great job together, and let’s have drinks and get this settled quickly, but no.
So I went over to what they call Black Rock, the CBS building, and it was this long conference room, and it was just Joe and myself sitting in the middle, and Joe said, “Hey, you’re here to negotiate your fee, right?” and I said, “Yeah.” You project some confidence, but you’re really nervous inside, and he said, “Just to break the ice a little bit before we get into that negotiation, do you want to play some cards? Do you want to do a card trick? I’m getting into cards recently.” That sounds great. We’re friends now too? This is great. Amazing. So, he said, “In fact, you know what? More than just a card trick, why don’t we just shortcut the whole thing since you’re busy, I’m busy, and why don’t you just pick out of the deck any card, and whatever card you pick will be your fee, and we’ll just do it by chance.”
I said, “Really? We’ll do that?” I said, “Just to clarify, a face card with a jack, queen, and king, that’d be like $10 million?” and he said, “Yeah, that’s right. Sold the company for 500 million. Whatever you pick, that’ll be your fee.” I said, “Okay.” So, I reach in, I pull a card out, and it’s a three, and he saw my face, that I was very disappointed. He said, “You seem dejected. Would you like to do it again?” I said, “Well, yeah. Can I do it again?” and he said, “Yeah, let’s do best out of three.” So, I said, “Great.” I’m like, “So nice, gracious.” I do it again and I pick out a three again, and I’m thinking, “No, this is terrible.” Now, I don’t remember exactly what I was expecting to get, but definitely more than a three, and definitely relative to the face cards or anything else I was thinking, this was towards the bottom of the deck.
So, he goes, “You seem like you’re in a bit of a stuck place. Maybe you want to call the home office back at UBS and find out what they have to say.” I go, “Yeah. I have to do that. I can’t just walk back with that.” He goes, “You can use the phone on the couch over here. Just sit in the corner.” So I went to the phone, picked up the handset, and there was a card on the handset, and it was face down. I picked it up and I turned it over, and it was a three. By that point, I had realized what was happening. I put the phone down —
Tim Ferriss: You were negotiating with David Blaine.
Aryeh Bourkoff: I said, “Are you telling me, Joe, that our fee is $3 million?” He goes, “That’s what I’m telling you.” He had the whole thing wired. So I respected it. That’s what we got. That’s what we took.
Tim Ferriss: So negotiating is one of your sports in the sort of decathlon of dealmaking that is the craft, one of the crafts you’ve mastered. This is going to seem like a lazy question, but I’m going to ask because it’ll be on the mind of a lot of people listening. For someone who wanted to become a skilled negotiator, would you have any recommendations in terms of resources, approaches, common beliefs that are actually very unhelpful, anything at all for somebody who wants to develop their ability to negotiate well?
Aryeh Bourkoff: Yeah, of course. As probably the opposite of what people will believe or instinctively would do, which is usually the answer, by the way, I would say 90 percent of the time everyone focused on what is important to them and what we or what you say. It’s irrelevant. All that matters is how it lands to the other person. It’s life. In order to understand how something will land to the other person, you have to meet them where they are. You have to put yourself in their shoes. Once you put yourself in someone else’s shoes, then you don’t have to do what they say in a negotiation, but you have to at least start with that understanding, and then go back to what’s most important to you from there, and then you have a fair understanding of what that negotiation is going to look like.
But if you just start throwing your words against the wall, it’s never going to end well, and you’re going to be very frustrated, and there’ll be temper tantrums, and so on. I kind of make it… The best analogy I can think of is when you are in huddle, about to throw at pass at a football game, and you have figured out you’re going to throw a post pattern in the huddle, and you thought about in that huddle. If you say “Hike,” play goes, and you throw the post pattern on play, but you haven’t looked at actually what happened in the field, and the receiver had to go in a different direction, you need to meet that receiver where they are. Your post pattern play is irrelevant. It’s only relevant to your formation at the beginning, but it’s not relevant to actually where the ball is going to go in the end, because what happened on the field is much more important.
So, you have to do the preparation work. You have to have a sense of what you think is proper and right from your perspective, but you also have to understand what will be the scenarios that will be important to them, and then the middle ground approach is too often used. It’s not that. It’s just starting from understanding both vantage points. It’s the same kind of skill set as saying before I put a buy on something, I have to also reject the sell. You have to be comfortable in an unknown position before you can adequately argue for what’s important to you. Then in a trusted relationship, which is the only way to negotiate, in a trusted relationship, you’re going to get down to things that are really important and things that are not really that important, and to be able to be comfortable saying that… Okay.
If I listed these three things, please rank in order for me what’s most important to you and what you really don’t need, that would give me a little bit more room to come back to you with something that I think we can work with, because that shows that you’ll be willing to give up something to get something, which is obviously a hallmark in any transaction. Now that’s a good negotiation. There are tactics above that. So, sometimes in order to get to somewhere that you need, you may ask for things that you don’t really want just to settle back into something that is a discount to that, that you only would do that if you feel like the other person’s doing the same thing.
So it all goes back to trust, and that trust is not about one person trusting another. It’s the different phases of the negotiation that trust picks up. So, at the beginning of a negotiation, it may be less trustworthy than at the end when things are really coming to the finish line, when you can see the light of day. Then things start to pick up towards the trust. So, you have to see when you can play with different tactics, but at the end of the day, it’s seeing people where they are, I think is really, really important, without giving up what you really need.
Tim Ferriss: So let’s explore that a bit. So, seeing people where they are, you gave the football metaphor. Could you describe an actual deal situation or process? It could be real. It could be anonymized. It could be hypothetical, but just to walk us through a concrete case study of what that looks like, knowing the other side, since you led with that in your answer. Could you perhaps just walk us through an example?
Aryeh Bourkoff: Yeah. I will, actually. I think all the deals that we work on that are public, company deals, end up being filed publicly with the play-by-play of the deal. No one likes to read legal documents, but the fun part of the legal document is the play-by-play of the deal if people are interested in the step-by-step of how a deal works, because while we’re doing the deal, we’re very aware of the fact that it will be filed publicly. So, it’s not like you’re pulling fast ones because it’s going to be disclosed, how you’re doing what you’re doing. So, you have to be truthful. There’s no concept of lying in a deal because it will all be uncovered later, if you want to be in the business the next day. So that’s called a proxy statement, and that one section is written up by lawyers that actually recount the deal.
Tim Ferriss: Did not know that.
Aryeh Bourkoff: Yeah. So, what I’m going to say is public information. When we did the transaction of selling MGM Studios to Amazon, which is the only example of a content company being sold to a technology company to date, there was an impasse between the buyer and the seller that went on for a while. The deal ended up being worth around $8.5 billion, but for months Amazon would not go above eight billion, and MGM and the owners of MGM decided, “We are not selling below $9 billion, hell or high water.” So we were at an eight-to-nine-billion-dollar bid ask for months, to the point where the deal could’ve gone away. On the one hand you’re close, on the other hand, nothing’s happening. So, finally, the chairman on MGM who was a really dear friend calls me and says, “I’m ready to… What do you think? I’m ready to unlock this gap,” and I knew Amazon very well, enough to know that they were thinking because of this gap was going on for so long that the owner of MGM and the chairman, in their mind, they were thinking didn’t really want to sell.
So they were thinking that nine billion was just basically saying, “I don’t really want to sell.” Of course, I knew that was not to be the case. So the owner and chairman of MGM said to me, “I give you, my proxy, to go in there and break the log jam.” So I did, and when I went to call the Amazon executives, I said, “Okay. We’re ready to negotiate now,” and they said, “Well, there’s nothing to negotiate. They’re at nine billion, and we’re at eight billion, and we’re not moving.” I said, “Okay.” They said, “They’re not even really interested in selling the company.” I said, “Well, what if I told you that they were selling the company?” He said, “Well, how would I know?”
I said, “Well, I’ll, in good faith, speak on behalf of the chairman, and I give you a new offer that will yield a bit, under the condition that you get back to me with a counteroffer right away, within 24 to 48 hours, so I get also the feedback back to the chairman that you’re serious about dealings, meaning that if I could speak for a principal, you have to speak also that you want to get something done, but I’m not going to move unless you’re going to move, and I need know that you’re going to move.” That was trust because they took a risk that I could represent the owners of MGM. They said, “Okay. What do you got?” and I said, “I think we should split the difference and go right to it, but it has to go fast, and you have to get back to me right away,” and they did. If they didn’t… In those 48 hours, there was a lot of emotion, but they did get back, and it moved very, very fast from there. So that’s exactly what we’re talking about.
Tim Ferriss: Yeah. Well, someday I look forward to reading your compendium of deal stories. I would be the first in line to buy a copy of that. But before we get to the compendium of deal stories, probably a better title to be had, you mentioned a while back reading time, and there are quite a few books recommended in your year-end letter. Are there any particular books that come to mind that have impacted your thinking recently, in the last few years, or any, let’s just say timeless books, perennial books that have impacted your thinking?
Aryeh Bourkoff: Yeah. There are quite a few. I mean, I probably buy more books than I read. I wonder if that’s the case for a lot of people, actually. I listen to more books than I read. I don’t read complete books, but I do try to read as much as I can. So I would say the timeless books are, one we’ll call Leadership and Self-Deception. It’s really a book about self-awareness that we really handed out to the firm, and it’s a book about really just owning your own decisions. That’s a timeless book.
Tim Ferriss: And the title was Leadership and Self-Deception?
Aryeh Bourkoff: Yeah, Leadership and Self-Deception. The other two timeless books are a book called Scale by Geoffrey West that is all about why some things last minutes. Humans could go on for 70, 80 years. The Queen lasted 96 years. The average public company goes for 10, 10-and-a-half years, and then dies, but cities seemingly last forever. You can throw nuclear bombs at cities, unfortunately, but they still keep moving. Why do some things last finite periods of time, and some things last much longer? It’s all about what you feed it and the ability to grow it, but ultimately, it goes back to adaptability. If something has a rigid purpose and you break the purpose, it will die. Profits for a company will die.
A city, the people always reinvent itself. This summer, I think five governments fell this summer, the UK, you had Italy, you had Israel, you had Sweden recently, and you have even France became dysfunctional, and I was like, “Oh, my goodness. All these governments are falling, but that’s okay because if the people are unhappy and the governments don’t fall, that’s rigid. That’s a problem.” If governments fall, it’s a chance for reinvention, and just like New York City where I’m sitting now had a chance to reinvent itself post-pandemic, or in Detroit, a company town, when the industry falters in the auto industry, it had a chance to reinvent itself with creativity, or Medellín in Colombia, it used to be known as a rough drug trade town.
Tim Ferriss: Yeah, murder capital of the world during Escobar’s rule. Yeah.
Aryeh Bourkoff: Yeah. That was cool.
Tim Ferriss: Yeah.
Aryeh Bourkoff: Technology hub, artsy. Cities reinvent themselves, basically adaptable, forcing function of those people. I love that. It’s very helpful for a company build dynamic. The third one is a book called Scarcity. I think we’re moving from a period of abundance to scarcity. So how you are not fearful of scarcity, but how you could do more with less, and we’re getting into a period now where unfortunately, there’s scarcity of food and water and energy resources, shortages because of macroeconomic dynamics, warfare in the Ukraine and Russia, and I think inequality post-pandemic and how you deal with scarce resources, people paying their bills plus inflation, what you do out of those dynamics, it creates a lot of tension and fear and conflict, even military conflict.
It’s a different kind of read than Abundance, and we have everything we want. But then the books I read now more recently are about people. I’m reading a book now called A Banker’s Journey about Edmond Safra’s journey, a banker from Brazil. It just came out. I’m reading a book now by Chris Blackwell about the music industry and his forming in the music industry and founding Bob Marley and U2, and his journey, things that are interesting, personal stories. I read books all the time. Jann Wenner just came out with a book today I’m looking forward to buying, the Rolling Stone editor and founder. He and his son Gus are friends, his son more than Jann. But interesting life stories, texture to read. I like to read a lot and I probably read more than I consume other forms of media.
Tim Ferriss: So related to the books, any biographies that really stick out for you? And then second, if you read any fiction, which is not a judgment question, but if you read any fiction, if there are any fiction books that have had an outsized impact on you in any way?
Aryeh Bourkoff: Biographies? I like all the Niall Ferguson books. I read The House of Rothschild, the J.P. Morgan books. I actually read Bill Cohan’s book on the Lazard, Last Tycoons. Really good book. That’s not only because of being in this business, but you do want to go back to the underpinnings of what is relationship banking. I really think that’s a really interesting profession beyond just finance. It’s how to build with people over a long period of time, I think, with outsized impact. I think that’s really, really interesting to me and I hope other people in the firm and even your listenership.
And fiction? I’ve always loved some of the mystery novels, the legal thrillers. I’ve always liked the John Grisham books. But I would say meaningful to me? Ayn Rand, obviously it’s not fiction per se. John Steinbeck, The Pearl, a recommendation of a friend of mine who’s in the business. I reread the other day, great book. And I love The Sun Also Rises, Hemingway.
Tim Ferriss: Yeah, great book.
Aryeh Bourkoff: There’s a particular line in there that I love, at least if we’re talking about bankruptcy, saying that it happens gradually and then suddenly. Sometimes things on the way up happen to feel very slow and methodical, but on the way down, things happen gradually and then suddenly. There’s not a symmetric relationship between things that happen on the way up and things that happen on the way down.
And then another book I would say is David Brooks’ The Second Mountain. It’s a really interesting book. I view it as a book about personal development, careers, people in our age of life. You kind of start your career coming out of school and thinking about what you want to do, one step in front of the other. And then you get to a certain point at our stage of life and then you say, “Well that’s where I started from to where I am. It has nothing really to do with where I want to end up, top of the second mountain.”
And once you start thinking about that, you end up in the valley of thought until you figure out where that second mountain is. And when you start climbing the second mountain, you don’t even have to get to the destination. It’s just a joyful climb. It’s a happy climb. You’re doing every single thing you want to do with every breath you have. I love that whole concept, finding that second mountain. There’s no such thing as a linear move from the day you come out of school all the way until you die. It’s not linear. You’re going to hit a chasm and it’s cool until you find that second mountain to climb personally, professionally, et cetera. It’s all good.
Tim Ferriss: I’m going to buy that today. I also love John Steinbeck and I’ve read pitifully little of his work, but Travels with Charley, if anyone has not read that nonfiction account of him traveling across the United States with his dog, it is absolutely laugh-out-loud hilarious, and also very profound in its hilarious observations. But David Brooks, I’m going to get that book today. Thank you for the recommendation.
I must ask a question to scratch my own itch in terms of curiosity, and this is related to one of your more recent investments. You’ve invested in Malcolm Gladwell’s audio production company, Pushkin Industries, per your 2021 year end letter. I’m a huge fan of Malcolm. He’s been on the podcast, huge fan of Michael Lewis also who’s been involved with Pushkin and who’s also been on the podcast. The caliber and quality of what they produce is I think absolutely astonishing. What do you think is next for the podcast market? Or if you have any thoughts on where you think things are going, what trends are emerging or converging? What do you see coming over the next handful of years for the podcast market or industry?
Aryeh Bourkoff: The audio market and the podcast market is strong and growing. Clearly, like everything in content, the quality has to rise to the top because a lot of people have jumped into it and have to also get curated in terms of guides. Remember at the beginning of YouTube you were in the jungle, you had no idea how to navigate YouTube. Now finally you could, if you want to go to sports you know where to go. And if you want to go to history, if you want to go to brands, commerce, you know where to go. So I think there needs to be more curation around audio and podcasting in general, where you find different content and when, how you digest highlights versus the whole episodes, et cetera. But if it’s going to be more branded and more curated I think from here.
And heavily monetized, but hopefully not over-monetized in ways that are uncomfortable. I’m not anticipating things that are full advertisements, but sponsorship is going to be more interesting. Platforms that will really get behind it. Obviously iHeart, Spotify, Amazon, but every platform that reaches a global audience needs differentiated content today. Video content alone has hit diminishing returns. Audio content and podcasting content, I think, that’s really well-branded and curated and quality like this one, I think the best is yet to come still. And it hasn’t even stretched service globally. So I think those are going to be really interesting. But I think more curated, more guides, more branded content and monetized in different ways I think will be pretty important.
And then there’s social features as well, some more interactivity of being able to do events and tours and going around to talk to your audiences and having more of an interaction between the fans and the creators I think is a big wide space.
Tim Ferriss: And do you have any thoughts on how the market will move or consolidate? Because I’ve watched all this with great interest of course, and I’ve looked at certain transactions, say relatively speaking, heavy spending. And I will just underscore something you said, which is, I think it’s still very early. If you look at the terrestrial radio, total ad dollars compared to what has currently migrated to say podcast, it is still just the tip of the iceberg. And even when I launched this podcast in, I can’t even recall what it was, 2014, 2016, I was told by folks the ship has sailed, it’s too late, there are too many podcasts. I just don’t think that’s the case at all.
Aryeh Bourkoff: I was told the same thing when we launched the bank in 2012, that it was late to start a new independent bank, that ship has sailed. And I was like, “Well, maybe the door will shut behind us, we’ll be the last one.”
Tim Ferriss: Seems it seems to be working out in both cases.
And if I pick one player, for instance, let’s just say Spotify spending very heavily with respect to just their market cap and moving into podcasts, the Joe Rogan deal valued at least a 100 million, probably quite a bit more with earnouts and everything else, my assumption has always been that once Spotify accounts for more than single-digit listenership or downloads or streams for the top, say 100 podcasts which will be reflective of broader trends, that that type of talent acquisition would drop quite significantly. Just as one sort of hypothesis. But what do you think the movements will be amongst some of the larger players? Because you have Amazon, you have Spotify, you have iHeart and podcasts are an existential imperative perhaps or viewed that way for some and not others. What do you think the landscape of the larger players will look like a few years from now?
Aryeh Bourkoff: Look, I think it took some of the streaming platforms like Netflix and Amazon and Apple a long time to get into sports, for example. And now they’re all bidding for sports rights because they have to have sports as a differentiator. And once one gets in, they’re all in. So Amazon is bidding for sports rights, Apple just did the MLS deal, and they’re all looking at sports. Netflix has Formula 1: Drive to Survive, right?
In some ways, I think podcasting is the same thing. Now that it’s hitting the sweet spot of the curve from a revenue and profitability contribution for iHeart, that was all over Spotify’s investor day of the podcasting growth driver. Then you’re going to see Amazon and all of them jump into it and then you may see competition for talent between platforms and then you may start to see some of the podcasting personalities and brands intersect with other genres.
So imagine you’re with Amazon and Amazon’s doing the NFL and they want your post-game show intersected with your podcast of the NFL. So they’re going to start using you as a key brand for the platform overall beyond just the show. So I think that these becomes assets of the platform that become very interesting and different packaging of the deals I think will be fascinating. It all depends on the loyalty and engagement of your user base and your community and what the community is going to be driving that they want to see and obviously your ability to engage with them.
Tim Ferriss: I hadn’t thought about the cross-asset utilization of podcast personalities, but that makes all the sense in the world and I have to imagine that’s playing into negotiations right now for talent deals because they might say, “Well, what’s the size of your advertising base? Will your sponsors transfer over to us if we acquire exclusive license or if we acquire you outright?” Or whatever it might be, but in fact the value of that property in terms of the personality may be much greater when it’s viewed as being possibly applied to all these various things. This is pure speculation, not investment advice, obviously, but I think Twitch is going to prove to be increasingly valuable to Amazon. And I recall when the pandemic hit, I had an ongoing bet of sorts with a friend of mine that we would see some type of platform utilization for streaming sports if sports could not be attended in person. And I just think these off-label uses of these technology platforms and cross-asset utilization of personalities, I hadn’t thought about that, makes a whole lot of sense.
Aryeh Bourkoff: You and I met at Formula 1, so imagine maybe that’s in your future where you’re taking on a British accent, doing the Formula 1 car, I know you’re friends with Lewis and I think there could be that in your future. But what do you want, if you were going to migrate and take and evolve your audience into a different genre with you, what do you think that they would be into?
Tim Ferriss: That’s a great question. I haven’t really thought of it in this way. I would imagine, and this will seem very simplistic, but whatever I am interested in, I think my audience will trust me to take a very close look at, or a meaningful percentage of my audience will trust me to look at, which is by design largely, that’s why I did a book on physical and sports performance after The 4-Hour Workweek rather than doing The 3-Hour Workweek, is I wanted to see early on, since I had this open option to always extend the business book side of things, if my audience, much like say with a Michael Lewis, even though he’s a far superior writer, or John McPhee, or Malcolm Gladwell, would they follow me because of my approach and thinking, not because of the subject matter? And I think by and large that has held since then. So it would be a matter of me determining what I am legitimately interested in because without that legitimate interest, I won’t have the endurance, I won’t have the necessary emotional investment and endurance to make it count in any meaningful way, if that makes sense.
Aryeh Bourkoff: Well yeah, I think that your whole community is built on trust. You also have a curiosity to you as well, but based on certain foundations that people view you as dependable. They don’t think you’re going to veer them off to an extreme position, but you’re inquisitive about where the world’s going. And my view is that you’re ultimately interested in an impact around that.
Tim Ferriss: Yeah, I am.
Aryeh Bourkoff: But not in an establishment sort of way. There’s this sort of insurgency around it, right?
Tim Ferriss: Yeah.
Aryeh Bourkoff: I think we’re very similar.
Tim Ferriss: Yeah, I do too. I was just thinking about this trust and how its asymmetrical rise, decline, the precipitous drop, how it takes 20 years to build a reputation and 20 minutes to destroy it if you make the wrong choices. So I say no. The vetting process for, say, sponsors and guests and so on is very, very… I don’t want to say strict, it’s not quite the right word, but I always try to ensure that I’m following my own rules and not getting swept away by the winds of trend or more specifically fads. This may seem like a non sequitur, and it will be probably one of the last questions, so hopefully we can do a round two sometimes, because I have a lot of questions that I would still love to explore, but this may seem like an odd segue, but maybe it makes sense in some way.
You were known as a goalkeeper at UBS, protecting the balance sheet. You saved them hundreds of millions of dollars. And I’m reading here just a snippet from the piece in The Hollywood Reporter. Your job was to analyze potential deals and advise the bankers on whether they made sense. “In that role, he rejected 40 out of 45 potential deals.” And this is my words now, didn’t make everybody super thrilled. “However, when all 40 companies later went bankrupt, they realized, the higher ups, that you’d saved hundreds of millions of dollars.” What were you doing there? You seem to have a certain, I don’t want to say prescience, but an ability to see where the puck was going with respect to the 40 that were rejected. How did you do that? Why did you do that?
Aryeh Bourkoff: First of all, I was a goalkeeper in high school. Even as a relatively short person, I was able to play goalie in soccer. I think that it all comes down to understanding there’ll be many more shots on goal than exists today. So don’t be afraid to say no to something today with a fear that nothing’s going to come tomorrow. The sample set that you’re dealing with today is not the whole thing and play the long game. And so I felt that a lot of the companies that we were looking at at that time were coming to us because of negative selection, that we were getting pitched by companies that weren’t necessarily the highest quality. But just because we had capital doesn’t mean that we should do it. I wanted to play quality.
I wanted to only do business with the best companies and if we didn’t have the structure in place to attract those best companies today, that’s our issue to deal with.
But the worst thing you could do to compound that is make bad decisions on top of fixing your own structural issues. And that governs everything even today. When you’re building the company, when you’re working with the outside world, the internal world, you’re making sure that you’re making the right decisions with a quality standard for excellence at all times and that you’re not accepting mediocrity, especially if those things have a lot to do with your own fixes that you have to make. So we spend a lot of time doing infrastructure work internally and then planning for excellence. But if you’re going to do one thing, I prefer inactivity than mediocrity. I want to make sure that we play for excellence and quality all the time, all the way through the company and all the way through the ripple effects we have externally, and do fewer things with quality than scale things, obviously.
Ultimately, prefer to do a lot of quality things, but that takes a lot of structure. That’s what I call scaled intimacy. If you can scale the constant of intimate relationships and intimate deal making, that’s the panacea. But otherwise, I prefer to do just a few high quality things and then take it easy for a while. But I think that’s the standard. Don’t settle that. But I do have to tell you one story, though, because you did give me some really interesting prep work.
Tim Ferriss: Yes, please.
Aryeh Bourkoff: Your prep work had questions on it about certain things, “What’s one of the things that you purchased for less than a $100 that made a big impact?” And I would’ve said a book, so we talked about some of these books. But you also said, “Anything particularly interesting that you’ve ever had to eat or drink in your life?” I thought about it for a few minutes. I travel the world in interesting places and you try to integrate business and life and enjoy what you’re doing and appreciate the finer things where you can. There is a drink that is served at The Hemingway Bar at the Ritz Hotel in Paris that is called the Mach2, M-A-C-H-2. I’ve never had it anywhere else. It’s a whiskey-based drink with chartreuse and the essence of ginger and some ice. It’s really, really good. But the funny thing about it is, as I was thinking about it yesterday and thinking I was going to be talking to you on the podcast, I last night went to an event in New York for the Ritz in Paris and Frame was part of the fashion week. I was invited to because some friends were putting it on.
Unexpectedly, that bartender from the Hemingway Bar in Paris at the Ritz was at the event. And I said, “It’s unbelievable. I’m going on the Tim Ferriss podcast and he’s going to ask me about a drink and only you serve this drink in the whole world. And here you are in New York leaving your perch at Hemingway Bar. Could you indulge me with this Mach2 drink?” He did yesterday.
Tim Ferriss: That’s wild.
Aryeh Bourkoff: It all came together. This is how there’s certain karma to my calendar and this podcast and everything else and your questions, so I wanted to make sure that we talked about it.
Tim Ferriss: Wow, that is incredible. That’s synchronicity. Now I have to try the Mach2. I look forward to that. I’ve needed a reason to… I’ve only been to Paris once really in any meaningful way, so I need to get back. Side note, because this took place in Paris for me, I did a lot of writing. I’ve done almost all of my writing for my first three books during those witching hours. Before the morning and after the usual night, almost all my writing was done in that I would say 10:00 p.m. to 3:00 a.m. period. Almost all of my writing in those witching hours.
Aryeh Bourkoff: Is that when there are fewer distractions or you’re clear-headed?
Tim Ferriss: Yeah. No distractions. No distractions, more energy. I tend to be like a hamster. I just have a second wind that for whatever reason for my entire life has started very, very late. Freedom from distractions, silence, less compulsivity to interact or text or check anything because I know the rest of the world is asleep. I shouldn’t say the rest of the world, but the rest of my network is largely asleep and it’s just always been that twilight, that creative twilight through which you can perhaps pull on threads that are normally harder to access. I think for me that’s been my experience.
Well, Aryeh, I could keep going for hours. I’ve got plenty. So maybe another time, but is there anything you would like to add, any recommendations or requests of the audience, things you’d like to point their attention to? Of course people can find LionTree at liontree.com. We’ll link to all of the Instagram handles and social handles in the show notes so people will be able to access those. But are there any closing comments or requests you would like to make before we wind to a close?
Aryeh Bourkoff: It’s been a great pleasure, Tim. I could also talk to you for hours. I was looking forward to this for a long time. As we go through different periods of time in our lives and the world at large, and we’ve all been through different unexpected movements and motions and things. And that’s one concept, there’s going to be more unexpected things to come. It’s all about these trusted friends and communities that we can build, which is the distinguishing feature of humans, that we can bond together for good things and tackle the world. I think if we eliminate all the extremism, then everyone can redefine their view of what their centers look like and then that’s where the richness lies. And whether you find it in the magic hours in the wee hours of the night or the middle of the day, I think we can form these circles and then really bond together, and I think the best is yet to come.
I really appreciate this relationship and what we can do together. And I really appreciate the attention of all of your audience. And the one thing about media that is defined is it’s the distribution of content over a technology. And when you think of it that way, the technology used to be books, newspapers, now it’s podcasting. It could be different things in the future, but the best content distributed is something that applies to everything in life that people consume and digest, whether it’s music or words of wisdom or politics, and the responsibility is on all of us to make the best impact out of it all and I really appreciate what this media can do for our lives. So best is yet to come.
Tim Ferriss: Perfect place to close. So Aryeh, thank you so much for all your time and for your wisdom and for your stories. I have copious notes of my own, so I’ll be following up on a lot after this conversation personally and really love what you’re doing. And the more I read and learn of you directly or indirectly, the more questions I have. So I look forward to future conversations and for everybody listening, we’ll have links to all resources, names, books, everything related to Aryeh and LionTree in the show notes as per usual at tim.blog/podcast. And until next time, please be safe, be just a little bit kinder than necessary and find your center.
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