My #TEDxMileHigh talk, “Colorado Mavericks,” is up on YouTube at http://bit.ly/SvJvqT; a bit of background here: http://bit.ly/JM8xly.
Final draft of the talk:
Making the leap
I’m Todd Neff. So many stories of epic success (personal and professional, in business, politics, sports, sciences, the arts) involve some huge risk – some leap into the void – that paid off and led to fortune. Some people find this inspirational. I find it daunting, unsettling. Because I look at my own life and wonder when these kinds of pivotal moments might happen, if I’d recognize them, and whether I’d have the guts to make the leap.
I got to thinking about these leaps into the void. Because if super-successful people’s success was in fact not really a function of living on the edge, then there may just be hope for me. In particular, I took a look at the stories of three of the world’s most successful businessmen:
Charlie Ergen, chairman of DISH Network;
John Malone, former CEO of cable company TCI and Liberty Networks founder;
and the investor Philip Anschutz.
These are the three richest people in Colorado, according to Forbes magazine, worth more than $20 billion combined. Each is self-made. Each a brilliant businessman, strategist and tactician. And each with his own story of having taken a pivotal risk early in a career that led to the business pantheon. Let’s take a look at their legends.
It’s 1980, and 27-year-old Charlie Ergen is bouncing around the West. He happens into the satellite-dish salesman – remember those 10-foot monsters? He, future wife Cantey and a friend cobble together $60,000 in savings – including pretty everything Ergen has – to buy franchise rights to sell them in Colorado, Utah and Wyoming. The company grows to the point they change its name from “Echosphere” to “Echostar” because it’s easier for overseas partners to pronounce. But Ergen’s thinking bigger: he wants to broadcast from his own satellites. In 1992, Ergen wins the license to do that.
He doesn’t actually have satellites, so he loads up on $335 million in junk bonds. He brings in Lockheed Martin to build him two satellites. To save money, he decides to launch them on Long March rockets by China Great Wall Industry Corp. As of late 1992, two of the last five Long March launches have failed. For comparison, one of the past 90 Boeing Delta rockets have failed. On December 28, 1995, a Long March 2E carries Ergen’s satellite to orbit. The very next Long March rocket takes out a Chinese village. With his new bird parked high above the Pacific Ocean, Ergen launches DISH network in March of 1996. “I bet this company on the nose of a Chinese rocket,” Ergen would say more than once. “A Chinese rocket!”
Then there’s John Malone. Malone graduates Phi Beta Kappa from Yale in 1963, hires into the famed Bell Labs and earns two technical masters degrees and a PhD on their dime. He was in such physical shape as a young man that he could do a one-armed chin-up, so in the unlikely event he didn’t outwit you, he could always just go ahead and kick your ass.
Malone leaves Bell Labs and spends two years at McKinsey & Company, then hires into a client that makes equipment for and loans money to growing but cash-strapped cable companies. By age 29, he’s leading the 3,000-person division. A couple years later, in 1972, Steve Ross, the Warner Communications chairman, offers Malone a salary of $150,000 ($775,000 in today’s dollars), a limo and driver, and to relocate Warner’s new cable headquarters to Connecticut, where Malone lives. Instead, for less than half the money, Malone chooses to come out to Denver’s TeleCommunications, Inc., or TCI, “an obscure cable company that had lurched from crisis to crisis for the preceding 20 years. In a western cow town,” as one writer put it. It’s run by Bob Magness, a hard-drinking former rancher cottonseed buyer. “I can’t pay you very much,” Magness tells Malone, “but you’ve got a great future here if you can create it.”
Malone grew TCI into the world’s largest cable company and sold it to AT&T for $44 billion in 1999.[1]
Finally, Philip Anschutz. In 1967, Philip Anschutz is a 27-year-old Denver oilman with not much in the bank. The phone rings at 2 a.m. It’s a rig supervisor. There’s been a blowout at an exploratory well he was drilling near Gillette, Wyoming. When Anschutz gets there, he finds the site ankle-deep in crude oil. He gets the well capped. Then he buys up as many oil leases as he can before the word gets out – on 30 days’ credit.
Back in Denver that night, he flips on the TV. There’s been a colossal oil field fire. In Gillette, Wyoming. When Anschutz gets back to the site, it’s flames everywhere. He calls famed oil-field fighter Red Adair, who tells him, “”Kid, I checked you out, and you don’t check out.” Anschutz begs; Adair relents, but with the warning: “If you don’t pay me, don’t ever have another oil field fire.”
Anschutz learns that Universal Studios is making a movie based on Adair’s exploits. He make a deal with Universal to film Adair’s crews fighting the fire – for a fee of $100,000 — enough to keep him afloat until the banks lend him money to pay for the leases he’s bought on credit. The rest is history.
So these are the legends. Now for the backstory.
Charlie Ergen had a Wake Forest MBA and a CPA, most recently having worked as a financial controller for Frito Lay (so he had skills to fall back on). Before his bet on the satellite, Ergen had paid himself $15 million from the sizable satellite-dish company he, his wife and friend had grown from scratch. And that satellite on the Chinese rocket? It was insured, and he launched that second satellite on a French rocket. (Ariane-42P H10-3)
John Malone had recognized during his time with Bell Labs that he wasn’t meant to work his way up an organizational ladder. At Bell Labs, “He knew exactly what he was going to make the next year, and the year after that, and the year after that. It wasn’t the fortune that Malone had begun to envision – not just the financial fortune, but his personal fortune.”[2] He understood the cable business intimately before joining TCI and recognized its potential for growth. And Malone was also an exceptionally talented executive and dealmaker who would not, should TCI fail, fall very far.
Philip Anschutz’s father was a wildcatter, and Anschutz had learned the ropes of an inherently risky business from him. The biggest risk Anschutz took in Gillette was doing exploratory drilling in the first place. Anschutz understood the game and how crucial it was to act fast in the face of good fortune – or bad. With the Universal Studios story, well, some legends are myth. I watched “Hellfighters” – The Duke, the lovely Katharine Ross, drinking, smoking, cavorting, a Malayan bar fight, walls of flame – what else could you ask from a movie? – and called the director, Andrew McClaglen. He’s 91 now, still directing plays up in Friday Harbor, Washington. Turns out they’d sent the special effects coordinator (Fred Knoth, who had a University of Colorado engineering degree/Loveland) out with Adair to watch an oil field fire in Gillette, Wyoming, presumably Anschutz’s. Then Knoth recreated what he’d seen using copious amounts of diesel and propane in Casper and Houston, where they actually filmed. McLaglen said all the oil-field fires in the film were simulated, including this one.
As long as we’re shattering myths, Charlie Ergen was never much of a professional gambler,and John Malone… well, he could probably still kick your ass, actually. I mean, look at the guy. He could definitely kick my ass. Maybe Ergen and Anschutz could join him for a sort of bad-boy billionaire smackdown broadcast LIVE from the Staples Center via Chinese satellite.
So what can we take away from all this?
Looking at these 3 legends, at least,
- What look like awesome stories of terrific risk-taking are often much less dramatic when considered in context.
- You don’t need to take radical risks to meet with enormous success.
- These guys all took risks. But they didn’t take crazy risks. They took calculated risks. Their stories teach us that we should leap – and by the way, it doesn’t mean that we’re necessarily leaping towards financial riches – you may want to leap into teaching, or leap into downshifting to spend more time with your kids.
- Yes, we should leap. But not into the void. We should leap onto what we, after careful consideration, see as an escalator – or better yet, an elevator toward our goals and dreams.
