Mar 11, 2024 · 1h 30m · founders
What I learned from having lunch with Sam Zell
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In this episode of Founders, David Senra shares key insights from an intimate lunch with billionaire investor Sam Zell before conducting an in-depth review of William Zeckendorf's autobiography, examining both Zeckendorf's revolutionary real estate engineering and the catastrophic dangers of excessive debt.
Statements from this episode (20)
Sam Zell sold his company for almost $40 billion
“Sam sold his company, you know, for almost forty billion dollars.”
Elite builders study history while building, not just after becoming wealthy
“You don't build a company and sell it for forty billion dollars and then learn all this stuff. Like he was, had an insatiable thirst for knowledge and information that could be useful to his life and his career, his entire life. He knew this stuff as he was bu…”
Zell and Charlie Munger matched their public personas in private
“I found the same thing when I was meeting with Charlie Munger, is like, they are authentic to themselves, and I, that's something I'm obviously trying to strive to be, but like, I just love seeing that, because sometimes you see, like, the public persona is fa…”
Sam Zell's parents escaped Poland on the final train before bombings
“They leave on the last train of Poland, and then the Nazis wind up bombing that train.”
Sam Zell: Optimize for freedom rather than chasing money
“He's like, if you get the freedom, you can control what you do every day and you'll love it. And if you love it, you'll be very good at it. And then the money will come with it. You have to love the day to day. It does not mean it will be easy. That does not m…”
Sam Zell: A private jet is the only luxury worth buying
“He did say one thing. He's like, listen, don't get caught up in owning a bunch of shit. It's just like, you're just going to keep buying nicer versions of the same stuff. Like, it's just not worth it. That's not what life is about. And he goes, there's a true …”
Experienced founders have an obligation to teach younger entrepreneurs
“He says, it's an obligation. I'm getting goosebumps. It's an obligation for me to share with other entrepreneurs what I learned.”
Zeckendorf: The secret to any great project is maintaining momentum
“The secret of any great project is to keep it moving. Keep it from losing momentum.”
Sam Zell recommended reading William Zeckendorf's autobiography
“And the one Sam Zell told me that I had to read one that Sam Zell talks about in his autobiography that he read when he was a young man. He's actually around 30 years old when he read this book. And that book is Zeckendorf, the autobiography of the man who pla…”
Understanding entrepreneurs requires studying juvenile delinquency
“If you want to understand the entrepreneur, study the juvenile delinquent.”
Human nature causes founders to ruin their own successful businesses
“Your job in life is to get in a great business and then stay there. And Charlie's point here is like, I could tell you that advice. You're just not going to do it. It's so hard to build a wonderful business. You're not going to be assaulted from the outside. M…”
The $25 million Ritz Hotel sold for $725,000 during the Depression
“The Ritz Hotel,
Which cost twenty-five million dollars to build, sold for 725,000 dollars, and it had a 100,000 dollars worth of liquor in it at the time.”
James J. Hill built a profitable transcontinental railroad without bankruptcy
“He's the only entrepreneur in history to ever successfully build a profitable railroad without going into bankruptcy first.”
Great family names carry the same commercial power as corporate brands
“A great brand is like Magic. That applies to a family name just as it does to a company name.”
Zeckendorf: Over-negotiating fair deals poisons relationships and loses business
“In my judgment, a property is, if in my judgment, a property is worth the asking price, I see no reason to try for less. A lot of shrewd dealers think this is foolish, but I notice that others tend to lose more business and to poison relationships by trying to…”
Zeckendorf turned a $10M property into $15M by valuing components separately
“For example, one Park Avenue in Manhattan, which the marketplace had valued at ten million dollars, was ultimately worth fifteen million in Zeckendorf's hands. He calculated everything separately. The building's title, the land, the leases, the individual mort…”
Maximize real estate value by legally segmenting property components
“The theory had to do with breaking up a property into various components, which is what Sam Dell just told us, right? Its ground leasehold, its fee position, its operating leasehold, and a residual position, and seeking out various investors for each.”
Howard Hughes managed his businesses exclusively via intermediaries and secret summons
“He deals with his various company managers only intermittently, do obscure intermediaries, midnight phone calls, or summonsons to secret out of the way meeting places.”
Howard Hughes rejected William Zeckendorf's $500 million acquisition offer
“I'm offering you four hundred and fifty million. Will you take it? No. Howard, what do you want? I won't tell you. Howard, take it or leave it, five hundred million. He said, I'll leave it.”
Great family dynasties are founded by ruthless cutthroats, not aristocrats
“And so that insight by this fictional character Braun in Game of Thrones is something I see over and over again. Who were your ancestors, the one that made your family rich? Fancy lads in silk? No, they were cutthroats. That's how all the great houses started.”