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Albert D. Lasker

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2021-09-23

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2021-09-23

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1. “cost one point two million dollars. Lasker's legal and financial advisors warned him that the rate was likely to be raised again perhaps to a level that would make liquidation unfeasible. Lasker returned from lunch one day and told his wife that he decided to give up the company. Laskar had made his decision and now he would look he would not look back. He had turned full circle from hectic business to a calm and consoling life filled with unendless unexpected wonders, and he was using his large fortune to cede a growing list of projects in the public interest. He had traded what he saw as a life of repetition for one of new exploration and discovery, and he wanted to make the closing of the first so complete and so unequivocal that it could never impinge upon the second.”

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2. “For much of the previous year Mary and then his son Edward had been encouraging Laskar to begin taking capital out of Lord and Thomas, but Lasker couldn't bring himself to cut the cord. If the payout came in the form of dividends, it would be subject to a tax rate of close to eighty percent. So he's got millions of dollars stuck in the company, and if he takes it out, he's going to give up. He's only going to get 20% of it. And so this is where there's a loophole and it kind of expedites him. He's already feeling, hey, I'm not into this anymore. He's going to live for about another 10 years after this, but he's got to act now. And this is why there was a loophole, however. The federal tax code specified a flat tax rate for businesses in liquidation. That rate had been twelve point five percent until 1941, when it was raised to fifteen percent. But in 1942, the tax rate went up again to twenty five percent, and the liquidation that would have cost Lasker something like eight hundred thousand dollars in taxes in nineteen forty one would now”

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3. “And to Mary, that's his third wife, he gave all of his children $5 million of millions, maybe $20, $30 million today, maybe more. And he gave his wife a third wife a million dollars. He was extremely, he made a lot of money, but he would give it away to people. Even his settlement with his second wife, he didn't have to give her. They had a prenup and everything, and he just wound up giving her half a million dollars or something like that. But the point the author's making here is that he's running low on cash. He spent tens of millions of dollars in 1930, 1940 dollars, which is just amazing. So it says his gender skifts to his children marry, Lasko was running low on cash. His taxable income, which mainly consisted of Lord and Thomas' salary, was just under $200,000 a year, which was down from nearly $900,000 six years previously. He still owned about $1.5 million in marketable equities, but most of his wealth was tied up in Lord and Thomas's cash reserves.”

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4. “If Lord and Thomas were to go forward, it would require a substantial rebuilding on Laskar's part. And now at 62, Lasker was feeling his age. I'm tired. I go to bed tired. And when I wake up, I wake up more tired than when I went to sleep. One reason, he said, was that he was bored. For many years changes in the industry had been making the job less fun for him, and the strange new world of advertising now dominated by marketing vice presidents and account reps no longer played to his strengths. The pioneering days of advertising, he believed, were over. There is nothing left in advertising which is inspiring to me, he said. The final compelling reason to shut down Lord and Thomas was financial. By nineteen forty two as a result of his opulent lifestyle, his real estate purchases, his philanthropic efforts, his settlements with Doris Kenyon, that's his second wife that he divorced after the honeymoon, and his generous gifts to his children.”

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5. “first name basis with the presidents, he's invited to the White House all the time. He's got deep personal friendships with captains of industry. Not enough. Those are external things. It's the internal struggle, these monologues that we have to struggle through. He was fragile and rudderless and he had a perception that he wasn't a big man. He saw himself as weak and small, unable to justify his existence. And so eventually, this is where he gets out of the, this is the end, really, to think about this. This is the end of his career, 40, what do we say, 44 years in the same job.”

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6. “Diversification, you know, diversified diversify, diversify. Diversification only makes sense if you don't know what you're doing. But if you have a winner, you need to bet heavy. Do not diversify. And so Lasker's saying the same thing. Like they're making, I don't know, like 50 different products. He's like, what are you doing? Put all your ammunition. You have one great product here. Their first piece of advice to American tobacco must have been coming surprise. Stop advertising most of your brands. Lasker argued that rather than maintaining many modestly successful small brands, the company needed to create one overwhelmingly powerful product. Instead of spending a little more and a moderate amount on money on each of these 50 products, take what you spend on them and put it behind lucky, this is lucky strike, one of the most famous cigarette brands ever made, right?”

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7. “So he tells Albert no. And Albert's like, okay, I didn't take no for an answer. He hops on a train and goes to his office to box office. And this is the argument that he made to overcome the objection, which was really smart. He says, listen, I don't agree with your reservations about Cotex advertising, but I respect them. I know they're based on your vast knowledge of what American women are thinking and what appeals to them. He's buttering up first, right? Because of that, I'd like to ask you if you'd let me put that knowledge to the test right here in your office. Would you be willing to call in your secretary and have her read the first Cotex advertisement that we'd like to place in the journal? If she's embarrassed or repelled by it, I'll accept your judgment. There'll be no further arguments. Box like, all right, that seems fair. Bach brings in the Secretary. So says the door open to admit a dignified white-haired lady seemingly around 60. So it says Bach explained the situation and handed her the copy, which she began to...”

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8. “So, I guess just to sum up, invest in technology, the savings compound, and sometimes it's the difference between profit and loss. This is the takeaway that Lasker is realizing. He's like, man, I'm really good at advertising, but I'm really bad at managing these other businesses. And so really just stay within your circle of competence. I learned a great lesson there. I could be poisoned to any manufacturing business where I had any say in the manufacturing end, that my specialty was publicity and distribution.”

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9. “I wouldn't advise my son to do what I did. And so this is how Laskar recruits and convinces Hopkins to come work for him. He found Hopkins because he's like, who's writing these ads? These ads are fantastic. And so this is Hopkins talking about being recruited by Laskar. Mr. Laskar said, I have searched the country for copy. This is the copy I got in New York. This is Philadelphia. I have spent thousands of dollars to get the best copy obtainable. You see the results. Neither you nor I would submit it. Now I ask you to help me. Give me three ads which will start this campaign. And your wife may go down to Michigan Avenue to select any car on the street and have it charged to me. As far as I know, no ordinary human being has ever resisted Albert Lasker. He has commanded what he would in this world. Presidents have made him their pal, nothing he desired has ever been forbidden him. So I yielded, as all do, to his persuasiveness. And then this is just Hopkins talking.”

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10. “He experienced a total collapse. He looked at the world and couldn't stop crying. I had a terrible breakdown. I couldn't work. I couldn't keep going anymore. My wife, of course, was never well. She was an invalid all through our 35 years of married life. And there was a tremendous burden on her in her condition because I couldn't do anything but cry. Literally, I lost control to do anything but cry. I had done nothing but work from the time I was 12. I just had a good old fashioned breakdown, and in fact, my life ever since has been a struggle from breakdowns. I always say I got over all my breakdowns except the first one, and so now they're talking about what would it be considered today? Most likely he was affected by bipolar two disorder in 1907, though, the only option for an individual who couldn't stop crying was to retreat from the world. So that's what Lasker did.”

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11. “He was, he drank a lot. He was an alcoholic. He was suspicious and paranoid. He was a man who was impossible to get along with, as Lasker said. Laskar believed that he was the only person who ever got along with Kennedy. But that was my business to get along with him out of Laskar, and it was worth the price. Kennedy proved to be fundamentally unreliable, and he couldn't be managed. So he wound up leaving in 1906. He had one big message to give, and from the day he left, he regrogressed steadily. It fell to others to extend Kennedy's powerful concepts and put them to their fullest use. Okay, so I'm fast forwarding and Lazarus' life. This is how it becomes a partner. And really the lesson here is you just can't be afraid to ask. He was convinced, like, he's making so much money. He's like, I can go out. I got to run my own show. He does not like having partners. He does not like having bosses. And so he tells Thomas he's going to quit. And Thomas, actually Thomas finds out he's going to quit through.”

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12. “Manageable, but it's worth it. He's under a lot of stress because Kennedy is really hard to do with this. He says, if I had nothing else just managing him was a man-breaking job because you had to sit on top of him to get the workout. He had very long lapses where he couldn't work at all. Kennedy turned out to be a basket full of contradictions. He was hard to know and hard to talk to. Lord Alaska's genius lived a life of extremely productive highs and miserable lows. He lost interest in accounts almost as soon as he solved their initial challenge, leaving Lasker to struggle with the client whose expectations had now been elevated by Kennedy's talents. He was like a bee. He went and sipped up a flower, and if he got it, his interest was gone. He wanted to try another flower. He would work almost nonstop several days running and then disappear on a binge for weeks on end.”

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13. “So this association with Laskar, with Kennedy, only lasts like a year and a half, two years, but it plays an important role for the rest of his career. And something Laskar is doing here, he's realizing also, it's like, okay, I know my strengths and weaknesses, right? I also know Kennedy. So he can teach one-on-one. Laskar tried to have Kennedy teach like every other copywriter in groups, and he's like, he's just not good at that. So Lasker winds up taking the job as teacher. He learns the insights from Kennedy, okay? Then he's the one teaching the classes at night for his copywriters and his creative people working in the industry. This is something that I've noticed that the best leaders in history, they all consider themselves teachers. Think about what Jim Senegal, founder of Costco, told us, right? If you're in the leadership role, right, your management, leadership, whatever it is, if you're not spending 90% of your job teaching, you're not doing your job. And he's used this quote multiple times. Another way he said it is teaching is 90%.”

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14. “Alcohol company. And so Olga gets a call one day and Sam is on the line quoting passages from this 16-page report that Olga V had sent him and then what happened at the end of the call? He hires Olgar. That's exactly what Laser's doing here. And then let's get to another thing, another smart thing that Lasker realized. He's like, yeah, I'm okay at writing copy. I'm okay. But Kennedy is way better. So he's smart enough to know what he should keep doing and what he needs to hire for. And again, this is important because what C. Job said, people make all the difference. Lasker's awareness that he should get out of the writing end. Lasker had the awareness that he should get out of the writing end of the business. He knew that his strengths lay in editing rather than writing. He had assessed his copywriting skills. and decided he wasn't good enough”

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15. “So, why doesn't somebody go out, read all these books, find out what they come back and tell everybody else what they learned so then we can then keep these ideas going and push them for future generations of entrepreneurs? It's the exact same thing with Laskar's doing. He's like, dude, I have this gigantic laboratory. I'm coming up with all these insights that other people aren't. And then I can use that to build it. He's using that to build his own business. Because then I can go and talk when I go and sell somebody. I was like, hey, you know, I have a lot more knowledge than the person that's just throwing an ad in a newspaper. And I've demonstrated that knowledge because not only can you see my ads, but then I have this body of work that I can point to where it's like, hey, look, there's an entire book of everything we learned. That person is more likely to hire them. Ogavi used something similar. He did this huge direct mail campaign. And he sent a 16-page report to the head of Sam Bronsman, who I also read his biography. He's the head of Seagram's, this gigantic...”

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16. “And so it says the response was overwhelming in response to these advertisements. It was nothing for us to receive hundreds of letters a week from leading manufacturers all over the United States. In other words, Lasker and Kennedy refined their craft on the client's nickel and delivered increasingly effective advertising to those clients. Lasker later referred to this early work, which tracked the agency's work for some three hundred accounts as a great laboratory, and it was one of the foundations upon which Lasker's genius as a business consultant was based, and so that's why they go back to Damon Sarnoff. Listen, if you give, like, there's nobody, like, if all facts can be known, I want Lasker's judgment. And so he would go around not only are you going to hire him to do advertising, but he's like, listen, I'm working with 15, 20,”

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17. “For something and happy to pay $20 for something that Kennedy can deliver for 40 times cheaper. And if you take an already profitable company and you reduce their customer acquisition costs by 40 times, you're going to get wealthy. So this is wild. So they're learning all these insights. They use this great laboratory for their customers, right? And then they derive their insights and then they use it to get more customers themselves. So this is really on out teaching the competition. And this will change their entire business. So Lasker and Kennedy get together. They do, they release the series of essays, right? So think about this. Like everybody says in advertising, you've got to start with service, right? Don't say, hey, just buy my tires, buy my thing. Hey, this is the thing I have. Why don't you buy it? That doesn't work. But if you give them something, so they're going to give them a bunch of, I guess we'd call this content marketing today. We're just like, okay, I'm going to write, I think it's like a dozen essays. These are all the principles.”

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18. “And so let's get into the result. And what is he using? He's talking about the ad that he was just watching him write. Reasons why abounded. Do twice the wash in half the time. Let our machine pay for itself. Use the washer four weeks at our expense. And then conclude it with a note of urgency. This offer may be withdrawn at any time it overcrowds our factory. And this is why I say that the reason I'm so interested in this is because to me, this is indistinguishable from magic. And why do I say that? Because the company that they're doing this ad for that hired them. This is the results. In the first seven days, it generated 1,400 inquiries for a per inquiry cost of 47 cents. per inquiry. That is why Jobs is telling you in everything I've ever done it paid to go after the best people in the world. They were paying.”

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19. “We only see the end result. We don't see the process that went into that. Lasker is now seeing the process. He saw the end result. He had been reading. He didn't know he was reading Kennedy's ads, but he had been reading Kennedy's ads. Like, why am I drawn to this? I'm not even interested in this product. Why the hell am I reading this ad? And yet he's realizing, okay, that ad that I read might have taken this guy weeks to do. And it's an agonizing, hard process for him. So the public praises people for what they practice in private.”

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20. “Of 50 words. Then laboriously he would underline and scratch out until maybe half or three quarters of the words were taken out. He would hunt for a word and then seek to polish the sentence so that its impact was not to be resisted. And so when I get to this section, the note I jot it down on this page is something I learned. I've mentioned this guy a couple times that I think there's a lot of lessons that entrepreneurs can get if you focus on these young independent musicians because they've analyzed the music industry, which is notorious for just abusing the talent, right? I think something like seven cents on the dollar, 10, 15 cents on the dollar, something like that go to the actual person making the music. And so there's this young independent musician who's been at it for a long time. His name is Russ. In fact, I was just watching yesterday. I was just watching an interview he did with this guy named Steve Stout. Steve Stout”

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21. “He says he held the key for which Lasker had been searching, and history ultimately proved that Laskar's faith in the power of copy was well placed. Now this is very fascinating. It's not like he was just gifted. And we saw this with Hopkins and Founders No. 170. Hopkins is like, listen, the only reason I can write a book, an authoritative book on advertising is because I just spent more time doing it than everybody else. I work 12 hours a day, seven days a week. I've done this for years, and that's the only reason. This stuff is hard. Laskar, when he was watching the massacre at work, discovered that writing did not come easily to Kennedy. And so this is a description of that. He had to think everything out laboriously with labored pains. I imagine he corrected an advertisement 25 to 50 times before he would release it, and to write his key ad which is the first ad of the campaign might take him a month or six weeks for one ad, okay? He would be lost to the world for two hours thinking out a paragraph.”

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22. “Reasons why created demand, which essentially is reasons why create customers, right? Now we get into dealing with the genius or crazy? No, probably both. When he was with Kennedy, he felt he was in the presence of a great man. Yet Kennedy was eccentric, eccentric, egocentric, utterly inconsiderate of everyone else and expensive. This is what Olgarby told us. It's like, you gotta learn to manage the geese that lay the golden age. A lot of the talent is going to come from nonconformists misfits and dissenters. They're hard to deal with, but they're worth it. He probably learned that from Lasker because Laskar's realizing this guy's crazy, but he's really good at what he does.”

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23. “So he says advertisers Kennedy said disprovingly seem to believe that consumers should buy their goods because it was good for the advertisers and this arrogant attitude came through loud and clear in their copy. Nonsense, said Kennedy. Advertisers had to give consumers a reason why they should buy the advertised goods”

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24. “Who will turn into Alexander the Great? He's like, he's not going to go to school, he's going to have his private tutor. You know who he hired? Aristotle. What the hell? Imagine Aristotle was teaching you one-on-one. So this is not very different from what this is like Kennedy's like the Aristotle of the copywriting industry. So he's like, hey, you've got to tutor me, dude. Laskar asked him for a tutorial, in his theory of advertising. Kennedy agreed. And so for the next year, they did their respective jobs during the day and then met for classes after hours. Kennedy was a superb teacher one-on-one. And so what Kennedy is teaching Lasker here right now when Lasker still in his early 20s are principles that Laskar will use until he leaves, until he retires in his 60s. So it says they focus on the application of this principle, a lesson that Kennedy called reason why.”

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25. “The patent medicine firm values that this Kennedy's talent so much that they're paying him $16,000. So Lasker takes over this contract. He's like, we have to pay this guy. And luckily, Thomas goes along with it, which is remarkable. Tells him how much he valued a young Lasker's opinion. So this is where he's just like, hey, Kennedy, I'm paying you. Teach me everything you know. So you also see humbleness on his part, right? He's technically Kennedy's boss. But they start doing, they build it essentially like a tutor, like being tutored. I just listened to another, I think I told you this before, just listened to another of Dan Carlin's addendum series. He's doing the series on Alexander the Great's mom. And in that, just this random side note, he talks about that Alexander's father had hired a private tutor for his son. So King Philip is having Alexander the Great.”

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26. “They should be focused on the interest of the customer. So let's get into this. It says Kennedy was under contract. Oh, so this is what I meant about you got to pay your people. Like, it doesn't matter what this guy's going to cost you. You have to get him. Kennedy was under contract to his patent medicine firm for an annual salary of $16,000. That is insane in 1904. To give you a difference, a copywriter working for Laskar at the time would make $1,400 a year.”

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27. “And the note I left myself, this is also another fundamental principle that Lasker, Hopkins, and Kennedy have influenced the entire advertising industry with. But what's interesting is people are extremely self-interested. You have to tell them what is the benefit, Ogreby says, the most important, your most important job when you're doing an ad is what is the benefit you're going to promise. Do not just say, hey, I make tires, buy them. Everybody acts out of self-interest so they use this idea that you have to say the reason why. Once you learn this, you will see what's interesting to, because I didn't, I don't think I definitely didn't know this before I started reading about it. But what's interesting is once you learn it, you see the absence of this everywhere. Because just like the consumer acts in the self-interest, the advertiser acts in their self-interest.”

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28. “Advertising did the same work as great salesmen. Advertising multiplied the work of a salesman who wrote it thousandfold. Remember, you and I have been talking about the fact that Lasker found points of leverage and exploited them. You have leverage in the sense of gigantic advertising budgets, right? These big companies that he has personal relationships with. And the leverage, then he combines that leverage with the leverage that advertising gives you, right? I don't need to send out, and a lot of people, you know, sales at this time and a lot of the insights that they applied to copyrighting came from door-to-door salesmen. Well, think about how expensive it is to employ 1,000, 2,000, 5,000 salespeople, and how time intensive it was, which you can do that same thing with the millions of people that are reading newspapers every day. Just put an ad in front of them. So it says advertising multiplied the work of a salesman who wrote a thousandfold. The minute he told me that last year said, the very second he told me, I understand.”

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29. “Let's go to this. Laskar was intrigued in part because he had written, Kennedy had written the ads for Dr. Schupes. When he pressed him, Kenny countered by asking Lasker what his conception of advertising was. It's news. Lasker replied. No, Kennedy said. News is a technique of presentation, but advertising is a very simple thing, and I can give it to you in three words. Salesmanship in print, Kennedy said. Remember when I started, when I read you that extract from the beginning from Olgarv in advertising, this conversation's happening in 1904. Olga is writing that book, I think, in 1964. 60 years later, he's saying that that definition of what advertising is has never been improved. And so Kennedy's getting to his point. And as soon as this is why, there's a, you know, I'll read my notes to you after this. It'll make more sense. But this Lasker immediately gets this. He's like, oh, because he's obsessed with big ideas. Great.”

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30. “If you wish to know advertising, So of course, last year's like, yes, I've been looking for somebody answer this question. Come on up. They have this meeting. It says, Laskar was intrigued in part because Kennedy had written the ads for Dr. Schuop. So remember that ad where he's like, why am I reading an ad? I don't drink tea. I don't buy medicine. Why is this ad? And I guess this is why I need to back up and tell you why I'm so fascinated by this. And I'm going to keep running down all the biographies I can about advertising people. Because not only, like, I think a whole movie I told you before, like I discovered OgleVee through this podcast.”

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31. “Advertising also intrigued Laskar. This goes back to the patent medicine industry that's extremely successful at the time. So there's this guy named Dr. Schoop, who is most likely not a doctor. But he's running ads. He says he was running ads with a provocative headline. What tea drinking does for rheumatics every time he saw this ad, Lasker stopped and read it even though he didn't use patent medicines, didn't have rheumatism, and didn't drink tea. Why was the concept so striking? And this is where you have this twist of fate that's going to change Laskar's life. He's doing this inventory. He's trying to figure out what's going on. He's at the office at 6 p.m. A messenger boy comes in with this memo. And it's a simple note. And it says, I am in the bar downstairs. I can tell you what advertising is. I know you don't know. It will mean much to me to have you know what it is, and it will mean much to you.”

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32. “Kind of accept things. I mean, we're limited mental bandwidth. We can't question everything. You know, I come to work for Lord and Thomas. There's a bunch of people in the office. They got customers. Apparently somebody's going to know what advertise judiciously means. So this is what Lasker's like, okay, I'm asking these questions. I'm getting, I don't know. And so he's like, oh, okay, here's my opportunity. Laskar started scrutinizing all the ads in newspapers and magazines. And then he just applies like which ones stick out to me? He finds this one guy that's in Chicago, this guy named Fuller. And he's like, oh, this is interesting. Fuller is writing his ads because everybody's reading newspapers at the time. You know, there's 2 million people in America that read newspapers every day. So Fuller just made his ads look like newspapers. He's like, this is people already reading this. So this is where Lasker's like, oh, maybe advertising is news. Fuller wrote and ran ads that looked exactly like newspaper copy in the same typeface as a newspaper and told stories about happy users of the product. That's an idea he's going to steal later on. Other departures in Addis Ababa.”

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33. “Why was I the first person to see this? And so he starts asking. He's like, Well, what is advertising really? And he didn't understand advertising. It takes him meeting this guy named Johnny Kennedy, which I'll get to a minute because he's like, oh, maybe it's news. And so this is where Lasker does, another sort of thing. He does a fundamental analysis of the industries and he's studying, he wants to know all the players. He wants to know the history. He wants to understand what is happening here. How is it possible for this young kid, things like 22 at the time, 21 years old when he does this test, to just come to a realization that everybody else is missing? So says this put more pressure on him to resolve his uncertainty about the substance of advertising. What exactly was good advertising? Remember these questions are unknown. Laskar felt compelled to discover the essence of advertising. I had to find out what advertising was about. And so he's talking about this point. I haven't been able to find the man who could tell me what advertising is.”

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34. “So he goes to, and he does a test. This is a big, something that's a big principle of Lasker, and then Hopkins as well, is you got to test the world is too complex to think that you know what's going to happen. So just do a test first, and you'll discover, there'll be insights through this process of trial and error that are previously undiscoverable to you. And so he goes to this guy, what are they selling? Hearing aids. And so he goes to this guy in Louisville, Kentucky. That's only paying them 6%, right? And it's 6%, and they're not doing any of the creative work. They're just brokering advertising space. They're middlemen. So he says they made an unorthodox proposal to one of Lord and Thomas's clients, who was then paying a 6% commission. Lasker proposed that his firm write the copy and develop the artwork for future ads. If the ads showed good results, the advertiser would then agree to pay a 15% commission. So you're only paying for results.”

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35. “Powerful if you can figure out a way to wrestle fear to push you from behind rather than stand in front of you. And so there's a quote I think it's in that great documentary The Defiant Ones where he's talking about I felt fear in my whole career. It took me a while but I finally trained myself the moment I feel fear and I realize okay I'm afraid that's the moment I have to force myself to go towards whatever's making me afraid and he's like that was very helpful in my career Jimmy's talking now that was very helpful in my career just train yourself okay I feel fear go forward And his point is like you can't get rid of fear so you have to use it as a tool. Okay, so this is where we get into his the foundational idea that he builds his career on so it says he was beginning and this is so this is so powerful He was beginning to suspect that advertising agencies certainly including his own were leaving an enormous amount of money on the table I have to point this out like there are it's not like there's only a few advertising agencies there is a bunch of advertising”

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36. “What's also interesting about this part about him being so nervous this is something that he had to deal with his entire life. He thought he was an imposter. He had imposter syndrome. It says long after he earned a reputation as a pioneer and a giant in the advertising field, he would shake and with fear before that first meeting throughout his life, Laskar lived with a fear of getting called out or being discovered as unqualified for the task in front of him. Laskar confessed to a feeling of deep inadequacies, a feeling that I was going to be very unhappy because I was untrained and inadequate, a feeling that I was attempting to do something that I knew I wasn't competent to do. And so that idea of being scared even long after, you know, from the outside, it's like, why is this guy worried? He's still before he takes his first meeting. He's still worried. The best way to think about this that I found is Jimmy IVEN. And he always talks about, you know, instead of using fear is very, it's very...”

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37. “Much about the business they were in. So little was known about the principles of advertising that I had as good a right to talk about them as anyone. So he goes to this meeting with way more confidence, winds up selling several hours later. I don't know how to pronounce his name. This guy was sold. Fireworks burst within him. Lasker wrote later. He had looked failure squarely in the eye and realized that he very much wanted to succeed at this new venture. He had to admit it. He was having fun. And the sums that he was now bringing into the office were beyond anything he might have imagined. I was on my way to building up a clientele of twenty five thousand dollars per year, he later recalled, and that was enormous. That was respectability, he said.”

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38. “as I then realized that I let them fool themselves, that there was any chance that I, a kid, who didn't know anything about advertising, was going, he's saying I convinced them to send me down here. And yet, like I think this is an example of imposter syndrome. He's like, I don't actually know anything about this. And then why is he so worried? I felt I was going to disgrace myself.”

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39. “And so let's get to his big break, and he does two smart things here. They're trying to, the agency is trying to sign up this guy in Cincinnati that manufactures a lot of alcohol. They sent a salesperson down there, the guy's like Kick Rocks. No, we're not doing it. So then they send, he's like, Lasker, like, maybe you could, you know, you're selling like crazy. Maybe you could convince this guy where the other salesperson failed. And so he does two smart things here. One, he doesn't give up after an initial rejection. And two, he gains confidence by realizing that he knows as much as anyone else about the industry because they don't actually understand their own industry. So let me read this part to you. First we get to his mindset, how it's like he's just sick with worry about failing at this opportunity. Albert was anxious about the task that lay ahead of him. I remember really, literally and figuratively shaking as my whole, so my whole body was sweating. My hands were clammy. It was hard for me to talk because”

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40. “He's just literally go around, talk to owners of businesses, and sell them, say, hey, we will advertise for you, we will find the best publications and magazines, you make the ads, we'll place them, and you pay us a small commission, right? That is the entire advertising agency. And then advertising industry, keep mixing those two words up. And what he realizes no one actually understands the business they're in. And we're going to get to that. So it says in these early, so Alaska's a gifted salesperson, he signs up a lot of new accounts for the agency. He's young, he's hungry, he wants to be his own man, he wants to be rich, so he's extremely motivated. With these early successes that convinced Lasker to delay his move to New York. I was quite a hero by accident. Lasker later recalled, and I was having fun. He did not expect to be so good at signing up accounts. So when that three-month period, his initial three-month period, he's like, oh, I'm making good money. Let me just stick around and see what happens. And so he starts being mentored by the owner of the agency.”

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41. “As 1898, he is going to work at Lord and Thomas till, what, 1942, so 44 years. Okay, I'll be here for three months, whatever, and then I'll go do what I really want to do. And then he winds up mastering the industry of advertising and just dominating for 44 years. So let's go to the state of the advertising agency as Lasker starts working in it. And there's something that's happening here where there's going to be three main factors that converge that are going to transform the advertising industry. And it reminds me of Charlie Munger has this idea that he talks about called a Lalapooza effect. And he talks about it in terms of human psychology and how it affects investors, right? So it's Munger's term for the phenomenon wherein different biases layer and interlock with one another. He calls the Lalapooza effect. It occurs when multiple different tendencies and mental models combine.”

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42. “They're in Galverson, Texas at the time. He goes up to Chicago and he's going to work for the agency, Lord and Thomas, and that's the one he's eventually going to completely change and take over. So it says out of devotion to his father, Albert agreed. He didn't know he would later said how much has hurt me. From hanging out with the hard-drinking crew in the newsroom, Albert had learned to despise the business side of the shop. To ask a reporter to become an advertising man was to enter a life of shame. I thought my father doesn't know what he's asking of me, but I'll go do this for a few weeks. Lord and Thomas agreed to give Albert a three-month trial at a starting salary of ten dollars a week. Albert quickly agreed to these terms, secretly pleased that the three-month limit in the spring of eighteen ninety eight he boarded a train for Chicago with but one goal. Due his time, satisfy his father, and then be turned free. To pursue his real passion, journalism.”

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43. “Talking about hey, I learned from the stress my dad was under, the fact that he was leveraged at the worst time, that I'm never going to borrow money. I don't want to deal with debt. It was weird as he chose to be on the other side of the transaction. So in some cases, he winds up losing a lot of money because he'll lend out hundreds of thousands of dollars. Remember, we're in the early 1900s. That's the equivalent of tens of millions of dollars today. And he does it at like unbelievably low interest rates, 4 or 5%. And several of these loans, these investments, whatever you want to call it, wind up going bad. Okay, so anyways, I'm going to fast forward. I want to get to the point. His first love, he thought he was going to be a reporter. He worked part-time in a newspaper industry. He's like, okay, I'm going to go be a journalist. And this is where his dad kind of steers his career because he didn't like at the time most reporters and journalists were known for just getting hammered all day. There's a lot of alcohol in this book. And so his dad's like, no, no, I want you to agree to at least try to work in the advertising.”

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44. “Personal relationships. He's one of the greatest salespeople you'll ever meet. So he'll go out and he'll sell heads of companies that have large, the potential to have large advertising budgets. So that's a source of leverage that Albert gets that he's sent to pay for, right? So you combine that large source of leverage with the best copywriting talent on the planet, which is in turn going to sell more products for the people that have these budgets that keep increasing and Albert's business grows because he gets a percentage of that. And then you combine that with a low cost structure. And that's why the guy can have what Ori was talking about. He's got just in his country state. He had a small company working there, just taking care of it. He had 18-hole golf course, you know, staff of 40 people, 50 people, whatever it was. So in essence, he just built this giant cash flow machine, didn't have any debt. In fact, that was very surprised. I don't think I'm going to cover it on some of these. He gets involved in all these companies. If his clients get in a hole,”

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45. “Prints money. He's just got millions. And this is in the early 1900s. He's just got millions and millions and millions of dollars sitting in his company account. And part of the reason that he was able to make his company so profitable, as you're reading and what I guess it echoes in that one sentence that Olga be quoted on him on, where he says an administrator is somebody without brains. If you analyze a structure of how Albert built his company, it didn't have excessive layers of management. It didn't have a bunch of expenses. As he builds it, he has offices throughout the country. He might have one manager in that office, and then the rest of the people are just creative people. So his expenses are basically office space and talent, and he will pay record salaries and bonuses for talent. And we'll go into more of that. I have a lot of highlights about how he talks about the importance of talent. I really think there's a lot of these ideas that you see a bunch of history's greatest entrepreneurs use.”

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46. “For Albert, the memory of those sleepless nights never receded. I received the full impact of the panic as a lesson. Throughout my business life I never borrowed. I never asked a living soul to lend me on the premise that I perceived some way of making money. At the same time, Morris's travails had a near term impact. They made Albert all the more impatient to make his own way in life. And so this idea where he's like, I never borrowed, I own ninety five percent of my company. This really speaks to how profitable the insight. He has one fundamental idea that he built his entire career off of. And once that happens, and it winds up being extremely effective, and that's realizing the power of copyright on sales and combining potent copywriting from creative geniuses like Kennedy and Hopkins with the leverage that advertising gives a company, his company...”

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47. “That is also a trait that Albert has later on in his life. He's extremely wealthy. If he does up investing in some of the companies that he does advertising for, right? And in some cases those companies go bad. And if he would recommend that investment previously to a friend or a coworker, he felt so terrible, even though he was losing money, he would reimburse the person he recommended the investment for. So he just felt like he had betrayed that person by recommending a bad investment. So this is on the rare occasions that Morris was able to sleep. He was beset by dark dreams. During the night, Albert could hear him his sleeping father's finger. Listen to this. Albert could hear his sleeping father's fingernails raking through the rug next to his bed. Within a few months Morris had clawed his way through the rug's thick fibers and laid bare a patch of flooring.”

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48. “It would be my father, sleepless from worry, sometimes for hours, I would beware of the pat pat pat of his bare feet pacing the room. I would become wide awake from more disturbing sounds. He would smack the palm of his hands against one another and groan. If I sat up, he would talk to me. He was a lion at bay, bewildered by misfortunes that threatened to be overwhelming. What caused him anguish was no ordinary fear of losing money. All his dreams, all his terrors were caused by the prospect of being unable to meet his business obligations”

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49. “Breakdown, and we'll see Albert talk about what he learned, the lessons he learned during this period were something he never forgot. Albert also, there was no official diagnosis at the time and not treatment, but it's widely acknowledged that Albert suffered from bipolar disorder, and his father might have too. So it says, by this time Morris had interest in flower mills and other commercial properties throughout Texas, and he had placed mortgages on all these properties to pay for his development projects, his real estate development. He was severely overleveraged and cash was short. That's a bad position to be in when the Panic of 1893 hits, right? Rather than force his family to live in reduced circumstances, Morris sent his wife and the younger children to Germany for a year only. Only Albert remained at home with his father. It was a bad arrangement with surreal consequences for Albert. While he slept or pretended to sleep, his father would stealthily enter his bedroom and pace. Albert recalled I would see a wraith.”

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50. “One afternoon, late in 1942, and this is after, I didn't know this at the time I was reading this, he spent 40 years doing the same job. So it says one afternoon, late 1942, he suddenly said to Mary, this is his third wife, Mary, I have decided to get out of the advertising business. Two days later, he gave Lord and Thomas to three of his bright young men for a token payment of $100,000”

    2021-09-23 · Founders · #206 Albert D. Lasker (the creation of the advertising industry) · IDENTIFIED FROM THE TRANSCRIPT · source