How Adversity Made Him Unstoppable | Barry Diller

0:00It's an irrational exuberance that causes movies to be made at such extraordinary amounts of money. This week, we have legendary executive Barry Diller, the first to cross from television into movies and later the visionary behind some of the biggest shifts in entertainment. Do you think it was a better business back then? I think it was creatively much better. I can't bear sequels of these movies that run too long for no good reason. An inexplicable narrative. People in the movie business look down on the people from television as an inferior class of people. And I was the first person from television to go into the movie business, basically because Charlie couldn't care less what anybody else thought.

0:39He went on to pioneer cable in the internet age, building IAC, Expedia, and ventures that transformed how we shop, travel, and experience media. In the middle of its closing, 9-11 came and travel stopped completely. People around me said, well, you can't buy this thing. There is no travel. And somebody in the room said, well, if there's life, there's travel. And I said, well, that's it. And we closed the deal. and of course travel came back, et cetera, et cetera. And the rest is history? Yeah, yeah, yeah. I'm Enrique Dubugras, and welcome to HD in HD. This episode is brought to you by Brex, a brand I'm proud to have co-founded and one that's shaped by the same journey many of you are on.

1:16Brex has everything startups and fast-growing companies need to make every dollar count, from modern corporate cards, banking, and treasury, to accounting, automation, travel, and expenses. Over 25 ,000 companies, including DoorDash, Scale AI, and Anthropic, spend smarter using Brex. Well, Barry, first, thank you so much for doing this. I really appreciate it. Happy to do it. I was trying to remember the first time we met. And I think the first time I met you, you probably don't remember. Who knows? I remember so little. Yeah, but it was once at the Met Gala. I think it was the Met Gala. Exactly.

1:53Exactly. And I said that I, you know, I knew Alex, you know, your stepson as, and you said, no, my stepson, my son, you know, I treat him like family. Yes, yes, yes. Very much so. I remember that was a little, that was interesting to me and that, you know, kind of after reading the book and seeing how close you are with your family, that's been very inspiring. So tell me, your dad, you know, from the book, he seemed like he did, he was pretty successful building his business, quote unquote. So what do you think you learned from him business-wise? I don't know that I actually learned. I mean, well, there is one thing that I, my father was relatively uncommunicative and somewhat stoic.

2:36And my parents kind of lived an independent life pretty much from each other. But the one thing I got from my father was how honest he was. He was a deeply honest person. He actually didn't take much joy in anything. And I never could figure out what he actually did. I mean, I know what he did because they built all this stuff in LA and in the surrounding area of LA. But what I mostly got from him was his absolute honesty. And was that in business in the sense of like... It was in everything. It was just his nature. Interesting. And you think you're clearly like that too. I hope so. And then you grew up, you know, it was very interesting reading where you were kind of in the middle of Hollywood when Hollywood is being formed, I guess, right?

3:37That's not that early. I'm not that old. Well, definitely much smaller than it is today. In the late 50s, early 60s is when my career life began. And I was very lucky that the people who really founded it, a few of them were still around. And I got to know them. Who were the founders in your view? Well, the founders were the Warner family, founded Warner Brothers. The Zuckers, who founded Paramount, which was actually the first company. Paramount was the first actual studio. The Lemleys at Universal. They were all, there were these kind of Fox, William Fox, and Zanuck. There were like five guys, five mostly Jews from Eastern Europe, not Germany.

4:31And they really were the founders. And were they like kind of like business people? They're more creative? No, no, no. They were the whole equation in their head. They knew they started, most of them, with very primitive Nickelodeon theaters where you, you know, see a few frames pass. Motion pictures, like people saw a train on a film strip, which scared them to death because no one had ever seen that before. So the originators were so, it was so primitive. They started in the theater business. And then they realized that they had all these seats. Unless somebody figured out stuff to make for them, these seats would remain empty.

5:17So they got into the production business. And then they, you wouldn't call them creative souls. And yet they were enormously actually creative in the decisions they made of what to produce and make resonated with the world, which is quite remarkable. And did you look up to them when you were kind of like in your teens? Well, I love the history of it because the history was so dramatic as to how the whole thing formed and fascinated me. And I wanted to participate in it. But by the time I came along, they were really gone. I mean, they were just a few of them. Daryl Zanuck was still dodderingly active, but mostly so that he could get his various mistresses work so that they would be mistresses to him and not overly burden him.

6:11What was one story that you remember from the time that fascinated you? Well, the story that, I mean, the story of, there's a wonderful book called, not a kingdom, something of our own, written by Neil Gabler about these founding people. and each of their, there's not one little story. There's the entire, really, history of an industry that got made up by a very few people. Yeah, no, it's... So that fascinated me. I will go on to read that one because I'm very interested in history of these industries. It's their own. Anyway, it's Neil Gabler. And then when you're going through your teenage years, were you already, you weren't thinking that you wanted a career in movies?

7:03or are you already thinking that? No, the only thing, I mean, I was basically hibernating. I had not much of an idea in my head for a whole lot of reasons. And I was kind of just floating around. But the only, and I thought, you know, I'm now 19, 20. I don't want to go to university. And I thought, well, I got to do something. And the only thing, it wasn't like, oh, I've got to go to work because I didn't have that pressure. But the only thing that intrigued me was the entertainment business. And so I thought, I'm 19 then, and I'm thinking no one's going to pay any attention to me. but I thought I could go to William Morris Agency, this theatrical agency that had been in business for 70 years and had the entire history of the entertainment business under its building walls.

7:59I thought, oh, I could go there and learn. And that's what I did. Would you consider yourself ambitious at that time? No. No. Absolutely not. Was that something that kind of grown into you? It was such a shock to everyone around me, particularly my family, who thought I'd never work and didn't really care much. And I absolutely had no functioning ambition. I was not, like, stirring. I was becalmed. And my family had a lot of resources, so I didn't have to do anything. And I was kind of living this kind of nocturnal, little wayward kid life. But once I started in the mailroom, William Morris, and I had known that I was so interested in entertainment, but I was so fascinated by it that it galvanized me.

8:55And suddenly I realized, you know what? There's a motor stirring in there. And I've never been able to shut it off since then. It's so interesting because, you know, you were, when you became the CEO of Paramount at 32, was it? Yes. Which at the time, there's not a lot of, is there anyone else that was like at that age, you know? No, not even close. Which it's kind of fascinating to me that like, how is it that it was like no ambition, you know, before and then out of the blue was the youngest, you know, to kind of do this. Well, I was actually before that, that's a 32, but at 26, it was 26. I was the youngest vice president of ABC, television network, in the history of television.

9:41So I was very kind of lucky, whatever, circumstantial, serendipitously young and ridiculously successful at a ridiculously young age. Where did this come from? What do you mean? Why? Most things come, at least my experience, from serendipity. I mean, now, I think everybody gets a certain amount of it. I've gotten a tremendous amount of serendipity of situations that were unpredictable. You could have never predicted that, for instance, my first job at ABC, I accepted to become the assistant to the middle-level executive at ABC. And the day I agreed to do that, I'm 22 or 23, just 23. The day that I said, yes, I'll become your assistant, they fired the czar of all of ABC's programming.

10:49They reached out and they picked my middle-level guy to be the head of programming and the head of the network. and I became his assistant. Oh, wow. And so where do you go write that one down? Where do you predict that? Now, did I do something with it? Yeah, but I have so many of those markers that you can only say that serendipity had an enormous amount to do with it. But what do you think, you know, obviously, you got a lot of shots on goal, but you scored a lot of them as well. What do you think you were really good at already at that age? at seducing people. Interesting. Was it conscious or unconscious?

11:29No, it was definitely not. I mean, it was not like, oh, I know how to do this. Let me turn this trick. It just was, I knew how to please people. All sorts of reasons in earlier times of mine that were necessary for me to please people, to get out of worries that I had. And I think this is generally true that the difficulties that you have, this can be true, that all the things that made your life difficult, age four, six, 10, 12, 14, 16, whatever those are, all those things actually become little power levers for eventual abilities to succeed. And they were not certainly fun to go through. Most adversity is not.

12:23But the things that you automatically develop, aside from your own biology, which is its own cookery, the things that you develop out of adversity become your kind of unique powers. And I had a lot of adversity. So I had a lot of unique powers. Now you can take adversity and let it destroy you. But if your biology is strong, the opposite can happen. It becomes like your biggest weaknesses are your biggest superpowers as well. Yeah, yeah, yeah. So if you had to like, you know, you probably mentored people over the years. I hate that word. It's too official. Why do you hate it? Because it's too official.

13:05It's to the whole mentoring thing, which gets bureaucratic and, you know, when people choose each other off because it's kind of imposed on them. I just resist such stuff. But a lot of people have been in my orbit. I don't know that I've, quote, mentored anyone. So maybe let's pick that. So from people in your orbit, what do you think they would have learned from you about how to please people or seduce people? No, I don't think you get that. I mean, I don't think you get that.

13:44You just talked about these tools that you develop out of adversity. Yeah. You can't teach that to anyone. And there's no teaching there. The, the, the, the going up, having people in your orbit means essentially they are observers and reactors and they kind of learn from being in, it's almost osmosis. They learn from being in your environment. And if they're malleable enough, young enough to be impressionable, which I think is the best way to develop people is before they've had experience. and they're in your environment and they see the processes you use, not necessarily your, quote, native abilities, but just your way of functioning, allows them to develop their way of functioning best.

14:46Which is why the concept, the little word bubble that you have above your head of a mentoring is to me so empty. Yeah, because it's... It seems like instructive. Yeah. And I don't really believe that instruction... Again, I hated school, so I don't like being instructed. Yeah, no, I get it. Yeah, yeah, yeah. It's... Pulling stuff. Makes sense. So let's talk a little bit about the business, you know, of... Let's start with the network back then. Give us... for those of us who weren't there, what was the business of cable back then? And like, what was your exact? Well, first of all, back then, this is the 60s and 70s.

15:28There were three, there were only three networks. There was no cable. I mean, cable was basically just used to pull signals so that you could get a better picture if mountains or other obstructions didn't give it to you because everything was over the air and kind of line of sight. But you only had three television networks controlled in the United States, 100 % of the viewing. So today, a successful audience is 5, 7, 9 million. Then it was 30 million because you were really dividing by 100 million households by three. So the three networks were enormously powerful. They were the only mass engines of communications other than movie theaters and local newspapers.

16:15Almost all newspapers were local. Yeah. And then did you understand what the business was of cable network back then? Cable. Don't use the word cable. There was no such things. Yes, network. They were called broadcast networks. Broadcast networks. Yes. Did you understand the business of the broadcast networks back then? Of course, it was all based on 100 % revenue came from advertising. It did not come from consumers. It came from advertisers. Television was, quote, free to consumers. And then your job was, after being an assistant, you got promoted to be the picker, right, of the movie of the week?

16:49Is that kind of the best way to do it? Well, most things on television then were hour or half hour series where everything was basically in stasis, meaning people didn't get old. I mean, they got old physically, but their roles were the same in playing characters in television series. And I thought, well, I wasn't very much interested in that, but I was interested in making original movies for television, which hadn't ever happened. Nobody did that. And so we invented this concept called Movie of the Week, where we made the first year 25 original movies. And the next year we got up to 40 or 50.

17:36And by the third year, we were making 75 movies a year. and why do you think you were good at doing that without having done that ever how did you learn how to make go ask harry i mean like anything again the whole aspects of the entertainment business every part of it interested me and but i never really thought i didn't think that i was equipped to make editorial decisions because I'd never done it before. But the thing is, it's how you get experience. You teeth on something and you essentially develop some sort of expertise in your fingertips. And I had sold at the age of 24, 24 and a half or something, I sold this idea that we wanted to make these movies.

18:33Everyone thought they would fail at ABC. And so nobody really wanted to be around it. And so they let me do it because they thought it would fail. And I surprised them. But to answer the question, and I think this is great. I think if you're a manager of business, the best way to learn how to be a manager is, of course, to start something where you're essentially the first employee. And you're going to hire people to help you get stuff done. But in doing so, you essentially learn each role as you progress to build an organization. Because when you're starting something with a blank piece of paper, that's the only way you can do it.

19:21You don't go out and hire 12 people the first hour of the first day. I had to hire people to read scripts, to write scripts, to then perform all the functions of getting this stuff done. So in 12, 18 months, I think probably initially we were a couple of hundred people. But every role in that organization I developed. So I got to know how it worked and how to make it work. And so it taught me the individual role. But again, by process, it taught me how to be a manager because there was nobody, there was no other way for me to learn it. No one was teaching you how to be a man. No. I mean, to me, you know, listen, B schools, MBA programs have a value of some kind, although I doubt it.

20:24at least for me and for my observations of others, I think it's far better than that kind of learning process to be dropped into a situation where you actually have to do things that teach you by the things you're doing. It was basically a startup within. It was a complete startup, yes, from zero. Yeah, and you had to learn how to do everything, and if you failed, it was on you, and if you succeeded, you also got there. Yeah, and again, the only reason a kid got to do it, and I think this is probably true of lots of other situations, is because no one else wanted it because I thought it would fail.

21:11Yeah. No one of the other more experienced people were interested in it. Of course, because they all saw the risks. I only saw the opportunity. And was there anything structural that made it work as well? Or just you made great movies, therefore it worked? It's like so many things, time and circumstance. I am the beneficiary of a time when free network programming was very constricted and there wasn't much variety in it. And so as a counter programmer, which I love and have been for life a counter programmer, meaning programming where others aren't, countering what is obvious with something that's not obvious, that the moment gave that to me.

22:01I didn't invent that. I was just the beneficiary of circumstance and timing. Yeah, that was the opportunity that was available at that moment in time for you. That moment, I was in a particular place with a particular set of circumstances. I didn't create those circumstances. I had an idea, a somewhat original idea, I guess. But the circumstances that allowed me to succeed were not of my making. They were structural. Do you think that in the end, you developed taste from this experience? Well, this is an interesting thing, taste. Yes. I don't know. I'd use the better word. Better word. I use a word that I think is better, which is instinct.

22:42When you're making decisions in the world of creating things product, it's an editorial process. You're saying, I will do this, I won't do that. Just take it as when we're making 25 movies, it's, all right, what one movie do you make as against not make, meaning this idea versus that idea. So in a way, it's a bit binary. And if you are lucky enough that your mainstream instincts, if you keep them clean, and that your mainstream instincts are consistent with the general population or large subsets of that general population, Out of that process, if you repeat it enough, whether or not it eventuates into better taste or less better, I don't think taste is the word.

23:45It's instinct and the ability to keep your instincts fresh and clean so that you can make those decisions, those editorial decisions. Got it. So it's something you think comes out of experience and pattern recognition. And also, if it somewhat aligns with the general population, then you make a hit. It's just, it's if you're, again, lucky enough or whatever, if you're, it's in, there's no research that can ever tell you the tale. there's no facts that benefit you or that you can refer to that will allow you to make better decisions it's all instinctive so if you've got a set of basic instincts that resonate with the general public things will work out better for you who did you look up to at that moment in time like who were you're kind of like getting inspired from is it your boss is it no not particularly i mostly saw flaws but uh i'm lucky i don't have any envy so uh jealousy of so first thing i would think of is where do i look up to did i look up to people i mean people who were i would say i looked up to people who were confident interesting because i didn't have any you didn't have any no wow that's surprising to hear given how much you have right now.

25:14I don't know how much I have now, but whatever. I have experience in whatever. God knows age and whatever. But yeah, I think that the people that I went, wow, are people who I saw had native confidence. Was Charlie one of those? Charlie Bluedorn? Yeah. Oh my God, Charlie Bluedorn was such a huge combustible character. He was like a, when I met Charlie Bluedorn and I was 25, he was not old. He was maybe 30, no, 40, I guess. And this is in the 60s. And when I met him, this was a time in the United States and actually probably the world, And I say it's leaded, certainly, where conglomerates had been functioning for maybe a decade or so, which was multi-business businesses.

26:15And Bluedorn built from scratch probably the largest conglomerate of its time, which owned the conglomerates in this case of kind of similar, certainly not to the way Berkshire built its multi-business business that covers so much ground. But I think Gulf and Western, which was this company, maybe 30 or 40 individual companies from making bumpers for cars to sugar refinery, sugar plantations to industrial, highly sophisticated. I mean, in other words, just endless numbers of companies under one roof, assembled by this brilliant Austrian-American, Austrian immigrant to America at the age of teens, I guess.

27:22Just an incredible industrialist. And why were conglomerates a thing, and why do you think they're not a thing anymore? Well, because they're, you know, I don't know what conditions produced them. I think, again, it was just the energy of a few individuals. There were only four or five big conglomerates, multi-business businesses. What produced them was the stock market because what happened with Gulf and Western, and I think with several others, is they made acquisitions because their paper value kept accelerating. So they would buy a company for stock. The market would like that, pushing their stock price higher.

28:09They'd use those securities to buy more. The dilution was gigantic. But the rising price was also gigantic as this spinning thing kept going. So they were the rage until it became clear they were all unmanageable. You couldn't manage that many enterprises efficiently. And so the flywheel really turned against them. And they went out, I don't know, probably in the 80s. That's when it started going. I think they got picked apart by private equity. And I was going to say private equity was another, let's call it a better model. But Charlie, who started all this, was the person who got me to come to Paramount.

29:00and he just had to be in the room. There was no one I'd ever known. He would buy or sell anything. He walked into this room before either of us walked out of the room. Something would be bought or sold. He was that voracious. His appetite was gigantic. What did you learn from him? Oh, my God. I don't know. I learned it. I don't know. Again, I don't know that you learn, or at least I didn't learn any particular how could I learn from Charlie was a genius I watched him and observed him he took the sugar market and I'm pretty sure this is true this is somewhere in the late 70s early 80s from 6 or 7 cents to 62 cents and on the 62nd cent he sold it and drove it down back to six cents.

29:59I made a ton of money. He made more money than you could ever even conceive of in one year, yeah. Because he dominated. Gulf and Western owned a company called South Puerto Rican Sugar, which owned basically the sugar production of the Dominican Republic. And what do you think? He was just a very good dealmaker? Was that kind of the thing? It's not that he was in... He was in insatiable everything. So, yes, he could... He also... He had a first-rate brain. He could add boxcar numbers and divide them in his head. So he had that ability. But he also had, as I say, this voracious appetite and energy.

30:43And there was nothing that he saw in front of him that he didn't want. just ambitions with extreme yes and he died he was 56 56 when he died so he was he died quite young yeah very much so and would the companies have like a shared culture or no no absolutely not no every company was it's kind of they were all kind of yes they were again they weren't really uh optimally managed they weren't efficient let's call it it wasn't kind of let's cut the costs and you know, make, because we operate a lot of things, we can make things, you know, simpler on a dollar averaging basis. But they were opportunistic.

31:28I mean, the range of companies is just so incredibly diverse. But he loved, he bought Paramount out of almost bankruptcy. and by his just wily way of being able, the tale of how we acquired each of these companies was like a great opera buffet drama, every one of them. So, but all of them were in situations that weren't, like he'd never overpaid for stuff, I guess. Never. Makes sense. It was always like a good thing. No, no, no, no, no, no, never. Book value. Book value. Oh, wow. Oh, no, no. He was, Charlie was, or some book that I used to see him rifle through, which was, you know, this is way before, obviously, any digital data.

32:14There was some book that I think, book, that in it had every company and endless little tables in it that you could derive book value from. And any time a company would just flip to it and you would say, this is the book value, how much under it can I buy the thing for? Oh, wow. So it was very much the, like, buy it at a cigar bar. Yeah, yeah, in a way.

33:04on your cash brex was designed to make every dollar count so you can focus on what really matters building your dream so whether you're just getting started or you're ready to take on the next big thing brex has your back check it out and see why the world's most innovative startups like anthropic scale ai and robin hood trust brex when he picked you to do paramount like what was you were like now running a successful movie. I was at ABC. At ABC. Yeah, yeah. I was definitely, we had been successful making not only movies, but then we started the novel for television, which became the miniseries.