Why Billionaire Tilman Fertitta Says ‘Shut Up and Listen!’

Why Billionaire Tilman Fertitta Says ‘Shut Up and Listen!’


(door creaking) – Hey. – Welcome, Ty, how are ya? – How you doing my friend? – California greet you. – Oh, look at this. – Got a little Texas hospitality. – Beverly Hills and Texas meet up. (both laughing) – For those of you who don’t know, Tilman was named by Forbes as the richest restaurateur in the world, but near and dear to my heart, you own a basketball team,
which is probably the, probably the greatest accomplishment, in my mind, somebody
could do for just a fun business goal, owns 600 restaurants, 60,000 employees. – Yeah, five casinos, but I have to say, I love ’em all, I love all the businesses and the hotels, but
it’s really great owning a basketball team. – Basketball team, that’s as good, and you’ve got a good team this year. So question from your book, “Shut Up and Listen”,
great title by the way, you talked about knowing
your numbers, right? So we now live in a world,
I’m in the middle of it, social media, everybody’s
become an entrepreneur, which in many ways is good,
and people wanna think big, they believe in secret and
all these big picture things like I’m gonna succeed,
but when I read your book, there’s two things that stand out. One is know your numbers,
meaning you’ve gotta have technical skill, you have to pay attention to the business. In your experience, you had a TV show, you’ve seen so many business owners, what percentage of business
owners know their number? – None, really, a lot,
all your successful ones. And the unsuccessful ones
don’t know their numbers and I don’t care how good your product is, if you don’t know your
numbers, and I can talk to somebody for a minute and a half and start quizzin’ you
about your business, and I can know real quick, you know, how much is your receivables,
what’s your payables, what is your cost of sales,
what is your labor cost? And if they don’t know those numbers, they’re gonna go out of business unless they just happen to have a product that is just flying off
the shelf everywhere. – Right, yeah. – Because you have to know
your numbers to be successful. – What do you think, I mean right now, there’s all this in the
news about big businesses, Uber, We Work Now is in
the news, do you think some of the issues they have is just not having enough common
sense with the numbers? Like those companies are growing. – No, I think that Wall
Street finally said, you know what, just
because you’re a technology company and all you have
is revenue and you don’t have any profits, okay, we’re sick of it. We’re sick of all the dreams
and you just goin’ out and buying revenue but not
worrying about a bottom line. – Right. – And for me, ’cause I
was public for 17 years, I took the company
public when I owned 100%, I took it private ownin’ 100%. But at some point I think
Wall Street just smartened up and said wait, anybody can create revenue. I could start right now
’cause I understand business and go grow a comp, my
company from four billion to 10 billion, you know, in 24 months. – Really. – But I have to worry about
the profits along the way. – Right. – Okay, and so finally. – So you’re saying the
artificial growth can happen. – It was just artificial,
absolutely, I can grow anything but Wall Street was
allowing these companies not to make money for
years and years and years and finally they said,
wait, time out here. We want to see some earnings. – Yeah, so do you think,
the other thing that you, I was reading an article,
it was not your book, but it was a recent interview
where you were talking about that goes along
with this, about every 10, it’s been 10 years since the recession. – Yeah. – Do you think, one of my mentors told me, said, “Ty, about every
every seven to 10 years, something comes along.” Do you think we’re potentially
cruising for a bruisin’ here? – Absolutely, and I’ve
been sayin’ this in, you know, all kind of
interviews as I been out talkin’ about the book,
and what happens is, and everybody wants to talk about the GNP and all the barometers of a recession, it’s really simple, okay? We tend to overbuild
everything in good times and we’ve been on a building spree. Just look at LA, Houston, New York, we’ve built so many apartments, so many houses, so many cars,
so many restaurant seats, so much retail and what happens is, the consumer finally gets full and can’t eat any more, and so what happens, you need a recession to let
everything catch up again and so there’s supply and
demand for everything, from TV’s to cars to restaurants to apartments to homes. And that’s where we are right now. The consumer is full, and that’s why all of a sudden you saw the manufacturing
numbers slow down today and that’s as easy as I can put it. We’re full right now, we’re all fat. – But to someone listening,
in my experience, there’s opportunities in recessions, there’s opportunities in
expansion, contraction. Somebody listening
doesn’t necessarily have to be freaked out that
there’s no opportunity. There’s still gonna be opportunity, right? – Let me tell you something. You can go back and look
at my history, okay? And Forbes has me right at
five billion dollars today. And I’ve made all the majority
of my money in bad times, because that’s when you
can be opportunistic. This isn’t how I live. You build your balance
sheet and your liquidity in good times, and then you
don’t acquire in good times. You acquire in bad times,
and this is the time you eat the weak because the
weak is going down right now. Every single business that I see right now is trading at a lesser
multiple and is starting to have weaker earnings than they had two and three years ago, so this is the time and I can promise you this, we’ll come out of this recession and
you can play this back in two or three years if we go in it and then we’re out of it,
and I built my net worth considerably because I’m
gonna do some eatin’, I’m gonna get fat in the
next couple of years. (both laughing) – So basically, in a
lot of ways, it’s like contrarian, get fat when
everyone’s gettin’ skinny. – 100%. – Stay skinny when
everybody’s gettin’ fat. – I have not done a lot of acquisitions in the last few years, but
just in the last couple of weeks, I’ve done two. – Really? – I bought Del Frisco’s. – Okay, yeah, I heard that. – And I bought Restaurants Unlimited out of bankruptcy, and my team right now is in another city right now today lookin’ at another company
that’s about to fall that we’re gonna try to
be the stalking horse for in a bankruptcy procedure. – I think I read about that. – You know. – You put a stalking horse bid in. – For Restaurants Unlimited, but I’m tryin’ to do it again, because if we’re in the deal, people know that there’s no financing
issue and that we’re gonna close the deal. If you do business with
us, they will close, and ’cause you have so
many people kick tires and look at deals, but
this is the beginning of it right now, I’m lookin’ to
eat some weak right now. – Me and my business
partner, Alex, are currently in doin’ the same thing. We were at a bid in at
one of the biggest US retail brands, all the retails goin’ so. – 100%. – We’re in a bidding war right now. So one of the things that
I like what you’re saying and as I read your story,
it’s a little bit contrary, which I like, I mean, I’m right to say you dropped out of college? – Yeah. – Dropped out of college,
which is a little contrary, I mean. – Had a year to go, but
I started making too much damn money, and you
just hell, I’ll go back, I’ll go back, and you know, of course, you never. – You didn’t need to go back. – No, and what’s so funny
is that at the school that I was at that I
dropped out of, I’d been the longest running chairman
of the board of regents at the University of Houston right now, since the founder back in the 30’s. – They probably forgot you
didn’t graduate, right? – No, I think they know it, but they know, he’s a pretty good, good damn chairman. – And so you got, you’re contrary around your education, your background, you’re contrary in how
you think of recessions, you’re also contrarian in, most people go can’t make any money in restaurants, but I always tell people,
anything humans consume at volume, there’s money to be made. – 100%. – Whether it’s steel
or cars or restaurants, you just have to be extra
smart on restaurants. That’s why I’m happy to be talkin’ to you, ’cause restaurant, I was
in the night club business with a restaurateur in
Raleigh, North Carolina, when I was real young. And I saw, it’s a tough business. You have to be sharp. – It is, and there’s nothing, I’ll just, I tell this to everybody. There’s nothing more profitable than a profitable restaurant, and there’s nothing more unprofitable than an unprofitable restaurant. And it’s just, do you
hit that revenue number and do you have the
lease right, do you have your expenses right, do you have? – You talk about that
in the book, the lease. – 100%, I mean, you, people
just make the same mistakes over and over again and
I learned to always learn from my mistakes, and I’m a lot smarter today than I was 25, 30 years ago. – That’s, I did a tweet,
I said, “The main reason, the only reason to be
happy about getting older is if you’re getting smarter.” That’s the main advantage of age. – You know, I’ll say this, is that. – Let me grab a ball here. – You can. – We don’t have to have
a contest or anything. Bounce it around a little bit. (ball bouncing) Okay. Sorry, you were sayin’. – You can take the smartest guy there is or woman from your best university, Princeton, Harvard,
Stanford, and I don’t care how smart they are, okay,
they don’t have two things. They don’t have experience
and they don’t have history and I’ll outdo them
every time on experience and history and I don’t
care how smart kids think they are today, they
really are, and they’re probably smarter than us at that stage, but they don’t have
history and they don’t have experience, and you can
never make up for that. I don’t care how smart you are. – One of my mentors, Joel
Souton, said, “You can’t Google experience.” – You cannot Google experience. – You have to have it. – That is a really smart statement. – He’s a farmer and he
has a lot of common. I always say common sense
is no longer common. I tell people, you know,
in an entrepreneur world, what happens, everything
creates its opposite as people get more book
smart or more academic smart, it leaves a hole in the market for people with common sense. (ball bouncing) – Absolutely. – So owning a basketball team, tell me about the feeling. Was this in the mind for a while, like, ’cause you, the
neat thing that you did is not only did you buy a basketball team, but you got one in your home city. – You know, it’s really
interesting is that of the 90 something
professional sports teams in America of your major sports, there’s probably only three, four people that actually own 100% of
their team in their home town. They’re not even, might even be that many if you want to know the truth. It’s a. – ‘Cause now it’s a lot bought in groups and things like that. – Yeah, yeah, absolutely but
then not in your home town and you know, when everybody
else was trying to figure out to make the numbers work, I went out and bought it (laughing). And because you can never
make the numbers work, okay. But it’s the greatest
long term asset, also, because you’ve never
sold a basketball team or football or baseball team for less than they were paid for the time before. But it’s great, you know,
I tried to buy the team 25 years earlier for 80 million dollars and I got beat out. – 80 million. – 25 years, but you know
how I look at things and this is where you gotta be positive, and that’s what the whole books about is if I wouldn’t have, if I would have bought the basketball
team, maybe I’m only worth a couple of billion
today because I would not have been growing my
business, so everything happens for a reason and so here it is, 25 years later, I’m
worth $5 billion dollars, I’m able to buy that team
for $2 billion dollars. So things work out, you
gotta look at it that way. – Do you think you maybe,
you would have worked a little bit less hard if you’d
owned the Rockets earlier? – Well maybe I would
have just gotten consumed with the Rockets because
they’ll consume you, okay, and I would have
worked to build sponsors and do all this, but I
don’t think they would have been worth any more,
but I was able to build my company and now I get to enjoy both. I didn’t have to sell
my company to buy them. – Do you have to be careful to balance, you’ve got all this other business and the Rockets just
natural to want to just focus all day on that? – Yeah, but this goes back to once again, something I talk about, I know what I know and I know what I don’t know. And so I really can’t contribute at the Rocket’s office everyday. ‘Cause I’m not gonna scout players, I’m not gonna tell you who to pick. Sure, could I have a little effect talking about the business side
and sponsors and expenses and all that? Sure, I might have a little bitty effect, but I still get up everyday
and go to my other office and I never use my office at the Rockets. ‘Cause I just can’t contribute enough to make a difference there. – I looked on the Vegas odds. You guys are top four or
five contender Vegas wise to win a championship. – Absolutely, and that’s
all you can do every year. You know, let me give you an example. All you can do is put
together a great team and hope to be one of the
top four or five teams to have a chance at a championship. Because after that it’s luck. Okay, look at the great. – A little injury. – Absolutely, look at the
great Golden State Warriors, okay, the greatest team
ever in the last five years. How many championships did they win in the last five years? – Was it two or three? – Three, three, and they lost two. Okay, so no matter how good you are, it still takes some luck. So my deal is with my team is, we’re gonna set ourselves up
to be one of the better teams every year and let’s
hope we get some luck. And maybe I get some and maybe I don’t. – Yeah, a few years ago I would say the Rockets potentially were one injury, one Chris Paul, I mean,
that, let me ask you, how do you, this isn’t
a business question, but how do you deal with that, does that just, are you the kind of person that sees Chris Paul get injured and there was a great chance
you guys would’ve won and gone all the way and
won the championship. How do you deal with those
kinds of emotional setbacks? Are you the kind of
like, Warren Buffet says, “Think about it for three
days, learn the lesson, and then suppress it.” Are you a suppressor, or does it pop back, do you have regrets like that? – I don’t, you know, and
I don’t in business either because it’s just, you’ll
drive yourself crazy and I thank God I get another chance the next year and the next
year and the next year. But I mean, have I thought about it and said, gosh, would
that have been a story, the first year ownin’ the
team, you win the championship, but you know, you can’t look back. I’m so thankful to own the
team and have another shot year after year after
year, now I’ll be really disappointed if before I close my eyes one day that I don’t
win a championship, so you know, and you never
know, that could be the closest I get in
the next 25, 30 years, I mean, you don’t know. I mean, a James Hardin
only comes around so often. You only get a chance
to have a James Hardin and a Chris Paul on your team for so long. You only have a chance
to have a James Hardin and a Russel Westbrook
on your team for so long. So let’s look, let’s go
forward five, six years from now, if we don’t win it. And I sit there and I say
this is James and Russel’s chance, they’re both 30 years old. They’re both under contract with me for the next four years, okay. The Houston Rockets, so
where are they gonna be four years from now and where will I be four years from now that I
will ever have an opportunity and they will ever have an opportunity, ’cause I’ve signed Chris for another, I mean I’ve signed Clint
for another four years, I’ve got Eric Garden
for another three years, four years, I’ve got PJ
for a couple of more years, so this is the chance. – You set up a fine team. – This is the chance, right, now you need to come to a game with me. – All right, be careful what you offer me because I may show up. – Absolutely, you better, absolutely, this is somethin’ that you wanna do. There’s nothing like going to a game with the owner and enjoyin’
it and before the game, seein’ everybody and sittin’ center court, you need to try it. – I appreciate it. – It isn’t a bad deal (laughing). – I will make a special trip. I’m tryin’ to think what,
what game would be a good one. I don’t wanna take your
best game, ’cause you got a better guest than me,
but we’ll have to figure that out. – For sure, and I’m not
just, I’m not just sayin’ it. It’s somethin’ that you really should do. It’s a great experience. – I appreciate that. Changing topics completely,
we’re off the basketball court, he hit a full court shot. It was off camera for a second, but when it comes to just pure mindset, you talk about in the book,
something I think that’s surprising that needs
to be talked about more. You basically say don’t
be afraid, but worry more. Because everything in the modern world is guys just like, don’t worry,
everything just works out, but you’re, there’s quite
a few business people, great business people,
you’re, you know, Forbes list, that say it’s the paranoid who survive. How do you balance that
with having happiness but also worrying about things? – I have no fear because
I do my due diligence. Okay, so if I do a deal,
I deserve to get kicked if it doesn’t work because
I did my due diligence. I don’t do make believe performance, I always do a worse case performance for myself and I know
there’s a paddle for your ass if you don’t watch out. – Yeah, I like that saying,
paddle for your ass. – Okay, so every day I get up, I have no fear of doing any deal, but I also worry about
everything and I worry about where can that paddle get
me and so I better know my stuff every day. – Right, so it’s more of a matter of, it’s almost like you’re not a optimist, you’re not a pessimist, you’re a realist. – No, I’m a real, 100%. I think, I told somebody
about this, I think yesterday I’m drivin’ in the car, I don’t, and I said I don’t think
because I own somethin’ it’s worth more, you
know how everybody think, well my house is worth
more, my boat’s worth more, when they’re tryin’ to sell it. I’m a realist, it’s only worth this. Oh, I know, I sold a concept last year and he said, you know, you were right on. It’s just, that’s all it was worth, but nobody, everybody
thought it was worth more, but that’s truly all it was worth. And I owned it and I sold it. But people have got to be a realist of what their talents are,
what their abilities are, and do your due diligence always. – Do you think we live
in a narcissistic culture that thinks more and more and
it’s a, we live in the selfie age, the Kardashian
age, do you think people feel more entitled? – There’s definitely an
entitlement that is out there today that was not out there before, 100%. – Yeah, do you think it
makes people poorer or richer in the long run to be entitled? I mean there’s a case
for having confidence and self esteem, but where
does it cross the line? – Well, it’s, well it just
kinda, it’s kind of like, well, I want to go to college,
but I want you to pay for it. And so I can tell you
and a lot of millennials do support socialism, but
those same millennials that wanna be entitled that want somebody to pay for their college, it’s capitalism that makes billionaires and millionaires, not socialism. Remember, socialism, we
want everybody equal. Well, I don’t want to be
equal with everybody else, I don’t want to be equal with you. I don’t want to be equal with them. I want to be able to
separate myself from you. In a nice way, not in a mean way, but when I can’t separate myself, then what’s great about that? So are we gonna make
everybody win the same amount of basketball games? We’re gonna make everybody
make the same amount of money? That’s the competitiveness
that makes America great, and so we wanna take the
greatest thing we have, is competitiveness and
capitalism and take it away from our country? I want everybody to have an opportunity. – Well, see 2020’s gonna be
an interesting year here. – It’s gonna be an interesting
year, but that’s what made America great is that a guy like me can start out with one
restaurant, I don’t think you were born successful. – No, I was born to a single mom. My dad was in prison when I was born. – Okay, so do you want
to move to a society that people like me and
you and these people here can’t succeed? – No, because I think it
actually hurts everybody in the long run. – It does, it does. I love the competitiveness. – Great honor here to
have Tilman Fertitta here. We’re talking about his
book, “Shut Up and Listen.” I just read it this week. It’s a good book. What I like about the book
is you say a lot of things that aren’t generic cliches. A lot of business books
now are generic cliches. If you don’t know Tilman,
he was named by Forbes as the richest restaurateur in the world, $5 billion dollar net worth,
owns the Houston Rockets. Owns Morton’s 600 restaurants,
6,000, 60,000 employees. Casinos, aquariums, even a
boardwalk I saw, was that right? – Yeah, it’s a, in Houston
I have the number one tourist attraction, the Kemah Boardwalk, with over three million visitors a year. And anything in the entertainment field, you know, the five Golden Nugget casinos, you know even here,
we’re shootin’ this in LA and it’s, everything from
Mastro’s to Martins to Catch, to, it’s great to, in a city like LA, have a couple of the busiest restaurants in Mastro’s and Catch and I
used to have the Rainforest out at Disney, but
they’re buildin’ a hotel where the Rainforest was,
but I still have the big Bubba Gump out there on the. – Yeah, I was gonna ask you, I gotta, I have to hear, Bubba Gump
is like one of the greatest themed restaurants in America. Every time I see it, I’m
like, I have to eat there. Who’s idea was that? – Believe it or not, a couple of people came and took a idea
from my Joe’s Crab Shack and then went to Paramount and said hey, can we license Bubba Gump? And it’s just a Joe’s
Crab Shack that became a Bubba Gump and so I bought it out ’cause I didn’t like that
they took a lot of my ideas and Paramount’s got a big deal, and you know who’s really got a good deal is who’s the director from Bubba? – [Cameraman] Robert Zemeckis. – Yes, Zemeckis and then who’s
the actor, what’s his name? – Hanks. – Hank, they make a bunch
of money off of Bubba Gump. You’d be shocked. – Every shrimp they get a small royalty. – You know, believe it or
not, when they cut their deal for that show, they took a huge back side. And they are making a ton
of money off of Bubba Gump Shrimp Company, a bunch of money. And you gotta give them credit. They didn’t take the money up front. They took it on the back side
and they’re doing very well off of Bubba Gump. – Let me ask you this,
because I’m a very very junior deal maker compared to you, right, me and my business partner. – I think you’re doing
quite well (laughing). – But it, you’ve got
the numbers to back it. Let me, what is, I often
say, what do they not teach us in school, there’s many things. And one of the simple things
is, sales, people skills, reading people, you
mentioned due diligence, just deal making overall. Wealth comes from deal making, knowing how to spot an
opportunity, value it, and then put the terms together. It, you talk about this some in the book, what makes you a good deal maker? – Well, I think that this
is the problem with college is that they teach you the
theoretical side of everything, for the person that’s working for you, but it doesn’t teach you to be the CEO, the practical side, and
the young entrepreneur, whether you’re trying to
go up the corporate ladder or you are doing it your own, and it’s just the simple things of, and these are some of my
great Tilmanisms from the book and my Harper Collins
came to me and asked me to write this book was know your numbers. Okay, you’ve got to know your numbers. There are no spare customers, we’re all in a consumer business. People watching this podcast for you or me serving casino customers,
restaurant customers, hotel customers, there
are no spare customers. We’re all after the same
consumer, to the 95/5 rule. That 95% of everything is
right, so look for the 5% that’s wrong, to the take
the word no out of your damn vocabulary. Why does everybody say no
in the hospitality business? It’s 11:02 and I’ve called
down to order breakfast ’cause I was on a business
call and they say, I’m sorry sir, we don’t
serve breakfast any more. That’s fine, I don’t
want an eggs benedict, I don’t want a Spanish
omelet, I don’t want a waffle, just throw a couple of eggs in a skillet, scramble ’em and send
them up with one of those pieces of bacon that you’ve got cooked for that club sandwich. No sir, we don’t serve breakfast any more. Well, you’re gonna throw a chicken, piece of chicken or a
hamburger in that skillet for that chicken salad or that hamburger, just throw me a couple
of eggs that are sittin’ right there in that refrigerator. I’m sorry sir, we don’t
serve breakfast any more. Why do we feel like we have to say no? Okay, so I try to live by, because I know I’m after that customer,
there are no spare customers, that consumer, we don’t
tell our customer no. Okay, and especially in
LA, a lot of these super chef driven restaurants,
there’s a restaurant in town that will only
serve a steak medium rare. And I’m not gonna say who it is, I’m never gonna go after a competitor, but you’re gonna tell me
how to order your steak? And that’s part of the society today is we’re not worried
about hospitality any more or service any more. A lot of the most expensive hotels now are these minimalistic
hotels where they don’t have any service, they don’t have anything, but I’m paying more for a room there than a five star hotel. The most expensive hotels now
are not your five star hotels, they’re minimalistic
hotels that can’t even get two stars. What happened to service and hospitality? – But you’ve proven, ’cause I was talking when we were outside, it’s
like you’ve pulled off restaurants because one
of the business adages you hear is there’s no
money in restaurants and what you’re saying is, by having these things that you call
Tilman, is it Tilmanisms? – Tilmanism. – They give you an edge. – They do give you an edge. – And that edge adds up
to $5 billion dollars. – Right, and I’d go after the
masses and not the classes. – So by that you mean you go,
you like mass appeal approach. – I like, I want the masses. I’m goin’ after the masses, okay. Because this is a Tilman
that I tell my people all the time, and I
don’t even know that it’s in this book now that I think about it. – That’s good, we got
exclusive content on the show. – And honestly, every,
honestly all the interviews I’ve done in the last couple of weeks, I haven’t used one of the
most famous Tilmanisms of them all, and that’s
you make it with the masses and you spend it with the classes. But even Mastro’s and Catch,
even though that they are expensive restaurants
and they’re a lot of fun and they’re a great entertainment value, they’re still for the masses. We do hundreds of covers a
night in those restaurants. – Do you think now that
with this approach, is it guiding you, you’re
going Golden Nugget Casinos, you’re just, you were working
on two acquisitions now. The Rockets is obviously
something, even there, where it’s for the masses. Everybody’s watching basketball. – No actually, believe
me, and you know what, it’s no different than a hotel or casino or a restaurant, you
better put a damn good product out there on that
court or you know what? You’re gonna look up there in those seats and I’m not gonna have any butts in ’em, no different than a casino
or a hotel or a restaurant, so you gotta always work
to keep a good product on the court. You’ve gotta always do that,
to take care of your sponsors, and I go, at the end
of the year last year, the same thing I use in all my businesses, the 95/5 rule, 95% of everything is right, look for the 5% that’s
wrong, and I sat there and sat down with the head
coach and the basketball ops people and I said what
can we do to make us better? Let’s, we’re 95% right, okay? We’ve won more games in the last two years than in the history of the franchise, what’s that 5% we need? And we decided we needed
a little more athleticism. We needed a little. – You got that in Russell Westbrook, boy. – You’re damn right. Here’s a guy that, the greatest fast break transition player in
the history of the game, a tremendous athlete to speed the game up for us a little bit and transition and so I think that we got that 5%. So let’s see if we can put that chemistry together and go out on
that court and get it done. – So what do you say to
somebody who’s watching this, I have all different levels
of entrepreneurs watching, what do you say to somebody who goes, that’s great, that’s his
story, but he got lucky. ‘Cause there’s a lot of people nowadays that say success is luck. What’s your rebuttal to that, or thought? – You know, I have no
problem in the world if we, I don’t want to have to do it again, but I truly do believe this that you always have a little luck. Absolutely, but you also
put yourself in the position to meet that luck. I got out there and met people that I know have given me advice or
helped me along the way or who believed in me,
but also did something to put myself in that position. And do, I’m very humble in the sense of I’m very thankful of everything and I can tell you honestly
I’ve outworked everybody, my team has outworked everybody, and I do believe this, and
I know this is a cliche. You can start all over
again, and the same people are gonna end up with the money. I hate to say that, but really. – So you feel that way? – I really do feel that way. But now, do I feel that
oh, somebody was a tech entrepreneur and was working on an app and some other bigger tech company came along and bought it and they
made $50 million dollars? I do think that’s luck, but once again, they set themselves up for that luck even though they didn’t
have a good product because they developed it and they found somebody that was a greater
fool to buy it from them. So they were lucky, but they weren’t lucky because they put themselves
in a position, still, right? – My grandpa used to say, “Once is luck, twice is skill.” You’ve done it 600 times, you
started with one restaurant, you’ve got 600 restaurants,
probably a good chance that it’s not luck. – No. – Okay, once is luck,
twice is skills, 600 times is mastery. – And I evaluate guys a lot and I know some smart people and I won’t go by names, but they’re one hit wonders, and I’ve watched them hit it big and then their next 10 things, they were not successful in. So they really just kind
of maybe got a little lucky in that one hit, but I try to think, and I’m not sayin’ there’s
not a paddle for my ass, but I’ve been successful in restaurants, casinos, I’ve made a
billion dollars in equity in the restaurant
business and I’ve done it in the gaming business
and basically start it with one both times. I wanna make a billion
in the Houston Rockets, but I’m gonna have to hold
onto it for a few years. But I think in time, the
Rockets, I’ll have an equit, a billion in equity in that. I paid $2.2, I think you’re
gonna look up in 10 or 15 years and the Rockets will be
worth $3.2, so then I would have made a billion dollars
in three different industries. And so then you’re not a
one hit wonder any more. – Yeah, well, two industries is hard, three is, you’ve got the trifecta. – Well, you’ve gotta, but you
know, I gotta make it happen. I’ve got to keep building my EBITDA, and keep finding sponsors
and keep puttin’ butts in those seats and hopefully
I’ll do it in another industry, you know, that’s kind of. – What will be the next one? – Well, I haven’t built a hotel company that there’s a true
billion in equity either, but you never know, I mean, you just. – What do you think of the hotel business? Donald Trump, that’s kind
of the one thing he did that’s still around, are you a hotel fan, the industry in general? – It’s a tough industry
because of the maintenance capects to keep ’em fresh and good, but real estate, if you buy it cheap and you sell it high,
it’s a good business. But it’s a very cyclical business, so you don’t want to get in it at the top and you know, I’m, now
that I’m sittin’ here thinking about it all my hotels, you know, I may be only a few buyin’ right and sellin’ high or just keeping that in a good time are not far from bein’ worth a billion dollars. – So that’d be your fourth. – Hopefully I’ll get
there, I hope, I hope. That’s the sport of business. Business is a sport and a competitiveness, just like basketball, football, baseball, or anything and it’s the competitiveness when I was 21 years old,
I won my first Cadillac sellin’ Shaklee Vitamins. I told myself I wanted to
own my first jet at 35. – Did you pull it off? – 100%, 100%, and then
when I was in my 20’s I said when that Forbes 400 came out, I said I wanna be on that list one day. So you gotta set yourself
goals and try to set yourself apart, and I talk about that in the book is that anybody
can set themselves apart. You can be the best sound guy. You can be the best cameraman. You can do certain things
and study your field and then you get a break
because you were such a good cameraman or
you’re the best sound guy that you got recommended to go on this set and then this set, and
then all of a sudden in Hollywood, you’re known
as the best sound guy. You can do things to separate yourself from everybody else by just
working a little harder. – I have a shirt that I
wear, I put a quote on it, “Be so good they can’t ignore you.” – 100%. – You know, people go, I’m being ignored. I’m like. – Nope, 100%. – Charlie Munger, who I like reading him, he says, Warren Buffet,
his business partner, he said, “The world’s not
yet a crazy enough place to reward a whole bunch
of undeserving people.” Meaning in general, but not always, the people who deserve
it, he said the best way to get what you want is
to deserve what you want. For you to get the jet,
you had to deserve it. It just didn’t come. – It didn’t, but I knew that I wanted it and so I was gonna work as hard and I said you know what, I gotta go, even though I’m makin’ a bunch of money and my dad told me after five restaurants and I had five successful restaurants, I was makin’ a couple of million dollars, I’m in the late 80’s,
early 90’s and he’s sayin, why would you want any more? You’re in your late 20’s and you’re makin’ a couple of million dollars a year. Well, I wanted that jet. I wasn’t gonna, I wasn’t
gonna be able to pay for a jet that cost to operate a
million dollars a year with takin’ half of my income, so I had to just keep goin’ and keep goin’ and havin’ some failures along the way because they’re not all successful. But you just keep punchin’,
which I talk about in the book. – Do you use mini goals
like that, like the jet, I need to make more so I can pay the fuel? Do you use little, like
Jordan, Michael Jordan would read the paper. If he wanted to play the
Knicks, he was hopin’ John Starks said something
like “I’m gonna shut him down.” He needed these micro
goals and then he played his best game ever. Are you like that? – Well, I mean, yeah, I
mean absolutely, you know, and I’ve gotten to know
Michael as a fellow owner, a wonderful human being
and it just, it’s what he’s done with his brand
and name and you know, all these other basketball
players, after their career some of them still stay
in the limelight some way, but Nike shoes still
outsell anybody else’s and the great Lebron James
is the greatest brand there is, it’s amazing that
Michael Jordan still outsells and he hasn’t played basketball
in what, 20 years, 25 years? So it’s just the
competitiveness, the fight, the keep punching, don’t give up. And that’s what I’ve always
done, and even today, and honestly when I got the Rockets, I really thought I had,
that’s it, I’ve kind of accomplished everything
I want to accomplish, but already there’s something
else you want to accomplish. – You’re too, I can tell. – I do in steps to go to the next step, but it’s a sport. That’s what I do. I mean, why would you
always want a bigger boat, you want a bigger plane, you
want another sports team. You just keep punchin’. – What do you say to people, ’cause I, nowadays, I get people following me that are very kind of zen and you know, the absence of desire
is the way to happiness. But you seem happy. Do you think that there’s
different approaches to happiness, like do you feel your path, even though you’re saying they call it a hedonic treadmill, you’re kind of like I got the jet, now I want this, then. Do you think there’s
anything wrong with that or does that make you have a great life? – Not at all, absolutely,
there’s nothing wrong with it, but also I have no problem with the person who, first off, I respect
everybody for the talent that God gave ’em and everybody
has a different talent. You guys do something I can’t do. I have the respect for the Hispanic guy that can take the engine apart of a car and put it back together and go in there and I just sit there like
God, you are so smart. The guy that could just
be painting this house and he’s able to cut that
perfect line up there between the two colors,
I just look at that guy and I say how in the
world are you so talented? How did, how did you get that? You were just born with it and that guy’s just as smart as me. I was just given a
God-given gift of understand finances and economics and business, just knowin’ how to go out and sell myself to be able to borrow
the money and do things. But I have just as much
respect for everybody else. The poet, the author, the whatever. God gave us a talent,
find out what He gave you and use that. And it’s not about money. In academia, teaching, a
great professor who loves to get up and teach is a wonderful person and you know what, I
know I have lots of toys, but you give me a good color TV, a good comfortable bed and a cool room, I’m pretty happy. – I know, but if you’re
from Houston you’re like I need a cool room, that’s the hot seat. – And you know what,
and we all love to go, we all love to go out and eat great food because we can, but let’s be honest, okay? My last birthday, I sat at
home and watched Netflix and ate me some Popeye’s fried chicken and gained two and a half pounds, okay? But what’s better than some spicy Popeye’s and some red beans and
rice and a great roll? Okay, but yet instead we usually go out to a fancy restaurant, but
when you really get back to what we really enjoy
and need, it isn’t a lot. And that’s really what we
usually enjoy even more. – I agree, in my life, sometimes I think it’s like with big houses. I have a farm and I
have a little log house, 2,000 square feet, and
sometimes I go there and I’m just like, it’s
almost like your brain settles down, you know,
from, so I totally could see where you need that balance. – No, absolutely, you do. – Let me ask you this question. Two questions that I try to ask anybody who’s hyper successful like you. One, best day of your life
or one of the greatest days of your life, what was
it and how did you feel? It doesn’t have to be,
but what comes to mind as like one of the
great days of your life? – Well, you know, your,
the day your kids are born is always a great day for one. Another day is I remember,
you know, taking my company public and all of a sudden you wake up and you only had 12
restaurants that were makin’ you know, $10 million
dollars, $8 million dollars, I don’t even think that,
but because of the growth and what we do with
companies, which we were talkin’ about up there, you
wake up and you have stock worth $100 million dollars. That, the day that I knew
that I bought the Houston Rockets, that was a pretty darn happy day. – How do you feel, do
you go out and celebrate? Do you get quiet and just contemplate? – I’ve never been one to celebrate. Just like I’ll open a big
restaurant and I don’t need a fancy opening, who would,
we’re doin’ that for people to give them a bunch
of free food, and then, why are we doin’ this? I don’t need a party to
make myself feel better. It’s almost better to have
the people that you are around that helped you accomplish
what you accomplished. – Are you an extrovert or an introvert? – I’m a huge extrovert in one way, and then an introvert in another way. You know, I’m a great people person, I’ll talk to anybody who comes up. I’ll take a picture with anybody. ‘Cause it’s nice to be important, but it’s more important to be nice. But at the same time, I
have a really small small inner group that I’ll
go out to dinner with, a really small group. – Do you find that as you’ve
gotten more successful, wealthier, that you go
back to those friends that you had before because
you can trust them more? Or you keep expanding
your friends, your friends and such? – You know, believe it or not, I’m, this is kind of funny and crazy, but I’m not friends with
anybody from the past. And it’s, I don’t know if it’s, ’cause every time I was around them, they wanted to sell me
something or can you buy this or would you buy insurance from
me or I’ve got this product, and they just finally
got intimidated by me and stayed away from me,
but I’ve met two people along the way, four people along the way that have just been great
friends and I say in business, you gotta make your friends your friends and you know, some of my best
friends are a guy out here in North Point who is the
number one MNA company for consumer businesses
that I told him to jump off the cliff a few years ago,
and leave an investment banking firm and he went out on his own. He’s worth a couple of hundred million. The CEO of Jefferies, Rich Handler, and the astronauts Mark Kelly, the one married to Gabby Giffords who’s running for US
Senate and his brother Scott Kelly, who spent a year in space. That’s kind of my inner group that I, and a guy that’s out in the deal that is one of my executives,
that’s kind of my small group of people that I hang
with and’ll go out of town with and. – So you almost designed
your social circle. – I have my own little small little world and I just, it’s just the way it is. It’s just the way it is. I just don’t hang with that many people. Not that I don’t trust ’em, but I just, you know, when
you have the free time, these are the people that you want to go. – So that, so the best days of your life, the social circle, what
about the worst day you can think of where you almost gave up, you thought about giving
up, how’d you get there, how’d you feel? – Well, I kept punching,
I can remember in the late 80’s when the world had fallen apart and it was just tough, and you know, it was tough and you just keep punching and you realized you made it,
you know you talk about luck and I talk about this in the book, back in the 80’s and everybody wonders how did these banks get so big today that there have trillions in assets, it’s because all the other banks failed and they were failing, too,
but some had to survive and so the US government
would come in and say, we’re gonna peel off these bad asset, but we can’t let this bank
fail with all these deposits and you’re just gonna get bigger. Well, in the 80’s, when
the world was fallin’ apart and I was fallin’ apart,
I had banks that like eight or nine, I had loans
at like eight or nine different banks, and I talk
about this in the book, and I don’t tell a lot
of stories, ’cause that’s another book, this was
just more of the Tilmanisms and the little things
I did, but not stories and the art of the deal. Every single bank that I did business with failed before I did. Now think about that, okay, you have these bank loans,
you get the little thing to make your payments every month or every quarter and things
are really gettin’ tough and you’re startin’ to fall behind, and the FDIC comes in every Tuesday into Texas and they start
shutting down the banks. And in a matter of six
months, every single bank that I did business with shut down. And you don’t, you can call the government and you can call ’em and
go, well, where do you make your, nobody knows. – So you don’t have to pay? – You don’t have to pay, so I get, this is the God’s honest truth. I get a four year reprieve. – [Tai] Wow. – And in that time, you
can’t borrow a dollar, buildings in Texas are just shut down, during the middle of construction, and I get a four year reprieve, so in that time, remember I’m a developer and I buy my partners out
of their restaurant business in ’86 and I start building restaurants. Okay, so over the next four years, I scrounge together, I use credit cards, everything and I open up
a restaurant in Dallas and in San Antonio and Keene, Galveston, Lafayette, and I build these restaurants and I’m all of a sudden
making a couple of million a year and the FDIC
calls me, I think it was the resolution trust was the,
was the, what they set up the government, the government
sets up these things. – [Tai] And they wanted you to pay back. – And they call me and
they say Mr. Fertitta, you’ve come up, I wasn’t
big enough for them to come at me immediately, remember that. And they call me and
said we have these loans, we need a meeting, and
over the next six months, I negotiated, I had
started making good money with these restaurants,
and I was able to pay back the same full $2 million
dollars, they waived all the interest, and you
know what the guy told me who had my account? You are the only person that
has able to pay back 100%. Isn’t that an amazing
story, and you wanna know the next side of the story? I didn’t do this because
I couldn’t fill out the disclosures and say
how well you’re doing, but you can’t lie because
you have to tell them you’re making a bunch of money today. I signed that settlement, wrote them out a check of $2 million dollars, and I had already put a
deposit down on my jet, my first jet I was 35, and
closed on my jet the next day. – [Tai] Wow. – But I couldn’t close the jet while I was still negotiating with them. – So you did it right after. – The next day, ’cause I
knew that we were settling, so I timed them, you do
one and then the other the next day. – Yeah, the higher at, the FDIC got for. – I outlasted the banks. How many people get to outlast the banks? – Not many, the US government’s about the only one that outlasts the bank. What was the first jet? – A Citation jet, and then
I went from a Citation jet to another bigger Citation jet, an S2 and then a Citation 5, and then a Falcon, matter of fact, Boone
Pickens, who just died, I bought one of his, I
bought a Falcon from him, and then from a Falcon to a Challenger, and now I have to fly around
in two G5’s (laughter). – You got two G5’s. Does one follow you with the assistance? – No, no, no, believe,
just, you just need two. We’re a one G5 family right
now because one’s broken and it is not easy. I’m just kidding. – I like that, he’s a tough liar. I like that. Do you have. – I’m very thankful, I
mean I am bein’ sarcastic but I’m very thankful,
I mean, life is good. – Life is good. – And I’m very humble about it and I thank the good Lord every day. – So one of the things in the book that we kind of touched
on here, let me see if I can find it. I wanted to go back, I opened right to it. The 95/5 rule, so there’s two parts of it I wanted to understand it. So my understanding,
correct me if I’m wrong, most people are pretty good at things. It’s this last 5% that you suck at, it’s kind of like the
weakest link in a chain. You’re only as strong as the weakest link, and then on the next
chapter you talk about, but focus on, you’ve got
to leverage your strength, so that’s another one. So how do you balance
focusing on your weakest part, while also, so let’s say for example, for me, I’ll give an example. I think my weakest point in the past was I have so many kind
of ideas in my mind that I forget to focus sometimes, right? So maybe that’s my 5%
I need to get better. But my strength is also that I’m broad. I reach a lot of people, so
what would be your advice to me, like how do I balance my weakness, but still focus on my strength? – Well, you’ve become
successful because you do 95% of everything right. And everybody that is successful, every business out there,
they’re doing 95% right, but the ones that really make it go figure out the details on the 5%. And I always know that
I have to keep pushing and driving everybody to get that 5%. And let’s just look at it in a simple way. You know, I can drive up to, and I’m just gonna use a
restaurant or a retail store just as an example. I was talking to Walmart,
their Saturday morning meeting a couple of Saturdays ago. And I just, and somebody
asked me about the 95/5 rule and I said, let me just
give you an example, okay. You’re the general manager of a Walmart and you drive up to
your store that morning and you’s look in the
parking lot and you see is there bottles left out
there or cigarette butts and you go up to the front door and you look, are all the lights on, is the sign right? Is there dead weeds around the flower beds around the front door,
all the baskets in there, you know, you go to the front door, and is there smudges on the glass and you, does it look real clean out there or is there spilt drinks and everything. Well, I hadn’t even walked in the store and me personally or that general manager, I can judge the general
manager of that store. I can tell you if that’s a well run store. And I can pull up any of my restaurants or anybody’s retail store and tell you before I ever walked in the door if that’s a good operator or not. And if they’re not a good
operator on the outside, why in the hell should
I think they’re gonna be a good operator on the inside? So just think about when
you’re drivin’ around and you’re lookin’ at somebody’s business. And it’ll tell you a lot about them. That’s the 5% from just
a visual standpoint. But you know your 5%,
maybe I’m not quite focused cause I’m trying to go
in too many directions, so it’s just you workin’ with yourself and sayin’ I have got to
follow through on this or I’m not gonna get it
done and I can’t lose, ’cause all of us guys that are successful, we have ADD, okay, that
is why we’re successful. – Do you think you have ADD? – Do I think it? I know it, now when I
was in school I think my teachers thought I had
other bigger problems, ’cause we didn’t focus on it then. But I realized I have it because I think all my kids have it. It’s just somethin’ that you’d be shocked at how many of us have. – I think I heard your
daughter laugh out there when I said do you have ADD? – And but most successful
people do for some reason because that’s our brains
that they’re working in a complicated way and that we’re trying to always go do something else. So I have to stop myself
and say I can’t go on to this next deal or this next project till I follow through and make sure that I’ve done everything
here to make sure I’m successful. So it’s kind of pinching myself and saying “Step back and catch
yourself, or you’re gonna have a bad deal here.” – It’s that discipline. Well, good, where is the
best place to get the book? Amazon? – Amazon or Walmart online or Barnes and Noble,
any of the bookstores, the Hudson’s all over the
airports, it’s everywhere, but you just order it online if you don’t have to leave the house. Do it whatever you want. – I’ll put a link, Tailopez.com/tilman, and I’ll redirect it. – Yeah, there’s a tilman.com
that I think shoots you to everywhere else I believe. – Yeah, go to tailopez.com/tilman
and it’ll redirect you to the right place to get
the book, more information, I’m glad you’re going kind
of, I know you’ve been behind the scenes making money. You know there’s a lot of
people, it’s speak less, do more, you’ve been doing that, and I’m glad knowing now
that you’re gettin’ out and kind of sharing the message because people need to hear this, common
sense is no longer common. – It’s all common sense and logic. – Yeah, a lot of your book is just like, it’s common sense. – There’s nothin’ that
somebody’s gonna say, well he’s just much smarter than me. ‘Cause I’m not the
smartest guy in the room. But there’s little things. – But you’re the richest guy in the room. (Tilman laughing) So you win on that one. – In most rooms. In most rooms I am, very, but it’s okay. And I love to be in a room
with somebody richer than me ’cause I’m gonna learn somethin’ whether it’s from somebody in this room or some other room, so
next time I see you, we’re gonna be at a basketball
game in Houston, Texas. – I’m gonna definitely
take you up on that. Let me ask you this bonus
question, 30 seconds. If you had to, this is
your last day on earth, you’re going to space with Elon Musk, and you wanted to leave
your family and humanity like two or three sentences,
what do you say to them? Your greatest thing, the
greatest Tilmanisms in just a couple of sentences. – Always be happy with what you have, because there’s always
somebody who has less. Always be happy. – Thank you. – Thank you. – This was great. Go check out the book,
“Shut Up and Listen”, Tailopez.com/tilman will redirect you to his website and Amazon. Grab the book, it is
a good book, I read it over breakfast and a good thing is it gets right to the
point, so those of you who have a hard time reading long books. – It’s an easy one, it’s an easy read. – It’s dense so that’s good. So thank you. (upbeat music)

100 Comments on "Why Billionaire Tilman Fertitta Says ‘Shut Up and Listen!’"


  1. Tai i Am Waiting for you Interview with Billionaire WARREN BUFFET !!! Please make it happen i know you can!

    Reply

  2. This video provides so much value! Seeing only 3,435 views blows my mind because of how good this video is

    Reply

  3. I agree, sometimes you just gotta sit down and listen to somebody, especially to successful people. You have a lot to learn from them.

    Reply

  4. Great interview Tai! Didnt think i was going to watch a 50 min interview but it was to good to pass up!

    Reply

  5. Gary vee should take notes ie the name of the book shut up and listen! Gary was rude and interrupted when he interviewed Tillman

    Reply

  6. Tillman do you eat the bacon jam topping they put on the pork chop at saltgrass steakhouse, if not plz let management know it’s not good to put the topping in a plastic container then melt it in microwave then melted scoop it out onto burger. Mom and pop where you at I filmed it then called to office to delete it once from the top server I was trying to get it fixed but o well now it’s posted

    Reply

  7. Great interview & content . Tillman has enough knowledge and experience to fill a oil tanker . No wonder guys like him & Cuban kick a lot of ass with regard to business .

    Reply

  8. The literal American dream! Tilman Fratida is the realest no nonsense relatable billion I’ve ever seen. Talk about living the American dream. This man is what all of us aspire to be, rich AF, honest, relatable and real!

    Reply

  9. Experience history cant goigle experience practical know your numbers you make it with the masses you spend it with the classes

    Reply

  10. Every business is a risk, this mans rich because he’s civilized & he got good at the right thing .

    Reply

  11. "cruising for a bruising" … shit… time to study. missing opportunities. been staying "skinny" for a while. time to bulk up!$$$

    Reply

  12. Tai, you’ve been a huge inspiration to me since I came across you 2 years ago. I have tremendous respect for you Tai

    Reply

  13. As much as Tillman seems relatable, try working for one of his companies and you soon realize while his ideas seem like good goals. In practice it does not work.

    Reply

  14. "You make your money appealing to the masses and spend your money with the Classes" Wow this is an amazing interview.

    Reply

  15. The best damn video that's come out in a while from TL. Actually has valuable experiential learning embedded in the content

    Reply

  16. I haven't been on Tai's content like that, but this interview definitely rekindle the relationship back! Always 🔥

    Reply

  17. Tai dynamite interview plus you look great dude back on top of your game all the best hoping 2020 is your best year ever!

    Reply

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