Thoughts on "One Dumb Step in Front of the Other" - Who Knew - Barry Diller's Memoir

I read Who Knew, which is the memoir of Barry Diller. I didn’t know about the book until Friday, June 13^th, when I saw a tweet by Graham Duncan saying it was excellent, and a tweet in response by David Senra, saying he had just read it, with an episode coming out soon. I bought the book right then for same-day delivery on Amazon. I finished it that Monday.

If you generally like business autobiographies/memoirs and biographies, read Who Knew.

Who is Barry Diller?

Diller was a skilled builder in the media industry, from television in the 1960s through the formative days of the internet in the late 1990s and 2000s. His career started in the 1960s, when he became a young executive at ABC, then CEO at Paramount, launched Fox in the 1980s and founded IAC in the 1990s from a meager broadcast station asset. IAC later became a media conglomerate owning brands like HSN, Ticketmaster, USA Network, Expedia, Match.com, Tinder, among others.

Takeaways and Thoughts

There were four recurring ideas that I liked:

1)        Curiosity and interest are the best guide for figuring out both your long-term game and your next step.

2)        Experience is overrated.

3)        Prize instincts and action over analysis, research and data.

4)        The journey of a career is unpredictable and unfolds somewhat randomly. Reality is not the product of someone’s grand plan. “One dumb step in front of the other.”

Curiosity and interest are the best guide for figuring out both your long-term game and your next step.

As a child, Diller wasn’t interested in school, but he was a voracious reader (common among eventual founders and business leaders) and figured out what interested him most at a young age.

“There was only one area that authentically excited me, and that was the world of entertainment. Simply, it resonated, not just as nothing else did, but as something I was instinctively drawn to…from the time I started to ride my bicycle from one famous Beverly Hills house to another, my eyes were starlit with every aspect of the entertainment industry.” [bold added]

I’ve also felt that your core interest(s) and curiosity is something instinctual, felt or difficult to describe. Why do some people like the taste of celery and others don’t? Simply, either you like the taste, or you don’t. There’s not much to explain at the true root of that preference. I acknowledge that intellectual preferences can at least in part be explained, such as ‘I am interested in entertainment because it’s a dynamic expression of art and performance, etc.,’ but how do you explain the essence of your raw curiosity?

Back to Diller’s story. Through a friend’s dad, who was an actor, he asked to work in the mailroom of that dad’s agency, William Morris. Turns out the treasure at William Morris wasn’t the job itself – it was the file room, which “housed the entire history of the entertainment business,” and he “found excuses to disappear into it and deeply read every file from A to Z.” His voracious reading habit, an intense interest in entertainment and this file room would be an invaluable foundation for the rest of his career.

Later in his career, Diller decides he wants to be done being an agent in the principal vs. agent relationship – someone who is ultimately told what to do because he is not an owner – to actually become a principal. He leaves Fox in the 80s and has a transition period where he’s figuring out what to do. By his now wife’s suggestion one day, he toured the QVC production studio in Pennsylvania and immediately became very interested in and curious with the interactivity that consumers could have with screens, which had not occurred to him before. TV and movies were one-way communication, but consumers buying products from infomercials by calling in to the studio was two-way. This revelation the spark that ignited the foundation for the rest of his career (and the vast majority of his wealth).

As Paul Graham said in his essay How to Do Great Work, “If you’re interested, you’re not astray.”

Here's Diller talking about his book...and when asked how he succeeded, what was his answer? Curiosity.

Experience is overrated.

I like collecting examples in business where prior “relevant” experience is obviously not a requirement for success, and in some cases, even a disadvantage. It was entertaining to find that to be a theme in Diller’s career.

Diller’s first career defining moment was at ABC when he was a 25-year old junior employee. At the time, when ABC broadcasted movies, they were usually several years old after having come out in theaters. Diller’s first ‘real’ job was to buy those movies. One season, when the pickings for quality movie buying were slim, he suggested that ABC produce movies on their own. This was a crazy idea at the time because only a small handful of studios produced movies; the networks simply were not in the production game.

“It would be impossible to produce and promote.”

“We don’t have the resources.”

“We should just make better comedy and drama series and not mess with this nonsense.”

Despite the initial pushback, Diller persisted because he felt strongly that having the control over production and produce quality movies for this new initiative would be the best way to execute, rather than ceding full or partial control to outside studio partners. The ABC higher-ups finally listened and told Diller and his boss they had a week to figure out what it would cost and how they’d do it.

Says Diller:

“I went into more than overdrive. I attacked on three fronts: the costs, the creative, and an argument for our maintaining control instead of giving it up to Universal. I was convinced that $600,000 for each movie was a made-up number, with no basis other than it was what they demanded. Of course, I couldn’t know, since I’d never produced more than a postage stamp in the mail room. I had to learn fast on bottom-up budgeting, figuring out just how many days it might take to shoot a ninety-minute movie…I needed to figure out all these things in areas where I had no experience—I didn’t even know the right doors to knock on to find the answers. And I needed to know all this within a week, and all I had was my untutored brain and the energy of a speed bunny. I made up a production plan on pure instinct and common sense, though I couldn’t figure out how to pay for it.” [bold added]

This bet, Movie of the Week, went on to be a huge success for ABC and set Diller on a trajectory that was an initial force behind his successful career.

Later, the founder of Gulf + Western, a conglomerate that owned Paramount, hired Diller to be its CEO, only with the experience Diller had at ABC, where he was a relatively junior 30-year-old VP at the time. He had no prior experience as a CEO.

Diller’s first hires at Fox, where he was creating another network to compete with the Big 3 (CBS, NBC, ABC), didn’t have prior relevant experience:

“Garth looked twelve, and Kevin looked even younger. I'm naturally disposed to hiring people who don't necessarily qualify or have lots of prior experience; it comes from my own history. I like to give people "too much" responsibility because I took on "too much" when I was at ABC in my early twenties. I liked my process of drowning until I could figure out where the current was moving.

By the time I got to Fox at age forty-two, I had learned the hard way that the odds of hiring qualified people based on résumés and brief person-to-person meetings were pretty poor, and the worst way to populate a company. Especially at senior levels, where I would say the odds are so much against it working out.

I much prefer hiring people who are relatively blank slates, but who have sparks of energy and smarts. And some edge. If you do that consistently enough, which we did at Paramount and at Fox, you end up with a very strong group once they've had a few years to marinate. Maybe it's a simplistic formula, but it works: Give them responsibilities before they are considered ready. Drop them in the deep end and see who struggles and who survives. Keep promoting those who survive.”

Prize instincts and action over analysis, research and data.

This is a useful way of life, and I think it’s an underappreciated mentality to embrace. If you’re curious and interested in the game you’re playing, and you have a desire to improve, you’re going to have results despite, or even as a result of (!), trusting your instincts and taking action.

Why isn’t this a more common mindset? One observation is that people don’t want to look dumb, especially in larger organizations with peers looking on. They don’t want to fail unconventionally. If the data and research says to do something, and you do that, and it doesn’t work out, you won’t be blamed or considered unreasonable.

Some of Diller’s musings on this topic:

“Sometimes the staff would ask, "Is it commercial?" and I would brutalize them, because rather than using their instincts, they were trying to predict the public's appetite, which I said then and say now, over and over again, simply isn't possible. Neither is using research to help make decisions. No amount of research on ideas is worth the paper (or computer screen) it's printed on. Data can tell you what has happened, not what can or will happen. Data is often harmful to instinct, and I believe this to be true for making not only creative decisions but many business decisions. PowerPoint can be the enemy; structured information often narrows the sieve just when you need to broaden it out in the spaces between information and real understanding. Overtraining our brains on data alone doesn't confer an advantage, and it can be a deterrent if it's the only decision-making component. That's often the problem with MBA students, who come armed with all the business tools and case studies but little simple human instinct. I do not believe that using instinct rather than deep, hard numerical or fact-based data to help with decision-making is the lazier process. Too much information can overload, overcomplicate, and obscure what is at the essence of any proposal: Is it a good idea, and does it make any common sense?”

Talking about starting a new network from scratch at Fox:

“The only business plan created before we started was truly written on scratch paper with roughly estimated figures I pulled from the air. I also had never researched how many independent broadcasters would be needed to reach the entire country. I was going to follow my usual process: one dumb step forward, two back, course-correcting as I went, bouncing off one wall then the other, finding my way. Deeper examination would have doomed the network from ever starting. PowerPoint decks with all their worthless forward projections would have said it couldn't be done. Instinct and grit were all we had. So we began.” [bold added]

Talking about taking action:

“I had one philosophy about new ventures: If you like the idea, get on with it.

Don't overanalyze it, don't waste time making decks and projections where it's absolutely certain, absolutely, that they will be wrong, high or low. Don't do anything other than shake the idea back and forth until you resolve that the only known is it's a good idea. And then, just get on with it! Make mistakes and correct them as fast as you can, and eventually there will be fewer mistakes. This is the way non-geniuses succeed, and I'm very squarely in that camp. I don't see things clearly in the beginning; I can't see around corners. It's process I prize-the rocky road from idea to implementation. The consternation and the thrill of pulling it through to success is the most gratifying work. Once that's done, I lose interest and want to find my way to the next gnarly process.”

The journey of a career is unpredictable, and a pre-meditated grand plan is far from required. “One dumb step in front of the other.”

That said, there are helpful ingredients: curiosity and interest, voicing ideas and executing them, and luck. And of course, relationships along the way underpin it all.

Let’s retrace the main series of events and roles that made up Diller’s career…major spoiler alert:

Diller grows up in Beverly Hills, smack dab near the Hollywood action; the entertainment industry becomes a fascination. (Luck, Curiosity)

Becomes friends with a girl whose dad is an actor, who he asks to get him a job at his agency as a mail clerk; keeps his job because he is considered an important family friend of the actor. (Luck, Voicing Ideas)

At one dinner at that family’s house, he impresses a programming executive working at ABC (Leonard Goldberg). (Voicing Ideas)

Goldberg is in need of an assistant one day, and now knowing of Diller, asks Diller if he wants the job.  (Relationships)

That same day, Goldberg’s boss gets fired (almost immediately after that boss interviews Diller), and Goldberg becomes the head of programming, making way for Diller’s eventual opportunities because he is now by default exposed to higher-ups in the organization. (Luck)

A few years later at ABC, he floats the idea of ABC producing its own movies, because the supply and quality of movies available to buy were not good. (Voicing Ideas)

While that idea is viewed as crazy, Diller persists and convinces ABC to take on the project, with Diller leading it. Because the idea was so unconventional, the higher-ups back away as to avoid association with a likely expensive failure given the difficulty to execute. (Execution)

That project, Movie of the Week, becomes a hit for ABC. Diller gains respect. (Execution)

About five years later, Charlie Bluhdorn, founder of Gulf + Western, which owns Paramount, shows up at the office of ABC’s chairman, wanting ABC to buy the rights to broadcast his library of existing movies, which were objectively bad movies. Diller’s boss is not there that day, so Diller gets the call. That day’s long story short, Diller creatively makes the deal with Bluhdorn, which establishes their relationship. (Luck, Voicing Ideas)

Bluhdorn taps Diller to be Paramount’s CEO. (Relationships)

Diller trusts his instincts by sticking to his principles and choosing movies that simply meet a ‘this is a good story’ threshold. Paramount undergoes a revival and becomes the leader of the four studios. (Voicing Ideas, Execution)

After Bluhdorn’s death, Paramount’s parent company is led by a new person, who Diller doesn’t align with. On the day Diller decides to leave, he had a call waiting for him from the new owner of 20^th Century Fox, a studio that had not been doing well. (Luck)

Diller agrees to join Fox as CEO. Unbeknownst to Diller, Fox’s financial situation is weak and is in need of cash. In a stunning move, the owner of Fox quickly agrees in principle to sell 50% of the company to Rupert Murdoch (Chairman and CEO of News Corp). (Luck)

At that same time, Diller, Michael Milken, John Kluge and Rupert Murdoch happen to all be in LA on the same day, and they find themselves in a room together. Kluge had just bought a company that owned 6 blockbuster TV stations. Diller had long fantasized about owning stations under the same roof as a studio. Milken suggested Kluge sell the TV station assets. Diller and Murdoch agree to go after the asset. FOX becomes the number one rated network and the studio makes hits, such as Die Hard. (Luck, Voicing Ideas, Execution)

In early 1992, Diller resigns from Fox, with the desire to be a principal or owner instead of an agent (CEO agent, nonetheless). He spends much of that year contemplating his next move. One day, his future wife, Diane, tells him about QVC and suggests he go check it out (it’s in Pennsylvania). He had never heard of it before. (Luck)

He goes to QVC and is entranced with the idea that screens could be a two-way medium with consumers. “I was thunderstruck. To me, those calls were like watching waves coming to shore. I thought, Screens don’t have to be just for narrative, for telling stories. Screens can interact with consumers—that was the epiphany.” (Voicing Ideas)

Brian and Ralph Roberts, the owners of Comcast, want to meet with Diller because they want him to run and revive the network like he had done at FOX and ABC. During that meeting, they mention off-hand they co-founded QVC and the other co-founder was going to be retiring and could be interested in selling his 15% stake. Diller eventually buys that 15%. (Luck)

John Malone’s Liberty Media happens to be another major owner of QVC. Malone (the Cable Cowboy) might lead the hall of fame of successful media entrepreneurs and executives. Malone becomes more relevant a bit later.

In an effort to stop a merger between QVC and CBS, the Roberts’ and Malone, the two largest shareholders of QVC, agree to buy all of QVC. This means Diller’s 15%, which he bought for $25 million, cashes out for $125 million, two years after stepping into QVC. QVC had been humming under Diller’s leadership. (Luck, Execution)

Several months after that, Diller calls John Malone and tells him he’s struggling to find his next thing. Malone says he controls Silver King and that “you can have that if you want it.” Silver King is a small set of TV stations which were merely repeater stations for the Home Shopping Network (HSN). Diller and Malone agree to that deal, with the condition that Diller also gets to control HSN. (Relationships)

Diller turns around HSN from losing money to making money, and gets a $950 million unsolicited offer from Univision to buy the Silver King stations. (Luck)

That windfall, and another much larger windfall from selling USA and other networks, gives Diller a war chest to deploy into the internet, at just the time the internet is burgeoning. (Relationships, Execution...having USA Network under Diller’s purview was a result of his track record)

That war chest ultimately turns into IAC, which is the “anti-conglomerate conglomerate” that Diller chairs to this day. Notable assets and brands included Ticketmaster, Expedia, Match.com, Tinder and Angi. (Execution, Relationships)

"There was no straight line to my late-stage career. It made no linear sense. Opportunity came from the unintended consequences of disconnected situations that reconnected in serendipitous ways, as if some cosmic hand had been at work. That's about the only explanation for how events that began to grind way back in 1977 would become one of my greatest, zigzagging-est adventures. It took almost two decades for all the disparate pieces to come together into opportunities I never could have imagined. It's also a grand illustration of how the meandering paths of media have crissed and crossed in bewildering ways throughout my life."