20VC The Story of Turning Around MTV, AOL and Time Warner How To Be Effective When Making Hard Decisions Tactics vs Strategy and Why Plans Are BS with Bob Pittman, CEO @ iHeartMedia

In a candid conversation with Harry Stebbings on 20 VC, media mogul Bob Pittman, CEO of iHeartMedia, shares his career journey, from his early days as a teenage radio host to pioneering MTV and leading major companies like AOL. Pittman discusses the importance of embracing both successes and failures as stepping stones, the power of convenience in consumer services, and the significance of team dynamics and dissent in decision-making. He also touches on the challenges of parenting, the non-permanence of legacies, and his approach to business, emphasizing profitability over popularity. Additionally, Pittman offers insights into the podcast industry's resilience and the critical role of consumer engagement and convenience.

• Both failure and success are considered equivalent in the context of progress and learning.
• Failures are seen as directional changes, whereas successes are steps forward.
• The journey is continuous and never truly finished.

"I think a failure and a success is exactly the same thing. It's a stepping stone."

This quote emphasizes the idea that both successes and failures are part of a learning journey where each experience, regardless of its outcome, contributes to growth and progress.

• Harry Stebbings introduces Bob Pittman, CEO of iHeart Media.
• Bob's career includes co-founding MTV and leading various companies such as AOL.
• Acknowledgments are given for question contributions from Brad Gersner, Ryan Seacrest, and Joe at Human Ventures.
• The introduction also highlights AngelList's platform for launching funds and startups, and the nonprofit GiveDirectly for donating to people in need.
• Squarespace is mentioned for its web services, including mobile optimization, email campaigns, and SEO tools.

"Now, Bob is the CEO at iHeart Media, the number one audio company in America."

This quote introduces Bob Pittman and his current role, setting the stage for the conversation about his career and insights into leadership and innovation.

• Bob started in radio at 15 to fund his flying lessons.
• Despite being considered too young for other jobs, a radio station owner hired him based on his good grades and behavior.
• His radio career began in a small town where high school kids often worked on-air due to technology limitations.

"I walked into this little radio station and asking Bill Jones, who owned the station, if I could have a job."

Bob recounts the start of his career in radio, illustrating his initiative and the opportunity that arose from a simple request for employment.

• Initially, Bob's interest in radio was a means to an end for flying lessons.
• Over time, his engagement with the community, especially through the request line, deepened his interest in radio.
• By the ages of 17 or 18, Bob was fully captivated by the radio industry.

"I actually began to fall into radio, and by the time I was sort of 17 or 18, I was just mesmerized by it."

This quote reflects the gradual development of Bob's passion for radio, which evolved from a practical job into a captivating career.

• Bob's career advancements often seemed accidental and were supported by mentors who believed in him.
• He transitioned from a young disc jockey to programming major radio stations by the age of 23.
• Career moves to MTV, AOL, and iHeart Media were seen as risky at the time but were driven by Bob's recognition of underappreciated assets.

"Clearly there were some people along the way who really believed in me, and sadly, they gave me a shot I might not give a kid."

Bob acknowledges the role of mentors and opportunities that allowed him to advance rapidly in his career, despite the risks involved.

• Leadership involves a relentless focus on goals and objectives.
• Success is attributed to working with a great team where members complement each other's strengths and weaknesses.
• Bob has never seen significant success without team effort and collaboration.

"The key is, at the end of the day, there's something we're trying to do. There's a goal, there's an objective."

This quote captures the essence of leadership as a goal-oriented pursuit that requires clarity of purpose and teamwork.

• Bob does not claim to predict the future but is highly observant and listens to various perspectives.
• He looks for unique insights and epiphanies that can drive business growth.
• Curiosity and a willingness to ask questions help him identify early signs of significant trends.

"I think what I am is I'm wildly observant."

Bob describes his approach to identifying marketable trends, emphasizing the importance of observation and curiosity rather than prediction.

• Dissent and diverse opinions are valued as they prevent groupthink and mediocrity.
• Bob encourages listening to dissenting views as they can reveal potential issues and solutions.
• Quick decision-making and willingness to iterate and adapt are crucial to success.

"We worship dissent. I want to hear where people disagree."

This quote highlights the importance Bob places on dissent, seeing it as a critical element in the decision-making process that can lead to improved outcomes.

• Quick decisions are favored, and delays are challenged unless new information is expected.
• The 24-hour rule is used to expedite decision-making and avoid procrastination.
• Admitting mistakes and adjusting quickly minimizes the impact of wrong decisions.

"When you get it wrong, admit it, you made it wrong and change it quickly."

Bob emphasizes the need for agility in decision-making, recognizing that not all decisions will be correct and that swift adjustments are necessary.## Decision Making in Management

• In management, decisions are often divided between clear winners, clear losers, and a middle group that is not as easily categorized.
• The most courageous managers are willing to kill off projects that are not clear winners, while most will only kill the clear losers.
• Allowing too many mediocre projects to continue can clutter a company, referred to as "gunk" between the winners and losers.
• It's important to have "excruciating honesty" in teams to acknowledge when something isn't working, despite any personal attachment to the project.

"The real courageous people kill everything that's not a clear winner. Most people, Coley, kill things that are clear losers."

This quote emphasizes the importance of decisiveness in management and the courage required to cut projects that do not meet the criteria of clear success.

• In content creation, immediate size and material success are not the only metrics for decision-making.
• Early stages of a project should be given time to grow and reach the intended audience.
• It's crucial to evaluate whether the content is reaching the right people and if they are engaging with it positively.
• Scaling and adjusting content is part of the process, based on feedback and realistic goals.
• Success is measured by the alignment of outcomes with the original goals of the project.

"I don't think kill something that's not sizable or material because I think there are many things that aren't sizable or material but will be."

Bob Pittman expresses that size and material success are not the sole factors in determining the potential of a content project, highlighting the importance of growth and alignment with goals.

• Goals should be differentiated from objectives, with goals being more overarching and objectives being quantifiable outputs.
• The "ghost" process involves setting goals, objectives, strategies, and tactics, with tactics being subject to frequent change.
• Changing goals and strategies often indicates a lack of a solid plan or business foundation.
• A goal is a broad, overarching aim, while an objective is a measurable step towards achieving that goal.

"A goal is what am I trying to do? [...] The objective is, okay, and we'll make $10 million this year and $12 million the next year and we'll do a profit of 2 million this year."

Bob Pittman clarifies the distinction between goals and objectives, emphasizing the importance of having clear, measurable objectives that support broader goals.

• Rigid life plans rarely come to fruition, and the same can apply to business plans.
• Weekly operational meetings are essential to adapt plans based on new information and circumstances.
• The ability to pivot and change plans is a necessary skill, as unforeseen events can significantly impact business operations.

"Because we have to change plan every week. Things they'll turn out as planned."

Bob Pittman points out that constant adjustments to plans are a normal part of business operations, reflecting the dynamic nature of the business environment.

• Great storytelling engages the audience through tension, discovery, and excitement.
• Effective messaging combines the "math" (understanding the audience) with the "magic" (captivating them).
• Attitude, mood, and image are integral to messaging, and not all decisions should be made by committee.
• The "keeper of the vision" ensures that messaging and content align with the overarching vision of the brand or product.

"What makes a great story is what is interesting to people. What's the sort of sense of tension or discovery in that? What makes it exciting?"

Bob Pittman emphasizes that a great story captivates the audience with elements that spark interest and excitement, which is essential for effective messaging.

• Successes and failures are seen as stepping stones, part of the ongoing process of business evolution.
• The journey of a business is continuous, and the "right place" can change over time.
• Learning from both successes and failures without keeping a tally can lead to better decision-making and adaptation.

"I think a failure and a success is exactly the same thing. It's a stepping stone."

Bob Pittman equates successes and failures to stepping stones, suggesting that both outcomes are integral to the learning and growth process in business.

• Six Flags was marketed against Disneyland not as a direct competitor but as an alternative within the same category.
• The strategy aimed to position Six Flags in the minds of consumers as a comparable but distinct option to Disney, leveraging the category leader's brand to elevate their own.
• Marketing strategies can be influenced by external events, requiring agility and reevaluation of messaging.

"I want to get in the Disney category and be a crummy Disney. That's a win."

Bob Pittman shares his strategy for Six Flags, aiming to be perceived in the same category as Disney, which would be considered a win even if Six Flags was seen as second-best.## Marketing Strategy at Six Flags

• Six Flags positioned itself as a convenient alternative to destinations like Disney by leveraging the "day trip" advantage.
• The marketing targeted dads, playing on their desire for convenience and cost-effectiveness.
• The key selling point was that Six Flags was "bigger than Disneyland, closer to home," emphasizing both size and proximity.
• The strategy was to make Six Flags appear as an easier, more convenient option that didn't require extensive travel or time commitment.

"So I wanted to use Disney to get in the category of Disney. So I would get the halo of Disney on Six Flags. And then we managed to sell it as what could be the advantage of a day trip versus the vacation."

This quote explains the strategic positioning of Six Flags as a more convenient, day-trip alternative to the longer, more involved vacation experience offered by Disney.

• Consumer convenience is a significant factor in product success.
• At AOL, convenience was marketed as the primary benefit, with the tagline "So easy to use, no wonder it's number one."
• The perception of AOL as "the Internet with training wheels" was a tech industry view, not the consumer's, who favored ease of use.
• Marketing efforts included making technology seem simple and accessible, such as the slogan "It's so easy, even my dad can do it."

"And there's one thing that really matters of all consumer products, which is convenience."

The quote highlights the importance of convenience as a key factor in consumer decision-making, often outweighing other product attributes like quality.

• Convenience is a primary driver for consumer services, as demonstrated by AOL's strategy.
• Bob Pittman argues that convenience often trumps quality in consumer preferences.
• He cites examples where convenience has led to widespread adoption despite quality trade-offs, such as mobile phones over landlines and microwave ovens over conventional ovens.
• The focus on convenience influenced AOL's product development, prioritizing fewer clicks and ease of use.

"Convenience beats quality. And when you understand that, then you can just bake everything down to is more convenient."

This quote reinforces the notion that convenience is paramount in consumer services and that understanding this can guide successful product development and marketing strategies.

• A great product does not guarantee a great business; a viable business model is essential.
• Profitability is key, and businesses must have a clear path to earning money.
• Bob Pittman emphasizes the importance of a simple and demonstrable business model, such as being able to explain it on the back of an envelope.
• He critiques businesses that focus on metrics like eyeballs, traffic, or revenue without a clear connection to earnings.

"If you can't show me on the back of an envelope, about three or four lines equal the business. I don't think you've got one."

The quote stresses the need for a clear and straightforward business model that can be easily understood and communicated, highlighting the importance of profitability as the end goal.

• iHeart focuses on revenue, expenses, and EBITDA, with an emphasis on free cash flow.
• The company has a strategic approach to podcasting, leveraging its extensive reach to promote and monetize content.
• iHeart's podcasting strategy includes selective deal-making, ensuring profitability, and utilizing cross-promotion and social media presence.
• Bob Pittman believes in maintaining strong economics and profitability, even if it means passing on certain opportunities.

"I just always demand that things are really profitable. I don't believe in phony stuff, and there are times in my life in which I'm out of phase with the world, because there's great value in businesses that are never going to make any money."

This quote underscores Bob Pittman's commitment to profitability in business ventures, highlighting a cautious approach to investments and skepticism towards businesses that don't demonstrate a clear path to profitability.

• The podcast industry is characterized by a few hits generating the majority of revenue, a pattern similar to radio.
• Bob Pittman is not overly concerned about the podcast industry's susceptibility to macroeconomic factors due to its strong growth and engagement.
• The podcast audience is desirable to advertisers due to its youth and engagement, offering a strong platform for activation.
• The biggest concern in the ad industry is the overall spending and sensitivity during economic downturns.

"Podcasting is just, you say, what's your list of ten things to worry about? Podcasting is not on that list."

The quote reflects Bob Pittman's confidence in the resilience and potential of the podcasting industry, even in the face of macroeconomic challenges.## Advertising Recession Impact

• The podcasting and digital sectors appeared resilient during the ad recession two years ago.
• Traditional advertising saw a significant drop in revenue, specifically 40% in April 2020.
• Podcasting and digital, while now larger and more susceptible, still perform better in downturns compared to traditional advertising.

"Didn't feel that our podcasting business and our digital, if I looked at numbers, I wouldn't have known there was a recession."

This quote emphasizes the relative stability of the podcasting and digital advertising sectors during the recession, contrasting with the traditional advertising sector.

• Bob Pittman expresses a sense of comfort with leadership that comes with age.
• He acknowledges a decrease in passion but appreciates the calmness and perspective experience has provided.
• Advises embracing crises as learning experiences and stresses the importance of correct diagnostics in problem-solving.

"And I probably am not as passionate or as fiendish as I just like maniacal as I was when I was younger. But I'm also a lot more chill."

Bob Pittman reflects on how his leadership style has evolved over time, suggesting that while he may have lost some intensity, he has gained composure.

• Bob Pittman prioritizes job satisfaction and adventure over monetary compensation.
• He views money as a means to an end, not a defining factor of success or happiness.
• Pittman emphasizes the importance of maintaining diverse friendships and being generous with wealth.

"I've never chased money. I've never worshipped money. I don't think money ever defines me."

Bob Pittman explains his personal philosophy on money, indicating that he has not let financial success dictate his life choices or identity.

• Raising children with wealth requires instilling humility and a strong work ethic.
• Parents should be advisors and role models but allow children to make their own decisions and mistakes.
• Encourages independence in children and cautions against over-involvement in their lives.

"I think you can be an advisor. I think you can set a tone."

Bob Pittman discusses his approach to parenting, highlighting the importance of guiding rather than controlling his children's lives.

• Believes that what may seem like mistakes can turn into brilliant ideas.
• Advocates for allowing children to learn from their own experiences.
• Supports being a non-judgmental sounding board for children rather than a controller.

"I want to be careful that I'm not imposing my judgment of mistake on them."

Bob Pittman expresses the belief that children should be allowed to make their own decisions to foster their independence and learning.

• Discusses the challenge of balancing being a present parent with the demands of being a CEO.
• Advocates for life-work integration rather than a strict balance.
• Values the insights and growth that come from parenting and learning from his children.

"Life work balance is hard. I think life work integration is easier."

Bob Pittman shares his perspective on managing his responsibilities as a parent and a CEO, favoring a more integrated approach to work and family life.

• Acknowledges the difficulty of accepting the lack of control over children's outcomes.
• Describes parenting as rewarding despite the inability to guarantee results.

"The hardest part of being a parent is you can't will things to happen."

Bob Pittman identifies the lack of control as a significant challenge in parenting, emphasizing the unpredictability of raising children.

• Recalls the best memory from his MTV journey involving CEOs Steve Ross and Jim Robinson.
• Reflects on memorable concerts and their impact on musicians and audiences.
• Expresses skepticism about the concept of legacy, focusing instead on personal fulfillment.

"There are no legacies. Unless you put your name on a building and then they think you are the building."

Bob Pittman dismisses the idea of leaving a legacy, suggesting that accomplishments are often forgotten or misattributed over time.

• Highlights the importance of passion and authenticity in business.
• Discusses the unique approach of allowing Casa Dragone's to grow naturally.
• Shares a personal win-win outlook on the tequila venture.

"One is that passion really does matter."

Bob Pittman shares key lessons from his experience with Casa Dragone's, emphasizing the significance of passion in driving business success.

• Observes that consumer behavior fundamentally remains the same, seeking convenience and quick responses.
• Notes that while the expression of consumer behavior changes with technology, underlying desires are constant.

"The consumer habit is the same, which is convenience."

Bob Pittman comments on consumer habits, noting that despite technological advances, the core pursuit of convenience remains unchanged.

• Expresses hope to be alive in five years without speculating on professional status.
• Emphasizes the unpredictability of life and the importance of living in the present.

"I hope I'll be alive."

Bob Pittman responds to a question about his future with a simple wish for continued life, reflecting a focus on the present rather than long-term predictions.