“The ’30s in Chicago, man. Whew. No joke. My brother and I saw dead bodies every day. Guys hanging off of telephone poles with ice picks in their necks, man. Tommy guns and stogies, stacks of wine and liquor, big piles of money in back rooms.” “A guy attacked me with a knife when I was 7 years old. I was on the wrong street.”
Jones moved to Seattle from Chicago so suddenly that he was not even allowed to go back to his home and get his possessions. His father was a carpenter for some notorious Chicago gangsters and there was no time to ask questions.
“I started at age 13 in Seattle and met Ray Charles when he was 17. He was an amazing musician. It was never about money or fame back then. We just thought about what gave us goosebumps.” “We’d play five nightclubs a night. First, we played pop for the white kids at the Seattle Tennis Club. We’d have our little cardigans on and ties. Then we’d change into our suits and go over to the Washington Social and Educational Club, which was really just a bottle club. We played everything: rock and roll, rhythm and blues. Then we’d go down to the red-light district and have bebop jam sessions.”
Police and other government officials tolerated gambling and other vices in parts of Seattle city from close to the time the city founded until 1969. Occasionally someone would run on a law and order platform like a great grandfather of mine (James Trenholme), but they were rarely elected. Another great grandfather of mine (Judge Arthur Griffin) owned the Crown Hotel in Pioneer Square as an investment, which was almost certainly part of the entertainment scene at the time. Seattle’s nearly continually operating bribery/tolerance system gave Seattle nightclub owners outsize profits that they could use to pay musicians enough to create a vibrant music scene in certain parts of the city (more than 40 nightclubs were in operation at one point just on Jackson Street).
One beneficiary of money flowing into nightclubs in the late 1940s was Quincy Jones who lived on 22nd Avenue, just a block from Garfield High School. Jones has said about this time in his life: “Parker Cook was my high school teacher. He never scolded me for not getting to school until 11:30 in the morning.” The Wikipedia entry on Jones notes: “In 1951, Jones earned a scholarship to Seattle University, where a young Clint Eastwood – also a music major there – watched him play in the college band.” People performed in places like the Trianon Ballroom “which covered a half block and had a 30-by-135-foot dance floor that accommodated more than 5,000 dancers — was hyped as “the largest dance-hall west of Chicago.”
Organized crime was involved in what was called Seattle’s “tolerance policy” but it was mostly tame by east coast standards. But there were some more violent incidents. For example, in 1969 I was a witness to the aftermath of the murder of my neighbor Mr. Cichy who was known as “the pinball king of Seattle.” It was the first time I saw a dead body. The local newspapers at the time reported that “foul play was suspected in the death of Mr. Cichy, yet never proven. He was an excellent swimmer found dead in five feet of water.” The autopsy was not correctly witnessed which, increased the controversy even more. Before his death Mr. Cichy contributed to my childhood education when, together with some friends, I found a chest buried near his home filled with Playboy magazines from the early 1960s.
Once Seattle ended the tolerance policy in the mid-1960s the vibrant live music scene mostly died off since without the revenue from illegal gambling and other vices paying musicians like Ray Charles was no longer economic. Of course, vices continue to create revenue for the music business today in the form of casinos which hire live bands.
I have not quoted some of the more colorful parts of the recent interviews that put Jones in some very hot water. I have decided to focus on them more positive aspects of what Jones has said and to write about how they apply to business, investing and life.
- “Since I was very young, I’ve played all kinds of music: bar mitzvah music, Sousa marches, strip-club music, jazz, pop. Everything. I didn’t have to learn a thing to do Michael Jackson.” “You’re supposed to use everything from the past. If you know where you come from, it’s easier to get where you’re going.” “Musical principles exist, man. Musicians today can’t go all the way with the music because they haven’t done their homework with the left brain. Music is emotion and science. You don’t have to practice emotion because that comes naturally. Technique is different. If you can’t get your finger between three and four and seven and eight on a piano, you can’t play. You can only get so far without technique. People limit themselves musically. Do these musicians know tango? Macumba? Yoruba music? Samba? Bossa nova? Salsa? Cha-cha?”
There are significant parallels between music and investing and music and business. The more you know about different investing styles and different businesses the better your investing record will be. There is no single investing style that is right for everyone. There are different pools of alpha that can be captured by different approaches. And there is no formula for creating a successful business either. But you can learn best practices and adapt them to find success. Often the most important thing about best practices is knowing when to break one of them, which can enable the creation of an innovation.
- “Seattle is like a global gumbo, a melting pot with all kinds of people – the rich, the poor, white people, some Chinese, Filipino, Jewish and black people – they’re all here. If you started in New York you were dealing with the biggest guys in the world. You’re dealing with Charlie Parker and all the big bands and everything. We got more experience working in Seattle.”
This quote reminds me of Warren Buffett and Charlie Munger talking about the advantages that can come from living in Omaha and Pasadena respectively. Buffett has said:
“In some places it’s easy to lose perspective. But I think it’s very easy to keep perspective in a place like Omaha. “It’s very easy to think clearly here. You’re undisturbed by irrelevant factors and the noise generally of business investments. If you can’t think clearly in Omaha, you’re not going to think clearly anyplace.”
- “People gave [music] up to chase money. When you go after Cîroc vodka and Phat Farm.” “I’ve been driven all my life by a spirit of adventure and a criminal level of optimism.” “You can’t get an album out because nobody buys an album anymore.” “They sell 4.5 million albums and they think it’s a hit record. It’s a joke. We used to do that many every weekend in the 80s.” “If these people had paid attention to Shawn Fanning 20 years ago, we wouldn’t be in this mess. But the music business is still too full of these old-school bean counters.” “We’re in another new business now. And we’re going to get there. We’ve got to grow into the business now.”
Once music became digital it became what is called a public good (non-rival and non-excludable). Making money from hard goods that are rival like I wrote about on my Sammy Hagar post makes sense. Or you can put the music in a server and sell it as a streaming service like Spotify.
I have written before about the need for musicians to have a basic business education. The band leader and producer Bumps Blackwell, who is in the picture with Jones below, took time to teach artists the business side of music, “because I don’t want my pupils to be unprepared like I was, like [Little] Richard was, like we all were.”
- “It’s amazing how much trouble you can get in when you don’t have anything else to do.”
The key to the style of an investor like Buffett is patience. He has said: “The stock market is a no-called-strike game. You don’t have to swing at everything – you can wait for your pitch. The problem when you‘re a money manager is that your fans keep yelling, ‘swing, you bum!'” very often the best thing you can do is nothing. But to balance this you must be aggressive when the time is right.
- “Cherish your mistakes, and you won’t keep making them over and over again. It’s the same with heartbreaks and girls and everything else. Cherish them, and they’ll put some wealth in you.” “You cannot get an A if you’re afraid of getting an F.” “If they overestimate you, they get in the way. If they underestimate you, they get out of the way.”
Jones and Munger share this sentiment about the value of mistakes. Rub you nose in your mistakes advises Munger, but then move on after you have learned the lessons. If nothing is ventured in an investment, then nothing will be gained. The key is to make sure that you are more than compensated for the investment risk taken on by obtaining a margin of safety. Sometimes an investor will believe there is an upside is available from an action, but it is not really there.
6. “I never cared about money or fame, and I don’t care now. I follow the groove, and money always follows.” “I have never in my life made music for money or fame. Not even Thriller. No way. God walks out of the room when you’re thinking about money.”
Missionaries have more success in business than mercenaries. Many missionaries get an arrow in the back, but they possess a reality distortion field which means they do not see that risk as applicable to them (i.e., just other founders). Mercenaries run away too easily so fewer of them survive. Missionaries work harder because they are driven by a cause.
7. “Ghetto Gump! I don’t know how it happened. I had nothing to do with it. It’s divine intervention.”
Jones is talking about the importance of luck in this quote. I have often told people over the years that I am a “Technology Gump.” During my life I have ended up in a range of important situations in the technology business. That is mostly the result of some early luck the benefits of which compounded over the years.
8. “You could spend a million dollars on a piano part and it won’t make you a million dollars back. That’s just not how it works.” “At the recent South by Southwest [an annual music festival in Austin], they had over 1,900 musicians, but fans didn’t know where to go.”
Selling something like music is super interesting topic and the best discussion of that is the Duncan Watts essay entitled: “Is Justin Timberlake a Product of Cumulative Advantage.” You can find a link to this essay in the notes. Watts writes:
“Ultimately, we’re all social beings, and without one another to rely on, life would be not only intolerable but meaningless. Yet our mutual dependence has unexpected consequences, one of which is that if people do not make decisions independently — if even in part they like things because other people like them — then predicting hits is not only difficult but actually impossible, no matter how much you know about individual tastes. The reason is that when people tend to like what other.” ..What our results suggest is that because what people like depends on what they think other people like, what the market “wants” at any point in time can depend very sensitively on its own history: there is no sense in which it simply “reveals” what people wanted all along. In such a world, in fact, the question “Why did X succeed?” may not have any better answer than the one given by the publisher of Lynne Truss’s surprise best seller, “Eats, Shoots & Leaves,” who, when asked to explain its success, replied that “it sold well because lots of people bought it.”
9. “Frank Sinatra used to tell us every day, ‘Live every day like it’s your last. And one day you’ll be right.'” “Just get up every morning. If your elbows don’t hit wood you’re in good shape.”
Life is short. When you friends start to die regularly you feel this acutely. My father is 89 and says he is more or less the only person still alive of the people he went to school with. He does not read the obituaries any more since “there is no one left.” How many summers do you have left? Each one is precious. As is each day.
10. “Je ne regrette rien de tout. I don’t regret shit.”
When one door closes another door opens, so it is wise to focus on the open and not the closed doors. Like envy, regret is a useless emotion that you can’t have any fun with. At least with lust and gluttony, you can harness them to create a very fun weekend.
- “Ray (Charles) and I had a saying: ‘Not one drop of my self-worth depends on your acceptance of me.’”
The older I get the less I care about what other people think about what I say. This is a very liberating thing. Being able to say what I mean feels good. Do you know the difference between ignorance and apathy? I don’t know and I don’t care.
- “I feel like I’m just starting. It seems like at 84 all the things you used to wonder about come clear to you.”
This quote from Jones reminds me of a joke:
An old guy walks into a bar and the bartender asks for ID. “You’ve got to be kidding,” he said. “I’m almost 60 years old.” The bartender apologizes, but says he had to see the license. The guy shows his ID, then pays and tells the bartender to keep the change. “The tip’s for carding me,” he says as he leaves. The bartender put the change in the tip cup. “Thanks,” he says. “Works every time.”
Jones has said about jokes like that: “I’ve always thought that a big laugh is a really loud noise from the soul saying, ‘Ain’t that the truth.'” Almost every joke isn’t funny to someone. Humor is tricky.
P.s., One more Quincy Jones quote: “I always get in trouble, you know. My daughter Kidada calls me LL QJ — Loose Lips.” Sometimes you need to know when to shut up. Charlie Munger said once on this topic: “Disguise your judgement. You don’t need to show people how smart you are. I didn’t learn this until my early 80s.”
Cassandra Tate. (2004). Charles, Ray (1930-2004). Retrieved from http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=5707
Peter Blecha. (2013). Jones, Quincy (b. 1933). Retrieved from http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=10354
President and Fellows of Harvard College. (2007). “Who Mentored Ray Charles?” Retrieved from http://www.hsph.harvard.edu/chc/wmy/Celebrities/ray_charles.html
Terry Gross. (2013). “Quincy Jones: The Man Behind the Music.” Retrieved from http://www.npr.org/2013/05/27/186052477/quincy-jones-the-man-behind-the-music
Duncan Watts: https://www.google.com/search?q=is+justin+timberlake+a+product+of+cumulative+advantage&rlz=1C1CHBD_enUS750US750&oq=is+justin+timberlake+a+product+&aqs=chrome.0.0j69i57.10490j0j8&sourceid=chrome&ie=UTF-8