Leadership Lessons from 7-Eleven and Blockbuster

Blockbuster is a great example of perception. You look on the internet, you'll see my name, and you'll see somebody say, oh yeah, he's the idiot that turned down Netflix for $50 million, which happened. And I— my response to them is, did you buy the stock at 79 cents, genius?

Yeah, you were the captain of the Titanic after it was already sinking, you know.

It was listing, not sinking. The iceberg was the 2008 financial crisis. That was the iceberg.

Welcome to The Deal Table. I'm Lane Carrick.

I'm Ryan Harper.

And today we interviewed Jim Keyes. Jim was the former CEO of 7-Eleven, the former CEO of Blockbuster Video. Uh, he's written a book on education and how education is freedom.

And what an honor to speak to somebody who led a Fortune 500 company, not just one of them but two of them. The amount of knowledge he has, the lessons we can learn from him, I'm really excited to share our conversation. Great episode. So check it out. Education is Freedom, it's the book you have out right now, but it's more than just a book. It feels like after reading the book, listening to it, and talking to you privately and been to a lecture, it feels like that's kind of like the, the motto of your life right now. I'd like to jump into that at the beginning, but then obviously follow up with like your experience with 7-Eleven, Blockbuster, and just business in general.

Sure, I think you're right. It has become more of a movement than a book. I didn't see that coming. I've had friends encouraging me to write the book, and they said this is something that needs to happen worldwide, and I'm now seeing it come to life, and it's really fun.

So what do you think motivated you to take that plunge?

The motivation was simple. It was 20 years of Having the experience of building a nonprofit, putting it into schools, seeing lives be changed by the simple communication of the opportunity and letting people growing up like me not having the frame of reference to know that you can do anything you want to do with the power of knowledge and to be able to share that with young people has been fascinating. We've had a nonprofit literally for 20 years and have changed hundreds of thousands of lives with people who perhaps wouldn't have ever gone to school or known of the opportunity. And now all of a sudden they've discovered a whole new world, and they use learning to truly find a path to unlimited opportunity going forward.

So one of the lectures I saw you speak at, uh, I think it was about a month ago, you talked about the importance of university. And one of the things that I've seen, at least lately viral-wise, is with education costs growing astronomically and with, you know, trades— more and more people are not doing trades— it's like there's this social media movement to say, look, college is not that important anymore. You should really invest in becoming a plumber, electrician. And really, if you want to make all the money and not have this astronomical debt held over you the entire life, go into the trades. So with that type of— I don't want to say conflict, but this— and it's not even necessarily controversy, but juxtaposition— like, what would be your sales pitch for, for university nowadays?

It is a narrative today, and I, I see it as a dangerous narrative. And I'm going to give you two angles. First, I'm going to give you the corporate CEO angle. As you know, I ran two Fortune 500 companies. I see this as a supply and demand problem. 20 years ago, I had a hard time hiring educated store managers for a $50,000 a year store manager job. And if you think about 7-Eleven, a lot of first-generation Americans, it's a good thing. But that to some extent is because people would come from another country with a degree or at least an associate's degree, get a job at 7-Eleven, become a franchisee, build a business, get another franchise, et cetera. We couldn't find enough American kids to fill those roles with a degree. And this is 20 years ago. Today, countries like China have gone from 40 up to 60% of their population with a college degree. We in the last, well, since that's since 2012, we since 2012 in America have gone from high 50s to low 40s. What does that do for the supply and demand? That's the way I look at it, as a supply and demand problem. And it's the supply of the human resource, corporations are the demand. And if we don't recognize this and do something to turn that around, 20 years from now we're not going to be competitive on the global scale because, because we won't be able to fill these professional roles with college-degreed people. So that's for the corporate perspective. Can I give you the kid perspective now?

Please. Yeah.

Alright, I was one of those kids. Everybody told me, you're not a college guy, you know, you can't afford to go to college, go be a plumber, get a job. Look, there's some great mechanic jobs, and it would have been a good life. It would not have given me anything close to the freedom that I have today. So here's the way I respond to that need for trades. By all means, trade, trade schools, trade professions are great. But while college may not be for everyone, opportunity is. And the real path to unlimited opportunity is the college degree. So it's a choice. And my recommendation is encourage trades, encourage any kind of learning, but make sure every kid, especially in this country, sees the unlimited opportunity that lays in front of them through a path of learning.

And for me, it's, it's that choice. Because in the trades world— and, and I'm speaking very, very broadly, you know, and maybe not even the trades world, but you even if you go zoom out to more of a corporate world, you have this choice of do you want that 40 to 50 hour work week the rest of your life, or do you want to sacrifice working 120 hours a week and then eventually have the, the dream life, you know, and that comes from that unlimited opportunity. It's like, how much do you want to invest in your future? Because even like in my situation right now, I invest a ton of time and I make very, very little money, but I'm banking on myself that if it works out, I will make way, way, way more money than if I ever had a corporate job.

Sure, exactly. Well, you know, Dallas ISD is a great example. They've got a lot of— they've really put a push on trades, so they've got a lot of trade opportunities available. What I'm telling these young people is, by all means, pursue— if you enjoy a trade, go pursue it, but at least get an associate's degree. Because at some point, you're going to probably want to go from doing that trade to perhaps owning the plumbing business or owning the woodworking business. And the first time you make that transition, you're going to have to borrow money. You're going to rely on other people, and the first thing they're going to ask is, show me your background. And having that degree will provide a point of differentiation and make it easier to pivot beyond just doing the trade to perhaps building a business around the trade.

And one thing— and I promise I'll let Lane jump in here— is I think one thing that I never learned when I was, you know, 16, 17, 18, or hell, even when I was in college, my undergrad, is the importance of the school itself. Because like you always, at least in my experience, a degree is a degree is a degree. And while that may be true, where you got that degree matters, what school you went to matters. And that's why I'm pursuing the SMU program, because I'm trying to buy into that SMU network. The Executive MBA, yes, 100%. I want the information, I want to learn, but it's that network I want to be tied into. I mean, the reason I'm able to sit with Lane and have this, this podcast with him is because I met him through the SMU network, which allowed us to be in this beautiful room. And without the SMU— I mean, could I have made that happen without it? Maybe. It would just take a little— a couple more doors that have to break down. Whereas having that, that network of an institution, you're like, oh, you went to the same school? Cool, let me help you out. And I don't think that is, is leaned on or taught enough when you're younger.

Exactly. And that's where the kids with parents who come from that background have a bit of an advantage, because if you don't have parents that went to those schools, you don't have the appreciation for the network. I'll give you an example. I, I, I even sometimes those who do have that degree are telling their children today because of this narrative, you know, with technology, maybe you don't need college. I literally this morning had a gentleman come up to me after I spoke at the Texas Concilium and he said, "Give me some advice. I don't know what to do with my kids." He said, "They're smart, they're doing well, but I'm really encouraging them not to go to college." Now he's an engineer with a degree and I was kind of a little shocked to hear him say that, but he said, "You know, today I'm not sure they need it because I think they can get enough breadth of learning." Here's what I told him. I'm a practical guy. I ran these big companies with lots of people. How do you expect me when I'm hiring 400,000 people to differentiate between someone who's very smart and learned on their own versus someone who went to an accredited school? I've got a piece of paper. So for some period of time, and it may only be the next 20 or 30 years, but his kids will fit into that window. That degree is, for practical purposes, an important form of differentiation to compete with others for that same job that you may want down the road. That's why I'm saying don't fool yourself. Yes, you can get all kinds of education outside of the formal system, but for a period of time, until technology really does replace accreditation standards and we've got a way to measure people's intelligence and experience, electronically. Until that happens, that's not going to happen in 20 or 30 years, that'll be down the road, that college degree is pretty important to your ability to compete in the real world out there. Very practical, but not a popular point of view.

Is it that narrative that's driven the percentage of children to attend college?

It is, and I, you know, I blame some of this populist movement because it's How do you argue? If I was sitting here with Mike Rowe, the very popular guy, he'd be saying, Jim, you're crazy. Don't tell them to go to school. Just tell them to go get a trade. It's a far better thing. We need workers. This is what people told me. They told me, Jim, don't waste your time. Degrees, you don't need a degree. I would not have had the freedom I have. I would not have had the unlimited opportunity. Could I have still pursued a trade? Yes. Nothing wrong with that, especially if I had a passion for woodworking or I'm a pilot. I could have easily gone and become a pilot professionally. But my advice to that young person that wants to pursue that career, even though I love flying, go be a pilot. You don't need a degree, but get a degree in addition because 20 years from now you might find yourself in a world where self- where autonomous aircraft make you lose your job, then what are you going to do? And they can pivot with a degree.

And it's challenging when the wealthiest man in the world, Elon Musk, says he doesn't care if you have a college degree to come work for one of his businesses. How do you, how do you combat that?

Well, exactly. You've got— this is part of the narrative because to me, that's like Michael Jordan saying, just go play basketball. You'll be fine. You're fine.

You're tall.

You'll be OK. And 0.1% will succeed. Peter Thiel, same thing. He put a bounty out there. He said, don't go to college. I'll give you $100,000 to go get a trade or go be a programmer. And to me, that is such a disservice because let's face it, a kid will take any excuse not to have to do the work. I think in the world of AI and in the world, in the information age where we're heading, breadth of human learning is going to be far more important than depth. And that's where a college degree really helps. No one's going to sit around and study humanities on their own.

Well, you know, to that point about Elon Musk or Peter Thiel looking for that 0.01%, I would say it's probably less than that. It's on one hand, yes, you could be anything you want. You have unlimited opportunity. Go do those things. But there's also a severe difference of people and capabilities. Like General Williams, that dude is so damn smart and his ability just to function on the battlefield, in the boardroom, all those things, that ain't me. I have capabilities. I think I'm fairly good personable, but when it comes to academia, Good luck. 2 2 is— hold on, ChatGPT, it's 4. Whereas most people just— they're so smart. And I'm not trying to discount or be self-deprecating, but there's a difference when it comes to human intellect of people. So like when Elon Musk or Peter Thiel are saying, hey, we want you, it's like, yeah, they're talking to that 1 in what, a million, a billion, 100 quadrillion?

I don't know.

Right. So for the 99. All the percent. I think that's who the lesson really needs to hold on to. And, you know, if you're— if you think Elon Musk is talking to you, he's probably not, you know.

But he thinks he is. That's the— that's the scary part, because he's very bold about saying, yeah, it's not as important anymore. I, you know, I really have a very different perspective because, again, I see this as a— this is a national security issue. Because if you think about our population, and when the Chinese government learned from us the power of education and doubled down and is committed to everybody in that society is going to be educated. And we're sitting there going, yeah, it's not important anymore. That's scary when you dial forward because we're not gonna be competitive, our businesses, our vulnerability to things like crime, disease. There's statistics that are mind-boggling for the kids that go to college versus not. Life expectancy is literally 8 years higher.

Well, for 20 years we've been hearing national security about, you know, health and weight and we're overweight. Right. I've never heard national security tied to, you know, education. Yeah. So, I mean, that's huge. And that does play into the narrative of, hey, we're getting dumber and we're getting fatter.

Well, you know, take it to the extreme and you look at terrorism. And I'm fascinated by this the psychology around how does someone convince a kid to strap a vest on and blow themselves up? And I have a hard time believing this is just ideology, right? And brainwashing. But it's a function of the absence of education and opportunity. And it makes you wonder if we continue on the path that we are, I am not an expert on defense, but every time we blow up a neighborhood, I mean, we're creating— except if I'm 10 years old and I see my whole family wiped out, I'm going to be pretty mad for the rest of my life and willing to do anything to fight back. Could we educate those kids instead? Find a way to break that cycle?

You don't even have to go as extreme as terrorism. The inability to have critical thinking in the modern politics of like, yeah, oh, you voted this way, you voted this way, I hate you. It's like, well, timeout. Let's really dig into why you feel that way and is that information true or false or— but again, it's that critical thinking component of it. And I think you're absolutely right because there's a ton of times you disagree with people, but I don't hate them. Right. But I think that's because I— if we got in debate, I at least have a good faith mentality of you can change my mind, whereas most people, they go into it where they're never going to change your mind. So when it comes to business though, just to pivot into— because I mean, we could spend 10 hours talking about trying to solve the human condition in politics— being able to have that critical thinking, how does that play into the role of, uh, business?

Okay, can I first— absolutely. I don't want to lose that thought because going all the way back, I, I was shocked myself when I did research for the book, that going back to our founding fathers, Jefferson himself, Alexis de Tocqueville coming from France studying our democratic process, all of them said that education was fundamental to the, the success of a working democracy. And on the COVID of my book, I referenced that. I said literally, education across the world is at risk. I talked about this polarization of today's society and the foundational right of freedom of speech is now being challenged, not from one side, from both sides. And what's causing that is this, I said truth is under siege, is misinformation and hostility replaced critical thinking, to your point, and civil discourse. This is caused by fear. There's a sense, a pervasive sense of fear in society, not just here in the United States, It's a plague around the world where people are being led to believe that someone's gonna take something from them, do something to them. And the analogy I provide is when you're a kid and you're scared, it's at night, you think there's a monster in your room. Your mom comes in, turns on the light, and you go, oh, that's silly. I had nothing to be afraid of. That's knowledge. That's critical thinking, the ability to have understanding. And this— that's why literally the subtitle of my book, The Future Is in Your Hands. Each one of us not only has the ability, but we have the responsibility if we want to be in a civil society to use our human instinct and fight that perception that's out there that's causing fear and anger and ultimately violence. We can fight it with knowledge.

You talked about the impact of an education, and I did a little research to prepare for this, and I read from the College Board. The math is the math. I don't know if it'll change as a result of some of these dynamics, but 2 years ago, full-time workers with a bachelor's degree earned a median of $67,400 a year versus $38,800 for those with just a high school diploma. It grows over time. Mid-career professionals earn $90,000 annually. Those with a high school diploma, $50,000. Job security. Higher education is linked to lower unemployment. Unemployment rate for those with a bachelor's degree was 2.3%, one-third of the unemployment rate for those that are just high school graduates. Quality of life, which I believe you referenced. Those with higher education experience better health and life satisfaction. 54% of adults with a bachelor's degree engaged in vigorous physical activity compared to 29% of college graduates. College graduates vote, they volunteer, they engage in the community. Only 4% of bachelor's degree holders lived in poverty in 2022, versus 13%, 3 times the number. So statistically, mathematically, there's a very compelling argument for, for education. But, you know, I, when you think about education, it's the sort of all of these inputs that you get from all these different sources. And one of the things that's really frightening to me is recently I read that most people that are my children's age, 30s, get their news from the internet from sources that are completely unreliable. And they're not discerning the quality of those sources of news. And even mainstream news now has become very politicized. We had here in the debate chamber before the last election Frank Luntz,, and somebody representing the— and it was a Republican pollster. And he asked the people in the debate chamber here at Old Parkland, he said, how many of you will watch the news results on CNN tonight? Hands went up. How many of you will watch it on Fox? Okay, well, I can tell you exactly who you're voting for, right? Where the split is in this room. So we've become very polarized. And we receive news in a way that— and we get into these bubbles. So I don't— I'm overwhelmed by that. I don't know how to find a path through all that to a better place?

This is literally my mission in the book because it is a crisis. And the last time society had this much force-fed information, if you think about it, go back to the French Revolution, the American Revolution, and the advent of the modern printing press. Would the Patriots have gotten as upset about unfair taxation without representation but for all these leaflets and newspapers, right? They were farmers, they were out living off the land. All of a sudden they're reading this stuff. Yeah, you're right, that's not fair. They got mad, they got angry. We're now with the internet and with this mass onslaught of information, it's really the first time since the revolution, since the 1800s, that all of a sudden people have this onslaught of info. And because we're a capitalist society, and I'm a capitalist, the good thing about it is We've let people profit off of these forms of communication. The bad part is they're so good at profiting that they are basically curating the content to that audience. So it's perpetuating and making worse this divide. It's just, it is what it is. It's change and it's people adapting to change. That's why my mission is to say, take a breath. Be careful of perceptions because, in fact, my image on the COVID of the book is on purpose. This represents perspective. When I'm flying at 40,000 feet, I see this beautiful planet spread out in front of me. No borders, no wars, no races, no problems. The astronauts see this. They call it the overview effect. And it gives them a different perspective on this planet. I land the plane, I turn on the news, I get a fire hose of perceptions. And so the difference between this view and the view that I see on the internet is my responsibility now to not let that perception trigger that negative cycle of fear and anger. Instead, step back, take a breath, try to seek the truth, and it's hard, but it's there, and it's each of our responsibility, then, only then, can we truly use perspective and have a different way of looking at these issues. And perhaps we'd find that we have more in common than we have to divide us.

You said earlier that your friends, the people you were growing up with, said you're not a, you're not a college guy. And in fact, you grew up the youngest of 6 children in a 3-room home, and a shack without plumbing, as I recall. And, and you're being told in your environment that you shouldn't go to college. And yet you went to the College of Holy Cross, you graduated cum laude, Phi Beta Kappa, you graduate with an MBA from arguably one of the best business schools in the world at Columbia. So how did you get on that path? How did you ignore the noise of your environment telling you you're not.

That guy? You know, there's a little luck along the way, of course, but I'd also attribute it to some really good teachers that took me under their wing and showed me that I could do it, that believed in me. But here's the way I look at it. We all have adversity. You don't have to grow up without running water to have challenges. It could be you were bullied as a kid, or maybe you were wealthy and had too many rules. We all have some form of adversity. And it's in our power to respond to that challenge either positively or negatively. Too often we become the victim and we say, oh, woe is me, you know, I'm poor, or they have a better advantage, I'll never make it. For some reason, I turned that adversity into my superpower. I go over to Oak Cliff and I tell these kids, you guys are lucky. It's those kids on the north side of town, they're at a disadvantage. They're giving everything, everything to them. They're, they're, they're soft. You, you're hard. You, you, you're hungry. You can do this, but you've got to turn that disadvantage into an advantage by recognizing that the opportunity is in your hands. You can do this. And that, and that truly is the difference. That's what separated me, my brothers and sisters I have a brother today that says, oh, Jim, you were just lucky. Thanks, dude, but I busted my butt while you were out partying and having fun and then quitting school and going to work so you could buy a car. I was, I was struggling.

All right, well, it's how do you make a diamond?

Pressure.

Yeah, yeah, it's just the same thing.

And, and to that end, you're, you really are a Horatio Alger story, um, uh, coming out of that environment and, and and creating that path. You won the— you were awarded the Horatio Alger Award. And congratulations, that puts you in some pretty rare air. I will say that I read that the largest concentration of recipients of the Horatio Alger Award of any metropolitan area is Dallas. New York is second. Chicago's third, right? So there's something in the water in Texas. The other thing I learned in researching this is, and what a great dovetail into your book and what your mission is these days, is that the Horatio Alger Association has given away $265 million in need-based scholarships since 1984. And so people coming out of poverty and getting these awards are graduating at a 72% rate versus a 20% rate for those that don't receive these awards. So that's got to really pull at your heartstrings to have received that award and be part of an association that's basically fulfilling the mission you're describing in your book.

They really do some good work, and the scholarship money is amazing. There have been some very generous people that have given a lot to support these kids, but the best part is Once a year we get together in Washington, D.C. We have all these kids. And here are a bunch of old farts like me sitting around telling these kids how hard I had it. I didn't have running water. And it's like, well, we had running water, but my mom is in jail. My dad is on crack. And it's like, whoa. Makes my story pale in comparison. But it's the same opportunity. They can turn that. These kids are hungry and they know they don't have a safety net. So they're gonna, many of these kids are gonna do so much better, sadly, than kids that had a nice comfortable middle-class upbringing because they've got that desire and they're gonna turn that adversity into their superpower.

I'm curious how you think the educational delivery of education is gonna play out. I moved here in 2019 and I, had a meeting with Dr. Gerald Turner over at SMU. And they were just finishing a billion-dollar capital raise to rebuild the campus. And I was congratulating him on that. And I'll paraphrase what he said. He said, we're always going to be raising a billion dollars because you've got the Ivy League, and you've got the University of Phoenix. And then you got Elon Musk saying it doesn't matter if you have any higher education. And we have a shrinking demographic, just the aging population, a shrinking number of college-age students. And to your point earlier, you've got a smaller percentage of those that want to go to college because of this narrative. And he said, look, there's going to be— it's going to be hell in the middle, right? The Ivies will always have their students that want to come. The University of Phoenix will have its students. And those of us in the middle middle, we have to, we have to create a value proposition. So the value proposition, as you said earlier, is a 10-and-1 football team, and an on-campus stadium. And it's those beautiful new buildings that as an Executive MBA student, you get to go sit in with the bad chairs nonetheless, but you get to sit in. And so but there aren't a lot of schools that can raise a billion dollars from their alumni. And so I wonder about the fate and sort of the collapse of the middle there. And do you have any thoughts on that?

Yeah, I believe that the middle will be just fine. I do want to come back to the future though, because I've got a vision for the future that I think is important. But I think the middle will be fine. I'll give you an example. You mentioned College of the Holy Cross. It's one of those schools in the middle. It's not Ivy. It's not one of the community colleges. It's right squarely in the middle. But contributing to this problem of not enough students seeing the value in a college education not of parents seeing the value of a college education, is another part of this narrative that we've got to get in front of. It's such a negative thing. There's a perception, I'll bet both of you believe, I'm not being critical, but you probably both believe that college is much more important, much more expensive than it was when I went to school.

I do have that perception. Yeah, it's false.

Okay.

All right?

Inflation-adjusted, right?

Dirty little secret.

Okay.

Yeah.

All right. No one's doing the math.

Again.

Again, we are so mired in perception because we see it on the internet. You see it in the news. College is so— I went and did an interview at Fox. Brian Kilmeade, he goes, yeah, college is so much more expensive now. I was like, Brian, do the math. 1997, when I graduated from college, $10,000 room, board, and tuition. In today's dollars, that's $65,000. That's just math, right? It's inflation. So, okay, maybe my school, Holy Cross today, is closer to 80. We also had an endowment of zero back then. I didn't even get a scholarship. Talk about need. I mean, I was out working at McDonald's and driving a truck to pay for school. And I figured out how to do it. Today, they have a billion-dollar endowment at little, middle Holy Cross, right? And their discount rate, this is another, never discussed fact. I happen to sit on the board there, so I know this. I don't know if I'm supposed to tell about it, but 47% discount rate. And I'll bet you SMU has something in that same ballpark, probably 50%. What does that mean? That means they're using a big chunk of that endowment to buy down scholarships for the average student. So that means really that that degree for the average kid at Holy Cross is only $25,000, $30,000. It's less than what I paid in 1977. How do we get that word out? Because we should be telling kids. And you know who needs to know this? Those kids that most need to go to school, those underprivileged kids that look at that price tag and say, there's no way I could ever afford that. I'm not even going to try. But they're the ones that are most likely to get a piece of that endowment scholarship money.

Well, speaking of getting the word out in regards to like education, like what kills me about— because I'm at SMU right now in the executive MBA program.

And I see— now.

That'S expensive. Noted. Yeah, but well worth it. What's funny about that is, uh, you know, uh, because SMU is doing very well in college football right now and it's like, you know, I didn't jump on the bandwagon, I bought the bandwagon. But what kills me the most of being up there is, and again, I don't know if it's just my personality or the entrepreneur in me, but I see opportunity everywhere. And you see so many different events happen there, so many high-profile people that come through there. You did a Leaders on Leadership, you did a BLC there, and it kills me that so many students don't take advantage of that. And like, and again, it's that whole hindsight 20/20. If only I could be 18 again and just really— and again, it's like, if I was 18, I wouldn't go to those either. But like, I'm up there as a, you know, 26-year-old— no, 43-year-old, uh, you know, entrepreneur. And like, I'm in there like every opportunity I can to learn from gentlemen like yourselves, or just meet, get FaceTime with people. And It just— it killed me that so many people don't see those opportunities. And then the question I would have to myself or to anybody is, how would you motivate an 18-year-old to be like, hey, by the way, you have the former CEO of 7-Eleven and Blockbuster right there giving a one-on-one presentation that you can have FaceTime with, you can have a relationship, you can reach out on LinkedIn and have lunch with, which is what I did. And It just kills me that people don't see those opportunities and then don't.

Jump at those opportunities. So that's probably a good segue into the vision I have for the future of education. And, and why, why don't those students take advantage of those opportunities? Why don't students want to stay in school? Why don't they get engaged in the classroom? Classroom participation's gotten worse and worse. Behavioral issues are worse and worse. Here's my point of view, right or wrong. This is just an individual's point of view supplemented with a year's worth of research to get this book out. We are— I discovered that our current education system was really motivated by the business community. The Rockefellers needed, and the Mellons, they needed an educated workforce. So they jumped in and helped the government to say, let's build this standardized system of public schools and universities that will support our workplace needs. It's kind of like I've been saying, this is a supply and demand issue. They saw it many years ago. And they helped to build a very structured, very standardized program with books and blackboards and the bell curve. Everything was standardized. Even the bells that announced class change came from the factory floor. Right? I didn't know that until I So I did the research and I was like, wow, that makes sense. But if anyone was an outlier and they had ADHD or they were dyslexic, you don't fit the standard rule. Well, in today's world, we're still teaching. We've gone from the machine age to the information age and we're still teaching with books and blackboards and this bell curve and we're forcing people into the same model versus— I came from retail. We use technology to totally transform the way we go to market. Look at Amazon, right? And then I got to Blockbuster, totally transformed the way people consume media. Space. All of these are technology-motivated transformations, business transformations. It's time for us to completely transform the way we teach and learn. Because we have the ability in America especially to build this— call it the internet— a, a, a open source foundation for education that every tool— Google Classroom, LinkedIn Learning, Khan Academy, SMUs, this and that— everything can be put into this foundation. Transcripts protected with blockchain security. Incentives provided 20 cents at a time. Don't give a kid a scholarship at the end. In a blockchain world, you could give a kid 20 cents because they passed an online exam, and it goes into their 529 blockchain-secured savings account. By the time they're a senior, they've saved $30,000. Of course they're going to go to college. These are all things that are possible with technology, but what we're doing today is fighting yesterday's battles. So you get out of the legislature in Austin, we're fighting over vouchers. Why aren't we talking about the future of education rather than fixing a broken system that was never designed to do what we're asking it to do today?

So before we move on too far away from the education world, you talked about the supply and demand, how 20 years ago you, you were faced— you couldn't find qualif— there was a qualified labor shortage. And, you know, and then we talked about just now about how The Rockefellers wanted an educated workforce. And if you look out, if you zoom out, it seems like— I know the numbers are, you know, you talked about 50% versus the 40%, but there's— you go to any college campus, it's full of people. So what makes qualified labor force versus just having a labor force? Because if you ask the normal person trying to apply for a job, nobody's hiring. And, and if you ask the the corporate, they're like, well, we can't find qualified people. So in your opinion, where's the failure?

It's a combination of things right now, but it really comes down to that practical aspect of we do need educated employees. We only have one way to measure that today, and so that measurement is in place. And if you bypass that system and go straight in, try to go straight in just because you I learned at Holiday Inn last night, and I got on the internet, it's going to be a lot harder. What you pick for a subject matter may be harder. Your degree of choice may make you less qualified for those jobs. Your school, realistically, if I'm hiring a bunch of engineers and I can pull them from MIT and other places, I may be less likely to pull them from North Texas. Just practical reality. But that pipeline is not full. That pipeline— if you look at doctors today, something like— I put the number in the book when I researched it— but something like 30% of our medical professionals today here in the United States are foreign-born. We can't hire enough doctors. And that's, that's a leading indicator because that's 8 years of school, and there are not, not enough American kids going through med school today. Maybe the economic incentive isn't there. As much as it was a few years ago, but that should set off alarms to say, wait a minute, what are we doing here? What about our engineers? What about our scientists?

But to that point, do you think it's a matter of changing the qualification? Because I know, like, a friend of mine is a foreign-born attorney, and for him to be licensed in Texas, he just had to pass the bar. He didn't have to go back to college. Um, and, and I'm— and again, I don't— I'm ignorant on this subject matter, but what I've heard is like when doctors come to America, they don't have— they don't get to take a test. They have to go back to med school. I don't know if that's accurate or not, but I believe that's true. I think it might be true. So couldn't that be— eventually, if it gets so bad, we're just like, hey, let's, let's change the rules and let's just actually have an accreditation system where you, you became a doctor in, in, in Pakistan or India and it's the same kind of standards, therefore you could.

Be a doctor here. Well, I think really the challenge— you have to back up and look at the pipeline. I think the challenge is the pipeline in the college. We're not getting enough kids through high school properly trained, strong enough in the fundamental curriculum to be successful in these schools, especially going on to med school. And you see a lot more engineers come from other countries, etc. It's that pipeline that's struggling, and that goes back to my, my need for us to overhaul our public education system so that we can bring more technology in. This is all about engagement. And where I started on this mess, on this, on this seemingly random journey, was your question about why aren't kids more interested? Right, in, in the CEO of 7-Eleven being to speak at SMU. Why didn't they show up? Well, some simple stuff. How did they communicate it? They communicated it with a bunch of signs on campus, which is cool, but they used— they didn't say Jim Key is CEO 7-Eleven, former CEO 7-Eleven Blockbuster. They said Jim Key is CEO, chairman, CEO Key Development, which is my holding company. That doesn't mean anything to these kids. So first of all, they didn't even— we didn't The adults in the room didn't communicate it as effectively. But these kids don't live in the normal forms of media. They live online. And I'll give you a great example. I had a kid interview me. I'm now becoming a social media star. On purpose.

Congratulations.

Well, on purpose. And I hired a 23-year-old. I knew nothing. I had like 3 Facebook followers. Or something, you know. I hired this 23-year-old and she has to teach me how to do this. But she had— she invited a kid from UT to come interview me over at Highland Park Village. He sticks a microphone in my face and says, what's your secret to success? Okay, well, change, confidence, and clarity— 3 things I outlined in the book. You got to deal with change as practical reality. You have confidence to do something about it. You got to be able to communicate. I gave them a little bit more, more meat on the bones. That crazy little TikTok thing got 50 million views. Oh my goodness. Yeah. And you know, it's not us looking at TikTok. These are 20-year-old kids. We think they're out there scrolling pictures of cats and, you know, silly stuff. And they're hungry for learning, but that's where they live. So the message to me was, we've— it's our job as the adults to create content that these kids will learn from.

Well, also it speaks to complacency. It does. Because, because I have a lot of— because I obviously have a production company and I, I'm in that marketing exposure influence world. And, and, and I won't speak too ill will of SMU because I would love to work with them, but like, it just— it is interesting to see how they market themselves. One of the biggest examples, and I'll zoom out really far, is I would argue when, when SMU football beat Pitt, that was probably one of the biggest games the last 35 years. And I would assume all of downtown Dallas would be lit up SMU. Not a— not the Reunion Tower wasn't lit up, Bank of America wasn't lit up, Omni wasn't lit up. And to me, that's an absolute failure on the marketing department's job at SMU. Now, does that mean they were complacent? Does that mean they're ignorant? Or does that just mean they never travel south of Mockingbird? I don't know. But from an exposure point, it's a failure. And— but I think— and I hate to use the word failure, but I think it's just complacency. Because when you're high and mighty SMU, which they are, obviously everything they do touches to gold, but To your point, maybe it's not.

Well, let me put a little different spin on it.

And hopefully that didn't come off too pejorative.

No, no, it doesn't. And I'll start with what SMU has done well. I sit on the board of Columbia Business School, and I sat on the board for a while at Cox. And I would go back to Columbia and say, you guys have to learn from Cox School of Business. Columbia's like, we're Columbia, what are you talking about? And I said, no, no, you gotta understand. We've got a guy named Gerald Turner, and at the time Al Nima at Cox. And I have no affiliation with SMU, but they reached out to me and made SMU my school. Why? They brought me on the board of the business school. They involved me in their activities. Why? Because I'm CEO of a major corporation in town, not because I was an alumni of SMU. That's brilliant. That makes SMU part of the community. I told Columbia, you guys are in New York City, and everybody on this board is from Columbia. You should, you know, you need to reach out and bring these other leaders in and make them feel that Columbia is your school, is part of this community. So I literally brought the SMU learnings to New York, and they, they actually done a better job now of reaching out in the New York community. But here's what they're struggling with. So, so point is, SMU does some really good things. But they're also struggling with change because this whole onslaught of media, new technology for teaching and learning, this all represents.

Change, and change is hard. One thing, just because I don't— I never want to sound like I was ever speaking ill will of SMU because I love being a part of that. I was in a lecture with Dean Myers, and one of the things he said I had never I never knew that this is one of the purviews of higher education, is their job is to get placement for their students. So when they heard— he told a story of when they heard Company XYZ was moving their headquarters from California to Dallas, the first thing they did was they sent two representatives to see if they could just meet the CEO. And they cold went to their office, was like, hey, we're here to meet Mr. Smith. And to their surprise, they got in because the CEO was just like, why are these guys? And they were just floored that an institution, to your point, would want them to be a part of their university. And also your point, I think that's huge that they would do that. And obviously I'm not in academia, but I would never even think that that was part of their purview because I would just think that their job is to get people in the institution and get them out. Yeah, you know, attract more and more students. But their real job is to place them in high-functioning jobs. Again, qualified labor. And then that way, where do they— where do they recruit from in the future? SMU. So therefore, SMU can then recruit new talent into the institution. So it's that, you know, self-perpetual machine.

I have an example along those lines that I think is positive and reinforcing of of this. I was on the board of the Fogelman College of Business at the University of Memphis years ago, 15 years ago. The largest employer in Memphis is Federal Express, 30,000 employees. By far, yeah. It is Memphis. And we had a new dean that came in to Fogelman College and I met with him and he said, would you help me go out and talk to our customers? And I said, customers? And he said, yeah. He said, who are our customers? Our customers are FedEx and it's Smith Nephew and it's Wright Medical. They are buying our product, which is our students. And we need to go ask them how we're doing. And I thought, that's a really great approach. Supply and demand. What are you demanding? And we went. I arranged meetings with Dean Grover and the C-suite people at those organizations. And they said, look, we got a problem. These kids aren't showing up on time for meetings. They're not dressed appropriately. They're not making eye contact. And the curriculum curriculum that they're taking at the University of Memphis is not preparing them. So when we hire them, we have to then basically do remedial, you know, basic education and training. So we said, well, how can we, how can we partner with you to create a better outcome for the University of Memphis, for the students, for FedEx? What that evolved into was a FedEx curriculum and scholarship. And if students could come, they could have partial payment or full payment of their tuition. They had to take that curriculum. They interned with FedEx when they weren't in class. For FedEx, what they said is our cost of acquiring talent has gone down. And the talent we're getting, we don't have to train them, you know, for the remedial things. That led to the FedEx Institute of Technology at the University of Memphis, which may or may not have led to Elon Musk putting the new supercomputer in Memphis. So this was someone who thought outside the box because a prior dean at the University of Memphis was not thinking about Who are we serving? Who's in the community? And to go ask them, how are we doing? They now have the largest Toastmasters organization, the University of Memphis, in the country. So the students are signing up to look, you know, to go through the process of speaking, making eye contact. They have a clothes closet where people contribute clothing that can be used by the students to go out and present well. So that's sort of outside of the typical thought process of a college, and that benefits the students and And I think that, and now Memphis, you know, their grading as a business school has gone up dramatically. And people are coming not just from Memphis, people are coming from around the country to take part in that program. So that was a win. I'm not sure that all schools are thinking that way.

Well, what's interesting about that is like, because the Collins Building where the executive education, there's a wall that has all these corporate partners. Yeah, but other than them dumping a ton of money at SMU and maybe they do functions they ever sign up, I would think they would get more value doing something like that where it's like, hey, let's develop a curriculum where instead of trying to compete with all these other institutions for these talent, let's just get them when they're young. Yeah, you know, because that sounds like, uh, it just sounds like obvious that.

Every institution should do that. Yeah, I thought it was completely outside the box for the way we'd been thinking as a board of a business school. We were not thinking about going out in the community and talking to the employers. And it was like somebody just flipped a switch and we went, oh, so much clarity.

So what that represents is change. Yeah. I mean, and that's really at the heart of my book. That all institutions, corporate, nonprofit, academic, we're all vulnerable to the same thing. We get to a point that we, this is what we do, this is how we do it. And then the world changes and we're like, oh geez, that's hard, I don't wanna do that. And it's hard for us to change. And then someone else will come in. One of my favorite stories is Sears. I grew up with the Sears Roebuck catalog, not even stores. We didn't have a store anywhere near us. I used to look at the catalog. It was like, wow, look at all these cool tents and things, camping equipment. And then Sears started building stores. And then Walmart came in and said, we can do it better. We're going to leverage our scale. We're going to have lower prices. And Sears could have, but didn't, change. And then Amazon comes in and says, well, We'll just go online with this stuff. And what did Amazon build?

It's the Sears catalog.

Yeah, right, right. And that's all it is. Yeah, online.

Yeah.

And, and so here's, you know, Sears, Walmart, both of them could have evolved.

And there'd never have been a role for Amazon. And then what does Amazon do? They do the brick-and-mortar Whole Foods.

So it's a cyclical nature of stores. Exactly. But it comes down to change, and any them could have embraced that constant philosophy of changing and adaptation, but there's inertia that sits in. And the academic world probably suffers from.

It even more than us.

Probably more so. Well, it's the innovation factor. Because you bring up Walmart. I recently just finished Sam Walton's book. I mean, there's so many lessons there if you haven't read that book, but it's Made in America is the book name. But one of the innovations that came about that, in my opinion, was just like the most off the wall, which was the Walmart greeter. The Walmart greeter, which is in every Walmart, it came about because it wasn't Sam Walton's idea. He went to one of his stores that— and that store was suffering a lot of theft. So part of their loss mitigation strategy was to have somebody up front. And what they found was if they have somebody up front that looks like security but is also welcoming everybody in, not only did they increase sales but they decreased loss. And by doing that, that Sam Walton in innovation, he saw that, and instead of like questioning it, he made it a policy. And, and that's why you have Walmart greeters. And, and to me, that's such a great lesson in one allowing your franchisees or having your staff, or however you want to look at it, having the freedom to, to innovate, but then noticing that, that how successful that innovation is and then immediately applying it across the board. And his— speaking of his board, and you'll appreciate this— his board fought him on it.

Interesting.

Yeah, I think it took— and somebody.

Else can— that's a function of change, isn't it?

Right.

But it's that fear factor, you know, fear change. Which could be synonymous, but the fact that it, I think it took, and I'm just throwing a number out there, probably 6 months to actually implement something.

That he immediately saw as a value add. So I think that change narrative gives us a nice segue. And talking about preconceptions coming into today, I had this preconception that what happened with Blockbuster, where you were CEO, was simply that the young, nimble Netflix outmaneuvered you and you were the old stodgy, unchanging, but I did some reading and it doesn't appear that that's the right explanation. There was a lot going on with Blockbuster. And there was change going on with the digital delivery. There was change in the CEO seat where you came in with Carl Icahn, who was a blessing and a curse, I'm sure, in your life, created an opportunity. I learned a lot. But you had an activist shareholder breathing down your neck. You had a balance sheet that was upside down with enormous debt. They'd eliminated the late fees, which I feel like I paid a lot of them with my children every Friday going down to Blockbuster. But I read that the year before they stopped and you wanted to put the late fees back on, it's like $800 million a year in revenue from late fees. That was just staggering. So they basically had cut off a revenue stream, leveraged the balance sheet. You've got an activist investor who wants you to squeeze profits.

What was that experience like?

It was.

Fun.

Fun?

Yeah. I learned a lot. I bet. But thank you for doing your homework, by the way, because Blockbuster is a great example of perception You look on the internet, you'll see my name, and you'll see somebody say, oh yeah, he's the idiot that turned down Netflix for $50 million, which happened, but in the year 2000, 7 years before you got there. And my response to them is, did you buy the stock at $0.79, genius?

Right. Well, before you respond fully, just to add to that preconceived notion, It wasn't until a couple weeks ago when I was at another SMB BLC where I forgot the gentleman's name, but he was at Blockbuster and he talked about it. And then I brought up you and he's like, oh, well, he came in after the decision was already made. So what the preconceived notion I had was you were the captain of the Titanic that hit a glacier. And what I learned from that one little interaction was You were the captain of the Titanic after it was already sinking.

It was listing, not sinking.

OK.

Sorry.

I'm not a nautical— it's all the same.

It hadn't hit the iceberg. The iceberg was the 2008 financial crisis. That was the iceberg. We were struggling anyway, because when I arrived in '07, the company had already been violating bank covenants 2 or 3 times. Banks were ready to shut them down. They kept them going and allowed us to defer our debt obligations through 2009 because we had a plan now to transform the company. So the first bullet that we dodged was when I joined the company. Now, in hindsight, and this is the benefit of a crystal ball if we had one, I was trying to take the company private. I had a lot of private equity support after a very good run at 7-Eleven with the 10x increase in the equity value. The private equity was saying, please, please let us go buy something with you. And my plan was to take Blockbuster private. Had we done that, we would have refinanced $1 billion worth of debt at about 6% interest and never batted an eyelash during the financial crisis. So I missed that window. No big deal. Carl Icahn talked me into leaving it public. Keys, you're the, you're the operator. I'm the financial guy.

Trust me. Yeah, okay, we'll keep that billion dollars of debt.

Yeah, yeah. So, you know, hey, he didn't have a crystal ball, neither did I. So we said fine. The first thing we did was to acquire streaming video company from the studios. Excellent property, had all new releases, 3,000 titles already digitized. Now, wasn't much we could do about it because there were no smart TVs. It was no Wi-Fi capability. And people were just thinking about putting a box out to be able to plug into your TV to be able to stream. But it was very early. We acquired that. We fixed the stores. We were working with the rating agencies to improve our debt rating so I could refinance the debt. Year 2008 rolls around. Now I've got about 12 months under my belt. Doubled EBITDA. Things are looking good. Had a streaming company. Competitive advantage versus Netflix. We had this thing called Total Access that had streaming. We had stores, online, by mail delivery, kiosks. We had the whole enchilada. And in September or October of 2008, Moody's finally called me up and said, good news. We're going to give you a 2-notch upgrade in your debt rating.

Good.

Now I can refinance that debt. The trouble is when they put the article out in the Wall Street Journal— I've still got a copy of it today— said, Southland based on— not Southland, sorry, flashback— Blockbuster, based on its superb operating performance, is going to get a 2-notch upgrade in their debt rating. However, because of the collapse of Lehman Brothers and the worldwide financial markets, they may not be successful in refinancing their debt, so therefore we're going to increase their probability of default rating.

Thanks.

Yeah, thank you. Can we just— never mind, I didn't want the upgrade.

You know, it took the narrative, didn't they?

They just sucked the wind right out of our sales. But, um, still no problem. We, we had 90-day credit terms from our studio partners. No big deal. We'll, we'll find We'll, we'll make it through. I actually got the debt, a piece of it refinanced, a little higher interest rate than I would have liked, but we're out there working it. Carl said that'll never happen, you'll never get it done. We got it done, we got it refinanced. The real thing, that the iceberg wasn't even the financial crisis, it was the fear among the studios, because I only had 6 suppliers with 90-day credit terms. I had no liquidity issues at all. But when one took me from 90 days to cash, that then started the dominoes falling. And when all 6 studios took us to cash payment terms, that pulled $300 million in flow right out of the company. Within 2 weeks, we had no choice but to file.

Was that done because of that article?

Because perception of fear? Yeah, the article came out— not that article, there was another article. I had hired a firm, I tried to hire I want— my preference was to hire Haynes Boone here in Dallas, a good all-purpose law firm. I was talked into by my board hiring Kirkland Ellis, known for bankruptcy restructuring. So when I hired Kirkland Ellis, that rumor leaked. That's a signal. And that was the signal. And that's what spooked the studios. I said, well, these guys hired bankruptcy counsel. They're gonna file. I don't want to be left standing. And so I think it was Paramount was the first one to take us to cash terms.

The others heard, and they're like, that's a huge lesson, lesson about, you know.

How perception drives so much.

Massive, massive lesson, especially with fear. Yeah, because like the perception of fear, and all of a sudden, you know.

That just, it just escalates. Yeah, yeah. And, and, and, and the studios are still paying for it today because what they did is they had a window, it was called You think about movies, you make a $500 million movie and it goes to the theaters for about 2 months. And then it would go into this rental window where we would pay the studios a revenue share, half of the $5 we were charging to rent it. And that would last another 3 to 6 months. And then, only then, it would go into the all-you-can-eat buffet, Netflix. HBO. So when they basically panicked and put us out of business, they also collapsed a very, very valuable window of profitability for the studios. So they're paying for it still, but it's— the lesson is so rich. And that's why if people would just take the time to do what you did— all you did is research the facts, right? And you said, oh my gosh, Netflix didn't kill Blockbuster.

A billion dollars of debt in a finance capital market. And Reed Hastings said in an interview not terribly long ago that even up until that time when those factors drove you to bankruptcy, he still thought you guys were going to kill them. Oh, yeah. So again, my perception was that they just outran you, outmaneuvered you. They were scared to death of you.

All the way up until basically your demise. We had our shoe on them in a big way. We had a superior streaming product. They had old movies, we had new releases. 80% of Blockbuster's business was new releases. Far superior business model. They, one thing I didn't, there were two things I don't talk about much because they were never disclosed. We were all under NDAs. We had an opportunity to lock up 60% of all the old movies. So we already had the new movies. We had 60% of the old movies exclusively. Studios wanted us to have that. Yeah, but it would have been a $100 million a year obligation, and no one knew how many years it would take to monetize that. It could have been 10 years before Wi-Fi was strong enough to really support streaming. Yeah, this is, this is before the.

Ipad was even launched. Yeah, well, you know, that point, it's, it's— if I remember correctly, and again, this is years ago, but like all those companies that laid all the fiber lines and all the oceanic territories, because of the— it's so obvious of the need to have all those fiber lines. I think they all went out of business bankrupt because it was so cost— it was so expensive to do that, and they never turned a profit, so they had to go bankrupt. Yeah. And somebody else can fact-check me on me, but that sounds accurate. So when you were telling the story about laying all the groundwork for the streamers But it just wasn't there yet. It was like, well, that's just immediately what I thought.

Of is all those fiber lines. Well, and another piece of the story that really very few know is that we actually did succeed in restructuring Blockbuster, took it through a filing, kept it from being liquidated, sold it to Dish Networks. Dish could have again crushed Netflix. Dish was a bit of a perfectionist. Charlie Ergen, the CEO, he wasn't satisfied with the state of streaming, and he wasn't satisfied with the delivery method. He wanted to keep improving it, the, the, the actual software that we were using to order up the movies, etc. But his vision was to bypass the internet and go straight to wireless because he believed very strongly that that was a better solution, that, that we would get to 5G faster than we ultimately did, and wireless would be a much better delivery mechanism than traditional internet. So he placed that bet when he bought Blockbuster. Our stores would have been distribution centers for Sprint and T-Mobile that he was also trying to buy. And imagine that world where he buys up all of these stores, sells Sprint and T-Mobile service out of them. Every one of those services comes with free Blockbuster inside. Wow. Yeah, right. And, and we've got a lock on all the new releases, etc., etc., that he could sell video on demand. It was a great business model, but when the government didn't release that, that Wi-Fi capability and that spectrum that he had been amassing for years until many years later he threw up his hands and said, "Nah, forget about it. We'll close down the stores and put.

The brand on the shelf." Such a fine line between extraordinary success and failure in that case. These small— well, big events, but somewhat unpredictable events that occur. I'm sure that was a great learning experience. I saw where Carl Icahn said that Blockbuster was the worst investment he'd ever.

Made, which is insult to injury.

That was before me though. Yeah, exactly. Now am I correct that didn't he buy in and become an activist in Netflix as well? I mean, did he go from Blockbuster being an activist and not putting you in a position— well, I don't want to blame it on him, but not putting you in a position to be successful to then being an activist shareholder.

Pushing the Netflix team. Yeah, he was actually quite supportive. And Carl's a financial animal. So I learned a lot from him. I actually do like him. We beat him in bankruptcy court. And he kind of scowled at me on his way out at 2:00 in the morning.

Maybe dropped an F-bomb.

He's a scowler. Yeah, a little, a little. But I was in his office the next day with a bottle of scotch in his hand saying, hey, you know. And we were laughing about it. But he was very supportive for the first year. When the financial markets collapsed, he's a financial animal. He said, this is going to be too hard. Just file it. Well, I was talking to strategics. I had 19,000 employees. I'm running a public company. I was like, Carl, if you want to go down that path, I respect your decision. But I'm going to go the other way. And we knowingly and willingly went in two different directions. And at the end of the day, I beat him fair and square. I believe we did the right thing for the company. Now, it didn't work out as well as I had hoped. 'cause I thought Dish would have taken it to the next level.

But I sleep really well at night. So I read the other day that— well, one, there's one Blockbuster store left, and I think it's in Alaska. Bend, Oregon.

Yeah, Bend, Oregon. Thank you.

Might as well be Alaska. Yeah, right. Pretty far up there. And Netflix still generates several hundred million dollars a year revenue revenue mailing discs to customers.

I would have thought that would have disappeared.

You'd think, but there's still a market.

There are non-streamers out there. Yeah, there's still a market, particularly in rural areas where they don't have the strength of Wi-Fi. Yeah, there's still a robust business. It's not that great, but I think had we been able to refinance the company early on, Blockbuster stores, there'd still be a few around in smaller markets.

But we would have had a much stronger digital offering. So your experience with 7-Eleven was strikingly different than your experience with Blockbuster, I.

Guess, in a way. Yes and no. It really kind of comes down to.

How long you ride the pony. Yeah. Well, you rode the 7-Eleven pony for 20 years. I did. If you include Citgo, the subsidiary that you worked with. And so when I look at your bio, it says you were CEO of 7-Eleven for 5 years.

But you were 20— you've had 20 years.

21 years with the company. 21 years with the company. And you went from the CTO to being a CFO to being the COO to being the CEO. And your accomplishments during that period were staggering. You referenced early a 10x on equity.

Quite an accomplishment.

You, you, you, you know, you had some meaningful impact on the inventory management. And I think under your tenure, and I would never have thought of this at 7-Eleven, that sales of fresh food became 20%, which I don't associate 7-Eleven with fresh foods. So that was, that was interesting for me. So you were somebody who really moved the needle in terms of the operations of the stores that showed up in the equity value. And then, as I understand, the controlling shareholder, an Asian group, bought it. You took it public during your tenure as well. And then they took it private by buying out the rest of the shareholders. Did you transition out then? Did you want to leave 7-Eleven?

Did you— How did that 20-year, 21-year tenure end? Yeah, when we sold the company to our Japanese licensee after 21 years, I was ready to try something different. In hindsight, I really enjoyed that role. And I see what they're doing today. They're in play today. Yeah, they are. Shockingly, for $60— latest bid is $67 billion, I think it is, with their almost 80,000 stores worldwide. I miss it a lot. It was an amazing ride being able to lead that company and a privilege. But I also saw it through some really dark times. When I arrived, it was a high-flying New York Stock Exchange company. 1987, very similar path to Blockbuster. People don't realize the history. 1987, 7-Eleven was being sought after by a Canadian company, and this was during the Drexel days of LBOs, and the Thompson family decided they were going to take it private. And they did in October of '87 when the market collapsed. I remember that well. Sounds familiar, right? Sounds like the Blockbuster story. I lived through two of these things. But when that happened, the— they loaded up with $4 billion of debt at 17% interest, which is shocking today if you think about it. Well, the Japanese licensee, recognizing that they had such a stake in the 7-Eleven brand, didn't want to see us be liquidated and have the brand be in play. So they stepped up and helped us with a restructuring. So I was able to have such great experience as a relatively young guy. And the lesson coming through that restructuring was that 7-Eleven badly needed that crisis to reinvent itself. Interesting. We were broken. We had 10 years of same-store sales declines. Covering it up with new growth, new store growth, but the core business was just dying. When you say it's broken, like what aspect of it? We had not embraced technology. We had not embraced change. And it's a beautiful story. I went to the chairman, John Thompson. He was my mentor. I said, John, should I leave? And he told me about the origins of the company being an ice house on 12th Street and Oak Cliff. And he said his dad started the business in 1927. By 1929, somebody had invented a Frigidaire and they were going to be out of business by 1930 if they didn't adapt. And his Uncle Johnny, he said, asked customers what they want. And they said, we don't come here for the ice. Where else are we gonna get ice in Dallas, Texas for our icebox? We come here for the convenience 'cause you're the only place I can get ice. Sell us other things we need conveniently. And they pivoted. John's message to me in 1991 was we forgot our mission. We think we sell beer, soft drinks, and cigarettes. He said, my dad taught me we sell convenience and convenience will never ever die. But you have to keep changing and.

Finding things people need conveniently. Yeah, what you're selling is the 10-foot.

Walk versus the, you know, 200-foot walk. Exactly.

Corner store.

And the Japanese gentleman that came to the US and saw 7-Eleven had the foresight to say this will work in Japan because they value convenience as well. He did.

And you expanded into China, as I recall. Yes, we took the stores into Beijing. The Beijing government actually came here to Dallas, Texas to ask us to bring 500 stores to Beijing by the time of the 2006, I think it was, Olympics. It was fascinating. People were clamoring trying to get into China and they were— I don't know of any other companies that the Chinese government actually came here to ask us.

If we would bring our stores there. Interesting.

Fascinating.

So real quick before we move on, You say we forgot what we sell. When did they identify what they sell? Because like you said, because realizing what you are and then later forgetting that, those— yes, those are two different lessons. But I think for entrepreneurs and people building businesses, it's like, what are you actually selling? Because there's so many— so often they're like, oh, I sell this. It's like, that's not what you're selling. You're selling this, you just don't realize it. Yeah. So what, what lesson would you— or.

How do you determine what it is you're actually selling? Well, first of all, I— we didn't know what we sold. Um, we had no technology, so we had just old dumb cash registers that you would punch the numbers and the drawer would open and you'd make the change. No scanning, nothing. I got to view now the Japanese, who when they— when a guy named Toshifumi Suzuki from Japan came to the United States and asked for the license He also recognized in Japan we're going to have to do this different. We only have 1,000 square feet for our stores. We've got to make every one of those product decisions work. And by the way, a store here in a residential building will be an entirely different product set from the store next door in a commercial building. So we're going to need to use the technology of scanning and create a database and provide tools to that operator that will let them make better decisions. So they used technology to make the retailer a better retailer. We had no technology. So when I saw what they had done, they're selling restaurant-quality sushi, delivering it 3 times a day, more cost-effectively than I was delivering once a week in the 7-Eleven stores in the United States. I was like, I have got to have that. So I copied the heck out of their technology and their infrastructure and brought fresh foods into the system. But it was that change, the crisis.

That created opportunity. Change equals opportunity. Yeah, that, as I recall, that family had 7-Eleven. They were your Japanese licensee. They were also the Denny's licensee. Denny's, Oshman's. Think about these two American brands, and I wouldn't think that they would necessarily translate, but they did. It's interesting that your franchisee or your licensee made you better. They did. As a company by their innovations there. So the original family, the Thompsons, are back in play with 7-Eleven, as I understand. The original founding family, they're part of.

This pursuit of the company now? No, not unless you've got new news.

That I don't know.

No, I just, I read that One.

Of the founding families was part of the Chase?

Yeah, a guy named Junro Ito. This is the Asian?

Okay, I was thinking it was the American family. No, he's the son of Masatoshi Ito, who is the— I like to think of him as the Sam Walton of Japan. They created— yes, they had Denny's and Oshman's as US licenses, but he was a contemporary of Sam, friends with Sam, and he built the same kind of store. It was called Ito Yokoro. Department stores based on the Walmart model. The two of them compared notes and basically built the same kind of chain. And so it was that operation that became the licensee— they were already very successful retailers in Japan— became the licensee of 7-Eleven in Japan, then became ultimately the owner of all 7-Eleven. So his son is, uh, I see, countered a move by Circle, the parent.

Company of Circle K. Okay. It's so interesting how if you zoom out enough, everything's cyclical, because the fact that they went to Sam Walton— and again, Sam Walton, the only reason Walmart became Walmart is Sam Walton was relentless to go, like, every day he was going into competitors' stores to get lessons from them. And like to the point where like one time he went in a store and he would bring a tape recorder and then, you know, somebody caught him one day and then he just gave it to them and wrote a note like, hey, he recorded, hey, uh, come talk to me. And then he met with that CEO. And it's just interesting how that cyclical nature of learning for your competition and then realizing that the change is the opportunity and, and being able to not one-up each other but just push, driving each other for that efficiency for that.

Profit for, for change.

Exactly.

I, I've actually, as you know, I've coined the expression now, change equals opportunity. And in telling my story, the 7-Eleven story, the Blockbuster story, um, over and over I kept coming back to, uh, think about that crisis at 7-Eleven that led to personal opportunity. I couldn't have sat in a CFO role in a successful public company But we were, we were struggling, and I couldn't have had the opportunity to sit in all of those chairs in that period of time. The company wouldn't have been successful. So that change created opportunity for me, created opportunity for the corporation and the shareholders, for the other employees. And so yeah, that's why I've coined the expression that ironically, when I wrote down when I'm working on the book I've got to talk about change being— change equals opportunity. And I stepped back and said, that's the acronym CEO.

Of course, of course.

Nice. I hadn't thought about that.

And that's the role of the CEO, to embrace change. So, so earlier you talked about wanting to talk about the future. And as we, we come to a close on this segment, like, what's the future for you? Is it— do you see yourself ever jumping back into the world of, of high-flying corporate making all the money in the world, or is it, hey, more advocacy and, and, and really driving home the point of education and altruism and whatnot?

Like, what's the future hold for Jim Keys? I wish I knew. You know, I'm supposed to be a planning guy. What do you want to be when you grow up? Laid out, you know, it's like, that's a good question. What do I want to do when I grow up? Exactly. Um, unfortunately or fortunately, I don't know, I, I have always been rather opportunistic in my career path because again, the more I know, the more I can do, and the more doors open. The more I learn about different things, whether it's flying an airplane or painting a picture or writing music, the more doors open. My current passion is spreading the word about the power of learning because as I travel around the world, I'll be doing a Mideast tour in January And there's a hunger out there for how do we use knowledge to be successful? And how do we adapt to change? So I think I've got a bit of a roadmap to do that. Now, if somebody walked in tomorrow morning and said, hey Jim, we'd like you to be CEO of you name it, big hairy challenging company that needs transformation.

I'd be all over it just because that's— If you'll take $1, you could be my CEO. Well, speaking of Mideast, Andy, which is Lane's partner, he shared an email that there's a conference you're speaking at, and I believe in Dubai, that he's going to. Oh, really? Yeah. Yeah. Unfortunately, he's not here. He's out of town today. But he was like, it'd be funny, like, well, because I— we were able to manage to get you on. He was like, this is such a small world because the conference— he's speaking.

At this conference I just booked. Oh, that's really smart. Yeah, it's a It is a small world. It's a really small world. I was at a conference in LA last week. And I ran into a bunch of people that had heard me speak in Australia a couple of months ago.

And it's really fun. It's that whole world is flat. I know the world is flat refers to something else.

But it's that same kind of mentality. It really is. Shrinking. And that's why this message is so important, because the more technology continues to shrink the world— I've got a chapter in cultural literacy that's so critical, and especially for young people today. It's like, learn other languages, get out and, and understand other cultures because you're.

Going to need it. We spoke with General Williams and he was talking about how just in Dallas.

Alone There's, what do you say, 120.

Different languages, dialects, and then like most people speak 5. And that's when I lived in Dubai years ago, and that was one of the things that I learned very quickly is like everyone there spoke at least 3 to 6 languages. And here I am, the American Texan.

And I'm like, I barely speak English.

We want everyone to speak English. Well, I think, I think, I think.

English is still the business language, at least for the science aviation language.

It's the aviation language. Yeah. So although I got my floatplane license in Italy. Wow. And it's supposed to be the aviation language. Yeah. That always works. A lot of little towns in Italy, they're like, find the guy that speaks English quick, bring him in.

We got an American pilot here. That's funny. So you said you were at a book signing recently and there were 500 people in line. And so I guess my question is, are they there because there's a message in your book that, that they are— is resonating with them? Are they there because they want to meet the CEO of Blockbuster or 7-Eleven? Or are they there because of your TikTok video?

Could be, right? I think it's a little all of the above. The, uh, I didn't have an appreciation for the the power of the Blockbuster brand or 7-Eleven brand, just the nostalgic. I've had so many people come up to me and say, yeah, I grew up, you had two brands I grew up with. Grabbing a Slurpee and going to Blockbuster on a Friday night, you're part of my childhood. So that I think is a draw. But I think the biggest thing that I've found is I created this, I call it the hierarchy of success. That at the very top is embracing change, but at the bottom, the foundation is character. And I talk a lot about the importance of integrity and humility and gratitude and these things that make us who we are, our personal brand. And that really has been resonating, that hierarchy of success and a roadmap to be able to, I call them the meta skills. Sounds nicer than soft skills, but those things you don't learn in, in a curriculum in graduate school, but you learn after 20, 30 years in the workplace how important these elements are— cultural literacy, creativity, these things. So that roadmap, I think, really has been what's been the most popular in.

The reception for the book. Excellent. So to close, I understand character is massively important. What do you think is the biggest actionable lesson out of your experience with.

7-Eleven and then conversely with Blockbuster? I wish somebody came and whispered this in my ear when I was a kid. I have this— I quote Yoda when I talk about fear because Yoda teaching Luke The Force said that with knowledge and the Force, perhaps a metaphor for faith of any kind, you can accomplish anything, and there's really nothing to be afraid of. But that fear leads to anger. Ignorance leads to fear. Fear leads to anger, and anger leads to violence. And it's a very negative cycle, and we're all vulnerable to it as individuals. And then collectively, it's even worse. We reinforce it in each other. The antidote to fear is knowledge. And especially if you combine faith and knowledge, then it's a double set of armor that ironically— and I started researching these concepts, I went back to— I found someone actually told me Pope John Paul in 1998 said a really beautiful thing, put out this treatise on faith versus reason, and he said, He said faith without reason is superstition. I was shocked to hear a pope say that. And he said reason without faith is nihilism or materialism. And he said really it's the two are like wings that elevate the human spirit to seek the truth. And I love that expression because it's all about seeking the truth. And when you have— when you're equipped with those tools, the ability to learn anything and to believe in yourself, if nothing else, to have some belief, then there's absolutely nothing that we have to fear. And not to get religious, but I went back to the Quran and I went back to, um, uh, various religious texts, uh, the Torah, the Bible. The Bible, 365 times, the most common repeated verse in the Bible Do not be afraid. So what are we afraid of, right? So that's, that's what I wish someone had told me.

Don't be afraid. Great message. I think it's a great ending. Yeah, it's amazing.

Well, thank you so much for doing this with us.

Yeah, thank you. Great opportunity.

I appreciate it. Excellent, Jim. Thank you. Combine faith and knowledge, then it's a double set of armor that Ironically, and I started researching these concepts, I went back to, I found someone actually told me Pope John Paul in 1998 said a really beautiful thing, put out this treatise on faith versus reason, and he said, faith without reason is superstition. I was shocked to hear a pope say that. And he said, reason without faith is nihilism or materialism. He said, really, the two are like wings that elevate the human spirit to seek the truth. I love that expression because it's all about seeking the truth. When you're equipped with those tools, the ability to learn anything and to believe in yourself, if nothing else, to have some belief, then there's absolutely nothing that we have to fear. And not to get religious, but I went back to the Quran and I went back to various religious texts, the Torah, the Bible. The Bible, 365 times, the most common repeated verse in the Bible, do not be afraid. So what are we afraid of, right? So that's, that's what I wish someone had told me.

Don't be afraid. Great message. I think it's a great ending. Yeah, it's amazing.

Well, thank you so much for doing this with us.

Yeah, thank you. Great opportunity.

I appreciate it.

Excellent, Jim.

Thank you.