Broke and in debt at 33 — then he built MTV (co-founder Tom Freston)

Tom Freston 0:00 This guy said, "W- we're looking for people who have absolutely no experience in television." Which I was like, "Wow."

Jeff Berman 0:05 [laughs]

Tom Freston 0:06 I said, "They didn't even have television where I've been living. I mean, I'm walking around in flip-flops and pajamas for a year." It was hard to believe now, but MTV was really revolutionary at the time. It was a sign of some kind of future that might be coming, this TV revolution.

Jeff Berman 0:21 This is Masters of Scale. I'm Jeff Berman, your host. This week on the show, the word legend gets thrown around a lot. In this case, we have a legend who is actually legendary, Tom Freston. Tom is a co-founder of MTV, former CEO of Viacom, and his new memoir, Unplugged, is full of wild stories and deeply meaningful lessons from his life as an unconventional CEO. This is gonna be a fun one. [upbeat music] Welcome to Masters of Scale.

Tom Freston 0:57 Nice to be here.

Jeff Berman 0:57 Uh, great to have you here. I was, uh, in an airport, uh, with a book that I wasn't really loving, so I popped into the airport bookstore. I saw your book. I figured I'll grab that. I'll start it on the plane. Fortunately, there was no Wi-Fi on the plane. By the time I landed on a cross-country flight, I'd nearly finished it. It is a rollicking read. Um, and one of the things that stood out for me in reading the book was the extent to which the early part of your career was shaped by breaking rules, making new rules. And as we look at what's happening in the world today, I'm curious what your take is on what the line is between what is acceptable rule-breaking and what is really reckless and dangerous rule-breaking.

Tom Freston 1:44 Well, first of all, I'm excited to hear that they were selling my book in a bookstore in the airport.

Jeff Berman 1:48 Yeah.

Tom Freston 1:49 I'm glad you liked it. Um, well, in terms of breaking rules, well, you don't wanna break rules that are against the law, generally. You know, a lot of the rules that we broke, say, with MTV, were like they were more in the cultural realm, and we broke rules o- on a business basis. Like, at one point, we, we couldn't get the cable operators who were, at that point in time, in the early '80s... This seems like ancient history, but they were local monopolists. We decided after a couple of years, and we only had a couple of million subscribers, we would just go over their heads. It was like, "Screw them." And we, we cranked up the I Want My MTV campaign, which to try and pull, you know, demand right through these, these distributors who were largely Elvis fans who didn't like MTV, who didn't like the idea of paying us 10 cents a month. We were just somebody to cut into their profit margins. So that was a rule broken which was like it was sort of not a polite thing to do in the cable business back then.

Jeff Berman 2:54 Well,

Jeff Berman 2:55 and beyond that, I mean, let's go back to Hindu Kush, which, I mean, I think most people know you for MTV, such an iconic stretch of your career. Um, but you, you started by building an apparel brand out of India, right? And Afghanistan. I mean, um, where it's not even clear what the rules were at times, right?

Tom Freston 3:15 I wanted to live there. I w- I had been traveling, and I had developed this fascination with that part of the world. I figured, "How can I afford to live here? I need to start a business," 'cause I couldn't get a job. So I started this business in the garment business knowing nothing, never wanting to be in the garment business, but it took off like a rocket. And then at, at the end, there was an embargo that Jimmy Carter put down that ultimately put my company out of business.

Jeff Berman 3:39 Yeah.

Tom Freston 3:40 No more imports from India, and I sent three tons of clothes to f- to, to Montreal, and we smuggled them over the Saint Lawrence Seaway [laughs] which was insane. I don't know what I was thinking, but, uh, I was kind of just looking for a little justice.

Jeff Berman 3:55 You had a business that was growing. You were living the entrepreneur's dream and, and really... And the stories are so colorful and so vivid, and then all of a sudden you've got a change in geopolitics. You've got a rise in tariffs. This sounds very familiar- [laughs]

Tom Freston 4:09 Yes

Jeff Berman 4:09 ... to anyone who's paying attention-

Tom Freston 4:10 Yes, it does

Jeff Berman 4:10 ... to the news today.

Tom Freston 4:11 I, I, I really feel for all these young importers these days g- who are screwed.

Jeff Berman 4:17 So what, what did you learn from then that would be useful for those entrepreneurs today who are dealing with the similar turmoil?

Tom Freston 4:25 Well, I have to say all the, all the experiences that I had... I mean, I lived eight years in Afghanistan and India, and but also we were selling clothes, and I was dealing with retailers here, but a lot of the things I was living, I've learned humility.

Jeff Berman 4:38 Hmm.

Tom Freston 4:39 Living in that part of the world, you learn humility, and you also build up a great confidence in yourself and your ability to do things. It was like a sort of a be-bop, be-bop business lifestyle. You could... You, you would improvise. You would take chances. You would take risks. You would bet on unusual people. You would learn how to tolerate unusual people. All of this kinda came in place, and it made sort of a perfect resume for someone who was gonna lead what, what became a cutting-edge, uh, you know, eccentric media company.

Jeff Berman 5:07 There are so many ambitious 20-somethings who are terrified of stepping off of the, the well-worn path. They, they're, they're kind of going through a machine of, well, it's the right college, and maybe it's the right grad school or the job at the right company, and, um, and it, it, th- there's real fear about following something that's more of a passion or, or that they feel in their body just might be something worth trying and being a little bit more be-boppy about their career. Um, when, when you're talking with young people who are in that mindset- How are you helping them understand that there's a- another path?

Tom Freston 5:43 Yeah, I mean, it's really a good question, and I, I really worry for the... First of all, it's really a, it's a tougher time for kids. You know, you're in your 20s these days and you wanna start a career, and the office culture thing has sort of collapsed, and a lot of things that maybe we knew when we were that age are sort of gone. You know, step off the conveyor belt and embrace some uncertainty. No one's gonna miss you if you're gone for a while. You can maybe travel all around the world like I did, but I would say that... But travel, making that part of your, uh, you know, post-college experience, is, is like the world's greatest classroom.

Jeff Berman 6:18 Mm.

Tom Freston 6:18 You, you learn a lot about empathy. You learn a lot about your country. When you come back, you know, you've had a m- a, a better formed existence. You're probably gonna be more attractive to someone who's a recruiter than someone who just w- went on the conveyor belt the whole time. Relax, for God's sake, you know?

Jeff Berman 6:36 When you came back, um, you ultimately, as I recall it, uh, answered an ad that, uh, wanted people to work at a fledgling TV network who had no TV experience.

Tom Freston 6:51 Yeah. [laughs] I had, I had come back. I had built this business. It was a multi-million dollar business. It was a big success, which I never expected, and I loved it. It crashed and burned. I'm deep in debt. I'm back in New York. All my friends... I'm now 33. All my friends have gone out and they gotten married. They have careers. And I said, "What the hell am I gonna do?" I bought this book, What Color Is Your Parachute? The only self-help book I've ever bought. I've recommended it to so many people. I mean, it said that you have transferable skills. You can do a lot of different things, and you, by the way, you should do something that you love 'cause that, that's really... what's better than that? And what do you love? So they had all these little exercises where you could evaluate your skills, look at what you like, and I came up with, like, music. I mean, I was a music nut. So I saw this article in Billboard Magazine by this guy, John Lack. He was interviewed and he was talking about this was the start of cable TV, cable TV networks. They had started the Movie Channel and Nickelodeon, and they had plans to start a video music channel. I said, "Oh, God, that's a great idea. How do I get to meet this guy?" So my brother, who was in the record business, knew a guy who had just gotten to work there. I got an interview, and when I went in, this guy said, "Well, we're looking for people who have absolutely no experience in television," which I was like, "Wow."

Jeff Berman 8:08 [laughs]

Tom Freston 8:08 I said, "They didn't even have television where I've been living." I mean, I'm walking around in flip-flops and pajamas for eight years. So everyone they hired was, um, had no experience. A lot of people came from out of radio, came out of the music business. At Nickelodeon, they were school teachers, and that turned out to be, like, the brightest move. We had to think of totally new ways to do things, and there's nothing like having no money to force people to innovate. And, uh, and if you're working with a group of people who are on a crusade like you are, really passionate about something, you'll figure some good things out. It'd be hard to believe now, but MTV was really revolutionary at the time. It was a sign of some kind of future that might be coming, this TV revolution.

Jeff Berman 8:51 Well, it, it's such an interesting challenge, Tom, because you're, you're launching a television network in a world where there are rules and their own, there are norms. How did MTV thread the needle of taking the experience and expertise of people who knew how the system worked, but the insurgent challenger mindset of the outsiders who came in with the real passion for music and for the artists and the, you know, screw the rules, let's, let's n- not, let's not do illegal stuff necessarily, but let's do things really differently. Uh, it, it feels like that's a bit of a clash between mindset and culture. How, how'd you guys navigate that?

Tom Freston 9:27 Well, we had to learn what the business was and, you know, ultimately, the business of cable programming wasn't that complicated. You gotta have to create 168 hours of programming a week. You're gonna bounce it off a satellite that's 25,000 miles in the sky, which seemed to me like, wow, this is like outer space stuff, which gave you the ultimate scale of, you know, you put together this thing and then it's, you know, it has a footprint all over the United States. We hired people who knew how to do video, and we would reach out, say, to NASA. We would grab a lot of footage that was available in the public domain and, and utilize that, like the rocket ship launches, and we got this product from the... The program staple at the beginning were these music videos which already had been produced, so it was sort of, we were sort of like a radio station. Everybody was in their 20s but me. I was the oldest guy at 33. My boss, Bob Pittman, who's an incre- incredible character, he was, like, 26. He never went to college, you know, very successful guy. I learned a lot from him. He was like a mentor to me.

Jeff Berman 10:32 What's, what's a great lesson you learned from Bob?

Tom Freston 10:36 Uh, the, the, the, the key to the business is the consumer.

Jeff Berman 10:40 Mm.

Tom Freston 10:40 You, you have to deal with a lot of different groups: advertisers, in our case, cable operators, artists, record companies, this and that. But if you could, if you could make a connection with the consumer and know what's going on inside that consumer's head and maybe build up a research enterprise that gives you a lot of insights into what's going on and get that bond and build up some loyalty, that will allow the other things that have to happen in your business, getting distribution, getting advertisers, convincing people to do things, that will allow them to fall into place. So it's consumer first, second, and third.

Jeff Berman 11:20 Outside of a couple of years at the NFL, I have spent the entirety of my career, uh, working for effectively challenger brands, insurgent brands or building them.

Tom Freston 11:30 You were in my space for a while.

Jeff Berman 11:31 I was, and I'm very keen to talk to you about that.

Tom Freston 11:33 [laughs]

Jeff Berman 11:34 Um,

Jeff Berman 11:35 but you know, one of, one of the challenges when you're scaling, uh, an, uh, an organization that, that is a challenger brand and has that insurgent's mindset is how you keep that culture while you grow. It's really not hard when you're five or 10 or even 20 or 30 people. You get to 100, 200, 300, and you start to have things literally called divisions, right? You're separating the company. How were you all able to maintain the culture at MTV through that scaling journey?

Tom Freston 12:03 Yeah, that was a huge challenge You know, particularly 'cause we wanted to stay sort of on, on the, on this cutting edge. So the first thing... Uh, so I always thought that having a creative, innovative corporate culture, I almost hate to use the word corporate, would be a big competitive advantage. We needed to be diverse, which, which was not something that happened right out of the box.

Jeff Berman 12:26 Mm.

Tom Freston 12:26 I mean, we started as a lot of like w- w- white guys. You know, diversity a- actually came our way, and it was more challenging than I thought it would be, but we were able to pull that off. And you want a place where people think their opinions get heard, that politics aren't really important, an organization that's sort of flat. I would always go out and speak to them and try and reinforce the company values. And, you know, we're a creative organization. It's okay to take risks. We encourage you to take risks. We tolerate that. We want people to be collegial, and I wanted it to be... I wanted to have a fun vibe, you know. So we always had parties, and get-togethers, and socially. A lot of these things don't happen anymore. I've watched sort of the disappearance of office culture in general. It, it, uh, it's not that great with the pandemic. I mean, people lose opportunities to bump into each other, learn things via osmosis. Uh, mentorship kinda has disappeared in a way, so I think it's sorta coming back. Um, but it's, it's not... It's, I don't know if it's ever gonna be like it was with people working remotely in their underwear, like from some distant location. [chuckles]

Jeff Berman 13:32 No, they should be working in the office in their underwear.

Tom Freston 13:34 Right.

Jeff Berman 13:34 That, that was the MTV way.

Tom Freston 13:35 We, we, we had the worst-dressed group of people. [chuckles] We probably did have people in their underwear. We didn't have a dress code. It was only no frontal nudity was our rule, and at that point in time, everybody had a dress code. But I said, "You know, screw that. We're gonna be an untraditional company." And I wanted the people in the company to look like the people I just saw in a subway car.

Jeff Berman 13:56 Hmm.

Tom Freston 13:56 You know, young and a bit batty. The other thing is we wouldn't tolerate, um, you know, bad actors. If someone hires somebody who's substandard and they don't work out, that person is likely to hire other people who are along the same lines. So you're gradually eroding your company's vibe from the inside.

Jeff Berman 14:20 Yeah. Uh, B players hire C players, and A players hire A players-

Tom Freston 14:23 That's right

Jeff Berman 14:23 ... and it, it's a pretty firm rule.

Tom Freston 14:25 By the way, I never really focused on money.

Jeff Berman 14:29 Mm-hmm.

Tom Freston 14:29 When I would address the company at large, I would always talk about our sort of our creative risks and so forth and leave the money stuff aside.

Jeff Berman 14:37 Well, that was one thing when you were, when you were leading and helping lead MTV. It's another thing when you're leading and helping lead Viacom itself. What was different for you going from overseeing one brand to a family of brands that have wildly different cultures?

Tom Freston 14:53 Well, we had a family of brands in the sense we, we, we became a big cable networking, uh, operation. We had Nickelodeon, we had Comedy Central, we had VH1, we had Noggin, we had Nick Jr., we had TV Land. There was, uh, Country Music Television. So when I ascended to be the CEO, I, I became the president of Viacom, along with Les Moonves. We were like a big entertainment conglomerate, and I became co-president with Les. We got along well. You know, he had his fiefdom, I had my fiefdom. But then the digital revolution began to hit and break up this ecosystem which we survived on the fact that we had a central operation. We're, we were like editors. We could manage because of scarcity. We didn't have to put out a lot of things, and now all of a sudden we've got the internet.

Jeff Berman 15:45 [upbeat music] Hey, folks, before we get to more of today's conversation, I want to share some very important news, and if you haven't been before, you may not realize quite how big it is. Masters of Scale Summit is returning to San Francisco this October, 20th to 22nd, and we want you there. The stage program is iconic. The setting is truly breathtaking, but what makes this so special, it's you. The community at the Masters of Scale Summit is highly curated and quite unusual for what looks like a business and technology conference. Yes, there are founders, there are investors, there are executives of unicorns and decacorns and big public companies. But you also have artists. You have professors, authors. You have people who create culture, and it's this intersection that makes

Jeff Berman 16:32 the experience truly special. You kind of have to be there to experience it for yourself. I hope you'll join us. Visit mastersofscale.com/summit. Viacom did not really make that digital leap.

Tom Freston 16:47 Right.

Jeff Berman 16:47 Um, it, it struggled to. So given that talent that was there, what, what stopped you from, from getting there on the digital side?

Tom Freston 16:55 Yeah. Well, that was, uh, you know... It's back to the innovator's dilemma.

Jeff Berman 17:00 Mm.

Tom Freston 17:01 Like I'll just take in the case of MTV. We, uh, you know, we saw, we saw that... It wasn't like we didn't see what was coming. I mean, you have to be an idiot not to see that, and we were the canary in the coal mine. I mean, 'cause it was teens, kids, teens, young adults, they were the first people to really dive into the internet and, and begin, you know, m- moving some of their viewing time and attention over there. Now, you know, people can upload stuff, share stuff, comment on stuff. Everybody's almost their own little broadcaster. How do we get in on this business? We don't really have the DNA to do it. So all of a sudden now we're probably gonna have to buy something.

Jeff Berman 17:38 Mm-hmm.

Tom Freston 17:39 We're gonna have to buy something and, you know, try and integrate that into our business. So we fooled around. We bought, we bought a bunch of small, uh, websites that were of no great consequence, but then, you know, a couple things happened. You know, we realized... We had our eye on social media. Met with Mark Zuckerberg. I'll never forget that. Someone called me up and they said, "You know, we want you to meet this guy, Mark Zuckerberg. He's like 20 years old. He started this thing called The Facebook." Their revenue's nine million dollars. So Mark Zuckerberg came in and, uh, you know, we had seen Friendster, we'd been watching MySpace. We thought social media, this is interesting. At the time, he was debating whether or not to add... He came in in flip-flops and a hoodie in February in Times Square, I remember that. They were our offices. And they were debating whether to add high school students to the platform, and they had a, they had revenue of nine million dollars. He had just, I think, moved to California. We, we neg- we offered to buy the Facebook for a mil- billion and a half dollars, which was a lot for us.

Jeff Berman 18:42 Well, especially with nine million in revenue.

Tom Freston 18:44 Yeah.

Jeff Berman 18:45 Yeah.

Tom Freston 18:45 It was a lot for us, and half of that would be in earn-out. So we were the first people to bid on it, and Mark Zuckerberg wanted nothing to do with it.

Jeff Berman 18:52 He's done okay. [chuckles]

Tom Freston 18:53 He's done all right for himself-

Jeff Berman 18:54 Yeah

Tom Freston 18:54 ... that young fella. So then we looked at, uh, YouTube. YouTube was really like a wow. We were the king of short-form video, and here they are doing this, but it was a whole different model where anybody could upload video, anybody could comment on it and share on it, and we said, "How do- This is fantastic." So the problem was because we were a big public company, we were liable. They were people up live- uploading, you know, episodes of our shows or Saturday Night Live, whatever. There'd be a lot of copyright stuff. And, uh, the board at Viacom viewed it sort of as a copyright infringement machine. They ultimately, after I left, sued YouTube famously for a billion dollars, then lost it after 10 years. And no one ever could have imagined w- the ecosystem that YouTube was ultimately able to put together. I think it's worth almost six hundred billion dollars today-

Jeff Berman 19:48 Yeah

Tom Freston 19:48 ... and it's a monster. We cast our eyes on you and MySpace, and so let's see what's going on over there in Santa Monica.

Jeff Berman 19:55 There's an alternate universe where you would have been my boss, Tom. Um, and, you know, y- you open the book with, with the, the MySpace story and, um, and it sort of being the catalyst for leaving Viacom. Um, not long after you left, uh, Oprah reached out, as she does, you know, uh, uh, and, and asked you to help her build her company. W- what's a lesson you learned from working with Oprah that you haven't shared with the world before?

Tom Freston 20:24 She's the easiest person in the world to talk to, to be with, and she just radiates goodwill and goodness, and we all know that. We all know Oprah, so working with her was a pleasure. Oprah had a cadre of, uh, largely women who had surrounded her and worked on her syndicated show, which was this huge business. And they knew Oprah, and they knew what they wanted, and they, they kinda came as outsiders to Hollywood. And I helped mostly in the business side. Can we get a deal with Comcast for distribution? Can, you know, how do we set up some of these departments? I would work on that kinda level. So I did that for a couple of years. It was interesting.

Jeff Berman 21:01 Tom, o- one of the hallmarks of your career has been, um, seeing trends before they emerge. Does what's happening with the consolidation in media and the, and, and ironically, then also the fragmentation in media also create lanes for innovation-

Tom Freston 21:16 Yeah

Jeff Berman 21:16 ... that is exciting or-

Tom Freston 21:17 I guess, I mean, look, I look at the, the s- the s- s- I'm always attracted to stuff around the edges, sort of out of the mainstream. So I look at, uh, like yeah, the movie business and television, but then I look at A24.

Jeff Berman 21:27 Mm-hmm.

Tom Freston 21:28 They're independent. They're not owned by one of these public companies, and they've opened up a, a, a live venue space. They sell merchandise. They have great instincts and great taste, and they continually seem to pick up and pick projects that are low cost and seem to do really well at the box office, and they're doing television, and they're experimenting with, uh, you know, um, shorter form programming that could go on the internet. I said, "Well, they're putting together a whole new model." And, a- I thought one of the most interesting is, is the, uh, the idea that they have a live entertainment venue where they can also test and, you know, sort of pilot things and maybe m- maybe th- they're, like, uh, they're like a, like a little mini conglomerate-

Jeff Berman 22:11 Mm-hmm

Tom Freston 22:11 ... existing outside of the mainstream and w- you know, with credibility now, and, you know, they, they seem to be self-financed, and Neon's another one. Uh, so I think some of these little folks are the people to keep your eye on, some of these people that might jump off YouTube. The YouTube economy is in- remarkable. I mean, one of the most remarkable things about YouTube is YouTube TV as an app. I don't know if you, if you get that. And that's like, that's like everything we ever wanted.

Jeff Berman 22:39 Yeah. If you're trying to build something like this, whether it's media or in other categories, uh, what I'm, what I'm taking from what you're saying is have a point of view.

Tom Freston 22:49 Have a point of view, and then also try and, uh, build relationships with key creative actors-

Jeff Berman 22:56 Mm.

Tom Freston 22:56 ... and talent. You know, it's like the t- at the center of this, all this change, everything i- is talent, and, uh, there's a lot of people today in the, in the YouTube universe and the TikTok universe that you might be able to tap into, have been able to establish pretty amazing

Tom Freston 23:11 businesses.

Jeff Berman 23:11 Speaking of relationships with talent, um, you've, you've built some pretty incredible ones. What's the secret to building and maintaining relationships with creative talent?

Tom Freston 23:22 Well, you have to be honest. You have to be someone that they respect, and, uh, and, and that means you, you, you, you, you, you... They need to think that you know what you're doing.

Jeff Berman 23:32 Mm.

Tom Freston 23:33 They need to think that you also are aware of what they've done in the past. I mean, we have great stories about, uh... I mean, Jon Stewart is a perfect example. He wanted to do a show about, uh... We had this guy Craig Kilborn on The Daily Show. He was sort of a middle-of-the-road, kind of a fraternity house guy, nice guy, but we gave to Jon Stewart the shot, and he said, "I wanna He had worked on, on it with us at MTV. "I wanna do political satire." And you know, he invented fake news. He could say he was with a guy... And he, and he turned, it turned into this steamroller with full of Emmys, and he's hosting the Oscars, and he hires Stephen Colbert, and he hires Samantha Bee, and he hires Stephen Carell, and he hires John Oliver, and this whole galaxy of people who, you know, who, they're still around today.

Jeff Berman 24:22 We talked about the, um, the extraordinary talent that you built at MTV and across Viacom. Um, you, you said that it was harder to diversify MTV than you thought it would be. Why was it harder, and what ultimately worked for you?

Tom Freston 24:37 It was harder because I thought, you know, at one point, MTV had received a lot of criticism for not airing, uh, Black acts, which, you know, fair enough in many ways. We, we, we, we, we kinda came around, and we, we kinda made up for that in a way. We were the first people to kind of give hip hop, uh, put it in the living rooms of Ameri- I mean, w- BET or in radio wasn't even playing hi- hip hop. But we were uncomfortably white, we were uncomfortably male, and, um, tried to change that. There's a great business case for diversity. I'm really offended with this DEI thing that's going on now with the Trump administration. Like, we don't want DEI. I mean, that's just nuts. There was a business case for why DEI is a healthy thing. If you, if you're programming, for example, to a diverse audience, why wouldn't you wanna represent them? So you have a room for, uh, you know, opposing viewpoints on this, that, or the other thing. It's... And plus it's just healthier to, to... Why, why do we wanna just be a bunch of white guys? It doesn't make any sense to me. We did have ended up about 50% women managers, but it was particularly with w- African Americans and Hispanics, we could just hire them and have them come on staff, and then, you know, we could say, "Hey, we kinda look like that subway car that I always had in my mind we wanted to look like." But if they didn't feel comfortable there, then they end up leaving. So I'd see these nu- they'd show me these numbers of what we have hired, and I'd go, "Oh, this is really good. We're making improvement here." I would actually make this a goal on people's bonus plans.

Jeff Berman 26:11 Mm.

Tom Freston 26:12 So after a couple false, false starts, uh, we got better at it.

Jeff Berman 26:16 Yeah.

Tom Freston 26:16 You know? We got better at trying to make the place comfortable for everybody, and, uh, you know, at the end of it, when I had left the company, we had achieved that. That was, like, in 2005, 2006. I'd get in the elevators, and I'd look around and go, "Yeah."

Jeff Berman 26:30 And then the corollary is you get what you measure and you get what you incentivize. I very much share your concern about the attacks on... You know, DEI has become this, like, bad, you know, uh, acronym. Um, uh, and it's not clear to me, I don't mean to be obtuse, but why? Like, to your point, if we're serving diverse and, and representative populations, shouldn't we have teams that reflect those populations, um, if for no other reason, and I think there are a lot of other reasons to do this, than to build the best business possible? What, what am I missing? Why-

Tom Freston 27:05 Nothing.

Jeff Berman 27:06 Okay. So is this, is this racism and sexism, or is it some-

Tom Freston 27:10 Yes, it's racism without the dog whistle.

Jeff Berman 27:13 As you

Jeff Berman 27:14 look ahead, as we're dealing with these challenges in our country, um, what gives you hope?

Tom Freston 27:22 Well, I believe in the American people. I believe th- this is really a dark time in many ways. I don't detect a sense of optimism-

Jeff Berman 27:31 Mm

Tom Freston 27:31 ... anymore. And I, I can't believe that that's not gonna be back. Despite everything that's going on in the world, many bad things, um, we're gonna... You know, we're still, we still have probably the best system, and we do have checks and balances that haven't been demolished. It's really demoralizing to see the level of grift and graft and how spineless certain politicians are to accede to this happening, whether, you know-

Jeff Berman 27:58 Well, it's not just politicians, and, uh, this is something that I, I can't get my head around. And as someone who spends time with, you know, CEOs at not just, you know, high-flying private companies, but of public companies, um, we depend on rule of law. Rule of law is what allows business to thrive in America. When we make a contract, we know that contract is gonna be enforced, and we can go to a court and get a neutral ruling, and the government's not gonna come after one party because one, one person or one company because they support the opposition party or the opposition candidate, right? They haven't kowtowed to the current president. And yet that's under attack right now. So when you're talking with business leaders, uh, are they, are they even thinking about this? Do they, uh, do they dismiss it? Do they think the threat is real?

Tom Freston 28:47 Yeah, I think they th- uh, on the, the ones I've talked to, they would say the threat is real, but a lot of people are afraid to raise their hand.

Jeff Berman 28:54 It's a collective action problem. If you go out alone, you're gonna get your head chopped off.

Tom Freston 28:58 Yeah, yeah.

Jeff Berman 28:59 So how do we solve for that?

Tom Freston 29:01 They all feel this way, you know, in private. Well, w- why don't they... But they're afraid to stand up. They've seen what, what has happened. When you have Tim Cook coming into the Oval Office with a gold gift for Trump. This reminds me, I spent a lot of time in third world countries. Cronyism and favoritism. I mean, it's just, I mean, it's appalling. Uh, but people think this is what you have to do to get things done in this administration, and this is what my shareholders are gonna need, so they do it. And they don't wanna be singled out, uh, and have their head chopped off by, by Trump.

Jeff Berman 29:40 Th- this, um, era of shareholder supremacy in, in running companies, this Milton Friedman concept that's not even 60 years old at this point, um, uh, really minimizes stakeholders, uh, whether that's Customers and clients, that's team members, that is, um, uh, society, uh, at large, our, our nation at large. Do you see a path to elevating stakeholder interests in how companies are led? Is there, is there a way back to a world where corporations have responsibilities that are co-equal with the shareholder responsibilities?

Tom Freston 30:21 That's a good question. You know, and I'll-- I'm, I'm thinking of Milton Friedman, but you're right. We have really pretty much boiled it down to the shareholder interests. And, you know, uh, there was a lot of time, it wasn't that long ago, when companies would do these purposeful things. And now they all got, uh, derided as, "Oh, this is woke stuff." Save the Music, you know, like music libraries and music... Instructing kids how to play musical instruments. These are good things. It ties in with our image. And what it did was it make everybody in the company feel good. One of the things I do, and I go through this in the book, I'm, I'm the board chair of this thing called, uh, ONE Campaign, and we-- w- part of that is (RED) , which is... I don't have my phone with me, but, you know, we would partner with companies making products. And what we would find that, uh, y- w- you deal with Starbucks and others, they, they-- the employees would feel good knowing that the company that they work for, that they devote their life to, is doing socially positive things as well as just marketing a product in the best way possible. So I hope it comes back. I hope we're just going through a phase. It would seem to be a-- me to be a lost opportunity. I think more people would be doing it if they weren't fearful that somehow it's gonna be lumped into this woke category-

Jeff Berman 31:45 Yeah

Tom Freston 31:45 ... that you're gonna be attacked

Tom Freston 31:46 for.

Jeff Berman 31:46 Tom, I'm very much the MTV generation. Uh, uh, I, I remember, uh, Dire Straits, I remember discovering the Beastie Boys and Biggie, and I remember remote control. I mean, MTV was such a culture shaper, um, for my generation. Um, and now if you turn on MTV, it's like wall-to-wall Ridiculousness reruns and what have you. And, uh, uh, several months ago, a year ago, they stopped even really as a, as a, as a video channel. W- what has the world lost with, um, uh... We, we gained a lot in the fragmentation to cable, but we still had sort of a monoculture.

Tom Freston 32:24 Yeah.

Jeff Berman 32:25 What has the world lost now that we are so hyperfragmented?

Tom Freston 32:28 Well, uh, outside of big sports events or, say, the last episode of The Stephen Colbert Show, there's not a lot of shared moments. What we used to call in the old days, you remember, w- the water cooler moments where everybody shows up, "Hey, did you see this thing last night on Friends?" Or, "Did you see this, uh, Unplugged on MTV with Bob Dylan?" Everybody lives in these silos, and everybody is being served up things by algorithms. You do see a bit of rebellion against that now. You know, you start seeing vinyl coming up, vinyl sales coming up. People are buying flip phones instead of smartphones. I mean, this is maybe still just a niche thing, but it does mean there's sort of an aching, and there's this great nostalgia for the '90s. But I think the disappearance of MTV and a lot of those linear networks and the big broadcast shows just, uh, uh, I'm not so sure it's a positive thing for the society, you know?

Jeff Berman 33:23 I, I really can't recommend your book, Unplugged, uh, enough. It is, uh, not only full of actionable insights and lessons, but, um, the stories are just freaking great. If you weren't gonna be my boss at MySpace, at least to have you-

Tom Freston 33:37 [laughs]

Jeff Berman 33:37 ... on Masters of Scale.

Tom Freston 33:38 We got close. Yeah, we-

Jeff Berman 33:39 We got close. We got close. Thank you so much for being with us.

Tom Freston 33:42 Anyway, it was a pleasure. I really enjoyed the conversation.

Jeff Berman 33:44 Thanks, Tom. Thanks again to Tom Freston for joining us. His story is a powerful reminder that truly disruptive companies cannot follow an existing playbook. For more fascinating takes from Tom's life, be sure to check out his memoir. It's called Unplugged. We'll put a link in the show notes. I'm Jeff Berman. Thank you for listening. [outro music]