The Magic Man
How Howard Tullman has Produced the Ultimate Innovator's Playpen
By Seth Kravitz on September 14, 2011
Photography by Tim Klein
A quick glance over the room and my first reaction was, Is it time to call the TV show Hoarders? There are pictures, creations, papers, and gadgets covering every inch of his office. It's not until you start to look closer that you realize, this is not junk, it's all part of the magic show you are about to experience.
Those aren't just pictures on the wall; they are Hollywood's A-list in candid shots with Howard. That junk on his desk? Some of the most cutting edge prototypes in the interactive space. Drawers and file cabinets full of past, present, and future innovations; some of which have earned Howard's companies a large fortune.
Trying to wrap one's mind around the life accomplishments of Howard Tullman is an exercise in pure futility. As our interview progressed, I stopped trying to dissect the details of his life and simply tried to keep up with his relentless energy. The chairs in front of his desk should come with seatbelts.
Where does one of the most prolific entrepreneurs in Midwest history credit the beginnings of his success to? Magic.
Early on I started practicing magic when I was about ten and that was a big deal when I did that for ten or fifteen years. I don't do it now, but it always felt to me that it was very instructive at that very young age. It wasn't learning the tricks that was the issue, it was managing the adults. It was hard when you were ten years old and they were going to pay you to come perform at this party.
It wasn't hard to handle the audience of kids; it was hard to keep the parents from looking behind the tricks. You had to be really aggressive in terms of like, 'You sit down there, too. You are part of the audience.'
I know some asocial entrepreneurs, but I don't know any entrepreneur who is incapable of standing up and sort of presenting an idea for better or worse, as if it is the best conceivable idea in the entire world. I think it could be debate team, which I did. It could be public speaking or maybe it was my magic. I just think that having one of those activities that helps you organize your ideas and present is really important. But in addition to that, the presence and the need to present yourself and everything else is a big part of what magic is about.
THE SON OF A SALESMAN, Howard saw what it meant to be out there in the daily grind and it had a lasting effect on him.
My father was a sales guy and he ran a number of sales organizations. He worked for different companies, but what he had built up over the years was a group of guys who sort of moved with him. If you grow up in a sales household, it is very clear that you eat what you kill and you gotta get up every morning and put your track shoes on and get going.
Borrowing from his father's handbook, he put a sales force to work to do his school fundraising. (Editor's Note: In many of the Technori interviews so far, there seems to be a strong correlation between children who set up candy rackets and future success as an entrepreneur.)
I think my first entrepreneurial experience was probably selling those World Famous Chocolate bars. I built a small army of people to sell them for me. It was a classic Tom Sawyer kind of thing. It was just a way of making some spare change. I used my Boy Scout troop to be my vendors. I was the wholesaler and they were the retail outlets.
Practicing magic and hawking bulk candy were some of the highlights of his youth. For the rest, Howard describes it as being a typical family. The oldest of six brothers and sisters, Howard was originally born and raised in St. Louis, before his family moved to Highland Park at age 10.
Highland Park was a very different environment. Highland Park was sort of an upper class thing so I was exposed fairly early on to this culture where I never would have guessed that when you were sixteen, you would get a new car. Maybe you might get some junker, but entering into this affluent community was really interesting. It was a big change from St Louis.
Highland Park was also peculiar in that it was the first time I had ever been exposed to one of these environments where you go to school and the teachers would know two and three generations of the kids who were the older siblings of my peers. It was very disconcerting to be the only one that Mrs. Miller didn't know who your older brother was.
AT NORTHWESTERN UNIVERSITY, Howard was drawn to the allure of becoming a lawyer. As with everything he takes on, second place is never an option.
I went to Northwestern for undergrad (Double major of Mathematics and Economics) and law school and I was the Chairman of the Board of the Law Review.
After excelling at Northwestern, Howard quickly moved onto what would be a short, but highly prolific law career. In just ten years of practicing law (1970-1980), he would be involved in a series of cases that reshaped the world of business law forever.
I practiced a very peculiar kind of law. My first five years I practiced almost exclusively large scale class action law. Multi-billion dollar cases where there was no precedent at that time. We literally invented the law and we wrote the class action law that seems so commonplace today.
I argued in front of the Supreme Court and I was the youngest guy by twenty years in these rooms . . . As far as the work goes, I was the one who would do it. All these senior partners at all these big law firms didn't want to do the work. It was great! I had sixty people working for me, traveling hundreds of thousands miles a year. There were about twenty-five large scale class actions in that five years and I was involved in about fifteen of them. Things like price-fixing for antibiotic drugs, price-fixing for drywall, and all kinds of different cases where the government would first investigate it and then the private litigants would come in and file these class actions.
After five years of dealing with class action suits, Howard decided to make a big change and entered the brand new world of Chapter 11 bankruptcy cases. If you haven't noticed by now, Howard doesn't enter a new space, he aims to dominate it.
I represented Continental Bank and Chase-Manhattan, the biggest financial institutions in the world, in these huge actions and they were all Chapter 11 reorganizations. The law was so new that I would take the cases with me when I would go from district to district. I would literally go to Atlanta and I would say, The only way you are going to find out what the precedent is in this case is to call the judge in New York because I was there yesterday and here is how he handled this. My clients were always the biggest guys in the world and they hired me in particular because I was the national roving asshole. That was my job description.
SUMMING UP HOWARD'S ENTREPRENEURIAL EFFORTS in one article is quite a task. To tell the story of each would push Technori's typical 3000 word articles into a word count range that even a PhD philosophy student would dread reading. So, for the sake of brevity, in Howard's words, here is condensed list of his businesses.
In 1980, I retired from law to start a business that was the first of what turned out to be four different very large-scale, very public multi-million dollar information management businesses. The first one was in 1980 and was called Certified Collateral Corporation and thirty years later it is still up operating, has thousands of employees, a multi-hundred million dollar revenue stream and still a monopoly which basically tells insurance companies what to pay if your car is lost or stolen. I started that business in 1980 with $250 and I hired a couple of other people and then it grew. I financed it originally and then brought in some other employees and investors. We took it public, sold it in about 1987 for about $1 hundred million bucks. That was the first of these information businesses where we developed large scale real time databases and then I did about seven more of those businesses. I did cars, real estate, boats, insurance, and customer satisfaction – every one of them was a variation on taking data that was historically being represented and making it current.
The second business was called Original Research which did about 12 million phone calls a year to consumers to measure customer satisfaction. Then there was Boats.com and UsedCars.com. Tunes .com was my music business I sold for $140 million and Tunes was started in 1995. UsedCars and Boats were early 1990s. I did the first jobs database in the world and sold it to a group of newspapers. So, I think those were the first twelve businesses. Then there was a restaurant, Hats and Shades, a jeans company, Top Hat, some venture capital investments, CD-rom games, and a car business which we just sold for $300 million to ADP. It ran the websites for roughly 12,000 car dealers, about half the dealers in America. More music stuff, more career stuff, more job databases, I-Builder business turnaround in New York, and experiential marketing. I was the Chairman of the Board of the Princeton Review as well.
Welcome to the magic show. The more he talks, the more the room starts to fill with energy. There might as well be an orchestra building to crescendo as he quickly changes subjects from the past and enters into a dizzying demonstration of several new Tribeca Flashpoint inventions.
BUILDING THE ULTIMATE PLAYPEN (…I MEAN INNOVATION LAB) is what Tribeca Flashpoint Academy (TFA) is truly about for Howard.
Here, I do a bizarre amount of things. The first year I wrote fifty ads. A new ad every single week for The Reader for fifty weeks in a row. It defined the whole school. It was really the story of the school. I have a very clear commitment to the fact that I think we have to have one voice. When you introduce something new you absolutely have to beat it to death, you have to really know exactly what the messaging is and you have to enforce it to an amazing extent. Considering that we have been at this for four years we already have an internationally recognized brand as a school in digital media.
We probably have ten more businesses that we are about to launch. All of these are new technology-based businesses that we're spinning out of here. I think that I am a little rare in that most guys who are pure entrepreneurs sort of work themselves out of a job and can only grow with their business to a certain extent. I have been fortunate to do this for as long as I want to in any one business and then bring in sort of an operating CEO.
I think that education is really important, but I built TFA to be the biggest sand box possible. I get to do new businesses, new products, and new projects constantly. The operation of the school will fund and will generate real results and some very impressive things for all of the students; and in the meantime, I also have those same resources for myself.
Every day when I come in, I have my business responsibilities, but mostly, my job is to look over the horizon with the new technologies to create new industries and new kinds of jobs for the students. That is a lot of fun and that is why I spend the time that I spend here. I might run out of time, but I'm never going to run out of the opportunity to morph things and change things and figure out how to do it.
SUCCEED OR FAIL FAST AND MOVE ON QUICKLY is how Howard operates the projects that TFA takes on. The underlying goal of nearly any academy is to create meaningful and lasting jobs or opportunities for all graduates. When things aren't moving forward, Howard is notorious for his pragmatic and laser focused way of dealing with people and projects that aren't cutting it.
I think what has saved me from having to say, gee, that was a really gross failure, to me, is that we fail fast. That is the real discipline. The real discipline is, if it is not working, you set some concrete metrics and then you change the game.
You see people who just want to go for the cosmetic solutions and we can't do that. We gotta go hard for the core things. We tell people what sacrifices we expect, and hopefully what rewards there will be, and what bumps there are going to be along the way. They either buy in or they don't.
When it comes time to make those tough decisions and figure out who is cutting it or not, Howard doesn't mince words.
I guess I could have spent a lot more time focusing on being liked, but that just doesn't work. You just have to make too many hard decisions. President Clinton once said, and he was exactly right, that all the easy decisions are staffed out. It is only the impossible choices that come to the boss.
When did it get to be a bad thing to have a short attention span? If you are serious and committed, that is what focus and prioritizing is all about. It's okay; I've spent my time with you. I'm sorry that socially I'm supposed to spend another three hours with you to make you feel good, but that is not why I'm on this earth – I'm on this earth to accomplish things.
People ask me all the time if I am having fun and I always say no, it's not fun. It's stimulating, it is challenging, it's super worthwhile, and I’ve created thousands and thousands of jobs. I have people come back thirty years later and thank me. I have parents come in here every week and say this school changed their kid's life - all of a sudden he has purpose, he's focused, and he loves what he is doing and thank you so much.
I get a lot of strokes and a lot of gratification, but I work like a fucking pig. I work about 100 hours a week and I know what 100 hours really represents! I always hear people who say they work eighty hours a week. Try doing the math on those kinds of numbers. What you realize is that you have about seven hours in the entire week that you are off, apart from sleeping, maybe four hours. Essentially, my day starts around five and I'm here by six or six-thirty. I leave around six or six-thirty, I don't eat lunch, and I don't stop. It's not like I put my feet up and read. Then I go home and I have dinner with my wife if she hasn't already eaten by the time I get home which is a 50/50 bet and then she retires at nine or nine-thirty and I usually work until about midnight. I sleep from about midnight to three or four and then I start again. That's how it goes. Part of that is an outgrowth of businesses on both coasts. The calls never stop and part of it is this is what I love doing.
CREATING BUSINESSES THAT PERFORM AND LAST is more important to Howard than anything else. His love of innovation and disrupting industries might drive him to take the lead, but he knows when to back away and he has one of the single most important leadership qualities: the ability to get people to rally around an idea as if they came up with it themselves.
Around here I have had a lot of employees and a lot of partners over the years. If you asked, they would say the exact same thing which is that: I learned a great deal, I worked really hard, I understood the difference between settling and never settling and we extend this to every single person who we engage.
None of these people will ever say anything other than I am ridiculously insistent on a standard of performance that is always a rising bar and they also will never say that I sat back and watched. They will say that I was the first one over the raised bar and it may be unrealistic to expect that everybody will do that. We don't settle, we do it the right way 100% of the time and if you really live by that, either they will quit or they will drink the Kool-Aid and most of them drink the Kool-Aid
Over the years I have given a presentation that says Make Room for People and what it mean is that, if you want to build a series of successful companies, you will be kidding yourself if you think they will all be in your image, that's just a bad strategy. You have to get people who are just as crazy as you and you have to get people who just want a really good job and people who want to go home at the end of the day and who don't take it as a mission. They both bring a set of different talents and skills and you need them all, no question about it. If you try to have everybody be Type A crazy people, you will drive yourself crazy and that is not important for success. That is a huge difference. It took me a few years to learn that and it also took me a few years to really understand what the value is of having advisors and boards and investors.
CALLING CHICAGO HOME SINCE CHILDHOOD, Howard has yet to find another place in the US that can produce the all around quality of life he has here in Chicago.
I've lived in Seattle, Miami, New York, spent a huge amount of time in Texas, but Chicago has always been the place that I thought you got the most bang for your buck. It is the most workable and livable city I have lived in. I have friends and employees in New York and Seattle, but it's catastrophically expensive just to live every single day and it's a struggle. There is no quality of life associated with that.
Chicago is also unique in that it has never had to re-invent itself. It has always been a multi-pronged city. It wasn't Detroit, it wasn't Hollywood, and it wasn't Cleveland which were essentially one-horse towns. When people say to me why are you here with an entertainment school – guess what? Half of my kids are going to go work for McDonald's and CPG companies and employers. This isn't the film capital of the world, but it may be one of the media hubs of the world and maybe one of the technology hubs of the world.
For our kids and for our student graduates, this is such a better market than to be on either coast where you have 10,000 kids sitting at Starbuck's wondering how they are going to get their resume in the door. Believe me, I've never felt that I couldn't go or be anywhere that I needed to be. I have never felt constrained for opportunities.