Thomas Tull - New Physics of Business - [Founder’s Field Guide, EP. 30]

**Patrick O'Shaughnessy** (0:00)
This episode is brought to you by Vanta. Does your startup need a SOC 2 report to close big deals? Or do you already have a SOC 2 report and want to make it easier to maintain? Vanta has built software that makes it easier to both get and renew your SOC 2 With Vanta's continuous monitoring solution, you avoid hosting auditors on site and taking screenshots to prove that you're compliant, so you can focus on building your business. Vanta partners with audit firms who file your SOC 2 report directly inside of Vanta at a fraction of the normal cost. Hundreds of companies, including more than 100 Y Combinator businesses, are leveraging Vanta's today to streamline compliance and focus on building their businesses.
Founder's Field Guide listeners can redeem a $1,000 off coupon at vanta.com forward slash Patrick. That's vanta.com forward slash Patrick. This episode is brought to you by DigitalOcean. DigitalOcean provides founders and creators with the platform they need to get their website and apps off the ground, all with low bandwidth pricing to save them money over other cloud providers. If you're looking for the best place to build web apps, or API backends on robust infrastructure, DigitalOcean is the place for you. They provide a fully managed solution that handles your infrastructure, operating systems, databases and other dependencies on their new app platform product. App platform makes it easy to build, deploy and scale apps.
Or if you prefer to manage your own infrastructure, DigitalOcean provides a suite of products that gives you full control. To learn more about DigitalOcean, get started for free at do.co/founders. That's D-O dot C-O slash founders.
Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Founder's Field Guide. Founder's Field Guide is a series of conversations with founders, CEOs and operators building great businesses. I believe we are all builders in our own way and this series is dedicated to stories and lessons from builders of all types.
Founder's Field Guide is part of the Colossus family of podcasts and you can access all of our podcasts, including edited transcripts, show notes and resources to keep learning at joincolossus.com.

**SPEAKER_2** (1:59)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:24)
My guest today is Thomas Tull, the founder of Tulco LLC, an investment holding company that invests in businesses with high growth potential and helps them apply machine learning and data analytics.
Thomas is also the founder and former CEO of Legendary Entertainment, the production company behind The Dark Knight, Hangover, Inception, 300 and many more iconic movies, which he sold in 2016 In our discussion, we covered the movie industry's value chain, the recipe for trying to make a successful movie, how Legendary pioneered the use of data analytics to improve its odds, and Thomas' concept of the new physics of business and why it matters for what he's now building at Tulco. Please enjoy my conversation with Thomas Tull. So Thomas, because you have led such an interesting career in and out of business, I thought an appropriate place to start before getting to your backstory would be with a big overarching question, which is what is sort of your philosophy of business? Like what has united the various things that you've done in terms of how you attack an industry or a problem space and made something work?

**Thomas Tull** (3:29)
Each situation is unique, but if I had to put my finger on a through line, I think it would be to find an interesting industry and to find a way to enhance the business model using technology usually, or a slightly different model to get outsized returns.
That's probably the through line. I'd say that in trying to align myself with people that are immensely talented.
And when you put those two things together, it's worked fairly well.

**Patrick O'Shaughnessy** (4:07)
What was the first example of you doing that in your career, meaning attack, I think, an industry that was around that people knew about, but doing it in a new way or applying a new business model to it?

**Thomas Tull** (4:19)
I don't do a ton of interviews, but one of the things that's been amusing to me is a while ago, somebody did some research and saw that I owned a laundromat chain in my 20s.
And it just seems like that shows up everywhere, Wikipedia, whatever. That's probably the first example, because at the time, I grew up in an economically challenged area and lived there for a little while in my 20s. And the problem that we had with the laundromat chain is that it was slammed on the weekends, and during the week, nobody was in there. At the time, all you had were these slide point operated machines that you couldn't dynamically change the pricing. So after finding a manufacturer and iterating with them on computerizing it, you could have a variable dynamic pricing and entice people to come in during the week that had the time for lower prices and to smooth things out. So I guess if I had to point to the first example of that, it would have to be that.