In his recent book Shut Up and Listen!, Tilman Fertitta lays out hard-hitting business advice like only the Billion Dollar Buyer could. In addition to starring in his own CNBC reality show, Tilman is a Houston native, “the richest restaurateur in the world” according to Forbes, and sole owner of Fertitta Entertainment, which owns Landry’s, the Golden Nugget Casinos and Hotels, and the NBA’s Houston Rockets.
What’s Tilman’s best advice for Texas CEOs? We asked him that—and a lot more.
Texas CEO Magazine: You came out with a book late last year. How was that process for you? It’s harder than a lot of people think, and very different than being an entrepreneur.
Fertitta: It was a great process. It was interesting how HarperCollins approached it. They said, “Hey, we don’t want a life story. We want you to take this part of your world and put it in a silo.” We stuck it into about 170 pages. HarperCollins told us that me and my team were more involved in the book than they’ve ever seen.
Texas CEO Magazine: You were one of those people who knew at a very early age you wanted to be an entrepreneur, correct?
Fertitta: One hundred percent. I say this in the book: I think God gives a gift to everybody and you’ve got to find out what that gift is. A lot of people don’t take time to realize what their gift is. Some people have a great music ear, some people are great artists, some people are great athletes—you’ve got to figure out what it is. I feel that he gave me a business mind and an entrepreneurial brain, so I took that and ran with it.
Texas CEO Magazine: Do you think a lot of people are still drawn to entrepreneurship and business?
Fertitta: Everybody wants to be a businessperson. It’s funny. I’ve had the opportunity to meet so many people, from television stars to movie stars to professional athletes, and they start making money on other things and then realize, “God, I want to be a businessperson too.” And there’s as much respect out there for the entrepreneur and the businessperson as there is for anybody.
Texas CEO Magazine: You’ve realized your dream of owning a sports franchise, the Houston Rockets. That’s got to be a unique challenge. There’s two scoreboards there: the business scoreboard and the scoreboard of how the Rockets are playing.
Fertitta: It’s definitely a balance. The two do go together in the sense that if you’re a successful team, you’re going to have more sponsors and more butts in the seats. And you’re going to make more money. The number-one goal is to always have a very competitive team, but at the same time you want to be careful about the business and make sure the other aspects you go into are successful.
Texas CEO Magazine: With your position in restaurants, in casinos, in the NBA, I would think you get a good pulse on the economy. What are you seeing right now? Things seem to be strong, but everybody seems to be worried at the same time.
Fertitta: We’ve been waiting for the economy to blow up now since around 2015 or 2016, since it runs in eight- to 10-year cycles. But we’ve had a great run here for 12 years. At some point, the consumer does get full. They’re not going to buy any more houses or cars or TVs. But we continue to build condos and cars and TVs until we’ve overbuilt everything. That’s what really causes a consumer recession. So we’re just going to have to watch and see. That day is coming. We just all hope it doesn’t come next year—or the year after.
Texas CEO Magazine: But you’re seeing nothing in your businesses today that has you worried about the near term?
Fertitta: I see a little bit, but it’s also the labor inflation that’s happening. I’m in a business with 60,000 employees. With these cities passing crazy minimum wages, it’s tough. And at the same time, I’m in a business that everybody wants to be in and that everybody thinks they can do. But all businesses are tough. Every business is competitive. The strong survive and the weak don’t.
Texas CEO Magazine: You mentioned having 60,000 employees. How do you find good people? I bet you’ve got a lot of jobs to hire every month.
Fertitta: Two things really help: Having a strong HR department and being the type of company that people want to go work for.
Texas CEO Magazine: You’ve leveraged debt throughout your career. Some people are very anti-debt, some people pro-debt. What are your recommendations for CEOs to use debt in a responsible, effective way?
Fertitta: You have to know your business and what kind of debt you can handle. A lot of people don’t do that research to see what they can handle and what they can’t. I have no fear of debt. I look at the amount of money I’ve borrowed as my greatest accomplishment, because I have the credibility to go to Wall Street and borrow that amount of money. It doesn’t bother me. I wouldn’t be where I am if I didn’t believe in debt.
Texas CEO Magazine: Doing Billion Dollar Buyer had to be an interesting experience, especially seeing so many different types of businesses. What did you learn from seeing such a wide swath?
Fertitta: There are so many young entrepreneurs out there today, and they all think they have a product better than everybody else’s. And they don’t necessarily. It’s important to be a realist and know if you have something special or if you don’t have something special. That’s something that entrepreneurs and even CEOs need to always remember. Just because it’s yours, that doesn’t mean it’s special.
Texas CEO Magazine: You write in the book about the 95:5 Rule, which is about paying attention to the 5 percent that makes the real difference in the business. In your restaurants, that can be tiny details like a drink served without a napkin or fans running at different speeds. Do you find you can teach that in your employees, or do some people have it and some people don’t?
Fertitta: You can absolutely teach it. I’ve taught at this company. Most of my people are homegrown, and it’s a culture that I’ve developed in the company. The best way is leading by example. When people see you do things as the CEO, then they do it.
Texas CEO Magazine: “Be plappy” is one of the phrases in the book I hadn’t heard before. Could you explain what that means?
Fertitta: It means to “play happy.” It’s something I heard 35 years ago when we were doing a premeeting for waiters. One of them was unhappy, and you could just see it on their face. We said, “Hey, everybody has issues and everybody has problems. But sometimes you’ve got to come to work and be plappy”—just “play happy.” The customer doesn’t care that your dog chewed up your wallet or that your wife or husband is mad at you. In the hospitality business, the customer experience is all that matters.
Texas CEO Magazine: You mentioned having a lot of people who work with you for a long time. What’s your secret for getting people to stick around?
Fertitta: I think I’m very fair. You always know where you stand. I think if you talk to most people, they’d tell you I’m very difficult to work for, but they wouldn’t want to work for anybody else. Everybody knows that we’re going to “be the bulls,” as I say. When times are tough, we’re going to be the acquirer. We’re not going to be the one being acquired. That’s just the way we operate.
Texas CEO Magazine: Any parting advice for fellow Texas CEOs?
Fertitta: Don’t count on your CFO to know your numbers. You need to know your own liquidity. Great companies fail all the time because leaders are expecting somebody else to understand the liquidity of their company. Just because you’re the boss, that doesn’t mean you don’t need to focus on the numbers yourself.
A Few Sample Tilmanisms
“Tilmanisms” are the phrases and ideas Tilman says over and over. Find a lot more in Shut Up and Listen!
- There are no spare customers.
- Never put your lifestyle ahead of the growth of your business
- Consultants can consult you straight out of a business.
- No matter the circumstance, be the bull.
- And of course . . . Shut up and listen!