#115 “Freeway” Rick Ross

James Altucher was joined by “Freeway” Rick Ross (@FreewayRicky) to talk about organizational management, career reinvention, and what to do when someone gives your counterfeit bills for a kilo of cocaine. This has to be the most unexpected guest of the James Altucher podcast and the interview – while short – doesn’t disappoint.

The actual interview took place at Jayson Gaignard’s MastermindTalks.com. In the introduction before the interview James tells Gaignard, “I never go to conferences unless it’s a hell yeah,” and this one apparently was.

This sort of decision making – wait for situations that have clear benefits- is one that a lot of people advocate. In his book Get Smarter, billionaire businessman Seymour Schulich prescribes “the Decision Maker.”

“On one sheet of paper, list all the positive things you can about the issue in question, then give each one a score from zero to ten – the higher the score, the more important it is to you.”

Then do the same for all the negative things you can think of.

“Then you add up the scores on each sheet. If the positive score is at least double the negative score, you should do it – whatever ‘it’ is. But if the positives don’t outweigh the negatives by that two-to-one ratio, don’t do it, or at least think twice about it.”

It sounds like this is what James did when he was considering whether to attend.

One note before we get started.  Right before listening to this interview I finished reading Gang Leader for a Day. The book is about the decade Sudhir Venkatesh spent with the Black Kings gang in Chicago. The book is wonderful and a form of gonzo journalism similar to Neil Strauss (episode #113). There were enough parts of the Ross interview that overlapped with the book, that it’s featured a lot in this post.

In his conversation with Ross, Altucher begins by asking what the cocaine business looks like exactly. Ross says that he got started by having a connection – a teacher and tennis coach – that connected him with the Nicaraguan gangs importing the cocaine. From there, Ross and his friends would cook the cocaine into “rock” (crack) and then sell it.

Unlike Tucker Max (episode #80), Ross says that he told his friends and dealers never to eat your own dog food. It’s very clear that Ross learned a set of best practices, ones that he says he “stumbled and bumbled upon.” He tells James that he had to deal with a lot of conflict resolution and that he would “take care of it.”

In Gang Leader for a Day there is the story of an dealer (low level) cutting the cocaine to make it it more diluted. This was lower quality crack, but it let the dealer skim some money his handler didn’t know about. When J.T. (the mid-level handler) showed up to ask the dealer about this, he had to take care of it, but in a certain way. He couldn’t beat the crap out of him or kick him out of the gang.

“J.T. explained that this decision couldn’t be so straightforward. “Most guys wouldn’t even think of these ways to make money,” he said. “Here’s a guy who is looking to make an extra buck. I have hundreds of people working for me, but only a few who think like that. You don’t want to lose people like that.”

When Ross had to to take care of things, my guess is that there were other factors similar to this.

Part of what helped Ross become a good leader is that he came from the streets. “I started on the street,” he tells James, “I had to stand on the street when it was cold and hot. Police would come by and strip search you.”

Peter Thiel (episode #43) told James that the same thing is true for startups. The best people – in Thiel’s view – are the ones who see things as “difficult but possible.” The people who come from easier circumstances (Microsoft or Google in Thiel’s case, the suburbs or another big city in the gang’s case) don’t seem to succeed in the same ways.

Ross tells James that as he learned the business from the streets, he saw that violence often wasn’t a good thing. “Most of the smart drug dealers don’t want violence.” he tells James.

In Gang Leader for a Day, our mid-level protagonist reiterates this point.

“Once in a while, a war began when teenage members of different gangs got into a fight that then escalated. But leaders like J.T. had a strong incentive to thwart this sort of conflict, since it jeopardized moneymaking for no good reason…I had never seen a war last beyond a few weeks; the higher-ups in each gang understood that public violence was, at the very least, bad for business. Usually, after a week or ten days of fighting, the leaders would find a mediator,to help forge a truce.”

A lack of violence led to stable – and profitable – times for Ross. He started investing his money in legitimate businesses but none of them made any money. “Why not?” James asks. “I didn’t run them.” Ross says. He lacked what Jason Calacanis (episode #77) said is essential in your work. “There’s  level of deep, deep obsessive knowledge you need to have of all your competitors. Of all the nuances of their products. Of the history.” Calacanis said in his interview.

Ross had that knowledge about drugs, but not other businesses. Ross says that he also enjoyed the parts that came along with selling drugs. Drug money allowed him to provide bond, housing, and help the community. In Gang Leader for a Day it happened too. J.T. gave money to help run events in the community, to families when someone from the gang died, and volunteered his lower gang members to run errands for the elderly.

James asks Ross, “why didn’t you get out?” If the money and the power were the carrot, then there was no stick.  Ross says that he never knew how to get out. “I was totally illiterate, never read a book” he says.

This didn’t stop him from learning though. He tells James that he knew early on about the value of collecting email, phone numbers from people. He says he would show up at someone’s house with some crack. Then tell that person, if you can get ten friends to show up, this is yours. When those friends came, Ross would collect their phone numbers and become their dealer.

Eventually Ross ended up in jail, something he says that he knew was coming all along. Only when he started down the legal road though, did he realize that it might be for longer than he thought. When things looked worst, Ross started really paying attention. “I knew more about my particular case than anyone in the courtroom” he told James. (Calacanis would approve)

When Ross got out he started to make his legitimate businesses work (he’s a speaker now). “I had studied so many people that were doing business and I learned how to transfer my drug dealing skills over to things I’m doing right now.” he tells James. Like Trip Adler (episode #61) who tried many things before creating Scribd or Andy Weir (episode #92) who wrote a number of bad books before one great one, Ross had to have a certain set of experiences before he could find the best path for him.

James ends the interview by asking what are some essential skills someone has to have.

1. “Want for the people around you, what you want for yourself” Ross says.  This doesn’t mean they’ll get it, they have to want it too.
2. Be Honest. Ross says that if someone came to him with the wrong amount of cash or counterfeit bills, “I would take the loss” the first time it happened. He gave people the benefit of the doubt. The next time though, “I would take more precaution in dealing with them” he says. Adam Grant (episode #73) said much the same thing. We should act as givers until someone burns us, then we should be more tempered in our interactions.
3. Don’t do it for the money. “I wasn’t doing it for the money” Ross says. It’s one of our Big Idea here. No one who is successful has ever said, I wanted to get rich. Everyone has bigger motivators than money. Well, except Mark Cuban (episode #24).

Finally, James asks him, “why are you a vegan?” Ross says that he wanted to prove that he wasn’t addicted to eating meat. He quit eating it for some time, tried chicken, got sick, and never went back. The book that started this for him was Eat to Live. Ross was experimenting to find what worked for him. Another of the Big Ideas here.

For more Rick Ross, check out his episode on the BET series American Gangster.

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Thanks for reading. I’m @MikeDariano.