Gary Vaynerchuk (@GaryVee) joined Joe Famalette (@JoeFamalette) for a Fireside Chat L.A. Gary talked to James Altucher early on in his podcast, episode #2 if you’re counting, and this was a nice update to that talk. Gary wasn’t on to promote anything except Gary, which he does so earnestly I think that’s why people like him so much.
You can watch the entire thing here:
The conversation had so many good moments, stories, and reactions that you should listen or watch it. These notes will get at a few of the bigger points. Namely:
- What does a D/F student like Gary really learn in school?
- Why you have to LOVE the grind.
- It’s – still – never about the money.
- Zig zagging for max bragging.
- Pattern spotting or, “wait a minute, I’ve seen this before.”
- Mental models make mistakes – and that’s good.
- The #1 thing to do before you get good at social.
The Education of Gary V
Gary was not good at school, but was very good at learning. As the Mark Twain quote goes, “don’t let school get in the way of your education.”
Listening to lectures that didn’t interest him and wasn’t a good situation to be in. It’s that system which Tyler Cowen and Seth Godin speak about. Don’t just teach people facts. It has to be interesting.
What interested Gary? People, wine, collections.
“I would sit in science class,” Gary says, “ and just read Wine Spectator.” James Altucher says that this is a good signal for what someone really wants. Look back to when you were 8, 12, 16 years old James says. What were you interested in then? Find a way to do that now.
Bill Belichick and his right hand man Ernie Adams were like this. Long before they reached the pinnacle of the NFL they were schoolboys doodling in notebooks.
“That Adams was football obsessed had been obvious from the time he had arrived at Andover and had sat in the back of some of his classes – more often than not science classes – and had pleased the teacher by seeming to be the most diligent and enthusiastic note taker in the class. Sadly, it would turn out, and much to the irritation of the teacher, these were not science notes but turned out to be sketches where eleven Xs took on eleven Os.”
Gary says his teacher just didn’t care. His teacher let him get away with it because he wrote him off as a dummy. The teacher’s academic expectations were zero.
This worked for Gary. It made him stronger. When people doubt him. When people dismiss him. When people hedge against him, it fuels him. Gary says that he wanted to prove everyone wrong. He says, “somewhere in middle school I started sensing I was going to be a different player.” He wanted to play a different game than the one taught in school.
This worked for Gary, but doesn’t always work. Stanley McChrystal told Tim Ferriss that he needed the opposite. It wasn’t until someone in school said they believed in him did McChrystal change his actions.
Gary wanted to learn the family business (a liquor store). So his dad began to teach it to him, from the ground up. Actually, Gary started underground.
“I hated every weekend for the first year,” Gary says. He was the owner’s son so the employees didn’t like him. He was paid half the hourly wage so he didn’t make much money. He spent the first year in the basement.
Eventually he moved upstairs and began to learn. Gary says that he has a very high EQ (emotional quotient) and was able to read people. As he worked he saw that people collected wine like he collected cards. “I was really into collecting stuff,” Gary says, “and saw that people would come in to collect wine.”
Gary had traded and sold cards and he began to apply those same ideas to selling win.
This is the fulcrum that Gary Vaynerchuk uses. It’s wait a minute, I’ve seen this before. Keep this in mind, it will come up again.
So Gary began to sell wine, even if no one wanted it. “If you came in for a case of beer,” he says, “I was going to try to sell you a chardonnay.”
He faced a lot of no’s. But as Seth Godin counsels, turn that “no” into “no for now.” Gary also built up his expertise. The hours reading Wine Spectator, stocking freezers, and advising a customer about which red wine added up.
Gary, well before the term was popularized, built up his 10,000 hours of world class expertise. He says as much in the interview. He had offers from Bravo and the Food Network for television shows. He had an offer to start a Vodka brand with Usher.
He said no to these things because they lacked something he needed. They didn’t have the grind.
Love the grind
Gary says, “I need the process, period.” The work is what Gary likes the most. More than money or fame or anything. He compares the challenge to oxygen.
What works for Gary is losing. “I love losing,” he says. Loses contain the challenges. If Gary were a car, he would be a Jeep where everyone else is a Honda Civic.
Sometimes we’ll fail at the challenges ahead. What happens then? Holiday again:
“On the path to successful action, we will fail— possibly many times. And that’s okay. It can be a good thing, even. Action and failure are two sides of the same coin. One doesn’t come without the other. What breaks this critical connection down is when people stop acting— because they’ve taken the failure the wrong way.”
Another perspective is what Ray Dalio about challenges. Instead of thinking about how you’ll be strengthened, think about the rewards.
“I learned that everyone makes mistakes and has weaknesses and that one of the most important things that differentiates people is their approach to handling them. I learned that there is an incredible beauty to mistakes, because embedded in each mistake is a puzzle, and a gem that I could get if I solved it, i.e., a principle that I could use to reduce my mistakes in the future.”
These are the things that feed Gary, and these are the things that set him apart. He likes things that are difficult. The things that people fail at are obstacles to be conquered, they are gems to be harvested.
If you can find a grind, something difficult, and you can master it, then you will be rewarded. If we return to Bill Belichick’s story we can see this.
Do you know why Belichick is so successful? He watches film. He studies, examines, and extracts from it. An early head coach said that not only could Belichick study another team and figure out what play they ran in certain situations, but their thinking behind it.
This took hours and hours of watching film. There was no socializing, something Belichick thought the other coaches did too much of anyway.
The grind fills Gary. He mentions in the interview that once the challenge of the grind is gone he has to move on to something else. It’s why he left Wine Library. Why he moved to VaynerMedia. Why he’s an investor. The one thing that’s never moved him is the money.
It’s never about the money
The topic of money comes up so often in these interviews that I can’t help but include it. Successful people want others to know that it’s not about the money. “Of course I like having money,” Gary says, “but I am equally as happy as I was paying myself $27,000 a year at 23 years old because the building of the game is what matters.”
And he saw this in others too. (wait a minute, I’ve seen this before). Gary noticed that his life was fulfilling because of work and family, not money. “I have a read on 200 employees and what makes them tick,” Gary says. He reasoned that his employees may want the same thing. He was right.
People stay at VaynerMedia when they could make twice as much elsewhere. They stay though because there are other things they want that VaynerMedia provides.
This is the big idea with money; there are things you can have that don’t require money. Working at VaynerMedia could be a perk for some people.
- Tim Ferriss says his podcast lets him talk to people couldn’t pay.
- Sam Shank would turn down 400M dollars to keep his start up. Peter Thiel said Mark Zuckerberg turned down 1B. Both liked their companies more than the money.
- Penn Jillette, Kevin Kelly, and Mark Cuban all said they would live simply to be able to do what they wanted.
What do people want then?
People want freedom to do good work. They want autonomy and responsibility. They want job security and clear rules and roles. If you can give people that, they’ll work for half as much. This is one example of when Gary zigged, while everyone else zagged.
Zig zagging for max bragging.
Gary nailed a number of online skills well before everyone else. In 1998 he had an email marketing list with 98% open rates. He bought “wine” for five cents on Google Adwords. He was an early user of YouTube. He had more followers on Twitter than Pepsi.
How does he do this?
“My game is very simple. Where is the attention while the rest of the market doesn’t think it’s there? Use it like crazy, figure it out. If it goes away, cool, because all you need is one or two to really work.”
We’ve seen this idea under other names. Peter Thiel calls it Zero to One (and wrote a book about it). Lewis Howes plays handball because of this. Barry Ritholtz listens for “Ughs.” Michael Mauboussin uses game theory.
It’s easier to be successful where others are not. For Gary that means zigging with others zag. One thing that helps him do this is how well he sees patterns.
Looking for patterns
Okay, let’s dive into “wait a minute, I’ve seen this before.”
In 2007 Gary headed to Austin to invest in some company (he hadn’t decided before he arrived). South by Southwest was a good place to zig to because Gary says, “there wasn’t a businessman in fucking sight.” Not only that, no one thought Twitter was all that great.
“Don’t let anybody bullshit you. Everybody was like, this is the dumbest thing I’ve ever seen. This is stupid, who cares. Nobody cares if you eat a hotdog…and I was like, wait a minute, I think this is like email.”
Wait a minute, I’ve seen this before.
Gary ended up with an investment in Twitter and the rest is history. But it’s the prehistory that we want. Why can Gary Vaynerchuk see these patterns?
- Gary has a high emotional quotient. He mentions in the interview that he wants to be dug up and tested if we can do that some day. I don’t think this is entirely innate. Growing up the child of immigrants I think Gary learned how to read people. I think that hours behind the wine counter nudged him to understand people better. He may be born with these gifts, but he’s also put in time to learn them.
- Gary built up intuition. In Thinking Fast and Slow, Daniel Kahneman writes that some people have good intuition and some don’t. Firemen and pilots both are much better at predicting what might happen in fires and flights than stock brokers or football coaches are in stock markets or football games.
Kahneman suggests that the former have more regular situations with clear feedback than the others. Gary had more situations with good opportunities to learn from.
- Gary has many repetitions. He mentions that he’s failed at interviewing “tons of times.” This is a domain that he doesn’t have the same skills in because he doesn’t have the same repetitions. The same is true for business. Each startup he invests in, and each business he creates are opportunities to see the patterns in them.
This is a lot of arm-chair analysis, and I’m sure that Gary will weigh in on this – as he does with most things – someday. One thing I know he focuses on are mental models.
Mental models and when they miss
“I only bet on two things,” Gary says, “do I personally believe in this or do I believe so much in the entrepreneur?” Those two things mean that Gary favors investments he can understand or entrepreneurs who have had success before. It also means he’s going to miss out on some things.
This is fine Gary says. He missed on Snapchat because the founders were first timers. That’s okay. Gary sticks to his model because it removes emotion. “Emotional decisions are really really bad in business,” Gary says.
Chris Sacca told Tim Ferriss much the same thing. His criteria for investments sometimes works and sometimes doesn’t. When it works, Sacca points out, it works really well. He invested in companies like Uber and Twitter to great reward. But he’s missed on companies like AirBnB and Snapchat even though some of those companies reached out to him for an interview.
Mental models aren’t designed to grab every winner, they are designed to avoid most losers. Gary and Chris are both better off because they removed the risk of too many opportunities.
Good mental models aren’t perfect. They don’t need to be. They just need to give good enough results. Much like a water filter only needs to remove 98% of contaminants, so too does a mental model work.
You don’t need to be good at social media – if you’re Lil Wayne.
Gary’s success has come in part through social media, but that’s actually the second step. The first is to have something worth selling.
Ryan Holiday says that he’s seen this with lots of companies. They come to him wanting to do some crazy promotion and Holiday suggests they improve their product first. “No,” they say, “we want to create buzz.”
You can’t create buzz about something that’s not good, and you don’t need to cause a buzz if you have something great. It’s why Lil Wayne doesn’t need social media Gary says. He may be leaving money on the table without it, but his work speaks for itself.
“The product you’re selling is the variable to success,” Gary says, “if your product is shit there is no great marketing that’s going to save you.”
Here we talk about the phrase, “be so good they can’t ignore you.” This is the advice Gary gives to a question from the audience. When a man stands up and asks how to get an angel investor interested, Gary says don’t. “The number one way,” Gary says, “is to not pick us, and have us come to you.”
You do this by being good at something.
It’s why Seth Godin doesn’t give advice. “People don’t follow it,” he says. Know why? The advice is to work hard. Ditto for Brian Koppelman who says to create something great, not to get an agent. Ditto for Joshua Foer.
In his book, So Good They Can’t Ignore You, Cal Newport quotes Steve Martin:
“Nobody ever takes note of [my advice], because it’s not the answer they wanted to hear,” Martin said. “What they want to hear is ‘Here’s how you get an agent, here’s how you write a script,’…but I always say, ‘Be so good they can’t ignore you.’”
If you worry about social media before you create something of value then you’re doing it all wrong.
Thanks for reading.I’m @MikeDariano on Twitter.