#101 Dr. Moises Naim

Dr. Moises Naim joined James Altucher to talk about the end of power, what that means for individuals, and how you can get a seat at the table. Naim’s book is The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being In Charge Isn’t What It Used to Be. The central idea to the book and interview is that the established players in any area, from entertainment to politics, have a much harder time holding their relative position.

The list of fans beyond James is quite a group. Mark Zuckerberg made it the first book in his 2015 book club. Bill Clinton too has recommended it.

Naim tells James that “power has become easier to acquire, harder to use, and easier to lose.” Look at Vladimir Putin, Naim says. A few years ago he was considered the most powerful man in the world. Now, he’s dealing with economic restlessness, brittle relations with Germany, and he disappears for a week while the world wonders where he is.

I’ll throw another example into the mix, Funny or Die. In 2007 the website released “Pearl the Landlord.” Adam McKay’s young daughter plays the landlord that Will Ferrell needs to ask for a rent extension. It cost nothing but time and went on to become one of the most popular videos of the year and launched the company. Now they share an office building with Oprah.

Or consider Google, a force that seems so dominant its power will never decay. But, if you look back in history, Naim says, you see that the same thing would be said about Microsoft. There’s always been a technology company that’s ruled until they haven’t. Looking back to look forward is one of The 5 Elements of Effective Thinking.

“Whenever you face an issue—whether an area of study or a decision about a future path—consider what came before. Wonder how the issue at hand landed in front of you. Ask where and what it was yesterday, a month ago, a year ago, and so forth. Everything, everyone has a history and evolves.”

This, and challenging our assumptions are two mental models that Kevin Kelly (episode #96) applies. “What if” he asked Tim Ferriss, “the things we assume to be true, won’t be.” Kelly specifically cites Moore’s Law, what if for some crazy reason, the raw materials that we use in computers don’t work anymore, then what?

The new key in thinking isn’t power, Naim says, it’s that “you have to have something special. You have to have a special attribute.” Peter Thiel (episode #43) might call this finding a secret and he writes, “every great business is built around a secret that’s hidden from the outside.”

Naim says that there is a movement in part from the growing middle class worldwide. Billions of people are moving from a class of poverty to a class of spending in places like Thailand, Peru, and China and “when this happens there are profound changes in their aspirations, expectations, and motivations” he tells James.

There are three revolutions at work, more, mobility, and mentality.

  • More. “We live in a world in which there is more of everything.” Naim tells James. There are more options, diseases, places to eat, and things to do. Like a chemistry experiment that’s stable when you add elements becomes less stable when you add more, so goes the world.
  • Mobility. It’s not just people that are moving to more urban areas, but information is moving too. This works against those in power because Naim says, “power needs a captive audience.”
  • Mentality. A change in values – going from a lower class to an upper one – is a factor that can drive change in people.

These changes will made things better though. Naim notes that thanks to something like Facebook – or even a WordPress blog, 🙂 – we all can tell a story. This bright future echoes what Peter Diamandis and Steven Kotler (episode #93) told James, “The day before something’s a breakthrough it’s a crazy idea.” You almost have to be small to have crazy ideas that can change the world. Kodak can’t make a filtered photo app. Some has speculated that this vein of thinking is the reason behind Facebook’s acquisitions of companies like WhatsApp, Oculus VR, and Quickfire.

“Here’s to the crazy ones.”

“People have a better shot than ever before to have a seat at the table.” Naim says, but too much fragmentation can hurt a democracy. This is why parents around the country tell their children this isn’t a democracy each night at the dinner table when requests for pizza are denied. Vetocracy has it’s advantages and disadvantages though. It often means that at the governmental level, nothing gets done, good or bad.

In the end, Naim says we live in “a world that has more opportunities and offers more possibilities to the average human being than ever before in history.”

Thanks for reading. If I reduced, removed, or reviewed something wrongly – let me know, @mikedariano. If you are interested, our own book club starts next week.

#43 Peter Thiel

Peter Thiel joined James Altucher to talk about startups, the PayPal mafia, and his book Zero to One. James tells Thiel that the book “blew my mind” in part because of the angle that Thiel approaches the aspect of creation.

“One of the critical things in starting businesses is the need to do something new, fresh, strange. This is the Zero to One ethos.” – Peter Thiel

This means you don’t want to be the 100th online pet food company or the 5,000th restaurant in San Francisco because those are incredibly crowded places to be. And if it’s a crowded place, it’s a place with competition and placed of competition don’t offer much capitalism. Thiel calls competition and capitalism antonyms because a business can’t accumulate capital while it competes. Instead Thiel suggests that we look at new things that haven’t been discovered yet. For example, “we’ve been in a world where there’s innovation in bits but not atoms” he tells James. “If you think of a cell as a computer that could be programmed” he goes on, you can begin to think about new areas of development.

This sort of out-of-the-box thinking is hard though because we’re humans. “Imitation is very endemic to the human condition” Thiel tells James and he mentions that there’s probably a reason that there is a non-insignificant number of Silicon Valley entrepreneurs who have Aspergers.

zigzagThiel also advocates that people develop a contrarian mindset, that they zig when other zag. He gives the example in the book that most people think more good minds will make better decisions, but sometimes that’s not the case.

“If you look at a company with a large board, don’t think, ‘Look how many great people are committed this organization. It must be extremely well run.’ Actually, a huge board will exercise no effective oversight at all.” – Peter Thiel

Thiel hasn’t always thought this way. He tells James he had a quarter-life crises when he was working at  New York law firm but quit after less than a year there. “From the outside everyone wanted to get in” Thiel says, “but from the insides people wanted to get out.” He left and in 1998 co-founded PayPal. “The lesson at PayPal was that you can build a great company, but it’s hard. It is not easy. It is not impossible.” Thiel tells James, “I think when people come out of super successful companies like a Google or a Microsoft, they’ve often experienced business as too easy.” Some discomfort can be a good thing for us. Mirny Kinrys (episode #48) told James that this exists in the world of dating too, calling it “pretty boy syndrome. ”You know, when you are pretty when you’re younger, you never really have to think about having a personality because things just came to you really easily.”  Kevin Kelly (episode #96) told James the same thing, but about money rather than looks, “The lack of money is often an asset because it forces you to innovate. People with money will try to buy a solution, but because you don’t have money, you are forced to invent a solution.”

zero to onePayPal was in part successful because of the pre-history, most notably, the number of early employees that built bombs. Not malicious bombs, but experimental ones. PayPal was like the Lost Boys of Peter Pan arriving in London, only they’re really smart and want to do something their way – a better way. To Thiel this mattered a lot because the pre-history people have together is important. In Zero to One he writes, “everyone at your company should be different in the same way.” You want it to be like an ecosystem, closer to cult than consultant.

There were all people Thiel wanted to spend time with and James Manos (episode #39) told James much the same thing, arguing that if you’re going to spend 8, 10, 12 hours a day with these people and collaborate to create something – you should enjoy their company.

Toward the middle of the interview James asks about Facebook and Thiel says that the company fit a profile he likes, companies undervalued because they are underused by the investor class. Facebook was to investors like microbrews were to wine collectors – quaint and irrelevant. It fit the Zero to One ethos, something new. But! You say. Weren’t there other social networks. Yes, Thiel says, but Facebook was the first one tied to your real identity. It was so much better than anything else out there, it had major stage one rockets.

Let’s make this analogy more fitting and call them “Falcon Heavy Stage One Rockets” like the SpaceX team does (Thiel invested in them). Just like a spacecraft needs stage one rockets to escape gravity, our ideas need stage one capabilities to be successful. James terms this 10X thinking, saying that things need to be ten-times better than what currently exists. There’s a good reason for this analogy, we are bad at thinking the validity of something once we get in that thing. Stephen Dubner (episode #20) calls this ‘Go Fever’ in honor of NASA, an organization that can’t reel in a new project when maybe it should be.

As Daniel Kahneman found out, we are quite bad at predicting how our group will fare, even if we have a pair of world famous psychologists who study this kind of thing in our group. As it goes, Kahneman and his partner, Amos Tversky began to develop a new curriculum for judgement and decision making to be taught in high school. How hard could this be? One day while working on the project, Kahneman thought he should test out the group’s judgement and decision making  as it related to their task at hand, creating the curriculum. He told everyone to estimate how long they thought the project would take and the estimates were “narrowly centered around two years.” Okay, this still sounds good. But (and you knew there was a but coming), Kahneman was doing research about decision making and our biases towards it. He wondered, was his own group biased as to how well they worked?

He turned to a senior member of the group and asked how long these sorts of projects usually took, “I cannot think of any group that finished in less than seven years” the man said. Seven? And about 40% fail. And their group was slightly below average when it came to overall skills and resources. This planning fallacy means that we tend to be most excited at the start, think of things in rosy terms, and overestimate how much we can do and underestimate the work to be done. If though, we think in 10X terms, then we can escape some of that. Creating a project that is 10X better means that we’ll only begin things that can sustain us through those challenges.

Facebook didn’t have this problem because Zuckerberg had built a good set of stage one ideas but had more to come. Thiel tells James of the story of the board meeting to discuss Yahoo!’s $1B offer. “I really don’t know what I’d do with the money. I’d probably start another social networking site, but I kind of like the one I have.” Thiel recounts Zuckerberg as saying. Sam Shank (episode #78)  mentions the same thing in his interview with James, saying that he would turn down the money too because he likes what he’s got.

Another thing in Facebook’s favor was that it satisfied Thiel’s Monopoly Rules. Going back to his competition and capitalism dichotomy, you want a monopoly. Thiel writes, “All happy companies are different: each on earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.”

PayPal started small by focusing on eBay power-sellers, Amazon focused on books, Facebook was only at Harvard. Thiel tells James that “if you just have one of these you can have a great business.”

James chimes in with a good name for this rule, the “Chinese refrigerator rule.”

The pair briefly talk about Uber, which Thiel says may be overvalued for the same reason Facebook was undervalued – “the investor class is likely to overvalue Uber.” But that’s not to say that because it’s current valuation (as of this draft in March of 2015) $41B is wrong.

The situation with Uber is tricky because it’s a place in the Land of Small Numbers. When we travel from place to place there, we can’t be sure of the local rules until we arrive and spend some time there. We factor in ideas like, tech startups sometimes go bust, and didn’t I hear a negative news story about Uber. Then we look at relative anchors. Tesla is valued at $26B, and Michelin $17B. Does Uber seem that valuable? What if we compare a different set of market caps, like Facebook at $263B? We factor all this in, but almost none of it matters. Uber depends on these anchors as much as a family in Chicago depends on business Miami. Both are companies/cities but their relation is almost none. Thiel cautions us to not think Uber is overvalued because it’s worth more than other companies but because it’s overvalued because of what it’s future potential really is.

The next fifteen minutes of the interview dive into Thiel’s specific thoughts on a handful of ideas.

  • He thinks there’s still a hangover from the 1990’s technology bubble.
  • He likes investing in venture capital because it’s not cash or credit.
  • Regulatory headwinds are not something you should underestimate.
  • Moore’s Law is real (except when it isn’t*).
  • Opaque companies are better because they might have a good secret.

And here we jump right back into a rich idea – secrets. In the book Thiel writes, “every great business is built around a secret that’s hidden from the outside.” But being open to finding secrets is hard now.

In Thunderstruck, Erik Larson writes about the Society for Psychical Research. Established in 1882, the group aimed:

“to bring scientific scrutiny to ghosts, séances, telepathy, and other paranormal events, or as the society stated in each issue of its Journal, “to examine without prejudice or prepossession and in a scientific spirit, those faculties of man, real or supposed, which appear to be inexplicable on any generally recognized hypothesis.” The society’s constitution stated that membership did not imply belief in “physical forces other than those recognized by Physical Science.” That the SPR had a Committee on Haunted Houses deterred no one. Its membership expanded quickly to include sixty university dons and some of the brightest lights of the era, among them John Ruskin, H. G. Wells, William E. Gladstone, Samuel Clemens (better known as Mark Twain), and the Rev. C. L. Dodgson (with the equally prominent pen name Lewis Carroll). The roster also listed Arthur Balfour, a future prime minister of England, and William James, a pioneer in psychology, who by the summer of 1894 had been named the society’s president.”

thatsinterestinAnd Thiel tells James that finding secretes is a self fulling prophecy, “if you believe there are secrets to find, then you will work at them and be someone who finds them.” You have to be open to finding them, look for them, and – as Dr. Atul Gawande said in his 2005 commencement speech to Harvard Medical School students –  “count something.”

“No matter what you ultimately do in medicine— whether you go into purely clinical practice or work in research or business and never touch a patient again—a doctor should be a scientist in his or her world…It doesn’t really matter what you count. You don’t need a research grant. The only requirement is that what you count should be interesting to you…If you count something interesting to you, I tell you: you will find something interesting.”

What you need, Thiel suggests, is something measurable, with a close frontier, and not too conventional. Ask yourself if many people are looking at a single area and not another.

The interview concludes with Thiel telling James that “anything interdisciplinary in our society is quite underrated” and that education pushes us towards “arcane specializations.” But the good part to all this is that “it’s always possible to do something new in our society.”

Thanks for reading. One of those new things is joining our book club. We’re reading So Good They Can’t Ignore You and you can sign up here.  The book is about dispelling the myth to follow your passion and instead suggests you “build rare and valuable skills” so that you can find a job with “rare and valuable” features. It’s a good book, a free club, and it starts in April of 2015. If you stumbled onto this post well after than, you can buy that information here.

If I quipped wrongly, quickly edited, or quietly overlooked something, please let me know. @mikedariano.

*Kevin Kelly talked to Tim Ferriss about this idea and had some interesting ideas about what if the things we take for granted as being true, won’t be. Included it that group was Moore’s Law.

#100 T. Harv Eker

Harv Eker (@T Harv Eker) joined James Altucher to talk about better training, persistence, and as the AC/DC song goes, “Who made who, who made you – If you made them and they made you – Who pick up the bill and who made who?” The rock song is asking who made you and then who made that person and so on. Eker’s angle is that we should ask who made the thoughts that come into our head. Ask why they are there, and then apply the four magic words.

Eker is on the podcast to talk about his latest offering, the T Harv Eker Life Makeover System. Besides being a mouthful to say, is “A Simple 7 Step System To Design And Create Your Ultimate Life…One That’s Filled With Happiness, Balance And Fulfillment!”

Before Eker created this though, wrote wrote, Secrets of the Millionaire Mind. This book had a strong affect on James, he told Eker, “What affected me about the book was that you could have these pre-programmed beliefs about wealth from tragic things that happened from your parents or childhood.” And many times, Eker says, “we don’t even recognize the program running us.”

This echoes what Daniel Kahenman writes in Thinking Fast and Slow, “A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth.”  The more often we hear something, the more likely we will believe it to be true.

Eker had to work his way through a variety of thought systems before arriving at this point, some of which were in business. He tells James that he had 14 jobs in 12 business in 11 years. “I had a belief that if you get in the right thing at the right time, you’re going to become successful.” Eker was trying to incrementally improve on the ideas that other people had, figuring that if it worked for them, and he worked hard enough, it would work for him too. Peter Thiel writes that these sorts of pursuits don’t work out because it’s too crowded when you are trying to go from 1-2. For example, if you want to open a pizza restaurant in your city, that’s going to be hard to do. And this is the equivalent of what Eker did, 14 jobs delivering pizza in 12 pizza shops in 11 years. Unlike a pizza delivery person, he was well paid, but like a delivery person, there wasn’t the success, skills, and growth he was hoping for.

Instead he should – and eventually did – go from 0 to 1. This is a lot harder. Rather than deliver pizzas, our enterprising pizza delivery person opens a make-your-own-pizza-bar; where customers come in, choose from organic and fresh ingredients, assemble the pizza in the right ratios, have them partly baked, and then frozen for their home freezer. Now that business may not work, but that’s the kind of business that has opportunities for great success if it does work. This is what Eker was searching for.

How do you get there? Eker suggests that the person sitting in their cubicle right now to reframe how they view their job. Instead of it being your job, think of it like a paid internship for your next venture. Eker says that “67% of entrepreneurs” end up in the same industry they had previously worked in. In his book, Zero to One, Peter Thiel writes that a key component of their success was figuring out how to have computers and humans work together to detect fraud. In 2002 – after the sale of PayPal – Thiel continued to wonder, “if humans and computers together could achieve dramatically better results than either could attain alone, what other valuable businesses could be built on this core principle?” The next year he pitched Palantir to some former classmates and the company was formed. In 2013, the WSJ estimated its value at $9B.

smokingnursesSo Eker did this. Eker knew about fitness and began selling fitness products and beginning the Peak Potentials Training company. Eventually he sold that fitness company but lost a lot of the money he made “A lot of people are good at what they do, but when they first have money, they’re not good at having money.” James says. Money management it turns out, is domain dependent. We’ll call this the smoking nurses phenomenon.

Eker realized that he needed to take a low risk approach to investing money and that’s something past guest Tony Robbins (episode #62) and Nassim Taleb both suggest. In his book  Tony Robbins wrote, “The most important piece of advice every investor I talked to echoed was, ‘Don’t lose money!’”

Taleb echoes those thoughts, writing, that he never invests his own money in his own portfolio, instead choosing a conservative mix.

After his financial transformation Eker began to work on a spiritual one. “My self worth was wrapped up in my net worth,” he tells James, and that was “another big mistake.” He’s not the only one. Seth Godin (episode #27) told James “ones identity as an entrepreneur is really tied up in what you do all day” and after Godin sold his company to Yahoo!, “that identity was stripped.”

Eker says that after blowing up he got in Zen Buddhism, but there he wasn’t happy being zen. So what was it? If he wasn’t the cutthroat businessman or the Zen Buddhist, what was he? It turns out, he was both. “Embrace both sides of your self.” Eker tells James. “What I teach is that you can be kind, generous, loving, balanced, spiritual, and really freaking rich.” When he learned this, Eker says, it “changed everything.”

How can you change, Eker says that first you have to be aware that certain beliefs are “not supportive of success or happiness.” To those beliefs you need to identify where they came from, why they exist in your life, and why they matter so much. My maternal grandfather lived through the great depression. The specific details of his experience I don’t know, but later in his life I noticed he would crumble saltine crackers in his coffee. When I asked him why he did this, he said that crackers and coffee were the two things he loved but could never afford, so now he enjoys them together. It would be somewhat foolish of me to expect that his experiences of having so little were not transferred to my own experiences.

Another thought that many people have is that you must work. Why hasn’t anyone suggested we find passive income as a means of work? Eker asks James. In another podcast – Tropical MBA – the guys there talk about this idea as it relates to Alex Blumberg’s (episode #70) podcast StartUp. They use an alternative universe theory to think about what if instead of going for venture capital, Blumberg bootstrapped his company. They also talk about episode #14 when Chris Sacca said that he hasn’t invested in a lifestyle business. But what if that’s what Blumberg had done? Eker doesn’t explicitly address any of this in his conversation with James, but in the ideas he does. He wants people to ask themselves why they think about things the way they do.

Ultimately to start any business, you will “get rich by solving a problem for somebody.” Eker says. Sam Shank said in (episode #78) that, “It boils down to saving time and saving money. I think all consumer products need to deliver on one, ideally both.”

Then Ecker shares a nice little suggestion for thinking in a healthier way. ”Thank you for sharing” are the four magic words we can tell ourself when we start to have thoughts about something that isn’t helpful. Dan Harris said that he developed a similar perspective by asking, “is this useful”?. Rather than worry about whether or not he would be late for his plane, Harris began to ask if the thoughts he was having were useful.

In that interview, James said he does this too:

“for instance, rather than worrying, oh my gosh, I went down in rankings today or what’s my number, what’s my ranking system, becoming more creative about right now what can I do, making a list for what can I do to market better, and that’s something – so I’m in control of what I can do right now, and as you said, I can’t control the future.  So I can say, okay, well, on Twitter, I’m gonna market a little better or I’m gonna build a Facebook page.”

Eker tells James, “Any thought you think that is not supportive to your happiness or success you immediately come back with ‘thank you for sharing’ and you move to a more empowering thought.” It’s an idea from the stoics that Ryan Holiday (episode #18) writes about in The Obstacle is The Way, “They can throw us in jail, label us, deprive us of our possessions, but they’ll never control our thoughts, our beliefs, our reactions.” He goes on:

In fact, if we have our wits fully about us, we can step back and remember that situations, by themselves , cannot be good or bad. This is something— a judgment—that we, as human beings, bring to them with our perceptions. To one person a situation may be negative. To another, that same situation may be positive.

At the end of the interview Eker shares three of the seven steps in his new system:

  1. Ask what do you really want.
  2. Ask why don’t you already have it.
  3. Ask what do you need to do to get what you want.

He tells James that people can go to his site to find out more details.

Thanks for reading. If I was pompous, pessimistic, or too pseudo-scientific in this post, do let me know @mikedariano.

Every tenth one of these I put a link here for readers to donate if they’d like. Each one of these posts takes 3-5 hours to write and if you are a regular reader who would like to say thanks financially, here you go. To those that have supported this site already. Thank you. It doesn’t matter how much, each email I get saying that someone took time to read the entire article, follow the link to PayPal and send me money means a lot. Thank you.

Matt Stone

On October 3rd, 2014, James Altucher interviewed Matt Stone (@180degreehealth) about goals, getting unstuck, and how long side projects really take.
 
Stone’s latest book is Goals Suck: Why the Obsession with Goal-Setting is a Flawed Approach to Productivity and Life in General. The book description on Amazon has quite the hook, “When you have sex, do you take a timer and a legal pad into the bedroom to log the number of hip thrusts and grunts? Do you compile all of your data at the end of the week and plot it into a graph?” Well, no. Should I be?
 
Kidding aside, Stone’s suggestion in the book is to follow your passions and let them fuel the pursuit rather than goals, to-do list, or rewards. This isn’t  to say your passion will only lead you in one direction. Stone says, “your passions are not life-long and consistent; they do jump around, and it’s important to kind of go with the flow, and if you’re in the flow of what you’re really interested in doing right now, you’re gonna be more productive, and you’re also gonna be a lot more focused, and everything that you do is gonna be higher quality because in a different zone when you’re doing something that you’re really engaged in.”
 
David Heinemeier Hansson thinks much the same way, in a 2011 interview at Mixergy he talks about passion rather than goals: “I think all those things are infinitely more important than this notion of the goal. I think the notion of the goal, perhaps work, if you’re doing something shitty, if you hate what you’re doing, you hate getting up in the morning to work on it and you generally are not passionate or interested in the work itself and the problems themselves and you’re just in it for the goal, you’re just in it for the flip or the payout or the reward at the end of the road, then sure, having something big and extravagant, a carrot up there might work for you. But I’d say that you’re doing it wrong because the chances are you’re not going to reach your goal”
 
Stone mentions a Daniel Pink TED talk, which Pink shares, that he too is critical of the carrot and stick system: “I spent the last couple of years looking at the science of human motivation, particularly the dynamics of extrinsic motivators and intrinsic motivators. And I’m telling you, it’s not even close. If you look at the science, there is a mismatch between what science knows and what business does. And what’s alarming here is that our business operating system — think of the set of assumptions and protocols beneath our businesses, how we motivate people, how we apply our human resources — it’s built entirely around these extrinsic motivators, around carrots and sticks.”
 
What do you do then? Don’t you need the to-do app with geolocation and cloud syncing to keep you on track?  No, Stone suggests you “do the shit out of” what you’re passionate about, and gives a lot of suggestions to find out what that is if you don’t already know. It could be looking at the things you enjoy doing or “will keep you up at night if you think about it right before you try to go to sleep.”
 
Stone got started by starting a blog, and just writing down his thoughts. After two years he realized he could gather up some of the knowledge he had been sharing and sell it to others because it was valuable. Mason Curry wrote the Daily Rituals book after following the same blog to book path.
 
Unlike some other e-book authors, Stone says it’s not about being productive, it’s about living the life you want. When he speaks to Altucher about living on the beach in Maui, or being a ski-bum, I couldn’t help but think he’s found what Greg McKeown would call essential. McKeown’s book suggests that to find the essential we; examine and explore and discern and subtract so that we can add.
 
These self pursuits are also a form a selfishness, which Scott Adams (a previous Altucher guest) writes is good: “If you do selfishness right, you automatically become a net benefit to society. Successful people generally don’t burden the world.” For Adams “The most important form of selfishness involves spending time on your fitness, eating right, pursuing your career, and still spending quality time with your family and friends.”
 
Adams might have chimed in with some choice thoughts on goals too – he’s with Altucher and Stone saying they suck. In the same book he writes that goals lead you to a perpetually bad place. You’ve either not accomplished them yet and have failed so far, or you conquer them and no longer have the thing that gave your life so much meaning.  
 
Stone also dispels the myth of the overnight success.  “I don’t recommend just completely quitting your job and putting your back against the wall….you’re probably not gonna be able to cultivate the skills and knowledge and expertise to monetize it successfully in a month or two months or three months or however much money you saved up that you can live on after you’ve quit your job.” Passion then isn’t the sole ingredient to this great life, there is some skill and knowledge required too. Cal Newport writes that these things – at best – go hand in hand, and that sometimes skill may actually precede our passions.
 
The interview ends with Claudia posing a question about creating a “Paleo, vegan, gluten-free, and no allergy cookbook” which turns out, already exists, Paleo Vegan Sweets & Treats.
If you like these notes let me know on Twitter, @mikedariano.

#19 Austin Kleon

Austin Kleon (@AustinKleon) joined James Altucher to talk about creative mashups, scenius, and that “every job is a job.”

Austin has a number of projects, one of which is the book Show Your Work, which James says he reads “every single day.” Klein’s other book is Steal Like an Artist which came from this talk. His site is Austin Kleon.com.

Kleon’s on to talk about his book Steal Like an Artist and says that:

“The whole point in Steal Like an Artist is that you don’t shut yourself down to influence and try to be wholly original. You actually open up the gates and embrace influence.”

It was this quote from T.S. Elliot that inspirited Kleon to write the book, “Immature poets imitate; mature poets steal; bad poets deface what they take, and good poets make it into something better, or at least something different.” Kleon also mentions the site Everything is a Remix as an influence. Take a peak if your are interested in digital media or want to hear where Stairway to Heaven originated.

While he was on tour promoting Steal Like an Artist, Kleon said he kept getting questions about how to promote yourself and Show Your Work began to form. It’s “an anti-self marketing book” he tells James.

Begin documenting your work, Kleon suggests, even at the beginning. “There’s a big gap when you’re starting out between what you love and what you’re producing.” You have to be gutsy enough to be vulnerable and still do the work though. Brian Koppelman said something similar in episode #98. For Koppelman, he had to learn how to fail in a new way (stand-up comedy) before he could finish writing Solitary Man. He went on to tell James that you need to find the right zone between vulnerability and being able to have your work ripped to shreds.

Kleon says that he gets his creative coffee in the mornings by reading the obituaries. “To get your obituary in a major newspaper,” he tells James, “means you did something with your life.” James asks for an example, and the one that comes to mind is Harold Ramis. Kleon mentions the same quote that James Manos (episode #39) did.

Kleon takes the understanding ones step further than Manos and says that not only did Ramis stand next to (that quote is at about 1:10 in the above video) the most talented person in the room – he also tried to be helpful to that person and form strategic partnerships.

These sorts of relationships hits on another idea that Kleon shares (and attributes to Brian Eno) having a scenius. Eno said that it’s not the lone genius at work. It’s a confluence of them:

“What really happened was that there was sometimes very fertile scenes involving lots and lots of people – some of them artists, some of them collectors, some of them curators, thinkers, theorists, people who were fashionable and knew what the hip things were – all sorts of people who created a kind of ecology of talent. And out of that ecology arose some wonderful work.” – Brian Eno,

Kleon tells James, “You used to have to go somewhere geographically, now, what is the internet but one giant scenius waiting to happen.” Seth Godin (episode #86) said much the same thing, that a lot of our boundaries to good work or work with good people are gone.

Okay, so let’s say you want to find a scenius of writers/entrepreneurs/stay-at-home moms. How in the world do you do that? Kleon suggests you start out as a fan. Share the work those people are doing and interact with them. Understand how they work, what they do, and why. You could also form a mastermind per Jack Canfield’s (episode #90) advice. Lewis Howes (episode #88) would suggest a coach. Adam Carolla (episode #25) and Tom Shadyac (episode #15) would say to find people that bring out the best in you.

What other advice does Kleon have?

Step 1: Start

It’s going to be a small start, but the good news is that everyone starts small. Ryan Holiday’s (episode #18) email list was initially only to a few friends. Maria Popova’s (episode #89)Brain Pickings was to eight. Sam Shank (episode #78) started Hotel Tonight and had no orders for the first two weeks. Kleon adds to this chorus:

“A little drop in the bucket everyday and pretty soon you get a pail full of water.”

Step 2: Sustain

I don’t have time though. A familiar refrain, but James says we don’t need as much time as we think. “People think they need a situation that’s ideal, when in fact you just need a routine that allows you to do a little bit each day.” Davide Levien (episode #85) said that his short commute actually helped him write a book. Ditto for Amanda Palmer (episode #82) who wrote “limitations can expand rather shrink the creative flow.”

Step 3: Share

Sharing can be hard, so Kleon suggests maybe not to share your own work, but something good someone else has done that has inspired you. An example he gives is Sam Anderson’s tweets his favorite line of the day:

You can also share what you are learning. “People think that when they share their expertise, they’er gonna give away their whole game. I think the opposite is true, when you teach people what you know, you establish your expertise even more firmly. For me this is Shane Parrish, creator of Farnam Street.

When you start to share your own work, “people will tell you when it’s not polished” Kleon says. Brian Koppelman says, “I want my stuff ripped apart” by the best filmmakers. But you’ll have some jerks that will go past constructive criticism. For those people you’ll need to consider where they are coming from. The stoics had a handy way to go about this as William Irvine writes in A Guide to the Good Life.

“One particularly powerful sting-elimination strategy is to consider the source of an insult. If I respect the source, if I value his opinions, then his critical remarks shouldn’t upset me. Suppose, for example, that I am learning to play the banjo and that the person who is criticizing my playing is the skilled musician I have hired as my teacher. In this case, I am paying the person to criticize me. It would be utterly foolish, under these circumstances, for me to respond to his criticisms with hurt feelings. To the contrary, if I am serious about learning the banjo, I should thank him for criticizing me.”

Eventually you’ll need to get paid. This one is a bit tricky, says Kleon, because you want people to value your work but you also need to put food on the table. Amanda Palmer tells the story about a friend who ran a successful fundraising campaign, hit her goal, and then went off to make her record. Taking Palmer’s advice, she began to share the process with her fans. Then she went on vacation and felt odd about sharing a picture of her toes in the sand and a mai tai in her hand. Palmer’s suggestion is this, artists shouldn’t worry about asking for money, “as long as art is coming out the other side.” The people who feel that way are the ones you want to support you. Those are your fans.

To get fans you have to stick around. “We’re big fans of the overnight success story,” Kleon says, “it’s a really good marketing myth.” Jack Canfield told James, “success is something you do over time.” It’s been true for every single guest on the podcast, it takes time.

Then a moment of personal serendipity occurred while I was listening. These notes were posted in March of 2015, and our first book club/enhanced book reading is in April of 2015 and Kleon literally mentions that book!

Near the end of their interview, James compliments Kleon, noting he got out of cubicle prison and is doing what he loves, to which Kleon responds:

“Well, I want to push back a little about that do what you love thing. A lot of what I do is not what I love.”

It’s administrative work. It’s traveling. “Every job is a job” Kleon says. It’s not about finding your passion, it’s about getting good at something and enjoying something you are good at and taking control there. This is the fulcrum for this book.

Thanks for reading. If anything was observed but not noted, obtuse, or obstinate let me know, @mikedariano. Two final notes:

If you like The James Altucher podcast, check out the post Erik Bison did on some other podcasts you may enjoy.

If you want to build the idea muscle habit, I’ve created something that can help. It’s a pay-what-you-want, three week daily email to help you build your idea muscle.

#99 Dave McClure

David McClure (@DaveMcClure) joined James Altucher to talk about startups, the synergy of skills, and what it’s like to see your peers ride to the moon while you walk on earth.

Prior to this interview, I had never heard of McClure who is “an entrepreneur and prominent angel investor based in the San Francisco Bay Area, who founded and runs the business incubator 500 Startups. He is often described as one of the super angel investors.” Well, things, can’t be that bad when you’re a super angel. But McClure was a late bloomer, in the sense that it took time for him to build up the right set of skills for the right moment in time. He mentions this explicitly in the interview when he says that timing matters quite a bit. Paypal, for example, at one time was going to make mobile payment systems. Only just now is that coming to the market and the original design was for a company that no longer exists.

McClure has found his success running 500 Startups where he learned, “the biggest companies are often outliers.” It’s hard – maybe impossible – to sniff out the next big thing. Even McClure, who has decades of Silicon Valley experience (and remember that Silicon Valley has only been called that since the early 80’s) makes mistakes. He missed investing in Uber and calls it “the single biggest fuck-up of my investing career.”

That career in technology started when he sold his own company, then moved on to Microsoft, and eventually the Director of Marketing at PayPal. At these places he rubbed shoulders with some of the most successful entrepreneurs in technology but faced “a lot of mental challenges.” It’s hard to be around the best, see what they are doing, and then not compare yourself. Well, that’s an ultra-FWP (first world problem), you’re thinking. We’d do anything to be in his shoes. Maybe.  It really depends on where you’re sitting to begin with.

Writing in the LA Time, Michael Shermer explains:

Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000? Assume for the moment that prices of goods and services will stay the same. Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have.

What? Yup. It turns out that when we think about things, we often compare them to some baseline/normal/traditional level rather than absolute level. The woman with one million today feels great if yesterday she had half a million but awful if yesterday she had ten.

H.L. Mencken noted this in his definition of wealth: “Wealth – any income that is at least one hundred dollars more a year than the income of one’s wife’s sister’s husband.

Rather, don’t look at what other people do or have done:

“If you look at someone from the outside and they have a successful business or blog and a podcast and you’re like wow, there’s no way I could do that. I felt exactly the same way…. but jump in anyway.”” – Ramit Sethi (episode # 36)

McClure kept working, and looked for “an areas I’m actually doing well at.” Then a stroke of “luck” when Sean Parker asked McClure to join Founders Fund. He did.

Then in 2010 he stared 500 Startups, their boilerplate reads:

“We’re based in Silicon Valley, but you can find the #500Strong family of mentors, investors, and founders all over the globe. In the last 4 years, we’ve invested in over 700 companies in more than 40 countries. We have offices in Mountain View, San Francisco, New York City, and Mexico City.”

setofskills500 Startups began, McClure says, because of his particular set of skills. “I had both the engineering and marketing side and there weren’t that many people doing investing that had both disciplines.” McClure had what Scott Adams articulates as the right combination of skills.

“I’m a perfect example of the power of leveraging multiple mediocre skills. I’m a rich and famous cartoonist who doesn’t draw well. At social gatherings I’m usually not the funniest person in the room. My writing skills are good, not great. But what I have that most artists and cartoonists do not have is years of corporate business experience plus an MBA from Berkeley’s Haas School of Business.” – Scott Adams

But wait, there’s more!

McClure had also taught a class at Stanford University and had been organizing community events. He also had some “very interesting experiences that have served me well.” His intersection of skills included teaching, business, coding, and communal. Tim Ferriss had a similar path, using community as a tool to connect. Ferriss got involved with Silicon Valley Association of Start-up Entrepreneurs and began taking any job they offered. Soon he was organizing conferences and consequently meeting the speakers. One of which, was Jack Canfield (episode #90).

Toward the middle of their conversation James notes that “nothing is predictable” and McClure chortles, like an east coaster just told him that Californian has wonderful weather.

He explains the iterations that PayPal alone went through. “There was two year with three to five business models, shifting strategies and iterations before they found something that caught fire” McClure says. “That’s pretty typical.”

How then can you know what to invest in? James asks. MCClure says it’s hard. “It’s hard to know the person.” At 500 Startups they look to whatever track record might exist, what school they went to, and what they’ve made in the past.

Once someone gets in, they only succeed about 15% of the time. McClure sounds pretty reasonable and realistic when he explains that number, which isn’t often the case. What usually happens is we negelct the base rate. For example, “John is a man who wears gothic inspired clothing, has long black hair, and listens to death metal. How likely is it that he is a Christian and how likely is it that he is a Satanist?”

Duh, John has his wallet hooked to a chain. Guaranteed. Au contraire mon ami. Think instead of how many Christians (2B) there are and how many Satanists (~15K) there are. It is far more likely that John is a Christian with an affinity for black (which does go with everything). What we did there was take the sample in front of us and think deeply about that rather than thinking widely. These examples are fun, let’s do another:

Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.

Which is more probably, Linda is a bank teller or Linda is a bank teller and is active in the feminist movement? Wikipedia has the deeper answer and if you like these sorts of things, add David McRaney’s You are Not So Smart podcast to your list of ones to listen to.

Bringing this back to McClure, we could expect that he would exhibit some bias toward expecting a higher success rate because he’s involved with a company. We typically overestimate this for a few reasons. One is that he succeeded in the past. If I can build and sell company X then I can build and sell company Y the thinking goes.

Another reason, Economist Daniel Kahneman explains  is that from the inside of a group we miss the view from the outside, we are overly optimistic, and we underestimate how long things will take.

This part of the notes is so long because it’s so important. This is a bias that it appears McClure has recognized and taken into his calculations. Like a chef might rework the menu because of a lack of lobster, McClure has reworked an investing philosophy. It’s not that no one will order lobster (that McClure will always avoid mistakes), it’s just that there’s some safeguards against everyone ordering the lobster (McClure making the same mistakes over and over).

James asks for suggestions about what might be one of the next big things, and McClure guesses home automation (just not yet), hardware and software combinations, and SAAS for busines. Steven Kotler (episode #10) had his own predictions.

About new business, McClure thinks that the ideas are new, but maybe not the technology behind them. “There’s nothing technically new about those businesses (Uber, AirBnb).” Rather it’s the synergy of ideas. PayPal was ready for mobile payments, but mobile wasn’t. Mitch Lowe (episode #67) had built a prototype of the Redbox rental machines for VHS, but the technology wasn’t there. A current example is Alex Blumberg’s (episode #70) Gimlet media which is increasing their pace because of the success Serial had. But Blumberg wouldn’t have a podcasting company without a mobile way for people to download them. I was listening to podcasts in 2005 and in a decade, we’ve come a long way. Timing matters for technology.

One bit of parting advice from McClure is to write about what you’re doing. Austin Kleon advocated for this in his interview with James and it’s something Gary Vaynerchuk (episode #2) has been shouting, whispering, and vining from every possible channel. (And your channel and message matters.) If nothing else, it’s a great way get your message out without relying on the press, said Jason Calacanis (episode #77).


Thanks for reading. If I nixed, neglected, or narrowed my focus too much, let me know: (559) 464-5393, @mikedariano, or in the comments. Plus, our book club begins soon. Sign up here.
One final story that didn’t fit. Uber comes up a few times in this conversation and a story about founder Travis Kalanick comes up around the 14:00 mark of this StartUp episode. Understanding it, will help you understand Uber.

McClure also had this reading suggestion:

#39 James Manos

James Manos joined James Altucher to talk about persistence, following your passion, and what it was like to write the College episode on the Sopranos. He also created Jimmy Stones and South of Hell which he talks about in this interview.

Manos has a rich IMDB profile with credits for Dexter, The Sopranos, and The Shield – the career “anti-hero” shows as James calls it. Manos says that the anti-hero is “a much more realistic version of what we’re all capable of doing and what we’re all capable of being.” This trend didn’t just happen. Manos says that The Sopranos was in “turn around” for five or six years before HBO picked it up. Originally it was bought by Fox, who David Chase wrote a pilot script for. They passed. So did every network to the point that HBO was the last broadcaster standing.

Even when the show started, “none of us were conscious of creating something that became truly iconic.” Manos tells James. It’s similar to this Dave Grohl quote about how Nirvana became Nirvana:

davegrohl

As the interview goes on, Altucher says that it seems like HBO was the “grandfather” to so many great shows. Manos says that “the best shows happen when the networks allow the original creator to do what they want to do. Disney knows this, so does FX.

For FX it went like this: “Basically, Louis (CK) gets very few notes, with very little supervision, for very little money. He has complete control over every aspect of the show and is able to create the show he wants.” But he’s talented, shouldn’t he get paid more? “FX exec John Landgraf explained, “I can write you a check right now for 200 but anything more than that I’m going to have to go ask Rupert Murdoch, and you’ll have to tell him what it’s about.” Louis agreed to keep it at $200,000.)”  This is an example of building up career capital and trading it for career control, a theme to our April book club

When you find a creator who has a chance to create, take the advice of Harold Ramis and try to stand next to them. (~1:10)

Part of the work feeling like play attitude that Manos has sought comes from working with people he likes. The world isn’t going to be full of kind and nice people, he tells James, so you may as well try to find some at work. Tom Shadyac (episode #15) said that working with Jim Carrey made him funnier, and vise versa. Brian Koppelman (episode # 98) said that marrying the right person was the best choice of his life. Find good people and be around them.

Manos’s big break came when he got “very lucky” in obtaining the rights to the “Texas cheerleader story.”  The movie included Emmy Awards for Holly Hunter nad Beau Bridges.

Altucher observes that it seems like story arcs for television has gotten more complicated. Manos doesn’t think so at the character level, and this is part of why he has been successful. His advice to Altucher about writing is that he writes what would be true to the character, and “my only goal is to come up with good stories.” In his eyes there is no change for a character, and if there is one that’s a failure of the writer. He said that working with David Simon was easy because he had such a clear vision. “If you know the characters really well, it doesn’t become all that complicated to reach your desired goal.” Manos says. In the Vanity Fair oral history Chase said, “I would always go away before the season even started and come back with a whole, overly complicated story arc for the characters. It started out very simple, just for Tony. Then as the years went on, I would do one for Tony and one for Carmela, one for Chris Moltisanti. Tony would have three story arcs by Episode No. 13; Carmela would have two or three; Chris would have a bunch. You’d lay them out and see how they’d all line up. Sometimes you’d see a resonance in the stories, and sometimes not. So we would start to work it out”

On a more macro level, Altucher might be on to something. In the book, Everything Bad is Good for You, Steven Johnson makes the case that games, television, and the internet are getting more complex over time, and that this is actually a good thing. Ironically enough, Altucher hits on what’s considered the start of this movement towards complexity in television with Hill Street Blues. “Watch an episode of Hill Street Blues side by side with any major drama from the preceding decades – Starsky and Hutch, for instance, or Dragnet and the structural transformation will jump out at you.” Johnson writes. Dragnet is a “single line.” Starsky and Hutch is a single line plus a “comic subplot.”  Hill Street Blues by contrast has more characters, more scenes relevant to more story lines, and fuzzy borders where one episode begins and another ends. Then we get to The Sopranos.

“The total number of active threads equals the number of multiple plots of Hill Street, but here each thread is more substantial. The show doesn’t offer a clear distinction between dominant and minor plots; each storyline carries its weight in the mix. The episode also displays a chordal mode of storytelling entirely absent from Hill Street: a single scene in The Sopranos will often connect to three different threads at the same time, layering one plot atop another. And every single thread in this Sopranos episode builds on events from the previous episodes, and continues on through the rest of the season and beyond.

Here’s are the graphs that Johnson uses to explain this. The vertical axis is number of threads, the horizontal axis, time.

everythingbadtvchartAltucher had a similar conversation with David Levien (episode #85) about this.

For the actual writing process, Manos doesn’t have much advice, even admitting that he doesn’t want to know how he writes. He’s not alone, none of the writing guests give great specificity about their process, but Simon Rich, (both episodes), Andy Weir (episode #92), and Ben Mezrich (episode #84) all beat around the bush. It’s not that they are intentional, it’s just that like, Manos, they aren’t sure how exactly it happens.

One thing Manos does know for sure, is that he needs to be doing it, the story telling. He said that he recently got a phone without email capabilities because “I don’t want to be inundated with email all day long.” He’s not the only Hollywood person to do so. In an interview with The Hollywood Reporter Christopher Nolan said he doesn’t have email or a cellphone. How can that be?

“Well, I’ve never used email because I don’t find it would help me with anything I’m doing. I just couldn’t be bothered about it. As far as the cellphone goes, it’s like that whole thing about “in New York City, you’re never more than two feet from a rat” — I’m never two feet from a cellphone. I mean, we’ll be on a scout with 10 people and all of them have phones, so it’s very easy to get in touch with me when people need to. When I started in this business, not many people had cellphones, I didn’t have one, I never bothered to get one and I’ve been very fortunate to be working continuously, so there’s always someone around me who can tap me on the shoulder and hand me a phone if they need to. I actually really like not having one because it gives me time to think. You know, when you have a smartphone and you have 10 minutes to spare, you go on it and you start looking at stuff.”

Toward the end of the interview, James asks “how do people find their passion?” That’s one of the big ideas here and Manos credits an old boss for giving him two weeks off to see if he really enjoyed the job he had. Zappos has something similar in The Offer.

Maybe though it’s not about finding your passion in a two week hiatus. Maybe it’s about finding your skill. Adam McKay was on the (very good) Working podcast.

“I’ve been doing this a long time. From the age of nineteen on, I was actively writing sketch and took screen play classes and I’ve watched thousands and thousands of movies, and I’ve rewritten and written – at this point – a thousand different kinds of scripts in my life.”


Thanks for reading. The book club starts in April and you’ll need to track down the book by the end of March. Sign up here. It’ll cover ideas like why you don’t need to check email as often as you think, what really matters in the passion vs. skill balance, and how you can build your own skills. It’s one book, six emails, in thirty days.

*A previous version of this post misspelled Jim Carrey’s name.