#110 Stephen Dubner

whentorobabankStephen Dubner is back. Dubner joined James Altucher to talk about writing a book, the bittersweetness of it, and when to rob a bank. Dubner was a guest on episode #20 and his ideas are woven through many other posts. If you haven’t read any of his books, you may as well start with When to Rob a Bank, the one he’s promoting on the podcast.

The book, Dubner tells Altucher, is a “curation and organization of over ten years of posts” from Freakonomics.com. There, Dubner, his co-author Steven Levitt, and others have written about the freaky conclusions they’ve found interesting. The book is a collection of not only the best posts, but the most applicable too. “The best posts are not about a thing that happened,” Dubner tells James, “but about an idea.”

This book has been brewing a long time time Dubner says. There were over 8,000 posts that a team of people whittled down to 1,000 and that Dubner chose 132 from. He says that sometimes they looked at metrics like comments, (“you figure 300 people comment on something, it’s worth looking at again”) but mostly it is things that Dubner found most interesting.

Some of the posts that made the cut include, The Cost of Fearing Strangers, Terrorism, Part III, and 10,000 hours later: the PGA Tour?

Dubner tells James that some of the posts have brought more criticism than others, notably the terrorism one. The pair joke that terrorists finally know what to do after reading Freakonomics. In their jokes and the criticism is a bigger idea, that people aren’t thinking in broad enough strokes. Michael Mauboussin brought this idea up (in macro and micro terms) when he talked with Shane Parrish. For Mauboussin it meant thinking about Colonel Blotto, a game theory exercise. The macro takeaway from Blotto is that if you are the weaker player in a game, you should aim to have more places to compete. Dubner says that this example can be seen in terrorism, and gives the example of the Washington D.C. sniper attacks. There, two people terrorized the greater D.C. area for three weeks in October of 2002. Rather than be outraged, aim to understand the logic behind the application.

Not many people think in these terms and Dubner says his co-author, Steven Levitt, “doesn’t get the person who would be upset by it.” Thinking about these sorts of issues can be uncomfortable, but it’s thinking about them that helps us find solutions. Astronaut Chris Hadfield wrote that when we see a loose thread, we should tug on it to see if the whole shirt unravels.

This outrage is just part of being a bestselling author Dubner says. “The bigger the audience the more likely you are are to have variance in your reactions.” This comment is notable because of how economic his thinking has become. I’ve been reading Dubner since the first Freakonomics books, and he wasn’t always thinking like this. His transition is one that we all can have because it’s an evolution of thinking. Dubner has taken a new lens, fit it over his proverbial glasses, and found a better way to look at the world.

He goes on to tell James about the evolving title for this most recent book. The first iteration was, “Hooray for High Gas Prices” but Dubner says that didn’t work for the British publishers who said a cultural translation would require clarification that they were talking about petrol, not flatulence. The next attempt, “We were only Trying to Help” was rejected by marketing as too passive. Altucher tells Dubner that he should have just bought some Facebook ads and had people vote on it. Yeah, we could have done that, Dubner says, but it wasn’t about getting the most appealing title. It was about saying what he wanted.

“Freakonomics was twenty times luckier and one hundred times bigger than I could have imagined” Dubner says, it changed his life. “Once I realized that I was going to continue having a career writing what I wanted, that was it.” For Dubner it was about being financially able to live in NYC and not have someone tell him what to write. Mark Cuban (episode #24) said the same thing, noting that he was willing to “live like a student” if it meant not having to work. “It’s not about the money, honey.

Altucher says that he’s re-read Freakonomics many times looking for clues and he thinks that he’s boiled down what’s made it so successful.

  1. There is an “ah-ha” moment.
  2. There is a crisp story built around that moment.

Dubner says this sounds about right, and says that he writes in stories because “we remember stories.” Dubner paraphrasesAnton Chekhov’s advice to, “start in a place, in a way, that brings the reader in with an investment.” You don’t have to start at the start of a narrative arc. A better spot may be somewhere in the middle.


James moves on to ask Dubner about the path to mastery and they talk about Dan McLaughlin, who is trying to be a professional golfer by practicing for 10,000 hours. Dubner says that his progress is going well, but wonders if he’ll really make the PGA Tour. The problem, Dubner says, is the non-linearity of progress. If it was the case that 1 hour of practice = .05% improvement, then yeah, maybe. Unfortunately most of our skill development is closer to the Sigmoid Curve. During the early parts we build up a lot of skill quickly but plateau. Tim Ferriss (episode #109) says that he’s trying to figure out how to do this the most efficient way possible. Josh Kaufman also tackled this idea in his book, The First 20 Hours. If you’re looking not to go from the 5th to 95th percentile, but 95th to 99th, Ferriss recommends Josh Waitzkin’s book, The Art of Learning.  To really dive deep, Dubner suggests The Cambridge Handbook of Expertise and Expert Performance.

James ends the interview by thanking Dubner for his hard work, “you guys did all the work and I get to read it and in a couple of hours get all the knowledge.”

Thanks for reading, I’m @mikedariano. That two really intelligent people share how much they value reading is telling. I’m a big fan too, and so are many other people. If you need suggestions, I send out a monthly list of what I’m reading. You can also sign up for a book club I run or browse the many other posts here, almost all of which include something good to read.



TKP Michael Mauboussin

This post is going to be a little different. I started this blog because of the quality of guests on the James Altucher podcast. There was just so much to learn from people like Ramit Sethi (episode #36), Gretchen Rubin (episode #97), and  Peter Thiel (episode #43). But there are other great people to learn from too. This post is derived from The Knowledge Project, a new podcast from Shane Parrish, author of the Farnam Street Blog. If you enjoy this post, it’s only a small glimpse of the sort of thing that Parrish shares.

Meet the Author: Michael MauboussinMichael Mauboussin (@MJMauboussin) joined Shane Parrish to talk about decision making, reading, and how to make your kids – or anyone else – better thinkers. Mauboussin is the author of three books; The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing, More Than You Know: Finding Financial Wisdom in Unconventional Places, and Think Twice: Harnessing the Power of Counterintuition and is the managing director and head of Global Financial Strategies at Credit Suisse.

The interview begins when Mauboussin shares his daily routine and he notes that he really needs a good nights sleep and exercise. “Physical activity is important to me” says Mauboussin. I don’t know if you need your physical health to find success in life, but it might make it easier. Dan Harris nearly killed himself and his career when he was snorting cocaine. Rich Roll (episode #107) found that even though he kicked a drug and alcohol addiction, he wasn’t successful and happy until he got himself in a good physical state. Even Carol Leifer (episode #66), who has to look at twenty-something Hollywood actresses, hasn’t lost her motivation. If anything, looking at the young people around her has spurred her on to value her physical health too.

Besides sleeping and exercising, Mauboussin tells Parrish that he reads, a lot. Most of the reading he does is related to his job and when Parrish asks how he remembers so much, Mauboussin says, “when I need to write about it or speak about it, I tend to know the material reasonably well.” You don’t need to be the “head of Global Financial Strategies at Credit Suisse” to use this technique to learn things. Anyone with a blog – even me – can use what’s known as the “Feynman technique.” Maria Popova (episode #89)  told James Altucher, “Learning to read well and to write well is really learning to think well.” In taking information, turning it around in your head, organizing it, and then writing about it you learn it.

The main course of the interview between Parrish and Mauboussin is about decision making and Mauboussin notes that “there is often a role for intuition, but it’s generally overestimated.” A lot of his thinking comes from Daniel Kahneman’s book Thinking Fast and Slow.

Mauboussin says that a lot of our intuition is domain specific, in part, because it takes time to train ourselves to think about things following certain rules. Take the game of chess as an example. My daughter is learning how to play chess and I’m constantly reminding her which pieces can move in which directions. It takes a lot of active thinking for her play the game. My thinking on the other hand, is almost completely intuitive.* Flip the roles though, and have someone more advanced than me play me, and I’ll be as plodding as she is. Chess then is a domain I have a certain level of intuition in.

Mauboussin’s suggestion is that we lean on our intuition only when we have enough expertise. “An expert is someone who has a predictive model that works. Just because you’ve been doing something a long time, doesn’t mean you have a predictive model that works.”

To start developing your own intuition you need to get good feedback. This is something we talked about in the last TWP Book Club. If you want to be good at something, you need to practice the key parts to that thing and practice them well. James Altucher likes to talk about watching stand-up comedians before giving a talk. That’s good, but what would be even better is if he could watch a comedian and then have a comedian watch him. It’s not practical in every instance, but it’s what would make him better. You could also try to find a mentor.

It’s not easy to develop the right level of intuition. The bad news is that becoming intuitive takes time and a stable environment.  Luckily there is a model that anyone can use to become a better predictor. In Thinking Fast and Slow, Kahneman suggests we first start with the base rate. That is, 50% of small business survived four years, there is a 70% chance of rain, there is a 15% chance your stock portfolio will go up this year. This is the base rate that we should begin our thinking with. Paraphrasing Kahneman, you are not a special unicorn that poops rainbows, so don’t think of yourself as such. You. Are. Not. The. Exception. After the base rate, think about what you think the chances are once you get involved. Maybe you think the odds for your business rise to 85%, the chance of rain is 50%, and your stocks have a 40% chance of rising.

Now, Kahneman suggests, ask how much of an influence you might have. You do have some influence on your business, but not entirely. Lots of people work hard and fail. In regards to the rain, you can hope all you want, but your influence there is nill. Finally, move the base rate based on that influence. For example:

  • The divorce rate is 30% (base rate).
  • You think your marriage has a 10% chance to end in divorce.
  • You give yourself those odds because you go to church together, had been friends a long time before getting married, and you both like Game of Thrones. Those seem like strong influences.
  • Your best-guess divorce rate is moved to 14%.

The hard part to this, writes Kahneman, is checking your ego at the door and trusting the system enough to use it. Mauboussin and Parrish talk about this too. If you are the senior person on a team, it’s not just ego, but experience, that leads you to trust your intuition rather than a model. Suggesting you try models and experiment – which Mauboussin says is a good idea – is hard to do.

Getting people to experiment is difficult. Stephen Dubner (episode #20) recounts a story when he and Steven Levitt were consulting with a retail company. The company wanted to know how effective their advertisements were, but weren’t willing to change the ad levels in any meaningful way. Even when Dubner and Levitt found a market, through a mistake, where ads didn’t run, the company wouldn’t replicate it.

But there is value in experimentation. Ramit Sethi suggests you “test your way to it” and Tim Ferriss (episode #22) says that he tests almost everything in his life. Trip Adler (episode #61) says that he and co-founder tested, experimented, and integrated for 18 months before they started Scribd.

Parrish and Mauboussin also talk about the value of technology and Mauboussin says that technology does two things well. It computes big data and it builds models without emotion. If you do this when you’re clear headed, and then follow through during a stressful time, you’ll avoid some mistakes. Models are like a bridge you build to cross a river. Put in the time and effort during construction, and then trust your work when the wind is blowing and rain is falling.

The second half of the interview between Mauboussin and Parrish moves from decision making to thinking in general. Mauboussin says that he uses the Colonel Blotto game to teach his kids, “how we might act in various contest.” Here it is explained:

There is a nice collection of videos like the one above that come before and after that one if you want to dive deeper.

One of the big lessons from Colonel Blotto is that if you are the the stronger position, you’ll do better with fewer battlefields. If you are in the weaker position, you’ll do better with more battlefields.

After hearing this, I began to see it more places. In technology you can see it in the number of screen sizes. Apple offers tables with two choices, their competitors see this as two battlefields, neither of which they will be “win.” But, they reason, what if we add more battlefields (tablet sizes), then there is a chance other companies can win.

Another example is that of Samuel Zemurray, the man who might have been most responsible for bringing the banana from Central America to the United States. Zemurray began his career as a “fruit jobber” the lowest position in the fruit trades. These jobbers, mostly immigrants, would line up at the docks and bid for produce to sell in their carts. After doing this awhile Zemurray found a new battlefield, ripe and nearly ripe bananas. “The importers were happy to get money for what, in other towns (Zemurray was in Mobile Alabama), was considered trash.” writes Rich Cohen in his book about Zemurray.

In the framework of Blotto, Zemurray didn’t many resources. He was a bit wiser, stronger, and more driven than his fellow “fruit jobbers,” but much smaller than the big fruit companies. But it was in selling the ripes that Zemurray found a new battlefield, and it was one that let him get the footing that would lead him to become the largest importer of bananas many years later.

For other learning moments, Mauboussin suggests that people adopt the right mindset, noting Carol Dweck’s work on growth versus fixed attitudes. Lewis Howes (episode #88) brought this up in his interview with Altucher too.

Mauboussin also wants his kids to consider different points of view, take fun bets to learn things, and talk about things like the solution to the Monty Hall problem.

And this is why I write these things. I heard Mauboussin say that his 7th grader knew the solution to this, and I felt a little bit dumb. I’m old enough to have a 7th grader as a son, but don’t know the answer. So let’s figure this out together.

Rather than me explaining it in words, watch this video from Numberphile. Even if you don’t get it, stick with it because the second half makes it very clear.

Mauboussin also said that he doesn’t “tell my kids what to do.” He gives them suggestions, but doesn’t provide specific instruction. In his book, The Secrets to Happy Families, Bruce Feiler writes that for money, this is pretty good advice. This is his conversation with financial advisor Byron Trott.

“One of the biggest problems I see in families,” Trott said, “is a reluctance to let your kids make decisions for themselves.” As an example, he cited the story of Jack Taylor, the founder of Enterprise Rent-A-Car, who with a net worth in excess of $ 9 billion has been ranked as high as the eighteenth richest American. When his son turned thirty-two, Taylor handed him the company and never looked back. “Most parents meddle,” Trott said.

He chided me for not letting our girls make enough decisions for themselves. For example, he said, Linda and I should not force our daughters to divide their money equally into the four pots. We should let them choose the percentages, even if that means one pot gets less. “You’ve got them on their training wheels, now take the training wheels off and let them ride by themselves.” “But if they ride into the ditch?” I said. “It’s a really good idea to bike into the ditch with a $ 6 allowance instead of $ 60,000 salary or a $ 6 million inheritance.

Mauboussin also wants his kids to be “bayesian updaters.” That’s a fancy term for changing your mind when you get new information. But, Mauboussin says, “it’s extremely difficult. Even if I get you to move in the right direction, I can’t get you to move the appropriate amount.”

The interview ends with Parrish asking for some book suggestions and Mauboussin doesn’t disappoint. Besides the other books mentioned, Mauboussin suggests:

  • Creating Shareholder Value by Alfred Rappaport. An “influential book” from Mauboussin’s mentor.
  • Darwin’s Dangerous Idea by Daniel Dennett. “A fascinating book.”
  • Consilience by Edward O. Wilson. This book inspired Mauboussin to say, “many of the problems we face are going to have solutions at the intersections of disciplines.”
  • Complexity by M. Mitchell Waldrop. A book that’s “extremely fertile. It gets you to think about systems, be they business, markets, what have you.”
  • Work Rules by Laszlo Bock. A good book for managing people from the HR Director at Google Mauboussin says. When he was coach of the Los Angeles Lakers, Pat Riley said “the major part of my job isn’t to tell the players what to do. The most important thing I do is to create a great setting for them to work in.”
  • Creativity Inc. by Ed Catmull. “One of the books I enjoyed the most in the last few years.”
  • Tales From Both Sides of the Brain: A Life in Neuroscience by Michael Gazzaniga.
  • Intuition by Dave Myers.

If book reading seems overwhelming, do check out what Shane Parrish has written about reading. If you want to see what I’m reading, you can sign up here.

Thanks for reading. If you want to connect, I’m @mikedariano and at 559-464-5393.

One extra note, I’m actually not that intuitive playing chess against my daughter. With her I’m trying to keep the game going long enough she doesn’t get discouraged, effectively playing both sides of the board, which is not intuitive for me. When I play my nephew though, I crush him like a bug, a role all uncles need to serve in from time to time.

#109 Tim Ferriss

Tim Ferriss (@TFerriss) joined James Altucher to talk about dealing with big organizations, meta learning, and what it takes to film a television show. This is Ferriss’s second interview with James, appearing first on episode #22.

This interview begins – and is dotted throughout – by the story about what happened on screen and behind the scenes with the Tim Ferriss Experiment, a show he describes as “Jackass meets Mythbusters.” What surprised me this story was how long this process has taken, nearly a year before Ferriss was talking about the show and promoting it. “It took a long time to make the show in the first place” Ferriss tells James. That things take time is prudence we can exercise. The overnight success is a good marketing story says Austin Kleon (episode #19) and Trip Adler (episode #61) said that companies fail because they fail they forget this.

Not only does making a show take time, but Ferriss wanted to work with Zero Point Zero Productions to film a non-fiction television show rather than a reality television show. This is a notable difference, even though it may not appear so on the surface. Real tv isn’t all real and knowing the difference is valuable. Alex Blumberg (episode #70) saw this working for This American Life. Blumberg tells James that he thought telling good stories on the radio meant he could tell good stories on television. Not so.

James notes that Ferriss must have been busy while filming, and “these episodes were not four hour work weeks.” Ferriss agrees that he was very busy, acting as co-executive producer, actor, and actually learning the things he’s attempting. He’s also quick to point out being busy fits within the 4-Hour ethos. Because he’s optimized, arranged, and organized his life around a 4-Hour type of system, he can do things like film television shows. The 4-Hour Workweek isn’t literally about only working four hours, it’s about promoting a system that lets you get the required stuff done in four hours so you can do something else. As Austin Kleon told James, “every job is still a job” meaning that each job has parts that just need to get done. Ferriss wrote the book to teach you ways to get those parts done in less time.

In this attempt to avoid a scripted product that was closer to reality than reality tv, Ferriss says that they had to plan their shoots very carefully. He tells James they had a bunch of If/Then propositions ready, like, “if Tim breaks his leg, then we do this.” It reminded me of Ramit Sethi’s (episode #36) interview with James when he mentioned his theory of preeminence. Sethi approaches his projects by trying to figure out everything that needs done ahead of time. He tries to figure out a customer’s objections and have answers, find their problems and build in solutions, and translate their misunderstandings and explain things more clearly.

Despite the work, Ferriss got through all the filming (though not unscathed). During this he was hearing rumors about unrest at Turner Productions, but was hopeful that his show would get released, and it did, on HLN. This was a bad fit Ferriss said. His audience wanted on-demand options, not appointment viewing. They wanted digital, not broadcast. They wanted portable, not televised. It was a bit of bad luck.

Lady luck plays a lot of rolls in the lives of the interviewees. Mark Cuban (episode #24) and Seth Godin (episode #86) both told James they got a bit lucky selling their companies when they did. Scott Adams (episode #47) and Kevin Kelly (episode #96) makes the strongest case for luck their lives. But we all get lucky and unlucky and rather than curse it, quit, and lick our wounds, we should just keeping going. Seth Godin told James it’s like getting up to bat over and over again and to just keep swinging. Scott Adams compared it to a slot machine that doesn’t require any money to play, just that you put forth a bit of effort to pull the handle.

Ferriss saw this programming arrangement as a bad break and took a page of freaky thinking from Stephen Dubner (episode #20) and asked himself: Did my show not do well because it’s a bad show or did it not do well because of bad luck? He reasoned that it was probably luck since all the other pieces were competent at what they were doing.

Ferriss eventually found out that the branch Turner Production that included his show was closing and he moved in to get the rights. He reasoned that the people who were now in charge of his show wouldn’t want it because it was a lose-lose situation for them. If the new executive came in and relaunched The Tim Ferriss Experiment and it worked, his predecessor would be praised for the success. And if the show failed, the new executive would bear the burden. Ferriss then began the process of buying back his show, telling James, “large organizations are often not properly incentivized to cooperate.”

The pair then get into the different experiences Ferriss has had, beginning with being a rock and roll drummer for Foreigner to learning Brazilian Jiu Jitsu from Marcelo Garcia.  Ferriss says he was connected to Garcia through mutual friend Josh Waitzkin, who ironically James met “briefly on a street corner.” (Though this is an interview I would love to hear)

The conversation moves to dating and, Ferriss tells James he worked with Neil Strauss on his cold approaches, that is, going up to someone without any reason to talk to them other than getting to know them. Ferriss tells James, “I was nervous every time I did it.” But with some tweaks from Strauss (stand laterally, don’t overthink it, don’t start with “sorry”) he was able to get over his initial fears.  In Choose Yourself Altucher writes that “rejection is probably the most powerful force in our lives.” And because we can’t avoid it, we may as well get used to it. Ben Mezrich (episode #84) for example, told James that he got 180 rejections for his writing. He probably faced a similar experience to Ferriss where the first few were hard, but it got easier. Gretchen Rubin (episode #97) told James that if we make this sort of thing a habit, it can “dampen our emotional reaction to things.” For Rubin it meant driving a car and becoming less anxious about it, for Mezrich it was writing rejections, for Ferriss it was cold shoulders on cold approaches.

Hearing all this James says that he could never approach women like Ferriss did, but Ferriss responds, “none of the rejections were that bad.” Ferriss said something similar in his first interview, noting that we often have a “nebulous fear of failure.” Instead we can ask ourselves what’s the worst that can happen, how can I minimize this thing from happening, and if it does happen, what can I do to get back to where I am now?

In his experiments Ferriss looks to deconstruct the key elements to understand them. He wants to dive deep into the details to figure out each one. James has had other guests mention this as well. Brian Koppelman (episode #98) and Carol Leifer (episode #66) both have great stories about how comedians have to figure out the chemistry between, funny, harsh, gross, brash, TMI and LOL.

Ferriss says that his systems involves a lot of experimentation and James says this is a great idea, not just for best-selling authors on television shows but anyone, “take investing in startups, almost nobody knows in advance what’s going to make a successful startup” Altucher says because each startup goes through some iteration and experimentation to be something better. Jay Jay French (episode #75) told James the same thing about playing in a band and writing songs. You just have to keep doing it, learning something, change it, and do it again.

And don’t be afraid to mess up during these experiments. “I screw up more than most people I know, but when you see the highlight reel in a bio or a book that’s the end product, you don’t see all the work that goes into it” Ferriss tells James. Ramit Sethi had similar counsel:

“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. Know that I felt exactly the same way.”

Another experiment for the show was to get better at poker, and Ferriss says, “your psychological state is very different when you’re playing with your real money.” Past guest Nassim Taleb writes that English bridge builders used to have to spend time under their bridges to ensure their incentives were in line with those using the bridge.

Ferriss said that some types of poker require a good player to fold a lot of hands and that can lead to boredom, “I don’t have a problem with being bored for long periods of time if I have a system that supports it.” A lot of the guests talk about letting systems guide their thinking. We need systems, argues Ramit Sethi, because we are “cognitive misers.” Chris Guillebeau (episode #46) for example, told James that “I do a lot of the same things everyday.” These aren’t boring to Guillebeau because he knows that those actions will help him get what he wants. Ditto for T. Harv Eker (episode #100) whose entire framework is built on reframing our systems and thought patterns.

Some of Ferriss’s other shows focus on urban evasion and escape (hot-wiring a car, getting out of duct tape handcuffs), open-water swimming, and golf. In all of these things Ferriss tells James that the learning got easier because he began to understand the meta learning aspects with each experiment. He also recognized his own patterns in life and began to adapt those to what was required for filming a television show. He looked at when he was getting tired and tweaked his sleeping schedule. He looked at when and how he was getting hungry and changed what and when he ate.

Near the end of the interview James tries to draw analogies between learning chess and learning anything. It sounds like Ferriss is on board with this connection, but that he doesn’t have the same understanding of chess as James. He can’t give examples to connect the two as easily as he might in one of the experiments. Ferriss does say that one key part is chunking the big aspects of something. In another clip he says that if you learn twelve basic sentences in a foreign language, you can start to cobble together a bunch of other things. He tells James, that once we build a model for doing something in our brain, we don’t need to make a lot of effort the next time. For example, look at this text. You can probably read it easy enough even though someone learning to read would have great trouble with it.

But once we get those chunks established, it’s hard to override them, even when it’s something as simple as riding a bike.

Riding a bike that steers the opposite way is evidently really hard and Ferriss tells James that “there are definite skills that allow you to fake it sooner than others.” If you want to learn to play the guitar, you might consider learning four chords:

Ferriss says that he’s doing these things because “the skill that I’m refining is meta learning.” Ferriss is looking for the best ways to go from being at the 0 percentile and improving to the 95th percentile. He tells James that it Logistic-curve.svgonly takes about six months of constant work to do this. Learning anything, Ferriss says, progresses like the Sigmoid curve. Slow at first, then a rapid ascent of skills and then another plateau in the final stages.

James asks for specific techniques about how Ferriss has learned about meta learning and Ferriss goes back to DSSS: deconstruct, select, sequence, stakes.

Ferriss says that the show cost him “blood, sweat, tears, and money.” James says he’s going to force his children to watch it as part of their education. Ferriss ends the interview quoting Thomas Edison, “When you have exhausted all possibilities, remember this – you haven’t.”

Thanks for reading, I’m @mikedariano.

One final note: In the interview Ferriss talks about Josh Waitzkin’s book The Art of Learning and Joshua Foer’s book Moonwalking with Einstein. I’ve read both and would recommend them to anyone interested in learning. I have a newsletter where each month I share what books I’ve been reading. I’ve also created a Slack group for people to talk about what they’re reading, get help reading more, and find your next book. So many of the guests talk about reading as part of their success. James talks about reading almost all the time. Get in touch for an invitation.

#61 Trip Adler

640px-Trip_AdlerTrip Adler (@TripAdler) joined James Altucher to talk about startups, lessons learned, and starting small. Adler is the cofounder of Scribd and Forbes has listed him as a 30 under 30 to watch.

The interview begins when James asks Adler what Scribd is, and he says it’s like “YouTube for documents” and that their goal is to be “one of the the broadest and largest libraries of content on the internet.”

Adler began trying to figure the problem of sharing documents when he dad, a doctor at Stanford, was frustrated by the eighteen month delay in medical publishing. Instead he wanted a place to share his work online. This proximity led Adler to find what Peter Thiel (episode #43) calls a secret. “Every great business is built on finding secrets” Thiel writes and the secret that Adler found was a missing connection between readers and writers. In the same way that Uber connects riders with drivers, Scribd connects readers with writers. He tells James that they’ve found a way to preserve the formatting, get documents indexed by Google, easily embed them, and monetize them for the writers.

Uber is a fitting analogy for this, because that’s the company Adler wanted to start. “I met my founder Jared and had an idea for a totally different company. It was basically the idea for Uber but I was a few years too early.” Mark Cuban (episode #24 ) told James much the same thing about his experiences in the streaming music industries. “It pisses me off,” Cuban says, that they were doing that sort of stuff years before Spotify, Pandora, or anyone else. You have to be a little lucky with your timing. Jim Luceno (episode #60) was lucky to get a chance to write for Star Wars and told James, “sometimes hard work isn’t enough.” Seth Godin (episode #86) and Mark Cuban admit to lucky timing when they each sold their companies.

But it’s not just luck. Stephen Dubner (episode #20) told James that we should look at luck as one ingredient, like raisins in a cookie. If you make a batch of oatmeal raisin cookies and don’t like them, it doesn’t mean you don’t like cookies, just that you don’t like those. Luck is an ingredient to experiment with and quantify as best you can. If your effort and skills were good but something didn’t work out, you can figure in a bit of bad luck.

So, instead of the ride sharing service, Adler says that he and Jared spent “a good year, year and a half iterating on ideas.” And then, “after trying and failing at a bunch of ideas we had the idea for Scribd.” Sam Shank (episode #78) did the same thing with his career. When he saw that becoming a Hollywood director was a long shot, he looked for other areas he might have creativity and control.

When they decided to start down the path of building Scribd, Adler tells James they built a minimum viable product. Guest after guest on the podcast have advocated for starting small on big projects.

  • Jon Acuff (episode #106) spoke anywhere for free before being paid as a public speaker.
  • Maria Popova’s (episode #89) Brain Pickings was first an email to eight people.
  • Lewis Howes (episode #88) did instructional videos for LinkedIn projects before expanding.
  • Ramit Sethi (episode #36) said not to look at what people have built, because built things are far from starts.

Adler started small, building up the Scribd community, which turned out to be a good move. Before launching he tells James, they were “picking off internet users one by one” reaching out to anyone what might be a good fit for the service. It’s always striking to me how often technology companies start with so much non-automated activities. Scribd didn’t have a base of customers so they had to email people one by one. Sam Shank tells James much the same thing about Hotels Tonight. When they started they had to call each of their participating hotels each day to see how many rooms were available and at what price.

Scribd had a successful launch though because they manually built a community. Since then the company has grown and started to compete with SlideShare and Amazon. Throughout the interview Adler really seems to know his industry, talking knowledgeably about both his own company and his competitors. Jason Calacanis (episode #77) told James that he looks for founders who, “know this stuff cold.”

As Scribd has grown Adler has learned some valuable lessons, things he had to go through. “Getting advice is only going to help you so much, ultimately you’re going to have to learn these things on your own” he tells James about the bumps along the way. Jairek Robbins (episode #96 ) told James the same thing about his coaching business, noting that his dad Tony Robbins (episode #62) could have warned him about so many things – but that those lessons wouldn’t have been as valuable.

One of those hard lessons was in 2011 when, “a lot of things were not working out at the same time” Adler says. We’re all going to have our moments like this. Alex Blumberg (episode #70) has had a lot, figuring things out as he goes along. Ditto for Ben Mezrich (episode #84)who didn’t know if he’d ever be a full time writer.

James asks if Scribd had a “Lazy Sunday” moment (ala when the Adam Samberg video Lazy Sunday went viral and people began to discover YouTube.) No, Adler says, their model is more like the long tail. Kevin Kelly (episode #96) termed the coin and talked to James about it. Amanda Palmer (episode #82) has lived the long tail as a career.

James paraphrases Stephen King and asks, do you do it for the money, honey? Adler has a King like remark and says, nope. “The trend to start a company and make a lot of money is on the way out” Adler says. Sam Shank told James the same thing and Peter Thiel recounted the same story about Mark Zuckerberg. There’s more than money to life because some guests have had all the money they could ever need, and still weren’t happy. Tom Shadyac (episode #15) found himself sleeping in a closet and dealing with a disconnect between an actor making $20M for a movie and the janitor on set making $20/hour. Brad Feld (episode #91) tells a similar story of going through depression even though his financial health was great.

The interview ends with Adler sharing three lessons he’s learned:

  1. Focus. “Decide what you need to be” Adler tells James.
  2. Communicate. “I didn’t naturally communicate as frequently as I had to as CEO.”
  3. Effort and Determination. “The main reason companies fail is because they give up.” Jay Jay French (episode #75) told James about as it related to Twisted Sister. It took French 11 attempts to form a band with competent members and 6,000 shows before signing a recording contract.

Thanks for reading, if you want to connect, I’m @mikedariano.

#108 Ryan Holiday

Ryan Holiday (@RyanHoliday) joins James to talk about hard work, meeting the right people, and creating win-win situations. Holiday has written three books; Trust Me, I’m Lying, Growth Hacker Marketing, and The Obstacle Is the Way. Holiday was a previous guest in episode #18. What I liked about Holiday’s interviews is that he tells James, “I’m a person who’s worked hard and had some success, I don’t feel like I’m some prodigy or something.” This matters to you and me because we can learn from the things he’s done in life. If you aren’t taking away life lessons from these interviews, you’re really missing out.

Holiday’s admission means that we can tease out natural talent as a reason he’s had success. Austin Kleon (episode #19) told James that “genius can’t teach you anything,” meaning that someone who didn’t need to work, hustle, and dig around to find nuances, has less to teach you than someone who did. Stephen Dubner (episode #20) told James that this is a tool he uses when writing the Freakonomics books. Dubner’s success is built on figuring out what might have been randomness and what was not. So what did Ryan Holiday do that we can learn from?

Their conversation turns to when Holiday just getting started. He was writing for a school paper and liked what Tucker Max (episode #80) was doing. So, he wrote an article about Max, “without needing anything” Holiday says.  He sent it to him, hoping it would lead to an interview but not dependent on it. Holiday wasn’t seeking money, or a job, but instead the chance to talk to Max. Tim Ferriss (episode #22) mentioned this idea in his interview with James when he said that we don’t need money for a lot of things. (And James modeled in when he interview Maria Popova (episode #89)) In fact, money probably couldn’t have bought a meeting between Holiday and Max, only his effort could.

And you can’t be fixed on the goals, because sometimes the goals don’t ever come. Jon Acuff (episode #106) tells James, “you can’t do it for the money, results, or affirmation because you’ll stop as soon as that stuff doesn’t show up.” And that stuff takes a long time to show up.

Astronaut Chris Hadfield might be the best example of this. Hadfield was a Canadian who needed to be accepted to test pilot school in America and then get launched into space on a Russian ship to the international space station. He had to stay healthy (and did barely) be better than many others and luckier than some. He had to actually survive, because each year he saw one of his peers die. About getting to space he writes:

“It’s probably not going to happen but I should do things that keep me moving in the right direction, just in case – and I should be sure these things interest me, so that whatever happens, I’m happy.”

Holiday’s internship with Max led to a connection with Robert Greene, who had hired Max to do some work for him. Creating nodes in a relationship network have proven to be fruitful to other guests as well. John Acuff told James that this was how he got featured in the Southwest Airlines inflight magazine. Ditto for Adam Carolla (episode #25) who never intended to become friends with Jimmy Kimmel, but did, and it launched both their careers.

Holiday went from his internship with Max to working for Robert Greene, about which he says: “I would not be here right now, I would not be a writer if I hadn’t been Robert’s research assistant.” That job meant sorting through Greene’s unread pile of books and finding things he might use for his work-in-progress. It was, “far and away my favorite job of all time.” Holiday says.

Now that Holiday has earned his own success, he tells James that he gets people coming to him in similar situations and saying they would be happy to work for him for free for the experience but “for me to train this person to do something for me is not free for me.” If you’re reading this thinking about having a mentor in your life you need to take a different direction. Do not email someone and offer to work for them. Tim Ferriss suggests helping other people and not expecting any return, a refrain that Adam Grant (episode #73) suggested too. Ramit Sethi (episode #36) told James that he wants people to come to him prepared, to read something he’s written, and bring value by asking a new question about it.

Greene’s mentorship to Holiday led to an introduction at American Apparel where Holiday organized the marketing division of the company. It sounds like this is where Holiday developed the idea of a story about the story. American Apparel did this with advertisements that featured naked porn stars. About this Holiday says, those ads only ran on two sites, but the story about them were picked up on hundreds. It was a campaign around the campaign and has been leveraged since; Tucker Max tried to sponsor a Planned Parenthood, Tim Ferriss talked about being excluded from Barnes and Noble, and even James Altucher got in on things when he accepted Bitcoin for his books. Click the image to watch him on CNBC.

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Holiday calls this “leaning into the problem” and it’s another thing to learn from.

At this point in the interview the pair dive into some rapid fire advice:

  • About Marketing Mistakes. “People don’t do the work beforehand because they get so caught up in their love of their own creativity and ideas.” Holiday says. They need to dive deep and figure out what people want, not only what they can provide.
  • Holiday’s Two Rules for Writing. “Who am I writing this for and how will it reach them?” Make sure you know what group of people is going to buy the first thousand copies Holiday tells James.
  • About Email Lists. Start small and slowly build it up. It’s the most valuable metric Holiday has because 1 email newsletter subscriber is more valuable than 100 page views for an article.
  • Write at Other Sites. Holiday says that “everyone needs content” and “no editor has ever said, ‘we have too much good content.’”

The interview concludes with the pair talking about the publishing industry and what it looks like. Holiday says that he hasn’t self published yet because the “constraints make me better and stronger.” Constraints helped David Levien (episode #85) write his most recent book series. Astro Teller (episode #81) told James that time constraints lead to better time spent with kids for divorced couples.

But Holiday is keeping his options open to self publishing. This is the sort of optionality made Nassim Taleb rich (but not smart) about that  billionaire business man Seymour Schulich writes “is a terrible thing to give but a wonderful thing to own.” Holiday owns his future writing options.

Thanks for reading, I’m @mikedariano.

One final note. A lot of what Holiday talks about sounds like it’s passion driven but what Holiday really has is control. He went from having no skills and no control (sleeping on Tucker Max’s floor) to have valuable skills and much more control (owning his own business, writing the books he wants. Holiday built up career capital that he traded in for control (and presumably a bed ;)) If you want to learn more about the ideas of control, capital, and why following your passion is bad advice check out http://gum.co/sogoodbookclub which teaches So Good They Can’t Ignore You.

#24 Mark Cuban

markcubanMark Cuban (@MCuban) joined James Altucher to talk about following your passion, leaving a trail, and finding success in life. Before we jump in, know that a lot of the conversation in this interview revolves around Cuban’s apps, Cyber Dust and Xpire. It’s an interesting conversation about big ideas, but not a lot of ideas you and I can apply to our own lives. But there are some good ones, like:

Why following your passion is bad advice. James begins the interview with a nice twist, turning things around on Cuban. James lists all of Cuban’s companies and experiences and asks him if isn’t going from building computer networks, to creating an audio company to stream basketball games, to buying an NBA basketball team a procession of passion?  No, it’s not Cuban says.

“It wasn’t because I wasn’t passionate about systems integrations. It wasn’t because I was passionate about computers, even though I liked them…The more I worked with computers, the better I got at it. The better I got at it, the more passionate I became about it. The more passionate I became at it, the better I got at it.”

On his blog, he’s a bit more blunt, writing, “What a bunch of BS.  “Follow Your Passion” is easily the worst advice you could ever give or get.

PassionSkill (1)Ramit Sethi (episode #36) told James something similar, “When you get good at something, you get passionate.”  Mark Ford (episode #102) took a stand against following your passion as well, noting that if you start a business with your passion, you’ll start to see its warts. If you find yourself stuck in this passion rut see the note at the end of this post.

Cuban tells James that his thinking was formed during college when he and some friends owned a bar. The bar was going to be shut down due to some violations but it imprinted on Cuban the idea of survival. He tells James, “I went through a period where I just wanted to survive month to month” and when he moved to Texas and started his own company, his short term goal was just to be profitable and survive another day. Jay Jay French (episode #75) told James the same thing happens with a band. If you can just keep playing, making enough money, and see another day – you’re doing okay.

When Cuban’s (profitable) company – MicroSolutions – sold, Cuban walked away with $3M in his bank account, which was more than enough. He tells James, “my goals was to retire, but my parameters were that I could live like a student.” Cuban was hoping for one million and live off ten percent of that. Tim Ferriss (episode #22) noted a similar mindset in his interview. Ferriss said that money was just “wampum” – a medium you used and that you don’t always need money for that. Cuban for example, bought a lifetime pass on American Airlines, which cost a lot of money up front, but for the rest of his life he gets to fly first class. Kevin Kelly (episode #96) echoed this too, once you figure out how little money you really need, you can focus on many other things.

Fast forward through the 2000’s where Cuban has more financial success trading stocks. Now he’s created Cyber Dust, and James says the name sounds kind of antiquated. Yeah, Cuban says, but “there’s no such thing as a good URL that’s going to work no matter what.” Cuban lists all the domains he owns, and some of them seem good, but he doesn’t have businesses that will work in them. Jay Jay French told James the same thing about writing music, “nobody knows why anything is a hit.”

At this point in the interview the pair talks about Cyber Dust and Xpire. If you’re not interested in any of this you can skip to the 34:00 mark, but there was one other point to add here.  Cuban notes that with all the data that exists about us, people can figure out quite a bit. Some people know this as the curly fry effect. Researchers at Cambridge looked at 60K Facebook users and found that, “their ‘likes’ alone, predicted a wide range of personal traits. The researchers could predict attributes like a person’s gender, religion, sexual orientation, and substance use (drugs, alcohol, smoking).”Another study was able to predict where people would be in twenty four hours. If you have an iPhone, it can do this.

James and Cuban move their conversation to what Cuban looks for on Shark Tank and Cuban says there are four things he aims for a company to have:

  1. Growth. Peter Thiel (episode #43) told James that every successful business has to find a secret. Secrets are areas where few people are and have more room for growth. An example Thiel often gives is to think in terms of atoms rather than bits. In bits (Facebook, Twitter, Uber) we’ve seen major changes but in atoms (biology, transportation) we haven’t. Thiel reasons that you’ll have a better chance of growing in atoms than in bits.
  2. Entrepreneurs that can run it. Jason Calacanis (episode #77) told James that he looks for entrepreneurs that “know this stuff cold.” They need to understand both their business, but their competitors too, and the industry at large. They need to understand the nuances as well as a comedian – like Carol Leifer (episode #66) knows about how to shut down a rowdy audience member.
  3. Differentiation.  Dave McClure (episode #98) told James that differentiation was how he started 500 Startups. He saw that in the domain of angel investing, very few people understood both marketing and engineering as well as he did. He was different in a good way.
  4. That Cuban can add value.

About selling his own companies, Cuban notes  “luck and timing have a lot to do with it.” Scott Adams (episode #47) compared success to pulling a slot machine handle and eventually getting lucky. Kevin Kelly said he “lucked out to be at this moment.” Jim Luceno (episode #60) told James that “sometimes hard work isn’t enough.” Noticing luck is important – says Stephen Dubner (episode #20) – because it helps us better evaluate our effort and skills. If you tried something and it didn’t work, it’s good to note why. If it was back luck, you know your effort and skill were good and you should try it again. If not, then something else needs to change.

James asks for a few predictions about what the next big things are going to be and Cuban says that he thinks passive sensors, like a heart rate monitor or cameras that can quantify data will be a growing area. He also thinks that personalized medicine will become larger and that our grandkids will ask, “is it true that everyone bought the same kinds of medicine.”

Thanks for reading. – @mikedariano

One more note, about So Good They Can’t Ignore You. I created a reading supplement to the book, offering updates on the examples in the book, providing case studies (from some guests here), and creating an email drip that can spur you along in your reading and get you asking (and answering the right questions). You can find more details here or on the Products page of this site.

#75 Jay Jay French

Jay Jay French joined James Altucher to talk about systems, playing fields, and the best business advice he ever got. I nearly didn’t do a set of notes from this interview but I’m glad I did. If you missed it, go back and listen to it. In this interview there were 5 main lessons.

  • Survey the playing field and know the rules.
  • Avoid the big risks to your survival
  • Use financial validity as a directional test
  • Have some ego and delusional thinking
  • Build up career capital

I’ve put them in bold, let’s go.

French is on the show to talk about the upcoming We are Twisted Fucking Sister documentary.

It sounds like the interview covered a lot of the same ground as the film and French starts out by noting “we were not a west coast, L.A. hair band.” It’s what they get identified as but they weren’t. Instead, “we learned our craft after years and years in the bars” French tells James. As the interview goes on French tells the story about coming up the bars. “The early days were a struggle, it was constant defeat. Constant rejection.” It wasn’t a lack of money, no that they actually had a bit of – it was getting signed by a record company. Back then, French says, you didn’t go out of your region without a record label. So they tried to get signed only to fail.

French took a look at what they were doing and “surveyed the playing field.” The best example was late in their career when French began to manage the licensing of the song, We’re not Gonna Take It. This helped make the song more universal and French implies that this has prolonged the band’s ability to tour. Rather than selling out with the song, it’s a method in the new economy. The new playing field isn’t about one song, but part of that song everywhere.

Starting out that economy and playing field looked different. French saw that a band could share a house, truck, and rent their lighting rig. If they played five or six nights a week and paid themselves “the bare minimum”, they could make it – and making it until tomorrow was all that matter. Today, he tells James, the economics of that process are totally different.

Another lesson was to avoid the big risks and just survive. Part of the risk in a band is incompatibility of bandmates. French tells James that Twisted Sister is on its eleventh iteration, in part because of the crazy people he worked with early on. One singer pulled a gun on their drummer, and the band broke up. Another time two band members stole French’s truck, and held it ransom, and the band broke up. Not until French met Dee Snider did the group survive. In part because of French’s and Snider’s abstinence of drugs and alcohol. “We became obsessive in our desires to succeed and not have anything stand in our way” French says. In the early iterations he saw the negative effects that things like that could have, and he wanted no part of them.

They also had to survive the nearly-made-its. French says that more than once the band was almost signed when something happened. One time they had signed all the papers only to have everything unravel when their German producer died of a heart attack on the plane ride home. French says you just have to, “mourn the setback, accept it, then you reapply and reinvent.”

Part of their survival was because Twisted Sister was validated. French says “we were validated in what we were doing and who we were by the fan base that we had.” French had financial validity. Even though the band hadn’t been signed, they were making money and had fans coming to see them. About knowing when to quit French says, “we knew we weren’t wrong…but it’s a tough call.” It takes time to get this, Stephen King advises writers, “And if you’re not succeeding, you should know when to quit. When is that? I don’t know. It’s different for each writer. Not after six rejection slips, certainly, not after sixty. But after six hundred? Maybe. After six thousand? My friend, after six thousand pinks, it’s time you tried painting or computer programming.”

Cal Newport writes about this too, noting that checking the financial validity of your ideas is a good way to test the temperature of the water before you jump in. Quoting Derek Sivers, “I have this principle about money that overrides my other life rules, do what people are willing to pay for.”

And you must have an  ego and bit of  delusional thinking all the while. “I don’t know if I’m brilliant or just stupid” French tells James. Alex Blumberg (episode #70) praises stupid optimism while A.J. Jacobs (episode #94)  like delusional optimism. You’re going to need this when you push into unfamiliar places. Peter Thiel (episode #43) told James that “imitation is very endemic to the human condition.” Thiel means that we need a new mindset if we are going to think about things in new ways.

After all the club shows, failed auditions, and setbacks of a rotating cast, Twisted Sister was signed to a record and made this music video:

We were “much more developed as a band than 99% of the bands on MTV” French tells James. Twisted Sister has developed career capital that helped them become a huge band. French compares their skills to an iceberg:

“The surface, the shiny tip you see that sticks above the water is beautifully formed and underneath it is a base that so broad, so large, so heavy and all encompassing and in that base lies our history.”

This story has been told over and over again. Tim Ferriss (episode #22) seems like an overnight success – until you look at his history as an academic researcher, startup employee, entrepreneur, volunteer, and event planner. Tim Ferriss isn’t Tim Ferriss without all this. Austin Kleon (episode #19) told James that overnight success is a good story, nothing more.

Then Twisted Sister made it and everything was good. Or not. French tells James that during their apex as a band they, “couldn’t stand to be in the same room” and soon after disbanded.

French soon found himself going from divorce, to bankruptcy, to divorce again, and working menial jobs. “Did I go through all that just to end up bagging groceries” he asked himself. French says that he opened up Tony Robbin’s (episode #62) book, Awaken the Giant Within. After the first page he tells James that he began to think differently. He began to think in terms of the systems he needed in his life. Systems work. For Kevin Harrington (episode #49) it’s tease, please, seize. For Marcus Lemonis (episode #51) it’s people, product, process.

French tells James that it’s been a long road, but that he wouldn’t change anything. About each thing that happens French echoes this video of a talk Alan Watts gave.

Now French is up to a number of different things. Twisted Sister still tours, and do a surprising range of audience ages. He tells James that in South America, “no one is older than twenty-two,” Europe has the next youngest group of fans, and America has the oldest. French also writes for Inc Magazine and speaks.

Thanks for reading. One final note:

What advice would French give? “I’ll give you advice, but whether that advice applies to you, I don’t know.” This quote sums up my recent thoughts from listening to the podcast, that there are common themes to all of the guests that James has on, and those are the things we can draw on. Some of the ideas the guests share will have little effect on most of us, others share big ideas we all can use. I’m collecting those big ideas for a book and would love to talk to others about the big ideas they’ve taken away. If this is you, let’s connect.