#117 David Bach

David Bach (@AuthorDavidBach) joined James Altucher to talk about money, values, and which of those should lead the other. Bach is the author of a twelve books including; The Automatic Millionaire, Start Late Finish Rich, and Smart Couples Finish Rich. He joins James to talk about his current tour and his website is Finish Rich

Bach begins the interview with a story about a woman he met at an airport. “Your book helped free me,” she told Bach, “I felt trapped…everywhere I turned I felt trapped.” He opens with this story because it gets to the heart of the money issue – as he sees it. Your problems aren’t about your money. Your problems are about your values. Figure those out first and then figure out your money.

Bach advices values based financial planning. “I wasn’t living my values,” said a client, Bach recounts, “but when I started fixing my financials I started living my values.”

Here he touches on a counterintuitive point that some other podcast guests have mentioned too. Sometimes it’s easier to start with changes to our actions rather than our thoughts. Both A.J. Jacobs (episode #94) and Gretchen Rubin (episode #97) said that our thoughts can be hard to change. Our actions though, they are a bit more malleable and like the tail follows the dog, they will come along too.

DISGUST_RenderThis all works because our thoughts don’t like to be out of line. They are like the fringe member of a cliche. They just need to fit in. Rather than you’re wearing that, really?

The leader of his mental cliche is cognitive dissonance. This is the voice in our minds that keeps thoughts and actions in step. When we act like A but believe in B we have mental unease (cognitive dissonance). Either our thoughts or actions aren’t quite right. Because we can’t change what we did, so we have to change what we think.

A great historical example is when Benjamin Franklin wanted to borrow a book from an unfriendly peer. Franklin approached the man, told him how he admired the book and implied that anyone who would own such a book must have good taste. The man, slightly flattered, lent Franklin the book and the two became friends.

The psychological reasoning goes:

I don’t like him (thought)  -> I lent my book to him (action) -> Why would I lend a book to someone I don’t like, maybe I like him (thought)

For our financial choices the reasoning might go like this:

I don’t like my financial life (thought) -> I change my finances to reflect my values (action) -> I must like the things I’m investing in and will pursue those (thought)

Remember, it’s not about the money, it’s what you do with the money that matters. Tim Ferriss (episode #109) says that “money is wampum.” It is the bridge that takes you from one place to the other. Sometimes you don’t need the bridge. Sometimes you take the long way, and sometimes that long way is even more fun.

That’s what Wayne Dyer (episode #6) did when he was selling his first book. After multiple rejections from the national television shows (who said that if he called one more time they would never put him on again) he had to figure out something else. He could buy advertising, but that would cost a lot of money. Or:

“There’s a second way, and it’s a lot more fun. You go to everyone in American.”

So, Dyer loaded his car up with books and began a cross country trip.

Kevin Kelly (episode #96) would applaud Dyer’s choice. For Kelly it goes beyond just not needing money, but seeing the value that the constraints of not having money. If you have money, Kelly reasons, you can often buy a solution. If you don’t have money, Kelly goes on, you have to create one yourself.

All of these ideas are fall under the advice umbrella to choose yourself. In his book that shares these ideas James writes:

“That’s when it clicked. When everything changed. When I realized that nobody else was going to do it for me. If I was going to thrive, to survive, I had to choose myself. In every way. The stakes have risen too high not to.”

It’s being selfish in the right way. Scott Adams echoes these thoughts:

“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. If you neglect your health or your career, you slip into the second category— stupid— which is a short slide to becoming a burden on society.”

Find your values, and pursue them. That’s the essence.

But it’s hard to find your values, choose yourself, or be selfish in the right way because there are so many voices telling you otherwise. In the interview Bach guesses that we see “thousands” of advertisements a day. James guesses “50K.” According to CBS News it was 500 in 1970 and is up to 5,000 today. That’s about five a minute.

In addition to the advertisements, another problem is how you view money and how your spouse views money. Some of us are natural savers and some are natural spenders Bach says. Despite the differences they can – and must – work together. If you don’t work together, he says, you’ll face the number one cause of divorce, disagreements over money. There are two things to figure out:

  • Don’t have a different view on what “small purchases” means. Make sure that you and your partner have the same expectations for what purchases you should talk about and what you don’t.
  • Don’t let someone become disengaged. Often one person will handle the money and the other won’t know much of what’s going on. Have monthly (or bi-annual at the least) meetings to go over where you are financially.

If you can make it past the advertisement barrage and marriage money spats you are nearly home free. The final hurdle is when you retire. Bach says that your chances of death are highest the year you are born and the year you retire. “I saw multiple men die within six months of retiring,” Bach tells James. Part of it is their health goes on them, but I think there was something else. A job is part of an identity.

Both Seth Godin (episode #27) and Jason Calacanis (episode #77) bring up the emotional weight when they lost (Godin sold, Calacanis folded) their companies. It was the thing that they identified with most of all, and like a horcrux, it was painful to see it go.

On the health side, look no further than what Gretchen Rubin told James in her interview. “Start the way you want to continue,” advises Rubin. For her it meant getting up early on her first day at a new job, no matter what. If Rubin can do it before clerking for a supreme court justice, you can too.

Bach goes on to tell James that for some people the recession had positive outcomes. “The good thing about the recession,” Bach says,  “was that it forced people to reboot their lives.” Being able to change and be flexible is like a superpower, and my guess is that people who were most flexible handled the situation best.

Sam Shank (episode #78) is a good example of flexibility. Shank arrived in Hollywood ready to “pay his dues” and then get a chance to show his creative skills. There was one small hurdle – he could “pay his dues” his entire career.

“I looked around,” Shank told James, “and there were people decades older than me at my level or one higher.” He saw the harsh landscape of Hollywood. It’s a pyramid of roles. There were precious few director, producer, and creative positions.

Shank left Hollywood films for technology websites. After building up a set of skills, he started a travel website that he sold. Then he ran another company. Now he runs Hotels Tonight. He reinvented.

Sam attached his work to an idea, not a position. Have a job that allows me to be in charge of something creative is more flexible than be a Hollywood director. Jack Canfield (episode #90) gave the same career advice. Don’t be attached to one thing, but find an general area to aim for with your career.

Bach has the same idea, but calls it values. “Find your values,” Bach tells James, “ and align with them.” You don’t have to be a near retiree to do this either. In his book ,The Secrets of Happy Families, Bruce Feiler writes about creating a family mission statement; “a central tenet of the family strengths movement, going back to the 1960s, has been a focus on what families should do and less on what they shouldn’t do.” Bring focus, whether it’s to your finances, family, or faith.

Another piece of advice Bach has is to cut out your daily latte. The daily latte. It’s the scapegoat of regular purchases. Bach mentions it, but says that when he goes into people’s homes for  makeover he sees so much more. Cable, subscriptions, lots of stuff.

Wait, wait, wait. What’s that sound. Oh my. It’s Ramit Sethi storming in.

When Bach mentioned the financial foolery of a Latte, I knew that would lead to Ramit Sethi (episode #36). For Sethi (and I think for James based on his comments) it’s not about cutting out the latte. It’s about increasing the money you get from it. As James mentioned in the interview, you can only cut so much. Stop buying lattes and you save $4 a day. Instead, think about making more, which has an unbounded upside.

Gretchen Rubin might chime in to echo Sethi’s advice, don’t strip everything away. Rubin saw this when she was studying why people wanted to get in the habit of going to bed earlier, but couldn’t. As one interviewee told her, “if I go to bed earlier then I have no time for myself and feel like the firm owns me.”

This opposition, no latte but more money vs. one latte but less money, is something you need to figure out on your own. Don’t take any advice here as gospel. Everything must be tested. Self experimentation is how you figure things out in life. A.J. Jacobs and Jim Norton (episode #31) are two good examples.

That said, if you want a starting point for testing something, the Big Ideas are a good place to start.

The middle of the interview is mostly about becoming an “intrapreneur” and beyond what James and Bach say, Mark Ford (episode #102) encouraged this too.

The pair also touch on what it takes to reinvent yourself. Bach said that a decade ago there used to be many publishing jobs in NYC that paid 350K. Now there are none, and all of those employees are fighting to work for 175K. This seems bad, but maybe not as much as we think. Bach says that he’s seen people who are forced to reinvent their lives and face some of the most exciting work they’ve ever experienced.

There’s actually an entire book of these stories – The Up Side of Down – where Megan Mcardle shares many stories about good outcomes that come from bad events. What did the the Hawaiian prison system do when they had too many inmates? What did a married woman do when her husband left her? Why do companies, behind closed doors, admit that 2009 was helpful? These bad events all end positively because  – in Wayne Dyer’s words – they’re all “enlightenment through suffering.”

The interview ends with three valuable points.

  • If you don’t know what your values are, try writing in a journal. Meditation is also good.
  • The most effective way to get rich says Bach, “is to pay yourself first.” Here’s a Quora question with other answers.
  • Don’t forget to give back. Bach says that he’s seen people give back well before they were financially wealthy because it brought them a spiritual and emotional wealth. Giving is good, just see what Adam Grant (episode #73) had to say how.

Thanks for reading. I’m @MikeDariano if you want to connect on Twitter.

One of the big ways to improve – “to reinvent” as Bach might say – is to read. It’s listed over and over on the podcast and if you want to do it together, you sign up here. In July we are reading Influence by Robert Cialdini. It’s a book both James Altucher and Ramit Sethi highly recommend.

Unlike the first book club we did, there will be no regularly scheduled emails from me, just big ideas for us to talk about. The first round was like a classroom where I was the teacher. This round is more like meeting over coffee to talk.  These by the way, are always free.

One final favor. I’m writing a book that ties up the ideas on this blog into a nice bow. If you could help me give it a title (2 survey questions here) I’ll send you the e-book for free.


#116 Robert Kurson

James Altucher was joined by author Robert Kurson, (@RobertKurson) to talk about pirates, writers, and treasure. Kurson is the author of Shadow Divers, Crashing Through, and most recently Pirate Hunters. (Via Amazon: “John Chatterton and John Mattera—are willing to risk everything to find the Golden Fleece, the ship of the infamous pirate Joseph Bannister.”)

And they lose so much. But when you Listen to Kurson, it doesn’t sound like the loses matter. The Johns are doing things they enjoy and if they find the treasure all the better. It’s similar to what Chris Hadfield (episode #111) told James about getting to space. “It probably won’t happen,” Hadfield writes in his book, “but I should do the things that move me toward it and make me happy.” Hadfield knew that the work he put in shouldn’t just lead to the big goal (be an astronaut) but it should be enjoyable in itself.

Hadfield knew that the work he put in shouldn’t just lead to the big goal (be an astronaut) but it should be enjoyable in itself. Even though the treasure hunters were digging down and the astronaut was flying up – they both ended up with the same perspective on their work. This was not the case for Kurson.

Much like past guest Peter Thiel (episode #43), Kurson began work as a big-shot lawyer. And like Thiel, he hated it. Thiel recounts his experience this way; “it was a place where everyone on the outside wanted to get in, and everyone on the inside wanted to get out.”

Kurson was in the same boat, he wanted out. One memorable experience that catalyzed this was when he was working on a case about the shade of pickles a McDonald’s franchisee was allowed to have.

So he left the place where “time seemed to tick backwards,” and began his life as a writer. Even though he was a Harvard Law graduate. Even though was making a lot of money. Even though he was successful on many metrics. He still disengaged from that life. How?

Part of it, he tells James, had to do with his family. As a kid he would go on multi-week road trips with his traveling salesman father. James suggests that this experience got him a “head start thinking that things could be done differently.” This different thinking helped Kurson and it can open new doors for us too.

Tim Ferriss (episode #22) says that “some impossibles are negotiable.” T. Harv Eker (episode #100 ) told James that he had to change many thought systems before he was successful.

Kurson also had another skill that helped him become a writer – ignorance. “If I knew how difficult it was to make it as a writer,” he tells James,  “I might have thought differently about it.” This is the kind of ignorance that many of the guests have praised. A.J. Jacobs (episode #94) called it “delusional optimism” and Alex Blumberg (episode #70 ) said he was a “little bit delusional” when he started Gimlet Media.

So Kurson began with small strokes. He didn’t try to write a best-seller, he just tried to write well. Even though his books have done well, they did so because of the small beginnings. James Manos (episode #39) said the same thing about writing for The Sopranos. Manos told James that if they had been trying to create something great, they surely would have messed it up. Instead it was about getting a character, scene, or episode right.

Besides his modest start and bit of ignorance, another helpful part of Kurson’s experience was the disinterest in money. “I was lucky to have made enough money to realize that a BMW didn’t matter to me,” he tells James. Money motives didn’t matter for Kurson (or the subjects in his books). They haven’t mattered to the other guests either. Tom Shadyac (episode #15) sold almost everything he owned and downsized his lifestyle. Kevin Kelly (episode #96) found the same money truths, but with the opposite approach. Kurson had it all, realized he didn’t need it all, and was happy with less. Kelly had very little, realized that was all he needed, and was happy with that. Both perspective led to the conclusion that money wasn’t what they needed.

One of the things money is good for is doing cool stuff. For Kurson’s pirate hunters it meant funding another expedition. Nicholas Megalis (episode #104) calls money “gasoline” because it can fuel the next thing he wants to do.

Kurson didn’t know what he was getting into, he didn’t try to write the next great nonfiction book, and knew early that there was more to it than money. He tells James that he also had one more thing going for him. He had failed before. “The fact that I had been through some things before, where it looked hopeless for me and looked like I had no where to go and I survived helped me jump into the darkness.”

The pits are sometimes the place we need to stand. J.K. Rowling had a similar experience to Kurson. Before Harry Potter, Rowling was not doing well. Her marriage had ended, she was unemployed, and she had a useless degree (in classics). “(I was) as poor as it is possible to be in modern Britain without being homeless,” Rowling writes. She goes on:

“Failure meant a stripping away of the inessential. I stopped pretending to myself that I was anything other than what I was and began to direct all my energy into finishing the only work that mattered to me… And so rock bottom became the solid foundation on which I rebuilt my life.”

Rowling and Kurson both had low moments before they soared. Kurson eventually succeeded with Shadow Divers, a book that spent 24 weeks on the New York Times Bestseller list. That book began with “a lucky phone call from a friend,” who told him to turn on this series on PBS NOVA.

There was nothing, Kurson tells James, “I was less interested in,” than German U-Boats. Not the fairy tale beginnings we might think.But, there was something missing. The documentary never told the story about why the two guys looking for the sunken ship would do it. That missing answer was the catalyst for Kurson.

But, there was something missing for Kurson. The documentary never told the story about why the two guys looking for the sunken ship would do it. That missing answer was the catalyst for Kurson.

Gretchen Rubin (episode #97) writes about ideas the same way. For Rubin it was over lunch with a friend who told her that in high school, she never missed a single track practice. But now couldn’t get into the habit of exercise. “Why?” That question, Rubin writes, “buzzed in my head with the special energy that tells me I’ve stumbled onto something important.”

Kurson began to explore. He called one of the guys in the documentary. He asked questions. He dug around.

What he found was a burn the ships attitude. The Johns created an environment where there was no backstop for their failings. If they fell, they would fall all the way. Jim Norton (episode #31)  told James that this was the only mindset that worked for him. “I personally left myself with no safety net,” said Norton.

Much of the second half of the interview is about Kurson’s books. It made me want to stop listening and start reading (Shadow Divers has been on my “to read” pile for months.)*

One interesting analogy from this section was a part when Kurson and James talked about how to find a sunken ship. In one case the ship seekers thought they had a pretty good idea about where the ship was. They just needed to triangulate the actual wreckage and get it out of the ocean. The problem was, that they didn’t know exactly where it is. “It’s hard enough if you know where it is.” said Kurson.

This stuck with me because it’s an analogy for many of the things we do. Even if we have a really good guess about the components to a successful career, relationshiop, or business – it’s till hard to do.

Thanks for reading, I’m @MikeDariano.

Two quick notes:

I need your help naming the book that is coming from this website. It’s about how the people who have been interviewed have found success. Each of them seems to follow the path of Skills -> Persistence -> Luck. If you would offer your thoughts on a two question survey, I’d really appreciate it.  (I’ll also send you the ebook for free when it’s done) Click here.

In July I’m going to read Robert Cialdini’s Influence. If you’d like to join The Waiter’s Pad book club subscribe here.

#114 Matt Barrie

Matt BarrieMatt Barrie, CEO of Freelancer.com, joined James Altucher to talk about startups, stories, and the moment when Barrie realized, “I could hire an army with a credit card.” Even though this interview started out slow, it was filled with some Big Ideas. Plus, many of the podcast guests are on the show to sell something. That’s not bad and it’s great to learn from people like Andy Weir (episode #92), Nicholas Megalis (episode #104), and Jack Canfield (episode #90). But it’s also fruitful to hear from people who are just getting work done. While Barrie is promoting Freelancer.com, it’s less so than others.

Barrie starts the interview by telling James that the types of jobs available at Freelancer.com are “anything that can be done on a computer.” Of course, the pair quickly dives into what it’s like to “choose yourself” and Barrie says, why not. You can “architect your career,” he tells James. Scott Adams (episode #47) has similar advice in his book, How to Fail at Almost Everything and Still Win Big. Adams writes that for every skill you have, you double your odds of success. In the book, he has a list of ideas:

“I made a list of the skills in which I think every adult should gain a working knowledge. I wouldn’t expect you to become a master of any, but mastery isn’t necessary.”

His list includes public speaking, psychology, and accounting among many others. It’s the working knowledge part that Adams stresses.

In some ways I think Barrie is expressing the same thing. If you want to hire a freelancer to build you a website or write some code – you don’t have to understand everything that goes along with that. You have to understand just enough.

One thing that might help, says Barrie, is the parallel alignment between you and the freelancers. Everyone who works in freelance is there to make money Barrie says, so you’re dealing with people who want the same things as you. Being around the right people like this is often part of what makes something a success.

Peter Thiel (episode #43) told James that PayPal was built by people all aligned around a common goal. Jay Jay French (episode #75) needed to find band mates that were aligned with his goal of making great music. Thiel and French and create great things because they worked with their friends. They created great things because they didn’t. The more powerful alignment was with goals, not personalities.

Barrie says that 3D printing is the freelance trend of the moment, but there has been an uptick in Apple development requests as well because of the Apple watch. James says that he thinks 3D printed jewelry is one of the next trends that will be big. (For more futuristic predictions, go back to the Kotler and Diamandis (episode #93) interview)

One thing that neither could have predicted was giant inflatable swans.

The story goes, according to Barrie, a guy wanted inflatable swans for a party. Not being able to find what he wanted, he created a contest at Freelancer to have people design a new swan. He got a good option, ordered some from a factory in China, and now just sells them. It’s his full-time job.

The biggest project on the site was $340K for an ongoing series of website templates. In another case, an engineer was hired to reverse engineer a boat.

One of the far-reaching benefits of a site like Freelancer.com, says Barrie, is the change in the quality of life. “The quality of life of someone changes dramatically as they go up the s-curve of industrialization.” Tim Ferriss (episode #109) said that he looks to the s-curve (also know as the Sigmoid curve) when he tries to help people too.

James asks Barrie how he started Freelancer.com and it was a case of needing to scratch your own itch. Barrie began with a degree in engineering (from Stanford of all places, and at the same time Brin and Page were there building Google) and he started a circuits company. Eventually, that company was sold to Intel, but only years after Barrie left. When he first left the company, “I was actually crushed emotionally and physically crushed” Barrie tells James. The problem was that the timing was off. His company was good but good at the wrong time.

Mark Cuban (episode #24) tells James that his timing has been off too. In Cuban’s case, it was streaming media, which his companies had done years before Pandora or Spotify. Trip Adler (episode #61) told a similar story about his idea for a ride-sharing app that was ahead of its time.

In Barrie’s case, his lack of timing here would be balanced out many years later. After leaving the circuit company he started doing some website work. Eventually he had some data entry he needed to be done, but couldn’t find anyone local to do it. After a handful of failed attempts, Barrie stumbled onto a freelance site and had someone from Vietnam do “perfect work” in a matter of days for less money. “This was the real eureka moment,” Barrie says, because “every great business needs to have a problem that’s being solved.” Sam Shank (episode #78) told James much the same thing:

“It boils down to saving time and saving money. I think all consumer products need to deliver on one, ideally both.”

Barrie realized that he could hire an army of developers, coders, and designers with a credit card. Rather than transatlantic flights for meetings – which are often unnecessary, just ask Brad Feld (episode #91) – Barrie started hiring people digitally. Eventually, he realized he should just own the freelancing company he was using.

This is where Barrie gets the timing right. Before 2008, he says, developing countries weren’t on the map for freelancing. You could go online and get something done, but chances were that the person wasn’t all that different from someone would meet offline. It might be the case where you were in Boston and ended up with someone from New York. The idea was so prepubescent that sometimes you even had to meet face to face to collect the software. After 2008 though, technology reached the point where you could get good work done by people who really were remote.

Clay Shirky wrote an interesting book about this very idea. In Here Comes Everybody Shirky writes that the burden for organization was too high. Much like Archimedes when he said, “Give me a place to stand and a lever long enough, and I will move the world.” Connecting to people around the globe lengthened the lever.

Even though technology allows you to reach more people, you still have to find the good ones. The hardest ones to find now are good designers says to Barrie. This was his experience at least.  After he bought the freelancing business for $3.5M, one of the first things he did that changed the revenues was to change the design. It had a huge impact. One person who’s figured this out is Ramit Sethi (episode #36). “We are all cognitive misers,” Sethi told James in their interview. This is why design can be such a crucial element. We don’t want to spend the time and energy to compare and contrast things. We don’t want to weigh the pros and cons.

What we want is to have easy decisions that we can feel good about. Who can design things to be this way, designers.

Barrie ends the interview by telling James that his success was thanks to “timing and luck.”

“If I was six months earlier it probably wouldn’t have worked out and if I was six months later it would have been financed by venture capitalists.”

Much like Kevin Kelly (episode #96) and Adam Carolla (episode #25), Barrie admits that part of it was luck.

And it’s important to recognize this for decision making says Stephen Dubner (episode #110). If our success = skills + persistence + luck and we fail, then we need to know how much of each we had and how much of each we need.

Thanks for reading, I’m @MikeDariano. My favorite quote from Barrie that didn’t fit was; “the Australian stock market is like Kickstarter for grown-ups.”

One small request. I’m working on a book that unifies the concepts on the blog and need a good title. If you could take this two question survey about title ideas and leave some feedback, I’ll send you the e-book free once it comes out.

Our book club for July is going to change a bit. We’re going to try a book buddy system. The book is Influence by Robert Cialdini. If you’d like to join The Waiter’s Pad book club subscribe here.

Remember, reading is something a lot of successful people do. Barrie said, “education has always been the lubrication for moving up in the labor force.” If you don’t want to read Influence, you can sign up to see the other things I’m reading.

Photo credit: “Matt-barrie-1” by freelancerOwn work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.

TKP2 – Michael Lombardi

Michael Lombardi joined Shane Parrish to talk about the four elements of leadership, good systems, and what a week in the NFL is like.

Just a programming note, this was not a James Altucher podcast. James consistently has great interviews, but I’d like to expand to more smart people figuring things out. If you know of someone, do get in touch.

Lombardi is an NFL executive, currently with the New England Patriots though he’s been throughout the league, from Oakland to Cleveland. He tells Shane that he started small, playing football at Hofstra and attending any coaching clinic he could find. That led to an unpaid position at UNLV and he was off. Slowly for sure, but off none the less.

When you want to accomplish big things – Lombardi was looking up to Vince Lombardi of all people – it’s hard to start small, but that’s the only place to start. Sam Shank (episode #78) started Hotels Tonight with only a handful of properties. Rick Ross (episode #115) started selling crack on the street before he was ever on top. Maria Popova (episode #89) began Brain Pickings with an email to seven people.

Stephen Dubner (episode #110) writes that starting small has four specific benefits:

  1. Small questions are less often asked and may be virgin territory for discovery.
  2. Big problems are dense and intertwined small problems that have to be solved first.
  3. Small problems have a smaller mass and easier to change.
  4. Thinking big leads to more speculation, small problems can have a more accurate observation.

It was #3 that was especially true for Lombardi. “There’s a fine line between producing work and learning,” he tells Shane. At the highest level, there’s always work to be done and finding time to get better can be hard. The NFL, according to Lombardi, “is similar to chess.” You have to dive deep and have a rich knowledge of the three key aspects of the game (offense, defense, special teams) as well as the nuances of the different positions.

Alex Blumberg (episode #70) is a good example of diving deep. Blumberg is a skilled radio reporter, working for shows like This American Life. But when the TAL team tried to take the show to television, it wasn’t as successful. Blumberg says that they failed to achieve the same relevancy because storytelling on the radio is different from storytelling on television.

Comedians have shared this insight in a more specific way. Carol Leifer (episode #68) and Brian Koppelman (episode #98) both told stories about hecklers, and how each learned to shut them down without losing the audience.

Lombardi says leadership is the one skill that solves these small problems and good leadership has four elements.

  • Management of attention. You must be able to get people to follow you because you “have a plan.”
  • Management of meaning.  You must be able to “explain your plan clearly and concisely.”
  • Management of trust. You must “be consistent, and not have double standards.”
  • Management of self. You must be able to “self-correct.”

Within these four areas is the key to a successful system. The west coast offense (a popular and successful NFL system in the 1980’s*) worked within these four areas. Bill Walsh, Lombardi explains, had the plan and a way to explain it. When it was time to practice the system he did so consistently and when the team lost there were procedures to identify why.

Each of these things, says Lombardi, “have to be time tested.” This is one of the favorite tools of Nassim Taleb as well. Taleb applies this from the simple (drink only things that have been around a long time like water, wine, and coffee) to the complex (everything will blow up, make sure you don’t blow up with it).

Not only does this team philosophy need to be time tested, but it can’t be in a state of constant change. Lombardi’s implied message is this; study history to find something that consistently works and do that thing with only minor adaptations.

Another part of a successful philosophy in the NFL is to draft the right players. “Scouting’s not about finding players,” Lombardi says, “Scouting’s about eliminating players.”

In a world of constant lifehacks, pro-tips, and new blog posts – sometimes all we need to do is not do something. If you avoid the bad eggs (in life and football) you’ll often be just fine. Gary Vaynerchuk (episode #2) proved it was true for marketing, Astro and Danielle Teller (episode #81) found it was true for parenting.

When you get the right players (or avoid the wrong ones) you still aren’t quite there Lombardi says. “You have to have a team that can play right or left-handed,” and if you can’t do this you have to hope to get very lucky. In a sense, that’s what happened to Scott Adams (episode #112). Adams would have had to get lucky if he were just a cartoonist, businessman, or MBA graduate. Instead, Adams is all of these things and so he can play right or left-handed. Adams rephrases Lombardi when he writes, “every skill you acquire doubles your odds of success.”

The end of the interview focuses mostly on the last part of leadership, management of self. “Control what you can control,” Lombardi says, and be able to ask yourself what went wrong. He stresses to Parrish that it’s important to separate the process from the product.

It comes down to figuring out:

  • Did I have the right plan but bad luck?
  • Did I have the wrong plan and good luck?

This distinction is important. If luck is a component of an outcome, we should figure out how much luck there was to see how much of an effect it had. If it was bad luck, we need to get over it. Adam Carolla (episode #25) likened it to getting a traffic ticket. It doesn’t mean you’re a bad driver, just an unlucky one.

Part of the analysis between process and product is finding the urgent and important data points. One example Lombardi mentions is scouting. Twenty years ago a scout might go to a school to watch film, talk with coaches, and meet the players. Lombardi says that while this took a lot of time and there wasn’t much film, you at least got to glean a few nuggets about the player. Maybe how he stood, shook your hand, or acted on campus. That was all data.

Now, the data is every snap a players plays (all available as on demand video) but less time on campus meeting people. This is a change in the data. The successful coaches need to adapt how they evaluate players Lombardi says.

Coaches aren’t the only ones who need to adapt, Lombardi says, players do too. There’s a lot less structure in the NFL than there is in college, Lombardi points out, and some players have a hard time adjusting. New conditions are a great time to begin new habits, writes Gretchen Rubin (episode #97). When Rubin got her job as a Supreme Court Clerk, she wanted to make sure she exercised. Rather than wait until she got a feel for the job, she started working out the first day. “Start like you want to continue” she writes in her book, Better Than Before.

Shane ends the interview by asking Lombardi for some reading recommendations. Lombardi says that “anything you can get your hands on” will help. Some specifics he suggests are; The Life and Times of RFK, When Pride Still Mattered, The Rabbit Hunter, Win Forever and The Wright Brothers.

-Thanks for reading, I’m @MikeDariano.

  • One interesting little nugget from this interview was how much history of football Lombardi knew. Bill Belichick was featured in an interview and showed how much he knew as well. Even the term “west coast offense” has a rich history that explains the origin that you would have to know.

#115 “Freeway” Rick Ross

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thanks for reading. I’m @MikeDariano.

#113 Neil Strauss

Neil Strauss (@NeilStrauss) joined James Altucher to talk about self experimentation, writing, and what real estate agents know about picking up girls. Strauss is the author of The Game, Everyone Loves You When You’re Dead, and Emergency. Strauss is most famous for The Game, and that’s what a lot of his conversation with James is about. In that book he writes about the pickup scene, where men use specific tactics to find, attract, and seduce sexual partners.

James starts the interview by telling Strauss that he watched other interviews to prepare. One they touch on is this Jimmy Kimmel appearance when Strauss was asked to pick up Jessica Alba.

Those pickup skills aren’t just for late night TV shenanigans. Strauss tells James that a government agency asked him to work with their field agents. Which is somewhat ironic considering these posters from 1943.

James says that the same ideas apply to good copywriting too. “It’s straight out of Richard Chiladini’s Influence.”

One of the tips that Strauss found useful for pickup is one that real estate agents use too. Strauss says that in real estate, agents keep up their relationship with home buyer so they don’t feel like they were used. In pickup it means to talk to someone even after getting their phone number.

Strauss isn’t the only one who brings domains together like this. Ramit Sethi’s (episode #36) first project was about combining psychology and finance. Ted Leonsis (episode #53) told James that AOL used marketing techniques of the shampoo world to better distribute free copies. Bringing together things that work in different domains seems to be something that works.

Strauss says that he “had no idea” The Game would be huge. “In retrospect” he says, “things always look perfectly planned and marketed.”

It sounds like Strauss’s projects start with his own problems. He wrote The Game, to learn how to pickup women. He tells James that some great stories didn’t even make the book because they don’t serve the overall story. Jon Acuff (episode #106) told James much the same thing about writing. For Acuff it was jokes, that while funny, didn’t add to the book.

Strauss writes these kinds of books in part to provide an alternative to what he calls, “the TED Talk culture” where “the loudest voice wins.”

An older example – but one I just came across – was Gang Leader for a Day. This book from 2008 is the story of what happens when a graduate student at the University of Chicago befriends a local gang leader. This is not the story you see on the news. I found myself empathic to the (lawbreaking) characters and wanting to know more about the nuances of their world.

For these authors – Strauss and Venkatesh – research wasn’t the only data point. When they jumped into a situation, they saw things the data didn’t show. Strauss goes far enough to say that the things he sees are more important to him than the things he might read. “The burden is, does it make my life better.”

Strauss is repeating common advice here, find what works for you. A.J. Jacobs (episode #94) is the most extreme example when he tried to be the healthiest man alive. From paleo diets to plastic contaminants, Jacobs tried nearly everything. From that swatch of experience he took the things that worked best for him (stand, don’t sit – eat slow, not fast – 3,4,1, & 2(plastics) all the rest are bad for you). James too in his daily practice of physical, mental, emotional, and spiritual growth is his system. If that works for you, that’s great. If it doesn’t then what are you trying?

Chris Hadfield (episode #111) told James we all should be trying something:

“If you’re not studying something at all times to improve your ability to do things, then why not? What’s the other thing you’re doing that’s more important than getting better at life?.”

Part of finding things that work is knowing who you are. “It’s important to know who you are” Strauss tells James. Gretchen Rubin (episode #97) writes about exactly the same thing in her book Better Than Before. Rubin wanted to improve her habits. She knew she wanted to be healthier, but didn’t like competition or intensity. Long, slow runs were perfect for her. The same goes for figuring out if you like being around others, what time of day you work best, and more.

One thing Strauss knows, is that he doesn’t like selling. It’s a feeling of “horribleness” he tells James. Many guests who are selling things seem to share this attitude. Some mention, often while laughing, that you have to be a bit egomaniacal to feel like something you write is worth other people to read. Strauss goes so far to say that he feels shameful.

What might help is to remember Anne Lamott’s advice about detachment.

“And then learn to be more compassionate company, as if you were somebody you are fond of and wish to encourage. I doubt that you would read a close friend’s early efforts and, in his or her presence, roll your eyes and snicker.”

Strauss would surely encourage a peer to promote her most recent book, so he should try to extend the same encouragement to himself.

Once you get comfortable giving yourself this permission (to Choose Yourself as some might say), realize that the comfort isn’t permanent. “Breaking outside your comfort zone is where learning and growth happens” Strauss says. This was true for Brian Koppelman (episode #98) who had to dive into stand up comedy before figuring out how to finish writing Solitary Man.

Other guests too have said that discomfort is where growth happens. Peter Thiel (episode #43) said that the best entrepreneurs come out of situations where they were challenged. Dave McClure (episode #99) said that he had to learn a lot of lessons the hard way to begin to solve his problems.

Strauss gives a good test to figure out where we can find areas; look where you are making excuses and attaching negative consequences where there aren’t any. Tim Ferriss (episode #109) calls this “a nebulous fear of failure.” Ferriss says that too often we overestimate how bad something will be.

Even Strauss suffers from this to some degree he says. There’s a want to make something as great as the first thing, but rarely is the situation that same. When you start you have the power of nothing to lose but with success that’s exactly what you lose. James says that this happens to him too, especially when someone he respects emails him and says “I love your writing.”

The end of the interview talks about Strauss’s imprint, Igniter books. One of the books published there is about Satan is Real who have “the greatest album cover of all time” Strauss says.

You can be the judge of that.

James asks for some reading suggestions, and Strauss (like many other guests) does not disappoint. Some of his suggestions are; The Fan Man by Kotzwinkle, anything by Dennis Johnson, Ladies Man by R. Price, Last Exit to Brooklyn, and James Joyce’s Ulysses.

Thanks for reading, I’m @MikeDariano. If you like a good reading list like this post ended with check out some of the other posts here. If you want even more book suggestions, I share a monthly list of what I’ve been reading.

#112 Scott Adams

Scott Adams (@ScottAdamsSays) is back to talk to James about success, going viral, and why he’s never had writer’s block. Adams’s first time through he talked about his book, How to Fail at Almost Everything and Still Win Big in episode #47.

The interview begins when Adams tells James that success “is a trap.” He means that even though Dilbert may get larger, it doesn’t proportionally get more fulfilling. It’s a bit like the teenager that gets their first car. They’re excited. A second car, cool, but not as much as the first. A third? Well, even a teenager doesn’t need three cars (unless they were of the same quality my first car was, then you may need some spare parts).

In her conversation with James, Gretchen Rubin (episode #97) said that this deadening of emotions can be both a good and bad thing. Rubin said that if we have habits we don’t particularly enjoy, but want to adopt, we should keep this in mind. Sure, you may not like running, but as you do it more, the dislike you feel will lessen. For Rubin this meant that driving became a less harrowing experience. The flip side is that our positive emotions will dull too.

I take my daughter’s to school each day, and it’s a small moment of relative quiet after a hectic morning. Do I appreciate that? Not really. Unlike, say a divorced or busy parent who might only get to do it once a week. That parent may seize the chance to enjoy that time.

This isn’t saying you should take your kids to school because it’s a chance to bond. Adams will be one of the first to say not to take his (or my) advice. Instead you want to experiment to find what works best for you.

Experimentation is fast becoming one of the big ideas here. Many of the podcast guests advocate personal experimentation as a means to find a better way to do things. Brad Feld (episode #91) found that traveling less for his business led to running a better business. A.J. Jacobs (episode #94) experiments so much he calls himself a “human guinea pig.” Ditto for Tim Ferriss (episode #109) who even created a show about his self-experimentation.

For Adams the tipping point came when he realized how bogus a lot of the nutrition advice was. Instead of following the diet du jour, he began to experiment with what foods made him feel better. He suggests we build up our own toolkit and bank of experiences to draw on. Two of those tools are willpower and habits.

Gretchen Rubin wrote about this in her book Better than Before, writing that one size does not fit all:

Screen Shot 2015-05-20 at 9.13.07 AM

A lot of this round of conversation between James and Adams is about what it means to go viral, and Adams has a lot of opinions (through experimentation, no doubt) about what that means.

#1 To go viral you need familiarity. Adams says that some of his content that’s gone viral has been old content. He attributes this to people knowing a little bit more about what he’s saying. Ryan Holiday (episode #18) leveraged this technique when he wrote about stoicism. Stoic ideas have been around for 2,000+ years, but Holiday took modern examples (things we are familiar with) to promote the old ideas.

#2 To go viral you need contradictions. Adams says that he see this work by combining “science” and “failure” in the title of his post, Science’s Biggest Fail. This post restated his thoughts about how often we (science) has whiffed (failed) in getting nutrition right. If you are confused about what to eat, it make sense. From Dave Asprey (episode #68) to Dan Buettner (episode #105) there is a lot of advice. Nassim Taleb gets through the noise by using the filter of time. Taleb says, if it’s been around a long time, it must be fine. This is hardly a contradiction, but Taleb doesn’t seek virality.

#3 To go viral you need to connect with small groups. Adams says that he doesn’t split test Dilbert comics because he doesn’t need them to widely popular. He doesn’t want to necessarily find the comic that is best overall, but the best within a group. He says, “when I was trying to build up Dilbert in the early days I would target specific micro areas.” One example might be a comic about being a Ham Radio operator.

Adams says that he did things like this on purpose in hopes to connect with that group. If he did, he might get them reading his comic on a regular basis.

#4 To go viral you need to understand your medium. I can only imagine that Gary Vaynerchuk (episode #2) and Nicholas Megalis (episode #104) are excited to hear that Adams is focused on the medium as well as the message. Vaynerchuk has an entire book about why the medium matters and Adams says that he’s figuring out why videos work better on some platforms than others.

In each case that something goes viral, Adams has a goal. If he can get people to laugh at one in every five comics, then he knows he has a fan. When James presses Adams about why it’s this ratio, Adams doesn’t have a great answer, so I’ll take a stab at it.

When we remember things, we actually do a pretty bad job. What we often do is remember the best or worst, most unique, and last parts of something. Then we fill in the blanks around that.

Think about the last vacation you took. You can probably recall if your flight was delayed, but otherwise not many details around the actual travel. You can probably recall the best thing you did, though not what you had for breakfast that day. You can probably recall what you did on the last part of your trip, but not day two.

My guess is that when Adams creates something that that draws in readers it’s because of they remember the highs, uniques, and ends.

Adams also tells James that he’s never had writer’s block, though this is hindsight of 26 years worth of cartooning. Early on he was afraid he might sit down to draw and come up with nothing so he keep a pipeline full of ideas. A.J. Jacobs and Ryan Holiday also say that they keep ideas squirreled away for future projects.  Adams says that he doesn’t do this much anymore because there’s often a better idea – whatever he’s feeling.

Another tip Adams has is to start moving. “If your body does it, your brain will follow” he says. A.J. Jacobs says this works for him too and not just with writing. Jacobs quotes Millard Fuller, who said, “It’s easier to act your way into a new way of thinking than to think your way into a new way of acting.”

James and Adams end their conversation with some ideas about what Adams can do to share more behind the scenes processes for Dilbert.

Thanks for reading, I’m @mikedariano. Adams’s book has been one of my favorite books of the past two years. If you want to see more about what I’ve been reading, you can sign up for my newsletter. It’s a once a month summary of books I’ve read.

I also run book clubs here. If you want to purchase the last round, a reading guide to Cal Newport’s So Good They Can’t Ignore You.