Interviews → Jay Baer - Convince & Convert

Jay:

Hey everybody, it's Jay Baer and I'm joined today by a very special guest. It's entrepreneur, author, motivational speaker, international gadabout Derek Sivers, who wrote the fantastic new book Anything You Want: 40 Lessons For a New Kind of Entrepreneur. That's not actually Derek as you can tell, but that's the cover of the book. It's part of Seth Godin's Domino Project, which is a joint venture between Seth's company and Amazon. It's an unbelievable book, I just read it a few days ago and Derek was nice enough to join me for an interview. Derek, how is it going? How is the book doing?

Derek:

Good! Thanks Jay! You know what's funny? I already stopped doing most interviews, like I kind of have a form letter now when people want to do an interview, I'm like "I'm sorry, I'm really just focused on my next thing now." I checked out your site, I love what you're doing and I love your style and everything. I was like "yeah, you know what? I'm making an exception this time." So I'm really happy to be here.

Jay:

Thank you. I appreciate that very much. I am a former indie music guy myself. I started the radio station at my college, University of Arizona, and so was a CD Baby fan from way way back, back when it was just a tiny thing. It's just an amazing story. Most successful businesses are based on the premise of doing something that their customers like, and you certainly did that with CD Baby. But it's sort of a weird, almost backwards tale. Because you didn't even try to start a company, right? You sort of accidentally started a company. So for people who might not be familiar with CD Baby or your story, could you kind of run through that a little bit for folks?

Derek:

Sure. Of course. So when I was 14 I decided I wanted to be musician, like really be a professional musician. Not just rockstar dreams, but I really was determined to be a full-time, "make my living doing music" kind of guy. So I did it. I was very focused on this and when I was 27 or so I was selling my CDs at live shows and then I started a website to sell my CD, because back in 1997 there was no way to sell your CD online. There was no PayPal, Amazon was just a bookstore and all of the big online record stores at that time were really just front ends to the major-label distribution systems. So if you were just a guy with a CD, there was no way to sell it online. So I went and did the hard work, like build a shopping cart and get a credit card merchant account, which again in 1997 was pretty hard. So when I was done I had a "buy now" button on my site. It was a huge accomplishment.

But then some of my musician friends in New York said "hey man, do you think you could sell my CD through that thing?" And I went "yeah, I guess so." As a favor I started hooking up friends and giving them the same thing I have done for myself. And then more and more friends called. Pretty soon it was friends of friends, and then people announced it on their newsletters and then all these requests started pouring in. So it's really kind of interesting when I didn't mean to start a business, but demand grew anyway. And along the way I realized oops, I started something. It's taking off.

So honestly man, I was never a business minded person that set out to do this thing. I was a little like Forrest Gump, everything just kind of happens to him and he just stumbles into things. And so it's kind of like that.

Jay:

I had the same kind of accidental company circumstance in college. I started making fake IDs for friends. I was in the fake ID business. And it all of a sudden got to be kind of a big deal. It was, you know, hook up a friend, same kind of experience. And then I was at a bar one time and I heard the bouncers say "man, there is a lot of kids from Idaho at this school!" I decided that maybe that was the time to get out of that business, so I got out while the gettin was good. You know, sometimes you don't want to grow the company when it ends up being jail time.

Derek:

Yeah and there is a lesson.

Jay:

There is a lesson! That was going to be the lesson in my upcoming new book. You obviously come at it from a different perspective, because of a lot of people that you know and that you hang out with now that sort of core driven entrepreneurs, start a lot of things, you know that's in their DNA, right? So do you think, knowing people on both sides, that on the whole it's better to accidentally start the business or better go about it in in a very methodical, planned way?

Derek:

I'd actually say better accidentally, but… I think the distinction is this: because of course we can't just all make it a life's mission to have accidents happen, so I think it's when the world seems to be saying "yes I want that", those are the things you should do. And if the world does not seem to be saying yes to what you're offering, it means you need to change your offering, not keep persistently doing something that's not working.

So this was a huge lesson learned in hindsight, because we tell the fun bit of the story, like when I started CD Baby, but for 12 years before that I had tried everything. Things weren't working, I tried to start a record label, I started a recording studio, I was a touring band, I was doing five-piece band, one-piece band, two-piece band, I'm sure I did some other crazy stuff. Oh I did! I did music for film and TV, once, and that wasn't working too well. So all that stuff, I kept persistently trying to push it, full of intention and plans and well-thought-out plans, but I just wasn't getting good feedback from the marketplace, let's say. People weren't into it. So then all of a sudden one of the many things I did completely took off, right?

So I think there is a lesson in that, that we need to pay close attention to what the world is responding to, and do more of that. Instead of thinking only of our intentions, like the world's asking me to do this other thing, but I don't want to do that because this is my plan. It's like, well, the world is asking you to do this, listen to it. So sorry, that's not quite the soundbite...

Jay:

No, it's perfect. And I'm glad you mentioned that, because you don't talk as much in the book about your litany of, I don't wanna call them failures, but less spectacular successes. And so it's good to have that frame of reference, right? That it wasn't just magic. It ultimately worked out. And what I always tell people, and I presume that you'll agree, that a lot of what you learn being an entrepreneur is what you don't like, right? It's almost a process of elimination, rather than a process of finding. Like okay, I know that sucks, I know that sucks, I know that sucks, and what you're left with is something awesome. It's a reductive process, rather than the discovery process.

Derek:

You're the first person I've heard say that, and I so agree. That's so true. I love it. Yes.

Jay:

But you don't realize that until get a little older. When you're 25 you haven't seen enough disasters to sort of figured that out.

Derek:

Well honestly, I took the same approach to dating. I would just go out with anybody, everybody. You start to learn through each person you go out with, you're like "now I know I don't want that, you know I definitely do not want a TV addict, okay no I don't want somebody who likes to party all the time…" And eventually you narrow down to what you do want.

Jay:

That I did not do. I found my wife first day, first class, in college. And I say good I was punching so far above my weight class that I had to close that deal as quickly as possible, that there was gonna be no other circumstances for me. And it worked out. I married to way way way up. One of the things that I love about your style and your story is that throughout the whole history of CD Baby, partially because you started it somewhat accidentally, you almost purposefully kept in small. You almost went out of your way to, I don't want to say not grow the business, but you certainly didn't do all the things you could have done to grow it. Which is so counter to all of the entrepreneurial culture, certainly in the US, where there is almost this undercurrent of "if you're not growing it, you're lazy and you're not trying hard enough". Which really is irksome to me. How were you able to just toe the line on that?

Derek:

It's exactly what we were talking about just before. It's like I noticed what I did and didn't want. Luckily I was living in New York City and I had other entrepreneur friends that say they had investors and a board of directors and a hundred employees. And I'd look at their life, and be like "God, that is awful!" They were always telling me about having to please the investors and put together a presentation for the board of directors. I'm like "sorry, but fuck that! That's not the life I want!" So I was really glad that I got to see those bad examples and know what I didn't want. So investors would come calling, I started CD Baby before the big dot-com boom, so of course during the dot-com boom, all these people were trying to...

Jay:

"Wait, a company that revenue positive! Call those guys!"

Derek:

Exactly! And so they were calling a lot and I ended up just telling customer service to just handle it. Like when somebody calls and they say there an investor, and they want to invest, don't even send them to me anymore. Just tell them no, just say "we don't want any, thank you. Goodbye." And that's what we did for 10 years. They didn't even send me the calls, I love it. Every now and then one would get to me at a conference or something and they'd say "well, but don't you realize that you could grow your company with the right amount of capital infusion you could grow this thing!" I was like "I don't want it to grow." And they would just look at me like "huh?" They would end the conversation really fast, I loved it.

Jay:

Yeah, it's like being from Mars, right? But that's what I love about your overall thesis that is woven throughout the book is that you, and I think this to be very sincere just in a reading your stuff and having a couple of brief interactions with you, you really do make decisions based on your happiness and what's going to make your customers and loved ones happy. Which, of course, sounds self-evident to everybody. But that's not the way the world usually works unfortunately. And it takes, I think, quite a bit of backbone to say "you know what? I'm gonna into what makes me happy, regardless of what the financial circumstances are, or any other circumstances."

Derek:

I think, again, it helps that I saw… Say, when I was in the music business, when I worked at Warner Brothers, when I was 20 years old I got a job at Warner Brothers So for two and a half years I worked there, and I met a lot of miserable rockstars. People who had, say, set out to be a rockstar when they were 17, they had achieved it when they were 27, now is they're a big rockstar but they're 35. And you got the feeling that it was probably time for a life change for them, but they were trapped. In fact they were still following their 17-year-old trajectory when you could tell that they were miserable, but they wouldn't stop doing it. And I've also met some miserable, angry multimillionaires.

Luckily I just saw these lessons early enough, it's like "those people are not happy." It can't come down to that, it's not just get as big as you can, as famous as you can and you'll be happy. Now, I think I found proof that that's not true. So instead you just have to…

You know what it is? You have to find what your personal setpoint is. So there is some people, like say Richard Branson seems truly happy being a multibillionaire. It's like even a billion isn't enough for him, he wants to have ten billion because hey, it's fun! Like that his natural setpoint is way up there. To me, I just found that I'm happier here. I don't want to pressure of a billion dollars. In fact, I think anything beyond 1 million or so won't make me more happy.

You know what's funny now? The joke was before we had Dr. Evil, now to me the joke is the movie The Social Network. So my little punchline of this that I've been telling a lot of entrepreneurs now is I know so many entrepreneurs that are trying to be the next Facebook. They're trying to invent something that is so huge and all-encompassing, that every living person is going to use, and it's going to make billions of dollars, because they've seen The Social Network and Justin Timberlake told them that a million isn't cool. So now I think the reverse, it's like "a billion dollars isn't cool, you know what's cool? A million dollars."

Jay:

Five hundred bucks in free food is awesome.

Derek:

Yes! If you do something that makes a thousand people happy, that's actually cooler than doing something that makes a billion people happy. Find something that a thousand people would think you are really cool. Like, find a niche. Aim for small things. That's much cooler than trying to please everyone.

Jay:

Absolutely. One of the things that was really smart in terms of how you handled the growth of the company, even though you didn't really want to, was systematizing your processes and sort of thinking yourself out of the day-to-day, sort of that E-Myth philosophy of "let's get this to the point that I am working on the business, not in the business." Did that happen to you intentionally or accidentally, like was it chicken or the egg? Did you say "I've got to build systems so I can get out of the company" or did you get out of the day-to-day and say "oh, now let's build systems to replace me"?

Derek:

I built systems so I could get out of the day-to-day. But that it came from a couple motivations. For one it was the happiness thing that we just talked about. I noticed that I got to this point where I would go to the office and, even though I look forward to having a productive day focused on some real creative work and, say, like inventing a new part of the website, programming and focusing, instead it's like every five minutes one of my employees would be like "hey Derek, there is this guy on the phone, he sent his CDs and he needs to know if we can send it back, now what do I tell him?" And I'd say okay tell him this and this and that. And then five minutes later "hey Derek, we ran out of Post-it supplies, how can I get some more?" And I go okay do this. And I found it's like every five minutes, all day long I was interrupted because my employees didn't know how to do everything. Everything was dependent on me. And I was hating my life. I was just like "I hate this! I want to get out, I don't want to go to the office anymore." Then I was getting angry like "why don't I just go to the office and put a stool in the middle of the hallway, and just sit there all day and answer questions. That'll be my full-time job!" So is like okay, hold on, I got to come up with a better solution to this.

That's when I realized I need to teach everybody how to do everything without me. Because the only way I'll get some peace and quiet to do the important things, like not the urgent things but the things that will actually make a big difference in the business, is to stop doing these little petty urgent things. And the way to stop doing those is to teach everybody else how to do them. So to me it was really one of those epiphany nights, you know those nights were a light bulb goes off. So I went back to work the next day, after this bleak miserable night of hating about everything about the company and wanting to get rid of it, I went back to work the next day and I went like "alright, I'm going to teach everybody how to do everything without me." And I did, it took like six months of hard work to show everybody how to do everything without, but it was very worth it.

Jay:

And in addition to the personal satisfaction you derived from changing what you have to tackle, did you see disproportionate company results because it worked more efficiently?

Derek:

Huge! Huge! It's never fair use just one guy's example of this. Who knows what aspect of this was because of what I've had done? But to me the final step in my delegation was: just after I had spent six hard months delegating everything to my team, I for the most part was not necessary for the business anymore. And then my girlfriend moved to LA, and I was up in Portland, Oregon. She went down there for film school. And I thought "yeah, I think that might actually be my final step, to move away as to make sure that these things are running without me." I moved to LA when my business was in Portland. I just told everybody "alright guys, you're on your own. If you need me, here is my phone number. But other than that, you're on your own."

I was down in LA for six years, maybe five. In those five years the business grew from 1 million in revenue to about 80 million in revenue while I was gone, and grew from 20 employees to 85 employees. I taught them how to hire too. So they were just free to hire even without consulting with me. And yeah, the business just grew without me. It was awesome.

Jay:

Fantastic. I did the same thing actually, I moved out of town when I ran the company. It's hard though. It's hard to pull that plug definitely.

Derek:

You know, I think the biggest lesson for anybody who's listening to this that would love to do the same thing, my succinct bit of advice is to get used to the concept of good enough. If you were the business founder and you're used to doing everything yourself and micromanaging, it's because you want everything to be perfect. You just have to realize along the way that there is the points where if you want everything to be perfect, it's never going to be able to grow. So at a certain point you have to learn to say "all right, good enough."

Jay:

It's not even perfect, it's you wanted done the way you do it. The assumption there is that you do it better and I don't think that's always true, it's just the way that you know how to do it. It's a little bit sort of self-congratulatory to think the way I do it is by definition the best way. And I've always had a lot of luck with saying "you know what? I'm just gonna let you do it however you want to do it", and sometimes people do it better than I did. I just didn't realize there was another way.

Derek:

Yeah, you're right. Exactly. That's really well put.

Jay:

I listened to the podcast you did with Mitch Joel recently, who is fantastic obviously at Twist Image and he interviewed myself and my co-author for our book a couple of months ago. I love Mitch, it was a great interview. One of the things that he mentioned almost on the side in your interview with him was, you're obviously a big proponent of "try stuff", you've tried a lot of things, before CD Baby you were involved in a lot of different projects. And Mitch sort of made the point that when you have something going, like in his case a large agency, that the notion of trying something is very attractive but it comes with an opportunity cost based on what you're currently doing. How do you look at that? I mean, there is a long list of things I want to do, so does Mitch, but you end up not doing some of those things because you've got to do the things that you're already doing. You've got to run the company you've already built. How do you get out of what you are doing day-to-day in your current company in order to experiment with different projects, I guess is the best way to say that.

Derek:

Well, there is the thing I just said, learning to set up your company so it doesn't need you anymore, so that your really free to just do future stuff. But even then it's like, I don't know if I have found a good solution to how to narrow down what to do. There is this idea that whatever the world responds to the most, you almost let the world decide what to do. But then again I could see somebody using that and getting kind of trapped, like the world wants me to keep showing up to my stupid job I hate. So I guess it is kind of that mix of what is the world asking me to do the most versus what do you love and hate doing.

Jay:

I love the sentiment in your book, the sort of "hell yeah" sentiment, right? That if there is something that you really want to do, you'll know it. And if it makes you say "hell yeah", do it, and if it's anything short of that, if it's more like "meh", don't do it. And I think it's a really good credo. It's almost like love, right? People always ask how do you know when you're in love. You'll know. And I'm starting to feel the same way about business. I'm fortunate enough to get a lot of opportunities, and so does Mitch and you, and it's great that people ask if you want to do this or do that. But I think you know inherently when it's awesome. You'll know pretty quickly. And I think that's one of the things that needs to guide your behavior.

Derek:

Yeah, you know that the "hell yeah or no" is a wonderful rule of thumb. I use it almost every single day, even if somebody says "hey, you know that girl we met once at a party, she's having some people over for dinner, do you want to go?" I'm like "eh". And so any time I catch myself going "eh" it's like "oh, okay hold on, I'm feeling on the fence, so no. Just say no." Say no so much so that you have all this room in your life. So that when something comes along, like "hey, would you like to fly to New York and had dinner with Seth Godin?" It's like "hell yeah!", And you're able to do that because you said no to all this other stuff, you're free to do that.

The only thing to add to that is don't forget that often the things that scare you are also what you should be doing. It's like another rule of thumb of mine. Whatever scares you, go do it. So sometimes there is the simple achievable thing, and then there is the giant like "oh my God, no way, there is no way I could ever do that! Could I?" If it seems almost out of your league, like your wife, then that's what you should be doing. And I'm trying to learn that lesson myself.

Sorry, this almost gets like personal and confessional here, but it might be useful to people. I still have things that I feel that are within my realm, like starting another website. And then there are things that just feel like I'm not that kind of person. So say like, starting a resort in the Caribbean. Like, I don't know who those people are that could do something like that. But it's like, I'm not that kind of person, I couldn't do that. Starting a resort? Now that's something that very professional wise and rich people do, like that's not something I could do.

It's funny man, I read Tony Robbins' book when I was 19, called Awaken the Giant Within. And he mentions in that book that he has a resort in Fiji. And at the time, I was 19 and he was an adult to me, so well okay, he could have a resort in Fiji. I'm just 19, I'm a musician. But the funny thing is looking back, now I'm 41 and I think he was 27 when he wrote that book. Now I'm like no way, this 27-year-old kid started a resort in Fiji? And sometimes I have to adjust my self image of what I'm able to do. And I'm still in the process of doing that.

Jay:

Yeah, I feel the same way. It might be because I'm 41 as well, and so to get to that stage in your life where you sort of have to recalibrate what your own personal expectations are. And I really had no goals for myself to speak of. This is my fifth or sixth company, but similar to you, you wanted to be musician, and I wanted to help people with marketing. And now fast forward, it's like okay, what the next hill to climb? That's why the best album name of all time is Is This It, right? Because that's how you end up feeling sometimes. Like okay, I accomplished that, is that the limits of my accomplishments?

Derek:

Right. You know there is something I did really consciously, when I sold CD Baby, and for those of you who have never sold a company, it's a weird thing, I started describing it as: it's like getting divorced and graduating college and a winning the lottery on the same day.

It's a really kind of these conflicting feelings, like this feeling of loss that you are no longer with your company, but you got a bunch of money and that's nice and you feel like you graduated to a new level.

In dealing with that I went and did a bunch of stuff, to very consciously trying to change my trajectory. Because what I had actually done was the day after I sold CD Baby I set up my next company, MuckWork, and I set up the website, I threw myself into it, I spent a few months programming it, and then I kind of had to say "what am I doing? I'm not changing my trajectory." Like here is my trajectory, and yes I sold CD Baby, but am I just kind of replacing the company's name over my head? Like okay, take down that logo, put up a new logo and keep doing the same thing? It's like no, hold on, I want to make a change in my life. I don't even know what that change is, but I know it's not just doing the exact same thing, because I'll burn out.

So I started doing this intentional process of, I call it: say yes to everything you used to say no to, say no to everything you used to say yes to. It's about being more impulsive. So I started doing things like, like on a Tuesday I was reading the Wikipedia page about Iceland. I was like "God, look at that, that's a gorgeous! It's beautiful! And never even been there, I never even thought about going there." I was like "I'm going to book a flight." And by that Friday I was on the flight to Iceland. And then I'm in Iceland and I see a really deep lake that's crystal clear. I'm like "I want to go in." And somebody says "well, they teach scuba diving lessons here." I'm like "yes! That's what I'm going to do." I've never scuba dived before. And it's like "I'm going to learn to scuba dive."

I think it's this kind of intentional scrambling of your self identity to realize that you can be anything that you weren't before.

Jay:

Yeah, absolutely. Because otherwise you get constrained by your own history. No question about it.

Derek:

Yes! So "well, I'm not the kind of person that does that. That doesn't sound like me."

Jay:

Yeah, exactly. You mentioned Iceland. You've lived in a ton of places in your life. And you live in Singapore now. Does your physical location have an impact on your ideas and how you approach life and business? Are you the same person wherever you are in the world? Where you are, does that have visceral meaningful impact on your thought process?

Derek:

Good question. I think mostly you are the same person, no matter where. Let's say for example, to me the biggest change, so I was living on the beach in Santa Monica, California. Beautiful, weather is always perfect and I'd ride my bike on the beach. The weather is always 68°, I had this gorgeous house overlooking the ocean, everything was perfect. But then I went to a friends wedding in New York City and we get off the train at Penn Station. And all of a sudden, in the middle of Penn Station, New York City, I'm surrounded by thousands people from like all over the world. I was like, I just a lot of this kind of adrenaline of the moment. But it was also the diversity of the thing. Meaning that Santa Monica, California is one of my favorite places in the world. And, sorry, but everybody is white and everybody is pretty rich. It's a little like the other Beverly Hills. And in New York City is this the melting pot of just like everybody from all over the world, and everybody is together on the subway trains. Rich or poor, you're shoulder to shoulder with a couple from Korea and the man from Russia and a guy from Nigeria and you're all together on the train. And there is something about this mix of ideas, getting different points of view and not getting stuck… You don't want to get stuck in your little echo bubble, where everybody agrees with you. I hate that!

I don't want to be in a place where everybody agrees with me, because then you get such a feeling of righteousness.

Jay:

Where everybody is in the business, right? Where everybody is in the industry, which happens certainly in the entertainment business and LA, and in the tech business in the Valley and San Francisco, where everybody has sort of this groupthink mentality.

Derek:

Yeah. So that's why I intentionally, again talk about changing your life, so moving to Singapore was another, like going to Iceland, was a very intentional "I need to see the world, different point of view." And Singapore in particular is pretty cool, because if I had moved to Tokyo I'd have been in a place where everybody was Japanese, and if I moved to Beijing everybody would be Chinese, but Singapore is an interesting little hubspot. There are a lot of Muslim people from Malaysia and Indonesia, there are a lot of Chinese people that moved here from China, there are a lot of people that moved here from India. And if you just stand in the street or the subway, you see all the different beliefs and races, it's really kind of encouraging. It sparks something in you where you can't ever think… You get out of the bubble where you think that you're right.

Jay:

The last question for you: social media, sort of my industry, has changed the music business significantly. This ability for artists to communicate with their fans and stay in touch with them and those kind of things. It almost is a circumstance now where social media aptitude and technology comfort are almost a prerequisite to be a successful band, to sort of come up out of nowhere you really have to play that game very well. There is of course many case studies of these artists, both big and small, who have done that greatly. Do you feel that's ultimately a positive or a negative for the music business? That sort of being good at social media and being good at tech is almost a requirement of being a successful band. It's almost like "yeah, write great songs, play great guitar, but also be awesome at Facebook." It's almost like this whole other piece of the story that didn't used to be there. Maybe it was there but just in a different way.

Derek:

Unfortunately I do think it's negative, sorry. One of the most common bits of advice I give musicians, sometimes I think just to be kind of contrarian, that people often ask me "what do you think I should be doing?" One of my biggest bits of advice is I say "turn off your computer. I know everybody is telling you the opposite, I know everybody is trying to tell you you should do this, you should sign up to their site, you should use their service,…" If you don't focus, it's all for naught. You need to turn off your damn computer and practice singing arpeggios. You need to turn off your computer and do your finger exercises on your guitar, your drums or whatever you do.

If you don't learn how to shut out distraction, you're never going to get good at anything. I often think about this thing about take the path less followed, right? So, if everybody else in the world is spending their life kind of clicking their mouse and looking at the screen and clicking things, and you are the one oddball who didn't do that, and instead spent eleven hours a day singing arpeggios, whatever it may be, then you are going to be and unique, remarkable, precious talents in the world. When everybody else is here, you are up here.

Some of the biggest advice for musicians is to turn off your computer and focus on what will really set you apart, what is really valuable to the world. Which is usually what are others not doing. Because if everybody else is doing it then it's not valuable, by definition you know, supply and demand. So de the stuff that people are not doing. And as far as like Facebook, Twitter, having your social media presence, I think that there is probably a way that either you could, if not find somebody else to do it, you can find a way to give yourself like a 15 minute deadline per day. Keep yourself 15 minutes, like from 8 to 8:15 I will do social media. Say okay, add friends add friends, okay do this, okay tweet once a day, what I've been up to, done, 8:15, turn off your damn computer! Get back to what's important.

Jay:

Yeah, go practice.

Derek:

Yeah! Good practice!

Jay:

Derek, thanks very much. This has been tremendous, I really appreciate your time and your wisdom and the gift of your book. It's a fantastic read. I hope people will pick it up. If Anything You Want from Derek Sivers, the Domino Project. Enjoy Singapore!

Derek:

Thanks Jay. I like your style, I love this conversation. And I'm just happy to be here. Thanks a lot.

Jay:

Thanks a lot, take care!