Interviews → Suitcase Entrepreneur

Natalie:

I would just love for you to share a little bit about your story. I know you are – as you put it on your blog, an introvert and a private person. So I appreciate you being transparent in your story but it’s a fascinating one. So I love you to dive into it.

Derek:

Well thanks. I don’t mean to be that private. I think just a while back, I just drew that line somewhere between public and private. So I don’t tweet what I am eating for lunch but I try to live pretty public.

Natalie:

But that’s so interesting. No I know, I know what you mean.

Derek:

Yeah you know what’s funny, I kind of think of Twitter like a microphone that’s broadcasting through a PA system. Wouldn’t it be kind of unnatural for somebody to walk up to a microphone you know with a 100,000 people in the audience and go tap, tap, tap! I had scrambled eggs and they were good. You know, the audience would start going, boo! What are you doing, get off the stage. So I try to just you know say thing, when I am on the mic, I try to just say things that are about other people, not me.

Natalie:

Okay. Well for now, it’s about you and you have a big microphone. So go for it.

Derek:

So yeah about me, as you can tell by my accent, I am American, born in California and I just had this thing where all I wanted in life was to be a musician. Ever since I was a young teen, I decided I was going to be a musician. I was never going to have a job, I didn’t want to have a briefcase and a job and a wrist watch and all of that. No man, I was going to be a rebellious musician and I did it. I went to Berklee School of Music and I became a pretty good professional musician and I quit my last job in 1992 and ever since then, I’ve just been doing whatever it takes to make a living, kind of doing that freelance musician life. I was living in New York City playing guitar, producing people’s gigs, going on tour, producing demos in my recording studio. Just kind of the hustling life of a freelance musician to just do whatever it takes to make a living. I was even the Ring Leader MC of a Circus for 10 years.

Natalie:

Really?

Derek:

Yeah.

Natalie:

That’s fantastic. I think I did read that.

Derek:

It paid 300 bucks a gig and that kept me going for a long time. So in 1998, I was making my living as a musician in New York and I had my CD that I would sell off the stage and then sold about 1500 copies just at gigs but I wanted to put it online to sell and in 1998, there was no PayPal and Amazon was just a bookstore and there was literally not a single business anywhere on the internet that would sell your CD for you unless you were Madonna or Miles Davis or signed to a major label. And I looked everywhere. Nobody would sell my CD. They would all ask, well who is your label, who is your distributor and I’d say, I don’t have one. Can’t I just send you a box of CDs and you sell them. They just scoffed at me like, that’s not how it works kid. So I thought come on, how hard could this be. So I went and built a shopping cart which in 1998 was hard you know like I said there was no PayPal, there was no like ready-to-go Gumroad kind of click this button kind of thing. So I had to get a little book about cgi-bin Perl programming and it took like 3 months of work but after three months, I had a Buy Now button on my website. It was awesome and it was such an accomplishment that all my other musician friends in New York City said, hey man, you know, could you sell my CD through your site because I don’t know how to make a Buy Now button. So it was literally just – it wasn’t even meant to be a business. It was just Derek selling his CD on his website but then it became like click here to buy my CD or some of my friends and pretty soon, I was listing a few of my friends on my band’s website and after a while, it cluttered up my band’s website so bad that I bought a domain named cdbaby.com and just took my friends CDs and put them over there so they wouldn’t mess up my band’s website and that accidentally became a business like pretty soon, it wasn’t just friends but then I got calls from like friends of friends saying hey man, my friend Dave said, you could sell my CD. And I’d say sure, no problem if you are a friend of Dave. I just did it as like a – as a favor to friend. So I wasn’t charging anything. I was just doing it to be a nice guy but yeah in 1998, it was a different scene and if you were a musician anywhere in the world trying to sell your music independently online, the only way to do it was this guy named Derek in New York that could do it for you and that was it you know.

Natalie:

Isn’t it amazing like how far we’ve come. In fact, I just have to go back to one thing. I didn’t even know that Amazon was a bookstore.

Derek:

Really?

Natalie:

Yes and this is how I had no idea. I’ve always just thought of Amazon as this online powerhouse and that just shows you how little I knew about their standing roots even though I read a lot about them. So I am – gosh, I can’t believe that actually and other people are probably laughing listening to this but I didn’t know. So I will admit that right now something Natalie Sisson didn’t heard of which is hilarious, so yeah. But I didn’t live in the US as well.

Derek:

That’s been for years.

Natalie:

So I mean was it an international bookstore or was it a US?

Derek:

I am pretty sure it was international. I mean it was amazon.com, it’s probably before they made their nation specific sites but…

Natalie:

I am going to do some research on that because that has blown my mind. I just always thought they were an online platform. So there we go, that is a long time back.

Derek:

Yeah. Well I often use that as an example of how unambitious I am because I kind of like things to be small and easy to manage and I always joke that if I was the guy that started Amazon, it would still be a bookstore today you know like I don’t have that kind of ambition that wants to conquer the world and do an IPO and become a billionaire and all of that, you know.

Natalie:

Hmm that’s really very, very true but at the same time, you’ve gone on to do many things. So I would love to come back to how CD Baby just grew and grew and grew and as you said, you are kind of the accidental entrepreneur.

Derek:

Yeah.

Natalie:

So I’d love to hear more about that because people are probably out there going, “I have all these great accidental ideas and maybe you can start paying me for it”

Derek:

Well actually accidental is very correct but to me the more important word is, I was actually a reluctant entrepreneur. It is an interesting crossroads in my life where I actively did not want this new thing I started called CD Baby to distract me from my real work which was to make a living as a musician. So I was actually trying to keep it smaller like of course, it was you know immediately in 1998, people came trying to throw money at me and trying to invest in me and I just said, no, no, no, no, no I don’t want any investors. I don’t want this thing to get too big. It’s just a hobby. I am making my living doing gigs and producing people’s records. I am a musician, I am not like some businessman. So I don’t want this little hobby to take over my life.

But what’s funny is, there was such a demand from the public you could say I guess musicians and music fans that it grew anyway. So it was like reluctant growth. So I went as long as I could without hiring an employee and I went as long as I could without getting an office. So it’s hard for me to relate to people who are really ambitious and they want to raise a lot of money and get an office and get employees when something is just like the tiniest little seed of an idea that the public has not been asking for you. You know what I mean? It’s kind of, it’s the reverse of the way I did things which was to almost avoid the growth unless absolutely necessary.

Natalie:

Yeah and we will come to that because in your book Anything You Want, you talk about that clearly and that’s what I always thought was so fascinating. You literally were the reluctant entrepreneur the whole way. So I will let you continue with this but it really did grow. I mean you – I am not going to jump ahead to your story but actually I am. So you made $100 million in sales in the end for a 150,000 musicians got into your wonderful Bragging Bio and I really don’t want to brag but that’s not. It’s like to take it from this little coding piece to put this Buy Now button to that. Did you have…

Derek:

Yeah.

Natalie:

Obviously you didn’t have any idea it would get there but at some point, clearly you are like, well this thing is going nuts and what did you do about that time because I guess you could have – I think you did talk about it in your book maybe walking away from it and not expanding it but you realized you really wanted to serve other musicians and get their gifts out. Well, right so that’s what it became for you.

Derek:

Yeah. When I look back, I think it probably has a lot in common with musicians who write a hit song. You know like if you read the interviews or biographies of musicians who have these #1 hits, a lot of them were actually kind of slogging away for years writing dozens and dozens of songs and releasing albums and releasing albums and then one day for whatever reason, one random song that they wrote in ten minutes becomes a big hit and gets picked up as the theme song on a TV show and then it’s this and then people in American Idol are singing it and it becomes this worldwide hit and then what you do is, you just try to deal with this massive load of attention and demand from the world. So you are just kind of managing the growth at that point. It’s like you don’t even really have to try that hard to grow things. You are just trying to manage all of the demand. So CD Baby felt a little like that. I didn’t want it to grow but it was just the timing was right or whatever that I was the only guy out there that would sell your CD if you were guy trying to sell a CD anywhere in the world and so it just exploded and for the next 10 years, really I felt like all I did for the next 10 years was to just try to manage that growth same way you know.

Natalie:

Yeah definitely and do you want to tell people how because I just think it’s hilarious. I am not going to give it away this time but what actually eventually happened with CD Baby, you can let people know and they can also go and grab your book because it’s fantastic.

Derek:

Do you mean that what happened along the way or what happened at the end?

Natalie:

What happened at the end unless there is some really poignant mode. I am sure I feel like you talked to them so well in the book and I love for people to check it out. It’s also a short fascinating read but maybe if you just want to pull out the three key pivotal moments that happened between the start of that little seed and then the massive growth to you, you know selling a company, there were some good ones in between. So I will try not to give them away this time.

Derek:

Sure. Let me see. The key moments were – yeah for one, I actively didn’t want it to be big and so there was a funny moment about one year into it when I had one employee and I already felt huge and I remember, one night I was feeling really big and dreamy and ambitious and I wrote a letter to my one employee John - you know we have to consider some day that this thing might be really big. I mean we might have 1000 artists using this thing and we might have to hire a second person and we are going to have to figure out how to network together the three computers in my living room here. I mean this could be that big you know and like that was my idea of dreaming big.

So it’s kind of funny that years later when people would ask me something like, what are your future plans for CD Baby and I’d say well yeah, all of my future plans happened many years ago. I don’t have any plans left. I don’t dream that big but let’s see, along the way, for your audience, here is what’s interesting is:

About 4 years into it, I had maybe 20 employees and every day I would go into the office and people would bombard me with questions as soon as I walked in the door. Hey Derek, this is guy on the phone and he wants to know if we can change his album something, something and I’ve given answer and somebody said, hey Derek, how do we get the printer to print out postscript files because some…-I’d say okay and then somebody would ask another question in saying, hey Derek, I need to take two weeks off, what’s our vacation policy and every day I just kind of would show up at the office and just answer my employees questions all day. And I felt like God, I am going to just like put a stool in the hallway and just sit on the stool and just answer questions all day like that’s all I do anymore and it was really frustrating and I hated it so much that I wanted to quit. I almost – In fact I actually booked a flight to Hawaii and was looking to rent an apartment in Hawaii just to like run and hide to get away from the problem.

But then I realized actually after watching Vanilla Sky with Tom Cruise, remember like how his Board of Directors is trying to kick him out.

Natalie:

That’s right.

Derek:

I watched that movie and it really resonated with me and I felt like I can’t just put on a mask and hide from my problems. I need to solve them.

Natalie:

And secretly you are a Tom Cruise fan, come on!

Derek:

Oh you are right. Whatever it takes to get with Penelope Cruz.

So I decided to deal with this problem. So the next day I went back to work with this new sense of mission to make myself unnecessary to my company completely. So the next time I walked in the door, of course somebody within 5 minutes asked me some question. Hey Derek, there is this guy on the phone and he wants to know how to change his audio clips. So anytime somebody asked me a question, I would call everybody together, everybody that was available in the office and say, okay everybody come here, come here. All right, Jeff here. Just ask me this question about this guy on the phone that wants to change his audio clips. So for future use, and somebody please write this down. Okay Lindsey over there, could you please open a text file and write this down please. Here is what you do if somebody wants to change their audio clips and I would just tell everybody and then I’d kind of pick some random person in the room and I’d quiz them. I would say okay, Kristen, what did I just say? What is the policy now if somebody wants to change their audio clip? Okay Lindsey, did you get everything written down? Okay, we good. So next time anybody asks, you guys know how to answer it.

Okay good and then of course you know ten minutes would pass and there would be another question and I’d call them together again and say, okay here is the next question and I just did this until pretty soon, there were no questions left for me and everything that I was doing say like even the bookkeeping was still my responsibility. I would teach somebody else how to do it and it took about five difficult months but pretty soon, I was not needed. I would show up at work and I would sit there doing my programming and nobody would really ask me anything all day and eventually I stopped going to the office just to see what would happen and….

Natalie:

That’s brilliant. That’s seriously outsourcing yourself out of the job.

Derek:

Yeah and it was wonderful. So eventually even though I was still living in Portland Oregon where the business was based, I would call into the office and you know, Daniel would pick up the phone and I’d say, hey Dan how is it going? It’s good. I’d say, everything going okay? He’d say, yeah man, we’re good. I say, do you need anything? I mean everything is fine? And he goes, dude, we are all set. I’d say, okay. Well I am at home if you need anything, okay. So if there is any trouble just let me know and he is like, we are cool man. And so that’s when I moved to Los Angeles.

Natalie:

Right and you just set up a different life really?

Derek:

Yeah I was like okay, you guys are there. I am down here, you do your thing. I am the owner and I will spend my time programming the future of what this business will be but that was the point. It was like 2002. I was no longer needed for the day-to-day operations and that to me just changed everything.

I mean it is some work to get to that point to make yourself unnecessary to a company you own you know. You are the President of it. It’s tough to do and I think it involves a little bit of a mentality of shrugging things off as good enough. Do you know what I mean like every now and then somebody might not handle a client quite as well as I would have done it myself but oh well, good enough. You know, it’s you have to have that feeling of like, well you can’t do everything. You can’t micromanage every last little thing. So at a certain point, even no matter how much you care about your business, you do need to learn to shrug off some things as good enough.

Natalie:

Definitely I love that because I’ve talked about that here in the podcast before that perfectionism is really another form of procrastination and I met lot of people in the last few weeks especially with the New Year until I just said wow! I just don’t want to release it until its perfect and I am always that person going on, I get why that is but you cannot do this. You are never going to stop anything if you wait until its perfect because nothing is ever perfect.

Derek:

Yeah and so I think you are hinting at – you want me to kind of tell the big – how the things ended is that actually the book goes into more detail if you are interested but things actually got a little ugly at the end of 10 years of me running the company. Couple rotten Apples spoil the barrel as they say where there are couple – there were employees inside the company that very well intentioned - that unfortunately kind of destroyed a lot of the internal culture of the company so that like for the first 8 or 9 years, everybody was focused on pleasing the customers and something in the last year or two changed where everybody became very focused on the internal politics of the company and I just hated what it had become and I just hated doing it and even though technically I could have just remained owner and just collected the money, I just didn’t feel good doing it anymore.

For the first time ever, I considered selling the business and Seth Godin actually had this interesting bit of advice when I told him my dilemma. He said, if you care, you should sell because if you care about your clients, you are actually doing them a disservice right now by remaining at the helm of the company that you don’t want to grow or don’t want to manage. You are avoiding it and that’s doing your clients a disservice. You really should at this point sell the business so that somebody who is more actively interested in improving it can own it and he was right as always.

Natalie:

God damn Seth and his…

Derek:

Yeah. So in 2008, I sold the company which is something I thought I would never do. I thought I was going to just thought this was my baby and I was going to do it till I die but yeah in 2008, I sold the company, walked away, cut all ties and I’ve been doing a bunch of different stuff since.

Natalie:

And sold it for a fair amount for you like to discuss that on your blog obviously which has allowed you to go on and do other stuff.

Derek:

Yeah.

Natalie:

So around 22 million but you actually gave the proceeds to a charitable trust?

Derek:

Yeah.

Natalie:

All of it? Absolutely, all of it or did you keep the tiny little bit for yourself so you could survive?

Derek:

Well to be fair, CD Baby was already making about – between 2 to 4 million dollars a year net profit by the time I sold it. So that was – and I was the sole owner. So I already had millions of dollars when I sold the company. That’s why I was able to just give all of the proceeds away because I was just like I don’t need it. I am not going to – like I literally would almost have to be an idiot to burn through $20 million. I don’t even know how I would spend this. So why take it?

Natalie:

I think this is where I think going, I could spend a few there. Well I heard that Trust has put it towards some great stuff with regards to music education.

Derek:

Exactly yeah.

Natalie:

So neat story and I think that’s just one of the things that really sets you apart from people particularly in your book as I said Anything You Want, and I will link to that in the Show Notes which will be at suitcaseentrepreneur.com/79

Derek:

Well the funny thing is I think if I am talking to MBA type people, most of them probably can’t relate to the stuff that we’ve already talked about like me not wanting the business to grow or giving all the money away but actually I think you and I are quite kindred in many ways and I think that fans of what you do will get this thing about valuing freedom over money. You know money buys you freedom but at a certain point, you have to decide which is the most important thing. More money or more freedom. And if you life is organized around having more freedom, then things like having a smaller business instead of a bigger business makes sense and the idea of keeping things midsized and not doing an IPO and not taking on investors, it makes sense because that’s the freedom choice. You know, so I’ve always been oriented that way too and I think that’s – you and I have always bumping to each other in the same circles because we both have that same value.

Natalie:

Yeah definitely. Freedom is for sure my highest value and it’s an interesting point you brought up because I’ve had my good, good friend Natalie McMail on this podcast before and her intention is very clear. She wants to make her first million by the time she is 30 and I am wholeheartedly supporting her doing that and I know she will because she puts her mind to stuff when she does it but when I was looking at that, I was like that doesn’t interest me at all. I would much prefer to have a million dollars worth of experiences by the time I am maybe 40 because I have missed the 30 right now. And so this is really interesting to see a little bit like what you are talking about the CD Baby, you weren’t this person who even intended to start a business and then you weren’t one of these people who was pushing for an IPO or to really scale that. It was always about what you wanted to do and how you can make an impact and how you can ultimately have freedom but also I guess in the end, the successful business is still be a musician.

Derek:

Yeah.

Natalie:

So I really like listening to people’s different points of view and if it’s possible I just love to kind of come across to some of the main strategies or maybe lack of strategies or the great advice that you give in your book and then we will come on to what is very exciting and very relevant but there are couple of things I guess I would like to know some of your favorite chapters within the book. What you think would be most relevant to the listeners of the Suitcase Entrepreneurs given that they are freedom fighters and they are generally you know either in business for themselves wanting to figure out this online marketing game and how they can really make an impact and add a ton of value and obviously do it from anywhere or they are inside hustle and breaking out of the career aspect to go in and start their own business. So I think they are going to learn lot from you but what would be maybe the three favorite takeaways from your book that you can share with us?

Derek:

Oh boy! The first one we did already which was how to make yourself unnecessary. It’s such a hard thing to do. It’s so hard. It’s just such a different mindset.

You know we’ve all probably heard of the book Rich Dad Poor Dad which is a terrible book in many ways. He’s really just so full of crap and it’s so poorly written and it is just – he’s just shot out another 25 books after that that’s just filled with nothing but every now and then, there is like a little gem inside of his books and there was this quadrant thing about distinguishing whether you are an employee, self-employed, a business owner or an investor and the key distinction that most people never thought about the difference between is self employed versus business owner. And his definition went like this. He said, you know you are a business owner when you could leave your business for a year and you come back and it’s doing better than when you left.

I remember reading that at that time when I was really stressed out with CD Baby and I had 80 employees and all that. I read that and I went, yay! That’s what I want because self employed means like if you take three months off to do something else, you are not making money that three months but to be a business owner means like you’ve set up a system that runs without you. So I think a key way of thinking for anybody listening and I am sure you’ve touched on this many times is that kind of systems thinking. So not just how to get people to pay you for your time for things you are doing but how can you build a system that works without you or you are the kind of the owner, builder of the system but not required for the operation of the system.

Natalie:

Yes definitely I love that and it’s funny you’ve mentioned it because I’ve got my business and people have been listening to this podcast of – heard me basically explain how I have been removing myself from the business literally firing myself with my great team but I have definitely noticed coming into the New Year with the high fly club which I love, it’s a recurring revenue stream with a great group of club members, however it’s more active use of my time because I really wanted to be – I was almost going to say perfect but I am not but I wanted to be the best I can be and so initially I want to put in my time and effort to make that happen and then I will systemize it more so there is still the personal connection but I am doing less of the backend but I realized that I dropped myself right back into doing a lot of the work again just because when I start something personally I like to get it going and then I can hand it off but I was quite weary as I was watching digital product sales come in and my workshop sales come in and all of that didn’t really require ton of effort aside from you know, sales funnel and a lot of work that I’ve done over the years of building my credibility but I also – that’s what’s just happening without me doing much and yet over here, I am doing all the stuff to make this happen and it was a really good point to just reflect and go okay, less of the Sisson, more of this lifestyle, enjoyment, making an impact but also not being that self employed entrepreneur.

Derek:

You made a really good point. I forgot, but you are right. Whenever you first start a system, it’s almost the duty of the builder of the system to be inside the system themselves for a bit to make sure that it works as planned. It is like the idea of the baker that bakes the pies herself at first before showing someone else how to bake them. Theoretically I guess we are all probably self employed at first when building a system but I guess as long as you’ve got the vision that you are going to remove yourself from this. The other you asked about three takeaways from the book.

So I think the third and most important one in the book at least is, this idea of morphing your world to fit your personal preferences. It’s not talked a lot about in business conversations this idea of different types of businesses or different types of approaches for different types of people, right. So it sounds obvious but for example:

I learned the hard way that I really don’t like working around other people. I just do my best work when I am completely alone and I don’t even mean like sitting in the coffee shop. I mean completely alone. That’s how I like to work. That’s when I feel like I could just work for 16 hours a day, I feel energized, I feel at top of my game when I am sitting in total solitude. If there is even another person in the room, it’s like it dreams me somehow which is funny because my girlfriend and I compare that she is the opposite. She feels drained when she sits completely alone. If there is even just another person in the room somewhere, she feels more energized. So she is the type that would thrive in coffee shops, I am the type that would rent an office somewhere by the month just so I can be alone in a room.

But anyway, so now that I’ve learned this about myself, the challenge is to shape my life this way even though norms and conventions and standards push you into things like having employees and having an office and working with other people and collaborating and having a co-founder, all of this stuff, it’s almost become a given that of course any successful business needs a co-founder. Y Combinator always talks about that that they almost don’t want to fund anybody unless it’s got co-founders or of course you need to be with people in the same room because that’s where the best work happens and I disagree with all of that. Maybe that’s true for most people but for me, I just love sitting alone.

And then it makes you even challenge notions like being in a big city. It’s almost a given. Well of course, if you want to be successful in business, you need to be in a city. That’s where business happens but then if you look at yourself honestly and realize that you work the best in solitude, well then why would you pay you know five times the rent to live in a little box in a big city when what you really want is to be working alone. So….

Natalie:

Definitely. Fair point indeed.

Derek:

I think it’s really hard to keep shaping the world to your preferences like this and it’s not about challenging norms for their own sake. It’s not even about disrupting or any of that. It’s more just about being more sincere and honest about how you want to live and work.

Natalie:

And I love that you brought that up because I am back home in my home country New Zealand right now and I know that you’ve now that you are in New Zealand and I went and I watched the action and exact place, but you are in a beautiful part of our country and it’s been funny coming home because I know a lot of people have kept asking, aren’t you sick and tired of living in the suitcase, aren’t you sick of being on the move and all these things and there is definitely a time when for me, I am like yeah, I am but most of the time, I love that. Otherwise I wouldn’t be doing it and it’s almost like I find a kind of a constant re-education of people who can’t see why that would be a fun way to live your life or can see that it’s a great way to live your life like not necessarily the suitcase part but the freedom to live anywhere and want to almost stop you from doing that because they are a little like, they’d like to be doing it and I think well, why does she get to have the fun. So it’s quite interesting because it’s like either educating people on that or challenging their beliefs and assumptions about what is normal. Everybody here seems to want you know marriage, kids, the house, the car and I totally understand that but when there is somebody like me who doesn’t want that, yet they find that it’s kind of difficult. They can’t plug you into a hole that you are like the square peg in a round hole.

Derek:

Yeah.

Natalie:

And they are trying to force you in there and I am like, I am not going.

Derek:

Yeah.

Natalie:

This is an old feminine way to live, so…

Derek:

Well there is a cute story of a bunch of – what was it, a bunch of musicians I think were on their way to a gig. It was like a New Year’s Eve. I think it was like snowy out and they are all like already dressed up for their gig. I think it was like a big band. This isn’t a jazz or something like that and then the bus breaks down like 2 or 3 miles from the gig and so now, all the musicians have to grab their instruments out of the bus and they are slogging through the slush and the snow on the way to the gig. It’s like a 3 mile walk and then on the way, they pass this house. It’s got a fire inside and there is this happy family sitting by the fire and carving at the Turkey dinner and eating and just looking like so happy and content. They are inside their warm home by the fire and the musicians are passing this house and few of them look inside the window and one says to the other, “Jeez, how do people live like that?!”

You know, it’s like it’s true but we all have these different values that some want security and adventure is something to be avoided and some want adventure and security is something to be avoided. I have a real aversion to my comfort zone. Whenever I find that I am in my comfort zone, it actually makes me a little uncomfortable. I have really spent my whole life trying to stay on the outside edge or completely outside my comfort zone so much so that that’s how I like to live and whenever I feel like to like I have mastered my environment or I am too comfortable, it makes me a little itchy and irritable like it’s time to go out and push myself into something new.

Natalie:

That’s so funny because I am actually the same. When I am back and I do really like being back in a familiar environment and having access to you know printers of all things at office and you know things just like food that you know stuff and then a comfortable, wonderful house like my parents internally but then there is this part of me that’s like uh I need to move on, I need to go and it’s not this desire to run away from anything. It’s just this that I know that when I am on the move or I am experiencing different things, that’s when I am growing, that’s when I am enjoying it more because at any time, I can what I would call settle in and enjoy comfort and I can do that at any time in my life and right now, well I have the energy and I suppose, I am youth, I can sort of cut wheels and handstands and move good things I like to do as much as I can during that time which leads me into your next venture which is something you just put out there again. I was super excited to be involved but thank you for choosing me as the Author of the Vietnam Guide but you’ve come out with these cool – what I would describe as the lonely planet guide for business. So they are not travel books but they are kind of like the absolute all encompassing guide that you need to know how to do business or start a business in Asia.

Derek:

Yeah.

Natalie:

So what on earth prompted you to create Wood Egg guides and what are you and I think it’s very relevant to my listeners. They might be I’d like to start a business in Asia like what is the fundamental decision behind these guides?

Derek:

Well first, you are right. It starts from something that your listeners would get because I am one of them. That it’s this digital nomad kind of the type of person who for whom the idea of moving to Thailand and running a business there is a real possibility you know or at least a very possible daydream that you want to let it bounce around your head for a while.

So for years, I’d been reading about how to set up businesses in Singapore or how to immigrate to Indonesia or something like that. I’ve been learning little bits and pieces about it and then three years ago, four years ago I moved to Singapore and I’ve been living in Singapore for a year and I became a permanent resident by the way. So I really signed on full on like I filled out tons of paperwork and it took 10 months’ processing but I became a permanent resident of Singapore and I just intended that that was going to be my home base for the next 20 years or so.

So I wanted to get to know my new neighborhood right and I knew nothing about the Philippines, I knew nothing about Korea except for Gangnam Style and Samsung or something and I knew nothing about Cambodia except for the killing fields and I knew nothing about Indonesia at all. So I really wanted to get to know these countries that were my new neighborhood. So at first, I thought a way to do this would just be to travel around a lot. Right, so go book a flight. You get off the plane and you go look around and you get to know places, you talk to people but I found that that was a very diluted slow form of learning like I was just walking around Indonesia, learning things and talking to people and I felt like, there’s got to be a more concentrated way to get to the heart of the matter.

I don’t want to just have random conversations, I want to have deep conversations like I want to ask some difficult questions and talk to people that know the answers like I want to understand like what is the cultural difference between Indonesia and Malaysia for example. They are so similar but so different like what is it like can you help me put my finger on like, what do Indonesians think of Malaysians, what do Malaysians think of Indonesians.

Natalie:

Yeah it’s been fascinating when I was going through the research to look at that.

Derek:

Yeah because sometimes we define things by how they differ from other things, right. So all of this was like very haphazard and casual and I was just walking around getting to know things and then I felt that I wanted to learn faster, deeper, better and they say that the best way to learn something is to teach it. So that’s why I decided to start making these series of books and the big idea was to make an upfront 5 to 10 year commitment to do these books every single year. Like you mentioned at the beginning of the call that perfectionism can keep you paralyzed. So I decided to just get over the hump and just put out the first guides even if they weren’t that good and commit doing an annual improvement process and every single year, I would improve these guides and the second year, they would be good and the third year, they would be really, really good and by the fourth or fifth year, they would be really, really great but the whole point was to just get it started and start doing it. So the first year, I just went to Elance and I had written 200 questions that I wanted the answer to in every country. Questions like what are the laws around hiring or tell me something about marketing. How do small businesses market themselves in your country or how can I become a permanent resident or how can I hire foreigners. Questions like that. Actually a lot of them were cultural questions. I wanted to get to the heart of understanding the cultural differences and understanding the mindset of a place. So I wrote up these 200 questions and I just went to Elance and searched within each country and just found business consultants in each country and my favorite thing I did was hiring three people in every country to answer all 200 of these questions three times over. So now for every single question, I had three different answers and that was key because I didn’t want the book to just be one person’s opinion. I wanted it to have a variety of opinions. So for every country, I would find one local person, one foreign person that lived there and then one other person and all three of them would answer the question three times over unaware of each other’s answers and then afterwards, I bring in a writer to combine those three different answers into one single essay and that’s how the books were made.

Natalie:

Which is neat because from the writer perspective, when you say there were 200 questions, I was like what the heck! Like from a financial, cultural, economic perspective it was a full on episode to get that written and it was really fascinating sifting through those various perspectives because sometimes it would be completely different like not so much around the cultural norms like how should you greet somebody when you are in a business meeting which was great to know. Well I suppose once agreed but sometimes there would be ones that were pretty critical like where would you go to get your business forms and there would be just totally different answers. So it ended up becoming like a research into the research answers and really trying to figure out which of these people was consistently giving reliable information that I could shape and craft which became a little bit of a game which was fun. And so this year, obviously you’ve done the 2014 Wood Egg guides. You have all the countries in Asia. It’s pretty substantial and you’ve put together a memo for it, a mingle of thought a little bit like Seth Godin would call it which includes all of them which is not. So people can buy these on Amazon right?

Derek:

Yeah I couldn’t believe it when I put together that 17th book. It was something I’ve been day dreaming of doing but I wasn’t sure how possible it was going to be to do and then I guess I spent a few days and did a little programming and I’d put the book in a new format so it combined all 16 countries. The key is that it’s – it’s in a really interesting order now. I don’t know if you had the chance to check it out where each one of those questions now like what did you say – how do you incorporate your company. You read the question first and then in alphabetical order each of the countries answers are given in order. So now you can pick any question or topic that’s of interest to you and go compare the different answers of different countries. So it helps for people that are thinking of maybe setting up somewhere in Asia or thinking of moving somewhere in Asia and they want to read all of the different countries say approaches to immigration so you can say like how can I become a permanent resident, read the answer for 16 different countries and see, of those which one you might be more likely to be a permanent resident of or which one seems easiest to incorporate in.

Natalie:

Which I love because when I was doing the writing, I was like oh I’d actually really like to know this answer for Singapore for example but at that time, I didn’t have it. So I think that’s great and I am really excited because as we talked about before, jumping on, you know this is a new area. It’s very niche. It’s not everybody is going to want. This guy that basically helps them to start a new business in a new country but I love that you know. You’ve started with this great continent, one that’s very appealing to online entrepreneurs and digital nomads just because of the ridiculously low cost of living comparative to elsewhere, the ease of lifestyle, the kind of what I like to call the wild west in terms of how you can live there pretty freely and there is less regulations etc etera in some countries, not all of them.

Derek:

Yeah.

Natalie:

So do you have plans for expanding into other continents?

Derek:

Probably. What I will probably do, I mean I had never planned on it. It was really as you know, just like a personal project for me to get to know my new neighborhood. Right, it’s like I want to understand these 16 countries. So it wasn’t market driven, it was personal driven but you are right. Since releasing the 2013 books last year, I started getting emails especially from people in Africa, believe it or not like people saying you know, there are no books written about Entrepreneurship here in Zimbabwe or something or Tanzania and we really need this and there is a lot of information to share here but nobody is writing about it since it’s such a small market. I think you should do this and at first, I told like the first dozen people that I asked, I said, no, no, no, no interest. I am just living in Asia, I want to understand Asia and after a while, I thought what probably makes sense is for me to make this kind of like a franchise model where I’ve spent thousands of hours building that backend software that made these books. So and I’ve built up an audience. So maybe I could let somebody that really wants to write the guide to Brazil, let them use my software, use this kind of template, this system, gather their 200 questions and 600 answers and a writer and an editor and put together the Wood Egg guide to Brazil with somebody else could be in charge of it and they could just use my system and then we would co-own the project together. That’s what will probably happen.

Natalie:

I really like that. It’s that gifting style of sharing and adding a ton of value. So I am not going to compare to Seth Godin but he often talks about this which I love. So I think that would be neat. It would be fantastic to see Wood Egg guides around the world and particularly Africa since you mentioned them just because there is so much happening there and it’s such – once again, they call it the dark style but it’s such a wild west and I think it’s such a fascinating continent with a heap of opportunity and a lot of need for entrepreneurship and skills and training around that. So I would definitely be up for going over to investigate and write one of those.

Derek:

Good.

Natalie:

Put my hands up. And also about just various things that you have going on in your mind that often contradict what other people are thinking. So as we talked about, it’s in line with what I like to do and you definitely challenge the status quo. So we will link to everything that we talked about and at suitcaseentrepreneur.com/79 but for time being, where can find people you Derek so they can say thank you and learn more about you.

Derek:

Well my last name is Sivers and my website is sive.rs and everything is there. Feel free to – if you made it this far, 45 minutes into this podcast, well seriously feel free to email me. It goes directly to me. I didn’t outsource that. It’s all me and I am happy to hear from anybody that made it this far through the show.

Natalie:

So thank you so much for your time and generosity and just for being on the show.

Derek:

Thanks Natalie.