Welcome to The Disruptors podcast about the future of all of us, where we look at the technologies, trends, and societal norms shaping our collective future. Here, the world’s top minds share their insights and predictions on the convergence, direction, and ethics of exponential technologies transforming life as we know it. You can learn more and stay up to date at disruptors.fm
I hope you’re ready for some life advice on happiness and much more from somebody who doesn’t try to give advice. This one was fun, this one was informative, and this one was valuable for me.
We’ve got Derek Sivers on the program, the CD Baby guy. He’s a serial entrepreneur, blogger, author, musician, and motivationally cool guy.
He revolutionized the music industry pre-Spotify era with CD Baby, sold it for $22 million, and he doesn’t want me to tell you, but he donated all to charity without having taxes steal almost half of it. He’ll tell you how in the episode. Derek also created a viral TED Talk called “How to Start a Movement.” He blogs about entrepreneurship, life, and stoicism at sive.rs He’s the author of Anything You Want: 40 Lessons for the New Kind of Entrepreneur.
In today’s episode, we’ll discuss human beings’ competitive advantage over robotics, software, and AI, Derek’s “F Yes or No” mentality to life, how you can use it and when you shouldn’t, Derek’s best pieces of advice for every aspect of life from entrepreneurship to sex, parenting, and more, why Derek doesn’t get very excited about new technology, and the importance of minimalism.
Derek Sivers is a really interesting guy. We go everywhere in this interview, but most importantly, we talk about mindset happiness. This is something I need. This is something you need. This is something we might as well jump into.
Without further ado, I give you Derek Sivers.
So Derek, you have the world’s best quote, “Fuck yes or no.”
We have to start there because I try to adopt that where I can in my life. Where is the genesis of this phrase?
The story behind it is that I said “yes” to go to a conference in Australia even though I was living in New York City and had already said “yes” to too many other things. When it actually came down to it, I was just like, “Man, I don’t really want to fly the 29 hours to Sydney to speak on stage for an hour. Why did I say yes to this thing?”
Then I realized that there were things in my life that I would rather do all the way instead of having a bunch of things that I’m half-assing.
I realized life would be better lived if we said “no” to almost everything so that your time was actually spacious and empty. That way when you found the occasional thing that you were really into then you’d have the space in your life to actually dive into it.
So I ended up cancelling the conference in Australia. They didn’t care. They quickly found somebody else to sit on stage for an hour. I realized I should apply this mindset in a lot of other ways in my life.
The key point is leaving your time empty enough so that you’re not overcommitted. That way when you do find something that’s worth doing, you do have the space and time in your life to throw yourself into it completely.
That said, ever since Tim Ferriss started quoting my “hell yes or no” thing, some people have said to me, “Hey man, I love this ’hell yeah or no’ philosophy. I’m applying it to everything in my life.”
My response is,“Wait, no, hold on a second. It’s a specific tool for a specific situation. It’s a tool if you’re overcommitted and overwhelmed. I don’t think that a 22 year old straight out of college should be applying ”hell yeah or no“ to their entire life.
There are times in your life where the best strategy is to say ”yes“ to everything. Life can be like lottery tickets — you never know what thing is going to hit, so buy them all. ”Hell yeah or no“ is more of a philosophy for when you’re overwhelmed and overcommitted.
It’s a tool, and if you’re a hammer, everything looks like a nail. You’ve gotta be a little bit careful with that.
You sold your business, CD Baby, and there’s all kinds of stories there. But what’s life like after you sell a business?
I was lost and not quite depressed, but maybe it was just that it was hard to find something that felt worth doing. Also, my personal situation at the last year or two of the company was that I had 85 employees that reported pretty much directly to me. We didn’t have much of a hierarchy, so I was feeling personally overwhelmed and sick of having responsibility.
The next year or two after I sold the company, I was actually legally looking into how to disappear. How to change my name, how to go off the grid, “fuck off world”, disappear. I almost did it. I thought it would be cool to change my name and become an open source programmer somewhere, sitting in Switzerland, enjoying the quality of life, and programming some open source projects for fun.
Since I didn’t need the money anymore, and I had no responsibilities, I was on the verge of doing that.
I was 38, and I really felt my greatest achievements were behind me, like my gravestone would say, “Here lies Derek Sivers who made CD Baby and nothing since.” I really thought this was how life was going to play out.
Then it took about a year and a half, maybe two years, but I came up with a better goal. To answer your question, that’s how it looks after selling something or getting rid of something that was your sole identity.
Was that pre or post stoicism for you? I know that’s a big part of your life.
I didn’t even hear the word stoicism till as in my 40s. Tim Ferriss told me to read this book and I said, “No, dude. Some ancient Greeks? Fuck that [laughter].”
But then I said, “You know me well, alright.” I read it, and stoicism was the way that I’d already been living since I was a teenager, but I just thought this was my weird, quirky approach to life. I didn’t know anybody else did this. I didn’t know there was a name for it.
I just thought this was Derek’s weird approach to life. So when I read A Guide to the Good Life, this Stoicism book when I was 42, I thought, “Oh, my god! Somebody thought about this stuff before. Somebody has a reason for living this way!”
I thought it was just my quirky philosophy. So I wouldn’t say stoicism is a big part of my life. I don’t really buy into any -isms and I think it’s kind of creepy when people do. Where do you live — Atlanta?
I don’t know if there’s this yoga culture there, but I used to live in Santa Monica, California, and you’d see these people that would start doing yoga and then they would feel this need to buy all in. They’d start decorating their homes in a yoga kind of way and they’d say, “namaste” a lot. They’d start drinking and eating different things
Lots of kombucha [laughter].
Yes [laughter]. So, no, I never like buying into any -isms. I pick little pieces that I like when I find things I enjoy, but no, I’m not into Stoicism.
Speaking of buying into -isms, that’s one of the biggest problems we have. People are buying into all of their -isms. We have very separate groups of -isms.
There seems to be a need to do that. People want to be in a tribe and then they find one. They want that sense of belonging and identity to say, “This is who I am. I’m a member of this tribe.”
It doesn’t work for me.
You’ve got a Linux and a Mac. That almost makes you a terrible person in the eyes of some.
[Laughter] Even worse. My main operating system is OpenBSD. I’ve tried them all, and this is my favorite. I don’t even use Linux.
Interesting. You’re alienating everybody.
Thank you. [Laughter].
That’s OK. You’re a musician and you’ve made it so you can kind of do that.
So I want to talk a little bit about the era of music. Back when you started CD Baby, what’s the story for people who don’t know and how have you seen it all change?
So the year was 1997. Amazon was a bookstore. All they sold were books. PayPal didn’t exist yet. There were two or three websites online where you could buy music, which meant buying CDs. MP3s didn’t exist yet.
Music Boulevard, CD Now, and Tunes.com were the big three online stores where people could buy music, but none of them would take your music if you were an independent musician. You had to have a major record label deal and be set up through the major distributors.
As a musician in 1997, I looked at this scenario and said, “This sucks. I just want to sell my music directly.”
Because there was no PayPal, no Stripe, or any of these services, the only way that you could accept a credit card payment on a website was to go through three months of paperwork and $1,000 in setup fees to get a credit card merchant account.
You had to incorporate and have a separate bank account. They actually sent inspectors out to my location to make sure I was a valid business. It was a lot of work. After three months of work, I had a credit card merchant account and then it took a bunch of work to figure out the programming in order to have a “Buy Now” button on my website.
After months of work, I had a “Buy Now” button on my website. My musician friends in New York City said “Dude. Could you sell my CD through your band’s website?” I said, “I guess...that’s kind of weird, but sure, OK.”
So I never intended to start a music store. I was really just selling my CD. Then friends told friends and then word passed around in New York and then in the independent music community.
Within a few months, my little thing was the largest seller of independent music on the Web. If you were a musician from 1998 to 2002, and you wanted to sell your music online, there was basically one guy who could do it for you named Derek in New York.
So my little hobby took off. It was a weird accident that grew really fast. Pretty soon, I had like 85 employees — way more than I ever wanted. I never wanted to start a business. I really still thought of myself as a musician and thought this thing was a big distraction. I did it for ten years.
In 2008, I was personally sick of doing it so I sold the company with lovely timing. I sold it in August 2008 and then this little financial collapse happened after. So it was really lucky timing, and I haven’t earned a dime since.
What was the deal with donating part or some of it to a charitable trust?
Yeah. I wasn’t going to be public about that.
We don’t have to if you don’t want.
No, no, it’s it’s too late now. I meant I didn’t do that for the PR, but about a year or two after I sold, in some little interview, somebody asked me, “So what do you do with all the money?”
I said, “Well, I gave it away.”
Here’s the deal. I sold the company for $22 million, which, in my mind, is more money than I’ll ever need. I think in order to spend twenty two million, you have to actually be a little bit stupid to buy Lamborghinis, or nine bedroom houses.
I just didn’t want the money. Before the deal was done, there were eight months between the initial handshake deal with an agreed upon price then months of paperwork with banks before the deal was all done. In that eight months of time, my tax attorney asked me this question about the money.
I said, “I’m just gonna give it away anyway. There’s no way I’m going to spend $22 million in my lifetime.”
He said, “Are you really serious about giving it away?”
I said, “Yeah, I’m just gonna give it all to charity anyway. I’ll keep a million for myself or something, but I’ll give the rest to charity.”
He said, “Are you really serious about this? You’re absolutely 100 percent sure you’re not changing your mind?”
I said, “Yeah!”
He said, “OK. If that’s true, we can structure the deal. So you give the company to charity. Now don’t give the $22 million to charity. Give the company to charity. When the purchasing company buys your company, they’re buying it from a charitable trust.
That way, the entire $22 million goes to charity. Instead of you getting $22 million in cash, paying $7 million in tax, and having $15 million left to give to charity, give the entire $22 million to charity. Put the company into a charitable trust and have the charitable trust sell the company.”
So that’s what I did. It meant the entire $22 million went to charity instead of two thirds of it.
Interesting. It’s a super cool approach for people.
Yeah. Like I said, I was never going to announce this, but since it’s out there now, I’ve gotten some calls from people that are selling their company asking for the details on how to do that. In the US, it’s called a Charitable Remainder Unitrust, but I think every country probably has their own version of this.
It’s a nice way to structure a deal. If you know that you don’t actually need the money, then you just give it to charity in advance or give the company to charity. To me, it also had a psychological benefit.
I knew some rich people that were anti-role models for me. People that, because they had $50 million in the bank, would blow it in stupid ways. I never wanted to be one of those people, so I thought it would be better to make sure that $22 million never touched my hands.
Let’s talk evolution of music. First of all, I saw you guys did around $100 million in revenue and sold for $22 million?
Something like that. It was a strategic purchase. The company who bought CD Baby was a CD manufacturing company at the time. Their evolution was that they had pressed 78s, LPs, cassettes, 8-tracks, CDs, and DVDs. Their entire business was based on manufacturing physical products, and so they bought CD Baby as a strategic purchase. Not just looking at the asset value.
So evolution of the music industry today, all the indies are on Spotify and YouTube. Is that a good thing or a bad thing?
I don’t know. We’re here talking disruptors. I think sometimes you catch yourself not thinking clearly. Sometimes you realize that you’ve lost perspective in life. Whenever I hear people talk too much about politics, or too much about blockchain, or too much about anything, it feels like they might have lost perspective on reality.
In 2008, my last year with CD Baby, I felt like I had lost perspective on the music business. I was so in my world of the musicians I knew in CD Baby that I was doing that thing that I hate...
If you ever go to a conference and you put experts on a panel and the moderator asks, “What is the future of the music industry?” If somebody’s business is selling video subscriptions, they’ll say “video subscriptions are the future of the music industry,” and if somebody else’s business is selling downloads, they’ll say “selling downloads is the future of the music industry.”
Everybody gets full of shit based on their incentives. They want to believe the thing they’re incentivized to believe. So catching myself thinking in a cloudy way made me decide to just intentionally ignore the entire subject of the music industry for the next X number of years.
So I’m still completely ignoring the music industry. I haven’t tried Spotify yet.
We haven’t had any good music since the 90s. It’s all good.
[Laughter] I’m intentionally ignorant. I’m unlearning the subject of the music industry and someday I’ll probably decide to get back and do it. Then I’ll have a fresh perspective without thinking I know anything.
I know you said after you sold the business, you had a pseudo depression. Not exactly depression, but one of the things that you said you wanted to talk about on the interview and I think would be interesting for people, founders, scientists, people trying to do things and struggling, is overcoming bad feelings and feeling like shit.
What are some of your strategies for that? I feel like you’ve learned a lot and have been through a lot.
Don’t overcome it. Dive into it. Question it.
A lot of people ask me questions like “How can I overcome my fear at starting my own business?”
I say, “No, don’t overcome it. You should heed that fear. That’s a really good fear. You shouldn’t ignore that. You shouldn’t plug your ears and try to find a way to ignore it. It’s better to address the things that are bothering you instead of trying to leap over them.”
I dive into it when I’m scared of something. I dive into it and find out why. If something’s getting me down, I dive into it. I spend a LOT of time journaling — sometimes many hours a day if I’m making life decisions. Sometimes I spend three to five hours a day just writing in my diary for days or months on end.
A lot of reflection helps. Some of what I’ve learned has in life has come from input, but most of what I’ve learned in life has come from reflection.
It has to be because all of input is really just your filters on what you’re seeing anyway. So you’re reflecting on what you’re seeing instantaneously.
Right. Even when I think about the whole concept of speed reading or people reading a ton of books, I think, “No, no, no. It’s better to read less books and spend more time reflecting on everything you’ve taken in.
Ask yourself questions about it. Go through it twice. Question if that’s really true. Question how it applies to you. Look at each little thing that you’ve taken in. If you think it has value, find ways to apply it to your life.”
I would agree and disagree. I think that’s true on a bigger picture side of things, but if you had the opportunity to listen to three different podcasts on execution marketing, sales, things that are more action-oriented, I think you’re better off getting more and synthesizing it versus the “less is more” approach.
I think that only works when you’re dealing with big picture thinking and ideas because otherwise you don’t need it.
Good point. Good distinction here. I like that.
You said that when you started out, CD Baby had no money and you had no idea what you were doing. Now, you think that that’s a good thing — the advantages of no funding versus venture capital.
Yeah. Again, I don’t claim to be any kind of guru or expert on startups. I don’t know if you, or anyone listening, has ever had this happen where you get incorrectly categorized.
I told you my history. I was a musician selling my CDs and then my little hobby took off even though I didn’t want it to. When I sold the company and word got out that I had sold, people put me into this category of tech entrepreneur and then wanted me to start giving advice for other startups.
I fell into it for about a year and then I said, “Wait a minute! I don’t like these other entrepreneurs. My friends are not investors. I never had investors. I’ve never invested in anything. This whole world that people seem to think is the world of entrepreneurs, startups, and investors, I never did that.
When I got into conversations with other entrepreneurs, they were often talking about their second round of angel blah blah blah and series A, and I didn’t even know what they were talking about. I still don’t.
I realized I was incorrectly categorized. I don’t have any insights into startups and maybe not even into entrepreneurship, and as a musician that started a little thing, all I can talk about is my my story. All I know is just what happened to me.
In my little world, in case that story is useful to somebody, I found that not having any investors and not looking for investors was a competitive advantage because I started the company with $500 and it was profitable in its second month.
I lost money the first month, and during the second month it earned more than $500, so every single month was profitable since and I kept it on that basis.
When people asked me if I wanted to spend money on advertising or promoting, I said, ”I’m only going to spend $1,000 if it’s going to earn me $2,000 next month. I’m not just going to do brand advertising where I throw thousands of dollars at something in hopes of getting my name out.
I need an immediate return. I’m not going to buy a $1,000 chair unless somehow that’s going to earn me $2,000 next month, which a chair never will. Instead, I just would use folding chairs and get a plank of wood on some cinder blocks as a desk. You also have to remember, this was the first .com boom of the years 1997 to 2000.
People would pour money on you if you wanted.
Yeah, and they asked. In fact, I taught customer service that if anybody calls about investing, just tell them no, don’t even send it to me. Same thing with people wanting to buy the company.
For 10 years, I had people wanting to buy the company. I told customer service to shoo them away. I’m not interested. The point is, I saw a lot of friends who did get investment blow away too much money. Almost like the jokes where you hear that the military spends $50,000 on a toilet seat.
I saw startups doing that kind of stuff — spending 100 times more than they needed to on things just because they had it. Not having it makes you lean and smart.
Where did you get that philosophy from? Because you seem relatively minimalist now. It seems like something that’s a part of your life.
Part of it was a side effect of moving a lot. I’ve moved many times. I moved to New York City twice, I moved to upstate New York to Woodstock, then I moved to Portland, and every time I would bring all of my stuff with me.
After doing that a bunch of times, here’s my recipe for how to be a minimalist: Put everything you own into storage temporarily. After a few years of not needing it, realize you don’t actually need it.
When I first moved to Portland, Oregon, CD Baby was in full swing. I was so busy with it. I took all of my stuff from my house in New York, I put it into storage intending to come back to it a month or two later when I found a home to move into, but I never did find a home to move into.
I was staying in my grandmother’s guest room, and life was so busy that four years went by and all that stuff was still in storage. After four years, I thought, “Well, if I haven’t used it in four years, I’m probably not going to use it in the next 40 years.”
So I gave a surprise bonus to my 85 employees. I said, “OK everybody, I’m opening up my storage space. Everybody go take one thing that you want.”
Somebody took my guitar, somebody took my keyboard, somebody took my speakers, somebody took my mixing board. I just gave away everything I had to my employees.
I imagine you got some major bumps and employee excitement over that.
I wish [laughter]. People get entitled. I learned the hard way that if you want to give people a present, you don’t give them too much up front and then less later. You have to give incremental improvements. People look at the trajectory. They don’t look at the total amount they’ve received. They look at the trajectory of how it compares to what they’ve received before. So I made that mistake by being too nice up front.
And how it compares to others. You’re making $100k, but the next guy’s making $120k. Wait a second?
Anyway, sorry, we’ve taken some tangents here, but that’s how minimalism began for me, by getting rid of things physically. Then I found that as a life approach, the less you have, the less you do, the less you say “yes” to.
The starting question you asked me about “Fuck yeah or no,” the less you say “yes” to, the simpler life is, the faster it is, the faster you can change, the more peaceful it is.
I think about this metaphor of food and energy. I don’t know if you do this thing where, if you’re feeling really low energy, you think “I should get something to eat to give me energy,” but if you do that too much, then you get fat and it defeats the whole purpose.
Now you have even less energy because you’ve been eating too much. The problem you were hoping to solve has just become worse. I think people do that with stuff or even activities or commitments that they say “yes” to.
They think, “My life is a little boring. I want more stimulation. I need some excitement. Oh look, a new thing came out. I need that new thing. Oh look, there’s a new subject I can dive into, a new thing I can learn about, a new hobby.” They say “yes” to commitments.
They say “yes” to events, and pretty soon their life becomes too heavy. Now they’ve taken on too much and have too much burden. They’ve said “yes” to 20 things and they now have too many things. They’re less mobile and that drains your energy, which is the very thing that you were hoping to solve and get more of. To get more of this stimulation.
So instead, I found that minimalism all the way through, whether it’s stuff, whether it’s commitments. Keep them as small as possible. Even your identity — keep your identity as small as possible, like how you define yourself.
If you have a whole bunch of titles, “I’m an entrepreneur, I’m an investor. . .” The more titles and identity labels you give yourself, the more you’re burdened by them.
Even with programming, I like to write my own code do everything by hand. I don’t use frameworks. I don’t use software packages to write code. I just open up a simple text editor and I write everything by hand. So even tech wise, I don’t write a single line of code unless that line of code really needs to be there.
That’s why if you go to my website, it’s so damn fast because I wrote every line by hand and I won’t write a line I didn’t need to write. There’s minimalism all the way through my life. It makes me so happy. I’m talking you from this little cottage in Oxford, England, right now and when people come over to my house, they walk in and they ask, “Do you. . .live here?”
Is it a vacation? What’s the story?
Oh, no. I live here now. I am a legal resident of the UK. But yeah, my little house here has nothing in it. People come visit and they ask, “Have you moved in yet?” I say, “Yeah, this is all I got. This is just how I like to live. It makes me happy.”
I will clarify that it’s slightly harder with kids, but I definitely struggle with the what to focus on personally. I know a lot of entrepreneurs do. There’s so many different opportunities. How do you decide?
You say “no” to everything. Absolutely everything. Then do only the thing that you find that you can’t not do.
Granted, this is my strategy for me in my situation, in my life.
You have way too many people asking for stuff.
On the other hand, one of your questions, that you send to every person you interview asked if you were 18 today, what would you do and why? That would be a different strategy. I wouldn’t recommend saying “no” to everything if you’re 18.
What would you recommend doing?
I thought about this before our call. My advice to an 18 year old would actually be to master one thing. Anything. Getting great at any one thing teaches you how to focus, and it teaches you the skill of mastery so that you’re not a shallow dabbler.
For me, it was music, specifically playing guitar. When I was 18, I was a great guitarist. I was into that speed metal thing. My fingers were incredibly fast on a fretboard, but just that skill of mastering guitar taught me how to learn.
There’s a great saying from a jazz musician that said if you can learn music, you can learn anything.
I think that that applies to almost anything that you could master. If you learn to master anything, then you’re learning how to master anything, right? It teaches you the opposite of FOMO, which I think is POMO — proud of missing out.
It teaches you how to pride yourself on saying “no” to everything else, which is the path of mastery. The opposite of the mastery path is to be a dabbler where you just do everything for the first exciting week and then you try something else.
For an 18 year old today, I would pick anything that seems interesting, even if it’s a specific little niche thing like the web RTC technology or whatever it may be, and then dive into it completely.
Get known in that field and do it for many, many years, not just from your bedroom in Cincinnati, taking it as far as YouTube can take you and then calling it a day. But once you get to a certain level of expertise, finding the people that are the absolute masters at this, whether they’re in London, L.A., or wherever, and learn from them.
Even if it means that you need to move to that city to learn from the masters and dive even deeper into this expertise. Then, say you do this for a number of years. You’ve been doing it for five years or 10 years. When you feel that you’ve mastered this and you’ve taken it as far as you want to take it, then strategically you can make a sideways leap into another subject.
I think of the metaphor of a pole. You’ve climbed one pole very high and now when you want to switch to another field, you don’t go back down to the ground and begin again. You leap sideways onto another pole. Make a sideways jump to another field. That would be my advice for an 18 year old.
That’s pretty solid advice.
AI and robotics are emerging. Which of those niches do we avoid or steer clear of? Tell me a little bit more about this thought process?
Before our interview, you emailed me a question asking what technology or trend am I most worried about? So is this the same question?
Kind of. I know you’re big on the importance of human beings being an advantage. And yet some of that will be changing, so what do you think about that?
The competitive advantage of using human labor is that I feel that the year is not 2500 yet. We’re still in 2020, but everybody’s so focused on trying to be the next robotics genius and beat the game that a lot of people ignore the things that can be done by a human right now in the name of continuing to program and trying to develop some ultimate machine learning way of doing things.
Because of this, for example, they start these software companies that don’t pick up the phone because they say, “No no no. I’m going to automate all of this. I’m going to get voice recognition. So people will call and they’ll tell the voice recognition system what they want. My machine learning voice recognition system will direct them to the current way.”
I think, “Yeah, or you know, for $15 an hour, you can have somebody pick up the phone on the first ring. Doing that makes a brand loyalty that a thousand hours of machine learning can’t.”
I found this out not through a hypothetical theory, but in practice. At conferences, I would hear musicians tell other musicians why they like CD Baby, unprompted. I would hear this musician over here talking to this musician who’s not on CD Baby and the number one reason why they said they loved CD Baby totally blew me away.
It wasn’t my prices. It wasn’t my site. It wasn’t my service. It was basically, “Oh, dude, you should sign up with CD Baby. You know why? They answer the phone. You can contact them. If anything’s wrong, you pick up the phone and they pick up on the first ring. There’s no voicemail system. There’s no routing. You can reach them. This is the owner right here and you can email him and he replies. That’s why I’m with CD Baby.”
All these other things didn’t matter. In fact, I didn’t even mentioned in my history, but only two years after I started CD Baby, Amazon launched the exact same service.
So now your choice as a musician was you could either sell your music through CD Baby or Amazon and we beat their ass. We won. People chose musicians. Independent musicians chose CD Baby over Amazon almost every time because we had customer service.
You could call us and we’d pick up the phone. You could email the owner, and I would reply. So that’s what I meant about the competitiveness of human labor.
Also, there’s a cute little story about this. Also about a year or two after I started, one of these overfunded San Francisco companies was trying to make music algorithms to recommend songs. If you like this song, you’ll like that song. That type of stuff has advanced a lot in the last 18 years. But at the time, they were working very, very hard and spending tons of money to try and make this recommendation software. Apparently they had checked out a lot of competition.
When they came to CD Baby, they were blown away by the quality of the recommendations, so they asked if we could meet. They flew from San Francisco to New York. We met in some restaurant. They did this bullshitty chit chat for a while and I thought, “OK get to the point. What do you want?”
Finally, after 45 minutes, he said, “Look, we’ve been trying to make the ultimate recommendation engine. We’ve checked out the competition and whatever software you’re using there at CD Baby just blows us away. My God, your recommendations are the best in the industry. How are you doing this?”
I said, “Doing what?” They said, “How are you recommending that customers get this music if they like that music?”
I said, “I just listen to it!”
They said “What do you mean?”
I said, “I listen to everything that comes in. I keep some private notes. With my memory and my notes, I say, ’If you like this, you’ll like that.’”
They looked confused and said, “Well, how will that scale? What if you start getting 100 new albums a day?”
I said, “Then I’ll hire another person to help me do this. What’s the problem?”
They looked so confused by my answer, and sure enough, I did start getting 100 albums a day and pretty soon, it was two people’s full time job to listen to everything that came in, make private notes and recommend music. And that was it. I never did spend millions programming some software. I spent thousands paying some people.
We still have the world’s most powerful neural net right in our heads and we just don’t know how it works.
It is crazy. So many people on this podcast don’t think about that and I’m glad you brought it up.
I mentioned the customer service aspect first because I meet a lot of programmer nerds. I’m a programmer myself. I love talking to my fellow programmers.
But what’s funny is when they start a company, they think that technology is the solution to everything. They’re selling B2C or even B2B and service matters so, so much. People choose one company or another based on a single thing like getting a human reply instantly or somebody picking up the phone.
These are the things that make people choose one company over another, not the fact that you’ve gone server listener using parallel functional programming on the back end. Nobody cares about that. You care, but your customers don’t.
My account’s not working on Facebook. I can’t access it, and there’s absolutely no way. You can’t even submit a customer service report if you can’t log in because you’re not logged in. So that’s a whole other can of worms.
What technology or trend are you most excited about and why?
Most excited about? Umm. . .I’m not. I just moved here from New Zealand. How old is your kid?
When my kid was born — he’s eight next month — when he was born, I moved to New Zealand to be a full time dad for five years, which I did because of John Lennon .
Apparently, John Lennon had his first kid, Julian, at the height of Beatlemania and completely ignored him and he regretted it. So when his second kid, Sean, was born, he said he was going to take five years off. He told his agent to say “no” to everything and went off the grid for five years. From year 1975 to 1980, he was a full time dad.
I remember seeing that in the 80s as a teenager and thinking, “If I ever have a kid, that’s what I’m going to do. Once my kid’s born, especially those first five years that are really crucial, I’m gonna be a full time dad.” So that’s what I did.
He was born and we moved to New Zealand and I was mostly a full time dad for six years. We spent most of our time outside in nature playing in forests and beaches and climbing on the rocks.
Feet in the river and hands in the mud. It’s funny that most of my life for the last six years was being out in nature, which is timeless. I’d be playing with my kid in the middle of nowhere with nothing and nobody around, and the waves crashing on the rocks and the birds chirping in the trees.
I wouldn’t bring my phone or anything because it was just me and him focused in nature. And at the end of the day, he’d go to sleep. I’d turn on the computer and I was bombarded with “Trump said this and blockchain and blah blah blah.”
I would just go, “No. None of this is real.” To me, the real world is the physical world and my kid and my life. So I’d just turn it off again.
Things come and go. I’m not a geologist, but I started to appreciate the way that a geologist would see the world.
If you’re a geologist, mountains seem liquid to you and 1,000 years becomes your unit of time. So what’s going on this year? That little flash in the pan that’s gonna happen for a year or two just feels like a little firecracker going off. I’m getting a little preachy, but it shaped how I see the world. So I like that. I forget the name of it. There’s a name of some principle that says the longer a technology has been around, the longer it’s likely to be around. Remember the name of that?
I know what you’re talking about, but I’m not sure the name.
They used it for Broadway shows too. They found that the longer a Broadway musical has been running, the longer it’s likely to stay open. I think of that when it comes to technology.
What technologies am I going to focus my precious time on? I’d rather go deeper on the ones that are likely to be around the longest. Programming-wise, I’d rather learn C, SQL, and Lisp instead of the language that was invented this year because my time invested into the timeless ones will probably continue to be around for the rest of my life.
A technology that just launched this year? There are enough people looking at that. I can be competitive, too, so I think of this in terms of a competitive advantage. Everyone else is focused on current events, so I don’t need to be. It’s my competitive advantage to only read books and not read the news.
When everybody Trump launches a missile and the world’s about to end, someone will tell you, but otherwise, it’s totally fine.
Exactly. Anything short of that? I really don’t need to know. You don’t have to participate in their game — the game that everyone else plays. You don’t even have to play that game. You can just happily thrive in a timeless profession.
A lot of people have this anxiety for the future and they think, “I want to be ahead of the game. I’m going to master AI and machine learning. Nothing’s gonna get by me. I’m going to master blockchain inventions in innovations now so that nothing surprises me.”
But some things are timeless, like food, clothing, shelter. These are things that beings always need. You can have a wonderful life by mastering the art of chocolate and starting a damn good business that makes great chocolate. You’re going to have enough money, you’re going to be happy, you won’t need to anxiously read the news every day to see if there’s some brand new invention. And if you don’t like the idea of chocolate, you make a great tofu, or great shoes, or great wool clothing.
We talked earlier about the the advantage of the service mindset, focusing on customer service as your competitive advantage, not your back-end technology. I think of service things that are timeless, like entertaining, educating, waste management, even excavating. Somebody’s going to be digging holes [laughter].
People always need to be entertained. People always need to be educated. You can master any one of these disciplines that doesn’t require you to chase every brand new little magpie, shiny thing that comes up this year. And you’ll have a competitive advantage for doing so because everybody else is doing the magpie thing, and chasing every brand new shiny thing that comes along. Your competitive advantage is to not play their game.
I don’t know if there’s a better way to end the interview. That’s a great spot to start to wrap things up.
Do you want to ask me about the most valuable advice I ever received?
Yes! Let’s go for the most valuable advice. Either you can give it or you can tell it.
I am glad you e-mailed me that question beforehand because it got me thinking about it, and I ended up thinking about it for an hour or two. Let me ask you one quick question before we go for it. You’ve asked that question to a lot of your guests, right?
Do they usually narrow it down to one thing?
Some of them do. Some of them don’t. Usually it’s one or two things, or a theme. A lot of them do, though. But people also like to have an answer so it’s hard.
If you had to narrow it down to one or two things, wouldn’t it be so general, it’d almost be useless?
It would be unless you were speaking to a general audience.
I thought about it for a while and I realized that advice almost needs a target. Right? Some weirdo asked me the stupidest new age question I’ve ever heard.
He looked at me very seriously and said, “I want to ask you a very serious question.”
I said, “OK.”
He hit record on his recorder and he said, “How do you love?”
I said, “What? Love what?!” What a stupid question. It needs a target. How do I love nature? How do I love my kid? How do I love Miles Davis? What the fuck are you asking?
That’s a verb that requires an object to its verb-ness. So I was thinking about this question about the most valuable advice I ever received. And then I said to myself, “Advice about what?”
We can’t just assume everybody just wants to make money or get famous. So I wrote down a few for you. You ready?
Yeah. Let’s do it.
The most valuable advice I ever received about investing is to set it and forget it and just rebalance 5 minutes a year. When Fidelity analyzed all their client portfolios to see whose were performing the best and what they had in common. At the end, they found out the best performing Fidelity customers were the people who forgot that they had accounts there, and so they hadn’t even logged in in 20 years. They outperformed the active managers by far.
Most valuable sex advice ever received was when the person you’re with tells you exactly what feels good specifically and why.
Best parenting advice ever received is that kids communicate by playing. You can’t ask the question and get a direct answer. Play is how they communicate.
Best marketing advice I ever received is that marketing just means being considerate. Marketing doesn’t mean blasting or spamming or advertising. Marketing is a business being considerate.
Is that something Seth Godin said?
It’s very Seth-y [laughter], but not just him. Actually, Harry Beckwith. Harry Beckwith is the underrated predecessor to Seth Godin. If you can find Harry Beckwith books like Selling The Invisible, he has about four or five of them fucking brilliant, but almost nobody knows him.
Best love advice ever received was that my first great relationship taught me how to be honest and not play games.
Best programming advice was to learn the language, not the framework. Write code by hand and don’t repeat yourself.
Best writing advice is to write like you talk, but more succinctly.
Best life advice is that change is good unless you’re on the path of mastery. If you’re on the mastery path, stick with it.
Ohh, that’s a good one.
Thank you. But otherwise, change is good. Whatever scares you, go do it.
Most valuable advice on taking compliments. A famous musician told me that people always come up to him after the show, giving him a compliment. The best lesson learned is you just say “Thank you.” Never deny a compliment because that’s insulting. It’s scary when somebody gets up to give you a compliment, it’s vulnerable. So if somebody gives you a compliment, you just say “Thank you,” and then you turn the subject back to them.
Best advice I ever received on romance is to be meta-considerate, to let someone pursue you, aspire you and desire you. Don’t put them on a pedestal because if you put somebody up on a pedestal, you’re making them look down on you, which is meta-inconsiderate.
Best advice on hiring is to let your existing staff recommend their friends because people like working with people they like more than anything.
Anyway, I wrote down a bunch.
We don’t need any Tim Ferris’s books anymore. That’s pretty much all of the best advice for everything.
[Laughter]. Thanks for asking me that question. I had a fun hour sitting there thinking about the different, best pieces of advice I’ve ever received. Because the best advice you’ve ever received about sex is different than the investing advice, hopefully.
I think that should be a blog post on your site. Sounds like you’ve already done most of the ground work for that one.
Thanks for coming on today. That this has been an interesting, fun one that’s gone everywhere. Going everywhere while also coming back to that theme of mastery is very important for people, especially for me to hear right now.
Derek, where can people find you and learn more about you and what you do?
Well, the reason I do these interviews is because I like the people that I meet when I do them. If you made it all the way to the end of this, go to my website, sive.rs. I put my email address in a big font there and I actually reply to every email.
So introduce yourself. Ask me anything.
Just make sure it’s not a question because it’s everything’s always a “no.” You’ve got to remember what we talked about, guys [laughter].
Thanks for coming out today, Derek. This has been a fun one.