Living a Life in Full
host: Chris Stout
creativity and problem-solving, book writing process, charitable giving and philanthropy, independent music industry
listen: (download)
Transcript:
Chris Stout
Before we hit record, you and I are grounding ourselves back that I had seen you for the first time live at World Domination Summit. Back with my daughter and I think 2015-ish or something like that, in Portland, which was really one of my all time favorite talks of yours and things as well. So maybe a place that I would like to start off with is with all the variety of things that you’ve done, I think a connecting thread through all those is your creativity. On your website, you note that you like to make articles, books, websites, musics, companies, systems, apps, and especially new ideas. Can you say a little bit more about that, and where does that creativity spur from?
Derek Sivers
It usually feels like problem solving. I mean, there’s two different kinds of problem solving. There’s a mystery that needs to be solved or there’s something that needs to be done. So as a musician, I would sometimes make a mystery for myself or challenge maybe we should call it. Yeah, like a challenge. Where I’d want to combine an African bassline with a James Brown guitar part and a Beatles melody. And I’d say, How could I do that? Can I use those three ingredients to write a good song? And I would set myself out out with this challenge.
Derek Sivers
Then sometimes creativity comes from problem solving. Like when I first started selling my own CD on my band’s website. And then my musician friends said, “Oh, wow, hey, can you do that for me, too? Could you sell my CD?” And I went, “How could I do that? How can I help sell my friend’s music?” And that’s what led to me creating CD Baby, was just trying to solve that problem. Because they were asking me to. And then now, with writing my books, I’ll just pick the newest one, for example, the book, “How to Live”, is written in a really interesting format where every chapter disagrees with every other chapter. So I got inspired to think, How could I write a book sharing everything I’ve learned so far in my life, but succinctly, poetically, and in a format where every chapter disagrees with the rest. And so that was the challenge I set out for myself, and it took me four years to do it, but I nailed it. And that was, but all of these things to me are super inspiring, whether I’m trying to solve a problem to help others or complete a personal challenge.
Chris Stout
So I get it. It kind of resonates around the entrepreneurial spark of solving a problem, scratching your own itch kind of a thing. And CD Baby is a great example of that. When you talk about bringing your African drumline and your James Brown and your Beatle mash up, what happens just before that? I mean, is it like you’re listening to some Beatles and then you think, gosh, this reminds me of a riff from James Brown.
Derek Sivers
Oh, no. I think what you’re talking about is like, there’s just this creative urge for something that I think should exist, something that doesn’t exist yet, but I want it to exist. And I’m assuming, you’ve met or had more of these conversations than I have. I am assuming that a lot of filmmakers, authors, painters, anybody that’s creating something from scratch. Often has that same drive like, “Hey, there’s this thing that doesn’t exist and I’m imagining it and I think it should exist.”
Chris Stout
Yeah, I think that’s true. And I think, you know, part of what the in my, very naive perspective with around the creative aspect of it, is bringing things that at some level seem contradictory, which obviously your book is a newest book is a great example of that and bringing them together. And then through that process there is this new creation, be it a new song or a new business or a new book or what have you. So in the process of sorting those things and like you just said it, you know, it kind of took about a four year runway to be able to put this book together. It was part of this, and I know you’re also very good. You’re also very busy and you also travel and you do a variety of things. But it was it part of like using your well known hell yes or no decision tool because I’m sure there’s other opportunities that have been popping up. Or was it just, you know, a COVID spark that got you this idea? How did it come up that, that you were able to make the bandwidth if you did need to or maybe you already had it vis a vis COVID and lockdowns. But tell us about that, that your runway to being able to get this book together. And was it by just saying, hey, guys, I need to, you know, hunker down and focus on this?
Derek Sivers
Technically, I’m retired.
Chris Stout
You’re one of the most productive people in retirement, I think, Derek.
Derek Sivers
Well it was actually a border visa control guy that told me that. It was shortly after I had sold CD Baby and I was going to England just to visit. I was actually coming in with my bicycle intending to try to ride my bike from the bottom to the top of the UK.
Derek Sivers
It was actually in Brussels at the Eurostar train, and I was just about to get on the train. And they do the border control like at an airport. They do the border control or no, unlike at an airport, they do the border control before you get on the train. So instead of when you land. So he was asking me the usual questions, you know, how long are you going to be here? And I said, I don’t know. He said, “Well, what are you going to be doing?” I said, I don’t know. I’m just with you riding my bike. He said, “Who do you work for?” And I said, oh, this and that. I was just giving these vague answers because, come on, get me on that train. But he kept pushing and he and he said, “So what do you do for a living?” And I gave my usual conversational answer that I give to strangers that I don’t feel like engaging with. I just say I’m a computer programmer. And that he said, “Well, who do you work for?” I said, oh, this and that, just for myself. And who are your clients? And I was being vague. And finally he said, “All right, look, I’m not going to let you on this train because it sounds to me like you’re coming in here to take a job and you’re not admitting it.” And I went, Oh, okay. So all right. And so I kind of put my head down. I bet I said, All right, this is really embarrassing. But I just sold my company for $22 million. Like, I’m not going to be taking anybody’s job. You can go search the Web and confirm what I’m telling you. And he goes, “Oh, why didn’t you? Why didn’t you say so?”
Derek Sivers
He said, “Look, make it easier for everyone. From now on, just admit that you’re retired.” And I’m like, Oh admit I’m retired. Wow. Okay. Thank you. I got on the train, but I thought about that. It’s like from a government’s point of view. The technical definition of retired is you’re not employed by anybody for sure. You don’t you don’t need employment to pay your cost of living. If you don’t need employment to pay your cost of living, technically you’re retired and you’re just choosing to do things because I feel like it. So I’m writing books because I feel like it. I give all the money away. Even, you know, you’ve got a kind of a business angle to kind of LinkedIn audience. So I’ll say something that I don’t usually get into, but even the way that I structured my book publishing company, I made it a C corporation, not an LLC, Ernest Corp, because I didn’t want any of the money to flow through to me. So all those books I sell, like literally not a single dollar of it ever comes to me. It just, it goes into the C Corp and then the C Corp donates all the proceeds to charity. All of it to just stay, $0 annual profit. Just gives it all away. So none of it comes to me. So, yeah, technically I’m retired. So first I should just say that making time, it’s like, well, this is what I do. I’m just doing whatever I feel like doing.
Chris Stout
And there wasn’t a little checkbox on that guy’s form, you know, for the the Derek Sivers situation. So that’s right.
Derek Sivers
But I think your real question is like, how do you choose what to dive into? And I think that’s something that all of us need to ask ourself. Like, what’s worth doing is a common question. You know, I’ve got all these paths I could take. And so then I tried to just think of the intersection of what’s exciting me the most. And what would help other people. And what would be a smart use of my time. So sometimes it’s hard to intersect those two. I could think of something that’s exciting me but that might be a really dumb use of my time or something that’s exciting me, but is of no use to other people whatsoever. And so when I find the intersection of those three, what’s exciting me, what’s helpful to other people and what’s a smart use of my time, then I feel like, okay, this is worth doing.
Chris Stout
That’s good. You know, it reminds me. Stewart Brand, Long Now Foundation and Whole Earth Catalog and just kind of kind of your people I think. He talks about having like a five year perspective that for his model and thinking about his life is that any kind of project we’re doing is probably going to take about five years. So similar to your book, you said it took four. He thinks, you know, books are probably four or five year projects or startups. You know, there are five-ish years before they really get their feet underneath themselves or what have you. I think that’s, you know, to me, it resonates with the hell yes or no kind of thing. And now with this kind of three legged stool that you’re talking about, where can you find that sweet spot to be able to lean into. So for like then the next thing is like how is it that you then reconcile those three things when something, you know, comes to your attention or pops into your mind? How is it that you make those kinds of the decision making process to what the next thing is? Is it something always new or is it sometimes unfamiliar or is it iterative that plays off maybe programming or music or writing or how is your internal process for that of the next thing?
Derek Sivers
I really do think that the last thing I said is the complete process. It’s just like random things excite me. You know, if it excites me to start a company versus write a book versus build a new website or learn a programming language or something like that. Just whatever’s exciting me. Because if something’s not exciting you, then it’s kind of moot unless you’re going to do it with this very somber sense of responsibility. Like, “Well you know, this is the right thing for me to do. It’s going to be hard work, but here we go.” But I think if something just is haunting you that’s a good sign. Sorry haunting in a good way. Meaning like it won’t let you go. Actually, you know what? That’s one we didn’t mention, too, is persistence. There have been some ideas that have been sitting there for like two and a half, three years and they keep interesting me and they won’t go away. I’m continually interested in this. So it’s like, All right, it’s been years now, I’ve been interested in this idea. I think I better do it.
Chris Stout
Now’s the time. So you are a prolific reader and kind of as a gift to the world. You do your book notes and I just love those. I dip into those kind of every so often and is that again a process of like one of those things that you enjoy reading you enjoy obviously making notes about it and thinking out loud about it. And what Guy Spear refers to is sort of like learning in public sort of a thing. But tell us a little bit about like the genesis of book notes. I mean, a lot of people make notes, I can’t have a physical copy of a book without writing all over it and dog earing the pages and you know doing that sort of thing. And then that sort of becomes my little bite of information in that book. But I don’t take the time to to do the kinds of beneficial things that you do with your book notes. How did that come about?
Derek Sivers
Honestly, it’s just about the same as yours. Except that because I already had my website set up and I was already keeping my book notes in a text file, I used to scribble in the pages of a paper book. But then I thought, All right, so I’m always going to have to pull down the paper book off the shelf and look at my scribbles in the margins. I started in 2007 putting my book notes into a text file, one text file per book. It helped me search it so that say if I wanted to search all of my book notes for the word innovation or discipline or whatever it may be, I could search that across every book I’d ever read. You know, instead of having to pull down each one and say, “Hmmm”. Because every now and then an unexpected book might have a kind of a cross industry insight, a cross discipline insight, right. So say if you’re thinking on the subject of trust and distrust and trust. It might be a book on relationships and a book on the economy and a book on sociology, all might talk about trust, but that might not have occurred to you off the top of your head if you were just only putting your book notes in the margin of the book. And you’d have to remember all of the books you’ve ever read. And to kind of pull down and remember that this one also talked about trust, even though it was mostly a book about diet. So that’s why I started keeping them all in text files or putting them into text files.
Derek Sivers
If I was reading a paper book and I would just take half an hour after reading the book to type out all of my notes into a text file that way also, I could just give away the book. As you said in my intro, I’ve moved around the world a lot, so I couldn’t bring all these paper books with me everywhere I went. So keeping my notes in a text file was just the best format for me. So that was only for my own use for a couple of years. And after about two or three years of doing that, I thought, “Well, it’s actually no problem for me to just put these on my website.” It’s like an additional one minute of work. It’s really no additional work. So yeah, for every book I take the notes really just for my own sake, it is not a summary of the book when you go to my website. So the web address is sive.rs/book. That’s the URL for my book notes, which now has I think over 340 books on it. I keep adding a new one every week or two. But that’s all just for me. It’s really just for me. But as a side effect, I put it on my site because why not? It’s no extra work.
Chris Stout
Yeah, well and again. It’s a wonderful gift. I think you sort of have this very rare and wonderful generosity gene or something that gets expressed quite often in very creative kinds of ways. To the work part of it then, so you’ve been quoted in a variety of different places that you like work solo and you like to work a fair amount of the day. The old joke of like you work half a day and it doesn’t matter which 12 hours of the day it is. So how do you manage that? Because I also know your dad and you’re physically active and things. How do you parse the 12 hours a day plus reading the books and hiking and journaling and all the other kinds of activities that you’re involved with?
Derek Sivers
I think it just helps, I don’t really schedule things with other people. So I just wake up and begin. I don’t sleep much like five or 6 hours always just seems to be my natural time. So I wake up at 4 or 5 a.m. and I just start writing and my kid maybe wakes up at seven or eight and I play with him for a bit and then send him off to school. After he’s off to school, then I get back to writing or reading or programming or whatever I’m doing. I pick him up from school, we play, and then when he’s out with friends or goes to sleep, then I keep working till I fall asleep. Yeah, that’s it. There’s no special methodology to just always do. But it does really help that I’m remote in New Zealand. It’s different than when I lived in New York City or Singapore or Los Angeles, and people want to meet up all the time because there’s such hubs of innovation, you know?
Chris Stout
Is that why you chose New Zealand?
Derek Sivers
A little bit, yeah. I moved here after my son was born because I was living in Singapore when he was born. And it’s a very, very social place. So living in Singapore, I met up with later, I counted 490 people. I met up with in my two years in Singapore. So I was hyper social in Singapore and I just needed to, like my son was born, he was a little baby and I just wanted to give him my time. So I was like, all right, goodbye. I’m moving somewhere where I don’t know anybody in the middle of nowhere.
Chris Stout
Oh, so are you like in a rural area? You don’t have to tell the town or anything, of course. But I mean, is it like rural. Or what’s your geography like?
Derek Sivers
I wish. Well at first we lived rural, but his mom grew up in New York City and she couldn’t handle the small town life. So now we live in Wellington, which is the capital, but still I just keep my head down and stay with my head down in my work.
Chris Stout
Gotcha. You know, I have to say the first and only time I was in New Zealand, I was in Auckland and there were the Santa Fe Institute had a conference going on there, which is what got me there. And I remember I was jetlagged. I don’t know what time of day I thought it was or whatever, but I do remember it was a Sunday morning and I got up and the hotel was kind of near downtown. I could have a nice walk and stretch my legs and get reoriented. And I walked by this church that had the front doors open and you could hear the organ and you could hear the music and you could hear the people singing. And it was just sort of like, you know, I swear, Derek, there was like a unicorn that flew by when that was going on. It was just so idyllic, so lovely and so wonderful. And just for that short little amount of time where I got to meet some of the folks that lived around that area and whatnot and have little conversations and get to, you know, no one’s someone is in a quick kind of traveler kind of way. It was just charming and wonderful.
Chris Stout
So I just have such, you know, idyllic memories of what New Zealand is like. So I could certainly see that just being a wonderful place to to raise your son and to to have that time, but also have that distance as well to be able to have that productivity. So I know that you grew up as like this musician and technology guy, and it’s somewhere I forget, I don’t know how recent or distant this is, but that you were also refactoring your code and doing a massive cleanup of your code and that you have your own server and stuff. So if we can get nerdy for a little bit and then shift into your writing, your tech independent, you’ve got your own freaking server which kind of sounds like today a little bit like web three kinds of stuff. Is that something like why have your own server just just in terms of not having to be tech dependent on anything or anyone else, so to speak. Or what are your thoughts about that? And does it relate any which way now to to web3-ish kinds of things?
Derek Sivers
Nothing to do with Web3, though. The common theme is decentralization, which I’m always have been a huge fan of. So in fact, I’m going to answer your question by tying it together with something you said a few minutes ago. You said that my book notes seemed very generous of me. And you said this compliment and continued on. But actually, I don’t think I could take that much credit for that, because these things are combined. I think I’m a product of the original old web internet, meaning I got online in 1994 when the web barely had images. It was mostly text. And images were like a new thing they were a graphic. It was as the web was just beginning. So people were still using FTP and gopher and usenet newsgroups and actually most of the community was still in usenet newsgroups and you would dial in with your slow modem using your home phone line.
Derek Sivers
To connect to usenet newsgroups to ask people questions like, “Hey, I’m trying to get my reverb unit setup to my digital audio converters. Anybody else has solved this problem?” And somebody would say, “Oh yeah, you need to set it to 24 bit instead of 16 bit. Check the switch on the back of your thing.” And I’d say, “Oh, cool, that worked. Thank you so much.” And somebody else would ask a question that you knew the answer to. So you’d give back to this helpful community that helped you solve a problem. The entire thing was noncommercial. And it wasn’t until like a year or two later that businesses started showing up in this little noncommercial, little helpful library type place. And I was like, “Make money on the internet. Yeah, good luck with that.” You know, nobody’s going to make money on the internet. This is like a community of people helping each other. Like that’s what it is. And it really felt like your local library or community center it was very just information based, just everybody volunteering their time to help others because others helped you. And that’s the spirit in which I got online. The only way to have a website back then was to host your own.
Derek Sivers
And so you had to figure out how to use the Apache Web hosting software in the config files and upload your own HTML files to your public directory. And that’s how you made a website. That’s what I’ve been doing since 1994. And when other businesses came along. Say like Hotmail coming along saying, hey, hey, you don’t need to set up your own email server anymore. We’ll do it for you. And I thought, well, I don’t need you. I can have my own mail server. And then other WordPress comes along and says, oh, you don’t need to write HTML, we’ll do it for you. And I thought, well, I don’t need you. I do my own website. And so for each of these things, businesses came along saying, you know, no, no, no, you don’t need to do this anymore. We’ll do it for you. And I just thought, well, I’m all set. I have my own server, I make my own HTML, I do everything myself. I host my own mail, I host my own calendar and contacts. No, I don’t need you Google for calendars and contacts. I host my own. So I’ve just stayed with that. But even this thing about when you said that, it seemed very generous of me to share my book notes. I still don’t think so. I’m still just in the spirit of the old 1994 web era.
Chris Stout
Web brew era, right?
Derek Sivers
Yeah, it gave me a lot. And so I give back a lot.
Chris Stout
Yeah, that’s great. I’m a bit older than you, and it just reminds me, back in the day. I was a math major because computer science really hadn’t kind of propagated at least to Purdue, where I went and I remember having punch cards. Batching stuff and writing in Fortran and all that deck pens and stuff. I wrote this teeny weeny program just because then when I transferred into getting into psychology, I was always terrified that I was going to misdiagnose someone and treat them with psychotherapy rather than give a referral to an endocrinologist if there was something wrong with their thyroid, but they were presented with anxiety or depression or something. I just took this old Ashton Tait DBase three plus program and I just wrote its hardly even like I hate to even call it a program. But just kind of wrote what I needed to do to be able to put in a person’s symptoms and then to kind of sort and give a probabilistic answer as to well, this probably is really psychological versus you probably should give that referral, Chris, to someone that can deal with their thyroid.
Chris Stout
Maybe it’s again, kind of a reflection back of, kind of how you, the problems that you were trying to solve and just kind of taking the tools at hand to be able to do it. So. All right. I have one last obligatory techie question and then we can get into the book. I don’t know how much you follow. I feel like just totally out of my depth with anything that’s, Web3 and NFTs. I did have a gift on that, tried to hold my hand and explain what blockchain and stuff like that was all about. But it seems like with your tech background and the independent kinds of things vis a vis servers and all that. Do you have any thoughts or is this on your your radar of like music NFTs or like I read that I think it was sound.xyz has a curated platform where people are making NFTs out of some of their songs and limited editions and stuff. Is that something you’re curious about or you have opinions about?
Derek Sivers
In short, no. We all just do whatever excites us and interests us. Right? So some people get excited by Russian literature and some people get excited by mold and fungus growing patterns. Some people get excited by NFTs and metamask, Blockchains and web3 and other people get excited about training horses. So you can’t fault the people. If you’re really into training horses, you can’t really fault other people for not being into training horses, even if suddenly training horses is like the newest, hottest, trendiest thing. That everybody’s talking about on the cover of every magazine. And they’re like, “God, why aren’t you into training horses?”
Derek Sivers
“Well you’re not into training horses. Everybody is training horses now. Why aren’t you?”
Chris Stout
“And are you investing in training in horses, too? I got this deal.”
Derek Sivers
Just because everybody else suddenly got excited about training horses doesn’t mean I need to get excited about training horses. So, I understand all of that stuff. And since I’ve become a programmer just over the years, I didn’t start out as a programmer, but just over the years just building my own website than building CD Baby and running it. I always just did all the programming myself. I didn’t have a team of programmers, it was just me. So I know how to program. And so I built my own blockchain. Like when I heard about blockchain, it’s called the Merkle Tree, and I was like, “Well, that’s kind of interesting. Okay, So each refers back with a hash.” So I built my own blockchain just to kind of learn how that works.
Chris Stout
Wow
Derek Sivers
I bought a bunch of Bitcoin back when they were like a dollar each and I transferred them to some other people and then some people transferred some to me and I went, “Okay, that’s kind of cool. I see, all right. The distributed ledger. Okay, that’s kind of cool. I see how that works. Then suddenly my bitcoins that were $5 now were worth $5,000. I was like, “Oh, that’s kind of cute. They went up in value.” I was like, “Well, I don’t need these anymore and charities do.” So I gave all my bitcoins to charity. And yeah, Etherium came out and I learned about smart contracts and I made a little test to see how that works. I think Web3 is just the term they give it now, is trying to make a catchy name for it. But yeah, I get how it works, but it just doesn’t interest me and I think, I’m guessing, I don’t want to assume people’s motivations, but it seems from the outside, like most people are excited about it because they think they’re going to make money with it.
Chris Stout
Yeah, yeah.
Derek Sivers
And remove the money aspect. They’re not so excited. So I saw this happen in the music industry. I was in the music industry in its heyday in the nineties when a lot of people were making a lot of money and they were really excited about it. And then as soon as say, like the end of the 2000s came and not as many people were making as much money. A lot of people left it because it wasn’t so exciting to them anymore because they weren’t making so much money anymore. They just follow the money. So it was always a good test of how intrinsically somebody is motivated, is are they coming in just when the money shows up or are they sticking around after the money is gone?
Chris Stout
Yeah, well, and again, that reminds me of what you just said too, about the whole aspect of being able to provide helpful tips and build these kinds of things and be helpful to a community. And then all of a sudden there’s this monetization aspect or commercialization aspect of it that just kind of I don’t know, it certainly makes for people doing inappropriate, not nice things and just kind of also spoils the community aspects of it, too. I think. All right. I had it because, you know, in my head when I was thinking about things to discuss, it was sort of like this whole aspect of this. But knowing also that you were really kind of an early digital nomad in some sense of just even having your own server. Well, let’s shift now and talk about publishing in your books. My first book of yours was “Your music and People” and a couple of little fanboy things I just have to say. So in full transparency, I really enjoyed that, and that really kind of got me into wanting to know more about you and the talk that you had given at world domination, etc. It was just sort of like, okay, here we go, this guys does cool things and I need to learn more. And I also, I probably shouldn’t be saying this because it’s a little bit embarrassing, but I also downloaded your audio version of it and it was just sort of neat to hear that you have a wonderful voice.
Chris Stout
The way that you talk about these kinds of, like just reading your book in your voice was just really kind of a fun thing to do as well as now with your new book. So having said that and embarrassing myself, your latest book is “How To Live 27 Conflicting Answers and One Weird Conclusion.” And you’ve described this as your best work. So first off, how how did you come to it or how did it come to you?
Derek Sivers
By the way. Thank you.
Chris Stout
You’re welcome. Well, by the way, thank you.
Derek Sivers
So there is a book, maybe my single favorite book ever written. It’s called “Sum” S-u-m by David Eagleman. And what I love about it, is that it’s 40 short little stories, just a few pages each that all answer one question, which is what happens when you die? But every chapter answers it differently. So it’s a collection of 40 short stories, seemingly by 40 different authors, but actually by the same guy. So it’s like as if you asked 40 different people with 40 different opinions, what happens when you die? Tell me a little story about that. And the 40 people answer it in 40 different ways, all disagreeing with each other, of course. And I love that format. So I read the book twice over two years because I loved it so much. And then one day driving down the road, I just went like, “Oh my God, I want to write a book called How to Live in that format.” Because everybody’s got their different answer of how they think you should live. Some people think you need to be driven by habits. And some people say, “No, you need to be driven by the big picture, the big goal.” And other people say, “No, you need to live every day in the moment and just live in the now the power of now.” And somebody says, “No, it’s all about leaving a legacy. This is what it’s all about.” Somebody says, “No, no, follow the money. Money is a neutral transfer of value that shows you where you’re being of best use to the world.” And somebody else will say, “No, man, it’s all about love. Life is love. Everything else, he said doesn’t matter. It’s just love.” And each of these people writes a book telling you that their answer is the answer.
Derek Sivers
And it’s funny, as somebody like you and me, we read a lot of books. We’ve read a lot of conflicting opinions. It’s kind of funny then to read a book that says life is habits, and somebody else says, “No, life is love.” And somebody else says “No, life is money.” And they all disagree with each other. And I thought how fun to write a book like Sum, but about how to live. And each chapter will disagree with the rest. I don’t know if you had this when your daughter was born, this feeling of like, I want to share everything I’ve learned so far just in case I die before she gets older. I want to put everything I’ve ever learned into writing so I can share with her the lessons that I’ve learned in life and want her to know. I wanted to do that when my son was born. And so “How To Live” is also me doing that. It’s like taking everything I’ve ever learned in life the most important things that I’d want to pass on to my kid. But then categorizing them into this format of one chapter says like, live for the future, and another chapter says, commitment, “Here’s how to live, commit.” And a different chapter will say, “Here’s how to live, be independent.” Which is the opposite of commit, completely disagree with it. But it was a way for me to share everything I’ve ever learned in this wonderful format. But then along the way, I realized that the whole thing had a conclusion that all of these conflicting worldviews do reconcile. And so that’s what the surprise weird ending is about.
Chris Stout
Well, and it really is. You lead the reader through the journey of that. You know, the juxtaposition is like of teeing up that end which people need to get the book and see how that works. But, you know, I felt like such a lame brain as I was reading it, because I’m thinking, “Oh, Derek’s saying this.” And it’s like, “Oh, well, maybe, you know, that seems a little surprising that he would think that.” And then I read a little further. It’s like,”Ohh.” And then I read a little further still and be, Ohhh..”
Chris Stout
It’s really kind of a, there’s a certain I don’t know, it’s like the emperor has no clothes. There’s so many different kinds of ways to interpret it. I mean to is it satire to self-help books? Is it just sort of this sobering kind of thing of like, “Hey folks, this is kind of how life is, everything can be contradictory or paradoxical or ironic or whatever along with it.” And it also reminded me I love your talk of the opposite may also be true. Which I think also then kind of culturally contextualize, sort of like this is how things work. I remember the guy. It’s been a while since I’ve seen it. But yeah, you talked about, I think there was some kind of health care person, healer person and that he got paid. What was it? He didn’t get paid when you get sick. Yeah, he got paid when you were healthy because that was his job. And wonderful like.
Derek Sivers
Yeah and apparently it’s not too uncommon in villages in China. That the local doctor you pay him something every month when you’re healthy and when you’re sick you don’t need to pay him because it’s like he’s failed at his job. His job is to keep you healthy.
Chris Stout
Yeah.
Derek Sivers
And as soon as you hear that idea, you go of course that makes sense. That’s a great way of doing it. And it’s the opposite business model of most doctors, but it’s equally valid. You know, I live in New Zealand, which is at the bottom of the earth, and every now and then people in Australia and New Zealand will take a picture of the round globe that we live on and say, “There’s no reason to put those countries up top and us at the bottom. It can just as easily be the other way.” So it’s like, you know, you put the sphere this way around and people go, “What? You put it on the wrong side. You know, we live in a circle right here.”
Derek Sivers
So it’s interesting all of these ways where the opposite of something can also be true.
Chris Stout
Yeah. Yeah.
Derek Sivers
So how they do it right? It’s a common thread that’s fascinated me for years. So my book “How To Live” is like that TED talk that I did in 2009 where the opposite may be true, it’s still fascinates me.
Chris Stout
Yeah well and it’s also kind of become a little bit of a joke too, a clichè that one of the former deans of the Harvard Medical School said that we know that half of what we teach our students today will be shown as wrong. We just don’t know which half. And this is a little different spin on it, but it seems like it’s in this same maybe a little overlap of some Venn diagram of it, of like science and knowledge and learning. Like how the more data we get, the more we let go of these past orthodoxies that everybody gets taught. Or everybody believed was true until that black swan event occurs or there’s something that kind of proves that either the opposite may be true simultaneously and it’s all perspective and culture and circumstance or certain kinds of things do obviously change over time and evolve or grow or devolve or fall apart. And so with your book and in the TED talk, it almost makes me feel like, it’s refreshing to kind of be reminded of these kinds of things. And through the process of your book, it just says it’s so full throatedly in so many different kinds of ways. It’s sort of like not just the Chinese healer. It’s like, “Oh yeah, this way. “And then you keep reading. And go, “God darn it Derek.” So I can’t imagine writing that because it is like, I mean, did you feel like you were like writing poetry or something? What was that like?
Derek Sivers
So for anybody listening, if you haven’t seen the book yet, it’s written in a very, very succinct, almost poetry style. But that was just because Chris, honestly, the first draft of the book was over 1300 pages. I was like, “Okay, I am not going to put out a 1300 page book into the world.” So then I kept reducing and reducing and reducing. I don’t even want to put out a 600 page book. And honestly, I don’t even want to put out a 300 page book. I really value succinctness. So I kept reducing it until now. The book “How To Live” is only 115 pages. So each sentence in that book now represents what used to be an entire page. Like, over and over again, I reduced what used to be a page down to a single sentence. And so there’s not a single word wasted in that whole book. There is not an ounce of fluff.
Chris Stout
That is very true. Yeah
Derek Sivers
But going back to what you were saying a minute ago. Yeah, I had to be somewhat split personality to write it because every chapter I was writing, I completely believed that chapter. Say, for example, the first two chapters. The very first chapter says be independent, and it gives all of the reasons why you should be completely not dependent on anybody or anything. And then the next chapter is called commit, which is about the benefits of picking a place. And committing to it and staying and picking a person and committing to them. And whether marrying them or committing to your family, committing to your children, committing to a career and staying with it.
Derek Sivers
It’s the opposite of independence. And yet it’s also true. So for each chapter, I had to get into that mindset. But actually, I’m going to ask you about something to see how this idea resonates with you, because I’ve never talked about this before. But I often think in terms of what beliefs are useful, they don’t have to be true, but how are they useful to you? And so imagine that you go on a long run every day, and when you’re on your run, you have plenty of time to think. So you often think about the motivations to get you to the end of your long run. You used to often imagine a pot of gold at the finish line and you’d say, “Well, I have to get there first, otherwise I don’t get any gold.” And that used to motivate you to get to the finish line. But then one day you try imagining that there’s a tiger on your tail and he’s just a foot behind you for the entire time. And that motivates you better than the imagining a pot of gold.
Derek Sivers
So then you use that for a while. But then a running expert looks at your technique and says, “Hmm, try imagining that the ground is hot lava.” And so you try that. It helps you stay on your toes and lift up your knees more. Even though it doesn’t get you to the end faster, you arrive less tired. Then one day you just you do this experiment where you try closing your eyes for your entire run. And even though it doesn’t get you to the end faster, but like, oh, wow, it’s so much more interesting to do it with your eyes closed. It means that you listen more. After you’ve done the run a lot, a lot, a lot of times you think, “You know what? I want to improve this trail for the other people that do this run and what may do it for generations.” So you start bringing a shovel with you and stopping every time you see a hole and you fill it in or every time you see a bump or a root in the way, you get it out of the way. And so, of course, you’re not optimizing for travel time, but you’re making the path better for everybody that comes after you.
Derek Sivers
So each of these things are a completely different approach to your run. But now imagine if somebody came to you and said, okay, what is the right answer? Which is the correct thing about running? Or what if somebody came along and said, “I have just written a book that says the correct way to think about running is there’s a tiger on your tail, this is how you need to run everybody.” And you think, “Well, yeah, I did that. It works in some ways, but that’s not the only way to run.” And this is how I think of beliefs. For one, most importantly. It doesn’t matter at all whether they’re true or not. True has nothing to do with it. We’re not looking for what’s true. We’re looking what works for you. Because our actions are driven by our emotions. And what changes your emotions? It’s not facts. It’s beliefs. Like beliefs are what change your emotions. So all that really matters is not what’s true, but what you believe. That’s what changes your actions. And that makes all the difference in the world. How does this this whole idea of useful or true. Like, how does this work for you personally, Chris, I don’t mean you. And.
Chris Stout
You know, it reminds me, I have to kind of lean into my my psych stuff. Like, there’s the whole aspect. There’s a guy named Leon Vestager, and he had a concept called cognitive dissonance. And, I think it gets back to looking at yourself and who you see yourself internally to the external world. Am I a person who would do something dumb? And if I am and I do something dumb, then that kind of fits into my worldview. And I shouldn’t have any dissonance between doing something dumb because, hey, I’m dumb. That’s that’s what I do. Versus, if I do something dumb and I see myself as not being dumb, I see myself as being smart or wise or crafty or something. Then you sort of have to come up with this sort of reconciliation that either my belief as to who I was needs to somewhat be modified by virtue of this new evidence or this new evidence can be dismissed in some other way that this doesn’t really count for me. Or I’m not afraid of Tiger so if one’s chasing me on my run, it’s not really going to bother me. I’m just going to throw a saddle on it and ride it. So I guess, the whole concept of beliefs and how does a belief come into being? Is it indoctrination? Is it brainwashing? Is it Stockholm syndrome? Is it religious upbringing? Is it you what mom and dad always preached or wanted or whatever.
Chris Stout
And I think it’s hard for myself, I’ll just take responsibility for myself. I know it’s hard for people in general, but it’s certainly hard for me to try and sort those kinds of things out. I guess I have to talk to trusted friends or my family to kind of say, “Hey, I’m thinking this, it doesn’t quite fit right or feel right. Maybe it’s just too new and I need to break it in or maybe I’m misinterpreting something, or maybe I’ve got this all wrong.” And sadly, these kinds of things for me personally come up, like when there’s been some kind of conflict with someone in my family or with a friend. So I don’t know, it’s probably a bit of a rambling answer, but I don’t know if that really gets to it. Push me if I’m not quite what you were thinking or what are your thoughts about my gibberish here.
Derek Sivers
No, I like that a lot. But you’re saying that then when you have a belief if it feels in conflict with other aspects of your life. Like is that what you meant? Like the cognitive dissonance where your belief is in conflict with life or effectiveness or reality or what does it conflict with?
Chris Stout
More so conflictual with maybe my view of self. Because there’s the kind of thing too, I have a lot of different interests and someone externally might say, “Gosh, that really seems contradictory. You like X and people that like X never like Y, but you like X and you like Y.” And so they could either say you’re a hypocrite. Or you’re complex or isn’t that interesting? Tell me more. How is it that someone that you know thinks this way can also think this way? So I guess, it’s more so like of from a psychological perspective of how a person views themselves or how I view self, my being. And am I the kind of person that would do what I just did? It’s sort of like, maybe I need to question why I did what I just did. Was that purposeful? Was it just I wasn’t thinking? Was I being sloppy? And was that a behavior or was that a comment or something that I did or didn’t do that really doesn’t fit with. Gosh, maybe it’s like regret or something. Like when you say that really horrible thing that you just, 10 seconds later wish you hadn’t said. And it’s sort of like, “Oh, my gosh, is that what I really feel? Is that what I really mean?” And how does that reconcile with who I think of myself. I’ll tell you, here’s another super transparent thing, then we’ve got to change the subject.
Chris Stout
But it’s sort of like, I’ll say something in impulse and anger to my kids or something historically. And then the next day I’ll be like going, “Oh my gosh, you’re a psychologist dude. You know you don’t say those sorts of things.” Then I future project myself like I’m this cool, hip zen father that just says all these karate kid, fortune cookie, wonderful, epiphany things to my kids every couple of days. And they just scratch their chins and go, “Wow, Dad, that was really awesome.” Which it never has been, never will be.
Chris Stout
But it’s those kinds of things where I have thing of like, “Oh, you idiot. Why did you just say that? That is not who you are as a dad. That is not how you would like to identify as a person or a partner or a friend or something.” So again, I don’t know if that helps or if that’s just muddying the waters, But I guess it’s a struggle I have with it with those kinds of contradictions.
Derek Sivers
But that’s so fascinating. That for you, the identity thing that makes me wonder about the appeal of subscribing to one “How To Live”. You know, one way of life. Because for one, it’s kind of a tribalism to it. It says, “I’m a part of this tribe, this is my identity. I belong to to this.” I think most of us listening to this, we can’t imagine suddenly switching our religion to to become Jainism or Jains or Hindu or Baha’i or Muslim to the idea of just like completely switching your religion seems unthinkable because it would just completely go against who I am. And so I think when a book comes out like, say, Atomic habits, which is a wonderful book, but a part of the appeal is like, ah, yes, this is the answer. This is how I should be organizing my days. This is how I should be living my life. This is how I should be approaching my work. But then a different book can come out like “The 4-Hour Workweek”, and you can go like, “Ah, no, this, this is it. Or “Getting Things Done” or whatever it may be.
Derek Sivers
A big part of the appeal is that we say, like, I’m subscribing to this, I’m joining this mini religion or whatever. Like, this is the answer. This has the answer to all of the things. It’s identity, isn’t it?
Chris Stout
Yeah. Yes, I think so. And let me just think out loud with you, with this other real life paradox and concern that I have. Like we sort of joke in my family, with my son, if you say something, and if he doesn’t get it or even worse, doesn’t agree with it, he’ll say, “Why do you say that?” So sometimes it’s sincere, like just trying to seeking first to understand, like, well, why is it that you would think that And that’s that’s a great conversation. That’s great. But when there’s a little bit more of an edge to it, like he has challenged us in talking about like if this person is of this, I’m just going to kind of keep it quasi generic. If person X is and someone who he knows and cares deeply about is of this political party, how can they, if I see them as having all these one attributes that I don’t see as being part of this other identity, how do they reconcile that? And I just sort of have this hard time trying to explain to him to say people are complex. It’s not that they’re being hypocritical. I like X and Y. Most people that like X don’t like Y, but I for whatever weird reason, like X and Y. That’s kind of one of the challenges that we have and our conversations and discussions at home of that that kind of a thing. And it’s almost like having a bias, honestly. Well all people that are X really are dumb you know and boy, if that person is X and they’re not dumb, then they’re not really X. So they’ve mislabeled themselves, that sort of a thing. And back to like again, psychology and labeling theory and bias and things like that. But again, to circle back to you and to the book, it’s the way that you’ve distilled your your pages into sentences. There’s a potency to that, Derek, that really gets the message across. You know, it really,I mean, takes us a few pages to kind of get the point, but then.
Chris Stout
Again, for me, this is just dumb on me. But I get to that and then I start to read the next. I’m like, “Okay, now I know what I’m in for.” And I start to read it. It’s like, Oh God, yeah, that is how it works.” I have drank that Kool-Aid. Yeah, this has happened. I’ve seen this. And then you read the next paragraph or the next line or whatever. It’s like, “Oh, yeah.” So it’s just again, I think these are very difficult. It’s hard for me to even articulate with you on this show, like about how I struggle with it. And I know people, everyone, I think, that thinks about this sort of thing probably has some kind of struggle with it. And it’s sort of like the proverbial advice is hard. And advice fits very few people consistently. We’re all very different kinds of people. And we all have different experiences and perspectives and stuff. Again, the way that you did it, I think, is just such a frickin creative, brilliant way to do that. If I read a scientific article about it, it would have all these things about, “Well, some people think this and because of this reason, they also then think this. And then this leads people to having this kind of a conclusion versus..” Again, yours is really kind of this poetic treatment of it in a way that you kind of can’t help but be compelled to turn the page and see what the next one is going to be.
Derek Sivers
Thank you. Hey, did you say it was your son that found it hard to comprehend that people who do X sometimes do Y or categorized as X sometimes. So I’ve been thinking about that too, that I think truth is not simple. Truth is nuanced. I think simple works for bumper stickers and simple works for catchy slogans that can help become like a rule of thumb. And it can help you remember. But the truth is always more nuanced than that. If I was wise and if I was in that moment with your son, I might have explained to him that he shouldn’t think it’s weird when somebody who believes X sometimes does Y. He should think it’s weird if somebody doesn’t. That if somebody adopts one single philosophy and applies it to every single aspect of their life, that would be weird because even think about like I’m completely not political, but imagine that I treat my family like when it comes to my family, I’m a complete socialist. When it comes to my neighborhood let’s say I’m liberal or something. When it comes to my country, I’m a libertarian when it comes to the world. Yeah, I’m green party.
Derek Sivers
So, yes. I can hold different approaches, but it’s because the truth is more nuanced. It’s a different aspects. I don’t take, say if I’m libertarian when it comes to my federal politics, I don’t apply that same libertarian approach to my family. That’s ridiculous. So it would be weirder if somebody said that they were X and applied X everywhere in their life. In a way, I’d say that was a hint that they weren’t thinking clearly, that they were just trying to be dogmatic instead of realistic.
Chris Stout
I like that. Yeah, I like that. And as a thought experiment, I can’t imagine anybody that I know that would actually be that way. So that’s good. The variation on that is,that’s the weird thing. So. All right. Good. Okay. Thank you. I will I will be venmoing you for our therapy session today Derek, thank you so much.
Derek Sivers
Well no this subject has been fascinating to me because I ended up reaching out to the author of one of the best philosophy books I’ve read just last week to ask like, is this a thing like the story I told about the running and the pot of gold versus the tiger on the tail versus hot lava versus closing your eyes. Because when it really comes down to it, it can be summarized by saying, “I want to believe what’s useful, not true.” Whereas philosophy and philosophers always seem to focus on, yes, but what is true? What is reality? I’m going to debate this with you and figure out which one of us has the right answer for what’s true. But just the whole conversation seems moot to me because, well, for one, I want whatever’s useful to me. So, hey, if you’re saying the pot of gold is the most useful to you, great wheel tiger on the tail is most useful to me today. It might not be most useful for me tomorrow. In fact, I really enjoy imagining different things on my daily run. I like switching approaches, so even switching is useful to me. Like sticking with one for the rest of my life wouldn’t even be useful.
Chris Stout
Yeah.
Derek Sivers
So I want to adopt a philosophy that works for me to get me where I want to go today, which might be different tomorrow.
Chris Stout
I like that. Just a quick little segue, too, because like, you think about the scientific method and we started off with this talking about beliefs, I think. And what you just now said maybe is what triggered this trying to find truth and looking at it from a philosophical perspective. But if you even applied a scientific perspective or even the clichè joke about the Harvard Dean’s comment that in science, you try and prove the null hypothesis, so to speak. Or disprove the null hypothesis, sorry. And that you want to have a probability that within, you know, 0.05 or 0.01 level of of confidence. And there is a fellow I forget if he’s in University of Toronto somewhere I think in Canada. He did a study published it and I think it was something in medicine or health care and someone is often the case in that area tried to replicate his study and they tried to replicate it and they did not get clinically significant or statistically significant findings. So this kind of freaked out the original author. And he then read their paper and wondered maybe where they varied from what his methodology was, and he really couldn’t find anything. Then it just kind of irked him. So he reran his own study with new subjects, etc., and he himself did not get the same results.
Chris Stout
So it was sort of like there’s this almost kind of a meta scientific perspective of looking at things. And it really blows my mind to then think about, well, what is truth, what is evidence. The the anti is fairly high if you’re like looking at medications or clinical interventions or surgical procedures or those kinds of things. But it just seems like it’s a variation on that same theme of trying to find out, well, what is the truth, what does fit. I think your perspective with it of you kind of seeing it as what is it that works and what works today may not work tomorrow. So let’s just keep open and agile to adapt as need be and then keep at it, so to speak.
Derek Sivers
Well, you know, even the replicating studies. So Daniel Kahneman, who wrote “Thinking Fast and Slow”, was criticized a few years after that book came out saying, some of the tests you did in there, we we couldn’t replicate them. How dare you? Let’s debunk this whole thing. But once again, I come back to useful versus true. If say one of his findings in there said that, I’m just going to pick one that wasn’t in his book but it’s like related. One thing that I know about is one of these like social psychology studies found that people who didn’t share their goals with others were more motivated to achieve them because they hadn’t yet felt the social reward of telling others that they were going to do this thing. So the takeaway from that was, “Hey, instead of telling your goals to anybody, try keeping them to yourself and you might find yourself more motivated from now on.” So when I heard that, I went, “Oh, that works for me.” I think too often I’ve thought of a goal, I’ve told the world I want to do this thing. The world rewards me just for announcing that I’m going to do this thing. And I have felt myself less motivated to do that thing now that I’ve felt the social reward already just by announcing it, right? So that works for me. So if somebody comes along and says, you know what, we tried to replicate that study and it didn’t replicate, so it’s false. I think, “Well, I don’t care this works for me.”
Derek Sivers
So true or false doesn’t matter to me. It’s what works for me right now. And that belief might not work for me next year, but for right now, this is what I need.
Chris Stout
Yeah. The same benefit of a placebo or the same benefit of whatever it is you think it is that’s working. Lean into it. So that’s really funny because again, it’s back to your book with like the contradiction of accountability partner and tell the world so that then everybody’s got their eyes on you and so you’re not going to let them down. Again, it’s what works for who and what circumstance, don’t count on it working tomorrow because it may be a different day tomorrow. So I like that. Well, listen. I know we’re very much enjoying this. I do have a couple of other things I want to ask you about. If you’re good for time.
Derek Sivers
Yeah, we’re good. Let’s go.
Chris Stout
I think when you and I reconnected about getting to do this show, one of the things I had just written a piece for LinkedIn called “The Sting of Moral Clarity”. And it was basically that was spurred by a conversation I had with Charlie Bressler. And Charlie Bressler was a guy that volunteered to kind of like co-found with Peter Singer, the nonprofit entity called The Life You Can Save, which is a homage to Peter’s book of the same name. And Peter, it just recently come out with a 10th anniversary edition with some updated data and epidemiological stuff and all sorts of great research and nerdy number stuff that I love. So the concept of that is kind of then developed into this idea of effective altruism. In Peter’s book, he talked about Give Well, and they’ve got a good exposure in that and a lot of people know about them. So you then took book sales, I think it was and so clarify for me in this tell me about this process. I think it was through Give Well, then you found out about the Against Malaria Foundation and then donated at least a quarter of $1,000,000 of your book sales to that. So bravo, by the way. But tell us tell us about that process. And I’m going to say it again, Derek, the generosity that you have with these kinds of things.
Derek Sivers
I said earlier that I set up my company as a C Corp so that the money would stay inside the company and never flow through to me. So that was always my intention from the beginning to never take a dollar from any of the book sales. But I thought that the books were only going to sell maybe $30,000 worth. So I thought that that $30,000 then would be kept inside the C Corp and put back into future projects to pay future editors, animators, transcribers, printers. So when I put out the first two books, “Your Music and People” and “Hell Yeah or No”, they sold a quarter million dollars in the first couple of weeks and I went, “Oh, my God! Wow.”
Chris Stout
Yeah it’s so awesome man.
Derek Sivers
So first there was this spring in my step. That was unexpected. But yet, don’t forget, I’m still not going to take a single dollar of that. It’s still just kind of sitting in my C corp. Okay. So after the wild wore off, after a couple of minutes or days, it was like, well, what do I do with it? I don’t have anything in the works that would use a quarter million dollars. I don’t really want to start a new company right now that would take a quarter million dollars in funding to begin. I was like, “What do I do with a quarter million dollars?” I was like, “Well, obviously if I’m not using it, then it should go to whoever needs it most.” And that sent me down the path of who needs it most. I hadn’t heard the term effective altruism. I kind of did some searching and partially by asking that question of who needs it most. That’s what effective altruism is all about. It’s not just which organizations or people are saving the most lives, but of those that are saving the most lives which ones need the money the most, right? Like if you give more money to the Red Cross right now, it’ll just sit in their bank. The Red Cross doesn’t need more money. If you give money to the Against Malaria Foundation. Yeah, they desperately need more money right now and they are incredibly effective at saving lives. So your dollar is very well spent going to the Against Malaria Foundation, because if you give them even $2,000, they will literally statistically save someone’s life. So for every $2,000 you give, somebody won’t die.
Chris Stout
Yeah.
Derek Sivers
And once I heard that, it’s like, okay, so I think I’ve got a clear answer that a few hundred people now won’t die if I send my money to the Against Malaria Foundation instead of spending it on something else. So, just a clear answer that took maybe a day to figure that one out. I was like, “Yep, this is the right thing to do.” I would have given it directly to Give Well, but they even say right there, if you’re talking about doing more than, say, 10,000 or $1,000, it’s better to give it directly to the organization. So I just went directly to the Against Malaria Foundation and forget what I’ve contributed now it’s it’s I think it’s closer to $350,000 by now. I just kind of kept contributing all my profits I wasn’t using.
Chris Stout
That’s great. I find that so inspirational and also something that I try to mimic myself as well. So tip of the hat and glad to make it public and hopefully encourage other people to think about those kinds of things as best fits for them. I read, gosh, I think it was the last couple of weeks that Yvonne Chouinard gave away Patagonia and.
Derek Sivers
Oh yes!
Chris Stout
And I thought, Derek! Deja vu. Now from what I think I know and this is just maybe we can kind of wrap up with this because I love these kinds of threads through all the guests that we have on the show, because they’re generous, they’re philanthropic, they’re humanitarian, etc.. So you created, correct me if I get this wrong, the Independent Musicians Charitable Remainder Trust. And that was what CD Baby and Host Baby with its sale then went into and I think that’s what Yvonne did as well too with with selling. I don’t know all the details of his and stuff. Yeah, something along those lines. So is that like a, what is it, a 49, 47, 82 versus a 501 C 3. I’m more up on my tax codes about 501C3 But is that what it’s structured like or tell us about it and how that gets distributed or how that works or how you put that together.
Derek Sivers
I’ll just describe the mindset kind of like I just did with the books. It’s like there’s this initial kind of “Oh my God. Look, I made a lot of money.” Then the second thought is, “But I don’t need it.” And in fact, I don’t even want it. So if I don’t want it, I don’t want to be like the dragon in the mountain. Just hording my gold, like in The Hobbit. Smog sitting on a pile of gold. Right?
Derek Sivers
What’s that for? It should go to who needs it. So to me, it’s not social signaling. In fact, when I first did it, it was intended to be a secret, and somebody outed me later that I had done it. But it was a secret at first. So it wasn’t social signaling. It wasn’t even altruistic because you got to understand, CD Baby was very profitable. It wasn’t like a startup that had tons of investors and was deep in debt and only broke even when it sold. No, I was the 100% owner. I had no investors. It was making like 4 million a year net profit.
Chris Stout
Wow.
Derek Sivers
When I sold it. So I had already paid off all my debts. I already had a few million dollars in the bank, that I wasn’t even using that. It was just sitting in a Vanguard account. So when the sale of the company came along for 22 million, I was like, “Oh my God, wow, 22 million.” It was a little bit of a problem. Like, what do I do with this? And I considered like moving to San Francisco and becoming an angel investor.
Chris Stout
Which a lot of people do, there’s plenty of folks here that are situation you were in that’s kind of their next rung on the ladder.
Derek Sivers
I mean, I actually even kind of dabbled in it just the tiniest bit, but just like, kind of like you asking about Web3 earlier. It’s like, I just have no interest in this. I just don’t care. This does not excite me. I hate listening to startup pitches and powerpoint presentations.
Chris Stout
Yeah, from what I know of you, Derek. I mean, that just seems so antithetical to your creativity and oh my gosh, that would just be horrible.
Derek Sivers
Yeah. And even that was really alienating for me from the entire entrepreneur community because having sold a company, people put me in the category of tech entrepreneur, but every time I was meeting all these entrepreneurs, I felt like, “Man, I’ve got nothing in common with you.” They’re talking about getting their series A done, their angel round. Something you’re trying to do, and they’re meet their Q3 results. And what the fuck are you talking about?
Derek Sivers
Oh, I hate this. I need to leave now. I’m getting tired anyway. So yeah, just philosophically, I was like, “What should I be doing with this $22 million?” So the big idea was, you know what, all of this money came from musicians. It really should all go back to musicians like the next generation. It’s almost like the previous generation of musicians will fund the next generation of musicians through CD Baby. My lawyer that was helping kind of put together the whole sale deal of the contracts and all that stuff. He actually had a background in tax law, so he said, “All right, well, looks like the deal is accepted. So what are you going to do with the money?” And he was just kind of being conversational.
Chris Stout
Mm hmm.
Derek Sivers
I said, “Well, I’m just going to give it all away.” And he said, “Wait. Are you serious?” And I said, “Yeah, I’m serious.” He goes, No, “I mean, are you really, really serious? Like, are you completely committed to giving it all away?” And I said, “Yeah.” And he said, “Because if you really are and in like an irrevocable can’t ever change your mind kind of way. We could structure this in a much smarter way.” I said, “What do you mean?” He said, “Look, if you personally, Derek, sell the company for 22 million, then $22 Million will come to your bank account and immediately 7 million or so will go right back out to the IRS and you’ll give $15 million to charity after you’ve paid your taxes.” I said, “Yeah.” And he said, “We could transfer the company into a charity now, it’ll be irreversible. So even if the sale doesn’t go through, it’s too late. Your company will forever be owned by a charity.” I said, “Aha.” And he said, “But then when the purchasing company buys it for 22 million, they will pay the charity the entire $22 million. None of it will touch your hands and there will be no tax on it. And all 22 million will go to charity.” I said, “Oh, okay, well, that’s what I want then.” He said, “Are you sure are serious? The entire 22 million will never touch your hands.” I said, “Yep, that’s what I want.”
Chris Stout
Wow.
Derek Sivers
And to me it was just a no brainer. So yeah, that entire 22 million went to charity. Wait. But there’s there’s one little catch. Is that the charitable remainder unit trust is set up in such a way that it’s usually only done by older people doing it shortly before they die. It’s this idea of like, put everything I’ve got into a unit trust, which then pays out a certain amount of its proceeds of its assets to me personally every year. So the minimum I could set that to was 5%. Like by law, the smallest you can set it to is 5%. So every year the charitable trust pays out 5% of its assets to me. And that pays my entire cost of living and more. So that’s why when I say I don’t want to make a single dollar from the sale of my books, it’s because of that. My cost of living is way covered. I’m all set. I don’t ever need to make another dollar for the rest of my life because of the sale of that company, like the Charitable Trust is paying me out a healthy annual amount.
Chris Stout
That’s great. Do the dollars go out then to musicians? Like we put together a scholarship fund and it’s sort of like, I don’t know, not necessarily a Chinese wall. It’s not that sophisticated, but I don’t get to pick who in the scholarship gets the scholarship, so to speak, just from an ethical blind kind of thing. Is that how that works for you with with distribution of the musicians part of it, then the next generation of musicians.
Derek Sivers
No, in this case, it’s when I die. When I die, I have like listed three charities in order. So when I die, the entire 22 million or whatever it’s grown to, because hopefully by the time I die, that 22 million might even be 100 million then.
Chris Stout
Yeah.
Derek Sivers
If it’s just invested into index funds that keep growing while I’m alive, then when I die, that entire 100 million will go out to a music charity. And yeah, along the way, the charity could make donations to only only U.S. five or threes. But to me, I’m just letting it kind of all go when I die. Yeah, but in the meantime, like, the stuff that I’m earning through other means or just the this annual amount that I get out, then I can just make charitable donations on my own.
Chris Stout
That’s great. Well, and just one thing, too. One of the things that Peter Singer talked about in his book, he has a whole chapter on like there’s a lot of controversy around people, like having named things, you know, like the Hewlett-Packard or the Packard Building at Stanford or something like that, and people felt like there is ego. And I appreciate, because of who you are and your modesty and stuff around those kinds of things. But Peter makes a point that when people do see this and I don’t think he was doing it from a social signaling perspective, but that it sort of gives permission for other folks to do that. And you can, that oh, well, if so and so could do that. And I’m in a similar boat and, you know, I guess that’s something that I should look into, too. So there’s also kind of a normalizing aspect of that as well, too. But I think it’s a mix. Some people like the anonymity and anonymous donors and other people like to kind of say that this is, hey, if I could do it, pal. This is something that other people might want to consider as well, too. So anyway, I think that’s an interesting knot to kind of untie.
Derek Sivers
You know what, Chris? To me that comes back to the daily run, the pot of gold versus the tiger on your tail story I told earlier, which is like whatever works for you, you know. If the dream of having something called Rockefeller Center named after your family, if that motivates you and that’s what gets you to give away $100 million, is because you want to have your name on it that. Hey, whatever works for you. Sure. And other people stay anonymous and that’s what works for them. They’d rather be completely anonymous because they don’t want the hassle. Then that’s what works for you. There’s no right or wrong answer. Whatever gets you to give the money to people who need it more is a good answer.
Chris Stout
Yeah. Well, thank you, Derek. You know you are the master of insightful brevity. Is there anything you’d like to say to. To wrap up our conversation with.
Derek Sivers
Honestly, anybody? You know, the reason I do these interviews, I’m not here to promote my book. I don’t really care. If you if you enjoy my book, thank you. But I don’t care to sell more copies. The reason I do these interviews is honestly for the people I meet. So if you’ve listened all the way to the end of this interview, go to my website and send me an email. I don’t have any team of people. It’s just me. And I like hearing from thoughtful strangers. So yeah, my website is sive.rs and the contact link is right there on the home page. And yeah, send me an email and introduce yourself. Say hello. Great.
Chris Stout
Great and I will put that in the show notes so people can look those up as well too. So thank you again for just what you do and all the the content and the distillation and the sharing and stuff and the the 501C3 and the Trust and everything else. I think you’re a wonderful role model and you’re just such a pleasure To talk with. And I’ve been so looking forward to this as well, too. So it’s been a real treat for me and a little selfish probably as well. So I do have one final question, though, Derek. Can I get some cinnamon gum or a plastic squid?
Derek Sivers
Plastic squid. And listeners, you’ll have to have to look that one up. Go to “Anything You Want” to learn the context of that joke.
Chris Stout
All right. Thank you so much, my friend. I’m looking forward to what comes next. And again, just enjoy everything you do. Thank you so much for the time today, my friend.
Derek Sivers
Thanks, Chris.