Level Up
host: Gary Mauris
lessons from the circus, business philosophy and values, importance of customer service
listen: (download)
watch: (download)
Transcript:
Gary
Derek, good morning. How are you?
Derek Sivers
Hi. Thanks, Gary. And hey, everybody. It’s my fault that we’re five minutes late. It’s 8:00 in the morning here in New Zealand, and I tuned in just in time instead of 15 minutes early. I’m sorry. So blame me not Gary.
Gary
You know, we’re just so thrilled to have you, Derek. We completely understand that. And we knew there was going to be obviously a huge time difference from where you are to here. We’re just really, really thrilled. We’re here to all of our viewers today, guys, we’re going to give away a whole pile of Derek’s books. So if you’re making a comment or posting or resharing on social media, we’re going to send out books to probably everyone. It’s an incredible book “Anything You Want 40 Lessons for a New Kind of Entrepreneur”. Derek, let’s sort of maybe just start from the very beginning. You’re so thoughtful on how you sort of explain your story. Going back to 1969, obviously looking at your timeline, you were born in California. You’ve done a lot, a lot of things. I mean, you started off playing piano, I believe, was it violin and clarinet? And what kind of kid were you? Were you were you an always entrepreneur kid? Were you were you raised in that kind of household? I mean, how did this happen?
Derek Sivers
No, I think when I was 14, I heard like this heavy metal music that I was like, “Oh, that’s the sound of my soul.” And it just gave me this drive to play electric guitar. And that’s what I want to do. And so shortly after I became just really focused or maybe even obsessed with being a successful musician. So I think a lot of the things I’ve done in life have come from that. Like because I wanted to be a successful musician, I would read these self-help books on how to be like a better person, how to be more effective, how to be more productive, how to communicate better, how to work harder. And it was all in the goal of being a successful musician. And then later, once you learn those life skills, you can apply them to other things. Which is why I think it’s always great to have something you’re focused on no matter what it is, even if you’re just focused on being the best Checkers player or Emu farm raiser. If you just have anything that you’re focused on, it gives you the life skills that you can apply to other things later.
Gary
Yeah, yeah, it makes total sense. As I look through your timeline and your bio, I mean, you’ve done a lot of incredible things. You spent was it ten years in the circus?
Derek Sivers
Yeah, Yeah. When I was 18 years old, I was at Berklee College of Music and I got a call from an agent asking if I could go perform at a pig show in Vermont for $75. And I was living in Boston, so it was like a $53 round trip bus ticket to go to Vermont. But I was like, “75 bucks, yes.” It was like my first paying gig. So I said yes to go play at the pig show. I just showed up with my guitar and walked around playing while people were judging pigs and came back home. And the booking agent called me and said, “I heard you did a really good job. So look, we’ve got this circus and we’re looking for a new musician for the circus.” So I said, “Okay, sure. What does it pay?” And again, it paid 75 bucks per show. I was thrilled. And I ended up doing it for for ten years. I ended up being the ringleader emcee If you came to the circus, you would have thought it was my show.
Gary
Yeah. Wow. So what sort of lessons? Was there any lessons? I mean, obviously traveling. I mean, they say that the like of someone in the circus it must be incredibly colorful and very interesting. And, you know, anything you took away from that, that you sort of like carried with you.
Derek Sivers
I’ve learned the hard way the truism it’s better to apologise than ask permission. You don’t go into a venue and say, “Hey, is it okay if we juggle fire here?” Yeah, you don’t do that. Instead, you just do the show. Then you get ready, you put the gasoline on the torches, you light them on fire and you start juggling. And if there’s somebody running around with a clipboard going like this, you know, you just apologize to them later. Yeah. So I learned that. But also, I learned that you got to just roll with anything. The circus would pull into these towns in the middle of New England somewhere, and sometimes they forgot we were coming, you know? I mean, we did over a thousand shows. So, of course, it’s inevitable that a couple of times you show up and they’re just like, “Oh, yeah, yeah, forgot. Okay, could you just do a show over here for no people?” And you just learn to roll with whatever happens?
Gary
That’s a great sort of lesson for life, right? Because, you know, stuff’s going to happen all the time. There’s another train looking to run you over. There’s disruptions and breakdowns and failures. And it can paralyze you or it can power you. And you know, what a great story and what a great background. So it’s interesting because you were a musician for all these years, including those years with the circus. And then you decided, I guess you originally do your own CD? You made your own album. And that was sort of the start of CD Baby back in the day.
Derek Sivers
Yeah. So I was a professional musician in New York City for many years. So in there I just recorded my own album, but this is 1997, so like there wasn’t even PayPal back then and Amazon was just a bookstore. So if you were an independent musician with a CD to sell, there was literally nowhere on the internet that would sell it for you. So I got my own credit card merchant account, which back in the day was harder. It was like $1,000 in setup fees and you had to incorporate a separate business account and they actually sent an inspector to my location to make sure I was a valid business, Like it was a lot of paperwork. So when I was done with that, I had a credit card merchant account. And so I told my musician friends in New York City that I had done this and all my musician friends were like, “Dude, can can you sell my CD through that thing?” And I went, “Huh, I guess so. Sure. All right.” As a favor to friends and then, yeah, CD baby, my company grew out of that.
Gary
Yeah, it’s interesting because you talk about, you sort of started a business accidentally, right? And you sort of didn’t even really want a business, right? Just maybe walk us through sort of like what happened there. And, you know, obviously it got traction. I mean, you were the early days. I guess the only relationship you knew previously was that of music distributors that. It was their way, you know, and they told you how much profit and how to operate the business. I read in your book and you had sort of four different items that you when you started the business, you wanted to make sure that you controlled. You want to make it just--.
Derek Sivers
Yeah, the utopia. I think the idea was like I wasn’t doing it for the money. I was doing it as a favor to my musician friends that I considered myself a musician. I was a full time musician. I was still pursuing that same dream since the age of 14, I was trying to be a successful musician. So the fact that-- oh yeah, there’s a weird picture of me in the middle. Damn, you really did your homework, you found some old photos of me. Wow. So the fact that I was selling CDs for friends, I didn’t want that to distract from my musician career. Right. So I decided to make it utopian. I was like, “Well, as long as I’m going to do this thing, I’m going to make it like a dream come true from a musician’s point of view.” Because I’ve dealt with the music industry enough and it’s just like, this kind of, “Kid, you’ll get paid if you’re lucky, maybe next year.” Right. So I was like, no, I’m going to I’m going to make this like a dream come true from a musician’s point of view. And so that was my main inspiration. Even the money that I charged was just enough to compensate me for my time spent on this thing. I wasn’t trying to make a profit. But then it grew to a size where I got the economies of scale where it’s like, I priced it at like $35 to set up an album in my store, and that’s when it cost me to do it once. But pretty soon, like 50 albums a day started arriving and I learned to automate things so suddenly, it didn’t actually cost me 35 any more. It cost me more like $6. And so it became very profitable, but not by design.
Gary
And so you started the business was it 1998? Yeah. And you sold the business in--.
Derek Sivers
2008, ten years later.
Gary
2008, it was ten years. Yeah. I mean, it’s interesting because one of the things that I really liked about your book is, I really liked how you boil it down to 40 lessons. And you know, if you wouldn’t mind Derek sort of reading a couple of those lessons and getting your comments on them for you. I found it’s interesting because I’m a voracious reader. I love to do it. I much like you, lots of personal development stuff. But I really love the simplicity of your books. I just love the one hour read, very digestible. And I think it’s available for anyone. I mean, and just the lessons were so great. I want to maybe just go through a couple of them because I’d love to maybe hear your feedback. You talk about what’s your compass, right? You know, many people think they know why they are doing, so many people don’t know why they are doing it or what they’re doing. You speak of sort of some common themes and that making the company is a great way to start to improve the world and to improve yourself. Success comes from persistently improving and inventing, not from consistently promoting what’s not working, which I thought was very powerful.
Derek Sivers
Thanks.
Gary
Yeah. Any thoughts on that as far as--.
Derek Sivers
Oh, I learned all of these things the hard way. I think it really helps that I spent 15 years as a very struggling musician. You know, the doors did not swing wide open for me as a musician. It was a real uphill battle. It felt like every door was locked, you know. So when after 15 years of that, I was the guy running CD baby. Suddenly I was considered to be in the industry and I was the one helping all these thousands of musicians sell their music. So it felt like suddenly I was on the inside. So now I could be like a spy, telling musicians how things work from the inside. But from having been a struggling musician for 15 years. So I knew what it was like to be them. I think the the meta lesson in this is that I see a lot of people who just want to start a business. They don’t even know what-- they’re just like, “I just want to start a business.” Right? Which is to me always sounds like somebody who’s saying like, I just want to wear a bandage. You know, I don’t have a wound anywhere. I just want a bandage. To me a business is something that you do to solve a problem that nobody else is solving. It’s a bandage. It needs a wound.
Gary
Yeah. It makes a lot of sense. I want to just kind of go over it again because I see this all the time, right? Success comes from persistently improving and inventing, not from consistently promoting what’s not working. God. Derek, we see that so often, right? We see people that have a game plan or a business plan or something. They think and they push and push and they sell and they pitch and they present and you talk about it -in your book- being a hit record, like you, you know, a musician might write a hundred songs and not get any traction. All of a sudden, boom, they hit one and it hits. And you talk about spending your time right on things that are giving you that return and walking away from everything that maybe you thought you knew. Right? I mean it was very fascinating.
Derek Sivers
Yeah. You have to remember that the reason you’re doing this is for other people, not for you. And it has to come from that place. It’s selfish when people hold on to one idea and they just keep pushing it, even though it’s clear that nobody wants it. It’s like we call them a bore, right? Or the person that like, walks into a party and acts like a jerk and doesn’t pick up on the fact that nobody’s laughing. But if you’re actually doing it for other people, then you can pick up on the fact that like, okay, I’m going to put this into the world and the world goes, “Uh.” You go, “All right, I’ll put that into the world”. And the world goes, “Yeah.” You say, “All right, how about that?” And the world goes, “Ooh, we like that.” So I think you have to not get too attached to your ideas. I like the fact that in English we use the word release. You know, I released a new book, I released a new album, and I like the double meaning of that world. Like, just let it go. You’ve released it into the world. Don’t hold on to it. Go.
Gary
I think the lesson or how you summarize it, if it’s not a hit switch, right? Stop doing things that aren’t working and move on. We’re going to try a lot of different things. The other thing that I really liked and I’m going to play a video that I really liked and, you know, it’s how to start a movement, right? And going from a single nut right to something extraordinary. David, would you mind playing that video for me? It’s about two.
Derek Sivers
If you’ve learned a lot about leadership and making a movement, then let’s watch a movement happen. Start to finish in under three minutes and dissect some lessons. First, of course, a leader needs the guts to stand alone and look ridiculous. But what he’s doing is so simple, it’s almost instructional. This is key. You must be easy to follow. Now, here comes the first follower with a crucial role. He publicly shows everyone else how to follow. Notice how the leader embraces him as an equal. So it’s not about the leader anymore. It’s about them, plural. Notice how he’s calling to his friends to join in. So he takes guts to be a first follower. You stand out and you brave ridicule yourself. Being a first follower is an underappreciated form of leadership. The first follower transforms a lone nut into a leader. If the leader is the flint, the first follower is the spark. Thatrillioneally makes the fire. Now, here’s the second follower. This is a turning point. It’s proof the first has done well. Now it’s not a lone nut and it’s not two nuts. Three is a crowd and a crowd is news. A movement must be public. Make sure outsiders see more than just the leader. Everyone needs to see the followers because new followers emulate followers, not the leader. Now, here come two more people, then three more immediately. Now we’ve got momentum. This is the tipping point.
Derek Sivers
And now we have a movement. As more people jump in, it’s no longer risky. If they were on the fence before, there’s no reason not to join in now. They won’t stand out. They won’t be ridiculed, and they will be part of the in-crowd if they hurry. And over the next minute you’ll see the rest who prefer to stay part of the crowd because eventually they’d be ridiculed for not joining. And ladies and gentlemen, that is how a movement is made. So let’s recap what we’ve learned. If you are a version of the shirtless dancing guy all alone, remember the importance of nurturing your first few followers as equals, making everything clearly about the movement, not you. Be public. Be easy to follow. But the biggest lesson here. Did you catch it? Leadership is overlooking. Yes, it started with the shirtless guy and he’ll get all the credit. But you saw what really happened. It was the first follower that transformed a lone nut into a leader. There’s no movement without the first follower. See, we’re told that we all need to be leaders, but that would be really ineffective. The best way to make a movement, if you really care, is to courageously follow and show others how to follow. When you find a lone nut doing something great, have the guts to be the first person to stand up and join in.
Gary
Derek when I first discovered that it was sent to me from Dustin Woodhouse. I mean, it really resonated with us because I was that lone nut when we started Dominion Lady Centers with now the largest company in the country. And all of those, you know, that first person that jumped in and all of those initial people are still with us many years later. And the journey has just been absolutely incredible. But that really resonated. Where did that whole thought process come from? Because I think you turn that into a TED talk, correct?
Derek Sivers
Yeah. Or Ted turned it into a talk. Right. I just saw that video bouncing around YouTube. One day somebody forwarded it and said, “Huh, check it out.” But it was just a guy dancing with people joining him. But I had just recently read two books, Tribes by Seth Godin and The Tipping Point by Malcolm Gladwell. And so as I watched this video, I thought, okay, this is kind of funny. But more importantly, this is a visual representation of what I’ve just been learning about how a following starts. That’s what The Tipping Point was all about. I was like, Huh, “Let me just share my observation.” So I posted on my blog that video with just my commentary below it. Like, you know what’s really interesting about this? Notice how da da da, And it really takes that first follower. Like that’s the tipping point because you can go to YouTube and you can see that shirtless guy was dancing for a long time before that first guy finally joined in. And as soon as that first guy joined in, then the second, then the rest. So I thought, yeah, this is really interesting. So I just posted it on my blog. It was kind of a hit right away. And so then the TED conference asked me to do it on stage. So yeah, I did that on the Big Mainstage TED conference where there’s like Al Gore, there’s Bill Gates, there’s the two guys that started Google. There’s the guy that invented Unix. Oh my God. It was like the most intimidating audience ever.
Gary
Yeah, it’s so well presented. I mean, the way you narrate it is just--. It resonates so well. I congratulate you on that. I mean, it’s just so much fun. One of the missions I read was your mission to make people smile and think it’s a really, really good mission. And you know, something else that you did that I thought was fascinating and you probably know where I’m going with the jet. You were running this fulfillment business. Now you had built this very successful company. You had, 150,000 sort of musicians and artists on it. And every single person who ordered a CD used to get an automatic thank you for ordering the CD email and guess you came up one day with with a concept of a new email. I’m going to put the email up, but this is the email that actually went out. We’re going to read it quickly.
Gary
“Your CD has been gently taken from our shelves with sterilized contamination free gloves and placed into a satin or placed onto a satin pillow. A team of 50 employees inspected your CD and polished it to make sure it was in the best possible condition. Before mailing our packaging, specialists from Japan lit a candle and a hush fell over the crowd as he put you into the finest gold lined box. That money can buy. We all had a wonderful celebration afterwards, and the whole party. Hardy marched down the street to the post office where the entire town of Portland waved Bon voyage to your package on its way to join you in our private jet on this day, Friday, June 6th. I hope you had a wonderful time shopping at CD, baby. We sure did. Your picture is on our wall as customer of the year. We’re all exhausted, but can’t wait for you to come back to CDbaby.com.” Tell us about that, where that came from and just the power and impact of that one silly fun lighthearted email.
Derek Sivers
Okay, I’ll do the specifics first and then we’ll get to the real lesson from it. So the yeah, I was just a guy in my bedroom starting this little thing, as I said, to like sell my friends CDs. I didn’t call it CD baby until a few months later. At first it was just like on my band’s website. So once it was CD Baby, I did this thing and it had a very typical email confirmation. You know, your order has been shipped. And I just looked at that and I thought, “I can do better than that. That’s just cheesy. That’s so normal.” And so I wrote that email that you just read in like ten minutes in 1998 and just made it the automated email that everybody got
Derek Sivers
But then CD Baby ended up selling like, a few million CDs. So a few million people got that email and it spread so widely people would post it on their blogs, posted on their social media accounts, say, “Oh my God, guys, you got to see this hilarious confirmation I just got from this little record store.” And so then thousands of people ended up coming and becoming new customers of CD Baby because they heard of it from this email. Seth Godin even put it in one of his books, and I think Tim Ferriss did too, which to me is just funny, you know, it’s like ten minutes in 1998, I wrote that little thing. So I think the lesson is it really helps to look at everything you’re doing and ask yourself why? Like, why am I doing this? Like, why do we have a reception desk? Why do we answer the phones or not? And to question these things and not just do what everybody else does, but ask yourself like, why am I doing this thing? And if that’s the point I’m doing, then what would be the best way to do it? And to think of these things from scratch instead of just imitating others. That’s all.
Gary
Yeah. Incredibly clever. And, you know, I think of what it reminds us is that, it gives us license to have fun, right? You know, our business is not just boom, boom, boom and very serious and only the facts, man. And like, lighten up, have some fun, giggle a little bit because the world around you wants to giggle and have some fun, too. I think we take our businesses too serious sometime and I really love that thought. It was very great. You know, running the business that you started, you you got a lot of high level acclaim and you got a lot of recognition. And you talk in the book about Steve Jobs dissing you in a keynote. Can you share that story with us?
Derek Sivers
Yeah, that feels like two lifetimes ago. So CD Baby started doing digital distribution when Apple asked us to. So we had 200,000 musicians, so about 2 million songs in our database. And then Apple launched the iTunes Music Store, which was like selling 99 cent downloads for the first time. And so they launched it with only the major labels. But then right afterwards, they called us and a few others to their office and held this little presentation with Steve Jobs himself, comes out and says, “All right, everybody, we want every piece of music ever recorded in the iTunes music store. We don’t care how deep your catalog is. We want everything.” I said, “Great, okay, we got 2 million songs.” They said, “Great.” And so they sent me the contract. I signed it immediately. I sent it back, but then we heard nothing from them, like just nothing. And I had already told all my musicians like, okay, we’re on the iTunes music store once every piece of music ever recorded, let’s do this thing. I built this whole system to deliver it. I charged a musicians $40, which again was just like recouping. That’s what it actually cost me to grab their CD off the shelf, stick it into an Apple PC the way that Apple insisted we do it, put it into a mac and and upload it to their servers. So I charged I think it was about 5000 musicians opted in so it was like $200,000. And then Steve Jobs gets on stage. So like months went by and they weren’t returning our contract and I would try to contact them and no response. So then Steve Jobs went on stage and he said, “Yeah, you know, all the other shops have all this music we just don’t want that music. Like we believe that record labels do a good job. They filter. Yeah. Did you know that there are some musicians or some places out there that say for $40 they’ll just put anybody onto the iTunes music store? Well, we don’t want that stuff.” And like, my heart just sank like you, motherfucker. I put my ass on the line because you said--.
Derek Sivers
So I was like, all right, I give up. And so I emailed all 5000 musicians. I said, “Sorry, everybody. Steve Jobs changed his mind. Apparently, he doesn’t want your music anymore.” So I refunded everybody’s $40. I took a $200,000 loss because I had already spent that money to do all this digitizing and build the system. And then the next day, after I refunded everybody’s money, Apple sent the signed contract back to us and said, “Okay, let’s begin. We want everything.” I went--
Gary
You are kidding me. What did you do?
Gary
Did you do it?
Derek Sivers
Yeah, I gave him, I was like, “Fucking apple, duh.” So, yeah, sometimes people ask why I use Linux, not Mac. And I say, “You’ll see.”
Gary
Yeah, exactly right. It’s interesting because we talk about creating a movement. We talk about building followers. You know, you explain a business, your own business, big or small, of your own personal little private sort of universe where you make the rules. And I thought that was really interesting the way you describe that. But one of the other things you talk about and I think this is really important, is you say proudly exclude people and always explain to people yourself, listen, guys, in business, if you’re doing well, not everyone’s going to like you. There’s always competitors and for whatever reason, people have their own mind and their own free will and you look at the United States of America, the largest, you know, the strongest country in the world, and, you know, the president, you know, gets in with 50 or 51%. That means 49% of the people don’t like the other president or actively, you know, hate him. And you talk about excluding people, right. And proudly excluding people who maybe aren’t in the same page as you. Can You just sort of articulate that for us.
Derek Sivers
Yeah. I mean, like you said, it applies to everything. You just can’t please everybody. And you shouldn’t try, because if you’re trying to please everybody, you’ll create something really generic and of no use to anybody because you’re trying to be of use to everybody. So instead, I think it really helps to have a niche. There’s a brilliant book on this called “Positioning” by the authors Ries and Trout, brilliant, legendary masterpiece of a book about finding your niche. Do you guys have NyQuil up there? You know that?
Gary
Yeah, we sure do. Yeah.
Derek Sivers
Okay. So this is the story they tell in the book. I love this little story. Now, see, this is like me as a teenager wanting to be a successful musician. And I heard this story and I applied it metaphorically, which is this, that before NyQuil came along, you would go to the the pharmacy and there would just be a bunch of cold medicines saying, “We’ll make your cold better.” And then NyQuil came along and said, “This is the nighttime medicine all those other guys, those are for the day, but we’re for the night.” And so suddenly it’s like you can imagine the pie chart that used to have, you know, cut into little 20 slices. So suddenly NyQuil has half the pie chart and all the rest are put into the other half. And it was just such a nice way to describe, like once you claim your niche. It puts all the other generic guys kind of like off to the side. And so now it’s night time. There’s only one medicine they think of. So as a musician, I thought of this like declaring what style of music we do. It’s like, this is a pop funk. We only do pop funk. You know, this is our style.
Derek Sivers
And say, if I was running a recording studio for a while and I’d say, This is a recording studio for drums, you can go record everything else everywhere else, but if you need to record drums, you come to my recording studio, I just record drums. And that became the niche, right? And so I think this applies to anything you do. You can say, I’m not trying to be everything to anybody. Like you could say, like I only do industrial real estate. I only do back end database programming. I only write pop philosophy books. And it just really helps to own your niche and to just proudly let go of that other 99%.
Gary
I love it, right? It’s the old saying, Right. And it’s just nature’s great riches. You know, we talk in your book about proudly exclude people. You talk about a club in LA, I think it’s called Hotel Cafe. And it’s a no talking club, right? Like big red do not talk. You’ll get escorted out of here. You cannot be in our club. You cannot talk and at the time you wrote the book, you said it was the most popular club in LA. Right? Because they just did not. If you were a purist and you wanted to listen to musicians, then you don’t want to have a conversation. You’re there to listen to the actual music. And because they chose their wheelhouse or their niche, they became the most popular club in LA. Right? Thought it was a great, great story. Thank you for going through that and explaining that to us. The other thing that you talk about is, you say it’s important to know what you’re staying focused on, right? And to really know what you want in your business instead of doing what others think you should be doing in your business. And I see that a lot. I mean, on this call today, we have hundreds or thousands of people who have their own business and they’re running it a certain way because they think it should be run a certain way. But you talk about your business being your own little universe, right? And I really like that. And, you know, it’s actually-.
Gary
Sorry, Gary. It’s related to this niche thing we just talked about like this whole idea of like, make your own universe and make it the way you want. It’s part of the niching in the market to say like, “I’m not going to be like the other people. I know that most people do it this way. I’m going to do it this way.” And it helps make you that person that does things that way that people it helps you stand out. Like again, back to that little email I wrote, it was just ten minutes of my time. It was such a silly little thing, but I think what people responded to was like, “Whoa, this is so weird and different.” Right? And so you don’t want to do what other people do. You just want to like, find your own unique way to do it your way according to your values. Not trying to please everybody, but almost like an expression of yourself. That’s why I think business is creative.
Gary
Yeah, I love it. And there again, in your book, it’s just so simple the way you explain all this stuff. A couple other ones that sort of resonated with me and you know, this one sounds pretty elementary, but care about your customers more than you care about yourself. It’s not elementary, though, you know what I mean? I know firsthand that people get caught. I always say to people, right, when you got a problem in your business, solve for the emotion. Don’t solve for the problem. Trying to figure out on your finger that you know this, the reason why this happened, it’s okay, I’ll take care of it. But the reason why this happened is because you made a mistake or it started with your person like that doesn’t solve any problem. Right. And the person is still unhappy. Even if you solve it and give them what they want and make it all right. If you’re pointing finger or looking for the for the blame game. Right. You’ll never, ever win. And you talk about caring about your customers more than you caring about yourself. Is there anything you can add to that?
Derek Sivers
I think you have to feel secure. I think a lot of the worst business practices come from a business feeling insecure, like, well if we give away free ketchup on the hot dogs, then then everybody’s going to take more ketchup than we can afford. We’ll go bankrupt. You know, it comes from this place of scarcity and fear. But if instead if you just kind of relax into a confident state of abundance and know that you’re doing this for your customers, then you can be generous. And if you were to oversimplify what we consider good business practices and bad business practices, it generally comes down to being generous or not, that if you’re generous, people will love you and they’ll tell their friends about you because you’re generous. And it’s all the cases where a business is being very ungenerous, being stingy, that we kind of grumble and do business with them reluctantly. So it all comes down to that, being generous.
Gary
Tell a story about the cab driver that you were with in Las Vegas when he said this town was way better when the mob ran it, right? Because when the mob ran it, they cared about dollars in and dollars out. It was fairly simple. It was an easy to run that business. And they weren’t grinding on every nickel. And, you know, and you see it today. I mean, you know, everything you do, your Vegas has become extraordinarily expensive where we used to go there and gamble and everything was free at one point. Right. And it’s just it’s crazy how little things change.
Derek Sivers
Yeah, you know, it comes down to optimizing. Like that was the difference between the mob approach according to the taxi driver. Not that I know anything, but the taxi driver said, “When when the mob ran this town, all they cared about was the bottom line. Are we making money? Good.” He said, “Once the MBAs came in, they tried to micromanage every square foot of floor space. And try to make sure that every square foot is getting its maximum profit it can get.” I think a lot of misery comes from trying to maximize.
Gary
Yeah, absolutely. Couldn’t agree with you more. You know, one of the things that you say in there, again, it’s not rocket science, but the way you explain it is so simple. And I love your thoughts on it is little things make the difference. You said you had a policy. You had this this big company. You had thousands of CDs being shipped. You had phones everywhere, though, because you wanted that phone answered immediately all the time. Right. Like, you know, and talk to people all the time about speed of response being one of the most easiest wealth secrets. Right. Especially in the world we live in today, where there’s auto responders. You can’t get through and you can’t speak to somebody. Someone actually picking up the phone was a very novel idea. The little things just like that, that making people smile. Is there anything you want to add to that?
Derek Sivers
Yeah, well, again, I learned this the hard way, right? I thought I knew why people liked CD Baby. But then I would go to these conferences where I would meet hundreds of musicians. And more importantly I would hear musicians tell other musicians about CD Baby. So, like, every now and then, some musicians is talking to me and then somebody will talk to him and they’ll say, “What’s CD Baby?” Or, Why did you go to CD Baby instead of one of these other companies?” And over and over and over again, the thing that blew my mind I was never expecting is they’d say, “Oh, yeah. You know what’s cool about CD Baby? They pick up the phone. Yeah, like you can call them, you call them and they answer on the second ring, like they picked up the phone. You could talk to a real person right away, like try that with any other companies, try that with Amazon.” And people would go to CD Baby instead of Amazon because we pick up the phone. Simple as that.
Gary
It is. It’s just alarming how simple it is and how, you know, little things, how we forget about them. You know, I’ll give you a sort of a same example Derek, you know, I travel. We have a lot of people across three different brands in Canada. And it’s hard. We get bigger, right? It’s hard, some people you see once a year, once every two years. But I’ve really focused. I mean, I’ve made it a real mission of mine to remember names. And it blows my mind where, oh, yeah, DLC is a great company or they’re good to work with or they have great branding or they have great tools. You know how many times I’ve heard people just say, “The CEO remembers my name.” Something just as simple as that, it’s like answering the phone, right? You know what I mean? And it’s not a perfect science, but when I literally meet someone, you know, I literally will sneak off to the bathroom or turn around. I’ll make a little note on my iPhone. Right? Just, you know, met them and this Barry has a team of five just so that I’ll have to go back to it. But there’s so many examples of just like little things like that actually make a difference. The other thing that you speak about is execution. And you say, you know, there’s a million great ideas out there and the value of great idea is zilch. Right. But the value of a great idea with execution is millions and millions and millions of dollars. I couldn’t agree with you more on that. It’s just something that we got to get very good at. Any strategies or tips how to be better executors.
Derek Sivers
Err on the side of trying things. Now people get to be people have a kind of perfectionist tendency to not want to do something until everything’s right. I believe it’s in the software world there’s a brilliant saying that says, “If you’re not embarrassed by your first release you released too late.” Like you should be embarrassed by your first release of your software, of your company, of your project, whatever. Like you’re supposed to launch it when it’s still embarrassing. Like that’s how it’s supposed to feel. It’s always supposed to feel too early when you release something to the world. I think that’s my biggest tip.
Gary
Yeah. You know, I’ve had so many conversations over the years and say to people just start, right? What does it say? Just start. Just try something. It doesn’t have to be the perfect mouse track. You know what? Say, I’m going to start in six months. I’m preparing this. I’m building this. I’m getting it ready. Like, don’t build the perfect race car, right? Just get something with an engine and four wheels on the road. Right. Because your business plan is going to change so much. Always. Right? Like, it’s amazing how many times we think we’re going to do something a certain way in business and then we’re open and we actually listen. It completely changes, right? You know, it’s a complete 360. So, I love the the explanation on that. So Derek, here you are. You know, obviously we talk about CD Baby, because you’re going up against a Goliath. It was the early days. It was a business that you sort of started accidentally. I mean, you overcame all these incredibly amazing hurdles. I think what I really admire sort of most after getting to know you through your books a little bit. And I think you actually coined it yourself, right? You know, life is a symphony and you are the conductor. And if I look at you, you’ve traveled and been all over the world. You’ve lived in the UK, you’ve lived in New Zealand, I think you’re still in New Zealand now. You’ve been in New York City as a musician. You’ve been to Asia, you’ve done a lot of different things. You’re really living life on your terms. Maybe just bring us up to speed now, like, what are you doing and how is it going? I know you have a little boy now that I think 10 or 11.
Derek Sivers
Yeah. I was living in Singapore. Just because I wanted the challenge. I just moved there because I’d never lived in Asia before. And Singapore, if you haven’t spent more than a couple of days there, it’s it’s kind of Asia lite in the sense that it’s like for us people coming from the West, it’s like people in Asia consider it a western city and you come from the West and it feels like a very Asian city, but everybody speaks English. So it was like a nice, easy place. So I loved Singapore. I loved it with all my head. I felt at home right away. It was such an interesting place to be. And my son was born there. But I wanted him to grow up in nature. So we moved to New Zealand really just for the purpose of him growing up here. And he has and it’s great. But yeah when. I sold CD Baby, I sold it for so much money that I would be a fool to do anything for the money ever again. That would feel like hoarding. So everything I do now is not for the money.
Derek Sivers
So like you mentioned my books at the beginning of the phone call. Like all of my books, I give all of the money to charity. Like not a single dollar of it comes to me. And that’s on purpose because I just don’t want it. I just don’t want any more money than I already have. So the whole reason I’m selling books is to raise money for charity. I’ve donated over half $1 million to against Malaria Foundation and a couple hundred thousand to help babies, newborns not die in India and things like that. That feels better to me than having it come to me so I can get a new car or something like that, you know? So I’m just writing my books, which is, to me, the greatest intellectual challenge. You could tell in my book “Anything You Want”, like what I was doing with CD Baby and all the questions you’re asking me today. It’s like constantly thinking of everything somewhat philosophically from scratch.
Derek Sivers
You know, why are we sending an email confirmation? Why do we have a phone number? What’s the purpose of this? What’s the purpose of that? And so now I’m just doing the same thing with life. And questioning it all, which is a good thing.
Gary
So, your love now is just sharing your wisdom, making people smile, writing books. Your speaking, of course. Doing that sort of stuff. Is there any new projects, any new books on the horizon for you, or are you always working on one?
Derek Sivers
Yeah, there’s always a next book. Yeah. My most recent one is called How to Live. And honestly, I think it’s like the greatest thing I’ve ever done. It’s my masterpiece. One of sorry. If I died having done nothing but that book, I’d say that was a life well lived.
Gary
And so that book was the the most recent one right How to Live.
Derek Sivers
Yeah. Yeah that one that’s on the screen. Yeah. How to Live.
Gary
I’m gonna get my assistant to order that right away. It’s interesting. One of our one of our long term brokers. I’ve seen him on the screen. Norm Jurafsky, a good friend of mine. Great guy. I think he sums you up really well. He goes, “Derek is an entrepreneur goes against conventional wisdom.” Which I absolutely love. That’s that’s a great quote.
Derek Sivers
Can we say an unpreneur? Yeah. We going to coin a new term UNpreneur. Sure.
Gary
Yeah. That’s great.
Derek Sivers
That’s that’s really awesome. That’s a nice compliment.
Gary
So if you look at sort of life today and your journey, what is it that you maybe are still working on trying to accomplish? What have you got there yet?
Derek Sivers
Oh God, you know, the ocean gets deeper as you go into it, right? There’s the more you go into anything, the harder it gets, the deeper it gets. So both with my programming and my writing, I just keep loving those two things. I keep coming back to those two things. I love programming because programming is philosophical. Every time you’re programming, you’re starting from scratch. You’re going, “Okay, what’s what’s the real point of this? Why does this function exist? What do we really need to do here?” And same thing with my writing. So yeah, I just keep diving deeper into those two. I didn’t grow.
Gary
You didn’t grow up as a programmer. You didn’t go to school for it. You just went to the library and bought a book and started self teaching yourself, I believe.
Derek Sivers
Yeah. It was only out of pure necessity. For once, CD Baby grew beyond what I could do manually typing every line of HTML myself I had to learn programming in order to like have people be able to place an order while I was sleeping. Yeah. So I learned a programming just out of pure necessity, but just ended up loving it.
Gary
Yeah, that’s great. You know, obviously you’re a lifelong learner and you love to read, you share that with us already and you recommended a couple of books. Is there, 1 or 2 other books that sort of stand out for you that we could share with our viewers today that, you know, really resonated with you?
Derek Sivers
I will share all of them with you if you go to go to my website sive.rs/book. If you go to that URL since 2007, I’ve been taking detailed notes on every single book I read. Every time I read a book, I’m there highlighting my favorite ideas, underlining. And then when I’m done, I type them all out into a text file and I post it on my website for free. So there’s over 350 books there. Yeah, there’s already 350 books there and I sort them by how highly I recommend them. So if you just start at the top of that list, those are the best books I’ve ever read. And you can get a little preview of looking at the notes. And again, I just do that as my contribution to the community to try to encourage other people to check out things I’ve loved.
Gary
Yeah, you know what? I absolutely love it. And I love the fact that you share so much. You’re such a generous soul and it just resonates through you. Absolutely incredible. Derek, what are you most grateful for?
Derek Sivers
Huh? My limbs. I like having limbs. I recently met somebody that doesn’t have limbs. It’s really nice having limbs. Yeah.
Gary
Yeah, absolutely crazy. Very different answer. Very cool answer. One of the last things I want to touch on, and I’ve heard this before, but, like, the way you explained it, you know, when you’re deciding on whether to do something or not to do something, you say anything less than a wow is a no. Actually, what you say is hell yeah or no. How is that sort of helped you make decisions over life and and how important is that in our businesses today? Because we get inundated with requests. You know, we always take on way more than we can take on. And it’s just it’s very hard on us.
Derek Sivers
Yeah. When you’re in that situation, when you’re overwhelmed. It’s important to raise the bar all the way up. I think we have a kind of fear of missing out that if we don’t say yes to a lot of things like, well what if one of them turns out to be good? They’re like lottery tickets. You never know. Right. But you have to usually you learn this the hard way that if you spread your self too thin, then nothing gets done right. Nothing gets done. Well, so what I realized shortly after selling CD Baby aI was inundated with offers and people wanting to work with me. I just raised the bar all the way up and I said no to almost everything because the biggest lesson was this, that if you say no enough that you’ve actually got free time, then it means when something comes along that’s really like a big wow. Then you actually have the time to throw yourself into it completely. Like, then a big project comes up, you know, we want you to be in this movie or, you know, we’re starting this new venture. You can say, “You know what? I’ve been saying no to a thousand things. Yes, yes to this.” And I’ve actually got ten hours a day to throw into this right now because I’ve said no to everything else. I think it’s a great way to live, to say yes to less and just do a few things really well.
Gary
Yeah, absolutely. Love that. You know, I’ve been saying for years to just get really good at saying no, right? And it’s so hard to say no because you want to say yes. It’s just absolutely gut wrenching to say no. It’s funny, when I started my business 17 years ago, there was a sign shop next door and I went next door and I had a sign made, “Y Yes.” So it’s still in my office today. It says yes. Find a way to say yes to see the most opportunities. Like we’re 17 years later, I say to my assistant all the time, let’s find a way to say no and only yes to the most critical things because it just gets absolutely overwhelming. It’s it’s amazing how your mindset changes, obviously, over the years. Going back to--.
Derek Sivers
Sorry. It’s not just over the years, though. I just want to be clear. The hell yeah or no strategy is only for when you’re already overwhelmed with opportunity and it’s actually making you implode. Then you need to raise the bar all the way up. But the problem is, I actually hear from some 19 year olds that heard Tim Ferriss praise the hell yeah or no strategy because he used it for his overwhelmed life. And they think, yeah, I just got out of high school and you know what I’m saying? Hell yeah or no to everything I say. “No, no, no, no, no. That’s the wrong strategy. Like you are at a time in your life where you actually need to say yes to everything.” Like this is only a specific tool for a specific situation. At other times in your life, you asked me at the very beginning of the call, how did I get into the music business? It was by saying yes to a $75 pig show, Right. You know, so I think usually saying yes to everything is the right strategy. And you keep doing that until something goes really well, then you double down on that thing and then you’re very successful. The whole world wants a piece of you. Everybody wants you to join them, and that’s when you have to raise the bar up and start saying, “Hell yeah, no.” But don’t do it too early.
Gary
That is beautifully articulated, beautifully explained. Thank you for that. Right. So, you know, one of the things that you said saying yes to less is a way out. If you feel overwhelmed, that’s perfect. That’s an absolute perfect way. Listen, we’re just winding down. Just, you know, Derek, this has been an absolute pleasure. I’m going to have my assistant order all of your books, and I’m going to get through them, and I’m going to order a whole bunch so I can give them away, you know, on a regular basis to our team and franchise owners and top agents. Guys, if you want to book post it at Derek, there’s someone talking about how great the level up today was with Derek and we’re going to send you a book if you’ve tagged us somewhere else on social media, you’ve made a comment. We’re going to send you the book that I actually mostly referred to today. Right Anything You Want. Absolutely incredible read. Very simple. I mean, as Derek said, you can read it almost in an hour. But the way he actually articulates and explains these principles, we went through maybe 8 or 10 principles today. He’s got 40 in this book. And, you know, I mean, as a guy who’s been doing this for a very long time and read a lot of books, I thought the sort of simplicity of this book was extraordinary. Absolutely incredible. I love that, you know, your social initiatives and you’re giving back and you wouldn’t be considered a capitalist. I mean, you are very generous in your time. You are very generous in what you do with your life and your business, I think is extraordinary. And what an extraordinary interview. Thank you so much, Derek.
Derek Sivers
Thanks, Gary.