Productive Insights
host: Ash Roy
customer-focused business, generosity in business, avoiding external funding, content creation
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Transcript:
Derek Sivers
Everything about the business was optimized for them, not for shareholders. And you can just I think customers can feel the difference. So I think that to me is like the lesson of my book. Anything You Want is that generosity pays. Hi, I’m Derek Sivers from Sivers, and you’re listening to my friend Ash Roy on Productive insights.com.
Ash
Welcome to the Productive Insights podcast, Derek.
Derek Sivers
Thanks, Ash.
Ash
Thank you so much for being here, Derek. I’ve read just about all of your books. In fact, I’ve read all four of your books and I’ve read some of them multiple times. You have created some outstanding content. And if I’m not mistaken. When you wrote Anything You Want, which was the first book I’ve read, I think that was the one Seth Godin recommended you write. Is that correct?
Derek Sivers
Yes.
Ash
Well, I sent him an email last night saying, “I’m so excited. I’m interviewing Derek Sivers tomorrow. I believe you encouraged him to write anything you want. I love the book and I’m super excited.” And he wrote straight back and he said, “It’s a great book. He’s aces.” So I was like, “Wow.” Seth Godin is one of my heroes. I started my entrepreneurial journey listening to startup school ten years ago. Seth doesn’t even know this, but he’s somebody I’m proud to call a friend. He’s not my best friend. But we talk every now and then, and I’m very grateful to know him. He was also a guest on episode 200. So Derek, could you share with our listeners and our viewers the story of CD Baby and how you built CD Baby? Focusing purely on the customers needs and not obsessing on profits or worse still, revenues, which is what most Silicon Valley types seem to obsess about. And you sold it for 22 million. So can you tell us that story?
Derek Sivers
Yeah, well. First. I mean, don’t get the wrong idea. I mean, I’m clearly not a Silicon Valley type. I was a musician in New York City selling my own CD. So when I started, there was no CD Baby. In fact, in 1997, there was no business anywhere on the internet that would sell your music unless you had a record deal already, and then your record label would take care of it through the major distributors. But if you were just an independent musician wanting to sell your music, there was nowhere that would sell it for you. So I just had to do it myself. So I built my own store. I got my own credit card merchant account, which was like $1,000 in setup fees in about three months of work and had to figure out how to program my own shopping cart from scratch because there was no PayPal back then and it was three months of hard work. And so after three months of work I had a buy now button on my website and none of my musician friends had that because, yeah, I was the only one. So after I did it, my musician friends in New York said, “Whoa, dude, can you sell my CD through your thing?” And I went, “Huh? I guess I could. Sure, why not”? And so I was just doing it as a favor to friends. It was not meant to be a business. So that’s the big difference is that I wasn’t trying to make money. My full time living was as a musician and I didn’t want anything to get in the way of me making music.
Derek Sivers
So. Really just like as a hobby. In my spare time, I would sell some of my friends CDs and then they told their friends about it. And pretty soon I was getting calls from strangers or friends of friends, you know, “Hey, my friend Dave said you could sell my CD. And no problem. That’s why it was an accidental business, as I didn’t want to have a business. So when I realized that I had accidentally started this business, I decided to make it like a utopian dream come true. From a musician’s point of view, right? Not from my point of view as a business owner, I didn’t think of myself as a business owner. I thought of myself as a musician and I was doing something for my peers. Right. So there are lots of examples this. Like somebody is a bicycle aficionado, and then someday they start their own bicycle company. They make what they would want to be like their dream bicycle that nobody else was making. Or pick anything else-- somebody has a love of something. If you really love something and then you get yourself into the position where now it’s your job to make it, well, then of course, you try to make it like your paradise utopian dream come true. So for myself as a musician, CD Baby was only ever meant to be a service that I was doing as a favor to my fellow musicians.
Ash
Right. So I’m really glad you mentioned at the start that you’re not the Silicon Valley type, because that is exactly what I want to shine a light on. I spoke at length about this with Rand Fishkin in episode 159, where we talked about his story and his book, “Lost and Founder”. External funding is something that seems to be celebrated in a lot of business communities and to me, in a large proportion of cases, I think it’s an opportunity for commiserations, not celebration because you are effectively handing over control of your company. Often to people who don’t understand the business and understand how it’s run. And within a few short months after the honeymoon period has passed, it’s show me the money. And now all of a sudden you’re bending over backwards, you’re compromising service, you’re compromising the business just so that you can show profits so that these people can justify the cash cow that they have supposedly acquired. So I’m totally with you. And you know, I don’t speak from a place of complete ignorance because I suffered through a CPA in 1997 and then an MBA in 2004. I’m very familiar with all the weasel words. And while I think there are some things to be gained out of an MBA, I’m not saying it’s all bad. I am saying a lot of it is BS and I want to call that out because I think that what you stand for and what you say rings very true to me. And this contrarian idea, which in my opinion shouldn’t be contrarian. Of serving the customer and a business existing to provide some kind of a meaningful service to solve a problem for someone in society, not just to make profits. Not like we were taught in business school. The sole reason a business exists is for profit. Profit is important, sure, but if it becomes purely profit driven, then very quickly it loses its way. Would you agree?
Derek Sivers
Completely, in fact to me, that’s just not enough motivation. I think, early on. Like straight out of high school. Somewhere in there, I came up with a mission for myself. I shouldn’t say a mission. I should call it a rule of thumb. Never do anything for the money. Right. And I’ve kept to that forever. Even when I was doing gigs as a musician, of course, I wouldn’t have driven the five hours to do the gig if it didn’t pay $300. So you could say I was doing it for the money, but not really. What I was really doing it for was the experience, the connections I would make from doing it, the ego boost to tell myself that I’m a professional musician. These are the real reasons. And the $300 was just a side effect. So as for CD Baby, here I’ll tell you a little story by example, is when CDBaby was in full swing. And I mean, like it was the largest seller of independent music on the web, let’s say, around 2002 or so. I was speaking at a conference where I was up on a panel with a few other people, and somebody in the audience raised their hand, got the microphone and asked me this question in front of everybody. They said, “Okay, Derek. How do you deal with PayPal or musicians just selling their CDs directly from their own site? What are you doing to prevent that? Because if every musician did that, you would be out of business.” And I said, “Yeah, that would be great. I would love it if every musician was able to sell their music directly from their own site and not need me anymore.
Derek Sivers
That would be great.” And he said, “But then you would go out of business.” I said, “Yeah, that would be wonderful. That would mean that they don’t need us anymore. I would love that.” I was hoping that CD Baby would go out of business because it was just me. I was doing it as a favor to the musician community. So if it went out of business, that would mean mission accomplished. This is no longer needed. So I really think of a business as like a bandage, right? Like if there’s a wound. It needs a bandage. So if there’s something that’s lacking or something that’s needed, you put a bandage on it. But I don’t understand this mindset when people say, “I want to make a business, I just don’t know what it is.” I think that’s like somebody saying, “I want to wear a bandage. I just don’t have any wounds yet.” So it’s weird to like, you know, I just want to have a solution. I just don’t know what the problem is. The whole reason the thing existed was to solve a problem for the musician community. And maybe this came from a place of abundance, I mean, I had other things I wanted to be doing. I wanted to be making music. I wanted to be producing records. I wanted to be touring. And I kind of somewhat sadly, let go of that to do CD Baby instead.
Derek Sivers
So if CDBaby would have gone out of business, I would have happily gone right back to producing records. So it kept the incentives aligned. And what’s really interesting and this is to me kind of like the Tao of Business and maybe part of what my book called Anything You Want is about, is that in a counterintuitive way, I think customers can tell when they are your top priority, when you’re doing everything for them and not for your investors or not for yourself. They can tell. Right? So just two years after I started CD Baby, Amazon got into the same field. Like when I first started CD Baby, Amazon was just a bookstore and two years later. Or let’s say one year later they started selling music. But even then it was only from the major distributors. So about two years later, they started selling music directly from musicians like any musician could set up their own album for sale on Amazon and thought, “Oh no, I’m toast, it’s time to wrap up. Amazon’s in the same business. There’s no way I’ll last.” But musicians kept preferring CD Baby over Amazon because they could tell that I had their best interests at heart. They liked the way that I communicated with them. They liked the way that they could call and get me on the phone. And just everything about the business was optimized for them, not for shareholders. And you can just think customers can feel the difference. So I think that to me is like the lesson of my book, Anything You Want is that generosity pays.
Ash
I’m so glad you said that word, because I was going to ask you a question about that next. But let me compliment your story with a little insight of my own as you were speaking and you were sharing that story. I was thinking back to my membership program. I have a membership program where I mentor some business owners from around the world, and I helped them to try and achieve independence and ideally build a profitable business. And I was thinking, my average tenure is one way to increase the revenues is to increase tenure. But as you were speaking I realized, “But wait a minute, that would serve my interests.” And sure, I would love to increase my revenue and my profit, but in a way, it’s good that the tenure is relatively it’s not several years, it’s around about a year or maybe a bit, actually, maybe about 8 or 9 months. It’s probably a good thing that tenure is what it is because the business owner is becoming independent and the membership has come to its natural conclusion. So to try and cram-- to try and keep the member for longer is a classic example of being obsessed with the money but not being driven by the purpose. What’s the purpose? The purpose is to help the business owner when they’re free. If they can get free in a month, then good for them, right?
Derek Sivers
Yeah. Could you imagine a school that was incentivized for their students not to graduate, but to stay in the school forever, right?
Ash
Right. And, you know, well, there are private schools in this country that are about not necessarily extending the tenure of this student, but maximizing the revenue by maximizing the value of their brand. In fact, there are some schools and in fact, I can say that about some business schools where they are all about the brand and because they have a brand. They are able to attract high calibre candidates. And so they actually have what I would call a selection bias or the high calibre candidates are the only ones who get into the business school. So then the ones who end up graduating end up with higher incomes. And the business school can claim that the incomes have gone up since they joined the business school. But my argument is they would have done that anyway because they’re hard working people and they self-selected into the brand. So the brand then becomes a filtering mechanism. It’s like a lot of people say, you know, Olympic swimmers have very great physiques, but it’s actually people with great physiques that get to the Olympics. And so it’s actually a selection bias. All right. So just coming back to the generosity thing in episode 200, which, by the way, you can access at Productive insights.com/200. I spoke to Seth Godin and I said to him, you know, one of the least used words in marketing, I believe, is empathy.
Ash
And it’s probably one of the most important. And fortunately or he agreed with me, but then he said something that really struck me and he said, another important word is generosity. Now, you just said that word as well, which really struck a chord with me. In your book, Anything You Want. I think it was. You talk about the importance of approaching the market from a space of abundance and everything falls into place. As opposed to approaching things from a space of scarcity. Now I have a tendency because of my own mental baggage to approach things from a space of scarcity. I have mindset issues. I’ve been working on it for years and years. Can you talk to us a little bit about that? How do we approach the world from a space of abundance, particularly for people who have a tendency whether it’s a genetic tendency or whether it’s chemical imbalance or whatever it is. Some people have a tendency to have a negative bias. How does one approach the world from that generosity? I mean You give away all the proceeds from your books to charity. I admire that. How do you do that? Don’t you worry about what if there’s not enough money?
Derek Sivers
No, I think. It all depends who you’re comparing yourself against. So think of the woe of the silver medal winner of anything at the Olympics. They must be thinking of how if they could have been 20 milliseconds faster, they could have been the gold medal winner. Damn it! Damn it, Damn it! The silver medal winner can’t help but to compare themselves to the gold medal winner. On the other hand, the bronze probably has a very thankful attitude because like, yes, if I was 20 milliseconds slower, I wouldn’t have been up here on the podium at all. I would have no medal. But yes, I made it that extra little 20 millisecond push and that got me the bronze medal. They’re comparing their situation to the next lower tier, which is no medal at all. So I think I compare myself always to my musician friends, my artist friends, my writer friends that are struggling to make a few hundred dollars. And I just feel super lucky all the time. Very-- I don’t know what word you want to use, fortunate, privileged, et cetera. All those kinds of words that I was able to do anything at all. Like just when I was running CD Baby and I was making $1,000 a month. Sitting at my computer making a website, helping my musician friends. And not only was I helping them, getting a wonderful thanks every day like, “Oh my God, thank you.
Derek Sivers
This made my life so much easier. This is so great. I’m so glad you exist.” Which, I mean, that’s like, you know, better than money to hear that. But then I’d also come out with $1,000 profit at the end of the month, and that was just a great feeling. So was I yearning to be a billionaire? No, I was just really happy to have my $1,000. And then when it was like $10,000 a month, I’m like, “Oh my God, $10,000 a month, just helping musicians. This is amazing.” And then when it was more than that-- so I think I was just always comparing myself downward and just feeling like I’m one of the lucky ones. And what do you do when you’re one of the lucky ones? You share it. You relax. You just like I’m in an abundant situation, you share it with people who weren’t so lucky. And I don’t mean that in like a give your proceeds to charity way. I just mean in like the way you run your business. So again, in my book, Anything You Want, there’s a little story that a taxi driver in Las Vegas told me how--
Ash
Oh, I love this one. Please tell us.
Derek Sivers
Sure. I was just being conversational. I got in the taxi and I never go to Las Vegas. Right. But I was there for a conference and I get in the taxi and the driver looks like he’s about 60. And I said, “Lived here a long time.” He goes, “Oh yeah, 28 years.” And I said, “Well, long time. Has it changed since then?” He kind of looks over his shoulder. He said,” Hell yeah, it’s changed.” He said, “You know, when the mob ran this town, it used to be fun.” He said, “When the mob ran the town, only two matters numbered how much was coming in and how much was going out. As long as there was more coming in than going out, everybody was happy.” He said, “You know, you go to get your hot dog and you ask for some extra relish, some extra mustard, no problem. They put mustard and relish on it. But then the MBAs came in and they started trying to maximize every square foot of floor space, trying to analyze whether this square foot of floor space was making as much as that.” He said, “Now they try to maximize it. I try to get my hot dog. I say, I want extra ketchup. They say that’s an extra $0.25. Sucked all the fun out of this town. Yeah I miss the mob”
Derek Sivers
Every time I ever walked into, say, a restaurant or just any kind of retail shop that you’d walk in and you’d see all these signs posted that were like. It’s going to say no shoes, no service. But you know, all these signs that are like, yeah, very protective. It’s like all sales are final. No refund without a receipt. No, this, no that. And you just look at it and whenever I see that I think, “Yeah, this poor guy is paranoid and screwed and probably gets more screwed because he walks in every day with this attitude.” You know the, “Oh, these people, you can’t trust anybody. They’re all trying to rip me off. If they come in here trying to get a refund without a receipt, screw them. No way.”
Derek Sivers
There’s a department store in the US called Nordstrom. And Nordstrom has this legendary return policy where they say that you could buy a shirt at a competitor at Sears, light it on fire, and then go to Nordstrom to return it and they would give you their money back. And they just do it because it’s good PR for them. It makes people love them. It makes people feel better about shopping with them. And so I think just even as a teenager or as a musician in my early 20s, just looking out at the world, I felt like all of the examples of good customer service and just good warm and fuzzy feelings from doing business with a company come from generosity. Like, that’s what it really comes down to, when a company is generous with me and doesn’t get paranoid and stingy. Well, then it makes me like them. And it makes me happy to do business with them, you know? I mean we are emotional beings. You know, we spend our money, but we’re not just robots we want to feel good about where we’re spending our money
Derek Sivers
We like to feel that it’s congruent with who we are. So I’ve noticed that the places that feel bad to do business with are the the stingy ones or the ones trying to maximize every square foot of floor space, so to speak, even if it’s just like an online service that you just get the feeling it’s like charging you the maximum possible subscription fee they can and then it runs out after such and such and you know, the constantly pushing you to pay more and it just doesn’t feel good to do business with those companies. And so, yeah, I think all of this was in the back of my head when I found myself in the accidental situation of, “Oops, I’m a business owner now.” And to me it was clear like I’m going to do it the good way. I’m going to be the generous type. And it also helped that I loved my customers. You know, my customers were my fellow musicians. They were my friends.
Ash
A few things I just want to mention. First of all, I’ve listened to all or I think all of your audiobooks and I love the audiobooks because you put so much of yourself into them, especially when you tell that mob story, when you do the voice of the cab driver or when you’re telling the story about how your friend wanted to put his CD on your website and he goes, “My friend Dave calls me up and goes, ’Hey man, can you put my CD on the website?’” You know, it was just so, so entertaining and so beautifully done. So I love that. Kudos to you for doing that. Just want to bring out some points you made, framing. You know, one great thing I took away from what you just told me was if you want to change your attitude or your approach to the world, then change your framing. I actually remember Ali Abdaal talking about this and I know you were on his podcast. I’ve been following Ali’s work for a long time, and I think he mentioned that his coach talks about comparing yourself to those less fortunate rather than constantly comparing yourself to those who are more fortunate than you.
Ash
And as a society I think we’ve become a little bit obsessed with outcomes and results and goals, but we’ve forgotten this particularly post-industrial revolution. I think we’ve forgotten that the journey is actually important. It matters probably more than the destination because by definition most goals and destinations are fleeting. So if we were to embrace the journey, enjoy the journey. And as James Clear says, he was on episode 175, he talks about the changing one word in the sentence. Rather than saying, I have to do this, you say I get to do this. And that’s a great way to reframe pretty quickly. So framing helps to create this attitude of abundance and an attitude of humility, which I think is also lacking. We are in this culture of either you’re the gold medalist and that is the only valid position to be and everything else is just rubbish and we even remunerate people that way. Incentivization happens that way. The gold medalist takes pretty much all the winnings and the silver medalist, “Well, too bad. So sad. Maybe you try again.” It’s kind of like that, isn’t it?
Derek Sivers
Well, sorry to interrupt. No, I mean. I think that’s a misconception. I think that there are plenty of people making a damn good living being the bronze medalist or even being, you know, the sixth runner up that you don’t have to be the number one most famous, most noteworthy leading, blah, blah, blah.
Derek Sivers
You can be just in the mix and happy and fine. I mean, think of somebody who’s like a cognitive behavioral therapist helping somebody get over their fears or something like that. Right. They don’t aspire to be the best. You know, “I’m the best therapist in the world.” It’s like they’re serving their community. They’re based in Boston or Helsinki or Sao Paulo, and they’re--
Ash
As a culture, do we promote that and do we put that up on the pedestal like we do people on Instagram who are trying to show this unrealistically wonderful life?
Derek Sivers
You say we, but I mean, some do, but you can choose to ignore that. You know, you don’t have to buy into all of today’s current trends and follow what all the kids are following. And then look at that and think, “I need to be in there.” You can just look inward to yourself. To your own emotions. And notice what makes you happiest. So I think that’s what I was doing with my business. When I started CD Baby, it was at the very beginning of the.com boom. And so all around me, I was living in New York City at the time. All around me, lots of my friends were suddenly being handed 20 million and $100 million and they were miserable because suddenly they had a boss. They were answerable to the men in suits that handed them that money and were demanding it to, you know, all these MBA terms that, you know and I don’t. You know, talking, talking-
Ash
You’re not missing much. .
Derek Sivers
They use the letter Q a lot, Q2. We’re getting our Q3 round of our series A of financing and blah, blah, blah. And I didn’t even understand what they were talking about, but they seemed miserable. Whereas I was living up in Woodstock, New York, running a little record store out of my house, answerable to nobody. Just pleasing my musicians that were gushing their thanks to me every day. And I was making $10,000 a month and I was happy. So I had no desire to be the number one. You know.
Ash
What I’m trying to say, though, is that you’ve walked a very rare path or the relatively unbeaten path. And most people that I’ve come across in social media, which influences a lot of us today, is trying to drive people towards the gold medal. What I’m trying to bring out in this conversation is the bronze medal is perfectly okay. As Seth Godin said to me, and I love this, he said, “More is not always better and enough is a perfectly fine goal to have.”
Derek Sivers
Yeah. We’re saying the same thing. I just want to emphasize that I think it’s the same machine that’s trying to get you to buy McDonald’s Big Macs or trying to get you to upgrade your iPhone the day the new one comes out. It’s the same machine that’s also trying to get you to be the next Facebook. Instead of just serving your community. It is that--. What do you call that? Mimetic desire? René Girard. That kind of like trying to. do what society is telling you you should want. And so I don’t think I’m such a weirdo for not playing into that. So I don’t think the lesson of this interview would be to say, yeah, there’s some weirdo who didn’t buy into that. My lesson is like, nobody has to buy into that. You can just turn it off, spend more time journaling, less time swiping. And notice what really makes you happy.
Ash
That’s exactly what I’m trying to say as well. I don’t think that you’re a weirdo at all. I think to me, you’re a beacon of hope because you said--. Well, there’s a few people. There’s Rand Fishkin, you guys have made choices which we all can make and which to me seems like a sane choice because the path that at least when I did my MBA and when you go into the corporate world, you’re socialized to believe is everyone’s aiming for the CEO. Okay, not everyone, but that’s kind of like the implicit goal. But it’s okay to have a satisfying life. It doesn’t have to be driven by the dollar. Yes, we all need money to live. But enough is a thing and enough is a goal. And it’s a valid goal.
Derek Sivers
Right. And it’s about being honest with what makes you happy. So I always have to add in when the subject comes up that you might actually be like Richard Branson, who if you read his autobiographies and I think there’s more than two. He sincerely just has fun making money. You know he’s got a billion and once more and but he does it with a sense of fun. So to him, like, if that’s your internal thing, well, then don’t let anybody tell you that you shouldn’t be making money. And on the other hand, I know some people that want to be famous and did get famous and enjoy being famous. And I’m sure there are plenty of people telling them, you shouldn’t do that. You could actually make more money staying out of the spotlight and be in the back end, be the producer, not the star, be the investor, not the the media, darling. And they have to just be whole heartedly in looking inside themselves and knowing, you know what, I like being famous. It makes me happy. Yeah. And some people the opposite, you know, they like being anonymous. And I’m sure there’s somebody saying, you know, you should really step into the spotlight.
Derek Sivers
And I’m like, “No, I like being anonymous.” So you just have to know in yourself. What makes you happiest? It might be leaving a legacy that makes you happy. It might be the glamorous life in Hollywood that makes you happy. And you shouldn’t feel bad about whatever the thing is that’s driving you.
Ash
That’s true. Love that you said it’s about getting to know yourself and what you feel will make you happy. I mean, Warren Buffett loves to make money, but it’s not the money that makes seems to make him happy. It’s the making of the money that makes them happy. I mean, he says, “I’m not good at giving it away.” So he gets Bill Gates, who’s better at giving it away to give it away. So I agree. I think that’s a great point. Let’s switch gears a bit and talk about content creation. You have created some really pithy and useful content. I want to know the secret. Do you write 100 pages for every one page you publish? Because there is so much density and wisdom. In your content. But it’s so concise. Can you tell us what your secret is to creating this content?
Derek Sivers
Thanks. That’s a great compliment. First motivation. Meaning, I have felt the pain of reading 300 page books. That should have been 20 pages.
Ash
Yes.
Derek Sivers
And then noticing that, repeatedly vowing not to do that. And I think that’s a hard thing for us to get over. I think you need to acknowledge if you are a writer or a speaker or somebody putting stuff out into the world, you need to acknowledge the fact that in school you were taught to do the opposite. It was like, “We need a 10,000 word essay on this subject.” That you have nothing to say anything about. So you’d have to come up with 10,000 empty words that you didn’t want to be doing. And so we did that over and over and over again for years in school
Derek Sivers
And then you get out of school. And the best thing to do is the opposite, which is to put the least number of words possible. You know, the more succinct you are, the more people will listen. The more powerful your message is if you cut out the fat around it. So first you have to have the motivation and the drive to do that because some don’t, you know, I think in contemporary society. The worst offenders are talk radio or let’s just say radio hosts. They’re paid to just fill the air with noise. Just keep talking. Keep talking. Doesn’t matter. There’s nothing to say. Just keep those words moving. And I think a lot of people in business do that, too. They say all these puffery, “Well, you know, going forward..” You know all these nonsense words that mean nothing just to keep talking. Okay. So first, the motivation to be succinct. Then how? First and foremost, I talk with friends. Like I talk a lot with friends and share daily epiphanies and insights, and they share theirs with with me. We share our insights and ideas and we bounce. We reflect each other’s. So a friend calls me with her new epiphany of the day and we bat it back and forth a bit. And then I just notice any time I say something that makes a friend go, “Ooh, oh, that’s a good point. I never thought about it that way.” Then I go, okay, noted. You know, and then I’ll go write it down like, “Oh, that impressed somebody.” And that would happen when I would speak at conferences too, I would be on stage to a room of a couple hundred people, and sometimes I’d just be trying out new ideas. And you could see when I would say something that would make all the heads go down to take notes, you know, suddenly you see people do that kind of eyebrow, maybe a little frown, and then put their head down to write something down like, “Oh, okay, that just made people write it down. That must be good.” I’ll remember that one. I’ll use that. So then when I’m writing. I try to just share those things. And yes, my rough draft of everything is everything. It’s all of my thoughts on a subject. It’s just the verbal dump of everything. But then when presenting something to the public, I edit it down to share only the surprising bits. That’s my filter, it’s that I’ve noticed that we only really learn when we’re surprised. So if I can just get rid of everything, that’s not surprising. That means I’m just sharing the good bits that help people learn.
Ash
Have you read the book “Made to Stick” by Dan and Chip Heath?
Derek Sivers
Yes, loved it.
Ash
That talks about breaking our guessing machines. And you’re right. We are predictors. In a sense, it’s a survival mechanism. And when we break people’s guessing machines, that’s when they listen. I was trained to write by a person called John Morrow, and he taught me that he personally taught me to write. And he he said, “You need to think as a performer, not as a writer if you want to be a successful writer.” So I love that. You also mentioned in your conversation with Jay Klaus that you journal for at least an hour a day, sometimes 3 or 4 hours a day. I think that’s one of the best ways to really dive deeper into your thoughts and become more self-aware, even if it’s not for being a writer, but especially if you want to be a writer. Tell me given the artificial intelligence and all this, you know, more and more text that’s being spun out through these machines. Do you think AI is going to have any meaningful impact on writing?
Derek Sivers
I’m a programmer as well. And I have a membership to OpenAI. So I’ve used their APIs and I’ve programmed and tweaked and had it generate text, because at first I thought maybe this is something that could help me. But maybe in sheer quantity. I feel that I haven’t got any new ideas from AI yet. I kind of thought that like let me kind of seed it with some really insightful, surprising philosophical sentences. And then I’ll start the first half of sentences and see what it comes up with. And I did this over and over and over and over and over again. And I never found anything surprising that made me go, “Ooh, that’s good.” I was really expecting that. I thought it would. But I get mor, “ooh” surprise moments out of a conversation with a friend. If I’m sitting there working on something, I’ve a dozen different people I could just call and just say, “Hey, Tynan, what do you think of this idea?” And I’ll say, “I don’t know, man. Sounds to me like you’re basically saying--” and I’ll go, “Oh my God, you’re right.” You know, I get more insight from one random comment from a friend than from an hour of playing with GPT3. So that said, I mean, I’m sure it’s a useful tool. I think it would be interesting if you’re stuck. I think if you were writing fiction and you weren’t sure and you wanted a little random element, you know, it reminds me of-- Brian Eno made some cards that called Oblique Strategies. You should look this up. Anybody who’s like a creative creator of anything, let’s say. Brian Eno is a legendary record producer that produced some of the greatest rock albums of all time, including with David Bowie and U2 and Talking Heads and some good stuff.
Derek Sivers
Very, very, very creative guy, Very thoughtful. I like his ideas about music even more than I like his music. And so one thing he did years ago is he made a deck of cards that he called Oblique Strategies. And on each card was a directive saying like, cut a common thread and the next card would be saying, reverse it. And another card would be saying, get rid of something that seems necessary right now. And the idea was when he was producing a record and he felt stuck and wasn’t sure what to do, he’d shuffle the cards, pull one out, and the game was to follow its instruction no matter what, even if that felt wrong. So then he would cut out the drums or something like that, or remove the lead vocal, something that seems necessary or whatever the cards told him to do. So I could see AI being a random influence like that, to give you some random ideas if you’re feeling stuck. When people talk about it replacing writers, well then I think if you can be replaced by AI, then you probably should be. You should find something else that is more of your unique contribution in the world.
Ash
That’s interesting. Speaking of cards, I don’t know if you’ve seen this, but I got this when I bought Seth’s book “The Practice”, and it’s got these really cool cards. I love it. It’s got these, you know, sayings on the cards or these snippets. You know, “If you knew you were sure to fail, then what would you do?”
Derek Sivers
I haven’t seen this
Ash
“You’re not a boss but you’re in charge.” It’s really cool. You should get them. I recommend them. You can buy it all. At one stage they were selling it with the book. “All criticism is not the same.” And there’s another little thing called storyteller tactics. I just bought these. And these are cards that-- I’m not sure where you can buy them. I’ll send you the details later, but they’ve got these various ways to tell stories and then I’ve got another one for they’ve got different kinds of tactics. This is called workshop tactics. So yeah, cards are, cards are pretty cool. I love cards. It forces you out of your, out of your mental patterns, which is wonderful.
Derek Sivers
Yeah.
Ash
So tell me, Derek, in your book “How to Live”, which I’ve got right here, I’ve got all the goodies. I love this book. Initially, I have to say, I found it confounding, but it definitely broke my guessing machine. It was surprising. And I remember sending you an email about it saying, “Hey, man, I kind of don’t quite get what you’re saying here.” And then I said, “Wait a minute. Are you saying that the the point of the book is there is no one way to live?” And you’re like, “You got it.” By the way, that’s why the book is called 27 Conflicting Answers and one Weird Conclusion. And it’s a nice and thin, concise book. Like everything Derek Sivers, you know, concise. I love it. I love the fact that you’re not about just spouting 300 pages of stuff that could have been done in 30 pages. So in your book How to Live, you talk about pursuing pain.
Ash
Now, this is something that people don’t talk about enough. And I think it’s very important you say and I don’t quote exactly, but you say everything good comes from some kind of pain. The pain of practice leads to mastery. If you avoid pain, you avoid improvement. Now we see all or I see all this promotion about million dollars overnight, kind of some version of that. And there’s so many versions of that BS. But the truth is. In every instance, when I have seen somebody who has achieved anything meaningful, whether it’s financial or not. They have endured various kinds of pain. As a guy called John McGrath, the founder of McGrath Real Estate, said to me in episode 122, “It takes ten years to become an overnight success.” And most people just see the overnight part. When you started CD Baby, I think in the conversation with Jay Klaus, you said you were working, I don’t know, 12 hours a day, seven days a week or something like that for like three years. You didn’t just wake up one day and sell it for 22 million. You had to work hard. We don’t talk enough about that. Can you tell us a bit about your take on it?
Derek Sivers
Yeah, it might not be the answer you want.
Ash
But I want to hear your answer. I don’t have any preconceived notions.
Derek Sivers
My honest answer is, I don’t remember any hardship. I feel like there was none. Except for maybe one bit of drama with my employees about a year before I left the company. It was actually really the reason I left the company is because things got full of drama. But the previous nine years I basically worked from 7 a.m. to midnight, seven days a week. For mostly ten years. And I loved it. I was having a blast. I mean, there’s a reason I would, like, bounce out of bed quickly, throw on some clothes, dash into the office, and I’d be excited to be there, like, “All right. Back at it. Okay, today I’m going to make this at work.” I’m going to do such and such or such and--” I really enjoyed doing the emails and, like, answering people’s questions. It was like eating potato chips as little challenge to answer these things and to get some new ideas from customers on what they’re asking for or what they say would really help them.
Derek Sivers
I was learning programming along the way. I wasn’t a programmer at first. I learned out of necessity. So I’d say “Okay, there’s got to be a way I can get the database to show me who bought this, but not that, but not in this.” I’d make this a challenge to myself to make this SQL query that could do what I wanted. I found it a challenge to build systems that could automate things we were doing manually. You know, just me and three people at first. And those three people were completely swamped but I couldn’t really afford to hire a fourth person. I’m like, “Okay guys, show me. I’m going to sit here and work with you today.” And I’d say, “Okay, there’s a lot of repetition in this. There’s got to be a way I can automate that.” So that’s really-- this tone of excitement you hear in my voice, That was me for ten years.
Derek Sivers
That’s me 7 a.m. to midnight for ten years. Like, “Okay, how can I do this?” Or even like, I’m going to go to this conference and how can I knock it out of the park? They’ve asked me to speak at this conference. I don’t want to just get up there and go like,” Well, yeah, you know, music business is tough.” I want to get out there. I want to inspire these musicians to show them that they can emancipate themselves from the machine. And so I’d give that as a challenge to myself and I’d write these articles to try to help musicians. That’s my purple book called “Your Music and People” is mostly articles I wrote for musicians. So it ends up being about marketing. It was written to musicians, but you can read it metaphorically. It’s about the generosity of marketing in general. Except for that little bit of drama near the end. There was no hardship. It was just fun. And so I actually constantly wrestle with this definition of work, right? Like I tell my kid, “Sorry, I need to work.” But really, it’s play. And I tell my friends that too. It’s tough when they say, “Well, what are you working on?” It’s like, whatever I feel like. Really whatever I call work is basically me time.
Derek Sivers
It means whether I’m programming or I’m writing, I’m editing something, I’m learning something new, I’m reading a book. You know, not a fiction book, but something I’m going to apply to my life. This is all my “work”. This is what I love the best. Ten years of CD Baby was me just having a blast for almost all of it. Now the few years before I started CD Baby, there were some hard work in there. There was a lot of struggle to try to get my music into the New York City music scene. And there were a lot of constantly locked doors and uphill battles. But even that, like I said, about like driving five hours to go to a gig that pays $300. I had a deeper purpose. I was doing it for the experience. I was getting better. I was toughening myself. I was learning more and getting paid. So it was hard. But even that, I loved it.
Ash
So a lot of this comes back to framing, right? Because I think I’m sure you’ve heard the phrase. If you love what you do, you’ll never work another day in your life, right?
Derek Sivers
I do sound like that, don’t I?
Ash
No, but I mean, that’s true. I think that’s totally true. It’s framing. But then what did you mean when you said the thing about pursue pain because you say everything good comes from some kind of pain. The pain of practice leads to mastery. If you avoid pain, you avoid improvement. I mean, for me, even though I love what I do and I have for the last ten years. Sometimes for me the pain is in the form of repetition or boredom. I feel like I want to do something different today. I don’t want to do the editing today. It feels like a chore, man. I’ve got to edit this whole hour and a half long video and I’ve tried outsourcing the editing many times. It’s like editing your own book. You can outsource it. I’m not saying you shouldn’t, but it doesn’t always express it the way you want it expressed. So often not always, I’ll edit it myself, like I’m going to edit this interview myself because this is so important to me. Tell us about what you meant by that, when you said, you must pursue pain.
Derek Sivers
To me that’s applicable in so many parts of life. So I say pain, but it means--. I know some people that are professional weightlifters. And they actually enjoy it. It’s the difference between deep happy and shallow happy. Shallow happy is eating an ice cream. Deep happy is skipping the ice cream and going to the gym. And yes, lifting 120 kilos over your head hurts like hell. But you did it. And you get the deeper satisfaction of having done it and you’re proud of yourself for skipping the ice cream. You could say that was pain, but also a deeper happiness. In fact, I think that it might even be the definition of deep happy to me is when you pursue something difficult. And you achieve it. That’s a deeper satisfaction than pursuing something easy.
Ash
Right. So when you did those ten years at CD Baby, that was deep happy, right?
Derek Sivers
Yeah. So like, even when I said like, “All right, I’m excited to figure out this SQL query” for example. That’s like somebody being excited to go to the gym. Like yes, the actual lifting is going to hurt and yes, when I was sitting there for hours trying to figure out how to get the web server in Linux to do such and such and how do I get this SQL query. It was a lot of like, I’m still not working. But then four hours of frustration followed by like, “Oh my God, oh my God, it works. I did it.” And it’s like, now I know how, I poured through the manual for hours to learn how and I did it.
Derek Sivers
Yeah, you could say that those are four painful hours. So the thing I was talking about in “How to Live” too was also the pain of working through a problem in your relationship and your personal relationships instead of giving up and walking away? It’s also referring to practice. The best musicians sound terrible in practice. When a bad musician is practicing, you just hear them basically play and that’s why they’re not getting better. I went to Berklee College of Music, right? So, I’ve listened in to great musicians practicing and it’s a lot of mistakes and pain and trying hard to get that fingering just right and slowing it down and getting it better and like air and scales. Then they got to do scales and arpeggios and the tough finger combinations, but then they get it. And it’s a deeper choice. You could say, yeah, if you were to avoid that pain, then you would never get better at your instrument. And I think people do that in everything language learning. If you were to just kind of casually use Duolingo ten minutes a day.
Derek Sivers
You’re not really going to learn the language. If you put yourself through the pain of going to iTalki.com and forcing yourself to do a conversation with a native speaker and requesting that they don’t speak English with you but only use the new language that you’re learning. It’s a really painful 20 minutes or 30 minutes, but that’s going to teach you better than two hours of Duolingo.
Ash
And that’s deep. Happy.
Derek Sivers
Yeah, hopefully. But I mean, the bigger point to me, since you asked about the pain chapter of “How to Live” I was talking about that kind of stuff because I think it applies everywhere. The pain of really learning a new concept like struggling with a book. It’s about a concept that’s way over your head, but you force yourself to read it slowly and read it twice and really get it. Learning programming. Learning another language. Addressing interpersonal problems with others, Addressing personal problems inside yourself. These things can all be really hard, but that’s where the good stuff is.
Ash
You, I’m sure, would have gone through some challenging times when you were starting CD Baby. Or maybe you didn’t because you were a professional musician. What’s your advice to an entrepreneur who is trying to get that escape velocity. Where they have a certain runway by which time they have to either make the business work or they have to go back to the day job.
Derek Sivers
I mean, first I advise usually not quitting the day job until the other thing is supporting you. I don’t know if you know the Tarzan metaphor, is that when Tarzan is swinging through the jungle on the vines. The way that you swing through the jungle on vines, you grab the next vine, and once it’s holding your weight, that’s when you let go of the previous vine. You don’t let go of the previous thing until the next one is supporting you. So I usually don’t advise making a leap where you’re going to be screwed if you don’t make a ton of money fast. But that’s me. I mean, I think it’s--. You and I both admire Seth Godin, and I love his advice of just get one paying customer, like please one person, get one person happy to open their wallet to you. And once you’ve done that, you can talk with them, get to know them. Ask how else you could help them. Ask how else to improve and in the conversation with them think of how you could systemize what they’re asking you to do. Then you do it for a second person, and then you do it for a third person. And so instead of thinking, “How can I make $1 million quick.” First, just aim to make $1,000 and then after you’ve made $1,000, think about now, how can I make $10,000? And after you’ve made 10,000, think about how to make $50,000. I think if you start thinking in these millions and billions type terms from the beginning, it can really just be a lot of wanky daydreaming. Whereas if you just keep your focus on helping people in front of you. That’ll keep you improving and being useful to others.
Derek Sivers
Yeah. Did you hear? There’s a difference there. If you’re thinking, how can I make $1 million. That’s still keeping the focus on you. If what you’re thinking is how can I help more people? Then that’s going to keep the focus on them. And that’s like the Tao of business, that by keeping the focus on them, not you you’re probably going to end up doing better. Then if you were asking yourself, How can I make $1 million?”
Ash
How do you approach a new prospective customer. If you haven’t had any previous contact with them. And extend an offer to help them without them feeling like you’re trying to sell them something.
Derek Sivers
I’ve only done it for people I know already. Yeah being a musician in New York City, I would ask my musician friends how I could help.
Ash
Right. You’ve already got the trust built.
Derek Sivers
Yeah. Yeah.
Ash
By the way, have you read the book Delivering Happiness?
Derek Sivers
No. Everybody said I should. It sounded to me like it was preaching to the converted, you know?
Ash
It is exactly what you’ve been saying. So just for you, I guess it would be a bit of an echo chamber. It was very sad how his life ended. But yeah, it’s a book that is all about true generosity. In your book, “Hell yeah or No”, you say, “If I’m not saying hell yeah about something, I say no.” Sounds great. But easier said than done. Any tips on how we can do that?
Derek Sivers
Well, first you got to remember that it’s a tool for a specific situation. Like any tool in the toolbox, it’s not meant to be used for everything in the house. So hell yeah or no is a strategy to use when you are overwhelmed with opportunity, when everybody wants a piece of you. Everybody’s throwing everything your way and everybody wants you. You have to say hell yeah or no to basically raise the bar all the way to the top. So that you only say yes to a few things and then you have the time because you’ve said no to everything else. You have the time to knock it out of the park, as they say, for those very few things that you say yes to. So first you just got to know when to use the strategy. For example, I get emails sometimes from people that are straight out of college and they read my book “Hell Yeah or No”. And they’d say, “Hey, I loved your book and I’m just out of college. I’m just saying no to everything.” And I say, “No, no, no, no, wait. That’s the wrong strategy. Like you’re in a different situation, man. Right now, you need to say yes to everything. Say yes to everything you can. And only later, when you’re overwhelmed with opportunities, that’s when you need to raise the bar up and not say yes to all the new opportunities coming your way, but say no to almost all of them. It’s a strategy for a very specific purpose.”
Ash
That’s very helpful. Derek, you have such a refreshing approach to life, and every time I read your content, I feel a little bit freer from the shackles of these mental models that have been imposed on me through my life, especially that this book, “How to Live”. I recommend it to everybody. I recommend listening to the audiobook. I want to be respectful of time. I could talk to you forever, man, but I realize that you need to go. Just before you do, can you tell us what’s important to you in your life right now and why?
Derek Sivers
Journaling. Reflecting. I think all my learning comes from reflecting. I think when we read a book or watch a video or listen to a podcast is just input, but we’re not really learning. We don’t really learn anything until we have time to reflect and reflect on how you can apply that new incoming information into your own life. So to me, reflecting is super important and then reading, you know, if you have the time to reflect on it. And in the journaling, it’s asking myself questions. And then most importantly, questioning my answers. Meaning like I don’t trust myself. I doubt myself. I doubt everything I say every time I think I have the answer to something I like to challenge it and question it and doubt it. And I find that so useful to get yourself out of mental habits. What did you call them before? Practices. Forget what? You had a good word for it. Like your common mental routines. Yeah I’m constantly forcing myself to look for different perspectives on anything. Looking at all the things you’re doing in life saying, “Why am I doing this?” Like, what’s the real reason? And then questioning that going, “Is that the real reason? So if somebody were to move the magic wand and just provide me that, I would stop doing this other thing that I’m doing to get it. No, I wouldn’t. So what’s the real reason I’m doing it then?” And then no matter what you say, you doubt yourself and challenge yourself. Yeah, that’s probably the most important thing. Besides the obvious, I love my kid. And I spend probably at least 40, sometimes up to 100 hours a week, just one on one with me and my son. I’d spend way more time doing that than I do writing or programming or working or anything else you see me do. I spend way more time just with me and my son.
Ash
And is this because you’re financially independent now?
Derek Sivers
Yeah, but I think I did it that way on purpose. Ever since I was a teenager. I remember learning that John Lennon, when he was at the height of Beatlemania, he had his first son, Julian Lennon, but didn’t have any time to give him. So Julian Lennon grew up very neglected by his dad and didn’t get to know his dad. So when he was 35 and he and Yoko had his son Sean. He said, “Okay, I’m doing it right this time.” He told his manager, like, hold all calls. I’m saying no to everything. No, for five years I’m out, I’m taking a sabbatical. And for five years he was a full time dad for his son’s first five years of life. And I remember even as a teenager learning that going, “Yeah, that’s what I’m going to do. Like if I have a kid someday. I’m going to just set things up. Even if I have almost no money, I’ll just find a way, even if it means I’m going to be house sitting, staying at somebody’s house for free or something so that I can just be a full time dad and give my kid the full attention.” Because I just think that’s so crucial in those early years. So yeah, luckily for me, I sold my company, but I think even if I hadn’t, I would have just found a way to say, all right, world. Like, I have a kid now. This is obviously way more important than anything else.
Ash
Your son is very fortunate.
Derek Sivers
Me too.
Ash
Do you write with SEO in mind, by the way?
Derek Sivers
Fuck no. I don’t care one bit about SEO. None. I don’t expect anybody to find me in a stupid search. I don’t even use search engines. I hate that whole world. SEO to me it’s like, you know, kind of like your question about AI. If you’re doing something that AI can replace, then you know it should replace you. And to me, it’s like if you’re doing something where the only way people can find you is because you’re doing SEO, well then you really should be doing something better with your life. Zero interest in SEO. Sorry if that’s condescending to people.
Ash
No, no, no. That’s good. That’s very interesting. I’m sort of pleasantly surprised by the answer, but I appreciate that. I’m going to think about that a bit more because I’m kind of a little bit obsessed with it. But now I’m questioning. You know, because it actually affects the way I write, because it’s constantly in the back of my mind saying, “Well, is this SEO optimized?” And the whole creative process gets hijacked. And it’s kind of driving me a bit nuts. So I like your perspective.
Derek Sivers
I just figure anything I’m writing or creating, I try to have so many like unique insights that the people it does reach where there’s just 100 people now, but the people that are already kind of tuned in to what I’m saying, that I want it to be so good that they go like, “Oh my God, you have to hear this.” And then they tell their friends. That’s what I’m optimized for. What acronym could we make that? Our referral optimization. Oh, insight optimization. You know. Insight engine optimization. No, but now I just figured that anybody just searching the web for something is just searching for like, generic teacup glasses and USB connectors. I don’t expect them to be trying to find me.
Ash
How do people find out more about you, Derek?
Derek Sivers
Oh, you know that answer. Just go to my website sive.rs
Derek Sivers
And everything is there. I’m not a big fan of social media for the reason that we mentioned earlier about incentives when you have investors. Their incentives are for you to just make a lot of money no matter who you need to screw to do it. And I find that with social media sites as I feel that their incentives are not aligned with mine, their incentives are to try to get me addicted and to try to get you addicted and don’t want my friends to be addicted to things. So I try to avoid putting anything of value on any social media because I think that would enable my friend’s addiction.
Ash
There’s amazing things of value on that site because correct me if I’m wrong, but if I go sive.rs/a and scroll down, I get access to the audio book in bits and pieces which I can listen to any time, correct?
Derek Sivers
Yeah. Most of my books are for free on my website.
Ash
That is so generous, Derek. Thank you.
Derek Sivers
The only one that I didn’t do that to was for “How to Live”. Because “How to Live” has to be or should be consumed as a book. I didn’t want just one chapter of it to be misinterpreted on its own. So maybe someday I’ll just let people misinterpret it and put it out there for free. But yeah sive.rs, basically everything I do is on that site. And if you are somebody that listened all the way to the end of this interview, well then hell yeah, you should introduce yourself and send me an email and say hello. Yeah, that’s honestly the main reason I do these podcasts, is I love the people that I meet from doing them when people hear it and introduce themselves to me. So that’s my favorite part. Send me an email and I reply to every one.
Ash
Thank you so much for being on, Derek. This podcast will be on episode 222.