Tools of Titans

by Timothy Ferriss

  “I think we need to teach kids two things: 1) how to lead, and 2) how to solve interesting problems. Because the fact is, there are plenty of countries on Earth where there are people who are willing to be obedient and work harder for less money than us. So we cannot out-obedience the competition. Therefore, we have to out-lead or out-solve the other people. . . .

  “The way you teach your kids to solve interesting problems is to give them interesting problems to solve. And then, don’t criticize them when they fail. Because kids aren’t stupid. If they get in trouble every time they try to solve an interesting problem, they’ll just go back to getting an A by memorizing what’s in the textbook. I spend an enormous amount of time with kids . . . I think that it’s a privilege to be able to look a trusting, energetic, smart 11-year-old in the eye and tell him the truth. And what we can say to that 11-year-old is: ‘I really don’t care how you did on your vocabulary test. I care about whether you have something to say.’”

  ✸ What’s something you believe that other people think is crazy?

  “Deep down, I am certain that people are plastic in the positive sense: flexible and able to grow. I think almost everything is made, not born, and that makes people uncomfortable because it puts them on the hook, but I truly believe it.”

  ✸ Seth’s favorite audiobooks, which he listens to repeatedly

  TF: First I’ll provide the list, then his recommended uses.

  Goals: Setting and Achieving Them on Schedule, How to Stay Motivated, and Secrets of Closing the Sale by Zig Ziglar: “Zig is your grandfather and my grandfather. He’s Tony Robbins’s grandfather. None of us would be here if it weren’t for Zig.”

  Works of Pema Chödrön: “Almost the flip side. I’m so much better at [protracted difficult periods] because of Pema and because of meditation and because of knowing how to sit with it and not insist that the tension go away.”

  Leap First: “Inspired by [Zig and Pema], and some work I did, I did this book for charity; it’s a short audiobook and you can get it at Sounds True.”

  The Art of Possibility by Rosamund Stone Zander and Benjamin Zander: “. . . . which is very hard to find on audio and is totally worth seeking out.”

  The War of Art by Steven Pressfield: “Also hard to find on audio. I find Steve’s voice to be fascinating, and even before I knew him, I was fascinated by listening to him speak his own work. The War of Art is one of those books, at least for me when I finally was exposed to it, I said, ‘Why wasn’t I informed? Why did it take this long for this book to land on my desk?’ . . . You need to be clear with yourself about what you are afraid of, why you are afraid, and whether you care enough to dance with that fear because it will never go away.”

  Just Kids by Patti Smith: “This is the single best audiobook ever recorded by Patti Smith. It is not going to change the way you do business, but it might change the way you live. It’s about love and loss and art.”

  Debt by David Graeber: “I recommend it in audio because David is sometimes repetitive and a little elliptical but in audio it’s all okay because you can just listen to it again.”

  TIM: “Which of these, going from Zig to Pema and onward down to debt with David, which of these do you think I should start with, or which one would you suggest I start with?”

  SETH: “For me, if you are feeling stuck, it’s all about The War of Art and The Art of Possibility. If you are feeling stressed, it’s about Pema. If you need to see a path that is more colored than the one you’re already on, which is pretty Technicolor, then it’s Zig. And if you just want to cry a little, it’s Just Kids, and then Debt is the one that is closest to reading a book. I don’t think many people should listen to Debt ten times.”

  ✸ Seth’s best purchase of $100 or less?

  “You could become obsessed with artisanal bean-to-bar chocolate. Not that one should, but one could. So I did, and I worked my way up the ladder. About a year ago, I was going to start my own chocolate company because it’s not that hard. Then I bumped into a few brands that were doing it better than I ever could. . . . There are two chocolate companies I want to highlight: Rogue [from western Massachusetts] and Askinosie. And I’m actually an advisor to a new acumen company called Cacao Hunters in Colombia.”

  ✸ What advice would you give your 30-year-old self?

  “I had so many bumps starting when I was 30 years old. They lasted for 9 years, and I wouldn’t tell my 30-year-old self anything. Because if I hadn’t had those bumps, I wouldn’t be me, and I’m glad I’m me.”

  Pet Obsessions—Coffee and Vodka

  Seth doesn’t drink coffee or alcohol. Nonetheless, he enjoys making elaborate espresso and vodka for his family and guests. Odd side obsessions are a common trait of nearly everyone in this book, and I find Seth’s description hilarious. His vodka recipe is also simply delicious:

  “The coffee thing, we’ll start there. I don’t drink coffee. I wish I did. I need a vice. But I like making it. I like—without being one of those people who is measuring everything, because that’s not my shtick—to have an intuitive sense of what makes a good pull of espresso. I used to have a fancy Slayer machine, which is this super digital hunk of a device that did not belong in anyone’s kitchen, particularly mine. So when it started acting up, I was able to sell it for a fair price and switched, in the completely opposite direction, to a Swiss-made, 17-year-old, totally manual machine. You’ve got to pull a handle.

  “And I roast my own beans, which is key. Marco Arment [co-founder of Tumblr, creator of Instapaper and Overcast] taught me that. Roasting your own beans is more important than any other thing you can do, if you want to make coffee. I think there’s a metaphor there. I know there’s a metaphor there. Which is, you can spend a lot of time trying to fix stuff later but starting with the right raw materials makes a huge difference.”

  TIM: “Then, vodka . . .”

  SETH: “There’s a place near my house called [Blue Hill at] Stone Barns Center, which used to be the Rockefellers’ summer house. It’s a nice restaurant. At the bar—I don’t drink either, but I’m told that at the bar—they serve honey oatmeal vodka. I reverse engineered the recipe, and it’s not a still, but I make it in my basement. The recipe, for those who are interested, is you take a bottle of vodka—you don’t want the supercheap stuff but you don’t want the expensive stuff because that’s a little bit of a rip-off—you pour it over a pound of just plain old oatmeal, uncooked, and half a jar of honey. You let it sit in the fridge for 2 weeks, stirring it now and then. Then you strain it back into the original bottle and you’re done.”

  ✸ Final words of advice?

  “Send someone a thank-you note tomorrow.”

  “We all have, let’s say, two or three dozen massive pain points in our lives that everyone can relate to. I try to basically write about those, and then I try to write about how I attempted to recover from them.”

  Spirit animal: Mouse

  * * *

  James Altucher

  James Altucher (TW: @jaltucher, jamesaltucher.com) is an American hedge fund manager, entrepreneur, and best-selling author. He has founded or co-founded more than 20 companies, including Reset and Stockpickr. 17 failed, and 3 of them made him tens of millions. He is the author of 17 books, including The Power of No. I’ve never seen anyone build a large, committed readership faster than James.

  TF: To me, the quote above explains how James went from unknown to millions of readers faster than most writers gain a thousand readers. James made his specialty exploring his own pain and fear, and he shows the light at the end of the tunnel without ignoring the darkness in the middle. This is refreshing in a world of rah-rah positive-thinking “gurus” who are all forced smiles and high-fives.

  Some of my most popular blog posts since 2007 have been the least time-consuming but the most uncomfortable. To produce these, I usually ask myself: “What am I embarrassed to be struggling with? And what am I doing about it?”

  If You Can’t Generate 10 Id
eas, Generate 20

  James recommends the habit of writing down 10 ideas each morning in a waiter’s pad or tiny notebook. This exercise is for developing your “idea muscle” and confidence for creativity on demand, so regular practice is more important than the topics:

  “What if [you] just can’t come up with 10 ideas? Here’s the magic trick: If you can’t come up with 10 ideas, come up with 20 ideas. . . . You are putting too much pressure on yourself. Perfectionism is the ENEMY of the idea muscle . . . it’s your brain trying to protect you from harm, from coming up with an idea that is embarrassing and stupid and could cause you to suffer pain. The way you shut [this] off is by forcing [the brain] to come up with bad ideas.

  “So let’s say you’ve written down 5 ideas for books and they are all pretty good. And now you are stuck. . . . Well, let’s come up with some bad ideas. Here’s one: Dorothy and the Wizard of Wall Street. Dorothy is in a hurricane in Kansas and she lands right at the corner of Broadway and Wall Street in New York City and she has to make her way all the way down Wall Street to find ‘The Wizard of Wall Street’ (Lloyd Blankfein, CEO of Goldman Sachs) in order to get home to Kansas. Instead, he offers her a job to be a high-frequency trader. What a bad idea! OK, now go on to the next 15 ideas.

  “I [then] divide my paper into two columns. On one column is the list of ideas. On the other column is the list of FIRST STEPS. Remember, only the first step. Because you have no idea where that first step will take you. One of my favorite examples: Richard Branson didn’t like the service on airlines he was flying, so he had an idea: ‘I’m going to start a new airline.’ How the heck can a magazine publisher start an airline from scratch with no money? His first step: He called Boeing to see if they had an airplane he could lease. No idea is so big that you can’t take the first step. If the first step seems too hard, make it simpler. And don’t worry again if the idea is bad. This is all practice.”

  TF: If you can’t get 10 good ideas, get 20 ideas. This mantra has proven very valuable. About a year ago, I brainstormed a list of “The craziest things I could do” while sitting at a Wired conference listening to out-of-the-box thinkers like iconic photographer Platon. After a few bullets (e.g., “Give away all my money,” “Sell all my belongings,” “Go offline completely for 6 months”), I got stuck. So, in true James fashion, I decided to drop my standards and go nuts. Things got deep into “bad idea” territory quickly, even including “Cut off both feet” (WTF?). But the list grew and grew, and one of them was “Take an indefinite startup vacation,” which ended up being one of the most important ideas of the last 5 years of my life (see page 384 for more).

  Sample Lists for James’s “Daily 10” Practice

  Not all of James’s idea lists are business-related. In fact, few are. He elaborates: “It’s hard to come up with more than 3,000 business ideas a year. I’m lucky if I come up with a few business ideas. The key is to have fun with it, or else you don’t do it.”

  In his words, but condensed for space, here are some examples of the types of lists James makes:

  10 old ideas I can make new

  10 ridiculous things I would invent (e.g., the smart toilet)

  10 books I can write (The Choose Yourself Guide to an Alternative Education, etc).

  10 business ideas for Google/Amazon/Twitter/etc.

  10 people I can send ideas to

  10 podcast ideas or videos I can shoot (e.g., Lunch with James, a video podcast where I just have lunch with people over Skype and we chat)

  10 industries where I can remove the middleman

  10 things I disagree with that everyone else assumes is religion (college, home ownership, voting, doctors, etc.)

  10 ways to take old posts of mine and make books out of them

  10 people I want to be friends with (then figure out the first step to contact them)

  10 things I learned yesterday

  10 things I can do differently today

  10 ways I can save time

  10 things I learned from X, where X is someone I’ve recently spoken with or read a book by or about. I’ve written posts on this about the Beatles, Mick Jagger, Steve Jobs, Charles Bukowski, the Dalai Lama, Superman, Freakonomics, etc.

  10 things I’m interested in getting better at (and then 10 ways I can get better at each one)

  10 things I was interested in as a kid that might be fun to explore now (Like, maybe I can write that “Son of Dr. Strange” comic I’ve always been planning. And now I need 10 plot ideas.)

  10 ways I might try to solve a problem I have This has saved me with the IRS countless times. Unfortunately, the Department of Motor Vehicles is impervious to my superpowers.

  Short and Sweet

  On the Value of Selective Ignorance, After Working at a Newspaper

  “You’re basically told, ‘Find the thing that’s going to scare people the most and write about it.’ . . . It’s like every day is Halloween at the newspaper. I avoid newspapers.” TF: Many productive people do the same, including Nassim Taleb.

  The World Doesn’t Need Your Explanation. On Saying “No”:

  “I don’t give explanations anymore, and I’ll catch myself when I start giving explanations like ‘Oh, I’m sorry, I can’t make it. I have a doctor’s appointment that day. I’m really sick. I broke my leg over the weekend’ or something. I just say, ‘I can’t do it. I hope everything is well.’”

  Haven’t Found Your Overarching, Single Purpose? Maybe You Don’t Have To.

  “Forget purpose. It’s okay to be happy without one. The quest for a single purpose has ruined many lives.”

  How to Create a Real-World MBA

  It’s fun to think about getting an MBA.

  They’re attractive for many reasons: developing new business skills, developing a better business network, or—most often—taking what is effectively a 2-year vacation that looks good on a résumé.

  In 2001, and again in 2004, I wanted to do all three things.

  This short chapter will share my experience with MBA programs and how I created my own. My hope is that it will make you think about real-world experiments versus theoretical training, untested assumptions (especially about risk tolerance), and the good game of business as a whole. There is no need to spend $60K per year to apply the principles I’ll be discussing.

  Last caveat: Nothing here is intended to portray me as an investing expert, which I am not.

  Beginnings

  * * *

  Ah, Stanford Graduate School of Business (GSB). Stanford, with its palm tree–lined avenues and red terra cotta roofing, always held a unique place in my mind.

  But my fantasies of attending GSB reached a fever pitch when I sat in on a class called Entrepreneurship and Venture Capital taught by Peter Wendell, who had led early-stage investments in companies such as Intuit.

  Within 30 minutes, Pete had taught me more about the real world of venture capital inside baseball than all of the books I’d read on the subject.

  I was ecstatic and ready to apply to GSB. Who wouldn’t be?

  So I enthusiastically began a process I would repeat twice: downloading the application to get started, taking the full campus tour, and sitting in on other classes.

  It was the other classes that got my knickers in a twist. Some were incredible, taught by all-stars who’d done it all, but many, many others were taught by PhD theoreticians who used big words and lots of PowerPoint slides. One teacher spent 45 minutes on slide after slide of equations that could be summed up with, “If you build a crappy product, people won’t buy it.” No one needed to prove that to me, let alone drown me in calculus to do so.

  At the end of that class, I turned to my student guide for the tour and asked him how it compared to other classes. He answered: “Oh, this is easily my favorite.”

  That was the death of business school for me.

  How to Make a Small F
ortune

  * * *

  By 2005, I was done chasing my tail with business school, but I still itched to learn more about venture capital (VC). In 2007, I started having more frequent lunches with the brilliant Mike Maples, who had been a co-founder of Motive Communications (IPO to $260 million market cap) and a founding executive of Tivoli (sold to IBM for $750 million). He is now a founding partner of Floodgate Fund.

  Our conversations usually bounced among a few topics, including physical performance, marketing campaigns (I’d just launched The 4-Hour Workweek), and a focus of his at the time: “angel investing.”

  Compared to traditional VC, angel investing involves putting relatively small amounts of money—often from $10K to $50K—into early-stage startups. In Mike’s world, “early-stage” could mean two engineers with a prototype for a website, or it could mean a successful serial entrepreneur with a new idea. The angels usually have relevant business experience and are considered “smart money.” In other words, their advice and introductions are just as valuable as the money they put in.

  After several lunches with Mike, I’d found my business school.

  I decided to make a 2-year “Tim Ferriss Fund” that would replace Stanford business school. I wouldn’t go through the formal steps to create a legally viable fund; I would simply set a plan and invest my own capital as if I had such a fund.

  Stanford GSB isn’t cheap. I rounded it down to ~$60K per year in 2007, for a total of $120K over 2 years. For the Tim Ferriss Fund, I would aim to intelligently spend $120K over 2 years on angel investing in $10K to $20K chunks, meaning 6 to 12 companies in total. The goal of this “business school” would be to learn as much as possible about startup finance, deal structuring, rapid product design, acquisition conversations, etc., as possible.