[Music] all right I'm just curious how many people were Wall Street lawyers and then they decided yeah that's a stupid job I'm just gonna come out to here and work in San Francisco how many people have law degrees in here sorry all right couple do you have your law school debt still that you're paying back all right yeah do you have law school debt no I paid it off already podcasting is really lucrative I don't know if you knew that highly recommended now I want to know why a non billionaire is writing a book about how billionaires think and why we should listen to you well it's a good question no one to give the Larry King of podcast I think only a non billionaire should write about it so what what happened was is that and I write about this in other books but I was I had this bad experience where I was starting businesses selling them making some money and then thinking this is it I've accomplished all my goals in life now I could just do whatever I want because I'm a genius cuz I sold some business and then immediately I would lose all my money and maybe lose a home or a family along with it and I'd get depressed and it would be a miserable experience like I sort of feel lately there's been this genre of failure porn where you write or talk about your failures and that's kind of like a this weird honorable badge where now you're ready for success because you've experienced all these failures but failure is really just ugly and miserable like you just you just want to die when you fail and or at least I'm talking about me I'm not talking about you and so I figured what am I doing wrong it's almost like statistically significant the number of times just lost everything and what am I doing wrong on the way down and what am i doing right on the way up and so when I started this podcast I figured okay I can interview all these successful people and one category of successful people are these successful billionaires they've started businesses they've started multiple businesses they seem to magically go from success to success to success are they just lucky or do they have some habits in place that are different than me and what can I learn from it like are these habits replicable like can I learn what they did can I learn what Richard Branson did and somehow figure out maybe I can try some of his habits myself and that will help me avoid failure and and depression or mania whichever it is that was causing me this anguish and and and learn something and maybe the next time I could hold on to my money or maybe next time I could be more creative or maybe next time I could figure out how to have more impact on people and so on so I interviewed all these people and I did see some things in common and it's not just billionaires by the way I've interviewed you know Hall of Fame level athletes I've interviewed many authors I really love interviewing authors because I'm a writer myself I've interviewed probably people from every industry in life peak performers from every industry in life and you know but but but people are fascinated extra fascinated by billionaires in fact in today's world not only are they fascinated but they're also angered so depending on who you are but I was really just focusing that on the the political spectrum but that they have its spectrum what are they doing differently than me and how can i replicate it that was the main focus I had and how can I share with others so billionaires think a certain way that's her thesis yet they think a certain way that's different from how other business owners think yeah I think that's definitely true because I compare how a lot of these people think compared to how I think even when I was building businesses and succeeding and even when I was failing and I see that when these people are succeeding they're still thinking very differently than how when I was succeeding well let's talk about the skills that billionaires have is it about skills or is it about the way that they think like the meta skill level it's definitely not about skills in fact I wouldn't say any billionaire has stood out because of their skills so for instance it's not like Sara Blakely who created Spanx had any skills in the fashion industry in fact before she for the eight years before she started Spanx how many women here are wearing Spanx right now raise your hand we won't tell anyone it's only on video on YouTube so so I'm wearing Spanx right now they haven't met men's Spanx Sara Blakely was selling fax machines door-to-door for eight years before she started Spanx she had no experience in the fashion industry so it was and none of these Richard Branson had no experience in the airline industry when he started an airline Mark Cuban didn't know you know streaming audio was just starting on the Internet and he wasn't he was sort of a software guy but not really he didn't have any experience enough experience to create broadcast comm and I'm just going down the whole list of people nobody basically nobody had experience at what they ended up making billions at they nobody had any skills to be directly applied but they did have very similar meta skills and I can go over them you know one by one but certainly an extreme curiosity was one and that seems like kind of obvious but it wasn't the sort of curiosity that I have you know on my daily life I'll give you an example I was interviewing Ken Langone who started home depot and you know he was already a millionaire by the time he started Home Depot but that's really where he made his billions and in the beginning of the podcast we were we were sitting upstairs in a comedy club that I happened to be the owner of and he started asking me he got he got really intense heard that I owned this comedy club right : this comedy club he got really intense his eyes like squinted and he said well how much do you pay for every beer how much do you sell it for how much do the waitresses make how many what's your turnaround per show and I didn't know the answer to any of his questions at all like it was like I was the worst business owner on the planet and he like immediately dived down on everything that I should have known about my own business and I didn't know anything and I heard later actually I don't know if it was true enough but someone told me that he wasn't very impressed by me and but at the same time at the same time you know I there's other skills that he that he had to that I was very impressed by and again I could just I could tell stories about each skill are gonna tell stories about each billionaire there they're all interesting I'll moderate this conversation don't worry about it don't worry about it I'll lead the way you mentioned that billionaires often follow the arc of the hero which is kind of an interesting way to look at it I mean why would billionaires be unique in that aspect or in that respect what was what that billionaires often follow the arc of the hero so like the hero's journey yeah so think about like again Richard Branson is a great example so so and this one story I just I just love in a variety of ways so Richard Branson again was already doing well he was a successful music magazine publisher he was 27 years old and something happened to him he he was taking a plane I might get the exact locations wrong but he was taking a plane from the Caribbean to Puerto Rico where he was gonna meet a lady friend of his and the plane got canceled and he really wanted to get to Puerto Rico so he found somebody who had a private jet and he said I'm leasing your private jet to take me to Puerto Rico he didn't have any money on him he didn't have enough money to get this private jet to take him before we go but he said to the guy I want consider it done I have the money just give me a few minutes and don't listen to anybody else I'm taking this private jet he didn't have any money so he goes back into the airport and he puts up a sign he figures out all the people who were just cancelled because this jet from this commercial jet from the Caribbean to Puerto Rico was canceled and he put up a sign and he said it's $49 a ticket because he figured out if everybody put in $49 he could he could have enough money at least as a private you have to take the Puerto Rico so they all signed up he sold these tickets then he officially gave him money to lease the jet and he got to Puerto Rico so there's a couple of things interesting in that story and it's related to the arc of the hero first off the hero the arc of the hero is this kind of skeleton of the of primal stories like the story of Jesus the story of Buddha these stories that just are so primal we relate to them thousands of years later so even like Luke Skywalker beat by beat will mimic the story of Jesus say or the story of basically any great hero throughout religion or history or whatever and and the same thing happens in our lives and so it's a question to ask like where are you or where am I in my own story of the arc of the hero but there's always one so so so the called so in the organ hero the first step is the call to action where some event happens usually something tragic in this case Richard Branson can't get to his girlfriends and and you have to do something that you've never done before to take that first step on the hero's journey and so what he what he did was he did this concept which I call throughout the book ready fire aim so usually when you start a business you come up with the idea you build the product maybe you raise some money and then you start getting customers and making money but none of these billionaires follow the standard ready aim you know ready aim fire they all did ready fire aim so so Richard Branson wanted to get to Puerto Rico that was his ready but he fired for he aimed he leased the private jet without having any money at all and then he raised the money so he fired give me the jet and then he aimed he raised the money for the jet without knowing if he could do it or not but he did it and in anythings to himself huh that was pretty easy I just arranged for a bunch of people to fly a plane from one location to another and here's this 27 year old no experience in the airline industry music publisher and he thinks to himself I'm going to start an airline who would do that that's insane but again this two things were having this ready fire aim approach he takes now to starting any a much bigger airline and then in the arc of the hero what happens is is you solve that first problem you get the call to action you go on your journey you saw the first column and then you give your successively bigger problems happen so Luke Skywalker first escapes Tatooine and now he's got a rescue Princess Leia and then he has a much bigger problem he's got to blow up the Death Star but Richard Branson doesn't have to blow up the Death Star but first he gets this private jet to Puerto Rico now he says I'm gonna I'm 27 years old music magazine publisher England has a government monopoly airline already British Airways there's like you everybody kept saying you can't start an airline British Airways is a monopoly and what are you gonna do they're not gonna let you have an airstrip in Heathrow you don't have a plane cost 150 million dollars where are you gonna get a plane and richer brands is like I don't care I'm just gonna start an airline so he calls Boeing he calls Boeing out of the blue he doesn't know who to talk to he calls Boeing and he borrows an airplane from them they how does he I can't call can you call Boeing and borrow an airplane what would you say even you would you say hey I would really like to borrow a hundred fifty million dollar plane from you I'll give it back in a year or so which is what he said to them and so he has this ability to persuade and obviously this is a huge and so how does he persuade them he says listen you have no there's no competition in England you have no pricing pressure British Airways could pay whatever they want for a plane you have to sell it to them it's better for you Boeing if there are two airlines in the UK and Boeing's like hmm this guy could be an idiot or he could be right so they lend him a plane for a year and the same thing with Heathrow they give him one landing strip and JFK gives him one landing strip and now he actually can fly people from Heathrow to JFK he's got an airline Virgin Atlantic is launched and so again the problems get bigger and bigger how do you fly to other cities how do you get more airplanes how do you stay in business the airplane industry is very difficult then how do you launch a spaceship because now he's got Virgin Galactic so again that's that arc of a hero the problems get bigger and bigger until you've solved the biggest problem of all and then you come back to tell your story that's the arc of a hero and so Richard Branson has told the stories come on my podcast he's written several books and he's kind of break you know very easily followed the the hero's journey but also I'm really impressed by his ability to do this ready fire aim over and over he like starts a business gets the customers and everything he needs then figures it out and that's a kind of a common theme throughout many of the people I interviewed so Daymond John is just a great example the guy was a waiter in Red Lobster that was his job and then on the weekends he'd stand in the corner and sell hats was like LL Cool J logos on it to whoever passed by he goes to one clothing convention and me was Macy's Macy's makes $100,000 order of hats what does he do he doesn't say oh I I can't knit you $100,000 for the hats maybe next year he doesn't say that he says yes done so waiter and Red Lobster how is he going to make $100,000 wear the hats in a week here's what he does he mortgages his mom house he hires then 20 seamstresses to go in the house all day long and so a hundred thousand dollars worth of clothing gives it to Macy's Macy's pays him the hundred thousand dollars he buys back the mortgage so he gives his mom back her house and again it's this ready fire aim strategy while he's a waiter he doesn't even think to say now I'm just a waiter I can't do this he says yes figures it out later which could be a very dangerous strategy but he kind of knew what he was doing it's actually if you think about it is a very risk-free strategy he had the customer in place Macy's then he he figured nothing can go wrong because I know mace is gonna pay if I deliver so he mortgages the house which sounds really risky but he knows where the money's gonna come from to pay for the more pay for the mortgage back and then he makes all the products again I'm very much a ready fire aim sort of story so that was one I think I would be too nervous to do that sort of strategy although I found consistently again and again that was a successful strategy for these billionaires by the way he stayed being a waiter at Red Lobster even after this until he made several more of those types of orders there that might that doesn't sound legal that hold mortgage your mom so I'm not a practicing lawyer anymore but I'm pretty sure that you have to ask before you do that the strategy sounds fun right but it's also really like objectively a bad idea to do that don't you think I I don't know because again I you can go down by entire list of billionaires like Sarah Blake but isn't that survivor bias like hey she made it rich oh that guy went to jail we don't talk about well that's a really good point so with every billionaire you have to ask were these strategies survivorship bias meaning are we only hearing about the ones who succeeded the 15 who succeeded yeah not the 6,000 people who lost their homes when they couldn't deliver yeah they looking to Macy's they ready fire aim their way into their mom's basement so so so so I don't think you have to I don't think you have to buy borrow a hundred fifty million dollar airplane and I don't think you have to mortgage your mom's house but having some sense you can say yes the things that other people are saying no to whenever someone says and this is related strategy but whatever someone says you can't do this that's usually means there's some opportunity here it might not be the most obvious opportunity but like like people would probably say to Richard Branson you can't do this or people would say - Daymond John you can't do this you're just a waiter at Red Lobster people say - Sara Blakely you can't do this you're just selling fax machines door-to-door and it's going on the the only way to succeed is when everyone else thinks they can't do something and you're the only one who's doing it that's really where you'll find success and it almost sounds like a cliche because but but it's really true if everyone's doing it if it was easy for everyone then there's not a billion dollars waiting there for you to succeed now I'm not saying they took Hugh it almost seems like they took huge risks in there ready fire aim strategy okay take smaller ones not everyone you don't need to be a billionaire I don't need to be a billionaire I'm just trying to see what's in common with all of these billionaires maybe I can mimic those habits just a little bit maybe I could say to myself okay if I have an idea what's a way to test out this idea rather than you know I see so many people who come up with ideas and they think to themselves this is a great idea I'm gonna raise a lot of money I'm gonna spend a year building the product I'm really planning this out and then I'm gonna find the customer that's like traditional ready aim fire so I see so many of those businesses that act that that fail horribly because they didn't have the customer first and they didn't just say yes to the customer first and then figure it out how they were gonna get it done instead they thought in their own it's almost more risky and more ego to say my idea is great I'm gonna raise a ton of money I'm gonna build this product that somebody may or may not want and then I'm gonna I'm gonna quit my job because I raised all this money and then I'm gonna find a customer because I'm such a genius that there's got to be customers for this and I've fallen prey to that mistake whereas I think it's actually less risky say yes to a customer and then figure it out and I think there's probably a lot more examples from billionaires and even millionaires of that approach than the other I would agree with that I mean it's hard without stats but it does sort of give credence to the claim a lot of people will say well you know you have to do something unethical to be a billionaire it's a common belief right we talked about this before actually why does this belief exist other than some of them are mortgaging their mom's house without permission but other than that why do you think people say things like that well I did think he'd to get his mom's permission okay I think I think she was a believer but it's still scary but I think I mean I heard a quote recently from some politician that a billionaires exist because they take the billion they don't earn it which is a very interesting quote because who are they taking it from but it's not like everybody stands on line to give money to billionaires and other people but you know I think I think there's a lot of people feel there's it's unfair because if you think that money should only be earned by labor per hour then it's impossible to ever earn a billion dollar so if you have a philosophy that you know money is in exchange for time and effort that you put in then having a billion dollars feels unfair because nobody could ever earn an hourly wage that will get them to a billion dollars but the reality is is that a billion is usually a noble Wiest we create the billionaire's it's not like the billionaires appear magically out of nowhere we create them so Amazon amazon.com is a great example we all started buying from Amazon in the late 90s and the early O's and they started expand from books to close to you know electric or electronic equipment and computers and and movies and and so on and then they'd go public and then we hear all buy the shares and that's what creates a billionaire so we at every step away we gave permission for Jeff Bezos to have more and more wealth nobody ever said well I'm stopping buying from Amazon today because this is about as wealthy as Jeff Bezos should get we create the billionaires we all and you know and Jeff Bezos solved this massive problem we buy why do we buy from Amazon because I'm gonna get delivered whatever it is I'm buying on getting it delivered tomorrow heck I might you know I might get delivered it today and as AI gets bigger I'm gonna get delivered yesterday like Amazon Prime it's gonna be Amazon yesterday at some point and I'm not even there gonna know what I'm thinking and I'm gonna get delivered the book I want yesterday so you know then drones are gonna come in how much mine if you guys serve tonight before we got here oh yeah yeah have a sip gotta catch up with those people in the back and you know it's the same thing it's not like it's it you know you can argue incoming inequality is so great and yet the quality of life and every strata of society has gone up in every percentage whatever percentile you're in longevity has gone up infant mortality has gone down literacy has gone up on every standard quality of life has gone up so I think income inequality is almost the wrong metric which is why and look I don't usually think about it I didn't I didn't write this book or interview these billionaires in order to justify their existence but I really wanted to just learn what habits they had that I could that I could emulate but at the same time I also appreciate like take ken Langone from Home Depot so one thing he said I learned so many things from one interview with this guy but one thing is if you're if you go to New York City and if you go to the hospital chances are the hospital is named the Langone or the NYU Langone hospital he's basically donated to every single Hospital in New York City if you go to medical school in New York City chances are your tuition is being paid by ken Langone I think he's paying the tuition of every single medical student in New York City you know not every billionaire is charitable but Bill Gates if you why hasn't the US government solved malaria in Africa and yet Bill Gates in a few short years of applying himself and his money and his intelligence to malaria in Africa he's almost solved the issue why hasn't the US government or most of industry figured out how solar panels could be more efficient and yet I just read a few weeks ago a Bill Gates funded company has figured out how to triple the efficiency on solar panels and so many of these people are using their money for charitable efforts or actually profitable efforts that are doing good in society and again not every single one of them you can't go down the list of all the billionaires and say oh my god he's they're also ethical but again it's worth it's worth looking at how do they look at problems how do they solve them and it turns out to be very different from how for me it turned out to be very different from how I look at problems and how I solve them like when I started my first business my first business made websites for other companies and this was in the mid 90s so not everyone was doing it but a few companies were doing it there was maybe at a time when I started doing it in New York City for maybe five or six other companies doing it there was nothing special about my company and I was competing with every client I was competing against the exact same five companies and you see a lot of these billionaires so I basically copied I had a copycat business model I basically copied what five or six other companies were doing and figured okay I could do it maybe I could be a little cheaper but as I grew I wasn't even much cheaper than my competitors but all of these billionaires they did things that were very different they went into areas or industries that were very different so take for instance a billionaire that's not mentioned in this book but I've interviewed recently on Jim McKelvey started was a co-founder of square with Jack Dorsey what did he do well you all probably know what Square does they give you that little device you plug it into your iPhone or your iPad and now you can accept credit cards all of a sudden so so many mom-and-pop companies clinics have credit cards because the banks didn't trust them and there was a lot of fraud and who knows what other reasons now square allows 25 percent of American businesses to have credit cards and what did he do what was the thing that he did that was different well he took the bottom third of the population the bottom third that was starting businesses at least and these people were not allowed to accept credit cards banks wouldn't let them accept credit cards credit card processors wouldn't let them accept credit cards he figured out a way to serve the bottom third of businesses to accept credit cards using his square device and now 25% of all American businesses use square to accept credit cards so so what did he through different he took a market that nobody at all was serving not a copycat business he didn't just say okay I'm gonna open up another Bank or I'm gonna open up another credit card processor he opened up one to serve this enormous population that nobody ever thought of serving before and everyone kept telling him you can't do this by the way it was illegal to do it at the time he convinced the laws to change he convinced Visa to allow this to happen visa it was against visas rules to allow Square to happen he convinced them to let it happen so II II overcome these great big challenges and and that's again on the other side of can't the other side of the word can't is where billions of dollars could be found or Millions depending on how big the problem is that you're trying to solve again for me my first business I solved the problem that other people were solving again there was only a few of us so I had my own place in the industry but it wasn't gonna ever scale to billions I only did you know what I could and so it was a much smaller problem because I wasn't engaging in these habits that I later learned these billionaires always engage in you said in the book that you've never met a billionaire whose kids were as hungry as they were so how do we have which makes sense right how do we avoid ruining our kids if we're successful I mean I've met your kids they're really great no it's really your life that's all over the place their portal I'm mediocre there's no no they're much more stable than you so far oh that's for sure I'm below average on a lot of scales so I don't think I don't think it's net you know very few people very few small percentage of society are billionaires or even millionaires or success in any way so it's kind of natural that just using statistics it's unlikely that a billionaires kids are also going to be amazingly successful but McCall so when you have every comfort like I don't know about you but when I was growing up not only it was like hungry I was scared I was scared how was I gonna afford college I had to pay for every dollar of college myself how was I going to you know survive in the world I didn't have any backstop I didn't have any safety net so I was scared all the time and that made me extremely hungry to start a business and kind of break out of that cycle of fear and I think that was also that part of the problem too was when I made some money I thought oh my gosh I'm not afraid anymore and I kind of splurged on that courage until I was afraid again and and thinking to myself oh my gosh I had just won the lottery and now I'm never gonna make money again and so I'm even more scared than I was before because now I have kids to raise and mortgages to pay and so on so I think that hunger fed me a little bit and I know it fed a lot of the people that I interviewed in this book even more so perhaps like but but then again I don't know I don't necessarily know if Mark Cuban was scared or Sara Blakely was scared I think they kind of set out I think I was more scared which has probably limited me I think they set out to solve amazingly huge problems so again Mark Cuban is a great example where he was he was in Dallas and there was no way to listen to basketball games local basketball games in Ohio so he creates a company to solve it he figured why can't you just stream these events over this new thing called the Internet so he created what was called audio net later it was called broadcast comm and he and he solved this problem that became a massive problem now every day we stream audio over the internet and video and other things back then nobody was doing it and so he created the first company to make it very simple to stream audio on the Internet and when I asked him specifically oh you know it looks like you made money because of your interests he actually said no no no he said I was only interested in making a lot of money I only wanted it to be just like filthy filthy rich and but I don't believe it because he became filthy rich by solving the biggest problem in his life which was how to watch basketball a long distance and he didn't solve it through some other means he didn't start Home Depot for instance he he started something that was very important to him and and I but but related to what his answer I asked him what were you doing the moment you became a billionaire and he said I was in my house sitting naked by the computer and just constantly reloading Yahoo Finance until that moment where I was worth a billion dollars so that that's more related to his reason for becoming a billionaire but I think there were other reasons I believe that 100% I think that's probably what I would do as well clicking reload on Yahoo Finance boy in front of my computer I think the very first time I sold a company that's what I did like I was just obsessed with every dollar take up or down but again it wasn't the reason I mean yeah I wanted to make a lot of money but I did it using something I knew better than other people which is how to build a website so usually it's usually you are solving a problem that's important to you to make that first amount of money in the book you discussed the myth of focus and I think this is interesting because we see on social media or from any advice that we get from people like focus on one thing solve a specific issue do a specific thing focus on one thing you kind of your data anecdotal as it might be from your show and from the book breaks that down focusing on one thing often doesn't actually work right like in a great example is Jeff Bezos with Amazon he wanted to create the world's largest bookstore or did he the first he said first he created a book store for like half a minute and then he starts selling clothing then he starts selling electronics then he starts selling food then he starts selling a million other categories then what was amazing was he abstracts away from that he okay I have this huge software infrastructure for selling anything and for doing logistics and for storing things in a cloud so he starts renting out his entire software infrastructure so Amazon Web Services is this huge multibillion-dollar part of Amazon and then he he goes even further like he you know he's he's starting space companies and drone companies and you know all sorts of ancillary companies Richard Branson start I think he runs now something like over 300 different companies completely unrelated to each other so I think I think focus ultimately it all ultimately limits you because you're putting all your you know all your eggs in one basket you're putting all your chips on one on one on one bed and not having focus allows you to experiment in a lot of different directions and the directions that work you double down on so I'm sure Jeff Bezos try to other ideas I'm guessing he tried other ideas that didn't work and he then double down on them all these guys and ladies tried multiple ideas before they found the right experiment and I remember even in my first company yes we were making websites for record labels it was our main customer and you could probably tell by the my demeanor and the way I address we were making the websites for all the gangster rap record labels like Death Row Records loud records Bad Boy Records and I mean I would have you know so my some of the people working for me come back from a video shoot and say that's it I am no longer going to any video shoots where guns are being fired and so this is actually a major problem in keeping employees motivated for most of our clients and but we were always experimenting like oh should we start a record label there was one point where we were pitching to do the website for a tea company the honest tea company actually and they hadn't yet started but they were looking for someone to build a website and we were thinking maybe we should start a tea company so we started brewing different teas that trust me were disgusting you kind of you kind of he is and you see this a lot of these people as well the key is you have to constantly be experimenting yeah constant you constant have to experiment with new ideas how does it how is this gonna work so for instance how many people have heard of the 10,000 hour role for getting better serving so the idea is this is popularized by Malcolm Gladwell that was started by this professor Anders Ericsson if you'd put if you apply if you apply yourself for 10,000 hours and in the field you love the most you're gonna be among the best in the world in that field and I don't really believe that rule now it turns out to not be true at all yeah yeah I think I think that I think that's ray and I think Anders Ericsson but even moving it but like there was this golfer who started from scratch and he's like I'm gonna put 10,000 hours into golfing and become the best he made it to 5,000 hours and he realized he was just never going to be the best and quit so he wasted 5,000 hours of his life and I don't even know if he plays golf at all anymore and what but what I think is more interesting is for lack of a better term because but just because it sounds like is the 10000 experiment rule if you do an experiment in something you're interested in by definition you're gonna learn whether you succeed or fail so can I can I give you an example okay I'm gonna give you a really dumb example but that's all experiments kind of start off dumb I think because whatever it's like I'm not like I'm gonna solve nuclear fusion I'm gonna create some stupid app or whatever but I was at a dinner and there a friend of mine was there who I hadn't seen in a while and he had a new girlfriend and they were kind of snuggling together and I'm like oh you guys seem like you're happy with each other and my friend who was you know he was smiling and she was smiling he said oh yeah we just had the talk we decided we're going steady and I'm like Jason you're 45 years old like I haven't heard that phrase going steady since high school and and I said to him what does it mean that you're going steady and he's like well we both deleted all of the dating apps on our phone so I decided okay I'm gonna do an experiment i SPECT out this app the going steady app which if you connect to somebody and you say okay I'm going steady with this person it'll delete all the dating apps on both bones and I'll inform the other side if anybody reinstalls a dating app and then higher and then higher tiers would be you keep track of each other's location or it sounds like the foundation of an amazing relation exactly but I bet it would go viral because and in in a good way I bet it would go viral because it would also inform all your friends a is going steady but anyway so so that was just an idea and I are you not a billionaire already well I'll tell you why the proud tell you why because I experimented and I wrote up the full spec of this which took about a half hour that's how complicated this app was it took a half hour to write you know basically describe each page on this app and what this app does and I put it on freelancer comm and you know that's a site where you can hire programmers from all over the world programmers bid to do your app and so about 30 programmers in an hour bid to do this and I asked the same question to every one of them which is Canon app see what other apps exist on your phone with both iPhone and Android operating systems and most of the programmers like don't worry don't worry we'll we we could figure it out but one programmer said no Android yes iPhone no the iPhone could not an app on the iPhone cannot see app other apps on the iPhone and so I stopped doing this app it took me no money and about an hour of my time in total and I was able to experiment is this something worth trying or not and by the way even if I decided to go for it it was the bids were coming in at less than five thousand dollars to do this app so will cost like some money but not a lot of money so that's what I mean by an experiment at any given point I'm probably doing a dozen different experiments just to see what's out there that could work and what doesn't work and sometimes it's huge businesses that I'm thinking of starting but there's still worth a small experiment just to see it does this idea work at all a tiny bit and other things are just stupid that I just want to see what happens so another experiment I did was and this one was using another app like another site like freelancer but 50 shades of grey at the time this is several years ago was the most popular book in world history like one out of four books sold in like September of 2014 or whatever it was was 50 shades of grey so I figured what if I take fifty shades of grey and I look up in a thesaurus every single word and replace the word in 50 shades of grey with this word from the thesaurus so it would be a hundred percent different book but also the exact same book and so I use Fiverr I hired somebody for like $75 to basically replace every single word in 50 shades of grey with a synonym so again it was the exact same book I picked out a cover in Amazon I uploaded it to Amazon it's a published book now on Amazon and what was the title the title was how to satisfy a billionaire different from think like a billionaire so I'm obsessed with billionaires in the title I didn't I didn't do the cinnamon thing in the title and and I just I also use Fiverr to have someone come over the cover for like five dollars and the book did not do well and so I figured I couldn't replicate the success of a degree but again that entire experiment took me zero time because I didn't have to do anything and maybe it took me about $100 off me $100 so it was an experiment and again like I said almost at any given point I'm probably involved in like a dozen different experience not all of them that stupid but some of them that stupid and some of them a little better and I think you have to experiment in life to to actually learn things I'll tell you one more I did let me pause you right there for one second if you have questions for James you can line up at that microphone for the next few minutes and then we'll call on you continue James Oh watch it so only a few minutes that I will tell you some more of the habits of billionaires justice white end of the book but what I have a question just line up be patient no laughing if you can handle that and then he'll call on you when he is done so so I described dozens of habits in this book but but three that I've talked about or two I've talked about so far and I'll talk about one more there's the ready fire aim habit there's the idea of going beyond can't whenever someone says can't to you how do you go beyond that and then all of them or most of them engage in some form of what I've described before as idea sex they take one idea they take another idea they merged them and in the intersection is where they find a billion dollars so a classic example is Tyra Banks who's created possibly the most successful TV show in history America's Next Top Model you'd be surprised when she came up with the idea she said to herself oh I know all about being a model and the most popular show on TV right now is America's Got Talent what about if we just combine them ideas particular those ideas the ideas will have sex with each other now we've got this new idea for a show America's Next Top Model this should work she pitched it to TV companies agents managers they all said that's an awful idea it will never work you can't do that and so she just did it on her own and then she eventually found a TV company that would do it now it's in its 31st season I think it's in a hundred different countries it generates billions and billions in revenues it's an amazing it's amazing perfect example of idea sex and I think you'll find with almost every so I was talking to Peter Thiel for this book Peter Thiel started Facebook and I said to him how is Facebook different there was at the time there was MySpace and then before that there was Friendster there was geo cities there was tribe comm there's been there's been a ton of social networks and he said no and I'm like yeah there have been there's been tons of social networks and he said no no Facebook's very different it's the first social network with confirmed identity which was true and it turns out there was a huge need for people to know who they were becoming friends with and know that it was confirmed this was when I'm when I'm friends with Jordan Harbinger it really is Jordan ebinger and so on Facebook and you know again that's like an example of idea sex so he took social networks combined with confirmation of identity and you combine them together to essentially create a monopoly with even within the social network space it reminds me to of PayPal his first business he took you know the Internet combined with commerce and it's the first time it was a totally Internet only solution for e-commerce which was PayPal so again idea sex is a very important component of what these guys do it's very hard to come up with your own unique idea it's very it's not that hard though to take two ideas that work and combine them and and that turns out to be an amazing method for idea generation for creating businesses that are worth millions billions whatever in the next 25 seconds give us a spiel on why people should buy the book what can they learn that they can use after they buy and read the book well for me when I reread the book I'm always I always forget please whenever I do a podcast I kind of forget almost the entire podcast immediately yeah so it's great to read my interviews and reminds me of all the things these billionaires have been through all these different ideas like the the the ready fire aim the idea sex the getting beyond camp can't the the curiosity the things that these billionaires value in life because I find they very much are willing to take chances that are that are great if they seem greater than the chances I would take but very quickly much more quickly than I see most people do they remove risk they're not really risk takers they're actually more risk averse than anyone else the they immediately take all the risk out of the equation so Richard Branson as an example didn't buy didn't raise money and buy an airplane he borrowed one Daymond John didn't make $100,000 worth of hats with the hopes that he could sell them he got the order first the order for the hats first so again it's it's it's removing risk as quickly as possible and being as verse Damon John didn't quit his job is a waiter at Red Lobster even after he made $100,000 from this first clothing order he was risk averse until the moment where now it's time to take a risk now it's time to quit my job and be an entrepreneur now it's time to go headfirst into starting an airline now it's time to quit my job as you know selling fax machines door-to-door so I could sell a $300,000 order to Neiman Marcus which is Sara Blakely story and Peter Thiel you know he already you know had his foot in the door with PayPal before he quit his job as the top ranking lawyer at the best law firm in the world so an on and on on a great example - I'll just give one more Mark Cuban his first company wasn't broadcast calm very few of these billionaires made their billion on their first company so you know mark Mark Cuban started a software company which he sold for 10 million then he started a hedge fund which he probably made another 20 or 30 million at so he was come he was he was wealthy and then he started broadcast comm and most of these billionaires had the same path Richard Branson didn't make his billions from music or a music magazine but you made millions from it then he started a business that made him billions and on and on and on these people took risk out of the equation so that they could take bigger risks and so I read it to remind myself of all these habits and I usually I'm not trying to get you to buy it yes you are you are literally doing that right now that it's why I reread reread it because it's valuable to me great thank you Thanks [Applause] so if you have a question for James go ahead and raise your hand we'll just pass the mic if you have a question for James raise your hand and they'll pass the mic I couldn't hear that I don't know if you guys could so in the ready fire aim methodology a lot of times the firing step involves something where you're pushing the envelope or something that you said like might not technically be legal at that point for example the square story so how do you basically try to de-risk it or how do you take that leap of faith saying even if it's not accepted today let me just do it I'll figure it out so why should is already the question so it's easier so in let's make sure I get it right so in the ready fire aim example how do you do risk it or are you figuring it out as you go along did I miss another part of your question uh-huh specifically things that are not allowed or are illegal at that point specifically in the square story right so the way the way you D risk in a ready fire aim situation is experiment as small as possible or you know and and I'm speaking of things specifically that may really be impossible because of the rules or the laws so Daymond John was able to do ready fire aim and mortgage his mom's house and make all these clothes because he had a huge mega company Macy's mega retailer that was they had the check in their hand they're like please give us 100 mouths here's a signed contract please give us the money please give us the clothing and we'll give you this check so that's how he dearest it's always a matter of de-risking and again Richard Branson didn't put any money to work he borrowed the plane from Boeing and then he got permission from Heathrow to have a landing strip and then he started an airline but you know with something where the where the rules are not on your side you kind of that's a much more difficult example and again it has a lot to do with experimenting in very small ways so with square as an example he built a very an e built and designed a very cheap device the device that you plug in to your i phone and he made it so that it can prod he built the software so it you swipe your card through there's a card reader in the device it communicates to your bank's credit card processor and it deducts or adds money to the different accounts so he knew he had that he had all the technology in place so when we went to visa and basically said look here's how we're gonna handle fraud which is your big and then you then you learn how to answer all the objections so he knew he was gonna say well what are you gonna do about fraud well okay here's how we're gonna do it for fraud so he had examples of how you would deal with fraud and he's and they're like well how you gonna even get this done well we have this little device and the technology to implement it oh well are you really gonna get a lot of customers well yeah it turns out there's you know ten million businesses that need this service so you're gonna make a lot more money here's the money you're gonna make within the next month because of this so he answered all the objections he still put very little money to work compared to what he put to work as he was you know adding customers in something and and so on so all of it is about de-risking always figuring out how to take all the risk out before you do the aim part where you're really gonna try to get to build your business to be huge and a lot of that's again experiments do as many as experiments as possible in every industry any idea that strikes you mind you have an idea today all I'm gonna create the uber of nannies or whatever figure out if people need that like do it manually so a friend of mine was starting a business and it would seem like a good idea for a business to me but she wanted to raise two hundred thousand dollars to create a software product and then she find the customers and I said you know what you could do this manually first so get ten customers perform the service manually so then you see if there's demand then you get actual revenues coming in then you see the nuances that maybe you didn't realize before that you'll need in the software and then by the way it'll be much easier for you to raise money because you'll have customers testimonials revenues you'll know exactly how to design the software so the software design wind up being much cheaper and that was a better way to de-risk a lot of people say ideas are worth a dime a dozen and execution is everything the that quote is is that a good ideas are still hard to find but the other problem is execution is hard so there's a spectrum you could execute but if my friend had done it her initial way should have executed horribly and it would have taken years to get off the ground and $100,000 or more and she would have had to raise money and then she'd have to find customers customers would want something different so she'd have to rebuild the software and so on so that would have been bad execution good execution is hey get customers first and perform the service manually see what they need get revenues now you just be risk the whole whole thing and that's better execution execution ideas are subsets of ideas so you have to still be good at coming up with ideas it's not like ideas are separate from execution so again if anyone says ideas are worth a diamond dust and execution is everything that's one one thousands of the story it's very hard to have good execution so de-risking experimenting constructing experiments that that prove your your-your-your idea is the critically important thank you guys [Music] one thing I was curious about is blue ocean and it seems like some of the billionaires got into industries where they weren't familiar but already existed but others sort of created new lanes and spaces where there weren't much competition or if any so where did you find people navigated the most success and that they had sort of the least challenge was it creating something brand new that they just saw a need and a gap or was it just being better in an industry that maybe already existed even though they weren't in it that's a great question because so actually you want to repeat the question yeah can you rephrase it do you since you yeah so I think you're asking did a lot of these people find more success in an area where zero businesses existed before or did they just take some existing business model and make it better and that's how they succeeded and is that the question so yes that's the question so very few billionaires take an existing business and make it better I think that's actually extremely rare and the reason is for most people they can't tell the difference between 50% better and 0% better they don't know like the average person on the street can't tell if you know one clothing store is that much better or one fashion line is that much better than another fashion line but what people can tell or-or-or for in the stick podcasts Jordan and I both do a podcast we both have different interview skills and in some cases you know very different in some he's very similar but it's very hard to tell for all the podcasts that are out there who are the better you can't rank the interviewers from best to worst because it's hard to tell it's hard for the average person who doesn't do a lot of interviewing to notice the subtleties and who's a better interviewer who's not a who's not as good an interviewer it's very difficult to tell what you have to do is be different it's easier to determine difference than better I always know if somebody's different for instance if I listen to a podcast where they're not doing interviewing they're doing a true crime story that's different than Jordan in my podcasts so maybe I'm gonna listen to I'm gonna pick one interview podcast randomly cuz I can't tell who's better and then I'm also gonna listen to a true crime podcast I like my people in randomly cuz there's a thousand of them out there now and I'll pick the one that maybe I'd be interested in but I still can't tell who's better or not and again you know PayPal which is Peter teals first company wasn't better than any other ecommerce payment company it was the first you know Amazon wasn't really better than any other book online bookstore it was it was the first facebook you could say wasn't the first social network but it was like Peter Thiel corrected me he found a he found the blue ocean within the very crowded space of social networking he found based you know was social network combined with confirmed identity so often you could find blue ocean by taking to established business models and combining them to to find that intersection that's empty and that happens in almost all the cases now you don't have to be a billionaire just doing that with even small business models can be a millionaire again like my first business which created websites for large fortune 500 companies I I wasn't necessarily better than my competitors which was my problem and I wasn't different from my competitors which is why I was a much smaller business I wish I had done something different and I didn't do that I didn't kind of take the intersection of two models and and and see what was there so trying to think of an example were one of these billionaires just did some just simply did something better Sara you know Sara Blakely made you know women's undergarments but if you're wearing them right now you know that they're very different than the average undergarment she really innovated the whole industry so I would say yes most businesses are blue ocean but that ocean might be it might not be blue blue oceans for billionaires and me maybe there's like blue pond for millionaires but it's still gonna be empty and it's probably gonna be the intersection of two other established ideas because that helps you d risk as well one more question I was wondering at these billionaires when they build their businesses so let's say in Mark Cuban story after he had the first two businesses he already had 30 million and now he's founding the broadcast comm today use their own money or do they rather always prefer to try the capital markets and raise the money and what are the advantages they decide so do billionaires use their own money to invest in their new companies or do they use do they access the capital markets what are the advantages yeah that's a great question cuz I've always been curious about that as well so I was talking to on Naveen Jain who's a chapter in this book so navi and Jay made his first several billion on a company called InfoSpace which were in public in the boom in the 90s he cashed out at the right moment then the company crashed to the ground but since then he started many other companies and then he started a company believe it was called moon express after that I think that's the name not sure and the purpose of that company was to mine rare earth minerals on the moon because you know rare earth minerals are very valuable for so many purposes but most of the rare earth minerals because they're rare are not really on the earth they're in other parts of the universe so I mean the most of the rare earth minerals are either in China or Greenland actually and and by the way there's a company in Greenland called Greenland Natural Resources completely owned 100% owned by the Chinese so so I'm yeah you have to get nervous about where all the rare earth minerals are so I asked him he so I called him and got him on my podcast after he raised about 30 or 40 million for this company and I said to him the exact same question I said why did you bother going out thar work to raise money why did you go out and bother raising 30 or 40 million for this company when you could have just dug into your pocket and put 1 percent of your net worth into this company and he said he said because you don't know you know you don't know by yourself if something is a good idea something is a good idea if it can sustain itself in various ways either it's raising money from others at first or having customers is a great way to know you have a good idea but if he had just done it himself it's just this billionaires toy rather than something he knows might have a might be a good idea and then when you raise money as well it's not you're not just raising money from a bunch of random people you're getting potential partners potential customers in the fundraising round if you do it as strategically as possible well everybody raised money from their gonna have skin in the game for your success and so it basically can help you it's the same reason why crowdfunding is is on Kickstarter is so successful let's say you make a game okay call let's say you make a new version of Monopoly all right you take all of trumps hotels and make a kind of monopoly around it and it's kind of a fun little game and the Community Chest you can't get it you have to you have to go to the impeached square every now and then and you're frozen there until you roll double sixes or whatever anyway you want to you want to make this game you can make this with the money in your bank account probably you come up with the idea to go to a printer you can make this game for less than $100 but wouldn't it be cool if you go and put this on Kickstarter and 10,000 people put up $10 each or $50 each in promises of getting the game for free once you make it and and then there's higher tiers maybe they get the next the Trump Trump ah Polly 2.0 they get that you know if they put in a thousand dollars they get you know other you know rewards but now what did you do you created a built-in customer base you have 10,000 customers you automatically know are gonna get your game now you know it's a good idea before you even made the game so so you didn't have to crowd fund to pay for it but it gave you something other than money so if you're a lot of these guys they get something other than money when they raise money just like we everybody here in this room couldn't do with a Kickstarter or crowdfunding or whatever when you starts an idea like that that's it I won't have time for more video well first off thanks very much to script for both publishing this book as a script original at scribd.com it's uh just it's an amazing experiment you guys are doing to publish originals and it costs you essentially nothing to publish them so it's a very good experiment I congratulate you on that and thanks for having me come out and speak here and getting Jordan to interview me again we both did this for free and on our dimes - oh I got you didn't get paid I didn't give hade so draw a sock Jordan got paid and I didn't and I flew out here but another good experiment on your part and and thank all of you guys for coming out it's it's really nice to met you and and seeing you here and I guess I'll how about I'll take one more question as a final I don't okay fine go ahead not my show there you go you ever considered that it's not the individual that becomes a billionaire but the company itself yeah so again we talked earlier that maybe some of these billionaires got lucky maybe there's a lot of people with lots of ideas of all the same skills and just the ones who kind of fell into the right idea and made the right business or the ones who succeeded but other people with the exact same skills started bad companies and didn't succeed so that's kind of what you're asking is about survivorship bias but then again if you take by the time your company is worth like 300 billion million whatever then it's not your oh it's not your companies you're not the only decision-maker anymore like once you get to a certain scale you're not just like hey let me wing this yeah it's like so that's what grants it so that's a good question I'm sure many people did get up to 100 million 200 million 300 million and they either cashed out or maybe their business didn't succeed after that or maybe the business flourished but because they weren't the main people anymore other people kind of took the upside you know another person becomes CEO another person becomes an investor and so on I'm sure this happened quite a bit but one thing in common with every single one of these billionaires is they all picked great great people to work for them so I mentioned in the book can then go and specifically says there are no self-made billionaires he says I am he kind of claimed he wasn't a billionaire but whatever he he is he said there are no self-made billionaires everybody has a huge number of people working for them who are all eight plus people you can't have even a - people you have to have a plus people that you delegate you can't do everything in a billion-dollar company so you have to delegate to other A+ people to help you he said with Home Depot he's because of Home Depot an extra hundreds of two hundred thousand millionaires were created out of all the initial executives and all the initial stakeholders in his success so he knew very early on he's got a delegate and by the way he studied other billion along the way before he made home depot which by the way is a combination of big box stores like wal-mart and mom-and-pop you know house where stores there was no big box house where a company until Home Depot so he could had idea sex combine the two things but before that he was a banker and he took companies public he was the first person to take Ross Perot's first company public he made Ross Perot a billionaire so he studied the habits of a lot of other billionaires and he knew the most important thing was as soon as possible delegate to the absolute best people and have a support structure underneath you so you can focus on on the things that you're good at whether it's the ideas or the execution or product development or sales you got to he knew very quickly focused only on what I'm gonna and delegate to very strong people the best one more story on that Mark Zuckerberg was offered you know a billion dollars for Facebook by Microsoft or either Microsoft let's say it was Microsoft and he turned it down she was like a 24 year old kid he would have made 200 million dollars and he turned it down meanwhile every other social network was was going bankrupt so he was taking a risk and I asked Peter Thiel who was the first investor in facebook why did Mark suck was 24 I would have taken a 10 million dollar offer let alone a billion dollar offer and Peter Thiel said that he actually wanted Mark Zuckerberg to take the deal as well because he would have made a lot of money he bested a half a million dollars on Facebook was worth nothing but Mark Zuckerberg said if I take this money what am I gonna do for the rest of my life I'm just gonna go back and create another social network because this is what I'm interested in so why I already have a social network I don't need to take the 200 million and make another one I already have already doing what I'm doing so and of course the rest is history is worth like 60 million dollars or whatever it is right now so I think there's a certain Drive and obsession as well you have to be obsessed with every detail there's a story of Sam Walton when he was building warm on Walmart he used to go into every I don't know Kmart or Chloe you know discount clothing store and he would go to like wear the clothes you know underwear was the racks and he would make notes is it is it you know did they did they organize them as a dirty hair is it clean and he figured out for each store what was the ideal formula how he would stock the shelves he was just obsessed with every detail he was there with his CFO of Walmart the CFO was waiting outside and kept wondering where is Sam I I thought he had gone outside he stands lost and instead Sam Walton came out like a half-hour later with a full pad full knows about this rinky-dink little store in the middle of Iowa and because he was obsessed with every detail and so there's a certain obsession involved as well all right everybody thank you so much for coming I appreciate it and thank you Jordan for interviewing me always out of your podcast thank you [Music]
