Derek Sivers

Interviews → 33 Voices

The Tao of Business and how to live it, as well as how to design a life philosophy with deep meaning.

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Link: https://www.33voices.com/interviews/the-tao-of-business


Moe:

Hello everyone and welcome back to 33Voices Dialogues, where we get to talk to some of the world's most distinguished thinkers and doers on ways their point of view and perspective can help you accelerate your growth.

I have been waiting to get this guy on our program for a long, long time. For many reasons, but as I just shared with him, most notably his approach to life. By all accounts, Derek Sivers is a big time success. He was the brainchild behind the online indie music store CD Baby, before it was sold in 2008. He went on to found several companies from MuckWork, where he connected musicians to assistants, to Wood Egg -- it seems like you can come up with these fascinating names Derek -- which published annual guides on how to build companies, and then, Now Now Now.

I could go on but I think you get the picture. I'd like you to really pay particular attention to how Derek lives his life. So great to be with you man.

Derek:

Thanks Moe. That's a wonderful intro, I really appreciate it.

Moe:

Well, as I shared with you, I really admire how you designed your life. Not only have you done it purposely, but you left the vitality of the US. You moved across the world because you wanted a different life. Tell me what shapes your life philosophy.

Derek:

I think I've learned through the years -- I'm forty-five now -- that there are pendulum swings in your life. There are times in your life when you need one approach and times when you need a different one. And you don't need to define yourself too early. I think sometimes we start making public pronouncements of, "This is who I am. This is what I stand for. This is just the kind of guy I am." And then you find yourself, reluctantly, continuing to live by those things that you proclaimed, because you don't want to go back on your word six years later when those things no longer apply.

So I spent a lot of my life being very, very, fiercely ambitious. Trying very hard to get rich and successful, and doing whatever it takes to make a buck at all costs. I did that for a number of years before I hit a point about half-way through the history of my company CD Baby, where I noticed that the numbers in my bank account had gone up to a point where I said, "Oh wow, look, I guess I can retire now if I wanted to."

Moe:

That's a good thing.

Derek:

Yes, it's nice. I recommend it to anybody. It didn't change what I was doing in the moment. At the time, I was still completely driven by the things I wanted to achieve with that company. But then in 2008, when I sold CD Baby, I went to sleep that night feeling done and complete and with an empty head for the first time in a decade or so.

But literally the very next day, I came up with my next business idea and I threw myself into it immediately. I registered the trademark, and I got the domain name, and I started programming that very same day.

I got a few months into it before I said, "Wait a second. If I keep doing this, I'm going to stay on the exact same trajectory I've been on for the last ten years." And personal growth and development is really important to me. I don't want to just do the same thing over and over, I want to see life from a different perspective.

So, in 2008, I forced myself to hit the breaks on my ambition and just start looking at the world from a different point of view, and I'm really glad I did. I would have made more money if I had kept on that trajectory and did things that way, but I just had to look at what I had and realize it was more than enough for a lifetime, so there's really no point in continuing to do that. A lot of the stuff I'm doing now comes from that turning point moment.

Moe:

Did you set out to make a lot of money and build a big company with CD Baby? It's a great story because it just evolved, and it kept evolving, and it kept evolving, where the market started saying, "We want this stuff."

Derek:

I set out to be successful, but that was actually when I was 14 years old. I wanted to be very successful and at least somewhat rich, ideally doing music. Imagine this, from 14 til 29, I was fiercely focused on getting extremely successful. I wanted to be rich and famous. I wanted to be a famous musician. And man, I was a crazy workaholic. I went to Berklee School of Music and my classmates called me the robot because nobody ever saw me eat or drink or sleep or relax. Ever.

My friends would be like, "C'mon man, hang out."

"No. Gotta be working, gotta be practicing!"

I was so fiercely focused on success that I was one of those annoying guys that was inhuman in my pursuit. When CD Baby started, I didn't want it to be big, because I was actually still focused on becoming a successful musician, and I saw CD Baby as something that would get in the way of that. So it was actually a little hobby I was doing on the side as a favour to friends, but I didn't want it to grow. The Tao of business: the decisions I made because I didn't want it to grow, are the things that made it popular with my fellow musicians. It was set up in a very generous way and so that's what made it successful. It's funny because I did those things because I wanted to keep it small, but it got big anyway. It's a trick answer. Yes, I wanted to be rich and successful in my life, but I didn't want CD Baby to get as big as it did.

Moe:

You say that, and it parallels with all the great success stories today. That's probably one of the most important themes that comes out of there. We set out to build something that solves a big problem, whether it made us wealthy or famous or whatever you want to call it, that wasn't the point. It seems like those people approached the process of building something with a little different energy, I think, than people who set out, "Hey, I'm going to get in here and start CD Baby and it's got to be sold in three years for X."

Derek:

Yes, and sometimes I can't help making these musician comparisons because I was so immersed in music for 20 years. I read many, many interviews with hit song writers and very often you would hear that the big number one hit that this band had, was actually a little throw away song they weren't even going to record. They put two years and lots of money and effort into writing the other 15 songs on the album, and all those 15 songs they sweated over and toiled over and tried to make them the best they could. And then there was this one little throwaway thing they were singing on the bus, and the producer said, "C'mon, we've got one day left in the studio, just hit record on it."

And they said, "Ok," and that ended up becoming the big number one hit. Believe it or not, this has happened many times in pop music history, it's not just one anomaly. So there's something to that. The Tao of trying to hard at something. Who knows what that is, but it's funny.

Moe:

What does it teach us about approaching business? We're in the middle of this amazing entrepreneurial technological revolution, whatever you want to call it, where everybody thinks they can start the next big thing, and they can. Probably a lot easier today than before. But what does that tell us about how to approach the whole process of creating something from scratch?

Derek:

I think, from my experience, and just even in what I've seen in other people too -- I've said this twice in this conversation now, so sorry if it sounds like I'm repeating myself -- but I call it the Tao of business, where by being generous, you can succeed more than if you're trying hard to make as much as you can. When people set up a business to maximize profits, or to squeeze out every bit of permission from their users, or get away with as much as they can, by grabbing their users privacy rights or something like that, you might find that brink of profitability where your customers aren't exactly quitting, but they don't exactly love you. The whole Comcast situation for example. Nobody loves Comcast, but they've got this board of directors, they want to maximze shareholder value, blah, blah, blah, and so they find ways to squeeze the last bit of profit that they can out of everybody.

There's a different approach to business, where you almost see it like public service. Yes, you have to be profitable, otherwise you die, and actually I think a lot of young entrepreneurs make that mistake more often. They almost get too humble and they say, "Oh no, don't worry about me, I don't need to make any money," and then they go belly up in a year because they need to get a job. But if you find this sweet spot where you're covering your costs, and you're making a little profit, but generally you've set up your business in a way that it's very generous to your customers and your clients? Then people love you more because of this generosity that you exhibit to the core, and that you really walk your talk. And they feel better about sending everybody your way, and the business ends up growing faster than if you were trying to just do some kind of thing to make money.

Moe:

Derek, how much of your identity has been or is shaped by the work that you do?

Derek:

A lot, yes. I mean, I have a few dear friends and my best friends and I don't talk about work really, we talk about love and relationships and even just questioning the world around us, so that's not as much what I do, that's not career centred. But I find it hard to understand what it would be like to be somebody that is just working a job, just to pay the rent, and that's the only reason they're doing it.

Even ever since I was a broke 19 year old, everything I was doing was always with a bigger goal in mind. Like this is all stepping stones to a bigger path of personal development and improving my skills in order to get to the next level of success. Everything was always part of a path. So what I do is pretty intertwined with who I am.

Moe:

Well as I mentioned, I've been following you and your work for awhile, literally since the early CD Baby days. One of the things that I've noticed that is very clear in everything that you touch, is kind of what you've just said over the last five or six minutes. It seems everything you do is tied directly in some way shape or form, to improving someone's life. Is that how you approach it?

Derek:

Oh, definitely. Ok, even as a musician, I caught some flak from some of my peers and mentors when I was fully immersed in the life of a professional musician. From the age of 14 to 29 music was my only pursuit. From the age of 18 to 29, I was actually a full-time musician, just making my living and paying the rent, doing gigs and producing people's records and touring and whatnot. I even bought a house with the money I made touring. So I was a real full-time professional musician living the dream.

But even then it was not about the end product. It wasn't about making the best possible record or selling the most records, it was about what I was learning along the way. It was about the process not the goal. If you're interested, there's a story on my blog somewhere at Sivers.org/15-years. It's a story I wrote about where it actually took me 15 years to become a good singer. Of active work. Taking voice lessons every single week and practicing my ass off for 15 years. I finally did become a good singer.

But all along the way, people gave me so much flak saying, "Why don't you just find a singer? What are you doing? You're obviously just not good at singing, just give up and find a singer."

And I said, "Nope, this is all part of a process. I'm here to improve my singing."

And they just said, "Yeah, but it sounds bad."

I said, "Well, then I need to keep working at it."

If I was goal-oriented, I would have just found the best singer I could and made the best record I could with the best people I could, but it wasn't about that. It was about the process for myself, of becoming a better singer. And yeah, after 15 years I finally did it.

So that's an example of my approach to everything. The side effect will hopefully benefit other people, but usually the first reason I'm doing anything is to scratch my own personal itch. It's curiosity, just like a kid playing with legos. It's just something that I want to do that is hopefully to others also, but for the most part it first has to be something I find fascinating and want to improve about myself.

Moe:

In between the words you just said, one of the things that has really just evolved for me in watching you grow and watching you succeed, is you choose to stay very independent. You're not one to expect a lot of people to help you. Again, is that by design?

Derek:

Yes, that's a personality trait. I'm a nice guy, but I love solitude. I'm just an off-the-chart introvert, I guess. I met one or two people that are more introverted than me, but for the most part, I love great one on one conversations like this, but I don't like being around groups of people. It just exhausts me so fast. Even when I was running CD Baby, I had 85 employees and it would be so emotionally draining to be at the office surrounded by people that I would very often get there early in the morning, do a couple things I had to, then just scoot home and work there for the rest of the day all by myself. Yes, I try to do as much as I can alone. I just enjoy it more.

Moe:

And obviously it comes across in everything that you do because of your level of openness and so forth. You've built lots of companies, you've tackled lots of projects, when you start something new as you are doing right now, do you always follow a routine at the beginning? Do you always start a new project or new company the same?

Derek:

No, I wish. I'm not that disciplined. In fact, my friend Tynan wrote a book called, "Superhuman By Habit". A great book about making habits for yourself and designing habits and then letting those habits run your life. I tried doing it, and I really admire his approach to this, but I found that I tend to work best when I throw myself into something completely.

So that kind of life where people say, "Ok, I wake up and I exercise for an hour, and then I work on my French for an hour, and then I work on my programming for two hours, and then I spend three hours doing this, and then I spend two hours reviewing my such and such" -- I've tried doing that, but God, I thrive so much more when instead I throw myself into one thing at a time.

In fact, I woke up at three thirty this morning. I bounced out of bed at three thirty to get back to the programming I was doing. I've been up since three thirty this morning, and I'll just do it until midnight tonight because I am just so into what I'm doing that I don't want to do anything else right now. I will make myself stop for a conversation like this or to go running or something like that, but for the most part I love to just immerse myself in one thing at a time.

Moe:

So definitely no routines in your life.

Derek:

No routines! Not at all.

Moe:

Yeah, life would be pretty damned boring. You're around a lot of successful entrepreneurs, maybe not in person, but you've been around lots of successful entrepreneurs. You've seen lots of people take ideas and execute them greatly. What have you noticed through this tenure that you've had between people who are great at coming up with ideas and people who are better at executing those ideas?

Derek:

Great question. I think the main key is to not hold on too tight to any of your ideas. To feel this sense that you are a fountain of ideas and there are lots of them and there are always more coming. So if you have an idea and the public isn't eating it up, or it's not going as well as you thought, then you let go. You say, "Oh well, that didn't work," and you get back to trying other things, and listening to what the outside world is telling you.

I have this theory, through experience, that you'll know when you've hit something that hits home for people because it feels completely different. I need to explain. What I mean is, before I started CD Baby, from the age of 18 to 29, I did so many things, I tried so many things. I ran a recording studio, a booking agency, I had a five-piece funk band, a solo coffee house act, and a two-piece mime thing where I was running around inside a black shadow called the Professional Pests. Did I mention the record label? What else? I tried a few things in there and all of them, especially with my band, it felt like constant struggle. It was so difficult, so many obstacles and always banging on locked doors, figuratively. It just felt like everything was uphill, every door was locked, nothing was going my way, I could try really hard and get some success. Like I said, I was relatively successful. I was able to buy a house with the money I made making music, so that in itself was pretty good, so I shouldn't be complaining.

But then when I started CD Baby, as just a little hobby, it took off so fast that you could just feel the difference. Instead of feeling like I was struggling and trying to get people into this thing, it was this runaway growth and everybody wanted it. The toughest part of my job was keeping up with the demand. So my advice to other entrepreneurs is: when you've got an idea and it's just not really happening, then let go and try something else. I think we're taught that we should all be persistent.

Everybody says that persistence is key, you need to be persistent. But I think that many of us are misdefining the word persistent to mean doing the exact same thing repeatedly for years until you collapse of exhaustion. But I think persistence should mean sticking with the same pursuit, but trying many different approaches for the same ends.

Moe:

That's a really great point because I see that a big part of your life is living each day however you live it, and not really worrying about outcomes. If you can have a philosophy like that, it's probably a lot easier to let go of an idea that's not working.

Derek:

Right. And it's also selfless. If you're really, truly serving others, then if you've got some wacky idea and everybody is saying, "No, I'm not so interested in that," then be selfless and find another idea that is something that the world actually needs and is wanting. Get over yourself and let go of this idea. You've got many more, so go try some more.

I saw this even in the music business. There were some struggling songwriters that wrote one song nine years ago, and it was for their spouse, and it means the world to them and they spend ten years in Nashville trying to get everybody to record this one damn song. People just aren't into it, they're like, "Sorry, I just don't like that song." Then the successful songwriters I saw were the ones that just wrote two to three songs every single week. And they kept doing that, which means that they were writing 100 to 150 songs per year, and over the course of ten years, they had a thousand songs. They just keep writing. Those are the people that end up having hit songs because there is always more and more, and they just keep writing, and some of those hit.

Moe:

Derek, how do you decide what problems to tackle? I know you make it a priority to try to find really difficult problems and go after them. How do you determine, "I'm going to immerse myself in this."

Derek:

It's either two things. Number one, I feel that there is huge demand. People are really asking me to do this thing. Number two, if there is just something that is personally fascinating to me right now, no matter what the outcome may be. The first one is definitely more generous and serving the world.

So for example, we don't talk about it much, but HostBaby was my web hosting company that I ran from 2000 to 2008, and it was nothing I really wanted to do for people. I didn't dislike it, but it wasn't a big thing I was yearning to do, it wasn't a big idea. It was just that in the year 1999 or so, I had a lot of musicians complaining to me about their web hosting company. They were charging them too much, or treating them rudely because they weren't a big, giant IPO dot-com. I had learned so much about Linux and server administration and setting up a batch in PHP and MySQL, that I just told three or four friends, "You know what, I'll host your website for free, don't worry about it. Let me get you off that stupid web hosting company." And I did this for a few friends, and they were so thankful. Everybody else kept complaining to me about the same thing, so I felt like, you know what, I should just do a favour for the world and just start a musician friendly web hosting company. So I started HostBaby and I picked some low monthly amount that seemed enough to cover my costs and ended up hiring one guy to help me. But it was really just answering the demand. So that's ideal number one of choosing what to do. It's just people are asking you to do it, and you say yes and answer the demand.

Number two for me is where I scratch a personal itch, or follow a personal interest just because I want to. So if you look at this thing I did a few years ago, a book publishing company called Wood Egg, that was just a personal thing. There was no market demand for that. I was living in Singapore and I was just personally fascinated by all these countries around me and I wanted to learn more about Indonesia and Myanmar and Vietnam and Taiwan. I wanted to understand the difference between Taiwan and China, and the difference between Thailand and Cambodia. I wanted to understand what the cultural differences are between them. So I thought, I could just go and ask a bunch of questions and learn for my own sake, but I might as well just share what I'm learning.

So I started a book publishing company to formalize what I was personally learning. And yes, sure enough I lost a ton of money doing it and nobody bought the books. I think my Sri Lanka book, for example, sold a whopping eight copies in the past year and a half. So, from a commercial point of view it was a total flop, but it was something that was interesting to me, so I did it.

Moe:

Derek, what role does money play in your life?

Derek:

For the most part, I see it as a neutral indicator that you are adding value to people's lives. I know that has a lot of emotional baggage for people, but mostly I just see it as that. I think that is what I really liked about the time when I was out there as a professional musician, working so hard to make $200 on a gig. It was a nice measure of my success. If I can make money doing this, then that means that the music I'm making is valuable, or I'm finding a way to make it valuable to others. So that was a really good measure. I really liked that. As of now, I just feel like the guy who has got a lifetime supply of food in my basement. There's just no point in going out hunting if you've got a freezer with a lifetime supply. At this point, economically I'm retired. I don't do things for the money anymore, which is actually a hard habit to break.

Moe:

One of the things I've always believed in, is that making money is a skill. It seems like you started honing it when you were really young.

Derek:

Yes.

Moe:

That was part of your personal upbringing, so it is easy for you to now say, "If I'm adding value to people, if I'm adding value to lots of people, it's ok to make lots of money."

Derek:

I guess it all came from that initial pursuit of trying to be a famous musician. Whatever, we all have different role models. My role models were never the Mark Zuckerbergs, it was more like wanting to be Stevie Wonder. So it was still more about the artistic pursuit, and I felt that this is my personal challenge to find a way to make a living doing this, and ideally be a rich, successful musician. I devoured tons of books on marketing and sales and learning how to do this stuff because it was going to help me be a professional musician. I guess I probably did learn some skills.

Have you seen Jason Fried from 37signals, now called Basecamp? Jason Fried wrote an article years ago in Inc. magazine called, "How to Get Good at Making Money". It was such a brilliant idea.

Moe:

I did read it. They have a blog as well.

Derek:

If there is a way to link to that for listeners. It was such a brilliant idea, he just said, "I really wanted to get to the core of what it takes to make money. I wanted to practice making money." So I think the idea was -- I'm doing this from memory, I haven't read it in a couple years -- was that he would go on to Ebay, find items that looked underdescribed, or undersold, buy them and then ask the buyer to wait a week before shipping it. Then he would re-list the item with a better description, better photos, better sales pitch, sell it for a higher price, and then just ask the seller to ship it to that new person instead and he would pocket the difference. That was just such a wonderful way of getting to the core. Instead of starting a business and running it for ten years as a way to practice, I just love this idea. You could do that ten times a day to practice the art of sales and marketing.

Moe:

I love it. Those guys have done an amazing job. We've had them on our program and they are awesome. A couple more questions for you. I know you have a philosophy about not sharing your goals. Why?

Derek:

I think it is actually misunderstood. There was this one study that I read in a Newsweek magazine once, or something like that. In 2009, somebody pointed me to this interesting little article saying that announcing your goals makes them less likely to happen. It had some caveats: it was only for a certain type of goal, it was only for identity goals such as, "I'm going to learn Chinese," or "I'm going to compete in an Ironman competition." Goals where announcing to people that you are going to do this thing made them give you some kind of social reward. Like, "Wow, good for you," "Boy, I could never do that, you're stronger than me," "I could never learn Chinese, you must be smart." And you would get some kind of social reward for announcing that you were going to do this thing, and internally, that reward would make you satisfied enough that you wouldn't work as hard as if you hadn't announced it to anybody. But even then, they found that it made a 30% difference and it was only in this limited situation.

The funny thing is, the TED conference was doing an open call for speakers and so I pitched them three ideas. There was one thing I really wanted to talk about, there was a second thing that I kind of wanted to talk about, and, "I read this Newsweek article yesterday, that's kind of interesting, I'll toss that in as number three." And they picked me for number three. So suddenly I had to get up on stage as if I'm some kind of expert and talk about how announcing your goals makes them less likely to happen. So it actually isn't something I strongly believe, it was just an article I read once.

Moe:

But you did a hell of a job on all three of your talks, so obviously there is some truth to what you said. Certainly within the group of people that were there. Does anybody in particular influence your thinking? Who influences your thinking more so than others?

Derek:

Oh god, the books that I read. I am such a book baby. If you go to Sivers.org/book, there are a ton there. So that's my biggest influence, there's no one person. Even sometimes with people that were an influence on me in the past, I read there newest book and I'm not impressed, so it's really on a book by book basis. Some things just resonate with me, and those are my mentors. Every now and then I get people emailing me, asking me if I will mentor them, but I never had a mentor, I really just let books be my mentors. You'll usually know what you need. If you look at a big long list of books that people recommend, you'll see which ones are pointed at what you need to do now.

Moe:

What's your favourite book that you're reading now?

Derek:

My favourite one I just finished is called, "Au Contraire: Figuring out the French". The culture of France, the country not the language. It was fascinating because I thought it was going to be just a brief overview and I realized I didn't really understand Europe. I spent so much time in Asia that I decided to pick up ten different books explaining the culture of ten countries in Europe. So I read the one about Germany, and it was cute and light-hearted and actually did explain a few little things. And I read the one about the Netherlands and that was kind of cute. And then I read the one about France and it was deep.

"Au Contraire" was written by this couple that actually professionally helps companies in France understand America, and companies in America understand France. They've been doing this for decades, and so they wrote this book explaining the differences in the cultures, but in a very deep way. It was deeper than I expected and I really admire it, because that was actually what I was trying to do with the Wood Egg books. It was not meant to be about how to start a business in Myanmar, it was about trying to understand the mindset. To me it is applied philosophy. It's interesting that each culture has a philosophy they live by, and they're all correct.

Moe:

That's a really good point, they are all correct.

Derek:

Yeah, you can't say, "Those people in Singapore are wrong, they shouldn't be like that." Each culture has its reasons for the way it is and it's fascinating getting to understand the reasons why this culture is that way. I love it.

Moe:

Two more really, really quick ones. When you're in the midst of a really challenging situation, a crisis, how do you handle it?

Derek:

Two things. I used to immediately call somebody wise and detached, somebody that was outside of the situation. Far outside. Not even a best friend, but a person you only talk to a couple times a year, so that they could see the gist of the situation without all of the confusing minutiae details and give some advice based on just looking at the broad strokes. But then after doing that for awhile, I realized that before calling that person, I could first spend some quiet time and try to imagine what they would say. Which is really just a process of detaching myself from the situation a little bit, and imagining what an outsider that didn't know my details would say. Usually, I do that first. I try to zoom out and imagine a detached wise person looking at this, and then if I'm still stumped, I call an actual person.

Moe:

Really great insight. I know you're not a routine person, but are there one or two rituals, habits, that you can't live without?

Derek:

A nice cup of black tea? Short answer: solitude. Yeah, I think I could go without food longer than I could go without solitude. I really freak out if I don't get alone time. Like when I'm doing those conferences, you know those four-day-long conferences.

Moe:

Yeah, ten hours a day.

Derek:

People go to this thing for ten hours and then, "Now let's go to the party!" I'm like, "No, no, no, now let's go to the hotel room. Alone! Do some writing." Yeah, I need solitude. That's not a ritual, but it's the only thing. I've even fasted for ten days. I can go without all of my other habits, but I can't go without solitude.

Moe:

Do you meditate?

Derek:

Nope.

Moe:

So your solitude is your meditation.

Derek:

Yes, and writing. I don't even listen to music anymore these days. Well, not that much. I don't really have any commute, and I don't really have much downtime in my life, so most waking minutes I'm writing, reading or talking.

Moe:

Well, hey man, I'm one of those guys who can't wait to see what you're up to next, and after that too, because I know that you've got a lot of tricks up your sleeves. You've mentioned Sivers.org a couple times. That's the best place for people to go see what you're up to?

Derek:

Yes and in fact, if you're the kind of person that made it this far through the interview, scroll to the bottom of the page and you'll see my email address in a big font. It's [email protected] Feel free to email me. If you have a question, I'm happy to answer it. I answer every email, or if you just want to say 'hi' and introduce yourself.

Moe:

Great to talk to you, thank you.

Derek:

Thanks Moe!