Derek Sivers

Interviews → Radical Tribe

Talking with Faheem Moosa about starting, building, and selling a business.

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Link: http://www.radicaltribe.com/derek-sivers-on-building-a-one-person-business-doing-meaningful-work-and-life-after-cd-baby/


Faheem:

Hey, what’s up? This is Faheem Moosa of RadicalTribe.com, Welcome to Episode thirty nine of the Freedom show, this is where you’ll learn to escape nine to five and create your own freedom by starting a business, today on the show we have Derek Sivers, Derek is the founder of CDBaby, an online independent music retailer which Derek started several years ago and eventually sold and he’s done tons of interviews talking about his story of CDBaby, how he started, how he glued the business, various challenges etc.

Normally in these case studies of mine, these interviews, I delve really deep into how the founders started and grew their business but in this interview with Derek, I do talk about CDBaby and we briefly talk about how he grew the business but it’s not as deep as some other interviews, if you really want to know the CDBaby story then all you have to do is just go to Sivers.org, he’s got a list of all of the podcasts he’s done and you’ll find that story in detail and one of his other podcasts, so this podcast, this episode, I really wanted to understand Derek’s philosophy in [Inaudible] and life and we talk about some of the things he believes in and some of the ways he manages his life as a sole…That’s the focus of this interview.

So for those of you who are curious about working for yourself and just want to do it all by yourself just be a one person business mostly, then this would be a great interview, it’s a great interview nonetheless because Derek is really a very interesting, fascinating gentleman, so before we get into the interview, I just want to say that if you’re listening to this interview on iTunes or somewhere else on the web and you want case studies like these as and when they are published and all have to do is go to RadicalTribe.com/subscribe and type in the Email address and never miss a show, here’s Derek Sivers, Derek, welcome to RadicalTribe, it’s super to have you here.

Derek:

Thanks Faheem.

Faheem:

So, let’s…I want to learn more about you Derek, can you talk about your background and your work and how you started working for yourself.

Derek:

How I started working for myself, it’s funny, ever since I was fourteen years old, I wanted to be a successful musician, so, ever since I was fourteen, I knew that I would never have a job, I would never have a paycheck, I would never have insurance or a pension, or security of any sort and that’s always been my mindset, so every now and then somebody asks me like, how did you get the courage to quit your job and follow your dream, it’s never really that mindset for me, I think that a musician is an entrepreneur, a musician is always working for himself.

So…yes, I did do some jobs during college and out of college but I quit my last job in 1992, I think that you should always be working for yourself, I think it’s a good aim to never work only for the money, you always have to have a bigger reason if you’re doing any job, so I did get a job in the music business for a while, I was working in Warner Brothers, but it was like a minimum wage job, It’s just my way of learning the industry and making connections and it worked, had a lot of learning and experience and connection and skills from doing that, so I think that whatever we do for a job needs to be building to something in the future, not just doing something for the money and the present.

Faheem:

Right, so, talk to us about your music career, when you were 14, you wanted to be a musician, you started working at small places but talk to us about your music career, where did that go?

Derek:

Actually by my own measure, I did pretty well, I didn’t get on to the cover of the RollingStones magazine but I made a full time living from the age of…really from age of eighteen to twenty eight, except from eighteen to twenty, do you like some other jobs but really, I guess from twenty two to twenty eight, I was a full time musician, I even bought a house with the money I made touring, so I didn’t get super rich and famous but I was able to make decent living just playing music, so talk about the comparison between being an entrepreneur and being a musician, the way you make a living as a musician in New York city or I guess anywhere, you just say yes to everything, it’s like you were always on the hussle.

Anybody who’s liking for A kind of musician, try to find a way to say yes to it so, it was great training, whether somebody was looking for a heavy metal guitarist or a Jazz piano player, I would say, well, what does it pay and he’d say, atleast three hundred bucks, I say, okay, I can do it and then I’d quickly go learn how to play Jazz piano, so yeah the…let’s see, so I guess the peak of my music career was when I released an album and then it was played on a few hundred radio stations across the US and sold a thousand copies or so and that’s what led to me starting CDBaby, I was really creating a website to sell my own CDs but then my friends asked if I could sell theirs too and that became that.

Faheem:

So yes, CDBaby is what you’re most famous for and the entrepreneurial work, so talk about that, talk about like you already starting talking about…you needed a website to sell your CD’s and your friends asked you to sell theirs, so can you give us a brief about that journey and how that business grew.

Derek:

Sure, well it’s hard to imagine now, in 2015, but in 1997, the internet was pretty new and there was literally not anywhere on the internet that would sell your music for you, like if you were a musician, that it put out your own album and you were assigned to a big record label and there was just nowhere that would sell it except some guy named Derek in New York, I was the only one that’d set up this thing, just to scratch my own itch to build, to sell my own CD because there was no business that would do it for me, so I built this little system with an online shopping cart, processing credit cards and that was it, so word of mouth got around really fast and the business just grew faster than I ever expected and I never really meant to start a business, it was just helping out some of my friends and then it was helping friends of friends and then after a while when I had about twenty five various friends of friends on my website, it felt like I should give those people their own website so that’s what CDBaby was.

But yeah, it just took on, it grew, I had no investors, I wasn’t even trying to grow the business but I was just in the right place at the right time and it just exploded, took off and it became the largest seller of independent music on the web, we had something like a hundred and eighty five thousand musicians and ten million in sales or was it hundred and ninety nine, I don’t know, it got huge, I had eighty five employees eventually and that was just too big for my tastes, I was not happy, also, I felt like I had finished everything I’d set out to do, so after ten years of doing it, I sold the company in 2008.

Faheem:

You said something very interesting, you were in the right place in the right time, how important is that for a business, for a new entrepreneur starting out and really succeeding, how important is that?

Derek:

Well, I guess you could say that it’s crucial because if you’re not in the right place at the right time, then you’re in the wrong place at the wrong time and that means it’s probably not working, I think there has been a lot of businesses that we’d seen a [Inaudible], you’ve been online for a while, I’ve been around for twenty years, you’ve seen a lot of things that were just before their time, they just weren’t ready yet, I mean, I think about, of this website called Emusic that was doing…like selling MP3’s back in the nineties and they were just too early, world wasn’t ready for that and I remember that in 2004, 2003, 2003 is when the iTunes music store launched and here was Apple saying, we’re going to revolutionize the music industry, you can now buy MP3’s for ninety nine cents and the world went, Oh my god, you’re brilliant, where did you think of that but really now, music has been doing the same thing for many years with no success.

Remember when the iTunes music store launched, I thought “Ah, this will never go well because e-music did it already and it sailed” but no, e-music was just wrong place, wrong time, just a little ahead of their time.

Faheem:

The reason I asked you about that is because we see so many people struggling to build businesses, working hard day and night, really breaking their backs trying to build a business and formulating different strategies and tactics and creative things that you do to build your business etc and there are some businesses like yours that just grow because you are there… you started the business at the right time.

Derek:

Well yeah I actually would like to propose that anybody who is struggling too much with their business should stop because in hindsight… we talk about CD baby but I actually started six or seven different businesses that just didn’t go well, I started a record label, a recording studio. I did a bunch of other things that just never worked out well, you can even say that my band was like a little business, it did ok but nothing… I made a few thousand dollars but nothing like this.

So when I started CD baby, I could tell that I was now doing something that everybody wanted and you can just feel the difference so my advice to people that are banging their heads against the wall doing something that the world is not begging them to do, it’s getting too difficult, they should stop and do something else, try another idea and I think I am influenced by the fact that song writers in the music industry can either be the type of song writer that has written one song about their wife, something like that and they are trying to get this one song recorded by some famous artist and they try and try and try and they will bang their heads against the wall in Nashville, New York and Los Angeles for ten years trying to get somebody to record this one song and it doesn’t go well.

But hit song writers, usually the ones that keep writing songs, they write more and more and more, they write a new song every week, they are constantly recording, you never look back, you just keep creating and then every now and then, something you have written, something you have written is at the right place at the right time and becomes a huge hit so I think entrepreneurs should learn from this lesson and make sure that you are never feeling like this current idea that you are working on right now is the only great idea you have or is the only thing that is worth doing.

I think you need to feel like if this one just doesn’t seem to be clicking with the world then move on, try another idea, don’t get attached to any one idea.

Faheem:

So the idea of being perseverant, you keep hearing people say that one of the best traits of an entrepreneur is perseverance so is perseverance not on that one idea which isn’t working but perseverance, as an entrepreneur, trying out different things, experimenting with different things and not stopping that.

Derek:

Exactly, I think people have mis-defined the word perseverance and they think it means doing the exact same thing over and over again, of course not. People tell you the value of persistence, it means don’t get depressed and get a job at McDonald’s, keep trying but of course you have to try different things and if this idea isn’t working and it’s been a month or two and people aren’t freaking out and opening up their wallets to give you money then try a different approach, you keep trying different things until something works.

Faheem:

Let me ask you about the difference between starting and running those six businesses that didn’t work out and then CD baby, were you actually doing something different in terms of operating the business or having a… the way you ran those businesses versus running CD baby or do you do something different.

Derek:

No, there was no difference in operation or any approach, I guess you could say that CD baby grew out of a spirit of trying to do a favour of people so that’s a little different and you could even say that my recording studio was a favour to people, helping out my fellow musicians, so no, in short, there was no difference in what I was doing, it’s just that the idea of online music distribution for independent musicians, that was just the idea that the market needed, at that right time and even the timing… the fact that I started it at the beginning of nineteen ninety eight, just as this whole MP3 revolution started at the end of nineteen ninety eight.

So it was already up and running, CD baby, for nine months and you have to understand… maybe I mis-spoke a little earlier when I said, “If people aren’t freaking out about your idea after a month, let it go”, I will take that back because I need to explain also that although I felt big enthusiasm from people about CD baby, it was still very few people so even after CD baby was six months old, I was just getting one or two orders a week so luckily, I kept my costs down to nothing, I had no employees, it was just me and my bedroom so my costs were nothing so if I made three hundred dollars a month, I was profitable that month and there were quite a few months where I was really only making five hundred bucks but when people discovered it, when people found out about it.

They would freak out like “Oh my god, this is amazing, I can’t believe you did this, this changes my life, this is great” and they would happily open up their wallets and pay me lots of money to do this thing so even though I didn’t have a ton of customers, I could tell I was on to something and it really took two years before it started making real money, it wasn’t a whole year into it that I needed to get my first employee and it wasn’t until two years that I needed my second employee and two and a half years into it, it really started to take off and I really felt like something was happening but I think people also do need some patience with the growth of their business.

I do meet people that come to me and “Hey man, my business just isn’t working really well, I don’t know what I am doing wrong”, I say “Well, how long have you been doing it?”, “I have been doing it for like four months, it’s just not working”, “Come on”. Four months is nothing, people haven’t even heard of you yet, you are just getting started so it can take a few years for things to get rolling but you need to feel that the real enthusiasm, the difference between… if you tell your friends about their business idea or if you tell people about it and they go… “Oh yeah, cool, that sounds really cool, I should check that out sometime”, then what they have given you is a polite no. That’s not enough, what you really need to hear is if you tell people about the business, and they go like “Oh my god, I need that right now, can I pay you now, can I pay you to be your first customer even if you are not open yet, can I pay some money now so I can be there on opening day, can I be in your beta testers”. When you get that kind of response, you know you are onto something.

Faheem:

And you found that you got that kind of response even from the early days even if it was from one or two people?

Derek:

Yeah, you could say even before the business started, it wasn’t even a business yet before I had strangers calling me up saying “My friend Dave said you could sell my CD, is that something you could do for me, that would be amazing, what can I pay you to sell my CD on your band’s website”. So it’s like the business didn’t even exist yet and people were really asking me to do these things so that’s how I knew that this is something people need. A friend of mine had a musician newsletter and he announced it in his newsletter and instantly everybody on it contacted me and signed up immediately, that happened over and over again because like I said, there was nobody else offering this thing at all, I had no competitors until maybe a year into it, that’s when the first competitor showed up but it was too late for them.

Faheem:

How much effort were you putting into the business in the first two and a half years, how many hours a day were you focusing on this business?

Derek:

All of them, it helped that I was at a time in my life where I was no single, no kids, no other responsibilities, I would wake up at seven AM and work all day until midnight, at midnight I would go to sleep for a few hours and wake up and do it again, seven days a week and I did that for really the whole ten years, I think maybe in the tenth year, I started to live a little but for ten whole years, I worked seven days a week, seven AM to midnight.

Faheem:

Would you do anything different if you had to start again, forget the market factors and the industry, if you were to go back to the time you started the business, would you do anything differently?

Derek:

No, nothing comes to mind, I can’t anything a mistake, I don’t really have any regrets, I wouldn’t make any changes, I think it’s like, if someone didn’t mean to get pregnant and have a child, but they do have a child, but of course they love the outcome, they wouldn’t consider anything a mistake and wouldn’t do anything differently, even if they didn’t necessarily mean to have that child, they are glad they did, there were some things along the way…

Faheem:

That’s the best answer I have ever heard.

Derek:

Thank you. You ask that question, I wrote in my book, I put out a book called “Anything you want”, it’s really a summary of all these kind of things we are talking about, I have tried to compress it into a one hour read, the most important lesson that I have learned from starting, building and selling CD baby, so it’s a book called “Anything you want”, it’s for sale everywhere and there is a chapter in there that you will see, “My three point three million dollar mistakes” so I guess… I named the chapter that because it was a big mistake, it was probably my biggest single mistake and so I talk about that and there was the mistake I made with Apple iTunes where Steve Jobs dissed me from the stage, called me up, all but by name and that was pretty devastating and that was a mistake but I think with each thing that happened, almost right away, I learned such an important lesson from it that I am actually glad I happened because otherwise, I wouldn’t have learned that lesson.

There was one more tiny example that I have never written about that there was a guy, somebody publicly attacked me so I have never been sued but I have always wondered what it was like when somebody just sues you over nothing, the classic case, the frivolous lawsuit, they call them. Americans are notorious for things like this right. So luckily I wasn’t sued but there was one gut who just out of the blue, over nothing, conjured up something and launched a really public vicious personal attack against me. I think he was just doing it to get attention but I am actually really glad it happened because it made me realise how I was vulnerable in some other ways and how luckily that was just a PR attack but that could have been a lawsuit attack so I need to protect myself, with each of these things that were unfortunate, you could say, I ended up being glad they happened.

Faheem:

Just very quickly, what was that three point three million dollar mistake?

Derek:

Back when I was running my recording studio, years before CD baby, I was just a musician, mid twenties, living in New York, I was completely broken, asked my dad if I could borrow some money and he said “No, but if you start a company, I could have my company invest in your company”, I said “Ok”, it’s just paperwork. So I set up a company and his company invested in my company and it was like twelve thousand dollars or something like that, it was enough to get me out of a really hard time and a few years later, I actually paid back the twelve thousand dollars so I just thought we were all free and clear and then a few years later, a totally unrelated thing and the first time I got a cheque, I went down to my local bank and said “I need to open a new bank account because I have started a new business”.

And the bank accountant said “You don’t need to open a new account, you can just use your existing account”, I said “What do you mean?”, she said “Well, you have to pay a hundred bucks to open a new account so you can just make your new business like a DBA alias of your existing business, saves you a hundred dollars”, “Ok sure, I will do that then”. I didn’t find out years later that what I had just done is I made CD baby an alias of this company that my dad’s company had invested years earlier and that meant my dad owned a percentage of CD baby all because I was trying to save a hundred bucks and made it an alias instead of a separate business.

Faheem:

So your dad owned his company so…

Derek:

So we had to hire an outside evaluation company because the IRS watches interfamily transactions very closely because they don’t want them to try to scam them out of their due so I had to hire an outside evaluation company to evaluate CD baby and it turned out that I had to come up with three point three million dollars of my own money in order to buy back ninety percent of my company from my dad’s company so yeah I did it…

Faheem:

That’s quite a story. So it definitely wasn’t all smooth sailing for you even though the business just took off and everybody loved it, you definitely had some challenges.

Derek:

That was probably it, in general… the other comparison I think of… again, I am doing a music business songwriting comparison, I read a lot of interviews with song writers that said that, they write dozens of songs, sometimes hundreds of songs and they don’t even know why that particular song became a hit, it’s not that that song was any better than the others or that they had worked harder on it or anything else, sometimes, it was just that song became the closing credits of a movie that became a hit because the star of the movie died right before the movie came out and everybody went to see it, their song was now in the closing credits and it became a number one hit. These random things happen and I do think CD baby was a random success for me that I can’t take too much credit for.

Faheem:

Of course, you should because you woke up at six thirty AM and then you worked on it till midnight, what were those days like, how did you organize your day?

Derek:

I didn’t. Woke up, used the computer and dealt with things that needed to be done till midnight. For the most part, it didn’t feel like work, when you are doing something you love, especially if it’s for yourself, if it’s something you have started because you find it personally fascinating then most of it doesn’t feel like work, some of it does, there was some [Inaudible] kind of work I had to do with scanning people’s album artwork or fixing all of their typos but even that felt like fun in the big picture.

Even in my family, people make fun of me for being a workaholic and I always say that if somebody is sitting playing their saxophone all day long, do you call them a workaholic? No. If somebody is playing video games all day, we don’t call them a workaholic so why if I am doing what I a love all day long, just because it’s at a computer doesn’t mean it’s work, I am not doing anything I love doing, I am not doing it for anybody else but myself so it’s play.

Faheem:

So ever since CD baby, do you have the same philosophy, only work on things that you love doing, can we talk about what you have been doing since then… can you also talk about the outcome of CD baby then we can move on to what was next.

Derek:

In 2008, for personal reasons, I felt artistically done with it, I sold the company, for an amount that I was never going to disclose but then somebody… squeezed it out of me at the end of the interview and I have a hard time not answering a direct question, after asking me a bunch of technicalities, “What was the selling price?”, and I went “Twenty two million”. So yeah, I sold the company for twenty two million and because I didn’t really need or want the money, what I did was I set up a charitable trust before selling the company and I think this was a really good trick.

For those of you listening, if you think you might sell your business somebody, consider this structure, if you sell your business for twenty two million and you sell it yourself then that twenty two million dollars go to you and the taxman will keep seven million dollars leaving you with fifteen million dollars and even if you say, I am a charitable person, I want to give that all to charity, well now you only have fifteen million dollars you can give to charity but if instead, you put your company into a charitable trust before you sell it then the entire sales transaction is a tax free transaction so I put CD baby into a charitable trust before I sold it so that when the purchasing company bought it for twenty two million, that entire twenty two million went to charity and never touched my hands and it was tax free, it was a way to give more to charity then if I had just taken the money myself personally.

Faheem:

Why did you decide not to use any of the money and give everything to charity.

Derek:

The business was already profitable by the time I sold it so it was… it had been profitable all along, I told you, the second month, I made a couple of hundred dollars so it was in the black every month, and in the last years, it was making a few million dollars per year and I was the only owner, I had no investors so that was all mine, I already had enough money and I didn’t need anymore, it’s something I think of often in my life, this idea of enough, when you have enough of something.

We all know ridiculous examples, there are a lot of Indian politicians that don’t understand the word enough but… in the 80s and 90s, it was [Inaudible], they found out that she had four thousand pairs of shoes and anybody can laugh at that situation and go, what an idiot, who could ever wear four thousand pairs of shoes but I think a lot of us have versions of that in our life where we buy more things then we can really use or more things that are needed to make us happy. It’s just already in my daily life, where I live, I only have two plates because I don’t really like to entertain guests and I can’t eat on more than one plate at a time.

Sometimes I do have one person come visit so I have two plates, that’s enough, I only own one pair of jeans because that’s all I can wear and if I wash them, that doesn’t take long so one pair of jeans is enough, I don’t need ten pairs, that’s my life philosophy so by the time I sold my company, I already had enough not to just live on but retire on. it’s when I mentioned this to my lawyer, he knew about this charitable remainder trust so I just gave it all away in advance.

Faheem:

So what drove your personal fascination, what were you fascinated about after CD baby and what have you been doing since then.

Derek:

Well the short answer, I get asked this enough that I made a link on my website, there is a link “Now”, it goes on a page which says “What I am working on now” and everytime I change what I am working on, I update that page so that’s always what I am working on now including links to the daily output of my computer programming, stuff like that and links to all of the projects I am working on. Ever since I sold CD baby, I thought like, “Wow, now I really don’t need the money more than ever”.

So anything I do now should not be for the money, if it ever was, I should just do things because they need to be done so there are things that I am working on, some web apps that my musician friends may need or other people I know need and a new idea that I just posted on my blog last week That I’m fascinated with right now is taking everything I’ve learned from the last seven or eight years of book reading I’ve done, I’ve already publicly posted all of my notes for each of the two hundred and twenty something books I’ve read over the last seven years, now I’m thinking of finding a way to summarize and compress everything I’ve learned and give some advice for people that doesn’t just talk around the issues but just specifically says to this, here’s what you should do, based on everything we know.

Faheem:

That’s great, I find that so interesting because there’s so much information out there these days, people don’t want to read three hundred pages or a four hundred page book, they just want to know what to do, they just want to know who suggested this, so you…you did it for two hundred and twenty books, when are you going to do it for the rest of the books that have been published in this world?

Derek:

In the world, I guess that would be next year, I’ll do the rest, It’s a funny feeling to like tell people what to do, it feels strange because it feels like, hey man, you’re not my boss, who are you to tell me what to do? It’s like we have this voice in our heads that thinks that if we tell someone what to do that they will object to that but actually I’m thinking the very considerate thing to do, I mean there are many subjects that I do want to read a three hundred page book on this subject but there are other subjects that I don’t, so I give an example on my blog Sivers.org/number2, Sivers.org/2, I give some examples there.

Like on the subject of diet, nobody would feel like reading a five hundred page book that analyses all of the foods available today, the nutritional content of each, I just want somebody to tell me, eat this, don’t eat that, exercise like this, it appears the culmination of everything we know about nutrition and fitness today says that you should basically do these ten things, that’s all I really want to know and I’ll trust the subject, I don’t feel like analysing the data but there are some things where you do want to analyse the data so I think that’s why it’s useful to provide links for people who want more information. So you can say do this, and if you doubt it or you wonder why? This is a link where you can go read the four hundred page book for yourself if you want.

Faheem:

So these are obviously for nonfiction books, especially how to books, you’re doing the business books as well, what’s the range of genres?

Derek:

Good question, if you just look on my site, like I said these are all just publicly out in the open for free for anyone who wants them, so you go to Sivers.org/books, you’ll see all two hundred and twenty books that I’ve taken notes for and links to all of my notes and that’s where I’m constantly adding these books every month so Sivers.org/books, anybody interested, just go there and you’ll see all of the books that I’ve read in the last eight years.

Faheem:

And you said you were going to do, do you have a specific plan to do more books or is it that you’re just going to take it as it comes and just sort of do them for books that you personally read.

Derek:

Yeah, for ones that I personally read and it’s not, I think it was on my blog, I think I was a little misunderstood by reading the comments, I think a lot of people thought I was doing fucking [Inaudible], giving [Inaudible] notes or, I think there’s a company out there called Linkist or something that compresses books into executive summerings and I’m not talking about doing that, I’m talking about just…taking everything I’ve learned in eight years and summarizing it up, not a [Inaudible] basis so, yeah it’s, if it goes well, it’s something I’ll just keep doing for the rest of my life.

Faheem:

And is this…is this a business, or is it something you’re just going to publish on your blog?

Derek:

I think it’s just something that I’ll…I don’t even know if It’s going to be a blog, I’m open to new ideas if anybody, listening to this, finds it fascinating, please Email me, my Email is [email protected] and I answer every Email I get, so feel free to ask me anything or suggest anything or just say hello and yeah if anybody is interested in this, I’d love to hear any ideas, I think it’s probably…I doubt that it’s something I’d do for the money, I think it’s just something that needs to be done and maybe it would turn into a book someday but, books don’t really make money anyway.

Faheem:

So Derek…your journey has been…your journey has been pretty fascinating, right from the time you became a musician and you started CDBaby and all of the other things that you did, do you see, do you like look up to somebody, do you like have somebody in mind, say ok, I want to, not be that person but try and follow a few things that they did and try and like emulate, do you have somebody like that or not?

Derek:

Yeah, good question, Instead of mentioning the obvious, Richard Brandson type, too easy to mention, I’d actually like to recommend one that I think most people haven’t heard of is the guy named Rob Walling, Rob Walling, he has a business or website called Micropreneur, so it’s like entrepreneur, just with the word Micro, Micropreneur.com, heard him speak at the conference and I really admire what he’s doing, also, he put out a book called “Start small, stay small” and that book is in my [Inaudible], Siver.org/book, so you can read the notes from it but he’s doing something fascinating where he is a single guy, I’m sorry, single meaning, he’s just him, he and his wife have, I think four kids or something like that, so he’s busy, he doesn’t have a lot of free time and yet he has something like eight to twelve online businesses that he owns and runs.

Each one he strictly measures his time, so it’s like he goes into his office at 9 AM and then comes out at exactly 5 PM and through diligent, disciplined time management, from 9 to 5, he somehow runs 8 to 12, it’s a profitable little business, but each one, tracking his time, getting ready so that when he’s ready to sell that business someday, he’s able to show a potential buyer, here is exactly how this business runs, I’ve documented everything that needs to be done to run it, here is exactly how long it will take you each week to run this business, I can tell you from your [Inaudible] exactly how it works, here’s the four letters to you for each situation, here’s how to handle those situations, here’s the manual for how to run this business and I really admire that, I think it’s a really cool approach to…

Especially when we tend to get so passionate and emotional about what we do, obviously he loves what he does but he’s just found a really disciplined way to manage it and test the effectiveness of what he’s doing and so yeah, he writes about it in his books called start small, stay small and I think he has a whole community of people that are also doing this approach on his website, Micropreneur.com, so highly recommended.

Faheem:

And I believe he has a conference, the Micropreneur conference.

Derek:

Yeah, Thanks for remembering, yeah, I haven’t been to it yet but I’ve been meaning to so, yeah.

Faheem:

That’s great, thanks for talking about [Inaudible], start small, stay small is his book, Derek, how do you learn, how do you learn more about life, about business, do you have a pear group or do you…I know you say, say on your website that you’re an introvert but do you have a group of people that you meet up with or learn from, I know that in the entrepreneurship world, this whole concept of mastermind, having masterminds is pretty big so, can you talk about that, about how you…

Derek:

Yeah, that doesn’t work for me, the whole thing of people getting together and networking, media groups or even the whole thing about like [Inaudible] and a bunch of entrepreneurs getting together in the same place, an open plan and a bunch of people sitting there at a big giant table with headphones on, I don’t like that at all, if you could see, as we’re talking, I’m sitting here like on the edge of New Zealand, on the coast, looking out at nothing and going out of the water with the waves crashing out on the sharp jagged rocks, like this is my kind of lifestyle, I love to work alone and I love to read books.

That’s really been the main source of my learning, it’s been from books and yes I do have a few friends that are spread around the world, people like [Inaudible], Jared Ross, we talk on the phone every now and then and we trade ideas and we have ideas off each other, just phone call once or twice a year is kind of good enough for that kind of thing, I don’t really need a big support group, I think this is just an introvert thing, I used to think that I was fifty/fifty, Introvert/extrovert, but then somebody said, well, if you think you’re fifty/fifty, let me ask you this, where do you go to recharge your batteries?

I said well, alone obviously, he said no, not obviously, he said, I’m the opposite, if I’m alone for more than a few hours, I get really run down and depressed, he said, I need to be around people in order to like charge my batteries and it turns out that I didn’t even know that anybody would like that, I thought everybody got run down being around other people but now it turns out I’m the weirdo that’s an introvert so, I kind of object to the constant socialization of Networking and all of that kind of stuff, I don’t like to be around other people too much.

Faheem:

A lot of literature, entrepreneurship literature on the internet and I’m glad you brought this up because this is the question that I’ve always wondered about, they talk about how single founder business are not the way to go, have you ever missed having a business partner, because everything that you’re saying is that and I know there are several solepreneurs like you that do this alone but I’ve always wondered for a solepreneur such as you, have you ever missed having a business partner to sort of share the responsibilities?

Derek:

You can probably guess my answer, I think the bigger issue is this that, I could be more successful if I had a cofounder and I could be more successful if I delegated the programming to other people, hired a team of programmers but instead I insist on doing everything myself because I enjoy it, no, I love programming, therefore sometimes what would take a team of programmers two months to do, I’ll do it all myself, it will take me two years which means all kinds of lost business opportunities but I don’t care cause I’m doing this to be happy like I don’t…I’m not beholding to some investors that are demanding maximum return, I just do everything myself and so I do it in order to be happy, so…when Paul Graham talks about how through, all of his observations that he thinks that everybody need a cofounder, well okay, the rest of that sentence is in order to maximise your chances of financial return, right?

But if you’re doing it for happiness, then you just have to pay closer attention to what makes you happy, maybe you want to live out the countryside in the middle of nowhere and do everything alone or maybe you feel like having ten cofounders and doing everything with your entire family, sharing with everybody and that’s what makes you happy, you just need to be aware of what makes you happy and forget about all of this advice that people think what you should be doing, you can listen to them but only you know what works best for you.

Faheem:

Do you ever get, do you ever get exhausted with some of the things that you have to do as an entrepreneur and if you do, how do you deal with that?

Derek:

Good question, sometimes you just do them, the same way that you have to, [Inaudible], it’s just, there’s something that just needs to be done and doing your accounting or something like that and you could hire somebody else to do it but you just need to do it, but I think there are a lot of things that you can challenge the fact of whether…you need to actually do it or not, especially via the business owner, you can push back on some of these demands and just say, no, I know that this is something you want from me but I don’t feel like doing it so I won’t…this is…It’s an important lesson that I learnt from…a friend of mine who challenged me back whenever I said…I hate having all of those responsibilities, I have to do this, I have to do that.

And he said, no you don’t, I said, yeah, you do, you have to pay your employees, you have to pay your taxes, he said no you don’t, ofcourse you do, he said no, you don’t have to do anything, he said, if you don’t pay your employees, there will be some consequences, they will quit and they might sue you, if you don’t pay your taxes, the government will eventually come after you and they’ll demand a much higher payback plus interest for the money you should’ve paid them a few years ago, but you don’t have to, there will be consequences if you don’t but you need to understand that all of these things are choices, you’re actually free to do whatever you want to do, not to do whatever you don’t want to do, you just have to understand the consequences. If you’re happy with the consequences, you don’t have to do anything.

Faheem:

So Derek, when you don’t feel like doing something, let’s say you have to do your…let’s take an example that you mentioned your accounting, when you wake up in the morning, you don’t feel like doing something, what do you tell yourself, just do it, if you have to do it ofcourse, you want to do it.

Derek:

[Inaudible], I could just…just recently I did all of the book keeping myself for a project I’m doing because in order to output all of those numbers to somebody else to do it, it would’ve just taken longer than just doing it myself cause it was all digital, it’s not like it had somebody with a box of receipts, so I just kicked a chain and crumbled my pot of tea and I turned on some good music and I just had like nine hours one day and just gave it all, crumbled the whole time, there’s still things like that…

Faheem:

Right, when I was working with my dad in our family business many years ago, I think I was twenty years old and one day I didn’t go to work and he asked me why, I said I just don’t feel like it, he said, leave your feelings out of this, throw them out of the window, just go do your work, so that was a big lesson for me.

Derek:

Yeah, I agree with you, I think that…especially in America and Europe or especially online, I don’t know, especially…whatever, there is this big idea that, hey man, follow your dreams, follow your passion, just do whatever you want to do and I think…

Faheem:

Just very quickly if for a soleprenuer, somebody who wants to start a soleprenuer business, what are the top three actions that a soleprenuer that has started an online business, what are the top three actions that someone can take?

Derek:

Ok, number one, go read the book, [Inaudible], number two, go read Start small, stay small by Rob Walling and number three, do what they say, but you know much better than I do about these things but those are my main advices, or even honestly like Sivers.org/book and you look at that list of books there, the list of books on this…I just think…too many business owners I know released, people should be reading more and applying the lessons that they learned, cause a lot of really smart people have taken a lot of time to compress everything they’ve learned into a little twenty dollar book or sometimes a nine dollar book and it is so worth your time and your nine dollars to go get book and give it your full attention and take their advice.

Faheem:

I’m going to go to Sivers.org/book right now, so thank you so much Derek and I apologize if it went a few minutes more than I promised but this has been so fascinating, I just loved the conversation, thank you so much and I hope you come back and talk to me again as well.

Derek:

Great, thank you so much.

Faheem:

Take care, bye bye, alright that Derek Sivers, to learn more about Derek, you can go to Sivers.org, That’s Sivers.org, to be honest, for a week after I did this interview with Derek, I was hooked on to his book summaries page on his website which is Sivers.org/book where he’s written notes for two hundred and twenty books and I was just totally hooked so if you like reading different kinds of books, you just go to Sivers.org/book, I’m sure you will not be disappointed and if you like case studies like these or interviews like these straight to your inbox, do me a favour please go to RadicalTribe.com/subscribe and type an Email address and you will never miss a show, thank you so much again for tuning in, I’ll see you next time.