Derek Sivers

Interviews → Slow Hustle

Great talk with Peter Awad about job security, internalizing books, making memories, being global not local, parenting, expectations

Download: audio (mp3)

Link: http://www.slowhustle.com/giving-22-million-to-charity-memories-that-stick-with-derek-sivers-founder-of-cd-baby/


Peter:

Do you mind sharing a little bit of your entrepreneurial journey? What led up to CD Baby and then what led up to your current endeavors?

Derek:

Yea, in fact, I think, let me just double check. The thing that you're talking about, I think I posted it on my site too. Yea, if you go to sivers.org/uncommon. I named that talk Uncommon Sense, the one that you saw first on AppSumo. So yea, sivers.org/uncommon, you'll see the thing that you saw. So you just want a little bit about my background?

Really, I was just a musician, and this is important to know that ever since I was 14 years old all I wanted was to be a successful musician, and it's really all I did from the age of 14 on was just focus 100% on music and being a full time musician, a professional musician. In fact, last time I had a day job was 1992. I quit my last job and I was a full time musician every since. Being a musician is a little bit like being an entrepreneur. Let's say knowing that I wanted to be a musician in advance. It's a different mindset, so every now and then somebody will ask me this question like, "How did you get the courage to quit your job and start a company?" I'd say, no, hold on, I have to disagree with the question because ever since I was 14 I knew I would never have a paycheck. I would never have insurance. I would never have a pension. I would have no job security. Like if you decide to be a musician, it's deciding that every dollar you earn is going to be because you hustled your ass off and got a gig and got another gig, etc. So it's a life of hustling and so I think it was a natural progression then to become an entrepreneur because I already was in a way. Do you know what I mean?

So when I started CD Baby, it was after 15 years of me focusing 100% on me, me, me and my music. I just created this little online store to sell my CD. It was really just on my band's website, but then some of my musician friends in New York say hey, man, could you sell my CDs through that thing? I said sure. It was like a favor that I was doing to give back to my fellow musicians, but then it just took off and it became the largest seller of independent music on the web with almost 200,0000 musician clients and $100 million in sales and I had 85 employees and way too much responsibility. So after 10 years, I just was feeling pretty done with it, and that's when I sold.

Peter:

Gotcha, gotcha. So you would say that at the age of 14 you knew you're were going to be an entrepreneur?

Derek:

I knew I was going to be a musician. It wasn't until 20 years later . . . even with CD Baby, I wasn't in an entrepreneur world. Like I don't get this whole world of tech incubators and startups. Like, I'm not in that world. It was only after I sold CD Baby that people asked me to come in to that world because I'd sold my company, so now they valued my opinion. But the whole time I was doing CD Baby, I was in music surrounded 100% by musicians. In fact, everybody that worked at my company was a musician. Like, it was all music. It was by musicians, for musicians. Entrepreneur was a label that other people used for me. I didn't think of it like that, but yea, now after the fact people call me that and I say, yea, I guess by that definition I've been an entrepreneur since I was 14 and decided to make a living making music.

Peter:

So two questions for you. One, how do you think that you framed your mindset? You said you know from the age of 14 you were going to be a musician, so do you think that allowed you to like let go of the idea of having to get a job or follow the common path? You're like, oh, I'm not doing that.

Derek:

Yea.

Peter:

So that allowed you to like let go of all of those expectations?

Derek:

Well, it was never there in the first place.

Peter:

Yea.

Derek:

I mean I didn't have them before 14. I guess, yea, I never thought I would get a job somewhere, so it's a different thing. When I see even in high school people preparing for college so they could go to college to get a good job someday, and I just felt like no, none of this applies to me, like I never want a job. It's a different mindset you know. I find it hard to understand this mindset of entitlement, of this feeling that the world owes me a living, you know, or the idea of unions and all that. That's just never been my world because when you're doing something like music, people don't pay you to play music unless you're going to provide them that much cash value for entertainment that night or that much value for your guitar solo on their record or whatever it may be.

People only open up their wallets to pay you if it has immediate value to them, and that's the only way I ever expected that I would make money is immediately providing something of value. So even this idea of like getting investors for your business, I don't even understand that. I think if your business were valuable, you'd have customers paying you. So I've never had investors. I've never invested in anything. I just don't really understand that world. That doesn't fit into my worldview. I think what it means to be an entrepreneur, it's inventing something that doesn't exist that people have proven that they need because they're happy to pay for it. I don't think you can call yourself an entrepreneur if you're doing something that people aren't paying for.

Like starting a blog that people read isn't being an entrepreneur because people aren't paying for it. You're just doing something for fun or popularity or whatever it may be. It has to be something that people are happy to pay for. That's when you know you're onto something. If people aren't happy to pay for it, then you haven't found something that people need.

Peter:

Um-hum. Yea, I'm with you there. It's like you know there is a big push to go and get funded, right. It's almost like they skipped a step of finding out does anybody want the shit you're creating.

Derek:

Right.

Peter:

Maybe you get some cash to like scale your business if you want to scale it really fast for some economic reason, you know, timing or whatever, competition, but why don't you find out if anybody actually wants to buy your stuff.

Derek:

Right. Yea, so I know when we get to the slowness portion of this interview, I'm going to have more to say about that then.

Peter:

Okay. Alright, we'll remember to bring it back full circle. So what do you think made CD Baby a standout company? To me, just hearing you talk about it, it's like well, you're buying musicians for musicians, so you had that angle versus someone that was there to like just make a quick buck.

Derek:

Yes.

Peter:

So it's a completely different culture I'm assuming, but do you think that the story of the shrink wrapped squid, if you guys are not familiar, go ahead and google it - CD baby, shrink wrapped squid - and you'll see what I'm talking about. Like do you think that sums it up? Do you want to tell that story a little bit?

Derek:

Sure. Actually I made a short url for that. If you go to sivers.org/squid it will redirect you to the YouTube video where the guy tells his story about how . . . It was just one quirky little story, right, that . . . at every step of the business I tried to think what would be the dream come true for the customer's point of view? So you usually that was done from the musician point of view. Like what would be a musician's dream come true distribution deal? Like first you think of it from that point of view and then I'd think, can I provide that?

So from the customer's point of view, people who went to CDBaby.com to buy music, I would think from their point of view, what would be ideal and I thought, I should have a text box at the end of the order where they could make any special request, anything. It might be could you please Christmas wrap this. It might be something else, like please wait a week before sending it because I won't be home yet. I wanted to leave a place where they could communicate with a real person. So I did say, please, any special requests, yes, anything.

So one day, somebody said, I'm in the mood for some cinnamon gum and one of the guys in the warehouse got this order and there at the bottom of the invoice it says, I'm in the mood for some cinnamon gum, and he said, I was about to go out to the gas station anyway. Yea, hold on, put this order aside. He put the order aside. He went down to the gas station, picked up some cinnamon gum, dropped it in the box, and sent it to the guy. The customer that got the cinnamon gum went, wow, oh my God! He went on to his blog and his Twitter and his Facebook or whatever and he talked all about this amazing order he got from CD Baby and what a cool company. I just happened to mention I wanted cinnamon gum and they included it. What a cool company! God, I don't know how many hundreds of people came to us because of that one thing, right.

Then the squid story is kind of similar where a guy bought a CD where the album cover was like a guy with a squid on his head. So at the end of his order he said, special requests, yes, I would like a rubber squid included with my order. If you do not have a rubber squid, then a real squid will do, and it just so happens that some musician from Korea that had sent us a box of CDs recently included a shrink wrapped real squid in wit his CDs saying a present for CD Baby, I love you guys, enjoy some squid. The guys in the warehouse had kept this like tacked up on the wall for awhile and so when oh my God, an order comes in saying a real squid would do, the guys in the warehouse took it off the shelf, dropped it in the box, and sent the guy some squid. I didn't find out about this until a month later because the customer who received the squid in his order went - Oh my God! He went onto YouTube and told the story about how he received a squid in his order. You can see how many thousands of views that video has and how many people heard of CD Baby because of that story. So think about this when people talk about like how can I call attention to my business? How can I make a name for myself in the marketplace? Often it's just these tiny little things that you do that are out of the ordinary. I think Seth Godin wrote the book 10 years ago called the Purple Cow.

Peter:

Yea. It's a great book.

Derek:

If you haven't read it, don't let the fact that it's 10 years old make you think that it's moot. It's very appropriate right now. Read Purple Cow because it's all about finding these little things you can do to stand out.

Peter:

Yea. It's a great book and a classic. I agree, 10 years old or not. It doesn't really matter. Do you think that the squid and the gum . . . I mean, it's obviously different. People who put these requests in, they're not expecting to get anything. It's even different just to have that request box to begin with, but do you think a big part of it Derek is that like it's personalizing the service. It's like, oh this is not like a machine operated business. There's a person at the other end. They're human beings. They have personalities. They have their own sense of humor and that is what creates these customers for life, so to speak. Do you think that's what it is?

Derek:

Oh, absolutely, especially online. So many internet businesses are so focused on automating and optimizing everything that they remove the human touch intentionally, right. So I think that whenever you can show a real person, like God, you've just been loyal tonight.

I didn't think of this until you just asked, but just a few months ago I was going to Belgium and I was going to spend a month and a half there and I wanted to sign up for a cell phone company, like get a real sim card and just an ongoing thing so I wouldn't have to get a temporary sim card each time. I just decided, no, I want to subscribe to some company and just get a monthly plan because I go there enough. So I was looking into this company that somebody had recommended called Mobile Vikings, and they're already kind of like a smaller reseller for one of the big three cell phone providers in Belgium. But what I asked the guy is . . . I emailed customer service and I said, Can you let me choose my number? I'd like to get a number that I can remember instead of having to look it up every time because for some reasons phone numbers in Belgium are really long. I was like, it would really help if I could look at a selection of numbers and pick one that I think I'll be able to memorize better. So a real person emailed back and said, I'm so sorry. We can't. We don't have that ability, but he said, I'll give you a little hint. He said, when we mail you your sim card, we email you the phone number attached to that sim card at the moment the sim card is shipped. He said, you didn't hear it from me, but if you find that number difficult to remember, just say that the sim card never arrived in the mail and we'll send you another one. He said, we can do this up to five times before it's considered a fraudulent order. So he said, you didn't hear it from me, but you have up to five times to do this. I was like, that is the coolest tip and I loved it. He was kind of like saying it with a wink, like not supposed to. So now I feel like committed to Mobile Vikings for life, you know, that's my company just because of that, because some person emailed me back with a real human response.

Peter:

A human response. I was just talking to somebody about this yesterday. It's like you call the company and they give you their canned spiel, and then you tell them about that response is not acceptable, right, in a kind way I want to say, and then they give you same response again. You know, like dude, come on, you're a human being. If you were in my shoes, what would you want?

Derek:

Yes!

Peter:

Show me some sympathy at least, right.

Derek:

Yea.

Peter:

So that's what that guy did for you or gal did for you. It's like, oh well, we don't do that, but if I were you this is what I would do because I understand not being able to remember the number. I think it's a great example.

Derek:

Sorry, on that point, before we change subjects, Seth Godin made a good point years ago that you should your best people on customer service. Like that's not something to send out to the Philippines and keep your costs as low as possible because in that moment when somebody contacts your company, like this is your moment to shine. Like first, you should want people to contact your company, right. Like you should encourage it. Like please contact us because this is the moment where you might win years of loyalty in a one-minute conversation, right. So yea, not only encourage people to contact you, and then when they do, you need to have your best people there that have authority and leeway to do things and people that are "people people," you know whatever you call them, "people person," charming friendly, helpful, those are the people you need to have on customer facing jobs. How long did it take that guy from Mobile Vikings to write that email? Right. Like 20 seconds, 30 seconds, but now I'm going to spend hundreds, maybe thousands of dollars with this company because of that one 20-second interaction. There is so much to learn from that, like yea, encourage people to contact you and shine when they do.

Peter:

Shine when they do. The human element is so critically important and to have that person's interest. An example I've shared before where at a previous company I would answer the phone the customer was looking for a product and I would ask him some more qualifying questions about why they wanted it, and sometimes I would say, you know what, this is not a good fit for you.

Derek:

Yea. People love that when you tell them.

Peter:

I think you should buy XYZ, competitor's product because this one really, I mean, I'd like to sell it to you, but for what you want to use it for, it's not a good idea. You would catch people off guard. They would even say, well no, I really . . . They would argue with you about why they should buy it.

Derek:

Yep.

Peter:

That to me was like kind of a win, and I think as long as you add that human element, not only do you win that customer's business and loyalty, but they're also going to tell their friends, just like the gum example, just like the squid example.

Derek:

Yea.

Peter:

So Derek, I'd love to chat with you about your recent book. I think it came out about a month ago called Anything You Want. It's a very bold statement, and I can't wait to read it. Just the reviews alone say so much about it. Do you want to share a little bit about that book and kind of what it's about?

Derek:

Yea. You could read it in the time that we've spent talking already. It's a very tiny little book. Again, Seth Godin asked me to write a book. At first I said no. I don't feel like telling my tale, and he said, well could you extract the lessons that you learned in building, growing, and then selling CD Baby? I said, ahh, now that I can do. So it's a tiny little book. He started a little publishing company where he had the idea for making these short little, he called them manifestos, so it's like 88 pages. You can read it in under an hour, and it's just as succinct as can be, 40 succinct lessons that I learned. I think like the most important things I learned in starting, growing, and selling my company, and that's it.

Peter:

Very cool, very cool. I like the idea of a manifesto. It kind of speaks to something I had later on in the episode that I wanted to talk about, which is your kind of summary of books that you've read. I think you have over 200 that are on the site. I like the idea. There are a lot of books that are 200 or 300 pages that don't need to be, and I understand why they want them to be that long, but they don't need to be, so I love the idea of a manifesto like you're talking about or like this Cliff Notes version so to speak. Do you want to talk about that project, a little bit about that summary of books that you've read?

Derek:

Yea, sure. So I love books. Everybody has their own method of input that they prefer. A lot of people like podcasts. Other people like video podcasts. Other people like to watch documentaries on TV. People like audio books. Some people like paper books. So for me, it's books. Books are my favorite way that I learn things, and the main reason why is because whenever I'm reading something every sentence that makes me go, oh wow, that's powerful! I'll underline that sentence, or every paragraph that I find really counterintuitive that I want to remember this, I'll circle that paragraph. Then when I'm done with the book, I would type all of those underlined sentences and paragraphs. I'd type them into a text file and sometimes change the wording a bit to something that was more comfortable for me to remember. The point was that I wanted to remember everything I had learned, and I started doing this in 2007 because that's when I realized that there were some amazing books I'd read before 2007 and in the moment you read a book you get so inspired or same thing with listening to a podcast like this or watching something, you can get really inspired in the moment, but then talk to you two years later and everything you learned from that time was gone because you didn't really internalize it, right. Like it might be in there somewhere, but I wanted to remember it more so that's why I take these detailed notes and I we review these notes all the time. I will put them on my phone and anytime I just had some spare time, sitting on the bus or whatever, I would like pull up my phone and like re-read some of the notes from a book. I just wanted to memorize it.

So that's the main reason I started taking notes and I started doing that eight years ago. So I've read 220 something books in the last eight years and started putting all of my notes online. So originally this was just something I was doing just for me, but after a few years I realized it would quite easy for me to share it on my website. I just built a little script where I can copy my text files and it creates a little web page for that book and adds it to the list of books. So if you go to my website, it's sivers.org/book. You'll see the big list of 220 books with actually my . . . I rate everyone with a 0 to 10 rating with my favorite ones at the top. So if you go to sivers.org/book, like my most highly recommended books that I think you should read are at the top, and then scroll down and you'll see what . . . It seems like a good fit.

So with that as the context, I realized that every time I would get really excited about a book and I would tell my friends about it, most of my friends are not book readers. They're smart people but just books aren't really their main thing. They'll read articles. They'll watch TV shows, but they just won't read books. So I would tell them about this amazing book. I'd say, Jeff, oh my God, you have to read this book. It was so good. And he would say, like dude, I'm not going to read the book. Just tell me what to do. I noticed that was always my friend's questions. Just tell me what to do. Like, what does it say I should do? He didn't even say like, explain all of the concepts and ideas. It was like no, what's the takeaway? Like what am I actually going to use in my life? And I liked the fact that it distilled down to that because like you said, so many books are longer than they need to be. It's like 350 pages of argument and anecdotal stories and proof and all that, and really out of the 350-page book, you could compress the whole thing into a few sentences of like, so if this is true, then what should I do? You should do x, y, z. Okay, well if you already trusted the source, that's all you really need to know. Like my friend Jeff trusts me and so when I'm raving about a book, he's saying, just tell me what to do. That's all he needs to know. I can say, well it says that you should such and such, say hell yea or no, or whatever it may be.

So the project that you're talking about is based on that. I wonder now if I could go back through the last 220 books I read and extract just the tell me what to do bits out of it. Most books, I've noticed, don't speak this way. They don't tell you what to do. They tend to talk around subjects and they explore all the ideas or they share research and share ideas or philosophies, but they don't tell you what to do. So I made that my project that I'm working on right now, is how to take all of this wisdom that I've learned over the last eight years and how to compress it into just some tell me what to do type sentences, so that's what I'm working on.

Peter:

That's awesome. Before we started recording I was chatting with Hal Elrod today, author of Miracle Morning, and he has this whole deal where it's like six different exercises in the morning, but then there's four more and they're about habit forming. So he talks just about this specific thing. It's like you read books. You're very inspired. You get this endorphin rush or whatever you want to call it when you're reading it. You feel motivated and then you put it down. Then it's like, what the hell was the point? Like it's good to have this excitement, but then if it doesn't change your habit or it doesn't change your trajectory or it doesn't change an activity that you do every single day, it doesn't have the lasting effort. So he was talking about you forget 75% to 90% of what you've read pretty much instantaneously, and so I like the idea that you're creating this kind of tell me what to do bullet points and you're saying that you refer to them personally. Do you have some type of framework where it's like here's how I . . . if I have this main takeaway from a book and I want to implement it in my life, do you have a mechanism in order to like bring that into your everyday?

Derek:

No. I think the first thing is internalizing it, like a real awareness. Like you have to kind of get this idea and think about it multiple times. Let me think of a specific one. Okay, I read a book once that made this point that you only learn when something goes against your expectations. If everything in life falls is line with your expectations, then you're not learning anything. You're like, yep, that's just what I expected. So we are really only learning when something surprises our expectations. He said that when something surprises your expectations, it puts your mind into more like an open learning mode, like, oh, wow, things aren't what I thought. Therefore, what else is not as it seems? And it keeps you in that learning mindset, so he said if you want to keep learning and growing you should make a point of keeping yourself surprised as much as possible. He said one way to do this is to constantly read books about subjects you know nothing about, talk to people that you ordinarily wouldn't talk with that you feel almost intimidated by, or an aversion to, and getting to know those people. It may really surprise you.

He mentioned something about going to places that are very unlike the place where you grew up or where you live. I read this book around the time that I was selling CD Baby or maybe about a year before, and I felt like yea, you know, I'm very free in my life right now. I'm not tied down to anything. I don't have to be at the office. I'm free to go anywhere and I can afford to, so one way to keep my mind open and active is to live all around the world and keep moving and say, like live in Brazil for six months until it feels comfortable, until it's no longer surprising me daily, and then maybe move to Beijing until it's no longer surprising me daily, and then move to Mumbai until it's no longer surprising me daily, you know, just a way of keeping yourself in a learning mode.

You asked about a framework, so I think that's something that I . . . like I read that sentence or paragraph in the book, circled it, later put it into my notes, later reviewed it a few more times, and then later when I was like spending some quiet time with a diary or just thinking about my life or thinking about that. I write a lot, so I just spend a little time writing about that, and that's where I came up with the idea that living around the world is a good way to make that happen.

So I don't have a specific framework that I can say, yea, Peter, here's my framework for making things happen or making changes stick, but it is more like just spending time thinking about and maybe writing about what you've learned.

Peter:

I like that, and I think that re-visiting those ideas over and over kind of speaks to the what you talked about earlier which is about slow thinking and really kind of sitting and letting that simmer until you have that idea that comes to you. So what came to mind when you're were talking about opening your mind to learning, it reminds me of an article that I've referenced many, many, many times on the podcast, which is this article talking about how as you get older, your perception of time speeds up, and the whole thing was that your brain essentially has a cache and when your standing in the same environment, talking to the same people, driving the same roads, doing the same things, your brain just doesn't have to process those things. They're not new to you anymore. So in order to slow down your perception of time you have to change your environment. You have to change your experiences.

You have to do these things and all the things that you just mentioned, so it actually speaks to me currently as very applicable, right, because I'm like you know, we're spending 10 months traveling the country with the family for those exact reasons. If I'm comfortable, I don't need to go out and meet anybody. Like if I get into a room and there's 100 people there and know 20, what are you going to do? You're going to gravitate to the 20 people. The only way to make sure you stretch yourself and talk to folks that you normally wouldn't talk to is to put yourself in a room where you don't know a damn soul, right.

Derek:

Yep. Yea. I love that you're bringing this up. This is one of my favorite subjects and you learn things in the weirdest places.

So there was this book called Moon Walking with Einstein that I saw a bunch of glowing reviews about, so I read it. It was about memorization. It was like a journalist's tale of how he first was hired to write a little article about a memory expert and found it interesting, and within a year and a half he was a memory expert himself. So he's telling his talk of how he did this. So it seems like, if you're just talking about like, I'm just trying to build my business. How can I build my business or I'm trying to be happy, or I'm trying to find my calling, you think, what does reading a journalist's tale about memorization have to do with my life, but you never know where you're going to pick up these tiny little tidbits that will change your life, right.

So it was just the tiniest little sentence, deep in the middle of the book somewhere, where the author was interviewing another memory expert and he said, our memories don't stick in our mind unless they have something to hook onto, life events to hook onto. So if you remember very clearly that 2009 was the year you got fired or 2012 you graduated college, you're always going to remember that year as something to hook onto. But then say for example if you just worked at some dumb job from 2013 to 2017 and life was just a routine, then you might not remember whether something happened in 2014 or 2016 or whatever. Like it will just be a blur to you because you didn't have any events to hook onto in this time.

So what he said is if you want your memories to stick in life, you need events to hook onto. Again, just one little sentence in passing, he said, and therefore you could say the purpose of your life is to make memories to hook things onto because otherwise you'll be at the end of your life and you won't remember any of it. Kind of like a tree falls in a forest, no one hears it. Did it make a sound? It's kind of like, if you can't remember your life, did it happen?

So yea, if you want to remember you life you need to make events to hook your memories onto. It was just like one paragraph in that book, but that influenced me so much that my friends sometimes think I'm crazy for all of the radical changes I make in my life, but they don't understand that it's . . . I try to explain that I'm making memories. Yea, I make relatively big changes in my life often because . . . well, first it's fun and it's a challenge and it's daring and exciting, but man, I remember everything because my life is never routine. I have lots to hook my memories onto, you know.

Peter:

Um-hum. There's a couple that from AYearToThink.com, they took their two children, traveled around the world for a year, documented it, did an amazing job, and I was talking with Mark there and he's like, I can remember every single thing we did, every single day because they were all new, some painful, some exciting, some not, but they were all new and they were all over the world. He's like, I can remember every single day versus just a regular day, going to work, coming home, there are lots of days that kind of just you know blend together.

Derek:

You know, yea, and this is actually the other reason I started writing a good old fashioned diary so at the end of each day I put aside, sometimes just two minutes, and I just write down like what happened today. It's not deep thoughts. Sometimes it's just, this is what happened today. I only started doing this about a year and a half ago because I realized like, that would have been useful. I kind of wish when I look back to say, like other times in my life, like when I started CD Baby or when I went through like my first breakup or when I met the woman that later became my wife, kind of thing, how was I feeling back then? What did my days involve back then? Like I think I remember, but is my memory foggy? I would more likely trust myself writing at the end of that day, instead of looking back five years later trying to remember.

I'd say even if you're making a life full of memories, 20 years later, you say you remember everything now, but yet 20 years later you might not, so I still think it's worth putting aside even just a few minutes to document what you did today just so you can look back and remember, like, oh wow, I used to spend a lot more time worrying, or I used to spend a lot more time writing, or whatever it may be. It might be useful for you to look back in 20 years.

Peter:

Speaking of writing and the blog sivers.org, what would you say is your most received blog post?

Derek:

Ahh, so you sent me this question in advance, and we'll talk about that later, so I actually went and looked up what blogs have the most comments. I asked my database, like show the top five blog posts sorted by the number of comments as an indicator of people's interest in them, so the number one is my story about how I donated my company to charity which we haven't really talked about.

Number two was where I asked songwriters what do you do to get feedback on a song you've written. Number three, I was surprised, 920 comments. Oh I should mention, so about giving my company to charity, almost 1,500 comments on that one. Songwriters asking for feedback on their songs, 950 comments.

So this one was a surprise, I wrote a post once just a couple years ago saying, you don't have to be local, and it was me finally admitting that I don't really enjoy being part of a local community, that I liked to focus my attention worldwide and maybe because I've been so nomadic, but I like doing things that are not local based, but that are world based, where my physical locations is kind of moot. I'm doing things for the world, and that got 920 comments from people saying, like oh my God, thank you for mentioning this. Like I've always felt kind of not really part of my community and I can relate to this. People don't talk about this enough.

Number 4 is I posted a Kurt Vonnegut, I saw him speak before he died and he told a great story about drama and the Cinderella story and the arcs. It's linked from the front page of my site.

Number 5 also surprised me, is that I posted this thing a few years ago about somebody emailed me to ask my advice about his company, saying that he was going to try to find investors for his band or something like that. I said, I don't think you're going to find any investors for your band. I think it's all up to you. Nobody's going to help you. You have to do this all yourself, and he got really angry and upset by that. I said, wow, that surprised me because to me, when somebody says nobody's going to help you, it's all up to you, that to me is like an encouraging, powerful, yea, it's up to me, I can do this thing all by myself, like that's encouraging, but to him that was like the saddest thing he could ever hear and he got really upset by it. So I posted this kind of asking people. The subject is nobody's going to help you. Does that encourage you or discourage you? There are 720 comments on that.

So yea, thanks for asking that. I had always been curious to run that little query on my blog and I had never done it before you asked.

Peter:

Well, I want to speak to a few of those and one we planned to talk about which was donating the proceeds to charity. Like, what the hell? I mean, I don't know how many people have probably asked you that question. Like, you know, what was going through your mind. I've got a little bit of insight, but I'd love for you to share with the community here of like why you made that decision and was it easy?

Derek:

Okay. First the decision was when to sell your company and I think anybody who's listening to this that if you have a company now or someday you might, I wrote a little article about this at sivers.org/done that is how I know I was done with company. First I think you have to get to that point. I do get that question a lot, like I have the option to sell my company or I'm thinking of it or something and how will I know, so my answer is like when it feels finished. Like to me it felt like I had put the final brushstroke on a mural I had been working on for 10 years or I had written the final sentence of my novel or something. It felt like I'm done, like I have nothing more to add because for 10 years people had been asking me to sell my company. I mean I started it during the first dot.com boom so for 10 years I had people offering me millions of dollars and I said, nope, nope, nope. The amount of money doesn't matter. I'm not done. I'm enjoying this and then after 10 years, I got three more requests to sell my company, three requests in one week, and I told all of them nope, nope, nope, but then that week I spend some quiet time with my diary and I was like, actually I have no idea what's next, like I really am feeling done, like I have no vision left. I have no goals for the future or more like my goals are more diminishing returns. It would a lot of work to make an incremental tiny improvement at this point, so I was like, hmm, maybe I'm done. I just kind of pictured myself not being Derek at CDBaby.com anymore and for the first time in 10 years that felt kind of nice, so that's how I knew I was done. So first I think you've got to get to that point wholeheartedly because you don't want to feel conflicted about that.

I knew somebody that had sold his company just a year or two before and I called him. He was a friend of mine in a very similar situation. I called him and I asked, like how was it? Any regrets? And he said, yea, my biggest regret is that I agreed to work for them. He said, I've been my own boss for 15 years and suddenly because they acquired my company, now he said I have a boss and he tells me no to things that I want to do with my website which I'm charge of, but I still have to answer to somebody else. He said, it feels really icky. I don't like it. I was like, good point. I said, I would fucking hate that, so it made me define my terms you know.

So I called back the three companies that were interested in buying me and I said, okay, number one, I'm gone the minute the wire transfers done. I'm not a consultant. I'm not working for you. I'm out. Number two, I need a very narrow non compete because these are my clients. These are my personal clients, and I get to keep my database of people because these aren't just faceless customers. These are my friends. So first you've got to know if you're really truly done or not. Second, you have to know under what conditions will you actually be happy with letting go of this thing that you've created.

Then, yea, about the money, about giving it away. If I was just talking about a million dollars, I might not have given it away. I could say like, okay a million dollars could come in handy in my life, whether I buy a house and use that for living money or whatever. But $22 million, once we had this agreed upon amount. First you've got to understand the company was already earning a few million dollars a year net profit, and I was the only owner so I had millions of dollars. I had already paid off all my debts, and there was nothing I wanted to buy. I didn't want to buy a Ferrari or something stupid like that. So this idea of receiving an additional $22 million was like, wow, I had time to think about that because there were eight month in between the agreed upon price and the actual deal being done. There was eight months of time to think about this new situation for myself, and I mentioned to my tax lawyer, I mean he was my lawyer, but he had a great tax background. I said, you know I'm just going to give it all to charity anyway. This is what's so funny about negotiating these amounts. It's like I'm saying, no not $21 million, $22 million.

I said, it's just ridiculous because I'm just going to give it all away anyway. I'm like, I'm never going to use that money. He said, are you sure about that? I said, yea. I am never going to use $22 million. Like what kind of idiot played away fool would I have to be to spend $22 million in my lifetime? No. I'm not one of those people. I don't want to be one of those people. I'm just going to give it away anyway. I'll probably use a million or two in my lifetime, but not $22 million. So he said, okay, if you're really serious about this, there is something you can do that's really smart. I used to think that I would never tell this story because it's so weird talking about money, and I don't want to make it sound like it I'm such a nice altruistic guy. It was more just like deciding what would make me the happiest, but I think this is worth telling in case any of your listeners might sell their company someday.

There is a smart way to set this up, and it goes like this. If I had just sold the company for $22 million and taken the money myself, then the buyer would have paid me $22 million and then I would have paid income tax on that, like $7 million or so, and what would be left is $15 million, and that's what I'd have left to give to charity later, right. So what he recommended is if you give away the company in advance you create a charitable trust and you actually transfer the ownership of the company into the charitable trust now. He said ideally you would have done it years ago if you really knew this in advance, so the sooner you do this, the better. You transfer the company into a charitable trust, and then when the purchasing company buys it, now that's a charitable transaction and it is tax free. So now that $22 million never touches your hands. It never does go to you. It goes straight to the charity, bypasses all income tax because it is all going to charity. In fact, you've already given away your company to charity in advance of the sale. So that mean $7 million more going to charity than if I had taken the money myself, paid income tax, and then given it to charity. That's all. I felt very wholehearted about it also because I decided to give all that money to music education which to me if felt like closing the loop of the ecocycle, the circle of life, you know, like all of this money came from musicians and music fans, and so now it's going to go back in another generation or two to the next generation of musicians to help develop them, so I totally felt wholehearted, no regrets. Yea.

Peter:

Very cool. Very cool man. So I wanted to touch real quick on the done, final brushstroke statement that you'd made. How do you know it's done versus just burn out?

Derek:

It could be the same thing. There might not be any difference. I guess you know about burn out if you take a good vacation and you're still not feeling it. So actually when I was . . . actually I'm really glad you asked this. When I was considering selling and I was feeling these feelings of feeling done, I called this guy that was a bit of a coach for me and asked him, I said, Jared, I'm thinking of selling my company. Can you push me on this? Challenge me this because my friends are just . . . my friends will just agree. They'll say wow, man, that's great. I said, no, pushback, challenge me, and he said, okay, why do you want to sell? I said, I don't want this responsibility any more. I just want to be free of it.

He said, okay, well you can remain owner and be free of all responsibility. You could just disappear and go move to Hawaii and not give your employees your phone number and just collect the money. I said, okay, good point. I said, but I think I'd still feel some kind of moral obligation if I was the owner. It would still ultimately be on the hook for me to handle this, and he said, well, that's not true. You don't have to do that. I said, yea, you're right. I don't have to, but I think knowing my character I think I would. He pushed back and asked me lots of questions and with each thing he said it just became more and more apparent. Like, no, I really, really am done with this.

I guess it's like, selling a company is a bit like getting a divorce and graduating at the same time. It's bittersweet. It's like you're leaving this thing that you created. In that sense it feels like a divorce. It's kind of sad, but then it's a little bit like graduating college or something and this thing that everybody praises you for. You get this big reward, so yea. It's bittersweet, but I felt really wholehearted. You'll just know because you'll feel wholehearted, whereas if you're burned out you'll still feel like you need a break but you still might have some future vision for it.

Peter:

Sure, more of an attachment versus detachment.

Derek:

Yes, thank you. Good way of putting it.

Peter:

Okay, okay. That's super helpful, and then the other blog post I wanted to touch on just real quick because we're running up against the time limit here, but you don't have to be a local. Now, I think your pretty public about being introverted, right. Is that part of this idea of not having to be a local? Do you think it's true for either personality types? What's your take there?

Derek:

Yea, probably. I know a lot of musicians obviously, and a surprising amount of performers, even lead singers up there on stage putting on the biggest show, are actually quite introverted people, that it's something that you can get on stage and turn on for great groups of people, but a lot of them don't choose to spend their time around a lot of people. They tend to be like quiet inward focused, and then your creating something for the world to appreciate, enjoy, you put on a show or record an album, whatever it may be. So I feel more kinship with that kind of mentality.

Where there are other people that making music is a big social thing. They get together with their friends and they make music and they like to be a part of a community and have a huge circle of friends. I've just never really been that type. I always like one-on-one conversations.

There is an Indian friend of mine in Singapore that every single time we make an appointment to meet up, like me and Jay would say, hey, let's go out for lunch. He'd say, okay. Every single time at the last minute he'd call me and say, oh, I'm bringing a couple friends along with. I'll be like ah, fuck. I just wanted to talk with Jay. But to him it's like, he's such an extrovert, the more the better. Hey, a few more friends, it's even better now. To me it's like no, I like one on one. This is my kind of style.

So this idea of a local community and being surrounded by lots of people, that didn't appeal to me, but also I think it's only partially the introverted thing. Partially it's more of just a worldview. Like I don't see myself as a Chicago guy, right. Like I grew up near Chicago. I don't see myself as a Chicago dude, and I lived in Boston for a few years. I'm not from Boston now. I'm not part of the Boston scene. I lived in New York City for 10 years and then I moved to Portland, so I think a lot of it is also the side effect of moving around. Like I'm not from anywhere. I'm not a part of this scene in exclusion of others, right. Like yes, I am from Chicago. I'm also from Boston. I'm from New York. I'm from Portland, Oregon. Now I'm from Singapore and now I'm from New Zealand too. Soon I'll be from Belgium. I just became a legal resident of Belgium. So I like the idea of feeling kinship with all of these places, but at the exclusion of any others.

So I think the whole idea of feeling not local came from what people would say like, so what are you doing to benefit your local community? And feel that's kind of prejudiced in a way. That's playing favorites. That's saying that these people that are physically proximate to me are somehow more important than people on the other side of the world. I disagree. I think everybody all over the world is equally important to me, so I'm going to focus my attention equally on all of them.

Peter:

It seems like the world is your local.

Derek:

Yea, exactly. I mean, that's what I'm shooting for. But I mean, you talk about nature versus nurture, that yes I moved around a lot as a kid, so you could say that was it, but what's funny is my sister is almost my same age and she's the exact opposite. Like she feels very . . . she's in Portland, Oregon and feels very much like, no, I'm from Portland. This is where I'm going. This is where I'm from. This is where I'm going to die. This is the house I'm going to live in the for the rest of my life. She loves stability. That's her . . . like she's never been to Asia. She's never been to like to most of the world, and she has no interest. She never wants to go there, doesn't care about it at all, you know.

Peter:

I have some friends that are the same way. They're like, I just like my stuff. I like being where I'm at. I'm not moving around. Do you have any advice for someone that is in that state but they want to get out of it. You know, currently they don't move around. They are very much attached to stuff, but they're like, you know what, I want to change that about myself. I want to change that mindset about myself. What would be your advice to that person?

Derek:

Nothing brilliant. Just book a flight and go. That's what did it for me, honestly. Not that many years ago I was living in Santa Monica, California, and I loved it. I loved Santa Monica so much, and I felt like this is the end of the rainbow. I never need to be anywhere else. Then I broke up with my girlfriend and just suddenly had this epiphany like, it's a big world out there and whereas just like two weeks I was feeling like I never need to be anywhere else but Santa Monica. Suddenly I felt like that's not what I want out of my life, like that's not me. I don't want to reduce my self image down to like I'm from here and that's it. I want to expand my self image. I also want to be from Brazil and from Germany and from China, like I want to be from and feel a part of all these places, so in that moment, like really in it, and it just happened just like this, I booked a flight that night. I was thinking about it, and I spent a few hours thinking about it. Maybe I might have slept on it. It might have been the next day.

But almost right away I felt like okay, if this is true, then I should book a flight and live somewhere else and just try it for like six months. I was in Portland, Oregon at the time. I was officially living in Santa Monica, but I was up in Portland where my company was. I remember that night being in the apartment and saying, let's check out flights from Portland to London. That would be like an easy place to start is England for an American, right, if I'm going to live in another country. I went to go book the flight and they make you, at the time, choose your roundtrip flight, like as a non citizen or non resident, you can't book a one way flight. They need to see your return flight. So it said return day, I was like, oh, return date? Six months? So I picked a time six months away and I clicked, oh good, and it was a surprisingly low price. I was like, wow, that's a really good price. So I said book it. I got out my credit card. I was like, oh my God, I did it. Granted, it was still a few months away, like in December I booked a flight that was going to leave in May, like May through November, but I was like, I did it! I just booked my flight. I'm going to go live in London for six months. Like, I've decide that, and it was only $500 to book the flight. It's like, I've now committed to that. So then I had five months to arrange my affairs and settle things and do it. So yea, I guess my advice is to book the flight.

Peter:

Yea, set the ball in motion. The 10 month experience that we're on right now was started with a rental posting.

Derek:

Nice!

Peter:

We'll see if we can rent our house, and then it rented like in three days and then my wife was like, shit. I'm like you know we're actually going to do this thing. You know we did it. Yea. So to switch gears quickly here to the slowness segment of the show. I wanted to talk to you about, you know we had talked briefly about you know some intentional awareness or being specifically present with your family. Do you want to talk about this unique parenting schedule that you have? I think it would be really insightful for folks whether you are a parent or not and being like intentional about being 100% present.

Derek:

Okay, so, yes a few years ago I had a kid. He and I would wake up at like 5:00 or 6:00 am every morning, whereas his mom liked to sleep in until 9:00, so every morning from like 5:00 to 9:00 it would just be me and him. Just a few times I would find that when he was like one year old or two years old he would just be sitting there playing with blocks or whatever and sometimes I'd kind of like turn on my phone and kind of surf the web a little bit and I would just always feel this icky feeling of like, what am I doing? What the hell is coming through this screen that's more important than him? Nothing. So I said, no, no, no, no. I'm not going to be one of those people. Like this is it, he's only going to two once and like whatever's out there can wait, and I just decided in that moment, like no, I would never again, no more.

So now anytime I'm with him, it's just all devices off. Ideally, I don't even bring them with me. You know there's no need to bring the phone except maybe if I just feel like using the camera or something, but no, I turn it into airplane mode. It's just off. It's like I've noticed recently that it feels like meditation, like I don't meditate. I mean I have a few times in the past. I know what it is, but I don't do it as a regular practice except with him I kind of do. Like when I'm with him, it's just whoo, all time stops. No clocks. No appointments. Nothing else I need to do. I just made a point of arranging my life in such a way that when I'm with him everything stops. Therefore we let his clock lead because kids don't know you know 12 o'clock, 3 o'clock, things like that. I found that that most of my friend that would be like, ohhh, parenting is so hard. It's when they were trying to force their kids into this adult schedule of like come on, it's 8:55. You have to finish your breakfast, and we have to leave now. Like a kid doesn't know what 8:55 is. Okay, yea, a 14 year old does, but I'm talking like I could only speak from my experience with a tiny little toddler.

So yea, I just decided to let go of his whole idea of clocks and appointments and all that and my time with him is just like meditation and he leads. I'm just there to kind of follow and keep him out of trouble. But if he wants to throw rocks into the water for three hours, then that's what we do. We just sit there and I don't do anything else. I just sit there and appreciate throwing rocks in the water for three hours or he suddenly want to change gears or if I say hey, let's go here and he doesn't want to, I go, oh okay. Just he leads and it's really nice. It feels like meditation.

So right now my schedule is Thursday midday to Sunday midday I'm full time duty, so I just a point of finishing everything I'm doing by Thursday midday and I shut down everything and I don't turn it back on until Sunday. I just love that schedule. Just everything stops and I'm just fully present.

Peter:

I think the side benefit if you want to call it that, is that you're also fully present when your "working," right. You're totally focused on that.

Derek:

Yea. Because then obviously because of the way that we set this up is like so his mom is on full time from Sunday afternoon until Thursday, so now I'm like guilt free, just throwing myself into work from 5:00 am until midnight or whatever. Yea.

Peter:

So interesting. At our house we have a phrase, whether we are traveling or at home, it's like it's up to us whether we all have a good time. It's not up to the children at all. So the times that we've had the most fun, like the road trip from Iowa out to Arizona where we are now. We just stopped wherever. Kids wanted to stop, we stopped.

Derek:

Nice. Love that.

Peter:

We see something cool. We just pull over.

Derek:

Yes.

Peter:

And that kind of freedom I think to them was like total inspiring and they also thought like, wow, this is just crazy. Like we don't normally do things this way. Normally we have a place we've got to be at, a certain time, and I think for them it was very freeing. It opened my eyes up to like wanting to be able to do that more. So I love the idea that you're doing this weekly.

Derek:

Man you could get onto a bigger, deeper subject of expectations being the root of all unhappiness. But if you truly expect nothing, then you're never disappointed. I think there was actually a little Buddhist book I read 20 years ago called Expect Nothing, and it was about . . . I think the introduction said you know I used to get upset so much and I realized the root of this upset was that I was expecting my brother to say thank you when I would do something for him. I was expecting my mom to show up when she said she would. You know, things like this, and I'd get upset at people for being late. I'd get upset when people weren't doing what I thought they should and I just realized that if I could stop expecting anything and just let everything be a surprise, I wouldn't be upset.

Yea, I like that, what you said about, just the trip to Arizona and if you can let go of all these expectations like no, we have to get to this city by this hour. If you just let go all that and just go with the flow, yea, no upset, I love it. It's like friction free parenting. To me, it's just been easy as hell. I mean, granted, I'm in a lovely situation where I'm semi retired and that's actually my main advice for friends that don't have kids that are asking me about it. I said, wait until you're at a time in your life when you can really take a nice sabbatical and give your kid your full time attention because yea, if I would have tried to have a kid 10 years ago while I was like building CD Baby, I would have been a horrible parent. I would have been way conflicted, but yea, luckily I'm at a time in my life when I can do this.

Peter:

And then to speak to that expectation, there is a phrase, I think it's Hal Elrod's phrase, gap focus, focusing on the gap between where you are and where you want to be. I think that is definitely where that frustration comes from. It's where you're not there where you thought you'd be or you want to be and that's where the conflict come in.

Derek:

Yea.

Peter:

And to also, I mean, since we're in slowness, you talked about slow thinking. Do you want to speak to that? You also said you wanted to mention something about notes in advance.

Derek:

Ahh, yea. So you audience listening, watching. I asked Peter to send me the questions in advance, not out of some like media control freak thing, but because I've just recently started admitting that I'm not a fast thinker. Like I'm a slow thinker. When somebody asks me a question off the top of my head, like say if somebody's on the phone or in person, they say something like, what's the most surprising thing you've learned in the past year? I'm stumped. I'm like I don't know. I'll spend a whole awkward minute of silence just sitting there. I don't know. But if you were to ask me that question in writing, then I'll spend 10 minutes with it and I'll think about it and then I'll get to a deeper answer. Sometimes you'll ask me a question and I have a shallow like top of my mind, tip of my tongue answer that's not really the most interesting answer, but if I have another five minutes, I can think of something that's a lot more interesting. So that's why when I want to do an interview like this, I like to get the questions in advance because if this would have all been just top of my head, I wouldn't have had time to think about some of these deeper issues. So I think admitting that I'm a slow thinker has been very liberating.

Peter:

Admitting and then also being okay with it. It's not a bad thing.

Derek:

Yea. It actually feels like wisdom a bit in a world that's often very rushed and shallow. It's kind of saying like, no, the rush thing, the quick thing is often a shallow thing. I prefer to go deeper than that.

Peter:

Okay. I like that man. Well, hey, just a rapid fire question for you because I think we're running out of time here, but what would you say you're passionate about. What gets you out of bed in the morning besides the obvious like kicking the nuts from the kid or something like that.

Derek:

No, it's actually, it changes all the time. To me it's whatever I'm currently focused on makes me jump out of bed early in the morning. So yea, to just go for one thing at a time, so there will be a phase like December through April I was completely fascinated with this new approach to programming I was taking where I was putting more logic into the database itself instead of the Ruby Code surrounding it and that idea was like so revolutionary and exciting to me that I would jump out of bed at like 4:30 in the morning in the dark and jump straight back into my terminal and just start programming right away, and I'd be programming all day long until midnight when I would make myself go to sleep and at 4:30 I'd jump out of bed again and do it again. So there will be times for like five months at a time where I'll be really into one thing like that and then I finished in April. I'm like, yea, okay, I'm done, and then I started focusing on this project we talked about earlier about compressing everything I've learned from books into advice and I did nothing but that for five months. So I tend to just go for one thing at a time, which is currently interesting me. Yea.

Peter:

Got it. Got it. Well Derek, it's been a pleasure man. I mean, thanks so much for taking the time. Super enjoyed it. If somebody wants to keep tabs on what you're working on, what's the best way?

Derek:

Well, first obviously my website. Go to sivers.org, but the thing that I would like to encourage people to do, as you can tell the reason I do interviews like this, I'm not pitching anything. I don't care if you buy my book or not. I only make $1 I think and who cares, but I like the people that I meet when I do these things you know, the slow hustle listeners are my kind of people, so if you made all the way to the end of this, send me an email and introduce yourself. I answer every single email I get, so if you have any questions, send me a question and if you just want to introduce yourself, just say hi and we'll keep in touch.

Peter:

Awesome man. Derek, it's been awesome. I appreciate it.

Derek:

Thanks Peter.

Peter:

Take care.