Tools of Titans

by Timothy Ferriss

  TIM: “What advice would you give to Marc, the 20-something, at Netscape?”

  MARC: “I’ve never for a moment even thought about that. I don’t do replays well. The question I’ll never answer is, ‘What would you have done differently had you known X?’ I never, ever play that game because you didn’t know X.

  “If you’ve ever read the Elvis Cole novels by the great crime novelist Robert Crais—Elvis Cole is this kind of postmodern, L.A. private detective. They’re great novels, and he’s got this partner, Joe Pike. He’s my favorite fictional character, maybe of all time. He’s a former Marine Force Recon guy, so a lot like your friend Jocko. And in the novels, Joe Pike always wears the same outfit every day. He wears jeans, he wears a sweatshirt with the sleeves cut off, and mirrored aviator sunglasses. He’s got bright red arrows tattooed on his deltoids pointing forward. And, basically, his entire thing is ‘forward.’”

  TIM: “So that’s how you feel?”

  MARC: “Forward, like: We don’t stop. We don’t slow down. We don’t revisit past decisions. We don’t second guess. So, honestly, that question, I have no idea how to answer.”

  TIM: “I think you just did.”

  MARC: “Okay, good. Onward.”

  “Strong Views, Loosely Held”

  For a long time, this phrase was in Marc’s Twitter bio. I asked him to explain the meaning:

  “Most people go through life and never develop strong views on things, or specifically go along and buy into the consensus. One of the things I think you want to look for as both a founder and as an investor is things that are out of consensus, something very much opposed to the conventional wisdom. . . . Then, if you’re going to start a company around that, if you’re going to invest in that, you better have strong conviction because you’re making a very big bet of time or money or both. [But] what happens when the world changes? What happens when something else happens?”

  TF: That’s where “loosely held” comes in. People everywhere hate changing their minds, but you need to be able to adapt in light of new information. Many of my friends in this book will fight you tooth and nail over a topic, perhaps making dinner company nervously glance around, but as soon as you cite better information or a better logic, they’ll concede and say something like, “You’re totally right. I never thought about that.”

  Two Rules to Live By

  Marc and I are both huge fans of Steve Martin’s autobiography, Born Standing Up: A Comic’s Life. Marc highlighted one takeaway:

  “He says the key to success is, ‘Be so good they can’t ignore you.’”

  TF: Marc has another guiding tenet: “Smart people should make things.” He says: “If you just have those two principles—that’s a pretty good way to orient.”

  What does your ideal day look like?

  “The perfect day is caffeine for 10 hours, alcohol for 4. It balances everything out perfectly.”

  TF: This was said jokingly, but it’s surprisingly similar to my approach during crunch time. My preferred late-night “Silicon Valley speedball” for writing deadlines is a combination of Cruz de Malta yerba mate tea and 2 to 3 glasses of Malbec red wine. Not mixed but alternated. I sip the tea over hours with a traditional bombilla straw, taking a swig of the nectar of the gods every 5 to 10 minutes. Pro tip: Your writing does not get better after the third glass.

  Don’t Overestimate the People on Pedestals

  “Get inside the heads of the people who made things in the past and what they were actually like, and then realize that they’re not that different from you. At the time they got started, they were kind of just like you . . . so there’s nothing stopping any of the rest of us from doing the same thing.”

  TF: Both Marc and Brian Chesky, CEO of Airbnb, have read and recommend Neal Gabler’s biography of Walt Disney. Marc also mentioned a Steve Jobs quote in our conversation, which is printed in full below. It was recorded in a 1995 interview conducted by the Santa Clara Valley Historical Association, while Jobs was still at NeXT:

  “Life can be much broader, once you discover one simple fact, and that is that everything around you that you call ‘life’ was made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. Once you learn that, you’ll never be the same again.”

  Study the Opposites

  In addition to studying his competition in tech and early-stage investing, Marc studies value investors on the completely opposite side of the spectrum, such as Warren Buffett and Seth Klarman. This doesn’t mean they invest in the same types of companies; rather, the synergy is related to first principles.

  TIM [joking]: “You’re not going to invest in See’s Candies [one of Buffett’s investments]?”

  MARC: “No. No. Absolutely not. Furthermore, every time I hear a story like See’s Candies, I want to go find the new scientific superfood candy company that’s going to blow them right out of the water. We’re wired completely opposite in that sense. Basically, he’s betting against change. We’re betting for change. When he makes a mistake, it’s because something changes that he didn’t expect. When we make a mistake, it’s because something doesn’t change that we thought would. We could not be more different in that way. But what both schools have in common is an orientation toward, I would say, original thinking in really being able to view things as they are as opposed to what everybody says about them, or the way they’re believed to be.”

  Short and Sweet

  I followed Marc on Twitter well before we met in person. Here are a few of my favorite tweets of his, many related to the above points:

  “My goal is not to fail fast. My goal is to succeed over the long run. They are not the same thing.”

  “To do original work: It’s not necessary to know something nobody else knows. It is necessary to believe something few other people believe.”

  “Andy Grove had the answer: For every metric, there should be another ‘paired’ metric that addresses adverse consequences of the first metric.”

  “Show me an incumbent bigco failing to adapt to change, I’ll show you top execs paid huge cash compensation for quarterly and annual goals.”

  “Every billionaire suffers from the same problem. Nobody around them ever says, ‘Hey, that stupid idea you just had is really stupid.’”

  “‘Far more money has been lost by investors trying to anticipate corrections, than has been lost in corrections themselves.’—Peter Lynch”

  * * *

  Arnold Schwarzenegger

  Arnold Schwarzenegger (FB: @arnold, TW/IG: @Schwarzenegger, schwarzenegger.com) was born in Thal, Austria in 1947, and by the age of 20 dominated the sport of competitive bodybuilding, becoming the youngest person ever to win the Mr. Universe title. With his sights set on Hollywood, he emigrated to America in 1968 and went on to win five Mr. Universe titles and seven Mr. Olympia titles before retiring from competitve bodybuilding to dedicate himself to acting. Schwarzenegger, who worked under the pseudonym Arnold Strong in his first feature, had his big break in 1982 with Conan the Barbarian. To date, his films have grossed more than $3 billion worldwide.

  He gratefully served the people of California as the state’s 38th governor from 2003 to 2010. Notably, Schwarzenegger made California a world leader in renewable energy and combating climate change with the Global Warming Solutions Act of 2006, became the first governor in decades to invest in rebuilding California’s critical infrastructure with his Strategic Growth Plan, and instituted dynamic political reforms that stopped the century-old practice of gerrymandering by creating an independent redistricting commission and brought political leaders closer to the center by creating an open primary system.

  Schwarzenegger acts as chairman of the After-School All-Stars, a nationwide after-school program, and he continues his policy work through the USC Schwarzenegger Institute for State and G
lobal Policy, which seeks to advance his vision of post-partisanship, where leaders put people over political parties and work together to find the best ideas and solutions to benefit the people they serve.

  Behind the Scenes

  Arnold is a huge chess fan and plays daily. He rotates through different partners and keeps annual score cards. By the end of a year, some of them have tallies in the thousands of games. One of his favorite documentaries is Brooklyn Castle, a film about chess in inner-city schools.

  When I first met Arnold and we sat down at his kitchen table, I didn’t know how to address him and nervously asked. He replied: “Well, you can address me any way you want. You can call me Governator, Governor, schnitzel, Arnold, anything. But I think Arnold will be right.”

  I used a Zoom H6 recorder for primary audio, but I had a backup recorder (Zoom H4n) for our first interview. Arnold asked “What’s this for?” to which I replied, “Backup, in case the primary fails.” He tapped his head and looked at his team, seated around the room. Having backup audio makes a good impression. Cal Fussman (page 495) got the same response from Richard Branson, as no busy person wants to take 1 to 3 hours for an interview that never gets published.

  “I Wasn’t There to Compete. I Was There to Win.”

  I brought up of a photo of Arnold at age 19, just before he won his first big competition, Junior Mr. Europe. I asked, “Your face was so confident compared to every other competitor. Where did that confidence come from?” He replied:

  “My confidence came from my vision. . . . I am a big believer that if you have a very clear vision of where you want to go, then the rest of it is much easier. Because you always know why you are training 5 hours a day, you always know why you are pushing and going through the pain barrier, and why you have to eat more, and why you have to struggle more, and why you have to be more disciplined. . . . I felt that I could win it, and that was what I was there for. I wasn’t there to compete. I was there to win.”

  European Brick Laying

  In 1971, Arnold started a brick laying company with his best friend, Franco Columbu, an Italian powerlifting, boxing, and bodybuilding champion who’d lived in Germany. At the time, anything “European” was exotic and assumed to be better (e.g., the Swedish massage craze), so they put ads in the L.A. Times for “European bricklayers and masonry experts, marble experts. Building chimneys and fireplaces the European style.”

  “Franco would play the bad guy, and I played the good guy. We would go to someone’s house and then someone would say, ‘Well, look at my patio. It’s all cracked. Can you guys put a new patio in here?’ I would say ‘yes’ and then we would run out and get the tape measure, but it would be a tape measure with centimeters. No one in those days could at all figure out anything with centimeters. We would be measuring up and I would say ‘4 meters and 82 centimeters.’ They had no idea what we were talking about. We were writing up dollars and amounts and square centimeters and square meters. Then I would go to the guy and say, ‘It’s $5,000,’ and the guy would be in a state of shock. He’d say, ‘It’s $5,000? This is outrageous.’ I’d say, ‘What did you expect?’ and he’d say, ‘I expected like $2,000 or $3,000.’ I’d say, ‘Let me talk to my guy because he’s really the masonry expert, but I can beat him down for you a little bit. Let me soften the meat.’ Then I would go to Franco and we would start arguing in German. ‘[Content in German]!!!’ This would be going on and on, and he was screaming back at me in Italian. Then, all of a sudden, he would calm down, and I would go to the guy and say, ‘Phew . . . okay, here it is. I could get him as low as $3,800. Can you go with that?’ He says, ‘Thank you very much. I really think that you’re a great man’ and blah, blah, blah and all this stuff. I’d say, ‘Give us half down right now and we’ll go right away and get the cement and the bricks and everything we need for here and we’ll start working on Monday.’ The guy was ecstatic. He gave us the money and we immediately went to the bank and cashed the check. We had to make sure the money was in the bank account, and then we went out and got the cement, the wheelbarrow, and all the stuff that we needed and went to work. We worked like that for 2 years very successfully.”

  TF: The “content in German” is really fun to listen to. Most people, myself included, had never heard Arnold speak in his native German, let alone shout insults in German. It’s fantastic. Just jump to 29:30 in the full episode at fourhourworkweek.com/arnold

  “Did You Hurt Your Knee?” And Other Psychological Warfare

  “By the time I came to America and started competing over here [I would say to my competitors something like], ‘Let me ask you something, do you have any knee injuries or something like that?’ Then they would look at me and say, ‘No, why? I have no knee injury at all . . . my knees feel great. Why are you asking?’ I said, ‘Well because your thighs look a little slimmer to me. I thought maybe you can’t squat, or maybe there’s some problem with leg extension.’ And then I’d see him for all 2 hours in the gym, always going in front of the mirror and checking out his thighs. . . . People are vulnerable about those things. Naturally, when you have a competition, you use all this. You ask people if they were sick for a while. They look a little leaner. Or ‘Did you take any salty foods lately? Because it looks like you have water retention, and it looks like you’re not as ripped as you looked a week or so ago.’ It throws people off in an unbelievable way.”

  How Arnold Made Millions Before He Became a Movie Star

  “[Early on] I did not rely on my movie career to make a living. That was my intention, because I saw over the years, the people that worked out in the gym and that I met in the acting classes, they were all very vulnerable because they didn’t have any money, and they had to take anything that was offered to them because that was their living. I didn’t want to get into that situation. I felt if I was smart with real estate and took my little money that I made in bodybuilding and in seminars and selling my courses through the mail, I could save up enough to put down money for an apartment building. I realized in the 1970s that the inflation rate was very high and therefore an investment like that is unbeatable. Buildings that I would buy for $500K within the year were $800K and I put only maybe $100K down, so you made 300% on your money. . . . I quickly developed and traded up my buildings and bought more apartment buildings and office buildings on Main Street down in Santa Monica and so on. . . . I benefited from [a magic decade] and I became a millionaire from my real estate investments. That was before my career took off in show business and acting, which was after Conan the Barbarian.”

  TF: This makes me think of one of my favorite negotiating maxims: “In negotiation, he who cares the least wins.” He could ignore bit parts because he had cash flow from his real estate investments. On a related note, Arnold makes films or stars in them, but he doesn’t invest in them. He’s offset the potential volatility of his own career by investing primarily in real estate. I’ve taken a similar approach to date, focusing on two ends of the spectrum: early-stage tech startups (extremely volatile) and real estate that I’m happy to hold forever, if need be.

  Never Audition—Own or Create a Unique Niche

  “I never auditioned. Never. I would never go out for the regular parts because I was not a regular-looking guy, so my idea always was: Everyone is going to look the same, and everyone is trying to be the blond guy in California, going to Hollywood interviews and looking somewhat athletic and cute and all this. How can I carve myself out a niche that only I have? . . . Of course, the naysayers were there, and they said, ‘Well, you know the time [for bodybuilders] has passed. It was 20 years ago. You look too big, you’re too monstrous, too muscular, you will never get in the movies.’ That’s what producers said in the beginning in Hollywood. That’s also what agents and managers said. ‘I doubt you’re going to be successful. . . . Today’s idols are Dustin Hoffman, Al Pacino, Woody Allen, all little guys. Those are the sex symbols. Look at you. You weigh 250 pounds or something like that. That time
is over.’ But I felt very strongly and had a very clear vision that the time would come that someone would appreciate that. . . . [Eventually] the very things that the agents and the managers and the studio executives said would be a total obstacle became an asset, and my career started taking off.”

  TF: Arnold was able to use his biggest “flaws” as his biggest assets, in part because he could bide his time and didn’t have to rush to make rent. He shared an illustrative anecdote from the Terminator set: “Jim Cameron said if we wouldn’t have had Schwarzenegger, then we couldn’t have done the movie, because only he sounded like a machine.”

  Arnold’s Most Personally Profitable Film Was . . . Twins?

  “Twins came together because I felt very strongly that I had a very humorous side, and that if someone would be patient enough and willing to work with me as a director, that they would be able to bring that humor out of me.”

  Arnold loved Ghostbusters, so he pursued the director, Ivan Reitman. Since most people felt a comedy with Schwarzenegger would flop, that was a blind spot they could capitalize on:

  “We sat around at a restaurant, and we made a deal on a napkin: ‘We’re going to make the movie for free. We don’t want to get any salaries and we get a big back end. Ivan gave it to Tom Pollock, who was then running Universal Studios. Tom Pollock said ‘This is great, and we can make this movie for $16.5M if you guys don’t take a salary and you get a big back end [profit participation]. We’re going to give you 37%’ or whatever for Danny [DeVito], Ivan, and me [to divide among ourselves]. We worked out the percentage [our salaries would have been of the production budget] . . . and that’s how we ended up dividing up the pot amongst ourselves. Let me tell you, I made more money on that movie than any other movie, and the gift keeps on giving. It’s just wonderful. Tom Pollock, after the movie came out, he says, ‘All I can tell you is that this is what you guys did to me.’ Then he turned around and bent over and pulled his pockets out. ‘You’ve fucked me and cleaned me out.’ It was very funny. He said he’d never make that deal again. The movie was a huge hit. It came out just before Christmas. Throughout Christmas and New Year’s, it made $3 to $4M every day, which in today’s terms would be, of course, double or triple. It was just huge and went up to $129M domestically, and I think worldwide it was $269M or something like that.”