Tools of Titans

by Timothy Ferriss

  This type of theme investing is a great strategy for funds, but it never really applied to me as an individual angel investor.

  For me, the decision to invest in a startup comes after following a process that is heavily weighted towards EQ (emotional quotient). This process starts with exploring the idea emotionally. Should it pass that hurdle, I then do traditional due diligence, using objective data to validate the entrepreneurs’ assumptions around the quantifiable aspects of the business.

  So, how does one explore an idea emotionally?

  When evaluating a new product, I take the novel features (not every feature) and exhaustively play out how they might impact the emotions of the consumers who use them. After that, I take the same features and consider how they might evolve over time.

  Let’s take, for example, my notes around Twitter (which led to my investment in 2008). I was intrigued by a handful of novel features:

  Tweeting—Quick public sharing.

  Emotional reaction: Typing 140 characters is quicker and easier than starting a blog. The fear and time associated with writing a long post is nonexistent. Updates can be done through text, no computer needed (remember, this was before “apps”). This could be a huge draw for non-technical celebrities.

  Following—A new contrarian concept that allowed users to follow people they didn’t know. While this seems commonplace today, at the time it flipped the more popular bidirectional friendship model on its head.

  Emotional reaction: Building a following base feels like a game or competition. Users will encourage their friends and fans to follow, bringing in additional users. This “game” of bringing in your friends and fans is free marketing for Twitter. Following forces public sharing as default. This gives fans a deeper connection with people they admire but do not know. [TF: Twitter also used a “Top 100” most-followed list early on to pour gasoline on competition.]

  Syndication of content.

  Emotional reaction: Users are beginning to use the nomenclature “RT” to indicate a “retweet” (this was common practice before the official retweet feature was developed). This ad hoc feature allows users to syndicate messages beyond their social graph, giving a user’s message increased visibility. The real-time nature of Twitter allows news stories to break faster than traditional media (even at the time, my startup, Digg).

  In allowing myself to feel these features through the eyes of the users, I can get a sense of the excitement around them.

  * * *

  This type of thinking can also be applied to larger industry trends.

  My colleague and friend David Prager was one of the first owners of the Tesla Model S. The second he received the car he graciously allowed all of his friends to test-drive it. What stuck with me most was not the car, but the sound it made. When he dropped me off, he slammed on the acceleration pedal and was whisked up a large San Francisco hill. All I heard was the electric swish/hum of acceleration. For me, this was like so many sci-fi movies I had seen growing up—it sounded like the future.

  A few days later, I remember hearing a large city bus trying to climb the same hill. The diesel engine was rattling and struggling, almost as if it were out of shape, fighting for its next breath.

  It was clear to me that while consumer adoption would be slow, with technological advances in energy storage (only a matter of time), electric vehicles would be the future of this industry.

  These feelings led to me take a position in the company back when it was largely unfashionable.

  * * *

  I’ve actually used this framework more to help me steer clear of bad investments than to find good ones. In evaluating my meetings over the last calendar year, I met with an average of 18 companies before I found one worthwhile of investment. That’s a lot of saying “no.”

  For example, the current incarnation of virtual reality gear doesn’t pass my test. Units are large, clunky, require insanely expensive computers, and setup is a mess. The experience, while fun, isn’t an order of magnitude better than traditional gaming.

  So, as of right now, I’ve avoided VR investments. At some point (years out), the right mixture of power, size, price, and reality technology will combine into a device that will likely see mass adoption. But as of right now, I’m a pass.

  * * *

  [TF: Kevin did call the explosion of augmented reality (AR) months before Pokémon Go exploded, emphasizing that AR and VR are not the same thing. He was bullish on AR and very bearish on VR.]

  It’s important to note: I’m also a believer in objective data and using it to inform decisions, especially in later rounds of financing. But in the early stage, at the seed of an idea, the bet is largely based on the quality of the team and the emotional connection you feel with the product.

  Many fellow investors believe the gut shouldn’t be trusted, and chalk up success using it to dumb luck. Certainly, creative intuition varies from person to person. There is no magic formula here. But I do believe we can think of gut intuition as a tool that can be called upon when evaluating ideas with very little data, such as startups that have yet to launch.

  Spirit animal: Blobfish

  * * *

  Neil Strauss

  Neil Strauss (TW: @neilstrauss, neilstrauss.com) has written eight New York Times bestsellers, including The Game and The Truth. He’s also been an editor at Rolling Stone and a staff writer for the New York Times. On top of that, he’s built highly profitable companies. Even if you never want to write, his thinking can be applied nearly everywhere.

  Don’t Accept the Norms of Your Time

  “I was talking with this billionaire friend of mine, and I was saying, ‘I’d really like to write a book about the way your mind works.’ He was [commenting on] the difference between someone who isn’t a billionaire and a billionaire. . . . He said, ‘The biggest mistake you can make is to accept the norms of your time.’ Not accepting norms is where you innovate, whether it’s with technology, with books, with anything. So, not accepting the norm is the secret to really big success and changing the world.”

  ✸ Related book recommendation for artists

  Life Is Elsewhere by Milan Kundera; “I think it’s an analogy for that choice we all have in life: Are you going to fulfill your potential? Or, are you just going to give into the peer pressure of the moment and become nothing?”

  ✸ Neil’s best purchase of $100 or less

  “Freedom [app]. I have no vested interest in this, but there is this one computer program that’s probably saved my life. It’s my favorite program in the world. It says: ‘How many minutes of freedom do you want?’ You put in whatever it is—‘120 minutes of freedom.’ And then, you are completely locked off of your Internet, no matter what, for that amount of time. So, as soon as I sit down to write, the first thing I do is I put on Freedom, because if you’re writing and you want to research something, you research something, and then you get stuck in the clickbait rabbit hole. What you can do is save all of the things you want to research, and just research them when that time expires. You’ll find it so much more efficient.”

  TF: Neil and I, and many other writers, use “TK” as a placeholder for things we need to research later (e.g., “He was TK years old at the time.”). This is common practice, as almost no English words have TK in them (except that pesky Atkins), making it easy to use Control-F when it’s time to batch-research or fact-check.

  Edit for You, Your Fans, Then Your Haters

  Neil edits his writing in three phases. Paraphrased:

  First, I edit for me. (What do I like?)

  Second, I edit for my fans. (What would be most enjoyable and helpful to my fans?)

  Third, I edit for my haters. (What would my detractors try and pick apart, discredit, or make fun of?)

  Neil elaborates on the last: “I always use Eminem as an example. You can’t really criticize Eminem, because [in his songs] he impersonates the critics and then answers
them. . . . There’s nothing that people have said about him that [isn’t] already answered or accomplished in some self-aware way. So, I really want to answer the critics—their questions, their critiques—in a way that is still fun and entertaining. [That’s] the idea of ‘hater-proofing’ it.”

  TF: “Hater-proofing” can take many forms, whether making fun of yourself (“I know this is laughably contradictory, but . . .”) or bringing up a likely criticism and addressing it head on (e.g., “Some people might understandably say . . . [criticism].”). Seneca does a fantastic job of the latter in The Moral Letters of Lucilius, and Scott Adams (page 261) used a similar technique in his novel God’s Debris.

  “Writer’s block does not actually exist. . . . Writer’s block is almost like the equivalent of impotence. It’s performance pressure you put on yourself that keeps you from doing something you naturally should be able to do.”

  Writer’s Block Is like Impotence

  This is a common refrain from seasoned journalists. Whether it’s ideas (see James Altucher, page 246) or writing, the key is temporarily dropping your standards.

  One of the best pieces of advice I’ve received for writing was a mantra: “Two crappy pages per day.” A more experienced author related it back to IBM, who was the 800-pound gorilla across several different industries a few decades ago. Their salespeople were known for being incredibly effective and smashing records. How did IBM develop that? In some ways, by doing the opposite of what you’d expect. For instance, IBM made the quotas really low. They wanted the salespeople to not be intimidated to pick up the phone. They wanted the salespeople to build momentum and then overshoot their quotas and goals. This is exactly what happened. Translated to writing, I was told my goal should be “two crappy pages a day.” That’s it. If you hit two crappy pages, even if you never use them, you can feel “successful” for the day. Sometimes you barely eke out two pages, and they are truly terrible. But at least 50% of the time, you’ll produce perhaps 5, 10, or even—on the rare miracle day—20 pages. Draft ugly and edit pretty.

  Be Vulnerable to Get Vulnerability

  Neil is a seasoned interviewer and taught me a golden key early on: Open up and be vulnerable with the person you’re going to interview before you start. It works incredibly well. Prior to hitting record, I’ll take 5 to 10 minutes for banter, warmup, sound check, etc. At some point, I’ll volunteer personal or vulnerable information (e.g., how I’ve hated being misquoted in the past, and I know the feeling; how I’m struggling with a deadline based on external pressures, etc.). This makes them much more inclined to do the same later. Sometimes, I’ll instead genuinely ask for advice but not interrupt things, along the lines of “You’re so good at X, and I’m really struggling with Y. I want to respect your time and do this interview, of course, but someday I’d love to ask you about that.”

  Listeners often ask me, “How do you build rapport so quickly?” The above is part one.

  Part two, I preemptively address common concerns during those 5 to 10 minutes. I’ve been fucked by media in the past, and I want my guests to know A) I know how terrible that is; and B) my interview is a safe space in which to be open and experiment. Among other points that I cover:

  This isn’t a “gotcha” show, and it’s intended to make them look good.

  I ask, “Let’s flash forward to a week or month after this interview comes out. What would make it a home run for you? What does ‘successful’ look like?”

  I ask, “Is there anything you’d prefer not to talk about?”

  Much like Inside the Actors Studio (I hired their senior researcher to read my transcripts and help me improve), the guest has “final cut.” The recording isn’t live (99% of the time), and we can delete anything they like. If they think of something the following morning, for instance, we can clip it out.

  I’ll say, “I always suggest being as raw and open as possible. My fans love tactical details and stories. We can always cut stuff out, but I can’t add interesting stuff in later.”

  ✸ Three people or sources you’ve learned from—or followed closely—in the last year?

  Rick Rubin, Laird Hamilton, Gabby Reece, and Elmo (Elmo due to watching along with his baby boy).

  TF: Neil introduced me to Rick, who then introduced me to Laird and Gabby. Elmo won’t return my calls.

  ✸ Do you have any quotes that you live your life by or think of often?

  “Be open to whatever comes next.”—John Cage

  “No matter what the situation may be, the right course of action is always compassion and love.” (paraphrased from one of his teachers, Barbara McNally)

  “I only do email responses to print interviews

  Because these people love to put a twist to your words

  To infer that you said something fucking absurd”

  —lyrics from Fort Minor’s “Get Me Gone”

  Spirit animal: Snow leopard

  * * *

  Mike Shinoda

  Mike Shinoda (TW: @mikeshinoda, mikeshinoda.com) is best known as the rapper, principal songwriter, keyboardist, rhythm guitarist, and one of the two vocalists (yes, all that) of Linkin Park, which has sold more than 60 million albums worldwide and earned two Grammy awards in the process. Mike has collaborated with everyone from Jay Z to Depeche Mode, and he’s also the lead rapper in his side project, Fort Minor. As if that’s not enough, he’s also provided artwork, production, and mixing for all the projects mentioned above. I first met Mike when I interviewed him for BlogWorld & New Media Expo in 2008.

  I’m a big fan of Fort Minor, and the lyrics on the previous page take on special meaning once you’ve been bitten. Nearly everyone in this book has been misquoted in media. It’s usually the product of a phone interview, and the fallout can be disastrous. To the interviewer, it’s just another piece that’ll hopefully get clicks and shares. For you, it could be a confusing mess that haunts your Wikipedia forever.

  Mike elaborated in our conversation: “I don’t feel like the people are necessarily being deceitful. It’s just realizing that everybody’s got their own agenda. Even a music magazine is not interviewing you because they love music, right? Their day to day is ‘We need ad dollars, we need clickthrough. . . .’ If you have a 40-word sentence that chops down to 7, [and] it’s really titillating, [it doesn’t matter if] it has nothing to do with anything you said in your interview. It’s just clickbait, [but] they’ll absolutely go for that because that’s what their business is built on.”

  TF: The moral of the story is, whenever possible, do print/text interviews via email. A paper trail will give you evidence and recourse if people misbehave. But what if you can’t keep it to the inbox? What if you can’t (or don’t want to) dodge phone calls? My approach has evolved over the years, but it now checks two boxes: avoiding the pain of wasted time, and not getting misquoted or misrepresented.

  The pain is blocking out 1 to 3 hours for a print piece interview, but ending up with a single sentence as a quote. The remaining 99% of the Q&A never sees the light of day. Even if the journalist records the call (a step in the right direction), I’ve never been able to use their audio, as they have a boss who has a boss who has a boss. This situation burns time and makes me sad. So how to fix?

  Easy, you record it on your side—which doubles as a way to cover your ass and combat any malicious intent—by saying, “Great to connect! What I usually do for phoners is record it on my side as a backup [via Skype using Ecamm Call Recorder; Zencastr also works well] and then email you a Dropbox link afterward. I assume that’s cool?” If they agree, then you’re not breaking the law by recording, and everything is hunky-dory. If they don’t agree, that’s a red flag and you should abort. Missing any one media opportunity won’t kill you, but a terrible misquote can persist like an incurable disease.

  These days, I typically broach the “I might want to put the full audio on my podcast after your piece runs, which I’ve done before. I assume that’s cool?” before I agree to in
terviews. Trading 2 hours (don’t forget email follow-ups, fact-checking, etc.) for a potential one-line mention in any text piece isn’t otherwise worth it. But when the trade works . . . it can be beautiful. One of my most popular “inbetweenisodes” for the podcast was with journalist and hilarious satire writer Joel Stein of Time (TW: @thejoelstein), who killed. It was great for both of us.

  What Are Their Incentives?

  It’s always smart, before starting any collaboration, to ask yourself, “What are their incentives and the timelines of their incentives? How do they measure ‘success’? Are we aligned?” Don’t make short-term all-or-nothing bets on gimmicks, if you’re playing the long game. There will often be pressure from people who are thinking about a promotion next quarter, not your career in 1 to 10 years. Mike shared a story about advice Linkin Park got from their label in the very beginning:

  “And they tell us things like, ‘Well, you guys need a gimmick. We want to dress Joe in a lab coat and a cowboy hat. And Chester, you should kick a shoe off at every show.’ It was stupid record-company stuff that sounds like something out of a movie like This Is Spinal Tap. But it was absolutely true, and these were real suggestions. I imagine that if you [reminded them now] they’d say, ‘Oh, no, I was totally joking.’ I assure you they were not joking.”

  The band agreed amongst themselves to stick to their guns, and they offered their label two choices: shelve us, or let us do what we know how to do. It worked. I’ve “missed” many great financial opportunities predicated on gimmicks. As Thomas Huxley famously said, “It is far better for a man to go wrong in freedom than to go right in chains.” If you’re good, you’ll have more than one chance.