Episode of My First Million with Sam Parr and Shaan Puri.
Transcript
Note: This transcript was auto-generated from YouTube captions. It may contain errors and lacks speaker identification. A full Gemini audio transcript will replace this.
Kind: captions Language: en so the background here by the way Shawn is I was on James’s show three weeks ago and actually air today yes I’ve been getting people reached out reaching out to me James James is an oddball I like him he’s been around and done all types of interesting stuff he’s had books he’s got paid newsletters he’s I don’t know what how you describe yourself but you’re just kind of all over the place and you’ve done all types of stuff and you have a really interesting life and we thought we’d get up we thought we’d get him on here and we could talk about anything but uh do you know about James Sean I know about you yeah I know about him I’ve read about your stuff I was like this guy’s the [ ] and then I read I read something that was like I think you were talking about bit coin and crypto at the time and I was like wait a minute is this just a guy who just just sells the latest thing like oh here’s the new thing cool I’ll seal that and I was like okay I don’t how I feel about this and then I’ve read some of your stories where you talk about how you made money and lost it all over and over and over again and I was like this guy is very interesting you reminded me of like if Tim Ferriss you know smoked a bunch of weed and was on the Internet I don’t know like is this like some some variation of really interesting guy who potent you know who’s built his brand on the internet you know you always had like something unexpected like it wasn’t the formulaic thing like even the fact that you own a comedy club is like you always have sort of unexpected things that’s what I have sort of come to like about you but you know that’s my admittedly very loose knowledge about about you do you want to give some background yeah I mean it’s kind of like what you were both sort of referring to have I’ve had for better or for worse a lot of different interests which I turned into a lot of different careers and I say for better or for worse because a lot of times I would have an interest I’d built a business I’d sell it I’d make money and then for some reason I would just I don’t know I would totally [ ] the bed and lose everything and I’m not talking about like oh I sold something for a billion and I ended up with ten million this is horrible no I would sell something for millions and then end up with 0 or less than zero in my bank account really just zero actually I wish sometimes it’s better to be less than zero than to be zero because if you like are less than zero then that means there’s a deal you could work out with somebody like oh I owe you 10 million let’s work it out and you maybe give me some so I could build then I don’t know what it is but like I think it was a young man in the 90s named Donald Trump who said if you owe if you owe two million to the bank the bank owns you but if you owe two billion to the bank you owe in the bank and but but anyway I would often end up at 0 and be depressed to the point of like suicidal like I had kids to feed I had myself to feed and it's really true when you go from having money and selling a business to broke you find out who your real friends are and for me almost every time it turned out I had zero friends and so I had nowhere to go and and no idea and depressed and I didn't know how in some cases put food on the table for my kids after having millions and so I had to learn very quickly over and over again what are my interests what can I pursue what's an idea how to be creative and maybe a horrible environment and then figure out how to monetize it so I was a software guy I worked in the entertainment industry I work for HBO I started I combined those two things and I started a company in the 90s making websites for entertainment companies and then I became a venture capitalist then I started a hedge fund I wrote some software to help me invest in that and then I started writing books about that so I became a writer then I became a podcaster and then like you were saying I started writing about much more personal stuff and I think everybody who knew me couldn't believe it like it was almost like they had never seen anything like this before like why they people call me up like James are you do you have cancer or are you about to kill yourself are you about to die like why are you confessing to all these things these are horrible no one's ever gonna do a deal with you again or this is too embarrassing and I you know and then I think since then people have I don't want to say people copied it people have their own versions of writing about failure and and so on but and then those because I writing books based on those articles and it turned out I had not only was like building up even more as a writer and my audience was bigger than ever previously I'd written about finance now I was writing about all this personal stuff my audience became a hundred times bigger and then I started getting more investment opportunities I started gay cast which became successful I started getting many more opportunities because of I because because essentially I paid with my vulnerability for freedom and that created a whole kind of career for me and it wasn't intentional I just was sick of writing about all the BS stuff I kept seeing everyone else write about and if you want to if you want to be unique you kind of have to say what's unique to you and what was it unique to me was all the times I was scared to death and and depressed and and had to fight my way out of it so many things to answer the question I have back background a lot of things and also I always like trying new things and experimenting and I was everything I'm passionately interested in I like I like figuring out how to make money from it and and getting good at it and so if somebody's listening and they're like ok cool you made millions how did you go to zero so what what was happening what how are you making money and how are you taking it to zero were you just making wild bets or well yeah yeah but where you're like hit I imagine you've had like three hits yeah I would say it's more like five or six hits again provider or for worse I needed all five or six but the first one again I was working at HBO and I made their website and at at the time other entertainment companies and other companies they didn't even know what this Internet web thing was this was in 1995 and companies like American Express American at his world have an American Express would call Arthur Andersen which was their accounting firm and you know Arthur Andersen famously went on a business in a scandal six years later but American Express called him Arthur Andersen said can you make us a website Arthur Andersen said sure well they're going to charge millions of dollars Arthur Anderson would then call another software consulting company and they would say yeah will charge you a million dollars the software company would call me because nobody knew how to make a website in 1994-1995 so I would say sure I'll do it and then suddenly they pay me and my brother-in-law 250,000 dollars to make American Express calm so that was one of our first websites and I would my salary at HBO at the time was 40,000 a year so my brother-in-law and I we made HBO calm then we made websites for everything from Warner Brothers Sony Disney BMG all the record labels like we did every gangster rap record label bad boy loud records jive death row Interscope we did the movies for the matrix and many other movies but anyway that was and were these build up sites at that time like if you looked at that website today what would it look like is it like a Craigslist well you know what that's a great question so no it doesn't look like Craigslist I wish it did but design Web Design back in those days so I was a software guy my brother-in-law was a design guy web design back in those days was very heavy so there would be like big heavy images and animations using flash or the you know some Mac I forget the company macro something and they were there are very heavy designs not that usable and but yeah I mean they were okay they were admired back then so the website for the matrix was a great website which you know on archive.org you could find or HBO's web site was a great website but it wasn't as functional as all websites are now wasn't very easy to navigate and you walk away with at the end of that about 15 million and then oh [ __ ] yeah so cash not not like so a lot of people then you know when public or sold and they got paper and then they died in the dot-com bust because the paper went to zero the stocks went to zero so I had enough sense and like the peak in 1999 I cashed out and I had the cash in my checking account like I didn't even want to mean cash out were you getting like stock in these come I mean yeah so so no I sold the company to a company that was rolling up web web agencies and so we in a sense that was how we went public like some company that made I don't know vacuum cleaners or whatever decided to get into the internet business in 1998 and acquired us and so suddenly they were an Internet company and the stock went from three to forty eight and I cashed out with literally at the peak with about a little over 15 million almost 16 million cash and and here I was I was smart every step of the way like I knew that the web design development business industry was going away because they were teaching web you know how to make a website in junior high school classes so I knew that was going away I was smart I sold the business I cashed out as fast as I could and then I became everybody you suddenly when you when you make money at one thing suddenly you think you're a genius and everything or at least this happened to me and everybody would come to me and say hey how can what what should we invest in or you know this internet thing you you you have like curly hair and glasses you must know have all this internet stuff you're you look like a technology guy what should we invest in so I started thinking oh I must be really smart at this and literally I poured all this cash back into internet investments after I cashed out of the internet and it really went and then I also I bought like a huge apartment in New York City and the one thing I was doing that everybody thought I lost all my money on but it wasn't I was I was gambling every single day like I was playing poker for 365 straight days I played poker at least 8 to 10 hours a day I was going to ask you if you're a degenerate gambler because you kind of have that I mean you sound like that before you even told me you're a gambler but but but that's just it poker was the one thing I probably should have stuck with like I was doing well at poker and it was right before the poker boom took off when I decided you know what I'm just gonna focus on starting new companies and internet investing and I stopped playing poker like in you know right at the end of 1999 I started a venture capital firm and I just started investing money which was your firm all you money so your firm no no we raised we raised 200 million dollars like only [ __ ] that was the other thing too I didn't have any experience doing any of this stuff I didn't know anything um I'm trying to remember all investors uh CS first boston deutsche bank like all these major banks gave us money and then another company invest corp which is a major private equity firm gave us a hundred million and and then i started investing my own personal money side-by-side with the fund and in other investments and i started buying stocks all the way down so how long was chosen 0 from 15 to 0 how long was that I was losing about a million dollars a week in the summer of 2000 and and I just didn't know what I was doing and it wasn't even that I didn't know how to invest I didn't know there's so many other skills to investing than knowing what companies are good and what companies are bad like I didn't understand risk I didn't understand money management I didn't understand you know how to I really didn't understand anything that about investing like I was an idiot and I went to zero by right around mid 2001 I put up my I was desperately putting up my apartment for sale cuz maybe I would have some money left I stopped paying my mortgage and maybe I would have some money left after putting this apartment up for sale I lived two blocks three blocks from a little building called the World Trade Center and we were getting an offer on September 11 and of course many worse things happened that day than me not getting an offer for my house but 9/11 happened and we couldn't sell then because we were part of the crime scene and you know just I went totally really broken were you home I was at the World Trade Center oh my god which I don't really I don't really talk about because a it sounds unbelievable but be it also many worse things happen to people to many more people than me that day obviously but my business partner and I were there was a Dean & Deluca and on the first floor of the World Trade Center we ate breakfast there every day and then we would day trade the markets and at that point I was starting to come back a little bit from day trading and I had written some software and and so on and then we're walking to my home where I had my office and we my partner turns to me and says is the president coming into town today because this I look up and there's this plane that's just like right overhead and then boom we watched it go right into that like physically we watched it not on TV but like physically we saw it go right into the building and everybody on the street instinctively ducked and and your brain does weird things so my I started thinking to myself like my business partners name's Dan he said we're we're being attacked and I'm like no no no that was that was just an accident like and no one's no one's it's too early no one's in the building like my brain was telling me this even though it was a quarter to nine a.m. and you know how do you remote control us whatever was a 747 into the World Trade Center but that's what my brain was telling me so we run to the fire station and we said we want to help and these guys throw two firemen suits at us and say get this on we're gonna go straight over there and we start putting it on but then they say wait a second are you guys firemen and we're like no we just wanted to give blood or whatever we could do and they're like no no only firemen and that fire station it was the Duane Street bio station a hundred percent of those people died who went to the World Trade Center that morning and and then from you know there's a bad day but that kind of clinched me losing everything also because I had been invested in the stock market that morning and boom everything kind of went to went to zero after that and then I was just desperate for like a year and a half couldn't sell the place couldn't there were no jobs I was an idiot nobody would I had no friends anymore and you know I had to I had to teach myself how to invest so I wrote some software where I took every piece of data about every single stock since World War two and looked for patterns you know when would I would have my software find statistically significant patterns where trades were good so I would try to model let's say fear and greed in the markets and and and it worked pretty well doesn't it wouldn't I don't think that strategy would work now but it worked then because there weren't there wasn't that many quantitative investors in the markets then this was kind of the beginnings of that and so I was very successful with it and that kind of kept me alive and that's how I bit by bit I started learning about investing this gave me time to actually learn the skill and and talk to people who were experts and professionals and and really learned then I started writing about investing and I started going on CNBC and I started a hedge fund and I started I wrote my first book about investing and so gradually I built these two careers one in the hedge fund business and the other in writing about investing and going on CNBC and then I built so I was doing deals also then and making money and then I built a website that combined my interest in web development with investing made like a social I called it the myspace of Finance cuz myspace was big then and I sold that site and that was like my next big hit sold that for ten million and you know and then a year later I was broke again and that's but things like that just kept happening alright this episode is brought to you by super side alright so here's the deal I'm incredibly impatient like horribly horribly impatient and if I get an idea at midnight by 8 a.m. the next day I want it done you know but that's really hard because if something needs to be designed where am I gonna find designer at midnight to try to make this thing keep bring it to life so you know I don't am alone other startups even huge companies neat design help fast and they just don't have the internal resources or expertise to get it done so how do you get reliable design done without dealing with expensive agencies and lots of freelancers you use super site that's our sponsor for this week just go to super site calm slash MFM and tell them what you want they have a team of designers that can get it done fast you know they are 20 times faster than hiring a designer and 50% more affordable than a traditional agency so if you need high quality design done fast try super side lots of fast gory teams that are are using them already check them out supers Icom /m fm I'm using before I love them check it out there's a lot going on here but it's used told to companies so far well you've also sold your newsletter business too right yeah so that was a third company and I've also sold companies that I was on either there's many companies I've been an investor up that have been sold by this point and then some companies that I'm like a co-founder of that I've that I've sold I was like involved I've been involved with everything from like I'm a mental rehab facility that's sold for 41 million and then that was in 2004 I did go broke after that and then was stock picker of the stock site and then I was in an early investor in buddy media yeah which Peter Thiel invested in my class where I was the CEO Mark Pincus who started Zynga was an investor in it and we all were the seed investors at a four million dollar valuation that sold the Salesforce for about seven or eight hundred million I had a company today that I was a investor and it just it just kind of did or they just announced a reverse merger they're going public so hopefully that will do well but I've been I've been investor in a lot of companies that have done well cause like because I finally figured out the most important thing about investing that I missed before and that since then my private investing has done very well and I don't really do public investing oh what's that thing that one thing is that I am the worst idiot in the world if if you're in a room with me I'm the stupidest person in that room and what I mean by that is take buddy media as an example I didn't have to do any work once I invested because Peter Thiel was my co investor so it's not like they're gonna call me for advice they're gonna call the people smarter than me and also presumably the first investor in facebook wouldn't know what he was doing when investing in a facebook marketing agency which is what buddy media was so so I always if someone a lot smarter than me says hey I'm investing in this company I don't even have to do any more work I just send the check because I assume and I'm always correct when I assume this he's done or she's done all the due diligence all the hard work he's got PhDs working for him that are a lot smarter than me if worse comes to worse he or she can make phone calls and get this company acquired which is what happens and I've done very well with just that one strategy that if someone a lot smarter than me is investing at the same terms as me that's important too then I'm going to do well and it's almost like a hundred it's not like a normal success rate it's like a hundred percent success rate when you do that and and the other rule is if they ever call me for advice then on my spreadsheet where I keep track of these I assume their value is zero and I never call them back because if they've reached so far down the totem pole where they have to call me for advice that means they're screwed so and this secret works like it's amazing how well that one technique works and so that allows me to invest in at companies ranging from oil companies to tech to law enforcement to the company today is an erectile dysfunction drug I don't that I don't know anything about biotech like the yeah but as long as someone you know if if someone calls me and says look hey I've started the last three erectile-dysfunction drug companies and they've all done well now I'm investing in this are you with me here's my check I don't need to know anything else I think I think Sean's gonna want to ask you questions on angel investing and I want to ask them and I want to hear his answer or your answers to those questions but before we get to that what about selling I mean so you've sold more than a handful of businesses selling companies is hard most people will never sell one how are you how are you able to sell so many you think but you know that that's a that's a great question because and let me ask you saying I don't know if we've talked about this have you ever sold a company I had a small like hundreds of thousands of dollars sale for this company the hustle we had term sheets and I walked away at the last minute I've had two or three term sheets and I've walked away from them and I've never closed the deal yes so and I bought I've also helped by companies - yeah so it's a similar it's similar skills on both sides of but maybe slightly different but people don't realize selling a company is very difficult like it's there's three skills there's starting a company there's building it and they're selling it and Sean his company - to twitch yeah okay congratulations for you yeah and you so you know what I'm talking about like you'll you'll your company's up for sale and everybody's and you meet a bunch of people I don't know if you met a bunch of people but like I would meet a bunch of people each time and you kind of there's this courtship and you kind of fall in love with each other I just like in a courtship and then there's and then there's suddenly you move into a different period where lawyers take over and you're waiting it's a waiting period and it's a due diligence period and it's a very painful period because before you were in this like massive selling and dating mood but now you're like living together and you're getting to know each other and you know you don't want her to figure this out too fast and you know before she really falls in love and you know and all that dopamine you get when you first meet has gone away and it's by the way that's when I started this podcast was during the due diligence period because I got so itchy because I was waiting and I was like oh my god I'm gonna jeopardize this deal either because I'm gonna push too hard and just because I'm impatient or I'm gonna go start another business which is the worst thing I can do while trying to sell this one sounds like I need to have something and so that's why I started the podcast was during that due diligence period yeah that's smart because I would just do nothing but wait and it's it's it's a painful process and the way you sell is first off you have to and this is not you have to be sincere the whole way through you have to have a vision that matches their vision very strongly and it has to explain why you would well if this your business is so great why do you want to sell it like there's that inherent contradiction in selling a business and I was always aware that I would you know in every business I've sold that I would be better off with a better capitalized partner and now maybe I would limit my upside but you know the first time you saw a company for millions and then the second time if you're broke the second time you still owe me four millions and then the third time it's okay to not sell for billions because you want to get that initial chunk but you also have to say look together here's how it's one plus one equals three and you have to be really persuasive on on why one plus one equals three even for you personally like you have to be able to express that this vision is gonna benefit you personally if you partner with this other company and and and and it has to really make sense and then and then of course you have to survive this waiting period you have to survive the initial period where they're still checking you out but now you're together and you have to integrate and get along and you have to keep all your employees because usually there's some back-end earn out or something like that like that every you have to understand deal structure so you're not ripped off it's very easy to be ripped off by lawyers in a deal and people don't realize that and you have to be you have to have some skills at negotiation which negotiating is one of those things that 9 out of 10 people think that they're above average which is impossible like you have to be four out of ten only could be above the median and only one out of ten is really good enough to to sell a company improperly and so I had to learn the hard way how to negotiate and like when they come to you and they say well how much do you want for your company that's a very hard question to answer because you don't want to sound greedy and you don't want to sound desperate and you don't want to sound and you don't want to underprice yourself so there's all sorts of negotiating techniques that you have to use to help them answer that question in a way that works for both sides not just do you value your companies on a multiple of your profit or revenue or was it if we you use our stuff with your audience or your current products it will create this much value so that also is a really great question because this there's three ways to value a company right the one is a standard industry multiple on your earnings and cut it in half by the way because no one's gonna pay the maximum you cut it in half so they everybody wants to get a deal so like if if you have a profitable company and it's an industry that trades on the stock market for 20 times earnings then your company is probably your last year's profits times 10 the 20/2 that's just a basic formula or you could do what you just said which is hey and I learned this for my second company I didn't limit for my for my first company was profitable unlike every other internet company and so we sold for about 10 times earnings which was was a mistake on the second company was like I've did value like how you said which is if if you if we put ads all over here and you're driving this amount of traffic and we monetize those ads and then you cut that in half this is what we're worth and the second company I sold on the basis of that the challenge there is with the other company you work out this formula for how you're gonna value your company based on their them helping you build your earnings and the challenges then you fill in all the variables they know the variables better than you so you have to make sure when you're negotiating the formula that and you agree on the formula that you understand the variables enough so that it works out to what you want I didn't do that part properly on my second negotiation and then the third way to value things is you look at other companies acquired in the space they sold for this we're bigger so we should be this now that's kind of a BS way to value a company but that is how people value companies often particularly in the in the tech sector like giffy I don't know what the how they value themselves but certainly wasn't off of earnings I don't think they had 20 million dollars in earnings my guess is they were losing money so so they probably valued off of something some kind of comparable to deal in in the internet yeah cuz and then tenor solo tenor which was good if he's competitor just sold to Google a year before for a little less than that who was their competitor a company called tenor T enor they were and it just says society is it true that gippy was the second largest search engine in the world that's what they're saying yeah they don't they know they love this I thought YouTube was yep so YouTube is number two and three Amazon for right like so yeah depends what you call a search engine well I did in New York and it is huge it was just there was nobody make money off of it really yeah I had that issue I was I was a seed investor and on the board of bitly so bitly had about 5% of the internet's traffic every day running through it and for the life of us we just could not figure out how to monetize it like it was impossible and they did exit the private equity firm I bought it but it was like two or three acts which is not really what you're looking for an angel investment and so James when you lose your you lose all your money the first time you call back you make money again doing something else you lose it again I mean obvious question at some point were you like okay rainy day fund two million bucks is going into this account and hey I lost the I lost the keys just so you know just to stash some money away what surely your life was like come on man how did you get away with not just saving something I got divorced and I lost the second house that I bought and no I kind of finally I think it was the third time or the fourth time I finally looked back and I said what was I always doing right on the way up and what was I doing wrong on the way down and there were things in common which is just that I kind of I kind of would just give up after I made a lot of money I would kind of say whew I did my job as a human now I can just let my health go away my relationships I don't care about anymore I don't need to be creative anymore you know I don't need to have any kind of sense of spirituality and I was just whatever and I just would lose all sense of things and and not take care of myself and not just physically but like emotionally and creatively and so I just made it a very concentrated effort it sounds sort of cliche and almost self-help helped me a little bit but I really would make a concerted effort to keep myself physically healthy to have only good people in my life and quickly eliminate any toxic people I guess like the speed of light no second chances and creatively I just started writing down every single day ten ideas a day like and it could be business ideas it could be writing ideas it could be dumb ideas it could be ideas for TV shows it could be ideas for how Google could be a better search engine and then I would arrogantly send them to Google but the whole idea was not to have good ideas but to just practice this creativity muscle or else it would atrophy and literally like I'm not I'm not trying to sell anything here like literally within months of writing ten ideas a day down it felt as if my whole brain was rewired and I would just I would bounce back so quickly with ideas is just non-stop and then the aspect of sometimes I would write ideas for other companies and I would send them these ideas if I thought they were pretty good and you know I would always get new opportunities because of that like I would visit Facebook Amazon LinkedIn Google Cora Airbnb and just just this one process of writing ten ideas a day down for the past twelve years has been such an incredible thing for me I can't even praise it enough so the other day just for fun a friend of mine recently took a job at Disney plus and he was just like because of this lockdown we're not getting any good ideas pitched to us so I'm like well what are you looking for and he said we're looking specifically for unscripted ideas that would cater to nine year olds so I wrote my list of 10 ideas the next day and I sent it to him he forwarded it to that I don't know how like he forwarded to the head of reality programming at Disney and right after this I'm meeting they got excited and right after this I'm meeting uh with Disney to go over the ideas what was there um as someone who's gone up and down and up and down can you explain what your happiness levels went like what the range was from like let's say zero dollars to ten thousand dollars to a hundred to like 1 million to 15 million like what was the difference in hat your happiness and fulfillment things like that oh my god so and really we're just talking about the first time because then there's different where it's different each time but um I had zero dollars in the bank and I was living in a studio in Astoria Queens which is you know was not in the night early nineties was not a nice part of Queens before that I had a roommate and in a apartment smaller than the room you're seeing me in and I was paying 300 a month he’s working at HBO for 40,000 a year I was I had a suit in a garbage bag that I would pull out every day and put on the same suit seven days in a row and walk over to HBO and then we did the very first site I did was this diamond dealer and he gave me seventeen thousand five hundred dollars in cash this is 1994 and I had I had never had seen any money like this before seventeen thousand five like he almost was like I couldn’t believe this was actually happening and I walked over to the Chelsea Hotel on 23rd Street was like this sort of famous artsy hotel but also really rundown and I gave the owner like the whole bag was a paper bag of seventeen thousand five hundred dollars and said could I live here for a year and he said are you a drug dealer and I said no I work at HBO and he let me live there and I was just so happy like oh I’m living in Manhattan now and in this cool hotel and I felt like part of something I felt like part of a scene I felt magical and that was an amazing moment and then when I sold that first business I felt good but it was weird because it was so much pain closing that deal like I was so stressed out in the months prior to that and I got burnt out and that’s when I started playing poker every single night just to kind of escape burnout so I don’t know if I was happy or just more escapist then and then when I started losing and every time I lost every single time I’ve lost everything I was suicidal and in part for practical reasons I thought maybe my my kids could live off my life insurance and particular that first time there were babies so I figured they wouldn’t remember me but they’ll definitely remember the life insurance so fortunately I I couldn’t figure out how to do it in such a way as to not hurt myself and I never did it and you know I was very depressed though for long periods of time but each time the period of depression would get faster and faster and you know I think one of the most probably important things I’ve been learning you know I used to think learning is like you know in school it’s like learn math and then as you get a little bit older you’re like oh maybe I should learn some skills like sales or programming or whatever and now I’m like oh [ ] all that the only skill that matters is sort of managing my own psychology my own emotions and so I started to you know figure out what works for me right like cool if I exercise here’s how I feel if I you know eat this if I make this decision if I listen to this song whatever I started to find different little ways to manage my own psychology do you have a sort of any things that you’ve worked on or you figured out that help you either you know boost up gratitude or like you know get out of that Yap depression funk what works for you or do you are you conscious about that yeah very much so and that was part of this realization that every single day and I even it’s I call it my specific daily practice and it’s it could be different for each person but I always have to ask what am i doing to eat move sleep so that’s physical health I always try to stay healthy like I don’t I’m not an athlete I’m not a you know not used to working out or I mean I’m 52 years old I’ve got a stay as healthy as possible and so eat everyday I have to make sure I’m eating well sleeping eight hours and and moving and now with this pandemic lockdown is I have to go outside and make sure I have some outside time and then emotional health just what how much are the people around me toxic or not and that is the key to emotional health nothing else and then creative health am i writing ten ideas a day down because creativity not only is it rewiring your brain to be more creative you know or that muscle atrophies but it also triggers a lot of dopamine when you’re creative and it just if I do it in the morning to work on my ten ideas a day list I’ve got this surge of dopamine that carries me at least till like 1:00 or 2:00 in the afternoon and then spiritual health is just am I trying to control things I can’t control so that’s a very important part of spiritual health so you see people on Twitter all day long oh man they should we need to open up this economy right now or we need to lock down all the people who open up like on both sides they’re trying to control things they can’t control and they’re all day long they’re 24 hours a day on Twitter and even during this pandemic I felt like I was getting a little into that and then I pulled myself back and realized it wasn’t I can’t control this so it wasn’t healthy for me and so always avoiding trying to control things you can’t control is very important and that really just those four things physical emotional creative spiritual just those four things if I attend to them every day I keep at a very high state and even when I’m even when I lose money now or go up and money i keeps me very you know contentment and well-being are much more important than happiness happiness is very as the cliche goes is very fleeting but well-being you build a real foundation of well-being and that and that sticks with you so what’s your business now James that you’re like which like your job now uh well I do I do lots of things so I mean I I write every day and I just finished a book that will be published by HarperCollins in a year I do a podcast I am still involved in my newsletter business which I sold I’m I’m a private investor in about two dozen private companies so I’m but I’m remember I’m not active in those because they don’t I don’t want them to want my advice so it’s very very passive but I have to make sure I’m enough in the deal flow that each year I can still put a little bit of money to work because you never know which year you’ll find the next uber or whatever and and a lot of my time the past five years until this lockdown has been on stand-up comedy which makes you know which makes minimal at best so then you did did your nut for your angel money that came from like your initial sale really really now most the way I make a living and the way I built up is just from private investing because pretty much every company I’ve sold I ended up losing all or most of the money but private investing is now the way I’ve been able to make a living most of all so on the angel front so what percent of your money do you have your net worth do you put into angel deals which is a risky illiquid thing I’m very much now and this is this was the key point that made a big difference for me investing is that risk is the most important part of investing whether you’re investing money or you’re investing time Ritt risk has to be managed and about first and foremost and the way I remove risk is two ways one is as I mentioned I always invest with people who are smarter than me because I let that outsource some of the risk management to people who are professionals at it and the other way I manage risk is position size so I never invest more than 1 to 2 percent of my net worth is the maximum I will ever invest in any company right now I’ll let the I’ll let the investment grow to much more than that it’s sort of like what Warren Buffett says if you’ve got Michael Jordan on your team you don’t trade I’m just because he got better so I like it when good private companies don’t exit because that means they’re growing still at like 50 to 200 percent a year and as long as they’re doing that I don’t want them to exit and what was your biggest angel or private company you win so far which company yeah it’s it’s it’s hard to say because a lot of my investments are doing really well but there’s still private like I have deals I invested in in 2009 which are still doubling every year but they they’re still private but that buddy media won you know four million to seven hundred million was pretty good ticket fly was another one that invested in which I was in the seed round of that and it sold for 450 million I invested in another one which is public now it’s a law enforcement company they have a gun that if they we I was sort of a co-founder of this it started in the living room I was staying at and there was a hashtag black lives matter was the trending hashtag and so we tried to solve that problem basically so we found an inventor who made a gun that fires a Kevlar cable at you at the speed of sound and it wraps around you and the more you try to struggle to get out of it it squeezes tighter and so like like a Batman I was gonna say straight out of Batman yeah and even the one of the founders of taser is the president of the company now he became the president company about a year ago and we went public it’s it’s a really great company it’s still in growth mode but they’re starting to to sell quite a bit and that’s been I’m not exited actually I’m I own the shares of the public company I’m not planning on exit hopefully ever because it’s it’s what’s up no competition the comings called rap technology so I’m not trying to push the stock or anything so I don’t want to even mention that right the stock stock symbol but it’s it’s it’s just such a great thing to invest in and be a part of the founding of something that’s literally saves lives every single day so when you can you have the journal with you that you write your 10 ideas can we like what what do you what’s interesting to you right now James a lot of times it’s in my email oh there’s my iPad I do it all in waders Pat’s or I do it in my email so if I’m out in a cafe I do it in a waiters pad and if I do it at a sitting at my computer I’ll do it in my email well as an angel investor and I don’t know if you’re ever gonna start another company again maybe you are maybe you aren’t but as someone who’s always scheming what what do you have your eye on now yeah I’ve no problem even saying what I’m scheming at because so I haven’t considered starting a new company in a very long time but I have been considering it now and one of the ideas is I feel it’s a shame that content is not monetized unless you’re like but in the top 1/10 of 1% of content creators so you have to be like you know Logan Paul to monetize your YouTube channel and the other twenty billion people on YouTube even if they have one video that goes viral they can’t monetize it so or like even if you have a if you have a tweet that 20 million people see but you have only 300 followers you can’t monetize it so I’ve been figuring out a way to use these ecosystems to allow people to monetize content so that’s one idea I’m working on actually physically working on it and another one involves making a derivative of a board game that I like but in general I don’t I don’t come up with business ideas I come up with like like I said the other day I had this challenge like of oh I’m gonna challenge myself to come up with TV show ideas that nine year olds would like and I did that and I sent it off and usually I don’t send it off or sometimes the ideas are ideas for books I could write or if I have an idea for a book I could write like the next idea all right of chapter titles and again most of the ideas are supposed to be bad because you can’t come up with 3650 good ideas a year and it’d be foolish to think so so I’m just trying to come up with bad ideas what I’m trying to make my brain sweat so for instance one idea list that it’s particularly hard is and this is the one I wrote this morning is 10 good positive things that have happened to me personally because of this lockdown those aren’t actionable ideas but it was actually hard to come up with 10 like 1 through 7 is always usually pretty easy by 8 9 10 is usually makes my I feel like my brain sweating and but yeah but a lot of times we’ll come up with business ideas or I’ll start to say to myself what industries are gonna be attractive after this that are unexpected so you can’t say the obvious ones like obviously you know video communications technology is going to be a attractive businesses emphasis instead I would think what are the 10 ways I can improve unzoom which was is the most popular one right now so that will be how I exercise the idea muscle around zoom and for your content idea is there a comp out there like is there somewhere something out there that you’d like man this like little behavior that some people are doing I think that if we just blew this up or systemize this this could actually have legs yeah so sort of so I’ll do something what I’ll call what I call idea sex so I’ll take ideas from two completely different industries and again I’ve been a professional in many different industries again fortunately or unfortunately and I’ll combine ideas to see if after I do sex there’s a little idea baby that could work in what I’m doing so for instance if I go to a restaurant and have a pretty good meal that meal could get monetized and if the waiter or waitress treats me nice they might get they they have better chances of monetizing their behavior than otherwise so there’s lots to learn from how monetization works in the bottom third of the economy in other industries so a waiter is the third of the is in the bottom third of people who work in restaurants or involved in the restaurant industry so how do they monetize themselves and there’s a lot there’s a lot of industries where you can say hey the bottom third of this sector or this space or this country they don’t make any money but but they could maybe and you could look at that as examples of you know how do i how do i lighten up this third by allowing them to collect money this is that’s gonna be always a huge industry square is a great example square took the mom-and-pop store that couldn’t accept credit cards because no bank would trust them and square enable them to accept credit cards so squares the only company in the world that does that and they became I don’t know a twelve billion dollar company because they were able to monetize the bottom third of you know mom-and-pop retail stores and so that’s one model for creating a billion dollar company and then I might use idea sex to generate the ideas like oh how does every other industry monetize their bottom third let’s apply it to YouTube and see what happens you know and then I’ll look at competitors like okay there’s patreon but you have to patreon has various hurdles you you have to already know you’re gonna be a good content creator and you have to come up with awards and you have to interact and create content specifically for patreon and so-and-so patreon has problems so I try to look at hey I think yeah like if you’re a content creator patreon could be a great way to make money but it’s it I find a lot of content creators once they have a big audience I’m patreon to be more annoying than helpful but advertising also is annoying so you know finding advertisers yourself and outsourcing all your advertising to YouTube could also be annoying so you know there’s various problems in the current ways people monetize I mean you guys monetize a newsletter subscriptions another way but that puts a some friction in front of your subscribers and so you know I’ve done newsletters I’ve done you know advertising supported media like podcasts or websites and so I’m familiar with all these types of monetization and I don’t know all these things together help me make my idea list what’s your favorite wave ways for monetizing content for me right now I don’t think I’ve ever really monetized content the way I would like to like subscription okay so but let me ask you a question subscription is the best way to monetize most content but again you have to plan for that in advance so you have to say I’m gonna make a subscription and called a subscription product called the hustle with with new ideas and trends every week you’ve made by migrate analysts and people are willing to pay a dollar a month or whatever ten dollars or whatever it is and subscription is a great way to monetize because you’re not always chasing advertisers it’s this annuity that comes in and helps you even survive in a recessionary environment or like right now so I love I think subscription is a whether it’s an online newsletter or an online course or a subscription community like you know let’s say the trends Facebook community I think subscriptions my favorite way to monetize but it doesn’t solve the problem of monetizing when you’re not already in the top one third of content like like you guys are in the top 1/10 of 1% of content you’re going to monetize and do very well no matter what model you choose whereas the someone who rakes a newsletter about I don’t know you know some obscure kind of Taekwondo or whatever they’re not gonna be able to monetize a newsletter necessarily where someone who’s gonna monetize how to mow the lawn better is not gonna be able to monetize but might have one piece of content that really stands out and if you were you know I think you’re pretty much one of the top 1% or better of people at building new businesses or audiences right I think you’ve done an amazing job of building up audiences that will follow you through one medium podcasting blogging email whatever you want let’s say you’re 21 years old again today you know everything you know now but nobody knows your name how would you go about building an audience today yeah today I will first off let’s assume I have something to say you have to have something you have to have a unique perspective and again I’ll I’ll take I’ll take the this podcast as an example it’s my first million it’s the name of this podcast right yep so there are other podcasts about there’s there’s a podcast the eventual millionaire which talks to millionaires about it but most of these other podcasts unlike you most of them are started by people who haven’t yet sold their first business or haven’t made that first million so their unique thing is they’re approaching people almost as if they’re asking for advice how can I do it you did it how can I do it so that’s a different your perspective is you’ve done it so you’re able to more in a different type of nuance drill down on that and you have something unique to bring out of people and say to people and so on and and and Sam for you you’ve spent so much time studying trends and side hustles and the gig economy the hustle is like the best email newsletter out there because it’s your you’re the voice of it is so unique it’s it’s the go-to particularly during this lockdown it’s it’s amazing people ask me hey what are some side gigs we could do from home the first thing I always say is check out the hustle and you’ll get a ton of ideas even on our podcasts and it was just like spinning out ideas that I’ve run with it’s completely stolen from you so that’s the other thing about having good ideas they could steal them from people but you know I think you have to something you have to have something unique to say so at the age of 22 you have to question well do I really have something unique to say and often when I write something I don’t hit publish unless I’m afraid of what people will think about me after I hit publish because otherwise that I’m probably not saying something new or different or you know there has to be I have to challenge myself in some way to create unique content but give it let’s assume you have something unique to say or some expertise you built up by the age of 22 I would go on Quora and just answer every question I could I would participate on LinkedIn groups again answering every question I could I would go on groups like the trends group or other Facebook groups and you know a lot of people ask questions I would go on podcasters paradise which is a subscription community about podcasting I would a lot of people say hey what you know how do you get good guests or how do you what kind of microphone should I use I would answer every question I could and establish expertise and then I would again I’m thinking if I’m 22 I’m not thinking this way now and then once I had some expertise I would sprint out so now have you just you just saw me everywhere you looked you saw me Quora LinkedIn Facebook there’s James again answering questions now I’ll start going on sites where there’s a little bit higher barrier to create content so like a Forbes calm or Inc calm or TechCrunch or whatever and and this is what I did do and I started would start writing or Yahoo Finance I start writing articles for them so now people see me in a more of a position of authority so it’s not just I have like a number of sort of number of followers on either Korra or Twitter or LinkedIn or whatever it’s like oh I just saw James encore and now I see him on cnn.com what’s he doing there and so so I establish some authority then you got to create an email newsletter and it’s free 99% of your content has to be free so I would create an email newsletter and always just at the end of my articles I would say hey you want to hear more from me I have an email newsletter sign up now and I’ll give you my book the top 20 hustles for 20 20 and just for free and you know just and then I would just start putting all my articles on my free email and then I’d start at some point my level of expertise should be big enough that I can start a for pay subscription newsletter like whether it’s about trends or stocks or some physical activity or and this is the exact thing you did I mean I think that from an outside perspective I mean it looks like your newsletter business makes tens of millions in subscription revenue yeah so so I did do that and again it wasn’t the first business I started that would have been a good first business if the question was if I was 22 what would I do that is how I did do that that latest business that I sold and and it worked that model works and I encourage other people sorry online course like a friend of mine has an online course that she started this person is the most introverted shy person I know and she started a course on how to be noticed by the media how to become a media expert and she priced it at $700 she said she opens it up for like three days every year sells another thousand and makes seven hundred thousand a year and you know lives in a cheap country she moved there just to keep expenses down and you know this is a and it’s just a course so it’s not an ongoing newsletter I think an online course is better actually than newsletters and I think affiliate deals are better than also creating an online newsletter so so if I were to redo my business I would do it over slightly but you know that that’s what I would do if I was starting completely from scratch I think I’ve seen that methodology work over and over again and it is the advice I give people because content creation is is king like that is always there’s a demand how many times you’ve been asked this during this lockdown man what what show should i watch I feel like I’ve watched everything content people always want more content all the big content creators spend hundreds of billions on content just on sitcoms this year so there’s so much demand for content and you can provide value like if you really again ninety-nine percent of your content will still be free that’s key but you could provide extra value that it’s worth paying for like for instance I forget if I get I think I get the hustle for free right like that’s funny trends is not trends is not but but the hustle you convinced me I love the hustle and that’s where most of your content is yeah but it’s it’s the quality and the voice in the hustle that convinced me okay I need to get trends and I’m happy to always pay for it and it’s or it mean it’s just gone [ ] but we got yeah but there’s value like if you don’t provide value then people are gonna realize pretty quickly that you’re useless like you always have to provide value and have something and have a unique perspective yeah I think that is the key in the hardest part is having the unique perspective everything after that is sort of the textbook you know you run the PlayBook after that of how do I did it out there for free how do I collect you know over customer relationship and then how do i monetize for the most hardcore but the only perspective is hard how do you shape that I’ll give you another example like do you guys play fantasy sports at all yeah okay so I do not play fantasy sports I knew I don’t even know the rules of football but Matt Barry who’s the fantasy sports anchor at ESPN and he also hosts this TV show the fantasy showed ESPN that guy was a Hollywood screenwriter he was writing movies and TV shows and he hated his life and he quit that it’s making a ton of money he quit that I started writing blog he just loves sports and fantasy sports he started blogging about that for a hundred dollars a blog post just kind of broke after all this and quitting Hollywood moved away and a hundred dollars of blog post was the most he can get but because he had this writing skill from his Hollywood Times uh he had a quickly got a huge audience in fantasy sports then he built a for pay subscription site and you know after producing Moses condom for free ESPN bought it and he kept moving up the ranks there and boom he’s he’s done so much better doing what he loves at fantasy sports and monetizing in almost the same way I just described and he’s so much happier than when he was writing movies which is a lot of people consider the dream job I love it we should we should wrap up in a second James this was awesome I got to admit you were way more legit than I expected it you know I thought you were what why did you expect me not to be legit okay I’ve already already called them out on this which last time he called himself out he goes so when his company was acquired Sean James like dude my contents legit I’m legit I do it all but the acquiring company admittedly is incredibly aggressive with the advertising and sometimes that uh kinda makes me appear as though I’m one thing when I’m not yeah and and and and by the way it’s a very interesting topic how aggressive you should be with your advertising and they’re so aligned to Putin who’s this French philosopher he is this theory that even the good guys need to use Machiavellian tactics they need to use that because otherwise if I just said hey guys I have a unique perspective on Bitcoin please listen to me there was so much aggressive advertising out there they would have drowned me out and I would have not succeeded in my mission which was to inform people what I thought was a correct view of Bitcoin and then what would have been the point right so sometimes and but but it did cost me though like doing because my ads were so good we dominated I mean that was the reason Facebook Google and every shut down crypto ads is because of my ads yeah that was definitely a little piece of it but what I actually meant was most of the time when a guest comes on I think to myself well there’s a really successful person but man they’re there you know they don’t tell great story you know they they do not bring you know sort of energy stories and also you know some unique insights that the audit that you know I’m imagining I’m a listener right like during this interview you talked for the most of us I was actually you know listener number one for this podcast episode and I would have liked this one and so I I can’t always say that that’s the case with all of our guests but you brought that that’s all I really meant what you’re legit which is huh you know I’ve raised the bar for the podcast which is great excellent thank you so much so James this was awesome if people want to say hi to you is Twitter your go-to method no I’m James Altucher on tick-tock my absolute best content tick-tock 50-year old dude perspective oh yeah I’m not dancing I did do one one time I danced and someone said someone literally said commented dude this is not why we found out this I took that one down and I haven’t danced since although if if push came to shove and I was drunk I when I was 12 years old I was a semi-professional breakdancer big boy breakdancer that’s an ass man we appreciate you coming I I’m looking forward to joining you again and you coming back to us and developing a friendship that’s awesome excellent yeah and and Shawn yeah definitely let’s have you on the podcast as well so all cool let’s exchange emails and we’ll figure it all out sounds good thank you all right all right you guys thanks a lot talk to you soon bye [Music]