N.B This is the unedited transcript of the interview.
Can you introduce yourself?
My name is Derek Sivers. I started out as a musician and then while selling my CD in New York City, some of my friends said, "Hey, man. Can you sell my CD?" That led to me making this little website called CD Baby that really was meant to just be a hobby, like I really didn't want this thing to get in the way of me making my music. That was still the most important thing to me. It accidentally took off. The timing was just right. It was actually no particular brilliance on my part. I think it was just really good timing that I made this thing when there was literally not anywhere to sell your music online.
This was back in the end of 1997, so there was no PayPal then, Amazon was just a bookstore, and if you were a musician with a CD, there was no where to sell it except for some dude named Derek in New York. So everybody flocked to my little, tiny website I was running out of my bedroom. Ten years later, that became the largest seller of independent music on the Web with 85 employees and 200,000 musicians, and a quarter million customers and all that stuff.
Somewhere around then, I started hating it. I think it had grown way beyond what I was happy with. It was already well beyond what I was comfortable with. So, Seth Godin, who I know you've interviewed in the past gave me the advice when I was asking him, that he said, "If you care about your customers, you'll sell." I thought that was a crazy idea. Sell my business? It's my baby. It's my thing, but he had a really good point. If I'm not into it, and obviously my clients and customers are into it, the musicians especially want to sell as much music as possible, and if I'm feeling conflicted and not into this thing, then I'm actually doing them a disservice.
He was right. In 2008, I sold the company, which was terrifying then. That was five years ago, now. So the last five years, I've been kind of catching up on the rest of life that I had never done before, just chasing a bunch of things I wanted to learn. Having adventures and writing a lot, and speaking at conferences a lot. Saying yes to everybody that wanted to meet up, and all that kind of stuff. It's been a crazy five years. The pendulum's swinging back the other way, and I'm kind of focusing again.
That's who I am. You asked me to introduce myself. I guess that's what you get. That's who I think of myself these days.
That's perfect, and it leads into what you're doing now, Wood Egg, which actually seems to be the opposite. It actually reflects your views about what you want out of a company or project. Why have you not decided to pursue another CD Baby type business? One that scales.
I will. I have a plan to start something called MuckWork, that I've sketched out how it's going to work on my site. I already started programming it. I paused it for a while because it was literally the day after I sold CD Baby. Let me say, the day I sold CD Baby, I went to bed that night with an empty head. It was like, "Wow. I sold my business. Ah, I've got no responsibilities. I don't have to do anything now. I can just relax." I slept really well that night. I slept like 10 hours, which I never do.
How much were you sleeping before?
You know, five. I woke up in the morning, made a breakfast, looked out the window. I was like, "Lalala, no responsibilities. No company. No employees. Ahh, so nice." A few hours later, I had this idea, like, "What if there was an outsourcing firm where the client didn't have to micromanage the project. That there was, like, somebody in the middle that could actually manage the project so the client just has to say, 'here, do this,' could just dump something on you, and the company takes care of everything." I was like, "Ooh, how would that work?"
I started sketching out. I started programming. I even started building the database schemas and I did this, and I started designing everything on how it would work, and I got so excited about it, that I called it MuckWork, registered the domain names, and even filed for the trademark and all that stuff right away. I dove into it, a month or two later, I hired my first employee that was going to be the the person that was going to be the manager of this thing and build it with me, and I got a few months into that, and then, William, I was like realizing that I was about to immediately retrap myself into the same trap that I had just gotten out of.
And that trap is?
Employees, responsibilities. I felt like if I started MuckWork that fast, my life wouldn't actually change. It would be like I would swap out the company name on my forehead and continue on the exact same trajectory I was on. You know what I mean? I was absolute workaholic, like head down, 12 hours a day, doing nothing but this. That's how I was for 10 years with CD Baby, and to put my head right back down again the day I sell CD Baby and do it again? I thought I was going to be in for another 10-year commitment. That's why I intentionally put the brakes on it. I stopped, and I was like, '"Okay. Let me pause this and go see the world a bit."
I've never been to India. I want to go to India. I've never been to Iceland, and I've always wanted to go to Iceland. I started traveling. I started doing all the things I had been procrastinating my whole life.
Is it possible to build a big company and still have fun at the same time? Or is it just that you have to acknowledge that you have to sacrifice everything in order to build that big company?
I'm going to try a theory here. The real answer is I don't know, but here's a theory. Just yesterday, I was at gym, and I'm working on the fundamentals. I've never really been a gym kind of guy, but I'd heard that there's this book called Starting Strength by Mark Rippetoe, that is all about the fundamentals of the basic barbell stuff, like the squat and the dead lift and the chest press. Just dead simple, decades old fundamentals of lifting a barbell correctly, and the incredible benefits to the body. It does more for you than doing a hundred different nautilus-style machines.
So I went and found a guy who knew all these fundamentals here, and started working with him. Just yesterday, he told me something really interesting. We've all heard that slogan, “No pain, no gain”, right? I told him that after working with him for a few weeks, that I haven't hurt yet. The things we were doing at the time were difficult, but I wasn't getting the usual pain the next day or two. I asked him about that. I said, "I think we need to do more because it's not hurting yet." He said that's actually a myth that the benefit only comes from the pain.
He told me these other things, that the pain comes when your body is surprised and panicking. It sends you pain to make you stop what you're doing because it feels that it's more than it can handle, but the kind of training we're doing here, you're doing an amount that you can handle. It's at the top of your abilities, but the fact that we're doing the same actions repeatedly, your body's never panicking, so it will never send pain to your body. It's your brain that sends the pain, so you're actually getting an incredibly effective workout, but without the pain.
But then he had an interesting theory. He said, "I think some people need pain. They have this thing where they want to punish themselves." You know, I'm a bad boy. I ate those cupcakes. I'm a bad boy, I went drinking too much. I need to hurt myself. That's kind of, what is it? The lashes on the back, you know? He said, "I think people have this cultural need to hurt themselves sometimes to feel that they're doing good." He said, "You don't have to do that. You can get all the benefits but without the pain, if you just let go of that need for the pain."
I, of course, couldn't help but start thinking of this metaphorically, right? How many of these start up founders that are kind of working 18-hour days, and they tell you how hard it is, and "you have to give everything, man. You can't have a life." Is that really true? Or have they set up kind of a belief in themselves like they need to do this in order to be successful? "I need to hurt. I need to have pan to be successful." Maybe it's not true at all. My real answer is I don't know, but I guess I'm going to test out the other way of doing things.
How are you doing things now at Wood Egg? I know that you've used services like Elance and other ways to outsource. Can you explain more about that? That delegation and freeing yourself from the project itself?
Yeah, it's a tough mindset to get into. We tend to want to do everything ourselves, right? Nobody can do it as good as us. If you want it done right, you do it yourself.
An American slogan too, right? You want a job done right, you do it yourself. But then, at a certain point, you have to let go and realize one of two things: that either it doesn't have to be as best as possible. You can just exhale a bit, understand that the person doing might not do it quite as good as you, but hey, good enough. Or, number two: You admit that there are people out there in the world that are truly smarter than you and can do it better than you. You just can't be a cheapskate. You can't be a cheapskate and complain of the quality of what you're getting, that there are some people that are much smarter than you that can actually do a much better job of this than you, and you need to let them do it. It'll cost you, but then it's up to you to make it worth it.
Either of these two approaches work, and honestly even in my days at CD Baby with 85 employees, very often, it felt like the first one of the - having to learn how to say "good enough." I think especially when it came to customer service. At first, I felt like I was the best at customer service. It was my business, nobody cared as much as me. So I'd find some other people to help me with customer service, and I'd look at the emails that they would write out, and I'd be like, "Well, it's good enough. Let go. She doesn't quite have your sense of humor, your charm, but hey, you know? The customer got a good, fast answer, so good enough." But then, after a few years, I found people that were actually much better at it than me that had that much better tolerance.
I understand delegation, and the importance of it, but when it comes to building your product, the product is everything, and if you delegate that to somebody else, you risk the chance of compromising what it could be.
True. I agree. That in the beginning building stages, like turning something from nothing into something, it's probably best done by the person with the original vision. It's up to you to turn nothing into something, even if it's a rough first draft that helps communicate it the way that, say, the person with the vision for a movie might sketch out the storyboards or whatnot. Later, they're going to bring in a director of photography that's going to be much better at turning that sketch into a glorious reality on the screen, if we can call the screen reality. They help turn the nothing into something with their sketches, and then they can show it to somebody that goes, "Ah, okay. I get what you're doing, and in fact, I think I can improve it."
I think that's where we've got to go as entrepreneurs, that doing everything yourself actually kind of makes sense at first, to communicate your vision, to kind of make a rough draft of what you have in mind, enough so that you are effectively communicating it to other people. To say like, "See? This is what I want. This is what I have in mind." Even if it's not the best web design or whatever you can communicate that. Then find the people that can improve it, that can actually do it better than you. That can take the design that you had in mind and say, "You mean like this?" and show it to you, and you go, "Oh, my God! Yes. That's even better than ..." That's where we should try to get to with delegation.
Back to the Wood Egg story. When I first had this idea that I wanted to write these 16 books every year about these 16 countries in Asia as my own personal passion, in a way of understanding these 16 different local cultures. At first I thought I was to write all 16 books myself. I was going to go to each country for three weeks. That's 48 weeks; that's almost a year. I'll be able to write the book in three weeks, and then go back next year and do it again. That was the idea, but that idea only lasted about a day. Then I thought, well, I'll have somebody else do that and then I'll just manage them. Then I thought, I'll hire 16 writers, one for each country, and each one of these plans, I tried it for a bit, and it didn't go well.
Then I came up with this robust plan of hiring three different researchers for each of the 16 countries, so hiring 48 people and giving them these 200 specific questions that I wanted answered. So that was a little more failsafe. Then you just go onto Elance and oDesk, and you kind of search for the word, "Thailand" if you're looking for somebody that knows Thailand, and I would search for "Thailand Business Consultant," and find a dozen people that had called themselves a business consultant in Thailand, and I'd say, "I have a project. I have these 200 questions I want answered. I can pay $1,000. Who's interested?" A bunch of people will pitch you on it and say, "I'll do it." Then you look at their histories and then you pick the one, or in my case the three, that you liked, because of the high failure rate. A lot of people will drop out, but as long as you are expecting that in advance, it's no big deal.
Why do people let you down?
It's optimism. I think optimistically, when people are being optimistic, they look at something and they say, "Yeah. I could do that. Two hundred questions? Sure. $1,000, I could use the money. That'll be great." So they sign up, they say, "Yeah. I'd be happy to do it. I'll do it." Then they start. They do it. They do the first 10 questions and then it's like, "It's a little harder than I thought." They do the next 10 questions, and think, "Oh, my God. Okay. I'll do this a little later, I'm just ..." Then they think, "Let me look for another job that's a little easier out there. Oh, there's nothing else right now." Then pretty soon the deadline is passed, and I'm asking them, "Hey, what's going on?"
Sometimes they say, "I'm really sorry. Something came up. I just ..." And a few few times, they just wouldn't reply at all. I think just maybe to save face. They didn't want to face the embarrassing situation, so they just stopped replying, but it's fine. I think I'd done Elance and oDesk so many times that I knew that this is how it works. It's about a 50-50 chance that they'll follow through and do what they say. That's fine, as long as you're expecting it, it's no big deal.
What else have you learned from Wood Egg?
The next one was that the work is best done by people that have their own intrinsic motivation for doing it. It also serves their own self-interest. So if I find some business consultant in Cambodia, I'd say, "Can you answer these 200 questions for me?" I can pay them some amount of money, and he'll give me 200 answers, but he's not deeply motivated to give me the best answers possible. He's actually kind of motivated to just get paid as easily as possible, which means give me some quick answers that satisfy their requirements so I don't complain and he gets paid.
On the other hand, if I find a recent University graduate that wants to go to Cambodia and start a business but doesn't know where to begin, and I say, "Well, if you can go find the 200 answers to these 200 questions, I can pay you this much and that'll cover your expenses." Now, for their own self-interest, they are going to go out into Cambodia with a passion and find the answers to these questions because they're actually the same questions they have, and pursuing it will make them much more likely to be a success in their own business ventures in Cambodia. The contacts they can make in the name of research could serve them later on for helping them launch their own thing.
Now, this person's much more motivated to find the best answers possible and follow through with this project to the end because it really serves their own self-interest. You know what I mean? To me, that's the difference between just finding somebody on Elance versus finding somebody that is drawn to what you're doing out of a sense of passion for it.
I think you're in a good position to do that, though, because of who you are.
You're right. I have an audience at this point, but I think all of us ... Let's look back to when I started CD Baby. It was 1999, let's say. CD Baby had been around for just a year, and there were only a few dozen musicians using it and a few hundred customers. Every now and then, even at the small scale, you find somebody that loves what you're doing, and they're just like, "Oh, my God."
In the case of Dorm Room Tycoon, I'm sure you get emails saying, "I love your interviews. I love what you're doing. I love this." These are your biggest fans that I think are your first choice if you ever need help with your business. The first people you should turn to are your biggest fans because they're work will come with more of a sense of passion and purpose for themselves.
When I needed to start hiring at CD Baby, I started hiring people that were huge fans of the company, that were thrilled to work for CD Baby. I told them, "It's not glamorous work. A lot of what we do is just packing CDs into envelopes and shipping them." But I found people that were passionately interested in doing that because they had more of a of a big picture for this. They were doing this because now they were in the music business, or now they were helping musicians, or now they were free of their stupid boss at the insurance company that they were working at before. Now they had freedom where they could work at the warehouse and smoke cigarettes and listen to music or whatever. That meant more to them, and yes it was only paying $8 an hour, but it had more of a sense of purpose to them. It wasn't about the $8. Do you know what I mean?
Anybody at any size can do that. Even a band that has only 10 fans, but has one fan that is their biggest fan, and if you ever need an assistant or perhaps even a manager, then your biggest fan is the person you should turn to first.
How do you know when someone's genuine or not genuine? It's easy to fake passion.
Probably no difference in personal life than professional life, that you just get a sense. Sometimes it's persistence. If you tell whether somebody's just crushing on you or actually loves you. I mean that in the personal sense. We've all had crushes where we're head over heels for somebody for a month, and then got to know them better and said, "Oh, nevermind." We've all had someone do that to us, I think. We've had people that fell in love with you, or so they say, but then a month later, they're over it. I guess time will tell.
Sometimes you can just take advantage of the crush. If somebody's a big fan of what you're doing, and you need somebody to help whatever process, these spreadsheets or whatever it may be, you turn to your biggest fan at the time and say, "Wow. Thank you for all the kind words. Could you help me with this?" They say, “Sure.” Then they do it for a month and maybe they're not as into you a month later, but hey, you had some great help for that month.
Welcome back to Dorm Room Tycoon. I want to talk about programming. You are sending the message that people need to learn how to program. Why?
Because I get so many people telling me that they are looking for a job or dissatisfied with a job, or feeling like they're going to be replaced, and there's a brilliant essay, if anybody's interested. Mark Andreessen, who is the guy who built the original Netscape browser that became Mozilla that became Firefox. Mark Andreessen wrote a great essay a couple of years ago called "Software is Eating the World" where he'd talk about how everything is being replaced with software. Even cars are now run by the software inside of them. Things that used to be manual processes are now taken care of by software, and software is flying the planes, and all that.
Well, I could just say I agree with him. It's taking over everything. It's really becoming a part of our lives. Even basic programming, even the most standard, like learning how to make an HTML page with a little bit of dynamic text that changes based on what somebody clicks on or even what time of day it is, or something. Then I think it's a matter of understanding. I think the world instantly becomes less mysterious to you.
One of the most common emails I get from strangers when I get people that contact me out of the blue, is something along the lines of, "Hey, Derek. I have this idea for a business. I want to make a site that does this, this, and that but I don't know any programmers, and I can't afford to hire a programmer, so I think maybe I need to find a technical co-founder. Somebody who's a great programmer that shares my idea that will join me on this project? How do I do that?"
I don't have a useful answer, because I tell them, "Well, everybody that knows how to program also has their own ideas. They don't want to do yours, usually." Everybody that knows how to program is bombarded with people that don't know how to program asking them to do their thing instead of scratching their own. It's like, "Come scratch my itch." So I think that more people should learn how to program for all of these reasons I just named.
I think if you're interested in program, you'd have naturally been drawn to programming at an early age. The reason why you're not programming now is because you weren't drawn to it. Therefore, should you be drawn to it now just because out of "oh, gosh. I might get left behind."
But that may be enough. Like I think a lot of us don't do anything until you're required to do it. I didn't learn PHP until I had to learn PHP, until after I started CD baby, and it was taking off, and I thought, "Oh, my God. I need to learn how to make this site do what I want." I had to learn PHP. Once I did, Once the world forced me to do it, then I was like, "Oh, my God. This is fascinating. This is a blast!" It took that little nudge to make me do it, to make me realize I love doing it.
I think that even if it's something I've written or somebody being in a tough situation where they don't know how to fix their WordPress blog that's broken or whatever it may be, if something nudges you into learning some basic programming. Again, I'm not suggesting that everybody should go be a programmer. I think I mean learn to program the way that I would tell somebody, you need to learn how to make scrambled eggs and toast. You know what I mean?
Some people are like the equivalent of not knowing how to make their own breakfast. We all have the basic human skill of knowing how to crack an egg and stir it around on the pan and pour it onto a plate. Some people don't have the equivalent of that program-wise, but if you have that, it just makes you feel so much more capable in the world. Then if you're one of those people that has the ability to, say, go camping with a backpack on your back and walk off into the woods and survive for a few days. You feel so much more empowered in the world.
Even that level would be advanced programming, to know that almost any idea you have, you know how to code up even a scratch version to make a version 0.1 that you can start to show some other people. If you have those kind of abilities, it's just so empowering. Anytime you have an idea, it helps you see the world in a different way. It helps you see that I can change this. I'm not just a user. I'm a creator. I can change the way things are done instead of having to just accept that's the way things are.
So what are you trying to do now?
The next thing for me is the focus. A lot of my focus has been on pause for five years. I've been doing the opposite. If there are different ways of experiencing the world, I've been doing the way of following every shiny distraction and saying yes to every question and jumping around the world, like a little hyperactive Mexican jumping bean. I've been to dozens of countries in the last few years, and I've met hundreds of people, and I've tossed myself into all these wild adventures and then I've written about them on my blog. Some of the things I just laugh at the situations I get myself into.
I was hanging out with a bunch of Mongolians, meeting the next mayor of Ulan Bator, Mongolia on this business mission with a bunch of Chinese businessmen from Singapore, and I just catch myself in these moments going, "What am I doing? I'm a musician from California. What the fuck am I doing at this group of people from Singapore and Mongolia and talking?" It's like, "Oh, my God." It's been fun, honestly, but we all have the thing that we really measure our lives by.
For everybody it's different. Some people what to make an impact. They want to impact the lives of many people and that's how they measure their success. Some people want to have laughing, screaming fun as much as possible, and that is the measure of a successful life for them. Some people want to have warm and fuzzy family times and the warmth and support of a loving family, and that is their measure of success.
To me, I measure myself by how much I create. That's just my thing. Even if I'm learning something, I'm really learning in order to create. Creating is still the ultimate measure to me of how successful I'm living my life the way I want to live it. I like making things that, ideally things that are useful to others, but even if not just making things, it's how I measure my own success. All these adventures I've been having for the last five years, and all the hundreds of people I've met and all the conferences I've spoken at and been up there on the podium and the spotlight and getting all kinds of attention for having so many smart things to say, it's a nice ego boost. In the end, I feel a little empty or in the end I still feel like a failure if I'm not creating things. What's next for me is I'll be spending a lot more time just focused, saying no to everything else and just focused on working.
For those that aspire to create but also to become popular, there seems to be a need to always be going out, doing these things, meeting people. For someone starting now, should they just put their head down?
That is a great, great question. That's a really good question that I think strategically, there are different times for different approaches. Let me just say one strategy off the top of my head that before you throw yourself out into the world in networking mode, you could argue that you need to develop some valuable skills first, so when you go out into the world, you have something valuable to offer, right? That's the idea. I'm coming from the music business, right? The idea is you spend years and years in the practice room getting great at your instrument or your skill. Whether if that skill is songwriting or being a great engineer or producer or stage performer. Whatever it is, that's your time in the shed, as musicians call it, that you need to do first before you go out into the world and say, "Hey, look at me." You've got to be reclusive and focused, and develop your skill first, before you go out there.
The same could be true with other non-music skills too, whatever it may be. It pays off for you to have those years in whether it's in a University or not but those years where you're just focused on developing your programming skill, or you're business knowledge or whatever as much as you can. Then, absolutely, there's a point where your main focus should be being very public and connecting with as many people as possible and saying yes to everything and being in the middle of everything. Even geographically, that's a great time to move to the big city, whatever that big city may be to you. That's a great time to be there, physically present, than in the middle of it. Be in the city, meet everyone, go to every event, even ambitiously push to get a speaking spot instead of just being in the audience. Then push to be blogging instead of just reading other people's blogs. Be well known. That's the phase I feel that most people I know are in that phase of just continuing to push yourself as much as possible. Get out there as much as possible.
Sometimes I think that there comes a time that you'll have to know when it is that saying yes to everything, the strategy of saying yes to everything that worked well for you on the way up is going to start working against you at a certain point. Because you're never going to get everything done if you start saying yes to all the opportunities that are coming your way. There's a wise bit of advice. I forget exactly how he said it, but I think it was Steve Blank, who's kind of known as a startup guru, said something like, "Most startups died of drowning, not of thirst. They die of trying to take on too many opportunities instead of not having enough. That if you try to say yes to everything, it's hard to get anything done."
Somebody else described this to me as the - I think they called it the Nobel prize winner problem. That often the people who win Nobel prizes then are unable to get any more groundbreaking work done like they did before they won their Nobel prize because after you win a Nobel prize, everybody just wants you to come speak at their event and be in their magazine and advise their students or whatever, don't have any time to do your own work anymore if you say yes to even 1% of their stuff. A lot of the stuff I'm saying about I need to keep my head down and focus, that's just for my own personal point in life, my own personal strategy. I got to the point where I was saying yes to everything. I was doing too much. I was too public, and I wasn't getting any work done. Now I just have to say no to everything and focus.
Coming to a close now. You're a learner. I mean that's the theme that comes through from this interview, and through your blog posts. Constantly learning, constantly seeing how you can equip yourself with new things. Why?
Probably just that idea of learning for the sake of creating, like you want to feel that life is on an upward trajectory. Nobody wants to feel on a downward spiral, right? We all want to feel that it's an upward trajectory, whatever that measure may be. So you want to feel that you're constantly improving and growing and for me, I've just found through the years that's what makes me happiest. I love learning new things. I think there's almost nothing that makes me happier than learning some new idea that makes me look at the world in a whole new way. It's like literally changes the rest of my life from that point on.
The whole way I look at the world is changed now because of this new idea that I either heard or had. I love that. No amount of jet-skiing or bungee jumping could be as deep down fun and satisfying as learning something new that changes how I see the world. Learning something new that not only changes the world but then helps me make something new that contributes back to the world. Whether it's learning how to program or learning how to be a better writer or taking a lot of quiet time to sit and think through an idea so that I can write about it with a new perspective or angle on it, and then offer that up to the world. That to me is so deeply satisfying, that nothing compares. No chasing adventures like tango dancing in Argentina or whatever still doesn't compare to the fun of learning new things and creating new things. That's just for me. Everybody's got their own measure.
Is there any advice that you'd like to give the audience? Someone that's recently graduated or unemployed, or thinking of starting a company? People that are looking to transition into something new.
I feel that there are always benefits from taking the road less traveled. Whatever everybody else is doing, it's not as valuable for you to be doing whatever everybody else is doing. That almost always, the more valuable thing to do is the opposite of everybody else. It makes you more uniquely positioned in the world. It gives you rarer skills than if you're just spending thousands of hours doing whatever everybody else is doing.
These days I feel that when everybody else is glued to their phones, shut off your phone. If everybody else is addicted to their Facebooks or whatever, then turn off your computer, and if everybody else is learning everything they know from little sound bytes in articles or TED talks, then learn from books. Or if everybody else is focused on Silicon Valley, then head off to Myanmar. Do you know what I mean? If you do the opposite of what everybody else is doing, then you develop a more unique and valuable skill set or insights. The biggest one I see today is turning off these two things: the phone and the computer. That everybody gets kind of all of their little sound bytes of knowledge through. If you turn those off and focus, I think it really gives you a much more valuable perspective on things.