James Altucher On Losing 9 Million Bucks And Coping With Failure

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Today, we get to learn from none other than James Altucher, author of self-published bestseller Choose Yourself: Be Happy, Make Millions, and Live the Dream, along with his most recent bestseller, Reinvent Yourself.

I’ll be talking to James about how to bounce back from some of life’s toughest challenges and struggles, what losing nine million bucks taught him, how being creative every single day can completely transform your life, and the best way to grow your network and connect with almost anyone, and much more.

Key Points From This Episode:

  • Find out why James believes that the key to learning from failure is what you do directly afterwards to succeed.
  • Hear the story of how James lost $9 million dollars in company stock, within seven days.
  • Discover how James implemented his own advice on failure and lots to turn a devastating situation into a positive.
  • Understand how identifying the choices you are in control of can make you overall happier.
  • Hear how James spent two years going out at 3 AM to interview people on the streets.
  • Find out how creativity and ideas helped James get out from under a deep depression.
  • James shares about how he pushed himself outside his comfort zone to do standup comedy.
  • Discover why James’ kids had the biggest impact on his life.
  • And much more!  

Tweetables:

 [0:50:05.8]

 [1:12:15.1]

Links Mentioned in Today’s Episode:

James’s Website — http://www.jamesaltucher.com/

James on Twitter — https://twitter.com/jaltucher

James’ book, Choose Yourself — http://amzn.to/2odc4D2

James’ book, Reinvent Yourself — http://amzn.to/2p0FsJO

Philip McKernan — http://philipmckernan.com/

Herbie Hancock — http://www.herbiehancock.com/

Miles Davis — https://www.milesdavis.com/

Brian Koppelman — http://www.imdb.com/name/nm0002718/

Billions — http://www.imdb.com/title/tt4270492/

HBO — http://www.hbo.com/

Damian Lewis — http://www.imdb.com/name/nm0507073

Paul Giamatti — http://www.imdb.com/name/nm0316079

Diamond Cutters —  http://diamondcutters.com/

Stanley Bard — http://www.chelseahotelblog.com/living_with_legends_the_h/2017/02/-stanley-bard-former-owner-and-manager-of-the-chelsea-hotel-dies-at-82.html

Chelsea Hotel — http://www.chelseahotelblog.com/

American Express —  https://www.americanexpress.com/  

Time Warner —  http://www.timewarner.com/

Miramax — https://www.miramax.com/

Disney — http://www.disney.com/

Peter Thiel — https://twitter.com/peterthiel  / Zero To One Book

Larry Page —  https://plus.google.com/+LarryPage

Sergey Brin — https://plus.google.com/+SergeyBrin

Jerry Yang — https://www.forbes.com/profile/jerry-yang/

Craig Silverman — https://twitter.com/CraigSilverman

Marissa Mayer — https://twitter.com/marissamayer

Warren Buffet — https://twitter.com/warrenbuffett

Louis C.K. — http://www.imdb.com/name/nm0127373/

AJ Jacobs — http://ajjacobs.com/

Joe Rogan’s podcast — http://podcasts.joerogan.net/

Tim Ferriss’ podcast — http://tim.blog/podcast/

Tony Robbins — https://www.tonyrobbins.com/

Garry Kasparov — http://www.kasparov.com/

Coolio the rapper — https://twitter.com/coolio

Kickstarter — https://www.kickstarter.com/

WhatsApp — https://www.whatsapp.com/

Oculus — https://www.oculus.com/

Read Full Transcript

EPISODE 002

“JA: Then I got a job as a programmer for HBO and I really just wanted to make TV shows, to be honest, and I wanted to write novels. I didn’t really want to be a business man.”

[INTRODUCTION]

[0:00:14.1] ANNOUNCER: Welcome to The Fail on Podcast where we explore the hardships and obstacles today’s industry leaders face on their journey to the top of their fields, through careful insight and thoughtful conversation. By embracing failure, we’ll show you how to build momentum without being consumed by the result.

Now please welcome your host, Rob Nunnery.

[INTRO]

[0:00:40.1] RN: Hello and welcome to the podcast that believes, if you desire to create the life of your dreams then embracing failure by taking urgent and bold action is the only way. Today, you and I get to learn from none other than James Altucher, author of self-publish bestseller Choose Yourself: Be happy, make millions, and live the dream, along with his most recent bestseller, Reinvent Yourself.

I’ll be talking to James about how to bounce back from some of life’s toughest challenges and struggles, what losing nine million bucks in a single day taught him, how being creative every single day can completely transform your life, and the best way to grow your network and connect with almost anyone, and much, much more.

But first, if you’d like to stay up to date on all fail on podcast interviews and key takeaways from each guest, simply go to failon.com and sign up for our newsletter at the bottom of the page.

Without further ado, Mr. James Altucher

[INTERVIEW]

[0:01:54.7] RN: Hello and welcome to the fail on podcast, today we’re sitting down in New York City with Mr. James Altucher. James, welcome to the show.

[0:02:01.4] JA: Rob, thanks for not only having me on your show but you’ve been so good about scheduling, you came straight to where I am. I know I was horribly inconvenient, so you did a great job just kind of showing up. As they say, 90% of the job is showing up.

[0:02:19.4] RN: Hey, it’s 100% true and I’ve actually got to come clean. I was telling you as well as I know I reached out to Pam as well, your girlfriend, and I was like, “I’m going to be in New York City April 1st to 3rd,” zero plan in New York City April 1st. I knew I was going to be in Toronto and actually…

[0:02:33.6] JA: Wait, that’s my trick. You’re stealing from my book. You’re not allowed to do that, that’s what I do.

[0:02:40.9] RN: So I had a flight booked back from Toronto to San Diego and I was like, “Well,” and I finally heard back and we connected and we made it work. So I canceled that, got a flight to New York City and here we are.

[0:02:49.6] JA: By the way, it’s not all, I moved today from one Airbnb to the next so I made room on moving my schedule.

[0:02:58.1] RN: On moving day. No, yeah. No, trust me.

[0:02:59.7] JA: We literally moved in to this place three minutes ago and then you rang the bell.

[0:03:03.5] RN: That’s amazing. Just for a little context, we’re sitting what floor is this? You know?

[0:03:08.5] JA: 34th floor.

[0:03:08.6] RN: 34th floor, looking, I’m thinking that’s directly north, right?

[0:03:13.0] JA: Yes.

[0:03:13.2] RN: North facing view in Manhattan, see the Chrysler Building, do you see the Empire State Building?

[0:03:18.2] JA: I see the Empire State Building, yeah.

[0:03:19.4] RN: Just a gorgeous view though. Thanks for hosting, I really appreciate it. It’s number one on… I’ve done one of the beach with Philip McKernan, like I told you, a podcast and I think sorry Philip, but this takes the cake.

[0:03:31.7] JA: Well it depends what kind of view you like. Like a beach ocean view is of course this beautiful natural setting that humans are, it’s almost like an evolutionary thing. Like they always liked the beach, ocean view. But there’s something about kind of like these vertical cities like Manhattan where it’s just, there’s everybody on the ground and then there’s millions of people even at this high up level that we’re at right now. Just looking across, this is not the tallest building, there’s a thousand buildings out there.

[0:03:55.7] RN: Yeah, just driving in, like I in to Newark and I took a car under the Lincoln Tunnel you come out and you’re just like boom, you get hit with the energy right away. I love this city.

[0:04:06.3] JA: Yeah.

[0:04:07.8] RN: Just to get back on track, obviously this is the Fail On Podcast and, no offense, but you’re like the king of failure.

[0:04:13.8] JA: I’m the king of failure. Get out of here.

[0:04:16.1] RN: Yeah, don’t let the door hit you on the way out. No, but in a good way, right? Because you don’t just let failure kind of define you. You take lessons from it and you turn things around and you learn from it and you get better.

[0:04:28.1] JA: You know, I read this beautiful quote the other day. Herbie Hancock, you know who Herbie Hancock is? So I’m not into jazz or whatever but I liked Herbie Hancock when I was a kid and then he’s talking about how he used to play with Miles Davis and one time, Miles Davis was doing some kind of improv thing and Herbie Hancock was doing his thing and he hit a cord that was just a total mistake.

He says, “I made a total mistake, there is no way you could say I was in any way in sync with what Miles Davis was doing. Miles Davis,” he said, “paused for like a micro second and then he started playing and he made my cord that I had, that was a total mistake, he made it fit right in.” He said, “There is — no musical note is a mistake until you hear the note after it.”

I’m paraphrasing the quote because I don’t remember it exactly but it’s that same sentiment and I thought that makes so much sense that you can’t make a mistake and say that’s a mistake. You do what you do and then everything is determined by what happens next.

Miles Davis of course, again, I don’t know Jazz, I don’t know blues, I barely know who he is, I don’t know what instrument he plays if you told me, but clearly he was the best in the world at what he did. He was able to take anything he had in front of him and turned it into a work of art. So I think that’s the key is how quickly can you take an event and let’s not label it failure, but how quickly can you take an event and turn it into something amazing. That’s the key. I just read that quote two days ago but it’s really stuck with me.

So I’m going to add one more thing. You know, one key to writing, I think, is that if you think about something a couple of times in a row then that’s something worth talking about and writing about. I’ve been thinking about this one quote and to that something that’s I’m going to either write about or talk about or think more about.

[0:06:26.3] RN: No, I love that. Kind of on that note as well. I was just looking at the front cover of the Reinvent Yourself book, right? There’s a really cool quote by Brian Koppelman, the creator of Billions and just so I don’t mess it up. James is on a very personal journey, he’s telling you the story on Saturday. Sunday he’s talking about how it felt and on Monday he’s talking about how about doing it a different way, right? It’s taking action, screwing it up, and then reengineering it to find a new way, right?

[0:06:55.2] JA: Yeah, but let’s not even — I don’t even like using the phrase screwing it up because, and I’ll tell you a story that involves Brian and the show Billions but, you know, when you think about things in terms of experiments often. Life, this is a cliché, right? But clichés are worth kind of paying attention to. So life’s so short, if you waste any time in kind of this state of, “Oh I screwed up,” then that’s wasted time.

I’ve spent many years in that state. It’s not like I can avoid it. I think the key, everybody’s got ups and downs every year of their lives, I don’t know, the biggest billionaire in the world will of course age and have death in his life and get sick and have bad relationships and so on.

Everybody’s got ups and downs and it’s how quickly you can bounce back and you bounce back because of your internal sense of wellbeing, you bounce back because of the energy you have from physical house, you bounce back because of the people you’re surrounding yourself with are good people. You bounce back because you're creative and you have ideas that excite you and so on. I think that’s what really makes a life.

Do you mind if I tell you a story about Brian Koppelman and Billions? I always tell all the stories about how, “Oh I lost all this money in my first business, I was going to kill myself, I bounced back.” I’m going to hold off on that. I was on the set of Billions, before show time even fully picked it up and so Billions, for anybody who doesn’t know is a show about hedge fund manager versus a DA. The hedge fund manager, yeah, it’s a great show.

Damian Lewis plays the hedge fund manager, Paul Giamatti plays the DA, they’re fighting each other, whatever. Brian says, “Why don’t you come down and watch the first episode of season one being filmed, the premier of the series? I was like, “This is great, I’ve never watched like a scripted television show being shot before.”

I was so excited, and I get there and everybody’s explaining everything to me, I meet some friends I hadn’t seen a while because they were watching it also. We’re at the fictional hedge fund and Damian Lewis is playing Bobby Axelrod, he’s making his hedge fund decisions and Neil Burger who directed limitless was shooting it and Brian and David his writing partner were there.

In the middle of the day, around noon, I get a text, “emergency board meeting” and it was on a company on the board of that had a billion in revenues and great company, when I entered the board — and I was really involved and I entered the board, we had about 400 million in revenues, we built up to about a billion and the two years I was on the board, not because of me but I like to think I helped a little.

So I figure, “This is going to be great, this is going to be the best day of my life. Not only am I on the set of this TV show, I’m learning so much fun stuff but maybe this company’s going to get sold and I have all these shares because I’m on the board.” I have this emergency board meeting and it turns out the largest shareholder — had nothing to do with the company, the largest shareholder had a tax lien put on him for $90 million dollars. The bank who was helping us meet payroll, you know, many companies, you know, we’re a profitable company but we reinvested so the bank kind of on an annual.

So the company, money comes in phases, you know? You bill, money comes later. So to get make regular payroll, a bank will lend and then when we got paid we’d pay them and so on. The bank said, “This is ridiculous, we’re a little nervous, we don’t understand what happened here because this breaks the covenant in the loan and we’re just going to take over the company today.”

This was like a shock, I didn’t understand it. I’m like — I said to the CEO, “What are you going to do?” He said, “Well, we broke — this shareholder broke the covenant, he had backed his personal assets, he broke the covenant with the bank and so they’re coming in and I have to go, I’m fired, they’re taking over.”

I had nine million dollars’ worth of stock in this company. So within seven days, a billion in revenues, the bank came in, they basically took all our customers, gave it to their other clients who were in the same industry. So a billion in revenues went to zero, company declared bankruptcy, and it just went to zero, went out of business.

I wasn’t on the board anymore and that was that, and I knew this was going to happen. I’m an idea person, I came up with idea after idea but nothing, there was just nothing to do. I think this is why Brian says this quote. So I get off the phone, nine million dollars, it’s a fuck load of money. Like I was very unhappy.

[0:11:36.3] RN: Right.

[0:11:37.6] JA: Sorry for cursing.

[0:11:38.8] RN: No, curse all you want.

[0:11:40.1] JA: That one was worth a curse, I won’t curse again. There’s nothing for me to do, I’m out in the middle of nowhere at this fake hedge fund and they’re still shooting. They’re going to shoot for another six hours. So I went back, decided to just, you know, this would be like…

[0:11:55.1] RN: What are you feeling? Are you furious? Are you sad?

[0:11:59.4] JA: I’m furious, I’m sad, I’m angry, I’m scared, I’m anxious. You know, I was depending on this money, it’s not like I had a hundred million where nine I could like whatever. This was like, you know, a lot of my life savings practically and so I go back to the set and I figured you know what? I’m on the set of this TV show, I’ve been looking forward to this for a month. I’ve got all my friends here and I’m learning.

I spent the rest of the day just watching how the director — this is a great director, he’s directed some of my favorite movies, he’s directed other TV shows. So I’m asking him questions, I’m asking him the writer’s questions, I’m asking the actor’s questions. So I spend the rest of the day just having a great time. I didn’t think about it again until, of course, later at night, at three in the morning, I woke up thinking about it and then the next day I was thinking about it but a few months later, I told Brian what happened that day and he was like, “Oh my gosh, we just thought you were in the bathroom for a long time, came back, you were laughing, you were asking questions, you were enjoying the rest of the day,” and I think that’s where that quote came from.

[0:13:02.0] RN: How were you able to flip the switch so fast like when you took that time for yourself and then came back out, was it reframing your mind about what just happened or?

[0:13:10.3] JA: I think, I’ve written so much about other failures like failing in business, losing a home, losing marriages, losing other businesses, losing everything and I decided, okay, well this gives me a chance to not be some BS guy like every other person who says, “Oh, you know, do this or do that.” I’m just going to apply my own philosophy to what just happened. Bad things happen so let’s see if what I always say and write about works once again for me. Because it’s worked in the past, let’s see if it works.

So I just did it; I asked myself, am I being physically healthy? Yes. Am I, you know, am I being emotionally healthy? Yes, I’m around all this great friends and there was even a photo taken later in the day, we were all smiling and laughing. Am I being creative? Well, yes, I’m on the set of the show, I started thinking of ideas, if I were to write episodes of this show, what would I do? So I started thinking of all this things. Am I being spiritually healthy? Which means recognizing A, there’s nothing I could have done here, I have no regrets, I did have anxiety about the future like you hit so hard to disconnect yourself from your net worth.

[0:14:17.9] RN: Not the money mainly, right?

[0:14:19.4] JA: Yeah. But I figured, “You know what? One thing I’ve never had a problem with is getting in the trenches and making money when I needed to,” and I have diversified my life in various ways so I was able to focus on that whenever I was feeling anxiety and I just said, "Okay, I’m going to enjoy myself, that’s what I’m here to do today,” and so I did.

Now look, I’m still thinking about it like what the hell, that was a lot, what if that situation didn’t work out? You know what? Maybe it was too good to be true, you never know? So I learned from the experience and now we’re able to have a story out of it. I could die tomorrow and then it just wouldn’t have mattered anyway.

[0:14:59.8] RN: Exactly. In situations like that where it’s a failure, right? It’s not necessarily your failure, or within your control to have prevented it from happening, right?

[0:15:09.3] JA: Although, I don’t know, I mean, hard to say. Every situation, it’s not like you’re dealt — people say, “Oh, you play the hands you're dealt.” A little bit, I dealt myself those hands. I picked, I chose to go on that board and there were other factors, maybe I should have — I don’t know, it’s hard to say. You build experience and then if certain situations happen again that were similar, I’d probably say no.

Because I spent a lot of time — being a board member, if you’re a good board member, you’re going to spend a lot of time. Probably would not have said yes to being on that board knowing now, I mean, even in retrospect, not the big thing but little things that happened along the way.

Not that anything illegal, I didn’t see anything illegal happening and nothing bad was happening with the company, it was just this one guy. But maybe I should be more careful and do more due diligence on the shareholders, I don’t know? It’s hard to say.

[0:16:04.0] RN: that’s kind of a reactive, “how do I handle it when it happens” type thing. Like when you’re going into a situation where you’re putting yourself at risk of failure or embarrassment, how do you deal with those situations going into it being proactive, not something that’s already happened to you?

[0:16:19.1] JA: Well, I think now, I’m setting up my life, let’s say in a given day, you make a thousand medium to big choices. You choose what you’re going to wear, you choose what you’re going to eat, you get to choose who you’re going to call, you choose what you’re going to work on.

Say during the day, you choose what TV you’re going to watch, you choose what news you’re going to consume, so let’s say you make a thousand medium to big choices. I’m just making that number up. Maybe it’s more, maybe it’s less. What I try to do is overtime, I’ve gotten — I’ve really focused on how can I, of that thousand, what percentage are choices that I’m making to choose to do what’s going to make me happier? I’m trying to make a larger percentage of those choices, be ones that I’m directly in control of the choice so I can choose what’s going to make me happier.

For instance, if you work at a job and your boss says, “Run and get me coffee,” that wouldn’t make me happy. You can’t always change that in one day so I’ve been in jobs like that and you kind of say okay, “Well over time, that’s a sort of choice — I don’t want to have to do that. I want to start gearing directing my life in a direction so less and less will I be confronted with that choice.”

Over time and over years even, but every day you can improve this a little bit, you know, out of a thousand, maybe 10 choices you make at first that are like, “Oh, I’m going to take a walk around the block during my lunch time and that’s going to make me really happy.” So you can make maybe 10 choices of day one and so now I feel it’s not 10, it’s maybe 50% or more, maybe even 80% are choices where I’m making the choice to make myself happy.

Part of those choices for me now is, I’m not going on boards anymore because there’s a decent chance if I go on a board, 50% of the time, just from my own experience, it’s going to be a miserable experience. I don’t want to have those 50% miserable experiences.

[0:18:14.7] RN: In what way? Just by the time you have to spend?

[0:18:17.0] JA: Time you have to spend and some companies are good and some companies are bad. When a company is bad, you have to deal with a lot of bad problems when you’re on the board. You have to solve the problems. Now, I don’t mind solving problems but A, I’d rather solve my own problems than other people’s all the time.

I was on a board once of a company where we got the monthly financials, the board, and I look at the monthly financials and I saw a disaster happening. So I called the CEO and I said, I won’t say his name, I said, “Billy,” that’s not his name, “You have six months’ worth of money left according to the burn on this financials.” He said, “Yeah, that’s right.” I’m like, “Well, what are you going to do?” He said, “In three months we’re going to do a fund raising with venture capitalists,” and I said, “No, actually, I have to tell you, you’re already out of business. There’s already no way for you to not go out of business,” and he’s like, “What are you talking about?” He’s a first time CEO.

I said, “Well, let’s just imagine you start raising money today. Not in six months, not in three months. If you start raising money today, best case, within three months, you will have circled the money, then you have to get legal paperwork done, now you’re going to have one month of money left and you don’t think the investors are going to know that and then they’re going to put the gun to your head and really mess with you? You're out of business already.”

He said, “No, you're ridiculous I’m not out of business, I’m not changing a thing.” So I had to call — this was hard work — I had to call everybody else on the board. First I had to argue with him, which is very annoying, I had to call everyone else on the board, I had to spend a lot of time convincing them that there was an emergency. They all agreed. We then had an emergency meeting with the CEO. He disagreed with us but we still said, “Look, you can do your fund raising but we’re going to also hire a bank and we expect you to participate with them,” fortunately he did. To do kind of a fire sale of the company.

Six months later, he had three hours left before he was going to miss payroll. Everything was like on the clock. He sold the company, he personally made, I forget if it was like $6 million or $12 million dollars. I made a little bit because I had a small percentage, I was on the board, the sale wasn’t that much but I made this guy wealthy, he argued with me every step of the way along the way, so it’s not a fun experience for me. I spent a lot of time on the phone, I spent a lot of time anxious because I had other investors in there, I’d help them raise millions of dollars. So I cared more about their money than my own little money in the company.

[0:20:51.9] RN: On that note. Did nobody else see that there was an emergency within the company?

[0:20:57.4] JA: No, because most people, when they go in the board, it’s like, “Oh I put some money in and I’ll go on the board, it looks good, we got so and so in the board, he sold the company for $400 million dollars and now we’ll put him on the board.” They don’t care because they already have a lot of money, they don’t care at all, they’re running on other things. Everybody else was doing something else.

My issue was, I had helped raise a lot of money, I had gotten my friends into the company. A board member should have the same level, every board member should have equal level of fiduciary responsibility, but I had an extra, what I felt more responsibility. CFO was like an old friend of the guy and, I don’t know, you know, I don’t know why nobody else was aware, I just happened to have, after helping invest in and manage 40 or 50 companies, I knew these things, some people do.

[0:21:45.1] RN: Got you. What’s the count out now? Are you at? I think last I saw is 17 business failures?

[0:21:50.8] JA: Yeah, probably that at least.

[0:21:53.7] RN: Okay.

[0:21:55.1] JA: You know, also, I’ve invested in some of those that failed too.

[0:21:57.9] RN: You could up that number if you need.

[0:21:59.3] JA: If I wanted to, I can up it. I’ve had some successes though too.

[0:22:02.8] RN: Yeah, of course.

[0:22:03.7] JA: Well, it’s definitely enough that it’s statistically significant. I know, well what are the first signs of failure, for instance having only six months of burn is a good sign of failure.

[0:22:11.7] RN: Yeah, exactly. I was going to ask, I mean, you’ve got the data, right? You’ve seen 17 different ways businesses can fail. Were any of those like, were any of them repeat failures from kind of the same root cause or was it 17 different unique?

[0:22:29.0] JA: Well, there’s unique things and similar things in each one. Some of this are investments and some of this are businesses that I’ve started. But communication is very important. In any free business, there’s a lot of moving parts. There is a CEO, there’s a COO who is usually running day to day, there are employees, there are shareholders, there are future shareholders, there are customers and those customers are big customers and little customers.

There’s lawyers and accountants. I think I kind of summarized well most of the parties involved. But, each one of those has to communicate to most of the other parties. For instance, the CEO has to communicate with everybody, sometimes investors are customers, sometimes employees are shareholders and employees have to talk to customers and employees have to communicate to CEO’s and COO’s.

So there are lots of agreements in place but a lot of those agreements are not obviously contracts. They’re kind of like, I think because he’s the COO or he is the head of sales or she is the head of biz dev, I think he or she should be doing this and the shareholders think, the CEO should be great and the CEO thinks, the investor should be willing to put more money in. To there are all this kind of like implicit agreements but that no one’s really agreed to and then when push comes to shove, it turns out, nobody agreed to anything.

So a lot of the failure has to do with not everybody realizing what everybody else has agreed to going into this. You know, you kind of have to all buy into the same vision and it’s the CEO’s job, in part, to make sure that he has a really strong vision, it’s better than everybody else’s vision, meaning competitors in the space. That everybody from employees to shareholders to customers buy into that vision. That’s really difficult. That’s why it’s really hard to run a business, it’s really hard to be an entrepreneur.

[0:24:24.2] RN: You’ve run businesses in a few different industries from finance, now you write a lot. Do you remember the first time that somebody gave you money in exchange for something that you created, whether it’s a product or a service?

[0:24:34.8] JA: Yeah, it was so great. I remember one time, it’s like 1995, I had a full time job at HBO.

[0:24:42.1] RN: You were like a — sorry to interject you, you weren’t one of these people that were born entrepreneurs, selling lemonade and all that stuff?

[0:24:49.2] JA: I don’t’ know, I went to a school, I went to graduate school, got thrown out of that and then I was a programmer for a while and then I got a job as a programmer for HBO and I really just wanted to make TV shows to be honest and I wanted to write novels. I didn’t really want to be a business man and my sister and my brother in law were struggling with a CD-ROM business that they were doing. CD-ROMs of course were dying.

So I showed them this new thing, the World Wide Web. WWW and so, they learned it and I said, “Look, I’ll help you out as long as I can but I really want to just make a TV show, I’m not really interested in this.” But, they kind of needed help on the programming side, I was a software guy, and they needed help on the sales side. You know, sales is a skill. Not everybody has it and I think, I never studied sales but I had maybe a little bit of a talent at it. I would go in and do the sales for them.

Being the sales guy means that’s the who the customer’s going to call when things have a problem. So the first website we did and I figured, “Okay, I’ll just show them this and I’ll do this and then I said, first website we did was it’s still up, diamondcutters.com. We did this website for this diamond wholesale business and I had $0 in the bank, I was living in a one room apartment on — there was no furniture, I just had a foam mattress and it was like the summer so I would sweat and the sweat would like stick to the foam. There was like cockroaches in the bathroom.

I would just stay late at my brother in law’s office. Anyway, we found this diamond dealer who needed to make a website and I did the website, I did all this great software. You know, it was like an online course about how to value a diamond and then I would make the graphics on the fly, software made the graphics on the fly, this whole of the GIA certificates of certified diamonds and then I had a database of all the diamonds he had in his inventory and I had to order for him.

It’s eCommerce. It’s like this basic eCommerce website in 1995 and just doing all this like on the fly graphic stuff, it was pretty sophisticated for 1995. I knew what I was doing then, I wouldn’t be able to do the same thing now. He paid us so he paid us $35,000 and I said, “Okay, I want my half.” So I got $17,500 and I don’t know why I got it this way, but I got it in cash.

[0:27:18.2] RN: Like a briefcase, in a bag.

[0:27:19.1] JA: Yeah, on paper bag and I paid taxes on it and everything but later, I paid the taxes and — but at that moment, I had $17,500 cash and I had zero for my entire life.

[0:27:32.8] RN: Cockroaches in the bathroom.

[0:27:34.0] JA: Cockroach is a…

[0:27:35.2] RN: nasty mattress.

[0:27:36.8] JA: What I do was I was living in Queens but I walked over to the Chelsey hotel which is a hotel on 23rd street, it’s got a very rich history of artist and musicians and writers and you can’t really live there, if you just walk in and say, “I want to live here,” they say, “This is a hotel, you can’t live here.” But I had this paper bag of cash. I said, “Let me speak to the owner.” The owner, this guy’s name was Stanley Bart, famous guy now because again, because of the history of the Chelsey hotel.

I showed him my — let’s just go into your office, I want to live here and he said, nobody lives here. I’m like, I know people live here, I know half the rooms are people right here. Just go and do your — I gave him the bag of cash and I said, just give me whatever for a year that this cash will pay for. At the time, rents weren’t as high and he says, “What are you, a drug dealer? I’m like no, “I work at HBO. That clenched it because I work at this television company so I was…

[0:28:29.6] RN: Yeah, credibility.

[0:28:30.9] JA: Even though I was a programmer at HBO, I didn’t say I’m making TV shows at HBO. He said, “Okay,” he gave me a room and then I just gave him the cash and then I lived and then I moved to Manhattan.

[0:28:41.7] RN: How much did you actually get? Do you remember what it cost to live there for a month at that time?

[0:28:47.2] JA: Yeah, because I moved, what happens in the Chelsey hotel are not anymore because it’s sort of closed down but after 130 years, it closed down but I moved from room to room, I think eventually I was paying about $1,900 a month. It was cheap. Now you can’t — you wouldn’t be able to do that for like five, six thousand a month. New York got more expensive.

[0:29:00.0] RN: At HBO, it brings back something I read was that you spent three years interviewing prostitutes?

[0:29:12.9] JA: Yeah.

[0:29:13.3] RN: Tell us about that experience?

[0:29:15.9] JA: HBO didn’t want to have anything to do with the internet, maybe they’ll deny this now but — so one time, I spent the weekend basically creating an intranet for every — I hooked up all the databases and I even put the kitchen menu. You know, they had a great dining hall, I put the menu online, I made this intranet website and then I demonstrated it and they were like, “Oh my gosh, this is like amazing.”

I said, “Okay, well let’s make an internet website,” They had no website, they didn’t even have a domain name. They had to buy HBO.com because there was a medical supplies company named HBO. It was in Atlanta, Georgia actually. Did you say where you’re from? So HBO and company was around then, I think they got bought by somebody, but they paid $250,000 for the domain name HBO.com in 1995.

[0:30:00.6] RN: I can only imagine what it would be worth now.

[0:30:01.9] JA: I can’t imagine. Yeah. So I said to them, “Why don’t’ you let me, just like you do original programming for TV and you're so great at it which is why I wanted to work here, why don’t you let me do original web shows?” They said, “Okay, well what?” I said, “How about I go around at three in the morning on a Wednesday night, not a Saturday night because everyone’s out for their partying or whatever. But a Wednesday night, if someone’s out at three in the morning, they’re up to something, right? If you were out at three in the morning on a Wednesday night, like right now, you’re 31 years old, you’ve got a wife…

[0:30:35.9] RN: I’m up to no good, yeah.

[0:30:37.3] JA: Yeah, you’re up to no good, no one’s up to any good. That turned out to be true, I would find somebody, I would try to find one person who was up to good and nobody was up to good. I turned over every rock in the city, it was about two and a half years and then they did let me shoot it as a pilot, they didn’t air the pilot but I did shoot a pilot and I got that experience, which was amazing.

It was really like a wonderful experience because I’m a shy, introverted computer programmer and I had to like, in the middle of the night, just go up to like every character you could think of. You can’t even imagine some of the people I had to go up to and just say, “Hey.”

[0:31:15.1] RN: Were you with a crew or is it just you?

[0:31:17.4] JA: Well, I would go up by myself and then like a couple of blocks away or a block away would be like one assistant and one video guy.

[0:31:24.7] RN: Just kind of watching to see how it’s going?

[0:31:26.6] JA: Yeah. Once I started a dialogue then they would kind of like hone in. I was mic’ed so everything was recorded anyway and we would take the transcript, I would interview like let’s say 20 people on a night, and then we would take the top four and make the transcript, I’d get a designer, do a whole designer around and we put it up on the internet.

We’d take stills from the video and a photographer and so it was great. Yeah, I interviewed like maybe two and a half years, 20 people a week, I interviewed like over 2,000 people.

[0:32:00.8] RN: How many were prostitutes just out of curiosity? That’s out that late. If they’re not prostitutes, what the hell are they doing out that late?

[0:32:04.8] JA: Okay, who is out at that time? It really was like this alternative lifestyle that’s out at that time. There really is an alternative lifestyle. Nobody who was out at three in the morning, really works a normal job. There’s a whole sub culture, I kept running into the same people over and over again.

There’s a whole sub culture of people who live and thrive and are alive at three in the morning. I’m an early sleeper so that’s why I wanted to see. Yeah, maybe like a quarter will be prostitutes, another quarter would be some kind of drug dealer, another quarter would be people who were like up to something but you don’t know what. A lot of people were up to something, they’re not telling you what.

You learn very quickly, by the way, to recognize who is lying and who isn’t. There’s lots of skills in terms of determining who is lying. So I’ll tell you the greatest skill is, if somebody doesn’t answer the question, it means they’re lying. I’ll give you a great example. If you ask your wife, “Oh, where were you last night,” and she says, “I was out with friends, why?” She’s lying because she didn’t answer the question.

[0:33:14.4] RN: Got it.

[0:33:15.0] JA: You didn’t ask her who she was with, you asked her where she was. That happens all the time like…

[0:33:21.2] RN: Did you just naturally kind of start picking that up or is that something you — when you’re going out to interview this people, were you reading beforehand of how to best navigate this?

[0:33:32.9] JA: No, you pick it up because what happens is, I found myself getting really annoyed if — you could tell right away if somebody was being authentic or not. I could talk to a transvestite prostitute and say, “Well why are you here?” She could say, “Well, I was in and out of — you know, my parents were drug addicts and died, I was in and out of Juvie’s and then detention homes for my whole childhood, I was raped and abused constantly and so it really made me confused about what my sexual orientation was. But looking like this now, because I’m halfway between operation, the only thing I could do is sell my body and Juliani is pushing us more and more west so it’s in the Meat Packing District.”

This is someone who is being authentic and being honest with me, I could start asking questions. Or, I could find someone who is in the lobby of some 25 year old who is in the lobby of a hotel, he just rides in there on his bicycle and I say, “Oh, what are you doing?” He’s like, “Oh, I’m visiting my mother,” and I could say, “Why are you visiting your mother at three in the morning and what is your mother doing living in a hotel?”

He’s like, “Well, I love my mother, there’s some weird answer,” you know? Then you realize it doesn’t quite, nothing’s adding up. You know, you start to get a sense when people are making sense and when people are not making sense and if I feel that sense of annoyment, it could be because they really just don’t want to talk to me or it could be because they want to talk to me but they’re not going to tell me what they’re doing because they’re going to lie. That would be about like a third of the time.

[0:35:14.4] RN: Is there anybody back from those days that you’d go up to or that you went up to that really stuck with you, their story, that stuck with you through all this years?

[0:35:22.2] JA: Yeah, many people.

[0:35:24.8] RN: What’s one that sticks out?

[0:35:25.8] JA: Well, just all the pain, I mean, I feel like it’s a really interesting question because you know, since then, I’ve dealt a lot with all these things we were talking about earlier like entrepreneurship and let’s say writing or finance or speaking or all these BS self-help kind of things. But, what you realize is that during the day, everybody hides. Everybody hides in their suit, in their tie, and their job, and their cubicle and there’s many layers between what you see and who they are.

At three in the morning, there’s really no hiding. It’s dark out, that’s the only hiding and everything else is kind of like what you see is what you get for the most part. That’s why even the lying, you could tell they’re lying. During the day, everyone’s — 100% of the people are lying.

[0:36:17.6] RN: Sure.

[0:36:18.0] JA: What stands out is the suffering and like people are — like everybody here talks about, “Oh, be a minimalist, that’s such a great way to live.” I’m talking to hundreds of homeless people, those are the real minimalist. You know, they’re suffering and they’re mentally ill and like, or you talk to people who are cheating on their wives or cheating on their husbands or you talk to drug dealers who are also pimps and you kind of see them how they’re kind of managing their business on a really like violent way.

I’ve been out to Rikers Island at three in the morning, you know, sneaking there. There’s only one bus that goes back and forth that has to go back and forth 24 hours a day. You see just awful things like who’s going out on the bus and then who gets on the bus to go back home, because if you’re bailed out at two in the morning, you got to leave, they got to let you out.

I don’t know, just every week, I would see just the worst thing. This is New York City so yeah, it’s not — I don’t know, the worst city in the world but when you kind of get to the drags of New York City, it’s pretty bad. Even now. Now, it’s much better than it was 20 years ago but it was pretty bad then.

[0:37:23.5] RN: Right. So obviously you saw a lot of people that are going through really tough times just along your journey. I know you mentioned to start when you’re on the set of billions. What’s been your absolute rock bottom lowest point in your business journey?

[0:37:36.9] JA: Yeah, you know, it’s funny because I would say the most depressed I’ve ever been is not the same as a rock bottom. There’s never a one point where you could say, I mean, for some people, you always hear about this and kind of like rehab culture. There’s this one point where you hit rock bottom and now you seek help. That never really — that mythology is not really true because you hear rock bottom, you go to rehab, you go to a 12 step thing and then you get out and then 80% or 90% of people relapse into their addictions and their bad behaviors.

There is no one pivotal moment, I mean, the most depressed I ever got was that first business that I described, after I made that diamond website, suddenly, everybody was asking us to make a website, every entertainment company. Because I just made HBO.com also, every entertainment company in the world like you name an entertainment company that existed then, they asked me to do their website. We built an expertise really quickly of building entertainment websites and so we built a fairly big company very fast, these companies were desperate to make websites because nobody had a website then.

We made everything from americanexpress.com to timewarner.com to Miramax, Disney, you know, all these websites we were making and charging hundreds of thousands of dollars at that point for what you would do for now like for free now in WordPress, we were charging hundreds of thousands of dollars for.

We sold that business when I saw, as the guy making the website, I saw this is not rocket science and that more and more people compete and as Peter Teal so famously says, you don’t want to compete. You want to get out before your competition comes in. We sold it, we made every decision great and then I was an idiot. Because you think if you’re smart in one area, you’re going to be smart in every other area.

So I won’t go into the whole mess of how I lost all this money but going from millions to zero, losing a house, losing — getting so depressed and making, maybe I made like a hundred bad decisions in a row or more. Maybe I made like 10,000 bad decisions in a row and I couldn’t make a good decision, and I was losing money every day. I lost millions, I lost everything and everybody stopped talking to me and I had no friends and again, I lost this a beautiful place where I was living to live in like — I had to take my family, I was like, going back to the place with cockroaches practically.

And of course, this is all relative, right? Because I just told you about all this homeless mentally ill people and prostitutes, I mean, they certainly had it much worse. But, you know, your problems when you’re experiencing them are relative. I was feeling regret over losing all this money. So here, I was just talking about all these homeless people and mentally ill people and prostitutes and everything. But iI’s all relative.

When you’re feeling like I just did such a — I worked so hard on this business, I was working 23 hours a day and you have to deal with customers and employees and I really felt, and we did a really good service. I mean, no company had this websites and we really worked hard and then I just squandered it all and there was this .com boom that was happening so one of my, it was like winning a lottery ticket, I thought I was an idiot for losing this. So I was so depressed because I thought I was never going to make this money again, I had to get rid of — I lost everything, I had to move far away and…

[0:40:57.3] RN: Did you think you just got lucky or?

[0:40:59.8] JA: Yeah, I thought I just got lucky. So I refused to acknowledge that I worked hard, I just thought I got totally lucky. Then I thought that was it. I’m like dead, you know, of course I considered suicide. I won’t get into that whole thing and — but that wasn’t rock bottom. That was rock depression and by the way, it wasn’t like depression that I needed antidepressants and then I’m going to start feeling good. I did bad stuff so I had a right to be depressed, and I didn’t know how to get out of that.

So I did talk therapy, I did meditation, I did try antidepressants, nothing helped at all. Like zero things helped. It wasn’t like I was, they say, it wasn’t like I was resistant to the medication, just medication had nothing to do with what was going on with me. I deserved to be depressed, I really screwed up.

[0:41:48.0] RN: What was it that was able to, that you’re able to do or find that really helped you start on the upswing again?

[0:41:52.7] JA: Well, so this was before hitting rock bottom but what I was able to do was say, “Okay, I’ve got two kids, one of them was a tiny baby, the other one was like a three or four year old. I was just, I had like $143 left in the ATM, I remember checking it that one last time. I was like, “I have to get myself in gear, I have to start being creative again.” I started — well, A, I started taking care of myself. So I started eating better, I started exercising more, I started sleeping better and I started hanging out with a better group of people, people who would uplift me, people who were doing things that I was interested in doing, people who I wanted to model myself after.

I started being creative again. So I would take a bunch of books to a café in the morning, I would read them, I would take a waiter’s pad and I’d write down 10 ideas every day just to exercise this creativity muscle. I started sharing these ideas with other people to maybe get them interested in working with me. That really worked.

So over time, that started giving me ideas that I started getting excited about again. Other people were getting excited about them because I would share these ideas and other people would start giving me opportunities and so out of that, I got a writing job because I pitched a writer on “here is 10 ideas for articles you should write”, that he should write but he said, “These are so good, why don’t you write them?” They paid me to write them and then another guy, a hedge fund manager I said, “Here is 10 ideas, here is 10 pieces of software you could have and I’ve been using them and they work.”

[0:43:21.7] RN: Why are you doing this? Why are you creating — so you’re just creating stuff for other people, sending it to them just in hopes of that — what’s the point of doing it?

[0:43:31.8] JA: The point of doing this is nobody succeeds on their own, zero people succeed on their own. Every person in the gazillions or whatever has helped other people and built something with others. Just a classic example, Google. Larry Page and Sergei Brandon worked together but that’s not just it. They had their professor who was helping them with the algorithm. That’s not just it, then they had one of the cofounders of Sun wrote them $100,000 check to help them, that’s not all, Jerry Yang gave them advice from Yahoo.

But that’s not all, they took ideas from a patent about how you rank scientific papers and they put that in the search algorithm, they were the first company to do that. So this huge group, they were surrounded by very smart Stanford students so…

[0:44:22.4] RN: You're saying, give value out and then you’ll get it back basically?

[0:44:25.4] JA: Yeah, I mean, they were constantly giving value out and they were constantly building the universe of people around them. You know, Craig Silverman, their first employee was I think an ex-Stanford student. Marissa Mayer was going out with one of them or friends with one of them or she was in Stanford, I forget.

She became like the second employee and designed the logo and then they worked out of I forget, you know, another girlfriend’s garage. You have to be around good people who are going to help you and I need it to be, I wasn’t around anybody and you can’t just write to Warren Buffet and say, “Hey, I’ll buy you a cup of coffee and let me pick your brain.” I mean, I have this happen all the time.

[0:45:09.5] RN: He doesn’t need a cup of coffee.

[0:45:11.8] JA: Right, he doesn’t need a cup of coffee from me. He needs ideas of how he’s going to put his $50 billion to work.

[0:45:16.5] RN: If you send him 10 tips on investment advice, why should he listen to you though?

[0:45:22.8] JA: So by the way, I did send him 10 tips, yeah.

[0:45:23.5] RN: Did you? That’s amazing.

[0:45:25.3] JA: But he didn’t respond, which is fine, he didn’t have to respond. I sent 40 people tips and three people responded. So, again, there’s no obligation for anybody to respond. They’re all busy people. People call me and say, “Hey can I have a coffee? You’re someone who I really want to learn from.” Sometimes I have time but sometimes I don’t. I really love to read and to write and I really want to improve as a writer and I really want to improve my ability to write in such a way that can help people, and then I do have other businesses that I’m still involved in.

So where do I have the most effect on my own life and on other people’s lives? Sometimes I can’t — and people don’t even understand how to approach other people. Like, I had someone today, just today, he was like, “Hey can you introduce me to so and so?” And I’m like, “Well why am I going to give — you just gave me homework, and then I’m going to give him homework. He’s going to now have to feel obligated to me to respond to you, I don’t even know who you are and I don’t know what you want from him,” and he says, “Well, I have an event that I want to invite him to,” and I’m like, “Well, why don’t you just reach out to him?” And then he put in caps, “LISTEN, HOW ABOUT YOU CALL ME,” and then in lower caps, “and then I will tell you more about it,” and I’m like, “So I have to call you in order to find out about a favor I’m supposed to do for you to get someone else to do a favor for you?”

So fine, if we’re all like these amazingly altruistic people who would sacrifice our own lives all the time for other people then yeah, sure I’ll call you and then I’ll call him and then I will convince him to go to your event. Or I could take that half hour or an hour or however long it is and I could read a great book and then write a great post that a 150,000 people will read and do that. I have two choices, those are the two choices I have, what should I do?

So people don’t really know how to approach people. In order to approach someone they have to compete with that and that’s just with me. For Warren Buffet, I have to compete with someone who really is giving him a $1 billion in value and I can’t compete with that. So it’s fine if he doesn’t respond.

[0:47:38.0] RN: So if somebody is listening and they’re not sure about how to greet people like we know, you said you needed to surround yourself with better people, people that are doing things that you find interesting that you want to do. What would you recommend for somebody to reach out to people that are doing great things? Is it exactly what you just said like figure out 10 things you can send them that will help them?

[0:47:54.9] JA: There’s always ways you can help some people. So almost everybody can help somebody and so look at your own situation. You were describing to me your schedule in the past few days because you are gearing up to launch this podcast. You interviewed people, a lot of mutual friends we have in common, you went to their location so you made it easy for them. You asked them if they could be on your podcast. They’re not doing it just to help you when you launch your podcast. It’s good for them to — some podcast is good for them to be on. Some might not be good for them to be on, but they’re making a decision about if it’s good for them.

Now A, there’s a little bit that they want to help you, you are launching a podcast and you are part of a community of people. How did you get to be a part of that community of people? You went to a couple of conferences, you’ve put in the time networking. You exchange maybe emails and other ideas for people. You maybe made introductions that you thought would be useful for people.

So overtime you built up credits with people and they’re repaying a little bit. They don’t have to but they did and so everybody can have strategies to build up their network. It’s a slow process. Tomorrow I can’t build up my network but I can continue to build the network that, for instance, a lot of people say to me, “James you have the most incredible network I have ever seen,” which is ridiculous. Because I have so many horrible networking skills. I’m really bad at returning emails. I’m really bad at returning phone calls.

If I meet you at a dinner and we have so much fun talking and then I say, “Oh we’ve got to follow up and do these five ideas,” you might never hear from me again. Even though I really want to, I’m just really bad at it and I am shy and then I get awkward like, “Oh I didn’t return their phone call,” so I feel bad later on. I’m not going to return it now and yet overtime, if I do three things a day to build my network over a period of 10 years I’m going to have a phenomenal network and that’s what happens.

[0:49:51.8] RN: That’s a good point. I love your philosophy on growing 1% each week. Also for somebody sitting at home, what would you recommend for somebody that wants to do that but they don’t know necessarily what skills to start developing in terms of growing 1% each week?

[0:50:05.8] JA: Well everything has to do with energy. So you want to do the things that keep you as energized as possible because let’s say you’re sick in bed, you’re not going to have the energy to do anything. You can’t start a business if you are sick in bed. So how do you get energy? Here’s the most obvious thing, at the end of the day you’re tired and so this body was made to sleep so that you get energy by the morning. Sleep gives you energy. Food gives you energy. Good food gives you energy. Exercise, a little bit, gives you energy so that’s one thing.

Being around good people who support your efforts gives you energy. Being around bad people who wear on you doesn’t give you energy. It depletes you of energy. Being creative gives you energy. So doing stuff that you love doing and part of that is a lot of people don’t know what they love doing so just a basic thing I recommend to people, just write down 10 ideas a day, “Here’s 10 businesses that might be fun.” They might be all bad ideas. It doesn’t matter. The whole point is just exercising.

We’ve let our idea muscles as atrophy as a society so just exercise the idea muscle so they build up within three to six months of doing that, you’ll be an idea machine. Your idea muscle will be bulging, you will have a ripped and jacked idea muscle and then you’ll be creative every day and that will be exciting, and then having energy, regrets and anxiety is also depleting your energy. So having strategies for dealing with those. If every day you check those boxes, you will grow as a person.

[0:51:28.8] RN: So the idea of Fail On, that being the mantra, the whole premise is if you are not failing you’re not growing. So how are you on whether you are doing it day to day basis or a weekly basis, how are you pushing yourself outside of your comfort zone? I listened to your interview with Sarah Blakely and she said growing up that her dad would ask her every week, “What did you fail at this week,” right? Just to push her outside of her comfort zone. Is that something you try to incorporate in your life and if so how?

[0:51:54.3] JA: You know there’s a really interesting thing. I say yes to things that I think will A, be fun and B, take me out of my comfort zone and C, maybe will scare me. So for instance later this week I’m going to do standup comedy and I’m not going to market it. So I am just going to do it with a bunch of comedians, the audience will be…

[0:52:14.6] RN: Open mike type of thing?

[0:52:15.9] JA: Not an open mike, maybe like one level higher than that but the audience will be a random audience. Nobody who knows me or anything because like if I give a talk at a conference I like to make people laugh but that’s a friendly audience. This is not going to be a friendly audience. So that take me out of my comfort zone and it’s a skill I want to learn but then I called a friend of mine who I grew up with just by coincidence.

We went to first grade together or whatever and he’s a world famous comedian right now and I said, “I’m doing this because I’m scared” and he says, “Well…” and this is a guy who’s the top or maybe if a 100 people listed their top 10 comedians he’s on the bottom of the list and he said to me, “You learn that bombing is survivable. We all bomb and it’s survivable and that’s what you learn,” and so that scary to me. The thought of bombing scares me.

[0:53:13.8] RN: And you’ve done it before though, you’ve done a standup before. How did that go?

[0:53:16.1] JA: Yeah. I’ve done that before. That went great but that was the accusation, the comedian who was there told me, “Don’t get relaxed on this. Yeah everyone laughed but it’s a friendly audience. You did invited everyone.”

[0:53:26.8] RN: So you did well?

[0:53:27.8] JA: Yeah, I did great. I did great only because when I watched the video you can hardly hear me because everyone is laughing.

[0:53:35.8] RN: You should drop the mike on them and be done, standup comedy crew though.

[0:53:38.6] JA: I did drop the mike on that. I wanted it — it was funny because there’s one person who didn’t like it. I wanted to end that act in the middle of a joke. So I was dead in the middle of the joke, no punch line and I just stopped the act and I just wanted to do that just for the heck of it and one guy who was just very classic set out a punch line type of guy in the audience said, “I don’t know what you were doing there like what? You just walked off the stage?” So he didn’t like my act but everybody else, people got it and were even laughing then.

[0:54:06.3] RN: So your comedian friend said, “Don’t rest your [inaudible] on that, that was a friendly audience. You have to go do this in front of a hostile crowd.”

[0:54:13.2] JA: Yeah, don’t think you did anything yet.

[0:54:16.6] RN: So have you already drawn up all your jokes?

[0:54:19.1] JA: Not all of them, but some.

[0:54:20.0] RN: Let’s hear one.

[0:54:21.2] JA: Oh my god.

[0:54:22.7] RN: I guess on the spot.

[0:54:25.6] JA: I mean the problem is one leads into the other and then it leads into the other because I didn’t want to do just like stuff that was funny. I wanted to kind of…

[0:54:33.1] RN: Story tell a little bit.

[0:54:34.6] JA: Yeah but one thing is it talks about being a kid and I’m not such a good looking guy right now but I’m 49 or whatever but when I was a kid I was a monster and girls did not even want to be within a five foot radius of me and I had so much acne that it was so huge and so my pimple was so big that like scientists discovered two earth like planets orbiting around it and my pimple was so big it could scroll to the bottom of the Facebook feed. I just have a whole run with it, the pimple.

[0:55:07.4] RN: So just a self-deprecating stuff, I mean that obviously warms you to the audience right? Because you don’t take yourself too seriously.

[0:55:12.4] JA: Yeah and you know what my favorite body part was?

[0:55:15.7] RN: What?

[0:55:16.1] JA: My blind spot. Not so bad right?

[0:55:19.8] RN: Yep. So I actually made one up. This is actually one of my finer moments in comedy and I am not a comedian but I remember I had my wife and my sister there in San Diego at our condo at the time and we were having pasta. I don’t even know how it came up but I basically said, “Why couldn’t the pasta get in the house? Because he had Gnocchi.” Which was terrible but it was great.

[0:55:45.3] JA: That is terrible.

[0:55:46.7] RN: It’s terrible but it’s great.

[0:55:47.1] JA: Okay, but can you understand why that’s terrible and not that I am such an expert but you know why that’s terrible? Because it has nothing to do with you.

[0:55:58.9] RN: Yeah, that’s true.

[0:56:00.9] JA: Look at, like, let’s say the best in the world, Louis C.K. Louis C.K. doesn’t just say the stuff that’s funny. Louis C.K. sometimes says stuff that is really dark but it’s funny because it’s about him in this weird way and I want to be better at that not that joke wasn’t funny.

[0:56:10.9] RN: No you can destroy it, it’s fine. It’s terrible I get it.

[0:56:14.3] JA: And then I have this whole thing and this is I think about this with my kids. I remember as a kid — it starts off like, “Remember winning? Because I remember as a kid in order to be acknowledged you had to win. You got a trophy only if you won. Now kids get to participation trophy. If you just show up, you get a trophy and so what happens as an adult, we still get this.” I have a Mackintosh, it’s the easiest computer in the world to use, right?

But when I break it, what do I do? I go to the Apple store and it’s the modern equivalent of the participation trophy. So I’ve just broke the easiest computer in the world to use and I have to go to the genius bar. Like they called me I’m the stupidest computer user in the world but, “Oh here, there’s a seat right here, there’s a table for two at the genius bar. Enjoy yourself sir, we’re going to fix your computer that you are such an idiot you broke the easiest computer in the world. It’s made for an idiot to use.” So that’s the modern equivalent of a participation trophy.

[0:57:13.2] RN: I love it. So I was listening to a podcast that you did, you also had A. J. Jacobs on your show and he was talking about and I resonated with this because I do the same thing that he said, which is kind of embarrassing to say but he was talking about how he pees in the sink sometimes and he just does it in the bathroom sink but I do it when I can’t just hold it anymore and I just have to go and somebody is in the bathroom an somebody is in the other bathroom so I just let it rip in the sink. What’s the weirdest thing that you do that 99% of the people don’t know about?

[0:57:40.8] JA: Probably this is going to sound odd, I probably break dance for about an hour a day.

[0:57:46.2] RN: Just by yourself?

[0:57:48.2] JA: Yes, that’s my exercise.

[0:57:49.0] RN: Is it really?

[0:57:50.8] JA: Yeah and I have been doing this since I was 12.

[0:57:52.3] RN: That’s amazing.

[0:57:53.3] JA: And I’m 49 now so you can imagine I put in my 10,000 hours breakdancing. That’s the only thing I put in 10,000 hours at that.

[0:58:01.5] RN: And so you’d consider yourself world-class?

[0:58:04.3] JA: Well, I don’t know because I would say world-class is a lot, right now, it’s a lot more physical like you do a lot more things like on the floor. But I’ve run into kids who are into it and right in the park here and I’ll watch them for a whole and then I will show them a little bit what I can do and they’re equals. They’ll exchange moves and talk and stuff so it’s like a subculture I can fit in even though I am like a 49 year old white Jewish guy here.

[0:58:35.9] RN: Hey but if you can hit the streets at 3 AM in New York and mingle and mix in with that crowd, you’re probably pretty comfortable in this situation I would guess.

[0:58:41.5] JA: Well what’s great is Union Square, which is just a few blocks from here, if you go there at midnight, there’s two subcultures that I love very much that are hanging out there particularly when it’s a warm weather. There is the chess subculture so I will know everyone there and I’ll sit down and I will play and I have known these guys for 20 years and then there’s this breakdancing subculture that’s right next to them. So I will go back and forth between one subculture and the next and they all know who I am and it’s fun. I feel like, “Oh okay, that’s why I live in New York City.

[0:59:10.0] RN: That’s amazing.

[0:59:13.3] JA: I would like to say there’s a homeless entrepreneur subculture right like next to it but the entrepreneurs are well asleep then.

[0:59:19.4] RN: Or awake dealing drugs, pharmaceutical sales.

[0:59:21.7] JA: Yeah or Johns for the prostitutes.

[0:59:24.8] RN: Yeah exactly. This might be tough but if you had to single out one person throughout your life that you had to say has had the most profound impact on it, who would you say? Whether it’s business, personal, just that’s had the biggest impact.

[0:59:40.2] JA: My daughters, probably. I didn’t want to have kids but now I have an 18 year old and a 15 year old and they’re incredible. So they’ve certainly had — you don’t have a kid yet, right? So when you have a kid the impact is so much and it’s negative, it’s the worst thing in the world but then it’s also really good. So it’s impact in both ways so the range so maybe that’s why it’s the most impact. Some people have a really positive impact but that’s like unidirectional.

[1:00:06.5] RN: And so you are saying your kids have had the biggest impact in the negative way but also positive.

[1:00:10.6] JA: Yeah, they have the widest impact. The range of their impact has been excruciating so.

[1:00:16.2] RN: Got it.

[1:00:17.5] JA: And I would say this to their face, they know but they know I love them.

[1:00:20.7] RN: Just on that note, in terms of how you’ve been able to raise them and they’ve seen a lot of your journey through business, through your ups, through your downs, what have you been able to teach them about failure?

[1:00:32.1] JA: I think this is hard. You can’t really teach kids, right? You can be an example for kids and I think the example for kids that I think there’s lots of things like let’s say a 100 things you might be an example for. So I think one example I’ve set for my kids is that I don’t really get angry and when bad things happen, I tend to ask why has this happened and have you thought about this and I think to myself, “What am I really afraid of here if a child disobeys me. What am I really afraid this happening? Rather than yelling at them don’t disobey me.”

They see me interacting with other people that maybe I should be upset or angry about and I said, “Okay we all know this person’s got a problem so I’m not going to be angry at them. Or, this person screaming across the street might be crazy so I am not going to be crazy back.” In terms of failure I try to be a good example but those other examples in their life too, which is their peer group.

Their peer group is obsessed with getting A’s in school and so no other part of life expects you to get A’s in anything. A classic example is if you are a baseball player, if 30% of your hits make you safely to base then you’re going to be in the Hall of Fame. That’s 30%. In business I would say 40 to 50% of your decisions are correct. You are probably going to be a millionaire or you’re a hall of fame business person, and that’s a failure right? 40% is an F.

That’s the worst, you’ll get thrown out of school and I try to explain this to my kid when I was giving her tennis lessons and she was getting frustrated that not every one of her serves was getting to the other side and so she was very upset at herself and she was very critical of herself and I explained this math and she sort of got it but she didn’t really. So she started to getting really good at getting an A at serving, meaning every serve would land into the box.

But she would hit just these really light puffy serves to just get it in the box and so I started to slamming them all back and she would get frustrated because she couldn’t return them and I said, “If you are hitting every serve in the box correctly then you are not hitting them hard enough. You are not challenging your opponent enough,” and so I don’t know if these things she learns from or what? I think she didn’t learn from them but then she plays a match with other kids and she sees what I’m saying comes true. So she starts to adjust. So kids learn from lots of different inputs not just their parents.

[1:03:10.5] RN: If I was to ask them, “What is the weirdest thing about your dad that most people don’t know what would they say?

[1:03:15.4] JA: I think they would say…

[1:03:17.4] RN: The breakdancing thing or something else?

[1:03:19.8] JA: No, Josie my oldest has videotaped me breakdancing and she put it on her Instagram and everybody said to her, “Oh your dad is cool.” But…

[1:03:29.5] RN: That gives you street credit, yeah.

[1:03:30.9] JA: But I think they would definitely say I was not anything like their friends parents. I don’t know what specifically they would say, I don’t know.

[1:03:38.0] RN: You only have 15 possessions so that could be or less than 15, right?

[1:03:41.6] JA: Say that again?

[1:03:45.3] RN: 15 possessions or less? You’ve cut out a lot of stuff in your life.

[1:03:46.5] JA: Yeah, they could pick a lot of different things and say, yeah.

[1:03:49.1] RN: That are kind of different than standard mold.

[1:03:52.2] JA: Yeah, I think they would like to be like that but they are not quite — I think they’d get a little nervous, maybe I am a little too much for them. I don’t have enough structure in my life for them.

[1:04:02.9] RN: Yeah, I guess who have enjoyed interviewing the most? You obviously have a very long well known podcast and you’ve interviewed amazing people, what’s one that really sticks with you that taught you a lesson? Obviously you write a lot of posts of “what this person taught me” and you jot them down like the takeaways, but what is one that is sticking with you right now that you are implementing in your life?

[1:04:25.1] JA: It’s a good question only because there really is no answer and I feel bad saying that because it almost sounds like a cop out. I can say, “Oh they’re all great,” because I don’t want to insult any one of them but when I really think about it A, I’ve only interviewed people who I’ve really respected from the beginning. So maybe there might be actually let’s say out of the 220, there might be two or three that decided, “You know what? I really don’t like this person anymore like I kind of dislike them.”

[1:04:51.1] RN: Did you still publish the podcast for that?

[1:04:52.9] JA: One person I didn’t — two people I didn’t and then there were a couple of others that I did but whatever. But almost everybody out of the 220 I really liked a lot. They were my heroes or they were my friends, and so I would say from a lot of the ones who were my heroes, I would do so much preparation and then you read a book, it’s not just the book then I had a hundred questions. I get to have the author right in front of me I can ask them any question I want.

So I ask all these questions so I learned a huge amount, but then also probably most fun for me is when I just have my friends on the podcast and we’re just like having a party.

[1:05:28.2] RN: Just like you and AJ right?

[1:05:29.7] JA: Yeah, me and AJ.

[1:05:31.4] RN: It’s so natural it sounds like you guys are just shooting the shit.

[1:05:34.7] JA: Right and AJ has written four or five New York Times bestsellers. He’s working on this fascinating project right now where he’s trying to connect up the entire world in one genealogical tree. So we could talk about that and we could address things and how he does things and how he’s creative. So there’s topical educational things we could talk about but then we could just really start getting into it and just having fun and we have a lot of fun.

I have an unaired podcast with AJ because I am thinking of doing a mini-series where we each challenge each other and then we come back and talk about what happened and then challenge each other again and so the first episode of that I haven’t aired yet.

[1:06:12.7] RN: It sounds like you should air it that sounds really interesting.

[1:06:15.6] JA: Yeah, just remember I have about 10 friends on recently and you see this with Joe Rogan’s podcast. Joe Rogan does such a great podcast because most of the time he has on his friends and maybe the friend will be like some guy from Ultimate Fighting. He was an MMA announcer, so some guy from Ultimate Fighting championships but then they’ll just talk for two hours about UFO conspiracies and I just love how he veers around and he’s just relaxed the whole time.

Like he’s not even interviewing, they’re just like hanging out but Joe is so smart and even when he is not knowledgeable on a topic, he’s able to dig in and ask smart questions and I love that kind of style. I want to veer a little bit more towards that style.

[1:07:06.7] RN: Like less digging into business, experience, past, etcetera and more just seeing where the conversation goes and going crazy directions?

[1:07:09.9] JA: Yeah because I have to maybe have to have a little bit of faith that I’m going to ask good questions that are relevant and if somebody wants to read this guy’s book, they could read the book. I don’t have to necessarily…

[1:07:20.8] RN: Do an outline of the book in the podcast, right?

[1:07:22.5] JA: Yeah and in fact I have started doing that recently where let’s say someone’s been on Tim Ferriss’ podcast. I’ll say, “You know you did a great podcast, you know, Tony Robbins, you did a great podcast with Tim Ferriss, everybody should listen. 100% of the listeners should listen to that one if they want to get the basics of your book and stuff. Now let’s start talking about the things I’m really interested in and I am happy recommending my friend’s podcasts as well.

So if they do a good job with Tony Robbins or whoever, I don’t have to do the same thing. Then it’s like, “Oh I have already heard this guy,” I want people to know when someone comes on my podcast they’re going to get a different experience and I am even going to take that like a step further I think in the next few months like maybe do some stuff on the street with the guests or whatever. So we’ll see, I don’t know.

[1:08:08.7] RN: You do a ton of research on the guests that you have on the show and I try to do the same but what I find is that sometimes just trying to overload with that all of that research and information almost paralyzed me a little bit. Like even coming here today I was a little nervous and just having to lean in the fear a little bit of…

[1:08:28.8] JA: Yeah, you’ve got to lean into the fear. Like I will tell you before every single podcast about five minutes before I am praying that they cancel. Like here I am, I’m at the studio, I’m waiting for them, I’ve read all their books like it would be incredibly rude for them to cancel on the surface. But I’m praying for it to happen because I am just so nervous, I’m just going to mess it up.

But I am so excited for Monday so I am really a chess player. I have played in tournaments as a kid. I was New Jersey’s junior chess champion. I am a chess master and so for 35 years I have been following the career of Gary Kasparov who was the world chess champ. He was the number one ranking player in the world from 1984 to 2005.

[1:09:13.5] RN: Wow that is a long run.

[1:09:14.8] JA: Yeah and then he was the first, I mean he was first for so many different things and finally I’ve been asking for him for two years to come to my podcast. So on Monday I am going to have him on my podcast and I’m really nervous because he’s like a superior human being to me in every way. So what am I going to talk to him about and I am just like this, you know, I am a strong chess player for everybody else in New York City, I am a strong chess player but I am like a gnat compared to him.

So and I, for many years, have judged my life on how good I was at that. So I’m nervous and excited and I hope he’ll play me in the game of chess. I’m going to bring a chessboard.

[1:09:56.2] RN: That would be awesome.

[1:09:57.9] JA: We’ll video tape it if he’s willing.

[1:09:58.0] RN: How do you balance going, obviously doing a lot of research but also like letting the conversation kind of go where it goes.

[1:10:03.9] JA: If I get curious about something. I don’t know, when I was interviewing Coolio the rapper, I could ask all about like — you can‘t let anything go, if you’re curious about something, you have to stop and say, like he said his name and then, “You know, I had some cocaine problems but then after I got off of that,” — Wait a second. How did you get into having coke problems? How do you get out of having coke problems? Have you ever relapsed, you have to — did you have problems with your, did your parents have abuse problems? Do your kids have abuse problems? What happened to your marriage while you were having this?

So you have to get into all — everything that for me, it’s the same thing I would do in my interviews with prostitutes 20 years earlier, if I just get curious about something, I’ve got to ask. I’m never going to ask again, never going to talk, I will never talk to Coolio again for the rest of my life. So if I don’t ask this question right then I’m never going to ask it.

[1:10:56.7] RN: Got it. For somebody back home listening or at the gym or in their car that maybe has a corporate — I know you write about this a lot that has a nine to five job per se, they know they want to do something else, they want to get out on their own but they don’t know the first step to take. What’s kind of that directive item that you tell them to take for step one?

[1:11:15.4] JA: Well, again, a lot of it has to do with — there’s like, I could say take a class on coding or put your ideas up on Kickstarter and see who funds. None of that works. You have to really get back to the basics, which is be around better people and write 10 ideas a day to turn your idea muscle, which maybe or maybe not has atrophied, but turn it into an idea super machine, like a super nova machine. Be physically healthy, get sleep and read and so on, you have to kind of get to the basics.

[1:11:50.1] RN: It’s being patient, right? Because a lot of people want that perfect business idea and they want to go but…

[1:11:54.5] JA: I mean, perfect business idea but I started my business on the side, I stayed at my full time job for 18 months while I had a functioning business with employees on the side and nothing happens overnight. You know, I’m running a business now and I’m also thinking about other things I can do. You always want to have an evil plan. You always do your thing and then you have your thing on the side.

That’s how you can choose yourself. That’s how if somebody says, if somebody treats you poorly, you can say, “Fine, I’m moving away from this person, I’ve got my evil plan, I’m going more towards that.” You can have multiple evil plans so you diversify your plans. Now, you don’t want to have 50, but you want to have three or four or five things going on the side at different levels, maybe some things are on the back burner but then they come up again and…

[1:12:46.5] RN: It’s almost contrary, a lot of stuff I heard in terms of entrepreneurship and having like laser focus on one thing.

[1:12:51.5] JA: Who is ever laser focused? Tell me business because I don’t know any.

[1:12:56.5] RN: Sure. I don’t know, this is just the typical entrepreneurship advice that you hear, that’s kind of cliché.

[1:13:00.4] JA: I know, everybody says that and people criticize me and they say, “Oh you’re wrong, you have to focus.”

[1:13:09.7] RN: Where is the example?

[1:13:10.5] JA: You could say Google had 99% of their revenues come from AdWords but is Google focus, they spend billions of dollars on Gmail, they’ve cornered 70% of the operating systems in the phone market. They have all their formerly Google X stuff, which is —I mean, they even have, they’re trying to cure cancer in one of the projects, they’re trying to have… deliver Wi-Fi for everyone, that’s Google.

Facebook owns WhatsApp, Instagram, Oculus, they’re in everything from Facebook to virtual reality to people making cheap phone calls internationally, trying to think, Amazon of course, you know, they’re constantly — you can say, not only did they sell books, clothes, computers, furniture and everything but then they even went into enterprise storage.

My business stores, all the stuff in the cloud on Amazon. They’re an enterprise software company. Microsoft went from consumer to enterprise. Sometimes people start off with one product just because you have to launch or something but then, as quickly as possible.

[1:14:12.4] RN: Look at if there is…

[1:14:13.2] JA: Yeah, you have to. To stay in business.

[1:14:14.4] RN: We haven’t gone into your business too much per se right now and I’m going to respect your time because that could be another full episode, right? What are you most excited about now within your current business. What are your different revenue streams and what are kind of your 2017 goals?

[1:14:27.7] JA: Well, I’m excited in helping people figure out how to transition from corporatism, this idea that’s lasted for — let’s say in the 1800’s was all about the industrial revolution. We realize that we could start to use technology to make products more efficiently. So we built factories and we built in assembly line and we kind of figured out this whole method of moving classism into the corporate environment so you have everybody form executives to factory workers.

Then we had corporatism where the idea that you could have this big corporation and people have an education so they could fit in different pieces in the corporation and they can move around in the corporation but the corporation would then take care of you for the rest of your life and then you retire.

Now, we’ve obviously moved, that doesn’t exist anymore but we’re transitioning. So we’re in this new economy where you know, we’re automating everything and AI is taking over a lot. Amazon’s about to open a store where there’s no cashiers, there’s no employees. You walk in, your phone recognizes what books you pick up, it checks you into your amazon account, it cashes you out and you walk out. So there’s no cashiers.

That’s just one example, there’s discrete driverless cars. There’s examples in every industry. So I’m really excited about developing courses and newsletters that really help people figure out how to take this next step in their lives and educate them on the skills they need to survive in this new economy and it’s not changing tomorrow but it’s going to change over the next one, five, 10 years.

People need to be reeducated into what’s happening so they can choose themselves, they can reinvent themselves, they can survive in this very quickly transitioning economy. I’m excited about that and, you know, it’s a business because I put a lot of work into it, I hired people to help develop this things and people are willing to pay for it, I know there’s a need for it because people are willing to pay for it.

[1:16:22.0] RN: You guys are doing well, I think I saw it at another interview, was it $18 million in revenue this past year?

[1:16:28.3] JA: No, we started in like February 2015 so a little more than two years and I’ll just say within those two years, we’ve had 30 million in revenues and about four million in profits. The business itself is going well and then profits are going up all the time.

[1:16:42.8] RN: What are the actual products?

[1:16:43.2] JA: Products are like, you know, kind of this, like a newsletter which describes different trends.

[1:16:48.3] RN: It’s like a monthly type subscription model?

[1:16:50.7] JA: Yeah, and then there might be products that kind of reeducate people on like how they should think about their finances and things like that. Then there’s products, you know, and these might be cheaper but I’ll have like a book club, this is what you should be reading right now or there will be videos of me talking about like here’s examples of somebody who bought a bunch of drones and made $50,000 in seven days, starting a business using this drones he built or bought.

You know, another person made half a million dollars last month because he bought stuff cheap on the EBay of china and sold it on Amazon here and I just have tons of examples like that or I’ll talk about the stock market and how it’s changing and how you can take advantage of it.

[1:17:34.6] RN: All pretty much info products?

[1:17:35.8] JA: Yeah, what would be example — I also sell my books, that way and the podcast has ads.

[1:17:41.2] RN: Are you selling more physical books or Kindle?

[1:17:45.8] JA: Both.

[1:17:46.1] RN: Would you know which one is kind of you sell more of?

[1:17:48.1] JA: Kindle.

[1:17:49.8] RN: Kindle has more?

[1:17:50.3] JA: Yeah, I sell my physical books to my subscribers, you know, I’ll usually bundle it with some kind of deal so they can get a deal on the books and then if they buy some other newsletter product, which again, I think there’s a lot of scam businesses out there in that industry and I hate that, I hate being — the industry itself is a tricky industry because there’s just so much scam but I try to really, I always say, for every single piece of information we put out there, is there a return on investment for the reader and that’s the mantra.

[1:18:22.8] RN: Just test kind of?

[1:18:23.7] JA: Yeah, that has to be important. If there isn’t, then I’ll shut it down.

[1:18:32.7] RN: Fair enough. All right, I’m going to respect your time, I know you guys want to go get dinner so thank you so much for joining me today?

[1:18:39.1] JA: Well, thank you. I really appreciate you coming over and taking the time and really being accommodating towards my schedule, I really appreciate it because we were obviously busy, just moving and everything today and worked out fine so I appreciate it.

[1:18:47.1] RN: It’s perfect, thanks so much and I will catch you next time, have a great one.

[1:18:49.0] JA: See you.

[1:18:53.4] RN: You can find James at jamesatuchur.com and you can also connect to James on Twitter. He’s @jasltuchur on Twitter, all the links and resources James and I talked about including more information on his latest book can be found at the page created especially for this episode. You’ll find it all at failon.com/002.

Finally, as I’m launching this project with a simple goal of getting people to take action by embracing failure, if you could do one thing for me to support my mission, I would greatly appreciate it. If you’d be so kind to rate and review the podcast, I would be ever so grateful. This will actually help the podcast be visible to more people that it could potentially help so if you feel it deserves a five star rating and you leave a review I’ll be sure to mention you by name in an upcoming episode as just a small way to say thanks. To rate and review the podcast you can simply go to failon.com/itunes or failon.com/stitcher.

[OUTRO]

[1:19:56.1] ANNOUNCER: That’s all for this episode of The Fail On Podcast. For more resources, show notes and action items to help you find success in your failures, sign up for our mailing list at failon.com.

For more actionable inspiration, we’ll catch you next time right here on The Fail On Podcast.

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