Lessons from Richard Branson, Tony Robbins, and Ray Dalio | The Tim Ferriss Show (Podcast) | Transcription

Transcription for the video titled "Lessons from Richard Branson, Tony Robbins, and Ray Dalio | The Tim Ferriss Show (Podcast)".


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Intro (00:00)

At this altitude I can run flat out for a half mile before my hands start shaking. Can I ask you a personal question? No, what is it? I'm a cybernetic organism living tissue over a metal entoskeleton. The Tim Ferriss Show. This episode is brought to you by 99 Designs. I've used 99 Designs for ages, since even before podcasting was a thing. And I've used them for all sorts of graphic design needs. They are fast and they are convenient. So whether you need a logo, website, book cover, or anything else, I've done competitions, for instance, for book covers related to the 4-hour body. 99 Designs makes great design accessible to everyone and it makes the process so much easier. I used them recently for artwork and illustrations inside of my Tau of Seneca set of books. So this is a collection of stoic writing and modern interviews and so on. So for the Tau of Seneca I decided to use their one-to-one project service. In this case you invite a specific designer to your project, agree on a price, and then work together until you're satisfied. And the artwork just blew my mind. You have to check it out. I kid you not. I also bought some of the artwork from Tau of Seneca as well as some artwork and logos and so on that your fellow listeners have had made at 99designs.com/tim. That's 99designs.com/tim. I really suggest you check it out. And right now you guys can receive a free $99 upgrade on your first project. This gets you, I think, 130% more submissions. So people who want to work with you and give you first drafts of what you're looking for. To access your free design, please visit 99designs.com/tim and click the link on the landing page. That's 99designs.com/tim.

Insights, Anecdotes, And Personal Stories: The Tim Ferriss Show

Introducing this episode's themes from The Tim Ferriss Show guests. (02:00)

Hello ladies and gentlemen and welcome to another episode of The Tim Ferriss Show. This is Tim Ferriss speaking. And I should clarify that this episode is an edition of The Tim Ferriss Radio Hour where I share the patterns and themes of world-class performers that I've identified after more than 300 guests on the podcast. This particular episode is going to explore success. What does that mean? What a slippery, dangerous term. And the particular guests I selected for this episode, I would say, represent not only achievement but also appreciation and a well-rounded version of what I consider to be a successful human being.

The adjacent possible, Mapplethorpe, and the Chinese finger trap. (02:38)

And by any objective measure, certainly financially or otherwise, I've interviewed some of the more successful people on the planet. And in the next hour, we will revisit specific conversations that discuss the tips, disciplines, habits, and mindsets, perhaps most importantly, that separate world-class performers who reach their goals from those who fall short. This episode includes wisdom from Derek Sivers. I learned this the hard way at my last company because we had a quarter million customers. So when I'd send out an email to everyone, if any sentence was at all unclear in any way, I'd get like 50,000 confused replies from people. We also talked to Tony Robbins. You've got to become an investor. You've got to be an owner, not a consumer. And the way to do that, frankly, we all know, but very few people do, and that's you take a percentage, you lock it down, you never see it, it's automated, and you put it aside for investment, and that just occurs. You'll hear from my good friend Chris Sacca. Venture capital, I mean, it's totally unfair. People give me their money. I draw a management fee off it, so they pay me to take their money and invest it for them. Legendary investor Ray Dalio. I think three things make up a successful life by and large.

How being a rule follower in school hurt me and other issues with authority. (03:58)

First, you have to have audacious goals. Big dream. And we can't talk success without including Sir Richard Branson. One of the best things my parents taught me, going back a long way, if I ever said anything about anybody, they would sit me in front of the mirror for ten minutes in order to sort of let me know how badly it reflected on me. As a preface before we jump into the conversations with these guests, I thought it might be helpful to set the stage. And that is with an observation that I have made, certainly, in interacting personally with many of my podcast guests and many name-brand folks in Silicon Valley and elsewhere. And that is the following. The superheroes you might have in your mind, the idols, icons, elite athletes, billionaires, and so on, are nearly always walking flaws who have maximized one or two strengths. Now, I'm not saying that is true of the people in this episode, but in general, this is true. And there are some mutants, there are some freaks of nature who are the equivalent of the Usain Bolt of the business world, for instance, but they are rare. In general, humans are very, very imperfect creatures, which would be a generous way to put it. And you don't succeed, and most of the people I've interviewed don't succeed, in quotation marks, because they or you have no weaknesses. Instead, you succeed because you find your unique strengths and focus on developing habits around those strengths. And you can get only a few things right consistently and outperform almost everybody else.

Why hardcover books matter and some almost-certainly-true rumors about pirates. (05:32)

And I think that, for instance, the investment styles of Warren Buffett and Charlie Munger, who are both brilliant, granted, but who focus on being consistently not stupid, not consistently smarter than everybody else, which perhaps is a form of being smarter, and so on and so forth. But it's important to keep in mind, rather than putting these people on a pedestal and viewing what they do as unreachable and, in a way, then absolving yourself of the responsibility of trying to improve yourself, that everyone is fighting a battle and has fought battles you know nothing about. There are many mega-successful people who battle with depression, with pasts, that might include alcoholism, you name it. And that is not necessarily true of the people in this episode, but I think it's important to underscore that so that you think that, with incremental improvement, you can actually put yourself in a position to achieve seemingly impossible things. And that is the truth. So everyone is fighting a battle you know nothing about. The icons in this episode are no different. Everyone struggles, so take solace in that. And now, without further ado, let's jump into some of the things that separate those who achieve what they set out to do from those who don't. Let's start with Derek Sivers. @sivers on Twitter, S-I-V-E-R-S. He is one of my favorite human beings. Think of him as a philosopher, king, programmer, master teacher, and perhaps Mary Prankster. Originally a professional musician and circus clown, whole long story behind that, to listen to my long interview with him at Tim.blog/Derek. Derek created CD Baby in 1998.

One of my favorite humans, Derek, and a better way to think about success. (07:08)

It became the largest seller of independent music online, with $100 million in sales for more than 150,000 musicians. In 2008, Derek sold CD Baby for $22 million, giving the proceeds to a charitable trust for music education. He is a frequent speaker at the TED conference, with more than 5 million views of his talks. Since 2011, he has published 34 books, including a book titled "Anything You Want," which I've personally read at least a dozen times. When you think of the word "successful," who is the first person who comes to mind, and why? Well, the first answer to any question isn't much fun, because it's just automatic, right? Like, what's the first painting that comes to mind? "Mona Lisa," "Name a Genius," "Einstein," "Who's a Composer," "Mozart." But this is the subject of the book "Thinking Fast and Slow" by Daniel Kahneman. There's the instant, unconscious, automatic thinking, and then there's the slower, conscious, rational, deliberate thinking. So I'm really, really into the slower thinking, like breaking my automatic responses to the things in my life and slowly thinking through a more deliberate response instead. And then for the things in life where an automatic response is useful, I can create a new one consciously. So, like, what if you asked, when you think of the word "successful," who's the third person that comes to mind, and why are they actually more successful than the first person that came to mind? Well, in that case, the first person would be Richard Branson, because he's like the stereotype, right? He's like the "Mona Lisa" of success to me. And honestly, you might be my second answer, but we could talk about that a different time. And my third and real answer, after thinking it through, is that we can't know without knowing a person's aims, right? Like, what if Richard Branson set out to live a quiet life, but like a compulsive gambler, he just can't stop creating companies? Well, then that changes everything, and we can't really call him successful anymore. What are the most common misconceptions about you?

Misconceptions (09:30)

Oh, I feel pretty understood. I don't think people are thinking about me enough to conjure up any misconceptions. You know, we think the goal of writing and communication is to be understood, but I think a better goal is just making sure that you're not misunderstood. I learned this the hard way at my last company, because we had a quarter million customers. So when I'd send out an email to everyone, if any sentence was at all unclear in any way, I'd get like 50,000 confused replies from people, which would take my team like a thousand man-hours to go through. So now anything I put out into the public is rewritten and edited like crazy until I think it's as clear as can be. What are you world-class at that people might not realize? Or what do your friends know your world-class at that the rest of the world doesn't know about?

Attention Span (10:21)

I've got the world's longest attention span. I'll just sit down and do one task for like 12 hours straight, or all day for 25 days in a row. I actually love that my kid is getting it from me by the way that we play. Whenever we play, I never say, "Let's go! Time to go!" We just do something until he's ready to move on. He'll lead me to the river and just throw rocks in the water for a couple hours. Then we'll go to the ocean and build a fort out of driftwood for hours, and then draw in the sand with shells until he's sleepy. We've always done it this way since he was like a one-year-old. Other families would come play on the playground for 20 or 30 minutes at a time, but we would just be there for hours with him fully immersed in some newly invented game. What's funny is that nobody else can hang with us like this, like not even his mom. Everyone else gets so bored. People ask if I meditate or do yoga, but nope. My daily life feels like working meditation.

Phone Call (11:26)

Even being with my kid is like meditation, as you can tell. Okay, now we're doing the format today where we're going to open up the phone to callers. Since it's Christmas Day, phones are a little slow. Hey, there's a call! Hi, Derek. This is Dave DiGiovanni from Kalamazoo, Michigan in the USA. Thanks for doing the podcast with Tim. Thanks for taking this question. You've helped a lot of people make money, and I'm just wondering if success in business has to be more complicated than that. I get overwhelmed reading all the-- There's so much content out there on how to make money, how to grow your business, how to start a business, and I'm just wondering if business needs to be more complicated than coming up with ideas on how to help other people succeed. Thank you. So let's talk about two things, simple versus complicated and easy versus hard. So look at running. If you talk with people who hate running, you'll hear them say, "Ugh, first you have to get your running clothes, then you get dressed, "and then you've got to put on your shoes, and you've got to lace them up just right. "Well, then you've got to stretch, and then you've got to warm up. "Then afterwards you need to cool down, and you need to shower. "It's such a pain." But if you talk with people that love running, they'll say, "Yeah, you just pop out for a quick run." And if you ask them about the steps involved, they'll say, "There's just one. You just run." So knowing that we have this human nature to think of things we like as simple and things we don't as complicated, well, you can use this to deliberately simplify how you think of something you're avoiding, making it more appealing. So an ultramarathon is simple. You just run 100 miles to the end. But that doesn't mean it's easy, right? So success in business can be simple. You just find a need that people are proving they're willing to pay for and then find a profitable way to solve that need for them. But it doesn't mean it's easy. So what you have to do is notice in your mind when your complications are holding you back and then turn the dial towards simplicity in your mind. So you just jump out the door and start running. But then notice in your results when your simplified approach might be holding you back. Like perhaps you are using only one tool in your toolbox and you need to learn others. And as for all the business advice out there, well, you know, if information was the answer, then we'd all be billionaires with perfect abs. So really you, and yeah, you listening to this, most of you probably just need to shut that shit off, put your blinders on and get out the door and start running. Metaphorically speaking, that is.

Your Own Utopia (14:13)

Hi, this is Tobin in Boulder, Colorado, and my question is what should someone ask to determine their own utopia? Thanks. First ask yourself, is this in theory or in practice? And have you proven from your experience that this is really what works best for you? Whatever idea you have, you have to challenge it. You need to argue against it because there are so many things that seem great in theory. Like for example, say you're living in a little apartment in a noisy city and so you think that you'd be happy if only you had a big place out in the silent country. And so you do it. You splurge, you buy a place or you sign a year-long lease, and then you move out to the country and... uh oh, after two months you realize that you miss too many things about the big city. You made the wrong prediction. And it happens the other way too, right? Like people moving from the quiet burbs to the big city. Or somebody who's an employee that thinks they'd just be happy if they could quit their job and start their own business. And oops, it doesn't always work out like that. So my recommendation is to do little tests. Like, try a few months of living the life you think you want, but leave yourself an exit plan, being open to the big chance that you might not like it after actually trying it. The best book about this subject is "Stumbling on Happiness" by Daniel Gilbert. His recommendation is to talk to a few people that are currently where you think you want to be, and ask them for the pros and cons, and then trust their opinions since they're right in it, not just remembering or imagining. This is James McGeough from Sligo, Ireland.

Definition of Success (16:01)

My question is, how do you define success? And what habits or skills are most important to living a successful life? Thanks. Okay, well first let's define success. Ask yourself if you think Robin Williams and Philip Seymour Hoffman were successful actors. I think it's a tough call. Like, my first reaction is yes, but the more I think about it, my answer moves halfway towards no. As a different example, think of someone you know who you'd consider to be the definition of a total loser. And now you give that person a million dollars. Are they now a winner? Of course not. And that sounds like a contrived example, but a lot of fame and fortune is dropped into the lap of people who were just the right face in the right place at the right time, but are actually miserable, awful people by any definition. So the more you think it through, the more you realize that you have to define success first by your inner game, not some outside measure of money or fame, right? Mastering yourself, your mind, and your actions. But now, if you only master yourself, and you don't help anyone else, well then we'd call you happy, but nobody would define you as successful. So the very definition of success must include how much you helped others. And I'll bet that if you helped thousands of people, even if you didn't ultimately profit from it, but you were personally miserable, well we might still call you successful, because you helped others, right? So the point is, if you want to be undeniably successful, you need to both master yourself and help others. Don't focus on the money or the fame. The real success is mastering your emotions and actions, and actually helping lots of people. So, the definition. But now you asked, what habits or skills are most important to living a successful life? Well, by this definition, habits and skills, number one, the skill and habit of managing your state and your emotional reactions and actions. Number two, knowing what people need in general, and what you need in particular. Number three, people skills. How to see things from the other person's point of view, and how to communicate from their point of view. And number four, the ability to focus, learn, practice, and apply what you learn. If you can do those four things, you can do anything. You can first be happy without depending on anyone or anything in particular, and then you can understand what people need, learn how to provide it, and make sure they know it. Next up is Tony Robbins, @tonyrobbins on Twitter and elsewhere, the world's most famous performance coach.

Tony Robbins knowledge of interviewing cash cow investors (19:13)

He's advised everyone from Bill Clinton to Mikhail Gorbachev to Serena Williams and Leonardo DiCaprio to Oprah, who calls him superhuman, by the way. That's Oprah calling someone that. I love Tony's work and his Personal Power II set, which I listened to in my POS used minivan while I was commuting during my first job, helped me start my first company. And recently, I should say over the last several years, I've had the chance to work with Tony, get to know him directly, and it's been an incredible experience. Tony has worked with many legendary investors, including Paul Tudor Jones, who he's coached for more than 10 years, Ray Dalio, Carl Icahn, David Swenson, Kyle Bass, and many more. These are the hard-to-interview unicorns who consistently beat the market, despite the fact that it's considered by impossible by many folks. And Tony has done a great job of, I would say, condensing the lessons he's learned from them. And some guys are like Templeton, I got to interview him multiple times before he died. It's like, wait for the bloodletting. No, it's on the streets, that's what he invites. On the streets, but it's like when maximum pessimism hits, that's when you make all your money, that's what he did. And then there's the guys like Bogle, which is, it's the index baby, and these days even Warren Buffett is the index baby. So they all have their approaches. But what's in common, I think, is, I'll tell you four things I saw that stood out. And one is overly simplistic, and that's why people don't pay attention to it, but these guys pay attention to it. They don't lose. Half the key to awakening is not losing, and they are obsessed. Every single one of them is obsessed, they're not losing money. I mean, a level of obsession that's mind-boggling.

How Richard Branson contemplates expensive business decisions (20:46)

And it isn't just these investors, you know, Sir Richard Branson, for example, you know. People see Richard and he's such an outgoing, playful, crazy guy. He's kind of an introvert in some areas, but when it comes to athletics and taking on challenges, he's out in the world. But, you know, his first question to every business is what's the downside and how do you protect it? Like, when he did his piece with Virgin, I mean, that's a big risk. Going to start an airline? He went to Boeing and negotiated a deal that he could send the planes back if it didn't work out and he wasn't liable. That's the level these guys think at, so they look to see how do I not lose money first. Because the average person has no clue. If I lose 50% in 2008, well, guess what? You've got to make 100% to get even, not 50%, because your principal's gone down so much. So it's like people don't understand. You lose 60%, it's 200% to get even.

Investing Advice: Lessons From Tony Robbins And Other Experts

What it means to invest in asymmetrical risk reward (21:31)

And so the average person, you know, lives in a world where they try not to lose money, but they're not obsessed. Second thing they all have in common? Every single one of them is obsessed with asymmetrical risk reward, which is a big word. It simply means they're looking to use the least amount of risk to get the max amount of upside, and that's what they live for. So I'll give you an example. Paul Tudor, when I first went to do the turnaround, when Paul was having some challenging times, he'd broken his leg. You know, think about this. He did better than anybody in the history of the world during the biggest stock market drop in history, literally. And then he went to the mountain, he went to the moon, now what? And so lost a bit of the edge and, you know, got involved in other things and so forth. And now he's got a broken leg, he's not going to the office, I've got to come in. So I had to go watch that film. That's the first thing I did. The white tennis shoes. I wanted to go see everything about him, study his physiology, the way he used to move, because this guy's not moving at all, what his face was like, how he breathed, tone of his voice, what were the physical strategies, what were the psychological strategies or the financial strategies. I got to go to Druckenmiller and Soros, I mean, the word I got access to back then was unbelievable. See, what was he like then to put the plan together to do this turnaround?

How Tony got Paul Tudor back on track (22:38)

And when I started making those shifts in him, and you could see the shift happen immediately, it got really exciting. I got hooked on what was going to happen. So as I did this same process, basically, guess what, I'm thinking about two things at once, I did the same process during these interviews. I didn't just look at the training strategies, I looked at the psychology, what set it up. But here's what I found with Paul Tudor at the very beginning, getting him back on track.

What every single trade has in common (23:00)

When he was at his best, he made sure every single trade had what he called a five to one. That means if he was going to risk a dollar, he wasn't about to risk it unless he was certain he was going to make five. Now, you're not always right. So guess what? If I risk a dollar to make five and I'm wrong, I can risk another dollar, I still make four. I can be wrong four times out of five and still break even. Their secret is not that they're not wrong, it's they set themselves up where they risk small amounts for big rewards proportionally. Paul, if he's right one out of three times, he still makes 20%.

What an average investor would try to make (23:34)

So the average person risks a dollar trying to make how much? A dollar ten. That's right, about ten. If I could get 10%, wow, my dollar, right, of 20% would be unbelievable. How often can you be wrong? Not very often. Not at all. You're in the hole, you're starting from the hole, you've got to build back up. So their asymmetrical worth, like I was with Kyle Bass and Kyle Bass risked, check this out, in the middle of the subprime crisis, he made $2 billion out of $30 million because he risked, for every six cents he risked, he had an upside of a dollar. Six cents for a hundred. Well, you could be wrong 15 times and you're still located in that area. I mean, he was brilliant to figure it out. He's a genius figured out, but that risk/reward is why it is. He showed his kids, he taught, I said, "How do I teach this to the average investor?" And he said, "Well, you could teach them the way I taught my kids." And I said, "How'd you do that?" He goes, "We bought nickels." I said, "What do you mean you bought nickels?" He said, "Well, I did research. I had this question."

How these experts ask better questions (24:27)

That's another thing that all these guys do. They ask a better question, and we talked about it, they get better answers, right? Better quality question, better quality answer. What's wrong with me? You'll come up with stuff. How do I make this happen? No matter what, you'll come up with different answers. So his question was, "Where in the world is there a riskless trade with total upside?" And he started looking around and he said, "I'm worried about inflation." So he decided, "Well, gosh, of all the currencies in the world, a nickel, what it's made of today," it's not made mostly of nickel, by the way, he said, "It's costing the U.S. government nine and a half cents to make a nickel. That's how our government functions." Almost been almost 10 cents to make something worth half as much, right? The Pentagon plan. Yeah, that's right. It's the perfect plan. So he said, "But you know what? Just the actual material value is 6.8 or whatever it was, something, six and a half, we'll call it for round numbers." So he said, "If I buy a nickel, it's never going less than a nickel unless you believe the U.S. government's gone. So I've got something that never goes down in value. So I got a guaranteed return, and I'm not going to lose my principal. But day one, it's worth 36 percent more than the day I bought it. How many investments can you have 100 percent guarantee of no loss and have 36 percent?" I said, "Yeah, but that's smelt value. When I saw they passed the law a few years ago, I think Charlie Rangel was the one who pushed it through."

Millennium Edition Nickels (25:39)

He goes, "Yeah, but Tony," he said, "that doesn't matter." He said, "Let me tell you why." He said, "Look at pennies. When they changed it from pure copper to tin and all the things they changed, what happened to the old pennies? There's a scarcity of them, and now a penny from those days is worth two cents. It's 100 percent more valuable." So he said, "At some point, the government cannot continue to do something that costs twice as much. At some point, they'll make a change in the materials, and then all these nickels are worth an unbelievable amount." So he said, "I'm just showing my kids, here's a risk. You need to think different than everybody else. Don't think I have to take huge risks for huge rewards. How do I take no risk and get huge rewards?" And because you ask that question continuously and you believe in the answer, you get it. So he said, "Listen, if I could convert my entire wealth in nickels right now, I'd say, 'You're insane.'" He goes, "I am insane, but it's the best possible fundamental investment." He started telling me how to do it. He bought 40 million nickels. He has 40 million nickels. It fills up a room bigger than this. He'd better be on the ground floor. And he had his kids dragging him in and the other half laughing, having fun. It's like their little treasure room. So he can legitimately do the Scrooge McDuck backstroke. For real, with nickels. So that's asymmetrical. I'll give you one more and I'll shut the hell up. You're asking me the difference. There are differences. And then hours and hours of differences, but what I think is useful is what's aligned because then it gives something universal that can be applied. The other one for them is they absolutely, beyond a shot of a doubt, know they're going to be wrong. You look at these talking heads on television and people screaming you and hitting bells and telling you what to buy and the right, right, right.

The Market, Commonalities, And Vc Firms: An Analytical Perspective

No collective opinion on the market. (27:11)

The best on earth, the Ray Dalio's, the Pabble's, the, you know, I don't give a who you talk about. You want to look at Carl Icahn. They all know they're going to be wrong. They set up an asset allocation system that will make them successful. They all agree asset allocation is the single most important investment. There wasn't one person in terms of your vehicle that was the most important thing about how they attacked it. Asset allocation was the element there. And the last one is they are they're lifelong learners. I mean, these people are machines like you, like me, like Peter, like most of the people you and I share as friends. They just are obsessed with knowing more because the more they know, the more they realize what they didn't know. And then they apply that and they go to another level. And every time you think you're the best you can be in anything in life, your body, your emotions, spirit, your finances, there's always another level. And these guys live by it. And the last one that I thought almost all of them were real givers, not just givers on the surface, like money givers. That's wonderful, but really passionate about giving. And it showed up once they saw what I was doing was legitimate and was really real. I mean, then they're opening up three hours of their time with something. Many of these guys will never get. I think it was Dalia who said something along the lines of like Losers React winners anticipate. Actually, maybe that's OK. You know, give it to me. No, but the point being that the and I guess Mark Twink was also in there, which was what history doesn't repeat itself, but it rhymes. So there are going to be crashes. There are going to be black swan events and you want to have a plan in place for when that happens. And Ray Dalio actually said something in there that stuck with me brutally. He said, I don't care what it is that you think you're great at investing in or you like. Most people invest in what they like, real estate or stocks or bonds, what they think they're good at or what they were raised with. He said, whatever asset class you invest in, I promise you in your lifetime it will drop no less than 50 and more likely 70 percent at some point. And he said, that is why you absolutely must diversify because you're saying, but I can make so much more in this side. And I've had people throughout the years. I teach this bucket theory, this idea that you want to make asset allocation simple. It sounds like such a big word. It's just buckets. So my money is going to go on a secure bucket. That bucket is like a church teeple. I'm going to it's not going away. It's very secure type investments. Its upside is not gigantic in terms of speed. But you know what? The compounding process, if you give it enough time, those low returns are giant returns still. But you're not going to lose. And then there's this bucket called what most people call growth bucket. I call risk growth because it's really risk first. And on that, I'm taking bigger risks for potentially greater rewards. And now the question is, how do I balance these in my 60 40 50 50 80 20? And that's designed really by three things. Number one, what's your real risk tolerance? Not what you think it is. Yeah. And they're not the same. They're not the same. I do. I do these wealth mastery programs in a few years. And invariably I'll do some crazy thing. Like I'll say every stand up, make change. They look at me, go make change. And they start reaching their pockets and making change. And so somebody to pull out five bucks and ten bucks. Somebody put in one hundred dollars and they'll someone come up and they'll take it and give them five bucks. And they're like, you know, they don't know how to react. So this goes on for three or four minutes. Music's going on. OK, stop. Right. Sit down. And they go on like I'm talking about something else. And invariably somebody's like, hey, wait a second. I want my I want my hundred dollars back. So what are you talking about? He said, I don't mind at all. Like the game's over. I said, what do you think the game was over? You think the game had ever gone over? Right. And who said it was your hundred dollars? Right. And it's like it takes a while with finally finally get, you know, I'm stressed about one hundred dollars. What do you think is going to happen when you lose a million or half a million or one hundred thousand or ten grand? I mean, your risk tolerance is not we think it is. So when you find out your risk tolerance is we got great ways to do that in the book. And then you figure out really how much time do you have? If you're younger, you got more time to make mistakes. And so you can take bigger risks. You know, you got a timeline on your part. And then the next piece is how much is your cash flow? What's that? What's going to be the real. If you look at those three things, now you can decide how much goes in my secure back. How much goes my growth. And if you don't make that decision, it's the most important investment decision of your life. According to everybody I interviewed, like what percentage secure, what percentage growth and risk? Then when things come up, you're always going to go for the growth risks. It looks so sexy and exciting. And I can't tell you how many people over the years have done this. They're telling me, why would I put money over here when I've got this real estate? I'm making one hundred twenty percent. I have a friend that built some of the first big condos in Vegas back in the boom time. And he he actually went to my programs, sold the business he had made two hundred million dollars, invested in these condos, started building the panorama towers and places that nature. And he was up to like three quarters of a billion. I kept saying to him, dude, take some of your growth money and put it in the secure market. Right. How many times I told you this was told I love you. I made two hundred million dollars because you've been now on. You know, I'm really like what I touch goes to the gold and listen to the ego. And I'm going, I love your brother. But I said, you know, many times I have this conversation. And then guess what happens in 2008? How much do you think he was worth? Three quarters of a billion dollars. He grown that rapidly in those short years. What do you think happened to his net worth? Oh, I'm guessing it went down according to the Ray Dalio prediction. How about minus four hundred million? He didn't just lose what he had. He lost everything out and beyond. So then he's trying to negotiate. He was like he was leveraged, leveraged that way, wiped himself out. So most people don't put enough in the security bucket is the lesson. And a guy like Dalio provides you a strategy that's got great sustainability. But there are many approaches in the book. But you do have to decide how much is secure, how much is growth. And I show you how to do that. Chris Sacca at Sacca S.A.C.C.A. was once the cover story of the Midas issue of Forbes magazine. And I've known him for some time. But that's what happens when you are, for instance, an early stage investor in companies like Twitter, Uber, Instagram, Kickstarter and many more. Chris is the name, the face behind what will most certainly be the most successful venture capital fund of all time, lowercase one. Here are a few thoughts on success that I found fascinating.

What are the commonalities? (33:13)

What are the commonalities or are there commonalities when you look across these founders for whom success and massive scale just seems predestined? What are the commonalities? Well, I think something. So we'll take Evan Travis examples, but across our most successful founders, you know, Susan, Matt, Matt Mullenweg, WordPress. That's a billion dollar company now, billion plus. These guys are all incredible, incredible listeners. So when they do open their mouths, they can be bombastic and offensive and aggressive and in your face. But they're all incredible listeners. And I don't just mean in casual conversation. I mean, these guys go out of their way to interview other people. They really if you catch Ev, he's got a notebook always. And if you ask him to see the first, you know, last few pages of the notebook, he's just meeting with other people who's. You know, billionaires and kind of leaders whose jobs might not overlap with his at all, but from whom he's learning. Voracious reader. Part of why medium started was he was really back deep in a long form content when he took a break from Twitter. And so that guy is just constantly learning, studying, studying. And so when he speaks, it matters. But he's listening more than he speaks. You know that about Mullenweg, one of the most thoughtful people. I've never seen anyone read as many books as that guy does and retain all the knowledge. And he also it's even he listens to anyone that he's sitting down with. Doesn't matter if it's the waitress or primary school teacher. We've done a lot of traveling together. He was on the podcast also. Very good listener. Yeah. And so and again, you just look across the board. These guys are learning their modeling. They're constantly researching their gathering data. You know, Travis would think it a competitive disadvantage for you to know exactly what's going on in his head sometimes. So he'll listen. And and it's an amazing talent, I think, is a commonality across those people with the the investing game that you've obviously been a participant in for quite a while now.

It's not a level playing field for venture capital firms, either. (35:27)

You have to say no a lot. And I was, you know, took a close look at poker in the last year with the TV show. And there were a couple of quotes that came up quite a bit along the lines of, you know, I made my money sitting, not playing hands. And but but that having been said, what are some of the deals the whales that got away? Yeah, so first of all, I mean, this is a rigged game, right? And and I'm just looking to make it even more rigged. So for those who don't know, venture capital, I mean, it's totally unfair. People give me their money. I draw a management fee off it. So they pay me to take their money and invest it for them. If I make money, then I pay them back the management fee. And then after that, we split the profits and I get a really big chunk of the profits. And if I lose money, that's fine. I know it doesn't come out of my pocket. I keep my fee and my investors lose money. That's how this industry works. That's bananas. Right. And at some point it's going to break because it's you've also accepted me with the term bananas, which I've started using compulsively. Massey also has done the same thing. Who works with Chris? Yeah. It's it's just an unforgivably unfair rigged game that's in favor of the venture capitalists. And so the reality is the risk of an investor doesn't begin to compare to the risk of a founder. And so, you know, that's one thing that kind of drives me crazy sometimes about some investors. And I love the entrepreneurial spirit that goes into building a firm. I mean, I built my firm from scratch and there are certainly founder type lessons in there. But but your cash will deposit from day one when you start a venture fund and your your downside is incredibly limited by the structure of the fund. So so that said, what it allows me to do is place some bets on some stuff that I I'd like to think success is inevitable, those things. But I can take I can look at the risk analysis and say, OK, this is a binary outcome, a one or zero. And some of those things just don't get there. You know, one of my one of my kind of constant recurring nightmares is about the stuff I passed on. That's exactly that's what I was that's what I was trying to ask. You know, I've done some deals where I thought it was going to be a lot bigger and it ends up going away. But so the Dropbox guys, I met those guys very early on while they're still in my accommodator. I got an early look, you know, had an opportunity to deal and I pulled those guys a set and I was like, hey, look at Google, we were using a version of this called platypus, which became G drive. And they're going to crush you guys, man. So you should probably find some other product to pivot to. That probably cost me hundreds of millions of dollars. The they give you a pat on the head and walk away. No, I mean, it's when I see Drew, the CEO of Dropbox, I bring it up before he can. That's a good self-defense. Yeah, I just get I get it out there right away. The Airbnb guys at Y Com Air, same thing. An amazing business and one to be proud of, too. I mean, that's I'm really jealous. I'm not in that business, not just for the money, but I love what they do. I'm really admire them a lot in their culture. But at the time they were they were allowing you to rent out a room in somebody's house while the owner was still there. And that just seemed really scary to me. And I pulled the guys aside and I was just like, guys, you know, somebody is going to get raped or murdered in one of these houses and the blood is going to be on your hands. I literally said that out loud to them. And what's that worth like 15 or 20 billion? Now, in fairness, you're probably not wrong, right? I mean, at a certain scale, at scale, it has to happen. Something's going to happen. Yeah. I mean, I like to say sometimes, like when you think about scale, like someone who works at Wal-Mart murdered someone last night. Right. There's just no doubt about it. At that scale, with a few million employees, one of them murdered somebody last night. You have to look at it like Edward Norton in Fight Club, like an actuarial analysis for insurance, which is terrifying. That's the reality of big numbers. But there's one other famous one. There's a bunch of these, but actually, I'll give you two. Nick, because I wasn't reminded of this until recently. Nick Woodman from GoPro came to Google. Now, I wasn't an investor at the time, but I did a lot of Google's investments and partnerships. And so Eric Schmidt, CEO of Google, said, hey, will you come in here and sit with this pitch? He's a friend of a friend, said we got to meet this guy. So Woodman comes in with GoPro and Eric's like, I don't know. And I was like, we'd be we'd be foolish to do this deal. How is this guy from Santa Cruz going to compete with all these Asians and building hardware? You know, you can't you can't hold a candle like the Taiwanese and the Koreans is like no dice, man. Let this guy go. And I think I introduced him to somebody over YouTube just as a consolation. I saw that dude this winter skiing. He's worth like three or four billion dollars now. And he didn't forget that meeting. So and then the Snapchat guys, I gave a talk in L.A. and they came up to me. I never met them before they came up after the talk and said, we're big fans. We'd really like to work with you. And I was like, yeah, sure. I mean, I know you guys are up to something cool. I admire it. I took like eight weeks to set up the meeting. And by then, the benchmark guys had done that deal. That's OK. Oh, my God. I can't imagine how much money we've left on the table as a result of that.

Perseverance (40:51)

So, you know, I like to say when I'm wrong, I'm wrong. When I'm right, I'm really, really right. Ray Dalio at Ray Dalio on Twitter is one of the 100 most influential people in the world, according to Time, and one of the 100 wealthiest people in the world, according to Forbes. Because of his unique investment principles that have changed industry, CIO magazine dubbed him, quote, the Steve Jobs of investing, end quote. Ray believes his success is the result of principles he's learned, codified and applied to his life and business. Those principles are detailed in his book, aptly titled Principles, and he included some of his wisdom in our interview. If we flash back to when you first began Bridgewater Associates, so out of your two bedroom apartment at 26 years old. Do you recall any of your first big wins or things that you considered big wins at the time? And I'd love to just hear you describe what made those a big win. In other words, the thinking behind it. The funny thing is. I can hardly ever remember my big wins. I do remember my big losses. We can talk about those. Yeah, it's so it's so funny because, you know, I look at it and I said, well, I I guess I must have had a bunch of wins or successes because of, you know, how things have went. You know, the business is good and done well and all of that. But like I think of my history and I really think of those mistakes. And I think that's so great because it shows that that's a much better learning tool. But OK, so my big wins, you know, no, I think about that at that time. I think, no, the things I remember were the were the fun things. But a guy, you know, guys I played rugby with and parties and and those kinds of things, I don't remember a particularly big winning. Well, I do remember some things. You know, I remember one time. When we got the Kodak account. Again, I was in a position, it's OK, here's a guy and he's analyzing the markets and then he has a small team of people. He's analyzing the markets. And so I didn't have a long track record and I didn't have an institution and, you know, sort of competing with the big institutions of the world, the JP Morgan's and everybody. And and by the way, we beat them. Well, anyway, which shows that the individuals, the powers within the individual. But anyway, I remember when we got the Kodak account because at the time Kodak was a big, important client. And them giving us that account was a big deal for us because it was kind of a stamp of institutional approval. And it was all I remember, you know, the money mattered, too, because we would know that we were a bit more financially secure. So I remember that as a big win. And I remember it so terrifically because we were asked to submit research information and we were just a small team of people. And, you know, we stayed up all night with, you know, pizza and beer and all of that. And I remember it so sweetly because it was the dream of making our miracle happen. And we and the pulling together. That's the meaningful relationships part. I believe that I want meaningful work and meaningful relationships. And so that was what that was about. And we got the account and we won. And that was, you know, that was a big deal. Why did you guys win? I think it's a combination of being, you know, totally. Unconventional and having better processes, and then there's a hell of a lot of determination. I think three things make up a successful life by and large. First, you have to have audacious goals, big dreams. Then when you are headed toward those goals, you're going to have problems. You're going to deal with reality. You have to deal with those problems in that reality. Realistically learning from mistakes, writing down those principles and the like.

Happiness (45:42)

So that's the second part. Dealing with reality in a practical way where you learn about mistakes. And then the third is determination. Because if you're going for your goals and you're encountering your mistakes and you're learning and you do that with determination, you're going to get better all the time. You can't help but get better. And you do that a long enough amount of time and you're going to far exceed your dreams. My success has far succeeded in what I ever imagined, you know, one bit at a time. And it's just that process. If you were to conversely look at intelligent people who are unhappy, what do you think the primary causes of that unhappiness are? I think it goes back to this notion of meaningful work and meaningful relationships. Intelligence and happiness probably have no correlation with each other. In studies, it's repeatedly been shown, and money is very little correlated with happiness. The highest correlation with happiness is community. Am I part of a community? Do I feel connections with other people? That's been, you know, literally genetically programmed into us from, it's estimated between a million and two million years ago before we were even mankind. So that sense of meaningful relationships, I think, is very, very important. And if you have meaningful work, like you're on a mission and you have meaningful relationships, I think it's almost impossible not to be happy. I mean, there'll be unhappy moments in your life that you encounter this thing or that, but the people who are unhappy seem to be missing those things. Last but certainly not least, we have Sir Richard Branson. @RichardBranson on Twitter and everywhere else.

Negotiation (47:52)

Founder and chairman of The Virgin Group, a world-famous entrepreneur, adventurer, activist, and business icon. He's launched a dozen billion dollar businesses and hundreds of other companies. I loved our conversation and highly recommend you check it out. Of course, listen to the whole thing. But here are a few highlights you might find valuable. You strike me as a really good negotiator, by necessity you'd have to be. If you had, say, a would-be entrepreneur or a university senior, someone who's about to graduate and go into the real world, and they tell you that they want to become a very good negotiator, a very good dealmaker, how would you train them or what would you recommend they do or read to become a better negotiator or dealmaker? Because you seem very, very astute and subtle in structuring things in very smart ways. What would you say to someone who wants to develop that skill set? I'm sure that there must be ways of being taught it, but in my opinion, nothing beats personal experience. My education was being thrown into the jungle, being thrown into the real world, aged 15 or 16, and having to survive. And it was an incredible education. I learned about everything in life. I've traveled a lot, I've met people all over the world. I had to do a lot of different investigations. I think as I got older, I realized that one of the most important things about a negotiation is striking a deal that is fair to both sides. I also realized as I get older that you always come across the same people time and time again in life. And so your reputation is everything. In my new book, "Finding My Virginity," I talk about our dealings with Delta and how they felt that they'd legged us over in a clause, in a contract, and how they came to us to rectify it. And that's something I'll never forget, and most likely will be partners with Delta for the rest of my life because of that kind of approach. So I think if you realize that your reputation is all you have, and your personal reputation, the reputation of your brand, then you've got to make sure that you're negotiating a deal that you're not going to be unhappy with, and that you think of all the things that could potentially go wrong, and how you can get out of it if something goes wrong. But equally important is trying to strike a fair balance with the people you're negotiating with.

Entrepreneurship, Gifts, And Personal Improvements: Gleanings From Richard Branson

Business ideas (50:38)

And when we're looking internally, you mentioned how your teammates at the record company thought you were crazy when you brought up the airline. Are there any business ideas that you're glad your co-workers or team have prevented you from doing? As you know, my nickname is Doctor Yes. I have books like Screw It, Just Do It. And I think, to be honest, if I want to do something, one of the advantages of owning the company is I can normally ultimately get away with it. I mean, I'll try, obviously, to carry people with me. And I'm sure there have been one or two things where I have bullied the process through, where I've regretted, well not regretted, I've never regretted anything, but where perhaps I should have listened more to others. But I can't think of anything where they persuaded me not to do it. I think, most likely, when it comes to a decision about whether to do something or not, I like to think of myself as an Evelyn dictator. That's the one thing I generally get my own way on. We would never have gone into space travel, we'll come to that, I'm sure, later on in this talk, unless I was willing to do things against the sensible, on paper, the sensible advice of my fellow directors.

Finding novel ways to launch new companies. (52:00)

We will definitely get to space travel. What I'm curious about, because it seems if I look at many of the businesses that you've started, the positioning is often against a particular incumbent. In the case of, say, airlines, for instance. That seems to be a common element in a lot of the company or product launches. I want to connect that with some of your well-known adventures, and you'll see where this is going in a second. You've driven a tank down Fifth Avenue, crossed the English Channel in an amphibious car, took a 407 foot jump off the Palms Casino Resort in Las Vegas, gone from Morocco to Hawaii in a hot air balloon. You are very, very adept at PR stunts, getting attention for the things that you do and the companies that you do. Are there any particular best practices or a playbook that you have found to be very, or principles for that matter, helpful with the launching of a new company or product? I don't think so. I mean, I'm a great believer in trying, if your team worked really hard to launch a new business with you or for you, the least I think I can do is make a fool of myself, make sure that that new business ends up on the front pages of the newspapers rather than an anecdote on the back pages of the newspapers. So if that means having to use myself to put the new company on the map, I will do so. And I will try to do it in a way that makes people smile and that doesn't horribly backfire on me. It's like, it has backfired. And I suppose it's like being a host to a party. I mean, if you're the host of the party, if you stand in the corner of the room and you flip your sherry and stand around with your fellow directors all in suits, everyone's going to have a thoroughly dull party. And nobody will have a good time if you're the host of the party and you're first in the swimming pool and everybody else jump in too. Yeah, there may be a bit cold for the rest of the evening, but they're going to have a great evening. And I think the same applies when you're launching a business, make sure that you put it on the map and just occasionally it will backfire. You mentioned space travel, which I do want to use as a touching off point to ask you, roughly 50 years after starting your first business, why write Finding My Virginity? What was the catalyst for that? Why do it? I actually think everybody should write a book about their lives. I persuaded a number of people to write books about their lives. Steve Prosset, for instance, anyway, a number of people. But you don't have to lead a very public life. I think everyone's led interesting lives. Your children and your grandchildren will be fascinated by the lives you lead. And so I wrote a book, "Losing My Virginity" when I was a young man about all the adventures. It became a bestseller and sold millions of copies. But I was quite a young man when I wrote it. And the last 20 years or so, I've been very full and very rich and extraordinary. So I thought I would write, in a sense, a sequel to "Losing My Virginity," which we call "Finding My Virginity." And if I live another 20 years, "Virginity Found," I suspect, will be my last book. But we'll see how we go. But I think it's important. I love reading and learning, and I think others might enjoy, hopefully will enjoy it. And when I write books, I try not to make them like a "and then we did this and then we did that," just try to make it a really good, gripping read and an enjoyable read, and not try to cram in everything once done in 20 years. And hopefully people can get a few gems from it as well.

Books Richard has given most as a gift. (56:12)

What is the book or books you've given most as a gift and why? Outside of your own books, are there any particular books that you've given or recommended to others the most? Well, "Climate Change" is something which I've spent a lot of time on. I would highly recommend a book by Tim Flannery called "The Weathermakers," which was one of the books that opened my eyes to the problems that we have in the world. I'm just reading "Homo Dias," which I find is, and I will carry on to read "Sapiens," his first book, one of his first books, and I just love the style of his writing. And I love books where you're learning something from them. And rather than, if I want fiction, I'll get a good film out. So if I'm reading books, I like to read books which have got some substance.

What has most improved Sir Richard Branson's life? (57:12)

In the last, let's just call it five years or so, what new belief, behavior, or habit has most improved your life? Or what habit has improved your life? Could be any new belief, behavior, or habit that has markedly improved your life. If we could go back a bit further than the last five years. Oh yeah, we can go back. We can go back as far as we like, absolutely. One of the best things my parents taught me, going back a long way, if I ever said anything about anybody, they would sit me in front of the mirror for ten minutes in order to sort of let me know how badly it reflected on me. So I like to think I've generally never spoken ill about other people. And I think that's been one of the best bits of advice that I've ever given, sorry, I've ever received, and obviously then given. Archbishop Tutu, who chaired the Elders, which is an organization that we've run for ten years now, he was the epitome of forgiveness with the Truth and Reconciliation Commission in South Africa when Nelson Mandela took over power. And I think just people, nations, we should all try to run based on that philosophy. And I think the world would be a happier place if that happened. You mentioned Nelson Mandela, this is clearly not one of my stock rapid-fire questions, but I've heard you refer to Nelson as a mentor. Are there any key lessons or takeaways or memorable sentences or anything that come to mind when you think of your interactions with Nelson Mandela? Well, you know, I was lucky enough to get to know him very well over the years, even to the extent that on July the 18th we shared a birthday and he would ring me every single birthday to wish me a happy birthday. And I remember the sadness when I didn't get that call not so many years ago. He had an absolute joy for life and he would dance, he would smile, he would embrace everybody. But he had a tough side to him as well. And I remember one lunch I had with him early on in our relationship where, you know, I'd been warned that he was always trying to extract money for good causes. So, you know, we had the first course, then we had the second course, then we had the pudding, and we were onto the coffee and I thought, my God, I've got away with it. And then he turns to me and says, "Ah, Richard, last week I had lunch with Bill Gates and he gave me $50 million for such and such a course." And anyway, so he did not miss an opportunity. Yeah, I mean, apart from maybe Archbishop Tutu, I've really never met and I haven't met anybody as extraordinary in my lifetime as him. Well, there you have it, folks. I hope you enjoyed this episode of the Tim Ferriss Radio Hour focusing on success and more importantly the prerequisites, some of the ingredients that lead to success. And very often it's by focusing on the mindsets and the approaches and the tools that leads you to success as opposed to chasing the specter that you might call success. These Radio Hour episodes continue to be an experiment, so I always appreciate your feedback. Let me know what you did like, let me know what you didn't like, how we can improve it, or other topics or themes that you'd like me to cover. So please let me know on Twitter @tferris, T-F-E-R-R-I-S-S. And until next time, thank you so much for listening. Hey guys, this is Tim again. Just a few more things before you take off.

Five-Bullet Friday (01:01:04)

Number one, this is Five Bullet Friday. Do you want to get a short email from me? Would you enjoy getting a short email from me every Friday that provides a little morsel of fun before the weekend? And Five Bullet Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week. That could include favorite new albums that I've discovered, it could include gizmos and gadgets and all sorts of weird shit that I've somehow dug up in the world of the esoteric as I do, it could include favorite articles that I've read and that I've shared with my close friends, for instance. And it's very short. It's just a little tiny bite of goodness before you head off for the weekend. So if you want to receive that, check it out. Just go to 4hourworkweek.com, that's 4hourworkweek.com all spelled out, and just drop in your email and you will get the very next one. And if you sign up, I hope you enjoy it.

99designs (01:02:02)

This episode is brought to you by 99 Designs. I've used 99 Designs for ages, since even before podcasting was a thing. And I've used them for all sorts of graphic design needs. They are fast and they are convenient. So whether you need a logo, website, book cover or anything else, I've done competitions, for instance, for book covers related to the 4-hour body. 99 Designs makes great design accessible to everyone, and it makes the process so much easier. And I used them recently for artwork and illustrations inside of my Tao of Seneca set of books. So this is a collection of stoic writing and modern interviews and so on. So for the Tao of Seneca, I decided to use their one-to-one project service. In this case, you invite a specific designer to your project, agree on a price, and then work together until you're satisfied. And the artwork just blew my mind. You have to check it out. I kid you not. So you can check out some of the artwork from Tao of Seneca, as well as some artwork and logos and so on that your fellow listeners have had made, at 99designs.com/tim. That's 99designs.com/tim. I really suggest you check it out. And right now, you guys can receive a free $99 upgrade on your first project. This gets you, I think, 130% more submissions, so people who want to work with you and give you first drafts of what you're looking for. To access your free design, please visit 99designs.com/tim and click the link on the landing page. That's 99designs.com/tim. . Anybody want to join?

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