Ricardo Semler Interview | The Tim Ferriss Show (Podcast) | Transcription

Transcription for the video titled "Ricardo Semler Interview | 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 answer your personal question? No, it is the inappropriate time. What if I did the opposite? I'm a cybernetic organism, living tissue over a metal endoskeleton. The Tim Ferriss Show. This episode is brought to you by FreshBooks. FreshBooks is now the number one cloud accounting software designed exclusively for self employed professionals and used by more than 10 million people. You can send invoices, track your time, and get paid fast. Which basically describes the core needs of most entrepreneurs and freelancers. The product was recently relaunched and rebuilt from the ground up focusing on simplicity and speed. It's an awesome service and many of you recommended it to me, which is how they came to be a sponsor. 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Welcome to another episode of The Tim Ferriss Show, where it is my job to deconstruct world-class performers of all different types, whether they're from the worlds of business, sports, entertainment, military, or otherwise. In this episode, we have Ricardo Semler, who was by popular request, and has certainly had a large impact on me. He came up not too long ago in the very, very popular podcast episode with DHH, David Hanamier Hansen, who is of the 37Signals Basecamp and Ruby on Rails fame, who also credits Ricardo with having a huge impact on him. So, who is Ricardo? Who I always want to call "Hicardo," because he is originally from Brazil. He is the former CEO of Semco, a Brazilian company best known perhaps for its radical form of industrial democracy and corporate re-engineering. All that will make more sense as we get into the conversation. We really focus on entrepreneurship, even though there's so much more to talk about, including education and what he's done with his Lumiare schools. But going back to Semco, under his ownership, or during his leadership, certainly both, revenue grew from $4 million in 1982 to $212 million in 2013. His innovative business management policies, which are very controversial, attracted very widespread interest all over the world. He's taught at MIT. He's done many, many other things. Most recently, he has started a podcast, which he's checked out, called Leadwise. You can find that at podcast.leadwise.co. On Twitter, you can find him @Ricardosemilar or @LetsLeadWise, if you want to be podcast-specific, so you can check out both of those. Facebook, @LetsLeadWise, and then LinkedIn, Ricardo Semler. I should also provide some context for two very similar-sounding book titles. He wrote The 7-Day Weekend in 2003, which had a big impact on me. The 4-Hour Workweek -- I'm not sure how happy he is about how seemingly related those titles are -- but came about, for those people who don't know the story, from the original title of the book, which was Drug Dealing for Fun and Profit, which was the tongue-in-cheek name of the guest lecture I gave at Princeton in high-tech entrepreneurship, ultimately for at least 10 years. I think it was around 2003 to 2013 or so. When the book was sold to Crown within Random House at the time, there were a few retailers -- I want to say it might have been Walmart -- who really didn't like Drug Dealing for Fun and Profit. I quickly sketched out, as did they, a dozen or so prospective titles. One of the ideas was the 2-Hour Workweek, because that's how long it took me to manage my company at the time. That seemed too unrealistic, so I was like, "All right, we'll go up to four hours a week." Then I tested that along with the other titles in Google AdWords. For $200 a week later, since Google mixes and matches the ad headlines, which were the titles, and the ad text, which were my subtitles, I knew which combination had the highest click-through rate. That is how we ended up at the 4-Hour Workweek. No matter, I will put a shot of a photograph of my self-made index at the beginning of the 7-Day Weekend, which is a great book, and I recommend people check it out. This conversation ranges very, very widely, and I hope you enjoy it as much as I did. Without further ado, please enjoy my conversation with Ricardo Semler. Ricardo, welcome to the show. Thank you. Thank you.

Ricardo'S Journey: Transformation, Challenges & Insights

Ricardos turnaround point from tech geek to organizational outcast. (06:58)

I'm so happy to have you on the phone and on the show, because I have been a fan for so long, and I, in fact, have this copy of one of your books, The 7-Day Weekend, which has traveled with me for at least 10 years now. I bought it when it first came out, and I was looking at the index that I made for myself in the very beginning, which I'll have to take a photograph of and send to you. So, first of all, as it came up in my conversation with DHH on the podcast, I just wanted to thank you for sharing your experiences. Wonderful. Obviously, I have a copy of your "For Our Work Week" or similar name, and I'll have to see a photograph of that to believe that you've actually carried it around, but it's great to catch up. I know you've been very thoughtful about all these really deep issues of how to live, how to work, and how do you put wisdom into things, which is my concern as well. So, I think we'll want to jump into that and also talk quite a lot about education. A lot of my audience has many, many questions about learning and education, so we will certainly get to that. But for those people who don't have a lot of background and a lot of context, could you give us perhaps just a snapshot of where you grew up and your childhood just as a starting point, and then we can depart from there to many different places?

Evolution from the 4-Hour Workweek to The 7-Day Weekend. (08:13)

But that would be a very helpful place to start. Sure. And I was thinking about it the other day when I've been trying to work with some guys in the UN and elsewhere about putting education platforms into refugee camps, and it kind of explains my background as well. My parents were both Austrian refugees, and my mother was a refugee in all respects of the world in the sense that she ran away from Vienna to Shanghai, spent 11 years in Shanghai, but then was kicked out of Shanghai by Mao Zedong in 1949, and then actually spent 18 months in a tent in a refugee camp in the south of France, and she was one of these displaced persons who had no passport whatsoever. And so it's very interesting how we see different variations of the word refugee, but the fact is that she then became an immigrant in Brazil, which was the only place that accepted her, and so much later I was born. And she had, she lost seven pregnancies and stillborns, et cetera, and so she always regarded me as somewhat of a miracle, and Freud always says that if your mother believes in you absolutely that you can do anything, then you can do anything, and that's the only thing it takes. And so it was very interesting because I grew up in a household that was already well-to-do, and we had everything, and when I got to about 12, 13, I got involved with rock bands, and then I spent a lot of time as a roadie, and then as a, and playing, I was never terribly good, but enough to kid all the way, and enough to trick all my friends into thinking I was very good, and going on stage here and there, which is, I think, probably the most important part of it.

Why rich-ad attitudes helped democratize IDEOs culture (09:50)

And so by the time I was 17 or 18, I was very much in that mode, but my father then, who was 50 years older than me, and I always, it was very interesting also because I kept looking at it and I said, "50 years older, man, this man is almost my grandfather." And I said, "I could never do that myself," and so forth, and so promptly, I had a son now when I was 50, so he's now seven, so some of this stuff comes back to bite you in the ass. But the fact is that then I was 17, he wanted me to, you know, he kept taking me to the plant and saying, "Someday all this will be yours," because it was a manufacturing plant which made pumps and very heavy equipment, he was very engineering-oriented, there were about 100 people there, and this business had been there for a long time and doing relatively well, but then it started deteriorating, so that by the time I was 19 or 20, the whole business, the whole industry for that was in very bad shape. At that point, I had decided to do law school because I didn't want to do, I thought business school in general was very restrictive and very much turned to the past and so forth, and I wanted a more humanistic background. And I did that and then I joined the company. And when I joined the company, kind of following his wishes while I was still doing law school, I realized that we had a big difference in the way we saw the world or how we would run things, it was very traditional and he was wearing a three-piece suit, and I was wearing a three-piece suit with a watch in my pocket, which was pretty unbelievable. And then, so it was- Why was your watch in your pocket? Because this was my grandfather's watch, and my father went in his pocket with a little gold chain and pulled it out every so often. I was ready to start smoking pipes, you know? This is the world that was staring me in the face. I was very, very curious. But, and of course, this was all colliding with the rock guitarist and bassist, which I thought I was. I had hair down to the middle of my back until a year before, you know? So this was all very strange and it was a very strange world. And I saw people getting, having to come to the company and be searched on their way out and have exact times. And if they were five minutes late and docking pay, and this all seemed like an extraordinary world compared to what I'd seen up to then, let's say, in the world of rock. And so when I started looking at all that, at a certain point I told him, I said, "This is incompatible. This is what I would do here. It's so different and probably you're saying it would never work. So let me go do something else." And for a while, he just kind of took the bluff and said, "Sure, go see what else you can do." And I found at that point that the business world was more interesting than I thought and that I could do something with it. And I went out and started looking for opportunities to do something on my own. And that was not a world 35, 40 years old. It was not a world of startups or anything of the sort. So if you wanted to start a business, this was all very hardware-oriented. So I went out and I talked to people who were in the consulting business and I said, "I want to buy a company, but I don't actually have any money to pay for it. And if I were going to pay for it, it would be my dad's buddy." And of course, that makes no sense whatsoever. And then I finally found a consultant at Price Waterhouse of all places who helped me. He said, "No, we have to do the following. We'll look for companies that are broke, that have no money whatsoever, that have big debt. And if you're not scared of taking on debt, you can buy these companies for a dollar." And I said, "The dollar I have, let's go do that." And so we looked at dozens and dozens of companies, finally got to one which was a ladder company, made metal and wooden ladders. And I got to the point of signing those 200-page contracts. I was sitting at the lawyer's office to sign the purchase of this company, which was really a very high negative worth, of course, because it had a big debt outside of promise. But the guy wanted to get rid of it, and I said, "Give it to me." And suddenly my father burst into the law office and he said, "What does it cost to pay the fine to undo this deal?" At the sort of the longer side of the sign, I remember it was $200,000, which seemed like an enormous amount at the time. And so he paid it, and we paid the fine and didn't sign the agreement. And then I started with the company, so it was a very interesting beginning. Now, this, I think, and please correct me if I'm wrong, but probably chronologically is close to something I wanted to ask you about, that a lot of my listeners wanted to ask you about.

Pursuing an MBA as the founder of a 20-year-old company (15:11)

And that was when you took the reins as CEO. Maybe you could describe the circumstances, but the firing of 60% of top managers as one of the first decisions. And I don't know if that is as straightforward as it might seem, but the question that came up from a lot of my listeners was, "How did you make that decision?" And I would just love to hear the circumstances surrounding it and the thought processes that went into your first decisions when that transition took place. Yeah, yeah. And it's interesting, I mean, what I told you a little while ago now connects to that, of course. And it's interesting, the thought process, when you say, "Your listeners want to know this, that, or that." And I just started a little podcast, and we call it "Leading Wisely." And "Leading Wisely" is all about this issue. How do you make some decisions like that one, firing most of the people? And how do you know that it's folly or wisdom when you start? And so I'd gotten to that point where it was either him or me in the sense of there were two ways of trying to run this. And at that point, the business wasn't doing very well, which gave me an opportunity. But as I looked out at these people, maybe, you know, we had 100 odd people, so maybe 20 of them, a little bit more were either managers, supervisors, or somebody were in a leading capacity. And I looked out at these people, and I'd already had a little bit of experience with trying to change things. And people were always explaining to me why it can't be done. So they would listen very patiently, and then they would say, "Yeah, okay, but you're new, you're 19, you've just arrived at this." And the fact is we've been in this business for so long, and there's this and there's that and that. And I realized that the amount of time it would take me to turn these people around and to deal with the unconscious sabotage that everyone who is in place applies to everyone else. You know, anyone who's coming into something is always new and hasty and doesn't really understand. And so it takes a heck of a long time. And the business at that point was not doing well enough to withstand a long cycle. And then I realized that the amount of sabotage that I'd have and the amount of interactions, the permutations of firing three people who then create an alert and panic, and the other six people who talked to the other five behind our backs and so forth, that seemed like we didn't have the time for that. And it seemed obvious that these people were terribly in place and completely calcified with all these years being there. So I took a rash decision, which maybe only a 19 or 20-year-old would do, and I probably wouldn't have the courage. I don't think I have the courage to do that today again. But I looked out there and I said, "We just ought to pull the Band-Aid off this thing so that I can start the next day." And so on one Friday afternoon, I just called people in when I'd never hired anybody, much less fired anyway. And then I fired, I don't know, 16, 17 managers and directors, and that included the CEO, the CFO, or anybody who mattered. And these people went home Friday and didn't return on Monday. And we spent the whole weekend going through these people's filing cabinets, this was all paper, and going through the filing cabinet and trying to figure out what the hell is going on in this company. And we would look at it and we'd see a customer and they would say, "I wonder who this customer is." And we had no idea. And it was really quite a rollercoaster ride. But I think in the end, it made us change direction, of course, very quickly so that 60 days in, we were a completely different company. And then it was possible to throw out the whole rule book from nothing and say, "Wait a second, what part of this do we really need? And what part of it has just been here forever?" And doing that slowly, I think, would have killed me and the other guys as well. Did you have many conversations before making that decision? Was it scary for you to do that? I guess it just seems like such a, you said rash, but also, I mean, courageous in some respects, decision for someone at that age, in that position. Did you have any conversations inside your head or with other people that allowed you to take that leap and make that decision?

Ricardo gave the "order" the same day his father left for Europe. (20:13)

I'm just wondering what sort of led up to it. Yeah, I'm imagining that there must have been, and I can think basically, I think one or two people who from the beginning I felt would be on the right side and who maybe I tested it with slightly. But I already knew as well that I couldn't tip off the system or the wrong people. I didn't know enough people. I remember talking to my dad a few days before because he was about to go on a trip to Europe. And I said, "You know, I have to do a few things here and it might involve some of the..." And he said, "I imagine do everything while I'm gone." And so as soon as he had to get travel, he traveled on Thursday and I called everybody in on Friday. So, but I think it was knocking around inside my head in the sense that, "Geez, you know, if I try to do this the old fashioned way or the slow cycle, this is going to be 10 times as hard, but also the chance that I actually get to the end of this is smaller." And I felt in many respects that on top of it being rushed, I felt I really had no option. There was no time and we needed to do this very quickly. Now, of course, that gave me an opportunity to have a startup, let's say, on Monday from a business that was already 30 years old on Friday. And you, I want to flash forward a little bit and I'm sure we'll fill in some of the gaps and there'll be stories that will come back.

The meaning of VIRANDO A PRPRIA MESA. The English title is MAVERICK. (21:48)

But could you please describe the, I would love to know the actual meaning of the title, "Virando apropria mesa." And which is, as I understand it, later became Maverick, but clearly in, I don't speak Portuguese, but seems to mean something very different than Maverick. Could you describe how that book came to be? And as I understand it, became the best selling nonfiction book in the history of Brazil, which is saying something. I mean, there are a lot of books. I've spent some time in Brazil. That's a non-trivial accomplishment. So what does "virando apropria mesa" mean? It literally means turning your own tables, but it's basically turning the tables with your, stuck in the middle there to make it more self-effecy, you know? But it was really about, and in Portuguese, it makes a little bit more sense, but it is in the same vein, which is to say, turning everything upside down and so forth. Which was this whole process of starting from scratch and changing the rules entirely. And it was really just, because let's say from maybe the five, six years after this mass firing, let's say, in which we started redoing things, we started asking questions. And I don't know, it seems a very simple process, but actually when you do it, you realize the potential, which was a whole process of asking three whys in a row. And that was the only thing we were doing. I said, since we're starting this again, tell me again, why do we search people on the way out? Why do all people have to arrive at the same time, et cetera? And when you ask three whys in a row, the first why, people have a very good answer for. They've been thinking about this for a long time, or they've been living this for a long time. Or they've been practicing it a long time. Yeah. And so people say, why do people have to be here at the same time? And they'll look at you and say, oh, poor kid, look, little dunce, let me explain to you. If the guy comes here and the guy next to him on the assembly line is not here, the assembly line does not move. And that's the first set of whys. And it just becomes more sophisticated, but they did the same thing to me at law school, at the Harvard Business School, everywhere I heard the same condescending response to, oh, let me explain it to you. Well, the first why is the easy one. And I always say that, you know, I have five kids and the smallest one is seven. And I always say that, you know, when you have the three whys and you ask them, they ask you something, anything. They said, dad, why is this this way? And the first question, the first why is easy to answer. And then they'll say, but why that? And then you start getting into a little bit of trouble. And you say, well, you know, really, because by the third why, you have only one option, which is to buy them an ice cream. This is this is what happened to be there. So I'd say, why do we have to come at the right time at the same time? Or we'd say, why are we all dressed the same way? Why are we wearing suits and ties? Oh, you know, so that will look more like each other. OK, great. Why do we want to look more like each other? No, because this is the same with almost anything you ask of business rules. There was a reason. Sometimes somebody was concerned with something, but it wasn't really essential to what you're trying to do. And so we would say, if we can't answer the three whys about anything or about any rule, let's just throw it out and let's see what's left. And we're left with absolutely nothing or anything of really importance. And and so we started organizing ourselves around this new way of if you can't justify it, absolutely. Let's try to do it without. And that went for organization charts and boxes and titles. And we were asking things like, why can't you just set your own title, choose any title you want, put it on a business card. And if the guy who wants to is going to buy from you and you put there, you'd rather write VP regional sales manager instead of trainee. I don't care as long as he buys from you and he trusts you and you deliver the product and off we go. And so we started doing this for everything. And so we threw out the organization chart, we threw out job titles. We said very quickly, we started asking questions. Why doesn't everyone know what everyone else makes here? Why can't people set their own salaries? And nothing resisted three whys in a row. And but to make a long story short, suddenly the company started doing well. And then instead of a hundred people, we had two hundred and then five hundred and a thousand and two thousand. And then at a point we said, people started saying, oh, you know, you've got to write a book. You know, you've got to tell this story in a book. And I said, no, I don't. But at a certain point in time, I said, I think I'm going to write a book. So I started on a Friday and ended on the other Sunday. So I spent nine days writing and and that was it. And it's interesting because I consider that book so belonging to to, you know, the the thin air and not to myself that I never corrected any grammatical mistakes. And it came to me from the publishers many times. Are you sure you want to correct that? This is silly what you wrote here. And there's stuff that I'm not at all proud of anymore, of course. And there's a lot of mistakes. And I said, no, you can't touch it. It doesn't belong to anybody. And so what happened was I sent it out. I finished it in ink. And it was nine hundred pages of pen and ink. And I took it. I had I had someone type it. And then I send it out to the eight big publishers in Brazil. And the eight rejected it. And it didn't take them very long either. The eight rejected it. And they said, you know, nobody wants to hear anything from a Brazilian businessman. You know, they're buying the Iacocca and Aqui O Morita and all these guys. And they don't. Nobody wants to hear from a Brazilian businessman. And then one of the guys that talked to me, he said, you know what we could do? We could give this out as a year end gift from the company. Wouldn't that be nice? Three hundred copies or something. And I said, you know, my ego is not small enough for that. I can't do that. And then I found a publisher who was the ninth. And I said, this is not possible. You've got to publish this this for me in a small version. You can't you can't lose all that much money and so forth. So finally the guy said, sure, I'll do it. And we had a very interesting discussion about royalties because he said, you know, what you get is 10 percent royalties. And I said, oh, that sounds good. And I said, what if it sells more than five thousand copies? And so he laughed and said, I don't know. It's OK. Eleven percent. Anyway, we had this whole table because I kept asking. I said, what about fifty thousand? And he'd almost fall off the table laughing. So let's make that 15 percent. Anyway, so I got 20 percent of the years out of a million millions of sales. And but what happened was I I really never thought, of course, that I knew what I was doing. And I knew this book was very necessary. No, no, sorry. But I just wanted at least to get it out there. But apparently it was a bit like a surfboard, you know, that you're sitting there and suddenly the big wave comes the wave. I didn't make you know, there people were apparently ready to think about a different way of doing things. And so they took they took the book forward and it nothing happened at all because he put the book out. There was no publicity. There was nothing in about a week later. Somebody found it and somebody wrote a review. And then it spent 200 weeks on the bestseller list of which one hundred fifty weeks. And number one, it was very simple. It just went mouth to mouth. And apparently it hit it had a moment, a nerve, a time in which it went off on its own. But so that's a long-winded response to it's called turning the tables because of this whole turning things upside down and finding out that it works just as well.

The right way to fire someone (30:14)

In our case, a lot better. So I have a couple while I'll have a million follow up questions, but I have a few that are related to what we've talked about so far. So the first is, and this might seem super specific, but what is what is the right way to fire someone or how how would you go about firing someone now or to those entrepreneurs listening? So, of course, you had your approach when you first came into the company. But how has that changed or evolved over time? What is what is the right way to fire someone if you need to let someone go? You know, sometimes my my wife says that, you know, it's it's so nice being fired by you that I keep thinking this was a very positive thing that you did. And I see all these people getting up here after you say, I really have to fire this person. And then they get out and they're smiling and they're patting me on the back. And so what the hell are you doing with this firing process? But the fact is this, that one when when you get close to it, some people are surprised, but most people have an inkling already that things are not doing well. I have this this if someone's working close to me and that's the only situation, of course, where there's a firing situation, but persons working close to me and it's not it's not going places early on. I do very little of that. Let's do this again. Let's do another another chance, another way, another cycle, etc. So it's it's highly, highly intuitive. And so to me, if it doesn't feel right, it's not good for the person nor for me to continue. And so I'll sit the person down and say, this isn't working. And from many respects, the person said, I didn't realize or I didn't think so. Now, wait a second, other than that. But it's all about being very, very exceedingly frank and saying, you know, most of the time it's a situation which I say you can definitely count on good references. Let me see if I can help you. Let's think about where you could go from here, etc. And mostly I think that that's the bit of why people in the end don't feel so bad about it is because I look forward a bit, a few months or a few years. And I say, you're going to be stuck here. I want this from you. You're not you're obviously this isn't fitting your profile entirely. And you're going to keep at it, keep at it, but slowly we're going to start. And abrasion will set in, you know, and I'll be more ill humored about this, or you'll find that getting up on Monday morning and coming to do this isn't as fun as it used to be. Let's cut all this at the root and give you a real chance of finding something that makes you a lot happier. And normally I'll say that this is here may seem like something you do well, but let me tell you, this doesn't work. But this that you're good at, you should be able to find a way to do that. And normally it ends relatively well because it is so based on on transparency, you know?

When all the rules you've established fall apart, how to rebuild them (33:11)

Definitely. And when you subject these conventions to the three whys and everything falls apart or just isn't justifiable. So now you're effectively dealing with a blank canvas. How do you choose what to do first? Or if somebody does this in a company, is there a particular order you might suggest that they tackle things in if they're just left with all of these rules from all the way from, say, marketing to finance to hiring? To fill in the blank? Have fallen by the wayside because they can't be justified? Where do you start? Because I could see a lot of people feeling scattered or becoming scattered. How do you choose or how did you choose what to do first, second, third? You know, when you think, Tim, about what you write about and what inspires you and how you go into the issue of a work week or a chef or a workout or how to live life wisely, you're basically concentrated on process. The process by which you do all of this is the one that makes sense. So I would definitely start by the process that takes us out of bed. You know, the bit that makes you get up and go somewhere to do something that that process is the first one that needs to be changed. So how often do you want to work? How many hours do you want to work? Who do you want to work with? In what place do you want to work? That is the one that, to me, would be the number one issue because if you have people in your company organization, wherever you are, that are doing this because you told them to or somebody told them to, it's always been done that way, or people aren't stopping to think about why the heck should I take a subway and a bus and go to a place downtown and so forth. This is the stuff that is undermining your whole opportunity to have the right process. So I would always start with, is this really what you want to do? Oh yeah, I love doing it. Okay, but you love doing it at this time of the day? No, not really, actually, if I could take my kids to school first. Right? This is the stuff that I would take off. What's the stuff that you're doing or how you're doing it, which somebody asked for or somebody thought was going to be smart or was a good idea four years ago? I'm sorry to interrupt, and this is something you would ask of every employee? Yeah, and we did, of course. And so we ended up, of course, with people who didn't want to come at the same time, who didn't want to work there anymore. We went from one building, which was when we started asking this question, we had one central building and everybody came to us. And this was the obvious solution. Within maybe a year, year and a half, we had 14 different places around town. And so we would say, go to the place that's nearest your house or nearest the customer you want to visit or don't go anywhere. But don't even tell us because we don't want to have anyone who keeps tabs on you. Because your process of how you want to do this is the most important thing. And let's negotiate you and us, let's contract for something you're going to do. Are you going to sell 56 widgets a week? Oh, great. So if you sell 56 widgets on Wednesday, please go to the beach on Thursday and Friday. Do not show up and sell more widgets because you're going to create an enormous problem for engineering and manufacturing and consumer have to go out and buy another company and another. Don't do this before we thought it through. Sell your 56 widget, where you're going to do it from, how you did it, none of our concern. Don't tell us. Just sell the 56 widgets and we'll always be fine. And this is true for everything else. It's true for accounting, it's true for marketing and so forth. And so the process of how you're going to do this is necessarily yours. And we don't want to be in the way. So here are 14 different places you can go to if you want, you can stay in bed. We don't care. Don't tell us how many hours you worked or how hard it was to sell the widgets because we don't have any place to put that information. That was the whole focus on process.

Testing assumptions and learning from mistakes (37:21)

And when you're asking why not A, B and C, right? When you're testing these assumptions, are there any particular notable failures that come to mind with tests that you performed? Oh, yeah. And I can think of a few and I'll tell you a few. But the main thing is that the enormous amount of mistakes that one makes in organizations with your wife, with your kids, at the church, in a group, Italian and so forth is so humongous that you have to consider a bit, you know, the Babe Ruth permutation that if you just hit more home runs than you missed the ball. But can you think how many times did Babe Ruth miss the ball? And here we have very little in general, we have very little patience for these mistakes. And my thing is really to brush aside the mistakes. That's great. That was wrong. Let's try this again. Now, if we're wrong again and again and again, that's really no problem. We just have to be batting in the right direction. So there's a lot of things that we started that we thought was really smart. You know, we figured all of this out. And for example, we with the whole search thing, that was a very big issue because we had all these electronic components. We had all kinds of stuff that people said, this is crazy. People take this in their purses and in their hair and so forth. And we said, it doesn't matter. You mean searching employees on the way out? Searching. And I'm going back here 35 years, of course, and in Brazil. But this was a big issue because everyone kept checking the stocks and there was always something missing from inventory. And this was all very expensive stuff, which was easy to take. We worked, you know, and the motors were all copper wires and then there was silver this and then there was components and so forth. And I was saying, you know, the process here is that I cannot work with people that I interact with, that we try to do things together with, I have empathy with. And then I search on their way out to find out whether they're stealing from me. That it's just not possible. It can't be done. And so for some time that didn't work at all because slowly we had a lot of inventory problems and the amount of losses that we had in the months falling was obvious. And people look at us and say, see, you're silly guy. You know, it's getting worse. And my reaction to that at that point was, do we do we keep this inventory safe and locked up and people have to requisition it? Yes. Yes. Okay. Well, let's give up that process as well. And just leave the stores completely open the inventory and anybody can take anything. And then for the first time, we had a decrease until the problem went away. Because the whole process was if we're showing you here and there that we don't trust you and sign this and lock this and so forth, and then we're just making sure you don't steal. It's a crazy situation. It's always a very small minority of people. And as we put the process in place, people started saying through a form where they would come together at a meeting and decide who they needed in their area for the next six months. And slowly the system expelled the people who were just stealing. And I don't know what happened over the years. You say in these 35 years of people stolen more or less, etc. We don't measure it. We have no idea. We've never had any idea. But it's never become an issue big enough to worry about since, you know. And so what I meant to say was that we make a lot, we made a lot of mistakes in every one of these processes when we started telling people on the assembly line that they could come anytime they wanted. They could leave their kids at school. They could stay longer in bed. Of course, for a time, the assembly line suffered and we didn't deliver some products and people were pulling their hands out. But then a few weeks later, suddenly these people realized and they'd say, well, wait a second. You're not here. This is the same as I was going to move. So what time you think you're getting here tomorrow? And a whole new schedule started coming into place. So I'd say ultimately, if the process decision is to trust people, to believe in people as people, the issues go away with time and they just look like mistakes in the short term.

Where to get started challenging ingrained social expectations (41:52)

So I think this is actually a good place to perhaps tie this to folks who are listening who have say smaller companies. So let's just say they have fewer than 10 employees. A lot of people listening to this are entrepreneurs. They might be solopreneurs who are doing their first hiring or people with small groups, small teams. What are some experiments or questions or any type of assumption busting that you might suggest they test for themselves? Are there any good starting points for people who have processes in place, but they're small teams, relatively flexible, but very, very resource constrained? Where might they start in terms of testing? I think that undoing your first urges to become organized are a great place because when you have the two, three and you're in your backyard or in garage and suddenly something seems viable and you're writing code or you're put together a small object, which suddenly a shop wants. You're in your most primitive creative stage. It's not beautiful and romantic and Jean-Jacques Rousseau all around it or Thoreau. It's really your first urge. When you start going places slowly and you start realizing that people are interested or there's more volume or expansion possible, that's when you start looking around and say, "Oops, I need more people." But very soon after, and you might have eight or you might have 12, and then suddenly you say, "Oops, now wait a second. We're going to become bigger. I need to get organized." I think this is probably the single riskiest point because it doesn't seem like such a big assumption. You might ask someone who supposedly knows or you'll spend some time on the web looking at literature of organization. Then suddenly you're stuck in a world which starts ascribing and prescribing and describing how you should be doing things. I think that that is the original sin, let's say, of organizations. So I would say resisting the rationale that is being handed down to you that you need to get organized, I think is much more valuable than it sounds. People look at that and say, "But wait a second. If I don't have the this and I don't have a software that does that, and if I don't give my payroll to that, I'll never know and this will be wrong," and so forth. Then you find that the stuff, let's say the bureaucracy that has to be dealt with, is nothing like the creative effort of communicating and dealing with people and giving them freedom. Slowly you find that as you grow from 8 to 12 to 14, you suddenly say, "Now wait a second. Before we could do this, but now I'm not able to just hire somebody or agree and contract for something. I need to know what they're doing." I think that when you start asking, "Why do you need to know?" "Oh, because if I don't know, I can't. I'm following them on Slack, but I don't really understand what they're doing. I don't know whether they really come in. I don't know if they're working harder or less than someone else, whether they should be making that." Maybe the answer to all of this is, "It doesn't matter if you know this or not." If you get down to the very, very few things that really matter to you, being unorganized, apparently, which is not knowing a lot of this stuff, becomes completely irrelevant. I've had now in the last two years, Tim, I've been dealing with kids, 25-year-olds, 28-year-olds, 32-year-olds, who I've started businesses with. One of the businesses, which is in Holland, for example, these guys started this business. I have some minority partners and I have some equity partners, etc., who I have never met. Personally, I've never met on Skype. I have a few people who, one of them is, let's say, CEO of a startup, etc., and I have not this idea of what he looks like, whether he's tall or short. I have a very generic idea of age and so forth. One of these people the other day, I had set up time to talk to, and they said, "Oh, that time's not very good." I said, "Why not?" "Oh, because I live in Australia." I said, "What?" So, and I said, "How the hell didn't I know that?" They said, "You never asked where I live." And so, this whole process is now, I think, one in which I would highly recommend to people that they do not fall into the trap of saying, "I need to get organized. I need to know all of this." Because the essence of what people are trying to do with their lives, their businesses, and the organizations, they really don't require the amount of information, communication, and structure that you think it needs, you know?

Insular rationalization vs. impartial feedback. (47:06)

What would you suggest they focus on instead of that? And maybe the way to frame it is, besides focusing excessively on the bureaucracy and putting systems in place, what are some of the other most common mistakes that people in smaller companies... And I should say also that we might not... Those companies may stay the same size. So they may... Let's just say that, you know, 10-person company, they're creating a great product, but they want to scale in revenues, potentially not headcount. So, A, either what are some other common mistakes that the people in that position make, or B, what should they focus on instead, or what might they focus on instead? I think there's a lot of rationalization, a lot of tricking yourself, you know? Because... And I think that's a very dangerous enemy that you don't really realize, because whether you're going to grow or not, and it's doing well, etc., what happens is that there's a point where you try some of the things that you're testing out there, and that you tend to insist very much, either on an impulse, on an intuition, or an early result. And you say, "This is going to work, this has to work." And the difference between perseverance and self-trickery is very fragile, it's very delicate. And so I would say that testing impartially, finding a way to test impartially whether what you're doing is really worth what you're doing, and the way you're doing it, etc., etc., I think is a very difficult one that people sometimes take a heck of a long time to do. And that sometimes the business is there, the money is there, etc., but essentially there was nothing really of substance there, and it might take you years and years of spinning your wheels to realize it. And sometimes when something does not go through in the end, you start remembering those small comments or those people who were naysayers all along, you were just pushing out of the way in order to do what you had to do because you knew it was right. So I'd say this whole process of really poking at what you're doing, the product or the entity or the time you're taking, is a disheartening process most of the time because very few things really are feasible. And most of the things will run for a while. And I think that if you could poke at that early on and be excessively transparent and humble about whether that exists really as an opportunity, I think that'd be by far the most valuable thing you could do. Which of your books would you suggest, say, that small organization entrepreneurs start with? And which books besides your own have you gifted the most to other people?

Ricardo's favorite books. (50:03)

You know, the one that you mentioned, the Seven-Day Weekend, is a good place to, as with many other books, is a good place to poke around also inside your own head and to look for some insights. In the end, when I wrote the book originally, and Brazil was still a relatively closed elite environment for business people, etc., so obviously because the book had sold a good quantity, most people had read it and I kept giving autographs to taxi drivers. So it was a very small microcosm I was living in. But I remember the second occasion that this happened to me, which was being stopped on the street and somebody saying, "You know, I read your book and it changed my life." And they would go off and quote somebody else's book entirely. So when this happened the second time, I said, "Shit, this is not about me at all." You know? So let me stop right here because, and of course at that point there were all kinds of campaigns for me to run for mayor and for president and become Brazil's Trump. Because this is, people get lost along the way and they start believing in their own bullshit. And the interesting thing here was, going back to the issue of the book, was that it's when you come across an insight which was already yours, and you see it in writing, that's when you say, "This book changed my life." You know? But real insights where you go there and you say, "Geez, I never thought of that." And there is some of that. It has to add to something that you believe in or that jives with your moment and so forth. So I think that putting too much weight and too much importance on something that you got out of some are going to decide, doesn't remind us that this intuition and this insight was growing inside you already. We're just waiting for some clarification of it. But that kind of answers the second bit, which is, I taught for several years at the Sloan School at MIT and I had a group of MBAs. And this was always a very fun group and I used to go there in the fall quarter and I'd tell them, "Look, this is what you have to read to understand business and organizations." And so forth and so on. And they said, "Make this available on the MIT site anyway." And then the books that were there were Marco Polo's Travel, one book Kafka, Parable, a Jung book on synchronicity and so forth. And so these kinds of books and Kafka, I think is extraordinary. These kind of books, I think, give you an enormous insight into the people who are doing things or why they're doing things, rather than the whole set of how-tos. And when you run away from the how-tos into the issue of how do you get to real wisdom, you know, we've been at this for a long time. We've been in this agricultural area and then we were in the industrial area and then we were in the information age and we were in the knowledge age, but we don't get any closer to the age of wisdom. And something is terribly wrong for a population and the humanity that's been around for so long and doesn't get closer to wisdom. You know, when you think about organizations and I ask you to show me one democratic organization or business environment in the world or to find one wise company as a company, et cetera, these are all almost impossible to find. So answering your question, I would say that the books that stop to think about why the heck do we do the things that we do, which are in Kafka or in Freud or in Jung or in Thoreau, I think that those will answer a business world much closer than people think when they say, OK, that's all very good and well, but that's all philosophy and that's all airy-fairy and touchy-feely. But I need to get down to answer this. How come which people, how and so forth. But this process, I think, is much, much stronger from a philosophical point of what makes you want to get up in the morning and how you let the other people around you do what they want to do, how they want to do it and get out of their way. And then that is a philosophical issue that I think would solve a lot more issues if people went from that filter onwards, you know. Definitely. And do you have any particular books or writing of Kafka that come to mind that you would recommend? Yeah, there's one that I used always there, which is wonderful. It's a collection of parables. There's only one. And there's a set of parables, but one of them is especially interesting. It's called Before the Law. And Before the Law is only three pages long. And I used to sit on top of this teacher's desk there in Cambridge and read this to the kids, you know, the MBA kids. And this was really interesting because I really felt like I was reading to my small kids. And I'd sit there and I said, let me read this to you. And the fact is it's only two and a half pages long, but it just tells the story of a guy who sits in front of a door, which is open, has this big guy who is guarding the door. And he's a Cossack and he's full of these big fur coats and he's enormous and he's scary. And the guy asks him whether he can go in. And he says, sure, you can go in. The door is open. But don't forget that further on there's another door with a guy who's scarier than I and then there's another door. And then the guy says, well, I think I'll just wait a bit here. And this goes on and on until this guy's getting older and older and older. And then finally, when he's about to die, he's lying there on the floor. And then the guy, the guard bends down and he says, and he asks the guard. And he said, now that I'm about to die and I have no more forces to go through anyway, what is beyond that door? What's going to happen? And the guard says, well, this door was only for you. And since you are now going to die, I'm going to close it. And it's a wonderful, wonderful exercise in realizing that each of these doors that you did not go through were only for you and everything that we're comparing ourselves to all the time and the size of our businesses and the health of this and the wealth of that and how good our family is and how good our life is. Where is happiness? Where is wisdom, etc. It all really answers this one issue that this door is there only for you. And if you don't cross it, it'll close when you die.

Perceptions Of Wealth & Personal Experiences

Oprah and the birthday bonfire. (57:30)

Now, I've been struck with how much I was a nonfiction purist for a really, really long time and was fortunate to have a few people intervene and the amount that I've taken from books like Dune or Zorba the Greek. And since they're told in a narrative form have actually stuck compared to, say, The Dryer, in some cases, nonfiction has just been extremely eye opening and liberating for me. I want to ask about, this is really a question from a fan. So Felipe Muita, I don't know how to pronounce his name, but this is part of his question. So he, this is referring to you. He once said he made a big fire in his backyard and burned every article, book, interview, everything he had done as a symbol to not look back. Has this been done again? And how is his relationship to the past? So could you elaborate on this? I don't know if it's accurate or not. But if you could comment on that, I'd love to hear your thoughts. Yeah, that was when I turned 50. So I'm 57 now. So when I turned 50, I looked at my library and I looked around me and so forth. And I said, "Shit, there's a lot of stuff on me here." You know, I have my books in all these languages, 38 languages. I have a thousand articles. I have DVDs. I have CDs. I have even, you know, of course, a video because I don't know where I would play that, but I had it. And I said, "There's something wrong with this stuff." You know, one, I don't need it anymore for my ego. I think I'm all set. Or I need to figure it out with my therapist, but not here. And two, I have these five kids, you know, we're going to run around and suddenly they're going to find that I'm larger than life and people are going to say, "Well, are you going to follow your, are you going to run your dad's company?" And I said, "That's a terrible imposition to make on them." You know, and so I thought there were two things holding me back. One of them was that if I remember that I did this and I did that and I have this and I have that award and I have that, I have a very wrong sense of, very superficial sense of who I am. So I thought that if I get rid of all this stuff, I'm also lighter for the trip that's in front of me and that I can look at things from scratch and say, "Let's forget all that stuff. What would I do now and how do I kind of zero base my life from here on?" And two, I didn't want these kids to be burdened by the idea that your dad this, your dad that. So what we did was we started a bonfire in the backyard and it took us about five or six hours to burn everything. We just burned 100%. And so just like you're asking, this is in Sao Paulo or where were you? Yeah, I live up in the mountains. Just wondering what your neighbors thought. Okay. Yeah, they didn't call the firemen. So we just spent hours burning all this stuff and it takes a hell of a lot longer than I thought it did and VHS tapes don't burn very well and a lot of black smoke. So we get hours of this. And so it's now been seven years since there is no shred of anything of mine in the house anywhere in that respect. And the good part about it is my five kids, they really don't have the slightest idea what I do. And if you ask them, someone might say, "I'm a writer." Some might say, "I don't do very much." I've never taken them to a company. I've never told them that one day this could be yours. And so they, it's never entered their mind. They know that we have money because they can look around, but they've also learned from the very beginning that they've gone to public school with kids who have nothing whatsoever all along. They go to the house of these kids who are very humble and they've just learned to accept that there's luck. There's luck when you're born in a family that has money. There's other things that are talent and the kid plays soccer 10 times better than you. And they've found that there are other variations, but the one of your father's this or that, that one they've never caught up on. And so that was the whole rationale back there. I'm very happy that I did it. Now, I don't need to every seven years do anything because of course nothing else comes in. Anything I get, we throw out as it comes in. Anything that has my name or is about me or is from me, et cetera, we just, we don't keep it. And that way it keeps relatively clean.

Wealth beyond 12 million. (01:02:14)

I want to come back to the parable and the door and the doors being yours and yours alone and this trap that some people fall into in terms of comparison and keeping up with the Joneses. And just as context for people, I live in Silicon Valley for those who don't know and regularly interact with people who might have net worths of hundreds of millions of dollars who are miserable because the other person with hundreds of millions or maybe billions has a larger jet than they do or something like that. And I'm looking at, right? Yachts or fill in the blank pissing contest. And I'm looking at the notes that I made. It must've been in 2003 in the seven day weekend. So we have, I'll just give you a couple of samples. 168 find talent than opportunity, not job description than talent. 71 the reason for work. 104 max personal wealth is 12 million. That's what I'm going to dig into in a second. 123 no more than six month business plan or six month plans versus long term plans. And I have dozens of these, but what I wanted to do is turn to 104 because that I'd love to read a small piece of, and then just hear you perhaps elaborate on it and perhaps your thoughts have changed somewhat. And find out whether I actually wrote it myself or not. Yeah, exactly. So this is the paperback. This is on 104. I have a theory about wealth. My friends just sigh when they hear this. My theory is that the maximum personal wealth is $12 million. And I've done some calculations with economists to bear out this capitalistic and admittedly provocative number, not a cent over 12 million. After that, all millionaires are the same. And then I'm going to jump down, I'm skipping a few paragraphs, but you call this the da Vinci constraint. And then the example is a neighbor of mine in Sao Paulo built a house that reminds me of a South American dictator's compound. He may have spent his entire allotment of 12 million on this house, but now his problem is Leonardo who points out that a human cannot possibly feel at ease in such a disproportionate house. Certainly my neighbor can live there, open it to photographers from design magazines and be admired from afar, but in winter he'll huddle in the tiny TV room on the second floor withdrawing from the cavernous rooms to seek a more human scale. And then I'm going to bump down another two paragraphs. And I really like this line a lot, which is collecting money is like amassing any other item. By definition, no collector can ever be happy. So I'd love to just hear your thoughts on this and if they've changed at all, because this is something that, or it's a temptation, this comparison and growth for the sake of growth more, I need more and more and more, that leads a lot of people to be very miserable. Could you just elaborate on this thinking? I think nowadays when you, and this is what, this is about 15 years old or something, a little bit less. Yeah. I think in these, in this last decade and a half, I think that the number of people who have come to realize or to accept the intellectual concept that money is, doesn't buy happiness and growing for girls sake and comparing yourself to everyone else ends badly. And I think a lot of people have accepted this as a thought and then something in the back of their minds is, yeah, but you know, if I had 12 or 20 or $50 million, everything would be a lot easier. And it's only these guys who really have the money who keep bullshitting about how money is not important. So this is the, right, this is where, this is how it comes down, let's say after so much, so much time thinking about this, you know, basically we're in a world post 1989, let's say when the Berlin Wall came down, we're in a world that says, oh, capitalism has won. So there's no such thing anymore as Soviets and communists and so forth. This stuff we've now proven, the world has proven that money is the real kingdom and the world is a monarchy and the king is money. And of course, guys who do this better than other people have now taken this to new proportions, which is natural. It's just doing more and more and more and more of the same. So if I, if my house were big enough to huddle two, 300 people, and these were some of the people from around your house, let's say, and some of the most, some of the wealthiest people in the world, and I were to invite them all for dinner and they were to accept, I would have at my dinner, the wealth equivalent to half of the population of the world. So I could have in that dinner, people who have more money than three or three and a half billion people around the world. Now that is money is king rationale taken to its most logical extent. And I started asking myself and I asked this on a TED talk and it was the line that got most reaction from people over time, which was if you're giving back, it's because you've taken too much.

Bill gates, Warren buffett, and wealth thresholds. (01:07:27)

And people are, you know, I have to give back. When you think about this and you say, you know, one of your, it's not your neighbor, he's in Seattle, but let's say Bill Gates or Warren Buffett. And Warren Buffett says, boy, you know, I've been so good at this stuff, you know, that I've now made, according to his calculation a few years ago, I have now made $30 billion more than I need. Okay, so what am I going to do with this? Let me give it to people who really need it. And so forthwith, he gave it to Bill Gates, right? This was the full rationale. And so there's something wrong with people who have a lot of excess money, of course, because you're saying let's find someone who's already tramping around Africa and meeting tribes and trying to give money to aides and so forth. But the fact is that once you start accumulating, you're caught in this collection mode, which is, you'll always find a reason for thinking you need more of that, but it is taking away from something. It's taking away from your kids or it's taking away from sitting in the backyard and reading another book, or it's taking from somewhere. There's no such thing as I will work harder for a time and then I will have the money and then we'll and then everything will be all right, because that moment never arrives. And I think people will realize that evermore. They just, people in general, of course, feel that there is a level of comfort that in your mind about your worries about the future and the monies and the mortgages and so forth, that, well, boy, if you could have that least that bit, you'd be okay. This 12 million almost parable rationale was to say, look, let's put at least an upper limit on this at a point where to have a house here, an apartment there and something on the beach and something in the mountain and have and do anything you want and go to long vacations in Paris. That was at that time that you have to bring up today, but it was $12 million did everything. There was nothing you could not do with it from then on. This was an issue of ego vanity or obsession. It was something else. It no longer had anything to do with money on the lower end. See all these guys who are doing work on finding happiness levels and serotonin levels and what it takes to be minimally happy. But people are always looking in India at the people who are untouchable and so forth and finding levels of happiness that are high. And so I think people kind of accept the idea intellectually, but I think the feeling inside is always okay, but if I had only 200 grand more, finally this, then everything would be okay. I think that that isn't going away to him in the sense that I don't think humanity is getting wiser and slowly will realize, but intellectually was the first step, which I think humanity took and now starts to accept every time more that there's something dramatically wrong with zero 1%. It's not even the 1%, but zero 1% having such tremendous wealth and this whole amassing wealth because the wealth is going to the smarter guys and the smarter guys are the smarter guys who are able to siphon money away from everything else into their own pockets.

"Robber barons," then and now. A broader definition. (01:10:42)

It's a very dismal situation and you come to think about it today, you think about reading and thinking about the past a little bit, Tim, you think about the robber barons like Rockefeller and Carnegie and Vanderbilt. These guys were all monopoly players. These are guys who are setting up trusts and almost everything that they did at the time would be illegal today. Now, these robber barons are people that we somehow or other are very impressed with. We'd love to be today called to dinner by one of these robber barons, but is there a dramatic difference today, Tim, when you think about it, in the biggest corporations in the world and these people, many people who started writing code and doing wonderful things and so forth, which are now all about monopolies and trusts and suddenly a guy like Trump says, "Come to Washington and play with me." And everybody says, "Where's my play?" And I'm ready to play. There's something wrong with this whole process because money keeps calling money and it makes very, very disappointing people out of the ones who've been seeking money as a big issue, money, power and so forth. And you've seen it in all the films, you've read it in all the books, you've seen it with people you know. It doesn't end well, but it doesn't stop any of these people giving up other things in favor of that which in a money world, in a king-oriented money world, people seek. And that's the bit that I think most people have found to be silly, but they're still chasing somehow. And that was the whole bit about the $12 million.

The most important question to ask yourself. (01:12:27)

How do you use the question, "What for?" When you do the three whys in a row and so forth, you end up with process questions and they're very good for removing obstacles and things that are silly that you do or that you're involved in doing. But it still doesn't answer the question that has to do with wisdom. And that one is, "What the hell for am I doing this?" And that's a very, very tough one because you could eventually even answer the three whys for a process or for a way of doing things. And you can fix that by asking the three whys in a row. But when you try to answer in your marriage with your kids in the place where you would work at the chorus, you go to the church that you attend. When you start trying to answer what I'm doing this for, then I think you're getting to the real gist of things, but you're also getting into real trouble because those are the really difficult ones to ask. And there's really all of us have only one question in the world in our lifetime. And one kid of mine asked me that when he was three, the other one was four. And one we're sitting in a jacuzzi when he was three. And he said, "Dad, why do we exist?" There's nothing else to ask. And there's nothing, there's no other question to ask for the rest of your life. We'll never answer it and so forth. And this issue of what for am I doing this? Why am I waking up in the morning and go do this? And why am I doing a, what am I doing a podcast for? What good is this going to do? And going further because you'll say, "Oh, because you know, I want to help people and I want all these people to make their lives better." Okay, but what for? Oh, you know, so that the humanity will be better. What for? Oh, what for? Because essentially I cannot live with the idea that I'm not making the world slightly better than it was when I was born. Even though chances are and statistics tells that it's not the case at all, but for me to feel that way, I need to go do this. So I need to do the podcast. I need to write a book. I need to speak at conference. I need to do all this, but it's not because I hope that people now driving the car, they'll suddenly stop and get out and skip and jump to the house and say, "I found new ways to do everything in my life and everything would be better from now on." But it's about my feeling that I'm being useless. And so this whole what for issue is used for that as a key to try and answer really why you do the things you do.

Times that have been closest to terrible endings (01:15:19)

What people listening, you're very well spoken guys, they might look at your track record, look at the accolades, listen to you speak and imagine that you've always been confident, always known what to do. Could you share any particular dark, difficult times or time that comes to mind and how you found your way out of that? On several occasions, I've been, let's say, close to the brink of things not working to a point of undoing everything. So a few years after I started, it was the first time I ran into, we ran into such financial difficulties. I remember specifically driving to the plant and thinking what it would take and what it would mean if people have to talk to take the company into receivership. Let's say the company was going broke and what would I do? And that was to me the closest I ever got to the end, let's say, because I was only, I don't know, 21, 22 and suddenly everything I tried to do was completely wrong or wasn't working. And we came close to the brink at that point. And so what I found, I think, in that, and some moments later, I've never come to that same financial situation anymore, exactly. But I'd come to that situation looking at marriage, looking at how I was raising kids, looking at the opportunity to have a much richer life and finding myself stuck in the own traps that I'd set for myself of doing things that I still had to do because I said I was going to do them and not trying to. And so this whole process, I think there were many dark moments in which, in front of, let's say, family or business or wife or choices forking roads, where looking back, I realized either that it wasn't as dark as I thought it was and I was just scaring myself into things. Or two, that I was, luckily I got through that bend in the road, et cetera. So the answer is, first of all, no, it's far from easy, even though I've been terribly lucky all along. And so if you say, let me, tell me the story of the 10 companies that you started that went bust, that's easy because there's more than 10. The amount of people that you've put together to do something that became nothing, the kind of hopes you had for things that you were going to do that went nowhere. And I've written plays, I've put on plays and then spent a year in the theater learning all about drama and putting plays together and so forth. And I've been lucky enough that most of this stuff kind of wanders off or is reasonably acceptable so that I can move on. And I think that the real fears are always when somebody calls you and says, oh, you're, for example, this two, three weeks ago, somebody called me and my older kid was snowboarding. And he says, I'm calling you from the hospital. We have to operate on your son. You know, things like that where your whole life just kind of falls apart beneath you, you go and do what needs to be done, but you realize how fragile it is to think that you're successful and you have these big houses and you have all these people working for you and so forth. But this stuff is all very, very delicate and very fragile. So I think there are a lot of dark moments in which you realize what little it takes for you to kind of lose everything that you were standing on.

Success, Personal Struggles And Life Philosophy

Tips for handling terrible/inexplicable fortune (01:19:16)

You know, are there any, let's say philosophies or principles that you rely on to handle those situations when you're reminded of how fragile things are or uncertainty strikes or fortune blows in a direction that throws things seemingly off off balance? Yeah, I have a kind of a, an unnerving and unwavering belief that we're very, very insignificant, have really no idea what's going on. We're not, we're not given, it's not given to us to understand anything that's really important. You know, anything that you say is really, really fundamental in life, we know nothing about, we know nothing about love, we know nothing about death. We know nothing, all the really important things we don't know. If you take a, you go to a doctor and you go for a second opinion, a third opinion, et cetera, you will always realize that the first question, the first why am I, do I have this or you have this because you're a nerve on this, the that, the second one, et cetera. But the third why to any doctor is that we don't know, right? Everything is that we don't know. And is it is really important? We don't know. And so my feeling is that because of this, this insignificance, which is, let's say paired with the fact that we're terribly important to ourselves and we're almost 100% of our importance to ourselves. We're also insignificant in any other regard. And we noticed that when, when somebody passes away or when we remember something that we'd forgotten entirely that this stuff is all becomes dust very quickly. And so my feeling when, when things are darker, going badly, or is that, um, it doesn't seem reasonable to me. It never seemed reasonable to me for things to go completely awry. And so my feeling is that. I'm sorry, can you say that again? To go completely what? Awry. I mean, going completely wrong or going completely south, you know? Got it. And that my, and my feeling there, Tim, is that, you know, if you're, if you're really not spending most of your time, um, tricking people into things and finding, uh, ways on the side to make things work or to make money and you're not, um, you're doing your, your basic, uh, humanity is basic in place. My feeling is that you'll be all right. You'll be all right. And I think that's what carries me through in the end. Now, it's not religious. It's not structured in any form, but it's this kind of feeling that you don't have to do all that much just to plod along without, um, without being, um, uh, I'd say it's not even naive, you know? So the whole rationale of every time we have these small choices, the whole day long and by week and month and years as we go by, it's very easy to differentiate between that, which is a little bit less self-serving and that which is, um, which is only for your own good. And if you make enough of these choices along, I think that at these dark moments, right, these moments of enormous risk, it's kind of like a, a destiny or a balance that is in place and that takes care of you somehow, you know?

How Ricardo handles his battle with melanoma (01:22:41)

So on a semi-related note, is there any particular, uh, challenge or goal that you're facing right now? You could choose any personal or professional, uh, that you could describe and how you're, how you're tackling it, how you're going about it. The other day, I told my wife, I think I said this at a talk or something that, um, that I'm facing an empty bucket list, you know, and, uh, and my empty bucket list is all about saying this, that, um, you know, my, my family has all, um, everyone in my family had melanoma had a form of very drastic cancer, which is very quick. And, um, and I, I don't know about 15, 20 years ago, I was already, uh, scanned and they told me at the time I rated that I had a hundred percent chance of melanoma and cancer. And I've actually had it two, three times in the, in the meantime, but if you, if you watch out for it, of course, you can be quick and remove it. And I just had surgery again about three, four months ago, found a new one and it, there's nothing to it really. You identify, you know what it looks like, you go there, you have it removed and off you go. But I kept thinking, uh, you know, sitting in front of my, my oncologist, my cancer doctor, looking at me and saying, well, Ricardo, this time it went, you didn't see it. It was on your back and you have three months left or six months. And, um, which happened to, to my parents and to people, to others before them. And I kept thinking, geez, I don't want to be in that situation where suddenly now I have to go to ball games with the kids. And now I have to travel to places I haven't been in after right that play, which I never wrote. So I said, that's crazy. So let's do something else. And that's when I started what my wife, Shenan, doesn't like the name I give, but on Mondays and Thursdays, I have what I call terminal days and terminal days are the two days a week in which, um, um, my schedule is always completely clear. I have nothing. And I do on those days, what I would have done had I heard this conversation from my oncologist. And so I've been doing this for quite a while. And so my, my weekends are with the kids and family so forth and Mondays and Thursdays, I only do what it is I would do if I had just recently learned that I had a terminal disease. And it sounds dark, but it isn't really because it's just all about the freedom that you've just gained. And these days that you've just gotten back, um, to do whatever you want to do the way you do it and trying to answer to yourself what you really want to do. Because in the beginning you have these long lists of things you would do if you had the free time, but it's not, not really true. I'd read all these books which are sitting there and I hadn't read, I'd listened to all this music, which I hadn't, but you do this for an hour or two or three, but then it gets old as well. And there's a reason why you didn't do enough of it before. But it sounds like you'll be able to do this for hours on end, but you won't. And so if you're healthy and you're in good shape and so forth, and you have your entire day ahead of you and nothing to do, you start answering very, very interesting questions about what, what you really want and what really moves. So still going back to answer your question, the fact is that I've, uh, I'm not left with goals and I'm left with a whole set of wonderful processes that I love and I'd love to do again and again. But I no longer need or want to do something that I can measure. You know, the metrics I think have gone away. This, this process of doing what I want with the people I love that I want, that's entirely a process on its own. It's a goal on its own. And so there's no longer, I have no wishes for things that I could buy with money. You know, my kids and my wife are constantly frustrated by the fact that there's nothing that they can buy me. You know, because it's, it's gotten to that point where I don't, I don't need it or I don't want it, or it doesn't, doesn't tickle my fancy and so forth. So I'm not left with metrics saying, I'd love to have another this or the money I've, I've been doing math now. I think Tim on my personal finances for 30 something years or more 40 years on the same rationale, which is how much do I need to have in able to lead the life that I do? And Swiss bankers used to say that you need to have 20 times more than you spend per year. And it kind of as a rule of thumb, that's not bad, you know, because that says you need about a 5% return on monies you have. So if your lifestyle costs you and you say it takes me $5,000 a month to live minimally the way I want that 60,000. And so you need assets in the value of a million to house plus money, whatever. So because I've been always starting from what it is that I need minimally to have fun and to do the many fun things that you can do with money. I just multiply that by 20 if it if it's over 20, I don't worry anymore. And I thankfully haven't worked for a while. But if I looked at the opportunity, say, boy, if I did this and I put these two companies together and that I would have something else. If it's going to take away one of my Mondays or Thursdays are going to take one of the times or many of the times I can't pick up my kids from school Saturday. It's certainly a bad deal, no matter how much money or what metric it is, you know. Definitely. Well, I mean, the non-renewable resource being that time. And I'd love to hear some details because I'm grappling with some of these issues and structuring, structuring is too formal a word, but I had a very good 2016. And I think it was in part because I had so much slack in the system to do deep work and to enjoy and savor certain things. And 2017, because of the book launch a few months ago or six weeks ago, has just come crashing in with a lot of inbound, most of which is noise. So I'm thinking a lot about this. What are some of the processes that you love?

The illusion that the demands on your time ever let up (01:29:12)

And could you walk us through maybe a Monday or Thursday that comes to mind and what that what that looks like? Yeah. Yeah. And going from back to front, I've been, you know, writing a book in my head now for the last two, three years. And I'm just scared of putting it out there because you are then caught in a vortex of your own making, you know. And you get a publisher and then you kind of, you kind of sell them the idea that you're, you'll be there. And they're kind of saying, I'm going to do this, but if I need you for the today show, you're going to be there. Right. And, and you're kind of, yeah, I'll try. And so what the fact is that you didn't really want, you never really want to take on the whole weight of proving yourself, doing your thing. And satisfying all the co-sponsors of your effort. Right. And so there's the book launch and there's no end, of course, it doesn't end that quickly because you tricked yourself into thinking, this is six months and then it'll be OK. But we know it's not because I just had, for example, I got yesterday, I just got my two copies of the Chinese edition of my book of 1993. So it takes a little bit of time for things to happen. Right. So, you know, I got the Czech Republic edition of the Seven-Day Weekend about a month ago. So this stuff just takes on a life of its own. And then every time a request comes for your time, you stutter, you know, you say, well, you know, I don't really want to take this flight and go to this place.

The Little Prince and our responsibilities (01:31:03)

But on the other hand, you know, I kind of have a responsibility to do that. And it's a little bit like the Little Prince, you know, the French book by Saint-Euzperi, which says that you are responsible for everything that you captivate, you know. And so you kind of feel, you know, that, well, why did I write the book in the first place? If I wrote it in the first place, that means that I should go to the syndicated radio show because that'll sell more books and more people will be happy and I'll feel better on and on. And you're caught with metrics because somebody will say, so Tim, how many people listen to your podcast? Oh, a million or this and I'm number 13 or I'm number 11 and I'm number six. And people have caught you up in their vortex of metrics as well until something happens. You retire, you die and so forth. And it goes away because you're a non-contender from there on. And then it's perfectly all right. And then you have to think who the hell is going to remember 20 years from now or 40 years from now? And so you're left with the issue of what am I doing this for? So my answer to all of this, because if you take this to its ultimate consequence, you could easily be in a situation where you say I do nothing anymore because nothing is worth it, because nothing will reply to the issue of metrics. Nothing will satisfy me enough. Nothing is really worth it if we are these useless specks of dust on the universe. And so I don't I don't take it to that rush now because we are 100 percent of ourselves in terms of importance at the same time. And so you can be worried about the state of nations and poverty and immigration policies. But if there is a speck of dust in your eye, you're going to spend the next hour and a half only dealing with that. There's nothing else of any importance in the world while there's a speck in your eye and your eyes watering. And so what I meant by this is that on Mondays and Thursdays, let's say I stopped to think I wake up and one of the first things I do is lounge in bed, meaning I haven't had an alarm clock, I think, for 15 or 20 years. But I say I will not get out of bed. And of course, that doesn't last very long, but the feeling is good. And then I'm with the kids and so forth. And then suddenly they get into the van and they're gone. Suddenly everything is quiet in one second. And then I start asking myself, so what I want to do? I could read the paper, but I don't really want to read the paper. The news is this and that. I could read that book, but now I'm halfway there. And you're stuck, I think, many times with the issue that we keep ourselves so busy and we have all of these distractions and attractions and things going at such a rate that when you actually turn off all the noise and say, which of these things do I really want to do? You have much more trouble than you thought you did. And so when we put that book out there, or as you did, and you have requests and you have opportunities, you really just kind of measure the opportunities of what to do against each other. So, you know, in that sense, it's a bit like Kafka again. Definitely. That door is open just for you. But you say, you know, is it better to go talk to these guys in Denver or to do this thing in London? But the real question was, what the hell for am I doing either of these? And I think you'll end up with the with the reply that the things that you can look back on, you said that was a good one, two hours, three hours of my life because I either shared something, I learned something, it felt good. These are all wonderful responses. You know, you went to the baseball game, you're not losing two hours of your life. That's a wonderful way to spend those two hours if you love baseball on and on. And so it's not about nothingness or undoing yourself or consider yourself worthless and therefore it's not worth doing anything. And but it is especially about not comparing the opportunities with each other and rather compare them. What would I do if I had the whole day off? The best feeling I have in my in my time is never the Monday and Thursday, which I do love when I get up and I'm in bed thinking today I have nothing to do. It is on that Tuesday or on that Friday when I have something set, a conference call or a visit or something and that gets canceled. That's my most wonderful moment is always when I have something to do and somebody cancels it. You know, it's an enormous sense of relief, no matter how important it was or which I was looking forward to. It's that when somebody cancels something, I feel elated, you know, and so I think that kind of answers a bit as well.

Why risk isnt something we should be afraid of (01:36:03)

No, it does. And I mean, I'd love to uncover some of the some of the quirks. I had somebody ask me a question a few days ago that I thought was a good question. We'll find out. It may be it may fall flat, but he asked me what are what are some of the absurd things that you like doing or love doing? What are some absurd things that you love doing? Does anything come to mind for you when I ask that question? I have all these old old old line habits. One of them comes from Winston Churchill, which is to sit in a bathtub with a lit cigar. I'm sure it'll pass a lot of people's tests of absurdity. But so sometimes I'll say, you know, now I will do nothing and I will sit in a bathtub for an hour and a half with with a very long cigar and think like Winston Churchill. And I always remember this especially well, because Churchill was a guy who was even in power. And to an extent, this happened to FDR as well when he had his polio thing in Florida. But Winston Churchill would go off a bit before Christmas and take a ship to Egypt where he would go to the same winter palace hotel in Luxor. And he would spend 65 days there while he was running the country. And so I think we we give ourselves an enormous amount of importance into our time. And I think doing absurd things related to wasting time, I think are a wonderful way to remind ourselves that we're neither that important nor that necessary. Or none of that much happens when you do absurd things with your time. And I think purposely looking like you're wasting it, I think is an absurdly wonderful thing to do. Do you know people looking from the outside in, many people will be very impressed with your ability to experiment and to test and to have failures, but also have these successes and home runs. Do you think about risk differently than other people? Or how do you think about risk? I think that that word is a scary word to a lot of people and they don't really define it for themselves. And so they don't try, but I'd just love to hear your thoughts on risk or perceiving risk, how you think about it. When you when you try and deconstruct risk, I'd say there there there's an objective metric associated with risk. So I'm going to start this business. I'm going to take 32 percent of my savings and I might lose it all. So that's a kind of metric that I think is less scary because you know that it's 32 percent. You know that if you lose it, you're going to it's going to be trouble for some time and then some restrictions, etc. But it is an outside metric which you are willing to accept if you say I'm going to take a plane and I know that the statistical risk is zero, zero, zero, four of this or that or a peak coming late and then 100 times smaller of the plane falling. And I'll take that risk. That bit I think scares people very little, even though they bring it up. I think people use it very much as an excuse because the other risk factor is how will I look to myself, to my spouse, to my kids, to my former business partners, to my people. Now how will I look if I fall flat on my face? And I think that this element of risk is the one that doesn't bother me almost at all because I think it is so ephemeral. You know, you get a bad press or you get a bad opinion from neighbors or your wife is dismayed that you actually did this. I think all this goes away very easily and relatively quickly. It might take a few months or a few years, but all this goes away. And it's not to say that it's worth doing because if you do succeed, then you will show them all you will rub them on the face or you'll be happy or you'll be gratified yourself, even because we know that a lot of these apparent successes and apparent things that we call home runs, they're also temporary.

What is success, and how does it evolve? (01:40:36)

Right. In that sense that you do something and the last mile of everything you do is probably what's going to count. This is also an ironic turn on life, which is that you go there and you spend 20, 30 years today, this day, today, today, we had one of our biggest billionaires in Brazil fall into jail. He was in New York over the weekend and he was arrested and he's involved in a corruption charge and he was the seventh richest man in the world who's by far Brazil's richest person. His 20, 30 years of unearning successes and one success on top of the other were all wonderful. And he obviously has a genius for business. Otherwise he wouldn't have gotten where he got. And he has his dark side as well and so forth. So he got to this point. I don't know him personally. I've never met him. But he got to this point where he was this billionaire and he had these enormous projects and he was doing wonderful things. And he had on the side, he had hobbies and restaurants and yachts and doing things for poor people and on and on and on. Now he's in jail. I don't know for how long. Maybe, maybe even not that long. But the fact is that he has this hair products company who's always very proud of his hair. And you know, another guy who, who has similar hair and he in jail, the first thing they did was to shave him bald. So you see now, what I meant to say was, what is success for this guy? You know, was it the 34 years in which he had yachts and planes and every president, everybody would receive him. And he'd do wonderful things and so forth. Or is it now so tainted by this last image of himself that he will never recover? You know, and I'm no judgment at all. I'm just saying that when you think about this, I think about some of the people who were presidents of Brazil, some people who were presidents of the US who were there at 50 or 60 and their life is over. It's no longer success. It keeps deteriorating as the, as the years go by. You know, you take someone like, like Clinton, who has an extraordinary mind, did a lot of good things, but did it made a few enormous mistakes with cigars and trainees that he will never recover from. And so what, what is success in that past? What I meant to say was that your home runs and the businesses you built and the money you haven't, it is all very, very fragile. And it's probably going to be measured with how you handled yourself in a few, very few decisive moments in your life. And or in the end, you know, the last few things you did are terribly important compared to what you did before. And or this guy, I keep forgetting his name, Pastorius or Pistorius in South Africa. Yes, tremendous guy, etc. Until you kill your girlfriend and then suddenly all those other successes don't sit very well. Now, can you do your things, have your successes, build up your metrics, etc., and then retire and sit tight for 20, 30 years enjoying, etc. Probably the feeling inside is that slowly your worlds are deteriorating in the sense that your friends are dying. The press is no longer interested in you and you become a has-been who still has a few things to nail up on the wall or remember, you know, jaded photographs of you with someone very important, you know. And so I think that the success factor and this metric of how you measure yourself is very, very fragile. And when we stick to it, we stick to something that won't be there when we try to hold it in our hands. It has to be held a bit like a bird, you know, you press it a little bit too hard, it dies.

Imparting Wisdom & Life Lessons

How Paulo thinks about success (01:44:35)

How do you think of success for yourself then in place of leaning on or depending on the ephemera and all these things that can be taken away so easily or destroyed so easily? How do you feel at peace with yourself or feel successful? What lens do you use for that? I try to exchange these lenses of past and future for living in the present, which is the only very difficult thing to do. We talk about it, but nobody knows how to do it. You know, James Taylor said in a song, which is that the meaning of life is to enjoy the passing of time. Enjoying the passing of time is by far the hardest thing we can ever do. And when you take your thought process, we are almost constantly living in the past or in the future. And so success to me is always making sure that this passing of time is worthwhile, that this passing of time right now, that I'm not exchanging it for a hope in the future, I'm not exchanging it for something I got or had in the past, and that you're always kind of ready to survive or to withstand through the use of this wisdom of present time, of which I'm very far still from it, but I just keep hammering it into my own head. This passing of time, if this podcast and conversation with you was worth it because it made me think, because it was thoughtful for us and so forth, that is success and that can never be taken away. No matter if tomorrow I don't have the money or I don't have this or things go wrong, God forbid, with people, the fact is that that one hour or two hours which we spent in the podcast thinking about life and thinking about exchanging, that that one was definitely worthwhile and successful. And that one can no longer be taken away from you because it's now part. And when it becomes part of your history or your past, it's just building blocks of time that we spent.

The story of wine collecting and adjusting expectations (01:46:48)

You know, I had an interesting situation with, for a time I was buying much more wine than I should have, because I was kind of, I got into the collector's mode about 25, 30 years ago. And so I kept buying at auctions. And of course you get into this thing where you need to have that 1959 Mouton otherwise and so forth. And so you go crazy at auction, you overpay and so forth. And one of these days I had a friend over and I opened one of these wonderful wines that were extraordinary, extraordinary year. And I outbid for it and so forth. And this stuff can't be used for vinegar. It was completely spoiled. It was always completely spoiled. And when I bought it, it was already worth nothing whatsoever. And I always thought it was an interesting collection because you, you buy all of this wine that you have all kind of expectations from, and you're learning to say, you know, this has pencil shavings and a bit of mineral that and some marigold flower in the taste and so forth. But you know, there's an enormous amount of bullshit in what you're doing and why you're doing it and so forth. The interesting part is that once you consume your collectible by drinking the wine, you're left always with 20 cents of glass, you know, which is. And so it's just a way of saying that this whole process of wine is a good is a good comparison, because one guy told me a few quince in what gets you into your, your cellar and makes you take a bottle wine, which you paid $100 for is now worth $1,000 and drink this and be left with a little bit of glass because you end up probably not even having the courage to drink this wine that now is so valuable, etc, etc. But I've always answered that in the following way. If one day I look at my cellar, and I do now and it's about half empty or more, you know, it is now about half empty. And I think that every time I pulled one of those bottles, it was because I was with friends, or because I was feeling good or because it was a great time.

The moment that compelled Michel to give up wine collecting (01:49:02)

This must have been a good life, looking at those empty holes, you know. And so that's, I think, with everything else, if, if you're using that time and you at the end of it, you say, boy, that was a good two hours, this was worth it, then success is certainly guaranteed. How did you stop the collection of wine when you were getting caught up in these auctions and so on? What was the pattern interrupt or the conversation or the moment when you decided to stop doing that? I actually remember it very well. It was very specific. I went to Thailand. And in Thailand, I met this guy who was actually Chinese, but he was in Thailand and he was a tomato farmer. And he had mini meals. He had these mini steel meals, steel meals, and he was a magnate and he'd made, he was a real tycoon. He'd made enormous amounts of money, etc. And we were, we went to have dinner with this guy and he was smoking all through the dinner. And I asked him, you know, how many cigarettes he smokes a day or packs. And he said, no, I like one in bed. And then I light all the cigarettes with another cigarette. So I never did them. I never did the math on that, but it can't be very good. But anyway, so he would, he would eat with one hand and he would puff with the other and at no moment did he stop smoking. And then we started talking about, he said that he has a bit of an obsession for things and so forth. And he said, he collects things. I said, what do you collect? And he said, I collect Mercedes cars. And so you have a lot of these. And he said, yeah, I have a lot of these. I have 111 warehouses of Mercedes. And he said, and I have the Mercedes, the first Mercedes of 1896, which is a steam Mercedes. And I have all the Mercedes in between. And I said, what do you mean? He said, no, every time there is a Mercedes that comes out every year, they come out with, let's say six models. I buy one of each. And when Mercedes needed a Himmler's car and the car that Hitler went into pairs of, I lent them the cars because I have the cars. Okay. And so I was there obviously stunned at this conversation and all of this smoking. And I was like, Jesus, what little do I know about interesting people or freaky people around the world? And then I, at one point I said, well, but so what do you just keep on collecting? He says that. I said, and of course I have to go. I have to go in a few days. I'm going to an auction because there are several Mercedes. There are, there are a total of 12 Mercedes, which I don't have. And I said, how much does it bother you? He said, oh, it keeps me awake many nights. He said, and I keep going at it and I'm going crazy. And I need to have these 12 Mercedes. And at that moment I stopped buying any wine whatsoever. I don't think I've bought a wine since.

Charles' favorite documentaries and movies. (01:52:04)

Oh my God. What a story. We, we could go for a very long time. I want to be respectful of your time. There's so many things that I'd love to touch on like Lumière and, and many other areas, but tell me what you think of this. We could do a few rapid fire questions and then maybe if you enjoyed this and everyone enjoys it, which I think they will, we could consider maybe doing a follow up at some point. I'm certainly happy to stay on and talk about anything you'd like, but I'd, I'd love to ask maybe a few rapid fire questions and then lead people to what you're up to now and where they can, they can find you if that, if that sounds like a plan. But I know we've been on for recording now close to two hours. So if, if, if that works for you, we could, we could take that approach, but I'm certainly happy to touch on anything that you'd like to talk about. No, let's do that. And you're, I'm assuming you want rapid fire replies as well, which is not my special. No, the rapid fire questions really just means that I have to stop asking multi-part questions with 17 commas. So your answer can be as long as you'd like. So I will just keep my questions short. And I'm certainly not in any rush. So this number one is what books have you reread the most yourself? I always go back to two books, one by Carl Jung and this whole issue of collective unconscious, which is to me a big issue because you either are able to touch in and touch and get involved somehow in this collective unconscious, or you're doing things which are very much on your own and not significant in the sense that they're trailblazing, etc. They're just not connected to the world as they should be. And another one I keep, I keep going back to is very interesting because I come from a Jewish family, even though nobody was, was religious. There's a cultural and ethnic issue there, but I only found out actually I was Jewish maybe 10 years ago. And even though I was suspicious of it, but the one that I read every once in a while I pick up because it's around the house and because my wife is a bit more religious is the Bible. I was a wonderful set of stories, philosophy, etc. And I read it much like you would read Shakespeare, you know, and it's extraordinary because it has everything. Shakespeare has all the human traits. If you look somewhere, you will find it either in King Lear and Hamlet and Buck Beth it's there. And, and the Bible was very interesting book to keep going back to, to, to get a glimpse of humanity. Do you have any favorite documentaries or movies? Yeah, my favorite documentary is one called Up. Have you seen that? I have. Yes, it's fantastic. And, and for further people listening to us, it's a guy Michael Apted who in 1964 decided to follow about a dozen actually more kids from very different backgrounds and from in the UK and some in orphanages and some very well off to try and establish how much people are stuck to their, to their context, to their social context. And so when it's very interesting because he follows them every seven years, right? So it's 7, 14, 21, 28 and so forth until 56, which was the last one. And it's quite an extraordinary way to look at humanity and see, can people really escape their social constraints and their initial lay of life, you know, and in general, his assumption is that they cannot and that into a great sense it bears itself out. No, Tim, in the sense that it doesn't look like you can, you can stray that far from the path on average. No.

Charles' thoughts on the American Dream. (01:56:10)

Yeah, it's, I think they revisited them what every five years or something like that? Seven. Seven. I'm sorry. That's right. Because it was seven up and then it became the seven up series. Yeah, there are multiples of seven, but it's the same people, which is extraordinary. You've seen someone who's seven, who's 14, who's 21, who's 28, who's now 56 and their dreams and their hopes and what they were actually able to do and how close they in these seven year periods, how close they have stayed to their calling, apparent calling in life before they were born. It's an incredible situation. Yeah, it's, this is, this is the documentary series. It's come up three or three or four times. I'd never heard of it before interviewing a number of people on the podcast. So that was actually introduced to the series through the podcast as well. It's wonderful. And just, just on that tone, Tim, to say that, you know, you're, you're in a country that says, boy, anybody can do anything. You, anybody can be anything. Don't let anybody stand in your way. You can be, et cetera, but it's not really true at all. This is, I think, a very interesting take on this documentary and on the American dream, you know, even what's, what's happening today in the US is a reaction to this. Where the fuck is my American dream? That was promised to me, you know? But the fact is that you're promising classroom of kids and as a valedictorian and speaking at conferences and egging them on at MBAs. The fact is that you cannot, you know, humanity has a very, very long story and a very, very long proof that in general, your chance of changing walks of life, changing class, changing path from what, for the context, which you were started with is a very, very rare situation. And that very, very rare situation makes for wonderful books and speeches and films, but it only makes for these wonderful, for this wonderful entertainment, because it's so, so rarely true. Now, is that very dismal and disappointing to look at and say, boy, you know, now that you've put this in my face, now I'm not going to try anything. It's not even worth it. No, it's just to remember that in the passing of time of the station of life that was, that was created or available to you in your context, there could be and should be a wonderful life. The wonderful life is not in rising all the time until you're at the top. There's nothing that's particularly interesting at the top. It just seems absolutely wonderful when you look at it from the bottom.

What Charles would teach if he had one hour with a classroom of at-risk youth in America's inner cities. (01:58:51)

What would you say, for instance, if you were teaching again, but instead of at the MBA program at MIT, you were teaching a ninth grade class in some economically disadvantaged area, let's just say, could be the ghetto in Chicago, could be any number of places in the U.S. What would you teach in that ninth or 10th grade class to help them improve the odds of not remaining in their current cycle? And I have, you know, we obviously you talk way too much, so we haven't had time to talk about education, which I'd love to as well. But of course, I've taken let's say the last 10, 12 years, I've taken all of this effort and risk taking and what I'd learned before and taken it to the world of education. And but I spent the first the first few years of that teaching six year olds in a public school and heavily disadvantaged kids and so forth. So it was fun to do. What I what I tried to do most with them was to get them to realize the magic of the accumulated wisdom of humankind and that poking at this magic of what we've been able to do and think and all this time, all the rest will take care of itself. And so if I sit there and say, you can do this, you can find the strength within you, it is possible you can do anything you want, you can be anything you want. I don't I don't believe in that. And so I kept showing them things like I would say, I remember one day stepping outside of there and said, let's I'm going to teach you the special relativity theory of Einstein. So it's like this, you're here with me in this little village, right, right. Now you look up and I say, how long would it take you to go to the moon? And so they'd say this and that and rockets and all of them from moon to the next and on and on and to Neptune and rain is great. And then to the edge of the universe. And then this, their mind is going all over the place, of course, and we're trying to think this through together. And I said, if you come to the end of the world, the end of the universe, and there were a little curtain.

Inspirational Messages & Introduction To Various Concepts

The one message Charles says he would put on a giant billboard in the world's largest city. (02:01:15)

And now you've traveled for 1000s and 1000s and 1000s of years in your rocket ship and so forth. And now, according to this man, Mr. Einstein, you open this little curtain at the end of the universe, where would you be? And the answer in, in following the theory, people will know this will tell you, you will be in this little village, right here, while looking up into the sky. And these crazy, crazy concepts, which are true, and which are about us and to say that if you were up here in the mountains, so time here moves a little quicker than it does at beach level. And so that you have exact twins who were born, and one is on the beach, one is in the mountain, by the end of 90 years, when they meet again, the one in the mountain will be older, slightly older. This kind of stuff is to me what unlocks the whole possibility for people to think, boy, I can be anything, do anything, etc. Because they're looking at the magical response of what life looks like what we've learned all along to this date. And that is the key that they can eventually use to free themselves. You see?

Ricardos billboard (02:02:25)

I do. If you could have a gigantic billboard anywhere, and actually now I think of billboards, are there no billboards in Sao Paulo? I feel like that's one of a few cities that has perhaps made billboards illegal, but that's an aside. The metaphorical question is if you could have one gigantic billboard anywhere with anything on it, in other words, just getting a short message out to millions of people, what would you put on that billboard? Right now. That's enough, I think. If people pay attention to now, so many other issues go away because I think so much of everything we do is taken up by the past and the future. And so little of our success is there, that remembering that you're now in a bus, you're now in a train, you're now going somewhere you don't want, you're now... This is the stuff that I think falls short all the time. And Sao Paulo does have a lot of restrictions on billboards and it's expensive and it takes authorizations and so forth. So that helps. But Sao Paulo has so many other visual problems. Now we have a new Trump-like mayor who is going around and covering up all of the spray paints with graffiti artists. That's the newest. Well, I think this is a good place to wrap up. And do you have any, and I'll ask you where people can find more about you, and certainly I'll put that in the show notes as well, but do you have any ask or request for my audience, the people listening, or any last parting words that you'd like to share? I'd say that, you know, again, when I think about, you know, why would I sit with you on a two-hour podcast? Why would I have a few people that I wanted to talk to and that I'm doing this little podcast episode of my own? It's all to do with, and essentially, of course, it's all, is it thoughtful, is it insightful for myself? And therefore it's always very self-serving and very narrow, let's say. But on the other hand, my very generic wish is always that people will be able to take a little something out of it, which is insight into something that was already there. Not that we created in this conversation, but that someone takes on a little act of courage in either giving more freedom to people who work with them or for them, or their kids or their, anything that's around. And I think that that's, it's terribly gratifying to do just these very small leaps of faith and these very small movements in the direction of what seems like risk. And it's never a risk because it's never a metric issue, it's just getting past your own misgivings about doing something new. And that would be my hope that people take this little leap of fancy or leap of faith and finally decide to make a change on constraints, on restrictions that they either have or that they need to fight against, or they need to remove other people from. And find that that's a hell of a lot more liberating than it sounds. Well, Ricardo, I really appreciate you taking the time. This was extremely fun for me. And I've known you only through video and text up to this point, so this was a unique opportunity for me. So number one, thank you for taking the time. And for those people listening, I will put links to everything that was mentioned, books and podcasts and otherwise, in the show notes. As per usual, you can find those at tim.blog/podcast or 4hourworkweek.com/podcast. You can say hello, and you should, to Ricardo @Ricardosemilar and @LetsLeadWise on Twitter. Facebook is @LetsLeadWise and LinkedIn is @RicardoSemler. And until next time, as always, thank you for listening. Hey guys, this is Tim again. Just a few more things before you take off.

Intro to Five-Bullet Friday (02:06:30)

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.

Intro to Wealthfront (02:07:30)

This episode is brought to you by Wealthfront. Wealthfront is the future of financial advice. They've become incredibly popular among my friends in Silicon Valley and across the country because they provide the same high-end financial advice that the best private wealth managers deliver to the ultra wealthy. But for any account size and at a fraction of the cost. For instance, they monitor your portfolio every day across more than a dozen asset classes to look for opportunities to rebalance or harvest tax losses. Now, would you do the same? Are you doing the same? Probably not. And the power is in the software. Wealthfront now manages more than $4 billion in assets, which is up from around $2.5 billion when they started advertising on this podcast. They're growing incredibly quickly. Unlike old-fashioned private wealth managers, Wealthfront is powered by innovative technology, making it the most tax-efficient, low-cost, hassle-free way to invest. They don't have loaded sales teams or retail locations, so they can deliver all of this sophisticated financial advice and these services at a fraction of the cost of a traditional financial advisor. So at the very least, go to Wealthfront.com/Tim and take their free risk assessment survey. It only takes a couple of minutes, and Wealthfront will recommend a personalized portfolio of investments. In other words, they'll tell you exactly where they would put your money. So even if you don't use their service, you have a huge leg up and you have additional information for making good decisions. They use investment theory to automate good financial behavior and decisions that people typically don't make but should. So go to Wealthfront.com/Tim to get your first $15K managed for free or just to get more details. Check it out at Wealthfront.com/Tim.

Introduction To Business Tools

Intro to FreshBooks (02:09:11)

This episode is brought to you by FreshBooks. FreshBooks is now the number one cloud accounting software designed exclusively for self-employed professionals and used by more than 10 million people. You can send invoices, track your time, and get paid fast, which basically describes the core needs of most entrepreneurs and freelancers. The product was recently relaunched and rebuilt from the ground up, focusing on simplicity and speed. It's an awesome service, and many of you recommended it to me, which is how they came to be a sponsor. Now I can't cover all of the many, many features, but for example, you can take pictures of receipts on your phone using FreshBooks' iOS mobile app, or connect your bank account or credit card to FreshBooks and watch your expenses automatically import into your account every day. And if you have any questions whatsoever, a real live person answers in less than three rings to help you with all of your needs. So to claim your 30-day unrestricted free trial, that means no credit card needed, and see how the all-new FreshBooks can change your freelancing game, go to FreshBooks.com/Tim and enter "Tim" in the "How did you hear about us?" section. That is FreshBooks.com/Tim and then put "Tim" in the "How did you hear about us?" section.

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