Leadership Through Stories?!

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I’m still on vacation, but recorded this before I left. –Andrew

Why did Derek Sivers’ CD Baby grow after he stopped showing up for work on a daily basis? How did his people take it from $1 million in annual sales to $20 million in his absence?

As you’ll see in this interview, it had to do with the way Derek uses stories. You’ll learn about that and his other unconventional approaches to business in this interview and in his new book, Anything You Want.

Derek Sivers

Derek Sivers

CD Baby

Derek Sivers was circus musician and ringleader in the late 1980’s; he later founded and sold CD Baby, the largest distributor for Indie music online. This year he is launching MuckWork, which offers a network of reliable assistants to do the “uncreative dirty work” for musicians.

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Full Interview Transcript

Andrew: Before we get started, tell me if you’re having this problem. Your business is getting bigger and bigger and bigger, and congratulations on that. But at the same time, you’re email inbox is getting bigger and bigger and bigger and bigger. How do you manage it all? Well, here’s a solution. It comes from UserVoice. Watch this. It’s a form that pops up that’s familiar to users. They can type in the subject of their message and look at what happens. Right here, if their issue is already addressed before, it’s right there. They get the answer because UserVoice finds it in your system. UserVoice, it’s a one-stop solution for all your help desk needs, easy to add to your website. You don’t have to use Gmail, or whatever email program you’re using. You can use UserVoice to manage customer feedback. And it’s easy to add. UserVoice.com.

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Here’s your program.

Hi, everyone. My name’s is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart, and the place where entrepreneurs come, pow-pow to tell you the stories behind their businesses. So, in 1998, today’s guest did a favor for a friend. That favor led to a business that he sold ten years later for $22 million. Joining me is Derek Sivers, the founder of CD Baby, a website that helps independent artists sell their music online. He recently published a book called, Anything You Want. And I invited him here to talk about the book and his experiences. Derek, welcome back.

Derek: Thanks, Andrew. Good to see you again.

Andrew: So, you were one of my first interviewees here on Mixergy, and as I was editing your interview, the first one, I remember kicking myself for not asking a follow-up question. So I’ll ask it now.

Derek: Okay.

Andrew: A few years in the making. It’s based on what you did with the money from your business, CD Baby. Maybe you can just catch people up on what happened to it, since it’s one of your stories from your book, Anything You Want. And then I’ll ask my follow-up question.

Derek: Okay. Oh, that wasn’t the follow-up question.

Andrew: No, no. I figured you just tell people, because not everyone knows your story. Not everyone heard my first interview, though they should. But, let’s catch them up on that, and then I’ll ask my follow-up question.

Derek: So, to give a little context. When I started CD Baby, I wasn’t in it for the money. I had other ambitions. I wanted to be a musician. I was making my own music, living the life of a professional musician. So, CD Baby was always something that I never took too seriously. It was kind of a hobby. I never had ambitions to be a multi-millionaire, or anything like that. I just wanted to make a decent living. So the last few years of CD Baby, it was making a couple million dollars a year, net profit, just for me, by the end. I already had plenty. I’d already paid off my mortgage, and there was nothing I wanted to buy. I was cool. I had my money in a savings account. So when I decided to sell CD Baby, and we got this agreed upon price of $22 million U.S., there was like this eight months of time between when you have an agreed upon deal and when it actually happens with the bank and everything. In that eight months, I love that I can use this screen as a measure here, yes. That’s eight months. So in that eight months I had a lot of philosophical time, like okay, what the hell do you do with $22 million? What do I want to do? I can’t even think what I’d want to buy. There’s nothing I want to buy, so do I just give it all away? But I don’t to give it all away now and then all of a sudden be, like, broke in twenty years and have to get a job at the grocery store. So I wondered where I’d find my peace between those two. And I mentioned this to my accountant and he said, you know, there’s something in the U.S. called the Charitable Remainder Trust, which means that you really do give it all away to charity right now, but it sits in this trust while you’re alive and it all goes to charity when you die. But while you’re alive, it pays you out a steady stream of income. I was like, “That’s brilliant.” So I get to actually get it out of my hands. I don’t own the money, it’s gone, but it pays me this little trickle for life so I don’t have to, like, go get a job at the grocery store. That was my balance, so it made me really happy. It wasn’t really done out of any sense of saving the world or being a great guy or anything like that. It was really just like of all the various options, that one made me the happiest. So I think it’s important to kind of stay in touch with that little barometer inside your gut that notices when you get really happy about a decision, and go with that even if everybody’s telling you you’re strange.

Andrew: So here’s the part that I was wondering.

Derek: Okay.

Andrew: It seems to me like it’s also a clever financial plan. Because really, no entrepreneur wants to spend all the money that he gets after selling a big business. Some end up doing it by accident, but you don’t want to spend it all. You want to take a little bit out at a time. The problem is that if you take all the money that you made from the sale, put it in the bank and then take a little out of it at a time, the government’s going to take a big tax bite out of it, and then you take your interest off of a much smaller amount. So it feels to me like — this isn’t a criticism, this is just to try to understand Derek Sivers — it seems to me like you found a really clever way to do that without having to pay a lot of taxes.

Derek: Well, I still get taxed a lot, so no . . .

Andrew: When you take the money out?

Derek: Yeah, where actually all those, the annual little bits that are paid out to me, I still get taxed at like, I mean that gets taxed at 30% or whatever, so it’s kind of like the tax is delayed, not avoided.

Andrew: No, you’d still have to pay the taxes on . . .

Derek: So I pay tax each year.

Andrew: Oh, I see. Well, you’d have to pay the taxes on the interest at 30 or so percent, right? But you wouldn’t, what you’re avoiding is the tax that you’d have to pay on selling the company.

Derek: Right. So the whole idea is of this $22 million – look, I get to use the screen again – I never wanted most of it to touch my hands. In my lifetime, I may use $2 million of that, so you’re right, I didn’t want to be taxed on the $22, when I wanted to just give it all away anyway. So by having it go straight — oh, I forgot to mention to your new listeners here that didn’t listen long ago — what I did is actually transfer the ownership of the company into the charitable trust before selling it. So when Disc Makers, the company that bought CD Baby and now owns it, they bought it from the trust and not from me. So that means that $22 million never touched my hands, only this kind of annual stream that gets paid out to me.

So the stuff that comes to me I’m happy to pay my taxes on. I’ve got nothing against taxes, I like driving on roads without potholes and such. So yeah, I pay the taxes on the stuff that comes to me, but not on the stuff that I’m just going to give away anyway. You’re right; it was partially that, but it was also — I read this book called “The Paradox of Choice” by, I think it’s by Barry Schwartz. Brilliant book talking about how we think that we’re happier when we have more options in life, but actually, although we might make better decisions when we have more options, we feel worse about them. That the more options we have, kind of the worse we feel, because we’re always so aware of all the other things that we could be doing.

So in this brilliant book he spends most of the time talking about the problem, but the last chapter or two he talks about the solutions. He talks about this idea of intentionally restricting yourself, living within a certain set of limitations, can make you happier. I read this book just shortly before selling the company, and I also liked the idea that this $22 million would not even be available to me; like I would never get my hands on it. I really liked that. It made me happier for some reason.

Andrew: I could get that, and I do get that in general, too. Who was it? When I was talking to Jason Freed and I said, “What about, like, you’re missing this option and that option and that option over there by taking such [inaudible].” He said, “Sometimes it’s better not to have too many options.”

You know where to direct your energy, you know where to direct your passion. I’m only going to be able to ask you these questions, the next line of questioning, because you listen to my work. You trust me; I know you do.

Derek: Yeah.

Andrew: And you understand that I’m just here to try to understand you, not to grill you and say you’re wrong, you’re lying to your audience.

Derek: I love it!

Andrew: With that said . . .

Derek: Good prequel, yeah.

Andrew: Here’s the thing that I’m getting. As a reader of your book and of your blog, it feels to me like you’re giving such a simplistic approach to business that it sounds like you just Forrest Gumped your way to success. And here I am, trying to either figure out how you did it, because I’m ambitious, I’m determined to do something with my life, my audience is too.

I want to know, are right to grab all this information? Are we right to and Derek is being overly simplistic about how he got there? Are we wrong to? Maybe we are trying to put too much effort. Maybe it’s like trying to win over a girl by coming over every half hour and saying, “I love you, do you love me yet.” I want to be successful in Business, is it my time yet?

I pulled out some quotes that just sound too easy. You talked about hiring, this is a quote from your book, you walked into your office and you said, “Anyone have a friend who’s good with Linux? Yeah, he’s cool? Okay. Tell him to start Monday.” That’s the hiring process that you talk about in the book. You say, “While I was away from the Business, my company grew from one million to twenty million dollars in 4 years. From 8 to 85 employees.” All of these little nuggets, tell me how to understand them.

Derek: I think it’s hilarious that you brought up the Forrest Gump thing. I actually use an exact comparison about myself.

Andrew: You feel that you Forrest Gumped yourself to success?

Derek: Absolutely.

Derek: Yes. I can’t remember if I said this in the intro of the book and I absolutely say it off and on when I’m speaking at workshops or conferences. I say, “Look, I had a crazy streak of dumb luck. I’m a little bit like Forrest Gump in all of this. I start a little hobby and my friends say, ‘hey can you sale my CD,”‘ and then everybody else shows up and I say, “OK.” Four years into it, Steve Jobs holds this meeting at Apple and says, “Can you be a digital distributor for us,” and I say, “Okay.”

I’m definitely not a brilliant entrepreneur, I’ve just been damn lucky. What I’m trying to say is, in this experience of doing all of these things, kind of like, Forrest Gump sitting on the park bench talking to the lady next to him. I’ll tell you some stories and I will tell you what I learned in 10 years of doing it.

Insight of this, I think definitely stumbled across some things that don’t work and some things that do work. I think sometimes that the simplistic approach has a lesson to be learned inside the simplicity. For example, business wise, once your business gets to a certain size, people often try to come around and get you to make it more like a Fortune 500 company. All of a sudden consultants show up at your door and they want to start having consultant meetings. Women with a clipboard come by and want to start having terms and conditions, privacy notices, employee reviews and weekly meetings. I really enjoyed saying no to all of that stuff.

CD Baby was based in Portland, Oregon. Every time somebody would show up at our door in a suit, which was always suspected first, because we are a record store. Somebody shows up in a suit and says, “We believe you need to be having these,” what was it, for example, sensitivity training, you need to be having sensitivity training for your employees, such and such this . . . Oregon law.” I’d always ask, “Will I be arrested if I don’t? If I do not do this, will they come and take me and put me in jail?” They would say no. I say, “Will I get massive fines by law if I do not do this?” They’d say, “No, but you really should.” I say, “Okay, we’re done here. I got to get out of here. I don’t want all these formalities.”

One time, for example, they said, ‘you need to have this minimal wage sign posted in your office.’

Andrew: You really do. Isn’t that crazy that you have to have that up there?

Derek: I said, “Will I be arrested or severely fined if I don’t?” They said yes. I said, “All right. Does it say where it needs to be posted?” They said, “It needs to be posted publicly.” I went into our bathroom and I nailed it up to the ceiling, in the bathroom, upside down. I was like, okay, it’s clear. Everybody uses the bathroom, so here it is.

I think people do try to overcomplicate things. I love your example, how to win a girls heart, show up at her door every 30 minutes and scream your love for her until she gives in. That’s the wrong approach.

Another idea in this is, it feels like, there’s this thing I sometimes call, the dow of business, that sometimes being too focused on money can hurt you. That, if you keep your focus on the very simple goal of making your customers happy like thrilled, just do whatever’s best for them and not so focused on the money, then the money will come, if you’re making everybody happy. Whereas, I meet so many people that say they really want to have a business, and I want to get rich, and I’ll say, “What are you going to do for people?” I don’t know. Whatever. I’ll go register a thousand domain names and then point them back at each other and do this SEO thing, and I’ll make money that way. I’m like, that’s not helping anybody. You’ve missed the whole point. Money is a side effect. Money’s kind of neutral proof that you’re adding value to someone’s life. So keep your focus on how to add value to people’s lives, like do something helpful in a way that makes them really happy that they’re willing to pay for. So yeah I do think, kind of like Jason Fried, you said is another great role model that this idea of stripping away all of the noise, the static, and the distractions that can make you forget that the real point is doing something to help people to make the world a better place in a way that they’re willing to pay for.

Andrew: What I’m wondering about you is, is it as simple as it appears to be with you because you have systems in place? You have systems in place for your people to help delegate and make that they’re doing what they need to do. You seem to internalize books that give you a framework. Is that why business seems so simple to you?

Derek: I definitely, I really internalize the books I read, a lot. Maybe it’s because I went to music school. I didn’t go to business school. We all just have our different modes of learning, right? Like a lot of people who may watch your videos do it because they’re more visual learners, like they could read these words on a page or they could even listen to a podcast, but they like seeing people talking. It gets it inside to their brain more. So for me, it’s still books. I internalize what I read a lot, but then I often treat it as a to do list like I say okay, this is how this book that’s recommended says that I should hire, so here’s how I’m going to hire.

Andrew: Can you give me an example of that? I don’t mean to interrupt your train of thought, but I’m really curious about how you internalize books and how you use them. Do you have an example of how you take a book, make it into a framework or a to do list, as you say, and then go and act on it?

Derek: Yeah. Okay, so one thing, whenever I’m reading a book, if it’s a paper book, I’ve got a pen in my hand, and I’m underlining every bit that I think is cool, or if it’s a whole paragraph I circle the whole thing, and then when I’m done with the whole book, I go back to the beginning, and I go back to through the whole thing, and I type out every underlined and circled thing, so now I’ve got a text file just of my highlighted notes from that book. And then I review that text file every now and then, in fact, I have a little thing on my phone where I can drag text files over to it by USB, and whenever I’m just sitting on a subway or whatever, I can just pull it up and look at the list of books that I’ve notated and just reread through my notes. So I really like make a point, like I really want to get this.

But then I heard this idea a while ago about gut decisions, again, it’s a book, sorry, Jonah Lehrer wrote a great book called “How We Decide” that says that what we call gut decisions or the unconscious, a little bit like Malcolm Gladwell wrote this book “Blink” that was about a similar thing, but what he said was, even from looking at it from a neuroscience point of view that the thing that we think of as gut decisions are actually the stored . . . everything that we’ve ever learned consciously basically is all together in some, in our unconscious, and when what feels like a gut decision is actually the culmination of everything we’ve ever learned. So, sometimes when I’m just learning something, I will do it very systematically, and I’ll go into the office, sometimes even just a week after having read a book, and I’ll say, “Okay everybody, here’s what we should do, and I’ll do it just like the book said whether it’s “E-myth Revisited” is the one by Michael Gerber that talks about how to set up a system of delegation and documenting your processes so that they can be repeated by anybody. So I read that book and went, wow, that’s amazing, and I went into the office a couple weeks later, and I said okay, here’s how we’re going to do it. You’ve talked about this, you write this down, now you have to teach it to somebody else. And I did it straight up the way the book says, but then I’ve done it a few times and read similar books on that, which probably was just sitting in my unconscious so that it’ll just feel like the right thing to do. Does that make sense?

Andrew: It does, and this helps me understand you, I think in a way that I haven’t understood up until now. It feels to me when I read your blogs and when I read your book; you’re just kind of living in a very simplistic way, very basic. You’re not overcomplicating life. You’re not over-worried about life. And good things just happen to you. I think I now understand why they do. Because you do internalize a lot of books. Every conversation I’ve had with you, every time I go to your website, I see you’re a guy who doesn’t just read books. You process them. You take notes on them, and you come back and revisit them, as you just describe right here. And it seems that you do internalize those ideas, and they come out of you, sometimes very explicitly, as you just described. And sometimes, also, as you just described. It becomes a gut instinct for you.

Derek: Yeah. There’s a new thing I’m going to start talking about publicly soon.

Andrew: What’s that?

Derek: And I think it’s the coolest thing that I found in the past year. It’s Space Repetitions software. Do you know about this? Oh, you’re going love this. Okay. Space Repetitions Software. About a hundred years ago, they were doing a bunch of work on memory research, about like, how do people best retain knowledge? They tried things like getting people to memorize strings of random letters, and stuff like that. And what they found is we retain things best, or optimize, when you have a bit of information and it’s re-introduced into your consciousness in increasing intervals. So what that means is, like say I was to hear a new word in Japanese today and I wanted to remember it. The best way to remember it would be to hear it again in twelve hours, hear it again tomorrow, hear it again in three days, a week, three weeks, two months, six months. As the intervals are increasing, that’s how it gets in your memory best. But then they wrote software to enhance that even further, which starts with that increasing interval, but then for every flash card you give yourself, if you make these flash cards to help with anything you want to remember, and then every time you’re presented with the answer you tell the computer how well you knew that answer. So on a level of one to four, one meaning I totally forgot it, I didn’t know the answer; four meaning, I could do it in my sleep, two and three, half way in-between. And then based on that number, it nudges the interval accordingly. So if you had completely forgotten the fact, it shows you again in ten minutes, until now, maybe you rate it as a two or three. But if you give it a four, like, yeah I got it, it won’t show that card to you again for a week.

Andrew: There are similar systems for getting smokers to stop smoking, based on every time they take a cigarette, they hit a button. And they tell the system how long it’s been since they had a cigarette, and the system suggests that they have a cigarette longer and longer. It’s basically a [inaudible] zapper.

Derek: It’s amazing. I hadn’t heard of that. Cool. So people have been using this to learn languages. By the way, if you’re interested in this at all, the free open source program that does all this is called, ANKI. You can just Google for ANKI. Then what’s cool is a lot of people have been using this for language learning, right? It seems perfect for language learning. You toss in a bunch of vocabulary, word you want to remember, and you quiz yourself everyday. Where it gets interesting is that you can start to use this for other stuff you want to learn. So, there’s this woman in California named, Divia Melwani [SP], who is using ANKI flash cards to memorize entire books. As she’s reading an entire book full of all kinds of suggestions, and what not, every tidbit she wants to remember from that book she makes a flash card for it. And then, has it quiz her every day in these increasing intervals until she’s memorized the whole book, not word for word, but memorized every point inside that book. So, have you spoken with Josh Kaufman, who wrote “The Personal MBA”?

Andrew: No, I had an interview scheduled with him and I got sick and we never rescheduled. I should. Why?

Derek: Well, “The Personal MBA” was one of my favorite books of the year. Absolutely brilliant, a comprehensive overview of what it means to start, run, and build a business. And a lot of it is in these kinds of bulleted, numbered points. So I would really love to memorize that book, and so I think they’re going to take this approach of putting points into flash card software.

Andrew: And memorize points of his book?

Derek: Yeah. So actually, you talk to him about it, like, “Do you have this book memorized?” And he said yeah. He was teaching the book over the course of four years, before he wrote the book. So he said, “Yeah, pretty much everything in this I have memorized.” It was like, I want to get to that point. I want to memorize this book. Who knows, my ingesting of books might get a little more serious. They really are my best teacher.

Andrew: One of the books that you mentioned earlier, I want to come back to, ‘The E-Myth’. I love that book, the idea behind the “E-Myth Revisited” is entrepreneurs need to set up systems, they need to hand them off to other people who will take those systems and work. I love that book. When I interviewed Seth Godin, he said, do you know that he feels this way, he says that, that’s the worst book, it misleads managers, it misleads entrepreneurs, and I asked him why, he said look. That book tells you to create drones, you see the woman who helped schedule this interview with me? I said yeah, he said, she a She’da [SP], I believe she helped me get an interview with you too? He goes, if I told her to specifically what to do, all she would be is a shabby carbon copy of the way I would do it. Instead I tell her, you go, you be the entrepreneur of Buzz for me, and you go and figure out this job. So, because I take what Seth Golden says so seriously, I started operating that way, and I feel like operating that way means you just hand off responsibility off to someone else, and you say, go do it. And they can only come to you for a little bit of guidance, but for the most part people aren’t going to come to you with guidance, they’re going to come to you when things don’t work out right, and it’s going to take them as long to figure it out, as it took you to figure it out your business in the first place. And yeah, it’ll be clever, and it’ll be brand new, but it’ll take them so long to do it they can’t [inaudible] on it. How do you feel about that? Help me sort these two great thinkers, these two who I admire’s opposing point of view out.

Derek: I loved “E-Myth” when I read it, I went, oh my god that’s brilliant, and I had already been operating that way for a few years when I read the book so it kind of resonated in that way of like, yes, this agrees with what I’ve already been doing, and learn some more tips. And then I totally get what Seth is saying, that of course you don’t want to turn things into processes where there should be creativity and inspiration. Don’t you think it’s kind of both. It’s depending on the job, that there are some things, like CD Baby was 85 employees, 50 of those were in the warehouse, picking CDs off the shelf, packing them. 25 of those were in customer service, just responding to emails and phone calls, and then there were only about 5 jobs that were other, including head of this, head of that, CFO, CEO. So in that situation it’s like here’s 75 jobs, well actually no, let me take that back the warehouse, absolute systematization, the customer service even was a hybrid, where would have shared form letters within the company. Good form letters, not like annoying corporate sounding ones, but they were really just kind of stock answers, hey, anytime somebody says, how are you handling copyright for streaming music on CD Baby, here’s the letter you send them. And it sounds like a personally hand written letter. Anytime somebody says, did my CDs arrive, first you click this, look at the inventory, then you click this button and it will send them the appropriate response to tell them if their CDs arrived. So that’s definitely processes, but then of course anybody answering questions from the world has to be given the leeway to answer however is best, so then we also just made sure that everybody there really just understood the philosophy behind the company and I think that’s the important part in this, is trying to communicate your vision. Say if you’re the entrepreneur, it’s trying to communicate your vision, your motive, like why are you doing this, not just what, but why, like everybody at CD Baby knew for example that, CD Baby was there to make musicians happy, that was first and foremost. Even the CD buying customers were a side effect. Rule number one is make the musicians happy. And here’s some form letters to help you do that, here’s some systems that we use to do that. And other than that, your final goal is to just make the musicians happy, so whatever it takes. I think that’s kind of a hybrid isn’t it, and then there’s some jobs that don’t need any official processes that you do just say, I trust your judgment, do whatever you think is best.

Andrew: Michael Gerber of “E-Myth” would have said, everything needs to be systematized. I believe that he would say, even the creative jobs should be systemized and he might make room for creative adjustments to the system after the person’s up to speed, but first they need to be up to speed. You’re saying it’s kind of a hybrid and that there are some jobs like Ashida’s role where she was promoting Seth Godin’s book and promoting yours and her abilities. In those positions, when you have both of those you just let the person go.

Derek Sivers: Yes, it’s funny. You’re right. That’s a good reminder, that he probably would. That even the . . . he could say even the conversation . . . it’s almost like robotics, right? Like if you and I were artificial intelligence how would we be having his conversation? At what point . . how do you decide what you’re going to say when somebody says something. You could dive down the rabbit hole and try to automate and teach rules for every way that you think about everything. I think at a certain point . . . maybe that’s just it. Maybe it’s is like, yes you could build robots and maybe Michael Gerber will be a leading artificial intelligence robot builder someday because he’s been thinking this way for so long. Maybe it’s just where you draw the line into saying how far are you going to . . . at what point do you just say, “Use your best judgment.”

It’s interesting. Yeah, it’s almost like they’re not disagreeing about whether to do it or not, it’s just where to draw the line.

Andrew: I see.

Derek: Seth wants to put that line much farther back.

Andrew: More people need freedom to be creative. More people need to be like entrepreneurs within an organization and Gerber would say the opposite. He would say more people need to have systemized roles. I think he even used the example of a lawyer needs to have a systemized job. You’re saying the question is just where’s the line? At what point do you give people complete freedom and at what point do you give them a complete handbook?

Derek: Yeah. Seth’s approach is also really inspiring to me. When I read I think it was . . .

Andrew: “Linchpin.”

Derek: “Linchpin,” yeah, where he talked about that a lot. It was also really inspiring because then, of course, you think back about the encounters you’ve had in life and some of the best ones are the ones where the person you’re talking with is allowed to be a real person. That’s why we all hate calling the Indian call centers is because they’re not allowed to be a real person. They’re just told to only follow the script and that sucks. Whereas . . .

Andrew: Maybe their script sucks. Maybe it’s not that, you know?

Derek: Yeah.

Andrew: You seemed to also have given your people a script. You gave an example in your book about someone who bought a CD and in the order form you had a box that said, “What else can we do to make you happy?” or something along those lines. And the person said, “I’d like a pack of gum.” Now the person in the warehouse said, “Oh, I’m going to the store anyway. I’ll go pick up a pack of gum and I’ll stick it in with the CD and I’ll ship it out.” That seems like an out of the box way of thinking but I believe if you dig in deeper you would find an organization that said there’s a little bit of leeway here, in fact, it’s almost…it’s not officially written down but it is part of the manual that if someone asks for something that small and you can do it and make them happy, do it because that will make them happy.

Derek: You’re right. It’s kind of part of the job description. You’re right. If somebody’s asking for something and you can do it, do it.

Andrew: We look for those little moments and we can’t specifically say yes to gum. Maybe those scripts are bad. Maybe scripting people does help but it needs to be the right script and it needs to be a little less rigid.

Derek: Okay. Do you want to hear a secret?

Andrew: Yeah.

Derek: I have an assistant who helps me with some of my email. She kind of . . . all of the incoming emails, she handles the first round of them and handles what she can and then leaves a lot of them open for me. It’s not that she’s doing all of it. When I was first… I’ve been working with her for a few years and at the beginning we spent a lot of time on philosophy…the philosophy of answers. One of them, for example, this is kind of a lot like scripting the cinnamon gum. One of them, for example, one of my philosophies was imagine that every person you’re emailing with is Mick Jagger. If somebody were to email you and say, “Hey Derek, I’ve been checking out your site and I have a question about so-and-so and where can I download the PDF e-book?” If you think of that person as some peon that’s a pain in your ass, that’s another email in your inbox. You’re like, “You just follow the link. Jeez, don’t be such an idiot.” But think how you would respond if the email was signed Mick Jagger, Mick.Jagger@rollingstones.com? You would go, “Oh my god, it’s an honor to even be speaking with you. Wow. I’m so happy you emailed. Here, let me . . . in fact, you know what? Instead of telling you where to get the PDF, I will attach it to this email so you don’t have to bother because I know you’re busy. Wow, thank you so much for emailing.” This was kind of a rule at CD Baby. I make it a rule with my personal email too. Treat everybody like it’s Mick Jagger. In their own minds, everybody is Mick Jagger. They are that important. So let’s honor that, let’s respect that, and talk to them as that.

Especially because I deal with musicians so much. Being a musician is a really weird thing. Imagine spending so much of your life up on a stage, shouting your personal feelings into a public address system. It’s a really weird thing; it’s very self-centered. In all of the interviews they’re talking about themselves.

So it’s honoring that. Not looking down on it, but just honoring it. That’s a philosophy that gets communicated that helps make a process that you can use when answering emails.

Andrew: I see, okay. So not so much a manual the way a big company might hand its employees and scripts the way that a bad call center might hand its employees. Maybe more like a set of stories and philosophies the way a religion would manage people for years after its founders died.

If you have a story about the gum, then you don’t need to say there’s specific things you do and specific things you don’t. The gum is enough.

Derek: Andrew, that’s good. We’re making business parables.

Andrew: Are we?

Derek: Yeah, because you know what? Do you know the story of . . . wow, that is a really good point.

Andrew: I’m glad that this is going okay, because to be honest with you, I’m going a little bit different with this interview. I’m in a place with you, because I’ve read you for so long, that I’m just trying to philosophically understand the world through this interview.

The questions I have aren’t as directed because I just want to understand. So, sorry. Go ahead.

Derek: I’m trying to philosophically understand the world through this interview, too.

Andrew: I know, I love your line. I’m not a guru, I’m a student.

Derek: Thank you. Nordstrom’s, the department store . . . I don’t know if it’s U.S. only. I think it might even be western U.S. only. They have this amazing return policy that’s somewhat legendary.

Story has it that you could buy a shirt at Sears, throw it in the fireplace, bring the ashes to Nordstrom’s and say you want your money back and they’ll give you a refund. They say there’s some true stories out there floating around of things like this that have happened.

I think that, at Nordstrom, they teach people this. This is our return policy. If someone wants a return, give it to them. End of story. Doesn’t matter if they bought it here or not. They might even tell some of these parables.

So, you’re right. At CD Baby we had some of these parables, and I guess maybe because it started slow, where it was just me for the first year, then just me and John for the second year, it grew slowly enough that we could tell some tales.

Then the way . . . like you pointed out, my hiring process is I would just ask the existing people who worked here, ‘Hey, got any friends that need a job? Tell them to start tomorrow.’

Then friends tell friends the parables of the business that communicate the philosophy, and then everybody knows. It includes cinnamon gum. This guy asked for cinnamon gum, he was going down to the store anyway, we got him some gum.

Then months later, when somebody asks for a squid, that’s why we included the squid because everybody had heard the parable of the gum. That’s a really interesting point.

Andrew: Somebody asked for a squid and someone in the warehouse said, “Okay, we have some squid here because a different customer sent it to us. We’ll include it in the package and send it out to you.” There’s no guidebook that could have given them that direction, but that did come from a place.

Derek: Yeah, now imagine the Indian call centers. Imagine if they would be told, “Hey, when somebody’s on the phone, if they seem really upset, ask them some questions first.” Imagine, can you, tell them, “Be human and heart-felt for up to five minutes.” It’s okay. Ask them, listen to their problems and not just tell them you understand but really try to understand what it’s like to be them. Imagine if that was written into a call center script. Then to say, commit yourself to doing whatever is possible to solve their problem, even if it doesn’t fall into the following steps.

That would be amazing to script that. That was a really good point you just made. Maybe they’re just following the wrong script. That’s funny.

Andrew: I caught in between the lines of your book two references to a diary. It seems like at moments in your life you sit and think things through on paper.

Derek: Oh yeah.

Andrew: Tell me about the diary.

Derek: I think anytime I’m trying to make a big decision or feeling at any kind of crossroads or don’t know what to do, I just open up . . . for me, I know some people like to handwrite. I type so fast it just helps me think, it’s almost just like stream of consciousness. So I love to just open up a text file, and say, “Okay, what the hell am I doing here, like what’s the real point, what’s the problem, what’s the point of anything I’m doing anyway, like can I look at this in a new way instead of feeling stuck.” So yes, I do that a lot, I think you have to do it often. So many times we’re operating on momentum based on past decisions, but then it doesn’t apply. Like I worked at Warner Brother’s Music in New York City for a few years, and I met a lot of miserable rock-stars. People that were like at the pinnacle of their career, they were very famous, successful rock-stars; would come into the office, and I was the guy, I was like 22 years old, and I ran the tape room. So I had this big area, so musician would often use it as the escape, like they would go in for there high stress meeting with the manager in the suit, and then they’d come into my room kind of like exhale and chill for a bit. And I met a lot of miserable rock-stars, and it’s like they were probably pursuing something that they wanted when they were 15, and they wanted it when they were 19, and they wanted it when they were 23, but now they’re 35 and they’re still doing it, and it’s like they don’t really want it anymore, unfortunately they didn’t change their trajectory. They were on a certain trajectory and they just kept it, but it doesn’t apply anymore. So I think sometimes on a even on a weekly, monthly kind of basis, you need to look at what you’re doing, and say is this still what I really want, because it can change, and you need to acknowledge the change.

Andrew: And so how do you use your diary to get to that place where you can think this through? You said, I think you were referring to one of the decisions you’d made using your diary was, should I sell CD Baby or not. So when you have a question like that, or when you’re trying to figure out the future, how do you use your diary to help you answer that question or help you plot out the future?

Derek: I’ll get really specific with that one. It had come up a few times in the past. People would ask me, how do you decide to sell your company, how do you know when it’s time to sell? So what I would do, whenever I had this opportunity, because people would often be asking if I wanted to sell. I would kind of sit there with my diary and say, “Okay, what if I were to sell right now?’ Imagine that I were to say yes, it’s all yours, imagine some amount of money was wire transferred to my bank account, and as of tomorrow I was no longer the owner of CD Baby, how would that feel? And in the past I had written about that a few times in the past, and it was always like, no, I’m not done, there’s so much I want to do, that would feel horrible, that would feel like, the unfinished symphony or something like that. You can’t just like work on a painting until the last bit and then just let somebody else finish it for you, that would be horrible. So just in writing about this, very specifically how would that feel, it would feel icky and I would tell them no, I’m not selling. And then, for some reason, January 18th, 2008, [inaudible] specific date, because it was my sisters birth day by coincidence. That was a day that three companies in one week had asked if I wanted to sell, I told them all no, but that weekend, I spent some quiet time thinking about it, and I went to the diary again and I was like, okay. Let’s imagine that I were to sell, so tomorrow some sum of money transfers to the bank account and I am no longer Derek at CD Baby, in fact, let’s even say that I delete that email account that I’ve had for so long. Derek@CDBaby.com no longer goes to me, I’m no longer the owner, how would that feel. And for the first time in ten years, it was like, yeah, that would feel good. Yeah, I think I would really like that.

Andrew: So why does doing it on paper, or doing it on the computer in a diary, why is that different than just thinking in your head as you sit back, maybe with a cup of coffee, maybe with a beer, maybe with just water and say, do I want to do it, yeah, it feels good. Why is the paper, or diary help you think it through better?

Derek: I don’t know, I think it’s fun to see your thought process. I don’t even really go back to the [inaudible]. Sometimes I think it’s fun to see your thought process, organize it, and sometimes you can even challenge your self to say, okay, let me come up with five reasons at least, minimum why so and so. Or let me look at five different options, like do I want to sell my business, it’s not just yes or no, there’s a hybrid in between. Maybe I want to sell part of it, maybe I want to continue to be the manager but not the owner, maybe I want to be the owner but not the manager. So I think you can organize your thoughts in writing also, technically it’s using more of the senses, it’s using your visual, and not just your imagination, but that’s my personal quark it works for me. Some people do much better by conversations with a friend, they like to hear themselves bouncing ideas off a friend, even if their friend, you know the classic scenario, somebody says, should I wear the red dress, or the blue dress, and you go, blue, and the go, I think I’m going to wear the red. So some people just like to bounce this off of others.

Andrew: For me, journaling through an idea helps, and I wanted to know why it worked for you, but I know for me it’s because it forces me to acknowledge what I’m thinking. That if it’s in my head, I don’t really recognize it so much, but if I’m forced to say five reasons why you don’t want to sell it, one of those reasons might be, I really like being called the founder of CD Baby, or the CEO, like I have to just sit and write that down, and once I see it, I go, oh, yeah, and then I say, don’t insult that, don’t just put that down and belittle it, think through, is that really important, what is it about that that’s important, you know, and I have to carry that thought through because I’m seeing it on paper, and I say, no, it’s really important is that I like that people acknowledge me , well that’s not the best way to be acknowledged, that’s a way to be hated, and then I would think it through like that, where if it’s in my head, I might run away from the thought.

Derek: That’s awesome. To see something written down, to see like, no, was being honest and I wrote that and I’m looking at that and that’s true,

Andrew: Okay. Here’s a fun idea, coolest concepts I’ve learned in the past year; the concept of Confabulation, do you know about confabulation? Jonathon Haight [SP] wrote this book, called ‘Happiness Hypothesis.” He’s a psychology professor, and he said, look at a debate show, and look at the right fighting the left, talking about immigration, and then they’ll have all of these reasons, they’ll give all of these rational sounding reasons for their arguments, but the truth is, people believe what they believe, from an emotional gut level point of view. And everything that spews out of their mouth is just rational sounding arguments to explain why they feel what they feel, but the truth is those are all just made up to try to rationalize the emotion, so that’s called confabulation. So he gives this extremely vivid example in the book, which is, he said, say for example, a brother and a sister are traveling to Europe together, and they’re very close, and they’re traveling just the two of them, and they decide consensually, mutually, that they are going to have sex. And it’s not an impulsive thing, they go down to the drug store, they both wear protection, and they decide that they will never, ever tell their parents or anyone else. So they do it, it’s good, and it actually brings them closer together, and it was all-in-all a good thing, so, do you think this is wrong. So, if you present this to most people, they’ll start telling you why it’s wrong. They’ll start saying it’s wrong because, what if they were to have a baby it would turn out deformed. And [inaudible] say, well, if they were both wearing using protection that’s impossible. Well, what if the parents found out, and they’d be devastated. No, they would never tell anybody they did it. Well, it would harm their relationship as siblings. No, it didn’t. It made it better. Well, it’s just wrong, so you kind of recognize this kind of debate show thing. So that’s confabulation, but where it gets really interesting. And he didn’t talk about this in the book, but this is how I’ve been feeling ever since. Think about all the things, even our own internal dialogue, where you just feel something. I want to start a business. I want to sell my company. I want to be in this field not that field. I want to move to Chicago, whatever it may be. And you make up these reasons, even in your quiet moments in your diary kind of thing. You’ll list reasons, it’s good because of this, but I’d like say that all of that is confabulation. You’re just making up crap, that you just feel what you feel, and everything else you say, it’s almost that you can’t even trust the words coming out of your mouth. It’s all just made up crap to try to rationalize yourself into what you just feel like doing.

Andrew: So then the question is, how do you just get to really what you feel like doing, and maybe that’s just to do something, to just do it, to go with your gut.

Derek: Yes, to trust that gut feeling of like is this exciting me, or draining me, am I feeling bored or am I feeling psyched, or just the happiness factor, who knows how you can measure that. But like am I happy about this. I have this theory, do we swear on your show?

Andrew: Yes.

Derek: All right. I’m going to tell you the real theory. I never wrote this word on the website, I edited myself, but I call it the “Fuck Yeah or No” theory. And I use this for everything in life. Like, am feeling like fuck yeah about this, like, oh my god that would be awesome I would love to do that, I would be so psyched to do that. If I’m feeling that excited about it, I’d do it. But if I’m feeling anything less than that, I’d just say no. And I advise all my friends to do the same, so very often among friends, somebody’s going yeah, somebody asked me to go this birthday dinner tomorrow and I’m feeling like, you know, well she came to mine, and so I should probably go to hers, but, and it’s just become this short cut among friends, we go like fuck yeah or no. Like, I don’t hear you going like fuck yeah, about going to this birthday party so don’t. Because when you say no to like 95% of everything that doesn’t excite you that much, all of the sudden you have this room in your life so those few things that you feel like fuck yeah about, those get to expand in your life to have more space, more room to grow. And then you also have room in your life, so when a new fuck yeah kind of opportunity comes up, you have time.

Andrew: You don’t have all the BS of life, just since we’re cursing you don’t have the bullshit of life that you have to tend to and can’t get to the fuck yeah.

Derek: Yeah, I use this in so many ways.

Andrew: That’s why a lot of people ask me, why don’t you do more editing on the interviews, or more polish. I don’t feel fuck yeah about it. Actually for me it’s not that, it’s I don’t feel any intellectual satisfaction from it. I do from thinking about how can I sharpen my question, I do from saying Derek’s going to be on here, am I curious about reading the book all the way through, fuck yeah, I’m going to read that, but I don’t care so much about the design, I don’t care so much about those other things, and it’s hard to say no, because it’s a fuck yeah to other people, to other people the design is really, really important, to other people the little obligations they toss at you are really, really important. Here’s one blog post that you wrote a long time ago it’s very comforting to me. You talk about the grass and the professor, do you remember what that story is?

Derek: Yeah.

Andrew: Can you tell that story, I was going to lead into it, but I’d much rather have you tell it. And then I’ll tell you what I’ve been thinking about it for myself.

Derek: It’s an old story that somebody told me, it’s been floating around since the ’60s, and it goes like this. A new college campus is built, and they’ve built the buildings, they built the green, and there’s a big green park area in between the buildings. And there having a meeting about where to put the pavement. Do we make it go diagonally, directly in between the buildings, do we just keep it around the edge to keep the beautiful middle untouched and green so people can play Frisbee, and they’re fighting and they can’t decide. And so one professor comes up with the wining idea, he said how bout this, this year we will have no pavement, it will be just buildings and green. And at the end of the year, we will just look to see where people have made trails, where the grass has worn away, and that’s where we will pave. So the whole point is, that you always learn more as you go, with anything you do, business venture or whatever. So the longer you can delay, decisions the smarter those decisions will be. Instead of you trying to figure out in advance what people want, just look at what people want and decide as late as possible what to do about it. The later you can decide, the smarter your decisions will be.

Andrew: That’s been very comforting to me because that’s the stage I feel that I am in my life. You know, the first stage of my life was being very clear about where I wanted to go, putting the pavement there, and dammit, if people wanted to go somewhere else, I was going to pull them by the arm and make them go on the pavement where I had them, because I had a vision of how the world needed to work, and it worked for me. With Mixergy, I’m at a place where I just want to kind of figure it out, I don’t want to say these are the seven steps to success, and then make sure that every entrepreneur comes on fits within those seven steps or lives up to those steps or else I say forget it. I want to just kind of figure it out, and wherever the audience wants to go, wherever the interviewees show me is the better way to go, I’ll go there, and that’s where I’ll create the pavement.

The thing is that while I’ve been doing that I’ve been watching guys like Tim Sykes; guy who has a website where he’s very clear about what he wants. He’s very clear about what he wants out of everything, you know? He knows exactly what he’s going to sell his audience, he knows the message he’s going to communicate with them, he knows what he’s trying to build for the audience. And he will push me to say, “Andrew, you’ve got to do this; you have to do this one, set these clear goals, and you have to get to them. And you have to push the audience to buy everything that you create so you can get to your goals,” and so on. It does seem to work for him.

And meanwhile, here I am, I’m just having, you know, kind of having conversations that are meandering down a grassy path. So how do we fit those two worlds together? What’s the answer? Is it more like the Tim Sykes way where you create your path, and you tell the rest of the world that they have to go there, and you push them there with charisma and force?

Derek: For the most part I feel that you let your customers decide what they want.

Andrew: My customers would decide that they want me to do everything for them and charge them nothing. You start putting any kind of fee on anything online and people start to get upset. Or at least they’re, like, demanding.

Derek: Well, we could argue that those aren’t customers, then. Oh. Well, okay. Now thing about this in terms of, like, every now and then somebody would ask me to put advertising on the CD Baby website, and I’d say that my customers have never asked me to put advertising on the website. So why would I? Like, this is for them, this isn’t for me.

Andrew: I’m sorry to interrupt, but let me stop you right there.

Derek: Sure.

Andrew: One of the things you said in your book was in the early days you used to charge $25 to have a CD created on the site, so that you could then let people sell it, because there was a cost involved in that. Then one day, you decided, you know what, I’m going to charge $35 for it, because 25 and 35 are about the same way. And nobody complained, and you had a little bit more margin to give discounts. Nobody demanded the extra $10, you just knew that it was good for business. We don’t always wait for customers to demand, do we?

Derek: That’s a very good point, yeah.

Andrew: And again, I’m not saying this in a confrontational way . . .

Derek: Oh, I know.

Andrew: . . . to say, “This is the answer; you’re wrong, and you’ve been misleading yourself and your public.” How do we reconcile these two things? These two truths.

Derek: Whatever makes you happiest. I think that’s my way of saying I don’t know. I don’t know.

Andrew: This is why I feel like, I wonder if maybe you just need to take a position and force it down my throat and say Andrew, just take that — this is the answer. The answer is . . .

Derek: You know what’s funny? Okay, I just posted an article on my site, just a few days ago, called something about “Don’t Be a Donkey.” If you have too many, if you’re trying to make too many, paralyzed with decisions in life, don’t be a donkey. What it’s saying is if you’re trying to do too many things all at the same time you’ll be completely paralyzed. You won’t get any of them down.

If you think of your life long-term; like, say that you have ten things you want to do all at once, well, don’t forget life is long. So use the future; lay them out and you can do ten things for seven years each, and that’s 70 years. And it’s safe to assume that by the year 2080, it’s not unreasonable to think that we’ll live to the age of 95, so take advantage of that. Lay these things out serially.

And somebody replied back saying, ‘What a minute; that’s bullshit! Some things can’t be done later. If I want to be an athlete and take advantage of the dotcom boom #2 that’s going on now I can’t do both at the same time, I have to choose.’

And I said, “Yeah, all right, fine — then don’t.” The point is, like, any of us who write these short little articles, you have to just take a stance, because it’s not like I’m trying to write a little four-paragraph article that’s going to run your whole life. I’m trying to just toss another thought into the mix.

Strong opinions are very useful to other people because they can either subscribe to them if they don’t feel like thinking it through themselves. They can go, ‘Yeah, sounds right. I’ll subscribe to that.’ Or they can use them as something to push against, to say why they disagree with it. But to just throw out a strong opinion and have it as a starting point, instead of trying to always like be all inclusive, and include every possible scenario. See I know it would be easier if I were to come on here and give stark soundbites, saying no, you should never start a business with anything more than one dollar. No, you should never have employees, or so and so, and that might be useful to some people, but it’s a different kind of conversation.

Andrew: What about this, the idea that maybe earlier you had a clear goal, maybe not as clear as I did, maybe not as determined as I was, maybe you weren’t as money loving as I was, but there was a goal. And now in the second part of your life you’re just kind of letting the grass get rundown wherever the pavement needs be created later. Well first of all, do you think there’s any truth to that, that you’re now in a different place?

Derek: Well absolutely, there’s a really weird thing that happens once you have more money then you’re going to be able to spend sensibly in life. I actually kind of miss that feeling I had when I was like 22, and I’d be hustling to get gigs for myself as a musician, and like a University of Maine would call and say, we’d like to book you how much does it cost, and I know that last time they booked me at 400 bucks, and I’d say like well, my usual rate is 700 now, and I would try it just to see what would happens, and they’d go, 700, we really have a maximum of 600, I’d say well can you take care of the travel cost and the hotel then, and they’d say, okay. So if we do 600 plus travel and hotel, [inaudible] and then we’d hang up the phone, yes, I did it, I talked them up $200, that was awesome, I did it. I just made $200 in a phone call, it was like such a great feeling. And I kind of miss that now. It’s like now it sounds pathetic, but like you could add a $1 million to my bank account, and I wouldn’t even notice unless like the end of the year I was looking at the bank statements, and I’d be like, oh, where did that million come from. It’s crazy, it’s weird, and it’s a little depressing, but it’s like now I don’t do anything for the money. That’s kind of like another version of fuck yeah or no for me, it’s like am I doing this for the money.

Andrew: That’s a clear if you’re going to.

Derek: Right, right, it’s like if you’re doing something for the money, then maybe you shouldn’t be, well at least at this stage of my life. But I think I’ve had this philosophy ever since I was a teenager too, always make sure that you’re not doing something just for the money. If that’s the only reason doing it, don’t. You always have to be doing things for a bigger reason, even if it’s developing your negotiations skills, or something, but not just for the money. Think of like punching or doing something that you could do in your sleep, and you’ve been doing for years would be just for the money because you’re not enhancing your skills anymore like that. But at this phase in my life I’m definitely at a strangely mature zen kind of like don’t do anything for the money kind of place.

Andrew: So this zen place, in our last interview you were telling me about this new company you were launching, what happened?

Derek: Okay. Muckwork.

Andrew: I couldn’t think of the name right now, it just escaped me as I was asking the question, Muckwork.

Derek: It’s okay. So I told you it was January 18th, that I decided to sell CD Baby, and that was like the day in the diary where I was like, yeah, I’m going to do it, I’m going to sell, oh my god, and it was just, it was like that moment where if you’ve ever had like a big breakup or divorce, there’s that day when you decide that you’re breaking up, and the moving out might take longer, the paper work might take longer but there’s that day when you decided. So to me it’s like January 18th, was that day. So I went to sleep very peacefully that night, then January 19th I woke up in the morning and I was just like, oh my god, I had this idea, what about a company that’ll do such and such and such. And you can even look if you feel like doing a little who is. I registered the domain name on January 19th, I started building all the code, I put up the website, I even started announcing it to people, and I spent a few months building it, I even hired a manager. But then I realized that, you know, talking about trajectory, okay. I gave you the example about the miserable rock-stars in their mid 30s right. I realized that I was on the exact same trajectory, that like if I didn’t change this trajectory somehow, it would be as if I have never sold CD Baby, it would be like I had swapped out the name above my head. Took down CD baby, put up Muckwork, but my life would not have actually changed. And if I want my life to actually change and it to grow, I need to change my trajectory. I can’t just keep doing the same thing. So I forced myself to pause Muckwork. And since you and I last spoke, I’ve traveled around the world, learned to scuba dive in an Arctic Lake in Iceland. Spent a month walking around India. I’ve moved to New York City, met this awesome woman who just walked behind the computer before I said that, but that’s not why I said it.

Andrew: Weird.

Derek: Then got married, then we, two days after the wedding decided to pick a new country to call home. We grabbed a carry-on bag it, we went around the whole world, thought about moving to India, thought about moving to China, then we decided halfway in between. We moved to Singapore, went through the official resident’s process, moved to Singapore and got a kitten who also walked into the room just now. So, it’s like, now I’m ready to start.

Andrew: Oh, did I just lose the video? Ah, there we go.

Derek: Clear. Even in most [inaudible]

Andrew: Oh, sorry the video and audio had some . . .

Derek: [inaudible]

Andrew: We might have just lost you. Let’s give it a moment to connect the . . . there we go. So, you were saying, “Now I’m ready to start” and that’s where I lost you.

Derek: Okay. So now, I feel I’m ready to start the company. I think what’s interesting is that, I announced the idea three years ago. I even put up my full [inaudible], exactly how it would work. Almost hoping that somebody else would take the idea and make it happen. And nobody else has and I still think it should happen. So now I’m really determined to make it happen.

Andrew: So, are you really driven . . . we just lost him.

Derek: So, I have to change my trajectory first.

Andrew: Sorry. We just lost the connection again. I feel like we’ve got a bad connection line.

Derek: I’m here. [inaudible]

Andrew: In real, there we go. Meanwhile we’ve talked for over an hour so, I want to bring this to a conclusion here. Okay. Where I was going with that is that maybe the more directed, more desperate, more need oriented way to live is a better way or more productive way, no? That in the early days when you needed to make money, you found a way to negotiate with the promoter to get the space with the school to -.

Derek: Yeah, you’re right, it’s more productive, in fact, that’s what I mean, I feel a little bit of that loss, like I don’t feel as fiercely driven as I used to. But it’s honest, I think like I could pretend to be fiercely driven but then I think I might become one of those miserable people. So, yeah, it’s honest and you know what there’s this great story, sorry I don’t remember, I might have told it last time

Andrew: I’m not good at stories.

Derek: But Kurt Vonnegut and Joseph Heller. Now Joseph Heller is the guy that wrote the book “Catch 22.” The two authors were friends. And they went out to a billionaires party in Long Island one day and Kurt Vonnegut is looking around at the kind of at this great estate with a swimming pool and this and the ocean view, it’s a mansion and he says, “Look at this, this man has everything.” And Joseph Heller says, “I’ve got one thing he’ll never have enough.”

Andrew: I’ve not been very direct in this interview, like I haven’t taken you down the path of walking through every chapter of your book and making sure that people were, were learning enough but at the same time curious enough for more that they go and buy the book. And I haven’t given people unclear answers here and a lot of guests would be driven nuts with that. I actually had one guest a longtime ago, when I took him off that path, he asked me at the end of the interview, please don’t run the interview and I was so new that I said, instead of explaining to him, “No, this is really good, we’re actually trying to, you know, figure things out.” I said, “All right,” and I didn’t run it and I really regret that.

Derek: Wow.

Andrew: I appreciate you giving me the room to go here and giving, giving yourself the room to just kind of think out loud to make mistakes to come across as not someone who knows everything but someone who’s just being real here in a conversation.

Derek: Well thanks. I mean this is, when you and I started this call, maybe before you hit record we talked about what we’re going to talk about. I love that we just kind of left it wide open, ’cause this is why I was looking forward to talking with you, as I’m just, I’m such a fan of Mixergy and I just, I love your interviews and I love your questioning style and I was just psyched to see how conversation comes out.

Andrew: Thank you. There’s something in the beginning of the interview that I tease, that I thought at some point I’d get through. Let me say it quickly. The answer to what did I say, I said, the friend. That you started the business to help out a friend. You helped out a friend and ended up with a 22 million dollar business. What happened was you started selling your own CDs online, a friend said, “Hey, I’d like to be able to sell my CDs online.” This was at a time without PayPal or the Buy It Now button or anyway that people could sell it. You did them a favor and said, ‘sure, sell on my system’. And then another friend came in, another friend, another friend, before you know it you had thousands of friends who were all selling their CDs on your site. That stories really are the way that you send messages and get them to stick. I’m not someone who has a great memory but for some reason your messages always stick with me because you attach a story to them. And I think that’s great for management, I think it’s great for learning and I think it’s one of the things that, I know it is, it’s one of the best parts of your book and your site. So the site is Sivers.org and everyone I think who, listening to me should go read it. And the book is, where is the book here on my screen. I’ve got to be, there it is. The book is “Anything You Want.” I wanted the name of the book. But really it’s full of great stories, useful messages and I appreciate you coming here and talking about it.

Derek: Cool. Thanks Andrew, I just realized, I think that I might even be a theme of our conversation, where in you pointed out the idea of like business parables, almost like a religion. Stories that you tell to help communicate a point and I haven’t thought of that comparison before, good. Yeah, nice theme to the conversation.

Andrew: We finally found a theme to tie it all together.

Derek: Yes . Very cool.

Andrew: Thank you.

Derek: Thanks again.

Andrew: Hang out with me for just a moment.

Derek: Okay.

Andrew: And thank you guys all for watching.


  • “Treat everybody like they’re Mick Jagger!” -great customer service rule that Derek has in place for how employees should treat customers.

  • awesome interview. I love it :)

  • Love the guy and his philosophy! I tend to see the money and the business part as a side effect of doing something people like.

    Thanks Andrew & Derek!

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  • Doug Kaufman

    I have to say, this was one of my favorite interviews. I usually like the very tactical interviews that give me specific ideas I can implement…and that was not this interview. However, I found it to be one of the most interesting, thoughtful, and though-provoking interviews I’ve heard in a long time. I’ll be reading the blog and already bought the book. :-)

    Thanks for such an open and honest interview. Great stuff.

  • Jason Croft

    Wow.  90% of the time, I’m only listening to these great interviews on my iPod b/c of time and convenience and all of that.  I’m so grateful that I just happened to pick this one out today and watch it.  This fantastic interview with Derek is the epitome of why you do the video interview.  There were so many times that you saw his eyes light up with realization and excitement at something that the two of you were talking about.  Real discovery went on in this interview and it was such a pleasure to watch.
    As usual, I thank you for doing what you do, Andrew.  And Derek was so great.  I’ll get his book just because of this interview alone.

  • andrew use vidyo!!!! no more cutting out!

  • This is the kind of interview that induces breathes of fresh air / new perspectives and outlooks.

  • Love this interview! It instantly became one of my faves.

    I really like the method Derek uses to internalize books. I’m committed to doing a better job at that. One problem: I listen to a lot of audiobooks and I’m struggling with finding a way to pull out the useful tidbits so I can review later. But in the meantime I can easily do this with my ebooks so I’m excited about that. 

  • I just listened to it on my commute to work… but, I’m going to have to listen/watch it again so I can write down all his tips and advice. An instant classic and it’ll be one of the few podcasts I’m keeping on my iPod so I can listen to it again and again. Well done guys. Cheers!

  • Rnbmistress

    Hey Derek great interview!! My ears were tuned in. Not only are you a genius, but you were blessed by God with so much love to help others unselfishly. I’ve written down some tips. Props to Andrew Warner who is also a success in his own right. Thanks Derek for alerting me on the interview. I enjoyed the video and listening to you both educate me.

    ~Ruth aka RnBMistress~

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  • Martin

    Andrew, thanks for another great interview, this is one of my favorites.

    Martin

  • Gladwell

    Andrew, Here’s what I love about Mixergy interviews.  The obvious reason to watch is for “tips, tricks, lessons…” from experienced entrepreneurs.  The greater benefit, which I realized watching this interview, is that you introduce us to really interested people like Derek (and James Altucher before him) that have fascinating bodies of written work to learn from. I now follow them both.  Thanks for the introductions.

  • Anonymous

    This is a great interview Andrew — both of you remarkable in your candor. Though I appreciate pomp in some cases, it was inspiring hearing both of you admit sometimes you still feel like you’re ‘figuring stuff out’. Nice to know that you can be wildly successful, in a financial sense, without knowing the end-game as long as you’re enjoying the ride.

  • Derek – you encapsulate the wisdom coined by the late great Jim Rohn – that all leaders are readers. Inspiring!

  • “If you have a story about the gum, then you don’t need to say there’s specific things you do and specific things you don’t. The gum is enough.”

    Awesome line, Andrew. I think I learned more about what I like in an interview and, by extension, how to interview through this interview than any of your other recent ones. Thanks so much to both of you guys.

    -Marshall Jones Jr.

  • Jon

    Interesting interview, can related to much of what Derek said… interesting approach to an “interview” Andrew.

    Jon @ WoodMarvels.com

  • Thanks.

    I was worried about going too far off track on this one, but I decided to
    just let the conversation go where it wanted.

  • Thanks you guys!!! I have o talk to a client of mine in a couple of hours and you guys helped me at the right time! (I ‘ve followed Derek on the web for a couple of years now and will definetly check his new book)

    Cheers from Brazil!

    Guil
    (a 28 y/o guy that opened his own marketing services for musicians and labels this year)

  • LeRnintri

    Great conversation: very entertaining, informative, and inspiring. Very few people are comfortable in acknowledging the relativity of ideas, and only a small percentage of those are not monks or hippies. 

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