Quotes, March 2014

“Life is not transformed by the accumulation of knowledge, but rather the full-on application of specific knowledge.”
-Kamal Ravikant

“Dance like no one is watching. Run like no one is watching. Eat like no one is watching. Welcome to being a human. No one cares about you.”
-Jamie Woodham

“Governments don’t want a population capable of critical thinking, they want obedient workers, people just smart enough to run the machines and just dumb enough to passively accept their situation.You have no choice. You have owners. They own you. They own everything. They own all the important land. They own, and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear.”
-George Carlin

“Postpone joy, it will diminish. Postpone a problem, it will grow.”
-Paulo Coelho

“We don’t really want things. We want the feelings we think those things will give us.”
-Garry Tan

“I was really into DIY projects until I realized that if you just give people money, they’ll do all that stuff for you.”
-Maura

“There are two ways to become famous. Degrade yourself or have talent. The first way is easier.”
-Gary Janetti

“Every time you hear the word globalism, you should hear three things: 1. wealth uncoupled from work product, 2. lifestyle as a reflection of your personal self-worth, 3. you give up control of the capital, and by capital I mean you.”
-The Last Psychiatrist

“Emotional suffering ceases to be suffering as soon as we form a clear and precise picture of it.”
-Baruch Spinoza

“Yesterday I was clever, so I wanted to change the world. Today I am wise, so I am changing myself”
-Rumi

“You can always make more ideas, but you can’t make more time. If you decide to work on an idea, make sure you’re serious about it. Sleep on it, think about it, share it with other people. If you’re still crazy passionate about it, then do it.”
-Nick Pettit

“Serious journalists often imagine society is adrift because people don’t know certain things. Yet often, they know but just don’t care. So the task of serious journalism isn’t just to lay out truths. It is to make vital truths compelling to a big audience.”
-Alain de Botton

“Contra the prevailing belief, “success” isn’t being on top of a hierarchy, it is standing outside all hierarchies.”
-Nassim Taleb

“What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention, and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.”
-Herbert Simon

Why I Invested #5: Partender

This is the fifth in the series of posts that outlines the companies I’ve invested in, and why I picked them. My goal is to reach 100 early stage investments by January 1, 2018.

Company #5: Partender
What Does It Do?: Reduces bar inventory from 6 hours to 15 minutes through a smart phone app
Way To Think About It: This is (sort of) like Mint for bars
Year Invested: 2014
Amount Invested: b/t 25k-99k
How I Found The Deal: MicroVentures (their profile is here)
Why I Invested: I grew up in the restaurant business. I know it pretty well, and I know the problems that are inherent in the business, and one of them is inventory. Bar inventory especially is fucking awful. It’s a monthly thing at least, and everything about it SUCKS; it’s long, it’s tedious, it’s stupid, and it is such a waste of time and effort. But it has to be done.

As soon as I saw this company description on MicroVentures, I was sold on the idea. I knew exactly what problem it was designed to solve, I knew it was a big problem that a LOT of companies will pay a lot of money to solve, and the way they are solving it is fucking genius. I could explain, but you’re better off watching the video:

Right now, you may be saying, “So you save 6 hours once a week. OK, that’s a real business, you’ll make some money, but so what? What’s the big deal here?”

There are a few major implications of this. I’ll outline them from least amazing to most amazing:

1. Reduce Shrinkage: By improving and shortening the inventory process, you can increase the number of times you do inventory, and eliminate shrinkage. Meaning, you can stop your bartenders from pouring off the bar to their drunk friends. That is a HUGE cost center in bars.

2. Automate ordering: After every inventory, Partender instantly emails you your Purchase Orders in MS Excel, which you can forward to your reps and be done with inventory AND ordering in 15 mins. This has the potential to completely change the distribution process.

3. Improved Stocking: Cloud-based data analytics online show you what’s selling the best/worst, what your dead stock is, and what you’re low on, so you never run dry and miss a sale. Basically it can help you only stock what your customers want, and not waste money on dead inventory.

4. Improves Liquor Distribution Efficiency: Why is there such a big supply chain problem in liquor distiburion? Because the paper/pen process of inventory takes so long to do, no one does it. So no one knows what they’re running low on or places orders for these items. Consequently, bars constantly run out of product and miss $30 billion/yr in sale opportunities.

5. Changes the ENTIRE inventory process: This doesn’t just have to be used for liquor. In theory, you can inventory ANYTHING with this app.

You starting to see why I freaked out when I saw this company? (There’s actually two other big things, one having to do with data, another with distribution, but I’m not going to write about them, they are very non-obvious, and I don’t want to awake any potential competitors).

So the idea is genius, that’s great, but there is still another big concern if I’m going to invest: the team. Who the hell are these kids? This is super important here, because this idea is not as simple to pull off as it seems, and even if the app is great now and works well, they still are going to need to be able to do a ton of really difficult work to be able to do the things that are necessary to make this a billion dollar company.

I connected with the CEO through their AngelList profile, and after getting on the phone with him, I was pretty confident in his abilities. Or, I should say, there were no red flags. Nic was conscientious, intelligent, diligent, and meticulous. He was definitely young, which for this company I was a tad worried about, but he had none of the major young guy red flags–basically, he was nothing like the arrogant shit bird I was at 24.

They happened to be coming to SXSW, so that made further due diligence easy. So I went to the pitch event they did (that was sponsored by Georgetown Angels, thanks Josh), and was very impressed. Not so much with the presentation–its not fundamentally different than this video–but rather with Nic and his presence. This was not a young dude “playing start-up.” He was serious.

I invited him and his team over to my place later that night for drinks, and ended up hanging out with them until 4am, and that was what sold me. I knew within an hour or less I was going to invest in them and the company.

First off, let me say that neither Nic, nor his co-founder Anj can hold their liquor–and that is a GOOD sign. The last thing I’d want to see in a start-up in the liquor space is partiers. These two are serious about the business, not the party. Nic had two glasses of Deep Eddy, and was hammered.

Second, they were just really great people. Nice, intelligent, perceptive, emotionally intelligent–I’d have hired both in a second for almost any job in my company, even if they weren’t qualified. They’re the type that could learn anything in no time. You can just tell, both from their attitude, their energy, their stories–these two were both thinkers and workers. Even Anj’s boyfriend, who doesn’t work for Partender, was a solid dude, another good sign (who you associate with reflects who you are).

You might think, “who cares what they’re like as people?” That’s the complete wrong approach, in every way. Who you are matters, because who you are guides what you do, what decisions you make, and all the consequences that derive from that. I don’t believe I could invest in a company that was a great idea, but had shit founders–even if they were competent. I just couldn’t trust my money to people I don’t believe in as people.

 

The best part about this investment (for you): For every company I’ve listed so far, the opportunity to invest was long past. And in fact, for most of the 40+ companies I am invested in to date and will write about over time, the rounds are closed. But Partender is different:

You can invest in Partender if you want to. Right now.

That’s actually why I bumped their write-up to the front of the line, because I am so excited about this company and want to give my readers the chance to get in on this, assuming that you are an accredited investor, etc. Here’s where you can invest:

MicroVentures: I recommend using the MicroVentures platform, because it is just so easy to use. I know these guys and have used them to get in on like 5 or 6 companies (including MeetUp and Twitter pre-IPO) and they are great, I will absolutely vouch for them and their platform in all ways. You’ll have to sign-up for an account and verify your accredited investor status, but once you do that, you’re in and it’ll be easy.

AngelList: I love AngelList too, so if you prefer that, you can use it as well. I think they still use SecondMarket to process their raises, and I don’t like SecondMarket as much as MicroVentures, but they’re perfectly legit.

BTW–their growth numbers on both sites are old. I won’t disclose the current numbers because I’m not sure if they are proprietary or something, but they are WAY higher than the ones listed on the MV and AL profiles.

Also, they are hiring (their jobs are on their AL profile). If you’re a young person and don’t know what to do, you could do way worse than work for this company. They’re going places.

NOTE: I am getting nothing for this recommendation. I make no money, I get no equity, I take no carry, I get no kicker on my stock, etc. In fact, Partender didn’t even ask me to write about this. I just did on my own, mainly to give my readers the chance to get in on something I think is really cool.

 

The previous posts in the series are listed below:
Why I Invested #1: Deep Eddy Vodka
Why I Invested #2: [Redacted] Restaurant Group
Why I Invested #3: Regalii
Why I Invested #4: Terrafugia

The Right & Wrong Way To Ask For A Job Or A Mentor

One of the main themes of this blog is helping people find a mentor or a non-traditional apprenticeship. I didn’t start out with the intent of writing about these issues, because I am not an expert on either one. I’ve never had a mentor, and I never apprenticed anywhere. But I’ve mentored people before, and posted the entire process I used to hire an assistant for a project awhile ago, as well as written quite a bit about how the hiring process has developed in my new company.

Because of this, and other things I’ve done, I get emails from people that want to work with me all the time. And most of those emails ignore everything I’ve written about the right way to approach this situation, which is particularly baffling given that they are emailing me to ask for this precise thing I’ve written about.

I give you that background to talk about these two emails I got. They were received by me minutes apart, yet couldn’t be more different, and I thought comparing and contrasting them would be useful to people:

Email #1: The Bad One

Hello, Tucker, you sly motherfucker you. My name is [redacted]. I am a 22-year-old living in Chicago and a (talented) aspiring writer. I graduated from the University of North Carolina at Chapel Hill in May. Like you and your irreverent pride in your sexcapades, I am not humble when it comes to my editorial abilities.

 

I do not want to sleep with you. I don’t really care to meet you either. I just want you to help pub my writing or at least share it with your friends. As much as I despise (yet secretly love) your books, I, too, would like to publish a memoir about the obscene shit I have done in my life one day.

 

Here is the link to my blog: [redacted, for everyone's benefit]. I’d encourage you to read it…maybe skip the first two vulnerable/introspective/I’m-emo-and-graduated-college posts, but read the rest. I know you’ll enjoy. Additionally, I’ve attached a few stories to this email (stories I hope to one day include in my memoir). One is about an accidental acid trip, one is about getting fucked up with the marching band in college and one is about biting people at a bar.

 

I’d love it if you could help me. Give me some editorial direction or send me the contact information to the people who helped you achieve fame and success.

 

Oh, and I’m hot. If you want pictures for validation, I’d be more than happy to send them to you. Thanks. I look forward to hearing from you.

 

P.S. If you don’t respond to this email, I will continue sending it to you until you do.

What does she do wrong here? I’m not sure she does anything right. Let’s see:

1. She starts off insulting me, and then insults me repeatedly during the email. Remember, she’s asking ME for HELP. Then at the end, she THREATENS me with harassment unless I answer. What a fucking idiot.

2. She is obnoxious, arrogant, and worst of all stupid. For example, she proclaims that she’s “not humble when it comes to my editorial abilities.” Then why the fuck do you want to be a WRITER and not an EDITOR?

3. She commits the cardinal sin that seems like every young person who emails me commits: She demands a shit load of help from me–reading and commenting on her material, giving her advice, opening up my network of contacts to her–and not only does she not offer me anything in return, she doesn’t even acknowledge this fact. Is there anything else I can do for you bitch? Maybe give you an organ? Let you take my dog home with you?

Entitled isn’t a strong enough word to describe this attitude. I don’t know what is, but it’s breathtakingly obtuse, and I see it in about 90% of the emails like this I get.

I didn’t even respond to this awful email. Why? Aside from the fact that she’s so fucking lost I’m not even sure where to start, I can guarantee you what would happen if I did respond: She’d be a bitch and get angry at me because she wouldn’t like the truth. Why waste time?

Perhaps the best part is that she never even followed through on her “I’m going to email you non-stop unless you answer” threat. Literally never heard from her again (thank god).

Now, contrast that email to the next one:

Email #2: The Good One

Hey Tucker,

 

My name is [redacted]. I’ve been learning everything I can about marketing and influencing consumers to buy things. I’ve also been working with [redacted]. Some of my studies are here [link redacted]. I have some ideas on how you can market your testosterone ebook effectively. Here are a few, which do you think is the best? Just read the bold if time-pressed.

 

1. Set up a forum for people to track their progress on exercise, sleep, and food, and general well-being. This will foster a community, as well as somewhere we can direct inquirers to. Open for the people that read the advance copies, so when the sales start coming in, customers will be directed to an live community.

 

2. Use Google Adwords to make you the top choice for natural improving of testosterone. I will find the best search terms to make it as cheap as possible, also I’ll optimize headlines, copy, and the search terms through testing.

 

3. We can roll out guest posts similarly to how the Four Hour Body did. Some sites that would be good would be:
fourhourworkweek- Minimum Effective Dose is loved by this site.
artofmanliness- Most men want to increase T, this is a site for men. 150,000+ suscribers (smaller men’s sites: fearlessmen?)
lifehacker- Something about hack your T with the MED?

I have more sites that could be good not shown, and also more research to do, but this is just the general idea.

 

4. Encourage readers to share the book online, and in-person. A few days after people receive the Ebook, we can send them a short blurb, that’s very shareable. It would be the short version of how the book came to be. Since you provided value for them, many of them will share it with their friends. We can also give people affiliate links and give them 10% of profits. We’ll test the copy to make sure it generates the most sales, and we can adapt it.

 

I will do the research, find designers/programmers, write query letters to blogs, write guest posts (if you want), everything and anything to help you make this another great seller.

 

I would love to work with you. Would it be possible to set up a time for us to talk?

This dude does everything right. Let’s see:

1. He is humble and polite.

2. He wastes none of my time. He gives the briefest possible background so I know he’s legit, then quickly gets to the point. He tells me exactly what he wants, and then lays out the ideas he has.

3. Everything in the email is about me, and how he can help me, and how easy it will be for me.  He asks very little of me, and offers a lot in return.

For various reasons I didn’t want to work with this kid–the main one being that he had very little proof his his ability to actually execute any of the things he proposed–but he got a response from me. And it turned into something very valuable for him (at least according to him). This is the rest of our exchange:

From me:

Dude, I appreciate the offer and the effort, but not only do I already have employees who are very skilled at this, your plan is pretty basic and far less than what we’re already planning to do.

 

Also, if you’re going to try this sort of thing–offering to do work to get larger jobs, etc–you should have work online you can point to to prove you’ve already done this stuff.

 

But this is a good effort. Direct this effort to people who aren’t as good at marketing as I am and you’ll find takers.

His response:

Thanks for the quick reply and words of encouragement, I really appreciate it, especially from you. I haven’t done this kind of stuff before, so I don’t have anything to point to. I have things I’ve written, but no actual case studies. Thanks for the advice.

My response:

You have a blog right? Why can’t you do something like what you outlined for me, but for your blog? If you can get attention for your stuff, you can point to that as proof of what you can do.

 

Or, find a small business that does something you really like, and do a whole campaign for them for free. Then you can point to that and say “I did this” and it act as proof of your abilities.

His response:

You give more valuable advice in a half-minute than most people in a half-hour. Thanks.

I think my advice was pretty obvious, but that’s not the point. The point is that because this guy was polite and tried to be helpful, he actually got something out of me, something I was happy to offer.

I feel like a retard saying this, but it’s obvious that a ton of people don’t understand it:

When you want something from someone else, not only should you be polite, you should give them something they value in exchange.

Otherwise, you’re just an annoying fucking mooch who’s going to get nothing but ignored.

 

Quotes, February 2014

“Everyone wants a better life: very few of us want to be better people.”
-Alain de Botton

“Your actions reveal not what you want, but what you choose.”
-Shane Parrish

“The way to get good ideas is to get lots of ideas and throw the bad ones away.”
-Linus Pauling

“If I lived every day like it was my last, I’d just be running around hysterically screaming OH MY GOD I’M GONNA DIE.”
-Eliza Bayne

“Growth for the sake of growth is the ideology of the cancer cell.”
-Edward Abbey

“It was everything that’s bad about everything, all at once.”
-Tucker Max

“School is the advertising agency which makes you believe that you need the society as it is.”
-Ivan Illich

“If an opinion contrary to your own makes you angry, that is a sign that you are subconsciously aware of having no good reason for thinking as you do. The most savage controversies are those about matters as to which there is no good evidence either way. Persecution is used in theology, not in arithmetic, because in arithmetic there is knowledge, but in theology there is only opinion. So whenever you find yourself getting angry about a difference of opinion, be on your guard; you will probably find, on examination, that your belief is going beyond what the evidence warrants.”
-Bertrand Russell

“For warriors in particular, if you calm your own mind and discern the inner minds of others, that may be called the foremost art of war.”
-Shiba Yoshimasa

“Explaining things that matter: Be simple. Then simpler than that. Just say what happens. The part of reality that any given person needs to know is naturally riveting to them.”
-Anne Herbert

“The loudest defenders of the status quo are those it rewards most richly.”
-Shane Parrish

“A foolish faith in authority is the worst enemy of the truth.”
-Albert Einstein

“Work doesn’t bleed over into home because capitalism is evil, work bleeds over to home because we have no idea what else to do at home, and thank God we can blame it on work.”
-The Last Psychiatrist

“Education perverts the mind since we are directly opposing the natural development of our mind by obtaining ideas first and observations last. This is why so few men of learning have such sound common sense as is quite common among the illiterate.”
-Arthur Schopenhaur

“Both in fighting and in everyday life you should be determined though calm. Meet the situation without tenseness yet not recklessly, your spirit settled yet unbiased.”
-Miyamoto Musashi

“So many complaints boil down to the belly ache of the fragile, mortal, ignored ego in a vast and indifferent universe.”
-Alain de Botton

“In media, it doesn’t matter if you’re right. It matters if you’re understood.”
-Tucker Max

Play It Away…with bonus extra violence!!

My buddy Charlie Hoehn has a new book out, and I’ve read it, like it, and recommend it if you have anxiety issues. You can buy it on Amazon here, or read the blog post that inspired it first if you want.

I’m pretty glad Charlie wrote this book, because he was in a bad state prior to writing this book. Here’s a picture of him before he cured his anxiety:

hoehnzone

[OK, I'm kidding, he's obviously never planned a shooting, and that gun is not Charlie's (it's mine, and was randomly out for a reason that has nothing to do with him). That pic was actually taken after the book was finished. I just like to fuck with him. But his book is good, you should read it.]

 

The Publishing Business Is About Signaling, Not Publishing

I have good news: If you like to read books, or you want to write books, then rejoice, because things have never been better for readers or authors.

More people are reading than ever before. And not only that, but more books are being sold than ever before. For readers specifically, books have never been easier to get, cheaper to buy, or more plentiful in quality or selection. For authors, it has never been easier to get published, nor has there ever been a time where more people were making money from writing books.

And this success is not just limited to readers and authors. It’s a great time for those in the independent publishing services business. The small publishing services start-up I am a partner in doesn’t even advertise (yet), but we often have to turn customers away because we can’t grow fast enough to service all of them. I do a lot of investing and consulting with publishing reltaed companies as well, and all I see is tons of venture capital money being put into these companies (places like BookVibe, Wattpad and Oyster) because of the massive growth in this space.

I’ve only been part of the book and publishing industry for 10 years, but I’ve seen this transformation personally. I started as an author (I wrote a few #1 best sellers that sold millions of copies). Then I started my own publishing company, that made millions, and then sold that company (note: I also started a different one that failed). And I now am partners in a company that provides many different publishing services (like editing, book marketing, etc), so I have not only witnessed this change firsthand, I’ve been a small part of it.

Granted, retail book stores and mainstream publishers are doing very poorly. But everyone else involved in books, from creator to end user, is doing great.

So why the incessant media pieces about how awful everything is for books? You may have seen this piece about publishing in the New Yorker, with the breathless subtitle, “Amazon is good for customers. But is it good for books?” This is just the most recent in a seemingly endless barrage of mainstream media pieces over the past decade that are designed to convince us that everything in the book business is awful, and that a crisis is just around the corner, if not already upon us.

Of course, this never reconciled with what I saw. It took me a long time to understand why what I read about in the mainstream media never really lined up with what I saw in the book business. I used to approach the endless stream of “chicken little” articles about the demise of books assuming that the author was just misinformed. So I would write them emails explaining where they were wrong, show them the data, tell them what me and my author friends were seeing, etc. But they refused to accept, or even address, any of these facts. It reminded me of arguing about religion with a fanatic; facts are totally irrelevant to the discussion, because it’s about faith.

Then one day it dawned on me: that’s exactly what was going on. These were not objective journalists, piecing together facts and data and then writing the story that emerged. They were propaganda writers. They had a vision of the book world that did not include anything that wasn’t bookstores, big publishing companies, and their place in it. It wasn’t actually about books to them. It was about their vision of how books and authors and the publishing business was supposed to work that colored everything they wrote. Ultimately, it was about their vision of themselves, and their identity.

Don’t think so”? Let’s examine some quotes from that New Yorker article:

“I just met the world’s biggest snake-oil salesman. It’s going to be really bad for books.”

Few notice if Amazon prices an electronics store out of business (except its staff); but, in the influential, self-conscious world of people who care about reading, Amazon’s unparalleled power generates endless discussion, along with paranoia, resentment, confusion, and yearning.

Even in the iPhone age, books remain central to American intellectual life, and perhaps to democracy. And so the big question is not just whether Amazon is bad for the book industry; it’s whether Amazon is bad for books.

“Melville House puts out quality fiction and nonfiction”

Bookstores that depended on hardcover sales—from Barnes & Noble and Borders (which liquidated its business in 2011) to Rainy Day Books in Kansas City—glimpsed their possible doom. If reading went entirely digital, what purpose would they serve?

Sales meetings in Seattle were now all about payments, not new books, and the size of orders was predicated on algorithms, rather than on the enthusiasm of the publishers’ sales staff . 

To some people in the book world, Obama’s embrace of their nemesis felt like a betrayal. One literary agent said, “It’s strange that a President who’s an author, and whose primary income has come from being an author, was siding with a monopoly that wants to undercut publishers.”

In the book industry, many of those formerly employed people staffed independent stores. Two decades ago, there were some four thousand in America, and many of them functioned as cultural centers where people browsed and exchanged ideas.

Serious publishing is in such a dire state that thoughtful people are defecting to Amazon. There’s a line in Robert Stone’s novel “A Flag for Sunrise” about “a mouse so frightened it went to the cat for love.” The cat can inspire inordinate gratitude when it lets the mouse live. “I feel like, I get to do this!” an editor who has joined Amazon said. “I can’t believe it—I’m still standing! I can’t monitor other people’s feelings, but I can’t see what harm I’m doing.

Several editors, agents, and authors told me that the money for serious fiction and nonfiction has eroded dramatically in recent years; advances on mid-list titles—books that are expected to sell modestly but whose quality gives them a strong chance of enduring—have declined by a quarter.

“Writing is being outsourced, because the only people who can afford to write books make money elsewhere—academics, rich people, celebrities,” Colin Robinson, a veteran publisher, said. “The real talent, the people who are writers because they happen to be really good at writing—they aren’t going to be able to afford to do it.”

This conversation, though important, takes place in the shallows and misses the deeper currents that, in the digital age, are pushing American culture under the control of ever fewer and more powerful corporations. Bezos is right: gatekeepers are inherently élitist, and some of them have been weakened, in no small part, because of their complacency and short-term thinking. But gatekeepers are also barriers against the complete commercialization of ideas, allowing new talent the time to develop and learn to tell difficult truths. When the last gatekeeper but one is gone, will Amazon care whether a book is any good?

Look at the words that get repeated over and over: “serious fiction”, “real talent”, “quality.” Do you know why they use these words? This is the way the New Yorker pushes you into their mindset; by subtly implying that there is a right and wrong way to think about an issue, yet never addressing the actual questions at the core of the issue. And that is the key to this whole New Yorker article. I mean look at the last sentence, ”will Amazon care whether a book is any good?”

I was blown away when I read that. It never even OCCURS to the writer to ask what “good” means. He just assumes that everyone agrees what it means–that a “good” book is one that was selected by the approved publishing elite. By people like him. By people who read “serious fiction.” He literally never even addresses the issue about how a good book is defined, nor asks the series of questions that should be screaming out from this article:

Since the entire point of a book is to be read by people, isn’t good defined by how appealing and useful it is to people?

Is there a better way to measure appeal than by what people are willing to pay for?

And if so, isn’t Amazon–who’s only purpose is to find and promote the books that it thinks it’s customers will want, as defined by what they are willing to pay for–doing more for books than any company to ever exist?

That sentence he wrote would be FAR more accurate had he said this, “”will Amazon care whether a book is the right one?” Because that is EXACTLY what is going on here. The publishing industry is not about books. It never has been. It is about signaling status to other high status people, and that is what these articles are fretting about–the loss of their personal status, identity, and power. It has nothing to do with books.

The people who write these articles about the publishing business being in bad shape, or how Amazon is bad for books, are all people who associate their personal status with “book culture.” They consider themselves part of the “influential, self-conscious world of people who care about reading.” They are the people who read “serious fiction.” Or better yet–they like to see themselves as part of that world. They find their identity in this; by doing the type of things they think that people who “read serious fiction” do, and one of those is fret about books.

These are the people who see themselves as the arbiters of culture, in this case, through books. What is good is what they decide is serious. It is their opinions that make hits, not the opinions of the people actually buying and reading the books. They want to retain their power over books, they LIKE being the gatekeepers, because that gives them meaning and power. They care nothing about reading. This is about them, not about books.

And if you doubt that, if you need anymore proof that this is about identity and power and not books, read the ENTIRE last sentence:

“When the last gatekeeper but one is gone, will Amazon care whether a book is any good?”

You see that? They are pissed because they think Amazon will be the last gatekeeper. Except that’s the whole reason Amazon is successful–they ARE NOT a gatekeeper at all. Amazon is a platform that gets rid of gatekeepers.

New York Magazine on my angel investing

So, I woke up this morning to a flood of tweets about this article in New York Magazine about me being an angel investor.

I was kinda shocked by it. Of course I did the interview with the writer, and all the quotes from me are right, but I thought I was just giving quotes for a piece about celebs doing angel investments. I had no idea he was doing a profile of me and my investments only.

I’m not mad or anything, it’s just not what I expected. I’m still really new to angel investing, and I’m still learning about it, it feels weird for me to be profiled for it. I’m not that good at it that I should be profiled. There are thousands of people out there who are much better than me at this who deserve attention before me. I’m barely skilled enough to do it with my own money, much less get credit for it.

I mention this because I’ve already had two people ask me about joining my Angellist syndicate. I do have a syndicate, but it only has two backers (though Naval is one of them) and I’ve never used it. I may never actually use it. I feel like I would have to be REALLY confident in something to use other peoples money to back it. But it’s there, and I may use it, so feel free to sign up if that’s what you want (if you don’t know what an Angellist syndicate is, then don’t worry about it).

There are a few minor corrections that no one but me probably cares about:

Advising vs. Investing: I don’t think I made it clear to the writer that there is a distinction between angel investing and advising. Angel investing is putting small amounts of money into start-ups. Advising is when you get a small piece of equity in exchange for access to your expertise or your personal network. I do both. Some companies I just put money into (like Regalii), and others I just advise for equity and don’t put money into (like Med2You) and others I do both (like Deep Eddy). The companies that have asked me to sign NDA’s are all advisee’s, not places I’ve invested. That’s a tiny thing, I just wanted to be clear about it.

“2-3 Levels Below Marc Andressen”: This quote made cringe…at myself. I mean this in the most complimentary way towards him, and not towards me. By levels, I mean like zeros–he’s made billions in start-up investing, I’ve made millions (and even that is mostly on paper, not realized gains yet). That’s the difference in 2 zeros at the end. So those levels are BIG. It’s not like I’m a few months away from that or something.

“he doesn’t ask questions”: What Clayton meant in this quote is that once I decide to invest, I don’t pester them constantly. I do my due diligence, then I get out of the way unless I can help. This is a good thing, not a bad thing.

Bringing expertise to business: I don’t think a lot of people understand why a company would want someone like me as an advisor, and I don’t think author gets it. I mean, most start-ups that go after celebs want their name to get press or access to their fans. That can work with some people, but that’s not a great way to go most of the time. Yes, celebs have fans–thats what makes them celebs to begin with–but fans are usually more fickle than a celeb thinks, and very few will just do what some celeb says; even the Beliebers have limits.

The two reasons you want a good celeb to invest or advise is because they either have expertise in your area that can help you, or they have a network they can connect you to. That’s why you use them, not to use their name to promote your start-up. I’ve never used my name or my fans to promote a start-up. That’s an endorsement, and that you’re far better of just paying for.

For me specifically, he mentions that I didn’t go to business school. I mean…you don’t bring me on for business advice. You bring me on because I built a huge audience with nothing more than my ability to write and market myself. And I did this my understanding people, understanding how to persuade and reach people. That is incredibly hard to do, very few people have done it, very few people are good at it, and for a relatively cheap price in equity (or even paid, I do cash consulting as well), a company can get access to my marketing abilities. There is no company on earth who doesn’t need more sales, or more ability to understand and persuade customers.

It’s funny, most people think that business decisions are just business decisions, when actually, they are usually marketing decisions. Look at this Quora thread about the smartest business move. Read through it, and you’ll realize that the vast majority are actually marketing decisions, not straight business decisions. That’s something that people don’t understand about business–the “business” parts of business are usually pretty easy. Accounting, finance, payroll, that shit can be done by a monkey.

The hard part is sales, marketing, design–the creative parts. The parts where you have to interact with and understand people and convince them to do or buy something. That’s very hard, and most people don’t really realize that is a creative issue, not a “business” one. The start-ups I work with all know this and understand this, and use me for insights or ideas in this area.

 

 

 

Why I Invested #4: Terrafugia

This is the fourth in the series of posts that outlines the companies I’ve invested in, and why I picked them. My goal is to reach 100 early stage investments by January 1, 2018. The previous posts are listed below:

Why I Invested #1: Deep Eddy Vodka
Why I Invested #2: [Redacted] Restaurant Group
Why Invested #3: Regalii

Company #4: Terrafugia
What Does It Do?: They build flying cars.
Way To Think About It: Think about a car. Then imagine it flying.
Year Invested: 2013
Amount Invested: Less Than 25k
How I Found The Deal: WeFunder (their profile)
Why I Invested: I’m not going to bullshit you with rationalizations about the upside of this company. I mean, don’t get me wrong, there are plenty of legitimate reasons to be excited about the possible financial return on a company like Terrafugia. But that’s not why I invested in them, so I’m not going to sit here and come up with justifications that weren’t there when I made my decision.

I’ll be even more honest: I did less due diligence with this investment than with any I’ve ever made. And not by a little bit. I think I did more due diligence on the Ikea desk I bought last week than I did with Terrafugia. All I did was make sure they were a legit company, that their prototype worked, that they had real investors backing them, and that this was all above board and serious. Once I knew there was no fraud involved, I was in. And that’s ALL I did. I didn’t even look at the financials.

So why did I invest?

Are you joking? THEY MAKE FLYING CARS!!!! What else do you need to know????

This is not just a cool idea. It’s a real thing that actually works. They have a goddamn working prototype of a flying car, you can watch in this video.

Granted, I only invested a very very small amount, so it’s not like I dropped 50k because I saw a video. But as to the decision process I used when I made this investment, that’s the legitimate and unvarnished truth: Because flying cars.

Lessons I Learned: This is still a new investment, but I think there are actually a  lot of lessons that can be taken from this. Here are two:

1. Don’t pretend that decisions are rational when they aren’t; embrace the emotion: Look, as soon as I saw the profile for Terrafugia, I KNEW I wanted to invest. There’s no possible fucking way that decision process has ANY defensible basis in rationality, facts or deliberation. I can’t even say that I considered and weighed all the variables. So why pretend? I accepted the fact that on a deep, emotional level, I WANTED to invest in a flying car company.

So why did I know immediately? The honest answer is that things like social status matter immensely to humans (like me), even though we pretend that they don’t, and I felt (unconsciously, obviously) like this would convey that status. People will do amazing mental gymnastics to convince themselves that something they did for no other reason than pride or ego or something like that is done for a real reason. BULLSHIT! Stop doing that to yourself. I am not doing it here: I fully admit that the real reason I decided to invest in Terrafugia was because I wanted to be able to brag about being one of the first investors in a flying car company.

Most people don’t do this in investing; they make their decision emotionally, then trick themselves into thinking that the decision was made based on facts. They rationalize the evidence to fit the belief they already have–just like Republicans and Democrats do when talking about politics. What I’m about to tell you is not standard behavioral finance theory, but I think it will eventually be: Accept your irrational snap judgements, because if you try to rationalize them, they only get worse. Then you compile losses because you THINK you have a factual reason for the decision, instead of recognizing it is an emotional reason.

2. If you are making an investing decision for non-rational reasons, limit your downside: Because I knew I wanted to invest in a flying car company–which basically precluded me from seeing this investment rationally–I did the only smart thing possible: I invested a tiny, tiny amount that I was basically OK with losing.

Of course I made sure this was a legit company with a legit product, but I knew if I spent time studying everything I would just lie to myself more, and then maybe end up investing a lot more money, and then compounding my mistake.

I approached this the same way I approached gambling in a casino: I take only the amount of cash in with me that I am OK with losing, I assume it’s lost already when I walk in, and then I just have fun. Up or down, doesn’t matter, because mentally, that money is in the “entertainment expense” file. That’s how I account for the investment: As an expense of my emotional desires.

This way, no matter happens, I’m OK. The investment fails, OK fine, I still get to say I invested in a flying car company, I still get the subjective emotional pleasure that brings me. If the investment works, and I get to feel that, PLUS I get a bunch of money. Win-win.

 

 

Quotes, January 2014

“Choosing a spouse and a choosing career: the two great decisions for which society refuses to set up institutional guidance.”
-Alain de Botton

“No one ever got rich checking their email more often.”
-Noah Kagan

“Life isn’t about finding yourself. Life is about creating yourself.”
-George Bernard Shaw

“You gotta challenge all assumptions. If you don’t, what is doctrine on day one becomes dogma forever after.”
-John Boyd

“Envy: a confused, tangled guide to one’s own ambitions.”
-Alain de Botton

“Most anger stems from feelings of weakness, sadness and fear: hard to remember when one is at the receiving end of its defiant roar.”
-Alain de Botton

“To be somebody or to do something. In life there is often a roll call. That’s when you will have to make a decision. To be or to do? Which way will you go?”
-John Boyd

“Given opposing opinions with equal evidence in their favor, the less popular opinion is more likely to be correct.”
-Nick Szabo

“Do not be critics, you people, I beg you. I was a critic and I wish I could take it all back because it came from a smelly and ignorant place in me, and spoke with a voice that was all rage and envy. Do not dismiss a book until you have written one, and do not dismiss a movie until you have made one, and do not dismiss a person until you have met them.”
-Dave Eggers

“A lot of people who say they want depth actually don’t want depth. What they want is to be known as people who want depth.”
-Shane Parrish

“Solve your biggest problem. Sell your solution to people who were just like you. Look, now you have money.”
-Charlie Hoehn

“Much of the really serious trouble in the world gets going with a sense of humiliation.”
-Alain de Botton

“Communicating to communicate is a bureaucratic marker — ‘We need to communicate more.’ The rest of us communicate for a purpose.”
-Shane Parrish

“It takes far more energy to improve from incompetence to mediocrity than to improve from first-rate performance to excellence.”
-Peter Drucker

“The art of listening is not to hear what someone says but to hear how they feel.”
-Bob Chapman

“If you worship power, you will feel weak and afraid, needing ever more power over others to keep the fear at bay.”
-David Foster Wallace

“I recently realized that you don’t need to be talented, you just need to be completely unaware that you aren’t talented and then go for it!”
-Amber Tozer

“Apparently there is nothing in the news that falls between inhuman acts of horror and kittens.”
-Gary Janetti

“All your life people will tell you things, and most of the time, ~95% of the time, what they’ll tell you will be wrong.”
-Michael Crichton