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

Why I Invested #3: Regalii

This is the third 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

A side note: I think one of the reasons I’ve been late on the next posts in this series–even though I have like 25 investments I could potentially write about–is that I feel like I may have skewed expectations with the first two posts (on my investment experience with Deep Eddy and investing in my friends restaurant). The Deep Eddy post was a funny story to read, and the next post was really emotionally honest about a pretty big mistake I made. Those two posts were pretty good. Not all the posts in this series are going to be that good.

In fact, those two may end up being the best I ever write, at least in terms of the most entertaining to read. A lot of the companies I’ve invested in, there is very little to say beyond describing the company itself and how I made my decision. I am saying this just to make sure you understand the point of this series; its to help people understand how to think about start-up investing, by showing them how I think about it. Some of them will also be entertaining, some not.

———————————————————
Company: Regalii
What Does It Do?: Regalii has created a way for people, via their mobile devices, to send remittances to their families back home, which are received in the form of credits to pay bills, or to buy groceries.
Way To Think About It: It’s like a modern Western Union, designed for immigrants using mobile devices.
Year Invested: 2013
Amount Invested: Less Than 25k
How I Found The Deal: AngelList (their profile)
Why I Invested: The quickest way to learn about Regalii is either read this TechCrunch piece, or watch their presentation.

This was just a no brainer to me. A company that wants to build a platform for people to send money to anyone they want, all over the world, using just their mobile device, and not going through the banking system, for a flat fee? Um, yes…where do I sign up to put money into this company?

Here’s what’s so fucking smart about Regalii: They don’t start by trying to immediately solve the transferring money around the world without banks problem. That is a HUGE problem, and is going to take a long time, a lot of money, and serious political clout (witness all the Bitcoin issues right now). They start someplace much smaller and easier to get traction with: a platform that is specifically designed for immigrants to send money back home to their families. And the genius is that they use a financial structure that is already in place: gift cards. They don’t have to build anything new or deal with any regulatory hurdles to make money. They use technology to remove a pain point that millions of people have right now, and have had for decades.

This was one of those companies where, when I read about it, I sat up in my chair and said, “Holy shit, this is so fucking obvious, how has no one done this before?” I’ve dated girls or been friends with so many people from all over the world, and this is a super common problem that so many of them have, but I’ve never seen a great solution to (the common way–Western Union–are a fucking thieving group of assholes, btw). It hit me as the most obvious thing ever, even the super smart way they use gift cards and team up with retailers, so the families can use the money on what they’re going to spend it on anyway: necessities.

I think there are several reasons why this company didn’t exist before. The main one being that very few Americans understand the cross border money transfer to family problem, because they are Americans and don’t have family in Brazil. Plus, very few tech entrepreneurs are recent enough immigrants to know this problem, but also have the education and connections that cross both the world of start-ups, and the world of poor immigrants that send money back home to their families. The founder, Edrizio De La Cruz (more about him in a second), has that weird combination of experiences.

Second, and I see this ALL the time: Most entrepreneurs are focused on making money, and NOT on solving real problems that real people have. This is for a few reasons. It’s easier and quicker to focus on making money. And it seems like very few people actually understand that the best way to make money is to not focus on that, but instead solve peoples problems. I could go on and on about this, but the point is simple: In the long run, the companies that succeed (make money) do it because they are creating real value, and you can ONLY do that by solving the real problems of real people, but this is the harder path, and very few people take the harder path.

The other reason this company didn’t exist when it should have is that it’s not in a “sexy” industry. So many entrepreneurs are focused on the industries and markets they read about in the tech press, the ones that get all the attention like apps or software or things like that. But thats a really poor way to find a start-up idea. The fact is, almost every single industry in America is ripe for disruption, and the only ones that have seen real disruption so far are the ones that are sexy to the tech press. The “boring” industries are the ones where all the next big movements will be. This is a perfect example. Immigrants sending money home? Most people aren’t thinking about that, because thats not on the cover of Wired. At least not yet.

I am really impressed with the founder, Edrizio De La Cruz. I have not actually met him, but I know enough people in common with him I was able to get a good read on whether his press was bullshit or legit, and everyone I talked to vouched for him. You can read more about him on their WeFunder page.

So, to recap: What I love about this company is that they are solving a real problem that a LOT of real people have, doing it in a way that ensures immediate cash flow, but also gives them a beachhead to create a platform that could potentially tackle a huge problem that everyone would love solved: Easily, quickly and safely transferring money between people all around the world. Like all start-ups, nothing is guaranteed, but this has every chance to get really, really big.

Lessons I Learned: The company is brand new, so there aren’t really any lessons so far. I guess I can talk about the lessons I already know that I applied:

1. Pick companies that are solving real problems
2. Pick companies that are generating revenue immediately
3. If they are building a platform that makes it easier or cheaper for people to do things they are already doing, that’s a BIG plus
4. The founder(s) have to be great or none of the above matter

 

Quotes, December 2013

“All companies that grow really big do so in only one way: people recommend the product or service to other people.”
-Sam Altman

“Bookstores can blame Amazon all they want, but frankly most of them just really suck at selling books.”
-Shane Parrish

“You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.”
-Paul Graham

“People who end up being right about things, mostly do so by changing their minds. They see their conclusions as temporary. They are constantly revising their points of view based on new information, new ideas, resolving contradictions, and challenges to their own way of thinking. People who end up being wrong about things, mostly do so because they only look at facts that support one point of view. If you can’t explain why the other side might be right and see multiple angles toward your problems, then you’re going to be wrong most of the time too.”
-Tucker Max

“I can think of several heuristics for generating ideas for startups, but most reduce to this: look at something people are trying to do, and figure out how to do it in a way that doesn’t suck.”
-Paul Graham

“Don’t aim at success–the more you aim at it and make it a target, the more you are going to miss it. For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side-effect of one’s dedication to a cause greater than oneself or as the by-product of one’s surrender to a person other than oneself. Happiness must happen, and the same holds for success: you have to let it happen by not caring about it. I want you to listen to what your conscience commands you to do and go on to carry it out to the best of your knowledge. Then you will live to see that in the long run—in the long run, I say!—success will follow you precisely because you had forgotten to think of it.”
-Viktor Frankl

“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

“I think it’s far more important to write well than most people realize. Writing doesn’t just communicate ideas; it generates them. If you’re bad at writing and don’t like to do it, you’ll miss out on most of the ideas writing would have generated.”
-Paul Graham

“I’ll tell you how to succeed, it’s very simple. Imagine the life you want to live. What does that life require from you that you aren’t doing now? Go do that. You won’t get it right at first, so repeat that 2 step process over and over until you get where you want to be. Knowing what to do is not hard. Doing it, that’s hard.”
-Tucker Max

“The way you deliver a message to them is a cue to how they should react. If you make an argument, you’re implicitly asking them to evaluate your argument—judge it, debate it, criticize it—and then argue back, at least in their minds. But with a story you engage the audience—you are involving people with the idea, asking them to participate with you.”
-Chip Heath

“I’ve been a student of Zen philosophy for many years. In Zen archery, for example, you forget about the goal — hitting the bull’s-eye — and instead focus on all the individual movements involved in shooting an arrow. You practice instead your stance, reaching back and smoothly pulling an arrow out of the quiver, notching it on the string, controlling your breathing, and letting the arrow release itself. If you’ve perfected all the elements, you can’t help but hit the center of the target. The same philosophy is true for climbing mountains. If you focus on the process of climbing, you’ll end up on the summit. As it turns out, the perfect place I’ve found to apply this Zen philosophy is in the business world.”
-Yvon Chouinard

“People won’t listen to reasons why you’re better than something else. But they will listen to reasons why you’re different than something else, especially if those distinctions can benefit them directly.”
-Tucker Max

Quotes, November 2013

“I find that most people know what a story is until they sit down to write one.”
-Flannery O’Connor

“The single biggest problem in communication is the illusion that it has taken place.”
-George Bernard Shaw

“If you don’t say in public what you would say in private (about public matters), then you are either 1) not free, 2) a fraud, or both.”
-Nassim Taleb

“Don’t worry about people stealing an idea. If it’s original, you will have to ram it down their throats.”
-Howard Aiken

“People are bad at looking at seeds and guessing what size tree will grow out of them.”
-Paul Graham

“A startup worrying about competitors is like a fat guy smoking a cigarette as he worries about contracting West Nile Virus.”
-Paul Graham

“Never ask the doctor what you should do. Ask him what he would do if he were in your place.”
-Nassim Taleb

“What the business thinks it produces is not of first importance. What the consumer thinks he is buying, what he considers ‘value’ is decisive.”
-Peter Drucker

“We’re not rational creatures. We don’t optimize our choices to survive in the most cost-effective and efficient manner possible. We buy to blossom. We select to show that we belong. We purchase to get a sense of control and meaning. We choose to avoid looking bad, as well as to draw attention. We decide in order to feel good.”
-Tom Asacker

“The great stories go to those who aren’t afraid to live them.”
-Tucker Max

“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.”
-Jeff Bezos

“Making excuses for why you are right, yet still losing, is the mark of an egotistical loser. The secret to being a great trader – YOU ALWAYS ASSUME YOU ARE WRONG. Why? That forces you to constantly double-check everything four times.”
-Martin Armstrong

“Satisfaction with your own knowledge is a sign that a mind has become barren without even realizing its own barrenness.”
-Jake Seliger

“He who has never sinned is less reliable than he who has only sinned once. And someone who has made plenty of errors—though never the same error more than once—is more reliable than someone who has never made any.”
-Nassim Taleb

Why I Invested #2: [Redacted] Restaurant Group

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

Why I Invested, #2: [redacted] Restaurant Group
Product: One restaurant, now closed
Year Invested: 2010
Amount Invested: between 25-99k
Role: Investor & Advisor
Result: Total loss
Commentary: This will be the only company I ever write about where I don’t use the actual name of the company and link to all the public records. Not because I am trying to hide my mistakes; I’m about to admit to a slew of stupid decisions on my part that led to a terrible investment and a total loss of my capital.

I am keeping the identity of this company secret for the same reason it was such a terrible idea to invest in: It was started by one of my best friends. A guy I wrote about many many times in my books, for the purposes of this post, I’ll give him a new nickname, “Frank.” I don’t want to call him out in public, because it wasn’t a big company and it wouldn’t accomplish anything positive. I will write very honestly about what happened, but I can do that without being specific about the people and places involved.

Frank and I have been friends a long, long time. We were like brothers. We’d drink, act like idiots and pick up girls together more times than I can count. We’ve helped each other, fought for each other, had each others backs in all sorts of incredible and random situations. I trusted Frank even more than I trusted my own family.

Frank has been in the restaurant business his whole life, very similar to me. When he had the opportunity to open a new place, one that would be his, I jumped at the chance to help him. I know the restaurant world really well, and the hardest parts are things both Frank and I were good at: conceiving of a great concept, getting the right location, and executing on it. For this place, the concept and location were both perfect, and I’d seen Frank execute in restaurants for a decade. The place was going to crush, and we had visions of it being the launching pad for a national chain of places. It was a perfect investment for me. With his expertise and hard work, and my advice and money, it couldn’t fail.

The restaurant ended up completely failing. Closed within a year. Not because of the concept, or the location, or the business plan or the execution or anything like that. It could have worked. In fact, for almost the whole time it was open, it WAS working. It did great business.

The problem was Frank.

The reality was that everything about this company–except for the parts I mentioned above–was totally fucked from the start, and it was completely obvious to everyone except me.

Why did I not see it? Was I too inexperienced? Did I not know the market as well as I thought?

No. The problem was not my intelligence or experience or ability to analyze this market. The problem was that Frank was my friend, and because I was so close to him, because I was so emotionally invested in him as my friend, I refused to see all the OTHER problems that Frank had.

Problem 1: Frank took on awful investment partners. I was a minority investor, only putting up the seed capital. He then raised several million from bigger investors. These people were the worst kind of restaurant investors. They’d made their money elsewhere, were investing in restaurants for ego reasons, and wanted control and power in the restaurant. And worst of all, they were toxic, terrible people to be around.

Problem 2: Because Frank was so excited to start the restaurant and get it up and running, he took investment terms from these people that allowed them to take control of the restaurant from him.

It turned out precisely how it was destined to: Frank opened the place, it did amazing, and they fired him so they could make it theirs and take the glory.

By itself this is bad enough, but at least they’d have to pay him (and me). The worst part is that they didn’t know one thing about running a restaurant. That is a business that looks very easy, but is actually extremely difficult. Predictably again, they made a bunch of stupid, nonsensical changes that destroyed the place, and it closed only three months later.

There are a ton more details, but it’s all just ridiculous drama. There were so many chances for me to see this coming, and avoid it. And even chances for me to convince Frank to take the buyout they offered him before they destroyed the place, so he and I could get our money back. I didn’t. I could have asked to see the contracts and done more due diligence here. I didn’t. I didn’t do anything I should have.

I trusted Frank and relied on Frank’s representations about the contracts and these people. I let Franks excitement for this place become my excitement, and I didn’t spend any time thinking about all the problems that these awful people could cause. And then once these problems started to really show themselves, I believed Franks bullshit rationalizations and let his emotional issues override logic and good business sense, and what could have been salvaged became a total, complete loss.

I know that a lot of people swear by the “Never mix money and friendship” advice, and I think thats good advice for most things. But I know that a ton of people do really well investing in the companies that their friends start. I don’t think there is a hard and fast rule here about friendship. I think the rule comes from something else:

Never put money in anything you can’t objectively evaluate. If you can objectively evaluate your friends businesses, great. If you can’t, don’t. I couldn’t. I thought I could, but I was wrong.

Here’s the thing: He didn’t betray me. He didn’t steal my money or defraud me in any way. He opened the restaurant, and for a while, it was doing great. If he had just taken my money and fucked me, I would write it off to me being totally wrong about someone, and that would be it.

I didn’t get tricked by someone trying to trick me; I got tricked by someone who was fooling themselves.

I let myself get caught up in the belief of someone else, a belief that was driven by emotional issues and not dispassionate, objective analysis. I let someone’s emotional issues override my own judgement. This happened because Frank was my friend, because I couldn’t be honest about who my friend was and what he was doing, because our friendship colored the information coming in and how I assessed. I saw the world the way he wanted it to be, not the way it was.

This seems like its better, right? I can say, “Oh well, not my fault, I meant the best.” It’s seems easier to deal with emotionally, but actually, in terms of investing, it’s a much worse mistake.

It’s worse because getting tricked just means you need to get better at spotting the signs of fraud. I am already really good at that. It’s really hard to trick me intentionally, and even if I wasn’t, you can learn those skills relatively easily.

But the fact that he fooled me because he was fooling himself means that, at some level, I substituted his judgement for my own, which is the worst investing mistake you can make. I let him convince me that his course of action was right, when all I had to do was objectively look at it to see that it was wrong. I didn’t do that though. I let my emotions control my investing decisions, which is a perfect way to make terrible investing decisions. I accepted his frame and his analysis of the situation.

Losing the money wasn’t the hardest part. It wasn’t even that much money, really. The hardest part was the realization that I lost my money because I didn’t do my own thinking, and for me especially, that is humbling and embarrassing.

Lessons I Learned:

-Always see things and people for who they are, NOT who you want them to be.

-Always do your own thinking, and never substitute someone else’s judgment for you own. Listen to other people yes, but always make your own judgments based on your own analysis.

-Never invest in anything you can’t objectively evaluate. If you care too much about someone to be honest with yourself about them–or to be honest with them–keep your money out of the relationship (or just give it to them, don’t invest it).

-NOTE: I don’t put the other lessons in here, like don’t money from toxic people, because I already knew that. I just ignored what I knew, which is the lesson for me.

Why I Invested, #1: Deep Eddy Vodka

This is the first in the series of posts that outlines what companies I’ve invested in, and why I picked them. There will be at least 20 (how many investments I have now); my goal is to reach 100 early stage investments by January 1, 2018. That’s about 20 a year (retroactively beginning in 2013).

Some notes on format:

Investment Amount: I don’t tell the precise amounts I put in, but divide them up into three categories; 1. under 25k, 2. 25-99k, 3. 100k or more. I would be specific, but some start-ups are weird about that, so instead I give a range so you have an idea of how invested I am.

Investing Decision Rules: Through the course of writing this series, I’m going to explain very specifically about why I invested in each company individually. I do have some overall rules I use that guide my investing decisions, but I’m going to wait to outline all those until I am in at least 40 companies. This is for two reasons; 1. They are still developing because I am still learning about start-up investing, and 2. I don’t want to give that sort of general advice until I am highly confident that it’s good. I don’t mind risking my money on my decisions, but I don’t want anyone else making investment decisions based on my advice until I’ve tested it enough to be confident that it’s generally right.

 

Why I Invested, #1: Deep Eddy Vodka

deepeddylogo

Company: Deep Eddy Vodka
Product: Flavored vodkas (Sweet Tea, Ruby Red Grapefruit)
Year Invested: Series A in 2010 & Series B in 2012
Amount Invested: Series A (100k or more), Series B (100k or more)
Role: Investor & Advisor
Why I Invested: This was my very first “real” investment in an early stage start-up, and I kinda fell into it by complete accident. I was out one weekend drinking with a buddy of mine in Austin, Taylor Perkins, and I ordered what I always drink, a vodka and club soda.

Taylor “You should try Deep Eddy. It’s this new sweet tea flavored vodka.”
Tucker “Yeah, thats what I want, another stupid, shitty flavored vodka.”
Taylor “No dude, you don’t understand, this is amazing. It tastes just like sweet tea, and it’s made with all natural ingredients. It’s made in Austin, its really good, I know the guy who did it.”
Tucker “Dude, I’ve had Firefly, it’s really shitty, I don’t want anymore sweet tea vodka. I’m not a fucking little sorority girl who needs flavors in her vodka to hide the taste.”

Once Taylor gets an idea in his head, there’s basically no way to shut him up about it. He pestered me for 30 minutes about this goddamn drink until I realized the only out was to try the fucking drink. I figured I’d just take a sip, hate it, throw it in his face, and then get a normal adult vodka drink.

He ordered me a Deep Eddy Sweet Tea Vodka, mixed with water and a lemon. I tried it.

I was blown the fuck away. 

Tucker “This is incredible.”
Taylor “I TOLD YOU!!”
Tucker “Yes, but you’re an idiot, you tell me all kinda of nonsensical bullshit. This is actually legit amazing.”

I pounded it, ordered another, pounded that…rinse and repeat until I was like 6 in, and I felt AMAZING. It had just enough caffeine in the tea to keep you from getting that tiredness that comes with lots of vodka day-drinking. It was like the first time I ever drank a Red Bull and vodka, except it didn’t taste like cough syrup and it didn’t make me anxious and crazy.

Tucker “This is legitimately the first new alcohol I’ve had in 15 years that I’ve liked. I cannot believe this. How did I not know about this?”
Taylor “It’s brand new, it just launched in Austin a few months ago. My buddy Clayton did it.”

And then I asked the question that basically led me to this point in my life:

Tucker “Is he taking investors? This is something I’d put money into.”

Indeed he was. Two days later, Taylor invited Clayton to a brunch where me, him and about 6 other people were, so I could meet Clatyon. He showed up late, and after a few minutes, Taylor introduced us…sort of:

Taylor “Clayton, you ever heard of a guy named Tucker Max?”
Clayton “Yeah, he’s that guy with those books you always see in the airport right? The ones with stories about getting drunk and hooking up or whatever? I read some of those stories. They’re funny, but I don’t know. Do you think they’re real? I think that guy might be full of shit.”

The whole table cracked the fuck up. Even I was laughing, and Clayton was utterly baffled about what was so funny.

Taylor “That’s Tucker Max.”

I was not in the least bit offended by this, and to his credit, Clayton was super gracious about it, apologized (which he did NOT need to do), and we talked about what in the books was so unbelievable to him, and had a great conversation about it. He turned out to be an incredibly intelligent, thoughtul guy, the type of person who inspires confidence with his intellect and abilities, while still displaying real humility. I don’t say this lightly: This was a dude I’d work for–and I don’t work for other people. I came away from the brunch very impressed with him as a human being.

So far, I absolutely loved the product and was very impressed with the CEO. Great signs for investing. But not all you need to know. I know plenty of people who are amazing humans, but I’d never give them my money for a company.

After that, I did my research on him and Deep Eddy. In addition to my personal impressions, I found out that Clayton was extremely experienced at the beverage business. He’d started Sweet Leaf Tea, and recently sold it to Nestle, and this was his next project. The early story of Deep Eddy is here, but what was so attractive to me about this company–aside from the product itself being amazing, which is the MOST important thing–was that Clayton was a serial entrepreneur, with successes and failures under his belt. This guy had done it before.

This is a hugely important trait to look for in a management team: Real experience. He knew the beverage industry, and even better, he had hired some amazingly talented and experienced people to work with him who really knew the LIQUOR industry, and had been working in it for years. His company didn’t just have him, it had an incredible management team backing him.

I was scheduled to meet with him over coffee about a week later to discuss me investing in Deep Eddy. Now, I’ve done well financially, but cutting a 100k+ check is no fucking joke. That’s A LOT of books I worked my ass off to sell. During that week, I went to every single bar in Austin that had Deep Eddy–at that time, there were only like 15 places serving it, max–and I talked to every bartender and bar owner and customer I could about it. I knew what I thought, but I wanted to know what other drinkers and servers thought.

Pretty much unanimously, they loved it, recommended it to other people, and told me about near universal love for it from people they referred it to. Not everyone likes sweet tea of course, but for those who do, this was the most amazing thing you’d ever had; it was so much better than Firefly as to be almost a different product, and the cost was not much more.

I was 90% sure I was going to invest anyway, but this anecdotal research confirmed my personal opinion of the product, and my personal opinion of Clayton: Deep Eddy had real potential to be a major winner, and I wanted in.

We met for coffee, and Clayton started selling me on the company. I stopped him.

Tucker “Dude, I’m already sold. I’m in, I even brought my check. I just want to know how I can help make this company big.”

We talked this through, and he agreed that I could and should write about Deep Eddy in my next two books (Assholes Finish First and Hilarity Ensues) if there were any organic, honest places to put a mention (and there were, mainly because by blind chance I knocked a EuroTrash out on Claytons boat dock a fews months after that, a story which is in Hilarity Ensues). We also talked about who I knew in various markets, what influencers and celebs I could get this into the hands of, etc.

I actually didn’t realize it at the time, but he was interviewing me as much as I was interviewing him. Deep Eddy was raising a set amount in their Series A round, and they had allocated 20 slots at specific amounts. They were in such high demand that they could pick their investors. I made the cut without even knowing I was competing.

This was my first investment, and so far, it’s turned out really well. Since 2010, Deep Eddy has completely exploded. It is now in something like 25 states, it’s sales are now in mid-8 figure range, and it’s growing at an incredible month-over-month rate. They raised a Series B in 2012 (that I participated in, fully) to speed up expansion and get them past the regional vs. national liquor brand inflection point, and since then, they have done even better than they predicted. Sales are over a YEAR ahead of the projections they used to raise the Series B money. They’ve introduced a new flavor, Ruby Red Grapefruit, that is so good I have friends who make me send them CASES of it every month because they live in states where its not sold yet.

rrdeepeddy

I’m not sure what the market value of my investment is now, but it’s grown quite a bit. I won’t really know until the company either exits or starts paying profits out to investors instead of reinvesting everything in growth. As to what happens next, Clayton isn’t sure whether they will exit to a large international liquor conglomerate (large buyout offers have already been made), or whether he’ll keep growing it himself and turn it into a big company. I’m on board either way, because almost every decision he’s made has been right, and I’m proud to be an investor.

I know, I sound like a fucking corporate cheerleader, but in this case, I think it’s justified: I genuinely love the product, respect the team behind it, and am making great money on my investment.

Lessons I Learned:

1. Product first: One of the reasons I was so in on this company is because I LOVED the product, and it was in a field that I really knew–alcohol. I can’t really imagine, at least at this point in my investing life, putting money into something I don’t like, use and believe in. It’s hard to evaluate companies that make things for an audience you aren’t a part of. Not impossible, just hard to do.

2. Management matters: Great products are great, but if the people running the business suck, it can all go to shit. Clayton is a fucking star, and he put together a team of stars at Deep Eddy. If I wasn’t so impressed with him and his team, I’m honestly not sure if I would have put money in, and definitely not as much as I did.

3. Investing Is A Two Way Street: The best companies can pick their investors; you have to also bring something to the table. I brought quite a bit for Deep Eddy.

Quotes, October 2013

“When people want to sound smart, they add syllables to words, words to sentences, sentences to paragraphs, paragraphs to books. They try to make up in quantity and complexity what they lack in quality. That’s bullshit! They’re just hiding their bullshit!”
-Robert McKee

“Stories build cultures by answering the big questions.”
-Robert McKee

“Influence is just persuasion in slow motion.”
-Robert McKee

“Life is chaotic and meaningless, and you have to find your meaning. You must find the answer, you can’t just live. That’s the point of story: helping you find your meaning in life.”
-Robert McKee

“Leaders use story to author the future.”
-Robert McKee

“If someone sleeps poorly it is hard to keep them alive. If someone sleeps well, it is hard to kill them.”
-Robb Wolf

“In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts.”
-Jeff Bezos

“We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”
-Jeff Bezos

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”
-Upton Sinclair

“Action expresses priorities.”
-Gandhi

“Mainstream media: 80% stuff someone told them. 10% stupidity. 10% arrogance.”
-Seth Roberts

“Many men who transgress justice, honor appearance over reality.”
-Aeschylus

“For every complex problem, there is a simple solution that doesn’t work.”
-HL Mencken

“…for all men do their acts with a view to achieving something which is, in their view, a good.”
-Aristotle

“To begin a new novel, I look for the biggest problem in my life that I can’t solve or tolerate. Something that drives me nuts, but I can’t fix. Then I find a metaphor that allows me to explore the problem, exaggerating and expanding it beyond reason. I build it up to the worst scenario possible and then find a way to solve it. By the time the book is done, I’ve exhausted all of my emotions around the original problem. Whatever it was, it no longer bothers me. And typically, during the time of writing, the problem has resolved itself. It’s like magic. Try it. It will keep you alive in this world of bullshit.”
-Chuck Palahniuk

“That’s powerful branding in America: in opposition to what you hate.”
-TLP

“Curiosity takes ignorance seriously – and is confident enough to admit when it’s in the dark. It is aware of not knowing. And then it sets out to do something about it.”
-Alain de Botton

My Start-up Experience, And What I Learned

NOTE: This is a long post. I think it’s interesting, but I may be wrong. Feel free to quit it at any time.

Who to take advice from
I’m a big believer in the idea that you shouldn’t listen to someone unless they have both succeeded AND failed at what they are giving you advice about. Why both? It’s obvious why you should not take advice from someone who has only failed at something–what the hell do they know about doing it right? But it’s not obvious why you should not take advice from someone who has only succeeded.

I didn’t understand this until I read an interview by Paul Graham (it might have been Kamal Ravikant who told me this) where he said one of the best variables that predicts the success of a start-up is one of the founders having a previous failed start-up. He explained that if someone has only succeeded and never failed, they probably don’t really know what they’re doing, they only know how to keep repeating what they’ve been doing. Nothing crystallizes and teaches like failure; it forces you to face the consequences of your decisions and learn from them. Beyond that, if someone has failed, but got up and tried again, you know they are resilient, and resilience + willingness to learn from and correct mistakes is how one gets real wisdom and knowledge.

I started thinking about this in the context of my life, and it made perfect sense; this is why almost every good manager/coach of sports teams were very mediocre players. They HAD to understand everything about the sport to eek out every advantage just to compete with the great athletes. And it made sense in social terms; this is why so many people who are super popular in high school never progress beyond that in life. They just kept repeating what made them popular in high school, but the real world doesn’t reward those behaviors, and they don’t know what else to do because they never learned how to adapt and learn from failure.

Why am I bringing this up?
It occurred to me that since I’m now going to write consistently about start-up investing, and have dozens of articles about why I invested in certain companies coming, I might want to publicly talk about my experiences in this area. This is a fantastic (and funny) flow chart that shows how to decide if you should take start-up advice from someone, and I actually fit both criteria she lists, but many people may not know this.

Please be clear: I am not writing this to convince anyone that I am some amazing start-up entrepreneur, or to go into business with me, or fund the companies I start (we’re not even taking outside money), or sell you any idea about me. I am just telling you what I’ve done, in the most honest way possible, so you can have the factual information necessary to give my advice the degree of weight you think it deserves, given this experience.

My start-up experience covers four companies; three I founded, and one I joined after an acquisition:

First Company: Rudius Media
Started: 2006
Role: Founder, CEO
Sector: Entertainment
Product: Books, movies, web sites and content
Best Gross Sales Year: Honestly not sure, but under 100k
Best Net Profit Year: Same
Number of employees: 5
Result: Failure, company shut down in 2009

Commentary: This was my first attempt at a company, and it was a fucking mess, almost exclusively because of me and my mistakes. I pretty much did everything wrong that is possible to do wrong with a start-up, other than criminal shit like stealing company money to buy hookers and coke or something like that.

What Did I Learn?: Mostly, I learned how little I knew about business, management, money, and how the real world works. Here is a SHORT list of some of the things I know I did wrong:

-I had a poor understanding of the space I was competing in (media & publishing)
-I picked a business model that had virtually no chance of succeeding
-I didn’t focus enough actually making money
-I spent money much faster that I was making it
-I put too much of my own money into projects that made no financial sense
-I spent too much time in big picture thinking (and most of that was me fantasizing about my future success)
-I spent too little time in actual business details
-I picked the wrong people to work with
-I was too enamored with my own ideas, and not willing to listen to people or learn from them, even when they had much more experience
-I had too much emotionally invested in my specific vision and a specific outcome, and it prevented me from making the changes and decisions I had to in order for this company to work

That’s just the business part. My management skills were a total mess too. I probably hired the wrong people, but I DEFINITELY made those people worse employees by being a terrible boss. Some more things I did wrong:

-I didn’t communicate enough with my employees
-I didn’t set the proper goals and outcomes for them
-I didn’t give them enough guidance on what I asked them to do, and then get pissed when they didn’t do what I wanted
-I yelled when shit didn’t go my way
-I expected my employees to do things I wasn’t willing to do (note: this is one of the two hallmarks of bad leadership)
-And perhaps worst of all: I put myself and my selfish interests in front of the company AND it’s employees. (note: this is the other hallmark of bad leadership)

This list could probably be way longer, but you get the point. This company had no fucking shot, mainly because of my flaws, as an entrepreneur, a businessman and a manager of people. I wasn’t ready to run something, and it showed.

It’s hard for me to go back and think about that company, not because it failed, but because I was such a fucking dipshit in how I ran it and the way I thought. It’s embarrassing to think about now, to be honest. If failure teaches, and bigger failures teach more, than I learned A LOT.

The one good thing is that we did get some things done, even in spite of my bullshit. We developed a fledgling content network, that, with a smarter and more savvy leader (NOT me at the time), could have worked. And we did make a real Hollywood movie out of this company that went to theaters. It did poorly at the box office, but has done great in DVD and in the secondary markets. The problem wasn’t the creative effort or ability of me or my team; the problem was me, and that was hard for me to face for many years.


Second Company: Tropaion Publishing

Started: 2011
Role: Founder, CEO
Sector: Publishing
Product: Books
Best Gross Sales Year: 2012, 2mm
Best Net Profit Year: 2012, 1.4mm
Number of employees: 1
Result: Sold to Lioncrest Publishing in 2012
Commentary: It took me a LONG time to face the music from my first company and learn from my mistakes, but I eventually did it, and by doing that I was able to correct them.

What Did I Learn?: I learned so much, it’s hard to write it all down; you could almost reverse the list above, and that could be the list of what I learned. This company was extremely successful by any measure for a start-up. In our first year we were not only profitable, we made over a million dollars, and we did it with effectively two full time employees (me and Ian Claudius).

I think the key thing that I finally started to understand was not just business, but how the world actually worked. I stopped getting pissed and railing at people or systems that I thought were unfair, and instead focused on doing the job at hand. I think the big shift for me emotionally was asking myself the question, “Do you want to be angry at the injustice and fail because of that, or do you want to go around their bullshit, be effective at what matters, and succeed?”

Be clear: It wasn’t that I had to compromise my ethics or do things I thought were wrong. It was more about realizing that bitching about how unfair and bankrupt the entertainment and publishing businesses were wasn’t getting me anywhere but pissed off. So my options were to either get in the ring and do something about it, or stand on the sidelines and ineffectually bitch. I got in the ring.

This is abstract, but you can read about precisely what Tropaion did in this piece. It was pretty genius, and the only way I could have pulled this off would be if I stopped trying to fight an unfair system, and instead worked to outsmart it. That’s partly being smart and experienced enough, but it’s mainly about being able to emotionally let go of anger or a defined course, and instead being willing to see other ways.

Third Company: Lioncrest Publishing
Joined: 2012
Role: Partner
Sector: Publishing
Product: Books, conferences, editing services, instructional materials and courses
Best Gross Sales Year: 2012, 5mm (?, I think, it maybe more)
Best Net Profit Year: 2012, (not sure of the amount actually, but it had good margins)
Number of employees: 6
Result: Dissolution and reverse acquisition in 2013 (it’s complicated)

Commentary: This is a long, complicated story, but basically what happened is that I realized that Tropaion Publishing had the potential to be very successful, but it was going to take a lot of grunt work that I didn’t want to do. I didn’t want to be a “real” CEO, and do the things needed to take the company from 2m to 20m and then exit. So I found a company who I thought could do that work and wanted to do it: Idea Incubator.

It’s owned by Ryan Deiss and Perry Belcher, and they loved my business model and what I’d done, and they had the desire and resources to so take my start, add it to another similar business that they had started, and scale it up to 20 million quickly (they then planned to exit it to a private equity firm for a healthy 4-6x earnings multiple). So they acquired Tropaion, and I agreed to stay on with Lioncrest Publishing as a partner and help them scale the business, and I’d get a nice piece of the eventual exit.

This acquisition happened right before I did the TechCruch interview with Andrew Keen and wrote the piece for Huffington Post about my publishing company, so that’s why I talk about Lioncrest in those interviews instead of Tropaion. That was actually part of the deal, Ryan & Perry wanted me to get press for Lioncrest, which was easy because I hadn’t talked about any of the things I did with Tropaion in the press or even on my blog, so I started talking about them and attributed them to Lioncrest, since that’s what the company was called when I did the press. At that point, everything was going great.

But as happens sometimes, they had a different vision for what they wanted to do with the company than I wanted and was willing to back. We decided to part ways in mid 2013. As part of the deal, I actually got the Lioncrest Publishing name, and they took most of the assets and re-branded them under a different company (which is doing great, btw, I think they have a book with William Shatner coming out next year). It was very amicable, and I still respect those dudes and work with them on specific projects.

The funny thing was, I wasn’t even sure what I was going to do with the Lioncrest Pubilshing name at that point, but since I had been the face of it on all the media that we’d done, they were super cool and gave it to me. So there I was, with a company name, but no employees or real services.

What I Learned: I actually learned a ton from those guys in the year or so I knew them and we worked together. Ryan and Perry are amazing at sales and conversion (they run the Traffic & Conversion Summit), and they have an incredible ability to make money out of almost anything. It’s kind of incredible how creative they are when it comes to selling or marketing things; I’d give you specific examples, but I doubt they want me talking about the genius things they do that no one else does. I was basically introduced to the world of direct sales through them, and it is a field that I learned a lot from.

Also, they were the ones that really showed me how valuable all my marketing and media skills were to business. I knew my skills were valuable in the entertainment business, but I had no idea how truly bad almost all businesses are in every aspect of outward facing creativity, marketing, etc, and how much I already knew about “normal” business, without even really realizing it. It was crazy how well all the skills I developed at TuckerMax.com translated to “normal” business marketing and sales.

They also really drilled some basic business skills into me that I was lacking. I mean, of course I cared about money, but I was always so focused on the product or the writing that I never really spent much time on the specifics of converting that product into sales, and how to think about that systematically, especially how to monetize an audience you have earned. They are really good at that–at turning content into a sellable asset–and I learned a ton watching and listening to them.

As great as they are at certain those skills, they have their flaws (like we all do), and I learned quite a bit from those as well. Their flaws are things you could say about almost any direct marketer: They’re amazing at sales, but pay very little attention to design or aesthetics, and I saw the impact that can have. They tend to think very short term in regards to making money, and though it works for them in a way, I also saw how they missed bigger opportunities later on by taking the easy money now. And of course, they don’t put enough focus on having a great product, but instead focus on how to sell the product. They’re not scammy shitheads like a lot of direct marketers, but they definitely don’t care about quality the way that I think a business should (incidentally, this is where we diverged in future plans).

I learned more about my flaws too. I was still too emotionally invested in results, I was still too much of a yeller and not enough of a listener, and I still had issues with control, and with managing people. And I still don’t quite know how to operate in a corporate environment (though I wonder if that’s a flaw not with me, but with all corporate environments).

Fourth Company: Story Ark 
Started: 2013 (August 1st, actually)
Role: Co-founder & Partner (but not CEO)
Sector: Marketing & Digital Media
Product: Marketing and Business Consulting; Information Publishing
Best Gross Sales Year: n/a
Best Net Profit Year: n/a
Result: Ongoing (I will say that we’re already profitable, less than 4 months into our existence)
Commentary/What I’m Learning: This company has been a test for me on how much I actually learned from my previous mistakes. And so far, I think I’m doing OK.

The first thing I did right was partner with people who are more talented than me in most ways; Ryan Holiday and Nils Parker. The three of us are equal co-founders of the company (we combined Lioncrest Publishing, Brass Check Book Marketing, and Command+Z Content). I am not trying to do this by myself or be the hero; I have people around me who are just as talented or more talented as I am.

The second thing I am doing right is internalizing that it’s not about me; it’s about us. I know this may sound like stupid new-age bullshit, but it’s not. I’m not even the CEO of this company, which makes this the first thing I’ve done in ten years where I’m not in charge. It’s us, not me, and though that was a little frightening at first, it’s helping me to be so much more effective. I can lean on others, delegate, and learn from their abilities. And most importantly, I am listening to them, recognizing when their advice is good, and taking it. I’m really fucking smart, but I have some pretty big holes in my abilities, so partnering with two people I like and respect and who are probably more talented than me in most ways is great–because they are especially good at a lot of things I’m not good at. It allows me to just focus on things I AM good at, which is really relieving.

Third, we have a great business model. I don’t want to explain all of it here, because I think there are few things we’re doing that no one else is that could be pretty innovative. Plus, we haven’t executed on all the things we plan to, so until that happens, I’ll wait. It’s always better to tell people what you’ve already done, instead of what you plan to do. [James Altucher gets close to it in this piece; he essentially used our company to release his last book, but it was before we officially formed, and he liked us so much and wanted to invest so bad, it was part of the reason we combined forces]

Fourth, we’re mature adults now. Well, I think this mostly applies to me–Ryan and Nils have been mature adults much longer than I have (which is sad because they’re both younger than me). The fact is, in the past, I would say that at least 75% of my failures were caused by me and various aspects of my immaturity. Not even by simple mistakes–I’m talking about my personal and emotional flaws that I refused to address. That is very much less the case now (though by no means eliminated).

Fifth, we have great people working for us. I like each person on our team, and I think each one has legit potential to be stars. It’s hard to find and hire great people, but once you get them, it’s amazing. [NOTE: We are always looking for more great people. If you are a doer, email me: tuckermax@gmail.com]

Sixth, I’ve learned how to be a boss. I didn’t say I was GOOD at it yet, but I’m no longer bad at it. For example, though I still have a long way to go before I can be considered a good manager of people, I do some things much batter now:

-I delegate and assign work to people
-I set clear goals for them to achieve
-I set up the process by which I want them to report
-I follow through consistently and check up on progress, offering help where its needed
-I give relevant feedback in a positive way
-I demand excellence from others by showing in my work what excellence is
-I analyze both success and failure–on myself and others–honestly and directly

Seems obvious, right? It’s been hard for me to do these things in the past.

And last, I think I’m really starting to internalize the two most important lessons all leaders must know:

1. I always put my responsibilities to others ahead of myself, and
2. I never expect anything of others I won’t do myself.

Those are the things I have learned thus far. I expect this list will be much longer in no time at all, as I learn something almost literally every day.

 

So…that may have been much longer than it needed to be, but it’s my experience with start-ups, and what I learned from them.