Ten Percent Happier with Dan Harris - 123: Brad Katsuyama, Wall Street Reformer

Episode Date: February 21, 2018

Brad Katsuyama's blood pressure levels were "out of control" and he decided to make a significant change in his life. The Canada native left his job at Royal Bank of Canada, began a regular meditation practice and started IEX, a stock exchange that took on predatory high-speed trading and was the subject of Michael Lewis' best-selling book, "Flash Boys: A Wall Street Revolt." See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

It kind of blows my mind to consider the fact that we're up to nearly 600 episodes of this podcast, the 10% happier podcast. That's a lot of conversations. I like to think of it as a great compendium of, and I know this is a bit of a grandiose term, but wisdom. The only downside of having this vast library of audio is that it can be hard to know where to start. So we're launching a new feature here, playlists, just like you put together a playlist of your favorite songs.

Back in the day, we used to call those mix tapes. Just like you do that with music, you can do it with podcasts. So if you're looking for episodes about anxiety, we've got a playlist of all of our anxiety episodes. Or if you're looking for how to sleep better, we've got a playlist of all of our anxiety episodes, or if you're looking for how to sleep better, we've got a playlist for that. We've even put together a playlist of some of my personal favorite episodes. That was a hard list to make. Check out our playlists at 10%.com slash playlist. That's 10% all one word spelled out..com slash playlist singular.

Let us know what you think. We're always open to tweaking how we do things and maybe there's a playlist we haven't thought of. Hit me up on Twitter or submit a comment through the website. Hey y'all, it's your girl, Kiki Palmer. I'm an actress, singer, and entrepreneur. I'm a new podcast, baby, this is Kiki Palmer. I'm asking friends, family, and experts,

the questions that are in my head. Like, it's only fans only bad, where the memes come from. And where's Tom from MySpace? Listen to Baby, this is Kiki Palmer on Amazon Music or wherever you get your podcast. [♪ OUTRO MUSIC PLAYING [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ OUTRO MUSIC [♪ I'm Dan Harris. Close listeners will recall that toward the end of last year, I believe, or at the beginning of this year, I don't know one of those two. We did, and a first time, I was kind of invagled into doing this experiment, invagled by my

producers, Lauren and Josh, a call in show where we set up a number that you can call and leave a vo voice mail and ask me anything you want. So I didn't know if that was this was going to be a really stupid idea or something pretty cool. It turned out to be the latter. I love doing it. The questions were great. So now we're going to try every week to take a question or two at the top of every show. So here we go. Let's and a minute. I'll give you the number if you want to call in. But let's take question number one. Hey Dan, my name is Peter.

I began listening to your podcast and I'm listening to your app. And I'm already finding six days or so in to meditating in the way that your app is teaching me to feel different. But I wonder if it's a placebo effect or if I'll have an equal downward spiral for a while. I've tried meditation before haven't gotten it. This seems to be taking because I haven't done it every day, but I've been more faithful to this than I have been anything else.

And I'm feeling the benefits. So I wonder is this what I can continue to expect? So I'm going to issue the caveat that I always do and I think it's important to do which is that I'm not a meditation teacher. I'm just a fellow meditator who's written a few books on the subject, so I'm not like a complete moron, but close to it. So having said that, I think that, first of all, what you're describing sounds great and congratulations, and meditation does in my experience have benefits, and they are what you describe,

which is that you are boosting your ability to focus and pay attention and you're boosting your ability to be mindful. In other words, to be non-judgmentally aware of whatever is happening in your head so that it doesn't yank you around. So that what you're describing doesn't sound to me otherworldly unrealistic, you know, metaphysical, anything that is ultimately unreliable. That being said, it's not uncommon for me also to hear from people who get very excited at the beginning of a meditation practice and for one reason or another fall off either because they somehow

life intervenes and they just stop practicing for a couple of days and then their ego slips in and tells them that they're a failed meditator and they just stop doing it for months or because you know uh... brain chemistry and exogenous events conspired to uh... diminish your the perceived to benefits uh... and you lose some confidence uh... so it both of these things can be true simultaneously and so what i would say is it is just for my own experience as somebody who practiced now for

about nine years, that it comes and goes. And it's dependent on a whole bunch of variables. And so the quality of your practice and the quality of your practice as it shows up in the rest of your life can really fluctuate. And part of what you're training yourself to do in practice is to roll with these all these ups and downs in a more supple way. And not to get to hung up on what the quality of your last sit was or what the quality of your last week was and tie that to the overall utility

and quality of your practice. So over time, I think you just get used to the fact that meditation is not about, in the active meditation itself, it's not about feeling a certain way. It's about feeling whatever you feel clearly. And in your life, it's not about achieving some permanent state of improved focus and mindfulness. It's about an improved baseline, but it's going to fluctuate based on conditions. That's my experience. Great question. Let's do a more.

Hi, Dan. This is Jay Collins from Brooklyn. My question for you is, can the act of interrupting and noting a natural thought process potentially interrupt a good thought from fully blossoming? For example, if an inventor has a cutting edge thought and uses mindful noting to label it as thinking, can that simple interruption get in the way of the thought coming to life? Another great question. And I don't have a definitive answer. I'm just going to give you based on my own personal experience, which is the safest ground from which to answer all of these questions, I think.

This is a concern. I hear a lot from especially from creative, that so you're meditating and you get a great idea and you're supposed to sort of non-judgmentally note it as thinking and not so get so sucked up in the thought itself. Are you in some ways as, you know, shooting yourself in the foot because, you know, this may be the idea that is whatever, going to make you a million bucks or invent some, you know, something. My experience now that so it is definitely true that when you get into meditation, for me, at least that when you're meditating and you're turning down the volume somewhat, depending on the day, somewhat on your habitual thought processes that new and

different ideas can emerge. And so it's not uncommon for me to be sitting there in meditation and like some great idea comes up. And I get into the spiral that I'm sure will be familiar to anybody listening who's meditated of what do I write this down. I'm like, I'll lose it. Blah, blah, blah. But then what I've learned how to do over time is just trust that if it's truly a good idea,

it will still be there when I stop meditating. So long way of saying, in my experience, it is not detrimental to the thinking process, to the ideation process, to the creative process, to have creative thoughts during a meditation session, and to try to simply be mindful of them rather than to get sucked into them and keep going with it. But I also think, you know, like, you're not breaking some sacred law if you have what you believe is a truly genius idea and you decide to open your eyes, get up and write it

down. So what? Go for it. I have found many times that, for example, I've looked back at notes after meditation retreats where I've thought that I was, you know, solving the world's problems and often my thoughts weren't as good as I thought they were in the moment. So that's another delight that may be waiting for you as well in the future. All right, two great questions. I think we're gonna try to do this every week. I mean, I could live to regrets having said that and maybe we won't, but Mike,

our current thinking is that we're gonna try to take a question or two every week because it's really cool. So here's the number if you wanna call in. 646-883-8326. And we'll put it in the show notes, and I'll put it all over social media, so, and we'll say it in future weeks,

so we'll have plenty of opportunities here. Thank you for those questions, and all right, let's get to our guest. So our guest this week is incredibly smart, and has really made an impact in the world. I wish I was smart enough to describe with some accuracy, exactly how he's made impact. So I will do it in probably factual, in factually inaccurate ways. But then when

he gets to talk, he'll say it correctly. But his name is Brad Katsuyama. He has, he is the focus of a huge book called Flash Boys by Michael Lewis who's written all these amazing books about the business world Michael Lewis has and one of his most recent books was called Flash Boys and Brad is the protagonist and After the book came out he was on on 60 minutes Brad was and he was a And this is where I'm gonna get into you know, dicey territory in terms of describing this factually But he was was in the, he was a financial services executive basically involved in Wall Street stuff, which is not a technical term, and saw some, saw some structural aspects to trading that he thought was unfair to the rest of us. And he not only blew the whistle on it, but decided to create

an alternative. So that's about as much as I can say without actually losing the thread. But suffice to say, when he tells the story, it's quite riveting, ribbing enough for Michael Lewis to write a whole mega best-selling book about it. So trust me, he's also a meditator and which is useful because his life continues to be extremely stressful. So here we go, here's Brad Katziyama. Thanks for doing this, man. Thanks for having me. Nice to see you. Yeah, good to see you. The first time I've seen you without like a big play to fries between us. That's right. So, how and when and where did you start meditating? So in 2012, so 2004, I'm in New York City and I'm working as a trader at the Royal Bank of Canada, and started getting these headaches.

And so I go to the doctor and it turns out my blood pressure is out of control. And it was the first time in my life that I'd ever had high blood pressure. So he gave me this list of things to do and stop drinking coffee and cut out salt, etc, etc. And I tried for eight years to manage it in a variety of different ways and working out and doing this and doing that. And finally enough, in 2012, I quit my job at RBC to start IEX, which is a company that I now work at. I never had more risk in my life. Personally, professionally, you're going for making good money to nothing.

My second son was just born and my blood pressure plummeted to normal levels after quitting. It was the first time to me that I got a good understanding. I can do all of these things to try to manage my blood pressure, but psychologically, the effect of leaving one company and kind of starting fresh, had a profound impact on my blood pressure. It became this litmus test of kind of like psychological well-being. And so then I started to read about variety of different books and came to this point where meditation became this recurring theme of how to try to center

yourself and how to refocus. And so the whole concept of mindfulness became something that I dove into. And pretty much since 2012 on and off and probably more significantly in the last few years you know I've been trying to meditate daily doesn't always happen to be honest but I try to do it and it's had a pretty big impact on you know the way I the way I interact with people the way I interact at work the way I interact with my family and it's become this kind of like you know place for me to reset, and it's been it's been really helpful. What kind of meditation you're doing, where do you do it, how long?

Yeah, so I'm at, this is probably shameful to say, but I'm at 12 minutes. That's good. That's not shameful. Okay. This is a safe place. So, one of my new models is one minute counts. Right. So yeah, so on that 12, you're doing 12 times my minimum, just so you know, okay. Yeah. So that I feel good about that. I'll do it on the trains coming home from work. So we moved to Connecticut. And so I found that when I'm on the train coming home, it's you need to kind of like create a routine. So I run in the mornings before going to work, which is in a weird way, another form of meditating.

It's just trying to re-center yourself in a different way. And so, on the way home, I kind of want to leave work at work and be present for my family and so, I'll meditate on the way home. And on the way to the airport, always, on the way home from the airport, always, and I fly a lot. So I try to pick these places where I can, you know, consistently do it. And, you know, I've lived in Connecticut for two years. I've never missed the train ride. I've never missed a ride to from the airport. And I just really kind of try to focus on those times and it's been helpful. It's hard. My mind goes a million miles an hour as I'm sure a lot of people's

minds do and I find that it's still hard, it's still challenging, but it's had a pretty big impact. And again, I'm able to kind of, in a weird way, regulate my blood pressure by doing it. Because you're not, I mean, you talk about the challenge of the voices are coming and all this other stuff, your mind's going to minute, but it's, those thoughts are less sticky after a while because you learn through meditation not to take them as seriously. And that, I believe, is part of the mechanism for lowering your blood pressure and lowering your stress overall. In my experience.

Total, and what's funny too is that your body reacts to things differently than your mind does, or your mind believes it's reacting. And that was kind of the big connection for me is this idea that I don't feel stressed, but my body is telling me something dramatically different. And I feel like meditation was this point where kind of like mind and body became a little bit more aligned. Because there's a lot of people out there

that just I don't feel stressed, so I must not be stressed. And I don't necessarily think that's the case. Because your body does, at the end of the day, I mean, that's the litmus test for whether this situation is how you're reacting to your body. Yeah.

And mine can fully and all sorts of things. I've told the story before, actually, in my first book, the, I had an undiagnosed depression. I would feel awful. Just awful. Couldn't get out of bed. I felt like feverish and months of this. And I got tested for everything, you know, everything.

Dengue fever, you name it. And I had them tested, say, if I had a gas leak in my apartment. And I remember saying to my best friend at the time, this woman Regina is still a really close friend of mine. I said, I think I might have to admit, at some point, that I'm crazy, which is a flippant way of saying, like something else was going on.

And ultimately, I went to a doctor and was like, oh, you're depressed. And just naming it helped me figure it out. But the body knows even though the mind's in denial, it's a really crazy thing. Absolutely. It's just one of these things where the more you lean into it the more you realize that you know, this is a there is a connection between mind and body and and you can fool yourself into thinking nothing's wrong and I think You know another interesting part is like when you focus on your breath And really kind of nothing else you start to realize trigger points about like oh, I clench my jaw or I do this and it becomes so habitual that it almost becomes commonplace that your jaw is in this constant state of tension

and it's only when you like release it you realize so I think it's been helpful also to kind of like find these trigger points that I have so even if I'm not meditating I can immediately like say okay look focus on my jaw and be like crap. I'm really like for my shoulders Totally. Yeah, absolutely. It's so funny because that mind-body connection sounds so high for luten a new age But and it's so it's almost like somewhat embarrassing to talk about it But but it's undeniable. I mean the thing there's a reason why a lot of scientists are interested in this because it is a massive Massive and powerful phenomenon. But just on a nitty-gritty level, for those 12 minutes, what are you doing in your mind?

What kind of meditation? I don't have a chant, it's not transcendental, I'm focusing solely on my breath. The feeling of your breath coming into it. The feeling of the breath in and out, and it's mindfulness in the way that when I have thoughts, I let them pass, and I try to focus on different areas that feel tense. I'm really just trying to quiet my brain down. It's being a entrepreneur and working in a company where a stock exchange and every day is different and we're challenging the establishment.

So there's a lot of angry people and there's a lot of controversy and I really just focus on quieting my brain down because, you know, we have, I have three young kids, seven, um, brain and seven, Rylans five and Emmy is two. It's very hard to shift from, you know, being the CEO of this company to being at home as a dad and husband, and I found that meditation, let me bridge that gap, doesn't always work, unfortunately, but it works.

Well, you're in a place called 10% happier, so it's not always working, just again, a safe place for you, my man. That's right, that's right. I wanna get deeply into the tumult in your workplace because it is fascinating. But let me ask a question about your practice. So I wanna issue a caveat before I ask this question.

This is like you're with an unlicensed surgeon right now because I am not a meditation teacher, but I just wanna, you said a few things that just got me, made me curious. Do you, as I do, struggle with, because you said it before, like it's tough, my mind's going a million, and I'm trying to quiet it down,

do you find that there's a certain kind of subtle antagonism toward the thinking and that you're kind of beating yourself up a little bit when you get lost, or are you truly letting it go in a seamless way? No, no, it's a struggle. It is a, it's, some days easier than others, but it is a constant struggle, although I never could have done this ever two or three years ago for you. Like, I just never could, like, when I first tried it, it was almost a joke where I'd be like

checking my phone. I feel like it's five minutes, it's been 45 seconds, like that kind of thing. So, but it does, it feels like a struggle. It's been good. Like, you know, I like the app, the 10% happier app. Joseph Colstein, it's kind of like at this soothing way about him and it's kind of, it's okay. It's like, you know, just go back, start back

at the beginning. Yes. This isn't like business where you make a mistake in their monetary consequence. That's right. That's right. This is, it's so hard for people like me and you, just type A strivers to get our heads around the fact

that you can't win at meditating. No, right, right, exactly. And I think, so it's been helpful to be, even just the idea that it's okay just start from the beginning. Just that simple thought gives you something else to focus on other than saying, I suck at meditating. Yes.

So that's been hopeful. So I have to say, and I think this will be reassuring, I've been meditating for coming on nine years, and I literally do 10 times the amount of daily meditation that you do, literally 10 times, 120 minutes. I struggle mightily to this day with what you're describing. But in part and parcel of your description was the solution, was the illustration of the success that you've achieved. You started when you started, you were checking your phone and you're saying it's still 45 seconds in. Now you make it through 12 minutes and it's not a big deal. It may be harder, it's still hard, but that is a huge, that's quantum leap.

And that just shows you that the mind slash brain is trainable and you are doing it. And I'll just give you one, I don't know if this will be useful. One technique that was taught to me recently that I found that I found to be incredibly useful. And the first I will say that the first time somebody mentioned it to me, I thought it was stupid. So you may think it's stupid, but let me just say it. And I actually go into great, I have a new book coming out soon, and I, this story is in the book in a big way. Actually, by the time this post, the book may already be out. It's called Meditation for Fidgety Skeptics, available at Fine Bookstores everywhere. Plugged. Now done. The book is written with this guy, Jeff Warren,

who's one of my favorite meditation teachers, an amazing guy. And we were, we did this cross-country road trip in a big, stupid, orange bus with 10% happier decals on the side. And we went out and met people who were interested in meditation, but not doing it and helped them get over the hump so they could start meditating. And but a lot of the time on the bus, we just sat around talking about our own meditative practices. And he really identified what I identified in you, which is Dan. He basically started to refer to my meditation practice as Dan's gulug.

It was like, you're just like, this is a baton deathmarch you're doing in your own head. You're just killing yourself every time you get lost. So he said that he had this thing where he would notice the various neurotic programs that run in his own mind. Like there if you if you look carefully, you'll see that the voices that pop up run in patterns. There are like five or six voices that come up and he would name them. He would give them silly names. And then when he would see them, he would be like, Oh, hey, one of his one of his voices was

El Grandioso, which was this voice that would pop up and tell him how awesome he is. And he would be like, Oh, what's up, El Grandioso? It's you again. Yeah. Welcome to the party. Yeah. And then move back to the breath. And that created an inner atmosphere that was more forgiving. Okay, so like I said, when he said this to me, I was like, that's dumb. Yeah.

And I don't want to do it. But I ended up doing it. And now I do it. It is a huge part of my practice. And when I have one voice, I call Sammy, which is named after, I don't know if you've ever heard the book, What Makes Sammy Run, which is a book about an obnoxious,

striving Hollywood agent. You know, I noticed that I'm like, super ambitious thinking about things that I want to do today or how I'm gonna gain something out with my boss or whatever. Next book I'm gonna write, some grand plans for taking over the world with 10% happier and I'm like, oh, that's Sammy.

What's up, man? Welcome to the party, drop it. It's not, I'm not angry at him. I'm not, or you can fake it until you make it. You might be a little angry at him and that's fine, but you're trying to train yourself not to whip your back every time you get lost. So I just said a lot, but I don't know if any of that makes any, but you're trying to train yourself not to whip your back every time you get lost. So I just said a lot, but I don't know if any of that makes any sense.

No, the advice is great because the voices are consistent. Actually, they are, especially when you do it frequently enough, there's a few of them and it's always the same relative kind of like theme. They almost like come out of certain parts of your brain. So like absolutely. There's a recognition that that is there. For me, it's anger, impatience, striving, planning, and desire. You know, it's like there's, it's not complicated.

The other thing that's humbling about it is like yeah, I'm boring Right. I thought I was like such an interesting person, but I'm really not. It's the same crap all the time Which is actually useful in a humbling way. All right anyway Let's talk about your your professional life, which is like unbelievably interesting Tell us about flash boys and and and I guess my first question is the events in flash boys which we should assume nobody knows about. Were you meditating during that during all of that? Yeah, yeah, I was. And it was in a way, you know, meditation and running like saved me, kept me sane in those in those moments. Not necessarily. So when Flash Boys was being written, you know, spent a year and a half with Michael Lewis,

as he, you know, in a funny way, you know, walked the same path I did several years before and just trying to understand how the stock market works. And when you realize that, you know, the stock market isn't just a bunch of investors transferring capital. You have people who supply capital investors, you have people who supply capital investors, you have people

who need capital companies, and you have this massive multi-billion dollar apparatus in the middle that are intermediaries that are trying to make that as difficult as possible. Really? I thought they were trying to make it as easy as possible. No, no. How do you extract as much rent as you can from each party if you make it simple?. So you're super super popular with the guys who run the New York Stock Exchange. I would imagine with comments like that. Yeah, no, no, popular at all. What's funny is, you know, the stock exchanges end up becoming what is enabled our current market. 50% of the volume plus is high speed traders. Exchange is make more money selling high speed data and technology advantages to certain parties. They make more money selling high-speed data and technology,

advantages to certain parties. They make more money doing that than they do from matching buyers and sellers. In a way, the market's lost its mind. Flash boys' weight was a way of highlighting that. Going through the process of... Wait, I'm sorry I'm going to interrupt you again. You just said something really important, but I think a lot of folks who don't know your story might not understand.

So let's just do a granularly. So this started when you were at RBC Royal Bank of Canada and you noticed something really important and controversial and just tell me to walk us through what that was. So as a trader at Royal Bank of Canada, we have trading systems that show us buy orders and sell orders, bids and offers in different stocks. So if I was trading on behalf of mutual funds or pension funds, and they'd send me an order and say, we want to buy 100,000 shares of

Microsoft. And I'd pull up a quote in Microsoft here, the buyers here, the sellers, and let's say there's 10,000 shares offered to sell it, I don't know, $75. In 2006, I would type into my system, I want to buy those 10,000 shares, and I'd buy them, but in 2007, I'd type into my computer, I want to buy 10,000 shares of Microsoft. I'd try to buy them, and my computer would say, you only bought 4,000, and the stock would trade higher. So now I leave stock to buy. I try to buy 6,000 shares at 7,505.

I'd get back 2,000 and the stock would take off on me. So I could never buy or sell what I saw on my screens. And at one point I could. And it kind of drove me nuts for a while. And then in 2009, I got lucky. I was running US trading for RBC. They asked me to run global electronic sales and trading, which is a way of saying, I went from managing

a human traders to a group of computer programmers and engineers who are building algorithms that my trading team was using. So just a completely different set of people. And when I went over to manage this group, what I realized was that they actually understood that the stock market is not, you turn on CNBC and you see a bunch of people running around on the floor of the exchange. No trading happens on that floor.

The markets are completely electronic. All of that in a movie set? It's a television studio. Absolutely. All the trading happens in data centers out in New Jersey. And so what these engineers and developers and one of the co-founders of IX is this guy named Ronan Ryan, Ronan worked for a group of traders called high-frequency traders. They were building networks to connect the different exchanges.

They were buying technology. The exchanges were selling to them to give them the ability to pick up a signal at one exchange and to race me to another exchange to buy shares ahead of me and sell them back to me at a higher price. So essentially what happened was I tried to buy 10,000 shares of Microsoft. Let's say there was 2,500 shares at BATS Direct Edge, NASDAQ, and the New York Stock Exchange. New York Stock Exchange Arca. So I send four orders from RBC out to the market to buy 10,000 shares, 2,500 shares each.

My first order gets to bats because it's located in Wehaka, New Jersey right on the other side of the tunnel. So RBC's downtown Manhattan, the fiber optic connections to New Jersey go up the West Side Highway, out the Lincoln tunnel. I get to bats first, then I get to direct edge in Cacacus, then I get to Nasdaq in Carter at New Jersey, then I get to the New York Stock Exchange in Mauwa, New Jersey. I mean, these are happening in nanoseconds. So the difference in arriving at bats to New York Stock Exchange was two milliseconds, two one thousandth of a second, it's three hundred milliseconds to blink your eye. So I thought that was actually fast. Ronin comes to RBC.

I hired him there and he said, well, hold on, I just built a network that can get my high speed trading clients from bats to New York Stock Exchange in 476 microseconds, which is four times faster than me at RBC. And I look, how in the world can you do that? And he said, well, we buy faster technology from the exchanges. There's now, you know, they're erecting microwave towers

in the roof. You're going through a fiber optic cable. So basically, they were selling people the ability to pick up information. What I think is instantaneous. I think I'm buying 10,000 shares. It's not instantaneous. It's a series of events. And the exchanges are selling the ability to actually insert high-speed traders into the middle of my trade to buy shares ahead of me to sell back to me at a higher price. Life is short and it's full of a lot of interesting questions. What does happiness really mean?

How do I get the most out of my time here on Earth? And what really is the best cereal? These are the questions I seek to resolve on my weekly podcast, Life is Short with Justin Long. If you're looking for the answer to deep philosophical questions like, what is the meaning of life? I can't really help you. But I do believe that we really enrich our experience here by learning from others.

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That sounds to me and I don't know, I don't know anything. Well, let me see if I can rephrase this and then I'll tell you what it sounds like to me. So you're not even Joe Public, you're a guy at a pretty big bank. You're trying to buy shares and there are people out there, I guess these are the flash boys

who are able to see that you're about to order something. They beat you to market and then they sell it back to you at a higher rate. So just like whistling in between all of the purchases. And so it's not they'd so think of it a different way. I'm trying to buy four tickets to a concert and there are seats one, two, three, four, and row B. I try, they'll sell me seats one and two, but they won't let me buy seats three and four. They'll try to sell them back to me at a higher price. So, they don't know I'm a buyer until I buy from someone.

So that's me buying from someone on bats. Now they know I'm a buyer and now they're racing. That's is an exchange. That's an exchange. Yeah, so they they saw me buy it the first exchange and they're they're racing me to exchanges two three and four to buy stock ahead of me to cancel those sellers to basically just get in the middle of my trade and it's legal. Oddly yes, Michael Lewis asked the same question. How can how in the world can this be legal? And I think the challenge is that as the market evolved, these traders ended up trading at speeds,

no one imagined. And the exchanges in a very weird way are in this position as self-regulatory organizations. There's a very high bar to be in exchange. There's almost like an honor to be in a national stock exchange. And they corrupted themselves. Because they sold people the ability to trade ahead of other people as long as you're willing to think of it a different way. The role of the exchange is like a

referee. There's two teams playing. There's a set of rules. My job is to enforce the rules. So a buyer and a seller on an exchange are like the two teams. You have the referees in our stock market, the exchanges. They make more money selling things to one of the teams than they actually do from refereeing the game. So if that was happening in the NFL, the refs are selling, they have merchandise, they have this, they're selling nutritional packages, or they're selling turbocharged cleats to the astros but not the dodgers. Absolutely. Do you think they're neutral?

Absolutely not. They want the people buying the turbocharged cleats to win more than they lose. Because if they lost more than they won, they'd stop buying the cleats. But, so is this legal? It is legal, right? It is legal.

Nobody's gone to jail over this. Well, there've been a bunch of fines and things like that. But it's more about the fact that you didn't disclose the fact that you were selling these things to these other people. Or you hid the fact that you did this. I think the overall practice is really what we had a problem with. So part of the idea behind quitting my job at RBC and starting IEX was the idea that what was happening with legal, I could go down and, you know, we could go down and complain in Washington, DC and pick it and do a bunch of, you know, stuff. Or you can go out and we could go down and complain in Washington, DC and pick it and do a bunch

of stuff or you can go out and try to build a different kind of stock exchange. That's what I ex is. That's what I ex was our market response to say, not every stock exchange has to sell advantages. Not every stock exchange has to favor high speed traders at the expensive investors. We're going to build an exchange that actually protects investors from certain aspects of high speed trading We we have a speed bump. We slow orders down instead of speeding people up by selling them faster

You know technology we slow people down and it created literally a complete maelstrom in the markets People went ballistic in the fact that we try to actually just do something fair Full disclosure my, my little brother, I like to call him my little brother, because he's not here, because he's actually taller than me. Matt is an investor in your company, and that's how we know each other.

Well, funnily enough. Yeah, and if you have any. That's not how we know each other. Well, maybe slightly, I read the book, and then it was only, then I started watching videos online, and I'm like, damn, looks a lot like Matt. So I reached out to Matt and I'm like, is this your brother? Because it's so I want to, what's funny is the book,

the book is the book I give, I've been talking about meditation on and off to a lot of my friends and family, but a lot of the books were kind of, I don't call them crazy, but different. Maybe a little annoying. 10% happy was the first book that I felt comfortable recommending to people to kind of experience what I feel like I'm experiencing, because it explained it in a way that makes it okay to be cynical. And I think most people who have never experienced

meditation are naturally cynical. And so you have to almost embrace the cynicism to get someone to a point of appreciating. Right. I appreciate that. So I know, so basically I saw you out through him, but he, yeah, that was the, yeah. Well, if you have any embarrassing stories about him at any point, feel free to share, because I like making fun of Matt.

He is, by the way, the secret, he and my wife are the secret, my secret weapons. They basically are my primary editors on everything I do. Right. And Matt was, Matt came up with many of the best ideas that went into 10% App Year and if he ever asked me to repeat that, I won't. So anyway, so that all out of the way, you say it created a maelstrom in the marketplace. What was the reaction? Because you decided to do a stock exchange the way you thought it was ethical to do. Is it working? And are people mad at you? Yeah, so it's definitely working. You know, our first day we did 560,000 shares, you

know, a couple million dollars in trading. And our record now, we've had a day that was 10.7 billion dollars of trades happening on IX. So it's gone well. We continue to grow. In the simplest way, if the playing field is unleveled and you come in and try to level it, anyone who benefited from the unleveled playing field is going to be unhappy about that. Like it's kind of that simple. There's a lot of people who benefited from the system that existed, perpetuated the system that existed, made a tremendous billions of dollars off that system. And we came in and said, you know what? There's a lot of unfairness

in this system. There's a lot of 401Ks and mutual funds and pension funds that are basically bleeding out money. They don't even know they're entitled to, to a system that has been set up to essentially disadvantage them, and we're going to change that. Not a lot of people, very select companies, got very, very, very upset because they make a tremendous amount of money from the system. So, New York Stock Exchange, Furious, Nasdaq, etc. How does that fury manifest?

Stilling you, saying, I'll give you a good example so to be in exchange which we are now we started as it is kind of like a lightly regulated exchange but uh... we went through a process uh... it was a two-year process to get an exchange license from the s c the s c has to hand you a license to say you know you can be a national stock exchange uh... and it led to a very public fight

because the new york nasdaq etc., didn't want us to be in exchange. So they wrote nasty letters to the SEC about IEX. They called us all sorts of names. We've been called, you know, un-American, unfair, etc., etc. I'm Canadian, so I didn't take that much difference to un-American. But so they wrote all sorts of nasty things. NASDAQ threatened to sue the SEC if they approved IEX. So they did go to pretty extreme measures. And at the same time, you had California State teachers and Texas teachers, capital group, T-Rope Price.

You had a bunch of like real big investors supporting us. So like anyone that stands back so it's all in a second, these big investors representing millions and millions of people want IEX to be approved. And the existing exchanges don't and a bunch of high-speed traders don't like that fight set up exactly what the fight is all about this is about a concentration of power and a Billions of dollars going to a very small number of people and trying to stop that and trying to redistribute that wealth across all the other people that participate in the stock market and trying to stop that and trying to redistribute that wealth across all the other people that participate in the stock market. And so they did a lot of things to prevent us from getting approved.

And at the end of the day, the SEC made the decision to approve us. But that was a very long and drawn out public fight. Now, the funny part about it is that right after we got approved, the New York Stock Exchange says, you know what? Oh, we're going to take one of our three exchanges and become a speed bump too. We're going to, we're going to slow down one of our three markets, which makes absolutely no sense because the whole point of the speed bump is to say, we're protecting you from all the advantages,

we're protecting investors from the advantages they can buy on the other exchanges. So it's almost like having a tobacco company and then setting up a sub company that says, oh, we're gonna sell kind of know, kind of anti tobacco patches. Like, so New York copied us. It hasn't been successful, but it just, the level of irony and the level,

it's a very odd competition because they proclaim to do all these great things for the market, but in reality, they're protecting a business that's about rent seeking. If you, if what you're doing is so much better, it's so much more fair. Why isn't everybody trading through you? Because New York Stock Exchange, Nasdaq and Bats pay $2.7 billion a year to brokers to send them orders.

So if a pension fund trades through a broker and a broker sends that order to the New York Stock Exchange, the broker gets paid for that and we don't pay those those kickbacks and And essentially they are people get mad when I say the word kickbacks, but if a broker Has a client order sends it to an exchange and gets paid for it and doesn't give that payment back to the client I don't know what else to call it, but that's what it is. So there's a payment So basically an exchange builds an exchange New York Stock Exchange builds an exchange, New York Stock Exchange builds an exchange, they sell all these advantages to high speed trader.

Who in the world would want to trade there? Nobody would want to trade there. Why would you ever want to do that? Why would you ever want to play against the team with the turbo charge cleats? Well, a broker who's tasked with executing a client order is being paid to send the client into that exchange because Because when the client gets picked off, if broker doesn't have anything to do with it, they get the commission from the client, they get the payment from the exchange. The client's got to deal with the fact that they

but just bought a price that's not the right price. If they were here, if the representatives from NASDAQ and YSC were in the room, how would they refute what you're saying? Or is it not refuted? We pay people to provide liquidity. NASDAQ and YSC were in the room. How would they refute what you're saying? Or is it not refuted? We pay people to provide liquidity. Liquidity is one of those words that you say and just makes everything okay.

They'll say we pay people to provide liquidity. What does that even know? I don't even know what liquidity means in this context. Well, that's why they say it. It's a hard thing to, you know, it's, they'll say the technology and data we sell is available to anyone. But it's tens'll they'll say the technology and data we sell is available to anyone, but

it's tens of millions of dollars. So you can, so what that's technically a true statement, but are you and I going to go out there and is a pension fund of Missouri going to go out there and spend tens of millions of dollars on equipment from the, so it's kind of, but anyone can buy it. It's a fair market because anyone can buy this high-speed data and technology. We pay people rebates, they call them rebates, to provide liquidity on our market. So there's industry buzzwords that people use.

And honestly, before IEX launched as an exchange, every single exchange paid rebates right market data and technology is the is a huge revenue source for all these exchanges so we're just we're different kind of exchange so um you know but yeah it's it's very hard to refute in english so i think you use the word fight and and and I think people will hear the passion in your voice right? Because you're engaged in a fight and it's clear to me sitting here and having had private conversation to Before that you're really you're really worked up about this and I just wonder how do you stop this from and just Bleeding into every aspect of your life?

Like just dominating your thoughts when maybe you want to be, you know, just focusing on your kids or talking to your wife or whatever. Like, hey, this sounds so all-engrossing. Yeah, it's, it's, so meditation and running are my two big outlets. And, and they force in a way introspection. I think you have to, at the end of the day, we're in this huge fight and we're running a marathon. Sometimes my brain wants to sprint and sometimes I want to pass the next water station, but like in reality I realize that this is a long battle and by having these moments of introspection,

you realize that in order to win and we fully intend on winning, you have to reprioritize your life in a way that can let you make it to the finish line. Just your wife ever say to you, do stop talking about this or I can tell you're thinking about it, ease up. She does. She's a very good, she can tell just by my face what mode I'm in. And I think she does a very good job of kind of like keeping, you know, it normal. Meditation has helped a lot in being able to switch from, you know, kind of like work mode to home mode. As my kids get older, there's a different level of engagement than when they were when they were babies that requires me to understand that the influence I have on them and the mannerisms they pick up and

and the way that I interact with them is it has a profound impact on who they're gonna end up being as people and I think that. So I take it, I take home life as almost as seriously as I take work because it takes that amount of seriousness to like not let this impact your life. But again, it's, it's, if I stopped running, if I stopped meditating, I might go crazy. Cause I, I need these moments to like center myself. It's, it's just like so critical. And how's it going? I mean, I've gotten updates from you over the years, but you know, right now, as we sit here right now, how's it going this quest you're on? It's going well.

We just got approval by the SEC to now list companies on our exchange. We got approval of being exchange. Listing a company is Microsoft lists on NASDAQ, IBM lists on the New York Stock Exchange, and that's the trade elsewhere. They trade everywhere. And that just means that they open and close on those markets, but there's a huge honor

in being, yeah, cashier, like NASDAQ in New York are talked about in a different way because they have listings. We just got approval to do that. And so, you know, there's a group of companies and that we're going to move over. And I just, again, think that we're bringing a different type of model to the market. This has been a 50 year old duopoly from New York and Nasdaq and now we're a new entrant and I think it's just super exciting. Things are going well, market share is growing, companies doing well, we're profitable. And now we have this other business line that we can start to really push. So I think all of that is great.

Being able to, in a way, control our own destiny at IX, the stresses that I have, I think one of the greatest stresses I had working at a big company is that a lot of things that I was concerned about, I couldn't control. And I think that's probably one of the most stressful feelings that you can ever have is that I can't affect this outcome no matter what I do, this decision's getting made or no matter what happens, and I think part of why my blood pressure drops so much when I left is that

this burden of like seeing this path and knowing that, I don't know if we should be doing this, but I can't, I just can't do anything. You know, it was lifted. Yeah, but now you have a new burden, which is you have to make decisions to be held accountable for them. So that burden to me is a different kind of burden,

but I think individually it's less stressful than just being helpless. Feeling helpless is a terrible feeling. And I feel like, although there are stresses of what we do, I don't feel helpless. Every day I get up and I know that I can do things, even if it's a much longer term outcome, I can do things today that can affect the course of our company's trajectory. And sometimes when you work at a big company, it's very, very hard to feel like that. And so I think that it's just trying to manage it in a different way and trying to be introspective and have context about, where am I, what am I doing? Mindfulness is just an incredible practice because sometimes you just have to kind of be in the moment and recognize the

situation that you're in and be appreciative of the fact that this is the hand you've been dealt. I do think there's a lot of stress in our job. I've never been a controversial person. The funny thing about all of this is that I spend my entire life trying to get along with people. There were very few people that say, this brat, I don't like him before Flash Boys.

It's just, you know, why am I going to live more difficult on yourself? But now, obviously, it's controversial and there's a lot of people that don't like me. And how do you know that, do they actually say, I don't like you or that? Sometimes, yeah. Where would you meet somebody who's going to say that to? Add a congressional hearing where you're testifying or something like that? Yeah, sometimes it's you know, it'll be you know in DC or it'll be at an industry events or it'll be you know here or there Or you hear from other people are these people that hate you or this it's just it's in a way it you know

If no one disliked what we're doing. I would question what we're doing. Yeah You're you're trying to disrupt. Yeah, and I think, you know, although it's not, I don't know if I would have ever said, at the time, rewind the clock 15 years, this is what I want to be doing with my life. This just happened to be the hand I was dealt and I played the cards to the best of my ability. And I think that in a way, you know, what I really liked about Flashboys is that Michael Lewis did not turn me into this character that's larger than life that was this rebel that took on the system. Like he painted me exactly as I am. I was just

a guy in a certain place, faced with a certain set of decisions, that made decisions that I think a lot of people would have made in my situation. This is, you've been a great interviewer. Are there things that I should have asked you that I didn't areas that you wanted to explore that you feel like I failed to goddess into?

No, I mean, I do think it's, you know, what's interesting is that a lot of people think that, you know, meditation or even mindfulness is about, you know, you'll lose your edge or you'll become soft. And in a way, it's, I don't want to say it's the opposite, because you can be direct, but not aggressive. You could be, you know, you can be,

it provides me with a level of clarity that I think I wouldn't otherwise have if I didn't do it. Have you had moments where you think, maybe I'm losing my edge a little bit, or do you have so much edge that this is just taking us, a little bit of edge off of it? No, I think, especially kind of in my job now, I feel like I can recognize when I'm not

meditating enough or I'm not getting that part of what I need because my thinking is cloudy and my decision making starts to lapse or I'm reacting more than I want to. And I got to, you know, kind of like, refocus. So I feel like if anything now, I'll notice moments where I lack focus and clarity rather than like, oh, I just meditated and I feel soft. It's almost funnily enough. it's almost the opposite. When you can think very clearly, you'll be more decisive. You'll have more conviction. And that, to me, desiciveness and conviction, are kind of the opposite of soft. But I do think that, if anyone feels that mindfulness and meditation is kind of...

What's interesting is that I think it's just starting to get into and again, your book probably hits this area. A lot of people that were focused on meditation would have come from a certain kind of walk of life. And it was easier for them to embrace it. And I think that the industries that we come from are a little bit different. And there's more type A's that are attracted to it. And it's more driven and it's more like competitive. And I feel like it's just starting to kind of break in

to that realm. You know, I have an executive coach I work with Kate Bynarski. And you know, she worked at Nike. She had all she had this great, like kind of like business resume. I started working with her and it was all about mindfulness. We hardly ever talked about work. I have her working with my executive team. The people I never would have thought would have responded to this type of coaching are absolutely loving it. The changes are extremely positive.

It's not a sign of weakness whatsoever to think that this is the type of skill set that hard charging type A's should think about developing. It's almost the opposite. Yeah, no, I mean, look, you're preaching to the one man choir over here, absolutely. I agree, and I, you're a great poster boy for the point I'm always trying to make about, hey, this does not mean you're gonna lose your edge.

If you're more focused and lessy act around by your emotion, you have more edge, and it may be edge without edgy-ness. You can communicate more clearly without caring, the fight you have with your wife over into this conversation and being mean to people. It's a cleaner, calmer, sainter way to operate, in my view. Absolutely. And in today's day and age, heightened sensitivity, it's like decisiveness is important in doing that in a consistent and clear way. 10 or 15 years ago, people could blow up and have volatile

outbursts and be smashing things and like that happened a lot in finance. I don't know if that persona can exist in today's world. All it takes is one social media post and that person probably is out of a job. So it's kind of like- And millennials don't put up with that stuff. I mean, they really don't like it. Gen X, are you a millennial? 78, I'm probably a gen X.

Yeah, I mean, like my generation, the role models that I had, they were losing their temperates a lot. Like in this building here at ABC, nobody was still here, but like that does not fly now. No, no. And if it did, it'd be videoed and it'd be over quickly. So I think

this is such a good practice to say you can, you can have all these things. You can have that edge and you can have that level of aggression, but try to focus it. And again, I'm not perfect. I was a trader. So like, I'm, I'm, I'm always working on, I'm, I overreact a lot, but I have an understanding of that and that I can be better because I've had the ability to step back to kind of have that introspection to be critical without beating myself up. I just know that that's something I got to work on, but name that voice. Yeah, name the overreacting voice and like went in and greet him or her Warmly and and so that you're not so caught because what we end up doing is we see you know I was at a sort of Coltish at a lesson stage in my meditation where I was seeing the arising of the voices that that are Problematic for me and so that's the first step to see it

But I was then freaking out about the fact that I've seen it. It's really for you, it's like you know you know you know you're wiring which is that you tend to overreact to stimuli. But that's cool like you can't help that, that's not your fault this is why you were made and but then the thing is can you see it happening and then can you let it pass without freaking out about it and that is the ninja move of this whole game. Yeah, absolutely. I mean, I for I don't know how many nine years I was trained to react. Yeah, I was a trader. Yeah. And now I'm trying to untrain myself by by in in a way,

I meant it is a learned skill. And I think again, it's it's you know, after talking, I should do it for more than 12 minutes. This conversation has just convinced me to up my minutes. Well, I want to be careful about that because you, I learned the reason why I wrote this most recent book, the, so just as a little backstory. So I, you know what 10% happier is, but I wrote that book because I, first of all, I didn't think I was going to read it. But I thought that what if I had any value to add was because I have no, nothing original to say about meditation. But if I had any value to add, it was that I could talk about it using the F word and

listen humor and talk about it from perspective of an ambitious person. And I was under this naive assumption that, okay, well, anybody who reads this, once I make a logical case, they'll start to meditate. Right. That was a stupid assumption. Actually, as it turns out, habit formation is really, really, really difficult. And you even set it right back to the beginning of this conversation. You're like, I do 12 minutes.

Most days, not every day. And there's a little bit of guilt creeping into your voice. Yeah. So I wrote this, the most recent book that's called Meditation for Figuity Skeptics, and it's a, the point was to help figure out what are the obstacles standing in the way of doing this, establishing this habit that's manifestly really good for you. And you know, you should, you definitely should not bite off more than you can chew, which is set up a guilt spiral that would kill the whole thing.

That's right. Twelve minutes is working for you. My inclination is to say if you're going to go up, go up very slowly, gradually, and forgive yourself. Well, let me just say this. With the one thing I learned, I had to do a lot of research into behavior change, human behavior change, and the biggest lesson that's shown through for me was that experimentation and the willingness to experiment and fail and start again, just the way we do on the cushion, by the way,

is the magic, the magic of behavior change. So like for you, maybe you say, you know, I'm gonna go to 14 minutes, try it. And maybe that's really good, but maybe you get to 20 minutes and it falls off. So it's like, it's just titrating all the time. Yeah. The failure aspect and then not wanting to return, that's a real phenomenon. Yeah.

It's like, you know, that is. So I think what's funny about where I got on 12 is that now, especially, so I've been taking this train for over two years. When I get on the train, I have no signal. Like, I can't do anything. So it became the perfect corridor to just like mentally just realize that I can shut down. Yeah.

And I found like that gave me the consistency that I needed. And I think its consistency is key. King, actually, its consistency is you need to get, you need, and again, I've just learned all of this and I haven't written about it, I'm kind of steeped in it now, but you need to get the practice anchored

into your life in a consistent fashion, which you have done. And then you can, once you've done that, actually you are way. And then you can, once you've done that, actually you are way down the track on this. Once you've done that, you can experiment with the dosage. So maybe you should, but I just don't want you to do it with a sense of like, oh man, I'm screwing up, but we're not going to do more.

This has been a pleasure. You were just, you were great. If people want to learn more about you, obviously they can, they can check out Flash Boys. Is there anything you have a website or Twitter handle anything else? People should check out. Ixtrading.com's a website. Yeah, we're Ix's on Instagram, Twitter, and all that stuff.

Yeah, it's, we're out there. Flash Boys was helpful, but we have people want to find us. We're definitely out there. Awesome. Thank you. Great. Thank you. Appreciate it. Okay, that does it for another edition of the 10% happier podcast. If you liked it, please take a minute to subscribe.

Rate us. Also, if you want to suggest topics, you think we should cover or guests that we should bring in. Hit me up on Twitter at Dan B. Harris. Importantly, I want to thank the people who produced this podcast, Lauren Efron, Josh Cohen, and the rest of the folks here at ABC who helped make this thing possible. We have tons of other podcasts. You can check them out at ABCnewspodcasts.com. I'll talk to you next Wednesday.

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