The Tim Ferriss Show - #229: Ricardo Semler -- The Seven-Day Weekend and How to Break the Rules

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Starting point is 00:03:13 whether they are from the worlds of business, sports, entertainment, military, or otherwise. In this episode, we have Ricardo Semler, who was by popular request and has certainly had a large impact on me. He came up not too long ago in the very, very popular podcast episode with DHH, David Hannemeier Hansen, who is of the 37 Signals, Basecamp, and Ruby on Rails fame, who also credits Ricardo with having a huge impact on him. Who is Ricardo? Who I always want to call Ricardo because he is originally from Brazil. He is the former CEO of Semco, a Brazilian company best known perhaps for its radical form of industrial democracy and corporate reengineering. And all that will make more sense as we get into the conversation.

Starting point is 00:03:58 We really focus on entrepreneurship, even though there's so much more to talk about, including education and what he's done with his Lumiar schools. But going back to Semko, under his ownership or during his leadership, certainly both, revenue grew from $4 million US in 1982 to $212 million US or so in 2013. And his innovative business management policies, which are very controversial, attracted very widespread interest all over the world. He's taught at MIT. He's done many, many other things. And most recently, he has started a podcast, which you should check out called Leadwise. And you can find that at podcast.leadwise.co. On Twitter, you can find him at Ricardo Semler or at Let's Lead Wise if you

Starting point is 00:04:43 want to be podcast specific. So you can check out both of those. Facebook, Let's Lead Wise, and then LinkedIn, Ricardo Semler. And I should also provide some context for two very similar sounding book titles. So he wrote The Seven Day Weekend in 2003, which had a big impact on me. The Four Hour Work Week, I'm not sure how happy he is about how seemingly related those titles are, but came about, for those people who don't know the story, from the original title of the book, which was Drug Dealing for Fun and Profit, which was the tongue-in-cheek name of the guest lecture I gave at Princeton on high-tech entrepreneurship, ultimately for at least 10 years. I think it was around 2003 to 2013 or so. And when the book was sold to Crown within Random House at the time, there were a few retailers, I want to say it might have been Walmart, who really didn't like drug dealing for fun and profit. So I quickly sketched out, as did they, I'd say a dozen or so prospective titles.

Starting point is 00:05:42 And one of the ideas was the two hour work week, because that's how long it took me to manage my company at the time. But that seemed too unrealistic. So I was like, all right, we'll go up to four hours a week. And then I tested that along with the other titles in Google AdWords. And for, let's just call it $200 a week later, since Google mixes and matches the ad headlines, which were the titles, and the ad text, which were my subtitles, I knew which combination had the highest click-through rate. That is how we ended up at the four-hour workweek. No matter, I will put a shot of a photograph of my self-made index at the beginning of the seven-day weekend, which is a great book. And I recommend people check out. And this conversation ranges very, very widely.

Starting point is 00:06:30 And I hope you enjoy it as much as I did. So without further ado, please enjoy my conversation with Ricardo Semler. Ricardo, welcome to the show. Thank you. Thank you. I'm so happy to have you on the phone and on the show because I have been a fan for so long. And I, in fact, have this copy of one of your books, The Seven Day Weekend, which has traveled with me for at least 10 years now. I bought it when it first came out and I was looking at the index that I made for myself in the very beginning, which I'll have to take a photograph of and send to you. So first of all, as it came up in my conversation with DHH on the podcast, I just wanted to thank you for

Starting point is 00:07:14 sharing your experiences. Wonderful. Obviously, I have a copy of your for our work week or similar name, and I'll have to see a photograph of your For Our Work Week or a similar name. And I'll have to see a photograph of that to believe that you've actually carried it around. But it's great to catch up. I know you've been very thoughtful about all these really deep issues of how to live, how to work, and how do you put wisdom into things, which is my concern as well. So I think we'll want to jump into that and also talk quite a lot about education. A lot of my audience has many, many questions about learning and education. So we will certainly get to that. But for those people who don't have a lot of background,

Starting point is 00:07:55 a lot of context, could you give us perhaps just a snapshot of where you grew up and your childhood just as a starting point. And then we can depart from there to many different places, but that would be a very helpful place to start. Sure. And I was thinking about it the other day when I've been trying to work with some guys in the UN and elsewhere about putting education platforms into refugee camps and it and it it kind of explains my background as well my my parents were both um Austrian refugees and my mother was a refugee in all respects of the world in the sense that she ran away from Vienna to Shanghai spent 11 years in Shanghai, but then was kicked out of Shanghai by Mao Zedong in 1949. And then actually spent 18 months in a tent in a refugee camp in the south of France.

Starting point is 00:08:55 And she was one of these displaced persons who had no passport whatsoever. And so it's very interesting how we see different variations of the word refugee. But the fact is that she then became an immigrant in Brazil, which is the only place that accepted her. And so much later, I was born. And she lost seven pregnancies and stillborns, et cetera. And so she always regarded me as somewhat of a miracle. And Freud always says that if your mother believes in you absolutely, that you can do anything, then you can do anything,

Starting point is 00:09:33 and that's the only thing it takes. And so it was very interesting because I grew up in a household that was already well-to-do, and we had everything. And when I got to about 12, 12 13 i got involved with rock bands and then i i spent a lot of time as a roadie and then as a and playing i was never terribly good but enough to to kid all and enough to trick let's say all my friends into thinking i was very good and going on stage here and there which is i, probably the most important part of it, you know. And so so by the time I was 17 or 18, I was I was very much in that mode. But my father then, who was 50 years older than me, and I always it's very interesting also because I kept looking at it.

Starting point is 00:10:19 I said, 50 years older, man, this man is almost my grandfather. And I said, I could never do that myself and so forth. And so promptly, I had a son now when I was 50. So he's now seven. So some of this stuff comes back to bite you in the ass. But the fact is that then I was 17. He kept taking me to the plant and saying, someday all this will be yours because it was a manufacturing plant which made pumps and very heavy equipment. He was very engineering-oriented.

Starting point is 00:10:51 There were about 100 people there. And this business had been there for a long time and doing relatively well, but then it started deteriorating. So by the time I was 19 or 20, the whole business, the whole industry for that was in very bad shape. At that point, I had decided to do law school because I didn't want to do, I thought business school in general was very restrictive and very much turned to the past and so forth. And I wanted a more humanistic background. And I did that and then I joined the company. And when I joined the company, kind of following his wishes while I was still doing law school, I realized that we had a big difference in the way we saw the world or how we would run things. It was very traditional and he was wearing a three-piece suit and I was wearing a three-piece

Starting point is 00:11:38 suit with a watch in my pocket, which was pretty unbelievable. And then- Why was your watch in your pocket? Because this was my grandfather's, uh, watch and, uh, my father wore one in his pocket with a little gold chain and pulled that out every so often, you know, I was ready to start smoking pipes, you know, this is the world that was staring me in the face. It was very, very curious. And, of course, this was all colliding with the rock guitarist and bassist, which I thought I was.

Starting point is 00:12:12 I had hair down to the middle of my back until a year before. So this was all very strange, and it was a very strange world and I saw people getting having to come to the company and be searched on their way out and have exact times and if they were five minutes late and docking pay and it was an extraordinary world compared to what I'd seen up to then let's say in the world of rock and so when I started looking at all that at at a certain point, I told him, I said, we're incompatible. This is what I would do here.

Starting point is 00:12:51 It's so different. And probably you're saying it would never work. So let me go do something else. And for a while, he just kind of took the bluff and said, sure, go see what else you can do. And I found at that point that the business world was more interesting than I thought and that I could do something with it. And I went out and started looking for opportunities to do something on my own. And that was not a world 35, 40 years. It was not a world of startups or anything of the sort. So if you wanted to start a business, this was all very hardware oriented. So I went out and I talked to people who were in the consulting

Starting point is 00:13:32 business. I said, you know, I want to buy a company, but I don't actually have any money to pay for it. And if I were going to pay for it, it would be my dad's money. And of course, that makes no sense whatsoever. And then I finally found a consultant at Price Waterhouse, of all places, who helped me. He said, no, we have to do the following. We'll look for companies that are broke, that have no money whatsoever, that have big debt. And if you're not scared of taking on debt, you can buy these companies for a dollar. And I said, the dollar I have, let's go do that.

Starting point is 00:14:01 And so we looked at dozens and dozens of companies, finally got to one which was a ladder company, made metal and wooden ladders. And I got to the point of signing, it was a 200-page contract, I was sitting at the lawyer's office to sign the purchase of this company, which was really a very high negative worth, of course, because it had a big debt, a whole ton of problems. But the guy wanted to get rid of it, because it had big dead outside of problems. But the guy wanted to get rid of it. And I said, give it to me. And suddenly my father burst into the law office and he said, what does it cost to pay the fine to undo this deal?

Starting point is 00:14:38 So I remember it was $200,000, which seemed like an enormous amount at the time. And so he paid it and we paid the fine and didn't sign the agreement. And then I started with the company. So it was a very interesting beginning. Now this, I think, and please correct me if I'm wrong, but sort of probably chronologically is close to something I wanted to ask you about that a lot of my listeners wanted to ask you about. And that was when you took the reins as CEO, maybe you could describe the circumstances, but the firing of 60% of top managers as one of the first decisions. And I don't know if that is as straightforward as it might seem,

Starting point is 00:15:28 but the question that came up from a lot of my listeners was, how did you make that decision? And I would just love to hear the circumstances surrounding it and the thought processes that went into your first decisions uh when that transition took place yeah yeah and and it's it's interesting i mean what what i told you a little bit about now connects to that of course but and then and it's interesting in the thought process when you say you know your your your listeners want to know this, want to know that. And I just started a little podcast, and we've called it Leading Wisely. And Leading Wisely is all about this issue.

Starting point is 00:16:15 You know, how do you make some decisions like that one, firing most of the people? And how do you know that it's folly or wisdom when you start you know and so i'd gotten to that point where um it was either him or me in the sense of there were two ways of trying to run this and at that point the business wasn't doing very well which gave me an opportunity but as i looked out at these people um maybe you know we had 100 odd people, so maybe 20 of them, a little bit more were either managers, supervisors, or somebody who were in a leading capacity. And I looked out at these people, and I'd already had a little bit of experience with trying to change things. And people were always explaining to me why it can't be done. So they would listen very patiently, and then they would say, yeah, okay, but you're new, you know, you're 19, you've just arrived at this.

Starting point is 00:17:07 And the fact is we've been in this business for so long and there's this and there's that. And I realized that the amount of time it would take me to turn these people around and to deal with the unconscious sabotage that everyone who is in place applies to everyone else. Anyone who's coming into something is always new and hasty and doesn't really understand. And so it takes a heck of a long time. And the business at that point was not doing well enough to withstand a long cycle.

Starting point is 00:17:43 And then I realized that the amount of sabotage that I'd have and the amount of interactions, the permutations of firing three people who then create an alert and panic in the other six people who talked to the other five behind our backs and so forth, that seemed like we didn't have the time for that. And it seemed obvious that these people were terribly uh in place uh and uh completely calcified with all these years been there so i i took a rash decision which may be only a 19 or 20 year old would do and i probably wouldn't have the courage i don't think i have the courage to do that today again but i looked out there and i said we we just had to pull the

Starting point is 00:18:23 band-aid off this thing so that i can start the next day and so on one friday afternoon i just called people in one i'd never hired anybody much less fired anyway and then i fired i don't know 16 17 managers and directors and that included the ceo the cfo anybody who mattered and and these people went home Friday and didn't return on Monday. And we spent the whole weekend going through these people's filing cabinets. This was all paper and going through the filing cabinet and trying to figure out what the hell was going on in this company. And we would look at it and we'd see a customer name. We'd say, I wonder who this customer is. We had no idea. And it was really quite a quite a

Starting point is 00:19:05 roller coaster ride but i think in the end it made us change direction of course very quickly so that 60 days in we were a completely different company and then it was possible to throw out the whole rule book from from nothing and say wait a second what what part of this do we really need and what part of it has just been here forever? And doing that slowly, I think, would have killed me and the other guys as well. Did you have many conversations before making that decision? Was it scary for you to do that? you said rash but also I mean courageous in some respects decision for someone at that age in that position did you have any conversations inside your head or with other people that

Starting point is 00:19:53 allowed you to take that that leap and make that decision I'm just wondering what sort of led up to it yeah I'm imagining that there must have been and i can think basically i think one or two people who from the beginning i felt would be on the right side and maybe i tested it with slightly but i already knew as well that i couldn't tip off the system or the wrong people and i didn't know enough people i remember talking to my dad a few days before because he was about to go on a trip to europe and i said uh you know i have to do a few things here and it might involve some of the and he said no i imagine i imagine uh do everything while i'm gone and so uh as soon as

Starting point is 00:20:42 he i think he traveled he traveled traveled on Thursday and I called everybody in on Friday. So, but I think it was knocking around inside my head in the sense that, geez, you know, if I, if I try to do this the old fashioned way or the slow cycle, this is going to be 10 times as hard, but also the chance that I actually get to the end of this is smaller. And I felt in many respects that on top of it being rushed, I felt I really had no option. There was no time. And we needed to do this very quickly.

Starting point is 00:21:11 Now, of course, that gave me an opportunity to have a startup, let's say, on Monday from a business that was already 30 years old on Friday. And you, I want to flash forward a little bit, and I'm sure we'll fill in some of the gaps and there'll be stories that will come back. But could you please describe the, I would love to know the actual meaning of the title virando a propia mesa and which as as i understand it later became maverick but clearly in i don't speak portuguese but seems to mean something very different than maverick can you describe how that book came to be and as i understand it became the best-selling non-fiction book in the history of bra, which is saying something. I mean, there are a lot of books. I've spent some time in Brazil.

Starting point is 00:22:07 That's a non-trivial accomplishment. So what does Virando o Proprio Mesa mean? Literally, it means turning your own tables. But it's basically turning the tables with your stuck-in-the-middle there to make it more self-sufficient, you know. But it was really about, in Portuguese it makes a little bit more sense, but it is in the same vein, which is to say turning everything upside down and so forth, which was this whole process of starting from scratch and changing the rules entirely. And it was really just because, let's say, from maybe the five, six years after this mass firing, let's say, in which we started redoing things, we started asking questions.

Starting point is 00:22:56 And I don't know, it seems a very simple process, but actually when you do it, you realize the potential, which was the whole process of asking three whys in a row. That was the only thing we were doing. I said, since we're starting this again, tell me again, why do we search people on the way out? Why do all people have to arrive at the same time, et cetera? And when you ask three whys in a row, the first why, people have a very good answer for. They've been thinking about this for a long time or they've been living this for a long time. Or they've been practicing it a long time.

Starting point is 00:23:26 Yeah. And so people say, why do people have to be here at the same time? And they'll look at you and say, oh, poor kid. Look, little dunce, let me explain to you. If the guy comes here and the guy next to him on the assembly line is not here, the assembly line does not move. And that's the first set of why's. And it just becomes more sophisticated. But they did the same thing does not move. That's the first set of whys. And it just becomes more sophisticated. But they did the same thing to me at law school,

Starting point is 00:23:52 at the Harvard Business School. Everywhere I heard the same condescending response to, oh, let me explain it to you. So the first why is the easy one. And I always say that, you know, I have five kids and the smallest one is seven. And I always say that, you know, when you have the three whys and you ask them, they ask you something, anything. They said, Dad, why is this this way? And the first question, the first why is easy to answer.

Starting point is 00:24:17 And then they'll say, but why that? And then you start getting into a little bit of trouble. And you say, well, you know, really, because by the third why, you have only one option, which is to buy them an ice cream. And this is what happened to be there. So I'd say, why do we have to come at the same time? Or we'd say, why are we all dressed the same way? Why are we wearing suits and ties? Oh, you know, so that we'll look more like each other.

Starting point is 00:24:43 Okay, great. Why do we want to look more like each other? No, because, and this is the same with almost anything you ask of business rules. There was a reason. Sometimes somebody was concerned with something, but it wasn't really essential to what you're trying to do. And so we would say, if we can't answer the three whys about anything or about any rule, let's just throw it out and let's see what's left.

Starting point is 00:25:05 And we were left with absolutely nothing or anything of really important. And so we started organizing ourselves around this new way of, if you can't justify it, absolutely, let's try to do it without. And that went for organization charts and boxes and titles and you know we were asking things like why can't you just set your own title choose any title you want put it on a business card and if the guy who wants to is going to buy from you and you put there you'd rather write vp regional sales manager instead of trainee, I don't care as long as he buys from you and he trusts you and you deliver

Starting point is 00:25:52 the product and off we go. And so we started doing this with everything. And so we threw out the organization chart, we threw out job titles, we said very quickly we started asking questions. Why doesn't everyone know what everyone else makes here? Why can't people set their own salaries? And nothing resisted three whys in a row. But to make a long story short, suddenly the company started doing well. And then instead of 100 people, we had 200, and then 500, and then 1,000, and then 2,000. And then at a point, we said, people started saying,

Starting point is 00:26:23 you've got to write a book. You've got to tell this story in a book. And we said, people started saying, oh, you know, you've got to write a book. You know, you've got to tell this story in a book. And I said, no, I don't have to tell a book. But at a certain point in time, I said, I think I'm going to write a book. So I started on a Friday and I ended on the other Sunday. So I spent nine days writing. And that was it. And it's interesting because I consider that book so belonging to the thin air and not to myself that I never corrected any grammatical mistakes. And it came to me from the publishers many times.

Starting point is 00:26:57 I said, you sure you don't want to correct that? This is silly what you wrote here. And there's stuff that I'm not at all proud of anymore, of course. And there's a lot of mistakes. And I said, no, you can't touch it. You can't touch it. It doesn't belong to anybody. And so what happened was I sent it out. I finished it in ink. And it was 900 pages of pen and ink.

Starting point is 00:27:16 And I took it. I had someone type it. And then I sent it out to the eight big publishers in Brazil. And the eight rejected it and uh and it didn't take them very long either the eight rejected and they said you know nobody wants to hear anything from a Brazilian businessman you know they're buying Lee Iacocca and Akio Morita and all these guys and they don't nobody wants to hear from a Brazilian businessman. And then one of the guys talked to me, and he said, you know what we could do? We could give this out as a year-end gift from the company.

Starting point is 00:27:53 Wouldn't that be nice? 300 copies or something. And I said, you know, my ego is not small enough for that. I can't do that. And then I found a publisher who was the ninth and i said this is not possible you've got to publish this this uh for me in a small version you can't you can't lose all that much money and so forth so finally the guy said sure i'll i'll do it and we had a very interesting discussion about uh royalties because said, you know, what you get is 10 percent royalties.

Starting point is 00:28:29 And that's how that sounds. And I said, what if it sells more than five thousand copies? And so he laughed and said, oh, it's OK. Eleven percent. Anyway, we had this whole this whole table because I kept asking. I said, what about fifty thousand? And he'd almost fall off the table laughing. He said, let's make that 15%. Anyway, so I got 20% of the years on about a million, millions of sales. And, but what happened was I, I really never thought of course, that I knew what I was doing and I knew this book was very necessary. No, no, sorry. But I just wanted at least to get it out there. But it apparently was a bit like a surfboard,

Starting point is 00:29:09 you know, that you're sitting there and suddenly the big wave comes the wave. I didn't make, you know, there people were apparently ready to think about a different way of doing things. And so they took, they took the book forward and it,

Starting point is 00:29:21 it, nothing happened at all because he put the book out. There was no publicity. There was nothing. And about a week later, somebody found it and somebody wrote a review. And then it spent 200 weeks on the bestseller list of which 150 weeks in number one. It was very simple. It just went mouth to mouth.

Starting point is 00:29:41 And apparently it hit a moment, a nerve, a time in which it went off on its own. So that's a long-winded response to, it's called turning the tables because of this whole turning things upside down and finding out that it works just as well, and in our case, a lot better. So I have a couple, well, I'll have a million follow-up questions, but I have a few that are related to what we've talked about so far. So the first is, and this might seem super specific, but what is the right way to fire someone or how would you go about firing someone now or to those entrepreneurs listening. So of course you had your approach when you first came into the company, but how, how has that changed or evolved over time? What is, what is the right way to fire someone if you need to let someone go? You know, sometimes my, my wife says that, you know, it's, it's so nice being fired by you that I keep thinking this was a very positive thing that you did. And I see all these people getting up here after you say, I really have to fire this person. And then they get up and they're smiling and they're patting me on the back and say, what the hell are you

Starting point is 00:30:52 doing with this firing process? But the fact is this, that when you get close to it, some people are surprised, but most people have an inkling already that things are not doing well. I have this, if someone's working close to me, and that's the only situation, of course, where there's a firing situation. But a person's working close to me, and it's not going places early on. I do very little of that, let's do this again, let's do another chance another way another cycle etc so it's it's highly highly intuitive and so to me if it doesn't feel right it's not good for the person nor for me to continue and so i'll sit the person down and say this isn't working and and from many respects

Starting point is 00:31:40 the person so i didn't realize or i didn't think so. Now, wait a second. But it's all about being very, very exceedingly frank and saying, you know, most of the time it's a situation which I say you can definitely count on good references. Let me see if I can help you. Let's think about where you could go from here, et cetera. And mostly I think that that's the bit of why people in the end don't feel so bad about it is because I look forward a bit, a few months or a few years. And I say, you're going to be stuck here. I want this from you.

Starting point is 00:32:12 You're not. Obviously, this isn't fitting your profile entirely. And you're going to keep at it, keep at it. But slowly, we're going to start. Abrasion will set in, you know, and I'll be more ill-humored about this, or you'll find that getting up on Monday morning and coming to do this isn't as fun as it used to be. Let's cut all this at the root and give you a real chance of finding something that makes you a lot happier. And normally I'll say that this, this, this, and here may seem like something you do

Starting point is 00:32:42 well, but let me tell you, this, this doesn't work, but this that you're good at, you should be able to find a way to do that. And normally it ends relatively well because it is so based on, on transparency, you know? Definitely. And when you subject these conventions to the three wise and everything falls apart or just isn't justifiable. So now you're effectively dealing with a blank canvas. How do you choose what to do first? Or if somebody does this in a company, is there a particular order you might suggest that they tackle things in? If they're just left with all of these rules from all the way from say marketing to finance, to hiring, to fill in the blank have, have fallen by the wayside because they can't be justified. Where do you start?

Starting point is 00:33:33 Because like, I could see a lot of people feeling scattered or becoming scattered. How do you choose or how did you choose what to do first, second, third. You know, when you think, Tim, about what you write about and what inspires you and how you go into the issue of a work week or a chef or a workout or how to live life wisely, you're basically concentrated on process. The process by which you do all of this is the one that makes sense. So I would definitely start by the process that takes us out of bed. You know, the bit that makes you get up and go somewhere to do something that that process is the first one that needs to be changed. So how often you want to work?

Starting point is 00:34:21 How many hours do you want to work? Who do you want to work with? In what place do you want to work? How many hours do you want to work? Who do you want to work with? In what place do you want to work? That is the one that, to me, would be the number one issue. Because if you have people in your company, organization, wherever you are, that are doing this because you told them to or somebody told them to or it's always been done that way, or people are stopping to think about, why the heck should I take a subway and a bus and go to a place downtown and so forth. This is the stuff that is undermining your whole opportunity to have the right process. So I would always start with, do you, is this really what you want to do? Oh, yeah, I love doing it.

Starting point is 00:35:01 Okay, but you love doing it at this time of the day? No, not really, actually, if I could take my kids to school first. This is the stuff that I would tick off. What's the stuff that you're doing or how you're doing it, which somebody asked for or somebody thought was going to be smart or was a good idea four years ago? I'm sorry to interrupt. And this is something you would ask of every employee. Yeah. And we did, of course. And so we ended up, of course, with people who didn't want to come at the same time, who didn't want to work there anymore. We went from one building, which was when we started asking this question, we had one central building and everybody came to us. And this was the obvious solution. Within maybe a year, year and a half, we had 14 different places around town. And so we would say, go to the place that's nearest your house or nearest the customer you want to visit or don't go anywhere. But don't even tell us because we don't want to have anyone who keeps tabs on you because your process of how you want to do this is the most important thing.

Starting point is 00:36:04 And let's negotiate you and us. Let's contract for something you're going to do. Are you going to sell 56 widgets a week? Oh, great. So if you sell 56 widgets on Wednesday, please go to the beach on Thursday and Friday. Do not show up and sell more widgets because you're going to create an enormous problem for engineering and manufacturing. And then sooner or later you have to go out and buy another company and another. Don't do this before we thought it through.

Starting point is 00:36:30 Sell your 56 widgets. Where you're going to do it from, how you did it, is none of our concern. Don't tell us. Just sell the 56 widgets and we'll always be fine. And this is true for everything else. It's true for accounting. It's true for marketing and so forth. And so the process of how you're going to do this is necessarily yours.

Starting point is 00:36:51 And we don't want to be in the way. So here are 14 different places you can go to. If you want, you can stay in bed. We don't care. Don't tell us how many hours you worked or how hard it was to sell the widgets because we don't have any place to put that information. That was the whole focus on process and uh when you're asking why not a b and c right when you're when you're testing these assumptions are there any particular notable failures that come to mind with tests that you performed oh yeah and and and i can i can think of a few and i'll tell few, but the main thing is that the enormous amount of mistakes that one makes in organizations, with your wife, with your kids, at the church, in a group battalion, and so forth, is so humongous that you have to consider a bit, you know, the Babe Ruth permutation that if you just hit more home runs than you missed the ball.

Starting point is 00:37:48 But can you think how many times did Babe Ruth miss the ball? And here we have very little, in general, we have very little patience for these mistakes. And my thing is really to brush aside the mistakes and say, OK, that's great. That was wrong. Let's try this again. Now, if we're wrong again and again and again, that's great we that was wrong let's let's try this again now if we're wrong again and again and again that's that's really no problem we just have to be batting in the right direction so there's a lot of things that we started that we thought was was really smart you know we figured all of this out um and for example we we with the whole search thing that was a very big issue because we had um these electronic components. We had all kinds of stuff

Starting point is 00:38:28 which people said, it's crazy. People take this in their purses and in their hair and so forth. And we said, it doesn't matter. You mean searching employees on the way out? Searching. And I'm going back here 35 years, of course, and in Brazil. But this was a big issue because everyone kept checking the stocks and there was always something missing from inventory. And this was all very expensive stuff, which was easy to take. We worked, you know, and the motors were all copper wires.

Starting point is 00:38:59 And then there was silver this and then there was components and so forth. And I was saying saying you know the the process here is that i cannot work with people that i i interact with that we try to do things together with i have empathy with and then i search on their way out to find out whether they're stealing from me that it's just not possible it can't be done. And so for some time that didn't work at all because slowly we had a lot of inventory problems. And the amount of losses that we had in the months following was obvious. And people look at us and say, see, you're silly. You know, it's getting worse. And my reaction to that at that point was, do we do we keep this inventory safe and locked up and people have to requisition it? Yes. Yes. OK, well, let's give up that process as well and just leave the stores completely open, the inventory and anybody can take anything.

Starting point is 00:39:58 And then for the first time, we had a decrease until the problem went away because because the whole process was if we're showing you here and there that we don't trust you and sign this and lock this and so forth and then we're just making sure you don't steal it's a crazy situation it's always a very small minority of people and as we put the process in place people started saying through a form where they would they would come together at a meeting and decide who they needed in their area for the next six months and slowly the system expelled the people who were just stealing and uh i don't know what happened over the years you've said in these 35 years of people stolen more or less etc we don't measure it. We have no idea. We've never had any idea, but it's never become an issue big enough to worry about since, you know?

Starting point is 00:40:50 And so what I meant to say was that we make a lot, we made a lot of mistakes in every one of these processes. When we started telling people on the assembly line that they could come anytime they wanted, they could leave their kids at school. They could stay longer in bed. Of course, for a time, the assembly line suffered and we didn't deliver some products and people were pulling their hairs out. But then a few weeks later, suddenly these people realized and they'd say, well, wait a second, if you're not here, this assembly line is going to move. So what time do you think you're getting here tomorrow? And a whole new schedule started coming into place so i'd say ultimately if the process decision is to to trust people or to believe in people as people the issues go away with time and

Starting point is 00:41:33 they just look like mistakes in the short term so i think this is actually a good place to perhaps tie this to folks who are listening you have have say smaller companies. So let's just say they have fewer than 10 employees. A lot of people listening to this are entrepreneurs. They might be solopreneurs who are doing their first hiring or people with small groups, small teams. What are some experiments or questions or any type of assumption busting that you might suggest they test for themselves? Are there any good starting points for people who have processes in place, but they're small teams, relatively flexible, but very, very resource constrained? Where might they start in terms of testing?

Starting point is 00:42:29 I think that undoing your first urges to become organized are a great place. Because when you have the two, three, and you're in your backyard or in a garage, and suddenly something seems viable, and you're writing writing code or you're put together a small object which suddenly a shop wants um you're you're in your most primitive uh creative stage um it's not beautiful and romantic and jean-jacques rousseau all around it or thorough it's really um your first urge when you when you start going places slowly and you um start realizing that people are interested or there's more volume more expansion possible that's when you start looking around say oops i need more people but very soon after and

Starting point is 00:43:19 you might have eight or you might have 12 and then suddenly you say oops now wait a second this we're going to go we're going to become bigger i need to get organized i think this is probably the single riskiest point because it doesn't seem like such a big assumption you might ask someone who supposedly knows or you'll spend some time on the web looking at literature of organization. And then suddenly you're stuck in a world which starts ascribing and prescribing and describing how you should be doing things. And I think that that is the original sin, let's say, of organizations. And so I would say resisting the rationale that is being handed down to you that you need to get organized, I think, is much more valuable than it sounds. And people look at that and say, but wait a second, if I don't have this and I don't have a software that does that, and if I don't give my payroll to that, I'll never know and this will be wrong and so forth. And you find that the stuff, let's say the bureaucracy that has to be dealt with is nothing like the creative effort of communicating and dealing with people and giving them freedom. And slowly you find that as you grow from 8 to 12 to 14, you suddenly say, wait a second, before we could do this. But now I'm not able to just hire somebody or agree and contract for

Starting point is 00:44:49 something. I need to know what they're doing. And I think that when you start asking, why do you need to know? Oh, because if I don't know, I can't, I'm following them on Slack, but I don't really understand what they're doing. I don't know where they really come in. I don't know if they're working harder or less than someone else, whether they should be making that. And maybe the answer to all of this is it doesn't matter if you know this or not. If you get down to the very, very few things that really matter to you, being unorganized, apparently, which is not knowing a lot of this stuff, becomes completely irrelevant. I've had now in the last two years, Tim, I've been dealing with kids, you know, 25 year old, 28 year old, 32 year olds who have, I've started

Starting point is 00:45:34 businesses with. One of the businesses, which is in Holland, for example, these guys started this business and I have some minority partners and have some equity partners, etc., who I have never met. I've never met. Personally, I've never met on Skype. I have a few people who one of whose, let's say, CEO of a startup, etc. And I have not the slightest idea what he looks like. He's tall or short. I have a very generic idea of age and so forth.

Starting point is 00:46:07 And one of these people the other day I had set a time to talk to, and they said, oh, that time's not very good. And I said, why not? And they said, oh, because I live in Australia. And I said, what? And I said, how the hell did I know that? And they said, you never asked where I live. And so this whole process is now, I think, one in which I would highly recommend to people that they do not fall into the trap of saying, I need to get organized. I need to know all of this.

Starting point is 00:46:36 Because the essence of what people are trying to do with their lives, their businesses, and the organizations, they really don't require the amount of information, communication and structure that you think it needs. You know, what would you suggest they focus on instead of that? I'm just and maybe the way to frame it is besides focusing excessively on the bureaucracy and putting systems in place. What are some of the other most common mistakes that people in smaller companies, and I should say also that we might not, those companies may stay the same size. So they may, let's just say that, you know, 10 person company, they're creating a great product, but they want to scale in revenues, potentially not headcount. So A, what are some other common mistakes that people in that position make?

Starting point is 00:47:33 Or B, what should they focus on instead or what might they focus on instead? I think there's a lot of rationalization, a lot of um uh tricking yourself you know because and i think that's a very dangerous um enemy that you don't really realize because whether you're going to grow or not and it's doing well etc what happens is that there's a point where you try some of the things that you're you're testing out there and that you tend to insist very much either on an impulse on an intuition or an early result and uh and you say this is this is going to work this is as work and the difference between perseverance and self trickery is is very fragile it's very delicate and so i i would say that testing impartially finding a way to test impartially whether what you're doing is is really worth what you're doing in the way you're doing it etc etc i think is a very difficult

Starting point is 00:48:42 one that people sometimes take a heck of a long time to do and then sometimes the the business is there the money is there etc but essentially there there was nothing really of substance there and it might take you years and years of spinning your wheels to realize it and sometimes when something does not go through in the end, you start remembering those small comments or those people who were naysayers all along. You were just pushing out of the way in order to do what you had to do because you knew it was right. So I'd say this whole process of really poking at what you're doing, the product or the entity or the time you're taking, is a disheartening process most of the time because very few things really are feasible. And most of the things will run for a while. And I think that if you could poke at that early on

Starting point is 00:49:35 and be excessively transparent and humble about whether that exists really as an opportunity, I think that would be by far the most valuable thing you could do. Which of your books would you suggest, say that small organization entrepreneurs start with? And which books besides your own have you gifted the most to other people? You know, the one that you mentioned, the, the seven day weekend is, is a good place to, as with, with many other books is a, is a good place to poke around also inside your own head and to look for some insights, you know, in the end, when I, when I,

Starting point is 00:50:20 when I wrote the book originally, um, in, a relatively closed elite environment for business people, etc. So obviously, because the book had sold a good quantity, most people had read it. And I kept giving autographs to taxi drivers. So it was a very, very, very small microcosm I was living in. But I remember the second occasion that this happened to me, which was being stopped on the street and somebody saying, you know, I read

Starting point is 00:50:53 your book and it changed my life. And they would go off and quote somebody else's book entirely. So when this happened the second time, I said, shit, this is not about me at all. You know, this is, so let me stop right here because, and of course, at that point, there was all kinds of campaigns for me to run for mayor and for president and become Brazil's

Starting point is 00:51:16 Trump, you know, because this is, people get lost along the way and they start believing in their own bullshit, you know? And the interesting thing here was about going back to the issue of the book was that it's when you come across an insight, which was already yours and you see it in writing, that's when you say this book changed my life, you know? But real insights where you go there and you say, geez, I never thought of that. And there is some of that.

Starting point is 00:51:44 It has to add to something that you believe in or that jives with your moment and so forth. So I think that putting too much weight and too much importance on something that you got out of somewhere, got an insight, doesn't remind us that this intuition and this insight was growing inside you already. You were just waiting for some clarification of it. But that kind of answers the second bit, which is I taught for several years at the Sloan School at MIT. And I had a group of MBAs. And it was always a very fun group. And I used to go there in the fall quarter. And I'd tell them, look, this is what you have to read

Starting point is 00:52:28 to understand business and organizations and so forth. And I was obliged to make this available on the MIT site anyway. And then the books that were there were Marco Polo's Travel, one book, give you an enormous insight into the people who are doing things or why they're doing things rather than the whole set of how-tos, you know. And when you run away from the how-tos into the issue of how do you get to real wisdom, you know, we've been at this for a long time. We've been in this agricultural area, and then we were in the industrial area, and then we were in the information age, and we were in the knowledge age. But we don't get any closer to the age of wisdom. And something is terribly wrong for a population, and the humanity that's been around for so long, and doesn't get closer to wisdom. When you think about organizations and I ask you to show me one

Starting point is 00:53:46 democratic organization or business environment in the world or to find one wise company as a company, et cetera, these are all almost impossible to find. So answering your question, I would say that the books that stop to think about why the heck do we do the things that we do which are in kafka or in freud or in jung or in thoreau i think that those will answer a business world much closer than people think when they say okay that's all very good and well but that's all philosophy and that's all airy-fairy and touchy-feely. But I need to get down to answer this. How come, which people, how, and so forth. But this process, I think, is much, much stronger from a philosophical point of what makes you want

Starting point is 00:54:38 to get up in the morning and how you let the other people around you do what they want to do, how they want to do it, and get out of their way. And then that is a philosophical issue that I think would solve a lot more issues if people went from that filter onwards, you know? Definitely. And do you have any particular books or writing of Kafka that come to mind that you would recommend? Yeah.

Starting point is 00:55:03 There's one that i used always there which was uh which is wonderful it's a collection of parables there's only one and there's a set of parables but one of them is especially interesting it's called before the law and before the law is only three pages long and i used to i used to sit on top of this teacher's desk there in Cambridge and read this to the kids, you know, the MBA kids. And this was really interesting because I really felt like I was reading to my small kids. And I'd sit there and say, let me read this to you. But the fact is, it's only two and a half pages long. But it just tells the story of a guy who sits in front of a door, which is open.

Starting point is 00:55:46 It has this big guy who is guarding the door. And he's a Cossack, and he's full of these big fur coats, and he's enormous, and he's scary. And the guy asks him whether he can go in. He says, sure, you can go in. The door is open. But don't forget that further on, there's another door with a guy who's scarier than I. And then there's another door. And then the guy says, well, wait a second.

Starting point is 00:56:10 I think I'll just wait a bit here. And this goes on and on until this guy's getting older and older and older. And then finally, when he's about to die, he's lying there on the floor. And then the guy, the guard, bends and he says um uh and he asks the guard and he said now that i'm about to die and i have no more forces to go through anyway what is beyond that door what's going to happen the guard says well this door was only for you and since you are now going to die i'm'm going to close it. And it's a wonderful, wonderful exercise in realizing that each of these doors that you did not go through were only for you. And everything that we're comparing ourselves to all the time and the size of our businesses and the health of this and the wealth of that and how good our family is and how good our life is, where is happiness, where is wisdom, et cetera.

Starting point is 00:57:05 It all really answers this one issue that this door is there only for you. And if you don't cross it, it'll close when you die, you know? Now, I've been struck with how much I was a nonfiction purist for a really, really long time and was fortunate to have a few people intervene. And the amount that I've taken from books like Dune or Zorba the Greek, and since they're told in a narrative form, have actually stuck compared to say the dryer. In some cases, nonfiction has just been extremely eye-opening and liberating for me. I want to ask about, or this is really a question from a fan. So Felipe Moita, I don't know how to pronounce his name, but this is a part of his question. So he, and this is referring to you.

Starting point is 00:57:56 He once said he made a big fire in his backyard and burned every article, book, interview, everything he had done as a symbol to not look back. Has this been done again? And how is his relationship to the past? So could you elaborate on this? I don't know if it's accurate or not, but if you could comment on that, I'd love to hear your thoughts. Yeah, that was when I turned 50. So I'm 57 now. So when I turned 50, I looked at my library and I looked around me and so forth, and I said, shit, there's a lot of stuff on me here. You know, I have my books in all these languages, 38 languages. I have a thousand articles. I have DVDs. I have CDs. I have even, you know, of course, a video cassette. I don't even know if I would play that, but I had it.

Starting point is 00:58:43 And I said, there's something wrong with this stuff. You know, one, I don't even know if I would play that, but I had it. And I said, there's something wrong with this stuff. One, I don't need it anymore for my ego. I think I'm all set or I need to figure it out with my therapist, but not here. And two, I have these five kids. We're going to run around. And suddenly they're going to find that I'm larger than life. And people are going to say, well, are you going to follow your, are you going to run your dad's company? And I said, that's a terrible imposition to make on them, you know? And so I thought there were two things holding me back. One of them was that

Starting point is 00:59:16 if I remember that I did this and I did that, and I have this and I have that award and I have that, I have a very wrong sense of very superficial sense of who I am. So I thought that if I get rid of all this stuff, I'm also lighter for the trip that's in front of me and that I can look at things from scratch and say, let's forget all that. What would I do now? And how do I kind of zero based my life from here on. And two, I didn't want these kids to be burdened by the idea that your dad, this, your dad, that. So, um,

Starting point is 00:59:53 what we did was we started a bonfire in the backyard and it took us about five or six hours to burn everything. We just burned a hundred percent. And so just out of curiosity, this was in sao paulo or where were you yeah i live up in the mouth okay just wondering what your neighbors thought okay yeah i didn't have a they didn't call the the the fireman but so we just spent hours burning all this i mean it takes a hell of a long time i thought it did and and And VHS tapes don't burn very well and a lot of black smoke. So we did hours of this. And so it's now been seven years since there is no shred of anything of mine in the house anywhere in that respect. And the good part about it is my five kids,

Starting point is 01:00:38 they really don't have the slightest idea what I do. And if you ask them, someone might say, I'm a writer. Some might might say i don't do very much i've never taken them to a company i've never told them that one day this could be yours and um so they it's never entered their mind they they know that we have money because they can look around but they've also learned from the very beginning that they've gone to public school with kids who have nothing whatsoever all along. They go to the house of these kids who are very humble. And they've just learned to accept that there's luck.

Starting point is 01:01:16 There's luck when you're born in a family that has money. There's other things that are talent. And the kid plays soccer 10 times better than you. And they've found money there's other things that are talent and the kid plays soccer 10 times better than you and if they've found that there are other variations but the one of uh your father is this or that that one they they've never uh caught up on and so that was the whole rationale back there i'm very happy that i did it now I don't need to every seven years do anything because of course nothing else comes in. Anything I get, uh, we, we throw out as it comes in, anything that has my name or is about me or is from me, et cetera. We just, we don't keep it. And that way it keeps relatively clean. I want to come back to the parable and the door and the

Starting point is 01:02:01 doors being yours and yours alone. And this trap that some people fall into in terms of comparison, I'm keeping up with the Joneses and just as context for people, I live in Silicon Valley for those who don't know, and regularly interact with people who might have net worths of hundreds of millions of dollars who are miserable because the other person with hundreds of millions or maybe billions has a larger jet than they do or something like that. And I'm looking at... Or serious, Alison, looking at yachts.

Starting point is 01:02:31 Right, yachts or fill in the blank, pissing contest. And I'm looking at the notes that I made. It must have been in 2003 in the seven-day weekend. So we have, I'll just give you a couple of samples. 168, find talent, then opportunity just give you a couple of samples. 168, find talent, then opportunity, not job description, then talent. 71, the reason for work. 104, max personal wealth is 12 million. That's what I'm going to dig into in a second. 123, no more than six month business plan or six month plans versus long term plans. And I have dozens of these,

Starting point is 01:03:05 but what I wanted to do is turn to one Oh four, because that I'd love to read a small piece of, and then just to hear you perhaps elaborate on it. And perhaps your thoughts have changed somewhat. So here's just find out whether I actually wrote it myself or not. Yeah, exactly. Exactly.

Starting point is 01:03:24 So, so this is the paperback. This is on 104. I have a theory about wealth. My friends just sigh when they hear this. My theory is that the maximum personal wealth is $12 million. And I've done some calculations with economists to bear out this cabalistic and admittedly provocative number, not a cent over 12 million. After that, all millionaires are the same. And then I'm going to jump down. I'm skipping a few paragraphs, but you call this the Da Vinci constraint. And then the example is a neighbor of mine in Sao Paulo built a house that reminds me of a South American dictator's

Starting point is 01:03:54 compound. He may have spent his entire allotment of 12 million on this house, but now his problem is Leonardo who points out that a human cannot possibly feel at ease in such a disproportionate house. Certainly my neighbor can live there, open it to photographers from design magazines and be admired from afar but in winter he'll huddle in the tiny tv room on the second floor withdrawing from the cavernous rooms to seek a more human scale and then i'm gonna bump down another two paragraphs and i really i like this line a lot which is collecting money is like amassing any other item. By definition, no collector can ever be happy. So I'd love to just hear your thoughts on this. And if they've changed at all, because this is something that, or it's a temptation, this comparison and growth for the sake of growth more, I need more, more, more.

Starting point is 01:04:43 That leads a lot of people to be very miserable. Could you just elaborate on this thinking? In this last decade and a half, I think that the number of people who have come to realize or to accept the intellectual concept that money doesn't buy happiness and growing for growth's sake and comparing yourself to everyone else ends badly. And I think a lot of people have accepted this as a thought. And then something in the back of their mind says, yeah, know if i had uh 12 or 20 or 50 million dollars everything would be a lot easier and it's only these guys who really have the money who keep bullshitting about how money is not important so this is the right this is where this is how it comes down let's say after so much so much time thinking about this you know basically we're in a world post 1989 let's say when the berlin wall came, we're in a world post-1989, let's say when the Berlin Wall came down. We're in a world that says, oh, capitalism has won. So there's no such thing

Starting point is 01:05:52 anymore as Soviets and communists and so forth. This stuff we've now proven, the world has proven that money is the real king. The world is a monarchy and the king is money. And, of course, guys who do this better than other people have now taken this to new proportions, which is natural. It's just doing more and more and these were some of the people from around your house, let's say, and some of the wealthiest people in the world, and I were to invite them all for dinner, and they were to accept, I would have at my dinner the wealth equivalent to half of the population of the world. So I could have, at that dinner, people who have more money than three or three and a half billion people of the world. So I could have, and at that dinner, people who have more money than three

Starting point is 01:06:45 or three and a half billion people around the world. Now, that is money is king rationale taken to its most logical extent. And I started asking myself, and I asked this on a TED Talk, and it was the line that got most reaction from people over time which was if you're giving back it's because you've taken too much and and and people are you know i have

Starting point is 01:07:15 to give back that when you think about this and you say you know one of your is not your neighbor he's in seattle but let's say bill gates or or orett, Warren Buffett says, boy, you know, I've been so good at this stuff, you know, that I've now made, according to his calculation a few years ago, I've now made $30 billion more than I need. Oh, okay. So what am I going to do this? Let me give it to people who really need it. And so forthwith, he gave it to Bill Gates, right? Right. This was the, this was the full rationale. And so there's something wrong with people who have a lot of excess money, of course, because you're saying let's find someone who's already trampling around Africa and meeting tribes and trying to give money to AIDS and so forth. But the fact is that once you start accumulating, you're caught in this collection mode, which is, you'll always find a reason for thinking you need more of that, but it is taking away from something. It's taking away from your kids,

Starting point is 01:08:11 or it's taking away from sitting in the backyard and reading another book, or it's taking from somewhere. There's no such thing as, uh, I will work harder for a time and then I will have the money and then we'll, and then everything will be all right, because that moment never arrives. And I think people realize that ever more. They just, people in general, of course, feel that there is a level of comfort that in your mind about your worries about the future and the monies and the mortgages and so forth, that, whoa, boy, if you could have at least that bit, you'd be okay. This 12 million almost parable rationale was to say, look, let's put at least an upper limit on this at a point where to have a house here, an apartment there, and something on

Starting point is 01:08:58 the beach, and something in the mountain, and do anything you want, and go to long vacations in Paris. That was, at that time, there you have to bring it up to date. But $12 million did everything. There was nothing you could not do with $12 million. From then on, this was an issue of ego vanity or obsession. It was something else. It no longer had anything to do with money.

Starting point is 01:09:20 On the lower end, you see all these guys who are doing work on finding happiness levels and serotonin levels and what it takes to be minimally happy. People are always looking in India at the people who are untouchable and so forth and finding levels of happiness that are high. And so I think people kind of accept the idea intellectually. But I think the feeling inside is always, okay, but if I had only 200 grand more, if I had only this, then everything would be okay. And I think that that isn't going away, Tim, in the sense that I don't think humanity is getting wiser and slowly will realize. But intellectually was the first step, which I think humanity took and now starts to accept every time more that there's something dramatically wrong with zero one percent it's not even the one percent but zero one

Starting point is 01:10:11 percent having such tremendous wealth and this whole amassing wealth because the wealth is going to the smarter guys and the smarter guys are the smarter guys who are able to siphon money away from everything else into their own pockets. And it's a very dismal situation. And you come to think about it today, you think about reading and thinking about the past a little bit, Tim. You think about the Robert Barons like Rockefeller and Carnegie and Vanderbilt. These guys were all monopoly players.

Starting point is 01:10:42 You know, these are guys who were setting up trusts and almost everything that they did at the time would be illegal today. Now, these Robert Barons are people that we somehow or other are very impressed with. You know, we'd love to be today called to dinner by one of these Robert Barons. But is there a dramatic difference today, Tim, when you think about it in the biggest corporations in the world and these people, many people who started writing code and doing wonderful things and so forth, which are now all about monopolies and trusts. And suddenly a guy like Trump says, come to Washington and play with me.

Starting point is 01:11:27 And everybody says, where's my play? And I'm ready to play. There's something wrong with this whole process because money keeps calling money and it makes very, very disappointing people out of the ones who've been seeking money as a big issue, money power and so forth. And you've seen it in all the films, you've money power and so forth. And you've seen it in all the films, you've read it in all the books, you've seen it with people you know. It doesn't end well, but it doesn't stop any of these people giving up other things in favor of that which in

Starting point is 01:11:57 a money world, in a king-oriented money world, people seek. And that's the bit that I think most people have found to be silly, but they're still chasing somehow. And that's was the whole bit about the 12 million dollars. How do you use the question? What for when you, when you do the three wise in a row and so forth, you end up with process questions. And they're very good for removing obstacles and things that are silly that you do or that you're involved in doing. But it still doesn't answer the question that has to do with wisdom. And that one is, what the hell for am I doing this? And that's a very, very tough one, because you could eventually even answer the three whys for a process or for a way of doing things.

Starting point is 01:12:52 And you can fix that by asking the three whys in a row. in your marriage, with your kids, in the place where you work, at the chorus you go to, or the church that you attend, when you start trying to answer what I'm doing this for, then I think you're getting to the real, just the things, but you're also getting into real trouble, because those are the really difficult ones to ask. There's really, all of us have only one question in the world in our lifetime and and one kid of mine asked me that when he was three the other one was four and one we're sitting in a jacuzzi when he's three and he said dad why do we exist there's nothing else to ask and there's nothing there's no other question to ask for the rest of your life you will never answer it and so forth and this issue of what for am i doing this why am i waking up in the morning i go do this and why am i doing a

Starting point is 01:13:52 what what am i doing a podcast for um what good is this going to do and and going further because you'll say oh because you know i want to help people and I want all these people to make their lives better. Yeah, OK, but what for? Oh, you know, so that the humanity will be better. What for? Oh, what for? Because essentially I cannot live with the idea that I'm not making the world slightly better than it was when I was born, even though chances are and statistics tells that it's not the case at all. But for me to feel that way, I need to go do this. So I need to do the podcast.

Starting point is 01:14:34 I need to write a book. I need to speak at conference. I need to do all this. But it's not because I hope that people who are now driving the car, they'll suddenly stop and get out and skip and jump to the house and say, I found new ways to do everything in my life and everything would better from around. But it's about my feeling that I'm being useless. And so this whole what for issue is used for that as a key to try and answer really why you do the things you do. What people listening, you're very well-spoken guys.

Starting point is 01:15:07 They might look at your track record, look at the accolades, listen to you speak and imagine that you've always been confident, always known what to do. Could you share any particular dark, difficult times or time that comes to mind and how you found your way out of that? On several occasions, I've been, let's say, close to the brink of things, not working to a point of undoing everything. So a few years after I started, it was the first time I ran into, we ran into such financial difficulties. I remember specifically driving to the plant and thinking what it would take and what it would mean and people I have to talk to, to take the company into receivership. The company was going broke and what would i do and that was to me the the closest i ever got to the end let's say because i was only i don't know 21 22 and suddenly

Starting point is 01:16:12 everything i tried to do was completely wrong or wasn't working and we came close to the brink at that point and so what i found i think in in in that and some moments later, we never come to that same financial situation anymore. It's looking at the opportunity to have a wife or choices forking roads, where looking back, I realized either that it wasn't as dark as I thought it was and I was just scaring myself into things, or two, that luckily I got through that that bend in the road etc so the answer is first of all no there's it's far from easy even though I've been terribly lucky all along and so if you say let me tell me the story of the 10 companies that you started that went bust that's easy because there's more than 10 the The amount of people that you've put together to do something that became nothing, the kind

Starting point is 01:17:50 of hopes you had for things that you were going to do that went nowhere, you know? And I've written plays, I've put on plays and then spent a year in the theater learning all about drama and putting plays together and so forth. And I've been lucky enough that most of this stuff kind of wanders off or is reasonably acceptable so that I can move on. And I think that the real fears are always when somebody calls you and says, for example, two or three weeks ago, somebody called me and my older kid was snowboarding.

Starting point is 01:18:28 And he says, I'm calling you from the hospital. We have to operate on your son. You know, things like that where your whole life just kind of falls apart beneath you. You go and do what needs to be done. But you realize how fragile it is to think that you're successful and you have these big houses and you have all these people working for you and so forth. But this stuff is all very, very delicate and very fragile. So I think there are a lot of dark moments in which you realize what little it takes for you to kind of lose everything that you were standing on.

Starting point is 01:19:00 Are there any, let's say, philosophies or principles that you rely on to handle those situations when you're reminded of how fragile things are or uncertainty strikes or fortune blows in a direction that throws things seemingly off balance? Yeah, I have a kind of an unnerving and unwavering belief that we're very, very insignificant, have really no idea what's going on. We're not given. It's not given to us to understand anything that's really important. You know, anything that you say is really really fundamental in life we know nothing about we know nothing about love we know nothing about death we know nothing all the the really important things we don't know if you take a you go to a doctor and you go for a second opinion a third opinion etc you will always realize that the first question the first why am i do i have this or you have this because your nerve on this did that, the second one, et cetera.

Starting point is 01:20:06 But the third why to any doctor is that we don't know, right? Everything is that we don't know. And anything that's really important, we don't know. And so my feeling is that because of this insignificance, which is, let's say, paired with the fact that we're terribly important to ourselves and we're almost 100% of our importance to ourselves uh we're also insignificant in the other regard and we notice that when when somebody passes away or when we remember something that we've forgotten entirely that this stuff is all becomes dust very quickly and so my feeling when when

Starting point is 01:20:41 things are dark or going badly or is that is that it doesn't seem reasonable to me. It never seemed reasonable to me for things to go completely awry. And so my feeling is that... I'm sorry, can you say that again? To go completely what? Awry. I mean, going completely wrong or going completely south. Got it. And my feeling there, Tim, is that, you know, if you're really not spending most of your time tricking people into things and finding ways on the side to make things work or to make money and you're not, you're doing your basic, humanity is basic in place. My feeling is that you'll be all right. You'll be all right.

Starting point is 01:21:29 And I think that's what carries me through in the end. Now, it's not religious. It's not structured in any form. But it's this kind of feeling that you don't have to do all that much just to plot along without being, I'd say it's not even naive. You know, so the whole rationale of every time we have these small choices, the whole day long and by week and month and years as we go by, it's very easy to differentiate between that which is a little bit less self-serving and that which is only for your own good.

Starting point is 01:22:13 And if you make enough of these choices along, I think that at these dark moments or at these moments of enormous risk, it's kind of like a destiny or a balance that is in place and that takes care of you somehow, you know? So on a semi-related note, is there any particular challenge or goal that you're facing right now? You could choose any personal or professional that you could describe and how you're, how you're tackling it, how you're going about it. The other day I told my wife and I, I think I said this at a talk or something that, um,

Starting point is 01:22:51 that I'm facing an empty bucket list, you know, and, uh, and my empty bucket list is all about saying this, that, um, you know, my, my family has all, all um everyone in my family had melanoma had a form of very drastic cancer which is very quick and um and i about 15 20 years ago i was already uh scanned and and they told me at the time i rated that i had a hundred percent chance of melanoma and cancer and i've actually had it two, three times in the meantime. But if you watch out for it, of course, you can be quick and remove it. And I just had surgery again about three, four months ago, found a new one. And there's nothing to it, really.

Starting point is 01:23:38 You identify, you know what it looks like, you go there, you have it removed, and off you go. But I kept thinking, you know, sitting in front of my oncologist, my cancer doctor, looking at me and saying, well, Ricardo, this time it went. You didn't see it. It was on your back, and you have three months left or six months. And which happened to my parents and to people, to others before them and I kept thinking geez I don't want to be in that situation where suddenly now I have to go to ball games with the kids and now I have to travel to places I haven't been and I have to write that play which I never wrote and I said that's crazy so let's do something else and that's when I started what my wife doesn't like the name I give but on Mondays and Thursdays I have have what I call terminal days. And terminal days

Starting point is 01:24:26 are the two days a week in which my schedule is always completely clear. I have nothing. And I do on those days, what I would have done had I heard this conversation from my oncologist. And so I've been doing this for quite a while. And so my my weekends are with the kids and family. So for the Mondays and Thursdays, I only do what it is I would do if I had just recently learned that I had a terminal disease. And it sounds dark, but it isn't really because it's just all about the freedom that you've just gained. And these days that you've just gotten back to do whatever you want to do the way you do it. And trying to answer to yourself what you really want to do. Because in the beginning, you have these long lists of things you would do if you had the free time, but it's not really

Starting point is 01:25:15 true. I'd read all these books, which are sitting there and I hadn't read. I'd listened to all this music, which I hadn't. But you do this for an hour or two or three, but then it gets old as well. And there's a reason why you didn't do enough of it before. But it sounds like you'll be able to do this for hours on end, but you won't. And so if you're healthy and you're in good shape and so forth, and you have your entire day ahead of you and nothing to do, you start answering

Starting point is 01:25:42 very, very interesting questions about what you really want and what really moves. So still going back to answer your question, the fact is that I'm not left with goals. And I'm left with a whole set of wonderful processes that I love and I'd love to do again and again. But I no longer need or want to do something that I can measure. You know, the metrics, I think, have gone away. This process of doing what I want with the people I love that I'm with, that's entirely a process on its own. It's a goal on its own.

Starting point is 01:26:21 And so there's no longer, I have no wishes for things that I could buy with money. You know, my kids and my wife are constantly frustrated by the fact that there's nothing that they can buy me. You know, because it's gotten to that point where I don't need it or I don't want it or it doesn't tickle my fancy and so forth. So I'm not left with metrics saying I'd love to have another this or the money. I've been doing math now, I think, Tim, on my personal finances for 30 something years or more, 40 years on the same rationale, which is how much do I need to have in able to lead the life that I do? And Swiss bankers used to say that you need to have in order to lead the life that I do? And Swiss bankers used to say that you need to have 20 times more than you spend per year. And it kind of is a rule of thumb.

Starting point is 01:27:17 That's not bad, you know, because that says you need about a 5% return on monies you have. So if your lifestyle costs you and you say, it takes me $5,000 a month to live minimally the way i want that's sixty thousand and so you need uh assets in the value of a million two house plus money whatever so because i've been always starting from what it is that i need minimally to have fun and to do the many fun things that you can do with money. I just multiply that by 20. If it's over 20, I don't worry anymore. And thankfully, I haven't worked for a while. But if I looked at the opportunity and said, boy, if I did this and I put these two companies together and that, I would have something else.

Starting point is 01:28:01 If it's going to take away one of my Mondays or Thursdays, or many of the times I'm grappling with some of these issues and structuring, structuring is too formal a word, but I had a very good 2016. And I think it was in part because I had so much slack in the system to do deep work and to enjoy and savor certain things. And 2017, because of the book launch a few months ago, or six weeks ago has just come crashing in with a lot of inbound, most of which is noise. So I'm thinking a lot about this. What are some of the processes that you love? And could you walk us through maybe a Monday or Thursday that comes to mind and what that, what that looks like. Yeah. Yeah. And going from back to front, um, I've been, you know, writing a book in my head now for the last two, three years,

Starting point is 01:29:13 and I'm just scared of putting it out there because you are then caught in a vortex of your own making, you know, and right. You get a publisher and then you, you kind of, you kind of sell them the idea that you're you'll be there and they're kind of saying i'm going to do this but if i need you for the today show you're going to be there right and and you're kind of yeah i'll try and so what but the fact is that you didn't really want you never really want to take on the whole uh weight of uh proving yourself doing your thing and and satisfying all the um co-sponsors of your effort right and so there's the book launch and there's no end of course it doesn't end that quickly because you trick yourself into thinking

Starting point is 01:30:02 oh this is six months and then it'll be okay. But we know it's not because I just said, for example, I got yesterday, I just got my two copies of the Chinese edition of my book of 1993. So it takes a little bit of time for things to happen, right? So, you know, I got the Czech Republic edition of the seven-day weekend about a month ago. So this stuff just takes on a life of its own. And then every time a request comes for your time, you stutter, you know? You say, well, you know, I don't really want to take this flight and go this way. But on the other hand, you know, I kind of have a responsibility to do that. And it's it's a little bit like the The Little Prince, you know, the French book by Saint-Exupéry, which says that you are responsible for everything that you captivate, you know? And so you kind of feel, you know, that, well, why did I write the book in the first place?

Starting point is 01:31:09 If I wrote it in the first place, that means that I should go to this syndicated radio show because that'll sell more books and more people will be happy and I'll feel better on and on. And you're caught with metrics because somebody will say, so Tim, how many people listen to your podcast? Oh, a million or this and I'm number 13 or number 11 and number six. And people have caught you up in their vortex of metrics as well until something happens. You retire, you die and so forth.

Starting point is 01:31:40 And it goes away because you're a non-contender from there on. And then it's away because you're a non-contender from there on. And then it's perfectly all right. And then you have to think who the hell is going to remember 20 years from now or 40 years from now. And so you're left with the issue of what am I doing this for? So my answer to all of this, because if you take this to its ultimate consequence, you could easily be in a situation where you say, I do nothing anymore because nothing is worth it. Because nothing will reply to the issue of metrics. Nothing will satisfy me enough. Nothing is really worth it if we are these useless specks of dust in the universe. And so I don't take it to that rationale because we are 100% of ourselves in terms of importance

Starting point is 01:32:21 at the same time. And so you can be worried about the state of nations and poverty and immigration policies. But if there's a speck of dust in your eye, you're going to spend the next hour and a half only dealing with that. There's nothing else of any importance in the world while there's a speck in your eye and your eye is watering. And so what i meant by this is that on mondays and thursdays let's say i stopped the thing i wake up and one of the first things i do is is lounge in bed meaning i uh i haven't had an alarm clock i think for for 15 or 20 years but i i say i'm i will not get out of bed and of course that doesn't last very long but the feeling is good.

Starting point is 01:33:05 And then I'm with the kids and so forth. And then suddenly they get into the van and they're gone. And suddenly everything is quiet in one second. And then I start asking myself, so what do I want to do? I could read the paper, but I don't really want to read the paper. The news is this and that. I could read that book, but now I'm halfway there. And you're stuck, I think, many times with the issue that we keep ourselves so busy and we have all of these distractions and attractions and things going at such a rate that when you actually turn off all the noise and say,

Starting point is 01:33:43 which of these things do I really want to do? You have much more trouble than you thought you did. And so when we put that book out there, as you did, and you have requests and you have opportunities, you really just kind of measure the opportunities of what to do against each other. So, you know, in that sense, it's a bit like Kafka again, you know, that, that door is open just for you, but you say, you know, what, is it better to go talk to these guys in Denver or to do this thing in London? You know, but the real question was what the hell for am I doing either of these? I think you'll end up with the with the reply that the things that you can look back on you said that was a good one two hours three hours of my life

Starting point is 01:34:33 because I either shared something I learned something it felt good these are all wonderful responses I you know you went to the baseball, you're not losing two hours of your life. That's a wonderful way to spend those two hours if you love baseball on and on. And so it's not about nothingness or undoing yourself or considering yourself worthless and therefore it's not worth doing anything um and but it is especially about not comparing the opportunities with each other and rather compare them what would i do if i had the whole day off the the best feeling i have in my in my time is never the monday and thursday which i do love when i get up i'm in bed thinking today i have nothing to do it is on that t Tuesday or on that Friday when I have something set, a conference call or a visit or something, and that gets canceled. That's my most wonderful

Starting point is 01:35:32 moment is always when I have something to do and somebody cancels it. It's an enormous sense of relief, no matter how important it was or which I was looking forward to. When somebody cancels something, I feel elated. you know? And so I think that kind of answers it a bit as well. No, no, it does. And I mean, I'd love to uncover some of the, some of the quirks. I had somebody asked me a question a few days ago that I thought was a good question. We'll find out. It may be, it may fall flat, but he asked me, what are, what are some absurd things that you like doing or love doing? What are some absurd things that you love doing? Does anything

Starting point is 01:36:11 come to mind for you when I ask that question? Um, I have, I have all these, um, old, um, old, old line habits. One of them comes from Winston Churchill, which is to sit in a bathtub with a lit cigar. I'm sure it'll pass a lot of people's test of absurdity. So sometimes I'll say, you know, now I will do nothing. And I will sit in a bathtub for an hour, hour and a half with a very long cigar and think like Winston Churchill. And I always remember this especially well because Churchill was a guy who was even in power. And to an extent, this happened to FDR as well when he had his polio thing in Florida. But Winston Churchill would go off a bit before Christmas and take a ship to Egypt, where he would go to

Starting point is 01:37:07 the same Winter Palace Hotel in Luxor. And he would spend 65 days there while he was running the country. And so I think we give ourselves an enormous amount of importance into our time. And I think doing absurd things related to wasting time, I think are a wonderful way to remind ourselves that we're neither that important or that necessary or none of that much happens when you do absurd things with your time. And I think purposely looking like you're wasting it, I think is an absurdly wonderful thing to do. Do you know, people looking from the outside in, many people will be very impressed with

Starting point is 01:37:55 your ability to experiment and to test and to have failures, but also have these successes and home runs. Do you think about risk differently than other people? Or how do you think about risk? I think that that word is a scary word to a lot of people, and they don't really define it for themselves. And so they don't try. But I'd just love to hear your thoughts on risk or perceiving risk, how you think about it? When you, when you try and deconstruct risk, I'd say there, there, there's an objective metric associated with risk. So I'm going to start this business. I'm going to take 32% of my savings and I might lose it all. So that's a kind of metric that I think is less scary because you know that it's 32%. You know that if you lose it, it's going to be trouble for some time and then some restrictions, et cetera. But it is an outside metric which you are willing to accept.

Starting point is 01:38:55 If you say, I'm going to take a plane and I know that the statistical risk is 0,004 of this or that or a peak coming late and then and 100 times smaller of the plane falling and i'll i'll take that risk that bit i think scares people very little even though they bring it up i think people use it very much as an excuse because the other risk factor is how will i look to myself to my spouse to my kids, to my kids, to my former business partners, to my people? How will I look if I fall flat on my face? And I think that this element of risk is the one that doesn't bother me almost at all because I think it is so ephemeral. You get a bad press or you get a bad opinion from neighbors or your wife is dismayed that you actually did this. I think all this goes away

Starting point is 01:39:55 very easily and relatively quickly. It might take a few months, a few years, but all this goes away. And it's not to say that it's worth doing because if you do succeed, then you will show them all your face or you'll be happier. You'll be gratified yourself, even because we know that a lot of these apparent successes and apparent things that we call home runs. They're also temporary. Right. In that sense that you write, you do something. And the last mile of everything you do is probably what's going to count. This is also an ironic turn on life, which is that you go there and you spend 20, 30 years today. This day, today, today, we had one of our biggest billionaires in Brazil fall into jail. He was in New York over the weekend and he was

Starting point is 01:40:46 arrested and he's involved in a corruption charge. And he was the seventh richest man in the world. He was by far Brazil's richest person. His 20, 30 years of unearning successes and one success on top of the other were all wonderful. And he obviously has a genius for business. Otherwise, he wouldn't have gotten where he got. And he has his dark side as well and so forth. So he got to this point. I don't know him personally.

Starting point is 01:41:14 I've never met him. But he got to this point where he was this billionaire and he had these enormous projects and he was doing wonderful things. And on the side, he had hobbies and restaurants and yachts and doing things for poor people and on and on and on and on. Now, he's in jail. I don't know for how long, maybe even not that long. But the fact is that he has this hair products company

Starting point is 01:41:36 who's always very proud of his hair. And you know another guy who has similar hair. And he, in jail, the first thing they did was to shave him bald. So you see now, what I meant to say was, what is success for this guy? You know, was it the 34 years in which he had yachts and planes and every president, everybody would receive him and he'd do wonderful things and so forth. Or is it now so tainted by this last image of himself that he will never recover? You know, and I'm no judgment at all. I'm just saying that when you think about this, I think about some of the people who are presidents of Brazil, some people who are presidents of the U.S., who are there at 50 or 60, and their life is over.

Starting point is 01:42:24 It's no longer a success. It keeps deteriorating as the years go by. You know, you take someone like Clinton, who has an extraordinary mind, did a lot of good things, but made a few enormous mistakes with cigars and trainees that he will never recover from. And so what is success in that past? What I meant to say was that your home runs and the businesses you built and the money you haven't spent, it is all very, very fragile. And it's probably going to be measured with how you handle yourself in a few, very few

Starting point is 01:43:02 decisive moments in your life and or in the end, you know, the last few things you did are terribly important compared to what you did before. Or this guy, I keep forgetting his name, Pastorius in South Africa. Yeah, he's a tremendous guy, etc. Until you kill your girlfriend and suddenly all those other successes don't sit very well. Now, can you do your things, have your successes, build up your metrics, et cetera, and then retire and sit tight for 20, 30 years enjoying it, et cetera? Probably the feeling inside is that slowly your worlds are deteriorating in the sense that your friends are dying the press is no longer

Starting point is 01:43:45 interested in you and you become a has-been who still has a few things to to nail up on the wall or remember you know jaded photographs of you with someone very important you know and so i i think that the the success factor and this metric of how you measure yourself is very, very fragile. And when we stick to it, we stick to something that won't be there when we try to hold it in our hands. It has to be held a bit like a bird. You know, if you press it a little bit too hard, it dies. How do you think of success for yourself then? In place of leaning on or depending on the ephemera and all these things that can be taken away so easily or destroyed so easily. How do you feel at peace with yourself or feel successful?

Starting point is 01:44:42 What lens do you use for that? I try to exchange these lenses of past and future for living in the present, which is the only very difficult thing to do. We talk about it, nobody knows how to do it. James Taylor said in a song, he says that the meaning of life is to enjoy the passing of time. Enjoying the passing of time is by far the hardest thing we can ever do. And when you take your thought process, we are almost constantly living in the past or in the future. And so success to me is always making sure that this passing of time is worthwhile. That this passing of time right now, that I'm not exchanging it for a hope in the future. I'm not exchanging it for something I got or had in the

Starting point is 01:45:31 past. And that you're always kind of ready to survive or to withstand through the use of this wisdom of present time, of which I'm very far still from it, but I just keep hammering it into my own head, this passing of time. If this podcast and conversation with you was worth it because it made me think, because it was thoughtful for us and so forth, that is success. And that can never be taken away. No matter tomorrow, I don't have the money, I don't have this, or things go wrong, God forbid, with people.

Starting point is 01:46:11 The fact is that that one hour or two hours which we spent in the podcast thinking about life and thinking about exchanging, that that one was definitely worthwhile and successful. And that one can no longer be taken away from you because it's now part. And when it becomes part of your history or your past, it's just building blocks of time that were spent. You know, I had an interesting situation with, for a time, I was buying much more wine than I should have because I was kind of, I got into the collector's mode about 25, 30 years ago.

Starting point is 01:46:44 And so I kept buying at auctions. And, of course, you get into this thing where you need to have that 19, 15, 9 Mouton otherwise and so forth. And so you go crazy at auction. You overpay and so forth. And one of these days, I had a friend over and I opened one of these wonderful wines that were extraordinary, extraordinary year. And I outbid Ford and so forth. And this stuff can't be used for vinegar. It was completely spoiled.

Starting point is 01:47:14 It was always completely spoiled. When I bought it, it was an interesting collection because you buy all of this wine that you have all kind of expectations from. And you're learning to say, you know, this has pencil shavings and a bit of mineral lye and some marigold flower in the taste and so forth. But you know there's an enormous amount of bullshit in what you're doing and why you're doing it and so forth. But the interesting part is that once you consume your collectible by drinking the wine, you're left always with 20 cents of glass. And so it's just a way of saying that this whole process of wine is a good

Starting point is 01:48:00 comparison because one guy told me a few kipchins what what gets you into your your cellar and makes you take a bottle of wine which you paid a hundred dollars for and is now worth a thousand dollars and drink this and be left with a little bit of glass because you end up probably not even having the courage to drink this wine that now is so valuable, et cetera, et cetera. But I've always answered that in the following way. If one day I look at my cellar, and I do now, and it's about half empty or more, and it

Starting point is 01:48:36 is now about half empty. And I think that every time I pulled one of those bottles, it was because I was with friends or because I was feeling good or this was a great time. This must have been a good life looking at those empty holes, you know? And so that's, I think, with everything else. If you're using that time and at the end of it, you say, boy, that was a good two hours. This is worth it. Then success is certainly guaranteed. How did you stop the collection of wine when you were getting caught up in these auctions

Starting point is 01:49:10 and so on? What was the pattern interrupt or the conversation or the moment when you decided to stop doing that? I actually remember it very well. It was very specific i went to thailand and um and in thailand i met this guy who was actually chinese but he was in thailand and he was a tomato farmer and he had mini mills he had these mini steel mills steel mills and he was a a magnate and he'd made he was a real tycoon He'd made enormous amounts of money, et cetera, et cetera. And we were, we went to have dinner with this guy and, um, he was smoking all through the dinner.

Starting point is 01:49:51 And I asked him, you know, how many cigarettes he smokes a day or packs. And he said, no, I light one in bed. And then I light all the cigarettes with another cigarette. So I never did them. I never did the math on that but it can't be very good but anyway so he would he would eat with one hand and he would puff with the other and at no moment did he stop smoking and um then we started talking about he said that he has a bit of an obsession for things and so forth he said he collects things i said what do you collect and he said i collect mercedes cars so and so you you have a lot of these and he said he collects things i said what do you collect and he said i collect mercedes cars and so you have a lot of these and he said yeah i have a lot of these i have 111 warehouses

Starting point is 01:50:32 of mercedes and he said and i have the mercy the first mercedes of 1896 which is a steam mercedes and i have all the mercedes in between and i said what do you mean he said no every time there is a mercedes that comes out every year they come out with let's say six models i buy one of each and when mercedes needed uh himmler's car and the car that hitler went into paris of what i lent them the cars because I have the cars. And so I was there obviously stunned at this conversation and all the smoking. And I thought, Jesus, what little do I know about interesting people or freaky people around the world. And then at one point I said, well, so you just

Starting point is 01:51:19 keep on collecting. He says, that? I said, and of course I have to go. I have to go in a few days. I'm going to an auction because there are several mercedes there are a total of 12 mercedes which i don't have and i said how much does it bother you and said oh it keeps me awake many nights he said and i keep going at it and i'm going crazy and i need to have these 12 more cents. And at that moment, I stopped buying any wine whatsoever. I don't think I've bought a wine since. Oh my God, what a story. We could go for a very long time. I want to be respectful of your time. There's so many things that I'd love to touch on, like Lumiar and many other areas.

Starting point is 01:52:02 But tell me what you think of this. We could do a few rapid fire questions and then maybe if you enjoyed this and everyone enjoys it, which I think they will, we could consider maybe doing a follow-up at some point. I'm certainly happy to stay on and talk about anything you'd like, but I'd love to ask maybe a few rapid fire questions and then lead people to what you're up to now

Starting point is 01:52:24 and where they can find you if that sounds like a plan, but I know we've been on for recording now close to two hours. So if, if, if that works for you, we could, we could take that approach, but I'm certainly happy to touch on anything that you'd like to talk about. No, let's do that. And you're, I'm assuming you want rapid fire replies as well, which is not my special. No, the rapid fire questions really just means that I have to stop asking multi-part questions with 17 commas. So your answer can be as long as you'd like. So I will just keep my questions short. And I'm certainly not in any rush. So this, number one is what books have you reread the most yourself

Starting point is 01:53:08 no very always go back to um two books one by um carl jung and and this whole issue of collective unconscious which is to me a big issue because you either are able to touch in and touch and get involved somehow in this collective unconscious or you're doing things which are very much on your own and and not significant in the sense that they're trailblazing etc they're just not connected um to the world as they should be and And another one I keep going back to is very interesting because I come from a Jewish family, even though nobody was religious. There's a cultural and ethnic issue there, but I only found out, actually. I was Jewish maybe 10 years ago, even though I was suspicious of it.

Starting point is 01:54:02 But the one that I read every once in a while, I pick up because it's around the house and because my wife is a bit more religious, is the Bible. But it was a wonderful set of stories, philosophy, et cetera. And I read it much like you would read Shakespeare, you know? And it's extraordinary because it has everything. Shakespeare has all of the human traits. If you look somewhere, you will find it,

Starting point is 01:54:24 either in King Lear or in Hamlet or in Macbeth. It's there. And the Bible is a very interesting book to keep going back to, to get a glimpse of humanity. Do you have any favorite documentaries or movies? Yeah, my favorite documentary is one called Up. Have you seen that? I have. Yes, it's fantastic. And for the people listening to us, it's a guy, Michael Apted, who in 1964 decided to follow about a dozen, actually more, kids from very different backgrounds and from in the UK and some in orphanages and some very well off to try and establish how much people are stuck to their context,

Starting point is 01:55:19 to their social context and so on. It's very interesting because he follows them every seven years, right? So it's 7, 14, 21, 28 and so forth until 56 which was the last one and it's quite an extraordinary way to look at humanity and see can people really escape their social constraints and their initial um lay of life you know and in general his assumption is that they cannot and that into a great sense it bears itself out no tim in the sense that it doesn't look like you can stray that far from the path on average. Yeah, and I think they revisited them, what, every five years or something like that? Seven.

Starting point is 01:55:59 Seven, I'm sorry, that's right, because it was seven up and then it became the seven up series. There are multiples of seven, but it's the same people, which is extraordinary. You've seen someone who's seven, who's 14, who's 21, who's 28, who's now 56 and their dreams and their hopes and what they were actually able to do and how close they in these seven year periods, how close they have stayed to their apparent calling in life before they were born. It's an incredible situation. Yeah. This is the documentary series. It's come up three or four times. I'd never heard of it before interviewing a number of people on the podcast. So that was actually introduced to the series through the podcast as well. It's wonderful. And just on that tone, Tim, to say that, you know, you're in a country that says, boy, anybody can do anything.

Starting point is 01:56:55 Anybody can be anything. Don't let anybody stand in your way. You can be etc. But it's not really true at all. This is, I think, a very interesting take on this documentary and on the American dream. You know, even what's what's happening today in the U.S. is a reaction to this. Where the fuck is my American dream that was promised to me? You know, but the fact is that you're promising classroom of kids and as a valedictorian and speaking at conferences and egging them on at MBAs. The fact is that you cannot. You know, humanity has a very, very long story and a very, very long proof that in general,

Starting point is 01:57:37 your chance of changing walks of life, changing class, changing path from the context which you were started with is a very, very rare situation. And that very, very rare situation makes for wonderful books and speeches and films. But it only makes for this wonderful entertainment because it's so, so rarely true. Now, is that very dismal and disappointing to look and say boy you know now that you've put this in my face now i'm not going to try anything it's not even worth it no it's just to remember that in the passing of time of the station of life that was that was created or available to you in your context there could be and should be a wonderful

Starting point is 01:58:23 life the wonderful life is not in rising all the time until you're at context, there could be and should be a wonderful life. The wonderful life is not in rising all the time until you're at the top. There's nothing that's particularly interesting at the top. It just seems absolutely wonderful when you look at it from the bottom. What would you say, for instance, if you were teaching again, but instead of at the MBA program at MIT, you were teaching a ninth grade class in some economically disadvantaged area. Let's just say it could be the ghetto in Chicago, could be any number of places in the US. What would you teach in that ninth or 10th grade class to help them improve the odds of not remaining in their current cycle? And I have, you know, we obviously you, you talk way too much. So we haven't had time to talk about education, which I'd love to as well. But of course I've taken, let's say, the last 10, 12 years, I've taken all of this effort and risk taking and what I'd learned before and taking it to the world of education.

Starting point is 01:59:32 And but I spent the first the first few years of that teaching six year olds in a public school and heavily disadvantaged kids and so forth. So it was fun to do. What I tried to do most with them was to get them to realize the magic of the accumulated wisdom of humankind and that poking at this magic of what we've been able to do and think and all this time, all the rest will take care of itself. And so if I sit there and say, you can do this, you can find the strength within you. It is possible. You can do anything you want.

Starting point is 02:00:16 You can be anything you want. I don't believe in that. And so I kept showing them things like I would say, I remember one day stepping outside of there and I said, I'm going to teach you the special relativity theory of Einstein. So it's like this. You're here with me in this little village, right? Right. Now you look up and I say, how long would it take you to go to the moon? And so they'd say this and that and rockets and all the way then from moon to the next and on and on into Neptune and rain.

Starting point is 02:00:46 Great. And then to the edge of the universe. And then their mind is going all over the place, of course. And we're trying to think this through together. And I said, if you come to the end of the world, the end of the universe, and there were a little curtain. And now you've traveled for thousands and thousands and thousands of years in your rocket ship and so forth. And now, according to this man, Mr. Einstein, you open this little curtain at the end of the universe. Where would you be? And the answer in following the theory, and people will know this, will tell you, you will be in this little village right here while looking up into the sky. And these crazy, crazy concepts which are true and which are about us,

Starting point is 02:01:29 and to say that we are up here in the mountains, so time here moves a little quicker than it does at beach level, and so that you have exact twins who were born, and one is on the beach, one is on the mountain. By the end of 90 years when they meet again, the one in the mountain will be older, will be slightly older. This kind of stuff is to me what unlocks

Starting point is 02:01:51 the whole possibility for people to think, boy, I can be anything, do anything, et cetera, because they're looking at the magical response of what life looks like, what we've learned all along to this date. And that is the key that they can eventually use to free themselves, you see? I do. If you could have a gigantic billboard anywhere, and actually now I think of billboards, are there no billboards in Sao Paulo? I feel like that's one of a few cities that has perhaps made

Starting point is 02:02:22 billboards illegal, but that's an aside. The metaphorical question is if you could have one gigantic billboard anywhere with anything on it, in other words, just getting a short message out to millions of people, what would you put on that billboard? I'd write now. That's enough, I think. If people pay attention to, to now so many other issues, uh, go away because I think so much of everything we do is taken up by the past and the future. And so little of our success is there that remembering, uh, that you're now in a bus, you're now on a train, you're now going somewhere you don't want.

Starting point is 02:03:01 You're not, this is the stuff that I stuff that I think falls short all of the time. And Sao Paulo does have a lot of restrictions on billboards and it's expensive and it takes authorizations and so forth. So that helps. But Sao Paulo has so many other visual problems. Now we have a new Trump-like mayor who is going around and covering up all of the spray paints with graffiti artists. That's the newest. Well, I think this is a good place to wrap up.

Starting point is 02:03:35 And do you have any, and I'll ask you where people can find more about you, and certainly I'll put that in the show notes as well, but do you have any ask or request for my audience, the people listening any or any last parting words that you'd like to share yeah i'd say that you know again when i think about you know why why would i uh sit with you on a two-hour podcast why would i have a few people that i wanted to talk to and that i'm doing this little podcast episode of my own um it's all to do with and and essentially of course it's all uh is it thoughtful is it insightful for myself and therefore it's always very self-serving and very very um narrow let's say but on the other hand

Starting point is 02:04:20 um my my very generic wish is always that people will be able to take a little something out of it which is insight into something that was already there not that we created in this conversation but that someone takes on a little act of courage in either giving more freedom to people who work with them or for them or their kids or their anything that's around and i think that that's it's terribly gratifying to do just these very small leaps of faith and these very small movements in the direction of what seems like risk and uh and it's never a risk because it's never a metric issue it's just getting past your own uh misgivings about doing something new. And that would be my hope that people take this little leap of fancy or leap of faith and finally decide to make a change on constraints, on restrictions that they either have or that

Starting point is 02:05:18 they need to fight against or they need to remove other people from and find that that's a hell of a lot more liberating than it sounds. Well, Ricardo, I really appreciate you taking the time. This was extremely fun for me. And I've known you only through video and text up to this point. So this was a unique opportunity for me. So number one, thank you for taking the time. And for those people listening, I will put links to everything that was mentioned, books and podcasts and otherwise in the show notes. As per usual, you can find those at tim.blog forward slash podcast or 4hourworkweek.com forward slash podcast. You can say hello and you should to Ricardo at Ricardo Semler and at Let's Lead Wise on Twitter. Facebook is Let's Lead Wise and LinkedIn is Ricardo Semler. And until next time, as always, thank you for listening. Hey guys, this is Tim again. Just a few more things before you take off. Number one, this is Five Bullet Friday. Do you want to get a short email from me? Would you enjoy getting a short

Starting point is 02:06:25 email from me every Friday that provides a little morsel of fun before the weekend? And Five Bullet Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week. That could include favorite new albums that I've discovered. It could include gizmos and gadgets and all sorts of weird shit that I've somehow dug up in the world of the esoteric as I do. It could include favorite articles that I've read and that I've shared with my close friends, for instance. And it's very short. It's just a little tiny bite of goodness before you head off for the weekend. So if you want to receive that, check it out. Just go to fourhourworkweek.com. That's 4hourworkweek.com all spelled out and just drop in your email and you will get the very next one. And if you sign up, I hope you enjoy it.

Starting point is 02:07:15 This episode is brought to you by Wealthfront. Wealthfront is the future of financial advice. They've become incredibly popular among my friends in Silicon Valley and across the country because they provide the same high-end financial advice that the best private wealth managers deliver to the ultra wealthy, but for any account size and at a fraction of the cost. For instance, they monitor your portfolio every day across more than a dozen asset classes to look for opportunities to rebalance or harvest tax losses. Now, would you do the same? Are you doing the same? Probably not. And the power is in the software. Wealthfront now manages more than $4 billion in assets, which is up from around $2.5 billion when they started advertising on this podcast.

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The Tim Ferriss Show - #229: Ricardo Semler -- The Seven-Day Weekend and How to Break the Rules

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The Tim Ferriss Show - #229: Ricardo Semler -- The Seven-Day Weekend and How to Break the Rules

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