The Tim Ferriss Show - #286: The Man Who Taught Me How to Invest

Episode Date: December 16, 2017

Mike Maples, Jr. (@m2jr) is the man who taught me how to invest. He's one of my favorite people and a personal mentor.He is a partner at Floodgate, a venture capital firm that specializes in micro-cap investments in startups. He has been on the Forbes Midas List since 2010 and named one of Fortune magazine's "8 Rising VC Stars." Before becoming a full-time investor, Mike was inolved as a founder and operating executive at back-to-back starup IPOs, including Tivoli Systems (acquired by IBM) and Motive (acquired by Alcatel-Lucent). Some of Mike's investments include Twitter, Twitch.tv. ngmoco, Weebly, Chegg, Bazaar-voice, Spiceworks, Okta, and Demandforce.Enjoy!This podcast is brought to you by ConvertKit. After trying the competition, this is the only email tool that has made email marketing intuitive for my team without sacrificing any of the features and benefits I need to run a profitable business. It's easy-to-use systems, split testing, resending technology, automation, targeted content, high rates of deliverability, integration with more than 70 services -- like WordPress, Shopify, and Sumo -- and excellent customer service are the reason I made it my go-to ESP.Whether you have a thousand subscribers or a million, whether you run a simple blog or a whole company, ConvertKit has a plan that's scaled to fit your budget and requirements. Go to ConvertKit.com/Tim to try it out and get your first month for free! Test the platform and make sure it works for you and your business.This podcast is also brought to you by WordPress, my go-to platform for 24/7-supported, zero downtime blogging, writing online, creating websites — everything! I love it to bits, and the lead developer, Matt Mullenweg, has appeared on this podcast many times.Whether for personal use or business, you’re in good company with WordPress — used by The New Yorker, Jay Z, FiveThirtyEight, TechCrunch, TED, CNN, and Time, just to name a few. A source at Google told me that WordPress offers “the best out-of-the-box SEO imaginable,” which is probably why it runs nearly 30% of the Internet. Go to WordPress.com/Tim to get 15% off your website today! ***If you enjoy the podcast, would you please consider leaving a short review on Apple Podcasts/iTunes? It takes less than 60 seconds, and it really makes a difference in helping to convince hard-to-get guests. I also love reading the reviews!For show notes and past guests, please visit tim.blog/podcast.Sign up for Tim’s email newsletter (“5-Bullet Friday”) at tim.blog/friday.For transcripts of episodes, go to tim.blog/transcripts.Interested in sponsoring the podcast? Please fill out the form at tim.blog/sponsor.Discover Tim’s books: tim.blog/books.Follow Tim:Twitter: twitter.com/tferriss Instagram: instagram.com/timferrissFacebook: facebook.com/timferriss YouTube: youtube.com/timferrissPast guests on The Tim Ferriss Show include Jerry Seinfeld, Hugh Jackman, Dr. Jane Goodall, LeBron James, Kevin Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew McConaughey, Esther Perel, Elizabeth Gilbert, Terry Crews, Sia, Yuval Noah Harari, Malcolm Gladwell, Madeleine Albright, Cheryl Strayed, Jim Collins, Mary Karr, Maria Popova, Sam Harris, Michael Phelps, Bob Iger, Edward Norton, Arnold Schwarzenegger, Neil Strauss, Ken Burns, Maria Sharapova, Marc Andreessen, Neil Gaiman, Neil de Grasse Tyson, Jocko Willink, Daniel Ek, Kelly Slater, Dr. Peter Attia, Seth Godin, Howard Marks, Dr. Brené Brown, Eric Schmidt, Michael Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan Peterson, Vince Vaughn, Brian Koppelman, Ramit Sethi, Dax Shepard, Tony Robbins, Jim Dethmer, Dan Harris, Ray Dalio, Naval Ravikant, Vitalik Buterin, Elizabeth Lesser, Amanda Palmer, Katie Haun, Sir Richard Branson, Chuck Palahniuk, Arianna Huffington, Reid Hoffman, Bill Burr, Whitney Cummings, Rick Rubin, Dr. Vivek Murthy, Darren Aronofsky, and many more.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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and welcome to another episode of The Tim Ferriss Show and my brand new podcast, Tribe of Mentors, because this guest is suitable for both. Mike Maples, he's one of my favorite people, one of my oldest mentors, not in biological age, but he goes back probably 15, 20 years teaching me. And he is the man who effectively taught me how to invest. And the audio you're going to hear was recorded in front of a sold out audience at the Castro Theater in San Francisco. It was a blast. Thank you everyone for coming out. And it takes us a few minutes to warm up and then we get into not only investing but also his life philosophies, parenting. He is such a splendid human being and has a very, very wide set of skills. So I hope you enjoy this conversation with Mike Maples.

Thank you so much for coming, everybody. This is going to be great. And I'll read some suggested introductory remarks first. Thank you all for coming tonight. Welcome to tonight's program with Inform at the Commonwealth Club. And what I'm not going to do is sit here and regurgitate stuff that is already in the book that you just bought because that's very boring. So what I thought I would do instead is invite one of my friends who is in this book to join me on stage and to dig into some of the old stories,

the stuff you guys haven't heard, and to really just banter because he is one of my favorite people. So, who is this favorite person? Kevin Rose is one of my favorite people, but he has a brand new human being to take care of, so he is not here to booze it up with Ferris, I'm very sad to say. Mike Maples Jr. You can find him on Twitter, at M2JR, floodgate.com. Mike Maples Jr. is a partner at

Floodgate, a venture capital firm that specializes in micro-cap investments and startups. He's also the person responsible for introducing me to tech investing in general. And we go way, way back. He has been on the Forbes Midas list since 2010 and named one of Fortune Magazine's eight rising stars. Before becoming a full-time investor, this is very important, Mike was an operator. He was involved as a founder and operating executive at back-to-back startup IPOs, including Tivoli Systems, which was acquired by IBM, Motive, IPO Motive, acquired by Alcatel-Lucent.

Some of Mike's investments include Twitter, Twitch.tv, NG MoCo, Weebly, Chegg, Bizarre Voice, Spiceworks, Okta, Demandforce, and many, many, many others. Please help me. Welcome to the stage, Mike Maples. Yeah. I thought we were just having a little chat at like a bookstore or something. I guess you tend to draw a crowd

i keep forgetting that so yeah so i was trying to put us connecting on a timeline and i think we've had a number of of interactions beginning it had to be back pre-2000 yeah i think and i think that when we first started catching up, it was right before you had done the four-hour work week. Tim wasn't sure what to call this, but just anything goes? Anything goes. I may regret that, but yes. I'm a little bit less over my skis sometimes than Tim is. Well, it depends on the area, but whatever. So, Tim was deciding whether to call the book The Four-Hour Workweek or Drug Dealing for Fun and Profit. And I was like, Tim, why do you want to write a book about being a druggie? You know,

this is just a terrible idea. You know, it's just a terrible influence, just a bad idea. And Tim was like, well, you really want to get people sort of to provoke, to point a departure, right, to get access to the ideas. And so we did this thing, I think we called it ghetto testing, where we said, hey, look, let's not argue. Let's not, in your opinion versus mine, let's just test the two titles and just say, hey, buy the four-hour work week. Hey, buy drug dealing for fun and profit. And neither book exists yet, so people would click on it and they'd get a 404 error. But we could understand what got the better response.

And so now it was no longer your opinion versus mine. It was just like, what do people respond to? So we did this. That's my recollection. Yes. No, we had this testing, but it goes even further back. So you had appeared, I was more of a spectator in a class that I took in college. Oh, when you were high tech entrepreneurship. Back when I had more hair on my head. And Mike came to talk about thunder lizards yes which we'll talk about in a moment and that was part of what piqued my interest in Silicon Valley the Bay Area the excitement certainly of the time 99 who I mean granted that was an exciting time to be running towards the

precipice also but got me out here and then our conversations around the time that the four-hour work week came out involved, to my recollection, many things. But we would sit at, and I might be getting this wrong, but Hobie's. Hobie's, yeah, in Town & Country. Town & Country. Which is unfortunately no longer with us. They have it on at Rastradero. And we used to just eat omelets and talk about marketing and PR, but also about the deals that you were becoming involved with. Yeah.

And the testing, for people who don't know, was very simple. I mean, we had a number of different titles and used Google AdWords, which was, I mean, it was the golden age of Google AdWords. You could just shoot fish in a barrel. It was so inexpensive. And so he took the headlines, the prospective headlines, as the actual ad headlines, and then the prospective subtitles as the ad text, and then had all these unique URLs that, like you said, went nowhere. Because all we really cared about was the click-through rate. What I also did, if we want to talk about businesses going out of business, there are a lot of them to point to, is I went to Palo Alto, University Ave, to the

borders that existed at the time, and to test covers, I had mock-ups that I printed out, and I would wrap a book that was roughly the same size I thought mine would be, put it up during what I perceived to be rush hour at borders, not sure how I figured that out, and I would stand there like a bouncer keeping track of fire code, like click, click, watching the number of people who picked it up like every 15 minutes. So I could try to look at the visual appeal of different covers. Now it's a lot easier. You don't have to quite do that. Skill is wine.

Oh, yeah. Yeah. I should. Maybe I need some booze up here. We'll get to that. But what I wanted to do. So can I just interject one other thing about these books? You should interject with many other things. So I went to Kepler's bookstore and Printer's Inc., I guess, right?

Because they're like well-known as Bellwether bookstores. And I was like, I went and bought $1,000 worth of his book for our work week at both bookstores. And we didn't really know at the time, but Bellwether bookstores kind of trigger supply chains. And so it's a little bit like before the App Store happened, right? Because the iPhone wasn't out yet. And so like I'd go into these bookstores and I'd be like, how many copies do you have in the bookstore? I want to buy them all because this book's going to be hot and I'm doing this offsite and I need every copy you've got because I doubt you have enough copies for all the people in this organization I've run. And so, which was just me at the time.

But, like, it turned out it was true, right? Like, it becomes, oh, wow, Kepler's Bookstore and Printers, Inc., they're selling out like crazy this four-hour work week. And then it's just a hot heat seeker on the New York Times. And then more people read it. It becomes up on the – obviously, it was a hot heat seeker on the new york times and then more people read it it becomes up on the it obviously it was a good book that helped but uh but it was like just looking back on it how how crazy that was because i just like maybe you thought it was going to be this huge uh breakout bestseller but i remember i was just like hey i'll read these drafts and like help however i can and like i hope it works out, but whatever, right?

It was, I think you offered one of the very first blurbs in the first edition of 4-Hour Workweek after you read additional copies. I go, okay. Yeah, you're like, I need somebody to do a quote. She's like, okay, I'll do one. But when we're talking about this alchemy, for instance, Kepler's, let's just say,

unbeknownst to me, there's certain stores that trigger certain other things, and there's this, I'm not going to say black magic, but there's these tipping points. So now people look at what you've accomplished and the investments you've made and the Midas list and everything, and it's, oh my God, Mike Maples,

sort of in quotation marks. But my understanding is that you had a tough time getting hired as a venture capitalist when you first got here. Can you talk a little bit about that? You know, it's like in Coach Bill Campbell. How many people have heard of Coach Bill Campbell before? Fair number. And for those of you who haven't, I'll just give the quick version. Bill was an early executive at Apple, and then he ran a company called Claris, and then Go, which flamed

out, and then he was CEO of Intuit, but probably more significantly became kind of the most famous coach in Silicon Valley. He'd been a football coach before he was a business guy. And so he was on the board of Google and Apple. And actually, I got a chance to work with him in Twitter and in Demand Force, which were two companies he got involved with that we invested in. And Bill's favorite song was You Can't Always Get What You Want by the Rolling Stones. And it always struck me that, and we won't do too much of the book, but that sometimes the stuff you're not getting right now that you think you want wasn't the thing you really wanted. And so I couldn't get any venture firms to hire me coming

to Silicon Valley. I was just this random guy who'd moved to Silicon Valley from Austin, Texas, never done an angel investment in my life. And, you know, Kevin Rose, one of your favorite guys, one of my favorites, too. The first two entrepreneurs I ever backed were Evan Williams, who ended up doing Twitter, and then Kevin Rose. And by the time I met Kevin, no venture firm would hire me. Nobody thought I knew consumer Internet because I was an enterprise software guy. Nobody thought I knew how to invest. And I was like, Kevin, look, I just, I really need you to take my money on this thing. And I, you know,

That's what we call a high leverage opener. I'm afraid that I'm going to have to go on hunger strike in your apartment if you don't take my money in this dig deal. And, you know, he ended up letting me, you know, Kevin and then Jay Adelson let me invest in Digg. And, you know, Digg had a kind of a circuitous path. But, you know, I look back on it. That was the sort of the booster rocket. Yeah. And, you know, it's funny people talk about who backed them or whatever. You know, I think that it was Kevin's generosity that sort of got me.

I'm sorry. I get caught up in this stuff. Sorry about that. Yeah. So you and I share a similar affection for the same guy. Yeah. Kevin's a sweetheart. I'm a guy.

Also one goofy motherfucker, as you guys know. Well, you know more about that stuff. I know more about, well, we won't get into that. But how did you connect with Kevin? I mean, how did that meeting end up happening? Well, it was Ron Conway was really generous. So I heard about this guy named Ron Conway. I reached out to him who, I mean, probably still, but was thought of as the godfather.

The most famous angel and investor in the world, right? And so we go to the Oasis. Was it the Oasis? I can't remember. Maybe the Goose. And I say, hey, Ron. What are those, massage parlors? No, no.

A restaurant in Palo, in Menlo Park. No, I think it was the Goose. And so Ron's like, hey, great to meet you. And I said, Ron, I just want one chance, just one chance to work with you on one thing. Just give me one chance. That's all I need. And he's like, okay, whatever. You get your chance.

What does that mean? And I said, well, there's this company that I'm interested in called Dig. that's all I need and he's like okay whatever you get your chance what what does that mean and I said well there's this company that I'm interested in called Dig and I had come up with my own independent conviction about but there's no way like how am I gonna ever get in touch with Kevin Rose right I'm just some random dude and so um so Ron's like he looks at his spreadsheet and he's like oh yeah I'm meeting with him next week you want to come with me to see Dig and he's like, oh yeah, I'm meeting with him next week. You want to come with me to see Digg? And I'm like, sure, let's do it. And I just knew their, you know, I knew what they were trying to do. You know, I cared a lot about their mission and, you know, I wasn't talking about things like cohort analysis or, you know, like what was the retention and the decay factor of

the users. It was more like, you guys are transforming journalism and this is like super important. And it's like the wisdom of the crowds applied to stories and and so like it was just I think that part of why Kevin gave me a shot and Jay was that they just knew I just cared a lot about what they're doing for my own reasons well I think that from from the opposite side of the Hobie's brunch table, when I heard you talking about startups, you were always genuinely personally vested and excited about the products. And you spent a lot of time not just looking at the deal structure and the this and the that and the particulars

of whatever the projections might be, but the product itself. And knowing Kevin as well as I do now, like I would see that as a key factor. I mean, also many other things to him, then gravitating to you in that way. And I, when I think back to our lunches, we would talk about all these various things and I would pepper Mike with all these questions like, wait, what's, what's a clawback? What's a pro rat? I don't know what that is. What's this? What's that? And eventually... Like any of it matters. Yeah. It's all blindfolded monkeys throwing darts. But I really wanted to know how the best blindfolded monkeys threw the darts. So we're digging into it. And I remember at the time, I was pretty, this was before the four-hour work week popped.

Because keep in mind that that book had initial print run of between 10,000 and 12,000 copies. I mean, not even national distribution. No one expected it to do really much of anything. And I was eager to take a little vacation. And I thought this two-year vacation called an MBA might be interesting. So I was looking at Stanford Business School, and I made all these visits, and there were some great classes. One was taught by Pete Wendell, Venture Capital, Inside the Trenches, really great class by an operator. But then there's all this theoretical

stuff that I just couldn't quite stomach. And after, I don't know, four or five of these lunches, I said, wait a second, maybe I could put together a real-world MBA and make this, you know, Tim Ferriss fund in principle and spend 120 grand over two years and learn all these things and develop all these relationships and view the 120k as sunk costs. Like, that's gone. It's tuition. But I don't know if you recall, but right off the bat, what do I do? So I asked Mike if he'd be willing to let me piggyback on a couple of deals to co-invest and be really sort of cheap labor, to try to over-deliver to these companies. And if you want to mention it, you can, but I'm not going to bring up the name of the company. But there was this company that you were very measured in assessing,

and he told me about it, and it was super popular, I think, in Taiwan or somewhere. And I got so over-enthused. I was like, I want to put in 50K. Now, keep in mind, that's 50K of 60 for my first year. And in the first deal, I wanted to do 50K. And I remember what you said to me at the time in your very Mike way. You said, well, Tim, don't you think that might be a little aggressive? And I was like, no, man, this is going to be the next Google. And then I just thought you're like, okay. And then, yeah, that didn't, that didn't, that forced me though,

if you want to talk about like life-saving you from what you want, losing, I mean, it wasn't immediately loss. That's part of the tricky, one tricky aspect of the startup stuff. It's like you might not have a clean loss for many, many, many years. You just might have like. You solve that quickly. Yeah, so you might have a walking dead scenario where it's just like I am legend and you're like, oh, now what do I do? Kind of like certain areas in SF past six o'clock. Anyway, so I need more alcohol so I can excuse all the things that I'm going to say. Where was I? Oh, yes. So the point was I had to then figure

out something called advising because I was already out of money in year one. And that led to, in that period of time, a lot of the absolute best connections that I made, including just to highlight something that comes up over and over again in Tribe of Mentors, that comes up over and over again in conversations with you. There are these catastrophes or business failures that really end up, in no uncertain terms, sowing the seeds of really huge later success. Like you mentioned the cutest path of dig, but who cares? Because you befriended and became an ally of Kevin Rose who knows everyone just about in tech and is very generous with making introductions. And if he cares about you and believes in you, he'll make those introductions. Similarly, I ended up at one point introduced to

Garrett Camp and I advised StumbleUpon. StumbleUpon didn't work out, but we had a chance to work together extensively. And then what did Garrett Camp go on to do? He started this thing that people laughed at called UberCab LLC, which then got renamed and became Uber, right? So that, at least on paper, has worked out very well. That's more important than clawbacks. Yeah, more important than clawbacks. So first and foremost, thank you for shepherding me, even as a... You were a quick study. As much of a blunt instrument as I was into all that, but could you tell us about some of the responses from the venture capitalists, these rejections? Like, what happened?

Can you tell us about a meeting? You don't have to name names, but how did these meetings go? I don't blame them. I mean, I'd never made an angel investment before. I was from Austin, Texas. I had no network here. I just show up saying, hey, I think I want to be a VC. And, you know, that's not a very straightforward path. And so, you know, I would call up Sequoia

Capital and say, hey, I'd like to interview for a job at Sequoia Capital. And that's just not how it really works. And so, you know, I have no animus towards anybody. Like, they probably, you know, they probably made the right decision at the time for what their parameters were. So you have a characteristic, it seems, at least in the way you express yourself, that I don't see in a lot of people. And that is you seem to hold very, very few grudges. I don't think I've ever heard you express ill will towards anyone, especially in this day and age. That's a rarity. Is that something that you've always had by birth, or is that something you developed? Why is that? It's a waste of time. But how did you learn that how did you embody this because if you uh i i don't know i kind of i kind of look at it like life is short you don't have much time every

day is a gift and the the part of the secret of happiness is to figure out what your gift is and offer it to the world and to like not worry about all the noise and the hype around you that says what you should do you know think for yourself and don't waste any energy on the stuff that doesn't matter to you and holding a grudge is a symptom of not knowing how you want to spend the gift of today and so uh you know it's hard to it's hard to hold a grudge if If you're so focused on, I'm excited about these things. I can do a good job at this. I can't wait to do this stuff. How do you have time for grudges?

It just doesn't make sense, right? It doesn't make sense. Yeah. I mean, there's a few people, you know. Just to be honest, but, you know. So you land in Silicon Valley. Sequoia is like... And it wasn't just Sequoia.

No, no, no. I'm not trying to shave their nuts for any reason. I'm just saying... I'm singling them out because I was taking a fling at an impossible dream. And Sequoia is like, hey, Harvard, I want early acceptance to start, and I want to start in the middle of the year, even though I don't have the prereqs. I mean, in a sense, right?

And I have no resume, no grades. That's a hard pitch. Yeah. And they're really good at what they do. Yeah, it turns out it was, yeah. But you land here. You don't get the jobs. You are given this gift of an introduction through Ron

with really smart wordsmithing. I hope you guys are listening. Like the pitch is really, really important and nuanced. You end up meeting Kevin Rose. So you invest in Evan. Now at the time, was it Twitter or was it? It was Odeo. It was Odeo. So walk us through how that unfolded. Well, I thought, you know, I was in Austin, and what I would do is, you know, my kids were in grade school, and so we weren't sure whether to move yet, so I would come out every Sunday night and stay till Thursday. And it's funny, because when you're on that pattern on the plane, some of the same people are on the plane, like system integrator consultants, people from Deloitte and stuff, and I'd be like, oh, it's the brothers. Hey, buds, what's going on?

So I'd be on these plane flights with all these people, and we would go from Monday to Thursday. This is always dangerous when I get the bottle. Liquid courage. Yeah. And so I thought, okay, I'm going to take nine months and figure out if I can find something exciting in Silicon Valley. So I just basically immigrated here. And the reason that I did that was that I thought the web was shifting from an Internet of connected pages to a platform that would connect people. And it just felt like it was kind of time to get the party started again on the Internet.

You know, the bubble had burst. The meltdown had happened. And I saw things happen. I saw Tim O'Reilly talk about Web 2.0. I saw stuff about podcasting and broadcasting and stuff like that. And I was like, it's just clear to me, this is just obvious that something major new is happening. And I just have to go to California.

I have to go right now, not wait another day. And so I do that. And Ev had the best podcasting company. And so Jeff Huber at Google introduced me to him. He said we just ran him off because he doesn't want to work in a big company, but he's going to do something interesting podcasting. And somehow Evan took my money, his first time ever. So now he took your money, but walk us through. By the way, that's a pretty good start in investing.

That's a fantastic start. Kevin Williams, then Kevin Rose. It's not bad. You know, you could argue that the secret to venture is to get lucky in your first five years, which I think is a pretty strong argument. I think it's a huge argument. But you've since then been quite consistent.

Now, correct me if I'm wrong, but with Odeo, was there a point when a very good guy decided to offer investors the ability to get their money back? Yeah, so what happened was, so I invest in Odeo, I'm like, okay, great, best podcasting company, first angel investment I've ever made, just wired the money in.

A week later, Apple decides they're gonna give away podcasting company, first angel investment I've ever made, just wired the money in. A week later, Apple decides they're going to give away podcasting on iTunes. And at the time, it's hard to remember now, but 85% of all playback devices were iPods. It's like, what are we going to be, the one you pay for on the Zoom, right? Like, it's like, what business? Like, you don't have a business, right? There's still people trying that. So Ev, to his credit, tried for about a year to figure out another business, and we couldn't. And we'd go brainstorm, and we'd look at each other, and we're like, yeah, this is pretty tough. And so one day, some of the investors were getting pretty disenchanted because they're like, you're just

wasting our money. You know, there's no business here. And so Ev decides to give it back to everybody. And so I'm like, look, Ev, you know, you don't owe me anything. Venture capital is in the word adventure, has venture in it. And you win some, you lose some, right? He goes, well, this is the kind of the deal I've struck with some of the bigger investors, and it would help me a lot if you just went along with it. And so I said, well, as long as you let me invest in your next thing. And he goes, well, part of this deal is I get to keep this IP that I've been working on on the side,

and we're trying to decide whether to call it Voicemail 2.0 or TWTTR. And Jack is working on it along with Noah and we're figuring this out and I'm like what is I'm like come on voicemail 2.0 and like why don't you put the vowels back in because like Twitter without the vowel sounds like flicker and that's derivative and whatever so I don't think I had anything to do with that by the way but like I was just my gut reaction so he goes uh you say what you're doing. And I'm like, well, then what? Okay. Yeah. Then what happens? And he goes at 140 characters or less, because we wanted to do cell phones and stuff. And I'm like, this is before the iPhone. Right. So, so I'm like, okay. And then what happens? He's like, he's like, that's it. That's all it does.

And I say, what's the roadmap? There is no roadmap. And what's the revenue model? There is no revenue model. And so I say, Ev, like, why do you even think this is a product, much less a business, a company? And he goes, oh, I have no idea if it is. But he goes, here's the way I'm thinking about it. Like Blogger, a million people used Blogger software. And this is Ev's first company was Blogger. He was one of the pioneers of blogging. He goes, podcasting's

kind of hard. You had to use Audio Studio. You had to record stuff. You had to put it on an RSS feed. He's like, it just took more effort. He's like, what happens if you had microblogs? And rather than a million people did microblogs, 10 million people did microblogs. He's like, I think if 10 million people did microblogs, the burden of proof will be on the people who are negative. And so I was like, sounds good to me. I'd like to invest in Twitter, voicemail 2.0, whatever you call this thing. And he says, well, it's not a company. There is no investment. And then a few months later, maybe six months later, Twitter blows up at South By, which is such a delicious irony, right?

Because it's from Austin, right? The town I just come from. And a couple weeks later, Ev says, hey, and I thought by then it's like a hot air balloon drifting away. There's no way I'm going to get to invest. Ev's going to have forgotten, and everybody's going to be chasing him. And he calls me up one day and says, hey, did you mean it when you said you wanted to invest in Twitter? And I said, yeah. And he goes, well, we're about to take our first money,

and if you want to do that, now is the time. Wow. Yeah. Ev's a good guy. He is. So, like, I remember that because both of those guys were good to me, you know? Like, I was just some random Joe Schmo guy. And both of them, you know, gave me a chance to be involved in their companies and yeah good guys and the I try to remember that every time an entrepreneur pitches us I try to remember the grace those guys showed me

and our stories intertwine in so many ways because that I met him right around the time we were hanging out on this book. And 2007, South by Southwest, I begged and pleaded with Hugh Forrest, who was running South by Interactive, or at least the programming side. Still is. Still is.

And now a neighbor of mine, effectively. And I begged and pleaded. I said, if you have any last-minute... I know you don't have any spots because I've already been rejected multiple times but if you have a cancellation if there's anything that moves and there's a spot please let me know, I'd love the opportunity and lo and behold

there was this chance, 2007 which at the time, to put it in perspective, Twitter all of the tweets in the world were being displayed on these big screen TVs that were positioned around the conference hall. Just one feed, moving kind of slowly, every Twitter user. I was briefly in the top 100. I was very proud of that until Ashton Kutcher came along and just like kicked my head right off. I never

cracked the top 100. Well, you only needed like 500 at one point and then it was gone. I should have been Mike at Twitter, but I was like, oh, come on. it was gone but i should have been mike at twitter but i was like oh come on like how there's so many people who have that story they're like oh i just chose like hawaii steak 5.0 as my username because who it's not going to become anything then again i'm stuck with that for the rest of my life but yeah uh i ended up getting an email from you and he's like hey if you meant it like we have an overflow room that had a cancellation. A sponsor isn't going to do their shtick. So if you want it, you have 45 minutes.

So you blew up at South by 2. I did, and what was really funny about it is I was so nervous. I was so nervous. It was my first presentation really about the book, and it was before the book came out. The book came out in April 2007. This was in March, and I was before the book came out. The book came out in April 2007. This was in March, and I was staying at a friend's place because I couldn't, I wasn't going to pay for

the hotels. They were all sold out. Also, if you get a room, it's like a thousand dollars a night during South By. So I stayed in my friend's house, and I would go into his garage, and I rehearsed my talk in front of his three chihuahuas. And I'll explain why. A, my friend had other things to do, and he had a real job, so he wasn't going to be there. But the chihuahuas, you had to be at least like 10% Tony Robbins to keep them engaged. And these dogs are... Is that your secret?

No. Is that your secret? If I could be 10% Tony Robbins, I'm doing pretty well. If you were in Tribe of Mentors, that would be your talk? I'd say here's my trick, my secret trick for networking is first practice with dogs because they don't care about the content so much. But if you're monotone, they just kind of go, and then turn around and walk away. So I was in the garage, and I'm kind of doing this hand-wavy stuff to keep them engaged.

I totally believe this. Oh, no, it happened. I remember the garage. And then I go to the event and I had all these fancy slides and everything prepared. And what happens? Blue screen of death. My computer dies. And so I'm like,

okay, well, I guess I'm just going to have to do this without any of my problems. And I did it, but I'd rehearsed so much that I had it in my head. And yeah, so Hugh, also one of those people. It's like, To this day, if Hugh ever asks me, hey, could you help us with XYZ South by? It's like, of course.

Of course I will. It's just that one opportunity. I also want to emphasize one thing. People say, well, the luck was there with Twitter at the same time. I was absolutely lucky, but it's like every year there is something to draft on. Every month, there's something like that that something to draft on. Like every month there's

something like that that you can draft on. You just have to look for it. But you're going to. But the other, well, the other thing is it's kind of, I guess we talked about grudges earlier. To me, like the opposite of having a grudge is like to enjoy seeing somebody do well, right? And like when I was a founder, you're just trying to do real company stuff and make the company happen, and you're like, okay, we're going to go on this ride, and hopefully it works out. But one of the fun things about being an investor is you get to see people do well. You know, you get to see, you know, like Logan and John from Lyft ate beans until they raised their seed round. And when we had our first board meeting, Ann looks at the financials and says,

you guys aren't paying yourselves minimum wage. And that's illegal in California. Like, we have to fix that. And so, like, and now people talk about how much money Lyft has and how Carl Icahn's invested in Google Capital. But, like, I remember them when they were eating beans, right? And it's just fun to see them do that well.

It's fun to see you do this well, right? I mean, it's like we had no reason to think the four-hour work week was going to be that big a deal. I mean, you hope it will. We had a lot of reasons to believe it wouldn't be a big deal. But, I mean, it's just like every time I see, you know, I'll get a call from somebody like a reporter that says, hey, would you do a quote for this article about Tim in some major publication? I'm like, wow, he's just killing it. That's awesome.

Right? And it's just fun to see. It's a lot more fun to spend your energy on deriving joy from that and seeing your friends do well, especially friends who are like worthy of doing well and won't be changed by it. Like that's a lot more fun than remembering who wasn't nice along the way, you know. Yeah, it's a drag. I've been working on the grudge piece. I don't have many, but it's good to see you. Yeah, I mean like the Arab Spring or like when I would, I'd pick up Sloan on a play date, you know, my daughter Sloan and the parents of the play date would say, is it true you invested in Twitter? I saw them on Oprah. And then the Arab Spring happened.

And I was like, wow, this company is kind of working. Like, we got a chance to do well on this one. So you mentioned your daughter. I want to bring up something that I've thought a lot about since you mentioned it to me. And as context for folks, what I've really tried to do in the last at least five years is to look at the lives of people I look up to in a holistic way before modeling them. So what I mean by that is it's tempting to look at, say, the business success of person X and then replicate everything they do. But all you may see is one tiny piece of the puzzle,

and then in actuality they walk around in shambles in every other capacity. So I've tried with the interviews and the books and try with mentors to really look at things holistically. And I remember asking, and I ask, even though I don't have kids, I ask parenting advice of friends a lot because I'm curious to see how they look at it. And at one point I asked you, we were on a hike and I asked you what advice you would give to a new parent or someone thinking about becoming a parent. And please correct me if I'm getting this wrong, but... I bet your versions could be better.

But to my recollection, there were two main points that you made, and there could be more, but you said, number one, really teach your kids and train them to be optimists because without that, you're lost, and with that, you can at least look for or see solutions and silver lining and so forth. And then the second part was remember that your kids owe you nothing. Like they didn't ask to be born. You chose. You do remember. Wow.

I do remember. It was meaningful to me. I really made an imprint. And your job is to give them love. It is not their job to give you love. That's right. I chose to have them. They didn't choose to have me. Right. They owe me nothing. And like, I find it helpful to think about that. But like, the hope part, I think, is important for them. Like, the way I look at it is, unfortunately, unless we solve some breakthrough problem, we're all going to die. So, you could choose to be defeatist about that, or you can choose to say the fact that we get to live at all is just this huge gift. And so, like, I think that one of the things that you can do for your kids is you can help them feel optimistic and happy about the

fact that they have the gift to be alive. And that don't be defeatist about this world. You had the gift of today, and as long as you have the gift of today, like, you're on the path to the light, right? And if you can give your kids the gift of being optimistic and hopeful about the future and grateful that they have the time they're going to have, like, I think that that's helpful for them. Because, like, kids get, they get judged, and, you know, all of us are unkind to ourselves in our own mind, and we're judged by people all the time.

And it's easy to just forget that today's a gift, be grateful for that gift, be optimistic that tomorrow's going to be another day where you have another gift. So when your kids or, say, one of your entrepreneurs, I mean, startups are a full contact sport, right? I mean, people take their lumps in major ways, and bad things happen all the time. Whether it's with your kids or some of the founders you've worked with, when they're going through a really rough time, what do you say to them? And you could give a specific example or just a general principle, but I'd be curious to hear how you'd think about that.

Well, so like these founders that we've worked, some of them are just extraordinary, right? And so I'm reluctant to say we had much of an impact. I think the thing that sometimes I've done that I've been proud of is like when they're in the depths of despair, you know, like entrepreneurship's like this, where there's no even path. And there are times where you just, like, everything is against you. And you're just like, how did I get myself into this? And this is so terrible.

And I think I've been better than most at those times at kind of saying, you've got this. How do you, how, and sometimes, sometimes they need to hear that. Is it just the words or how do you deliver it? sometimes they need to hear that is it just the words or how do you deliver it like what makes no I tell I tell him look look you know Twitter we couldn't keep the servers running we couldn't decide who the CEO was twitch it was Justin TV we didn't even know what twitch was that story Chegg was Craigslist for colleges, and then Facebook decided to compete with us, so we pivoted to textbook rentals, and we only had 30 days left of cash. And like NG MoCo, we had 45 days of cash, and we pivoted from app downloads to free-to-play. And Lyft started out

as Zimride, and when we launched Lyft, we weren't even sure it was legal. So I'm like, guys, like guys, I've seen way crazier than this. You got this. And sometimes a founder needs to know, look, entrepreneurship, like I like to say, I like to invest in people I would enjoy getting in trouble with because it happens every time. And like when you're in trouble with these people, what's it going to feel like? Is it going to feel like, okay, it's us against the world. Yeah. Or is it going to feel like, oh, how did I get myself involved with these people? And so like, I like people where I'm like, we're in the foxhole together, screw the rest of the world and what they think we're right. They're wrong. Let's rock and roll.

Right. And so, um, so that's's kind of, I think that we've been, like I like to say, when I was an entrepreneur, one of the things I learned is my early customers, they didn't just buy what I was selling, they bought because they believed what I believed. We were in on a secret together. And like when I work with founders, I like to say I'm in on a secret with them. I believe their secret. And like we think the rest of the world is just wrong. We think we're right and we're going to prove it. And so when stuff goes wrong, we're like, eh, it's just a setback, speed bump, whatever.

But like in the end, it's like we still believe in our insight. We're right. Let's prove it. Let's prove it. Let's prove it. What about for yourself? If you can think of, you know, in the last decades,

could be anything, but when you, could you give us an example of maybe a tough time that you went through and how you found your way out of it or what helped you find your way out of it? Could be any facet of life. Gosh, there's a fair number.

You know, Liz and I broke up. You know, we'd been married for 17 years, and things didn't work out, and that just felt like I'd really failed as a person, and I was about to fail as a dad. And, you know, like what else was there if I failed at those things? Then what could I even think I was successful at? So that was a tough time. But, you know, fortunately, kiddos turned out okay. And, you know, I tried the hardest I could to navigate that time the best I could.

And, you know, kids turned out great. And Liz and I get along just fine. And, you know, you win some, you lose some. But at that point in time, it just felt like everything I had done in this life was screwed up. And I just totally blown it. How did you not just succumb to the depths of despair and stay there? Yeah. And someday, you know, we need to have some more wine to talk about this because I know you've said that you've struggled, right, at times with feeling depressed. And I'm like the worst person to talk to depressed people because I just don't understand the concept. And it's like I'm like the worst person to talk to depressed people because I just don't understand the concept

like like and it's like I'm not judging right but like I'm I'm just like today's a gift yeah and like I have to like make the most I can out of it and if it doesn't work out make the most out of tomorrow and and by the way like I don't look at that, I don't think that my way of thinking is better than your way of thinking. It's sort of like you're leaner than I am, you could probably run faster, jump higher. I don't sit there and say, give me your legs. I just realize that we're all different, and I realize that I've had a few blessings in life, and one of them is to be grateful for every day. And like for that to be the high order bit, no matter what's happening, I'm like,

you got to have today. So did that, was that just a life wrap that you had throughout that entire period that each morning you'd remind yourself of? Or how did it manifest on a daily basis? It's just ever present. It's just obvious to me. It's like breathing oxygen. Man, I need to borrow your code. All right. But I don't say that as like, listen to me and my advice. I'm so smart. It's just I was lucky enough to be configured and wired that way. So I want to make a suggestion to everyone in the audience. And this is based on observing Mike over and over again. When someone says to you, well, you can explain it to me. I'm just, I'm not a fast thinker. I'm from again. When someone says to you, well, you can explain it to me. I'm just,

I'm not a fast thinker. I'm from Texas. When someone pulls that, you should really be careful. And I actually borrowed that from you. And I was like, I think I can use this because most people think people from Long Island are idiots. Great. So I'll be like, you know, explain it to me again, because I'm not clear. My brain doesn't move that fast. I'm from Long Island, and everyone's like, what? So thank you for allowing me to do that. I'm glad I could help you act simple. I'm glad. So I wanted to bring up, and this is actually something we have not spoken about publicly or privately before, but Commander John Boyd.

Yeah. Can you explain who Commander John Boyd is and why you're a fan? Yeah, so Commander John Boyd was a flight instructor for the Air Force. And there was this expression that in a simulated dogfight, he could beat any pilot in like 30 seconds or some outrageously quick amount of time. And people were like, well, how does he do that? And he taught this form of combat, which was about moving very quickly. And so if you place yourself in the time I was reading about John Boyd, it was also when I was working with Eric Ries and Steve Blank. And so Eric Ries was a consultant at Floodgate before he wrote The Lean Startup. He's famous just like,

I have this magnetism for famous future-to-be authors, I guess. So we were talking and we're like, something really important is happening here. Offshore labor, search engine marketing, open source software, broadband penetration, global markets. And it seems like you can get a product to market for less money. You can do it faster. And Steve Blank started to talk about this guy named John Boyd. And so John Boyd is this flight instructor in the Air Force, and he could beat anybody in a dogfight super fast.

And Boyd's fundamental insight was that sometimes you can win a battle purely by being faster. So like let's say you're in a Russian MiG and I'm in an F-16 and I make the wrong move, but you haven't moved yet. And then I make the right move before you've moved yet. Just the mere fact that I was able to make a move in course correct before you made your counter move means two things. I can get in the right position relative to you, but more importantly, it's very disorienting to you because you don't know where I am. I was here, now I'm there. And so the philosophy of John Boyd that was inspiring to me back in 2005, and one of the reasons I started Floodgate was, I was like, you can do this as an entrepreneur and an investor. And so the F-16 fighter jet was designed

to John Boyd's spec. An F-16 doesn't fly faster than a Russian MiG, but it changes directions faster. And so the F-16 fighter was a system. It wasn't just the plane, which could change direction faster. It was the mind of the pilot. And the mind of an agile pilot with an agile plane will beat a Russian MiG all day long. And so I was like, that's what's going to happen with startups. And that's why 500,000 is the new 5 million. And that's why we need to go fund these agile entrepreneurs because they're going to be able to force multiply. And the big competitors who've raised a bunch of money and are going slower and doing waterfall development,

they're going to be disoriented by how fast these companies move. And so what I really learned from Boyd was kind of this idea that if you are a speed-based competitor, you can be wrong but still be right quicker, which makes you right. Right, which translates very directly to Blank and Eric Ries. That's right. Minimum viable product and iterating. You could be totally off base in the beginning, which a lot of your biggest hits have been. Right.

93% of our exit profits have come from pivots. And so, you know, you look at that and you say, gosh, when we invest, should we even care what the business is? I mean, it's a legitimate question. Like cruise automation, right? That's one of our recent wins. You know, Kyle had started Twitch. We made a bunch of money on Twitch and he starts this company called Cruise. It's like a roof rack that does autopilot self-driving. I'm like, Kyle, that's a bad idea because you're going to only have 20 customers in the world. There's only 20 car companies that matter and they have concentrated

buying power and they can design you out unless you're like 10 times better and there's gonna be competition blah blah blah so six months later he's like okay you're right the roof rack idea was dumb I've got this new idea I'm like what's your new idea he's like I'm gonna make Nissan Leaf self-driving and I'm like then what are you gonna do he's like well you know there's a lot of ways you can monetize that you can do a fleet of cars you can sell the cars people you do so I'm like, okay, let me get this straight, Kyle. Now you're just going to compete against everybody. You're going to compete against Uber and Lyft and Tesla and GM and everybody, Bosch. He's like, yeah, but you know, I'm passionate about this. I've been doing this since MIT is my research project. And I just, I just think this is the way to go. And I sat there and I thought about it. I

was like, you know, this guy made me 84 times of my money last time I wrote him a check. I think I'm just going to write him a check. And so I go to the partner meeting at Floodgate and thank God we don't have a voting system. And I say, you know, I think I've decided I'm going to do this Cruz deal. And everybody reads me the Riot Act. And they're like, Mike, come on. Like, I understand that a business model can be vague, but like you cannot even articulate a path where this is a business. And neither can Kyle. And I was like, no, but you don't understand. And he's an awesome founder. He's got incredible insights. He's very passionate, blah, blah, blah. So like everybody just is like, talk to the hand. This is stupid, whatever. So we had two new venture partners who became partners, Ryan and Arjun. And

six months later, they get bought by GM for more than a billion dollars. And Ryan and Arjun go, boy, it's really a shame we talked you out of this cruise deal. And I said, oh, we funded cruise. So I was like, of course we funded it. I secretly have super voting rights on every deal. No, at Floodgate, there's no voting system. It's just somebody has to pound the table. And so if somebody pounds the table and says, I will take ownership of this

and I am responsible for the outcome of our returns, the deal happens. But if everybody around the table is an A- and says, I think this is a good deal for you to do, Tim, or you to do, Ann, or you to do, Ryan, or you to do, Arjun, but nobody says, I will pound the table, I'm irrationally in love with this, doesn't happen. So like we, you know, we kind of think that in the super early stage, kind of love conquers all. And it's like, you know, when you're going through all these times, you're going to get in all this trouble. It's your love for the idea and the founder that will cause you to like overcome whatever you face. And you have to have enough authentic love and passion for the idea and the founders that you're willing to pound the table

and say, I will defend this. I will defend 140 characters or less, even though people say it's stupid in 2007, right? So you just need one person who is, in some cases, irrationally exuberant and willing to defend the idea for a go signal. For sure. And then, so this is really fascinating to me. Yeah, we're not exactly a private equity shop. No, but it strikes me that some of the best investors I know have a similar or close cousin approach to that. Like if they have somebody who's willing to just put it all on the line, who's already been vetted because they were hired as a partner yeah like okay kid like it's on you then but if they're really willing to go yeah go to go

to fight for it and and by the way like if you're a partner floodgate yeah you pound the table but guess what we keep track of the deals you did and if you like lose tens of millions of dollars with no returns it's nothing personal but like you just don't seem to be cut out for this. You're not allowed to pound our table anymore. Right. So like when I pound the table for a deal, I know just as much as any other partner that I am taking ownership of pounding the table. And we're going to all help each other and we're not going to say, yeah, I told you so. But it's like if I pound the table, I'm saying I care enough about this idea that I'm willing to have some of my track record and credibility be tied to this. How do you differentiate?

If you look at, for instance, 93% of the returns coming from companies that pivoted. Yeah. When you are observing a founder or trying to help, and just by way of giving the most convoluted question possible, the question I get a lot is, how do I know when to persist with my idea? How do I know when to quit? Or how do I know when to pivot? That's a hard question to answer.

But when I spoke with Mark Andreessen a while back for the podcast, he said, you know, sometimes people pivot so often, it's like every time I see them, I'm paraphrasing here, it's like watching a rabbit go down a maze. It's like every two days it's a different company. Yeah, it's like they think it's a mulligan, not a pivot. Right. So how do you help guide or even assess a good pivot versus someone who's merely unfocused. Yeah, so, and, you know, it could be that I've just been, had a string of crazy beginner's luck, and so that is a very real potential factor.

Yeah. But the way I see it is that you are right when not because people agree with you, you are right or wrong based on whether your first principles thinking is right or wrong. And so if I see a company where it's not working, but I still believe in the first principles of the idea, I say, this is great. We still believe in the first principles and we know more than we knew a year ago. That's a fundamental advantage. Like, why would we not want to double down on that? And so, whereas what happens too often is you say, this doesn't work, it doesn't have traction, we're not going to be able to raise money,

you know, forget about it. And the problem with that is that if you live with the results of other people's thinking, it's like if somebody really smart, like if I, you know, I guess if Reid Hoffman says to me, this is a bad network effects idea because it doesn't conform to network theory in these ways, I'm like, okay, that's data. He's the smartest network effects guy I know, the best first principles thinker about network effects I know. And I offered a first principle to him that he said, you're wrong on first principles. I'm like, hmm, I probably ought to listen to that. But like if somebody like with Chegg, right, when we did textbook rounds, people said, oh, people try that before with varsity books.

And like, who gives a shit? That was five years ago. Like, five years ago isn't today. And so, like, to me, it's about, like, what are just your first principles reasoning behind why you're excited about something? And are your first principles reasons being refuted or doubled down on? Because to me, the valid definition of a pivot is the first principles are still true, but you learned something from the data on the ground that caused you to double down on a new aspect of that that nobody else knows. Got it. So you have insight.

But that may just be me giving a good explanation for why I got lucky. That is a perfectly reasonable point of view for you to take. Yeah. I mean, it's certainly possible. I would tend to assess it as certainly a component of skill. But if you're looking at then, let's just say you have the first principles, maybe then you have strategy, then you have tactics, and you have tools. You could look at a stack.

Are the first principles in your investing experience mostly spotting, say, converging trends that people haven't spotted before? What would be an example of first principles as it applies to one of these companies? Will you surf? Do you surf? Poorly. Poorly? I surf even more poorly.

But I like the metaphor of surfing because you could be a skilled surfer, but you don't really control surfing. You can sort of control the board-ish. Even if you're good, you can only barely control it. But you can't control the wave. And to me, the magic that animates the tech industry is a combination of Moore's Law and Metcalfe's Law. And so I think we all benefit from the magic of Moore's Law and Metcalfe's Law. And so I think we all benefit from the magic of Moore's Law and Metcalfe's Law. And it's like literally as powerful as the ocean waves below you when you surf.

And so I look at it like the job of a startup founder is to surf a valid wave. And the wave is usually bigger than the company. When we invest in Lyft and Cruise, we had this belief that network capitalism is supplanting vertically integrated corporations and that there would be network transportation, just like I believe there's going to be network real estate, network manufacturing, all this stuff. And so we believe that those gathering waves are more powerful than any one company and that the job of the tech entrepreneur is to leverage the awesome

massive power of all of the, you know, all of the fury of the ocean beneath them of Moore's Law and Metcalfe's Law just surf into the beach. And, you know, like give Moore's Law enough time, it will breach the advantage of any incumbent. And give Metcalfe's Law enough time and it will breach the advantage of any incumbent and give Metcalfe's law enough time and it will create an insurmountable moat. Google tried to take out Twitter with Jaiku. Didn't work. Didn't matter because Twitter had a network effect. And so, like, to me, like, the tech industry is magical. Like, there's been tulips in the past. There's been the crash of 29. There's been the real estate bubble. There's bubbles all the time. There's manias all the time. But tech is animated by two valid exponential forces that are super powerful. And they are the asymmetric attack vector of the entrepreneur. They are the

rock in David's slingshot. And so I look for founders who have some type of fundamental contrarian insight about where a wave is about to gather. And then hopefully they have the stuff to surf it. And if they do, I'm like, hey, unconditional love, let's go. Well, you gave me some related advice really early on. Do you need any more, by the way? Any more wine? Are you good? Yeah.

I think I have a wine deficiency, yes. Yeah. I'd love some more wine. I got you. Thank you. Okay more, by the way? Any more wine? I think I have a wine deficiency, yes. I'd love some more wine. I got you. Thank you. You gave me some advice. I remember it was at a restaurant in Palo Alto. There was an event gathering. Reid Hoffman was speaking. I was attending, and

we were having wine, much like we're having right now. And we were talking about some deal I was flummoxed by because I had certain primitive parameters for investing and I was getting somewhat ridiculed for my simplistic parameters. Like I need to be a power user of the product. I need to, it needs to match with the demographic, the sort of core audience that I have. And I got a lot of flack for it. And I remember he said to me, well, if those are, say, you didn't use these words then,

but like your first principles, those are your sort of criteria. If you're going to make, in some cases, really good investments when people are poo-pooing the idea, but it perfectly matches sort of your criteria. Based on first principles. Right, based on first principles.

Conversely, if it doesn't match your first principles and you're getting into a deal because it's closing tomorrow but we can feel you in, if you're just following some consensus, however small, but it doesn't conform to your first principles, that's where you're going to lose your money. Yeah, this is where people talk about social proof. I think social proof is bullshit.

I think that it's... So my favorite example is actually an Elon Musk example. So I don't know if some of you may have heard this, but I thought you were going to say, I think some of you may have heard of him. Yeah. Yeah. Fair to assume. Yeah. So, so he talks about SpaceX and most people think SpaceX is like a better NASA, but that's not true. So you think about a rocket, what, 0.3% of the cost of the rocket is the fuel, and the rest of it is what gets burned up in space, what doesn't come back. So Elon says, okay, if you could have a reusable rocket, you could maintain 99.7% of the value of the rocket by bringing it back to Earth. And if you could

do that, you could have a two orders of magnitude improvement of the economics of space travel. That's first principles thinking. Or when Ev says if 10 million people write microblogs, that's 10 times more. The burden of proof is on the people who are negative. And so, like, I don't have to see the business plan to say that's an insight I can get behind, right? Conversely, I'll see plenty of business plans that look incredibly straightforward, and I eliminate them immediately because they're just not exponential enough and they're not first principles enough. And my whole business isn't about how often I lose. It's the magnitude of the rightness when I win. And so like when I win, I have to win super

freaking big. This is such an important point because it applies to life and not just. Well, it depends. Like if you're a PE guy, you don't want to lose. You don't want more than private equity. You don't want to have more than like a 15% loss ratio. Sure. So you want to take out risk, but I'm not a risk taker-outer. I'm a luck multiplier, right? Like I'm not asking what can go wrong because I'm investing when it's worth zero. Right.

I'm asking what could go spectacularly right as a rare event. And I only have to be right a fair number of times as long as the idea has the exponential awesome power to just take us to the promised land. Well, this is part of what appealed to me about the startup game as you explained it to me, because it's a hits-driven business, you can be wrong a lot, but if you have decent rules that have some basis in reality, maybe, maybe, maybe, then as long as you're,

this is, we don't have to get into like portfolio theory and stuff, but as long as you're investing enough in these bets that they can say return the fund or whatever the parameters might be, it's a fun game and certainly a dangerous one. But let me ask you this because I remember how impactful, and then we're going to go to audience Q&A in my pink basket that I brought. If you were teaching, you can pick the age. It could be college freshman, college senior, high school senior, doesn't really matter.

Graduate school. If you were teaching a class on entrepreneurship, so you're not teaching people how to be investors. So we do now. We teach one at Stanford. Oh, you do? Yeah. Well, that makes this easy. So what do you teach?

What are the sort of differentiators of the class? What we try to do is help people understand that there are things that we can learn from these prime mover entrepreneurs who create massive abundance. And it's about more than just having a good product. Product, market fit, clearly important. But designing a company, what's your culture? Are you going to define it up front or just kind of let it happen? What's your category? Are you going to design your category or just let it happen?

Are you going to chase revenue or are you going to accumulate attractive customers? And so, like, what we try to emphasize, we try to emphasize a couple things. One is great businesses truly are valuable. And so we should try to think about building a scalable business with the truth of value in mind rather than what's the latest fad and how do we raise money or what's a paper unicorn or any of that stuff. But then the other thing that we worry about some is that you look at some of these companies and the problems they've had with their culture, and a lot of these people come from Stanford or the top schools,

and it's like, how do we have some impact where if only one person who might have gone off the rails as a founder in that dimension doesn't because we're like, you know, culture matters, building a company foundation matters, how people treat each other matters. And some of this stuff is like a blockchain transaction. You get it wrong, you can't go backwards. Or like the metaphor I like to use, like the Hertz rental car parking lot. If you back up, the tires explode. And so you can't, some of this stuff you can't really back up. And so getting it right the first time, there's a lot

of counterintuitive lessons. And it's more about just having a good product. It's about designing a company and a category in addition to the product. And, and you know having a point of view about how you're going to bring abundance to the world and not just get rich and so um the class is sort of about that and about just like oh the other idea is that like you don't if you're a prime mover you don't just have to be a tech entrepreneur like you could be uh be the French laundry guy, Keller, Thomas Keller. You can be Elvis Presley and you invent rock and roll. Or you can be Albert Einstein. You can have a theory or you know, MLK had a dream. But it's sort of the idea that we try to express to people is find your gift and express it your way. And entrepreneurship is only one way to express that gift. But if they learn anything from the

class, it's not be an entrepreneur like these people. If entrepreneurship happens to be your calling, great. Here's what great people do. But figure out your calling. Figure out your gift. You don't have much time. Don't live someone else's life. Don't live by somebody else's thinking. Live your gift and actualize it to the fullest. How do people who say hear that, and I'm sure you go into much more detail in the class. Yeah, there's 13 lectures. No, no, 13 lectures, but for those people listening, if they wanted a place to start, just to get a toehold, and they say, God, I want to do that, I just don't know what my gift is,

what would you say to them? Like, what are the sort of whispers through the ether they should pay attention to, or any indication? I'd say spend time with awesome people and work on things with them, and you'll find it. But most people fail to find their gift not because they can't find it. It's because they're too busy worrying about what other people think. And like one of the things that I find, so like one of the things I find inspiring is that I wrote this post one time, and I was surprised that, so I called it Finding Billion Dollar Secrets. And the point that I was trying to make was that billion dollar secrets are everywhere. It's just that people aren't looking to pick them up off the ground. They're looking at each other. They're looking at status. They're looking at, hey, when I was in high school, I got rewarded for giving the teacher the answer to the questions the way they wanted it. And then I went to the right college and got the right graduate

degree and got the right job at the right company and lived in the right neighborhood and had the right designer kids, sent them to the right designer schools, and was in the right country clubs, drive my right designer car, and they get focused on, you know, Peter Thiel would probably call this mimetic behavior, right? This idea of people's desires being defined by the people around them and what's going to make a good impression on the people around them. The best entrepreneurs I know, they're just like, screw all that. I know why I'm here in this world. That secret on the ground, that's my gift. I'm picking it up. I'm doing this. And like that to me, that's the thing I tell my 20-year-old self, my 15-year-old self, my kids, is like, figure out your gift, your gift. It's not the world's opinion of your gift. It is yours.

It belongs to you. And figure out the gift that belongs to you and express your gratitude for the time you have by offering that gift. I love it. You guys can see why I've bugged Mike so much over the years with questions. Speaking of questions. Can I add one more? Sure. Good boy.

Wow, this is like the Willy Wonka golden ticket of questions. Thanks. Oh, wow, look at this. Oh, look at that. Rogue question givers. All right. I hope a lot of these questions are for you. I'm going to learn a lot more from your answers, I think. I know. This is like the improv jazz of question receiving. All right. So I'll start with the first one, and then we'll just kind of bounce between these. Oh, God, a two-part question always, which, by the way, means two questions.

Where would you have moved besides Austin? There are a few places I looked. I looked at – I love Austin. I've wanted to move there since I graduated from school. I just didn't get the job at Trilogy Software. Funny story. Founder of Trilogy. It was my roommate in college. I could have helped you out.

I know. I could have hooked you up. I didn't know what to do. I was lost, a babe in the woods. So Boulder, Colorado, I'm a huge fan of Boulder. I also looked at BC. I really like British Columbia and areas up in Canada. Sorry, Americans. Thank you. And there were many different places

that I considered, but Austin has this gravitational pull for me, so I ended up there, which changed my mind on the significance of fiction versus nonfiction. Really, it was because I had onset insomnia, and I did not want to turn on my problem-solving apparatus by reading business books and so on before bed. And I found that fantasy, Dune, Ender's Game, Stranger in a Strange Land, The Name of the Wind. Read that, but be prepared to wait like 17 years for the last in the trilogy. Have you ever read The Count of Monte Cristo? You know, I haven't. Oh my gosh. Speaking of a book about grudges. Ooh. So since we're on books, what books do you most recommend or gift to other people?

Hmm. Gosh. Lately, I've liked, there's a woman named Bronnie Ware called, she wrote a book called The Top Five Regrets of the Dying. And she was a hospice nurse who would spend time with people in the last 90 days of their life. And she would learn, like, what their regrets were, or sometimes she'd learn what their happiness was. So there was an example of this woman who was from a super-rich family,

and she decided to marry an artist, and the family excommunicated her, and she's like 32 years old. She gets cancer, and she dies, and she hasn't heard from her family in years, and her mom comes to her at the end and says, you know, to be honest, I was just jealous. You were living life on your own terms, and I've got all these obligations. I don't even like my life that much, and I was just kind of pissed off that you could go marry some artist and be this happy, and I realized, like, how wrong I was, but this woman who's dying says, I have no regrets. I got to be with the person I wanted to be with, and, like, I would have loved to have lived longer,

but nobody knows how much time they're going to have. At least I got to have the time that I got the way I wanted to have it, the best I knew how. And then they would have another person who the opposite was true. They would be dying and they'd say, promise me, Brawny, that you will not live life according to other people's thinking. Because I lived my whole life trying to please other people and if I could have it over again, I wouldn't do that. And so she does a great job of, like, having the example of the person who did it well with no regrets, and the person who's like, fuck, right, I'm dead now, and like, I could do it over again, I'd do it different. And so, and it's motivating to say,

gosh, you know, how am I measuring up against those five things? And so I like that book because it kind of takes people out of the here and now and kind of forces you to confront a broader set of issues. Yeah, I think that for me in the last few years, I've had a lot of death. Bren's passed away in the last two years or so. Including Terry Laughlin, rest in peace, who's in this book. Just a few weeks ago. I found it really, in an odd way, reaffirming

to familiarize myself with death and grief and grieving. In almost a preemptive way. I mean, one of my favorite people, I'm sure you've spent time with him, Matt Mullenweg,

incredible entrepreneur, but first and foremost, just a beautiful human being. And he lost his father in a very unexpected way and he recommended on grief and grieving to me. And I think it's a very useful exercise

to familiarize yourself with the details of death and people passing. And I learned a lot of this from Julie, who's my love of my life and puts up with me. And, you know, she's helped all these people who've had cancer. And so as a result, she ends up seeing a lot of people pass. And, you know, I think more than anybody, she taught me that in the last, in the last bit of time you have, all the shit falls away, right? All the expectations, all the external stuff. And so you just hope that when that, when that time comes, you're like, I did the best I could, you know, did it the way I could. And so that's why I find that book helpful. It's not because I'm preoccupied

with dying. I hope I live a long time. But it's like when the time comes, I want to say, I did it my way. I did the best I could. I honored the gift. So that's a good book. And there's business books, too, but we'll do that some other time. I think that's a good place to move. All right, is everybody cool? Well, if you have to leave, you have to leave. People cool with going a little longer? I'm having fun.

I hope you guys. All right. So here we go. This is the left turn from what we were talking about, but I'm curious to hear your answer. What emerging technologies or theoretical technology, that could really go wide, do you believe are most promising for anti-authoritarian disruption?

That's a leading question. Similar to how Bitcoin disrupts government control of money, maybe. I'm very interested in crypto and blockchain. You mentioned blockchain earlier. It's too bad we don't have Naval here. That'd be awesome. But I would be curious to hear first your thoughts, just general thoughts on crypto and blockchain,

and then any other emerging technologies that you think are promising for anti-authority disruption. Okay. So I hope this isn't a shaggy dog answer. I don't even know what that is, but it sounds good. The story is like a really long story that never ends. So for better or worse, I'm a little bit of a history buff when it comes to business. And so I took this class when I was in business school and only Harvard Business School would have a class called The Coming of Managerial Capitalism.

But it was a fascinating class because- Sexy name, rolls off the tongue. Like for example, like in the year 1820, there weren't any companies in America with more than 100 employees. Because you had people selling muskets or fur. Or if you were a really big monster company, you were like a spinning loom in Waltham, Massachusetts. And spinning yarn and fabric. Well, then the railroad and the steam engine come out. And that changes everything. So, like, what people don't realize about people like John Rockefeller and J.P. Morgan and Andrew Carnegie, like, imagine you're doing Standard Oil, and you want to compete with a guy in Pennsylvania

on oil prices. You don't just whip out your cell phone and call the branch manager and say, hey, lower the prices, run this guy out of business. I mean, there's no accounting. There's no org charts. There's no salary managers. We don't even have the telegraph yet. We don't have shit, right? And like Rockefeller is building a company against that backdrop. And then, you know, J.P. Morgan's like, well, there's nobody who has enough money to own a transcontinental railroad, so maybe I should do this thing where you create these fractional units of ownership of a company. We'll call it stock. You're some guy who sells, you're a blacksmith in 1820, and somebody says, do you want to buy stock in a railroad?

You're like, what good does that do me? Stock in some random company doesn't exist? Why would I want that? And so, like, but what happened was the modern corporation emerged and it drove the standard of living of humanity 13-fold from the year 1820 to 2000. The richest man in America in 1870 was Cornelius Vanderbilt. He didn't have flushing toilets. He didn't have running water. He didn't have electricity. You can have all those three things now and be defined as poor. And so I look at it, and I'm like, people say capitalism is screwed up. I'm like, what are you talking about? Like, I'm like, it's a freaking miracle.

It's like, in 1800, you had to work one hour to get six minutes of reading light. Today, you work one hour, you get 300 days of reading light. It's a miracle. And, you know, there's a lot of stuff that is wrong with how people are practicing capitalism. But free trade and voluntary, you know, I have this to offer, you have that to offer. We get to trade without somebody interfering. That's not the problem. That's not the problem we have. Well, what I think is happening today, and this is where blockchain gets in. I'm hearing a little Texas.

Sorry for this shame. No, no, no. I believe that blockchain and things like it and Moore's Law and Metcalfe's Law are the fundamental animating forces of what I like to call networked capitalism. And I believe that someday value is going to be created not by creating a large company where you have a lot of employees who work for you and produce a lot of stuff, but instead it's going to be the people who create and curate software-defined networks. And I think that Tesla is a software-network-defined car company, and I think that Apple was a software-network-defined phone company. Nokia thought they sell widgets. Apple thought, no, we sell software-defined phone.

The bet between Tesla and GM has nothing to do with who's selling more cars it's that will Tesla figure out manufacturing faster than GM figures out how to be a software-defined network capitalist company right so so like okay now back to blockchain uh there's a there's a book I like a lot called the Wealth of Networks by Yochai Benkler. I read it about 10 years ago, and it influenced my investing a lot. And one of the things that Benkler talked about was we're going to move from the tragedy of the commons to the wealth of the commons. And the examples he used back then, he had Dig in the book, actually. And he had examples of user generated content open source software. Well what if just like the stock market was a new way to practice capitalism for the modern

corporation animated by the railroad and steam engine that is a new way to create abundance because you couldn't have had a national railroad unless you had a stock market. You couldn't have said hey who has enough money to build a railroad? There was no one person who did. And so now I believe that crypto has the opportunity to create the wealth of the commons. And rather than a centrally organized equity capital structure, you have a set of people who contribute to a project on their own volition. And if the other people, their peers in the community, judge their value as compelling, they get rewarded. So it's kind of like the wealth of the commons. But I find it easier to think about crypto not through the lens of,

oh, so are you going to invest in a crypto company? How many shares are you going to own? That's wrong. That's like asking, how many dollars am I going to own in the Transcontinental Railroad? No. Stock units are a new thing. Yeah, it's a different unit. Crypto tokens are a new thing.

They are a new way to create wealth. They are a new way to leverage the wealth of networks rather than vertically integrated, top-down owned companies. And so, like, I just believe that 100 years from now, tokens or something like them will be one of many ways that an enterprising capitalist can create abundance in the world. And the more ways we can create abundance, the better. Does that obliterate venture capital as we know it? Or does it just reconfigure it so that

you guys are investing in the pickaxes? Yeah, so like I don't really, it's funny, so like I'm friends with Vinnie Lingham who did Civic, and the first time we met, he's like, hey, ICOs make you irrelevant, but I'm happy to give you courtesy of my time. And I'm like, Vinnie, like look, I'm just not afraid of what's going to be done to me. The question I ask today is, what would J.P. Morgan do if he's alive? J.P. Morgan wouldn't be like, oh, how am I going to get disrupted? Oh, gee. He'd be like, how can I play offense with crypto? And how can I create new businesses rather than, you know, like Elvis didn't say, I'm going to disrupt jazz, right? He wanted to create rock and roll. And like, when I look about crypto, I'm going to disrupt jazz, right? He wanted to create rock and roll.

And like, when I look about crypto, I'm like, what would Elvis think? What would JP Morgan think? I think disruption in tech startups is kind of bullshit. None of the tech startups I've invested in had people who said, you know, Logan and John didn't say death to taxis, right? They were like, ride sharing is going to be awesome. It's going to bring people together and make things better and disruption happens after you win almost by accident and it doesn't happen because you try to defeat taxis it happens because you transcend taxis and and like so like whenever

people say I'm going to disrupt something I I'm like, well, you're not a real entrepreneur. Because entrepreneurship comes from love and creation, not from anger and disruption and what am I going to attack. And so, like, I don't, like, I'm not going to get disrupted by crypto any more than the next guy will. So, just. Jamie Dimon might. By the way, I'd be happy to debate him anytime and anywhere. Ooh, I like this. It's a rumble in the jungle with Jamie Dimon. I can't wait for this to happen.

So just so nobody gets fired, I did get the wrap up smiley face sign, but I'm going to temporarily ignore that. I apologize. Just so that everybody knows someone has done their duty, and I'm going to continue for a few more questions, and then we'll wrap up. I appreciate it. Everyone okay with that? Cool. All right. So I'm having fun with my bud, Mike. Uh, Oh my God. All of these questions. I wonder if this is the same person. What nascent

tech could most disempower the state? Where do you see tech potential for removing government control over the individual? Holy shit. We've got a bunch of tech-enabled anarchists in here. This is one of the reasons I like the wealth of networks is that the wealth of networks potentially creates the opening to reestablish the idea of trade as a voluntary activity between people. And the government's role is not to own everything or legislate everything or give everybody handouts or free Scooby snacks. It is to protect the rights of people. That's why I believe the valid role of government

is to protect the rights of people. And what we've allowed our government to do is to have unsound practices with how they treat money. So the Fed is jacking with the money supply. And it's hurting honest people. If we want to explore that, we can. But the Fed is jacking with the money supply and it's hurting honest people but if we want to explore that we can but like the Fed jacking with the money supply is picking the pockets of the middle class and it isn't right and and and like crypto has the opportunity to say money should have a price just like everything else and just like we need to separate politics and religion, we need to separate politics and economics. Oh, my God.

We'd get on so many raps. Yeah, I know. No, no, it's great. I know. It's great. Man, I can't wait for this Rumble in the Jungle with Jimmy Diamond. It's going to be great. I want front row tickets.

All right. What were the traits you had early on that made you successful? I'll just leave it at that. That's from Jignesh. I'll leave the last name out just so I don't have to get permission for keeping you in the podcast. I just think that I was lucky that I was born with parents who were just really good to me and inspired me in ways that were surprising that I didn't understand at the time. Like when I was in the third grade, my dad bought me this book called How It Works Illustrated for my birthday. It was all these diagrams of how a product, you know, how does a dishwasher work?

I know this book. It's a great book. It's a great book. It's a great book. And he writes in the front, he's like, I know this is a little bit advanced for a third grader, but, you know, it'll make you think differently about life and, you know, someday

you're going to invent things that are going to be in a book like this. What else? Who has parents like that? I didn't decide that yeah just like just like uh you you're you you know when your parent your kids owe you nothing it doesn't mean you can't be grateful when you get lucky and have good ones yeah you're here yeah i'm curious about that too uh you know i I also, I think in a lot of ways, won the parent lottery.

I wish I could give a better answer. But the one thing my parents did, there are a few things my parents did that I think were very helpful in retrospect. Now, it's all kind of post hoc analysis, right? So who knows? But I would say, number one, you know, I wasn't, it's not like we, we did have a flushing toilet and electricity, so it's not like my parents

were poor, but we didn't have, yeah, but we didn't have, we didn't have a lot of extra cash floating around. Parents never made more than 50 grand or so a year combined, and anyway, the point was two things. Number one is they said, like, no, you can't have the new bike

can't do it can't do this but they said this is i i mean maybe it was by necessity not by engineering but they said the one thing we have budget for is books so if you really want a book like we'll figure it out and so we used to go to the remainder table in this bookstore in our local hometown and pick books. And I remember to this day some of those books just like you do. Fishes of the World was when I wanted to become a marine biologist for 10 plus years because of this book. And bought it for whatever, 70% off.

And I carried it with me to school every day because the playground for me, was a run I was a really small kid born premature got the shit kicked out of me like weekly until sixth grade so I would stay close to the teacher with this book and I remember I don't know I've never talked about this but I remember this one teacher substitute teacher not my real teachers because they knew me but the substitute teacher said to my mom you know you shouldn't have you shouldn't let him bring that book to school. He's going to destroy it.

My mom was like, what are you talking about? He's not going to destroy that book. It's the most important book he has. And they were very good at training us to want books. So that was a key. And then the second was my parents and my mom in particular were really good at just exposing me to a lot of stuff. And it was free stuff. It was like, all right, we're going to take a trip to the aquarium when it's free.

We're going to go to the beach and we're going to collect black sand with a magnet. And I'll try to explain what magnetism is. And my mom threw so much against the wall. And every once in a while something would stick and then she would just put everything behind it. Yeah. Yeah, me too. Like I read some book and I said, well, the best example of this dinosaur bones is in the Museum of Natural History in Washington, D.C. And my mom would say, well, we live in Princeton, New Jersey at the time. And there's a Museum of Natural History in New York. I'm like, but that's not where the biggest

one is. And that's where, like, sure enough, we'd be going to Washington, D.C. to see the biggest, like, Carolyn Maples, like, had, like, if I was interested in dinosaurs, and that's where I wanted to see the biggest dinosaur, like, by golly, we were going to Museum of Natural History in Washington, D.C., and maybe while we're at it, we'll go to Gettysburg and learn something about the Civil War. But it was, oh, one other thing that I think is good, and then on to the next thing. But my dad also told me, don't have heroes. And I think what he meant by that was that hero worship is a form of not thinking for yourself. Because heroes, first of all, a lot of times they're kind

of a story and you don't really know what they're really like and what really happened and why they decided what they did. But the other thing is defining yourself relative to somebody else's accomplishment or how somebody else acts causes you to not spend the time to discover how you can be your best self. And so, like, it's okay to respect the way somebody thinks, or it's okay to respect a talent that somebody has that you can learn from, but that's different from saying, oh, my gosh, Bill Gates is awesome. I want to be like Bill Gates. Because Bill Gates is awesome, right?

He's awesome at being Bill Gates, but you need to be awesome at being you. And like having a hero can cause you to drift away from that. So my dad was always very, whenever somebody famous on TV, you know, Ronald Reagan was president when I was young, he'd be like, be very careful not to have heroes. You don't know their whole story. He's like, he may be a great person, but don't have that person as a hero. Figure out what you admire that they do and try to understand that, but don't say, I want to be like that person ever. That's a good guideline. That's pretty good. That's pretty good. I don't know how he figured that out.

This is a question from An very nice handwriting um what would you put on a billboard could be i don't know if you answered it in the book i did yeah you did so let's let's hear it could be that or it could be something else but how would you answer that what would you put on a billboard that got out to millions or billions of people uh like um there's two things one would be integrity is the only path where you'll never get lost, and that's the one that I put in your book. And then the other one would be think for yourself always. And thinking for yourself doesn't mean don't listen, but it means be willing to have first principles. And you are right or wrong not because of how powerful the person is who challenges you.

You are right or wrong based on whether the content of your ideas and first principles is right or wrong. And you should seek out people who challenge your first principles like gold because they'll make you better. But you should, you you know and that's like ego is about who's right and truth is about what's right and if you become an authentic truth seeker in life uh to me that's kind of what it means to like think for yourself yeah it's for you i'm not yours i'm not going to follow that up yo come on you got it no everybody wants to know your sign i know but I'm like the broken record player that says

the same thing over and over again. Alright, so I would say, I'm going to give a new answer. Actually, I'll give two. So the first would be, and this is advice I got really early on that has stuck with me for decades now. You're the average of the five people you associate with most. And

Drew of Dropbox, many other people would give similar advice. And I think it's just so important, emotionally, financially, psychologically. It's very important that you choose the people you spend time with. It doesn't have to be in person. It can be via podcast.

It can be via books. They don't have to be alive. It can be Ben Franklin. I've learned so much from Richard Feynman and Ben Franklin, for instance, as just two examples. And can I just double down on that? Because, like, and it doesn't even have to be five people that will help you succeed in your career. So, like Julie, right, who I was talking about earlier, one of the companies that we invested in, the founder's son was 10 years old, got a brain tumor. And so he has to be operated on in San Francisco. And Julie calls me and says,

when are you going to get here? Like a few days later. And I'm like, sorry, am I supposed to, I'm in this meeting. I'm like, where are you? She's like to I'm in this meeting I'm like where are you she's like I'm here at the hospital Hugo's about to be operated on where are you and I realized like she never said hey let's meet at the hospital but like what I realized from her was that she's like what else are you doing that's more important than being here right now like Like, why did I have to tell you that? And she wasn't being judgmental about it. It was just to her, it was just obvious. And so, like, part of it is not just five awesome business people or five Fortune 500 whatever.

To me, it's more like five people who, in their own way, make you appreciate the gift of life in a more deep way so that you practice it better. And like where you say, wow, that person changed my point of view about how to use my time. How to use your life. We're going to wrap up in a minute, folks. I said I would give something new I've given you the average of the five people you associate with most a lot so I'll give you another one

which is relatively recent discovery for me which is if you want to succeed in any holistic capacity if you want to love the people you care for fully and have them feel that, you cannot do it if you merely tolerate yourself. You cannot do it if on some level you loathe yourself or aspects of yourself. And I've spent decades of my life like barely at best tolerating myself.

I had some bad things happen to me and I, as a consequence, decided to just hone myself into an instrument of competition. That was it. And I found validation and purpose in that and being number one. And any joy I felt was really from observing other people experiencing joy. It wasn't intrinsic

to me. And forgiving yourself or loving yourself is not a nice to have. It is a must have. Even if you're doing it just for other people and the people you want to express your love to most fully, you need to solve that. And there are ways to do it. There

are ways to do it. That's the good news. So I would just say, whether it's a book like Tara Brock's Radical Acceptance, terrible title, great book. Kamal's book, Love Yourself Like Your Life Depends on It Kamal Ravikant's book, also exceptional that is, I think the root cause of so many things that we can perceive is 30 or 40 or 50 different problems to solve and in fact, there's one or two things that happen to you that you need to unpack

and contend with can you double click on that for a second? Because I don't, like, I think it's like people will sometimes say, hey, you should love yourself. And they will dumb down that. They won't understand the subtlety, like, of what you just said. And I think that's important. Yeah, so the subtlety, if we were to drill down, I would say that, and this is borrowing from someone, actually, it's in the conclusion is borrowing from someone, actually it's in the

conclusion of Tribe of Mentors because it's that important to me. Jim Lohr, or Laird, who's a performance coach, has worked with a lot of incredible athletes and he, L-O-E-H-R, fascinating guy. And his book, Mental Toughness Training for Sports, there you go, really changed my life. In high school, don't worry. I'm getting the stink eye. I'll make it up to everybody. Tell the whole story, Tim.

So, Jim expressed to me when I met with him to learn how to play tennis for the first time, just in the last year, which I'd always wanted to do my whole life. He said, in effect, you know, the most important voice we ever hear in our lives is the voice that no one else hears. It's the voice in our own heads. And for my entire life, I mean really my entire life, it's been the most merciless, brutal coach you would never wish on your worst enemy.

Yeah, like raise your hand if you said something to yourself negative in your own mind today. Yeah. Right? Yeah. And you can create, even if externally you have all of the material trappings or rewards of a financially successful career, if you have the nuclear family that everyone has dreamed of and painted in Norman Rockwell paintings,

if that inner voice is just a demon on your back, you will not find the peace that you want. And nothing you buy, nothing you achieve will provide that. There are just things you need to unpack so that that voice becomes a different voice. And is it fair, Tim, to say that part of love is, like, you can love your country without thinking it's perfect. And you can love your kids without thinking they're perfect. And part of like loving yourself is like saying that doesn't mean I'm perfect. I'm not going to be jingoistic about myself. It's more about I'm going to hold myself in high enough regard that I'm going to do the best I can with the day that I have.

And I'm going to forgive myself when I screw up honestly. Yeah, that's a big part of it. And also for people who are looking for maybe a tactical recommendation, one thing I found very helpful, and I don't want to take too much time to go into it, but something called Metta, M-E-T-T-A, meditation or loving kindness meditation. I went through a meditation retreat recently, which was very difficult for me, and I was practicing this, just Google it, you'll find plenty, to convey in my meditation love and wishes for happiness to many different people who had helped me throughout my life. And I remember one of the teachers at this retreat said, at the very end, I was about to walk out the door, and she said, wait a second,

have you done any loving kindness to earlier versions of yourself who experienced a lot of pain, who maybe felt unsafe? And I was like, it didn't even occur to me to do that. I would encourage everybody here to explore that. And I know we're running out of time. So, Mike, I have one more question, and then I'll have some closing thoughts. This is the tradition at Inform to ask, what is your 60 second idea to change the world? No pressure.

Okay. Think for yourself and be kind to yourself in your own mind because 90% of the unkindness that happens in the world is actually people being unkind to themselves. And if you're going to be, if you set out to make the world better,

being kind to yourself in your own mind is probably the most straightforward, high-return use of your time possible. Cheers to that. And so, Mike, I just want to say that it's been such a joy and a privilege to know you for as long as I have, and I really hope to spend more time with you. I mean, we've spent a lot of time together, but I'd like to spend more time, and I really truly believe, and part of the reason I wanted to bring you out on stage tonight, that you're one of the most genuine, unentitled, positive people who want to also impart the gift of positivity to the world I've ever met.

So I just want to thank you for that. All right. Well, it's been fun to see you do so well. Well, you too, man. Ladies and gentlemen, Mike Maples. Tim Ferriss. Thanks, brother. All right, bud. Thanks.

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 email from me every Friday that provides a little morsel of fun for the weekend? And Five Bullet Friday is a very short email where I share the coolest things I've found

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