#792: Seth Godin on Playing the Right Game and Strategy as a Superpower

Transcript from https://podmenti.com/t/4367849153492a82

Coming up in this episode.
And
The mistake people make.
is if you find yourself saying, I just need to get the word out.
I've done all the hard part now, I just need to get the word out.
You haven't done the hard part.
What you've done.
Is
Waited for a miracle.
Hello boys and girls, ladies and germs, this is Tim Ferris. Welcome to another episode of the Tim Ferris Show.
My guest today.
is a fan favorite.
It is Seth Goten, the one and only he is the author of twenty one internationally best selling books, translated into more than thirty-five languages, including Lynchpin, Tribes, The Dip, and Purple Cow. His latest book is
This is strategy.
really caught my attention and it offers a fresh lens on how we can make bold decisions, embrace change, and navigate a complex, rapidly evolving world. We cover a ton of ground, including sets of questions that you can use.
To catalyze.
Yeah.
Maxims, different concepts to unpack that can
Productively shake the snow globe of your mind so that you can settle on new realizations. Different ways
to create competitive advantage in an increasingly crowded world. Seth is also the founder of the Alt MBA and the Akimbo Workshops, transformative online programs that have helped thousands of people take their work to the next level. His blog
Seth's.blog, that's plural. Seth's dot blog, is one of the most widely read in the world and has been such for a very long time. Seth is also the creator
of the Carbon Almanac, a global initiative focused on climate action. This is a very practical episode.
As all of Seth's are on this podcast.
And I'll leave it at that.
So
After a few words from the people who make this podcast possible, please enjoy.
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Optimal minimal.
At this altitude, I can run flat out for a half mile before my hands start shaking.
And I answer your personal question.
Now we're just seeing it.
My cybernetic organism, living tissue over metal and those galaxy.
No
I suppose I wanna ask the question that I always ask. Like what would make this
Time I'll spend for you. We'll make this a home run.
Looking back. I have to confess.
That I've never
had a conversation with you that wasn't well spent.
Make it.
It a home run for me?
Is if you considered it one of the best episodes of the year, or maybe even longer. I wanna be on the greatest hits. That's what we're pushing for. All right, perfect.
Kick that off.

what would be a sensible place to start? Is there a particular story or a lead question that you think would
Help us start with Bang. Anything come to mind?
There are a million places I could start, of course.
You know best, but
If
Seems to me.
That many of your listeners know
Actually wanted
Job without a boss.
Yeah.
seek to build something and they need to be woken up about that.
And number two.
People who misunderstand
Your breakthrough books think they're about tactics.
Mm-hmm.
And they follow the steps instead of realizing they're about strategy.
And then
Find a resilient way forward.
And strategy, this philosophy.
I mean you've been
Doing your entire career.
But never called it that.
Let's start there.
So strategy.
Like
Success.
Or
God, if we want to really get out there. Are words that a lot of people use, but oftentimes they're
in their minds referring to different things. So when you use the word strategy.
What does that mean to you?
I think it's a philosophy of becoming.
I don't think it's a set of tactics.
I don't think it's about
Winning in the short run.
I think it's about
Being very clear.
About the change we seek to make and who we seek to change.
Understanding
The systems and the games around us.
And then
Committing.
to the long term process of getting.

Meaning our tactics will change all the time.
Mm-hmm. But our strategy
Does not.
And
Most people
Because we've been indoctrinated to have a job.
Want tactics instead.
And I could
Do much better if I was peddling tactics, but I'm not.
I'm never gonna write a story a book called
This is God. The Tactic Monger, Volume One.
Exactly. But
So if I'm not gonna write this is God or This is tactics, at least I could write this is strategy.
And what would be a
Real world.
Example of good strategy.
Any particular company or project come to mind?
So some famous strategies, an elegant strategy.
Bill Gates says.
We are going to have the strategy that no one ever got fired.
for buying Microsoft.
Mm-hmm. He stole that strategy from IBM.
So IBM.
At a fifty year run.
Where their products weren't
The most cutting edge, they weren't the best priced.
But they had enough salespeople and support and infrastructure.
That if you worked for a big company
Buying IBM was easy.
Every time Microsoft followed
That strategy
They did fine.
And when they veered away from it,
They had problems.
A strategy when I was at Yahoo.
We had the chance to buy Google.
For about ten million dollars. And we didn't buy them.
I didn't get a vote.
Yeah.
Ya who's strategy was
The web is a
Dark and nasty place. Come to Yahoo and don't leave.
And the homepage had 183 links on it.
At Google.
Their strategy was
The web has grown up.
Come here and go somewhere else.
And Mersa Mayer
Built.
The most
profitable marketing engine of all time.
Bye.
Making sure, fighting for years.
to make it so there's only a couple links on the homepage.
Because that was built into the strategy, which is
If you're leaving Google, we're doing something right.
And that's where all the ads came from.
And that's why Yahoo couldn't buy Google.
'Cause the strategies were completely the opposite.
And
Starbucks.
had strategy that took them a very long way for a very long time.
But it's not about frappuccinos.
It's about understanding
Who is this for?
And how can we incrementally help them get there?
What did that?
look like for Starbucks and what did it look like for them to stray?
Howard Schultz
To not start Starbucks. When he got there, there were two Starbucks.
And
Neither one of them sold cups of coffee.
They only sold beans.
And Howard had been to Italy.
And he realized that there was no
I
Deep human desire.
A
To go from being precaffeinated.
Decaffeinated.
And
That gets refreshed every single day.
And two
To be able to do it.
With other people.
who you see yourself in.
People like us do things like this.
So in the northeast there was Dunkin' Donuts, but the idea of Dunkin' Donuts is you're not happy that you're getting coffee.
The coffee isn't that delicious. Let's just get this over with.


And
Every time Howard
Built.
More of that feeling.
That you could go to any Starbucks in the world and feel like you were with your people.
And that for five bucks you could feel like a rich person.
He could repeat it over and over and over again, and the tactics would take care of themselves.
If not the tactics, what are the core ingredients of
Enacting.
A strategy like that.
There's all sorts of surprising
Ways that we can challenge ourselves once we start down this path.
But to start down the path.
There are four things we're looking for.
We're looking for systems.
We're looking for time.
We're looking for games.
And finally empathy.
And all four of them.
Are really unexplored and mysterious?
But once you see all four of them.
Strategy is much easier to take care of itself.
So
I'm happy to take them one by one or
give examples, but those four keep interweaving over and over again.
And that unfolds for us.
What a strategy can be.
Right, let's go through
The four.
And
Maybe if it's not too cumbersome, if there's an example that's easy to give, that's great too.
However you want to land it.
Systems.
are invisible and they hide themselves.
'Cause they don't want people
to see who's operating things. They invent culture to defend themselves.
The most famous one is the solar system.
There's this invisible gravity.
The earth doesn't go around the sun'cause it wants to.
It goes around the sun because gravity makes that its easiest path.
If you group in the United States.
Two.
Middle class.
Parents.
You'll be under pressure from the time you're five years old to get good grades.
Why do I need to get good grades?
So you can get into a famous college. But you're not supposed to call it a famous college, supposed to call it a good college.
And
That
System.
With
Tuition and tenure and student debt and football teams and cheerleaders and college tours and the sticker on the back of a car.
And the SATs, all of it.
is this taken for granted as normal.
And
So
Danella Meadows has done brilliant writing before she passed away.
Way too early.
About
All the dynamics of systems systems in our world.
systems that we want to build.
So
When we see
A system under stress.
Then we can see the system.
That we can see the climate.
When temperatures start to rise.
But before the temperature started to rise, when the climate was normal, no one
Paid attention to it.
'Cause the system
The thing that keeps it going.
Was sort of invisible.
So if you're gonna start any enterprise.
A little plumbing business.
A giant internet company, if you're gonna run for office.
You should be able to see and name
The elements of the system, where is their gravity?
What is
seen as normal.
And there's pushback.
If you don't do it.
And so I'll finish the rear by
Asking a simple question.
How much
Should a wedding cost?

Ha ha.
And
I am especially unqualified to answer this. No, it's super simple. Okay. The answer is
Exactly what your best friend spent, but a little more.

Yeah.

And that's why a wedding in New York City costs more than a hundred thousand dollars.
Not because you need
Monogrammed matchbooks to have a good wedding.
You need them to be part of the wedding industrial complex.
to show your status to the people who've been invited, because that's what the thing is for.
Mm-hmm. So we have to see systems.
And then either we work for the system
Where the system works for us.
We can
Linger on this one for a bit because
Next one is time, so I feel like we should take our time. Plus it's long form. So
Could you give an example on
a smaller scale of a
You mentioned plumbing doesn't need to be plumbing, but a solepreneur or a very, very small startup.
Two to four employees.
And
how they might start to ask questions around systems to identify.
the systems that are at work.
Because for instance.
in my life I'm good at
identifying what is normal, like what are the un
questioned assumptions. I'm good at that, but that seems like I'm I'm holding

The tail of the elephant, like one of the blind men in the parable. It's like I've got a piece of it.
But not the whole
Elephant, clearly. I don't think you're giving yourself enough credit. The whole tango thing.
I mean you have been doing this
For a very long time.
Yeah.
So let's say
You're gonna build
a small business that supports medium sized businesses with their Google
Workspace.
Okay. So
You're a couple nerds.
And you're gonna be the person who helps
People set up their Google Drive and across the
organization reasonably secure.
For a a company with a hundred employees.
Okay. Mm-hmm.
Because you're in there.
In the factory, seeing how things are made.
It's very tempting to imagine that
Everyone you're serving wants what you want.
And that you think your customer
Is
The person who's
buying stuff from you and what they need is a tech solution.
None of these things are true.
that the system of a company with a hundred people
It's probably not the CEO's job.
To set this thing up.
So it's someone else's job. There's a system
A hierarchy of jobs.
What does that person want? It's not their money.
So
Lowering your price to get new customers is not going to help you get new customers.
That in fact.
What that person wants.
is a story to tell their boss.
The story of
Why did I pick these people?
And even better.
A story of if it fails, why they are are not gonna be in trouble.
So when we show up
At an organization to tell our story to that system.
We have to do it.
Understanding
How do they buy everything else?
What do they measure?
What?
Would happen to us.
If
We
We're bigger.
than the other people bidding, or smaller than the other people bidding.
All of these things
Go into
How the system works the same way.
The admissions office at the famous college.
Doesn't always pick.
The people with the highest SAT scores.
Mm because there's this complicated mechanism.
At play.
Thank you
is historical.
To feed.
And maintain.
The system.
So
In the case of this Google
Workspace thing.
Let's say
You decide.
To close on Thanksgiving Day.
And you've just got a message on your voicemail. We'll close on Thanksgiving Day.
Leave a message, we'll call you back tomorrow.
That seems normal.
Unless
What got you into the system?
was an unbreakable promise that
You will never get in trouble because we will always answer the phone.
That decision, that tactical decision.
Has to be driven.
By what you seek to stand for.
But that's only gonna happen if you see the system.
Of what this company, your client does.
And what stories do they tell themselves?
Mm-hmm.
And
Hollywood is a system.
And the senior prom is the system.
And there are all these factors that go into all of them.
subtle signals that people are sending to each other.
And if you're gonna make a living
Taking money from people to solve their problems.
It has to be
To help them.
Dance with the system.
that they're part of.
All right.
Shall we uh
Bookmark that and come to time, games or empathy. Which would you like to
Tackle next.
Time is really interesting. James Click wrote a brilliant book.
About the history of time travel.
No, of course there are no
Actual time machines.
But we know who invented the time machine.
And it was actually H G Wells. Before H G Wells wrote his book.
Nobody in the world
Talked about time machines. The concept that you and I take for granted, like if you go back in time or if you go forward.
No one ever said that.
Ever.
And
Time.
We're all very familiar with it and no one can define it.
And we know what now is.
And
The now of a week ago isn't now anymore.
It's
Back then.
And it feels different.
So
If you want
to build a company with a thousand employees in it. If you want.
To go public. If you want
To be
Somebody with a lot of zeros in your bank account.
That is not going to happen in the next three seconds.
There's something that's gonna happen between now
And then
And each one of the steps
As we look through time, the
Is not
Today.
So
When we want to have a forest.
We don't get a forest, we start
Planting trees.
'Cause twenty years from now we'll have it for us.
And when you're growing up in Long Island or when you're growing up
Training for the Olympics.
You know you're not gonna be doing the Olympics when you're fifty.
So
What
Exactly are the purpose of these steps?
And what does it mean to fail?
Does it mean
That you failed.
Write this moment in service of getting where you want to go later.
What does it mean you failed forever?
What does it mean to quit?
Does quitting now?
mean you failed forever? Or does it just open the door?
To succeeding later.
And so we have this opportunity.
to see time the way our competition does it.
So in two thousand and
One, I was at a conference.
And we were in this small group setting there were eight.
People they said go around the circle and
Say who you are, and the guy to my left said, My name's Steven, I'm a judge.
It turned out he was Steven Breyer, he was on the Supreme Court.
And the person next to him said, My name's Sergey.
And I have this new search engine.
And
Someone said, so Sergey, what's your marketing strategy?
And he said, Well here's the deal.
We think Google's gonna get better.
Every day.
So we don't want people to use Google for the first time.
right away. We want them to use it for the first time later so it's better by the time they get there.
So we're not doing any promotion whatsoever.
Because the Google of now only exists to get us to the Google of tomorrow.
And when we're at the Google you're ready for.
That's when you'll come use it.

And at the same time
Yahu was busy trying to defend a plunging stock price in the moment.
As opposed to saying
What are we gonna be in ten years?
Remember the T V commercials?
At exactly that.
For Yahoo.
Okay, so framing time.
differently. I mean, I suppose Bezos and Amazon would be an example of that as well. I mean who dog trained Wall Street.
Ha ha
To expect no profitability for God knows how long, a decade. I mean. And set out
In the very first
Annual shareholder letter.
That was subsequently, I believe, re read.
Every year or
represented in some fashion. Yeah. So let's just break that into pieces, right? Because
In the moment.
Morgan Stanley says, Don't do that.
That's dumb.
It's gonna hurt your stock price today.
But what Jeff said was
If I don't
Establish the conditions.
For Wall Street to send us the investors we want.
Our stock price will be zero in five years.
Mm-hmm.
So the only way
to get to five years from now.
is
To do this.
Today, even though it feels expensive, because compared
To the alternative, it's really cheap.
Setting the conditions.
Yeah.
I have a sneaking suspicion we're gonna come back to conditions at some point.
Mm-hmm.
Games. I like the sound of this. I like games.
Some games, I suppose. Depends on which one I choose and if I choose it consciously, but
What is games mean?
So again, back to the indoctrination. So we grew up with Candyland.
And Partizi and Monopoly. Those are board games.
And they're okay.
But that's not the kind of games I'm talking about.
Any situation
Where there are multiple people
And variable outputs.
With scarcity.
There's a game.
So it is the game to decide.
When two lanes merge, which car is gonna go first?
And it is a game.
To decide.
when you're working for Jack Welton, the bottom ten percent of the people lose their job. Which people are gonna lose their job?
And it is a game
to exchange money for a hot dog at the baseball game.
Because that exchange
happens in a way where two players come together
For mutual benefit.
So
We should not deny that games exist.
We should learn how games work.
And when we make a move in a game
That doesn't
Seem to work. We should not say we are a bad person.
We should say
I made a move that did not work.
Those are totally different things.
And so the only way you've been able to achieve all the things you've achieved
Between the
Archery and uh dancing and everything in between.
Is
You make more moves than most people.
And you measure them.
And you don't do the ones that don't work again.
But it is impossible to innovate.
If it has to work.
Innovation must always be accompanied by
The phrase this might not work.
And so if you and your team aren't saying this might not work.
in service of innovation, you're not innovating.
This is my
Entire notebook full of
training logs and experiments and I'd say
Fifty percent is
At least.
If not seventy percent things that did not work and required tweaks so that I would not repeat the same mistake the next time. Doesn't always work, but
Over time it tends to round towards improvement, at the very least.
We've only been going at this for a few minutes, but
Already
I can hear it.
People are saying, Wait, wait, wait.
I tuned in to have someone vindicate the tactics I am already using.
But that is what I am listening for, to hear that I am on the right tack.
When are you guys gonna get to the tactics part?
And the very fact
That we don't hear this kind of
Description.
Of
The world we're in is like the fish that doesn't realize it's in water.
And what I'm trying to help people see in a world that is changing faster than it has ever changed in history.
Is when you see these threads.
and these systems under stress.
That is when you know.
There's an opportunity for you.
And if it feels uncomfortable.
Imagine how it feels to people who don't get the joke.
When this discomfort
Shows up. That's the opportunity.
Yeah.
For sure. And
One of the many reasons I've been looking forward to the conversation is I spent a lot of time thinking about
many of these constituent parts, but I haven't
necessarily explicitly
woven them together.
into something that combines into strategy. But in terms of
Time horizon. And for me a lot of it is
trying to find or create a category of one for
quote unquote competitive advantage.
And
Part of that is choosing a game I can win.
Which
entails also understanding the rules of the game that you have chosen or inherited or somehow
deliberately or accidentally ended up playing.
It's really trying to parse the rules of the game. The time, I do think about that a lot. It's one of the simplest ways to have a competitive advantage, just have a longer time horizon, but it requires having a lot of other things fall online.
And then certainly the systems and
In part, depending on how what game you're playing.
But the
As you said, what are the
Gravitational polls, what are the incentives?
Of different.
Stakeholders.
Who has?
What degree of
respective influence. So it's it's fun to to hear these all combined.
Empathy is one
I mean I would like to think of myself as an empathetic person, but
This isn't maybe one that I would initially have thrown into the
Ring as
an integral piece of strategy. So what is
What does this mean?
Well, y you just gave it away. I'd like to think of myself as an empathetic person.
implies that there's a moral component to what we're talking about.
And at some level, of course there is, but that's not what I'm talking about.
What I'm talking about is this.
Everything we build and everything we make is
Only works
In a voluntary exchange if I
Someone else wants it.
More.
Then they want the money or time they have to trade for it.
Meaning.
Someone's not gonna buy the thing you're selling at a crafts fair.
'Cause you worked really hard to make it.
Mm-hmm.
They're gonna buy it because they want it.
And
All empathy is
is being very clear.
About who it's for.
And why they want it.
And
We get so busy.
And so exhausted making something we forget.
We hustle people.
and hassle people to buy from us'cause it's important.
To us.
Sounds like some of my blog posts.
Yes.

The notebook
You didn't need to publish the no book.
If your goal was for you to read it.
Because you already read it.
You are
Publishing it.
So
Other people will read it. So your description of the book is not
Please buy this because I worked really hard to write it.
It's
I have a thing here.
Yeah.
When I describe it, if I create the conditions
For
information exchange to happen.
You will
Banged on the door to get it.
You will be angry if you can't get a copy.
Yeah.
That implies
That it cannot be for everyone.
No matter what we make.
Because you cannot be empathic.

Everyone.
Unless you're selling
I don't know.
Oxygen on a planet that doesn't have any?
There's nothing.
That everyone
Wants the same way.
So
Where all of this must begin and end is
with the minimum, the smallest.
Viable audience.
Who are the people?
Just them.
that when they hear about this, they're gonna say, that's exactly what I was looking for.
That's all you need.
You pick that group.
You
Delight them.
And you forgive everybody else.
And here's proof.
that you're not doing it.
If
Someone comes to you and you are not regularly sending folks
to your competitors or people who th are thought of as your competitors?
You are not serious.
About
This
About
Picking
The audience to it's four.
And forgiving everybody else. When someone shows up
At the Ferrari dealership.
And says I got six kids, how am I gonna get'em to school?
You don't try to persuade him to get an inenso.
You send them down the street to the Volvo dealership.
That was one of your many questions, I suppose forty or so questions.
In the book that I wanted to ask about. And my position as a service, can I happily send
others to people who might be seen as competitors. And I was like huh.
Interesting.
I wanted to clarify that, which you just did.
And it makes sense if you can't do that.
Then
You
very likely to not have your
One thousand true fans are minimal viable.
Audience defined.
Positioning is
Why are the people who don't
Choose.
to buy from you.
Right.
To make that choice.
And if you have this attitude that everyone should buy for you, you can't answer that question.
So
The people
At Nestle's, don't get upset if you buy an Askinosi chocolate bar for fourteen dollars.
Because
Sean and his daughter aren't selling a chocolate bar.

by a Nestle part. They're completely different groups of people.
And the same thing is true for people who play Dungeons and Dragons versus
People who want to go watch Ultimate Fighting Championship in that given moment.
There are two different groups of people.
I'm glad you said it in that given moment because I happen to be the perfect overlap. There's some people who do both, but they don't do both at the same time. No, no, no. Very hard to do at the same time.


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I
Alright, so we have
Then this might be a good segue.
Many
Maxim's.
Or ideas.
That we could discuss from the book and

I circled a few for myself.
Mostly for clarification.
And I'll let you
Kick.
from one of these three and feel free to revise the wording, but I'm very curious. I'll read the three and then you can pick whichever one you want to start with. So the first is systems don't start out selfish, but resilient ones often end up that way.
The next one is you're not sitting in traffic. You are the traffic.
And then the third is don't try to burn big logs if you only have a little bit of kindling.
Perfect.
Let's do all three. We'll start with the last one.
If you've ever gone camping, you know what I mean by the
I do have enough kindling freezing my ass off in a rural archery range yesterday and realized they had a nice
Wood burning stove, but all the logs were as big around as my torso, and I thought, Well, that's gonna be a really tough fire to start.
Exactly. Unless you had an enormous amount of kindling and then it would go up in no time.
Yeah.
Too often.
Because of the media.
Entrepreneurs think if they don't start something that sounds giant.
They're failures.
Too often we
Give me a
entrepreneurs credit for raising a lot of money from venture capital.
That's
Probably not the right path for you.
The money you're raising from investors is kindling.
And the logs you're starting are the markets you're trying.
to get to.
So if you want to build a dialysis chain.
in forty cities where people can go get reliable kidney treatment.
You can't start that with a$100,000 loan. You just can't.
But a hundred thousand dollar loan is more than enough.
T
Get yourself doing very, very well with a hot dog cart somewhere.
Right.
So
We first gotta s make a
Smart decision.
Based on time.
Based on the systems we're confronting,
Do we have enough kindling?
Do I have enough reputation to even take this on?
The
What about systems is this?
Systems
Aren't people.
They are collections of people.
And they act in ways
Yeah.
Maybe the people who started the system and maybe the people who work in the system
Wouldn't choose, but that's the system they've got.
So if you think about the healthcare system in the United States, it's not a healthcare system.
It's a treatment system.
Because everyone in the system gets rewarded for giving treatments.
Not for making you healthy.
And so
It's quite likely that once you start
Working with the medical industrial complex you'll get
More and more tests and more and more probing and more and more bills.
Because that's what the system does.
And every time someone
moves out of where the system ended up.
The system exerts a feedback loop.
To push them back.
into the spot where they belong.
And so if we look at how we ended up with college educations that cost almost
Three hundred thousand dollars.
It's because the combination of
Accreditation.
And ranking.
And tenure.
And
Parent status.
And placement offices.
All support it going in only one direction.
And if you show up say
Look at me, I'm really smart.
I went overseas and in two years I learned X, Y, and Z.
the system's gonna push back.
And say, Yeah, but we require this kind of degree from this kind of accredited thing.
The N C double A
Is a system.
That started
With
People playing football in the back yard.
And now
They're taking private jets to stadiums with a hundred thousand people in them.
Because the system kept churning in one.
Direction.
And you might not like the output.
but you probably can't change the system by yourself.
What you might be able to do.
Is
Back to your second thing.
You're not sitting in traffic. You are traffic.
When you participate in a system
You're either going to make that system more successful and get a prize.
Or
You could try to fight that system.
But you're gonna need a lot of kindling to do so.
Because
Being in the system.
Actually
changes the system one way or the other.
So
The challenge that we have
Is
You know, Google didn't show up and say
We're going to
have meetings with all the ed agencies in the world and change the way advertising works.
Instead.
They walked away completely.
From that
World.
Multibillion dollar world of ad spend.
And it's dead.
built a tiny little engine for direct marketers.
Where someone would buy
The word Chanel.
And
They'd buy it for a nickel.
And then what would happen is a brand manager from Chanel
would Google themselves. Don't do it too much, you can go blind, but they would Google themselves
And they would see someone had bought their name.
For a nickel.
So they'd pay ten cents to take it back.
And the auction was on.
So Google changed the system.
But they didn't change it with a frontal assault.
They changed it by
Moving away from the system.
Finding people who weren't part of the system.
And then
The system chased them.
I wanted to
mention also just a footnote to the kindling.
comment which is some people listening might say, Oh man, well
Takes money to make money, and I would just say there are many ways to get that kindling.
You can do joint ventures, you could do licensing, you could do non dilutive financing, which is a fancy way of saying, for instance, two startups that I've been chatting with have raised money from the government. They're really good at doing that.
From DARPA and so on, and they get a nice big fat check. It's delivered within six weeks and it does not affect
actually enhances with lots of leverage their ability to raise money in the future.
So there are
Very
off menu approaches to gathering your kin play.
Yeah, and there's also
The choice you make, you know, if you want to be in the movies
You could invest years of your life and pay an enormous number of dues and wait for Hollywood to pick you.
Or
You could
Sharpen
Your writing skills and make
A two minute YouTube video.
And that YouTube video
Could then find you an audience.
And
Alana Glazer went on to be in a popular comedy central scene and then it
A movie star.
But she didn't go in the front door.
Because she didn't have enough kindling to go in the front door.
Instead, she found her audience in
And then multiply.
Yeah, there's
An amazing story. People can check it out in a book called Rebel Without a Crew.
By Robert Rodriguez.
And when he made, I think it was Mariachi way back in the day.
He basically came up with
his list of assets.
And she's like, all right, we got a turtle. Turtle's gonna be in the movie. All right, my friend has a broken down school bus.
School bus is going in the script. And like his cousin has a pit bull. Great. We'll figure out how to fit it in. And
retrofitted the entire script around this and people thought, wow, this must be
Like a legitimate well budgeted film. It's like no, I just made a list of everything I had and then tried to
Insert them somehow.
And he is very good at operating.
With
I would say lateral approaches.
Two.
Creative output.
Are there any other examples of
Taking the side door, so to speak.
That's
Stick out to you.
Could be for entering uh
well established sector it could be for anything at all.
In fact that's almost
Always what happens.
And
The mistake people make.
is if you find yourself saying, I just need to get the word out.
I've done all the hard part. Now I just need to get the word out.
You haven't done the hard part.
What you've done.
is
Waited for a miracle.
And
The people who have gone on
To build
For example, useful businesses on top of a Kickstarter.
Step one.

Said I
I don't have enough money to build a factory, get into Best Buy.
do national advertising. But I do have enough money.
to get one thousand people.
To pay me two hundred dollars.
For a coffee maker.
And then I can do the next one. And then I can do the next one.
So this stepwise process back to time.
Says
The shortcuts are illusory.
That the most
Direct way forward.
feels long in the moment.
that I'm going to serve a group of people
that so need what I'm doing that they pay for it.
And that are so delighted by it that they tell their friends.
And then I'm gonna repeat it and I'm gonna repeat it.
And if you look
at articles on TechCrunch places like that.
at companies that raise fifty or a hundred million dollars who were gonna change the whole world
Overnight.
They're all gone.
Right?
Because
You just can't shortcut that on demand.
What you can do is find that group of people.
and bring empathy to them and make a change up.
Yeah, also with raising that amount of money. Some of them
A handful out of
Hundreds.
We'll figure out a way to make it work. But
In most cases, they're like, All right, we have an idea on the back of a napkin, I think this space shuttle will work. Let's raise a bunch of money, and then they put together you know soapbox derby space shuttle and then.
incinerate themselves, break into a million different pieces. That's the usual outcome.
But you know, guests, no breaks. Sometimes it works, but not all the time.
And I think that
Also, I suppose I have a reputation for shortcuts, but it's not really
I don't think of myself that way. I like to find elegant workarounds if they exist, but I'm doing a
shit ton of experimentation taking all the notes that I had in that notebook for anything so that
I can hopefully make sure I'm not fooling myself and that I can replicate. And then if I can do that, I'm like, all right, let me try that with.
Two or three other people and I was like, Okay, well let's expand the scope a little bit.
Yeah, and so that's where feedback loops and network effects come in. So people don't really understand feedback loops.
Feedback loops are not
Feedback.
Right? The feedback of I'm gonna give you criticism.
That's not what we're talking about.
Feedback loops, there are two kinds, positive and negative.
So a negative feedback loop isn't actually negative, it's a thermostat.
And what that means is if it gets really warm in the hotel room, the air conditioning kicks on
It gets really cold.
The heat kicks on.
It's negative in that it keeps it in a central
Please.
And a positive
feedback loop is like the microphone at a
Bad wedding.
That gets that screeching sound that goes around and around and around'cause it keeps getting amplified.
So what we seek to do
Is
Build a project.
Yeah.
The next time we do it.
It's gonna work even better.
We want to find an insatiable desire.
And start the path.
Of filling it.
So
The insatiable desire could be something like status.
But it could be something like I need caffeine every single morning.
That doesn't fade over time. And as you become
The reliable purveyor of caffeine.
Then risk averse people are just gonna keep coming back again and again.
So once you had a small head start with this podcast.
You could
Keep that head start.
By creating ever better episodes of the podcast and no one could ever
Catcha.
I my blog
In April is gonna have post number ten thousand.
And no one's ever gonna catch up to me.
Yeah, but each time there's another post.
It becomes
More
of what people signed up for.
And this
Doesn't work.
Quite as well when you're talking about
Shoes.
Because once someone's closet is filled
The only way for them to buy new shoes is to get rid of the old ones.
So
A Christian Lubuton can't scale to infinity.
Because
Sooner or later you run out of people.
Who have the money, or you run out of people who have the closet space.
But what we're looking for.
Is to build
These networks with feedback.
Where
It works better when I tell my friends.
It works better when I have more of it. It works better when I do it again.
And these insatiable desires are
Everywhere.
But we ignore them and instead try to steal market share from somebody else.
So I think this ties into one of
the questions also that I was going to ask you about, which is how can I create the conditions for a network affected developer on my project, I suppose is ensuring that you have an answer to
Hopefully an affirmative answer to Can you say
Or would your
Clients say, or customers, it works better when I tell my friends.
Right that same.
To be one.
There are some very pure examples of this, but not many.
So a pure example is the fax machine.
Or email.
If it's forty years ago and you have friends who don't have email
You need to get them to get email because you can't send email to people if they don't have an email address.
Right?
Yeah.
Crispy cream.
Priced the donuts.
So that it was cheaper to buy a dozen than to buy four.
And Christy Queen's was scarce.
So if you showed up at work with a dozen Krispy Cream, you were a hero.
And so that spread the idea the more times people shared crispy cream.
The happier the sharer was
And the word spread.
So
A lot of things that people build.
don't have a network effect because there's no incentive to tell the others.
On the other hand.
Something like
The big Lebowski, I can't talk to you about it unless you've seen it.
So I gotta get you to go see the big Lebowski so we can talk about
Bringing the room together, right?
And so it's built into the idea.
of a certain kind of movie.
is we're gonna talk about it.
Where is the network effect? Why does it work?
Better.
Not better for you.
But better for the user.
If their friends have it too.
So I'm wondering where
You would
draw the demarcating lines between
Below average non existent.
moderate, excellent network effects in the sense that you give a few examples. I'm wondering, for instance, where something like Magic the Gathering would fall.
It seems sort of intrinsic to the nature of games themselves that if you want to play a game and it's not a solo venture, you need other people to play.
Magic was very beautifully designed.
I
I'm blanking on his first name, something Garfield.
I believe.
But
the collectible aspect to it also.
And the competitive aspect.
All of these things combined to help make it a real incredible phenomenon, but it's ultimately a game you need other people to play with you.
Yeah.
But how would you think about that or any other examples that come to mind?
If you're really trying to
dial this to eleven to use a spinal to my friends, but it works better when I tell my friends.
Right there are some
Obvious examples that spring to mind.
Facebook.
Something like that.
But crispy cream.
Another good example. It's a better one you tell your friends you end up being a hero.
Right.
So that is a meandering
Caffeine infused, speaking of caffeine.
lead into what I think is a question. But
I'll let you take that wherever you want. So so for people at home.
I'm cheating. I made these decks.
Of
Cards.
that people can get and they have
Two hundred questions on them.
And what you do is you
Play them out.
So that you can
Challenge your peers.
To work with you, to start
Working your way through these questions.
The book has
More than a thousand questions in it.
Because
The questions are how we open the door.
So in the case of the network effect.
What do people want?
Well at some level.
There is a desire for
Mechanical
Efficiency.
Yeah.
You want everyone to drive on the right side of the road if you live in North America and
'Cause if some people drive on the other side of the road, someone's gonna die.
And so
There's very much of a network effect about which side of the road are we gonna drive on. There's no disagreement whatsoever.
Those spots are mostly taken.
So now we have to say what do people want?
And I think people only want two things.
Three.
Freedom.
From the feeling of fear.
Let's leave that aside.
The other two are status.
and affiliation.
Filiation is who are you hanging with, who are your friends, who's at the table with you, are you alone?
Affiliation is
I got invited to a
Fancy wedding on in the Hamptons.
Couple of months ago we pull up.
You had a
Park your car and then a golf cart would take you in.
And there's
Three of us waiting.
It's Helene, my wife and I.
And I'm wearing a a suit.
And there's a guy.
Who's also waiting, he's wearing a tuxedo.
And I'm like
Mm.
Oh It's gonna be a long night.

And
I'm feeling really bad for myself.
Didn't I read the invitation?
And then two more cars pull up.
And
Three people in suits get out.
So
Now you can hear this guy going, Oh
Oh
Because
He was the only person in a tuxedo.
Why should it matter, right? It's still close.
Well, it does matter.
Because
Where do you fit in?
And status is who's up and who's down, who's winning.
I
So
Something like Magic the Gathering.
Said.
Two
A kid who might see themselves as lonely.
This is a really good way for you to hang out with other people without having the kind of conversations that make you uncomfortable.
You can talk about dragons and orcs and stuff like that.
But by making them collectible
They also built in status.
Because if you have a thicker deck
Or a more valuable deck.
You're moving up.
With people
that you're competing with.
And those two things kept dancing back and forth and back and forth and back and forth.
So what we're
Probably doing.
When we build a modern
Entity.
that's gonna use the network effect is we are offering people either
Affiliation. Everybody else is doing this. You are being left behind.
Or status, which is you're in the right room.
And other people aren't.
And if you leave this room, your status is gonna go down.
And so
If you do the math of
The TED Conference.
That's all it is, status and affiliation.
If you do the math.
Of why people
Have the latest version of earbuds or whatever.
Status and affiliation.
Over and over again.
Are we giving people
Creating the conditions
For them to get
The status they seek
or the affiliation they crave.
And that brings up
One of the
Scarest
non sequiturs in the book, which is the creation of tension.
If you wanna make
Change happen.
You have to create tension on purpose.
Not?
Stress. Stress is bad.
Stress is you're trapped. Stress is
Life is bad.
Stress is you want to leave, but you can't.
Attention.
Is what happens if I pull a rubber band back?
And then let go.
I had to pull it backwards to get the rubber band to go across the room.
So if I say
Teller Swift is playing in Amsterdam.
And there's only four hundred seats left.
I created
Tension.
Because everyone who wants to go knows that there are more than four hundred other people who want to go.
They better hurry and get their mom to give them the money.
Or else they're gonna be left out.
By creating tension, the contact promoter fills the venue.
If there is no tension, no one's gonna come'cause I think I'll just stroll in if I feel like it.
So scarcity creates tension.
Lack of affiliation creates tension. The desire for status creates tension.
When you're out trying to raise money.
And someone says to you, Who else is invested?
Why would they ask that question?
They're asking about affiliation, they're asking about status.
If you say I have term sheets from three people and I only have room for one more person, you create a tension.
And so we're constantly doing it.
But we rarely do it on purpose.
Could you say a bit more about affiliation status sidebar Richard Garfield?
is the mathematician who
designed Magic the Gathering. There's a great episode on a podcast called Think Like a Game Designer.
That has Richard Garfield.
on it, which I suggest to people. Affiliation and status. Could you perhaps give an example?
From
Book writing.
Or from
Podcasting.
Yeah, let's talk about books.
So
Why do authors blurb each other's books?
You don't see
Tim Cook.
blur being an Android phone.
So
Why are authors so eager to put their names on each other? Why do they
Not only
Permit but celebrate the idea that they're sold next to all the other books.
Books don't sell at the supermarket, they sell next to the competitors.
Because
You get status if your published used to be more.
by a famous publisher. You get status if you're reviewed in a certain kind of
Review you get status if you're
Face out.
You get affiliation if you're seen
In the same category as Stephen King or Elmore Leonard.
It's us high school over and over and over again.
Okay, so that applies to the authors. What about
Writing books.
If people are trying to pull some of these levers.
For
Pressing the buttons of affiliation and status for readers.
Yeah.
What might that look like?
There are a couple of elements here in the idea of fiction.
If someone says
Have you read Middle March or
Have you read Catcher in the Rye? And you say, Well, of course.
And you say something smart from it.
Your affiliation with that person
was established. If you said, what book? Catcher in the Who?
Your status goes down.
You don't have a th a bridge to talk about it.
So
You know on the upper west side in those fancy
apartments at the Dakota. That's all people are doing is signaling to each other.
I belong here'cause I just read what you read.
And I have an opinion about it.
And the same thing is true
A thousand miles away, but people are talking about NASCAR.
It's exactly the same thing.
We don't need
The cars to go around in a circle.
We need
The conversations that we have.
About the cars going around in a circle.
And how can you design a product or a company or a book?
To do that.
More effectively rather than less effectively. Exactly. Because there's certain things that culturally when they reach a critical mass, Game of Thrones is an example.
There was a point where that was such appointment viewing and such a dominant conversation that
People just felt completely out of the loop and like schmucks if they weren't able to have at least that common
Touchstone for conversation. I'm not saying everyone, but a lot of people. It was that dominant. Harry Potter, another example. But
Those are already
stratospheric successes. So in the early stages.
What types of questions should people ask, or what types of
thought experiments should people do when trying to run their idea through or their product or whatever it might be.
through the filter of affiliation status and then the other one that we tabled.
It's
Back to the conditions. Create.
The conditions.
For the people in the smallest viable audience.
To have to talk about it.
So Tina Brown
took over the New Yorker, it was failing.
The New Yorker magazine.
And what she did, it cost a fortune.
Is
It used to come out on Mondays.
By messenger.
On Sundays
Four thousand people got
the New Yorker delivered to their apartment.
Now.
If you're one of the four thousand
Your status goes up.
But it only goes up.
If people know.
That you are one of the people on Tina's list.
So the first thing you're gonna do when you get to work on Monday
Talk about the New Yorker. Yes, the New Yorker.
Because
You talking about it.
Is the only way for your status to go up.
And now people who want to be in your circle feel left out.
So they have to quickly go read it.
And it becomes a topic of conversation.
But only for four thousand people it was enough.
Because of that center.
Alcoholics Anonymous.
Which isn't anonymous at all. The first rule of Alcoholics Anonymous is you talk about Alcoholics Anonymous.
Only started with twelve people.
In a room. No one knows where the headquarters are, no one knows who's running.
Okay.

Good point.
Um
And so
Once you have that tiny circle of people and you do everything you can to create the conditions.
To change the lives of those twelve people.
Their desire
For affiliation.
Two.
Pay back to those they've harmed.
As a form.
Of establishing a new status in the world.
begins the kernel of its spreading.
But back to the
Access of time.
It took decades.
Before Alcoholics Anonymous was Alcoholics Anonymous.
Right? You can't make something like that work.
Overnight.
If you're gonna talk about a T V show
What's the biggest strategic mistake?
Netflix made.
And it's hard
to criticize Netflix strategy because of what they built.
But it's this.
They forgot to stop.
The binge watching.
When they started with the binge watching.
The strategy was this.
And it's one of the questions in the book.
What are we willing to do that our competitors aren't?
And they knew
That the T V networks and the cable networks
Would never be willing to show all the episodes of a series.
At once.
Because they had to defend
Their whole model
And the way they paid for the shows.
So Netflix said, We're just gonna let you see the whole series in one day.
The more you watch Netflix,
The less you're watching somebody else.
We're gonna get you.
Hot.
on this'cause you're not gonna get involved in other shows'cause you're gonna be impatient.
And it worked. They really
Struck a blow.
By doing that.
But what it cost them.
Is the water cooler.
Because you're afraid
To talk about
Episode four of Sucession,'cause your friends
All right.
not caught up yet, you're gonna spoil it for them. So we don't talk about it as much.
As if it was every week.
And so
Shifting gears and I talked
To tell about this.
And he didn't have a good answer.
It's like
About four years ago they should have switched back to once a week.
They use the binge watching to basically build a critical mass of market share.
And then
Dial it back.
Two more.
Appointment view. Exactly. Something like that. Mm-hmm.
Because then the only people who aren't paying for Netflix are gonna keep feeling worse and worse.
'Cause everyone's gonna be constantly talking about
The new show.
On Tuesday.
They're not in. So that's gonna be the incentive.
for them to become one of the last people who isn't paying for Netflix.
Let me pick up a few other questions. We can of course move in some methodical way, but
I kinda like the scatter shot.
Improv jazz.
So there are two, and I'm selfishly asking because I want to hear your thoughts on this since I
I'm experimenting as you know with the
currently codenamed. No book.
And we'll be releasing serially initially.
So I want to set the conditions such that
Good things can come, as domino effect later.
So one of the questions I'll give you
Two, you can pick, or we can do both. So one is how will early successes of my project make later successes more likely?
And then how big is my circle of us and circle of now? What can I do to expand them?
The second one we're gonna
treat a little differently, but the first one
I think it's really important.
The challenge
Of
Non fiction.
Writing.
in this world today is TLDR.
And for people who never read the dictionary.
'Cause they were too busy, it stands for too long, didn't read.
Which means
I don't have time to watch all of Dune.
Just tell me in three sentences what it's about.
People don't usually say that about a movie like Dune.
But they say it a lot.
about the books that people like you and I write.
And
James did a great job with atomic habits, but I will be
Delighted to wager.
Yeah.
Many people.
Didn't read the whole thing.
Because
They bought it so they could understand what it was about.
And then once they understood it was about their problem went away.
Same thing's true with four hour work we same thing's true with permission marketing.
Yeah, if you read the first
Three chapters permission marketing, you know what it's about.
And now you say I I don't need to go into more detail.
I've solved my problem.
So the challenge you face with the notebook
is if someone says
Tim's got a new book. You just created tension.
'Cause they don't know what it's about.
And
Then
If someone says
It's about this.
And they
Solve the tension problem?
Their problem goes away and they're gonna move on.
Early successes don't lead to later successes.
This is not what happens with the Bible.
Because the Bible is part
Of a cultural thing.
that people keep coming back to over and over again, and status is accorded to people.
Who spend more time reading it.
And so the key

A non fiction book work is to put it at the center.
Of a community.
And so
A weird
Seemingly unrelated story back when I was starting out.
And I was really struggling.
There were many days when no money was coming in whatsoever.
And someone said to me, why don't you do something useful?
Like, I don't know, invent
The seedless cherry.
Mm.

I took this personally, so I the next morning I called the US Department of Agriculture.
And I asked this was before the internet, and I asked for the Cherry Department.
And they had a cherry department.
And this guy answers the phone he says Cherries
And I say
I'm on a quest. I want to figure out how to make a seedless cherry.
And he said, Well
See this chair is actually quite
Easy.
But you wouldn't want to do it.
Because it would still have a pit.
And the thing is the seeds inside the pit.
And if you don't have a pit, you can't have a cherry.
Because the way droops that's a kind of fruit.
Like peaches.
grow is they have to have a pit and it all grows around the pit.
So no pit, no cherry.
That's the way it goes.
And so the book
is the pit.
And in the case of permission marketing
I wrote a book, but it turned into a
Hundred billion dollar year industry.

Mail Chimp.
And
HubSpot and all the others.
They were built around the idea in that book.
So
Your status at work would go up if you knew more of the detail.
Your connection
Would go up.
If you could
Stay current with it.
But if that hadn't happened
then my career wouldn't have happened either.
Because
All I did was show up with a pit.
And then the fruit showed up around it.
So what you have done.
Is
Somewhat with intent, and somewhat without.
Is there is now a vibrant community.
Of more than a million people.
who talk about what you do, who listen to your interactions.
And
You are the pit, but they're the fruit.
Sure.
And they need you.
To keep narrating these conversations.
If you're gonna make it a book work.
You're gonna have to figure out how to make it.
Drip in a way that
keeps making each installment.
Worth more.
Because you've read the previous one.
Yeah, that's
Part of what I'm excited about.
and a little nervous about, but I really think it'll work is to
workshop the book effectively, right? Because there are already five hundred plus pages and a lot of them are polished, but
By creating a
community of
Beta testers, right? Early readers on something like Mighty Networks or Circle or one of these platforms.
And
It's a challenge.
Worth attempting.
I really think I've also just done it the other
Way so many.
Not as many times as you have, but
But more successfully than me. So you but I mean
Let's think about volunteer firemen for a minute.
Yeah. I'm just gonna use that interjection from now on. I love it.


Thankfully they're
Except for tragedies like in California, there are far fewer
House fires than ever before.
Because of building codes and other things.
And yet volunteer firefighters continue to show up.
They show up at the fire station, they connect with each other around firefighting.
But fire fighting isn't the point.
The point is the volunteer part.
The connection part.
The affiliation part.
And so
You know what Gene has done with mining networks is very cool.
But at its heart.
It's
What do I get from the other members of the network?
Not do I
What do I get from the pit?
Yep, one hundred percent.
And so that's where your opportunity is.
Yeah, it doesn't work for me otherwise. Also.
I I don't wanna be you know time to make the donuts if for people who are old enough to get that.
Reference to the Dunkin' Donuts commercials from the eighties.
Let's come back. We don't need to spend time on this, but I'm curious, how big is my circle of us and circle of now? What can I do to expand them?
This was my
The most heartfelt part of the book for me and it's the one
That people ask me about the least. So I'm thrilled that you brought it up.
The circle of now is
Goes back to time.
A toddler
has a circle of now that lasts seven seconds.
If they don't get what they want within seven seconds they have a tantrum.
Somebody
at the peak of their maturity might have a circle of now.
That lasts.
A decade.
I am gonna go through medical school.
And
Payout money.
And have no fun.
For six or eight years.
Because after that
I will be able to achieve my dreams. That's a very big circle of now.
So when you pick your partners
When you pick your investor.
When you pick your customers.
It would really help if you would pick people whose circle of now.
is sort of similar to your circle of now.
And one of the giant crises that we're all gonna live with.
is what's happening to the climate.
Because a whole bunch of people have a circle of now that's fairly short.
It says
Yeah, but
My house is cold, so I'm gonna
chop down the furniture to put it in the fireplace to warm things up.
And other people have a circle of now that's much longer.
It says, I'm here for the seventh generation.
What do I sacrifice today?
To help them.
Later.
That's circle of now.
The circle of us.
Is
A toddler.
cares about themselves and maybe their parents.
It's a very small circle.
Whereas
Someone like my friend.
Jim who runs the Fuller Center in Nourishell.
who's been providing housing and sustenance
For
Strangers.
For decades?
His circle of us.
is tens of thousands of people.
It's a much bigger circle.
So when we think about our strategy.
We gotta keep coming back to well, how big is my circle?
Because even Ayn Rand
Cared about more than one person.
That the circle of us is
generally is more than just meat.
And the circle of now is generally more than just the next thirty seconds.
The exception is if you're drowning. If you're drowning, the circle is you
And the circle is now.
That's all there is.
But we're not drowning.
So
How do we grow into
big enough circles and how do we create the conditions for the people around us.
Have similar circles'cause if we're measuring the right things
They're gonna measure the right things and we're gonna get what we seek to get.
You
In addition to affiliation and status, there is one other need.
I wanna say it was something like extinguishing fear.
Something like that.
It's the freedom from the feeling of fear.
There we go. All right.
Where does that fit in?
It can short circuit everything.
If you are in a f a movie and the fire breaks out.
You're not really gonna focus on affiliation or status.
You're just gonna focus on survival.
Most of us are lucky enough that we're not in burning buildings.
But it's very easy.
To be persuaded by marketers or manipulators.
And it's very easy.
To get into a doom loop.
Well, you imagine that you are in a burning building.
And so
All these things happen. So
When
We think about
How do we get somebody
in a hospital to allow us to
Do an operation on them or
Make an incision.
Well that's because
They believe that the fear will go away if they can get through this.
It's not about affiliation, it's not about status. So I put it to the side.
Because most of us
should not be in the business of
Dramatically inflicting fear on other people?
Yeah, ideally. And so that's why I keep coming back to the other two.
Because in civilization
It's mostly status.
and affiliation.
What are other
Portions of the book could be questions, themes.
that you think are
Important for
entrepreneurs or would be entrepreneurs to understand
That might
Get glossed over. So I can think of things from all of my books where I'm like, man.
There's this one piece, maybe I didn't emphasize it enough. People tend to skip over it, and that is a very important piece of the whole puzzle. Wondering if there's anything that comes to mind.
for this strategy.
We'll talk to the freelancers in the room first.
I'm a freelancer. I have no employees. You're looking at my whole team.
I've been an entrepreneur.
It's a different job.
Entrepreneurs built something bigger than
themselves to get paid when they sleep.
They use outside.
resources to build something they could sell.
Whereas freelancers
Do a craft.
And
The only way to move up.
As a freelancer.
is to get better clients.
You can't
Work more hours.
And hiring junior versions of you is not sustainable.
Because if someone a junior version of you is better than you, they're not gonna take the gig.
And if they're worse than you, your clients are going to be unhappy.
So
Getting better clients is the defining
Stop.
The goal.
if you're going to be a successful freelancer.
And you don't get
better clients by doing a good job for bad clients.
You get better clients by becoming the kind of freelancer good clients want to hire.
Which leads to the two big insights that
People skip over, which is
When you pick your customers, you pick your future.
And when you pick your competitors.
You pick your future.
So let's take them one at a time. When you pick your customers.
If you pick people
Who are cheap.
Frasled.
In a hurry, don't read the instructions.
And our
Disloyal?
Well, now you know how you're going to spend your days. I can't believe you can throw me under the bus like that, Seth.
Yeah, it's gonna be a rough ride, if that's what you're
Sonic. But that's what most people do,'cause those are the easiest customers to pick.
And
If instead you pick customers that might be harder to acquire.
But
Demand
Better quality and insist on paying for it.
who are eager to talk about what you do and blah blah blah blah.
your future is going to change. So when you pick your customers, you pick your future.
And the second one which goes with it.
When you pick
Your competitors.
If your competitors
R
Ruthless.
Cutthroat?
Immoral.
And constantly racing to the bottom?
you're gonna be pressured to do the same.
And so the industry you walk into, and I've been in many industries, and the reason
I've stuck.
With the book business.
Is
That my competitors are my friends.
I have
No secrets from them, and I delight in spending time with them.
That's not true, for example, in the toy business.
The people in the toy business who compete with each other they
You know, there's secrets and there's lawsuits and everything else.
So
We should make these decisions on purpose.
And the same thing's true with who you're gonna get your funding from.
Because if you show up in Silicon Valley, you've decided what kind of company you're building.
And if you get
Raise money from dentists in Iowa, you could build a different kind of company.
Yeah, and if you bootstrap.
Yet another kind of company altogether.
Let me just make this into a
Sort of private.
Consulting side.
Yeah.
Got a strike while the iron is hot here.
So with communities because you have worked with and helped cultivate many different
communities for different purposes. Right. You've got alt MBA
You had a sort of mass collaboration for
The carbon almanac.
And you have experience with this, whereas I really do not, at least in a community management.
perspective.
And one thing that's been rattling around in my head and I haven't landed
Anywhere where I feel a high degree of conviction is
In building a community for, say, this serial release of the notebook, the principal goal of which is to make the book as good as possible.
But also to get people excited and to see if things work.
And that is part of making the book as good as
Possible. We have already tested everything, but
It has to work for
A certain critical mass. It doesn't need to be everybody, but a certain critical mass of people. And
I have wondered whether the community should be limited and free.
Or limited and
Paid, even if it's a nominal fee.
I have a lot of fear associated with the paid.
Because sometimes people
If they pay five dollars a month, they expect me to be their 247 life coach on demand. And that is not something I want to sign up for.
And we could
And will boot people who end up just being
too high maintenance. But
How might you think about this?
So I've leaned towards free'cause I mean the the money wouldn't really matter.
But for instance when I've done
in real life gatherings.
I don't care about the money that comes in through ticket sales. I do care about having an accurate headcount so we can plan for the event. And if people have to even just put in their credit card for a one dollar payment, they are more likely to show up.
So these are some of the thoughts rattling around. How would you chew on that stuff?
The money always matters.
Because
Money is nothing but a story.
It is not
A pile of green things or a bitcoin is a story.
So
Years ago I did an event in New York for nonprofit leaders.
I wanted to make sure they showed up, but I didn't want their money.
And so I said to them.
You gotta bring
A check for a hundred dollars made out to a charity I pick.
And at the end of the event, if you don't think it's worth it.
You can take the check back.
But
I knew that everyone would have skin in the game.
And I was heartbroken.
Yeah.
Some people took the money back because their mindset of donation was I'm already working in a nonprofit, I don't give money to anybody else.
Which was heartbreaking. But it
Help me see.
How deep the money is a story thing.
So
You mentioned three communities that I've been lucky enough to be part of, and in each case the money was different.
So
At the Carbon Almanac, it was my full time job for a year and a half.
I was a volunteer and so were the other nineteen hundred people.
No one got paid.
No one paid.
And
I don't think community
Management is as important as community leadership.
Community leadership.
Is about
Creating again again.
Creating the conditions for the community
Delete itself.
So my job was
What are things like around here?
How do we talk to each other?
Who gets to stay and who has to leave.
But once I could
Do that.
Then the amount of actual management I had to do.
Was fairly minimal.
Because the right people were in the room.
The Alt MBA.
We wanted to establish
that it was a bargain compared to two hundred thousand dollars at Stanford.
And that it wasn't
Some simple online.
Course. You had to show up every single day.
And so we charge
Three to five thousand dollars.
And
Thousands of people.
Went through it.
And the fact that people paid a lot was very important.
Because
They got more than that.
And the minute that wasn't gonna be true, I should stop doing it.
Because
No.
Premise was your time is worth even more than the tuition.
We're never gonna cut a corner because we have unlimited money to spend.
On this
facility.
And the third one is called Purple Space, which runs now.
Costs twenty dollars a week.
And the reason
People pay to be in it.
That I need them to pay to be in it.
Is
So that they'll show up.
Because like many
Asynchronous online communities. It's easy to join.
But then it fades on your priority list.
So what I would
Pushback.
on is
You said that the purpose of the community
is to make sure the book works.
And to make sure the book is good.
I don't think that's the purpose of the community.
Now it's your community, so you get to decide.
Yeah, no push back. I think the purpose of the community
Is
to build a place
Where
Using some of these core ideas.
The people who engage with each other.
supercharge
their journey to where they want to go.
If that's what it's for, then a side effect is the book's gonna be good.
That will be my indicator for the book working.
Right. If people
Have successes.
Help one another.
And I see that as a natural outgrowth of their
Engaging with the material.
If those are the tendrils that grow out of the soil.
Then it will have worked. Nothing less than that.
But that's why you charge for it.
You charge for it, not because
Please come here and help Tim make his book best.

But I work so hard on it, Seth.
If you're going over there.
Over there. That's where I'm taking people. If you're going over there
I think this is worth
A lot of your time and a hundred dollars out of your wallet.
And at any time.
You don't think it's worth a hundred dollars?
You just hit this button and you'll get the hundred dollars back.
So that means I have to work overtime
To make sure
That people
Would rather stay in it.
Then click that button and get their money back.
Cool. All right, lots to chew on.
And could you say more about community leadership?
So management and leadership.
Ray Crock.
And
Henry Ford were pioneers of management.
Yeah.
Frederick Taylor had a stopwatch.
And we got the phrase human resources.
From the idea of treating people like a machine.
And
If you've ever heard of
The phrase.
Being jerked around or calling someone a jerk.
It comes from the Henry Ford.
Model T plant.
Because you would watch the workers and they would be like dancing around like marionettes.
Because there was someone like a stopwatch on every single motion.
This is management.
And management
Is super effective at a fast food restaurant.
Or any process.
Yeah.
You needed people to act like a machine.
If you don't do it.
No one's gonna show up for the shift.
Your productivity may go down.
Leadership.
Sa
I don't know the right way.
But I might be able to build a community of people in a place
Where they find the right way.
And so I can't tell people what to do at every step because I don't know.
But if I get the right people in the room.
So here's a an example I love from the leadership category.
And I've talked about Google a lot today, I'm not sure why.
So
Early on.
Google
was going to go out of business.
And it wasn't from lack of revenue.
It was because the internet was too big.
And
Yeah.
Computers they were using to index the web weren't
Fast enough.
To keep up.
And so doing a search on Google
Went from taking a
A tenth of a second.
To seconds.
And people just weren't sticking around.
And two engineers
Worked over time.
And figure out how to hack.
Dell.
Hard drivers.
So that they put
The data that was most needed
Near the outside of the spinning disc.
So that the hard drive could get there faster. That's awesome. This is like the greatest hack of all time.
And I promise you that Sergey and Larry did not think to tell them to do this.
So
Leadership says let's get the right engineers in the room, give them the right resources and the right problems to go solve things and
With an incentive of status and affiliation for doing so.
And
Now with AI doing most of
The jobs where we can write down specifically what we need done.
Management is gonna get less and less important.
And leadership becomes more and more important, which is why strategy matters so much.
Because
You want to tell people the strategy and let them
Fine.
Tactics.
And so you know the fancy hotel that says to its
Frontline workers, the people who are changing the sheets and stuff.
Here's two hundred fifty bucks.
Per customer.
You can spend it.
Any way you want.
If a customer is unhappy
Give them.
Free dinner, give them whatever you want. Two hundred fifty bucks, we're never gonna question you doing it.
That lets your front line have tactical control.
But you're not changing the strategy.
Which is
This is a luxury hotel.
There's a
book I'll recommend to folks if they're interested. It's very fast read. It's by Will Guidara.
Mm-hmm.
Unreasonable hospitality.
And
It's a great example of how far you can push that.
Mm.
Will lives this, he's a a great guy, and so is his wife Christina.
And
He understands that you don't
Manipulate people.
With hospitality.
Which is easy to
Try to do.
But ultimately gets you in trouble.
Instead
You serve them.
With hospitality, and you can see it break down.
At places.
Like Madison Square Garden.
When
He has a temper tantrum and starts scanning the faces of people walking in.
And kicks lawyers and their kids out of the venue.
Wait, who are you? That's not hospitality.
Who's doing that?
The guy who owned Madison Square Gard, I can't remember his name.
There were
People who were challenging him in the outside world and he just started acting like
You know, the Emperor.
The point is
Hospitality is a point of view.
And it's a point of view
That sits right next to leadership.
So it doesn't mean you're giving away
Free candy all day long.
What it means is we agree on where we are going.
And then I trust you.
To help us get.
Yeah, as far as storytelling.
Also or
Setting conditions such that your customers will tell stories.
It's a fun book to listen to. And it was recommended to be by one of the top game designers in the world, who has nothing to do at face value with hospitality. But he was like, I'm halfway through this. You have to listen to it.
And
There's still stories.
that have stuck in my mind from that book. And for those who don't know, just very briefly tells the story.
primarily of eleven Madison Park.
Going from scrappy
start up to one of the top, if not the top ranked restaurant in the world and is a very fun listener.
Can we tell the hot dog story?
Go for it.
So
Let's be clear. Anyone who goes to a clothing store is already wearing clothes.
Speak for yourself. Okay.
Yeah.

I didn't say they were nice clothes. Anyone who goes to eleven Madison Park for dinner in the old days
To spend four hundred dollars.
already has food in their house.
Yeah, right. You're feeding people who already had lunch. So
You're not selling the food.
Will was the front of house person, Matre D and stuff.
And
He trained the staff.
Relentlessly.
One of the staff is serving
A couple of
that's celebrating their fortieth or fiftieth wedding anniversary.
And
There's like
Fourteen courses and
During the third course
The waiter overhears
The wife saying to the husband, Do you remember our first date?
Our first date in New York was right in that park.
And you bought me a hot dog.
'Cause that's all we had was twenty five cents. You bought me a hot dog.
From a hot dog cart.
Right there in Madison.
Square Park.
So
The waiter.
Goes back to the kitchen.
And somehow
They get
A New York City
Hot dog.
With the roll.
and substitute it out for the sixth course.
And so instead of bringing them, you know
Clams, casino, whatever it is.
On their plates, wrapped in the
Greasy paper.
is a New York City hot dog.
That's hospitality.
It it makes me cry every time I hear that story.
Oh yeah, there are a lot of really good stories in that one.
Alright, Seth. So
For somebody who's
Thinking to themselves, all right, I want to sit down.
And I'd like to
Sort of shake the snow globe of my mind.
with some questions, some more questions that I can use to land on approaches or solutions strategy, as it were.
Yeah.
Do you have any other
Favourite.
questions or perhaps
Counterintuitive questions. Any questions that you might toss out there is good.
Fuel for the fire.
I have
One question to get you started, and then two interesting challenges. The question to get you started is if you were forced
Two
Increase your prices by ten x.
What would you do?
And
This really unsettles people'cause they
No one
How to think about
If they were forced to have their prices'cause their competitors are racing to the bottom.
But if your competitors weren't changing and you had to charge 10x, what would you do differently?
Well
For example
This is where Concierge Medicine came from.
Right, because all these other doctors are saying, How can I take more insurance? And one doctor shows up and says, I'm gonna charge ten times more and this is why people are gonna get in line to pay for it.
But it doesn't have to be
Luxury goods for the ultra wealthy. There are lots of things
Well you could imagine
Charging ten times more.
Bottled water industry in the United States came from.
Charging infinite.
Times more.
So that's one question I like to ask. Another one is
If you were sure you were going to fail.
What would you do anyway?
And
I think that tells me a lot about who you are and what you stand for.
So
Two ideas.
then to follow that up with. The first one.
Comes
From a social scientist in the nineteen twenties and Adam Grant wrote about this in a recent book.
Which is the idea of scaffolding.
Scaffolding.
Is
What effective teachers do.
The pedagogy teaches us.
Yeah.
Dem.
Way we learn almost everything that matters, walking, talking,
Is
On our own.
We're autodidex. We teach ourselves to failure.
But when things get more complicated, like fractions,
People get stuck.
Scaffolding is creating the conditions so on those stuck moments.
You work your way through it.
And then you get back on track.
And scaffolding.
Or the lack of it.
Explains
In large measure.
Why people in some communities
Can't figure out.
How to get out of their rut.
And
Move up.
Different.
Status categories.
Because when they hit a speed bump.
At nine or ten or twelve years old.
There isn't
A learned, wise
Focused adult maybe.
Who could help them through that moment.
The scaffolding are the ladders we build.
to help people get through the tough stuff.
Now are those
traits like grit resilience, whatever it might be. Are they
lenses of looking at things like failure is feedback are they
Other tools? What is the scaffolding?
All of it. So if you've ever tried to use Fusion three sixty from Autodesk.
I have not.
is almost non existent. Like I've been
building and using software for fifty years, I can't figure out how to use this software.
And when I get stuck
There's nothing to hold on to.
Whereas
You know.
Part of the magic
When
The team
Built.
The first Mac is
Every app
had the same structure. So there was scaffolding built in, you knew where to go.
to get to the next thing.
If
You're trying
To build an entity.
Of any scale.
Where is the scaffolding for when a customer gets frustrated?
Where's the scaffolding?
For when someone's gonna
Veer off.
and use a competitor. Where's the scaffolding if they don't know what to tell their boss or their friends?
If you give them handholds
Right where the handholds belong.
You know, think about a rock climbing wall.
People are gonna grab the handhold.
So you can't
Take them.
through the whole thing, but you can make sure there are handholds.
In the right place.
So where is
The scaffolding.
The
Idea.
That Yahoo had

Buttons everywhere.
Hundreds and hundreds of buttons.
And the idea Google had was to give you a fill in the blank that when chat GPT came out
The scaffolding was type something.
And that puts a lot of pressure on what it writes back.
'Cause if you had type something and it says, I don't know.
You're not gonna use it three times.
You're gonna stop.
So you're making these bets.
And what's it gonna be like? What's gonna happen after that?
And now I want to talk about probability in games and decisions.
So if I have
A standard
Deck of cards.
What is your deck of cards called by the way?
It's called
The strategy deck.
The only place you can get it is it
Seth.blog slash T I S
And
It's really cool.
If I have a deck of fifty two cards.
And I say, Tim, pick a card.
What are the odds you're gonna get an ace?
Four and fifty two.
Right.
One out of thirteen, right?
There we go.
Yeah.
'Cause the deck is stacked.
There are forty eight non aces.
and for aces.
Every time
We engage in any
Probabilistic thing.
The deck is stacked.
And it is on us.
To know before we make a bet.
How many aces are in the deck?
So
If you're applying
To get into a famous college in Boston.
And you are
Fully qualified.
By every
One of the published measures
You have a one in fifteen chance of getting it.
Because
After they take all the qualified people.
Now it's
Pretty random.
One and fifteen.
That's how the deck is stacked.
If
You are
Super.
Super
Good at football.
And you're applying
to a small college.
And they
Have football scholarships.
You have a way better chance than one in fifteen of getting in.
Because that deck is stacked differently.
So what we seek to do.
When we're making a bet.
І шоуп і на плейс верні.
That the card we need
is gonna be in the deck.
That's what probability is.
Probability
Means
Then when you see poll results, it says
There's a sixty percent chance this person's gonna win the election.
That does it mean.
It's a tug of war between six and four.
And the sixth side is gonna win every time.
Doesn't mean that at all.
It just means there are six aces and four nonaces.
And there's gonna be a random selection.
And you're gonna get
The card you get.
So what we need to do when we're thinking about our strategy is not focus on how hard we're working.
or how much we want it to work out.
We need to focus on
What's the deck like?
And so
You're
Journey into archery.
Is
Partly based on the fact that you have
Thought through.
Who
else is gonna show up at this tournament.
'Cause if there were a million people who had devoted their lives to archery
I think you would understand your chances of
Winning a medal were very small. I would pick something else. Yeah.
Probably. Just given the time constraints. And
The fact that
Yeah, I'm coming in.
With I guess five to six months of
serious training and some of these folks have been shooting seriously since they're eight years old.

Gotta pick the right category.

Gotta pick the right deck.
And so then the thing that goes with that
is from our friend Annie Duke, which is what's the difference between a good decision?
And a good outcome.
And the question that I would ask
entrepreneurs who think they're innovating and leading is
Are you okay?
Making good decisions that
don't lead to good outcomes.
And most people if they're telling the truth, the answer is no.
And in my case.
The answer is yes. I have
Discipline myself. That's one of the things
I'm really proud that I'm good at
What are we talking about here?
So in her book she talks about the Seattle Seahawks.
It's the super ball.
It's
Fourth down.
They're on the two or three yard line.
If they score.
They win.
If they don't score
They lose.
Pete Carroll calls a pass play.
Calling a pass play
is a really good
C'est je.
Because if you do the math
V analyze all the situations
A pass is more likely to score than a run.
He calls a pass.
Think complete.
They lose.
Everyone says
Pete made a terrible decision, he should be fired.
No.
He made
A good decision, but he didn't get an ace.
He just got one of the other cards.
That's okay. You should celebrate that'cause you still made a good decision. If you
Buy a lottery ticket.
And you win?
You made a bad decision.
You should never buy a lottery ticket.
Winning
It's just
A weird anomaly.
But the deck is stacked.
Against you. Don't
Do that. Don't play games you can't.
Reliably win.
So
When I'm talking to people about decision making
I say
You know
Tell me the last time you made a really good decision.
And they do, and it always has a good outcome because they're measuring the wrong thing, and corporations are terrible at this. Corporations promote people.
Who make bad decisions and have lucky outcomes.
And they don't promote people who make great decisions but didn't get lucky.
Well Wall Street's probably the greatest breeding ground for that particular selection process.
Put that aside. That petri dish.
Fascinating environment, for sure.
So how do you cultivate that then? How would you suggest cultivating that? I mean, I do think
Learning to play.
A game, maybe doing some
very lightweight investing is another way to do this where
Certainly in the early stage game.
Anyone who's gonna last.
and be successful in long term playing that game is going to have to get very good at accepting
losses where they made a lot of good decisions.
'Cause there's so much outside of your control as well.
How do you think about cultivating that?
Good decisions over good outcomes.

Do is avoid false proxies.
And false proxies are easy to measure.
but ultimately not useful.
So how fast
Someone types is a false proxy.

They're going to
Be a good programmer.
It's easier to measure typing speed.
Then programming speed.
But
We measure the easy thing. We measure does that person look like me or look like I think someone should look?
I was talking

The last
Nine people this company hired.
had rode varsity crew.
At one of three colleges.
This is not a useful proxy.
Right? This is just
A lazy shortcut.
And
Then we
Turn it around.
When we think about
Decision making.
And we say
Are we going to insulate
Our decision makers.
From
Useless.
information. So if you're a stock trader.
And we work at an organization
Yeah.
We've promised our investors
We're making
Five year plans.
That we're here.
For the long run.
And you have a big Bloomberg?
Ticker on the wall?
You have really confused things.
Because
Now you're measuring the wrong thing in the wrong way.
And so the discipline
As you pointed out.
you know, in investing and making small investments
You don't even have to
Spend money. You just have to write down your prediction.
And you have to be able to
When you're working with other people.
Articulate
Why did you make that decision?
It's not okay to say well I just feel like it. That's just a hunch.
That's not how we actually
need to make our decisions.
Show your cart.
Make your argument.
Make your assertions.
Then your peers can
Talk to about whether that's a good decision or not.
If it's a good decision, you get rewarded regardless.
Of the outcome.
'Cause the outcome is out of your control.
That's just
Did you get an eight?
Or did you get an ace?
How if you
corrected course or spotted false proxies in your own life.
Or many projects.
Industries.
Et cetera.
Here's a really useful one.
I was
arrogant and thought I was good at hiring people.
Because
I was looking for signals.
That were ultimately false proxies.
And
I could see those signals.
Faster than most people.
certain questions or certain attitudes and interviews and things like that.
But as I thought about it afterwards.
What I really wanted
from people who I was hiring to work with to do a job was for them to do the job.
Not to be good at interviewing.
And so I made the decision to only work with people I've worked with
Before.
That doesn't mean
Only people I've met before. It means if I'm gonna hire you, I'm gonna give you a project and pay you to do it.
And that's your interview.
And we never even need to meet in person.
But if I've
Seeing you work on a project like I want
You to work on a project.
There's no more false proxy.
Right?
And
As a result
I've been able to work with a much more diverse group of people
Geographically background wise skill set.
Because
Now it doesn't matter if I want you to come over for dinner.
It matters.
That
We're doing this project together and I know you know how to do this part of the project. So the Carbon Almanac
Every single person could do anything they
Wanted once.
And then if the community said, We really like that
They got to do it more.
And so one guy
From India, Vivek.
He showed up.
And
He wrote one article and it was terrible.
And someone gave him some feedback.
And the second one was better.
And he was gonna quit.
But he got some more feedback in the third one.
was so good he ended up writing seventeen of the articles.
Because he figured it out and like great, we trust you now, just go and go and go and do it.
And
In a world that's so open.
To connection.
to strangers.
It feels like that's the appropriate way.
To interact.
With the work.
Which is to work with people who want to do the work.
And we can show you they can do that.
How do you read if someone is open to receiving feedback? I guess
The answer might be you give them a project and you give them feedback.
The only way to know. So maybe I'm you've already answered my question, but are there other indicators?
So I think
Back to this idea of Jeff Bezos creating the conditions for who wants to invest.
You creating the conditions for your community.
There are certain
Projects.
That I wanna work on.
Where I'm the creator.
Or I want to work with other people.
Where
Taking feedback isn't
An asset.
where you're looking for somebody who has a point of view.
This is what I do.
Take it or leave it.
There are other things where
Taking feedback is super important.
Because that's
Gonna keep things in sync.
And
For me it's
Not giving
Someone
Who doesn't match that.
A pass.
Just'cause they're good at what they do.
And this is
Analogous to
having bullies who work in your company.
I had a guy who worked for me years ago who was a yeller.
He wasn't a bully, but he was a yeller.
And we had one big open office.
And
The second time I heard him yell at someone.
I quietly took him aside, and
And I sat him down. I said, If you ever yell at anyone ever again, I'm gonna fire you on the spot.
It doesn't matter that you're the most valuable person in the company'cause you are.
Doesn't matter that you're the most senior and skilled person.
If I let you do that, I have made a statement about
What it's like around here.
And
He sent me a thank you note ten years later,'cause he never yelled at anyone at work ever again.
Even after we stopped working together.
'Cause I was the first person who had the guts to say
We don't want bullies around here.
And the same thing's true. If you really need
Someone who can take feedback in a role.
You've got to say
If you can't take feedback, you can't stay.
And it doesn't have to be a confrontation. It can just be
What are things like around here?
People like us do things like this.
What would be an example of someone who
You don't want your you don't require to take feedback.
I mean I can
Probably come up with a few.
As I search you probably can
Be faster on your feet with this.
A surgeon.
Yeah, I was just gonna say neural assertion.
I went to a dermatologist
Four months ago.
And he was terrible.
He not only was terrible at his bedside manner and terrible in that he didn't read the notes that I gave him, and he terrible that he prescribed a drug I already had a prescription for.
He just he didn't make me better, right? Yeah. So
I wrote a letter to the head of medicine for the whole thing and
They have
Obviously systems in place to make people like me be quiet.
But not to actually listen.
to people like me.
Yeah.
Because
They're taking the position.
Don't come here if you don't want to do what our doctors tell you to do.
'Cause we're busy enough already. We just want patients
Who aren't gonna push back.
And
There are plenty of people.
Who if you need something that is way outside your area of expertise.
Right. If you hire Chip Kidd
To make the cover for your notebook, which you should,'cause he's a genius.
Chip should not listen to your feedback.
Because he's Chip Kid, damn it.

Fair enough.
How do you use AI?
And how do you foresee using AI yourself?
I use it every day.
For more than an hour.
I think
It's electricity.
For our
Century.
In uh
Late eighteen hundreds there were companies that said, Yeah, this electricity thing's interesting, but we're not gonna be an electricity company.
And they're all gone.
Right.
But
Electricity is now you're not an electricity company, you're just a company that uses electricity.
And the same thing is true, I believe, with AI.
I will tell you.
And I'm not afraid to say it out loud.
I think chat GPT is arrogant and lazy.
And
I use it as a last resort.
Claw.ai
Is
A dear friend, I love cloud.ai. We have great conversations.
It's empathic.
It's self aware.
It warns you it might be hallucinating.
And when it makes a mistake, it's eager to correct it.
And I use perplexity.
Exclusively. I almost never do a search with a search engine.
But what I'll do with Claude.
Every word I publish
I wrote.
But what I will do with Claude, for example.
is I will say, here's a list of three bullet points.
Can you think of four more?
And it's great at that.
And then I'll
We write them and now I'll have five bullet points and I'll be
It's much better than if I hadn't.
Engaged.
With Claude.
If there's a concept in the world
That I don't understand.
I'll say to Claude.
Can you please explain it in three hundred words to a college student?
And that helps.
But I did it once.
And I still didn't understand it. And then I said, Can you write it to me like a Seth Goten blog post?
And
It did
And it did a terrible job.
But now I understood it.
So
I rewrote it.
And I said,
Do you think this is better?
And it said
Oh yeah, that's much better.
And I said, Thank you, I'll tell Seth.
And Claude said
Do you know Seth Goden?
Ha ha
And I wrote.
Actually I am self goated.
And I'm not making this up.
He then wrote
I can't believe I'm talking to you.
Your books have changed my life.
And then named like four of my books.
And it changed the
I like
All right, I'm in forever. You got me. I don't know how you did that.
But we're friends for life.
Alright, so I seem to have a similar use pattern with Claude and perplexity also, although I haven't.
Yeah, sandbag them.

Just yet. But
What do you think people are getting right and wrong?
About
AI.
I think that they are
Getting wrong.
Their expectation that it be fully baked.
And a magic trick every day.
When I think about
The dawn of the internet.
And how creaky it was.
And how fast this is going.
What it is now is amazing.
But when we add to it.
Persistence.
And when we add to it ubiquity.
And when we add to it
The ability to make connection.
It's
A whole different
Thank you.
It's just a completely different thing.
The second thing is
People tend to use it.
As a one shot like a search engine. Ask a question, get an answer.
But what it's
Already good at.
Is
A protracted dialogue.
Back and forth.
So I had a
Pump in my house that stopped working.
And
I couldn't find someone to service it. I took a picture of it.
I s put up the claude and I said, This isn't working.
Work with me for the next
Ten backs and forth. Let's figure this out.
And it would say, Go downstairs and take a picture of this part.
Alright, try this.
And we went back and forth and back and forth and it suggested something and I said that's not gonna work.
And
We figured it out and we fixed it.
That IDA
The fact that Claude is already better.
Yeah.
many medical diagnoses over time than a human.
And well it should be,'cause it knows
So much of the
Past
Of every single
Case not just the cases.
Your doctor has seen.
Right, if we're willing to engage
With that.
For people who are knowledge workers, I think it's a game changer.
And then the other thing
I think people need to wake up to is
If you
Do average work.
For average pay.
AI is gonna be able to do it cheaper than you.
For example, radiology.
Already we can use AI to
Do it.
A wrist x ray.
as well as a mediocre radiologist.
So if we can do it instantly and for free.
Other than licensing, you got some problems.
So
The opportunity is either
Get AI to work for you.
Or be prepared to work for AI.
What are your greatest concerns around AI, if any?
Or
foregone conclusions about
Challenges in the future.
I think that
Cori Doctor's work on insidification is super important.
What was that word?
Oxford Dictionary word of the year two years ago in shitification.
Okay.
Yeah.
Yeah.
Inhidification is what happens.
After
A business that uses the network effect.
Gets locking.
And decides to aggressively make things worse for its users to make more money.
Yeah.
And we could think of four hundred examples right now.
Oh we're not gonna do that.
Right.
Because
You say, Well I can't switch cable companies, it's just too much of a ha
And the same thing's true for social networks and everything else.
Yeah.
Capitalism has built into it.
Less
Doom loop.
That is getting faster and faster.
That says the race to the bottom pushes companies
To mistreat the people they've locked in.
To make more money.
Because that's what they get rewarded for.
And
Most things that the internet touches.
Start as a miracle.
There are huge prizes for the early adopters.
And then soon
The desire to serve a different constituency kicks in.
And it gets worse.
And one of the things that makes it worse in a hurry is advertising.
So
I'm really nervous.
That these organizations that have raised
Billions and billions and billions of dollars.

shortcutting things to either get bigger
Or get more profitable faster.
And
Because we don't know how they work, we have no clue.
Because
It's gonna be hard to switch'cause there aren't going to be many competitors.
Mm.
Often leads to just
A yucky mess.
So I think that's way more likely
Then
A
general artificial intelligence that
takes over the world and turns us all into paper clips.

I don't think that's gonna happen anytime soon. More likely just to have business instead of driven shitification.
Yeah, I would say that seems like a safer bet.
Well Seth.
Are there any
closing comments or challenges you'd like to issue to my listeners.
As we begin to wind.
to a close or anything that you'd like to add that
I have managed to somehow dance around.
There's nothing.
Better than starting a Tim Ferris podcast and nothing worse than ending one because you don't know if it's gonna happen again anytime soon.
Yeah, the challenge is super simple.
The people who listen to your podcast
Have there
Hands on the levers.
And they have
Influence and they have
Resources.
And
They don't have to hustle for a nickel.
They can make things
That really matter.
And so the challenge is
Take a deep breath and say
What can I build that to me of five years from now is gonna say thanks?
Thanks for walking away from those sunk costs. Thanks for
Ignoring those false proxies.
Thanks for
Asking uncomfortable questions.
In service of making things better.
Because
That person
Five years from now, they're gonna be here soon.
And
It's really great.
S
Pay the price and put in the work.
To become
That person.
And today is a good day to start.
The best day to start.
Thank you, Seth.
It's always so nice to see you.

And I encourage people to check out
Of course, this is strategy. You can find all things Seth at Seth's dot blog.
Love show notes and links to everything at Tim.blog slash podcast. Is there anything else you'd like to mention? We could of course include and we will include Seth's dot blog slash T I S.
Which is where people can also get the deck of cards.
And the chocolate bar.
And it's chocolate.
Something for everybody.
We didn't even get to talk about the system of cheap chocolate. We'll do that next time.
Okay, cliffhanger. For next time we will talk about the system of cheap chocolate and I'm sure much, much more. Well, Seth, as always, what a pleasure.
Nice to see you.
And to everybody listening.
Till next time.
Be just a bit kinder than is necessary to others, also to yourself. But do ask those uncomfortable questions. That's being kind.
to your future self, to your long-term self. And as always, thanks for tuning in.
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