“I should be used as a mercenary, not a lifer.” – Tim Ferriss
In this episode, we have a change of pace…
Expa (@expa) is a startup studio. It was founded by Garrett Camp, who co-founded Uber. Every once in a blue moon, they put together a night of education. I was recently invited to participate as a speaker.
In this episode, we discuss the topic of startup design vs. lifestyle design.
As some of you know, I’ve been involved with various startups since 2007, including Uber, Facebook, Twitter, Duolingo, and other businesses that have grown to more than 100 million users or customers (full portfolio here).
On the other hand, I have written about lifestyle design many times over the years, and I’ve suggested that it can often replace traditional career planning. Lifestyle design focuses on the here and now.
How do we reconcile or combine these two different approaches to business?
Should you focus on building your “muse” and creating a cash-flow-driven business to fuel your ideal lifestyle (like this amazing family)? Or should you swing for the fences and bet it all on a equity-driven startup?
This podcast explores these topics — and many more — and aims to answer questions that I think are under-examined.
You can find the transcript of this episode here. Transcripts of all episodes can be found here.
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Want to hear another podcast related to building a large audience from scratch? — Listen to this. In this episode, I explain how I did it and answer some of your most-asked questions (stream below or right-click here to download):
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QUESTION(S) OF THE DAY: Are you building a cash-flow business or a startup? What problems or questions do you currently face? Please let me know in the comments.
Scroll below for links and show notes…
Enjoy!
Selected Links from the Episode
- Learn more about Expa
- Margin of Safety by Seth Klarman
- Secrets of Power Negotiating by Roger Dawson
- Getting Past No by William Ury
- Anything You Want by Derek Sivers
- Built to Sell by John Warrillow
- The E-Myth Revisited by Michael E. Gerber
- Buffett: The Making of an American Capitalist by Roger Lowenstein
- Listen to interviews mentioned in this podcast:
Jocko Willink | Rick Rubin | Neil Strauss | Josh Waitzkin
Jon Favreau | Robert Rodriguez
- Thinking, Fast and Slow by Daniel Kahneman
- Small Giants by Bo Burlingham
- Learn more about Derek Sivers
Questions From the Interview
- How do you decide to invest in companies like Twitter and Uber? [8:06]
- Are we in a bubble? [16:31]
- Can you talk about your first business, BrainQUICKEN? [20:41]
- Can you talk a little about bootstrapped businesses vs. venture-backed businesses? [26:16]
- Are there examples of happy VC-backed founders? [29:16]
- What approaches have you seen that are successful in venture businesses, and do you actually work 4 hours a week? [30:46]
- Can you tell us about the distinction between a good CEO and a good founder? [36:16]
- How do you factor happiness into work ethic? [38:06]
- What are great examples of CEOs and founders who are killing it? [39:31]
- How has your understanding of neuroscience affected your writing? [43:36]
- Why prioritize wants vs. needs when starting a business? [47:46]
- Who are your favorite podcast guests and why? [49:26]
- Should a solo founder find a co-founder? [52:21]
- What have you changed your mind about in the last year or two? [55:16]
- Deconstructing “What next?“ in a lifestyle business, and the challenge of identifying “the one big problem.” [57:51]
- If you had to choose between being an investor, writer, or podcaster, which would it be? [1:03:16]
People Mentioned
The Tim Ferriss Show is one of the most popular podcasts in the world with more than one billion downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.
Comment Rules: Remember what Fonzie was like? Cool. That’s how we’re gonna be — cool. Critical is fine, but if you’re rude, we’ll delete your stuff. Please do not put your URL in the comment text and please use your PERSONAL name or initials and not your business name, as the latter comes off like spam. Have fun and thanks for adding to the conversation! (Thanks to Brian Oberkirch for the inspiration.)
Wrong place to comment, sorry, re: 5-bullet Fri Thoreau quote. We’ve amassed $10M+ net worth. Thoreau is right – IT does not satisfy the soul. Multi-homes, possessions, businesses, travel, investments. Transient projected value. If love is the eternal fabric of the universe, then love is our only lasting value, a love that sustains a whole, peaceful, healthy creation.
“We make a living by what we get. We make a life by what we give.” – Winston Churchill
(Tim, an honor meeting and chatting with you at TED Long Beach, in the upstairs bean bag chairs. Love the Rogen & Goldberg interview — just the slightest bit of today’s bud makes me overly anxious:)
Awesome! I would love to hear more podcasts about the concepts discussed in the 4-Hour Workweek.
I’m trying to create a cash flow business, but I run into a lot of problems because I’m an expat living abroad. Attempting to start a cash flow business based in the US is difficult since I’m abroad and starting a cash flow business here in Asia is tough because the climate is so different and my language skill is pretty good, but it still isn’t perfectly fluent. I’m planning to reduce my work hours next year to give me more time to solve these problems, but it’s a bit nerve-wracking. I’ve considered creating a start-up instead since the issues of language and climate are a little more straight forward
Hello Tim,
I absolutely love your content and get so much value out of it! Thank you so much for the value you are sharing with the world! I am obsessed with your podcast and listen to it religiously. This leads me to my ONLY critism: please for the love of god change that electronic song
QUESTION(S) OF THE DAY: Are you building a cash-flow business or a startup? What problems and questions do you currently face?
What about just doing what you love, being a writer/artist of some sort/coach etc., investing money to build financial freedom and not building business ever? I don’t think everyone needs a business to make life work and be happy, be free.
What are you thoughts on that Tim?
Tim-you da man! Love your work! I just started my tile installation and remodeling business. What are your top 5 “must have” tools for: infrastructure-marketing-website visibility and minimization tricks. And last but not least “schedule once”?
Currently I am using quick books. Thank you kindly for your response. I understand if you are too busy! Ps Jocko was awesome. One is none / two is one = new mantra.
Look forward to learning. Practice management is my tough area.
Tim I love your podcast and have been kicking this same question around in my head for the past little while now. This couldn’t have come at a better time and I can’t wait to listen to it later today!
Great topic, Tim! These are some things I have been thinking about a loth lately. BTW, I like the techno music intro.
I’ve built both ways before, Tim, including a couple startups that delayed, nay COMPROMISED, my wellness and quality of life for several years without the reward to justify the lifestyle investment. I’ve also enjoyed periods in my career where I worked for high compensation in muse style that left plenty of time for enjoying the moola.
Combining lessons from the past, and 4HWW tactics, I’m currently building a scaleable salable asset without compromising the lifestyle constraints and quality I defined before choosing my industry and startup model. I believe it’s possible to do both, I’m doing it.
I’ve learned the most sustainable ventures are built in this order: 1) what we need and want as entrepreneurs; 2) what the market needs and wants that intersects with the entrepreneurs’ desires; and 3) what business model supports both entrepreneur and market without compromise.
I can’t wait to hear your podcast on this important topic! I’m committed to entrepreneurship that is both fun AND profitable.
the market is the world
Enjoyed the talk. The name of Seth Klarman’s HF is Baupost though. Cheers.
Doh! I knew I got that one wrong. Alas, I’m good at getting pie on the face.
“When forced to choose, choose both.” Peter’s Law. Plus the end game is the same… love what you do and have the ability to choose.
Start with a cash flow business first (this way you learn a lot) and get your lifestyle. Then, if you find a project or start up you are very passionate about you go for it. You also have the time, money, clarity to have s chance!
Recurring revenue lifestyle business for me. I like to take calculated risks and have a good idea of what the return I will get. Probably won’t ever be super rich but I have created a good income and lifestyle for my family and I to enjoy.
Such a nice topic. It’s a question that bothered me too.
This is such a good question. I think I’ve been straddling my business as a muse business and a start-up. And I think I’m at the fork in the road to decide if I want it to continue to be all in and swing for the fences and keep reinvesting for growth or to let this business support my ideal lifestyle and continue to diversify revenue streams. Thank you for sharing this!
@jadah – Hey I thought I recognised you! Did you speak at a ProBlogger event, Gold Coast Australia about 6 weeks ago? I was one of about five males there.
Anyway, sorry I realise that was a bit random.
Hey Tim – Long time follower. What was your best investing decision resulting in largest outcome? Pareto style… Best, Andrew
I’ve just started creating a muse. The hardest part for me is balancing the work with the lifestyle. Despite “knowing” extra work is counterproductive, that I’d likely be far happier, healthier and more effective if I took time for other things and people – I still struggle to take that advice. I ask myself “What’s it going to take for you to change?”, continually deferring doing things I’d enjoy due to the sacrifice of time.
I’d love to know how Tim, and others, manage to take the advice they know they need, yet for whatever reason don’t.
Great talk, as per usual. Your depth of knowledge (from such a young age too) continues to impress me. Thanks Tim
Tim – Really enjoyed your Should I Start a Start-Up podcast. But, too short and so many more questions to ask. How about you poll your followers for the one question each would ask if they met you in person, add the standard questions you ask in interviews and have a long self-interview.
Hi Tim: I’m from RI and my brother-in-law contracted Lyme disease. He is on antibiotics. Could you do a podcast or blogpost on what healing regimen you used to get better from Lyme?
Thanks so much. Judith
Thanks as always for the valuable information.
I’m wondering where I can find out more about the connection between diet (ie ketosis) and gut health (especially post anti-biotic).
Started a Cashflow business. Dropshipping to be exact. Started a few months back. Results?…meh. But I’m all in. Your book gave me the confidence to start. I’m not even done reading it yet. Problem? Cashflow 🙂 Investing in ppc hasn’t given me the desired return. Social Media automation – hasn’t worked as effectively as hoped. . Truth is I’ve run out of runway. So now hoping that somebody famous will retweet us so we can gain some traction in Social Media:) SEO? – not cheap…but in the works. But as you say Tim, its really about how quickly you can learn and unlearn. I’m commited to that. Really appreciate you for being you man. Thanks for your inspiration.
Thank you Tim for the very insightful answers to the questions.
Do you still find the nutrition supplements space to be a good place to start a lifestyle business?
you may come to a place
when you realize it’s in the way you think-feel know.
I am a 33 year old carpenter/woodartist and i amlooking forward to meet you. I am in the process of trying to get my style and way of living and i ran across your cast. Give me an e-mail so can send pictures of my work.
Tim,
Agreed, “The opposite of happiness is boredom, not sadness…”
I believe you enjoy doing these podcasts because they seem like therapy sessions.
By the way, you forgot to add “People Mentioned” / Brene Brown
Brene Brown TED Talk http://fourhourworkweek.com/2015/08/28/brene-brown-on-vulnerability-and-home-run-ted-talks/
Hey Tim,
I’ve only recently had to grapple with the question of whether I’m working on a muse sort of business or a startup. At the moment, I think it’s a little of both, but leaning towards a muse as you defined it (with an exception that I’m actually making a physical hardware product that’s more complicated than say, the EarPeace).
The thing is, in my honest opinion, I think it’s not important to dichotomise here. Having said that, though, most of us follow certain paths to launching a business – paths that we learn to go down because someone else was successful heading down that path (eg. getting venture capital, hiring an A-team, build and expand, etc. for a Startup VS. building most of the business yourself while outsourcing engineering, design, manufacturing, etc. for a Muse). So even though it shouldn’t matter, knowing what kind of business you’re trying to run DOES matter, at least in the practical sense.
And that’s where people like me get a little confused and sometimes, when we use metrics from the wrong side of the fence to measure our company’s performance, we get demoralised. With all that’s said, I’m hoping to hear more about this topic from you as you’ve been one of the loudest proponents of lifestyle design in my opinion, and because this podcast only touched on the topic a little.
Even if you don’t decide to talk more about this topic, I want you to know that I love your work and will continue to tune in! Keep up the amazing job with the podcasts!
Sincerely,
Nick Ang (Singapore)
Hmm Tim, I wish you’d spend more time on the question: “Muse Vs Equity Startup” aka “Lifestyle Business Vs Change The World Startup”. I was hoping this would be the main crux of the talk but it was relegated to a few minutes at the end. You seem to be in a perfect position to answer it after authoring a book on muses and now having immersed yourself in the startup realm and directly witnessing the life of founders.
From what I got out of it, it seemed that you would prefer to meet most of the needs on Maslow’s Hierarchy with a Lifestyle Business before pursuing a Change The World Startup. This kind of makes sense because of the time required to obtain the relevant finances: spend a year or so setting up a cash-flow muse/lifestyle business and use the profit to check off one’s needs and then spend the rest of the years pursuing an exciting Change The World Startup, rather than first spending 5-15 years waiting for the big payout from the Change The World Startup. After all, we aren’t guaranteed to even live that long.
I think this is the crux of what plays in the mind of a 20-something year old: spend some time creating a profitable muse and enjoy some travel, experiences, etc or dive right into a startup but trade and gamble 5-15 years without any immediate payout.
Please, please do a Part 2 of this question.
Tim – thanks again for sculpting how to make better decisions, and the “why”, in following you. I noted in particular from this episode: “sell the want, not the need”.
I want to raise fund for my film project. Can you help me about it?
Hey Tim,
I don’t have any good time to listen to podcasts, but I can read like a fiend. Any chance you can hook us up with transcripts? I currently have a backlog of at least 3 posts I *really* want to listen to…
Hey Tim! Just want to say thanks for all the hard work on putting together these podcasts. Compared to other podcasts, I really don’t mind hearing your recommendations or adverts. Why? Because you offer us real value and that comes through each and every time. Thanks once again! Gladly a supporter!
How do we reconcile these two approaches to business?
Betting-it-all vs life-style design: isn’t it a choice of meaning? If you choose the 100hr a week start up knowing that it’s likely to fail in a bad way, and still do it, then it’s probably worth doing (like those companies that start in a bust cycle).
A lot of people say they would start the company anyways. So maybe a better indication are the thoughts that surround the project: do you start-up because you feel you have to, that people won’t respect you if you don’t, that you don’t want to be average? All of those reasons are not enough to propel you through the insane, hard moments because they come from your ego and your ego is pretty damn malleable.
Life style design is special because people will hustle and fight for the those things that are worth being un-conventional for. If you have a die-hard passion for Chinese calligraphy and all you want to do is study under a master- you’re going to find a way to make it work: either by making yourself independent (life-style design) or getting paid in the field. Both of which are good options.
Question is: would you make a life-style design business to sustain your start up? If your start up is dealt with in the same way as your I’ll-do-something-totally-off-the-wall-to-make-this-work passion, then start up life is a green go.
Hey, Tim Ferriss, I just found your podcast and am enjoying it immensely, but I’ve got one complaint. On your podcast lead-in where you’ve got a collage of voices and then that gong, the only woman’s voice represented is that of a super-sexy Russian spy sounding woman. All the other voices are of men speaking authoritatively using impressive words like “cyber” etc etc. It’s a turn off for people who would like to see women entrepreneurs taken seriously.
I am happy with my thriving cash-flow business but I live in Silicon Valley and am surrounded by friends who are VCs, startup founders, etc, so this is constant dinner table / soccer field talk. My husband, who sits next to me in our home office, is currently founding a venture-backed business so I see and hear first-hand on a daily basis what this involves. I see a lot of potential opportunities in my industry (the travel industry) but there are already lots of players in the space, and more importantly, I’m just really happy where I am. I have a good work-life balance and I don’t feel like “getting into the ring”. OTOH people tell me I am missing some good opportunities and I’m in a good position to do something about it. I’d also like to hear more on this topic from you Tim.
Sorry Tim, but not quite sure your interview (which is great in any case) really addressed the topic you mentioned as a title, so it was a bit misleading and I felt disappointed on that aspect. Nevertheless it was a very interesting one, for many other reasons.
As for your question, still trying to get re-hired in a corporate job (aaaaahhhh I’m such a loser… throw the tomatoes! (-; ) but if I can’t I have fortunately enough in the bank to start a “muse” business. Real start-up seems way too risky and too much work.
Tim,
Your show is interesting but WAY TOO LONG. I don’t have random pockets of 2 hours to commit to your show on a regular basis. This particular show, Should You Start a Startup or Build a Cashflow Business, I’m 40 minutes into it and there’s still no mention of a cashflow business. Please, for efficiency sake, make shorter focused shows, or explain at the very beginning “minute 1-40 are Q&A about investing, the minutes 41-60 are about cashflow…” for example.
Hi guys,
anybody caught at what time Tim mention 3yrs goals and planning?
Thank u so much Tim.
Your post is very interesting and useful.
You have given me new ideas to test. 🙂
Your comment on antibiotics causing mitochondrial damage that looks like Lyme symptoms caught my attention! I need more information–who/where to find “good science” resources on this?? Sounds like it might be the missing piece to my 3+ year struggle with “not-lyme”.
I believe that if you are building a start up or a start up business you have to look at number 1 first…yourself.
In my eyes success begins with the mind and everyones perception of success is different which is the beauty about it.
Just because one persons dream of success is to make millions of dollars it doesn’t mean that another persons dream of being a parent of two children is any less better. – – or to build a start up or cashflow business?! ..it is YOUR choice. Nobody else can determine your success than you!
Interestingly, I think its important to look at your mind first. The mind is trainable and has a plasticity of being moulded in what you want it to be. This has to be worked on FIRST before you lets say want to become a millionaire or be successful. Happiness comes first and then success, NOT the other way around.
Any thoughts on this are welcomed.
William
Hi Tim, I am twenty five year old lady, my vision is a property business, renting and selling houses. So I have already started to run the business because someone is renting my house. But now I do not know how to go feather because I do not have enough money. So if you can please suggest me on how to take a step forward.
Much like James, I’ve moved around a lot and have dabbled with many startup ideas. Thanks for the blog and after reading all the comments I’ll sign up for the podcasts! Keep up the good work!
I like to use a song that energizes my groove as an alarm clock. Hearing good music while asleep makes you not want to miss your lifes party. Life needs a little background music. The soundtrack to your movie.
Also, if you like to sleep in a lot, try taking a theromogenic (cellucor HD works best with no jitters) 45 mins prior to having to get up and set your snooze for 3 x’s for 15 min. It works wonders.
As far as workouts, I like to do a coursera video lecture then do one set of exercises. This allows for maximum recovery and maximum work/study combinations. The coursera app also allows me to get training done while on the commute to work. With a 60 min commute each day I really use my time efficiently. I really recommend the Morals in Politics with Dr. Sapiro. MOOC’s are the way to go for learning in the modern day.
Thanks for explaining the difference between venture backed startups versus a positive cash flow business.
Great podcast!
Would be great if you also will add links for movies and cartoons mentioned in podcast.
The rest of staff is perfect.
Thanks
Great show.
This podcast is great as it acts almost like an addendum to the 4HWW book as it discusses developments in the startup world, and world in general, that have come about since the book was published.
Thanks
M
This episode acts almost like an addendum to the 4HWW book as it takes into account developments in the startup world, and world in general, that have come about since its publication. Thanks
Great podcast – it acts almost like an addendum to the 4HWW book as it takes into account developments in the start up world, and the world in general, that have come about since publication.
Great idea to discuss this
Thanks for explaining the difference between a venture backed startup and a bootstrapped business.
This was the podcast that started me on my Small Giants journey! Forbes recently did a profile on my journey from athlete to entrepreneur. Tim’s work has certainly been an inspiration for me. [Moderator: link removed.]