The Tim Ferriss Show Transcripts: Bill Gurley Interviews Tim Ferriss — Reflecting on 20+ Years of Life and Business Experiments (#682)

Please enjoy this special episode of The Tim Ferriss Show, in which famed investor Bill Gurley interviews me at SXSW.

Bill Gurley (@bgurley) has spent more than 20 years as a general partner at Benchmark. Before entering the venture-capital business, Bill spent four years on Wall Street as a top-ranked research analyst, including three years at Credit Suisse First Boston. Over his venture career, he has worked with such companies as GrubHub, Nextdoor, OpenTable, Stitch Fix, Uber, and Zillow.

For more takeaways from his incredible investing career, you can find my interview with Bill at tim.blog/billgurley. 

Transcripts may contain a few typos. With many episodes lasting 2+ hours, it can be difficult to catch minor errors. Enjoy!

Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform.

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Bill Gurley: Well, it’s great to be here. It’s awesome to have the opportunity to turn the tables on Tim in interview. I was just recently on Tim’s podcast and so I actually suggested this before that, so that it would keep him honest when we were going earlier.

Tim, a lot of you, I assume, all know who he is. He’s one of the most celebrated and decorated successful digital creators of our time. He sold 10 million books. I’ve got a list here. He’s got two million email subs, over a thousand blog posts, seven million followers on social media, and his podcast is about to pass a billion downloads. And so, since South By is a lot about interactive and how people can be successful in these types of fields, I thought it’d be great to see if we could dive deep and find out how he got here and what some of his core tenets are for being successful. So you graduated from Princeton in the year 2000 with the East Asian studies major, is that correct?

Tim Ferriss: That’s right, yeah. Perfect setup for podcasting. Yeah.

Bill Gurley: And in 2014 you launched your podcast?

Tim Ferriss: Right.

Bill Gurley: Okay, so 14 years. Just tell us quickly what happened in those 14 years and how you found your way there. And I’m very curious about lessons learned and when it became intentional. When did you know you were doing something versus just experiencing it?

Tim Ferriss: I’ll do my best to wrap it up without making it a Dr. Evil life story. Good morning everybody, thanks for coming. So let’s see, graduate, move to California, Northern California, to be part of the tech pinball machine for serendipity. I actually think that was a very important decision, just geographically choosing where to be, and then what to do being really secondary. Worked in data storage, selling storage area networks. Had a desk and a fire exit. Definitely not up to code. I remember it was really packed to the brim.

Learned a lot about selling. I think everyone should have a service job, work in a restaurant or something like that, and have to sell for a period of time. You learn so much about human interaction and I learned how to reach out to CTOs and CEOs and so on, how to reach them, playing the long game, not trying to sell a seven-figure system in one phone call. All of these things translated to many things later. I couldn’t have seen that coming, but they did.

Then I started this sports nutrition company. Long story, a lot of people here probably know some of the barebones aspects of it from The 4-Hour Workweek, that experience was simultaneous with a professor of mine, Ed Zschau, who taught high-tech entrepreneurship at Princeton, which had a huge impact on me, inviting me back to guest lecture twice a year. And that went from 2003 to 2013 or so. Those notes later became the outline for The 4-Hour Workweek.

Bill Gurley: How long did the startup exist?

Tim Ferriss: Startup existed until, let’s see, I want to say 2009 or so when I sold the company, not for any huge sum of money, but I sold the company around 2009.

Bill Gurley: And how long was that experience? Six years?

Tim Ferriss: The experience of building it?

Bill Gurley: Yeah.

Tim Ferriss: I would say the building phase was the first three or four years. First year and a half had no idea what I was doing. I’d say the subsequent year and a half to two years was building out distribution and then I became very bored with the entire thing and was looking for a graceful exit, which turns out selling a company, even if it’s for a very small sum of money, is one way to do something new.

Bill Gurley: Did you raise money?

Tim Ferriss: I bootstrapped the whole thing. So it was credit cards, savings, trying to play buying remnant advertising against incoming revenue, getting prepayment from distributors. “You’ll be the exclusive distributor featured in this print ad if you pre-purchase X amount,” which would then give me the money to pay for the ad in the first place that I negotiated 80 percent off of because it was last-minute things of this type. So all of those games were what drove a lot of the growth, figured out that playbook, and then the focus really became trying to figure out what the hell I wanted to do when I grew up. I mean, I’m still doing that, I guess.

Bill Gurley: What did you learn from the startup? What were the key takeaways?

Tim Ferriss: A few key takeaways from the startup were number one, if you want to reach the decision makers, just call outside of business hours. So, if you’re actually cold calling, I was cold calling, smiling, and dialing a lot and cold emailing, then just do it before 8:30 and call after 6:30. And very often, even in a company of 100 people, you’ll get one of the top brass answering the phone at the end, which was astonishing to me. Next I would say if you’re going to talk to technical people, and I was not technical, but if you’re going to talk to, say, VPs of engineering and CTOs, do your homework. And I ended up being really, really successful as a salesperson, not because I studied sales per se, but because I actually took the time to try to understand what RAID was, what all the bits and pieces were that made up the hardware, what use cases would lead to them using Solaris versus something else, and being able to guess correctly what their setup was without them telling me anything, which opened the door to more involved conversations. Those would be a handful of things. And the value of storytelling ultimately, for everything. If you’re a human.

Bill Gurley: Right, I agree with you.

Tim Ferriss: Storytelling is key. It’s the crux.

Bill Gurley: So the life as a startup entrepreneur eventually wasn’t working for you?

Tim Ferriss: It wasn’t working because, for me, the learning curve had flattened out and I wasn’t sure how to change that. I knew I wasn’t a great manager. I didn’t aspire to become a great manager, which continues to this day, I should probably revise some of that. So then, as is the case now, I have a very lean team, very, very small team, and if we flash forward, then the notes of that class become the basis for The 4-Hour Workweek. I did not want to write a book, but a friend of mine who was an author suggested it and started making intros to editors and agents and so on, and I had to reply to those people and that gathered its own steam and The 4-Hour Workweek is what, as a lot of people here know, opened the floodgates for everything. That got the visibility that led to the angel investing that bought me permission to write a second book.

And I’d say to a question that you posed before we got on, and you may have also just asked it, when did I start doing something intentionally or thinking about a trajectory? And I would say that’s probably when I made the pitch for The 4-Hour Body, because I don’t have a grand five-year plan, I don’t have a grand 10-year plan, that’s today, was true then as well. But I wanted to choose the door that opened more doors and I realized that despite, or maybe because of the pressures that I felt externally from just about everyone to write The 4-Hour Workweek 2.0 or The 3-Hour Workweek, I could very quickly paint myself into a corner where that was my only niche and the only place I felt comfortable and the thing I felt I needed to defend. And so I thought, well, I can always come back and do that later. That will be available.

So let me do something in a completely different section of the bookstore. The publisher’s going to say yes because they are willing to at least take this bet. They’ll give me a decent, not even a decent, very good advance, which will actually make up for the 75 grand that I got paid over a year and a half for The 4-Hour Workweek initially. And that type of decision making, I think, has typified and defined a lot of my key decisions, which is entirely, seemingly out of left field but of interest to me that will potentially open new doors.

Bill Gurley: So when was the second book and when did the angel investing start?

Tim Ferriss: 4-Hour Workweek came out April, 2007. The angel investing started within, I would say 10 months, and I owe Mike Maples, Jr. a debt of gratitude for that.

Bill Gurley: Wow.

Tim Ferriss: I traded him advice for exercise and diet for — 

Bill Gurley: And Austin, like you said.

Tim Ferriss: Austin as well, meeting at Hobee’s for breakfast and him telling me about his deals just so I could learn about them. And then The 4-Hour Body was published in 2010, which means that I was probably working on it for two years.

Bill Gurley: So you said you made 75 grand and you’re hustling. How do you afford to angel invest?

Tim Ferriss: Well, fortunately the advance gets earned out. I had the savings from the prior company, so I had some savings, and decided to place very, very small bets. So I was co-investing with checks of say, $10,000. And the intention really early on, which comes back to playing the long game that I mentioned earlier, I wanted to be the cheapest, most valuable labor on the cap table, meaning “Here’s a $10,000 check. Now I’m going to put in so much effort and try to be so helpful that it will make no sense to you because my ROI is probably not going to pay for the time I’m putting in.” But that was to create raving fans and get referrals.

And so that’s what I did for the first six months. Very small checks, putting in way too much time, but for me it was actually the perfect amount of time, getting referrals and then that steamrolled in such a way that I was able to get advising. So I was able to get sweat equity.

Bill Gurley: Let’s run down the angel path for a little bit and come back to podcasting. So I didn’t mention, when I mentioned all the amazing things you’ve accomplished, your angel investing track record, which is actually pretty good, right?

Tim Ferriss: It’s turned out, yeah.

Bill Gurley: So tell the audience some of the companies you invested in.

Tim Ferriss: I invested in, let’s see, invested — when I say invested, it’s important to note that I mean time in a lot of these cases because I didn’t have the bankroll to pay for investing and I probably couldn’t have invested even if I’d wanted to. So Uber would’ve been when there were — 

Bill Gurley: Heard of that.

Tim Ferriss: — two employees. Yeah, you’ve heard of it. And Shopify, first advisor when they had eight to 12 employees, first investor in Duolingo, that was a bit later. Early secondary on Facebook and Twitter.

Bill Gurley: What was your rule set back then? How were you deciding what to do?

Tim Ferriss: Early rule set was super simple, and it’s the same rule set. It hasn’t changed for me, and that is something that addresses a personal problem that I have, that I understand, that I could be a power user of, that I think I could feel very good about recommending to my audience. That’s it. And that has worked pretty well. I mean, as you know, there are a lot of whiffs. I mean you get a lot of things that zero out.

Bill Gurley: Oh, my God.

Tim Ferriss: But it’s a power law game, so you are really aiming for the handful that return the fund. And I was always betting, this is actually another maybe key framework that I would say I’ve used over and over and over again, and that is I viewed the angel investing and all of that as a real-world MBA, assuming that I would lose all of the money I put in. You don’t get your tuition paid back to you by the same institution, but that the skills I would develop and the knowledge I would acquire and the relationships that I would end up cultivating would in the long-term, pay for all of it.

Bill Gurley: Are there takeaways you had from specific investments that became part of your mental model?

Tim Ferriss: Well, I think the most consistent lesson for me, and I’m not recommending anyone try to replicate this, but the timing was also really good in that period of time. But choosing people that you really like to work with because a lot of these startups are going to take, if they turn out well, longer than the average marriage. So you really want to make sure these people pass the beer test. Are you going to want to go out and have a beer with this person? And that doesn’t always apply.

I think really good founders are often pretty cantankerous. But I stuck to that. And for instance, I was thinking about some of the decisions in this area, and it’s true for so many others, I could say, “Well, becoming an advisor to Uber was a really good decision,” but that’s not really the right story. The right story is working with Garrett on StumbleUpon was the right decision, which didn’t pay off, but we got to know each other and that led directly to Uber. So, rather than looking at the decisions that are most well known for, say, successful people, even to this day when I’m interviewing people, I look for the antecedents like, okay, well let’s look at what happened before that without which those great decisions that are on the cover of magazines never would’ve happened.

Bill Gurley: We were talking about this in the back because it’s a question of can you increase your optionality for fortune or luck, or whatever anyone else says, by taking meetings that may seem superfluous or uncertain, that then lead to these big outcomes?

Tim Ferriss: Yeah, totally. And for me, moving to the Bay Area and then later moving to San Francisco, so it wasn’t enough to just be in the Bay Area, I moved all over the place and eventually got to San Francisco because I realized if I want maximum serendipity, if I want it to be easy for someone to say, “Hey, I’m over at this place, come and have a drink,” rather than driving an hour to an hour and a half to get there, I needed to be in San Francisco, or I wanted to be in San Francisco. And the question of where, I think in an increasingly virtual world, actually becomes more and more important. If you can operate in-person, you have a huge competitive advantage.

Bill Gurley: And it’s a contrarian mindset today, where everyone’s relishing in the fact that they can live wherever they want, you know?

Tim Ferriss: So, choosing at least seasonally, if you’re not willing to bet the farm in terms of moving to one place to be in certain locations. If you’re still in that growth phase of your career or life professionally speaking, then I think that’s undervalued.

Bill Gurley: Yeah, I agree with that. And some of the work I’ve done in studying, like Danny Meyer when he wanted to be a great restaurateur, he moved to Europe and worked in any job he possibly could.

Tim Ferriss: It’s all the same. People ask about patterns across the 700 or so interviews I’ve done. I’d say that’s easily one of the most obvious, prevalent.

Bill Gurley: That’s cool. Now, you’ve mentioned recently publicly that you’ve backed away from angel investing. So, for someone that’s had such a prolific run and successful run, why step away? That doesn’t seem to make any sense.

Tim Ferriss: Yeah, I’d say number one, I didn’t grow up with much money or spending much money, and I still think I’m actually quite bad at spending money, so why gather more skittles until I figured out how to use the skittles I have, I think, is one thing that comes to mind.

Number two is things have gotten more difficult, I think, in angel investing. There’s just more noise, more competition. It’s like in the early days I learned how to count cards with single-deck blackjack with a handful of friends, and now they’re like, “Yeah, what do you think? We’re going to change the odds. We’re going to swap it.”

Bill Gurley: You need a different brain to count into an eight-deck shoe with three pit bosses looking over your shoulder.

Tim Ferriss: Exactly, exactly. The game is harder. And I also feel like as with most things, the bolus, the majority of my really fast, nonstop learning, happened in the first few years. And that there are a lot of people who can invest, and there are a few things that I think I’m reasonably good at that I’ve, I don’t want to say neglected, but paid less attention to and I’d prefer to return to some of the creative stuff. And also I’ve been doing it for a long time. So generally, when I’ve been doing something for five plus years, I think what is something I could do — what is something that for whatever reason I’m attracted to, that seems completely unrelated, it’s a total left turn? And that is something that I’ll try to experiment with because it’s just worked for me over and over again. If something energetically is pulling me, I want to pay attention to. And right now, that’s fiction and animation and AI and a handful of other tools.

Bill Gurley: Let’s go back now to your journey as a creator. So where does the second book become the blog, become the email list, become the podcast?

Tim Ferriss: I’ll put them in order. So the blog was started in 2006, which was of course before the book came out in 2007. That’s not a coincidence. I had interviewed — so, long before I had the podcast, I interviewed people. That’s part of the reason it was easy for me to segue to the podcast, but I interviewed best writing authors, so people who had books that were acclaimed and that had won National Book Awards and so on, while I was writing The 4-Hour Workweek, to try to be better at writing books.

I also interviewed, reached out to bestselling authors, not always the same thing, and asked them about launch and the vehicles and the types of media that seemed to be undervalued but were increasing in impact in their mind. And there were patterns. Blogs were the big thing. They said, “These things called blogs seem to move a lot of books, but most authors pay no attention to them.”

And I was like, “All right. I don’t have a whole lot of wiggle room here for a number of reasons with, say, large budget for launch. I know the publisher’s going to want to control quite a few variables. I’m going to focus on two things: blogs and in-person events to reach bloggers.” And to do that credibly, I thought, “I really should have a blog that has some good articles on it.” And began that in 2006. And that then led to the book, or I should say was followed by the book in April, 2007. March, 2007, really important inflection point was presenting here for the first time, thank Hugh Forrest for giving me overflow space. I think it was next to a cafeteria, but it was a last-minute cancellation. I rehearsed at my friend’s garage using his chihuahuas as my test audience, and if they got bored and walked away, I was like, “I’m losing them, I’m losing them,” and so I’d do it again.

And that really planted the toehold in tech that I think directly contributed to the success of the book in the first — certainly in the first year. And then you have, let’s see, email gathered with the very first website. So, I was gathering email beginning in 2007. I knew that email could be important, but I didn’t send the first email until something like 2014.

Bill Gurley: So you just collected them?

Tim Ferriss: I just collected, I didn’t do anything with them. And then I continued to work on the blog. That became the way I communicated directly with my audience, which maybe we’ll come back to, based on WordPress, which meant I did not feel captive to any platform. I knew that I could take this open source platform and, if I wanted to migrate my blog and my content, I could do that. And that flexibility of migration has been a core tenet of my professional life, I would say, ever since.

Bill Gurley: When you’re interviewing these other authors, you’ve transitioned to intentionality, right? At that point you’re trying to do the best you possibly can on that product.

Tim Ferriss: Yeah, on the books. On the books, for sure. And I wanted books that would last, and thankfully they have, I mean, these books still continue to do very well. I think most of — 

Bill Gurley: Because the content’s more evergreen?

Tim Ferriss: I think it’s almost all evergreen. And that’s true for the podcast as well. I really don’t want to produce content that has an expiration date that is really obvious — that just requires more work for me.

Bill Gurley: What year are you aware you’re a professional content creator?

Tim Ferriss: Well, I thought of myself at that time, as I would say, a professional writer and books are a very particular thing. They have a permanence and they have a static nature. You can update them, but it’s harder, it’s easier now with Kindle, that requires a lot of forethought. And I think that’s something I also try to use now. I still try to measure twice, cut once with producing any content, which in a world of be fast to be first, I do think that pause gives you an advantage.

And then as far as say — I’ve never thought of myself, to be honest, as a content creator, it’s always been as a writer or an interviewer, something that makes it more finely categorized because it helps me then to work on a craft. If you say, “I’m a creator,” that doesn’t give you a great search function for trying to improve your craft. So I’ve always been very finely sliced.

And it was author, it was then investor, early stage tech — consumer-facing tech investor, to be clear. Then in 2012, The 4-Hour Chef burned me out. It was probably a three-to-four-year project that I put together in a year and a half. Very proud of the output, but it just physically demolished me. And in the process of doing the launch, I’d asked another cohort of bestselling authors which platforms were neglected but seemingly powerful. They said podcasts. I went on a whole host of podcasts, I was very lucky to be there at that point in time also. So you had Joe Rogan, you had Nerdist, you had Marc Maron, and this entire cohort, Adam Carolla, those really moved the needle. They were also such a sharp contrast to the morning TV shows and so on that I’d done previously, where I could actually get into nuance. I could curse, I could be myself.

I had a blast and decided, “I am too burned out to do another book. I want to try something else. Let me try podcasting. I’ll do six episodes to give myself a graceful exit. I’ll set that expectation upfront. It was either six or 10 episodes, and even if it fails” — this is coming back to something I mentioned earlier — “even if it fails, meaning the audience doesn’t like it or I don’t continue doing it, I will get better at interviewing and I will deepen relationships or make new relationships, all of which will persist after the hypothetical failure.” And then I just kept doing it because I was having fun.

Bill Gurley: Do you have a similar story to the book story on podcasting or interviewing, where you went out and studied the art or the craft?

Tim Ferriss: Definitely. I studied anyone I thought had something to offer, even if the format was very different, that would include people like Dan Carlin, Hardcore History, which I think is one of the most spectacular podcasts of all time.

Bill Gurley: So, I don’t know that one, the audience might. Tell us about him and why that’s — 

Tim Ferriss: Yeah. Hardcore History is, I would say one of the super, super first-gen, long-form podcasts. Dan Carlin does a deep dive on some facet of history, some chapter of history. For instance, Wrath of the Khans, about Genghis Khan is, I think four or five parts. Each one is probably four to five hours. And there’s no one who — if you’d had gone to a market research firm and said, “What do you think of this idea?” Uniformly, you would’ve been told it was a terrible idea, doomed to failure. If they could bet the farm against him, they would. And it worked. And even to this day, I think he just had a new episode come out a month ago, and it was — he has multiple podcasts now, so you can scratch the itch of doing something more frequently on current events. But the Hardcore History podcast, I think there was an eight-month interval where there were no episodes. So he’s effectively publishing audiobooks, but it became massively successful. And I love studying those outliers because anytime you’re told you have to do A, B, and C, my first question, at least internally, is: can I find exceptions? And if you can find exceptions, it’s not a must.

Bill Gurley: And anything you took away from him or others that you borrowed?

Tim Ferriss: Don’t believe any dogmatic rules around what you have to do, or what you should do. Test, experiment. It doesn’t matter, to maybe paraphrase Richard Feynman, it doesn’t matter how beautiful, how pretty your theory is, if it doesn’t match with the experiment, it’s wrong. So test, do lots of tests.

And I, in the early stages also, took my transcripts and ended up hiring a senior researcher from Inside the Actors Studio, amazing show, to look through my transcripts and identify where I could do a better job.

Bill Gurley: Wow.

Tim Ferriss: Where did I not follow up on a question that was a gem? How could I have reordered the questions for a better flow? All of these types of things.

Bill Gurley: And that was fruitful, that exercise?

Tim Ferriss: Very fruitful. And at the very least, I think everybody here should record a podcast just so you have to listen to yourself talk and you will find so many things that drive you insane. Everyone will have some form of tic that will drive you batty. You’ll notice where you’re sloppy also in your thinking because really, I mean, speaking is just thinking out loud and you become a much clearer thinker. You become a much more concise, deliberate thinker.

And for that reason, I think everybody should try podcasts for at least three episodes. Even if you never publish it. Interview your family, save that for your kids or grandkids. 

Bill Gurley: What makes you a great podcaster? Can you reflect on that?

Tim Ferriss: I’ll answer it maybe a little bit differently. I think what makes me a successful podcaster is, first and foremost, I chose a format very consciously that was simple enough that I could persist in doing it. So I knew I would have the ability to endure, I would have the endurance, to do a long form interview and then follow that with minimal editing and share it. I knew I could do that.

And many podcasters, I think, commit to failure before they even start, by choosing a format that is going to be too difficult or too exhausting given other obligations. So there’s this elephant graveyard of three-episode podcasts for that reason. The second is I chose a category, let’s say, and I earned the ability to do this. I’m not sure if I could have done this in the beginning. 4-Hour Workweek was very narrow. 4-Hour Body then says, “Hey.” And I guess it was proved to me that the hypothesis was correct that a lot of my readers would follow me for my thinking, not just for a single topic. And then it kept broadening.

And by the time I got to the podcast, landed on the very unoriginal title of The Tim Ferriss Show because I didn’t want to apply a label that would constrain what I could do. And you see what can go sideways. There are a lot of things that can go right with a very narrow niche, but if for instance, and this is very common, you decide you’re going to be the funny voice, wear a unicorn hat guy, on your YouTube channel, and God forbid that becomes mega popular. Four years later, are you still going to want to be the funny voice unicorn hat-wearing guy on YouTube? Maybe not. And many people end up feeling like they can’t escape a monster of their own making, if things go right.

So, I was able to make it very broad, which means I can explore my interests wherever they might fall, which also gives me endurance, which is a competitive advantage. If you are not able to endure, especially with the amount of noise and the number of entrants now, I think it’s very, very challenging to establish any type of firm footing upon which you can build a business. Which was never my intention. I didn’t monetize the podcast until, I don’t know, 20, 30 episodes in, which I still would recommend to most people. But those are some of — 

Bill Gurley: That waiting window.

Tim Ferriss: That waiting window. Because if you focus on — this is just my perspective, my two cents, I’m sure there are many counter examples. I would love for people to point at examples that prove this to not be correct for everyone because of course, that’s true. For me, I wanted to focus on becoming as good as possible at the craft. I wanted all of my attention to be on that, and we all procrastinate in different ways.

As a writer, my favorite way to procrastinate, reading. Socially acceptable, they’re like, “Wow, you’re such a serious reader. It’s amazing. I wish I could be so dedicated.” I’m like, “Damn right, I’m dedicated.” But really what I’m doing is procrastinating doing the thing I should be doing, which is the writing.

Similarly, as soon as someone dangles some carrot in front of me that’s related to marketing, business models, whatever. Oh, I love thinking about that stuff. I’ll just skip the hard work, which is focusing on getting better at interviewing.

Bill Gurley: In learning from your experience and your success, one of the things that jumps out, you talk about controlling your own destiny, and email and podcasting are two content forms where there’s no evil overlord that — they’re both these highly distributed things just by the way they’re technically implemented. But that’s been something that’s been — you’ve passionate about all along, or you feel like —

Tim Ferriss: I feel like it’s an existential imperative to have direct communication with your audience to the extent possible. And so I gathered emails starting in whatever it was, 2007, didn’t email I want to say, I’m getting the dates slightly off, until maybe 2013 or 2014, somewhere around there. And then started 5-Bullet Friday in 2015. So this very short format, easily digestible. “Here are the five coolest things I found through my enormous network this week. Check them out.” You can read it in 60 seconds. So that 5-Bullet Friday — 

Bill Gurley: It reinforced the podcast and — 

Tim Ferriss: It reinforces the podcast in some instances. It is legitimately whatever I have found most interesting that week. Took a photograph of a book I’m reading right now and sent it to my team saying, “Add to 5-BF, I’ll draft the bullet later.” Art & Arcana of Dungeons & Dragons, if anyone’s interested, beautiful book. And that ended up being, I think, one of the fundamental key decisions for increasing direct access to my audience. Because podcasting is largely a black box for analytics.

And just by contrast, I would say, I remember having a conversation with someone who had a massively successful business built on one or two Facebook pages. This was probably five years ago. And I asked him what it was like to run these businesses, and he said, “It’s like having the most profitable McDonald’s in the world on top of an active volcano.” Because if the algorithms are changed, if your organic reach is throttled, oh, fuck. Now you have a real problem on your hands.

I have enough trouble sleeping as it is. I did not want to be kept up at night worrying about those types of things. So yes, I use Facebook, yes, I use Instagram, yes, I use all these platforms, but I fully anticipated that at some point organic reach would be throttled across all of these. Maybe it’s the next recession that sparks it and people need to improve their bottom line, but at some point that’s going to happen and I don’t want to have all of my chips, I don’t want to even have the majority of my chips, in those places.

Bill Gurley: From a risk-management standpoint.

Bill Gurley: One other thing you talk about a lot is staying lean and you run this thing at a massive scale, but you have very little team and infrastructure, correct?

Tim Ferriss: Yeah, very few. Yeah.

Bill Gurley: And you just said something earlier that I keyed on. You said endurance. Is part of the endurance tied to that? Just not having the overhead of it all?

Tim Ferriss: I think they are tied together, and I should say there are many instances for many people, where building out teams makes perfect sense. Because I recognize some of my weaknesses, as I mentioned earlier, I don’t think I’m the most effective — actually, I think I am an effective leader. I’m not the easiest person to have as a manager, and I recognize that. So I have a very lean team. I mean currently just have three employees and we do everything effectively with that team. We have very well-defined processes, and it maps back to The 4-Hour Workweek, honestly, which is define, there’s define, definition, elimination, automation, liberation. We won’t get into liberation today, but defining exactly what your outcome measures are to use the fancy acronym KPIs. What are you measuring week to week, month to month that matters? Why are you doing these things? What are the priorities, one, two? Let’s just say. Then eliminating as much as possible that don’t relate to driving those forward and then automating as much as possible with really, really good processes. So we have very, very good processes for the podcast.

And for that reason, we don’t need 20 people. We don’t need 30 people. And I’ve pushed back a bit against the trend towards video because it would end up increasing the infrastructure required. It would also fix me to one location, and I’m not willing to make that trade off, largely.

Bill Gurley: How do you do prep? You’re doing this many podcasts, you’re not reading a thousand books a year, I don’t think.

Tim Ferriss: No. Step number one is write a blog post, which is called — I think it’s called “The Decision That Removes 1,000 Decisions” and then in parentheses, “Why I’m Not Reading Any New Books This Year.” So make it a policy. If you want to say no to a category of thing, make it a public policy. So number one is making it a public policy: I’m not reading any books published this year. That way I can tell every guest, “Not reading books,” without having to ruffle feathers.

The next step is looking at, before I even invite someone, looking at long form video and audio to the extent possible, and maybe I have to find something that was recorded behind doors. That’s something I’m usually pretty good at doing. Interviews, Wikipedia, what am I looking for though? What’s the filter?

I’m looking for a handful of things. One would be any odd hobbies or passover comments that weren’t fleshed out, that I think would make for a good first question or second question. In part because it will prove to the interviewee that I have actually looked at the details and done my homework, which is really important for a lot of interviewees. Because if you don’t prove that early, they’re going to go on autopilot and they’re gone, they’re checked out, they’re thinking about their next vacation, so you might as well be talking to Max Headroom or something. It’s just not going to be very interesting.

And then I would say beyond that, I will try to identify what has been neglected, so what has not been mentioned, and that can lead some interesting places. Not always comfortable places, but that can lead, for instance, if they haven’t talked about their childhood at all, I might ask them if they’re okay with me asking about their childhood.

Few other key, I would say housekeeping, and this is also in the category of prep. It’s just right before we record. I will talk to anyone, we did this even though we know each other, for five to 10 minutes beforehand. Number one, just for so everybody can get their hamstrings warmed up. We’re not trying to sprint out of the gates after hitting record, just talk. But there’s a format. I will say, “You have final cut, just like every one of my guests. This is no gotcha show. I’ve had that happen to me. It sucks. This is a friendly, my job is to make you sound as good as possible. You have final cut. We can send you the transcript, so don’t worry about it. It’s not live, so bathroom breaks, water breaks. If you want to restate something, we can do that.”

Then I ask them, and people comment on this because almost no one asks this, “What would make this a home run for you? Looking back after it’s published, say two months after it’s published, what would make this one of your favorite interviews or something that you would point people to?” 

Great, and then I can help steer it, and that puts people at ease and helps them to be vulnerable.

Another thing that I will think of, if I want to try to unbox something that hasn’t been explored before, there’s probably a good reason it hasn’t been explored. So, I will find something in that same category. Let’s just say it’s childhood, could be childhood, could be relationships, could be a business failure. I will volunteer that information from my side first —

Bill Gurley: Yep.

Tim Ferriss:— just to provide some transparency, because I know that — 

Bill Gurley: Comforting.

Tim Ferriss: — sometimes it seems like I’m talking a lot and I am, but there are reasons for, in this case, doing that. I’ll ask the question so they can think about it.

Then I buy them time so that they don’t feel too under pressure. Then I volunteer an answer from my own life that basically makes me vulnerable simultaneously, and it makes people much more likely to reciprocate. So those are a few of the things that I do.

If I have any access to that person or their lives through friends or acquaintances, then I’ll also back channel to a few folks and ask them what topics or questions. I’ll always preface, I’ll say, “I’m obviously doing a ton of my own homework.” Because people don’t want to help you, including my friends, if you’re being lazy. So I’ll say, “I’m doing a ton of my own homework, but are there any questions or topics that you think could be fun or uncommon to explore with so-and-so?” I did this with — sent a text to you like that, for Danny Meyer when I interviewed him recently.

Bill Gurley: Right, and you earn reciprocal trust through many of those techniques.

Tim Ferriss: Absolutely. And then I will also, and this leads to a lot and it smooths out the entire process, I will very frequently ask guests, not always, but ask them if there’s anyone they think would really have fun having a conversation on the podcast. So I’d say 70 percent of the guests come from other guests at this point.

Bill Gurley: You asked me that about Mike Mauboussin and you just had him on.

Tim Ferriss: Yeah, I did.

Bill Gurley: One topic that I adore just as a fan of media, is what I call peer respect. So I remember Shaq went on this five-minute rant about all the greats that had come before him, which was just super endearing. Tell us a couple of other podcasters that you respect and why.

Tim Ferriss: There are a lot.

Bill Gurley: You mentioned one.

Tim Ferriss: Yeah, yeah. I mentioned one. There are many, and I respect them for a whole lot of different reasons. I would say it runs the gamut from say, like a Guy Raz, so How I Built This, who is using, I don’t want to say This American Life format, but he’s doing a lot of — a ton of prep, a lot of recording, and then immaculate editing with his team and telling a story arc. So they might move things around and that is a particular game. That’s a very particular game, and he and his team are very, very good at it.

I would say, this is going to seem like an easy one, but Joe Rogan has done an excellent job of becoming a category of one. He wasn’t emulating someone else, and for those wondering where you might be able to read up on how to do this, there’s a chapter called “The Law Of Category” in The 22 Immutable Laws Of Marketing. A lot of the other chapters are outdated, this one everyone should read.

He did an excellent job of, number one, experimenting with a brand new format early. He has been in the podcasting world for a very long time, and he’s tested a lot and he found his footing reasonably quickly and the combination of entertainment and in-depth interview and tripling down on long format, I think he deserves a lot of credit for popularizing. He also made incredibly, incredibly good strategic decisions before most.

I’ll give you an example, YouTube, one of the world’s largest search engines, who did one of the very first spectacular jobs of capturing podcasts on YouTube. Not just long form, but using clips on a separate channel. So he has played that game like the consummate professional. And so he would be another example. I think Lex Fridman does an excellent job. I’d say our formats are probably closest in some respects. Patrick O’Shaughnessy, who we both know, who focuses on investing and investors, I think does a fantastic job. I could list another 20.

There are some really, really good interviewers out there, but it’s not enough to be a good interviewer. I really think you need to seek to be a category of one. It’s a lot easier to be the only than it is to be the best when you have millions of podcasts to compete against. So it’s spend a lot of time thinking about positioning.

Bill Gurley: I have a couple questions about big events in your world that have happened in the past two or three years. So Spotify leaned heavy into podcasts, did a couple of high-dollar acquisitions with Joe and Bill Simmons, and at least based on what they’ve said publicly with the layoffs and stuff, they backed off a little bit. What are your thoughts on that in and out and what it means for your world?

Tim Ferriss: I think first and foremost, that it was a very smart strategic decision to acquire talent and that podcasts and audiobooks, or some form of audiobooks, are probably existentially important to Spotify, versus, say, an Amazon. Amazon has put a lot of resources into podcasts and certainly they’re the dominant player in audiobooks with Audible, but they could survive without those things.

For that reason, for Spotify to acquire talent at whatever price necessary to fold in existing audiences, to get a lot of PR, which gets the attention of other high profile creators, who then might reach out through their lawyers or agents to have conversations. I think it was very smart. And I expected no matter what, that once they became a more meaningful percentage of every podcasters’ downloads, that they would back off of that because why buy audience when you get to the point where most podcasters have to pay attention to you and they’re coming to you at the same time they might go to Apple to ask for promotional help? You’ve established a different level of leverage at that point. So it doesn’t surprise me that they’ve backed off. I think that would’ve happened either way.

Bill Gurley: You’re in a position to know this. How successful have they been encroaching on Apple’s podcast player or others?

Tim Ferriss: They’ve grown a lot. They’ve grown really significantly. I can’t link that causally to the one lever that they’ve pulled in terms of — 

Bill Gurley: Do you know as a percentage, or at least for you, where — 

Tim Ferriss: You know, I don’t, and I would share it if I had it, but it’s easily tripled or quadrupled in the last handful of years, without a doubt.

Bill Gurley: Cool. And then the second thing I was going to ask you about on this front is just Twitter. Obviously, Twitter’s been through a lot of changes in the past two years, but it’s also a platform for redistribution, pretty powerful one in your world.

Tim Ferriss: I use Twitter in a very particular way. I am not totally convinced of its power as a distribution mechanism. It may be just the same 200 people yelling at one another all the day, every day. It’s hard for me to tell sometimes. But Twitter principally, for me, is a way of connecting with, I would say, a third of my podcast guests, and it is an excellent means by which you can make contact with someone who would otherwise be very difficult to get hold of.

Bill Gurley: Oh, the DM part.

Tim Ferriss: DM, because — 

Bill Gurley: It’s unbelievable.

Tim Ferriss: — if you are reaching out, say, to have a conversation with someone through an agent, a lawyer, a manager, a fill-in-the-blank, there’s so many layers and so many hurdles. Even for me, it’s very difficult to make contact with a lot of people. Twitter just gets rid of all of that because if you both follow each other, and in some cases you have open DMs, but you can communicate with someone and they don’t have to share any of their contact information.

Bill Gurley: Oh, I know.

Tim Ferriss: They’re not going to be getting a late night text from you, “Thinking of you, how are you?” They’re not going to have — the creep factor potential is much lower. So I would say probably a third of the people I ended up having in my book Tribe Of Mentors came from DMs on Twitter.

Bill Gurley: Yeah. I’ve wondered over the years, if LinkedIn hadn’t polluted their InMail and made it monetized and they had done what Twitter did, how much of the most powerful conversations in the world would have happened?

Tim Ferriss: Yeah. I will say I do think LinkedIn is going through a powerful resurrection of sorts, where I actually think LinkedIn is going to become a more powerful platform than people expect for broadcast. And I’ve seen inklings of that. However, I should add a warning, which is if you don’t have a focal point, like an email newsletter, or you don’t have a focal point, like the craft of improving your podcast, because quality always has a market. 

If you aim to be the best in a category of one, right now I know I’m combining a few things I said, might be separate, they’re not mutually exclusive. If you don’t have that type of focus, you haven’t made those definitions ahead of time, you are going to be like a rabbit in a maze trying to find a piece of carrot. You’re going to be jumping from one platform to the next, to this, to this, and even on one platform, oh, the algorithm changed. Now I have to change everything that I’m doing to it’s all about dogs farting now. Okay, great. How long can it be? 27 seconds. Okay, that’s what I’m going to do now. And you are going to lose, you’re not going to actually, I think, achieve any of the goals, if you have defined those goals in advance at all.

Bill Gurley: Cool. So what I’d like to do now is this gentleman, Tim Ferriss, wrote a book called Tribe Of Mentors, where he came up with a list of questions for a whole bunch of different people. So I’d like to turn them on you. Because I want to earn your trust, I’ll answer them first and show a little vulnerability.

Tim Ferriss: Perfect.

Bill Gurley: So the first question is, which books or books have you gifted the most? For me, it’s Complexity, about Santa Fe Institute, and a wonderful book called Mr. China about this guy that lost his shirt, this British gentleman that lost his shirt, investing in China. Those are my two. What are yours?

Tim Ferriss: Okay. I would say the Moral Letters to Lucilius, better known, I’d say, through Penguin as Letters from a Stoic. These are letters of Seneca that I think are very, very easily applicable to many different situations. That would be one.

Another one is Awareness by Anthony de Mello, a long-since dead now, but Jesuit priest who is also a psychotherapist. Awareness, and then I would say assorted poems, mostly of Hafez —

Bill Gurley: And you give these out?

Tim Ferriss: I have bookshelves full of these books at home and I give them to friends and guests and so on.

Bill Gurley: Very cool. The second question, which purchase of $100 or less has most positively impacted your life in the last six months? Now, I was hoping you were going to ask me this question, but you didn’t, so I was ready for it. I have a very peculiar answer. Really, really amazing nail clippers. Pay 50 bucks for them, or something. It could change your life, I promise.

Tim Ferriss: I get it. I’m in. I’m in. I could use some manicuring.

Bill Gurley: Most of us use really shitty nail clippers. Wait until you try a really good pair.

Tim Ferriss: So a piece of advice from Kevin Kelly, just a quick one. He’s like, “You know [how] you have that bad pen and that one bad pair scissors?” He’s like, “Yeah, just get rid of all those bad pairs,” or versions of whatever. Actually get a high-quality version. So fingernail clippers.

$100 or less. I would say, and this is not going to be applicable to a lot of folks, I have Raynaud’s disease, so my fingers and toes get brutally cold in the winter and really hot in the summer. Getting rid of ski gloves, I tried all the fanciest, including heated gloves, just getting mittens without finger dividers and putting heaters, cheap, disposable heaters inside.

Bill Gurley: And don’t worry about the fact that they might not look cool.

Tim Ferriss: They don’t look cool, and they make everything else harder related to buckling. But I was in some really cold temperatures recently, so mittens, there you have it.

Bill Gurley: Third is favorite failure or failure that set you up for success? I was thinking about this last night too. I was very fortunate and got introduced into math competitions in the sixth grade and was super successful. But by eighth grade, I was getting my head handed to me and there was just a whole influx of new students and new people, a lot of immigrants, and it just got harder. And in retrospect, I think feeling the victory, but then having it get away, was very humbling and gave me a proper perspective on things.

Tim Ferriss: Yeah, that makes sense. I would say, I already mentioned one, which would be The 4-Hour Chef burning me out and also getting boycotted by a lot of retailers because it was the first major title out of Amazon Publishing at the time. And for that reason, even though it sold 120,000 copies in the first week, which is a lot, and I think number two on The New York Times list sold something like 10,000 copies, it ended up number four on New York Times, which is largely an editor’s choice list. If you want a compiled list, something like The Wall Street Journal is a truer reflection of say, Nielsen BookScan. And that was very hard for me to stomach, after also just doing this suicide run of cramming it into a year and a half, which led to the podcast. If I had not burned out podcasts wouldn’t have happened.

I would add to that, flashing back much earlier, when I was initially in an undergrad, I wanted to be a neuroscience — I was a neuroscience major and I couldn’t do the animal testing required in the lab within which I wanted to work. And I think it’s important, I do think actually this type of testing is important. I couldn’t personally do it at the time, and I switched to East Asian studies, with the focus on language acquisition. And without that obsessive focus on language and language acquisition, I don’t think the fidelity of my hearing and awareness would be such that I could do my podcasting the way I do it.

Bill Gurley: That’s cool.

Tim Ferriss: Yeah, I think that cultivated a sensitivity that helped much later. So, just to add a footnote to that, do whatever gives you the most energy because energy is that currency that drives everything else. So I don’t regret majoring in East Asian studies at all.

Bill Gurley: The next one, you ask almost all of your guests about the gigantic billboard. I just a few weeks ago said, “Don’t be tribal.” And I just feel like there’s no reason that 50 percent of the world should have their opinion on everything decided by one group of people. And then I just think we all need to be responsible for our own thinking. What’s your answer to your own favorite question?

Tim Ferriss: I’ll piggyback on the thinking theme, and I’m going to borrow mine from BJ Miller, hospice care physician, who he does a lot more, but he’s helped thousands of people to die, and I had him on the podcast. And his answer was, “Don’t believe everything that you think,” which ties into the Awareness book, Anthony de Mello, I mentioned earlier, but “Don’t believe everything that you think.” I think many of our ills come from not cross-examining the things we take to be true.

Bill Gurley: Fair. That correlates with that famous saying, “Strong opinions loosely held.”

Tim Ferriss: Indeed, yes.

Bill Gurley: I think I might know your answer to this one. What is the best investment you’ve ever made? Mine’s Uber, what’s yours?

Tim Ferriss: Yeah, we’ve got startup — we’ve got the startup investments, but I’m going to actually, just to try to give a different answer. I’m going to say going to Blog Expo, because that is where I met a ton of bloggers in person, including Robert Scoble, who ended up being very, very helpful and putting something on his blog that I think was a phase shift moment for The 4-Hour Workweek. Because without any of that, none of the other stuff happens.

Bill Gurley: Okay, and then I’ll do this one last. In the last five years, what new belief, behavior, or habit has most improved your life? For me, I’ve learned that if you just wait a little bit of time, a lot of problems go away, and I used to go deep in them, and this weekend was a perfect example, and this is a good transition to Silicon Valley Bank, but a lot of people did a lot of crazy, manic things this weekend that didn’t matter because it all got solved this morning. So that’s mine. Do nothing and wait, my new habit.

Tim Ferriss: I would say mine is probably studying things like Nonviolent Communication. I encourage everybody, check it out. Get the audiobook by Marshall, I’m blanking on his last name. Learning how to navigate conflict well, and I don’t think I was terrible at it before, but Nonviolent Communication. And also, pro tip, if you are so dysregulated, if you’re just so amped up that no matter what, it doesn’t matter which tools you have in your toolkit because you’re going to blow it, you’re allowed to say to someone, which comes back to doing nothing, “I really just don’t think I’m in a place right now to have this conversation go well. So let’s just take a little breather and maybe we can do this later this afternoon, or some other time.” Just giving yourself permission to wait.

Bill Gurley: All right. And we’re out of time.

Tim Ferriss: We’re out of time. Bill Gurley, thanks.

Bill Gurley: Tim Ferriss.

Tim Ferriss: Thanks, everybody.

The Tim Ferriss Show is one of the most popular podcasts in the world with more than 900 million 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.