222. How Derek Sivers grew CD baby to $22m using a customer-focused approach
In this remarkable conversation with Derek Sivers, he shares his story around CD Baby. How he built it from nothing using an attitude of generosity and kindness and focused purely on the customer.
Anything You Want - Derek Sivers
01:39 - How Derek built a $22m company by focusing purely on the customer
04:40 - The problem with external funding
13:52 - How to approach the world with a positive bias
16:49 - The story of the cab driver and the mob
29:12 - Derek Siver's approach to content creation
32:22 - How Derek Sivers edits
33:44 - How Derek Sivers sees the AI changes
37:46 - How to live
40:28 - The attitude Derek Sivers brought to CD Baby
43:03 - The struggle before launching CD Baby
44:15 - Why I do my own editing now
44:34 - Why you must pursue pain
44:45 - The difference between deep happy and shallow happy
48:38 - Derek's advice to a person starting off in entrepreneurship
49:00 - The Tarzan analogy
50:24 - The key thing about internal vs external focus
56:28 - Derek Sivers on SEO
57:33 - Derek Sivers' approach to writing anything
Ash Roy and Derek Sivers Video Transcript (This transcript has been auto-generated. Artificial Intelligence is still in the process of perfecting itself. There may be some errors in transcription):
Ash Roy 0:00
Derek Sivers was born in California and now lives in one of the most beautiful countries I've ever seen, New Zealand. He's a musician and accidental entrepreneur. More in this shortly. And is the founder of CD Baby, which he sold for $22 million. He's one of the best writers I've come across on the Internet and is a generous contrarian with an amazing ability to express incredibly useful ideas, succinctly and impactfully. Today I'm delighted to welcome Derek Sivas from Sivas.org, and we're going to talk about entrepreneurship, which will help you, our listener or viewer, to achieve business growth on your terms. Welcome to the productive insights podcast, Derek.
Derek Sivers 0:42
Ash Roy 0:43
Thank you so much for being here. Derek, I've read just about all of your books. Uh, in fact, I've read all four of your books, and I've read some of them multiple times. You have created some outstanding content. If I'm not mistaken, when you wrote Anything You Want, which was the first book I've read, I think that was the one Seth Godin recommended you write, is that correct?
Derek Sivers 1:06
Ash Roy 1:07
Well, I sent him an email last night saying, I'm so excited, I'm m interviewing Derek Sivers tomorrow. I believe you encouraged him to write anything you want. I love the book and I'm super excited. And he wrote straight back and he said, it's a great book. He's aces. So I was like, well, um, Seth Godin is one of my heroes. I started my entrepreneurial journey listening to startup school ten years ago. Seth doesn't even know this. He's somebody I'm, um, proud to call a friend. He's not my best friend, but we talk every now and then and I'm very grateful to know him. He was also a guest on episode 200. Could you share with our listeners, uh, and our viewers, the story of CD Baby and how you built CD Baby, focusing purely on the customers needs and not obsessing on profits, or worse still, revenues, which is what most Silicon Valley types seem to obsess about. And you sold it for 22 million. Can you tell us that story?
Derek Sivers 2:01
Yeah, well, first, I mean, don't get the wrong idea. I mean, I'm clearly not a Silicon Valley type. I was a musician in New York City selling, uh, my own CD. So when I started, there was no CD, baby. In fact, in 1997, there was no business anywhere on the Internet that would sell your music unless you had a record deal already, and then your record label would take care of it through the major distributors. But if you were just an independent musician wanting to sell your music, there was nowhere that would sell it for you. So I just had to do it myself. So I built my own store. I got my own credit card merchant account, which was, like, $1,000 in set-up
fees and about three months of work. And I had to figure out how to program my own shopping cart from scratch because there was no PayPal back then. And, uh, it was three months of hard work. And so after three months of work, I had a buy now button on my website. None of my musician friends had that because I was the only one. After I did it, my musician friends in New York said, whoa, dude, can you sell my CD through your thing? And I went. I guess I could. Sure, why not? And so I was just doing it as a favor to friends. It was not meant to be a business. That's a big difference is that I wasn't trying to make money. My full-time living was as a musician, and I didn't want anything to get in the way of me making music. So really, just like, as a hobby. In my spare time, I would sell some of my friends' CDs and then they told their friends about it, and pretty soon I was getting calls from strangers or friends of friends, hey, my friend Dave said you could sell my CD and, uh, no problem. Um, that's why it was an accidental business, is I didn't want to have a business. So when I realized that I had
accidentally started this business, I decided to make it like a utopian dream come true from a musician's point of view, right? Not from my point of view as a business owner. I didn't think of myself as a business owner. I thought of myself as a musician. And I was doing something for my peers, right? So there are lots of examples of this, right? Like, somebody is a bicycle aficionado, and then someday they start their own bicycle company. They make what they would want to be, like their dream bicycle that nobody else was making, right? Or they pick
anything else. You know, somebody has a love of something if you really love something and then you get yourself into the position where, uh, now it's your job to make it well, then, of course, you try to make it like your paradise utopian dream come true. So for myself as a musician, Cd Baby was only ever meant to be a service that I was doing as a favor to my fellow musicians.
Ash Roy 4:40
I'm really glad you mentioned at the start, uh, that you're not the Silicon Valley type because that is exactly what I want to shine a light on. I spoke at length about this with Rand Fishkin in episode 159, where we talked about his story and his book Lost and Founder. Uh, external funding is something that seems to be celebrated in a lot of business communities. And to me, in a large proportion of cases, I think it's an opportunity for commiserations, not celebration because you are effectively handing over control of your company, often to people who don't understand the business and understand how it's run. And within a few short months after the honeymoon period has passed, it shows me the money and now all of a sudden you're bending over backward. You're compromising service, you're compromising the business just so that you can show profits so that these people can justify the cash cow that they have supposedly acquired. So I'm total with you and I don't speak from a place of complete ignorance because I suffered through a CPA in 1997 and then an MBA in 2004 and I'm very familiar with all the weasel words. And while I think there are some things to be gained out of an MBA, I'm not saying it's all bad. I am saying a lot of it is BS. And I want to call that out because I think that what you stand for and what you say rings very true to me. And this contrarian idea, which in my opinion shouldn't be contrarian, of a business existing to provide some kind of meaningful service to solve a problem for someone in society, not just to make
profits, not like we were taught in business school. The uh, sole reason a business exists is for profit. Profit is important, sure. But if it becomes purely profit-driven then very quickly it loses its way. Would you agree?
Derek Sivers 6:33
Completely. In fact, to me, that's just not enough motivation. I think early on, like straight out of high school, somewhere in there, I came up with a mission for myself. I shouldn't say a mission, I should call it a rule of thumb never do anything for the money.
Ash Roy 6:50
Derek Sivers 6:50
And I've kept to that forever. Even when I was doing gigs as a musician. Of course, I wouldn't have driven the 5 hours to do the gig if it didn't pay $300. So you could say I was doing it for the money, but not really. What I was really doing it for was the experience, the connections I would make from doing it, and the ego boost to tell myself that I'm a professional musician, these are the real reasons. And the $300 was just a side effect. Right. So as for CD baby, I'll tell you a little story. By example, please, is when Cd Baby was in full swing. And I mean it was the largest seller of independent music on the web. Let's say around 2002 or so I was speaking at a conference where I was up on a panel with a few other people and somebody in the audience raised their hand, got the microphone, and asked me this question in front of everybody. They said okay Derek, how do you deal with PayPal or musicians just selling their CDs directly from
their own site? What are you doing to prevent that? Because if every musician did that, you would be out of business. And I said yeah, that'd be great. I said I would love it if every musician was able to sell their music directly from their own site and not need me anymore. That would be great. And he said but then you would go out of business I said, yeah, that would be wonderful. That would mean that they don't need us anymore. I would uh, love that. So I was hoping that CD Baby would go out of business because it was just me. I was doing it as a favor to the musician community. So if it went out of business that would mean mission accomplished. This is no longer needed. So I really think of a business as like a bandage, right? If there's a wound, it needs a bandage. So if there's something that's lacking or something that's needed, uh, you put a bandage on it. But I don't understand this mindset. When people say I want to make a business, I just don't know what it is. I think that's like somebody saying I want to wear a bandage. I just don't have any wounds yet. So uh, it's weird to like I just want to have a solution. I just don't know what the problem is. The whole reason the thing existed was to solve a problem for the musician community. And maybe this came from uh, a place of abundance. I mean I had other things I wanted to be doing. I wanted to be making music, I wanted to be producing records, I wanted to be touring. And I kind of somewhat sadly let go of that to do CD Baby instead. So if CD Baby would have gone out of business I would
have happily gone right back to producing records. So it kept the incentives aligned. And what's really interesting and this is to me kind of like the Tao of business. And maybe part of what my book called Anything You Want Is about is that in a counterintuitive way, I think customers can tell when they are your top priority. When you're doing everything for them and not for your investors, uh, or not for yourself. They can tell, right? So just two years after I started Cdbaby Amazon got into the same field, right? Like when I first started CD Baby Amazon was just a bookstore. And two years later or let's say one year later, they started selling music. But even then it was only from the major distributors. So about two years later they started selling music directly from musicians. Like any musician could set up their own album for sale on Amazon. And I thought, oh, no, I'm toast. Okay, it's time to wrap up Amazon's in the same business. There's no way I'll last but musicians kept preferring CD Baby over Amazon because they could tell that I had their best interests at heart. They liked the way that I communicated with them. They liked the way that they could call and get me on the phone and that just everything about the business was optimized for them, not for shareholders. And I think customers can feel a difference. So I think that to me, like the lesson of my book, Anything You Want that generosity pays.
Ash Roy 10:35
I'm so glad you said that word because I was going to ask you a question about that next. But let me compliment your story with a little insight of my own. As you were speaking and you were sharing that story, I was thinking back to my membership program. I have a membership program where I mentor some business owners from around the world and I help them to achieve independence and ideally build a profitable business. And I was thinking one way
to increase the revenues is to increase tenure. But as he was speaking, I realized, but wait a minute, that would serve, uh, my interest. And sure, I would love to increase my revenue and my profit, but, uh, in a way, it's good that the tenure is it's not several years. It's around about a year. It's probably a good thing. The tenure is what it is because the business owner is becoming independent and the membership has come to its natural conclusion. So to try and cram, to try and keep the member for longer is a classic example of being obsessed with
the money, but not being driven by the purpose. What's the purpose? The purpose is to help the business owner when they're free. If they can get free in a month, then good for them, right?
Derek Sivers 11:42
Yeah. Could you imagine a school that was incentivized for their students not to graduate, but to stay in the school forever?
Ash Roy 11:49
Right? Well, there are private schools in this country that are about not necessarily extending the tenure of the student, but maximizing the revenue by maximizing the value of their brand. And in fact, I can say that about some business schools where they are, uh, all about the brand. And because they have a brand, they are able to attract high-caliber candidates. They actually have what I would call selection buyers. High-caliber candidates are the only ones that get into the business school. So then the ones who end up graduating end up with higher incomes. And the business school can claim that their incomes have gone up since they joined the business school. But my argument is they would have done that anyway because they're hardworking people and they self-selected into the brand. So the brand then becomes a, ah, filtering mechanism. It's like a lot of people say Olympic swimmers have great physiques, but it's actually people with great physiques that get to the Olympics. And so it's actually a selection bias. All right, so just coming back to the generosity thing. In episode 200, which, by the way, you can email@example.com 200, I spoke to Seth Godin and I said to him, you know, one of the least used words in marketing, I believe, is empathy. And it's probably one of the most important. And fortunately, well, he agreed with me. But then he said something that really struck me and he said another important word is generosity. Now, uh, you just said that word as well, which really struck a chord with me in your book Anything You Want, I think it was. You talk about the importance of approaching the market from a space of abundance and everything falls into place as opposed to approaching things from a space of scarcity, mhm? Now, I have a tendency, because of my own mental baggage, to approach things from a space of scarcity. I have mindset issues, I've been working on it for years and years. Can you talk to us a little bit about that? How do we approach the world from a space of abundance? Particularly for people who have a tendency, whether it's a, uh, genetic tendency or whether it's chemical imbalance or whatever it is, some people have a tendency to have a negative bias. How does one approach the world from that generosity? I mean, you give away all the proceeds from your books, mhm, to charity. I admire that. How do you do that? Don't you worry about what if there's not enough money?
Derek Sivers 14:21
No, I think it all depends who you're comparing yourself against. So think of the woe of the silver medal winner of anything at the Olympics. They must be thinking of how if they could have been 20 milliseconds faster, they could have been the gold medal winner. Dammit. Damn it. Damn it. The silver medal winner can't help but compare themselves to the gold medal winner. On the other hand, the bronze probably has a very thankful attitude because, like, yes, if I was 20 milliseconds slower, I wouldn't have been up here on the podium at all. I would have no metal. But yes, I made it that extra little 20-millisecond push and that got me the bronze medal. They're comparing their situation to the next lower tier, which is no medal at all. So I compare myself always to my musician friends, my artist friends, my writer friends that are struggling to make a few hundred dollars. And, um, I just feel super lucky all the time. Very I don't know what word you want to use, fortunate, privileged, etc. All those kinds of words that I was able to do anything at all. Like, just when I was running Cd Baby and I was making a month, sitting at my computer, making a website, helping my musician friends. And not only was I helping them, getting wonderful thanks. Every day like, oh my God, thank you. This has made my life so much easier. This is so great, I'm so glad you exist. Which, I mean, that's like, you know, better than money to hear that. But then I'd also come out with a $1,000 profit at the end of the month and that was just a great feeling. So was I yearning to be a billionaire? No, I was just, uh, really happy to have my thousand dollars. And then when it was like $10,000
a month, I'm like, oh my God, $10,000 a month? Just helping musicians. This is amazing. And then when it was more than that so I think I was just always comparing myself downward and just feeling like I'm one of the lucky ones. And what do you do when you're one of the lucky ones? You share it. You relax. You just like I'm in an abundant situation, like, you share it with people who weren't so lucky. And I don't mean that in, like, a givey of proceeds to charity way. I just mean in the way you run your business. So, again, in my book, anything you want. There's a little story that a taxi driver in las vegas told me how.
Ash Roy 16:53
Oh, I love this one. Please tell us.
Derek Sivers 16:55
Sure. I was just being conversational. I got in the taxi, and I never go to las vegas, right? But I was there for a conference and get in the taxi, and the driver looks like he's about 60. And I said, um, lived here a long time? He goes, yeah, 28 years. And I said, um, a long time. I said, has it changed since then? He kind of looks over his shoulder. He said, hell, yeah, it's changed. He said, you know, when the mob ran this town, it used to be fun. He said, when the mob ran the town, only two matters numbered how much was coming in and how much was going out. As
long as there was more coming in than going out, everybody was happy. He said, you go to get your hot dog, and you ask for some extra relish, some extra mustard, no problem. They put mustard and relish on it. He said, but then the MBAs came in, and they started trying to maximize every square foot of floor space trying to analyze whether this square foot of floor space was making as much as that. He said, now they try to maximize it. I try to get my hot dog. I say, I want extra ketchup. They say that's an extra $0.25 sucked all the fun out of this town. Yeah. Ah, I missed the mob. And every time I ever walked into, say, uh, a restaurant or just any kind of retail shop that you'd walk in and you'd see all these signs posted that were, like, very protective. It's like, all sales are final. No refund without a receipt. No this, know that. And you just look at it. And whenever I see that, I think, yeah, this poor guy is paranoid and screwed and probably gets more screwed because he walks in every day with this attitude. You can't trust anybody. They're all trying to rip me off. If they come in here trying to get a refund without a receipt, screw them. No way. On the other hand, you'd hear these tales of there's a department store in the US. Called Nordstrom, and Nordstrom has this legendary return policy where they say that you could buy a shirt at a competitor at sears, light It on Fire, and then go to Nordstrom to return it. And they would give you their money back. And they just do it because it's good PR for them. It makes people love them. It makes people feel better about shopping with them. And so I think just even as a teenager or as, uh, a musician in my early 20s, just looking out at the world, I felt like all of the examples of good customer service and just good warm and fuzzy feelings from doing business with a company come from generosity. Like, that's what it really comes down to. When a company is generous with me and doesn't get paranoid and stingy, well, then it makes me like them and it makes me happy to do business with them. We are emotional beings. We spend our money, but we're not just robots. We want to feel good about where we're spending our money. We like to feel that it's, uh, congruent with who we are. I've noticed that the places that feel bad to do business with are the stingy ones, or the ones trying to maximize every square foot of floor space, so to speak. Even if it's just like an online service that you just get the feeling is like charging you the maximum possible subscription fee they can, and then it runs out after such and such, constantly pushing you to pay more, and just doesn't feel good to do business with those companies. I think all of this was in the back of my head. And when I found myself in the accidental situation of, oops, I'm a business owner now, and to me, it was clear, like, I'm going to do it the good way. I'm going to be the generous type. And, yeah, it also helped that I loved my customers. My customers were my fellow musicians. They were my friends.
Ash Roy 20:39
A few things I just want to mention. First of all, I've listened to all of your audiobooks, and I love the audiobooks because you put so much of yourself into them. Especially when you tell that mob story when you do the voice of the cab driver, uh, or when you're telling the story about how your friend wanted to put his CD on your website. And he goes, my friend, Dave calls me up and goes, hey, man, can you put my CD on the website? It was just so entertaining and so beautifully done. So I love that. Kudos to you for doing that. I just want to bring out some points you made. Framing one great thing I took away from what you just told me was, if you want to change your attitude or your approach to the world, then change your framing. And I actually remember Ali Abdal talking about this, and I know you were on his podcast. I've been following Ali's work for a long time, and I think he mentioned that his coach talks about comparing yourself to those less fortunate rather than constantly comparing yourself to those who are more fortunate than you. And as a society, I think we've become a little bit obsessed with outcomes and results and goals, but, uh, we've forgotten it's, particularly post-industrial revolution, I think we've forgotten that the journey is actually important. It matters probably more than the destination because, by definition, most goals and destinations are fleeting. So if we were to enjoy the journey and as James Clear says, he was on episode 175, he talks about changing one word in the sentence. Rather than saying, I have to do this, I get to do this. And that's a great way to reframe pretty quickly. So framing helps to create this attitude of abundance and an attitude of humility, which I think is also lacking. We are in this culture of either you're the gold medalist, and that is the only valid position to be, and everything else is just rubbish. And we even remunerate people that way, incentivize that way. The gold medalist takes pretty much all the winnings, and the silver medalist too bad, so sad. Maybe you try again. It's kind of like that, isn't it?
Derek Sivers 22:54
Well, sorry to interrupt. No, um, I think that's a misconception. I think that there are plenty of people making a damn good living being the bronze medalist or even being the 6th runner up, that you don't have to be the number one, most famous, most noteworthy, leading, blah, blah, blah. You can be just in the mix and happy and fine. Think of somebody who's like a cognitive, uh, behavioral therapist helping somebody get over their fears or something like that, right? They don't aspire to be the best and the best therapist in the world. It's like they're serving
their community. They're based in Boston or Helsinki or Sao Paulo.
Ash Roy 23:42
As a culture, do we promote that and do we put that up on the pedestal like we do people on Instagram who are trying to show this unrealistically wonderful life?
Derek Sivers 23:52
You say we, but I mean, some do, but you can choose to ignore that. You don't have to buy into all of today's current trends and follow what all the kids are following and then look at that and think, I need to be in there. You can just look inward to yourself, to your own emotions, and notice what makes you happiest. And so I think that's what I was doing with my business is, yes, when I started Cd Baby, it was at the very beginning of the.com boom. And so all around me, I was living in New York City at the time. All around me, lots of my friends were suddenly being handed 20 million and $100 million, and they were miserable because suddenly they had a boss. They were answerable to the men in suits that handed them that money and were demanding it to all these NBA terms that you know and I don't.
Ash Roy 24:45
Talking and not missing much.
Derek Sivers 24:47
They used the letter Q a lot. Q two, we're getting our Q three round of our Series A of financing and blah, blah, blah. And I didn't even understand what they were talking about, but they seemed miserable. Whereas I was living up in Woodstock, New York, running a little record store out of my house, answerable to nobody, just pleasing my musicians that were gushing their thanks to me every day. And I was making $10,000 a month, and I was happy. So I
had no desire to be number one.
Ash Roy 25:15
You've walked a very rare path or the relatively unbeaten path. And most people that I've come across in social media, which influences a lot of us today, mhm is trying to drive people towards the gold medal when I'm trying to say, um, what I'm trying to bring out in this conversation is the bronze medal is perfectly okay. As Seth Godin said to me, and I loved this, he said, More is not always better, mhm. And enough is a perfectly fine goal to have.
Derek Sivers 25:46
Yeah, enough. Yeah. I mean, we're saying the same thing. I just want to emphasize that I think it's the same machine that's trying to get you to buy McDonald's Big Macs or trying to get you to upgrade your iPhone the day the new one comes out.
Ash Roy 26:01
Derek Sivers 26:01
It's the same machine that's also trying to get you to be the next Facebook instead of just serving your community. It is that, um what do you call that? Memetic desire. Renee Girard. That is kind of like trying to do what society is telling you you should want. And so I don't think I'm such a weirdo for not playing into that. So I don't think the lesson of this interview would be to say, yeah, there's some weirdo who didn't buy into that. My lesson is like, nobody has to buy into that. You can just turn it off. Spend more time journaling, less time swiping, and notice, uh, what really makes you happy.
Ash Roy 26:41
That's exactly what I'm trying to say as well. I don't think that you're a weirdo at all. I think to me, you're a beacon of hope, because you said there's a few people there's, Rand Fishkin that you guys have made choices which we all can make and which to me seems like a sane choice. Because the parts that at least when I did my MBA and when you go into the corporate world, you're socialized to believe, is everyone's aiming for the CEO. Okay, not everyone, but that's kind of like the implicit goal, mhm. But it's okay to have a satisfying life. It doesn't have to be driven by the dollar. Yes, we all need money to live, but enough is a thing and enough is a goal, and it's a valid goal.
Derek Sivers 27:33
Right. And it's about being honest with what makes you happy. Right. So I always have to add in when this subject comes up that you. Might actually be like Richard Branson, who, if you read his autobiographies and I think there's more than two sincerely just has fun making money. He's got a billion and once more, but he does it with a sense of fun. So, to him, if that's your internal thing, well, then don't let anybody tell you that you shouldn't be making money.
Ash Roy 27:59
Derek Sivers 28:00
And on the other hand, I know some people that want to be famous and did get famous and enjoy being famous, and I'm sure there are plenty of people telling them, you shouldn't do that. You could actually make more money staying out of the spotlight and be in the back end, be the producer, not the star. Be the investor, not the, uh, media darling. And they have to just be wholeheartedly in looking inside themselves and knowing, you know what? I like being famous. It makes me happy.
Ash Roy 28:28
Derek Sivers 28:28
And some people, the opposite. You know, they like being anonymous. And I'm sure there's somebody saying, you know, you should really step into the spotlight, like, no, I like being anonymous. So you just have to know in yourself what makes you happiest. It might be leaving a legacy that makes you happy. It might be the glamorous life in Hollywood that makes you happy, and you shouldn't feel bad about whatever the thing is that's driving you.
Ash Roy 28:51
That's true. I love that you said it's about getting to know yourself and what you feel will make you happy. I mean, Warren Buffett loves to make money, but it's not the money that makes sense to make him happy. It's the making of the money that makes him happy. I mean, he says, I'm not good at giving it away, so he gets Bill Gates. Who's better at giving it away? To give it away? So I agree. I think that's a great point. Let's switch gears a bit and talk about content creation. You have created some really pithy and, as you say, useful content. I want to
know the secret. Do you write 100 pages for every page you publish because there is so much density and wisdom in your content, but it's so concise? Can you tell us what your secret is to creating this content?
Derek Sivers 29:37
Thanks. Uh, that's a great compliment. First motivation means I have felt the pain of reading 300-page books that should have been 20 pages yes. And then, uh, noticing that repeatedly vowing not to do that. And I think that's a hard thing for us to get over. I think you need to acknowledge if you are a writer or a speaker or somebody putting stuff out into the world, you need to acknowledge the fact that in school, you were taught to do the opposite. It was like, we need a 10,000-page essay on this subject that you have nothing to say anything about. So you'd have to come up with 10,000 empty words that you didn't want to be doing. And so we did that over and over and over again for years in school. And then you get out of school and the best thing to do is the opposite, which is to put the least number of words possible. The more succinct you are, the more people will listen, and the more powerful your message is if you cut out the fat around it. So first you have to have the motivation and the drive to do that because some don't. In contemporary society, the worst offenders are, uh, talk radio, or let's just say, radio hosts. They're paid to just fill the air with, no, just keep talking, keep talking, it doesn't matter, there's nothing to say. Just keep those words moving. And I think a lot of people in business do that too. They say all these puffy well, going forward, all these nonsense words that mean nothing, just to keep talking. Okay, so first the motivation to be succinct. Then how? First and foremost, I talk with friends. Like, I talk a lot with friends and share daily epiphanies and insights, and they share theirs with me. We share our insights and, um, ideas and we bounce, we reflect each other. So a friend calls me with her new epiphany of the day and we bat it back and forth a bit and then I just notice any time I say something that makes a friend go, OOH. Oh, that's a good point, I never thought about it that way. Then I go. Uh-huh. Okay. Noted. And then I'll go write it down like, oh, that impressed somebody. And that would happen when I would speak at conferences, too, as I would be on stage to a room of a couple of hundred people. And sometimes I'd just be trying out new ideas. And you could see when I would say something that would make all heads go down to take notes, suddenly you see people do that kind of eyebrow, maybe a little frown, and then put their head down to write
something down, like, oh, okay, that just made people write it down. That must be good, I'll remember that one. I'll use that. So then when I'm writing it, I try to just share those things. And yes, my rough draft of everything is everything. It's all of my thoughts on the subject. It's just the verbal dump of everything. But then when presenting something to the public, I edit it down to share only the surprising bits. That's my filter, is that I've noticed that we only really learn when we're surprised. So if I can just get rid of everything, that's not surprising. That means I'm just sharing the good bits that help people learn.
Ash Roy 32:53
Have you read the book make the Stick by Dan and Chip Heat?
Derek Sivers 32:56
Ash Roy 32:57
Loved it. That talks about breaking our guessing machines. And you're right, we are, uh, predictors in a sense, it's a survival mechanism. And when we break people's guessing machines, that's when they listen. And, um, I was trained to write by a person called John Morrow. And he taught me that. He personally taught me to write. And he said you need to think as a performer, not as a writer if you want to be a successful writer. Wow. Uh, so I love
that. You also mentioned in your conversation with J Klaus that you journal for at least an hour a day, sometimes three or 4 hours a day. I think that's one of the best ways to really dive deeper into your thoughts and become more self-aware, even if it's not for being a writer, but especially if you want to be a writer. Tell me, given the artificial intelligence and all this more and more text that's being spun out through these AI machines, do you think AI is going to have any meaningful impact on writing?
Derek Sivers 33:58
I'm a programmer as well, and I have a membership to open AI. So I've used their APIs and I've programmed and tweaked and had it generate text. Because at first, I thought maybe this was something that could help me, but maybe in sheer quantity. But I feel that I haven't got any new ideas from AI yet. I kind of thought that, like, let me kind of seed it with some really insightful, surprising philosophical sentences and then I'll start the first half of sentences and see what AI comes up with. And I did this over and over and over and over and over again, and I never found anything surprising that made me go, OOH, that's good. Like, I was really expecting that. I thought it would, but, um, I get more OOH, surprise moments out of a conversation with a friend. If I'm sitting there working on something, I have a dozen different people I could just call and just say, hey, Tynan, what do you think of this idea? And they'll say, Ah, I don't know, man. It sounds to me like you're basically saying raw. And I'll go, oh my God, you're right. I get more insight from one random comment from a friend than from an hour of playing with Gpt-3. Um, that said, I'm sure it's a useful tool. I think it'd be interesting if you're stuck. I think if you were writing fiction and you weren't sure and you wanted a little random element. Do you know what it reminds me of? Brian Eno made some cards. That called oblique strategies. You should look this up. Anybody who's like, a creative creator, uh, of anything, let's say, um, Brian Eno, E-N-O is a legendary record producer that produced some of the greatest, uh, rock albums of all time, including with David Bowie and YouTube and Talking Heads and some good stuff. Very, very creative guy. Very thoughtful. I think I like his ideas about music even more than I like his music. And so one thing he did years ago is he made a deck of cards that he called oblique strategies. And on each card was a directive saying like, cut a common thread, and the next card would be saying, um, reverse it. And another card would be saying, uh, get rid of something that seems necessary right now. The idea was when he was producing a record and he felt stuck and wasn't sure what to do, he'd shuffle the cards, pull one out, and the game was to follow its instruction no matter what, even if that felt wrong. So then he would cut out the drums or something like that, or remove the lead vocal, something that seems necessary, or whatever the cards told him to do. So I could see AI being a random influence like that mhm to give you some random ideas. If you're feeling stuck when people talk about it, replacing writers, well, then I think if you can be replaced by AI, then you probably should be you should find something else that is more of your unique contribution in the world.
Ash Roy 36:50
Right? That's interesting. Speaking of cards, I don't know if you've seen this, but I got this when I bought Seth's book, The Practice, and it's got these really cool cars. I love it. It's got these snippets if you knew you were sure to sell, then what would you do? You're not the boss, but you're in charge. It's really cool. You should get him. I recommend him. You can buy it. At one stage, he was selling it with a book. All criticism is not the same. Attitudes of skills and so on. And there's another little thing called storyteller tactics. I just bought these, and these are cards that I'm, um, not sure we can buy them. I'll send you the details later. But they've got these various ways to tell stories. And then I've got another one for they've got different kinds of tactics. This is called workshop tactics. So, yeah, cards are pretty cool. I love cards. It forces you out of your mental patterns, which is wonderful.
Derek Sivers 37:44
Ash Roy 37:46
So tell me, Derek, in your book, how to Live, which I've got right here, I've got all the goodies. I love this book. Initially, I have to say I found it confounding, but it definitely broke my guessing machine. It was surprising. And I remember sending an email about it saying, hey, man, I kind of don't quite get what you're saying here. And then I said, wait a minute. Are you saying that the point of the book is there is no one way to live? And you're like, you got it. So that said, by the way, that's why the book is called 27 Conflicting Answers and One Weird Conclusion. And it's a nice and thin concise book. Like everything. Derek Sivers is concise. I love it. I love the fact that you're not about just spouting 300 pages of stuff that could have been done in 30 pages. So in your book, how to Live, you talk about pursuing pain. Now, this is something that people don't talk about enough, and I think it's very important. You say, and I don't quote exactly, but you say everything good comes from some kind of pain. The pain of practice leads to mastery. If you avoid pain, you avoid improvement. Now, we see all or I see all this promotion about million dollars overnight, kind of some version of that, and there's so many versions of that BS. But the truth is, in every instance when I have seen somebody who's achieved anything
meaningful, whether it's financial or not, they have endured various kinds of pain. As a guy called John McGraw, the founder of McGraw Real Estate, said to be in episode 122, it takes ten years to become an overnight success, and most people just see the overnight part. When you started Cdbaby, I think in the conversation with J Klaus, you said you were working 12 hours a day, seven days a week, or something like that for like, three years. You didn't just wake up one day and sell it for 22 million. You had to work hard. We don't talk enough about that. Can
you tell us a bit about your take on it?
Derek Sivers 39:51
Yeah, it might not be the answer.
Ash Roy 39:53
Um, you want, but I want to hear your answer.
Derek Sivers 39:56
I don't have my honest answer is, um, I don't remember any hardship. I feel like there was none, except for maybe one bit of drama with my employees about a year before I left the company. It was actually really the reason I left the company, is because things got full of drama. But the previous nine years, yeah, I mean, I basically worked from 07:00 A.m. To midnight, seven days a week for mostly ten years. And I loved it. I loved it. I was having a blast. I mean, there's a reason I would bounce out of bed quickly, throw in some clothes, dash into the office, and I'd be excited to, like, be in there. Like, all right, back at it. Okay, today I'm going to make this work. I'm going to do such and such and such. Or, uh, I just really enjoyed doing the emails and answering people's questions. It was like eating potato chips. A little challenge to answer these things and to get some new ideas from customers on what they're asking for, what they say would really help them. Um, I was learning to program along the way. I wasn't a programmer at first. I learned out of necessity. So I say, okay, there's got to be a way I can get the database to show me who bought this. But not that, but not in this, but only if it's been ten days since they last bought something. And I would, like, to make this a challenge to myself to make this SQL query that could do what I wanted. I found it a challenge to build systems that could automate things we were doing manually. It was just me and three people at first, and those three people were completely swamped. But I couldn't really afford to hire a fourth person. I'm like, I'm going to sit here and work with you today. And I'd say, okay, there's a lot of repetition in this. There's got to be a way I can automate that. So that's really this tone of excitement you hear in my voice, that was me for ten years. That's me at 07:00 a.m to midnight for ten years. Like, okay, how can I do this? Or even like, I'm going to go to this conference and how can I knock it out of the park? They've asked me to speak at this conference. I don't want to just get up there and go like, well, yeah, uh, the music business is tough. I want to get up there. I want to inspire these musicians to show them that they can emancipate themselves from the, uh, machine. And so I'd give that as a challenge to myself. And I'd write these articles to try to help musicians. That's my purple book called Your Music and People is mostly articles I wrote for musicians. It ends up being about marketing. It was written two musicians, but you can read it metaphorically. It's about the generosity of marketing in general. Except for that little bit of drama near the end, there was no hardship. It was just fun. And so I actually constantly wrestle with this definition of work, right? Like I tell my kid, sorry, I need to work. But really it's play. Yeah. And I tell my friends that too. Like it's, it's uh, definitely they say, well, what are you working on? I was like, whatever. I feel like what I call work is basically me time. It means whether I'm programming or I'm m writing, I'm editing something. I'm learning
something new. I'm reading a book. Not a fiction book, but something I'm going to apply to my life. This is all my quote-unquote work. This is what I love. The best ten years of Cdbaby was me just having a blast for almost all of it. Now, a few years before go ahead. I'll just finish to say, the few years before I started Cdbaby, there was some hard work in there. There was a lot of struggle to try to get my music into the New York City music scene. And there were a lot of constantly locked doors and uphill battles. But even that, like I said, about driving 5 hours to go to a gig that pays $300, I had a deep purpose. I was doing it for the experience. I was getting
better. I was toughening myself. I was learning more and getting paid. So it was hard. But even that, I loved it.
Ash Roy 43:32
So a lot of this comes back to framing, right? Because I'm sure you've heard the phrase, if you love what you do, you'll never work another day in your life, right?
Derek Sivers 43:39
I do sound like that, don't I?
Ash Roy 43:41
No, but I mean that's true. I think that's totally true. It's framing. But then what did you mean pain when you say the thing about pursue pain? Because you say everything good comes from some kind of pain. The pain of practice leads to mastery. If you avoid pain, you avoid improvement. I mean, for me, even though I love what I do and I have for the last ten years, sometimes for me the pain is in the form of repetition or boredom. I feel like, uh, I want to do something different today. I don't want to do the editing today. It feels like a chore. Man, I've
got to edit this whole hour-and-a-half-long video. I've tried outsourcing the editing many times, but it's like editing your own book. M, you can outsource it. I'm not saying you shouldn't, but it doesn't always express it the way you want it expressed so often. Not always. I'll edit it myself. Like, I'm going to edit this interview myself because this is so important to me. Tell us about what you meant by that when you said you must pursue pain.
Derek Sivers 44:38
To me, that's applicable in so many parts of life. So I say pain, but it means I know some people that are professional weightlifters and they actually enjoy it. It's the difference between deep happy and shallow happy. Shallow happy is eating an ice cream. Deep happy is skipping the ice cream and going to the gym and yes, lifting 120 kilos over your head hurts like hell, but you did it and you get the deeper satisfaction of having done it and you're proud of yourself for skipping the ice cream. You could say that was pain. Uh, but also a deeper happiness.
In fact, I think that it might even be the definition of deep happy to me is when you pursue something difficult and you achieve it, that's a deeper satisfaction than pursuing something easy. Right.
Ash Roy 45:34
So when you did those ten years at CD baby, that was deep happy, right?
Derek Sivers 45:41
Yeah, even when I said, all right, I'm excited to figure out this SQL query, for example, that's like somebody being excited to go to the gym. Like, yes, the actual lifting is going to hurt. And yes, when I was sitting there for hours trying to figure out how to get the web server in Linux to do such and such, and how do I get this SQL query? It was a lot of like, uh, it was still not working, but then 4 hours of frustration followed by like, oh my God, oh my God, it works, I did it. It's like now I know how. I poured through the manual for hours to learn how and I did it. Yeah, you could say that those are four painful hours. But by the way, the thing I was talking
about in how to live too was also like the pain of working through a problem in your relationship, in your personal relationships instead of giving up and walking away. Right. It's also referring to practice. You know, the best musicians sound terrible in practice. When a bad musician is practicing you just hear them basically play and that's why they're not getting better. When you hear a great musician practice, what you hear is they go yeah damn. You know like that's if you listen to I went to Berkeley College's music, right? So I mean I've
listened in to great musicians practicing and it's a lot of lot, a lot of mistakes and pain and trying hard to get that fingering just right and slowing it down and getting it better and like uh.
Ash Roy 47:16
And scale, you got to do scale to scale.
Derek Sivers 47:19
Yes. And there are pages and the tough figure combinations but then they get it and it's a deeper choice you could say. Yeah. If you were to avoid that pain then you would never get better at your instrument. And I think people do that in everything. Language learning. If you were to just kind of casually use Duolingo 10 minutes a day, you're not really going to learn the language. If you put yourself through the pain of uh, going to italki.com and forcing yourself to do a conversation um, with a native speaker and requesting that they don't speak English with
you but only use the new language that you're learning. It's uh, a really painful 20 minutes or 30 minutes but that's going to teach you better than 2 hours of Duolingo.
Ash Roy 48:00
And that's deep. Happy?
Derek Sivers 48:02
Yeah, hopefully. But I mean the bigger point to me is since you asked about the pain chapter of how to Live I was talking about that kind of stuff because I think it applies everywhere. The pain of really learning a new concept like struggling with a book that's about a concept that's way over your head but you force yourself to read it slowly and read it twice and really get it. Learning programming, learning another language, addressing interpersonal problems with others, and addressing personal problems inside yourself. These things can all be really
hard but that's where the good stuff is.
Ash Roy 48:31
You I'm sure would have gone through some challenging times when you were starting CD Baby or maybe you didn't because you were a professional musician. What's your advice to an entrepreneur uh, who's trying to get that escape velocity where they m have a certain runway by which time they have to either make the business work or they have to go back to the day job?
Derek Sivers 48:52
Well I mean first I advise usually not quitting the day job until the other thing is supporting you. To me, I don't know if you know, the Tarzan metaphor is that when Tarzan is swinging through the jungle on the vines the way that you swing through the jungle on vines is you grab the next vine once it's holding your weight, that's when you let go of the previous vine. You don't let go of the previous thing until the next one is supporting you. So I usually don't advise making a leap where you're going to be screwed if you don't make a ton of money fast. Right. But that's me. I think it's you. And I both admire Seth Goden and I love his advice of just get one paying
customer, like please one person, get one person happy to open their wallet to you. And once you've done that, you can talk with them, get to know them, ask how else you can help them, and ask how else to improve. And in the conversation with them, um, think of how you could systemize what they're asking you to do. Then you do it for a second person and then you do it for a third person. And so instead of thinking, how can I make a million dollars? Quick. First I think, well, first just like aim to make $1,000, and then after you've made $1,000, think about now how can I make $10,000? And after you've made 10,000, think about how to make 50,000. I think if you start thinking in these millions and billions type terms from the beginning, it can really just be a lot of wanky daydreaming. Ah. Whereas if you just keep your focus on helping people in front of you, that'll keep you improving and being useful to others. Yeah. Did you hear there's a difference there? If you're thinking how can I make a million dollars? That's still keeping the focus on you. If what you're thinking is how can I help more people, then that's going to keep the focus on them. And that's like the Dow of business that by keeping the focus on them, not you, you're probably going to end up doing better than if you were asking yourself, how can I make a million dollars?
Ash Roy 50:45
How do you approach a new prospective customer, uh, if you haven't had any previous contact with them, and extend an offer to help them without them feeling like you're trying to sell them something?
Derek Sivers 50:59
I've only done it for people I know already. Uh, interesting. Yeah. Being a musician in New York City, I would ask my musician friends how I could help.
Ash Roy 51:10
Right. You already got the trust built.
Derek Sivers 51:12
Ash Roy 51:13
By the way, have you read the book Delivering Happiness?
Derek Sivers 51:16
Ash Roy 51:16
Everybody said I should.
Derek Sivers 51:18
It sounded to me like it was preaching to the converted.
Ash Roy 51:21
It is exactly what you've been saying. It's just for you. I guess it would be a bit of an echo chamber. It was very sad how his life ended. But uh, it's a book that is all about true generosity. In your book, hell yeah or no, you say? If I'm not saying hell yeah about something, I say no. Sounds great, but easier said than done. Any tips on how we can do that?
Derek Sivers 51:44
Well, first you got to remember that it's a tool for a specific situation. Like any tool in the toolbox, it's not meant to be used for everything in the house. Uh, so hell yeah or no. A strategy to use when you are overwhelmed with opportunity. When everybody wants a piece of you, everybody's throwing everything your way and everybody wants you, you have to say Hell, yeah, or no to basically raise the bar all the way to the top so that you only say yes to a few things. And then you have the time because you've said no to everything else. You have the time to knock it out of the park, as they say, for those very few things that you say yes to. So first you just got to know when to use this strategy. For example, I get emails sometimes from people that are straight out of college and they read my book, Hell yeah or no, and they say, hey, I loved your book, and I'm just out of college, I'm just saying no to everything. And I say, no, wait, that's the wrong strategy. Uh, you're in a different situation, man.
Ash Roy 52:40
Derek Sivers 52:40
You need to say yes to everything. Say yes to everything you can, and only later, when you're overwhelmed with opportunities, that's when you need to raise the bar up and not say yes to all the new opportunities coming your way, but say no to almost all of them. It's a strategy for a very specific purpose.
Ash Roy 52:58
That's very helpful. Derek, you have such a refreshing approach to life. Um, every time I read your content, I feel a little bit freer from the shackles of these mental models that have been imposed on me throughout my life, especially this book, how to Live. I recommend it to everybody. I recommend listening to the audiobook. I want to be respectful of time. I could talk to you forever, man, but I realize that you need to go. Just before you do, can you tell us what's important to you in your life?
Derek Sivers 53:29
Life right now and why? Journaling reflecting? I think all my learning comes from reflecting. I think when we read a book or watch a video or listen to a podcast, it's just input, but we're not really learning. We don't really learn anything until we have time to reflect and reflect on how you can apply that new incoming information to your own life. So, to me, reflecting is super important. And then reading, if you have time to reflect on it. And in the journaling, it's asking myself questions and then most importantly, questioning my answers. Meaning, like, I don't trust myself. I doubt myself. I doubt everything I say. Every time I think I have the answer to something, I like to challenge it and question it and doubt it. And I find that so useful to get yourself out of mental habits. What m did you call them before practices? I forget. What you had a good word for. It's like, uh, your common mental routines. Um, I'm constantly forcing myself to look for different perspectives on anything, looking at all the things you're doing in life, saying, Why am I doing this? Like, what's the real reason? And then questioning that going, Is that the real reason? So if somebody were to magic wand and just provide me with that, I
would stop doing this other thing that I'm doing to get it? No, I wouldn't. So what's the real reason I'm doing it, then? And then no matter what you say, you doubt yourself and challenge those, yeah, that's probably the most important thing, besides the obvious. I love my kid, and I spend probably at least 40, sometimes up to 100 hours a week, just one on one with me and my son. I'd spend way more time doing that than I do writing or programming or working or anything else you see me do. I spend way more time just with me and my son.
Ash Roy 55:15
Is this because you're financially independent now?
Derek Sivers 55:17
Yeah, but I think I did it that way on purpose ever since I was a teenager. I remember learning that John Lennon, when he was at the height of Beatlemania, had his first son, Julian Lennon, but didn't have any time to give him. So Julian Lennon grew up very neglected by his dad and didn't get to know his dad. So when he was 35 and he and Yoko had his son, Sean, he said, okay, I'm doing it right this time. He told his manager, like, Hold all calls. I'm, um, saying no to everything. No, for five years, I'm out. I'm taking a sabbatical. And for five years, he was a full-time dad for his son's, uh, first five years of life. And I remember, even as a teenager, learning that, going, yeah, that's what I'm going to do. Like, if I have a kid someday, I'm going to just set things up. Even if I have almost no money, I'll just find a way. Even if it means I'm going to be house-sitting, staying at somebody's house for free or something so that I can just be a full-time dad and give my kid the full attention. Because I just think that's so crucial in those early years. So, I mean, yeah, luckily for me, I sold my company. But I think even if I hadn't, I would have just found a way to say, all right, world. Like, I have a kid now. This is obviously way more important than anything else.
Ash Roy 56:26
Your son is very fortunate.
Derek Sivers 56:28
Ash Roy 56:29
Do you write with SEO in mind, by the way?
Derek Sivers 56:35
No, I don't care one bit about SEO. None. I don't expect anybody to find me in a stupid search. I don't even use search engines. I hate that whole world. SEO, to me, it's kind of like your question about AI. If you're doing something that AI can replace, then it should replace you. And to me, it's like if you're doing something where the only way people can find you is because you're doing SEO, well, then you really should be doing something better with your life. Uh, zero interest in SEO. Sorry if that's, uh, condescending to me.
Ash Roy 57:07
No, that's very interesting. I'm so pleasantly surprised by the answer, but I appreciate that. I'm going to think about that a bit more because I am kind of a little bit obsessed with it. But now I'm questioning. Sorry. Because it actually affects the way I write, because it's constantly in the back of my mind saying, well, is this SEO optimized? And the whole creative process gets hijacked, and it's kind of driving me a bit nuts. No, to me, it's a perspective.
Derek Sivers 57:33
I just figure anything I'm writing or creating, I try to have so many, like unique insights that the people it does reach, whether it's just 100 people now, but the people that are already kind of tuned into what I'm saying that I want it to be so good that they go like, oh, my God, you have to hear this. And then they tell their friends, that's what I'm optimized for. What acronym could we make that role Optimization? Uh, insight engine optimization. But now I just figured that anybody just searching the web for something is just searching for, like, generic teacups or glasses or USB connectors. And I don't expect them to be trying to find me.
Ash Roy 58:13
How do people find out more about you, Derek?
Derek Sivers 58:15
Oh, uh, you know that answer? Just go to my website. It's s Ive Rs and everything is there. I'm not a big fan of social media for the reason that we mentioned, uh, earlier about incentives. When you have investors, their incentives are for you to just make a lot of money, no matter who you need to screw to do it. And, um, I find that with social media sites, as I feel that their incentives are not aligned with mine. Their incentives are to try to get me addicted and to try to get you addicted. And I don't want my friends to be addicted to things. So I try to avoid putting anything of value on any social media because I think that would enable my friend's addiction.
Ash Roy 58:55
But there are amazing things of value on that site because correct me if I'm wrong, but if I go, uh, S-I-V-E RSA and scroll down, I get access to the audiobook and bits and pieces which I can listen to any time.
Derek Sivers 59:10
Correct? Yeah. Most of my books are for free on my website.
Ash Roy 59:14
That is the only one. Thank you.
Derek Sivers 59:16
The only one that I didn't do that, too, was for how to Live. Because how to Live has to be, or should be consumed as a book. I didn't want just one chapter of it to be misinterpreted, uh, on its own. So maybe someday I'll just let people misinterpret it and put it out there for free. But, um, yeah, s I ve r s. Basically, everything I do is on that site. And if you are somebody that listened all the way to the end of this interview, well, then, hell yeah, you should introduce yourself and send me an email and say hello. That's honestly the main reason I do these
podcasts, is I love the people that I meet from doing them when people hear it and introduce themselves to me. So that's my favorite part. Send me an email and I reply to everyone.
Ash Roy 59:59
Thank you so, um, much for being on Derek. This podcast will be on episode 222. So productive.
Derek Sivers 1:00:04
Two to two.
Ash Roy 1:00:05
Nice slash. Two. Two.
Derek Sivers 1:00:06
Two. Yeah. Thanks, Ash. I'll hope to see you in the next