An Interview With Tim Ferriss, Author of "The 4-Hour Workweek"
Tim Ferriss is a man of many -- and increasing -- talents. Already an author, public speaker, angel investor, and entrepreneur, he is soon to add "TV personality" to the list with "The Tim Ferriss Experiment," which chronicles his quest to master new skills as diverse as drumming, parkour, and starting a business, in just a week. In this interview, he chats with Motley Fool's Brendan Byrnes about making change and choosing investments.
Brendan Byrnes: I'm joined today by Tim Ferriss, best-selling author, entrepreneur, angel investor, and future TV star. Thanks for your time today.
Tim Ferriss: My pleasure.
Byrnes: I wanted to ask you first about where I think people need the most help, which is their professional life. People spend half or more of their waking hours working, and there was a recent Gallup survey that said over 70% of people are either actively disengaged, or not engaged at all, which means basically they're checked out. What can people do to turn that around? What are some tips that you have for them?
Ferriss: I think there are two different scenarios. One is, let's say, a work situation that's fixable. Then there's the work situation that needs to be replaced. There are two different approaches.
The first is really just scheduling a regular 80/20 analysis, and I still do this. Every two to four weeks, I will sit down and I will ask, "What are the 20% of activities and people that are producing 80% of the results that I want -- the things that I want -- including positive emotional states?"
Then conversely, "What are the 20% of activities and people who are consuming 80%-plus of my time, producing 80% of the headache, the anxiety, the self-flagellation, all of that?"
You can very quickly create a to-do list and a not-to-do list, based on that, but making the time and scheduling the time to take a step back and do the 80/20 analysis is, first and foremost, a powerful tool. That's the Archimedes lever for improvement.
In the, "I need to change, but I'm afraid of changing" category -- where improving your job would be like hanging up nice curtains in a jail cell -- you need to fear-set. What I mean by that is, if you're considering quitting the job, or starting your own company, whatever it might be, identifying and very clearly defining the fears that you have related to that, so that you realize the worst-case scenario is very manageable.
A lot of people will hold off on making those decisions because there is some nebulous fear of, "What if I can't get another job? What if my company fails?" Those aren't specific at all. You should really write out all of the worst-case scenarios, all of the very specific things that could go wrong. Then, in the second column, the things you could do to mitigate those or minimize the likelihood of them happening. Then the last column is, "What would I do to get back to where I am now, if those things happened?"
You usually realize, if you're working at KPMG or McKinsey or whatever, you quit, start your own company, you have X number of months of health care. It doesn't work out, you can still find a job at Bane or whatever. It's not hard, and it doesn't have to be that fancy. I would say that, right off the cuff, those are the first things that come to mind.
Tech can obviously help. I could give you a list of tools that I use, like Evernote, for instance, Uber -- the daily apps that I use consistently to save me hours and hours of time -- but the principles are more important than the tools, that tend to change more frequently.
Byrnes: Let's talk a little bit more about saving time and productivity. Obviously you have a ton going on right now; books, and the TV show, et cetera, et cetera. How do we get more productive? How do we focus more, especially in this era of always-on, always-connected?
Ferriss: I think that you need to focus on being effective first, and efficient second. It's important to distinguish between the two. Being effective means you're doing the right things. You're picking the right things to focus on. Being efficient is doing something well, whether or not it is important.
I think, in a constantly connected world, it's very seductive to think that if you download these 17 apps you're doing A, B, and C so quickly that you're being productive, whereas in fact you're just doing a lot of hand-waving on things that are unimportant.
The true competitive advantage I think, in this day and age when people are constantly connected, i.e., constantly interrupted, is blocking out two to three hours a day, even every other day, to focus in a non-reactive mode on whatever your most important to-do is -- which is usually the thing that makes you most uncomfortable -- is a huge competitive advantage.
Paul Graham of Y Combinator has a great essay called "The Maker's Schedule Versus the Manager's Schedule," that discusses this. Peter Drucker has also written about this extensively; The Effective Executive. It's very deliberately not called "the efficient executive."
Those would be some high-level thoughts, and those are the most important.
Byrnes: You've also been a very successful investor or advisor to many companies -- Facebook, Twitter, Evernote, Uber -- talk about your process when you think about what companies you like to look at investing in, and how you advise some of these companies and how you help them out.
Ferriss: There's the selection process, and then there's the value-add component. Typically, I'm working with consumer-facing companies, because that's what I understand. I very often rely on my fans and my readers to find those companies for me.
The reason I connected with Evernote, the reason I connected with Shopify, was because I would poll my readers -- initially, in 2009, for updating The 4-Hour Workweek -- "What's the best tool for this?"
Byrnes: Crowdsource it.
Ferriss: I crowdsourced it. I'd be like, "Okay, this has come up 70% of the time. I've never heard of them; something's going on," and then I would check it out.
The unifying themes tend to be either productivity related, small business/entrepreneurship related, or tied in to one of my passions. It has to be a product that I can be a power user of; Duolingo for language, for instance, would be a good example of that. They now have 10 million users. They've grown like mad.
There are questions I ask: "Could I pitch this to The New York Times?" Not because The New York Times would necessarily help, but because if I can pitch to The New York Times it means it's different, and simple enough that I can encapsulate it in one or two sentences. It also probably means I can tie it into a trend of some type, which makes the entire job easier.
"Is it already working, and something that I can pour gasoline on?" Have they already demonstrated some traction, but perhaps I can help -- and this comes to the value-add piece -- with conversion improvement; that's the first place I focus, is product. Can I actually improve the percentage of visitors that are being converted to sign-ups, or sign-ups to freemium that are being converted to premium? Things of this type, and we'll focus on the actual product design if it's, say, a web-facing service.
Then I spend a lot of time with some really, really sharp -- I hate the term -- but "growth hackers"; quant-based analysts who are really good at this stuff. There are some stellar people who came out of, say, Quora, Facebook...
From that point, once we have a finer-mesh net for catching as many people as possible who hit a site or an app, then it's time to look at actual launch strategy. How do you go from one city, to nationwide, to global is a big question. I'm able to then invest or advise companies that are going to tackle the same challenges, so they can learn from one another.
If you look at TaskRabbit, Uber, same challenge; city by city by city, nationwide, then global. If you look at, say, Evernote, they're going to face some of the same challenges as Duolingo because they're both inherently memory/learning products, in some capacity. Those would be a few.
Also, of course, I live in Silicon Valley partially because I want to be in the mix. I want to be in the thick of things. The reason I became an advisor to Uber -- pre-seed money, which is insane -- was because I was an advisor to StumbleUpon and got to know Garrett Camp really well, and I'm also an advisor to his new stealth incubator ... it's not an incubator. It's a company, called Expa. The same rat pack tends to stick together if they're working well together.
Byrnes: I thought it was interesting you're a huge fan of Warren Buffett as well, because in many ways, Warren Buffett stays away from the whole tech area. He says it's too hard to predict, et cetera, but you've been to the shareholders meeting and actually asked him a question, I think.
Byrnes: What have you learned from Warren Buffett, and why are you such a big fan despite some maybe contradictory investment theses, principles, et cetera -- but also a lot in common?
Ferriss: I've read a lot of Warren Buffett, and I think that my approach is actually very closely modeled after some of his basic tenets, and Munger's, for that matter. When Buffett says, "I don't invest in tech," it doesn't mean "don't invest in tech." It means "invest in what you know."
I have an acute informational advantage in Silicon Valley -- and that's engineered. It's not accidental; I made a point of being there. I like the idea of having to choose your shots very carefully, as if you had a ticket where you can only hole-punch 10 or 12 investments.
When I've made mistakes, it's when I've tried to do the "spray and pray" approach. There are some people who do that, that are almost an index fund. Ron Conway is fairly well known for doing this. That's not my approach. I don't think I can succeed; I can't out-Ron Conway Ron Conway.
But can I take a very hyper-focused approach and invest in companies that, A, are growing and producing revenue, where they lack something I can provide very easily? Or, can I invest in a company where I get a discount on what you might consider the book or intrinsic value of the company?
Let's just say because of my location in Silicon Valley -- someone wants to buy a house, they want to offload some stock, and I happen to be in the right place at the right time -- that's how I ended up investing in Twitter.
Byrnes: Worked out pretty well.
Ferriss: Worked out pretty well so far. I've got a lockup, so we'll see what happens.
But I am methodical in how I approach this. There is some alchemy involved. You can't always apply pro forma analysis to these start-ups, but so far, so good. I think the next three to five years will really paint a more accurate picture of how effective my investing has been, but I think it's critical for people to realize, if they're going to invest in start-ups...
For instance, I'm an advisor to AngelList, which is and will continue to increasingly change the investment game completely for start-ups. If you go to Angel.co/tim, that's me. I have about $1.6 or $1.7 million in automatic backing for any start-up I want to back.
Ferriss: That's insane. It's totally different from anything that's been possible before. This only started about a month ago, with the raise on the ban of general solicitation.
What that means is, previously, a start-up would have to take months and months and months to raise money. Now I have enough money for a Series A, and I could literally just press a button. It's really kind of mind-blowing, when you think of it -- and I do have some really, really cool stuff coming up; that's a side note.
If anyone hasn't, they definitely need to get the collected annual letters of Warren Buffett. It just teaches you to be a better thinker.
Byrnes: Tell us more about what you're doing right now. You've got the show coming up. Tell us a little bit about it, and what's going on with that.
Ferriss: The show is "The Tim Ferriss Experiment." It's basically taking all these crazy experiments that I do on myself -- whether it's business related, investment related, physical manipulation related -- and putting it in front of a camera so that people can see.
How do I build a business in a week? I'll show you; there's an episode on that. How do I overcome my fear of learning musical instruments and attempt to learn the drums in one week well enough -- four days, really -- to go onstage with the band Foreigner and play to a sold-out auditorium, as the drummer? That's insane. Learning languages in a week. Surfing, golf, et cetera, et cetera.
Each episode shows my successes, and my failures -- all my mess-ups -- along with a world-class teacher; the best person I can find. I'm really good at finding these weird outliers. I give, basically, CliffsNotes to the viewer for how they can replicate these results.
The point is, you can get superhuman results, not by better genetics, not through infinite budget, but by just having a better toolkit. Each episode is intended to be very gritty, very action-oriented -- meaning, like an action movie; I'm doing parkour and rally racing, and all this crazy stuff -- and it's made by the people who do Anthony Bourdain's stuff, so it's very gritty.
But you're also getting a lot of stuff you can use. Extremely entertaining, but you're getting concrete takeaways, which is kind of what I'm known for, and what I like to include.
Byrnes: Tell us when it airs, and how we can find more info.
Ferriss: It airs starting December 1, Sunday, at 8:00 p.m. It's prime time; 8:00 p.m. Eastern, 5:00 p.m. Pacific on upwave, on HLN -- so the actual dial would show HLN. People can see sneak previews. They can see even a full episode at upwave.com/tfx.
Byrnes: Great. Tim Ferris. Thanks so much for your time.
Ferriss: Yeah, my pleasure. Thanks.
The article An Interview With Tim Ferriss, Author of "The 4-Hour Workweek" originally appeared on Fool.com.Brendan Byrnes has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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