Like half of the internet, I want to be Tim Ferriss.
He was crowned the Indiana Jones of the digital age before I even had a chance to become moderately competent with WordPress. He can cook. He’s fit. He writes New York Times bestsellers. He gives Facebook and Evernote advice on how they can be more awesome like it’s no big deal.
Back in July, I found out that Tim was travelling to Australia for a speaking tour in November and that he was giving just three interviews to Australian media in the lead up to his trip. I made sure that one of those interviews was with me.
(Side note: You can get almost anything you want if you act like you know what you’re doing and aren’t afraid to ask. That said, it also helped that AIM, which publishes Management Today, was sponsoring the event.)
During the interview, Tim and I spent a lot of time talking about his approach to advising and investing in start ups. If this is something you’re interested in, finish reading this post and head to Tim’s blog. I spoke to him a few months ago, and he’s since announced some pretty fascinating projects in the start up space worth keeping an eye on.
The interview turned into this story in Management Today, and as a bonus extra, I’ve published the interview transcript below. Enjoy!
Amy: You’re an advisor to big name start ups (Evernote, Automattic, Shopify etc), and been with some of these from pre-seed money to $1-billion+ valuations. How do you identify what’s worth investing your time in? What are the key indicators of future success?
Tim: I have a few criteria: the first is that it is a consumer-facing product that I could personally become a power user of. So it has to be something that I really understand exceptionally well and be able to not only use on a regular basis, but pitch to say media outlets like the New York Times. That pitchability is critical. It needs to be simple, but differentiated enough that I can take them from a say niche market of early adopters say in San Francisco, to mainstream in the United States and then international.
Another criterion that I look at is gross trajectory and traction. So even though I started with many of these companies when they were considered small, their growth rates were, month-on-month, very astonishing. I prefer to pour gasoline on something that’s already working, as opposed to trying to get something that’s at a standstill to movement.
The last criterion – and there are several other related criterion, like a proven management team or founders, typically co-founders – But I look at the lessons learned in the start-up and whether they can help at least two other startups in my portfolio. And that’s how I actually end up adding more value over time as my portfolio grows.
It’s been a very effective approach thus far. I mean with Twitter and Facebook and Evernote and Uber and twenty plus others, it’s been a very effective model. I also can’t overstate choosing to be located where start-ups are in the air 24/7. I do feel like I have an informational advantage living in San Francisco.
Amy: How many start-ups have you advised that have followed this model and haven’t gone on to be something really great?
Tim: I’d say less than five percent of the start-ups that I choose, or certainly less than 10 percent of start-ups that I choose that satisfy all of this criteria, have negative outcomes. Not all of them have a home run outcome, but I very rarely lose money. And as a result, the start-up founders usually make some money if all of those boxes are checked.
Amy: That’s a pretty impressive strike rate.
Tim: I’m happy with it so far. Who knows how much I’m responsible for, but I’m very happy with the results.
Amy: Let’s move on to talking about your books, and the one I’d like to talk about the most is 4-Hour Work Week. Now, that manuscript was rejected 26 times. A lot of people would have given up by that point – what was it that made you push forward through that?
Tim: I had an agent who believed in the book, and he had a better track record. He was an editor, and he had a better track record than most of the people who were turning the book down. Secondly, if I had come that far I didn’t see the harm in pushing for an extra week or two. When you’ve received 26 rejections, you might as well get 36 or 46.
I was also refining my pitch as I went. So in my meetings, even though they didn’t necessarily purchase the book, I was getting closer each time, and of course, the last meeting scheduled that we had with Crown Publishers, ended up being when the book was acquired.
The entrepreneur and author who introduced me to my agent was Jack Canfield, who co-created Chicken Soup for the Soul, which was turned down over 100 times and later went on to sell more 500 million copies. I had counter examples of persistence to look at as well, such as that.
Amy: How much of your initial success do you put down to good timing? When 4-Hour Work Week was published, Twitter was becoming popular, and people were realising that there would always be more information than hours in the day – would the response to your book have been different if released earlier or later?
Tim: It’s a very difficult question to answer. I’m sure there was a lot of serendipity and luck involved. One of the main tipping points for the book was a presentation I gave at South by Southwest, which was coincided with the first public major launch of Twitter. How much that helped, I don’t know. You can use good marketing and sales to put a book on a bookseller list for one week. The 4-Hour Work Week was on the New York Times bestseller list for four years straight unbroken. It’s still, as of last month, on the New York Times best seller list for the seventh year. You can use marketing to make a very big splash in the first week or two, but the product needs to stand on its own, whether it’s a start up or a book or anything else.
Amy: In 4-hour Work Week, you talk about how eliminating debt and possessions and not reading the newspaper or constantly checking email can be a completely liberating experience. I know some would find the thought of doing these things terrifying – there’s a real fear of missing out. But the world doesn’t fall apart if you aren’t constantly plugged in, right?
Tim: I would say that the most valuable question to ask – there are really two questions – If being constantly plugged in is necessary for success, do you really want success in the first place, and will you ever be able to appreciate that success? Being constantly plugged in pretty much removes any appreciation of what you have, and if you can’t appreciate what you have, nothing you ever get will make you happy.
If you’re having difficulty managing email, and it’s harder to manage now than it was a year ago, and it’s going to be harder in one month’s time, clearly something needs to change. If you have to change it, establish new policies and systems now.
The way I approach unplugging, or even just not checking emails in the first hour of the day is as an experiment. Don’t look at it as a permanent change, look at it as an experiment for 24 hours, or 48 hours and look at the results. Instead of letting some strange fear prevent you from testing it, test it, qualify the results and look at what became of it. What most people find is that they can go off email for the majority of the day and even manage up and manage their bosses without too much fall out.
I recently went off phone and email for four weeks in Indonesia, and if anything, there are many more demands on my time now than when I wrote the 4-Hour Work Week, so I’ve had to get better at using these tools and sticking to a lot of fundamentals from the 4-Hour Work Week compared to when I wrote it.
Amy: You’ve mentioned before that 4-Hour Chef is the last 4-Hour book you’re likely to do. Why? What’s next?
Tim: I’ll be doing a lot more with start-ups, and a lot more with innovative funding approaches, I think venture capital is going to change a lot in the next six months. I’m also looking into television, which I’ll be finalising shortly, and that will allow me to explore the visual medium, which I’m very excited about.
Amy: Thanks for taking the time to chat with me this morning, Tim. I really appreciate it. Best of luck with your next endeavours too.
Tim: You’re welcome, thank you.
Want more Tim Ferriss? Read my article in Management Today.