Transcript: David Senra of Founders Podcast (Podcast #11)
Full transcript
Here is the full transcript of this episode. You can listen to the audio here:
Listen on Spotify
If you prefer to listen on Spotify, here’s the feed:
Listen on Apple Podcasts
Here’s the podcast feed on Apple Podcasts:
Liberty:
Hey, David, how are you today?
David Senra:
What's up Liberty. Thanks for having me.
Liberty:
So good talking to you. I'm feeling so happy right now because I'm going to be able to share this conversation with other people because I've loved so much previous conversations, but nobody else is benefiting. So it's a good day.
David Senra:
It was funny. Last time we talked, I think it was like an hour and a half at the end because we were talking about podcasting a lot too. I was like, "Well, we just made a podcast. We just didn't record it."
Liberty:
Exactly. When you said that, I was like, "Okay, the next one has to be recorded."
David Senra:
For sure.
Liberty:
So I think, when I don't know where to start because I've got so many questions and topics for you, but when I don't know where to start, I guess the beginning is always a good place. So can you introduce yourself a bit for people who don't know you, don't know what you do. Where do you come from, what were you doing before, what are you doing now?
David Senra:
So when I hear questions like that, it reminds me when I was in school. The first day of school, you stand up, be like, "I'm David and this is what I do." Really the main thing I think about, the thing I can't stop thinking about is I think most people will know me just from the Founders Podcast. Essentially I spend almost all of my time reading biographies of entrepreneurs, studying the history of entrepreneurship and then making episodes about every single biography or autobiography that I read, in hopes that some of the notes or highlights that I personally thought were interesting were valuable to people as they listen.
David Senra:
Since this is a podcast, I think talking about podcasting is actually really interesting. My obsession with audio, spoken word audio, has predated podcasts by long period of time. I'm obsessed with music too. But even when I was a teenager, high school, early years of college, there was no such thing as a podcast. Right? So I was obsessed with listening to all forms of talk radio. And it could be sports talk radio, news talk radio, political talk radio. I used to listen to this show that it'd be almost like an advice column but in audio format. Howard Stern. Anything like, just hearing other people speaking was fascinating and you used to have to do that, as you know, you turn on a dial on a radio and just there's a show on from 11:00 to 1:00. You've got to be there or you missed it. Then a lot of those shows where then, "Hey, we have this new thing called the internet. Now you can stream it on your computer." If you had slow internet speed, you'd have the buffer so you'd miss part of the radio show or whatever the case is.
David Senra:
As soon as podcasting came out, I got really interested. I was actually a few years late into it. I started listening to podcasts in 2009, 2010. But once I discovered it, I was like, oh, I was completely obsessed. I was obsessed with the medium of podcasting for a good probably six years before I started Founders. Then even when I started Founders, if you go back and look at the early uploads. The first upload I ever did was in 2016. It was completely random. I would just read a book, decided, hey, I want to make a podcast about this book. And then I wouldn't upload again for another three months, four months, six months, whatever it is.
David Senra:
It wasn't until 2018, where I can remember the exact moment where I was like, "You should follow your energy, David, because you're completely obsessed with this thing and you think it's just a hobby or something fun to do. But why don't you try to do it full time?" I couldn't sleep one night. I was in bed. My entire family's asleep and I reread Paul Graham's essay, How To Do What You Love. And it was like a lightning strike. I was like, okay, I want to do this for the rest of my life. I love doing it. I want to turn it into not just a hobby, I want to think about it every waking hour. So I just made a commitment right there. I was like, I'm willing to spend every last dollar I have to be able to be a podcaster.
Liberty:
Awesome. I think you talk about this on the podcast, but find the thing that to you feels like play and to others feel like work. As you say, you weren't even getting paid. You were thinking about it as a hobby, but you were already doing it. But you'd ask most people to produce anywhere close to the rate at which you produce. You're not reading some Wall Street Journal article and then podcasting about it. It's long books. You were talking about Titan, like big bricks. You'd have to pay some people a lot to do that week after week after week for years and years and to you, it seems like you'd still do it even if there were no money in it.
David Senra:
Not only did I do it for no money, I paid to do it. So I went through ... I'm not even going to say the number. It was an insane amount of money until I got to the point... Because growing a podcast is extremely hard. Now, one of the benefits of that is once you do grow it, it's extremely sticky. The people that listen will listen usually for a long time. They'll recruit their friends. It just takes a very long time. It's unlike any other, I think, form of content out there. It's so difficult to ask somebody for an hour, hour and a half of their time if they don't know who you are. When I started the podcast, I had no social media presence. I'm certainly not famous, rather introverted. I had to figure out a way it's like, how can I get this thing off the ground?
David Senra:
That took several years to the point where it's like, okay. Now it covers my bills. And then from there, once I got to that point, I was like, all right, now I'm doing this 24/7. I'll do it seven days a week, which I still do to this day. And you just keep investing. It's like anything else. You could just see the compounding. Every month there's more people listening, more people subscribe, more people are telling other people and it just grows and grows and grows like that.
Liberty:
Yeah. And the medium is so interesting. I'm just like you. I started listening to podcasts maybe 2012 or something like that. And the medium is so different from anything else. I feel like a lot of the reasons are evolutionary psychology and all that. Broadcast radio has been around for a long time but that voice was not the authentic human voice in many ways. Right? If you're trying to sell soap and ads to the most number of people, you have to kind of create this voice that's kind of appealing to everybody, but not anyone in particular, the most kind of bland way possible. So everybody you could hear on the air had this kind of fake personality in some ways.
Liberty:
I feel like podcasting, the long tail of niches that you could find, you could have people speaking with their real voices for the first time and still reaching enough people to make it viable. Because if you're around in your village or something, you won't find the audience. But if all of a sudden you have the internet, you have the whole planet accessible. Then you can find enough people to make it something that's self-sustaining.
Liberty:
Reading is kind of unnatural to humans. Right? We get pretty good at it, but you still have to learn it. It's kind of like... I don't know. It's not as natural as listening to someone speak. We've evolved for so long, sitting around the campfire. And during those evolutionary timelines, anybody you heard in your ears talking in a real voice, conversational voice, was probably a close friend or family. Right? There's podcasts that I've been listening to for about 10 years now where I've heard the hosts speak more than pretty much anybody in my life. Pretty much all of my friends. Probably only my wife that has spoken more to than these people. So the kind of relationship that you can develop with someone on a podcast is very, very special I feel like.
Liberty:
I listen to a ton of podcasts, but some are closer to my heart. Yours is one of my favorite. The Acquired Guys also do a great job. I feel like one thing that makes your podcast and other special is this level of, it is your real voice. Right? I listened to your podcast for a while and then we started chatting, and then when we spoke for the first time, it's like an old friend. Right? It wasn't a fake relationship just because it was one way for a while. It was the real you that I was hearing all these hours. It's no wonder the relationship is so sticky.
Liberty:
On the technical side, the fact that it's RSS that you subscribe to and you don't have to do anything and you get the new episodes like that. That's great. Right? You don't have to convince people every time to come back. But even without that, just on the psychological point of view, I feel like podcasting is unique.
David Senra:
I think it's a miracle. So the reason I love what you just said, so I have a folder on my phone of screenshots, quotes. There's probably like 500 to a thousand things in there. Anytime I have a free moment where I want to be inspired or just a prompt thinking, I go pick it up. And you just said something while you were talking, it's like, I got to grab something out of that folder because it's about the fact that one human talking directly to another is as old as language. Right? And so I saw this tweet. This tweet came out in 2017 and I saved it. And the guy says, "Newspapers were a fad. The village storyteller is as old as language. Only there are 6 billion villagers and podcasts are the campfire."
David Senra:
And so I had a friend of mine... I've had basically like the same set of friends for like probably 20 years. Right? And as you obviously get older, you start having kids, you get married, it's harder to make friends and as adults. Now, all of my friends, my new friends are coming from the podcast for that same reason where they may listen to the podcast, they like it. They know we have the same interests. Maybe we think similarly. And what happens is when you start talking, they're like having dinner with you or being on a Zoom or being on a phone call is just like getting a podcast. It's the same thing. And so you used the word authentic. I think that's extremely important. So I was talking to now a friend of mine that I met through the podcast and he's like, "Hey, I love this idea." So he's running this very successful business.
David Senra:
And he's like, "I like Jeff Bezos's framework that I learned from your podcast about when he was starting Amazon." He's like, "You need to build your business around things that won't change." And so he's like, "If you are fairly confident, something's not going to change over the next 10 or 20 years, you could invest a lot of energy and money behind that." So he's like, "In my own thinking for Amazon, I was like, okay. Well what's not going to change about my business." He goes, "People aren't going to wake up 10 years from now, I'm like, I wish I got my package slower, Jeff. I wish you had less selection, Jeff. I wish you charged more Jeff." And so he's like, "Those three things, I just put an unbelievable amount of energy and investment into. And I knew that the benefits of those would compound and Amazon would benefit from them for multiple decades."
David Senra:
And so he threw that question at me. He's like, "What do you think in podcasting won't change?" And I was like, "I have no idea." Because my view of podcasting is very different from other people. I was like, "Oh, there's too many podcasts. Oh, I can't believe... It's too saturated." It's like, no, I believe 180 degrees different. We are at the very beginning of a gigantic technological revolution. And I use the word miracle, where it turns the spoken word into the same reach that the printing press gave to the written word. And so when people are like, "Oh, I can't believe somebody else is starting a new podcast." To me, that's like saying, "Hey, you know what? We have enough music. No one make any more music. Hey books. We have enough of those books. Books don't sell. Don't write any more books. Movies. We got millions don't make any of this."
David Senra:
It's like, no. We have no idea what podcasting is going to look 10, 20, 30 years now. But one thing that won't change and the reason my podcast is set up how it is, where it's like, I don't have intro music. I don't have ads. I, when I do the podcast, I talk directly to one person. Right?
Liberty:
Yes. I feel that.
David Senra:
Yeah. And I get that feedback all the time. I never understood when I was watching YouTube videos. Right? They always took the video, it was like, "Hey guys." And I'd look around. I'm like, "What guys? I'm watching this video by myself." There is no guys. It's just me and you. And so we've talked about this in private conversations where I think it's really helpful if somebody wants to start a podcast. Put a picture of a friend in front of. And just, I'm talking directly to that person.
David Senra:
The idea that I had when I started Founders, I was like, hey man, it would be kind of cool. What if you could meet up with your friend once a week? And he would just tell you about interesting things from this book that he read. How many people could possibly be interested in that? My guess is like, I'd be interested in that. I got this idea from Tim Urban from Wait But Why. He's like, "Listen, when I write a blog post or a book or whatever the case is," he's like, "I just write for Tim, because I know there's at least a hundred thousand Tims out there that are just like me." And in his case, his audience is obviously a lot larger. He's like, "There wasn't a hundred thousand Tims turns out there was millions of Tims." And so I think that the same way. How many people are interested in history, entrepreneurship. If you look at my natural interests, Founders sits in the middle. I like entrepreneurship. I like reading. I like podcasts. And I like history. That's what Founders is.
Liberty:
Yeah. I don't remember the name, but there's a law. Right? In one of those laws, which says something like the internet is bigger than you think even if you take into account this law. Right? So everybody's like, "Oh, I'm just doing my little thing. Who's going to care about that." Right? It's kind of like when I started my newsletter, I just did it for me. Right? Just stuff that interests me. And who's going to be at the intersection of these Venn diagrams where it's Deadwood jokes and like Soviet nuclear submarines and finance stuff. It's all kind of pretty random. Right? It's not something that you could easily make a pitch for. And yet, somehow some people seem to like it. Right? So to go back to the authentic part, it feels like people would try to have this big master plan in advance where they're like, "I'm going to target this."
Liberty:
No. If you don't find it interesting, what are the chances that someone else is going to find it interesting. Right? It's like start with yourself, start with the audience of one. And I've been influenced by what you said about speaking to someone specific. I'm trying to learn that when I podcast by myself, because it's very different. When I'm talking to you, I can feed off your energy. But when I record just like, I didn't ask me anything where I'm just alone with a mic. Right? And it's like, who am I talking to? The brain kind of looks for an audience. And if you grab onto the usual, like, "Hey guys." It's so weird. Right? I don't know. I'm kind of thinking about the same thing with writing in the newsletter. It's too easy to have this kind of amorphous audience in mine where it's like, oh, all of you. Right? But no, no, no, no. It's like, I'm talking to you and that's super powerful.
David Senra:
I have one other thing about authenticity because I think that's a extremely important point. Humans crave it. Right? And the best demonstration of this is look at... If you turn on like a cable news show, at least in America, right? They're on a fancy set. They have lighting, they're wearing makeup. Somebody else has written out the words they're going to say. Many cases, they're wearing business suit up top and shorts and sandals underneath. It's completely fake. Right? And then you have maybe 200,000 people or 50,000 people watching anytime. And you take somebody like the biggest podcast in the world where it's like Joe Rogan. Go back and listen to his very first episodes. And even episodes he does now. It's just like three hours, completely unedited. He's hanging out with somebody he likes that he's genuinely interested in. They're getting up to go to the bathroom. They're cursing. They might be drinking. They might be smoking. They might be laughing at funny things on the internet. Why has that attracted 11, 12, 13 million people? Because it feels like you're hanging out with your friend.
David Senra:
If me and you were in person we'd watching TV or maybe having a drink or whatever the case is. And just that it's not scripted. The conversation's going to go in unpredictable ways. Just before we started recording, you're like, "I never know what I'm going to say." I don't either. When I sit down to record Founders, I have the book, I have my notes, I have my highlights, but I don't have a script. It's just like, what I really wanted it to be is like if I sat down with you at dinner and I talked about this book. Sometimes I'll be in the middle of thought I'm like, "Oh wait, I'm going to stop that thought." I'm going to then maybe think of something else. I'm going to go over here. I'm not interested... There's very few scripted things I watch in general. Other than like movies. I really love films.
David Senra:
And I actually think the way I think about, I realize, because I read the biography of George Lucas, Steven Spielberg, Francis Ford Coppola, I got a bunch of other biographies of filmmakers in this giant stack of books that's at my feet right now. And I realized, I was like, oh the way they think about making films, I think about podcasts. It's the exact same thing.
Liberty:
No, I watched a Steven Spielberg documentary because of your episode about him. And as you say, it's one of the things I see in you, it's the power of focus. Right? When you figure out what it is you want to do. There are so many distractions, it's so easy to try to start new things because the honeymoon phase is over. And this isn't novel anymore. Let's try something else and something else.
Liberty:
And if you can figure out what it is you really want to do and focus on that for long enough that... I have this theory that the internet is really good at finding good stuff over time. Most people start out and they quit before that happens. Right? If they are just stuck with it for a long time and more iteration that improved a bit more and then over time people find it. It feels like this is kind of like the benefit of focus and of long term thinking that is so rare to see. I guess it's part of being authentic because if you're just trying to do something because you think it's going to be successful or because you saw someone else do it and so I'm going to do that too. How long can you stick with that when it doesn't work.
Liberty:
If the whole point of doing it is, it's going to work and it doesn't work for six months, for a year, who's going to power through if your engine inside, that's just... I'm going to get a trophy soon. Right? But if you do it because you love it, then all of the other goals are a lot more possible. Right? They're kind of a symptom of just sticking with it long enough. I don't know.
David Senra:
So I have a benefit of the fact that I spend seven days a week reading biographies of people that we were so remarkable that somebody wrote a book about their life. Think about that is the tiniest percentage of all humans that have ever existed. And I think I combine it with what Warren Buffet said. He's like, "It's really important you choose the right heroes." The fact that he had a hero of Ben Graham and other people that he's talked about over and over again in his shareholder letters and his biographies. And so what I look at through the research over my podcast, now I have a ton of entrepreneurial heroes. My own entrepreneurial Mount Rushmore. And whether it's Steve Jobs, Enzo Ferrari David Ogilvy, Charlie Munger, Henry Singleton, Edwin Land. I mean, the list just goes on and on about the people that I'm super inspired by. Paul Orfalea the guy from Kinko's. It's just completely unique operating system on how to build a business and to build a life.
David Senra:
Would I realize that they all had in common is they, "Followed their own drift," to use the quote from Charlie Munger. But they did what they did for an extremely long time. The reason that everybody's like, "Oh, it's so cliche to study Steve Jobs." I take the exact opposite approach. You haven't studied enough. You need to reread these books. I've read like 10 books on him. There's probably 10 episodes in the Founders archive about him. And I'll read every single thing that I could find about him. Because it's like, how rare is it that somebody made... He evolved as a person, but you go back and talk to a 19 year old Steve Jobs when he was working for Nolan Bushnell at Atari.
David Senra:
Nolan Bushnell was the founder of Atari he was running Nolan Bushnell is interesting in his own right. Because at that time it was standard operating procedures. Okay, the young person founds the technology company, the venture capitalists replace him with "adult supervision," quote unquote. Nolan ran Atari. And so Nolan's like 27. He hires Steve Jobs. And he said, he goes, "There was something indefinable." He goes, "There's something indefinable in an entrepreneur that I saw on Steve Jobs." He's like, "He just had it." And the reason I want to bring that to your attention is because Steve Jobs made great products when he was in his twenties, thirties, forties, fifties. So starting in the end of seventies. Every decade from the seventies, eighties, nineties, 2000 and 2010, the iPad right before he died. That's amazing. How many people found what they loved to do? First of all, I'm very jealous because I didn't find what I wanted to do until I was in my early thirties. Right? But he found it when he was really young, let's say 18, 19, 20 years old, right away. Right? And then he did that until he died.
Liberty:
And he found it, but he also created it. Right? A lot of what he did didn't exist before. When he was growing up, basically computers didn't exist. And him and Woz were part of the first wave and every subsequent wave, they found a new direction to take this kind of market in. Right? They didn't always win commercially. But as far as not just copying what others were doing, that's something incredible. Few people are that successful that long at doing exactly what they want to do. Yeah. Totally agree.
David Senra:
Well, that's also why the format of Founders is unique. Right? My personal podcast hero is Dan Carlin, I think he's the best of Hardcore History. I think he's the best podcaster that's ever lived. And so he inspired me. He's like... If I do a podcast one day, I'm going to do it as a solo endeavor. Right? I also did that because there's a ton of podcasts and entrepreneurship space that got a head start and they're really good at interviewing. And people think, they might look at like a Joe Rogan and be like, "Oh, he's just sitting around goofing off for three hours. How hard can that be?" To be entertaining and keep somebody's attention for three hours are the example I always use... So I get a lot of people that listen to the podcast and they'll be like, "Hey, I want to start a podcast. Do you have any advice?" And so we just talk about it. And usually it's the same format.
David Senra:
They're like, "I want to interview entrepreneurs and investors." I was like, "Okay, are you going to do a better job than Patrick O'Shaughnessy at Invest Like the Best? Are you going to do a better job than like Tim Ferris?" What they're doing looks easy because they put in so much effort and now they've done hundreds of episodes. And not only that, before they even started a podcast, they were diligent in learning. They read a lot of books. They were extremely inquisitive. They were curious, they took notes. They kept that... It's not like they learned something when they were in their twenties or thirties and then just forgot it. They kept reviewing it. They pushed it forward. They added onto it. I was like, "You can do that."
David Senra:
But it just seemed to me like they're so far ahead of you. Find a different angle. Podcast is a medium. That's what people... I talk to so many people, they don't seem to understand. It's just a medium, it could be whatever you want. It could be an interview podcast. It could be a highly scripted podcast. Like Gimlet. It could be a solo show like mine or Dan Carlin's. But there's all these other undiscovered formats. It's not settled. Just be creative with it.
Liberty:
Yeah. And also if you want to do something unique for a long time, I think it helps a lot, if... I'm not sure how to phrase it, but if you keep a lot under your own control. Right? So if you're interviewing other people, a lot of the quality of the show will depend on the quality of the guests. And a lot of that may not be under your control for a very long time. Right? But if I write a solo newsletter or if you do a solo podcast, almost everything you need is under your control. And so it's still easier to iterate quickly.
David Senra:
And you also have to figure out what is your skillset. And this applies not just to podcasts, newsletters it's any work that you do. And so we were talking earlier and I've been thinking, I was like, what is my skillset? And I was like, well, if you put me in a room alone with a book, a microphone, a lot of espresso, I'm going to come out every five days with a recording, an audio recording, that you can listen to whenever you want, that'll benefit your career. That is my skill set. And the reason I say I can film... I compare how I feel about podcasting to how filmmakers feel about making film. If you listen to Steven Spielberg, George Lucas, any of the... Francis Ford Coppola. They say, they're like, "There's something inside of me I have to get out."
David Senra:
If I'm not... Now, right now, we talked about I'm rereading Titan, right? 600, almost 700 pages, extremely dense material, extremely important material. By the time I release this, by the time I sit down and record and hopefully I'm going to do it on Friday, I probably spent 50 hours. That's not an exaggeration. 50 hours researching for every 90 minutes of the podcast I make. Right? And I couldn't do that if I had to rely on other people's schedule or if I couldn't just shut myself in, I say, a room, but you could see, I know people listening can't see me, but you can see me. I'm in a sound... It looks like a soundproof phone booth. It's a size of a phone booth, but it's soundproof. This is where I record all my podcasts. And I could just sit in here. I close the door, I hear nothing that's taking place outside. And I'm just alone with... It gets my full attention to what I'm doing.
David Senra:
And I want to tie this into what you mentioned the importance of focus. It's like, that's not even my idea. Right? The fact is like, there's a lot of opportunities that pop up when you put your work out there and it resonates with certain people. And so in the podcast space or the newsletter space or any kind of creating online space, sometimes they're a means to an end. And that makes perfect sense because they're very valuable. There's a lot of people that make podcasts because it's like content marketing for their business. That works. That's really smart. You're getting value to the world, nothing wrong with that. Some people do it because they want to sell ads. Some people want to do it because they want to get deal flow. All this stuff makes a lot of sense. Especially when you get to certain size. It gives you an unbelievable competitive advantage. But I can't do that because podcasting is not a means to an end for me. It is the end.
Liberty:
Yeah. It's the thing. Right? It's the goal in itself. It's the infinite game that you found that you want to keep playing. I was talking to NBI about this a while ago in the newsletter space and how much competition there is. But it's very rare to find people who want just... The writing is the thing that they actually want to do. Right? Most of them like maybe, okay. They got out of a job and they don't know what to do for a while. So they started a newsletter and it's a way to kind of market themselves. And then someone comes and hires them and then they leave the newsletter business. Maybe they become huge and then they start a fund and the newsletter was a way to raise AUM and get deal flow, as you say. So most of the time competitors don't stick around because they weren't in it for the writing in the first place.
Liberty:
Podcasting is probably similar, right? Some of them go onto... I don't know, I want to do a TV show. I want to start working the writer's room. I want this or that. I want to be a stand comedian. But I want to come back to one thing you said about how many hours you've put into each podcast. And to me that's the magic of it. It's similar to when I read a really good piece online. The amount of leverage from one step to the other. Right? So someone, some expert, may spend their whole life learning some skills. Right? Some entrepreneur or scientist or something. And then they spend like, I don't know, a few years writing a book about it. And then you spend like how many hours reading it and understanding it. And then you do a podcast. And so when I listen to this one hour of your podcast I get a distillate of decades and decades of experience.
Liberty:
And one thing I love about your podcast is I wish I could be able to read as much as you do now. Right? I'm writing, I have young kids. And so my reading has slowed down a lot. I try to get back to it to improve, but I'm kind of jealous of the amount of reading you're doing. But at least with the podcast is the next best thing. Right? But even that, I think it's underselling it because you could say, oh, it would be better if I read Titan. But at least if I listen to a couple hours about it, I get a lot out of it of the main thing, the highlights. That's when you compare one thing to one thing. Right? One podcast to one book. But in the time it would take me to read Titan, I may be able to listen to 15 of your podcasts.
Liberty:
So am I really getting less? Or am I getting more variety? And then the podcasts that really speak to me the most, I make a note and then I'll go read the book. So you're kind of both a source of information and value, but also a filter where you're saving me time for maybe bad books or maybe you know what the saying like, oh, this book could have been a podcast. Well, sometimes the book should be a podcast and it's fine. I wouldn't get that much more by reading it. But others is like, oh no. This is the one. Right? This one speaks to me. This one may change my life or something. So I have to go back to the source material. But I don't know. I feel like this is such a high leverage type of arrangement. It's the same with some of my friends like David Kim at Scuttleblurb or NBI.
Liberty:
They spend like a month reading transcripts and filings and books and then they distill it all into something I can read in a couple hours. The leverage there is incredible. David Kim once said something like, "Oh, I'm a bit..." Not jealous, but, "I'm a bit like... Oh, it's kind of strange that I have to spend 50 hours to research something and you can read it in one hour." It's like, no, that's the magic of it. If it took me 50 hours to read what you wrote, I could go back to the original source. Right? I'd just read the original, but if you're saving me that much time by kind of filtering it through someone who I trust, I trust his judgment and his intelligence, that's a ton of value created. That's super positive sum.
David Senra:
That's why I'm a huge fan of authors. And I'm so glad that I've been able to become friends with Jimmy Soni. I know our mutual friend.
Liberty:
Yeah. He's amazing.
David Senra:
Jimmy did his biography of Claude Shannon a long time ago. And so when he is writing this new book on the beginning of PayPal, he reached out super early and sent me an advanced copy. Right?
Liberty:
Yeah. I got one too.
David Senra:
Yeah, exactly. Because of the podcast. And then what I told him, I was like, "Man," because I've bought probably like 40... I think I bought up to like 40, 45 copies of that book so far and given out to people that are fans of the podcast or whatever. Just because I want to support what Jimmy does. And it's because how many... He spent five years of intense research and study on extremely important part of technology, like the history of tech entrepreneurship. And yet you can read that entire book in like 15, 20 hours, whatever the time is, if you're not rushing through it, whatever the case is.
David Senra:
So this is the way I think about the podcast. Because everybody's like, "How should I use Founders?" And like, it's a weird podcast in the sense that usually podcast players publish the newest episode, latest. But I'm maybe the only one of the only podcast hosts where I don't have... If I do an episode right now, I will not have the full attention to my audience. Right? Because I was just in LA. I flew to LA for 48 hours because there's a guy named Alexis Revis. He's founded this company called Cover. In my opinion, one of the most impressive private companies and I'm not a private company investor. Right? So I don't even... I literally don't think about anything but the podcast.
David Senra:
But what he's doing is trying to find a better... Home building's been taking place the same way for about a hundred years. He's like, "Why can't we do this in factories? Why can't we do it with algorithms and software?" And it's very obvious when you talk to him. I was like, oh this dude, he's just like the people I read about. So he invited me to an event a couple days in advance. I was like, "Dude, I'm going to fly out there just to meet you." I wind up going to a company event, an event at his company. And then I meet other people that also listen to podcasts. And what's fascinating is I met this guy named Rico who works for Cover as well. And he is like, I just started it episode one. And he goes, "I'm nowhere near." He's like... I think it was episode. I forgot what he told me. Like maybe 60 or 70. I can't remember. I've done 255. He's like, "I won't hear what you're doing now for probably a few years."
David Senra:
And so when people say, "Hey, how should I use it?" This is the advice that I give. If I was on your end, I would listen to two episodes a week. That means in one year I would've downloaded into my brain, the best ideas and the worst ideas, the mistakes to avoid of a hundred of history's greatest entrepreneurs. And then I'd pick one of those books a month and I'd read it in detail. Because these are not summaries. I am not trying to summarize the book. A book in my opinion, a book that can be summarized is a book not worth reading. Biographies and autobiographies are worth reading in full and take your time with them. Right? There's a reason why... As busy as Elon Musk is, as busy as Jeff Bezos is. It's why Charlie Munger, who, in my opinion is the wisest person I've ever come across. He's read hundreds of biographies.
David Senra:
Does Charlie Munger strike you as somebody that's likely to fritter away time on useless activity? No. No. He's a genius. And if he's telling you, "Hey, I'm a biography nut." If you just read a business book, the ideas are not going to stick unless you can tie the ideas to the personality of the person. I need to make this point clear. Everything I'm saying, I literally do not have one original idea. I can go through my entire life never having an original idea, just studying the great ideas, the best ideas of the people that came in before me, and I will have a widely successful, happy life. These are not my ideas. I'm just the one that's going to... I've use this term for a while. It's like idea archeology.
David Senra:
The same way that an archeologist is trying to uncover bones of dinosaurs, whatever the case is. I'm just picking up books. Most of the books I read are super old. Some of them you can't even find. I've spent, on individual books, $300, $400, $150, because they're so hard to find. And then my job is like, I got to go digging. I'm going digging for the best ideas that you and I can use on our work and also the worst mistakes. I know you want to talk about Ed Thorpe. And the reason I keep bringing him up on podcast over podcast is because I've studied... Listen. I'm a huge fan of Steve Jobs. If you made me... And it's all subjective, but if you said, "Hey, who's the greatest entrepreneur in history?" He's probably my choice. And if he's not your choice, that's fine. But you can't name a bunch. There's not 20, 30, 50 better entrepreneurs in history. No. You're going to have a hard time saying that. Right?
David Senra:
But I admire his clarity of thought. I admire his work. He was a very flawed person by his own admission. If you go and read... Like he says in the Walter Isaacson book and I don't even think that's the best biography on him. It's a great biography. But I personally like Becoming Steve Jobs a little better.
Liberty:
Yeah. Same. But I have a whole rant about how Steve Jobs, one of his biggest mistakes was picking Isaacson as an official biographer because while Isaacson is a great, great writer, I love his Ben Franklin, he's not a design guy. He's not a-
Liberty:
... writer. I love his Ben Franklin. He's not a design guy. He's not a computer guy. A lot of the central themes of Steve Jobs's life were not Isaacson's thing. As I was reading the book, as a nerd, I could see all of the little mistakes and the little misunderstandings. He wasn't focusing on certain things that were super interesting just because they were not part of his thing. So anyway ...
David Senra:
Isaacson, he's a phenomenal writer, though. In my opinion. But I'm just saying, it's not a bad one. It's just with all the material that you have there, there should be many more biographies about him written in the future, in my opinion. I just had the thought when I'm reading Titan, I'm like, okay, this book, I think, was published in 1998. There a market for somebody to write a biography of John D. Rockefeller right now. Do it like Paul Johnson's style. Do it 200 pages. I just discovered this biographer.
David Senra:
I read Churchill, Mozart, his Mozart biography. I'm reading his Socrates biography. They're 190 pages, 200 pages. Anyways, the point I was getting to was that, read the Isaacson biography because Steve tells you, "Why did I agree to do this?" Because I wanted my kids to know who I was. I wasn't around a lot because I dedicated my life to Apple and I want them to know who I was. To me, as somebody who grew up, both sides of my family tree, I had no mentors. I had no one to emulate.
David Senra:
All I saw was bad decision after bad decision after, oh, I don't want to be like that person. Up and down the family tree for generations. One thing I'm correcting and it's very important to me, is I have two kids. My kids are going to know who I am. I'm with them constantly. Right now yeah, I work every day. Obviously, when you work remote, I see my kids all the time. I'll be recording a podcast, I'll be reading and my son who's two, will knock on the door.
David Senra:
Guess what? I'm stopping what I'm doing. If he wants to go play blocks or Legos, or he wants me to take him to the park or the pool. That's why I want to talk about Ed Thorp with you because I literally read Ed Thorp's autobiography. I'm like, oh, this is the guy, out of every single person, that I have studied, oh, you're talking about six years. Thousands of hours. Over a 100,000 pages, 250 different biographies. Ed Thorpe is the one that got the closest, in my opinion, to mastering life.
David Senra:
I was just talking my friend, Eric Jorgenson, who is the author of the Almanack of Naval, which is the book I give most as a gift before Founders, Jimmy Sony book. He was like, "Dude, I listen to your podcast." He goes, "The more episodes I listened to, I can't help but think I want to ask you. What is David training for? Are you going to found the next Apple? That's what you're doing this for?" I'm like, "No, I'm training for life.
David Senra:
What I'm trying to figure out, because I never had the personal example is, for a certain personality type, me and you included, to have a contented and satisfied life, we have to be really good at profession. It's not something I'm trying to outsource or get away from. It is a huge part of my personal identity. A lot of my life energy goes into that." But I have read enough examples, Liberty, where people can make billions and be deeply and happily. The best example I give, I think it's episode 168, I don't have it in front of me.
David Senra:
It's this guy named Larry Miller. But his autobiography is called Driven, An Autobiography. He was the richest entrepreneur in Utah. He is writing the autobiography as he is dying. He says, "Mine is a cautionary tale." He's like, "I have a 30,000 square foot house on the hill. I own the Utah Jazz basketball team. I own 93 businesses." He's like, "I didn't know my kids growing up. I didn't know my wife. I didn't take care of my health."
David Senra:
Literally he's dying because he didn't exercise. He ate terribly. They had to amputate things off of him. He's like, "I didn't even have fun." He gets to the end of the book and he's like, "If I could do it all over again, I would've worked less. I would've known my kids. I would've spent time with my wife and I would've had fun." Think about that. The richest person in Utah didn't enjoy his life. That is terrifying to me.
Liberty:
Terribly sad. I keep mentioning that book, Stumbling on Happiness by Dan Gilbert, as this lesson where most people are very bad at predicting what's going to make them happy. They mostly just like it's memetic. They look around what others doing and they do that. All this reading of other people's experiences, including the mistakes. That's what it does. It gives you a base rate for what's actually happening. If you chase money all your life and you actually get it, what does it mean?
Liberty:
Does it automatically solve all of your problems and make you happy? Not at all. Well, you can hear someone say that, but in the abstract it can sound like, oh, let's be content not to have it. Let's not be jealous of these people. But deep down, we truly believe that they've got it made. But no, if you read in detail, someone's life, the words coming out of his mouth or his pen or whatever. I think that's much more convincing.
Liberty:
What you said about if a book could be condensed, it's not worth reading, reminds me of what I said with Cedric Chin on another podcast. He studies expertise. He studies how people learn. One of the great theories there is, that the way our minds work, if you give someone just the bullet points, the principles. Do this, do this, do this. It doesn't work. If you have the whole story with all of the details, the details may seem unnecessary or pointless.
Liberty:
But at the end of the day, our brains are made to remember these stories and use them. You never know when the details are actually going to be useful to you. So Charlie Munger, he doesn't have just a bunch of bullet points and principles, he has the stories in detail. When he sees something, he can know if the principles apply because there's a lot of pattern matching around it. Because life is much more subtle than can be fit into a PowerPoint slide or something.
Liberty:
That's one thing I love about your focus on biographies, as opposed to trying to turn this into a business book presentation. That would be pointless. When I started out learning about business, I read all these business books. The more time passes, the fewer of those I read. Once in a while, there's one that comes out and even thinking about them, like The Outsiders, it could be categorized as a business book, but it's basically eight mini biographies.
Liberty:
It's all about the actual details of what happened. The actual stories, the actual personalities of the people and why they made those decisions exactly. What was the context? You can't transpose decisions outside of their context. Yeah, I think that the focus on biography is pretty much perfect. I'm jealous of how Evergreen were to produce this, because my newsletter is a mix. There's some stuff that you can go back a year and read and it's still out of time. But a lot of other stuff is more about what's happening this week with the news. I think there's value in that. But I wish everything could be Evergreen and could be read in any order. But yeah, you've got a great model.
David Senra:
No, I appreciate that. I refuse. I adamantly refuse to read. I get book recommendations all the time. I was like, every minute of my time, if I'm going to be reading something for education, I still like to read fiction, science fiction especially. But it's all biographies for me. I've given up on business books. The one exception is, I just got a book recommendation from Patrick O'Shaughnessy that's the best. Because I've heard his podcast so much and I know he reads all the time and he's dedicated himself to lifetime learning.
David Senra:
You can tell clearly if you go to his website. I think it's join Colossus. It's an incredible resource. What they're doing over there is just incredible resource for investors and entrepreneurs. He's like, "You should read the book, Why Greatness Cannot be Planned." I bought the book. That is the one exception. Obviously, if you said, hey, read this book, then I would. But other than that, I'm really just trying to focus. I want to go back to Ed Thorp.
David Senra:
But I want to tackle the reason why I'm so obsessed. See, that's another thing, technically Founders is a business. But when I realized when I talked to other people, what's was really surprising to me is how many people, I've turned down a ton of acquisition offers. I think the fifth one just came in. I talked to them. They're usually fans of the podcast obviously and listen. I was like, "Yeah, but if you can really understand the way I think about this, technically it is a business.
David Senra:
Technically I know it has value. But to me, it's an obsession. It is a business because I need to get paid so I can do my obsession full-time, is the way I think about it. I don't think there's a limit to the size it can grow. I think of what Steve Jobs said. He's like, "Listen, I want to make insanely great products. I truly believe that my products are the best tools for your mind that anybody's ever created. I taught myself how to make insanely great products.
David Senra:
Now if I want to fulfill my goal for every single person in the world to have an apple device, that means we have to become not just a great company at making great products, but a great marketing company." He would meet every Wednesday. A lot of people don't know this. He'd spend three hours going over. He showed with his actions, that marketing is extremely important, because I'm here, I'm showing up. He gets to the point where he would have to approve every single ad.
David Senra:
It could be a billboard in the middle of Oklahoma. That is not going up until I see it and I approve it. He's demonstrating that with his actions. I just stole that idea. The way I interpreted it when I got to that section of the book. The way I interpreted it is, if you truly believe in your heart, that the product that you made, is capable of making somebody else's life better, then you have a moral obligation to get good at marketing.
David Senra:
I am not trying to artificially constrain. I want millions of entrepreneurs, investors, anybody doing something difficult, to listen to Founders, because I genuinely believe these ideas. What is the chance that somebody spent 60 years building a business and they learn nothing that'd be valuable in your work? That to me, that's laughable. It's obvious how valuable this stuff is. I hear the results constantly. My whole thing is, if I get to the end of my life and a lot of people say, David, raise your prices.
David Senra:
You're not capturing enough value. I understand that I have a different perspective. But I completely understand, and in many cases they're correct. But if I get to the end of my life and my work has benefited millions of other people and then those millions of people have then continued to spread those ideas. It just keeps reverberating. I only captured half the value that I should have. I'm cool with that. I'm cool with that. Because it's an obsession. I think, again, I have an advantage because I read the books first. Where a lot of people that put money first, don't wind up getting it. But when you put your obsession and quality and relentlessly serving the customer, you put that first, you'll get the money anyways. It just takes longer.
Liberty:
I feel like you are building up goodwill. If you give to people a lot more than what they give back in money, it just accumulates over time. Someone is not going to cancel their subscription for years and years. You mentioned to me something. Tell this anecdote, this is so great.
David Senra:
What I also get excited about, because I read these books, is in every single story, what that person was doing was misunderstood by people outside of them. My days are spent studying by reading really smart people. Then because the podcast has become this ecosystem for extremely smart people and driven people. If I'm not reading and learning from really smart people, I'm talking to really smart people from all spectrums.
David Senra:
What was fascinating to me is how many people tell me, man, you should do ads. Your podcast should be free. You should just use the podcast and then build another company on side of it. The same conversation we were having that's a means to an end. I love that. I love when smart people see things differently than me, because they will even say, I only think about this for a little bit of time. You probably think about this every day.
David Senra:
Subscription podcasting to me, subscription audio in general, is one of the best businesses in the world. There's not another business in the world that I'd want to do. It just so happens to match up to my obsessions and things I can't stop thinking about. Part of what people don't understand is, the very first person I ever sold a subscription to, I know their name. I remember this as if it was yesterday. They're still active.
David Senra:
That was four years ago. The subscription podcast in general, it's not just me though. Because I talked to the founder of the company that generates my fee that collects the payment. He says, it's company-wide, subscription podcast is less than 3% churn. That's like Netflix level churn. This is not anything new. If you go study the podcast industry in China, it is five, seven times larger than the one in America. It's mostly, almost all subscription or paid podcasts.
David Senra:
Almost all educational. Now you go to the north America or American Podcast Industry, there's a lot of entertainment and it's almost all ad based. Again, not original idea. I was not the first person to sell a subscription podcast. In my opinion, the best podcast going, not the best podcast, but a lot of the podcasts going forward are going to choose that model. If it's a means to an end, it doesn't make sense to constrain the amount of people that can hear it. Of course, keep it free. Keep it ad based. It's not either or, it's just for me. I don't want to do anything else. This goes back to your focus question. People get in touch with me like, hey, I love your podcast. You should write a book. Hey, I love your podcast. You should do a paid community. Hey, I love your podcast. You should start an investment fund.
Liberty:
Are you tempted though? Are you ever considering seriously something else? Or it's unreal now?
David Senra:
Not for one f’king minute.
Liberty:
Wow.
David Senra:
No. Absolutely not. Let me give you an example. I sent you this quote that is in Eric Jorgenson's book. It's from Naval Ravikant. The reason I give that book away so much, is because I think it's like a really handy tool to how to build a business in the age of infinite leverage. I am one person sitting alone, reading books, putting a podcast that goes out to a ton of people. I have paying customers in all six continents. I'm trying to penetrate Antarctica.
David Senra:
I need to find somebody down there that will subscribe. But it's clearly a high leverage activity. What Naval said is dead on. I talked about this with Eric the other day through text message. Being at the extreme in your craft is very important in the age of leverage. This hit me. I reread that highlight over and over again. I watched this fantastic documentary. You know Tony Hawk, right? The skater?
Liberty:
Yeah. Yeah.
David Senra:
Okay. When I was a kid, everybody loved Tony Hawk. He was like the godfather, the creator of the skating industry. There's a fantastic documentary on HBO Max. I recommend anybody that's interested in founder mentality. I repeat that over and over in podcast. It doesn't matter if they're a filmmaker, they're building a business, they're an investor, they're a skateboarder. Kanye west, same thing. Now that I've consumed so much information and processed so much information, oh, that woman she's got founder mentality.
David Senra:
That guy, that person is founder mentality. Tony Hawk had founder mentality. I'm not going to summarize the documentary, other than it's fantastic. He just followed his passion. He started loving skating when he was 12, 13, and he never stopped. I didn't know there was a bull market in skating. He got super famous and then the whole industry collapsed and he had to get a job. But he never stopped skating. I love his dedication. The way he thinks about skating is the way I think about podcasts.
David Senra:
What I realized is, why was that so important? What does that have to do with being into streaming your craft is so very important. The age of leverage. It's because there's a scene in the documentary where he has his own skate company. Makes a little bit of money. Going out and doing skate shows. A good living. But the vast majority of his wealth came from his video game. In the show, he's a young kid. They hand him the first check.
David Senra:
He goes to meeting. They're like, "Video game guys want to meet with me. They hand me a check. $4.5 million." He's like, "What the hell is this?" This is 20 years ago. 20 years ago. Then he goes, "A few years later, they handed me another check. $20 million." That made me think. I went to go look up. His video game in that time, since he got that 24.5 million, has brought in 1.4 billion in revenue. His video game. It's still going. He releases it. It still goes to the top of the charts. He's made hundreds of millions of dollars off of his video game. How much did the second best skater make?
Liberty:
Yeah. Power laws everywhere.
David Senra:
Exactly. Exactly. That's why investors, venture capitalists get this immediately. You just hit it. Power law rules everything around us and it's invisible to most people. If I dilute my attention, your attention is valuable. That's something I learned from Edwin Land. Edwin land, the founder of Polaroid, who I've been trying to preach. If you're an entrepreneur investor listening to this, you've got to go study Edwin Land. Edwin Land was Steve Job's hero.
David Senra:
If I only had to pick one person to learn about entrepreneurship from, I'd probably pick Edwin Land. I've read five books on him. I've done four podcasts. There's a reason why Steve Jobs copied and gives him credit to, more ideas from Edwin Land than anybody else. Edwin Land, all he talks about over and over again. He's like, "It's my mission for people to understand how valuable their attention is. How valuable concentration is. How much intense concentration gives you superpowers."
David Senra:
I apply that idea to my work. Every minute that I'm not spent working on the podcast, because I want to chase book deal or an investment or anything else, if you're obsessed with investing. I talk to a ton of investors and these are the investors that tell me I should do a fund or whatever. Then I'll have dinner with them. I'll be like, "Well, how often are you thinking about investing?" It's like, "Oh, it's just who I am.
David Senra:
There's no off." I go, "Exactly. You think I'm going to compete with guys like you? No way. No way. I have no skillset. I have no skillset." They're like, "Oh you do." All the case. Maybe they're right. But I already found the thing I'm good at. I took an idea from Charlie Munger. He says, "Find what you're best at." I'm reinterpreting what he said. Find what you're best at and then pound away at it forever.
Liberty:
Yeah. You pick the poker table where you're going to play. If you see a bunch of other people that you know are going to be much better and you're not even interested enough in the topic to catch up to those people. Don't go play at that table. Find your own table. That's the beauty of the internet. There's infinite poker tables. You just got to find your own. Sometimes people write to me like, oh, I want to start writing. But I'm a beginner.
Liberty:
I'm just starting with investing. I don't know if I have anything to contribute. I'm like, that's perfect. There's millions of people just like you. Write about your journey. Write as you learned. They're going to learn along with you. It's going to be much more relatable to people at a similar part of the journey to follow you, than to try to read a book by George Soros right away. It's going to be gibberish. There's always a way to figure out whose your own tribe.
Liberty:
Don't try to copy, too many financial writers. They try to sound like a financial times or Wall Street Journal article. To be all bland and professional. I'm going to sound like so authoritative. That doesn't work. You can't out Wall Street Journal, the Wall Street Journal. That's why I always tell people, lean into your own personality. Nobody's going to be better at being you, than you. I don't even know who's my competitor with Liberty's Highlights because it's so me.
Liberty:
It's entirely based around my personality. That's why, in some ways I don't feel I have as much focus as you do. But in other ways I feel like the podcast and the writing are kind of the same thing. The medium is different enough that the resulting artifact is different enough that for some things it's better to do a podcast because I can't get that out of the writing. But it's still kind of the same impulse. I'm trying to get at the same thing.
Liberty:
I'm going to try to talk about stuff that interests me. One of my missions is try to inject a bit of randomness in everybody's lives, because everybody's a specialist nowadays. That's the way to get ahead in life in many ways. All of the overachievers specialize in something and that's cool. But they're so deep into their field, that they never have time to go outside and go look around in other fields. I feel like at the intersection of all these disciplines, there's a lot of good stuff that's to be found.
Liberty:
I'll never out compete a specialist into their field. But if I can put together four or five different things and do the 80/20 rule on a few things, I may be able to find stuff that they will never find. While they may not have time to do all of the reading and research that I'm doing, because I don't have real job, but that's what I do full time, I can distill it. What we're saying before. To this newsletter that goes out a few times a week and then they scan around, few things are interesting to them.
Liberty:
Now they've maybe learned about a new artist, a new movie, a new technology, a new whatever. But I'm just trying to inject some of that into people's lives. I feel like it's all part of the same thing. The podcast is part of the same thing. Another aspect I love is, it's like a conversation with the readership. That's why I often will include stuff that people send me as feedback in the next edition. Then it becomes a conversation.
Liberty:
Right now I'm thinking about, should I create a community like a chat based thing like in discord or slack? Kind of what the acquired guys have done. I've been mulling that for a few months, because the readers I feel, is a self sector group of very, very cool people. They're very curious. They want to improve themselves. They're always looking for more stuff. I don't feel like there's tons of places where I can go and find these people of that filter.
Liberty:
I'm getting a lot of benefit from this group, because I'm the bottleneck at the center. They're all sending me emails and comments and stuff. But I want them to find each other and make connections and friendships with each other. Because I've made so many friends doing this stuff. I want other people to benefit. Is this kind of community the way to do it? I don't know. But to me it's also part of the same thing. Because some stuff I would learn there would go in the newsletter and sometimes the newsletter would create the feedback for the next edition. Then I meet someone who's going to be on the next podcast and it's all like the same engine. The format is not the same, but the impulse feels the same to me. I don't know if that makes any sense.
David Senra:
No, just like books are made out of books. Podcasts are made and newsletters are made out of the experience that you're having. I didn't know anything about Mark Leonard. I'm not an investor. I learned about him from you. The reason I've mentioned you on the podcast so many times, hey, this is one of the only newsletters I read because I don't read a lot of newsletters at all. I obviously spend all my time reading books. It's because of that.
David Senra:
It's because you exposed me to, you're just trying to be who you are. You're trying to take who you are in an extreme. When I open up your newsletter, I have no idea. I know you're going to talk about business and investing because that's your passion. But you're going to throw in a deadwood gift or you're going to say, hey, I had this conversation exactly what you said. When I talked about you in the Mark Leonard episode I just did, which I think is episode 246.
David Senra:
Liberty's the one to help me organize my thoughts with this. Its really important for me to link back to where I'm getting these ideas from, because I want to reiterate, none of these ideas are my own. Even this idea where you talked about almost two ideas that are combination. Like, take your authentic self and take it to an extreme. No one can compete with Liberty Highlights because it's just you. I really stole Charlie Munger's idea where he's like, listen, oftentimes a business we found, that the winning system goes ridiculously far in minimizing or maximizing one or few variables.
David Senra:
He's saying, hey, these at the core, the business idea is really simple and then they just drill down on it. He used the idea of Costco. Very simple to understand. We can buy a ton of things cheaper than you can. We're not going to try to make money on that. We're going to mark it up just so we break even and then we're going to make all money on our membership fees. That's why my wife's family has been a subscriber to Costco for 27 years. It's simple to understand. I understand the value as soon as I walk through the door and you have me forever.
Liberty:
Yeah.
David Senra:
That's a very powerful idea.
Liberty:
In business in general. Well I guess in life in general, almost all of the really powerful ideas are super simple. They're just hard to execute consistently over time. They're hard to remember. That's why I feel like I keep writing about the same things over and over again because I'm just trying to refresh my own memory about these things. It's very rare to find a totally new idea. The details can be new, but totally general concept.
Liberty:
A principle at the very high level to how to live your life or how to have a good business. It's all kind of the same thing. It's like DNA. It's four letters, but you can build anything you want with it. Well you always go back to the same few principle. Create value for people and how to lead a good life. Be nice to people. Treat them as you want to be treated. Move around. Eat good stuff. It's not that complicated. But yet you look around and it's so hard to do.
David Senra:
That's because people crave simplicity, but we over complicate things by our nature. That's why I just say no to everything. When Steve Jobs told me and when I read his biography, I feel like I'm, remember one sided conversation, when he said focus is saying, no. I didn't just read that like, oh that sounds good. No. I started applying it. The answer is no. I found what I want to do. All I'm trying to do is make it better over time and then spread to as many people as possible.
David Senra:
But I want to hit on something. That people I think, fundamentally misunderstand because business is obviously extremely complicated. Building a great company is incredibly hard. That's why there's so few of them. But when you go back and study them, it's not like they had 25 ideas. They had five principles, five ideas, six, a handful. They would repeat them over and over again. I've read a ton of books. I've read every single one of Jeff Bezos shareholder letters.
David Senra:
I've read three biographies on him. Read all his own writing. Read transcripts of his speech. He repeats the same stuff so much, they're called Jeff-isms. He had like a handful of ideas. I'm talking about less than 10. He just repeated over and over again. He said, "Hey, that principal worked in retail." I'll apply it to this. Then I'll apply it over here and I'll apply it over here. They all like this. Enzo Ferrari, Steve Jobs, any of them, they didn't have an abundance of ideas.
David Senra:
They had a handful of extremely important ideas that they repeated to everybody, because you have to. Repetition is persuasive. Then they applied them for unbelievable long period of time. This is why I was in a rush to try to find my life's work. Because, you know how Charlie Munger says, hey if you study the main concepts, it carries most of the freight? What I realized in my own research, a lot of the stuff we see, time carries a lot of freight.
David Senra:
It's just that most people to your point, will start something. Maybe they'll start for a year, they don't see traction. They'll jump to another thing or they'll start at a company. There's like a mind virus that I see in the entrepreneurship industry where it's like, okay, I'm going to start it. I'm going to scale it and I'm going to sell it and I'm going to do it all over again. But when I talk to them about this, because I talk to a lot of founders.
David Senra:
"Hey, I don't know if I should sell my company. What should I do with our cases?" I was like, "Do you have a better idea?" They're like, "No, this is my best idea." I go, "You're going to sell your best idea and you're going to go work on your second best idea." How the f’ck does that make sense? I go, "Who are your entrepreneurial heroes? Tell me who you look up to." They name them. Did they work on an idea for five years? No. Inevitably if we know their name, they worked on something for at least a decade, two decades, three decades. You're three years in, you want to jump out.
Liberty:
A lot of people say the right things. But when you look at their actions, you realize that it's not really what they believe. It's the difference between show me your portfolio. That's what you really believe. Well, if you believe in selling your business that quickly, the goal probably always was, well, I want to have a bunch of money. I guess some people can be addicted to the early phases of a startup. Some serial entrepreneurs, I think they come at it from, they're really good at the early phases of a something.
Liberty:
Then as soon as it becomes too big, it's not their skillset anymore. I can understand that. But I feel lots of other people, I don't know if it's a cultural thing. If after a bunch of people do it and then people get FOMO or they get jealous. They're like, oh I could build something too in five years and make a billion dollars. I don't know. Feels misplaced to me. Because as you say, you read about these people and many of them regret selling their business.
Liberty:
Because they think, oh, I'm just going to do it again. They don't realize how lucky they were to have it once. To have captured this lightning in a bottle once. To have a great group of people and good co-founders. Found a place in the market where they could be leaders and have some competitive advantage, whatever. Having all of these factors come together is not that easy. A lot of it is not under your control. Once you have it, I would be very, very careful about letting it go.
David Senra:
Again, whatever I'm saying is, I take Charlie Munger's advice. Follow your natural drift if you're a serial entrepreneur. I read about one serial entrepreneur. That's his personality, Jim Clark. He happens to be the first person to found three separate billion dollar technology companies. He had no really interest. I think of him as the person starting a movie. He's like, I'll write the script, I'll get the characters, I'll get the props.
David Senra:
Then you go and do it. Then he wanted to jump off to something else. But my point is, I think a good idea that I heard from somewhere else is, you should always be working on your best idea. I don't have a better idea than Founders. I'm not going to foreclose that I might have a future opportunity that a big problem I'm super passionate about, that I absolutely have to do where I can't think of anything else. Then yeah, I would go do that.
David Senra:
But I'm working on my best idea. Again, I don't think of it as a business. I think of it as an obsession that just happens to generate money. It's going to be extremely hard to compete. Say you wanted to do exactly what I'm doing now and there's a ton of people. I think more people should do different experiment, different formats. You're going to have a hard time catching up, because I'm 250 something books in. That it takes some amount of time, even if you started today. First of all, how many people on the planet have read 250 biographies of entrepreneurs? There are some people. Yeah. I'm sure there. I know there for a fact, Charlie Munger's probably read more of them than me. Warren Buffet has probably read more than me. But that's not a big number.
Liberty:
There's a lot fewer readers than there are people who say they read. Who claim to read. I don't remember who wrote this, but there's a great post I read a while ago about if you want to learn about a topic and you read a good book about it. Okay, there's I don't know, 10,000 people read the same book. Then you read two good books about the same topic. Now there's maybe 500 people have read those two books. You read three books and four books and you try to find books that take the thing from different angles.
Liberty:
One book is about evolutionary psychology and the other is about elder and psychology and the other is about... You create this little mosaic of things around the same topic, but from all different angles. I think you increase your resolution of the knowledge of that topic to a level that very, very few people will have the same overlapping number of sources. If you've read 250 biographies of founders and entrepreneurs and even overachievers like Arnold Schwarzenegger and others, I think that's very, very unique first.
Liberty:
But your overlap is reading all of those while podcasting about those. Those two combined together, because you don't read the same when you're going to make a podcast about it as when you're just randomly reading about it. It's more active ideally. For you maybe, but that's part of your superpower. Most other people probably don't. The skill of podcasting too, is something. Even if you forget about the books, just speaking into a microphone for that long, getting feedback from reader listeners and all that stuff, probably count people on one hand around the world.
David Senra:
Exactly. My point is, again, this is not my idea. I'm working my best idea. The reason I brought up the fact that I have basically a head start is, that's the way I think about Warren Buffet moat. Moat to me is just like, why are you hard to compete with? Again, I'm just taking their ideas. Find your obsession, see if you can build a moat and then just don't quit. These are simple ideas. Like you said. I think you said, simple ideas, but hard to do.
Liberty:
Yep.
David Senra:
That's the way I think about it. The reading of these biographies has informed me. That's literally what gave me these ideas. If I'm not applying them to my own work, then I'm wasting my time.
Liberty:
Can you describe how you use-
David Senra:
... it's my own work, then I'm wasting my time.
Liberty:
Can you describe how you use Readwise? I think this is a great deliberate practice thing, because two people can read the same book, or the same thing, or listen to the same podcast, and one of them is going to get a lot more out of it than the other. Over time, especially. So I feel like your use of Readwise is so great and I want to copy that at some point.
David Senra:
Okay. So I don't have a note-taking app. Everything is in the default note-taking app on Apple. But what I do read... I think of Readwise, the app, as like my second brain. So my process is very simple, I try to not think about anything. I sit down and read a book. If something's interesting to me, I underline it. And then, whatever thought is spawned from that sentence, I write it down on a Post-it note. So if you saw me making the podcast, it looks like I'm doing arts and craft class. I'm sitting here with Post-it notes, scissors, rulers, and pens. And so what I'll do is I'll go through the book one time, that's the process. Then the night before I record, I'll reread all of my notes and highlights in the book.
David Senra:
And sometimes I have to work off Kindle, I prefer to work off physical books. So that's now the second time that I've read the same highlights. Then I record the podcast, that is the third time I have read the highlights. And this is why I don't outsource anything and I do everything myself, because I'm trying to make a handcrafted product at scale. And I think that resonates with people. So then I've now recorded the podcast, so now I go back through and I edit the podcast myself, which everybody tells me not to do. So now that is the fourth time I have heard and absorbed the highlights. Then the podcast is done, it's published, I sit down with the Readwise app. I talked to this about our mutual friend, Frederik, from Neckar Value. Because he's like, "Dude, how the hell do you get all like...? You have so many..." I have over 20,000 highlights in Readwise.
David Senra:
And he's like, "How do you get them on there?" And I go, "The hard way." He's like, "What do you mean?" I go, "I take pictures of them using the Readwise app, it'll automatically recognize the text, but you have to fix some things. And then you have to add whatever note you wrote on the sticky note." And so that usually, per book, that's several hours, but I'll listen to a podcast on the back. It's actually really... I mean, it's kind of tedious, but again, I think exposing yourself to things that are tedious, I don't try to avoid work. And I think it just makes everything... Like it's just this constant repetition. So by the time I'm done, I've reread or listened to the highlights five times. And that is how I'm able to go, reference on a podcast that I'll make this week, something that I learned two years ago.
David Senra:
I don't think of it, like it's episodic in the sense that they're numbered and I'm releasing new episodes every week or whatever, but I really think about Founders as one gigantic conversation in the history of entrepreneurship. And that's why, go look at the notes. Anytime I mention a past podcast, I'll link to the book and I'll tell you what Founders episode it is in the notes, almost every single one. I reference 5, 6, 7, 10 other Founders.
Liberty:
That's such a huge part of the value I'm getting out of it, because most of the time I find the next episodes I'm going to listen to from the one I'm listening to right now, so you're saying like, "Blah, blah, blah. Edwin landed this, it reminds me of what this other person did, this other person." And it's like, "Oh, I'm making notes. These sound interesting." And it's all connected. It's all like all Wikipedia pages with links that interconnect, and you fall down the rabbit hole, and now I've listened to like four episodes on David Ogilvy because I heard you talk about him in some other pod-, right?
David Senra:
Yeah, he's one of my heroes.
Liberty:
And last time we spoke, you described your Readwise thing. The next step after that is you can go and randomly scroll through it and it's like your own private Twitter feed, but instead of having empty calories of what's on Twitter right now, it's all your favorite quotes from all the books you've read. And that seems like such a great way to... As I said, refresh your memory about all the stuff you learned, because it decays so quickly in our brains. It's hard to remember everything, but if you refresh once in a while, it sticks around.
David Senra:
The Readwise app, the iOS app. And I have to... Like Tristan is one of the co-founders, he's been a subscriber to Founders for a long time. And they just built... I could not make the podcast without Readwise. And I've told him this before. That's why I talk about it on the podcast. I don't do ads, I have no ads in any of my episodes. When I tell you Readwise, and people signed up and have told me. It's like, "Hey, I bought this and it's super helpful just because of what you said." I pay for it. Like I wouldn't even sign up with their affiliate program to refer. It's just like, "Dude, I want you guys to keep the money. I'm happy to talk about it. I'm happy to pay for it."
David Senra:
But in the iOS app, they have this thing called highlights feed. You press on it and it's exactly what you just said. It looks like Twitter, except it's just, instead of seeing the person like Liberty RPF and you're the satellite, you see, like I just opened up Creativity Inc. and you see the picture of the book and then it's just like, quote, this is a revolver, that's the biography of Samuel Colt that I read. This is Against the Odds, James Dyson. This is The Hour of Fate, which is a partnership between J.P. Morgan and Teddy Roosevelt. This is the biography of Milton Hershey. This is you just referenced Arnold Schwarzenegger, I just see something from Total Recall. Joseph Pulitzer.
David Senra:
Look at that. I'm six swipes in and it's just like, "Oh, I have a steady drop of great ideas." And I'm going to tell you where I started taking this super serious, why I got the idea to take that super serious, more serious than I think anybody else would on the planet. The reason I spend like an hour or two rereading highlights every day is because I read a 600-page biography of Michael Jordan. I actually I read two biographies of his. His autobiography is a lot shorter, you can read it comfortably in a weekend. The other one, not short at all. It took me a very, very long time. It's episode 212. And well, I was shocked. And I was a huge Michael Jordan fan when I was a kid, like I was obsessed with him. Basketball's still my favorite sport. And I was shocked to learn how much he talked about practice. He's like, "I'd rather miss a game than miss practice." He goes, "I'm a practice player. I believe in it."
David Senra:
And I think he has a lot of insights into his craft that I see in history's greatest entrepreneurs, they're obsessed with professional research, using a term by Bill Gurley. Just like, "What work do you do that enhances your work when you're not working?" It's a way to think about that. And so he talks about practice the whole time. And then he gets to the dream team in 1992. And this blew my mind. So it's like, first of all, how difficult is it to get to the NBA? You're talking about what, like 400 players out of millions? I don't know the exact number, but it's small. So then you have that. Then you have the All-Stars, which is even a smaller subset of a small subset. Then you have people that are getting invited to the Olympic team. 12 players out of the entire world that plays basketball, that wants to play basketball for the American team. You have 12.
David Senra:
So he's like, "Listen, I was burnt out." I think he'd just won the championship. He'd been going nonstop. He's like, "I had to be here because I wanted to see the very top. I wanted to see their practice habits." And so he said something in that book that gives me chills. I've repeated over and over again on almost every podcast since then. And he said he was shocked to see how lazy they were with practice. This is the best people in the world. To your point about a power law, it's like yeah, you have the 12 best basketball players in the world. Maybe not because Christian Laettner on the team, but whatever. So 11 best basketball players in the world, but the difference between... But Jordan won, I think, more championships, not including Bird and Magic, but whatever. It's essentially like, even at the very best, the difference between one and two is still vast.
David Senra:
And so he said, he goes, he was disgusted by their practice habits. And he said, this word, that changed my approach to my work. He says, "They're deceiving themselves about what the game requires to get to my level." Like he's beating Charles Barkley's ass at the finals, he's beating all these other dudes on the finals. He's like, "You're deceiving yourself about what this game requires." That is why I don't think about anything else, I don't work on anything else, I don't take days off, is because I'm not deceiving myself about what... If I want to make the best podcast in the world about the history of entrepreneurship, not the biggest podcast in the world, I'm not interested in that. I want to make the best about the history of entrepreneurship.
David Senra:
And I think about a podcast, not as a show, I think about it as a tool. It's a tool for your career. And so I realize my practice habits are not good enough. And so that's when I immediately start... I always, casually reread highlights, but now it's like, "No, I got to go to practice." Just like he knows on Tuesday at 11:00 AM, he's got to show up and he's got to practice for two hours. Same thing. I got to show up and I got to practice. And my practice is reviewing past things I learned so it sticks. So then when I'm sitting down in front of you with no script, it just comes to mind.
Liberty:
So many things I want to say at the same time. It's funny. I wrote this today. I wrote something like, "I don't want the most readers, I want the best readers." And I feel like there's always choices you can make. And so maybe if I lost the stupid dad jokes, and the smileys everywhere, and this and that, more people could read the newsletter or take it seriously, or not bounce the first time they open it and they're like, "What is this crap?" And they do bounce. But all that stuff is a filter to find the kind of people who are going to be, I don't know. I don't know how to describe it, but similar to me in some ways. Kind of like less serious, and more curious, and ready to accept weird things or whatever. That's kind of a filter.
Liberty:
So I feel like that Jordan quote, it cuts both ways. If you want to do it, you shouldn't deceive yourself about what it takes to get there. On the other hand, you should be honest with yourself that if you're not ready to do it, if you're not ready to do what it takes, then don't pretend that you're going to do it. So many people suffer unnecessarily because they do something half-assed and they kind of lie to themselves. And then they're so distressed when it doesn't work, but if they had been more honest with themselves from the beginning, it could be like, "Okay, I know I'm not going to even try this. I'm just going to do it as a hobby, or..." I don't know, being well calibrated is one of my things, right? So many people could have better lives if they were just more honest about all kinds of stuff.
Liberty:
One thing I got a suggestion. I have a product idea for you. You should make your Readwise archive available to members somehow. Like download the bundle, hosted somewhere on a website. And that would be so valuable to readers. I'd be scrolling to it all day, like as my own Twitter feed. And you would sell a lot of Readwise subscriptions too for them. So if you want to support them, that would help.
David Senra:
Well, I'm pretty sure they have this thing where it's like broadcast. I have to ask Tristan about this, where they'll send you an email from somebody else's Readwise every day with like 10 highlights or something like that, so that might be a... I'll have to talk about that. I know the pace, and it's interesting, like I never thought about... There's literally, they consider themselves a reading technology company. And I was like, "Oh, I would never came up with that term." But if you see their iteration, how they're constantly improving their product, that's really like a north star to how they're thinking about it.
David Senra:
I want to expand on what you just said, because you just said something that was fantastic. You used the word half-assed. Okay, so that's something like growing up, my dad, that may be the thing he repeated to me and my brother the most. My dad's like a blue collar guy, never graduated, didn't even graduate high school, but his work ethic is incredible. Extremely. And he's still a blue collar guy. He does physical, crazy labor because that's what he wants to do. And he's kind of a roughneck, kind of wild dude. But I think that's one of the best lessons you could teach your kids. This is like, whatever you do, do it with your everything. He would get on us so much if he saw. He's like, "You're half-assing it." He's got all this kind of Southern, these like maxims that are just funny, but that's one of them. So I realized, it's like, "Oh, I'm going to apply his blue collar work ethic to a highly leveraged white collar occupation, which is podcasts."
David Senra:
And I was like, "I don't know." And again, just because it's an obsession, I don't know how many people are working just on a podcast for 60 or 70 hours a week. So we got to talk about Ed Thorp. We can't get off this before we go to Ed Thorp, because how can you work a lot, but also have a complete balance of your life? I think Ed Thorp gives you that blueprint. But I just saw this fantastic video that Matthew McConaughey was talking about, the advice he got from his dad when he was a kid. And Matthew McConaughey is like just a gifted storyteller. I had no idea. And so his dad wanted him to go to law school. And so he calls his dad, and he tells the story in like 60 seconds. He's like, "Hey dad?" "What's up?" He goes, "I got to talk to you about something serious. And his dads like, "What's up?" He goes, "I don't want to go to law school. I want to go to film school, or art school, or acting school." I forgot the term. But he... "I basically want to be an actor."
David Senra:
And so he was bracing himself for his dad to yell at him or whatever. Complete silence for like 5, 10 seconds. He goes, "Are you sure that's what you want to do?" And then Matthew McConaughey says, he's like, "I didn't hesitate at all." He goes, "Yes, sir. That's what I want to do." He goes, "Well, don't half-ass it." And he remembered that advice 30 years later, that conversation 25 years later, 20 years later, whenever it was, a very long time later, is some of the best advice he gave. It doesn't matter what you do, that advice is applicable, man. You're going to spend half your life working, even if you work 40 hours a week. Maybe you sleep for 8, you got 16 left. You do whatever you want eight hours a day, you work the other eight, maybe take weekends off, whatever. So it's a little less than half of the time you're actually awake. Why would you not try to be as best as you can?
David Senra:
It doesn't have to be your entire life, but why would you not put everything into it, invest in whatever knowledge is going to make you better, skillsets are going to make you better?You're giving a third to half of your life energy over to something and most people hate it. And so I realized, by reading these books, there's two things if you make a mistake on. If you hate your job and you hate your spouse, it is impossible.
Liberty:
Yeah.
David Senra:
Impossible to have a good life. So if you f’ck up those two gigantic decisions, and I have a family full of people that did that on both sides of my family tree. And that's why I was like, "I'm not doing that. I'll rather be single." And I'm happily married. I listened to that Mark Leonard podcast where he said, he's like, "My wife is the nicest person I ever met." Same thing. Like that's exactly how I feel. So I like... Can we transition into the Ed Thorp thing if you don't mind?
Liberty:
For sure. But you've made me think about so many directions. There's also a big Cal Newport thing. When you say, "I want to take the work ethic of more of a blue collar thing to a white collar thing," I feel like everybody's kind of a knowledge worker today. Well, not everybody, but the people I know. And nobody knows how to be a good knowledge worker. When you start reading Cal Newport stuff about Deep Work and all that, it's like everybody's just bouncing around from meeting to meeting, going through their email inbox all day. And it's all busy work, it makes them feel like they're accomplishing something, but not much value is produced. So I feel like one way to get that Ed Thorp balance is not by sheer quantity of hours alone, but by like, if you're doing something you really love, you're really passionate about, or you love because you're a good at it, which is kind of a Cal Newport's point, which is not so much about what you do.
Liberty:
You can do all kinds of things, but it's going to be fun to you once you've developed a craftsman mindset of becoming better, and better, and better. And then, once you become one of the best at your field, then it becomes fun. There are thousands of kinds of jobs in the world. It's not only the same five jobs that are fun. These five types of jobs are fun and nobody else has fun. No, almost anything could be great depending on how you do it and if you've selected well. So I feel like the way to get this balance is that like, when I'm working, I'm not trying to look at the time, and think about when I'm going to punch out, and what I'm going to do when it's over, and do a bunch of busy work because it's easier to do than writing. Oh, I'm going to have a meeting and then I'm going to shuffle around some email. All I'm doing is reading and writing all the time.
Liberty:
So in the same number of hours as someone else, I can probably produce more. I'm lucky because I don't also have like office politics and all that stuff, but it's also a choice. Like I became independent, in control of my time through a design that took me 11 years to achieve. For 11 years, I saved like between 50% and 70% of my income to build up the capital to become a full-time investor, so that was a long-term plan that I decided on. So it's easy for someone else to look at it, "Oh, but you're lucky. You don't have a boss." And well, luck has something to do with it, but it's not only luck. So anyway, so it makes me think that a bunch of people working in these fields could achieve much better work-life balance if they only cut a lot of the BS and all of the unproductive hours that they're spending.
David Senra:
So that is the key, where the reason I keep talking about I consider Ed Thorp my personal blueprint. And I recommend everybody read his autobiography, which is A Man for All Markets. It's just fantastic. One is he's just a genius. So he's a hell of a lot smarter than I am and I ever will be. No problem saying that. It's obvious. So a lot of your audience I know is investors. I saw your post where you did the... Like you surveyed your audience. It's like 50% working in finance or whatever case was. So they obviously know that he's credited with the first quantitative hedge fund. But what I realized is why Ed Thorp, in my opinion, is out of every single person I studied so far, has got closest to mastering life, because he identified a handful of things that he was important.
David Senra:
And again, what makes a happy, contented person today is the same thing that made it 2,000 years ago. Like human history doesn't repeat, human nature does. And so he is like, "I want have..." First of all, he realized, it's like, "I want to be wealthy, but once I have more money than I can ever spend, I don't want to chase, give up more time for an additional dollar that doesn't make a difference to me. I want to have a life full of adventure, I want to be a good husband, I want to be a good father, I want to take care of my health. And in addition to adventures, is have fun."
David Senra:
So when I read his book, I'm like, "Oh, he just gave us the blueprint." So this is how I applied it. So first thing, first. Health, which I know you've been talking about taking a renewed interest in. So I think, even though Ed Thorp is a genius, he has a lot of simple systems that anybody can copy. I don't have his capacity for thought, his raw processing power, but the way he breaks it down, I can just copy that. So he says, "Hey, I view..." And his entire life, he's done this. If you go look at him, I just watched a video with him a few months ago. He's like 85, 86. He looks like he's 65. And so he is like, "I view every hour spent on exercise as one less day I'll spend in the hospital at the end of my life." So he picked up that habit of exercise when he was in college and never gave it up. So he is like, "You make it a priority, you put it on your calendar, just like anything else."
David Senra:
So then two, work. He's like, "I want to be extremely... I want to do something unique, fun, something that I can use all my intellectual power for, and it's extremely profitable." So that's when he starts Princeton Newport. Then, once that blows up, it winds up getting raided by the feds, but he didn't do anything wrong. He decides, he's like, "Do I want to build another fund? I just did this one for 19 years. Do I want to build another fund and have 100, 200 people working for me?" He's like, "No, I don't. And I'm already really wealthy." So he starts another, it's like more automated. I think it was called Ridgeline. I think at the time, Princeton Newport had like $200 million in under assets. This is in the '80s. It had like 100 people, 200 people, whatever the number was. I don't remember off the top of my head.
David Senra:
Ridgeline had like $400 million and it was him, five people, and a bunch of computers. And then he'd keep getting opportunities to make even more money, but he's like, "I already live in an amazing house in Newport Beach. I already..." He winds up meeting Warren Buffett. Warren Buffett's 30 years old. He winds up investing in Berkshire at $900 a share. [inaudible 01:20:53] was that crazy? When he wrote the book, he still had the stock. $900 a share, that's when he bought in at Berkshire. So he winds up being the first LP in Citadel. The first LP in Citadel, because he gave Citadel all the data that he... He's like, "Listen, I'm not going to run a big hedge fund. Here's my data." He gives it to those guys and he's like, "But I want to be your first investor." He winds up building the world's first wearable computer with Claude Shannon, the inventor of information theory.
Liberty:
And we know that Claude Shannon also knew how to have fun, and adventures, and have a good life and balance.
David Senra:
100%. 100%. And then he studies how to... He figures out a simple system for counting cars, which people still use to this day. He invented it in the 1960s, still in use to this day. He writes a book about it called, Beat the Dealer. It sells millions of copies. So you look at his list of accomplishments. I'm not telling people like, "Oh, I'm going to copy Ed Thorp so I can be less ambitious." How many people have that list of accomplishments that have ever lived? A tiny percentage. But then what's weird is he also took care of his health. He's like, "I will not go spending time..." His wife winds up dying of cancer later on in life.
David Senra:
And he's writing the book after she passes away and he's like, "I'm so grateful that I don't have regrets. Me and Vivian..." If I remember her name correctly. He's like, "We had a great relationship. I didn't pursue an extra dollar because that dollar, or going to lunch with someone, an investor, when I'm already rich, I could be spending that lunch with my wife, who I love more than anybody else. My kids know who I am. We spend an insane amount of time together their entire time..." He worked essentially nine to five. He was freaking a professor at UC Irvine. He didn't quit till he was like 12 years into his fund. He's like one of the most inner scorecard people I've ever come across and one of the people who by far I most admire. So when I looked at that, I'm like, "Okay, I'm not a quantitative hedge fund guy. I'm not going to build wearable computers, but I identified." I was like, "He has a system."
Liberty:
Well, you don't need to be. That's the thing. If you want to copy the results, you don't need a $200 million hedge fund or whatever. All of what he had as a result can be done by almost anyone. Exercising, spending time with your family, finding a job where you kind of set limits, all that stuff. A lot of people could... Like you go in a low cost area and you could live for almost nothing that kind of lifestyle. You can go further if you want, but most of the things where you got this life satisfaction doesn't cost hundreds of millions of dollars.
David Senra:
Correct. But I think what was nice for me to hear is that you could have both. It's very hard not to over optimize, but that's what I meant, is just the balance. So it's like, "Well, we got 24 hours in a day. I'm not sleep deprived. I sleep eight hours. I'm not sleeping four hours a day. I can't operate on that." So I was like, "Okay, I have to take care of my health," so I give an hour of that a day, no matter what. I spend an insane amount of time with my wife and my kids. If I'm not spending them with my wife and kids, like all in the last week, this is exactly what I've done. I spent a seven hours on some kind of physical activity, whatever you choose that you want to do. I winded up having lunch with one of my oldest friends. I had dinner with another one of my oldest friends. That was probably four hours, two hours each.
David Senra:
I spent an insane amount of time with my wife, spent an insane time with my kids, I spent an insane amount of time working on Founders, an insane amount of time having fun. And so that balance, the reason that thought spurns is what you just said. It's like people say they don't have time, but then you actually audit. This is like, they spend a bunch of time staring at a screen that they're not really interested in, or engaged in a meeting that didn't have to be a meeting, or whatever it is that's in your life that doesn't have to be there. And I just ruthlessly, ruthlessly prioritize and I cut everything.
Liberty:
Yeah. Everybody has the same 24 hours.
David Senra:
It's just centered around those pillars. It's like health, family, friends, work, and adventure. That's it.
Liberty:
Yeah. On Friday, I posted excerpt from a book I was reading on Twitter. And someone said, I don't remember their name, but someone said like, "Oh, Liberty, you're reading a book on a Friday night. Aren't you afraid you're not having fun and taking time to do stuff?" And like, "You're always reading, and working, and isn't that terrible?" And my reply was, "Well, I was just driving my kid to his parkour class. And so while I was waiting for him, I was reading that book. And then I spent the rest of the evening with my kids. And then they went to bed and I spent the rest of that evening with my wife. And the day before, I had five friends over for the weekly D&D game that we have where we laugh and drink Scotch."
Liberty:
And so, a lot of stuff you're not going to see on Twitter. You get a distorted view of my life, but I'm trying to have this balance. And I feel like hopefully others have more balance than sometimes they seem to do. But yeah, it is extremely variable. Like as you say, some people say they don't have time to exercise, to do anything, but if you were to look at the very granular calendar of how they spend their time, a ton of it is spent on random crap on Netflix and reality TV shows and a lot of filler can be cut. You shouldn't be jealous of anyone's free time because everybody has those same 24 hours. It's the choices that create the time, it's not like someone has magically more hours than someone else.
David Senra:
And sometimes the best use of your time is just thinking. So me and you have similar people in our audience, these entrepreneurial investor types, even if they're not at the office, it's like you go for a walk in the woods all the time. I'm sure sometimes you're thinking about your own life, you're thinking about your kids, you're thinking about your wife, you're thinking about your friends, but I'm sure part of that is thinking about work, thinking about this investment you want to make, thinking about this idea. People say, "Oh, just because it's not on a calendar, it's maybe not taking place sitting at your desk," or whatever the case is, I mentioned earlier, like David Ogilvy is one of my personal heroes. He's one of the best writers I've ever come across. And he worked a ton, but he's like, "I believe in working hard, but I believe in sabbaticals." He's like, "I need time to recharge."
David Senra:
And so he believed in the fact that, he's like, "I read and write basically 24/7. That's my job. And then I'll purposely carve out parts of my schedule where I do nothing. I go for a walk, I'm on a farm, I ride a bike." And he goes, "That is when I get to download. When I'm engaged in doing nothing, I take walks on the beach, because I live two, three miles from the beach. When I'm engaged in what it looks like from the outside, nothing, I'm getting these downloads from my subconscious." That is technically work. You used the word knowledge worker. You need time to get the computation, the result of the computation that your brain makes subconsciously that you don't have control over it.
David Senra:
And if you're scheduled every single minute, I constantly get people like, "Hey, I'd love to talk to you." They try to put something on my calendar. They're like, "What's your calendar look like? Or send a calendar." But I go, "I don't have a calendar. I don't have a calendar. Text me." They're like, "Hey, can we meet three weeks from now?" "No. Text me the day before." We set this up a couple days ago, we had an idea. It's like, "Hey man, you're working on a newsletter and other stuff. I'm working on a podcast. I know we want to talk." And then, it's not like we had this on the calendar weeks in advance. It's like, "I could do next Tuesday. I can do whatever day." I don't even know what date it is, actually. And it's just very simple.
David Senra:
I used the Tony Hawk example. I'm sitting there watching that documentary with my wife. That is something we enjoyed doing, watching documentaries, especially because they're entertaining but you also get to learn. And from that activity, still spending quality time with her, still spending entertainment, I'm like, "Oh, I got ideas for my podcast. Oh, the way he thinks about skating, I think about podcasts. It's the same thing."
Liberty:
Yeah. You almost said the word I'm using, is maybe last year I realized, and while we spoke, we talked about how wonderful podcasts are. At some point I realized I had too much input time during the day. Like I always add something in my ears, I was always reading something. And so I was looking for what I call processing time. So I've tried to, sometimes when I walk in the woods, I don't listen to anything. It's just processing time. My brain's going to go in whatever direction it wants to, like my subconscious has more space to work, whatever happens, I feel like I'm getting a ton of value out of that processing time, even if it's harder to define. If I heard a podcast and I write something about it in a newsletter, that's super obvious, the value I got out of it. Or if I hear an idea that I can apply, or... That's the visible part.
Liberty:
But I feel like there's a huge part under the iceberg that people never think about. And it's that processing time that a lot of people, they're rubbing themselves of it. They're always filling every second, they're waiting in line somewhere, they're scrolling on Facebook, or Twitter, or whatever. I get it. I am a Twitter addict, but the way I use Twitter now is almost like 75%, the DMs. Now it's kind of like a phone book for me, for all the people I know, the relationship I've built. And so we can exchange ideas and have conversations. And once in a while, I'll go on the timeline and see what's happening, and I get some news there, and I get value because I've heavily, heavily curated who I follow.
Liberty:
Some people I see, they follow like 6,000 people. It's like, "How can you have any signal in all that noise?" But over time, I've tried to curate a lot, because this upfront decision about who you follow is a decision about what you're going to think about later. So I'm curating my future thoughts in a way, just something that most people should spend more time on too. When I read a book, especially now that I have less time to read with the kids and everything, I'll put up a ton of upfront time about filtering the book and making sure it's recommended by someone whose taste I trust, and everything, so that when I end up reading it, it's almost always something I love where I get out of. So the podcast and one way to do it is the same with people.
Liberty:
Like at the past couple years, before the pandemic, I used to not really do calls with people. I always thought of myself more as a text guy, so I'll just write you an email or we'll chat and that's good enough for me. I'm more of an introvert and it's kind of stressful to meet new people all the time. And because I hang out with finance people and there's kind of a cohort of extrovert in there that are on the phone all day. Tons of people. I always felt like that's alien to me. I can't work like that. But what I discovered in the past couple years is that thanks to Twitter, and now the newsletter, this is kind of a filter for the interest graph, so it's about finding people who match you in some way on a basis of interest. It's not the social graph, which is people you went to school with or your family, but it's really based on interest.
Liberty:
This is such a good filter that if you've been following someone on Twitter for a year and then you have a call, I don't think I've had a bad call yet. It's such a good filter that you end up like... Same with the newsletter. If someone has been reading my stuff, and sending me emails, and they have good feedback, they suggest ideas and I'm doing a call with them, like the hit rate is so high with this, so now I'm trying to take more advantage of it. I don't remember how I got on this topic, but most people are afraid to put themselves out there because they don't think they have something to contribute, but part of contributing is you get much more than you contribute if you do it over time.
Liberty:
If you give some value to whatever, as a podcast, on Twitter, as a newsletter, and you only get 5% back from one person, because most people won't send you anything, won't reply, won't comment. Well, at first it feels like you're giving a ton and you're not getting anything back, but as you build your audience, two years later, 5% of people sending you something back is like a 100x more than what you're contributing. It's so positive, you're getting so much more than you're contributing. So that would be kind of my call to people to put themselves out there and not just lurk, and not just like hide in the corner and be afraid that people are going to judge them, because others don't really care. If you give them value, if you show them interesting stuff, then they'll reach out, then you'll meet new friend and all that stuff, so it's super valuable.
David Senra:
I want to go back to the processing that you just mentioned.
Liberty:
Yeah.
David Senra:
But before I go there, that's why I hope you keep doing the podcast because podcasts puts that, the phenomenon that you just described, where you feel like you know somebody on steroids. The easiest for two strangers, technically strangers, to become friends, there's not an easier relationship than two podcasters. When I talk to somebody that has a podcast that I've listened to and that they listen to mine, it's like we do know each other.
Liberty:
Yeah.
David Senra:
And there's like almost... Like you get on the phone for the first time and you just pick up, like you had this ongoing conversation. It's crazy. But I want to go back to this point that you mentioned and that we were both talking about, it's the importance of setting aside time for processing and getting a download of your own thoughts. Again, I said it, not my idea. David Ogilvy said that, but I also stole something from Jim Simons, the guy that did Renaissance Technology. So I read his book. What is it? Like The Man Who Solved the Market or something like that?
Liberty:
Yep.
David Senra:
And I read in that book, and I read that book probably, I don't know, two or three years ago, a long time ago. And I've done it ever since. And he had the habit of like, when he had a problem, he would lay down and close his eyes. And so people might walk into his office or see him and they're like, "Oh, is he sleeping?" "No, he's thinking." What I'll do, and I try to do this, and I did it yesterday. I wish I could do it every day, but I probably should do it every day. I do it frequently. I put on [inaudible 01:33:03].
David Senra:
I probably should do it every day. I do it frequently. It's usually in the afternoon so sometimes this could fall into a nap so you got to be careful, I put in earplugs, a sleep mask and I set a timer usually for 45 minutes for an hour and I just lay there, no input. I can't see anything, I can't hear anything and I just run through it because I'm reading all the time. It just gives my brain time to process.
Liberty:
It's almost like a flotation tank, right, isolation tank? You're turning all of your attention inward.
David Senra:
Yes. Sometimes you'll fall asleep, but most times you don't and I don't try to control it. I'm not a meditator or anything like that, but I just go. I want to get a download of what the hell's in there when I'm not reading something, listening to something, I'm not even seeing anything, it's literally black. I see blackness. I was like, "Oh, well, if he thought that was a good idea, maybe I should try it." I started trying it, I was like, "This is a great idea. It's useful for me. And I'm not running. I'm not printing 100 billion dollars or whatever that guy's done, but what I love about these ideas is they scale up and down just because you're not running the Apple or running an Amazon or running any other business, those ideas, I'm a one person business and they're still useful to me. And it can be useful to a five person business and 100 person business, and 100,000 person's business.
Liberty:
I think it's a great segue into Rick Rubin because he seems to have some of the same methods. When I was listening to your podcast about him... And I guess I should put some context. Rick Rubin is a music producer. He's basically probably one of the best known names. And he's an artists artist. He's not always the most commercially successful. He's not one of these producers, everybody knows their beats on the radio, but artists seek him out to do their best work in some ways. And I got to know him. I started out in metal music and I was into the early thrash bands and everybody was into Metallica and the bit heavier stuff at the time was Slayer, and he did Reign in Blood, which was the super intense album, super proto-death metal, created a new genre.
Liberty:
And that album sounded so good and everything about it was more it than any other albums by even the same band. So I read Rick Rubin's name on the back cover and I was like, "Oh, who's that guy? He must be such a metal guy." And then later I learned he's a hip hop guy. And so basically Rick Rubin had the same approach at the time that I now have about music, because I used to be more about this genre and now it's, well, there's good music and there's bad music subjectively. That's all that matters. Doesn't matter what kind. And he seems to think the same thing. Anyway, to go back to the method, when you were describing how Rick Rubin works in the studio, people see him and he is laying down on the couch, his eyes are closed, he looks like he's not doing anything, but that's exactly what he's doing, he's processing, he's feeling stuff, he's trying to be in the moment.
Liberty:
He's not fidling with knobs and trying to think about, oh, this preamp will be better. He says he's not even a technical guy. Some people are engineers first, Steve Albini is an engineer, but Rick Rubin, he's a guy who feels the music more than others. He's tuned himself to that and you can help the band say what they want to say better than they would otherwise. I don't know how he does it exactly, but it sounds a lot like he's a super Zen guy. I love the documentary he did with Paul McCartney where they're basically sitting in front of a control room board, music board for, I don't know, six hours, and they just put in tapes and talk about music for hours and hours.
Liberty:
And the way you can see how his mind works around music and he's going to listen to a song and he is going to lower the volume on everything except the voice and the acoustic guitar. He's like, "That's the core of the song. That's the skeleton of it and it's great as this." But then they added this because he's going to deconstruct everything, but not from a technical point of view. He's not like, "Oh, they start in four, four, and then they're switching three, four, and then there's the single pedal beat here. And he's like, "This gives me this feeling and that feeling." I don't know. I love the way how he's taken a very simple thing, but pushed it as far as it could go.
David Senra:
And that's why I love when he's like, "I'm not a producer." His very first album said, "Not produced by Rick Rubin, reduced by Rick Rubin." And the reason why I was so obsessed and I completely fell in love with even though I had heard of him before, I had watched a documentary about him 20 years ago. And I can't believe it took me this long to read a biography of him, is because there's a lot of things that I'm rather envious of in the sense that, it's episode 245, in case everybody wants to listen to that episode, by the way, he found what he loved to do when he was 18 years old and he's turning 60 this year and he's still doing it. This is what I meant about the importance of heroes.
David Senra:
A lot of people quote Charlie Munger and Warren Buffett, even Berkshire, you could say there's obviously precursors of Berkshire, they've been working on their best idea forever. So it's not just enough to look up to these people. It's just why are we not copying them even more so? And so the way Rick Rubin feels about producing music is the way I feel about podcasting. I've had a lot of different hobbies in my life, I think the only one that was consistent is reading. And so it's I don't think 10 years from now, I'm not going to be wanting to read books anymore. I don't think 20 years from now, I'm not going to want to read any books anymore. So what I really hope is I found my passion like Rick Rubin found his, I found it when I was older than he was.
David Senra:
And then his approach too, it's just he has a very high bar for quality. Most of music is I don't want to work with them. Just like I've read a ton of books for the podcast that I've read almost the entire book, sometimes I gave up right away or halfway through, it's just if I got to end a book and was like, "That's not good enough." There's a ton that I'd never make a podcast about. I'm stealing his idea too, what you just hit on, it's, well, a great voice playing an acoustic guitar sounded good 50 years ago, it'll sound good 50 years from now. A beautiful voice and a grand piano sounded good 50 years ago, it'll sound good 50 years from now. So when you see him work with the artists, he always goes back to fundamentals.
David Senra:
He'll take people like Neil Diamond or Johnny Cash where they had early success, then they fell off, and he says, he's like, "You overcomplicated it." He's like, "I'm going to take what made you great and I'm going to take everything that's not great. You don't need all the extra stuff." He's like, "I'm going to put you in a room with your guitar and your voice and we're going to make some of the best music you've ever made." I've been obsessed with hip hop, that's my love, and as I get older what I listen to expands, but when I was doing research for that podcast, I was listening to a ton of his stuff. I fell in love with his Johnny Cash album. I fell in love with his Red Hot Chili Peppers album. I listened to Slayer, is it Reign of Terror or Reign in Blood?
Liberty:
Reign in Blood.
David Senra:
All of this. I went back and listened to Rick Rubin's LL Cool J album that he produced when LL Cool J was 17 years old. It still sounds good.
Liberty:
It's timeless. He makes it for how much he loves it, not how it's going to sell on the radio right now or compared to other stuff.
David Senra:
What he picked up on is the same thing I think a lot of great entrepreneurs and investors do. It's just I don't want all the fancy shit, I want to master the fundamentals. If you master the fundamentals and you want to layer stuff on top of that's fine, but a lot of people try to get fancy before they master the fundamentals. And you'll see when they have trouble in their career, they're like, "Okay, this is too difficult. Let's take it back to the basics. Let's just master the basics." I see that theme over and over and over again in these books
Liberty:
Or what you see is also people who they don't have those fundamentals and so they try to mask the lack of it, they put 50 layers of all kinds of crap on top of it to distract you from the fact that the song is not that good to begin with. Once on the cutting room floor, if you only care about quality, to make it look easy, to make it look like, oh, the whole album just clicked, every song is good, they were on fire, they must have been in a good moment. No, it's okay, he had them write 50 song and then he took the 10 best one and said, "What five can we lose and then we keep only these five?" It's like Spielberg or whatever, what's on the cutting room floor when they're editing a movie.
Liberty:
You only see two hours of it, but maybe they film, I don't know, 400 hours of it from different angles and then they rebuild it. It's like with writing, you write something and it's, oh, it's okay, then you edit it, you rewrite it, you cut stuff off you. What you read in my newsletter is only a tip of the iceberg because there's tons of stuff I read, I never write about. There's tons of stuff I write, I end up cutting in the morning. I just deleted it all because it's not good enough. There's tons of stuff that's in my note files that I just can't get to because stuff piles up faster than I can write it. So I feel like most of the people who are trying to go for equality, and I'm still just trying or I hope someday I'll get it, but they have to be ruthless about what they cut and what's good enough. You can't just write 10 songs and put them on the album because that's the 10 you've got right. You got to have this bar that's super high and if you have one good song, well, write 10 more and maybe you one another good one, and now you have two, write 10 more and rinse and repeat until you meet the quality bar, not the quantity bar.
David Senra:
The way Rick Rubin would describe it is less is more, but to get less you have to do more. And so that's the approach I take, is I might spend this week, 50, 60 hours rereading Titan. I don't know what the podcast will be when it's done. Maybe it's only 90 minutes, but there's a ton, because the thing I'm most scared of is it's an investment, you're letting somebody into your ear, into your brain and I'm terrified of wasting people's time. And so what I try to do is just, well, I'll spend 20 hours reading a book and maybe the podcast is only 60 minutes, but I know it's a good 60 minutes because I went through 20 hours to get there. There's an idea that I stole from this young, independent rapper named Russ that I mentioned over and never again on the podcast, and it's something I've seen over and over again in these stories and it's that the public praises people for what they practice in private.
David Senra:
So everybody saw Apocalypse Now when Francis Ford Coppola dropped it, released the movie in the 70s and it's still two and a half hours long, but it was 300 hours of video. It was months and months of work. They're praising him for what they see. What they think is I love your movie, not realizing that they're actually praising him for all the work he did behind the scenes that they'll never see. Every single occupation is like that, whether it's a newsletter, whether it's building Apple, whether it's building a podcast, whether it's running investment fund, they'll see the results, they'll see what they see in public, but they didn't see all the stuff that went in private.
David Senra:
And that's why I'm not big on trying to find shortcuts or hacks or anything. I like Jerry Seinfeld's method of operation. He says, "If you're trying to be efficient, you're doing it wrong." And this is his words, the reason that Seinfeld was so successful was because I managed everything. I managed every script, every take, every actor, everything. I didn't know until I read this interview that him and Larry David wrote the entire thing. I thought that every show had a writer's room, he's like, "We didn't do that. It was me and Larry."
Liberty:
Efficiency is great when you know what you're doing. If it's a process, a technology, a business thing, efficiency is not the thing for a creative process. It's the inefficiency that gives you this processing time or this wandering time where you're going in all kinds of directions and you pick up the pieces that later you put together to create the thing. But if you're like, "I don't want to waste any time. I don't want to go out of my way. I only want to work all the time." Well, on paper it sounds more efficient, but you're going to skip all of the actual creative part of the process and the end result probably won't be nearly as interesting as it would be if you allowed yourself all of this, not indefinable, but fuzzier thing. It doesn't fit on a spreadsheet, today I spend three hours processing. I don't know, it feels underrated.
David Senra:
I read a book called The Dao of Capital written by Mark Spitznagel, which he runs the Universa hedge fund, and his entire book is about the circuitous route. And he uses the example of not only his own work, what he does, but he also uses example of Henry Ford and Robinson Crusoe and I think you just nailed it. You would be efficient once you have it figured out, but when Henry Ford, there was no such thing as mass producing an automobile, they had to invent that. And I've read probably five books about him too, and you read all of the ups and downs and trials and tribulations, the fact that his first two auto companies failed, the fact that he had issues with investors, the fact that he had this idea, he's like, "I just want to build a large volume, cheap car for everybody that can drive."
David Senra:
And you saw all the practice and the stuff that he had to go through in private, decade, decade and a half, I can't remember the exact time frame at the moment, until he got to the process and he figured it out. And then the Model T comes out and he become they sold 15 million in cars or whatever the number is. And it was like, "Oh my God, Ford's a genius." And it's like they're praising what the end result, but they didn't see the process. And if he had skipped steps, to your point, it's like, "We have to make this efficient." We don't know how to make it efficient. You have to do the work first, then...
David Senra:
Sometimes people misinterpret what I say, is, oh, I want to waste time, no, no, I'm saying that the reason I like to do things myself, the reason I still do my editing, the reason I do my practice is because that time invested is not wasted. It is utilized in the future and that makes my podcast better the longer I do it, and if I skip that step, it won't be as good. From the outside it looks like, "Oh, David's micromanaging or he's doing something he doesn't need to do." It's just, "No, I actually need to do that because that process influences the end product." And that may influence an end product a year from now, two years from now, five years from now,
Liberty:
Another way to frame it, to go back to music or art is, all of the overnight successes that we hear about that were 10 years in the making. Oh, this band just blew up on their first album and then you start reading more closely the bio, and they've been playing in small clubs for 10 years and they recorded five demos and they had six different members that turned before they found the right people. O, the people before they were in that band, they were in a bunch of other bands. It happens, but it's very rare to have someone who comes out fully formed and super genius. Your life makes sense when you look back, but at the time it seems very random. A bunch of stuff that's useful to me now, at the time I had no idea would ever be useful.
Liberty:
15 years ago I started a document where I keep quotes of interesting stuff. And now every time I publish a newsletter, I put one of those at the top. So it's all the work I did in the past, pass me that work and now future me or present me is benefiting right. For years and years, as you can tell, English is not my first language, so I started learning English for computers and music. I was in music forums. I learned to write there. Then I was on investing forums. I couldn't have never gone to the investing forums, and I'm self taught in everything financial, I've never studied finance, never studied tech so I could never have done that without being interested in music and learning English because my parents don't really speak English.
Liberty:
And then all of this writing on forums evolved my own weird little writing style that's not based on anything I learned in school because I didn't learn English in school. I learned English from The Simpsons and Frasier and Third Rock from the Sun and Deadwood dialogue, so my ear is very tuned to that kind of stuff. That's why I just want to write very conversational. I had no idea it would ever be useful, because if I had become a lawyer or something, what's the point of any of that? And then even when I became a full-time investor, everybody I saw writing about investing or finance did it some way, but I didn't want to do it that way. I didn't want to make stock recommendations, that's stressful. If it doesn't work out, I feel bad for others who follow me. I didn't want to share my portfolio all the time because I know why I buy this stuff.
Liberty:
I've built confidence over five years, 10 years, but the other person would just, in the month, decides to follow you. I don't know, I have so little control over what others do. And I know in theory it's all caveat emptor and it's their fault and it shouldn't be on me, but I would still feel bad. And so that's why it took me so long to figure out a way that I could write about the stuff that interests me, but only the part that interests me and not all of the other boring parts. And that's why I don't have a paywall in my newsletter because it feels very different to me to have supporters versus customers. And if I have supporters, they're just saying, "I like what you do. Keep going."
Liberty:
If I have customers, it's much harder to experiment and goof off and do all kinds of strain things, because they're like, "I'm paying for a product and I'm expecting this analysis." So it took me a long time to figure out a model that fit with my own life design or wiring or all that stuff. And I feel like more people should take the time to do that rather than look around and copy the model that everybody else is doing. I feel like more people would figure out something that makes them happy, basically. Because if we don't take advantage of this long tail of niches and poker tables or whatever you want to call them on the internet, if you don't take advantage of it's like it doesn't exist. It's like the person that knows how to read, but never reads. Well, may as well not know how to read.
David Senra:
So what you just described is why it's so essential, I think, for people as just being a complete human to read biographies and autobiographies, because you're describing the influence of who you were, how you were raised, how you learned language and what effect it had on your work. So by understanding your journey that led up to this point, first of all, it makes perfect sense why you approach your work the way it does, but it also makes the ideas that manifest in your work more likely to be remembered and taken. Because that's the point. What's the point if we're reading books, listening to podcasts, reading newsletters, and we don't retain any of it? We're just wasting our time. And we know, no matter what, 99% of the stuff that we're taking in, we're not going to retain. So I think that was a perfect demonstration of why you should match the person with the idea.
Liberty:
I guess everything is full circle, but what we were saying about how humans are designed to remember stories, and when you hear someone talk in your ears for hours and hours, well, evolutionarily, it would be a friend or a family member or someone close. I feel like if I'm going to write something, I want to write it to you and I want to write it the way I speak and I think. And I feel like you have a better chance of remembering it or understanding what I'm saying because I'm trying to upload my personality to you. I'm trying to be a person to you and your brain is probably better at remembering it. So if I write about some anecdote about my kids or about this company or that in a way that, I don't know, it feels more like I'm just speaking to you over beer.
Liberty:
To me, it's very different from reading Ben Graham's Security Analysis, which is a great book, but pretty dry. I don't know, making it memorable to some people it feels like dumbing it down, but I think if you do it right, it's elevating it because it's more accessible to people. The idea's going to come to them when they need it. That's what makes Buffett and Bezos and all these people who can compress ideas so well, so effective. If Buffett was speaking in bland jargon all the time, nobody would remember. But when Buffett says be greedy when others are fearful, or standing on tiptoes of the parade or Bezos [inaudible 01:51:17] day one, two couple words in there's a cluster of ideas in your head immediately and then you can try to apply it to the situation in front of you. It's not the same with some of the stuff I saw in university, I spent hours and hours and hours reading books and being in lectures, it's all gone. Nothing's left of it. But some video of Buffett I saw with Charlie Rose 15 years ago I still remember.
David Senra:
It's why Churchill said it's slothful not to compress your thoughts. He wasn't saying that to be a jerk or saying his time is super valuable, he says you won't remember it otherwise.
Liberty:
It's the thing about I'm sorry I didn't have time to write you a short letter so I wrote the long one.
David Senra:
It's do the work necessary to... In his case, like he said this, obviously in the middle of the worst war in history, but he's like, "Do the work before you've presented it to me and present it to me in a way that I can get it right away. We don't have an abundance of time to do the work together." And I think the best thinkers or the clearest thinkers, you mentioned some of them, I would add Steve Jobs to that list too, Charlie Munger obviously, they are gifted communicators. That is a superpower. It makes them better entrepreneurs, better investors, and in case of Charlie Munger, better teachers.
Liberty:
And better leaders. The whole point of forming a company is trying to creating a system, a machine that accomplishes what you want to do. Well, you could have the smartest person in the world, but if they're not able to inject their DNA, the way they think into other people so that these people become extensions of them, you may have some companies that work, but not the world beating companies like that change the world, that become huge. Apple is so much an extension of Steve Jobs that it's its best product by far because it's the product that created all of the other products. Without Apple, Steve Jobs could not have made all the stuff he did. And that sounds trivial in a way, but in another way it's like you needed so many pieces of the puzzle tied together to have the scale.
Liberty:
And even just the iPhone, all of the carriers, all of the leverage for every smartphone in the world, they put all of their crap wear in it, there was stickers all over it. You had to fight super hard just to get the original iPhone the way he did. And every carrier said no, and that's why it was on...
David Senra:
AT&T.
Liberty:
It wasn't even AT&T, it was some smaller carrier that AT&T bought. It was the only ones that said yes. It was ready to say no to all of the biggest carrier just to accomplish his vision. I don't know. It's the kind of stuff we can't do it at that scale, but there's always days when it's, oh, it would be so much easier to do it this way or I could make more money in the short term doing it this way, but if you keep your eye on the real goal, the long term goal, in 20 years, what would I wish I had done right now? What's going to get me on the best path for sustainable happiness in this thing? I think it's very clarifying.
David Senra:
I just want to say one thing too, I haven't yet to read a book about somebody who built a great company that was a short term thinker. So I know that's prevalent in human nature. I think you have to fight it by all means. I become friends with Sam Hinkie as a result of the podcast, and he's got the greatest maxim for this. He's like, "You always maintain the longest view in the room." Because I've had a pleasure of talking to him, he's got deep historical context like almost all the great entrepreneurs investors do and I was just think he you nailed it. In all these biographies, there's no short term thinking, because those people didn't last long enough to accomplish anything that people actually want to write books about.
Liberty:
And we're seeing right now in the market, with the crash and everything, the first thing that changes with people when there's problems, and I'm sure it's the same at companies, is that everybody's time horizon shrinks and shrinks and shrinks until it's almost a millimeter close to your face. It's much easier to think long term when everything's going well. Oh., I can see myself in 10 years, we're going to do all these things, and then stuff starts blowing up around you and everybody's like, "Okay, we're going to burn the furniture, we're going to slash everything." You just want to survive to the next day, which sometimes is what you have to do, but I don't know, I feel like too often people give up these long term visions right at the time when they're most valuable.
Liberty:
Because when everybody's taking long term, well it's a lot less differentiated, but when everybody's taking short term, if you're the only one who's thinking longer term and the one who's counter positioning and everything, You're hiring people when everybody's firing so you can get the best talent from others, you're thinking about what's going to happen in five years when everybody's cutting their plans. And so when you come out of whatever's happening now, you're the only one who's a couple years ahead of the others or whatever, you can imagine all kinds of examples, but it feels like everybody has such similar brain architectures that if you're feeling scared or you're feeling like you want to think short terms, everybody else is probably thinking the same way. So fighting these urges, that's the thing you got to train yourself to do when it's going well. It's harder to learn when you're gripped by emotion.
David Senra:
Having the longest view in the room is a competitive advantage. I'll give you a perfect example from the book I'm reading right now, because it's fresh in mind, I just got to this section, I think, two days ago, where at the very beginning of the oil industry, this is kerosene, this is not cart oil, Rockefeller is making all these investments because at the time there's the vast majority of people said oil, it's a fad. At the time it was only coming from Western Pennsylvania. Let's take all the money out, don't reinvest in the business, just get the profit. And Rockefeller was like, "No, I'm building for the long term." And he would do constant reinvestment, 95, 90% of his competitors just wanted cash. So not only at the very beginning did people doubt, you could have bought standard [inaudible 01:56:38] stock was publicly available.
David Senra:
And everybody's like, "No, this industry's not here to stay and these young kids," because I think Rockefeller was 24, 25, something like that at the time, actually younger, these older, more successful businessmen were like, "These kids are insane." They literally thought Rockefeller was insane. And so not only did he have a long term view then, but as he starts buying out his competitors, he always wanted to give stock because he was low on cash and he was flabbergasted. He's like, "I cannot believe that the vast majority of them, let's say nine out of 10 of those people I'm trying to buy out, took cash."
David Senra:
And then the author has a great line in the book where he talks about the difference between whether you took stock or whether you took cash, and it said, "American high society in the 20th century would be loaded with descendants of those refiners who opted for stock." That is the difference between having a long term view and somebody saying, "No, I want cash." And then the people that took the cash would get mad at Rockefeller because they saw the appreciation of the value of standard oil stock and felt they were cheated, when he is like, "I gave you the opportunity and you wanted the immediate return."
Liberty:
It's worse than that. Even those that took the stock, most of them would probably have sold it along the way as soon as they hit a bump in the road or something. There are so many companies, like Amazon or whatever, you look at the long term chart and it's like, "Oh, well it's up 40000%, everybody who bought it 20 years ago must be rich." But no, they all sold it along the way. Nobody holds it for the long term.
David Senra:
It's so hard.
Liberty:
And also, I get there's inside bias and it's not as easy as it sounds and I'm not saying I would do it, but it's still what's happening. Most people they churn true stocks in companies constantly, and they don't benefit much from those that do compound.
David Senra:
It's insane.
Liberty:
We were talking about business books, how few we read, I'm going to let you go now because I could do this all day, but I got to have you back at some point, but one I would recommend, and to me it's like the yin and yang of the outsiders, the one that makes the outsiders better, is called The Halo Effect.
David Senra:
I think I read it. It's been around for a long time, right?
Liberty:
Yeah. Basically the idea is that when a company is going well, there's this halo around it and everybody projects onto it, onto the leaders, all these qualities.
David Senra:
Yep. I read it.
Liberty:
So stuck is up and, oh, okay, Toby from Shopify is a genius, he's the greatest ever, and then the stuck is down and there's the reverse halo effect. Everything that's going wrong is because of Toby. Oh, we always knew we didn't have it. And the perception of people changes, the narrative changes with the price. And it's also about survivorship bias because a lot of people who did the same things as the people in the outsiders never made it, it didn't work for them. So you only look at the survivors, the people [inaudible 01:59:15]. So I feel like both books balance each other out, because if you only go all the way into halo effect, well you may as well not believe in anything.
Liberty:
It's all luck. People only say good things because it turned out to work. But someone with the same characteristics is on the streets, living in a cardboard box and so it's all random, basically it's all luck. I don't think that's reality. On the other hand, if you go all the way to outsiders like, "Here's the formula. You only have to be good at capital allocation and you buy back your stock when it's cheap and this and that," it's much, much harder and it's much more complex. So that's why I feel like if you look at the two books together, you get a more realistic picture of you can still learn a ton from successful people and how they did it, but it's not the only ingredients that you need.
David Senra:
100%. And a lot of the lessons are actually more than ideas to copy, it's mistakes to avoid. I really do believe in what Charlie Munger says. I love that his commencement address was not here's how to have a great life, here's how to have a miserable life, and so here's the blueprint, do the opposite. It's fantastic.
Liberty:
Exactly. Well, if you only avoid most of the big pitfalls, you're almost there, right?
David Senra:
That's why I'm reading these books. I'm not trying to be brilliant. I'm trying to be consistently not dumb. And I think if you're consistently not dumb over a long period of time and you don't interrupt the compounding, everything will turn out.
Liberty:
I don't think we can beat that advice, so I'm going to end on it. Thank you so much for doing this.
David Senra:
Dude, I'll talk to you anytime you want. Like we said last time with the conversations we've had that we haven't recorded, it's just fascinating talking. I love talking to people that have similar interests, different life experiences and I come away learning something new every time. Anytime you want me back.
Liberty:
Let's do it again.
David Senra:
All right. Sounds good, man.
Liberty:
All right. Bye.
David Senra:
Bye.
Did you really make your way down here? 🤘 💚 🥃