#76 with James Altucher - Making and Losing Millions Over and Over Again

this episode is brought to you by super side they're are always on design company that delivers great design at scale fast afford and within twenty four hours go to super side dot com slash m m m as in my first million some super side dot com slash m mfa to check them out so the background here by the way sean is i was on james to show three weeks ago and actually aired today yeah because i've been getting people reach out reaching out to me james james is an odd ball i like him he's been around and done all types of interesting stuff he's had books he's got paid newsletters he's i don't know what how you describe yourself but you're just kinda all over the place and you've done all types of stuff and you have a really interesting life and we thought we'd get we thought we'd get them on here and we could talk about anything but do you know about james sean i know about you i yeah i know about them i've read a bunch of stuff i was like this guy's the shit and then i read i read something that was like i think you were talking about bitcoin or crypto at the time and i was like wait a minute is this just a guy who just just sells the latest thing like oh here's the new thing cool i'll show that and i was like oh okay i know how i feel about this and then i've read some of your stories where where you talk about how you made money and lost it all over and over and over again and i was like this guy is very interesting you reminded me of like if tim ferris smoked a bunch of weed and was on the internet i don't know like is this like some some variation of really interesting guy who who you know who's built his brand on the internet you know you always had like something unexpected like it wasn't the formulaic thing like even the fact that you in a comedy club it's like you always have sort of unexpected things that's what i have sort of come to like about you but you know that's my admittedly very loose knowledge about about you do you wanna give some background yeah i mean it's kinda like what you were both sort of referring to i've i've had for better or for worse a lot of different interests which i turned into a lot of different careers and i say for better or for worse because a lot of times i would have an interest i'd build a business i'd sell it i'd make money and then for some reason i would just i don't know i would totally shit the bed and lose everything and i'm not talking about like oh i sold something for a billion and i ended up with ten million this is horrible no i would sell something for millions and then end up with zero or less than zero in my bank account really just zero actually i wish you sometimes it's better to be less than zero and to be zero because if you like are less than zero then that means there's a deal you could work out with somebody like oh i owe you ten million let's work it out and you maybe give me some so i could build then i don't know what it is but like i i think it was a a a young man in the nineties named donald trump who said if you owe if you owe two million to the bank the the the bank owns you but if you owe two billion to the bank you own the bank and but but anyway i would often end up at at zero dollars and be depressed to the point of like suicidal like i had kids to feed i had myself to feed and it's really true when you go from having money and selling a business to broke you find out who your real friends are and for me almost every time it turned out i had zero friends and so i had nowhere to go and and no idea and and depressed and i didn't know how in some cases put food on the table for my kids after having millions and so i had to learn very quickly over and over again what are my interests what can i pursue what's an idea how to be creative and maybe a horrible environment and then figure out how to monetize it so i was a software guy i worked in the entertainment industry i work for hbo i started i combined those two things and i started a a company in the nineties making websites for entertainment companies and then i became a venture capitalist that i started a hedge fund i wrote some software to help me invest and that and then i started writing books about that so i became a writer then i became a podcast and then like you were saying i started writing about much more personal stuff and i think everybody who knew me couldn't believe it like it was almost like they had never seen anything like this before like why they people call me up like james are you do you have cancer or are you about to kill yourself are you about to die like why are you confessing to all these things these these are horrible no one's ever gonna do a deal with you again or or this is too embarrassing and i i you know and then i think since then people have i don't wanna say people copied it people have their own versions of writing about failure and and so on but and then those became i started writing books based on those articles and it turned out i had not only was i building up even more as a writer and my audience was bigger than ever previously i'd written about finance was writing about all this personal stuff my audience became a hundred times bigger and then i started getting more investment opportunities i started get a podcast which became successful i just started getting many more opportunities because of because because essentially i i paid with my vulnerability for freedom and that created a whole kind of career for me and it wasn't intentional i just was sick of writing about all the bs stuff i kept seeing everyone else right about and if you wanna if you wanna be unique you kinda have to say what's unique to you and what was it unique to me was all the times i was scared of death and and depressed and and had to fight my way out of it so on many things to to answer the question i've i've i've back background a lot of things and also i always like trying new things and experimenting and i was everything i'm passionately interested and i like i like figuring out how to make money from it and and getting good at it and so if somebody's listening and they're like okay cool you made millions how did you go to zero so what what what was happening how were you making money and how are you taking it to zero were you just making wild bets or what happened yeah what were your like hit i imagine you've had like three hits yeah i would say it's more like five or six hits again for better or for worse i needed all five or six but the first one again i was working at hbo and i made their website and at the at the time other entertainment companies and other companies they didn't even know what this internet web thing was this was in nineteen ninety five and companies like american express american here's what i'm happened american express would call arthur anderson which was their accounting firm and you know arthur anderson famously went out of business in in a scandal six years later but american express called arthur anderson said can you make us a website arthur andersen said sure well we're gonna charge you millions of dollars arthur andersen would then call another software consulting company and they would say yeah we'll charge you a million dollars the software company would call me because nobody knew how to make a website in nineteen ninety four in nineteen ninety five so i would say sure i'll do it and then suddenly they pay me and my brother two hundred fifty thousand dollars to make american express dot com so that was one of our first websites and i my salary at hbo at the time was forty thousand a year so my brother lana and i we made h hbo dot com then we made websites for everything from warner brothers sony disney bm g all the record labels like we did every gangster rap record label bad boy loud records jive death row inter scope we did the movies for the matrix and many other movies but anyway that was and were these built websites at that time like if you looked at that website today what would it look like is it like a craigslist what you know what that's a great question so no it doesn't look like craigslist i wish it did but design web design back in those so i was a software guy my brother always was a design guy web design back in those days was very heavy so there would be like big heavy images and animations using flash or yep you know some mac i forget the company macro or something and there were there were very heavy designs not that usable and but yeah i mean they're were okay there they were admired back then so the website for the matrix was a great website which you know on on archive dot org you could find or h hbo website was a great website but it it wasn't as functional as all websites are now wasn't very easy to navigate and when you walk away with at the end of that about fifteen million and then oh fuck yeah so cash not not like so a lot of people then you know went public or sold and they got paper and then they died in the dot com bust because the paper went to zero the stocks went to zero so i had enough sense at like the peak in nineteen ninety nine i cashed out and i had the cash in my checking account like i didn't even you mean cash out were you getting like stock in these i mean yeah so no no i sold the company to a company that was rolling up web web agencies and so in a sense that was how we went public like some company that made i don't know vacuum cleaners or whatever decided to get into the internet business in nineteen ninety eight and acquired us and so suddenly they were an internet company and the stock went from three to forty eight and i cashed out with literally at the peak with about a little over fifteen million almost sixteen million cash and and here i was i was smart every step of the way like i knew that the web design development business industry was going away because they were teaching web you know how to make a website in junior high school classes so i knew this was going away i was smart i sold the business i cashed out as fast as i could and then i became everybody you suddenly when you when you make money at one thing suddenly you think you're a genius at everything or at least this happened to me and everybody would come to me and say hi how can what what should we invest in or you know this internet thing you you you have like curly hair and glasses you must know how all this internet stuff you're you look like a technology guy what should we invest in so i start thinking oh i must be really smart at this and literally i poured all this cash back into internet investments after i cashed out of the internet and it it really went and then i also i bought like a huge apartment in new york city and the one thing i was doing that everybody thought i lost all my money on but it wasn't i was i was gambling every single day like i was playing poker for three hundred sixty five straight days i played poker at least eight to ten hours a day i was gonna ask you if you're a degenerate gambler because you kinda have that i mean you you sound like it before you only you a gambler but but but that's just it poker was the one thing i probably should stuck with like i was doing well at poker and it was right before the poker boom took off when i decided you know what i'm just gonna focus on starting new companies and internet investing and i stopped playing poker like in you know right at the end of nineteen ninety nine i started a venture capital firm and i just started investing money and was was your firm all your money so your firm no no we raised we raised two hundred million dollars like holy fuck that was the other thing too i didn't have any experience doing any of this stuff i didn't know anything i i'm trying to remember all investors cs first boston deutsche bank like all these major banks gave us money and then another company in invest corp which is a major private equity firm gave us a hundred million and and then i started investing my own personal money side by side with the fund and in other investments and i started buying stocks all the way down so how sources zero from fifteen to zero how long was that i was losing about a million dollars a week in the summer of two thousand and and i just didn't know what i was doing and it wasn't even that i didn't know how to invest i didn't know there's so many other skills to investing than knowing what companies are good and what companies are bad like i didn't understand risk i didn't understand money management i didn't understand you know had to i really didn't understand anything then about investing like i was an idiot and i went to zero by right around mid two thousand one i put up my i was desperately putting up my apartment for sale because maybe i would have some money left i stopped paying my mortgage and maybe i would have some money left after putting this apartment up for sale i lived two blocks three blocks from a little building called the world trade center and we were getting an offer on september eleventh and of course many worst things happened that day then me not getting an offer from my house but nine eleven happened and we couldn't sell then because we were part of the crime scene and you know just i went totally were broke were you hon i was at the world trade center so my god which i don't really i don't really talk about because a it sounds unbelievable but b it also many worst things happen to people to many more people than me that day obviously but my business partner and i there was a dean in d luca in on the first floor of the world trade center we ate breakfast there every day and then we would day trade the markets and at that point i was starting to come back a little bit from day trading and i written some software and and so on and then we're walking to my home where i had my office and we my partner turns to me and says it's the president coming into town today because this i look up and there's this plane that's just like right overhead and then boom we watch they go right into the like physically we watch and not on tv but like physically we saw i go right into the building and everybody on the street instinctively duct and and your your brain does weird things so my i started thinking myself like my my business partners name name's dan he said we're we're we're being attacked and i'm like no no no that was that was just an accident like and no one's no one's it's too early no one's in the building like my brain was telling me this even though it was a quarter to nine am and you know out remote control us whatever it was a seven forty seven into the world trade center but that's what my brain was telling me so we run to the fire station and we say we wanna help and these guys throw two fire suits at us and say get this on we're gonna go straight over there and we start putting it on but then they say wait a second are you guys fire man and we're like no we just wanted to give blood or whatever we could do and they're like no no no only fire man and that fire station was the duane street fire station a hundred percent of those people died who went to the world trade center that morning and and then from you know is there's a a bad day but that kind of cli me losing everything also because i had been invested in the stock market that morning and boom everything kinda went to went to zero after that and then i was just desperate for like a year and a half couldn't sell the place couldn't you there were no jobs i was an idiot nobody would i had no friends anymore and you know i had to i had to teach myself how to invest so i wrote some software where i took every piece of data about every single stock stocks since world war two and looked for patterns you know when would i would have my software find statistically significant patterns where trades were good so i would try to model let's say fear and greed in the markets and and and it worked pretty well doesn't it wouldn't i don't think that strategy would work now but it worked that then because there weren't there wasn't that many quantitative investors in the markets then this was kind of the beginnings of that and so i was very successful with it and that kind of kept me alive and that's how i bit by bit i started learning about investing this gave me time to actually learn the skill and and talk to people who are experts and professionals and and really learned and i started writing about investing and i started going on cnbc and i started a hedge fund and i started i wrote my first book about investing and so gradually i built these two careers one in the hedge fund business and the other in writing about investing and going on cnbc and then i built so i was doing deals also then and making money and then i built a a website that combined my interest in web development with investing me like a social i called it the myspace of finance because my myspace was big then and sold that site and that was like my next big hit sold that for ten million and you know and then a year later i was broke again and that the things like that just kept happening alright this episode is brought to you by super side alright so here's the deal i'm incredibly impatient like horribly horribly impatient and if i get an idea at midnight by eight am the next day i want it done you know but that's really hard because if something needs to be designed where am i gonna find a designer at midnight try to make the thing brand to life so you know i don't think alone other startups even huge companies need design help fast and they just don't have the internal resources or expertise to get it done so how do you get reliable design done without dealing with expensive agencies and lots of freelancers you use super side that's our sponsor for this week just go to super side dot com slash m f m and tell them what you want they have a team of designers that can get it done fast you know they are twenty times faster than hiring a designer and fifty percent more affordable than a traditional agency so if you need high quality designed done fast try super side lots of fast growing teams that are stretched are using them already check them out super side dot com slash m m i've used them before i love them check it out there's a lot going on here but it's you sold two companies so far well you've also sold your newsletter business too right yeah so so that was a third company and i've also sold companies that i was either i've i there's many companies i've been an investor of that have been sold by this point and then some companies that i'm like a a c cofounder of that i've that i've sold i was like involved i've been involved with everything from like i'm a mental rehab facility that's sold for forty one million and then that was in two thousand four i did go broke after that and then was stock picker the stock site and then i was an early investor in buddy media yeah which peter t invested in mike las i was the ceo mark pink who started z was an investor in it and we all were the seed investors at a four million dollar valuation that's sold to salesforce for about seven or eight hundred million i had i had a company today that i was a investor and that just it just kinda did a or they're they just announced the reverse merger they're going public so hopefully that will do well but i've been i've been an investor in a lot of companies that have done well because like because i finally figured out the most important thing about investing that i missed before and that since then my private investing has done very well and i don't really do public investing well what's that thing that one thing is that i am the worst idiot in the world if if you're in a room with me i'm the stupidest person in that room and what i mean by that is take buddy media as an example i didn't have to do any work once i invested because peter t was my c investor so it's not like they're gonna call me for advice they're gonna call the people smarter than me and also presumably the first investor in facebook would know what he was doing when investing in a an facebook marketing agency which is what buddy media was so so i always if someone a lot smarter than me says hey i'm investing in this company i don't even have to do any more work i just sent the check because i assume and i'm always correct when i assume this he's done or she's done all the due diligence all the hard work he's he's got ph working for him that are a lot smarter than me if worse comes to worse he or she can make phone calls and get this company acquired which is what happens and i've done very well with just that one strategy that if someone a lot smarter than me is investing at the same terms as me that's important too then i'm going to do well and it's almost like a hundred it's not like a normal success rate it's like a hundred percent success rate when you do that and and the other rule is if they ever call me for advice then on my spreadsheet where i keep track it these i assume their value is zero and i never call them back because if they're if if they've reached so far down the tote pole where they have to call me for advice that means they're screwed so and this secret works like it's amazing how well that one technique works and so that allows me to invest in at companies ranging from oil companies to tech to law enforcement to the company today is an e dysfunction drug i don't that i don't know anything about biotech like the yeah but as long as someone you know if if someone calls me and says look hey i've i've started the last three e dysfunction drug companies and they've all done well now i'm investing in this are you with me here's my check i don't need to know anything else i think i think sean's gonna wanna ask you questions on nature investing and i wanna ask them and i wanna hear his answer or your answers to those questions but before we get to that what about selling i mean so you've sold more than a handful of businesses selling companies as hard most people will never sell one how are you what how are you able to sell so many you think like you know that that's a that's a great question because and let me ask you i don't know if we've talked about this have you ever sold a company i had a small like hundreds of thousands of dollars sale for this company the hustle we had term sheets and i walked away at the last minute i've had two or three term sheets and i've walked away from them and i've never closed the deal yes so and know i bought i've also helped buy companies too yeah so it's a similar it's similar skills on both sides of of maybe slightly different but people don't realize selling a company is very difficult like it's there's three skills there's starting a company there's building it and they're selling it and sean stole his company too to twitch yeah congratulations for you yeah and you so you know what i'm talking about like you'll you'll your company up for sale and everybody's and you meet a bunch of people i don't know if you met a bunch of people but like i would meet a bunch of people each time and you kind of there's this courtship and you kind of fall in love with each other like just like in a courtship and then there's and then there's suddenly you move into a different period where lawyers take over and you're waiting it's a waiting period and it's a due diligence period and it's a very painful period because before you were in this like massive selling and dating mood but now you're like living together and you're getting to know each other and you know you don't want her to figure this out too fast and you know before she really falls in love and you know and all that dopamine you get when you first meet has gone away and it's by the way that's when i started this podcast was during the due diligence period because i got so itchy because i was waiting and i was like oh my god i'm i'm gonna jeopardize this deal either because i'm gonna push too hard and just because i'm impatient or i'm gonna go start another business which is the worst thing i can do well while i'm trying to sell this one sounds like i need to do something and so that's why i started the podcast was during that due diligence period yeah that's smart because i would just do nothing but wait and it's it's it's a painful process and the way you sell is first off you have to and this is not you have to be sincere the whole way through you have to have a vision that matches their vision very strongly and it has to explain why you would if this year business is so great why do you wanna sell like there's that inherent contradiction in selling a business and i was always aware that i would you know in every business i've sold that i would be better off with a better capitalized partner and now maybe i would limit my upside but you know the first time you sell a company for millions and then the second time if you're broke the second time you sell company for millions and then the third time it's okay it's to that sell for billions because you wanna get that initial chunk but you also have to say look together here's how it's one plus one equals three and you have to be really persuasive on on why one plus one equals three even for you personally like you have to be able to express that this vision is gonna benefit you personally if you partner with this other company and and and and and it has to really make sense and then and then of course you have to survive this waiting period you have to survive the initial period where they're still checking you out but now you're together and you have to integrate and get a along and you have to keep all your employees because usually there's some back earn out or something like that like the every you have to understand deal structure so you're not ripped off it's very easy to be ripped off by lawyers in a deal and people don't realize that and you have to be you have to have some skills at negotiation which negotiating is one of those things that nine out of ten people think that they're above average which is impossible like you have to be four out of ten only could be above the median and only one out of ten is really good enough to to sell a company properly and so i had to learn the hard way how to negotiate and like when they come to you and they say well how much do you want for your company that's a very hard question to answer because you don't wanna sound greedy and you don't wanna sound desperate and you don't wanna sound and you don't wanna under price yourself so there's also sorts of negotiating techniques that you have to use to to help them answer that question in a way that works for both sides it's not just do you value your companies on a multiple of your profit or revenue or was it if we you use our stuff with your audience or your current products it it will create this much value so that also is a really great question because there's there's three ways to value a company right the one is of of standard industry multiple on your earnings and cut it in half by the way because no one's gonna pay the maximum you cut it in half so they everybody wants to get a deal so like if if you have a profitable company and it's an industry that trades on the stock market for twenty times earnings then your company is probably your last year's profits times ten the twenty divided by two that's just a basic formula or you could do what you just said which is hey and i learned this for my second company i didn't this for my fur my first company was profitable unlike every other internet company and so we sold for about ten times earnings which was was was a mistake the second company was like i did evaluate it like how you said which is if if you if we put ads all over here and you're driving this amount of traffic and we monetize those ads and then you cut that in half this is what we're worth and i the second company i sold on the basis of that the challenge there is with the other company you work out this formula for how you're gonna value your company based on their their them helping you build your earnings and the challenges is then you fill in all the variables they know the variables better than you so you have to make sure when you're negotiating the formula that and then you agree on the formula that you understand the variables enough to that it works out to what you want i didn't do that part properly on my second negotiation and then the third way to value things is you look at other companies acquired in the space they sold for this we're bigger so we should be this now that's kind of a bs way to value a company but that is how people value companies often particularly in the in the tech sector like gi i don't know what they how they value themselves but certainly wasn't off of earnings i don't think they had twenty million dollars in earnings my guess is they were losing money so so they probably value off of something some kind of comparable deal in in the internet yeah because and then ten sold ten which was if he's competitor just sold to google a year before for a little less than that oh who was their competitor ten company called tenor t e n o r they were and and their competitor yeah it just as a aside is it true that gi was the second largest search engine in the world that's what they're saying yeah they don't they love the largest is yeah they love to say thought youtube was the yeah so youtube is number two and amazon it would be is three amazon four right like so yeah depends what you call a search engine but i i did interview the founder in new york and it is huge it was just there was no way to make money off of it really yeah i had that issue i was a i was a a seed investor and on the board of bentley so bit had about five percent of the internet traffic every day running through it and for the life of us we just could not figure out how to monetize it like it was impossible and they did exit the a private equity firm bought it but it was like a a two or three x which is not really what you're looking for an a angel investment and so james when you lose you lose all your money the first time you call back you make money again doing something else you lose it again i mean obvious question at some point where you're like okay rainy day fund two million bucks going into this account and hey i lost the i lost the keys just you know like just a stash some money away what surely your wife was like come on man yeah how did you get away with not just saving some god money i i got divorced so right there you go good was a problem and i lost the second house that i bought and no i i kind of finally i think it was the third time or the fourth time i finally looked back and i said what was i always doing right on the way up and what was doing wrong on the way down and there were things in common which is just that i kind of i kind of would just give up after i made a lot of money i kinda say phew i i did my job as a human now i can just let my health go away my relationships i don't care about anymore i don't need to be creative anymore you know i don't need to have any kind of sense of spirituality and i would just whatever and i just would lose all sense of things and and not take care of myself and not just physically but like emotionally and creatively and so i just made it a very concentrated effort and it sounds sort of cliche and almost self help help you a little bit but i really would make a concerted effort to keep myself physically healthy to have only good people in my life and quickly eliminate any talks of people like a like the speed of light no second chances and creatively i i just started writing down every single day ten ideas a day like and it could it could be business ideas it could be writing ideas it could be dumb ideas it could be ideas for tv shows it could be ideas for how google could be a better search engine and then i would arrogant send them to google but the whole idea was not to have good ideas but to just practice this creativity muscle or else it would atrophy and literally like i'm not i'm not trying to sell anything here like literally within months of writing ten ideas a day down it it felt as off my whole brain was rewire and i would just i would bounce back so quickly with ideas it was just non nonstop and then the aspect of sometimes i would write ideas for other companies and i would send them these ideas if i thought they were pretty good and you know i would always get new opportunities because of that like i would visit facebook amazon linkedin google cora airbnb and just just the this one process of writing ten ideas a day down for the past twelve years has been such an incredible thing for me i can't even praise it enough so the other day just for fun a friend of mine recently took a job at disney plus and he was just like because of this lockdown we're not getting any good ideas pitched to us so i'm like well what are you looking for and he said we're looking specifically for un scripted ideas that would cater to nine year olds so i wrote my list of ten ideas the next day and i sent it to him he forwarded it to the i don't know how like he forwarded to the head of reality programming at disney and at right after this i'm meeting they they got excited right after this i'm meeting with disney to go over the ideas that's been a while what was there as someone who's gone up and down and up and down can you explain what your happiness levels went like what the range was from like let's say zero dollars to ten thousand dollars to a hundred to like one million to fifteen million like what what's the difference in your happiness and fulfillment and things like that oh my god so and and really we're just talking about the first time because then there's different it's different each time but i had zero dollars in the bank and i was living in a studio in a astoria of queens which is you know was not in the nine early nineties it was not a nice part of queens before that i had a roommate in a in a apartment smaller than the room you're seeing me in and i was paying three hundred dollars a month i was working at hbo for forty thousand a year i was i had a a a suit in a garbage bag that i would pull out every day and put on the same suit seven days in a row and walk over to hbo and then we did the very first sight i did was this diamond dealer and he gave me seventeen thousand five hundred dollars in cash this is nineteen ninety four and i had i had never had seen any money like this before seventeen thousand five like it almost was like i couldn't believe this was actually happening and i walked over to the chelsea hotel on twenty third street was like this sort of famous arts sea hotel but also really run down and i gave the owner like the whole bag was a paper bag of seventeen thousand five hundred dollars and said can i live here for a year and he said are you a drug dealer and i said no i work at hbo and he let me live there and i was just so happy like oh i'm living in manhattan now and in this cool hotel and i felt like part of something i felt like part of a scene i felt magical and that was an amazing moment and then when i sold that first business i felt good but it was weird because it was so much pain closing that deal like i was so stressed out in the months prior to that and i i got burnt out and that's when i started playing poker every single night just to kind of escape burnout so i don't know if i was happy or or just more escape then and then when i started losing and every time i lost every single time i've lost everything i was suicidal and in part for practical reasons i thought maybe my my kids could live off my life insurance and particularly that first time they were babies so i figured they wouldn't remember me but they'll definitely remember the life insurance so fortunately i i i couldn't figure out how to do it in such a way to not hurt myself and i never did it and you know i was very depressed though for a long periods of time but each time the period of depression would get faster and faster and you know i think one of the most probably important things i've been learning you know i used to think learning is like you know in school it's like learn math and then as you get a little bit older you're like oh maybe should learn some skills like sales or programming or whatever and now i'm like oh fuck all that the only skill that matters is sort of managing my own psychology my own emotions and so i started to you know figure out what works for me right like cool if i exercise here's how i feel if i you know eat this if i make this decision if i listen to this song whatever i started to find different little ways to manage my own psychology do you have a sort of any things that you've worked on or you figured out that help you either you know boost up gratitude or like you know get out of that depression fun what works for you or or do are you conscious about that yeah very very much though and that was part of this realization that every single day and i even i it it's i call it my specific daily practice and it's it could be different for each person but i always have to ask what am i doing to eat move sleep so that's physical health i always try to stay healthy like i'm not i don't i'm not an athlete i'm not a you know i'm not used to working out or i mean i'm fifty two years old i've gotta stay as healthy as possible and so e every day i have to make sure i'm eating well sleeping eight hours and and moving and now with this pandemic lockdown is i have to go outside and make sure i i have some outside time and then emotional health just what how much are are the people around me toxic or not and that is the key to emotional health nothing else and then creative health am i writing ten ideas a day down because creativity not only is it re rewire your brain to be more creative you know or that muscle but it also triggers a lot of dopamine when you're creative and it just if i do it in the morning that work on my ten ideas a day list i've got this surge of dopamine that carries me at least till like one or two in the afternoon and then spiritual health is just am i trying to control things i can't control so that's a very important part of spiritual health so you see people in twitter all day long oh man they should open we need to open up this economy right now where we need to lock down all the people over there like on both sides they're trying to control things they can't control and they're all day longer twenty four hours a day on twitter and even during this pandemic i felt like i was getting a little into that and then i pulled myself back and realize it's just wasn't i can't control this so it wasn't healthy for me and so always avoiding trying to control things you can't control is very important and that really just those four things physical emotional creative spiritual just those four things if i attend to them every day i i keep at a very high state and even when i'm even when i lose money now or go up in money i it keeps me very you know contentment and well being are much more important than happiness happiness is very as the she goes is very fleeting but well being you build a real foundation of well being and that and that sticks with you so what's your business now james that you're the like what's like your job now well i do i do lots of things so i mean i i write every day and i'm i just finished a book that will be published by harper collins in a year i do a podcast i i i'm still involved in my newsletter business which i sold i'm i'm a private investor in about two dozen private companies so i'm but remember i'm not active in those because they don't i don't want them to want my advice so it's very very passive but i have to make sure i'm enough in the deal flow that each year i can still put a little bit of money to work because you never know which year you'll find the next uber or whatever and and a lot of my time the past five years until this lockdown has been on stand up comedy which makes you know which makes minimal at best so then did did you're not for your angel money that came from like your initial sale really really now most the way i make a living in the way i built up is just from private investing because pretty much every company i've sold i ended up losing all or most of the money but private investing is now the way i've been able to make a living most of all so on the angel front so what percent of your money do you of your like net worth do you put into angel deals yeah which is a risky ill liquid thing i'm very much now and this is this was the key point that made a big difference for me investing is that risk is the most important part of investing whether you're investing money or you're investing time risk has to be managed and thought about first and foremost and the way i remove risk is two ways one is as i mentioned i always invest with people who are smarter than me because i let that i outsource some of the risk management to people who are professionals at it and the other way i manage risk is position size so i never invest more than one to two percent of my net worth is the maximum i will ever invest in any company right now i'll let i'll let the investment grow to much more than that it's sort like what warren buffett says if you've got michael jordan on your team you don't trade them just because he got better so i i i like it when good private companies don't exit because that means they're growing still at like fifty to two hundred percent a year and as long as they're doing that i don't want them to exit what was your biggest angel or private company win so far which which company yeah it's it's it's hard to say because a lot of my investments are doing really well but they're still private like i have deals i invested in two thousand nine which are still doubling every year but they they're they're still private but that buddy media one you know four million to seven hundred million was pretty good ticket fly was another one that i invested in which i was in the sea round of that and it's sold for four hundred fifty million i invested in another one which is public now it's a law enforcement company they have a a gun that if they we i was sort of a c cofounder of this it started in the living room i was staying at and the there was a hashtag black lives matter was the trending hashtag and so we tried to solve that problem basically so we found an inventor who made a gun that fires a ke cable at you at the speed of sound and it wraps around you and the more you try to struggle to get out of it it squeezes tighter and so like a batman i was gonna say straight out of batman yeah and even the the one of the founders of taser the president of the company now you became the president of the about a year ago and we went public it's it's a really great company it's still in in growth mode but they're starting to to sell quite a bit and that that's been i'm not exited actually i'm i own the shares of the public company and i'm not planning on exit hopefully ever because it's it's it's what's the name competition the company called rap technology technologies i'm not trying to push the stock or anything so i don't wanna even mention that sure the stop stock symbol but it's it's it's just such a great thing to invest in and be a part of the founding of something that's literally saves lives every single day so so can you can do you have the journal with you that you write your ten ideas can we can we do random let's let's a lot of time is like what what do what's interesting to you right now james a lot of times it's in my email or there's my pad i do it all in waiters pads or i do it in my email so if i'm out at a cafe i do it in a waiters notepad and if i do it at a sitting on my computer i'll do it in my email well as a as an angel investor and i don't know if you're ever gonna start another company again maybe you are maybe you aren't but as someone who's always scheming what what do you have your eye on now yeah i have no problem even saying what i'm scheming at because so i've i i haven't considered starting a a cup new company in a very long time but i have considering it now and one of the ideas is i feel it's a shame that content is not monetized unless you're like the in the top one tenth of one percent of content creators so you have to be like you know logan paul to monetize your youtube channel and the other twenty billion people on youtube even if they have one video that goes viral they can't monetize it so or or like even if you have a if you have a tweet that twenty million people see but you have only three hundred followers you can't monetize it so i've been figuring out a way to use these ecosystems to allow people to monetize content so that's one idea i'm working on actually physically working on it and another one involves making i a a derivative of a of a board game that i like but in general i don't i don't come up with business ideas i come up with like like i said the other day i had this challenge like of i'm gonna challenge myself to come up with tv show ideas that nine year olds would like and i did that and i sent it off and usually i don't send it off or sometimes the ideas are ideas for books i could write or if i have an idea for a book i could write i the next idea alright a list of chapter titles and again most of the ideas are supposed to be bad because you can't call up with three thousand six hundred fifty good ideas a year and it'd be foolish to think so so i'm just trying to come up with bad ideas what i'm trying to make my brain sweat so for instance one idea list that is particularly hard is and this is the one i wrote this morning is ten good positive things that have happened to me personally because of this lockdown those aren't actionable ideas but it was actually hard to come up with ten like one through seven is always usually pretty easy but eight nine ten is usually makes my i feel like my brain sweating and but yeah but a lot of times i'll come up with business ideas or i'll start to say to myself what industries are gonna be attractive after this that are unexpected so you can't say the obvious ones like obviously you know video communications technology is gonna be attractive businesses after this instead i would think what are the ten ways i can improve on zoom which was the is the most popular one right now so that will be how i exercise the idea muscle around zoom and for your content idea is there a comp out there like is there somewhere something out there that you'd like man this like little behavior that some people are doing i think that if we just blew this up or system this this could actually have legs yeah so sort of so i'll do something what i'll call what i call ideas sex so i'll take ideas from two completely different industries and again i've been a professional in many different industries again unfortunately or unfortunately and i'll combine ideas to see if after idea sex there's a little idea baby that could work in in what i'm doing so for instance if i go to a restaurant and i have a pretty good meal that meal could get monetized and if the waiter or our wages just treats me nice they might get they they have they they have better chances of monetizing their behavior than otherwise so there's lots to learn from how monetization works in the bottom third of the economy in other industries so a waiter is the bottom third of the is in the bottom third of people who work in restaurants or involved in the restaurant industry so how do they monetize themselves and there's a lot there's a lot of industries where you can say hey the bottom third of this sector or this space or this country they don't make any money but but they could maybe and you could look at that as examples of you know how do i how do i lighten up this third by allowing them to collect money this that's gonna be always a huge industry square is a great example square took the mom and pop store that couldn't accept credit cards because no bank would trust them and square enabled them to accept credit cards so square is the only company in the world that does that and they became i don't know a twelve billion dollar company because they were able to monetize the bottom third of you know mom and pop retail stores and so that's one model for creating a billion dollar company and then i might use ideas sex to generate the ideas like oh how does every other industry monetize their bottom third let's apply it to youtube and see what happens you know and then i'll look at competitors like okay there's patreon but you have to patreon has various hurdles you you have to already know you're gonna be a good content creator and you have to come up with awards and you have to interact and create content specifically for patreon and so so patreon has problems so i try to look at patreon i think yeah like so stupid if you're a content creator patreon could be a great way to make money but it's it i find a lot of content creators once they have a big audience find patreon to be more annoying than helpful but advertising also is annoying so you know finding advertisers yourself and outsourcing all your advertising to youtube could also be annoying so you know there's various problems in the current ways people monetize i mean you guys monetize a news so subscriptions another way but that puts us some friction in front of your subscribers and so you know i've done newsletters i've done you know advertising support and media like podcast podcasts or websites and so i'm familiar with all these types of monetization and i don't know all these things together help me make my ideal list what's your favorite waste ways for monetizing content for me right now i don't think i've ever really monetize content the way i would like to like subscription but okay so but let me answer your question subscription is the best way to monetize most content but again you have to plan for that in advance you have to say i'm gonna make a subscription called the a subscription product called the hustle with with new ideas and trends every week you've made by migrate great analysts and people are willing pay a dollar a month or whatever ten dollars or whatever it is and subscriptions is a great way to monetize because you're not always chasing advertisers it's this annuity that comes in and helps you even survive in a recession environment or like right now so i love i think subscription is a whether it's an online newsletter or an online course or subscription community like you know let's say the trends facebook community i think subscriptions my favorite way to monetize but it doesn't solve the problem of monetizing when you're not already in the top one third of content like like you guys are by in the top one tenth of one percent of content you're going to monetize and do very well no matter what model you choose whereas the the bot someone who writes a newsletter about i don't know you know some obscure kind of tae quan or whatever they're not gonna be able to monetize a newsletter necessarily or someone who's gonna monetize how to mow the lawn better is not gonna be able to monetize but might have one piece of content that really stands out and if you were you know i think you're you're pretty much one of the top one percent or or better of people at building new businesses or audiences right i think you've you've done an amazing job of building up audiences that will follow you through one medium podcasting blogging email whatever you want let's say you're twenty one years old again today you know everything you know now but nobody knows your name how would you go about building an audience today yeah today i well first off let's assume i have something to say you have to have something you have to have a unique perspective and again i'll i'll i'll take i'll take the this podcast as an example my first million it's the name of his podcast right yep so there are other podcasts about there's a there's a podcast they eventual millionaire which talks to millionaires about it but most of these other podcasts unlike you most of them are started by people who haven't yet sold their first business or haven't made that first million so their unique thing is they're approaching people almost as if they're asking for advice how can i do it you did it how can i do so that's a a different your perspective is you've done it so you're able to more in a different type of nuance drill down on that and you have something unique to bring out of people and and say to people and so on and and and sam for you you've spent so much time studying trends and side hustle and the gig economy the hustle is like the best email newsletter out there because it's you're your the voice of it is so unique it's it's the go to particularly during this lockdown it's it's amazing people ask me hey what are some side gigs we could do from home the first thing i always say is check out the hustle and you'll get a ton of ideas even in our podcast managers you're just like spitting out ideas that i've i've i've run with and completely stolen from you so that's the other thing about having good ideas that you could steal them from people but you know i think you have to something you have to have something unique to say so at the age of twenty two you have to question well do i really have something unique to say and often when i write something i don't hit publish unless i'm afraid of what people will think about me after i hit publish because otherwise that i'm probably not saying something new or different or you know there has to be i to challenge myself in some way to create need content but give it let's assume you have something unique to say or some expertise you built up by the age of twenty two i would go on quo and just answer every question i could i would participate on linkedin groups again answering every question i could i would go on groups like the trends group or other facebook groups and you know a lot of people ask questions i would go on podcast paradise which is a subscription community about podcasting i would a lot of people say hey what you know how do you get good guess or how do you what kind of microphones should i use i would answer every question i could and establish expertise and then i would again i'm thinking if i'm twenty two year old i'm not thinking this way now and then once i had some expertise i would branch out so now have you just you just saw me everywhere you looked you saw me cora linkedin facebook there there's james again answering questions now i'll start going on sites where there's a little bit higher barrier to create content so like a forbes dot com or inc dot com or tech crunch or whatever and and this is what i did do and i started would start writing our yahoo finance i'd start writing articles for them so now people see me in a more of a position of authority so it's not just to have like a number of certain number of followers on either ko or twitter or linkedin or whatever it's like oh i i just saw james on cor now i see him on cnn dot com what's he doing there and so so i establish some authority then you gotta create an email newsletter that's free ninety nine percent of your content has to be free so i would create an email newsletter and always just at the end of my articles i would say hey wanna hear more from me i have an email newsletter sign up now and i'll give you my book the top twenty hustle for twenty twenty and just for free and you know just and then i would just start putting all my articles on my free email you and then i'd start at some point my level of expertise should be big enough that i can start four pay subscription newsletter like whether it's about trends or stocks or some physical activity or and and this is the exact thing you did i mean i think that from an outside perspective i mean it looks like your newsletter business makes tens of millions in subscription revenue yeah so so i did do that and again it wasn't the first business i started that would have been a good first business if either the question was if i was twenty two what would i do that is how i did do that that latest business that i sold and and it worked that model works and i encourage other people start online course like a friend of mine has an online course that she started this person is the most introverted shy person i know know and she started a course on how to be noticed by the media how to become a media expert and she priced it at seven hundred dollars she sell she opens it up for like three days every year sells another thousand and make seven hundred thousand a year and and you know lives in a cheap country she moved there just to keep expenses down and you know this is a and it and it's just a course so it's not an ongoing newsletter i think an online course is better actually than newsletters and i think affiliate deals are better than also creating an online newsletter so so if i were to redo my business i would do it over slightly but you know that that's what i would do if i was starting completely from scratch i think i've seen that methodology work over and over again and it is the advice i give people because content creation is is king like that is always there's a demand how many times have you've been asked this during this lockdown man what what show should i watch i feel like i've watched everything content people always want more content all the big content creators spend hundreds of billions on content just on sick sitcom this year so there's so much demand for for content and you could provide value like if you really again ninety nine percent of your content will still be free that's key but you could provide extra value that it's worth paying for like for instance i forget if i get i think i get the hustle for free right like that's a free news newsletter trends is not trends is not but but the hustle you convince i love the hustle and that's where most of your content is yeah but it's it's the quality and the voice in the also that convinced to me okay i need to get trends and i'm happy to always pay for it and it's or it mean it's just but we got yeah yeah but if put there's value like if you don't provide value then people are gonna realize pretty quickly that you're useless like you always have to provide value and have something and have a unique perspective yeah i think that is the key in the hardest part is having the unique perspective everything after that is sort of the textbook you know you run the playbook after that of how do i get it out there for free how do i collect of you know of a customer relationship and then how do i monetize for the most hardcore but the perspective this is hard how do you shape that i'll i'll give you another example like do guys play fantasy sports at all yep okay so i do not play fantasy sports i knew i i don't even know the roles of football but matt barry who's the fantasy sports anchor at espn and he also hosts this tv show the fantasy show at espn that guy was a hollywood screen reader he was writing movies and tv shows and he hated his life and he quit that he's making a ton of money quit that started writing blog he just loves sports and fantasy sports he started blogging about that for a hundred dollars a blog post just kinda broke after all this and quitting hollywood moved away and hundred dollars of blog posts was the most he can get but because he had this writing scale from his hollywood times he's he had a he quickly got a huge audience in fantasy sports then he built a four pay subscription site and you know after producing most of his kind for free espn bought it and he kept moving up the ranks there and boom he's got he's done so much better doing what he loves at fantasy sports and monetizing it almost the same way i just described and he's so much happier than when he was writing movies which is a lot of people consider the dream job i love it we should we should wrap up in a second james this was awesome i i gotta admit you were way more legit than i expected you know i thought you what why did you expect me not to be a legit well he i've already i already called them out on this which last time or he call himself out he goes so when his company was acquired sean james is like dude my content legit i'm legit i do it all but the acquiring company admittedly is incredibly aggressive with the advertising and sometimes that kinda makes me appears though i'm one thing when i'm not yeah and and and and by way it's a very interesting topic how aggressive you should be with your advertising and they're so who's this french philosopher he is this theory that even the good guys need to use machiavelli tactics they need to use the because otherwise if i just said hey guys i have a unique perspective on bitcoin please listen to me there was so much aggressive advertising out there they they would have drowned me out and i would have not succeeded in my mission which was to inform people what i thought was a correct view of bitcoin and then what would have been the point right so sometimes and but but it did it did cost me though like doing because my ads were so good we dominated i mean that was the reason facebook google and every place stops shut down crypto ads is because of my ads yeah the you know that was definitely a little piece of it but i what i actually meant was most of the time when a guest comes on i think to myself was a really successful person but man they're they're you know they don't tell great a great story you know they they do not bring you know sort of energy stories and also you know some unique insights of the audio you i'm imagining i'm a listener right like during this interview you talked for most of us i was actually you know listener number one for this podcast episode and i would have liked this one and so i i can't always say that that's the case with all of our guests but you brought that that's all i really meant when you're legit which is hi you know i raised the bar for the podcast which is great excellent thank you so much so james this was awesome if people wanna say hi to you is twitter your your go to method no i'm james alt on tiktok that's oh my gosh that's where that's where you could find my absolute best content now it's tiktok no one went fifty year old dude dance rihanna no james perspective oh yeah i'm not dancing i did do one one time i danced and someone said someone literally said commented dude this is not why we filed stop this yeah so i took that one down and i haven't danced since although if if push came to shop shove and i was drunk i when i was twelve years old i was a semi professional break but that was a long time the comedian bitcoin answer well that's not asked man we appreciate you coming i i'm looking forward to joining you again and you coming back to us and and develop a friendship it's awesome excellent yeah and and sean yeah definitely let's have you on the podcast as well so i'll i'll cool i'll exchange emails and we'll figure it all out sounds good thank you alright alright you guys thanks a lot sir talk you soon bye bye