Fastlane AMA: James Altucher; Startups, Publishing, Bloggin More...

[biophase]

Hi James,

You have mentioned that you don't want to own a home and that you invest only 1% of your portfolio on an individual stock or fund. What does your net worth asset allocation look like? Do you own real estate rentals such as apartments? Do you hold mostly cash? stocks and options? precious metals?

What do you think about diversifying into owning small stakes of other businesses? Not as in public stocks, but for an example, owning 5% of a Jimmy Johns. Should that be something to think about as we try to diversify our portfolios?

 

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[Rawr]

How do you control your ego?

 

[J. Altucher]

You have mentioned that you don't want to own a home and that you invest only 1% of your portfolio on an individual stock or fund. What does your net worth asset allocation look like? Do you own real estate rentals such as apartments? Do you hold mostly cash? stocks and options? precious metals?

What do you think about diversifying into owning small stakes of other businesses? Not as in public stocks, but for an example, owning 5% of a Jimmy Johns. Should that be something to think about as we try to diversify our portfolios?

40% one public stock. Started out as 2% of my net worth but it grew. As Warren Buffett once said, "I don't trade away a basketball player just because he turns out to be Michael Jordan".

30% private companies that I invested in diversified over tech, biotech, energy. About 20 separate investments.

15% other public stocks. Two of whom have grown much higher than the 2% and maybe another 5 or 6 after that.

15% cash. I don't like to run low on cash. I like to always be able to take advantage of good opportunities.

 

[J. Altucher]

How do you control your ego?

I think ego kills writing and I like to write. I also meditate, read inspirational books, and know every day that I can lose everything, including the people I love if ego gets out of control. I've already been through losing so much I don't want to do it again.

 

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[J. Altucher]

So James, do you ever think about releasing a biography of yourself someday?

I sort of feel "Choose Yourself" is that but I'm probably going to do a followup (working title is "Bad Behavior") with more personal stories.

By the way, I recently finished a very strongly written memoir: "The Glass Castle" by Jeannette Walls.

Thanks for the Bernie Mac suggestion. I will read it.

 

[Joe Cassandra]

Hey James!

Love your work, I got introduced to your stuff from your interviews with Srini on BlogcastFM.

I've read your stuff, I've read MJ's stuff...inspired by all of it. So I have the knowledge and mindset.

I'm co-host on a podcast where we get to talk with great leaders/millionaires. So I have the contact with influencers.

I've tested ideas and didn't drum up any interest.

My wife and I started going to bed early and waking up early as you've mentioned, as well as exercising. Feel much better each day for sure.

I try and write down ideas everyday, but rarely can make it to 10.

I feel like I need to come up with an idea that is both market-driven and I'd be interested in doing it everyday, but not sure if I'm using that as an excuse to not dive in or an actual roadblock.

I think it's an opportunity cost problem, I don't want to start on one idea, than suddenly have a great idea and regret not pursuing that.

What am I doing wrong? Am I over-thinking the whole idea part or just making excuses?

Cheers!

Joe

 

[J. Altucher]

Can you elaborate more on this bolting-on strategy?

I'll give a generic example and then a specific one.

What if there was a popular site that had restaurant reviews.

Now you made a site that interviewed the best chefs around the city and included recipes of their best dishes. Your site could be bolt-on to the restaurant review site.

More specific examples:

Matt berry was running a fantasy sports site. It had a lot of traffic. ESPN.com bought it. Obviously a fantasy sports site is a great bolt-on to ESPN's content.

I set up a site in 2007, Stockpickr.com which was like a social media site for finance. It was a great add-on to content at any finance site and eventually thestreet.com acquired it.

 

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[J. Altucher]

What am I doing wrong? Am I over-thinking the whole idea part or just making excuses?

Both. The key is: not to come up with a good idea. Just come up with 10 bad ideas if you want.

The key is to not let the idea muscle atrophy.

If you don't walk for 10 days, your leg muscles will atrophy so quickly you will need physical therapy to walk again.

It's the same with the idea muscle. You need to exercise it every day.

There's a story about an ad agency. The boss said to everyone,"Come up with one good idea". Nobody could come up with an idea that day.

The next day he said, "Come up with 10 ideas". Now everyone came up with ideas.

Don't put so much pressure on an idea. Come up with a bunch of bad ideas. Then throw them out. Repeat tomorrow.

Here's some bad ideas for books one could write:

"The autobiography of Anthoney Weiner's penis"
"50 Shades of the Bible"
"North By North West, everything North of Kim Kardashian's new child"
"10 Jobs That Suck and Why, interviews with janitors, plumbers, garbagemen, and the women who love them"
"50 Suicide Methods That Might Not Hurt" - it's hard to kill yourself. Here's some tips.
"The Gospel of Satan" - as told to a three year old
"How To Pick Up A Girl Through Lying and Manipulation -3000 year old techniques that work today".
"A Complete Guide to Investing in Detroit for 2014"
"How To Default on Your Student Loan Debt Without Declaring Bankruptcy - 10 loopholes that WORK!"
"A Step by Step Guide to Performing Your Own Abortion"

There. 10 ideas. Bad ideas. They can be 30 page books, written and uploaded to Amazon within a week. Each one will probably bring in $1k income per month.

 

[J. Altucher]

How can a service biz turn into a product biz?

Most product businesses started out as service businesses. here's the problem, when someone wants to sell a service business it's usually valued much more cheaply than a product biz. Acquirers say, "all the assets of the business walk out the door every night".

The key is to take services you do over and over and package them as products.

Oracle did this. Oracle is a "database company". But for the first five years they were in business if you bought their "database" they would need to send in 50 consultants to "install" the database and provide consulting services.

Eventually, they actually had a product to sell (the database) but it took a long time.

Another example I've written about is Buddy Media, which i was a seed investor in and which sold to salesforce.com for $900mm last year:

Here's where I wrote about it:

"How to Make a Billion Dollar Co from Scratch"

How To Make a Billion Dollar Company From Scratch Altucher Confidential

 

[LibertyForMe]

This is amazing. Haha.

"The autobiography of Anthoney Weiner's penis"
"50 Shades of the Bible"
"North By North West, everything North of Kim Kardashian's new child"
"10 Jobs That Suck and Why, interviews with janitors, plumbers, garbagemen, and the women who love them"
"50 Suicide Methods That Might Not Hurt" - it's hard to kill yourself. Here's some tips.
"The Gospel of Satan" - as told to a three year old
"How To Pick Up A Girl Through Lying and Manipulation -3000 year old techniques that work today".
"A Complete Guide to Investing in Detroit for 2014"
"How To Default on Your Student Loan Debt Without Declaring Bankruptcy - 10 loopholes that WORK!"
"A Step by Step Guide to Performing Your Own Abortion"

I've been lurking long enough; time for a question:

Imagine you had a job that meant you were away from home from 7am to 6pm, you don't have a side-business generating any income yet, and you don't have enough money to quit. How would your daily schedule change and what would you prioritize/focus on? You mention reading 3 hours a day, exercising, working, etc. Would the balance change if you were in the above scenario?

(or would you just quit anyway?)

 

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[J. Altucher]

Would the balance change if you were in the above scenario?

First, I would really examine what I do during the job that I could change:

- do you go out to lunch with co-workers every day? Change it to 2 days a week and work on your own stuff the other 3.
- do you go on cigarette breaks twice a day? Stop and do your own stuff.
- do you find yourself in waste-of-time meetings? Avoid those.

I'm not 100% sure, but 90% sure you can probably find jusst an extra 5 hours a week you can spare.

Second, I'd start looking for a new job. This doesn't mean quit today. It means start writing down ideas of other you can do for money. Start today (writing ideas) and see where it takes you

 

[LibertyForMe]

Second, I'd start looking for a new job. This doesn't mean quit today. It means start writing down ideas of other you can do for money. Start today (writing ideas) and see where it takes you

Thanks. I have been looking for a new job and working on my side business at nights, but I haven't been writing. I really like how you talk about the 'idea muscle' and writing ideas every day to strengthen it. Thanks for your valuable insight.

 

[MyDuckets]

Any advice for a perfectionist who was labeled the smart kid his entire life and who's (1) realized his fear of failure has prevented him from really doing anything to protect that image, and (2) doesn't even know what he really wants to do?

 

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[InMotion]

James,

In your opinion, what industries or segments will produce the most entrepreneurial opportunities, for non-rocket scientists, over the next 5-10 years in North America?

What are the promising new/young industries on the horizon entrepreneurs should have a look at?

 

[J. Altucher]

Any advice for a perfectionist who was labeled the smart kid his entire life and who's (1) realized his fear of failure has prevented him from really doing anything to protect that image, and (2) doesn't even know what he really wants to do?

Yes, take a big step back and realize you know nothing.

I tell this to my own daughter. She gets A+ on everything on her report card and is very proud. I hope i don't upset her too much but I say, "this report card is bullshit!" she knows I am kidding but only part-kidding.

But then I give her a real example. We go to play tennis and she gets upset if she misses one shot.

I tell her, "Your bullshit school makes you think the A+ is normal but real life is actually very hard. Tennis is hard. You have to practice adn be disappointed or you will never get sharp, you will never hit the ball over the net. This is not the bullshit A+ world you are used to. And everything else inlife is like this also."

She's a perfectionist. Perfectionism is the death of all talent and skill.

The good thing is you admit it. So understand now, just like someone with a deformity has to work extra hard to be good at something, so will you.

As for knowing what you really want to do? If you knew that then you and Larry Page would be the only two people on the planet who know what they really want to do. Most people just want to lie on the beach or something. And I Don't blame them. Most other stuff is a lie. Who wants to run a t-shirt store and say "this is my purpose in life!" and yet people run stores like that.

All purpose is man-made. The only real purpose in life is to eat, have sex, and relax in between. Everything else is fantasy (and sometimes sex is also).

If you write down ten ideas a day and stay healthy (e.g. sleep 8 hours a day, be around supportive people, be grateful every day), you'll find things that you want to do more than others. Give it time, give it six months. Start today.

 

[J. Altucher]

In your opinion, what industries or segments will produce the most entrepreneurial opportunities, for non-rocket scientists, over the next 5-10 years in North America?

What are the promising new/young industries on the horizon entrepreneurs should have a look at?

Honestly, I am seeing people every day make millions of dollars through internet marketing. Get really good at how to build, rent, use email lists. Write an info product that people will want to buy. And sell it.

 

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[rogen]

Thank you for this AMA James, it's really great to read and learn from someone's success.

I would like to ask you a question, since most of the talk here is about US, do you think that 19 y.o from Europe (Poland) can be entrepreneur too? If yes do you know any examples of people from developing countries who gone from nothing to living a good life?

 

[J. Altucher]

do you think that 19 y.o from Europe (Poland) can be entrepreneur too? If yes do you know any examples of people from developing countries who gone from nothing to living a good life?

Yes and yes. Basically, take a model that has worked here in the US and then build it in Poland. There are two German brothers that keep doing it over and over again in Germany. Do it in Poland or Eastern Europe. Example: make 4sq for Poland. Or zappos for poland. Anything.

 

[MyDuckets]

Perfectionism is the death of all talent and skill.

Thanks for the quick reply James. I realize I could have asked a better question.

I have had ideas, lots of ideas. I will research and research and plan and then even take a first step, but then everything stalls out. It may be perfectionism that is stalling me, it may be something else.

How do I cross that gap from idea to implementation? (and yes, I am starting therapy next week as a first step)

 

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[CommonCents]

Yes and yes. Basically, take a model that has worked here in the US and then build it in Poland. There are two German brothers that keep doing it over and over again in Germany. Do it in Poland or Eastern Europe. Example: make 4sq for Poland. Or zappos for poland. Anything.

Entrepreneurial Geographic Arbitrage

 

[InMotion]

Thank you for this AMA James, it's really great to read and learn from someone's success.

I would like to ask you a question, since most of the talk here is about US, do you think that 19 y.o from Europe (Poland) can be entrepreneur too? If yes do you know any examples of people from developing countries who gone from nothing to living a good life?

How Three Germans Are Cloning the Web - Businessweek

 

[1PercentStreet]

James, thank you for taking your time and giving back to this community.
Pressing the thanks button isn't enough, it's great to have someone like you here. I'm sure you've already changed several people and their lives will never be the same.

 

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[J. Altucher]

How do I cross that gap from idea to implementation?

It's very hard. The key though is taking that step back. Something is telling you not to implement. We don't know what it is.

So, for me, I know it means I have to just focus on what I describe as the daily practice. I have to sleep MORE, eat better, exercise, be around positive people, etc.

I know that eventually if I do this every day then I will implement right, when the right moment comes.

 

[M&N]

James, first of all thanks for doing this AMA. I've read all the posts and your insights are just great.

My questions for you:

1. You wrote about huge opportunity in selling information products via email marketing and I totally agree with that. How would you approach an information product business in a field where you have no expertise? I have a broad range of interests but I don't feel like an expert in any of those areas. Should I partner with true experts (pay them a fixed price) and create a product leveraging their knowledge? Do you think that an infoproduct without a "story and experience" behind it (for example just based on a research) might make a great offer?

2. Again, I think that the most successful information products are usually attached to personalities, personal brands etc. Do you think it's a sellable business?

3. Speaking of exits...I love Web and the potential it offers, I've always wanted to run a worldwide business (I'm from Europe) and I hate offices. That being said, I'm focused on Internet based businesses. I work my a$$ off, learn everyday and I have quite ambitious goals. However, I must admit that sometimes I start having these limiting beliefs "Dude, what are you trying to do? Nobody knows about you and any US company will want to buy a business for 7 figures from a guy with no connections living on the other side of the planet". I wrote "US company" because let's be honest - most of big online businesses are based in the United States. So my question is: what are the most important factors for the buyer when acquiring a new business? Are my thoughts reasonable?

By the way, I've watched your interview on Mixergy. I'm really impressed what you did with StockPickr, really inspiring story.

 

[LibertyForMe]

Just wrote down my 10 ideas. The category I chose for today's ideas was "Ways to sell things for other businesses." Out of my 10 ideas, I had about 3 solid ones; 2 of which I am going to research more. Thanks for the good tip!

I already made some calls on one of the ideas; and one party in the two sided transaction was very interested. We shall see what the other side says...

 

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[karmazon]

Hi James,

First of all, thank you for doing this, I really appreciate your answers.

This is quite embarrassing to state publicly but I must ask. I am clinically depressed and I'm currently trying to read your book. It's not going too well because I just get more and more frustrated at how easy making money seems to you and other people in your book. What can I do to put myself on the right track? I know you talk a lot about "Daily Practice" and I already do a lot of it - but exercising and coming up with 10 ideas(which seems to be the opposite of what MJ preaches - discovering needs) has not brought me any closer to making a living. What else can I do?

 

[J. Altucher]

I am clinically depressed

You need to make sure you get healthy. Making money is a side effect of health. It's way down the road. It's not the important thing.

Health is important. Its #1.

When you say "clinically depressed" it means you feel a sadness that is not brought upon by any one event but more of a biological feeling that overwhelms you.

This happens for many reasons: biological, environment, genetics, history - who knows?

The Daily Practice is not just about coming up with 10 ideas every day. It's about making sure all 4 of your "bodies" - physical, emotional, mental, and spiritual are working well together.

But also first getting out of a crisis situation into a situation where you can start focusing on the Daily Practice is important:

A) see a therapist and if the Depression is serious enough, you may need to take medication. I'm not advocating that but for some people it helps.
B) Meditate for 1 hour a day. You have to find silence. Silence the monster that attacks every morning. That monster gets suffocated with silence. You MUST do this to survive. Not everyone can meditate. But someone who is clinically depressed needs to do it more than most.
C) Sleep 8-9 hours a day
D) No alcohol (which is a depressant)
E) Try to avoid eating late at night or eating sugar (both can mess with digestion and sleep)
F) Be around people who love you and who you love. Read books from people who inspire you. Watch comedy movies. One a day if you have the time.
G) If you can't come up with 10 ideas, come up with 3 ideas. Make them bad ideas. Really really bad. Come up with the 10 worst ideas you can possibly come up with. Here's a bad idea to start you off: "donuts laced with prozac". "a toilet that wipes you". "A Google Glass app that lets you see everyone naked (it puts fake naked bodies in below people's heads)." And so on.
H) Every day, when you feel the monster coming on, try to think of 5 things you are grateful for.

Don't rush into making a lot of money. ONe day at a time. You have to defeat the monster first.

 

[karmazon]

Thank you James, your advice means a lot since I know you went through very hard times many times and came out successful. I hope to do the same. I will do the things you suggested and report back. Thanks again.

 

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[Whiphsh]

What does, in your opinion, the future hold for Greece?

 

[Connor]

My Issue as Well

You're totally right on this- I never had to study at all in high school, and only had to really work hard in a few classes in college, and it has definitely hurt me as I have entered the real world. Not having to work hard and seriously focus for long periods of time, combined with expecting that of myself, has made accomplishing what I want even harder. I'm finally starting to get it together enough, but it's crazy how having school be easy can basically hold you back later in life. Thank God I'm only just about to turn 23, but having had to work harder earlier would have been great experience. And as someone who is definitely a perfectionist, I have had to come to terms with pushing through my hesitancy to start something I know I can't do perfectly. I'm glad that you're instilling this in your daughter at a young age!