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

This episode is brought to you by SuperSide. They're an always on design company that delivers great design at scale, fast, affordably, and within 24 hours. go to super side dot com slash M F M, M F M as in my first million. So superside.com slash MFM to check'em out. So the background here, by the way, Sean, is

I was on James's show, um Three weeks ago. It actually aired today. Yeah I've been getting people reach out reaching out to me. James uh James is an oddball. 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 y 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 uh we thought we'd get a we thought we'd get'em on here.

And we could talk about anything, but uh Uh Do you know about James, Sean? I know about you uh yeah, I know about'em. I've read a bunch of your stuff and I was like this guy's the shit. And then I read a 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 don't know how I feel about this. And then I read some of your stories where you're where you talk about how you made money and lost it all over and over and over again. And I was like, This guy's very interesting. You reminded me of like uh if Tim Ferris, you know, smoked a bunch of weed and was on the internet. I don't know, like it was just like some some variation of really interesting guy who po 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're 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 uh knowledge about about you. Do you want to 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 Uh 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 sometimes it's better to be less than zero.

Than 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 the n I don't know what it is. But like I I think it was a a a young man In the nineties

Um Name 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 Uh 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 But 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? Uh How to be creative in maybe a horrible environment. And then figure out how to Monetise it so

I was a software guy. I worked in the entertainment industry. I worked 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, then I started a hedge fund.

I wrote some software to helped me invest and that and then I started writing books about that. So I became a writer. Then I became a podcaster. 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?

J people will call me up like James are you Uh, 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 and do a deal with you again. Or or this is too embarrassing. And

I I you know, and then I think since then People of I don't want to say people copied it. People had 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. I my audience was bigger than ever. Previously I'd written about finance. Now I was writing about all this personal stuff. My audience

became a hundred times bigger. And then I started getting more investment opportunities. I started gay a podcast which became successful. Uh, I just started getting many more opportunities because of Uh

Yeah. 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 B S stuff I kept seeing everyone else write about. And if you wanna If you wanna be unique, you kinda have to say what's unique to you and what was unique to me was all the times I was scared to death and and depressed and and had to fight my way out of it.

So many things to to answer the question. I've I've I've Back uh background a lot of things. And also I Always like trying new things and experimenting and I'm I was everything I'm passionately interested in, 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 w what what what was happening? What how were you making money and how were you taking it to zero? Were you just making wild bets or what happened? Yeah, yeah, what were your like hits? 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 um The first one, again, I was working at HBO and I made their website.

Uh and I think it At the time. Other c 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 would happen. American Express would call Arthur Anderson Which was their accounting firm. And you know, Arthur Anderson famously went out of business

uh in in a scandal six years later But American Express called him Arthur Anderson and said, Can you make us a website? Arthur Anderson said sure, well they're gonna charge you millions of dollars. Arthur Anderson 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'cause nobody knew how to make A website in nineteen ninety four, nineteen ninety five. So I would say sure, I'll do it. And then suddenly They pay me and my brother in law.

Uh two hundred fifty thousand dollars to make American Express dot com. So That was one of our first websites. And I w my salary at HBO at the time was forty thousand a year. So my brother in law and I we made HBO.com.

Then we made websites for Everything from Warner Brothers, Sony, Disney, BMG. All the record labels like

We did every gangster rap record label. Bad boy. Loud records. Jive, Death Row, Interscope. Uh, we did the movies for the Matrix, uh, and many other movies. But anyway, that was

And were these good websites at that time? Like if you looked at that website today, what would it look like? Is it like a Craigslist? You know what, that's a great question. So no, it doesn't look like Craigslist. I wish it did. But uh Design web design back in those days. So I was a software guy, my brother in law was a design guy. D web design back in those days was very heavy.

So there would be like big heavy images and animations using flash or you know, some Mac yeah, I forget the company, Macro something. And uh Uh there were they were very heavy designs, not that usable And

But yeah, I mean They were okay. They w 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 HBO's website was a great website, but it w it wasn't as

functional as all websites are now. It wasn't very easy to navigate. And what did you walk away with at the end of that? Uh about uh fifteen million. And then buck. Yeah, so cash. Not not like

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 want to. What do you mean cash out? Were you getting like stock in these comp I mean? Yeah, so so no no, I sold the company to a company that was rolling up. Web design for web agencies. And so we 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 hey, 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 the all the 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 Uh Internet investments after I had 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 play 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 liked it before you even told me you're a gambler. But but but that's just it. Poker was the one thing I probably should have stuck with. Like I was doing well at poker.

And it was right before po 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 your was your firm all your money? So your firm. 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.

Um I I'm Trying to remember all investors, uh C S first Boston. Deutsche Bank.

Like all these major banks gave us money and then another company Invest Corp Which is a major private equity firm. Uh 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 long was the zero? From fifteen to zero, how long was that? Um 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, how 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 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 a little building called the World Trade Center. And We were getting an offer.

Uh September eleventh. And of course Many worse things happened that day than me not getting an offer. For my house, but

Uh, nine eleven happened and we couldn't sell then because we were part of the crime scene. And Uh You know, it's just I went totally totally broken. Were you home in that? I was at the World Trade Center.

Oh my god. I don't really talk about because A, it sounds unbelievable, but B It also many worse things happened to people, to many more people than me that day, obviously, but My business partner and I were there was a Dean in DeLuca in the on the first floor of the World Trade Center.

We ate breakfast there every day and then we would day trade. The markets. And uh At that point. I was starting to come back a little bit from

day trading and I had written some software and and so on. And Then we're walking To my home. Where I had my office and we s my partner turns to me and says Is the president coming into town today?'Cause this

I look up and there's this plane That's just like right overhead and then boom. We watched it go right into the like physically we watched it. Not on TV, but like physically we saw it go right into the building. And everybody on the street instinctively Ducked.

And And Your your brain does weird things. So my I started thinking to myself Like my my Business partner, his name's Dan.

He said we're We were 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, how do you remote control a whatever it was, a seven forty seven Into the World Trade Center, but that's what my brain was telling.

So we run to the Fire station. And we say we wanna Help. And these guys throw

two fireman 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 gonna do it? Fireman. And we're like no

We just wanted to Give blood or whatever we could do. And they're like No no no only firemen. And that Fire station, it was the Dwayne 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 It was it was a a bad day, but That kind of

clinch me losing everything also because I had been invested in the stock market that morning and Boom, everything 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 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 uh took every piece of data about every single stock stock since World War Two.

And looked For patterns. Uh, 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. It doesn't it wouldn't I don't think that strategy would work now. But it worked th then because there weren't there weren'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 were experts and professionals and and really learn. Then 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 uh investing and going on C and B C. And then I built

Uh 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. I made like a social I called it the My Space of Finance because MySpace was big then. And

Uh so that Say and that was like my next big hit. Sold that for ten million. And Um You know, and then a year later I was broke again.

And that things like that just kept happening. All right, this episode is brought to you by Super Side. All right, so here's the deal. I'm incredibly impatient, like horribly, horribly impatient. And if I get an idea at midnight, by eight a.m. the next day, I want it done. Um, you know, but that's really hard because if something needs to be designed, where am I gonna find a designer at midnight to try to make this thing bring it to life? Um, so you know, I don't think I'm 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 superside. That's our sponsor for this week. Just go to superside.com slash MFM

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 design done fast, try SuperSide.

Lots of fast growing teams that are stretched are using them already. Check them out. Super Side.com slash MFM. 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 I so that was a third company. And I've also sold companies that I was um

Either um I've I there's many companies I've been an investor of that have been sold by this point. Um, and then some companies that I'm like a a co founder of That I've That I've sold. I was like involved I've been involved with everything from like um

A mental rehab facility that sold for forty one million. And then That was in two thousand four. I did go broke after that. And Then was stockpicker the stock site.

And then I was an early investor in Buddy Media. Yeah. Which Peter Teal invested in, Mike Lazra was the CEO, Mark Pincus, who started Zinga, was an investor in it. And we all were the

See it investors. at a four million dollar valuation that's sold to Salesforce. For about seven or eight hundred million. I had a I had a company today that I was a uh investor in that just It just kinda did a rev or they're they just announced a reverse merger. They're going public.

So hopefully that will do well. But I've been a I I've been an investor in a lot of companies that have done well.'Cause I'cause 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 idiom 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 Uh

Take Buddy Media as an example. I didn't have to do any work once I invest because Peter Thiel was my co 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 Wouldn't know what he was doing. When investing in a an a 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 send the check. 'Cause 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 PhDs working for him that are a lot smarter than me. Worst comes to worse. 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 of these, I Assume their value is zero and I never call them back. 'Cause if they're if they've reached so far down the totem 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 erectile dysfunction drug. I don't But I don't know anything about biotech like H

Yeah, but as long as someone's a little bit more than a little bit. You know If someone calls me and says look Hey, I I've started the last

Three erectile 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 um I think Sean's gonna want to ask you questions on ancient investing and I wanna ask some of 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 uh more than a handful of businesses selling companies is hard. Most people will never sell one. How are you w how are you able to uh Sell so many, you think.

You know that that's a That's a great question because and let me ask you, Sam, I don't know if we've talked about this. Have you ever sold a company? Uh I had a small like hundreds of thousands of dollars sale. Um, for this company, uh 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. Uh so and then I bought I've also helped buy companies too. Yeah, so it's a similar it's similar skills on both sides of uh uh but maybe slightly different, but

People don't realize selling a company is very Difficult. Like it's There's three skills.

Starting a company. There's building it. And they're selling it. And Sean sold his company too to Twitch. Yeah, last year. Congratulations for you. Yeah. And you so you know what I'm talking about. Like

You'll you'll Your company's 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

Uh 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

Uh 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 'Cause I was waiting and I was like, Oh my God, I'm I'm gonna jeopardize this deal either'cause I'm gonna push too hard Yeah, just'cause I'm impatient.

Or I'm gonna go start another business, which is the worst thing I can do while I'm trying to sell this one. So I was 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 Uh it's it's it's a painful process. And the way you sell is First off You have to

You and this is not y 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 w if this your business is so great, why do you want to sell it? 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 saw a company for millions, and then the second time If you're broke the second time you sell a company for millions and then the third time

It's okay to not sell for billions because you want to 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.

Um 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 we 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 along and you have to keep all your employees because usually there's some back end earnout 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 in 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 want to sound greedy and you don't want to sound desperate and you don't want to sound and you don't want to underprice yourself.

So there's all sorts of negotiating techniques. That you have to use. to to help them answer that question in a way that works. For both sides, not just do you think it's a good idea. Did you value your companies on a multiple of your profit or revenue, or was it uh if when 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 a uh 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.

Uh 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 learn this for my first comp 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. Um

The second company was like I did value it like how you said which is uh If if you If we put ads All over here.

And you're driving this amount of traffic. And uh 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. Y your company.

Based on their Few uh there them helping you build your earnings. And the challenge 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

And then you agree on the formula that you understand the variables enough. 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 B S way to value a company, but That is how people value Uh

companies often, particularly in the in the tech sector. Like Giffy. 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 uh

So they probably value it w off of something some kind of comparable deal in in the internet. Yeah,'cause ten or so. Tenner, which was Giffy's competitor, just sold to Google a year before for A little less than that. Oh who was their competitor? T uh company called Tenner. T E N O R. They were their competitor, yeah.

It just as a side, is it true that Gippy was the second largest search engine in the world? That's what they're saying. Yeah, they don't think is number two, and Bing is three, Amazon four, right? Like so depends what you call a search engine. But I d I did interview the founder in New York and uh it is huge. It was just um There's no way to make money off of it, really. Yeah, I had that issue I was on I was a A seed investor and on the board of Bitly.

So Bitly had about five percent of the internet's 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 pr 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 in uh Angel Investment.

And so James, when you lose your 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 were you like, Okay, rainy day fun. Two million bucks is going into this account and hey I lost the I lost the keys. Uh just uh you know, like just to stash some money away. Surely your wife was like come on, man. Wha how did you get away with not just saving some amount of money? I I I got divorced. Alright, there you go. Good answer. That was a problem. And I lost the second house that I bought. And um

Uh no, I I kind of Finally, I think it was the third time or the fourth time I finally look back and I said What was I always doing right on the way up? And what was I doing wrong on the way down?

And There were things in common, which is just that I kind of I kinda would just give up after I made a lot of money. I would kinda say Hugh.

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. Uh to have only good people in my life and quickly eliminate Any toxic people like a s like the speed of light.

N no second chances. And Creatively. I I just started writing down Every single day.

Ten ideas a day. Like Uh, and it could it could be business ideas, it could be writing ideas, it could be Dumb ideas. It could be Ideas for T V shows, it could be

ideas for g how Google could be a better search engine and then I would Arrogantly 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 w it felt as if My whole brain was rewired and I would just I would bounce back so quickly with ideas. It's just nonstop. And then

The aspect of Sometimes I would write ideas uh f for other companies and I would send them. And

You know, I would always get new opportunities because of that. Like I would visit Facebook, Amazon, LinkedIn, Google Quora 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. It 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 unscripted 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 it. Disney And right after this I'm meeting

They they got excited right after this. I'm meeting uh with Disney To go over the ideas. That's wild. W was there um 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? Like What what's the difference in ha 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

W it's different each time, but Um I had zero dollars. And the bank and I was living in a

studio in Astoria Queens, which is you know, was not in the n early nineties was not a nice part of Queens Before that I had a 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. 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 H VO

And then We did the very first site I did. was this diamond dealer And uh He gave me

Seventeen thousand five hundred dollars in cash. This is nineteen ninety four. And I hadn't 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 artsy 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 Uh 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 escapist. Then and then when I l started losing and every time I lost

Every single time I've lost Everything I was suicidal. And Uh in part for practical reasons, I thought maybe my My kids could live off my life insurance, and particularly that first time there were babies.

So I figured They wouldn't remember me, but they'll definitely remember The life insurance. So uh Fortunately I I I couldn't figure out

How to do it in such a way as to not hurt myself. And I never did it. And You know, I was very depressed though for long periods of time, but each time

The period of depression we get Uh faster and faster. And you know, I 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 in school it's like learn math.

And then as you get a little bit older, you're like, Oh, maybe I 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 uh managing my own psychology, my own emotions. And so I started to, you know, figure out what works for me, right? Like Uh 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 um 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 funk.

Uh what works for you or or do you are you conscious about that? Yeah, very very much so. And that was part of this 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. physical health. I always try to

Stay healthy. Like I'm I don't I'm not an athlete. I'm not a You know, uh Not used to working out or I mean, I'm fifty two years old. I've got a 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'm have some outside time. And then

Emotional health. Just what how much Are the people around me toxic or not? And that is the key to emotional health, nothing else. And then Creative Alf am I writing?

Ten ideas a day down because Creativity. Not only is it rewiring your brain to be more creative, you know, w or that muscle atrophies. But also

triggers a lot of dopamine when you're creative. And it just If I do it in the morning, the 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 on Twitter all day long. Oh man. They should op we need to open up this economy right now, where we need to lock down all the people who opened up like on both sides. They're trying to control things they can't control. And they're all day long. They're 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 realized 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 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 cliche 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 your the like what's like your job now? Uh 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 uh will be published by Harper Collins in a year. Uh I I do a podcast. I I I'm still involved in my newsletter business, which I sold. Uh I've

Uh I'm a private investor in about two dozen private companies. So I but I'm remember, I'm not active in those Because They're

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 um 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 the

Did your nut for your angel money that came from like your initial sale? Uh Really really now most The way I make a living and the way I built up is just from Private investing because

Pretty much every p 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?

Um Yeah, which is a risky illiquid thing. I'm very much now uh and this is this was the key point That made a big difference for me in investing. Is that risk is the most important part of

Investing. Whether you're investing money or you're investing time. Uh R 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. 'Cause 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 the I'll let the investment grow to much more than that. Um it's sort of like what Warren Buffett says. Uh, if you've got Michael Jordan on your team, you don't trade him just because he got better. So I 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. And what was your biggest angel or private company win so far?

Um 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 in two thousand nine. Which are still doubling every year. But They

They're they're still private. Uh But That buddy media won, you know, four million to Seven hundred million.

Was pretty good. Ticket fly. was another one I invested in which um I was in the seed round of that and it sold for four hundred fifty million. Uh I invested in another one.

Which is public now. It's a law enforcement company. They have a a gun. That if they I was sort of a co founder of this. It started in the living room I was staying at.

And 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 Kevlar 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 like a Batman. I was gonna say straight out of Batman. Yeah, and even uh the one of the founders of Taser is the president of the company now. He became the president of the company about a year ago, and we went public. Uh uh 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 Uh that that's been I'm not exited actually. I'm I own the shares of the public company and not Planning on exit. Hopefully ever because it's It's the name.

Uh the company's called Rap Technologies. I'm not trying to push the stock or anything, so I don't wanna even mention the the stock uh stock symbol. But um 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 s literally saves lives every single day. So so can you um can you do you have the journal with you that you write your ten ideas? Can we can we get it a random day? Let's talk about some ideas. Like what what are you what's interesting to you right now, James? A lot of times it's in my email. Oh, there's my pad. I do it all in waiters pads or I do it in my email. So if I'm out in a cafe, I do it in a waiters pad.

And if I do it at uh Uh sitting at 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 uh what do you have your eye on now? Yeah, I have no problem even saying what I'm scheming at because uh so I've I I haven't considered starting a a cup new company in a very long time.

But I have been considering it Now And one of the ideas is I feel It's a shame. Yeah.

Content is not monetized. unless you're like the t 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 Monetise it. So I've been

Figure out a way to use the These ecosystems to allow people to monetize content. So that's one idea I'm working on. Uh actually physically working on it.

And another one involves um Making I a a derivative of a of a board game that I like. Uh but Uh i 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 Oh, I'm gonna challenge myself to come up with T V 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 I'll write. A list of chapter titles. Uh and again. Most of the ideas are supposed to be bad. Because you can't come 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, but I'm trying to make my brain Sweat. So For instance, uh one ideal list that is particularly hard.

Yeah, 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 uh Uh but yeah, but a lot of times I'll come up with business ideas or I'll 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

Uh uh uh uh Attractive. businesses after this. Instead I would think What are the ten ways

I can improve Zoo on Zoom, which was the is the most popular one right now. So that will be how I exercise The idea muscle around Zoom. For your for your content. Idea.

Is there a comp out there? Like is there somewhere something out there that you like, man, this like little behavior that some people are doing. I think that if we just blew this up or systemized this, this could actually have legs. Uh Yeah, so sort of. So I'll do something what I'll call

uh what I call idea sex. So I'll take And again I've been A professional in many different industries, uh again, fortunately or unfortunately. And I'll combine

Ideas to see if That could work in in what I'm doing. So For instance

If I go to a restaurant And have a pretty good meal. That meal could get monetized. And if the waiter or waitress treats me nice

They have better chances of monetizing their behavior. Then Otherwise So there's lots to learn from how monetization works. In the bottom third of

The economy in other industries. So a waiter It's the bottom third of the is in the bottom of people who work in restaurants or involved in the restaurant industry. So how do they monetize themselves.

Uh a and there's a lot uh 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 Uh

You know, how do I how do I lighten up this third by allowing them to collect money There's that's gonna be always a huge industry. Square is a great example. Square took. The mom and pop store.

They couldn't accept credit cards. Because no bank would trust them. And Square enabled them To accept credit cards. So Square's 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 idea 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 Patreon has problems. So I try to look at Patreon. I think people are so stupid. If you're a content creator Patreon could be a great way to make money, but it's it I I find a lot of content creators, once they have a big audience, find Patreon to be more annoying than helpful.

But advertising also was annoying. So Uh, 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 newslet so subscription's another way. But that puts a sh uh some friction in front of your subscribers. And

Uh so you know, I've done newsletters, I've done you know advertising support in media like uh 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 idealist. What's your favorite way ways for monetizing content? Uh For me right now I don't think I've ever

Really Monetized content. the way I would like to. Like s subscription but okay, so but I'll 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. Uh every week.

made by my great analysts and people are willing to pay a dollar a month or whatever, ten dollars whatever it is. And subscription 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 r recessionary environment or like right now. So I love I think

Subscription It's a whether it's an online newsletter or an online course. Or uh uh subscription community, like you know, let's say the trends Facebook community. I think subscription's 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 in by f 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 bu someone who writes a newsletter about I don't know. Uh You know

Yeah. Some obscure kind of Taekwondo or whatever, they're not going to be able to monetize a newsletter necessarily, where someone who's going to monetize how to mow the lawn better is not going to be able to monetize. But might have one piece of content that really stands out. And w if you were you know, I think your your

Pretty much. uh one of the top one percent or or better Uh people at Building New businesses or

uh audiences, right? I think you 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. Um, 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. It's my first million. It's the name of this podcast, right? Yep. So there are other podcasts about Um, there's a there's a podcast, The Eventual Millionaire, which talks to

Millionaires about 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 it? 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 hustles and the gig economy. The hustle is like the best email newsletter out there because it's Your 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 on our podcast, Sammy, 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 is you could steal them from people. But um

Uh uh You know, I think you have 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 then I'm probably not saying something new or different. Or you know, there has to be I have to challenge myself in some way to create You 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 Quora. And just answer every question I could. I would participate on LinkedIn groups, again, answering every question I could.

I would go on Um groups like the trends group or other Facebook groups And You know, a lot of people ask questions. I'll go on Podcaster's Paradise, which is a subscription.

community about podcasting. I would a lot of people say, Hey what You know, how do you get get good guests or how do you What kind of microphone should I use? I would answer every question I could. And establish

Expertise. And then I would Again, I'm thinking if I'm a twenty two year old, I'm not thinking this way now. And then

Once I had some expertise, I would s branch out. So Now I've you just You just saw me everywhere you looked, you saw me. Quora, 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. com or Tech crunch or whatever.

And And this is what I did do, and I started would start writing Or 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 Quora or Twitter or LinkedIn or whatever. It's like, oh, I

I just saw James on Corn, now I see him on CNN.com. What's he doing there? And so So I established some authority.

Then You gotta create an email newsletter that's free. Ninety nine percent of your content has to be free. Um 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 tw twenty hustles for twenty twenty. And just for free. And uh You know, just and then I would just start putting all my articles on my free email.

And then I'd start At some point my level of expertise should be big enough that I can start a four pay subscription newsletter, like whether it's about Trends. Or stocks or Some physical activity or And this is the exact thing you did. I mean I think that

Um 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 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.

Um and And it worked. That model works. And I encourage other people start an online course. Like A friend of mine has an online course that she started. This person is the most introverted, shy person I knew 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 makes 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 was and it's just a course, so it's not an ongoing newsletter.

Uh I think an online course is better actually than newsletters. Uh 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 uh

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 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.

sitcoms this year. So Uh there's so much demand for for content and you can 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 newsletter. Trends is not. But but the hustle, you convinced me 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 hustle that convinced me, Okay, I need to get trends and I'm happy to

always pay for it and It's or it it means it's just but We gotcha. Yeah, but but if but there's value. Like if 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 and the hardest part is having the unique perspective. Everything after that is sort of the textbook, uh, 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 unique perspective is is hard. How do you shape that? I'll I'll give you another example. Like do you guys play fantasy sports at all? Yep. Okay, so I do not play fantasy sports. I knew I I don't even know the rules of football. But um Uh uh Matt Barry, who is the fantasy sports anchor at ESPN. He also hosts the TV show, The Fantasy Show at ESPN.

That guy was a Hollywood screenwriter. He was writing movies and T V shows. And he hated his life. And he quit that. It's making a ton of money, he quit that. Uh uh 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 a blog post was the most he can get, but because he had this writing skill from his Hollywood times Uh he' he had a he's quickly got a huge audience in fantasy sports. Then he built a four pay. Subscription site.

And you know, after Producing most of this content for free. ESPN bought it. And he kept moving up the ranks there and boom, he's he's done so much better. Doing what he loves.

at fa fantasy sports and monetizing it almost the same way I just described. Writing movies which is A lot of people consider the dream job. I love it. Uh we should we should wrap up in a second. James, this was awesome. I I gotta admit, you were way more legit than I uh expected. You know, I thought you were What why did you expect me not to be legit? Well he I've already I already called him out on this, which last time or he called himself out. He goes uh

So when his company was acquired, Sean. J James is like Dude, my content's legit. I'm legit. I do it all. But the acquiring company admittedly is incredibly aggressive with the advertising and sometimes that uh kinda makes me appear as though I'm one thing when I'm not.

Yeah, and and and and by the way, it's it's a very interesting topic, uh how aggressive you should be with your advertising. And there so Alain Tibetan, who's this French philosopher He has this theory that Even the good guys Need to use Machiavellian.

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. Uh there was so much aggressive advertising out there, that 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 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 shut down. Crypto ads is because of my ads. Yeah, th th 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. Um, I think to myself, wow, this is 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

Yeah, sort of energy stories and also You know, some unique uh insights at the audio you know, I'm imagining I'm a listener, right? Like During this interview, you talked for the most of it. So 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 you know, you raised the bar for the podcast, which was great.

Excellent. Thank you so much. So uh James, this was awesome. If people wanna say hi to you, is Twitter your your go to method? No, um I'm James Alticher on TikTok. Oh my gosh. No one wants to see a fifty year old dude dance at the Rihanna. No, I'm just dancing perspective. 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 followed us. And so I took that one down and I haven't danced since. Although Yeah. If push came to shove and I was drunk, I when I was twelve years old, I was a semi professional breakdancer. But that was a long time ago. The comedian Bitcoin uh break dancer

Well that's badass, man. Uh we appreciate you coming. I uh I'm looking forward to joining you again and you coming back to us and and developing a friendship. That's awesome. Excellent. Yeah, and and and Sean, yeah, definitely let's have you on the podcast as well. So I'll I'll let's exchange emails and we'll figure it all out. Sounds good. Thank you. All right, you guys. Thanks a lot. Talk to you soon. Bye.

What you see above is a preview of the first minutes. One unlock costs 3 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.