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Tim Ferriss on 10 Keys to a Successful Business

I’m a compulsive note-taker.

I have recorded nearly every workout since age 18 or so. Roughly 8 feet of shelf space in my home is occupied by spine upon spine of notebook upon notebook. That, mind you, is one subject. It extends to dozens. Some people would call this OCD, and many would consider it a manic wild goose chase. I simply view it as the collection of my life’s recipes.

My goal is to learn things once and use them forever.

That’s why I wrote my new book, Tools of Titans, which is a compendium of recipes for high performance that I gathered for my own use.


Tim Ferriss, Seth Rogen, and Evan Goldberg - keys to building a successful business
Me with Seth Rogen and Evan Goldberg, who have both appeared on my podcast.

In this exclusive first look, I wanted to share some of what I learned from one of the smartest investors in the world: Marc Andreessen. If you’re not familiar, Andreessen is a legendary figure in Silicon Valley, and his creations have changed the world. Even in the epicenter of tech, it’s hard to find a more fascinating icon.

Marc co-created the highly influential Mosaic browser: The first widely used graphical web browser. He also co-founded Netscape, which later sold to AOL for $4.2 billion. He then co-founded Loudcloud, which sold as Opsware to Hewlett-Packard for $1.6 billion.

He’s considered one of the founding fathers of the modern Internet, alongside pioneers like Tim Berners-Lee, who launched the Uniform Resource Locator (URL), Hypertext Transfer Protocol (HTTP), and early HTML standards.

This makes him one of the few humans ever to create software categories used by more than a billion people and establish multiple billion-dollar companies. Marc is now co-founder and general partner of venture capital firm Andreessen Horowitz, where he has become one of the most influential and dominant tech investors on the planet.

Here’s some of the wisdom he shared with me about the keys to a successful business.

Lesson #1: Raise prices

This was Marc’s response to “If you could have a billboard anywhere, what would it say?”

He’d put it right in the heart of San Francisco, and here’s the reason:

“The number-one theme that companies have when they really struggle is they are not charging enough for their product. It has become conventional wisdom in Silicon Valley that the way to succeed is to price your product as low as possible, under the theory that if it’s low-priced, everybody can buy it, and that’s how you get to volume,” he said.

“And we just see over and over and over again people failing with that, because they get into a problem called ‘too hungry to eat.’ They don’t charge enough for their product to be able to afford the sales and marketing required to actually get anybody to buy it. Is your product any good if people won’t pay more for it?”

>> Learn how to get started with building an online business

Lesson #2: Don’t fetishize failure

Here’s what Marc says about failure:

“I’m old-fashioned. Where I come from, people like to succeed… When I was a founder, when I first started out, we didn’t have the word ‘pivot.’ We didn’t have a fancy word for it. We just called it a fuck-up.

“We do see companies that, literally, every time we meet them, they’ve pivoted. Every time, they’re off to something new, and it’s like watching a rabbit go through a maze or something. They’re never going to converge on anything because they’re never going to put the time into actually figuring it out and getting it right.”

Lesson #3: Apply the “nerds at night” test

How does Marc look for new opportunities? He has dozens of tools, but one of his heuristics is simple:

“We call our test ‘What do the nerds do on nights and weekends?’ Their day job is Oracle, Salesforce.com, Adobe or Apple or Intel or one of these companies, or an insurance company, or a bank. Or they’re a student. Whatever. That’s fine. They go do whatever they need to do to make a living. The question is: What’s the hobby? What’s the thing at night or on the weekend? Then things get really interesting.”

Lesson #4: Stress test ideas with a “red team”

“Each of our GPs [general partners] has the ability to pull the trigger on a deal without a vote or without consensus. If the person closest to the deal has a very strong degree of positive commitment and enthusiasm about it, then we should do that investment, even if everybody else in the room thinks it’s the stupidest thing they’ve ever heard. However, you don’t get to do that completely on your own without stress-testing. If necessary, we create a ‘red team.’ We’ll formally create the countervailing force to argue the other side.”

To avoid the potential problem of newer hires getting battered more than senior folks, Marc and his founding partner, Ben Horowitz, make a point of smashing each other.

“Whenever [Ben] brings in a deal, I just beat the shit out of it. I might think it’s the best idea I’ve ever heard of, but I’ll just trash the crap out of it and try to get everybody else to pile on. And then, at the end of it, if he’s still pounding the table saying, ‘No, no, this is the thing…’ then we say we’re all in. We’re all behind you… It’s a ‘disagree and commit’ kind of culture. By the way, he does the same thing to me. It’s the torture test.”

So, where can you create a “red team” in your life to stress-test your most treasured beliefs?

Lesson #5: Always look forward

I’ll let the below exchange speak for itself:

TIM: “What advice would you give to Marc, the 20-something, at Netscape?”

MARC: “I’ve never for a moment even thought about that. I don’t do replays well. The question I’ll never answer is, ‘What would you have done differently had you known X?’ I never, ever play that game because you didn’t know X.

“If you’ve ever read the Elvis Cole novels by the great crime novelist Robert Crais􏰀 — Elvis Cole is this kind of postmodern, L.A. private detective. They’re great novels, and he’s got this partner, Joe Pike. He’s my favorite fictional character, maybe of all time. He’s a former Marine Force Recon guy, so a lot like your friend Jocko. And in the novels, Joe Pike always wears the same outfit every day. He wears jeans, he wears a sweatshirt with the sleeves cut off, and mirrored aviator sunglasses. He’s got bright red arrows tattooed on his deltoids pointing forward. And, basically, his entire thing is ‘forward.’􏰀”

TIM: “So that’s how you feel?”

MARC: “Forward, like: We don’t stop. We don’t slow down. We don’t revisit past decisions. We don’t second guess. So, honestly, that question, I have no idea how to answer.”

TIM: “I think you just did.”

MARC: “Okay, good. Onward.”

Lesson #6: “Strong views, loosely held.”

For a long time, this phrase was in Marc’s Twitter bio. I asked him to explain the meaning:

“Most people go through life and never develop strong views on things, or specifically go along and buy into the consensus. One of the things I think you want to look for as both a founder and as an investor is things that are out of consensus, something very much opposed to the conventional wisdom… Then, if you’re going to start a company around that, if you’re going to invest in that, you better have strong conviction because you’re making a very big bet of time or money or both. [But] what happens when the world changes? What happens when something else happens?”

That’s where “loosely held” comes in for you. People everywhere hate changing their minds, but you need to be able to adapt in light of new information. Many of my friends in this book will fight you tooth and nail over a topic, perhaps making dinner company nervously glance around, but as soon as you cite better information or a better logic, they’ll concede and say something like, “You’re totally right. I never thought about that.”

Lesson #7: Live by these two rules

Marc and I are both huge fans of Steve Martin’s autobiography, Born Standing Up: A Comic’s Life. Marc highlighted one takeaway:

“[Steve Martin] says the key to success is, ‘Be so good they can’t ignore you.’􏰁”

Marc has another guiding tenet: “Smart people should make things.” He says: “If you just have those two principles􏰀—􏰀that’s a pretty good way to orient.”

Lesson #8: Map out your ideal day

“The perfect day is caffeine for 10 hours, alcohol for 4. It balances everything out perfectly.”

Marc said this jokingly, but it’s surprisingly similar to my approach during crunch time. My preferred late-night “Silicon Valley speedball” for writing deadlines is a combination of Cruz de Malta yerba mate tea and 2 to 3 glasses of Malbec red wine. Not mixed, but alternated. I sip the tea over hours with a traditional bombilla straw, taking a swig of the nectar of the gods every 5 to 10 minutes.

Pro tip: Your writing does not get better after the third glass.

Lesson #9: Don’t overestimate the people on pedestals

Says Marc: “Get inside the heads of the people who made things in the past and what they were actually like, and then realize that they’re not that different from you. At the time they got started, they were kind of just like you… so there’s nothing stopping any of the rest of us from doing the same thing.”

Both Marc and Brian Chesky, CEO of Airbnb, have read and recommend Neal Gabler’s biography of Walt Disney. Marc also mentioned a Steve Jobs quote in our conversation, which is printed in full below. It was recorded in a 1995 interview conducted by the Santa Clara Valley Historical Association, while Jobs was still at NeXT:

“Life can be much broader, once you discover one simple fact, and that is that everything around you that you call ‘life’ was made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. Once you learn that, you’ll never be the same again.” — Steve Jobs

Lesson #10: Study the opposites
In addition to studying his competition in tech and early-stage investing, Marc studies value investors on the completely opposite side of the spectrum, such as Warren Buffett and Seth Klarman. This doesn’t mean they invest in the same types of companies; rather, the synergy is related to first principles.

Here’s an excerpt of an exchange we had:

TIM [joking]: “You’re not going to invest in See’s Candies [one of Buffett’s investments]?”

MARC: “No. No. Absolutely not. Furthermore, every time I hear a story like See’s Candies, I want to go find the new scientific superfood candy company that’s going to blow them right out of the water. We’re wired completely opposite in that sense. Basically, he’s betting against change. We’re betting for change. When he makes a mistake, it’s because something changes that he didn’t expect. When we make a mistake, it’s because something doesn’t change that we thought would. We could not be more different in that way. But what both schools have in common is an orientation toward, I would say, original thinking in really being able to view things as they are as opposed to what everybody says about them, or the way they’re believed to be.”

The tips and tricks in Tools of Titans changed my life, and I hope the same for you. It was distilled from more than 10,000 pages of notes and 150+ interviews, and everything has been vetted and tested in my own life in some fashion.

Click here for sample chapters, full details, and a foreword from Arnold Schwarzenegger!


Tim Ferris talks with Arnold Schwarzenegger - keys to building a successful business
Me talking with Arnold Schwarzenegger.

There Are 4 Comments

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Tim, love the point about “Strong views, loosely held.”

So key to avoid the commitment/consistency bias.

[Micro-Example: Writing]

When I think I have the perfect blog post/email written, sometimes I open a new doc and I ask myself “What if there were no limits?”

What I write next is typically 10x better/more personal than the original. Having the flexibility to select all and hit delete is a painful, yet powerful skill for me.

Lesson: Just because you’ve done something, doesn’t mean you’re locked into that behavior permanently.

Loving the book so far, Tim!

Bob Donaldson

My copy came last night. I willingly stand on the shoulders, rely on, admit to and submit to the giants who have proceeded me so I can, with specific intent, be a giant for others that follow me. My daughters, step sons, my grandchildren are relying on me (I say) to help them find their own daemon, their own genius – and the best way i have found to do that is to learn what others have learned and from there: “invent anew” ….every path through the forest serves nearly the same purpose, but none of them are the same …. this is true for all things…

My favorite lesson in all of these is #9. Basically, “NOBODY knows what they’re doing.” The real magic in that statement is that it should remove your excuse for starting anything. Oh, “I don’t have any connections.” Make some. “Oh, I’m not very good at this.” Find a coach and start practicing.

There is NO reason not to start.

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