#132: Chris Sacca on Shark Tank, Building Your Business, and Startup Mistakes

Sometimes one interview just isn't enough. That was certainly the case with my good friend, Chris Sacca. Chris (who I interviewed before http://fourhourworkweek.com/2015/05/30/chris-sacca/) was recently the cover story of the Midas Issue of Forbes magazine http://blogs-images.forbes.com/alexkonrad/files/2015/03/cover-e1427241112883.jpg. He was on the cover because he's a newly minted billionaire and the proprietor of what will likely be the most successful venture capital fund in history: LOWERCASE Capital http://lowercasecapital.com/posse/. He's an early-stage investor in companies like Twitter, Uber, Instagram, Kickstarter, and many more. Also, he wears cowboy shirts, has a great beard, and is hilarious, which is reason enough to bring him back for more. In this episode, he answers all of your most pressing questions based on your votes and feedback.s You'll find some fantastic responses, ranging from life advice to business recommendations and everything in between. Show notes and links for this episode can be found at www.fourhourworkweek.com/podcast http://www.fourhourworkweek.com/podcast. This episode is brought to you by Foodist Kitchen http://foodistkitchen.com/tim. Sometimes the most life-changing habits are the ones we put off, and learning to cook is at the top of that list. I only finally took the plunge when writing The 4-Hour Chef, and it turned my eating and my life into high definition. Foodist Kitchen http://foodistkitchen.com/tim is a 30-day program that teaches you how to cook without recipes, and I highly recommend it. Chopping and sautéing are just a small part of the whole deal -- you also need to know what flavors taste good together and what it means to cook until done. Foodist Kitchen http://foodistkitchen.com/tim brings all these skills together so you can walk into the kitchen, open the fridge, and have an intuitive sense of what to cook and how to do it. It was created by Darya Rose, who's a friend of mine and one of my cooking mentors for The 4-Hour Chef. She has offered a $15 discount off your membership, so check out FoodistKitchen.com/Tim http://foodistkitchen.com/tim to learn more about the program. This episode is also brought to you by Exo Protein https://www.exoprotein.com/tim. These guys are making protein bars using cricket protein powder. Before you screw your face up and look disgusted, I bet they taste better than any protein bar you've ever had before! With recipes that were developed by a three-Michelin-starred chef, the bars are paleo-friendly, with no gluten, no grains, no soy, no dairy, etc., and they won't pop up your glycemic response. In fact, they're less processed than any other protein bars you'll be able to find. Exo Protein https://www.exoprotein.com/tim is offering a deep discount to Tim Ferriss Show listeners -- if you go to ExoProtein.com/Tim today https://www.exoprotein.com/tim, you can try a sampler pack with all of the most popular flavors for less than $10. This is a startup with limited inventory that sells out all the time, so act fast https://www.exoprotein.com/tim!

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  At this altitude, I can run flat out for a half mile before my hands start shaking. Can I ask you a personal question?

• 0:08Speaker 01

  Now, what is the appropriate time?

• 0:12Speaker 00

  I'm a cybernetic organism, living tissue over metal endoskeleton.

• 0:23Tim Ferriss?

  This episode is brought to you by Foodist Kitchen. Sometimes the most life-changing habits are the ones we put off, of course, and learning to cook is at the top of that list. I only finally took the plunge when writing The Four Hour Chef, and it turned my eating and my life into high-definition. That is what I want for you. The secret to learning to cook and enjoying it is doing so without recipes. Following recipes slavishly makes cooking a pain in the ass. It's miserable, time-consuming. Doesn't have to be. This is where Foodist Kitchen comes in. Foodist Kitchen is a 30-day program that teaches you how to cook without recipes. I highly recommend it. Chopping and sautéing are just a small part of the whole deal. You also need to know what flavors taste good together, what it means to cook until done. Whoever knows what that means, by the way, if you're novice. Foodist Kitchen brings all of these skills together

• 1:07Tim Ferriss?

  so that you can walk into the kitchen, open the fridge, and have an intuitive sense of what to cook and how to do it. It was created by Daria Rose, who's a friend of mine, one of my cooking mentors for The Four Hour Chef. She's also a neuroscience PhD, and specifically designed this program so that the skills you will learn turn into habits you will keep and enjoy for life. And she has offered a $15 discount off your membership. So check it out, Foodist Kitchen. That's F-O-O-D-I-S-T kitchen.com/tim to learn more about the program. And if you haven't learned how to cook without recipes, you don't know what you're missing. It is awesome. Change that today. Check it out, foodistkitchen.com/tim. This episode is brought to you by ExoProtein. It's one of the startups that I work with. I love what they do.

• 1:50Tim Ferriss?

  These guys are making protein bars using cricket protein powder. And before you screw your face up and look disgusted, I bet they taste better than any protein bar you've ever had before. I devour these bars after lifting sessions. I take them with me on the road. The recipes were developed by a three-michelin-starred chef, former head of R&D at The Fat Duck, which was ranked the number-one restaurant in the world. During his tenure, the bars are paleo-friendly, no gluten, no grains, no soy, no dairy, etc. They are high in protein and flavor and extremely unique, and they do not pop your glycemic response up oddly enough. And you can look that up online to see some stories on that. Ferenstein, that's the journalist who looked at it. On top of all that, they are less processed than nearly all protein bars you'll be able to find. This is your

• 2:35Tim Ferriss?

  chance to see what the hype is about. The founders were just on the Forbes 30 Under 30 list, and they are offering a deep discount to Tim Ferriss Show listeners. If you go to exoprotein.com/tim, that's E-X-O protein.com/tim today, you can try a sampler pack with all of their most popular flavors for less than $10. That's exoprotein.com/tim. And I would recommend doing it relatively fast, and that's not a BS scarcity thing. They're a startup with limited inventory, and they sell out all the time. That is what happened last time I mentioned them. So check it out, exoprotein.com/tim. Hello, boys and girls, children and squirrels. This is Tim Ferriss, and welcome to another episode of the Tim Ferriss Show. This is not one of my normal deconstruction episodes

• 3:19Tim Ferriss?

  where I interview someone. This is an in-between episode, but a very, very valuable one, I hope. It is with Chris Sacca, who is recently the cover story of the Midas issue of Forbes magazine. He was on the cover because he is a newly minted billionaire and the proprietor of what will likely be the most successful venture capital fund in history, lowercase one. He's an early-stage investor in companies like Twitter, Uber, Instagram, Kickstarter, and many more. Also wears cowboy shirts, has a great beard, and is hilarious. And in this episode, he answers all of your most pressing questions. They were voted upon, and he takes the most popular, the most interesting, and gives some fantastic responses ranging from life advice to business advice and everything in between. So, without further ado, please

• 4:03Tim Ferriss?

  enjoy this episode with Chris Sacca.

• 4:06Chris Sacca?

  How's it going, everybody? This is Chris Sacca. But because of this microphone and these headphones and this fancy podcasting setup that Tim Ferriss made me go by so that I could do this update with you, I'm feeling pretty hip-hop right now. If you look at me, I think, you know, I asked some of you for suggestions for the name. I like Sir Tweets a lot. The Unicorn Chief, aka DJ Sacca Juwia, aka MC140, aka Sakatumi, maybe DJ Term Streets, Cowboy Shark, MCVC, or even Sacca Khan. I think I'll go by any of those handles and more. In fact, at the end of listening to this, if you have other suggestions for my DJ handle, just put them up on Twitter to @saka.

• 4:50Chris Sacca?

  Meanwhile, you guys were very cool to put up a bunch of questions on Reddit, following my discussion with Tim. It's always fun to talk to Tim. That particular discussion was in the midst of my 40th birthday celebration. So we were foggy, but having a good time. And I really appreciate the question you guys put up. I am going to try and tackle a bunch of them. Tim asked me to do five or 10, but let's see how many we can bang out before real-life responsibilities catch up to me. One of the first questions I saw was, "Hiring and finding a good technical co-founder versus exporting to a mobile web development company to retain equity." This is always challenging just because I think one of the first questions I get asked very frequently is, "Where do I find a good technical co-founder?"

• 5:35Chris Sacca?

  I think you can just go to where the geeks are hanging out, virtually and physically. You can go to hackathons, you can hang out on GitHub and in Hacker News and in places where geeks are. And I think you'll find that if you're non-technical yourself, you'll find you're actually more helpful than you probably thought you were or that you could be. I would encourage you to just not find the process of finding a technical co-founder so daunting. As much as you may be envious of their coding skills, they probably have a quiet respect for the other things at which you can be helpful, the other aspects of the business as well. That said, what I've seen when people outsource their mobile and web development, particularly for a tech-oriented company, is it just puts a glass ceiling on the company.

• 6:19Chris Sacca?

  You usually can get a first and a quicker round one and round two of your product, get your MVP out there, but then you're stuck with a codebase that you can't really expound upon or improve in any way.

• 6:32Chris Sacca?

  And you end up tearing it down and starting from the beginning. And so at a time when your users are most excited and you're most excited about building something for the future, you don't really have the tools to improve it. And that's incredibly frustrating. So I think double down, get that technical co-founder right up front. And I think that'll put you in the best spot. The last part of your question there was about retaining equity. Don't be short sighted about retaining equity in the early days. Anyone who's going to come on and be worthwhile is going to be worth a chunk of the company. And if they're not, take it back. The next question here, if you were to give a commencement speech tomorrow, what would your message be? My first message would be congratulations to all of you who are graduating in January. Now you don't have to, they'll just have a much longer spring break. It'll be great for them.

• 7:15Chris Sacca?

  That said, I gave a commencement speech in Minnesota a few years ago. I was pretty proud of it. I think it's probably YouTube-able and Tim has a great way of posting links to these things on his site. But I was at the Carlson School of Management up at the University of Minnesota. And I will say it was funny because I actually, they, they contracted me for that speech through my agent. We agreed upon a fee. I put a lot of heart and soul in any time I've talked publicly. And so I showed up to do the speech and I didn't realize they actually had me give the same speech three times to three different graduations that day. It was intense, but I had a really great time. They filled up this hockey arena and three times I gave a speech and I actually think it got better. I made, I took notes, I saw which jokes got no reaction and gave the speech.

• 7:56Chris Sacca?

  But the core of it was to be your unapologetically weird self. I think authenticity is one of the most lacking things out there these days. And that as people strive to all pad their life, their resume and their credentials, we've started to miss out on some of the fun edge cases that make life interesting and that make us want to be around other people and that make us helpful and valuable. And so I spent, you know, an hour or so going into that stuff. So I would encourage you to go check that out because I think it holds up now. Next question, what are the keys to success for an amazing disco night? Good, good memory. When Tim and I did the podcast originally, it was indeed about to be Disco Night on Necker Island.

• 8:38Chris Sacca?

  We were on Richard Branson's island, celebrating my 40th birthday, and I gathered a bunch of great friends. And Tim was there, and man, it was just a week of really competitive athletics during the day, intense backgammon and chess matches, debates about the future of tech, lot of heavy drinking and partying and dancing, and you name it. We were lucky to have Richard Branson and a bunch of fun people there with us. What I found from over my years of going to parties that I've hosted or that other people have hosted, if you could bring one thing to make for an amazing party night, it's wigs. Seriously, go to Amazon right now and order 50 mullet wigs. Mullet wigs change everything.

• 9:22Chris Sacca?

  I was at a party recently, a good buddy of mine's 50th birthday party, and the crew that he had, there was a mix of people. Some were serious business associates, others were kind of really fun, aggressive party people. There were some athletes, some artists, they were all walks of life, different cultures too. And I brought a bag of 75 or so mullet wigs, and I just opened it up and I laid them out on a couch, kind of off to one of the sides of the party. It was amazing. It didn't take 15 minutes before people found their way over there. And I mean, even someone like the stage financial people went over there, found themselves a mullet wig that they felt best represented who they are and what they stood for. Maybe it was a Dog the Bounty Hunter style, maybe it was a real short long,

• 10:07Chris Sacca?

  maybe it was just a bandana that had a rat tail coming down off the back of it. But everyone had an opportunity to express themselves, and the party just kicked up a notch. It's incredibly inclusive. And what you'll find too is they're even great for women. So like a brunette will put on a blonde mullet wig, vice versa. It's fun. So the key to an amazing disco night. Because you asked, mullet wigs. What are the cases where startups should not take investor money? I think startups should be very wary of taking investor money if they haven't really checked their guts and made sure that their expectations of what is considered as success lines up with what the venture investors' expectations of success are. There's this whole category of businesses called lifestyle businesses

• 10:49Chris Sacca?

  that you'll hear mentioned with disdain in the venture community, as if those companies are some kind of failure. So a lifestyle business usually refers to something that's not growing particularly fast, but it's throwing off enough cash for the founder and the employees to live comfortably, and no arguments here. But it's not growing 10x year over year. It doesn't look like it's going to go public anytime soon. So that's a lifestyle business. Generally, VCs look down on lifestyle businesses because they themselves, the VCs, have investors whose expectations are huge racks, stacks of cheddar being passed to them at the end of the VC fund. And so when a VC puts money into a company

• 11:30Chris Sacca?

  that evolves to become a lifestyle business, that's a bad result for a venture investor. And yet, that might be a great result for you, the founder. In fact, you guys are all fans of Tim. And if you read Tim's books and follow the people he highlights, many of them have successfully pulled off lifestyle businesses. Work relatively balanced hours, know some, you know, generate income, live by the beach, have some control of your own destiny. That's great. It's kind of like the definition of American success. But that doesn't necessarily align with what a lot of investors are looking for. And so I think you shouldn't take investor money unless you are confident that you and your investors define success in the same way. Which person would you most like Tim to interview? You know, Tim and I talk about this sometimes, and he's approached me about people that he wants to interview.

• 12:15Chris Sacca?

  But I have a different take on it. I would like to see Tim interviewed by somebody else.

• 12:24Chris Sacca?

  I would like to see Tim interviewed by God. Does that work? Does this sound like God right now? Tim, it's God here. It's been a while. Haven't heard much from you since you started having Sam Harris on the podcast. Anyway, let's dive in. Question number one. Your fridge is constantly filled with your own blood and urine samples, yet you keep praying to me, asking me to convince the perfect girl to settle down with you. Drawing any correlations here, my little Tim? Tim? I think Tim just learned that there are much deeper costs to having your friends buy their

• 13:09Chris Sacca?

  own audio visual equipment for your podcast. So the question was, who should Tim interview? And I think I want to turn the tables on that. I think Tim is an amazing interviewer. He's got a really unique perspective on identifying guests, convincing them to come on the show, the kinds of questions he asks them, what he learns from them and translates to all of us to be able to act on. It's unique in this world. Tim really is one of the best interviewers in media. That said, very infrequently does anyone interview Tim? And as a longtime friend of Tim's, I know where some of the bodies are buried. I've been with him through thick and thin, and I think we have some other fellow friends who do as well. And so what I propose is that we bring back a panel of interviewers from past episodes

• 13:54Chris Sacca?

  to turn the tables on Tim, put him under the light, and see what we can get out of him. I want to hear what you guys think about that. Hit me and Tim up on your socials and let's see if that's a doable thing. One of you asked, what's your best advice for getting down to business when it's getting tough? Whether that be working a late night or just going for a run? So in my mind, those are two really different categories, but I think I might undertake those challenges differently. In my world, the physical challenge always just seems so surmountable. You can go just get it done. It's finite. You go out for a run and you know how many miles you're going to run, or you run until you stop running. But with more intellectual pursuits, it feels like there's no finish line there. So it's always really challenging for me.

• 14:38Chris Sacca?

  Because I feel like I could always be doing more and I don't always know when something is done, like I do with a physical challenge. I'm even more prone to distraction when I'm doing something that's not inherently physical. So as a result, if I really want to get some shit done, I first focus on the physical space. I want to be out of the way. I want to be clear of visual distraction, of audio distraction. I usually have some headphones on, even if they're not actually playing music. More about that in a second. I make sure nothing else is on the desk. You know, we, we have people who come and look at my workspace and laugh because there are no papers. I've got fax machines out of my life in like 2006 or seven or something

• 15:20Chris Sacca?

  like that. I just, I really don't have things in the space in which I want to get something done. I create digital space for myself, so I turn off all notifications. We have a company called Rescue Time that Tim and I are both investors and advisors in that has a tool that will just basically shut off all the other distractions for you in your desktop environment. But put your phone on, do not disturb. You're not going to miss anything. Music wise, sometimes I just wear headphones without even focusing on whether there's particularly good music through them. They, they send a signal even, a social signal. I am not to be interrupted. That said, I know a lot of people put classical music on, but I wouldn't jump to the assumption that that's what works best for your brain. Strangely enough, when I was in law school, a dirty little secret

• 16:04Chris Sacca?

  of mine that I ever went to law school and was a lawyer, but I could not sit still through reading the most boring of books. And so I tried a bunch of different music types and weirdly, what worked for me were Grateful Dead bootlegs. There was something about them, even though they had lyrics, there was something about them melodically that I could just zone out that conscious part of my brain and instead focus on reading the books. For me, these days, I listen to a combination of New Age and stuff like that, like Andreas Volenwider, George Winston for piano. But I also have been known to put on hip hop tracks on repeat. And I know that's something that's been discussed in the podcast before. Matt Mullenweg, who's a, a good friend

• 16:46Chris Sacca?

  and a guy whose company I've invested in, he listens to the same track over and over again when he's coding. I do the same thing when I'm writing. Even for very long things, I will just have a song on repeat. Some of those songs have included the Harlem Shake, believe it or not. I can bang through an amazing amount of email with the Harlem Shake going to the background. I listened to that song Lift Off by J and B. And I've just put that thing on repeat for over and over again before to get something done. I think I cranked out a few thousand words with that actually in the background. So who knows, but generally what all of this comes down to is whether you are on offense or defense.

• 17:27Chris Sacca?

  And I think that as you survey the challenges in your lives, it's just which of those did you assign yourself and which of those are you doing to please someone else? Are you out there actually working off your own to do list? Or are you letting everybody else write your to do list for you via your inbox? And I think being on offense requires more work. You have to do the work of writing down the to do's of creating the space in which to get it done, of planning the execution, of pushing everything else aside and prioritizing your work. And so I think before we even get to how you arrange your physical space and your digital space and what's in your head and getting your food and nutrition right, making

• 18:10Chris Sacca?

  sure you have a glass of water, making sure you've gone to the john. I think the number one thing you can do is focusing on, am I doing this thing for me? Or am I doing this thing for someone else? Okay, you asked if you could move your family to anywhere in the world and start fresh, what country would you move to? So I don't know about starting fresh. I don't necessarily want to think I, I don't, I don't think I necessarily want to start fresh right now. I've got a pretty good setup. That said, at multiple points in my life, I've certainly uprooted everything and moved, even when it didn't make any sense to. Some of you don't know this, but despite being what people continually refer to as a Silicon Valley investor, I haven't actually lived in San Francisco since 2007.

• 18:52Chris Sacca?

  I moved to Truckee, California, up in Lake Tahoe, amazing place to live, a great place to live, but certainly not a tech hotbed as we think of it. And by that time, I really hadn't made real money in the investing game. And so there I was, an aspiring venture investor, moving away from the epicenter of Silicon Valley to a rural region, up in the woods, in the mountains. I did that, though, because, as I referenced earlier, I was going on offense. I was sick of doing coffee after coffee of just routine meetings in San Francisco. And instead, I wanted to go on offense. I wanted to have the time to focus, to learn the things I wanted to learn, build what I wanted to build,

• 19:34Chris Sacca?

  and really invest in the relationships that I wanted to grow, rather than just doing a day of coffee after coffee after coffee. And so I moved up to Lake Tahoe. Again, on paper, it didn't make any sense at all. Fast forward a few years, just as things in Lake Tahoe were starting to really make sense, my wife, Crystal, and I, on like two weeks' notice, decided to buy a house in LA and start splitting our time with Los Angeles. Neither of us had ever lived there before. We didn't really have any business there at all. It just felt like the right thing to do for us. And again, people read into it like, oh, Chris is endorsing the LA startup scene or something. It wasn't any bigger than that. It was just Crystal and I decided that that's what made the most sense for us at that time. And so we did it. We made that jump.

• 20:15Chris Sacca?

  And we love LA, but last year, we made another jump to Montana. And we found that there were some things we wanted to do and to experience that were in Montana that weren't in Los Angeles and weren't in Truckee. And so I embody that spirit of just picking up and moving my family. We have three kids now, and so picking up, moving my family. And it's an adventure, and it's fun. And I think it teaches them flexibility, adaptability. It certainly makes you question how many things you own, because it's hard to move all your stuff. So you end up owning less stuff. But that said, I think the thing that it reminds me of and that I'm most grateful for is how every time I've made one of those moves, I've done it by choice.

• 20:56Chris Sacca?

  And I think there are too many people on this planet right now who don't have that control over their own destiny and who are forced to make much more drastic moves, not by their own choice. Whether it's on one extreme, a Syrian refugee, or on the other extreme, someone in the United States who's losing their house or whose job has been... Downsized. And I think it's a moment for reflection that as much as I really enjoy the culture of lifestyle design, implicit in it has to be some gratitude that we're fortunate enough to make these kinds of choices. And so, you know, ultimately, my family will live outside the country. Significantly, we have three kids under five right now. So letting everybody grow up a little bit. But my wife grew up all over the world. I want

• 21:41Chris Sacca?

  to have that same experience for my kids, too. I want them to be exposed to the human condition. I want them to know people of every color. And I want them to learn other languages and just have that, that broad human experience that I don't think you can get living in a wealthy suburb of a major US city. Chris, in light of your admiration of Buckminster Fuller and fascination with sci-fi and musings about the future, what are your thoughts on how human societies can adapt to the increasing speed of tech advancement? And then there were some other questions like this. How do you see your family's day to day life changing as virtual reality comes to prominence? Artificial intelligence starts replacing a certain number of jobs. Biotech starts changing

• 22:24Chris Sacca?

  our lifespans and we begin to colonize other planets. Oh, man, this just got dark. Well, first of all, let me just say planet colonization is not a short term concern of mine. The physical limitations of space travel render it pretty low on the list for me. It's just not going to come up for myself, maybe my kids, grandkids, probably, but it's not high on the list for me. Unless you know something about hyperspace, I don't know yet. So let me know. But posting back on these other questions that I think are truly tough questions about the impact of technology and societal adaptation, I am concerned. We approach a lot of this stuff with this universal embrace of progress by with a really engineering centric

• 23:06Chris Sacca?

  focus on what the measures of progress are. I mean, we think about each year at CES, they show a display with more and more resolution, and they show a virtual reality headset with less and less latency, and they're incredible technical achievements. Yet, what I worry about is that those displays are outpacing the rate of our biological and physiological adaptation. Years ago, someone gave me a Sony PSP. It was somebody at Sony gave me a PSP and I was monkeying around with it on a flight and I was playing Grand Theft Auto. And when I got to the airport, I got in my car and started driving and realized I was

• 23:47Chris Sacca?

  driving incredibly aggressively. I was, I was a really asshole driver all of a sudden. And it was my brain hadn't totally distinguished between the fiction of that game, even though, and again, you know, the PSPs, tiny screen, weird controls, a lot of latency, but my brain, this neural pathway had been created that told my brain that it confused it. Was that real or was that fiction? And so when I got to the real highway, I was driving recklessly. Now, I'm not making an argument for game censorship, et cetera. I'm, I don't want to make this into a bigger discussion than that. But the reality is that if you've tried a VR headset now, you know, your brain doesn't really know what the hell is going on. You

• 24:31Chris Sacca?

  walk up to the edge and you feel fear. You look down and it's scary. And that's one of the things that's interesting is that one after one, these advances are technical achievements. And I'm really impressed by the teams that build these. But I don't think we're making the same investment in the biological and psychological ramifications of some of these things. And I don't think it's all bad at all. I'm an optimist. You, you asked me about Buckminster Fuller. And he is the optimist when it comes to technology. He was the believer that tech could solve all of our problems. He held steadfast that technological progress would ensure that the whole planet's needs could be met in

• 25:13Chris Sacca?

  terms of food and education, natural resources. And yet I, and I'm sure you see a digital divide. There are haves and have nots. A healthcare divide, an education divide, a criminal justice divide, a nutritional divide. And yet, much of the tech available today doesn't seem to be improving those situations very much. You know, I had this interesting lesson in this years ago when I worked at Google. I was working for Larry and Sergey and we had an opportunity to partner with Walmart on a big project. It was related to the wireless stuff. We realized there were about 4,000 or so Walmart locations in the United States. And if we'd put a cellular tower on top of each of them, that would have been a great way to build a wireless network. That was one of the things I was focused on back then.

• 25:57Chris Sacca?

  And I once made some offhand a comment about how partnering with Walmart would be, oh, that'd be a dark day for me. And Larry and Sergey asked, why? What do you mean? And I said, well, you guys are fans of Walmart? And they said, yeah, it's like the triumph of efficiency. I mean, think of that. Like, think of all the money that's been saved by consolidating everything into massive purchasing power and bringing down costs throughout the supply chain and central distribution hubs like that. It's an amazing triumph. And so they saw us in engineering and economic exercise. And who can blame them? They're one of the most successful engineering and economic pairs ever. But as someone who grew up in a small town where the downtown was replaced by a Walmart

• 26:41Chris Sacca?

  out of the center of town, I saw Walmart as the catalyst for a lot of American downtowns being abandoned. And I saw a lot of people losing their jobs and their identities and the control over their own destinies. And it was interesting to be sitting in that room with them and have those two completely different perspectives on that company because of how we'd grown up and what we'd been exposed to and the lens through which we saw the world and how we evaluated successful outcomes. And so to bring this back to your question about the future of technology and societal adaptation, one of the things I think it's hard for me to do is to put myself always

• 27:24Chris Sacca?

  in the shoes of those who are going to end up on the wrong end of these equations. One of you asked a question somewhere who postulated that it would be something like, in the future, 30% of us would have it good and 70% of us will have it bad. I actually think on this current path, it's going to be way worse than that. There will be way fewer people who have it good and the rest will struggle. In the old economy where people used to have careers and pensions and benefits, that doesn't exist anymore. It's been replaced by people who are called associates, who work hourly, who don't really qualify for benefits, who don't have a safety net. And there's scary implications to that. I saw a prophetic comment recently on Twitter about how the future will basically be

• 28:09Chris Sacca?

  10 trillionaires and the rest of us will be taking turns serving venti espressos to each other and driving around in each other's Ubers. Obviously, that's intensely dystopian, but there's a trend line pointed in that direction. And yet, what I worry about is that it's hard for those of us who are even listening to this podcast right now to parse that. Because when you think about your day, when you think about your month and your year and your life up to this point, I, like you, like to think that I hustled to get here. I can point to all the times I've worked my ass off. But the reality is, apart from just the advantages of being white and a male and

• 28:50Chris Sacca?

  a native English speaker with an American passport, in my case, I was always just smart as hell. I went to college for math, starting in 7th grade. And I've always known that if there's a system somewhere, I'll figure it out. I'll hack it. And that's the challenge, is that how do I begin to perceive the fear and the anxiety and the hopelessness and even the helplessness in a system if I just know in my heart that I will always figure out a way to come out on top? That's the myopia that concerns me the most. And that's what I think is so prevalent in Silicon Valley today, is that Silicon Valley is populated mostly by folks who would consider themselves winners of the traditional race,

• 29:35Chris Sacca?

  people who floated to the top of their educational institutions, who have succeeded in the ranks of their traditional businesses, who have taken risks, entrepreneurial risks, and who've had great success. And yet, all of that has come at the exclusion of a lot of the voices that I consider to be vital in a worthy society, in a round and robust and exciting society. But they've just been, it's beyond gentrification. They're just not voices you interact with much in Silicon Valley today and in the tech world today. And I think that myopia, it concerns me because I think it's actually going to end up costing us as an industry, a lot of success. But I also think the lack of empathy there

• 30:19Chris Sacca?

  is going to lead to more social and political unrest. And this country, there's a really good shot it unravels. I mean, I'll just say, you know, this leads into, one of you asked a question that says, Chris, you recommended two books on the first podcast, How to Make Millions in Rising Asia, and then the other book's called Not Fade Away, both to cultivate a more empathetic perspective. Why empathy and what got you there? And what is everyone missing? I think I touched on a lot of that already, but you know, as a builder, as an entrepreneur, how can you build something for someone else if you don't have even enough glancing familiarity with them to imagine the world through their eyes? How can you

• 31:02Chris Sacca?

  define the feature set? How can you think about pricing? I mean, I might not care about, I don't care about a $4.99 app install, but almost everyone on the planet does. How can you build something with identity and heart? You're building it for an audience you don't really know. Sometimes you can luck into it. And sometimes audiences have problems they themselves don't understand. But there's an incredible amount of empathy, I think, missing in the system today. And I think you don't have to look far to understand why there's so much political discord, particularly when, you know, I think those of us in tech tend to either be progressive or libertarian. But generally, within the tech world, there's

• 31:44Chris Sacca?

  been a lot of animosity toward those in the extreme right, the anti-science right. And yet, I don't think you have to look far to understand where that comes from. You've got a huge group of people in the United States who have basically lost the control over their own destiny. The small businesses they used to run have gone away. They've lost their farms. They've lost their houses. They've lost the ability to plot their own future. When they get up in the morning, committed to work hard, they don't necessarily know that it's going to work out for them. If that were you, you'd probably be looking for scapegoats too. Now, I think some of those scapegoats are misplaced and the blame isn't laid in the right place, but underlying that though is a certain amount of empathy.

• 32:27Chris Sacca?

  And part of that's because I've gone and spent time with those people and tried to understand their plight. And I think those of us who will take that time, invest in that understanding, our lives will be richer for it, our societies will be stronger for it, our kids will be better for it. And I think our products and the services we offer will actually play out a lot better as well. Was that a long enough answer for you? Chris, if you were to start your own school to educate youth, how would you do it? What would you concentrate on? How much would you pay the teachers? Is education the answer to the world's problems? Presuppose that you weren't using schools to just train your kid to be "successful" with air quotes around it. Think about how the purpose of education up to this point has always been, well, if

• 33:10Chris Sacca?

  you do well in school, you can get into a great college. Get into a great college, maybe you'll get into a great grad school and then you can get a great job. And that has been the basically baseline, underlying assumption for our education system for at least a generation now, probably two. And yet, imagine if that weren't the case. I mean, I was lucky. I went to the School of Foreign Service at Georgetown, one of the most competitive schools in the country. And among my peers were kids who went to all the fanciest boarding schools, all the best prep schools, all the best high schools. I went to a public high school. I went there with absolute trepidation that I would just get trampled by these kids. And while their life experiences are certainly more diverse and exciting than mine because

• 33:52Chris Sacca?

  they had the money to do all kinds of cool things and they had AP classes and stuff that I didn't necessarily have, spending time with them, I realized that their worldviews were incredibly narrow. Most of them had never worked or lived among poor people. Most of them hadn't actually volunteered. Most of them hadn't had service jobs, tipping jobs, they hadn't worked manual labor. Same went on when I worked out in Silicon Valley with top Harvard and Stanford grads at Google and beyond, all across the valley. Same kind of thing. I found people who were incredibly successful with those air quotes and yet had very unidimensional lives. And so, back to your question, if I were to start my own school, what if you started

• 34:33Chris Sacca?

  a school that presupposed the goal was happy kids? And I mean happy with a capital H, balanced. Thoughtful, compassionate, doers. What if their resume wouldn't ever matter? Some of you have heard me say before that the only people who care about your GPA are people who you've given no other basis to evaluate you. So what if instead you wanted to build an education that fostered interestingness, understanding, action, experience? I don't know what that school looks like, but that's how my wife Crystal and I have been approaching raising our three daughters. I've yet to see test scores correlate with happiness.

• 35:18Chris Sacca?

  I've yet to even see test scores correlate with learning with a capital L. And so I don't know what I would do to reinvent the education system or any particular school, but it's certainly top of mind for me. One of you asked, can you elaborate on the Ironman you completed in 2008? What real world transferable lessons did you learn? So the Ironman I did, I actually did two of them five weeks apart. One was just a training session where I realized there was going to be so much training that day. I was like, fuck it, let's just do the whole Ironman. And then I did a formal sanctioned Ironman a few weeks later. I had a phrase I kept repeating in my head over and over again, which was, tonight I will be in my bed. Tonight I will be in my bed. Tonight I'll be in my bed.

• 36:00Chris Sacca?

  And it was something I just repeated that to remind me that the pain of what I was going through was temporary and that no matter what, at the end of that day, I would be in my bed that night. In 2009, I rode my bike across the country. It was a 40 day trip with 35 days of riding, incredibly intense, almost 100 miles a day. And I hadn't trained for it at all. A friend of mine gave me the trip about two weeks before it left. And so I showed up to the West Coast muffin topping out of my, my Lycra bike shorts. I couldn't name any of the parts of my bike. I just bought a bike. Actually, I didn't even have a road bike at the time I agreed to do it. I'd given away my tri bike, but I used the same principle there during one of the most

• 36:45Chris Sacca?

  painful experiences of my life. Just every time I would just say, tonight I'll be in my bed. And so I don't know if you can translate that to everything you do in the real world, but try it. Someone asked, are you more inclined to invest in a founder who has a proven entrepreneurial track record or someone who's a first time founder, but a seasoned professional with relevant expertise in the area they'll be competing? I really worry, expertise can be a contra indicator. Think about the Uber founders, Travis, Garrett, Ryan. None of them had ever driven cabs before or limos. And what I think I've found is that experience often deeply embeds the assumptions that need to be questioned in the first place. When you have experience of something, you don't notice the things that are new about it.

• 37:27Chris Sacca?

  You don't notice the idiosyncrasies that need to be tweaked. You don't notice where the air gaps are. One of the things I've always admired about Evan Williams as an entrepreneur is his ability to see the assumptions that the rest of us are taking for granted. On the other hand, I don't always think track records play out. I do not automatically back someone who's just had, who had a great first exit. I don't think that's necessarily determinate. Surely there are founders who go on to show us that time and again, they are capable of building cool stuff. But often what happens is you'll see that second time founder malaise where if they've already exited, they might not have that same fire in their belly.

• 38:12Chris Sacca?

  You have to test those assumptions. They may keep making every decision based upon what they did the last time around, even though there's new facts this time. They may try and pattern match, and that can be distracting. So be careful about that. Next question was, Chris, I know this is a tired subject, and hopefully one day we won't have to talk about it anymore. But what are some of the ways that VCs can bring more diversity to their firms and more diversity to their portfolios? Women and people of color are underrepresented on both sides of the table. Truth is, it doesn't really matter what you're doing. A diversity of thought is good for business. Why the reluctance from VC? Well, I'm glad you brought it up. It's not a tired subject, and it's not going to get better unless we talk about it.

• 38:56Chris Sacca?

  And I'm glad, I'm glad there's awareness. I'm glad people are talking about it. But here's one thing that I think is going to end up fixing it in the end for us. It's greed.

• 39:06Chris Sacca?

  The reality is that these underrepresented talents, women and people of color and LGBT community, one of the interesting things about this is that they all represent huge communities of disposable income with unique product desires, with unique tastes. These are huge economies that have largely been ignored. And so what happens is Silicon Valley has invested in the things it understands and the things that white guys get to the chagrin of these other founders. And as a result, they've missed big markets. I mean, we get credit for being early StyleSeat investors. And yet, what was funny was we invested in StyleSeat because we liked Melody and we

• 39:51Chris Sacca?

  thought she had some hustle. I had no idea how big that market was until my wife, Crystal, explained to me how big that market was and how much women actually spent on their hair. And then later, when I checked back in with Melody, I learned how much African-American women spend on their hair and as a percentage of disposable income. It was huge. And I started to learn about this huge, huge economy. And so I put more money in the company and then I took her out to help tell the story up and down Sand Hill Road, and she was ignored because most white guys don't pay more than 20 bucks to get their hair cut. And so they have no idea what it costs to get a collar, what it costs to get a weave, what it costs to get a digital perm if you have Asian hair. No idea.

• 40:34Chris Sacca?

  And so it turns out that's an incredibly successful company going after a huge market. And now there are a lot of white guys who are figuring that out. And the company succeeded as a result of having, you know, it's led by a woman who's an incredibly successful leader with a dynamic management team of women. And it's going to be a success story. And I think the next time people get approached with a deal like that, they're going to remember that. A similar company that we have called InVenture, it's absolutely revolutionizing how credit works in a mobile environment, particularly in the developing world, led by a woman named Shivani Saroya. Shivani would be easy to underestimate, and I'll bring up just her physical stature

• 41:17Chris Sacca?

  by way of this prejudice, but she's like a short Indian woman. And it would be easy in the traditional, big, glad-handing, white guy venture capital world to just walk past her and say like, she can't be up to anything incredible. And if I were in a room looking for who I was, whose company I was going to invest in, I probably would have ignored her. The circumstance by which we met where I was seated next to her at dinner and I asked her what she was up to. And two and a half hours later, I realized I hadn't taken a bite of my food because as she pitched me what she was working on, it was so amazing. I was just, I was incredibly engrossed. I couldn't stop talking to her about it. Ultimately, I became a partner in her business and yet I saw as she went and told her story to

• 42:02Chris Sacca?

  other investors, I really do think they judged her by the cover and didn't take her seriously as one of the most aggressive, ambitious, savvy and successful entrepreneurs I've ever worked with. Inventure will be a huge company and it'll be thanks to Shivani, who not only founded herself, but taught herself to code. And yet I, I was as guilty as anybody. I really think initially I was judging the book by the cover and I wouldn't have given it the time of day unless we'd been forced to sit next to each other. And so I encourage everyone to keep building diversity and inclusion programs, to keep putting time into these efforts and talking about the subject

• 42:44Chris Sacca?

  because it's glaring and the extent to which we're seeing these communities underrepresented, it frankly just makes for a more boring and starched environment. I love going to Inventure for the board meetings and you can see if you go to Inventure, I-N-V-E-N-T-U-R-E, and look at their about page and who works at the company, you'll see it's the most ethnically diverse company, maybe in our entire industry. I have the most fun when I go to their offices. I think it's the most collegial and exciting and happy place I've ever been to. I think it correlates. And so when you've got just a bunch of white guys all hanging out with each other, I don't think it's, it's fun. I don't think this is rewarding. So hopefully this will continue to get better,

• 43:27Chris Sacca?

  but I, I just want to acknowledge the fact that I think greed will play a role in helping straighten that out. Where can I get some of those sweet shirts? Scully is my brand. I buy them direct from the company now. Well, they send them to me, but vintagewesternware.com is a good place to go look for all of them. If working in a startup environment, what should one do or focus on to learn and improve as much as possible? I think you should go to all the meetings you can, even the ones you're not invited to, and figure out how to be helpful. If people wonder why you're there, just start taking notes. Read all the other notes you can find in the company and gain a generalist knowledge that your very limited job function may not offer you one day.

• 44:11Chris Sacca?

  And just make yourself useful and helpful by doing so. That's worked for me in a few different environments, and I encourage you to try it. Chris, what's next for you down the road a bit? Will you grow bored with the current VC path? Will it fascinate for decades? What would you be doing if you decided to stop investing? Well, it's not about getting bored. Solving problems and competing to make things better is always fun. And if you don't agree with that, this is definitely not the business for you. You should gut check on that. But instead, the current VC path for me can be frustrating. One of the hardest things as an investor is having so much time, energy, money, passion, and even identity wrapped up in a company that you don't actually run.

• 44:55Chris Sacca?

  It's exhausting to not be able to make those decisions and yet to have so much at stake. Plus, as these companies get bigger and bigger, yes, it means bigger dollars, more money potentially to be made. But it also means bigger egos, more politics, more pissing matches, more backstabbing. I realized all this a few years ago, and I realized the cost, I wish it was coming for me. I wasn't sleeping very well. I was gaining weight. I wasn't getting the exercise I wanted to. I had high anxiety. So I actually brought on a partner, Matt Mazzio. Matt not only helped re-energize me a bit, but he was a fantastic partner and really taught me some things about investing and about the companies that were going to be successful.

• 45:39Chris Sacca?

  And so a little over a year ago, Matt took over our funds day to day, and I became the chairman of lowercase. So I actually have stepped back from the VC path and the path that built the business. Still work on lowercase every day, but Matt runs our funds. In place of that, I have three kids now. I have an amazing wife, a brother who I'm really close to, my parents who I'm close to. I have been there to help my wife on her creative projects, just basically a support role on these incredible Scratch and Sniff Wine and Whiskey books she's written. We've worked with partners on restaurants,

• 46:20Chris Sacca?

  nonprofit work. I've tried to focus on getting back in shape. That was hampered by shoulder reconstruction I just had to do. Let me know, by the way, if you know any diet gurus with a favorite nutritional regime. I don't know. I'm out there looking for somebody. But at the end of the day, trying to be away from startups is an exercise in futility, I think, for me. And that that leads me to Shark Tank. You know, this this season, I'm on Shark Tank for a few episodes. And a lot of people have asked me why, as someone who stepped back from the day to day in my firm. And I think what I realized is that Shark Tank brought me back to what made me passionate about startups in the first place. It brought me back to a few founders with a great idea, with a product in hand, with early traction.

• 47:04Chris Sacca?

  And they want somebody to come on board and help them. And that's something that really was at the core of who I think I am. I get excited by those ideas. I get excited by that early traction and trying to parse which ones are going to work and which ones aren't. I'm thrilled by the opportunity to be helpful and have a stake in the upside when it all works out. I love putting my money where my mouth is, and I love staking my own brand and energy and reputation on these projects. And the stage of companies that come to Shark Tank are, they're raw, they're edgy, they're so early still. It just reminds me of my very first days of angel investing, when we would sit down at a coffee table at Brick House Cafe

• 47:47Chris Sacca?

  in Soma in San Francisco. And I would just get so thrilled. And I miss that. Over the years, as the business got bigger and bigger, and there are more and more lawyers involved, more and more accountants and tax people and regulators and filings, back office folks, I just started to lose touch with what was exciting about this business. And so that's one of the reasons why I'm absolutely thrilled to be on the show right now. And I think you'll you'll get more and more of that energy from me as the show goes on, as the season goes on. Anyway, thank you, everybody, for having me back. It's always fun to talk about Tim Ferriss behind his back. Let's keep this going out on the web. More than anyone else on the internet, I love you guys and gals as a tribe.

• 48:32Chris Sacca?

  You're insane. Tim and I talk about this a lot. You are savvy, curious, you're pragmatic, you're cheap as hell, you're ambitious, motivated, you're highly engaged, and yet you're not as crazy as one might think you'd be on paper. A lot of people, I think, would jump to the conclusion that Tim's devotees must be all crackpots. A few of you definitely are, but most of you are just really amazing people. And so I enjoy hearing from you. I'm @saka on Twitter, @saka on Periscope, and C Sacca on Snapchat. And last, let me just say I'm on Shark Tank this Friday, the 15th of January, 9:00 PM Eastern and Pacific.

• 49:17Chris Sacca?

  And I've got something to say. During those time slots, go into your calendar and schedule a vitally important meeting with me. Do it at my email address, C Saka, C S A C C A at gmail dot com. I'll accept your meeting and we can have a one-on-one, particularly if you give it a name that makes it sound like the fate of the world is riding on it. A few hundred people have done this already and are getting a kick out of it. So give it a try. This Friday, Shark Tank at 9:00. Let's watch it together. I'm sure I'll be on Periscope and we can live watch it together. All right, everyone, thank you so much. This has been fun.

• 49:49Tim Ferriss?

  This episode is brought to you by ExoProtein. It's one of the startups that I work with. I love what they do. These guys are making protein bars using cricket protein powder. And before you screw your face up and look disgusted, I bet they taste better than any protein bar you've ever had before. I devour these bars after lifting sessions. I take them with me on the road. The recipes were developed by a three-michelin-starred chef, former head of R and D at The Fat Duck, which was ranked the number one restaurant in the world during his tenure. The bars are paleo-friendly, no gluten, no grains, no soy, no dairy, et cetera. They are high in protein and flavor and extremely unique. And they do not pop your glycemic response up oddly enough. And you can look that up on Line to see some stories on that Ferenstein. That's the journalist who looked at it.

• 50:34Tim Ferriss?

  On top of all that, they are less processed than nearly all protein bars you'll be able to find. This is your chance to see what the hype is about. The founders were just on the Forbes 30 under 30 list and they are offering a deep discount to Tim Ferriss Show listeners. If you go to exoprotein.com/tim, that's E-X-O protein.com/tim today, you can try a sampler pack with all of their most popular flavors for less than 10 bucks. That's exoprotein.com/tim and I would recommend doing it relatively fast. And that's not a BS scarcity thing. They're a startup with limited inventory and they sell out all the time. That is what happened last time I mentioned them. So check it out. Exoprotein.com/tim. This episode is brought to you by Foodist Kitchen.

• 51:17Tim Ferriss?

  Sometimes the most life-changing habits are the ones we put off, of course, and learning to cook is at the top of that list. I only finally took the plunge when writing The Four Hour Chef and it turned my eating and my life into high definition. That is what I want for you. The secret to learning to cook and enjoying it is doing so without recipes. Following recipes slavishly makes cooking a pain in the ass. It's miserable, time-consuming, doesn't have to be. This is where Foodist Kitchen comes in. Foodist Kitchen is a 30-day program that teaches you how to cook without recipes. I highly recommend it. Chopping and sauteing are just a small part of the whole deal. You also need to know what flavors taste good together, what it means to cook until done. Whoever knows what that means, by the way, if you're a novice. Foodist Kitchen brings all of these skills together so that you can walk into the kitchen,

• 52:00Tim Ferriss?

  open the fridge and have an intuitive sense of what to cook and how to do it. It was created by Daria Rose, who's a friend of mine, one of my cooking mentors for The Four Hour Chef. She's also a neuroscience PhD and specifically designed this program so that the skills you will learn turn into habits you will keep and enjoy for life. And she has offered a $15 discount off your membership. So check it out. Foodist Kitchen, that's F-O-O-D-I-S-T kitchen.com/tim to learn more about the program. And if you haven't learned how to cook without recipes, you don't know what you're missing. It is awesome. Change that today. Check it out. Foodist Kitchen.com/tim.

• 52:41Speaker 04

  If you want more of The Tim Ferriss Show, you can subscribe to the podcast on iTunes or go to fourhourblog.com.

• 52:47Speaker 05

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• 52:50Speaker 04

  Where you'll find an award-winning blog, tons of audio and video interview stories with people like Warren Buffett and Mike Shinoda from Linkin Park, the books, plus much, much more. Follow Tim on Twitter. It's twitter.com/TFerriss.

• 53:03Speaker 05

  That's T-F-E-R-R-I-S-S.

• 53:05Speaker 04

  Or on Facebook at facebook.com/TimFerriss. Until next time, thanks for listening.