Tom Bilyeu: The Secret to Surviving Any Setback in Business | Entrepreneurship | YAPClassic

Tom Bilyeu faced failure long before he achieved business success. After his senior thesis film fell apart, the future he had imagined for himself suddenly felt out of reach. Instead of letting that moment define him, he rebuilt his belief system around learning, feedback, and skill-building, a shift that later helped him build Quest Nutrition into a billion-dollar business and launch Impact Theory. In this episode, Tom shares how entrepreneurs can use failure as feedback to make better decisions, build businesses around meaning, and stay adaptable as AI reshapes the creator economy. In this episode, Hala and Tom will discuss: (00:00) Introduction (01:48) Building Around Meaning and Purpose (05:08) Work-Life Harmony for Entrepreneurs (11:24) Using Failure as Data for Progress (16:39) First-Principles Thinking in Business (21:37) Tom’s Path to Self-Improvement (24:10) The Illusion of Free Will (29:32) How to Beat Laziness to Achieve Your Goals (32:50) From Crushed Dream to Growth Mindset (40:17) The Power of Storytelling in Business (44:50) Starting the Journey to Entrepreneurship (50:17) The Future of AI and Content Creation Tom Bilyeu is a serial entrepreneur and co-founder of Quest Nutrition, which he helped build into a billion-dollar business. He is the co-founder and CEO of Impact Theory, a media company focused on storytelling, mindset, business, and personal empowerment. Tom is also the creator of Project Kyzen, a video game and virtual world built around community, user-generated content, and empowering ideas. Sponsored By: Indeed - Get a $75 sponsored job credit to boost your job's visibility at Indeed.com/profiting Shopify - Start your $1/month trial at Shopify.com/profiting. Northwest Registered Agent - Get a complete business identity with Northwest. Visit northwestregisteredagent.com/YAPFree and start using free resources to build something amazing. Mindstone - Master practical AI skills without the complexity with Mindstone’s AI Competency Programme. Head to experience.mindstone.com/yap and get 10% off. AT&T - Stay connected with reliable, secure internet built for entrepreneurs. Switch to AT&T Business at business.att.com. Quince - Make your summer wardrobe feel easier. Go to Quince.com/profiting for free shipping on your order and 365-day returns. Now available in Canada, too. Resources Mentioned: Website: tombilyeu.com LinkedIn: linkedin.com/in/tombilyeu TikTok: tiktok.com/@tombilyeu Instagram: instagram.com/tombilyeu Determined by Robert Sapolsky: bit.ly/RS-Determined The Tao of Jeet Kune Do by Bruce Lee: bit.ly/BL-TaoJeetKune Active Deals - youngandprofiting.com/deals Key YAP Links Reviews - ratethispodcast.com/yap YouTube - youtube.com/c/YoungandProfiting Newsletter - youngandprofiting.co/newsletter LinkedIn - linkedin.com/in/htaha/ Instagram - instagram.com/yapwithhala/ Social + Podcast Services: yapmedia.com Transcripts - youngandprofiting.com/episodes-new Entrepreneurship, Entrepreneurship Podcast, Business, Business Podcast, Self Improvement, Self-Improvement, Personal Development, Starting a Business, Strategy, Investing, Sales, Selling, Psychology, Productivity, Entrepreneurs, AI, Artificial Intelligence, Technology, Marketing, Negotiation, Money, Finance, Side Hustle, Startup, Mental Health, Career, Leadership, Mindset, Health, Growth Mindset, Passive Income, Online Business, Solopreneur, Networking

• 0:00Speaker 00

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• 0:45Speaker 00

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• 1:08Speaker 01

  Meaning and purpose is ultimately all that matters. If you have all the money in the world, but you don't believe in what you're doing, then it will be a very empty pursuit. Progress is a foundational pillar to human happiness. The average human is designed to get better. So if you put time and attention into getting good at something, you will actually get good at that thing.

• 1:26Speaker 00

  How do we push through our emotions to achieve our goals?

• 1:30Speaker 01

  I think people should, don't let anybody tell you something is impossible unless it legitimately violates the laws of physics.

• 1:37Speaker 00

  You've built billion-dollar companies across different industries, and right now, money is really not a concern for you.

• 1:44Speaker 01

  Money only monetizes once. You can only spend it one time. But knowledge and connections monetize forever. As long as you're, then you can have everything you want.

• 1:53Speaker 00

  Yeah, fam, this week, we're continuing the conversation around what it really means to build success that feels meaningful, not just impressive from the outside. Because as entrepreneurs, we can chase revenue, growth, and big wins all day long. But if the work is not grounded in purpose, it can start to feel empty. That's why we're bringing back this yap classic with Tom Bilyeu, co-founder of Quest Nutrition and creator of Impact Theory. Tom breaks down why impact, meaning, and purpose matter so much, how to use failure as feedback, and how to build a life and business that actually moves you forward. So listen in, take notes, and enjoy my conversation with the one and only Tom Bilyeu. Tom, welcome to Young and Profiting Podcast.

• 2:31Speaker 01

  Thanks for having me.

• 2:33Speaker 00

  I'm so excited for this conversation. You are somebody that I look up to both as a podcaster and an entrepreneur. You've built a multimillion-dollar and billion-dollar companies across different industries. And right now, money is really not a concern for you. And so I'm curious to understand, when you think about starting a new project and a new company, which are always starting new things, what are the considerations that you have?

• 2:58Speaker 01

  So, meaning and purpose is ultimately all that matters. If you have all the money in the world, but you don't feel engaged, you don't believe in what you're doing, then it will be a very empty pursuit. And I thankfully learned that lesson when I was quite young. And so, yeah, when I had all the financial success at Quest, I knew that whatever I do next has to be grounded in meaning and purpose, just like Quest was. So my last day at Quest was Monday, and my first day at Impact Theory was Tuesday. And just got right back to it, because that's ultimately what feeds me, is that sense of, okay, I'm doing something with my time that matters. Obviously, I'm very thoughtful to make sure that I enjoy what I'm doing, even when I'm failing, that it's a thing that I not only care about the potential outcomes,

• 3:43Speaker 01

  but that I enjoy the process. So you gotta fill your time somehow, and I'm not a retire-to-the-beach kind of guy. So, yeah, impact is, to say it in a word.

• 3:54Speaker 00

  Yeah, and something that I love for you is that you've got so many different philosophies and ways that you live your life. And one of the things that you've said is that the most crucial aspect of life is what you think about yourself when you're not alone.

• 4:08Speaker 01

  No, what you think about yourself when you're by yourself. So there's no one there to hype you up, no one there to tear you down. What do you think about you? And it's normally in that quiet space that people start beating themselves up, and they don't feel they're living up to their own ideals. That matters. I think ultimately, we just were hardwired for it.

• 4:28Speaker 00

  And so, how do you feel self-respect and having self-respect for yourself is impacted by the work that we do and the jobs that we have?

• 4:37Speaker 01

  Well, so we are a hungry species. We are designed to pursue. We're designed to grow, to keep getting after things. When you think about it from an evolutionary perspective, you would be hardwired to do the things that are going to keep you alive long enough to have kids that have kids. And so, hard work, contributing to the group, facing difficult tasks, making progress, like, all of those things are hardwired. So the things that you do either make good on those evolutionary algorithms that you have running in your brain that say, like, hey, you've just been lazy. I don't feel good about that. Or, whoa, like, you really did something, and it helped a lot of people. You're gonna feel great about that. So in that sense, what you do becomes a critical component.

• 5:21Speaker 01

  So the way I like to explain it is, we are both the shout and the echo. So we're the things that we do, that's the shout. And then we're what the world tells us they feel about the thing that we did. And anybody that thinks that they can escape that sense of, like, that feedback impacts me in some way, is delusional. You are going to be impacted. Now, you want to keep it in balance. You don't want to let that get out of hand, where you only live for the validation of others. But we are a social animal, and so you will be impacted by what other people think.

• 5:53Speaker 00

  And so, something that I know about your journey is that at certain points in your journey, you worked really hard, like 120 hours a week at some point, and you didn't really have so much work-life balance. So how has your mindset changed regarding the way that you prioritize work and life?

• 6:11Speaker 01

  Well, to be honest, it hasn't changed in a very long time. And so, when I was working the 120 hours a week, which was a couple of years ago, I knew that I was making a short-term error for a long-term gain. And it really did, though, get to the point where I was beginning to damage my marriage. And that's always my barometer of, okay, if my marriage is really the most important thing in my life, simply because it has yielded the most return on my investment, then I needed to make a change. And so, at the height of all that, I pulled my wife aside and said, look, I will find my way back to you. And it just became about putting business processes in place that I could hand things off, that I wasn't trying to do everything myself. And so, it's like, look, at the same time, it was, it's the period of my life that I'm probably the most proud,

• 6:54Speaker 01

  because if the world was ever going to break me, that was going to be the moment. And so, it didn't, and I kept pushing forward, and I got the business to where it needed to be, and I got back into the rhythm of prioritizing my marriage. And so, look, it was not a period without its consequences. But if you're very cognizant of that, if you engage, in my case, with both the business and the marriage, to communicate, okay, business, this is what we're gonna have to do. We're gonna have to get people in that replace these different elements. We're gonna have to create new processes so that this isn't so manual. And then, dear wife, we're gonna need to start setting aside some time. I need a couple more months to, like, really put these processes in place. But if you can just bear with me until this time, I won't be working these stupid hours anymore.

• 7:40Speaker 01

  And so, because I was able to make a promise, make good on that promise, and then she could see the results that I was yielding in the business. So it's like, through communication, all things are possible. So I'm not, I don't believe in balance. The cheesiest way to say it is, I believe in harmony. The more accurate way to say it is, goals make demands. And as long as you're executing in priority order, then you can, can have everything you want, but you can be very efficient in what you get done by just saying, okay, this is the most important thing that I can do based on my goals and where I want to end up. This is the second most important, so on and so forth down the list.

• 8:22Speaker 01

  And if it's integrated with a marriage and friendship and things like that, you'll be fine. But most people, and this is really like, hey, dear everybody listening, if you want to know one problem I see over and over and over, is people allow themselves to get overwhelmed. There is not an amount of things barring a hot war, where people are literally getting shot and dying around you. There's nothing that should be able to overwhelm you. And so, overwhelm is about an expectation that you are putting on yourself that you can carry an infinite load that triggers a psychological revving up of you trying to track every variable. And the reality is that I don't ever get overwhelmed,

• 9:06Speaker 01

  even when I was working 120 hours a week, and it was a massive physical toll. There was never the additional layer of, I'm mentally breaking, because I just, it's all about priorities. I have them in priority order. I draw a dotted line, and say the things below the dotted line just are not going to be addressed right now. And I'm able to just shut that door. And what I find is people are not able to shut the door on the things that exceed the number of hours that they're willing to work. And so, they're trying to track everything, even the things that are what I call dormant priorities. And that's the thing that drives them crazy. And you literally just have to do what's known in behavioral cognitive therapy as, cognitive behavioral therapy, excuse me, as a pattern interrupt. And so, like anybody, I get that initial impulse of, like, oh, my God,

• 9:51Speaker 01

  like, I can feel my brain speeding up. And that's when I say to myself, I don't do overwhelm. And then I do diaphragm breathing, and I slow down ironically. And in slowing down, rather than trying to speed up to do everything, it just dissipates. And I thought this would be something I could just tell people about. They would adopt it, and it would be great. And I see people get overwhelmed all the time.

• 10:15Speaker 00

  Yeah, I feel like so many entrepreneurs get overwhelmed. And it's so true what you're saying. Overwhelm is a feeling that is maybe not necessarily real. We can only do so many things. And so, if we just prioritize what we're doing and set some boundaries, then we shouldn't necessarily get overwhelmed. It also helps that you have a wife where you guys are very communicative about your goals. You both set out to be entrepreneurs. You've decided to do things like not have children so you can be successful entrepreneurs. So do you feel like the relationship that you chose with your wife also helps you be a better entrepreneur?

• 10:55Speaker 01

  No doubt about that. The, my marriage has given me more of everything that you could want than anything else. So my wife has certainly made me a better person. I do not know who I would be if I had not met her. I met her in my early twenties and we've been together for 24 years, married for over 22. It's crazy to think, but yeah, it's extraordinary. Absolutely. And having somebody that supports you and having somebody that sees things that you would otherwise be blind to, somebody that instead of getting on their knees and crying with you when things are going rough, they're like picking you back up and reminding you who you are and brushing your shoulders off. You know, my wife has given me the Jerry Maguire speech many times to, you

• 11:35Speaker 01

  know, get me back in the game when you're starting to flag. So that's, that's really been incredible.

• 11:43Speaker 01

  Being self-aware and having a partner that is also self-aware and that can talk with you and lay options out and help you problem solve, that's really the thing that I would give the credit to. And, and so you don't necessarily need a significant other. It helps. It's wonderful and I encourage it for everybody. But I don't want people to feel like that's out of reach simply because you don't have a partner. Cause it ultimately comes down to what are the beliefs that you hold that are choices? What are the values that you hold? Those are choices. And if you live by your beliefs and your values and your beliefs and values are positive and they move you in the right direction, you're going to be fine. Now, if you have a significant other

• 12:26Speaker 01

  to reinforce it all, even better, but certainly not necessary.

• 12:32Speaker 00

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• 13:13Speaker 00

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• 13:41Speaker 00

  What's up Yap gang? I recently had Gary Vee on the podcast and he told me something that really stuck with me. If you've got sales DNA, you've got to be paying attention to live selling because it's one of the biggest opportunities right now online. And that really got me curious. So I checked out an app that he told me about called Whatnot. I jumped into a live show and I instantly got it. The seller was showing products in real time, answering questions in the chat, and building a real relationship with the buyers. It didn't feel like boring shopping. It felt like a community. Whatnot is the largest live shopping marketplace in the country. And for entrepreneurs, the results are really hard to ignore. Sellers on Whatnot can sell up to 10 times more than traditional marketplaces. And the number of sellers making over a million

• 14:23Speaker 00

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• 14:40Speaker 00

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• 15:21Speaker 00

  If you're ready to launch your business before Black Friday, go to Shopify.com/profitting to start your free trial. That's Shopify.com/profitting. Go to Shopify.com/profitting today to hear your first. So we were just talking about how entrepreneurship can be a little bit overwhelming. I mean, you were building a new virtual world, right? That's a very complex thing that I'm sure took a lot of dedication. There was a lot of experimentation, a lot of challenges, and I'm sure failure along the way. So as a seasoned entrepreneur who has built many different successful companies, how are you approaching failure now?

• 16:02Speaker 01

  Well, so failure, the only right way to approach it is to approach it like AI. So when AI is trying to learn a pattern, which is essentially what all of us are trying to do, it tries a thing and it gets a result. And it's not like, I mean, you can't imagine the AI having like an emotional breakdown. Oh my God, like I tried to play this video game and it didn't work. It's like the AI just goes, okay, I'm trying to learn the rules of the game and I move the paddle this way. And I don't make contact with the ball. I don't get any points. So what if I move over here and then eventually it makes contact with the ball and the ball bounces and scores a point. And it's like, okay, I see now. I have to make contact with the paddle and the ball and the ball will then hit this. And so you're just getting what are known in AI as samples. So you try a thing,

• 16:43Speaker 01

  it gives you a piece of data. This is a sample. Now you know a little bit more about the world. And if people understood that you're running trial and error as a way of building up a prediction engine, so that you know, oh, when I do this, I get this outcome. And that really is all life is. It's what I call the physics of progress. You're trying to build a prediction engine so that you know, when I do this, I get this result. And I want to go, you know, to XYZ goal. And I see what I have to do in order to get there. And I've got such an accurate prediction engine, I can now do all the things that are going to take me there. Now, you can never be guaranteed to arrive at your goal because the world is just changing so rapidly. But at least if you're running this exercise of the physics of progress, you always know what to try next. Whether it will

• 17:27Speaker 01

  work or not depends on a whole host of factors. But that is really, really useful. And, and failure is, is a necessary part of that sequence. And there's an amazing guy, is the largest hedge fund manager in the world named Ray Dalio. And he's got a great quote, which is, pain plus reflection equals progress. And so when you fail, it hurts, but that sting causes you to reflect and say, okay, I want to feel this way again. What did I do last time? What was the outcome that I got? Let me change my behavior so I can get where I want to go. And as long as you don't let that emotionally break you, then you can hit escape velocity.

• 18:05Speaker 00

  So something that I'm hearing you say is that we need to kind of push past our emotions. Like we might feel overwhelmed. We might feel stressed. We might feel like just everything is out of control. How do we push through our emotions to achieve our goals?

• 18:20Speaker 01

  I would say it slightly differently. So I think people should distrust their emotions. So this is where you want to ground in the fact that you're having a biological experience. And so I'm going to ask myself, okay, I feel some kind of way. Why do I feel the way that I feel? If you're really going to go macro, this is, evolution only has two levers, pleasure and pain. Evolution has one goal, to make sure that you survive long enough to have kids and have kids. Okay. So I'm doing something right now that hurts. That means I'm doing a thing that evolution does not want me to keep doing, or I'm doing something pleasurable. This is something that evolution wants me to keep doing. Okay. Now, if my goal is not focused on having kids that live long enough to have kids, I have some different goal, then those emotions might not

• 19:01Speaker 01

  be what I need to reach my goal. And this is what I see all the time. People confuse feeling with thinking. Don't make that mistake, boys and girls. Feeling is not thinking. So feelings are literally a very high bandwidth communication from the part of your body and your subconscious mind that can read a lot of points of data very, very quickly. But it's hard to translate that into conscious thought, into words, even, you know, more narrow of a data pipe. And so you just get a feeling, right? Tiger and bush run. You don't have to like think through it. In fact, you may not even get to tiger. You just have a sense, I need to get out of here right now. You don't know why, you don't know what it is. Maybe you picked up on a rustling in the bush,

• 19:45Speaker 01

  certain way, you know, a stick cracked. And the same is true in relationships, in business, you just get this overwhelming feeling. Now, if in that moment, you realize my life isn't actually in danger. So the fact that I'm having this really strong emotion should lead me to pause and go, why am I feeling this? And if you can pull that very, you know, high bandwidth emotion through that low bandwidth pipe into your conscious mind and say, oh, this is what all of that is boiled down to something very simple, which is almost always, if you're having a negative emotion anyway, it's almost always an insecurity. So I'm worried if I don't get this right, my business is going to fail and then I'm going to lose her. I'm a loser and my parents are going to disown me or my girlfriend is going to break up with me, whatever. It's, and it's all happening,

• 20:29Speaker 01

  again, based on that level of emotion. If you can slow down and say, hold on, that's overwrought, that's ridiculous. This is one of many things that I need to think through. I can make a lot of mistakes and still be fine. I do need to be thoughtful. I need to learn my lessons. But people don't do that. They get mad and they react mad. And then that makes things worse. And they never take the time to say, why am I mad? Oh wow, this is an insecurity, not anything positive or empowering. This is an emotion designed to mask the underlying thing.

• 20:59Speaker 00

  I know that you talk, or at least in the past, you've mentioned before, you might have changed your approach to this, but you take a first principles approach to thinking. Can you talk to us about what that is?

• 21:12Speaker 01

  Yeah, and if I ever change my first principles approach, you should be the first to come punch me in the mouth.

• 21:18Speaker 00

  I just didn't want to say you do it and you don't do it anymore.

• 21:20Speaker 01

  No, no, I totally get it. So first principles is quite literally the only way to think. It is at its simplest. It is trying to get to the fundamental base reality that we all live in, which we are shockingly bad at, and I can explain why later. But the idea is don't reason from analogy. Reason up from physics. So the great example of this is Elon Musk saying, hey, for us to make a electric car that is priced to a place where the average person can afford it, we have to completely reinvent the way the batteries are made. Now, when they went around to everybody, everyone was just like, but this is the cost of batteries. And he was like, well, does it violate the laws of physics to lower the cost of batteries? It might. If you go and look at what it costs to get it out of the ground

• 22:05Speaker 01

  and all that stuff and to mine it, and you may be like, yeah, this is just it, and there's no way to get any cheaper. But when he looked at it, he realized, whoa, there's like all these markups along the way. We could actually get closer to the source. We can do them for a lot cheaper. Cool. Same thing happened to me at Quest. We took our formulation for a protein bar to the manufacturers, and they said, this bar can't be made. And we're like, hold on, does manufacturing this bar actually violate the laws of physics? Like, that doesn't seem true. And so we went and looked at it. And long story short, we realized what was happening is because the government subsidized corn, everybody used high fructose corn syrup in their products as a sweetener. It's cheap, it's delicious. So all the equipment that had been manufactured

• 22:48Speaker 01

  over like the last 70 years could be made with the assumption that all the products that would run on it would have high fructose corn syrup. So this government intervention had all these downstream effects that nobody thought of. So when we said, well, wait, it's not that the bar can't be made, it's that we would have to engineer our own equipment. And so by being willing to engineer our own equipment and becoming our own manufacturer, suddenly it wasn't impossible. It was just impossible with that equipment. And so by thinking from first principles of, okay, this bar only takes a certain amount of pressure to put down. The bar has a certain viscosity. The bar has a certain level of stickiness. So what could we re-engineer on the equipment to deal with the deviations from a standard product to our product?

• 23:33Speaker 01

  And once you engineer equipment with those different tolerances, now it produces just fine. And that ends up being one of the reasons that we are very successful. So that's thinking from first principles. You're not allowing anybody to hand you a frame of reference. When people say, think outside the box, what they mean is you've been handed a frame of reference. You see the entire world through that frame of reference, and you don't realize it's artificially limited because it's all shorthand, it's all analogy. Instead of saying, well, hold on, this is just how we view the world. It's not necessarily how the world actually is. And so let me, again, go back down to base physics and build up from that. And if you sell an info product or something like that,

• 24:16Speaker 01

  start with human psychology and build up from that. But don't let anybody tell you something is impossible unless it legitimately violates the laws of physics.

• 24:25Speaker 00

  What do you mean, start with human psychology for info products? Because I think I have a lot of like online entrepreneurs listening.

• 24:31Speaker 01

  Yeah, I had a feeling. So, yeah. I don't want people to feel like this is an exercise where it's like, oh, my God, do I really have to go back to quirks and bosons? And, you know, all that stuff, which we don't even fully understand anyway. So most of the time, when I'm running this experiment, it's something for sales and marketing. And so forget all the early stuff. Just get to, how does a human mind operate? What do people look for in products? Like, what is the truth, the inescapable truth of the human mind? So like, for instance, people don't make decisions rationally, they make them emotionally. I mean, I can just tell you that from the architecture of the human mind standpoint, that is true. And so, once you get to that, it's like, oh, well,

• 25:15Speaker 01

  you may want to sell this product on features and benefits, but it won't work because that's not the architecture of the human mind. So now, instead of like, if you're looking at somebody else in your field, and you think, well, they're doing it as good as it can be done. Well, not necessarily. What are they missing in terms of their approach that would allow you to get more bang for your buck? If you go back to, instead of the frame of reference that they're handing you and go, what do I know to be true about the way the human mind works? Now you can do something better. You can do something different. And when? Because you're building up from universal truths about how people think.

• 25:55Speaker 00

  Such good advice. I feel like that's going to be really helpful for everybody who's tuning in. So I want to move on to your personal journey. I feel like a lot of your philosophies about life came from your own struggles and learning from them and things like that. So when I did research about what you were like as a child and a teen, it turns out that you self-describe yourself as somebody who is naturally lazy. And I'd love to learn about, you know, what you were like as a child and a teen, and what kind of self-respect or lack of self-respect that you had for yourself back then.

• 26:34Speaker 00

  What's up, Yap gang? I recently had Gary Vee on the podcast, and he told me something that really stuck with me. If you've got sales DNA, you've got to be paying attention to live selling because it's one of the biggest opportunities right now online. And that really got me curious. So I checked out an app that he told me about called Whatnot. I jumped into a live show, and I instantly got it. The seller was showing products in real time, answering questions in the chat, and building a real relationship with the buyers. It didn't feel like boring shopping. It felt like a community. Whatnot is the largest live shopping marketplace in the country. And for entrepreneurs, the results are really hard to ignore. Sellers on Whatnot can sell up to 10 times more than traditional marketplaces. And the number of sellers making over a million dollars a year on the platform has doubled.

• 27:18Speaker 00

  So if you've got products to sell and you're looking for a new way to reach customers, search Whatnot, W-H-A-T-N-O-T, in the App Store. Download it, and you can start selling right away. That's Whatnot in the App Store.

• 27:33Speaker 00

  Hello, young and profiteers. If you're running a business, getting website traffic is only half the battle. The real key to profiting is turning those visitors into paying customers. And I know checkout friction can quietly kill your sales. That's why I always say, serious entrepreneurs build on Shopify. Shopify is a commerce platform that helps you launch and run an online store without needing to be super technical. You can build your storefront, manage your business, and make it easy for people to buy. And here's the major advantage. Shopify checkout with Shop Pay converts up to 36% higher than the competition. With Black Friday coming up, now's the time to get your store ready and simplify your checkout experience. If you're ready to launch your business before Black Friday,

• 28:17Speaker 00

  go to Shopify.com/profitting to start your free trial. That's Shopify.com/profitting. Go to Shopify.com/profitting today to hear your first.

• 28:32Speaker 00

  What's up, Yap fam? You guys know we love reading on this show. So I'm always excited when I find a book I genuinely think is worth sharing. Life at the Speed of Play: Launch Products People Love by Mark Pincus is one of those books. Mark is a legendary Silicon Valley entrepreneur and investor. And this fast-paced 170-page book is his playbook for testing ideas quickly, navigating uncertainty, and figuring out what's actually worth pursuing. One of my favorite concepts is what he calls the abyss, those moments when you feel stuck or unsure of what's next. Instead of fearing uncertainty, he shows you how to use it as a tool for discovery. Right now, Mark is doing a buy one, get one offer for Yap listeners.

• 29:17Speaker 00

  Go to GetMark'sBook.com/Yap, buy one copy for $32 and get a second copy free. So you can keep one for yourself and give the second to a friend, future co-founder, or someone who needs a little push.

• 29:30Speaker 01

  Okay, so that went in interesting waves. So when I was young, I felt very confident in myself, but I absolutely lacked self-awareness of any kind. And then, as I began to develop self-awareness, I became incredibly self-conscious and very insecure. And then was afraid that I wasn't going to be able to achieve the goals that I wanted to achieve because I wasn't good at the things I needed to be good at. And I, at the time, just by default, had a fixed mindset. So I believed that my talent and intelligence were fixed traits, and life was just about making the most of what I had. Now, the honest answer is, we are 50% hardwired. Like, half of what you're going to be able to achieve

• 30:12Speaker 01

  is grounded by just the hand that you've been dealt. But 50% is malleable. And so I started really focusing on the part that I could change and not worrying about whatever was hardwired. It is what it is. And so what can I do with that part that I could change? And once I started leaning into that, then it was like, okay, I didn't need to believe I was special. I just needed to believe that I was average and that the average human is actually designed. It's what I call the only belief that matters. The average human is designed to get better. So if you put time and attention into getting good at something, you will actually get good at that thing. You just have to put the time and attention in. So then it's like, okay, well, my goal makes a demand that I be good at XYZ thing.

• 30:57Speaker 01

  Am I willing to go get good at it? Because I could certainly. Just assume you can get 100 times better at anything. Am I willing to put the time and energy to get 100 times better? And is 100 times better going to be good enough? And if it is, and you're willing, then you go down that path. And if it's not, you either stop pursuing that thing or you find a partner that can be good at the thing that you've decided you're not going to invest in. But really getting the lay of the land of how the human animal actually works was freakishly liberating for me because I didn't have to believe I was born special. But it was incredibly encouraging to know that I could get better in any aspect of my life.

• 31:36Speaker 00

  I want to dig on this a little bit because I thought this was one of the most interesting things that I learned about you is that you feel that free will is an illusion. Or you've at least said that.

• 31:49Speaker 01

  Yeah, no, again, good to hedge your bets. But yes, free will is an illusion, though. And I mean, is an illusion. And if you don't believe it, you read the book Determined. It is, it's an unrefutable take. People will try to refute it, but if you read the whole book, I mean, he really does.

• 32:07Speaker 00

  Is that Robert Sapolsky? Robert Sapolsky? Yes, I had him on the show, and we talked about it, yeah.

• 32:12Speaker 01

  So good, man, so good. You've got good guests. I like it. I'm in good company here.

• 32:17Speaker 00

  Yeah.

• 32:18Speaker 01

  So, yeah, Robert Sapolsky, absolutely brilliant.

• 32:22Speaker 01

  It's just a horrifying truth that we all think we have free will, but we really don't. But I don't think it matters. And I think if you let it influence your life, it will drive you crazy. You need to act as if you have free will.

• 32:35Speaker 01

  It's the only logical way because here's why that matters. Even though we are automata that are just responding to things, we do respond to ideas and we are changeable. And we are changed by our surroundings. This is why culture just keeps getting better and better and better. Because as we learn more, we're able to do more. But there is no ability to escape your biology. It's just not possible. Like even the most monk of monks has not escaped their biology. They've leveraged their biology in a pretty fascinating way. But they have not escaped their biology. And so just as nobody can will themselves to fly, they cannot will themselves to think a thought that they've never thought.

• 33:16Speaker 01

  If they could, then I would say, please solve quantum physics because that's in need of a solve. And if they then say, well, but I'm not smart enough. It doesn't have to do with free will. Yes, it does. You're just telling me that you're limited by your biology, which we already agree on. So yeah, I wouldn't spend a lot of time there, but it is true.

• 33:35Speaker 00

  Yeah. So basically what you're saying is that even though there might be biological factors, environmental factors are his, like our own personal history that impacts all of our decisions, we have the ability to change. Right? We have the ability to improve and things like that. Yeah. When I talked to Robert Sapolsky, he was really adamant that like, nothing is in our control. And he basically was saying that, you know, if somebody is poor and poor 20 years later, it's not their fault. If somebody is obese and cannot lose weight, it's not their fault. Somebody has a drug addiction, it's not their fault. It is their biology. It is like out of their control. Like basically saying that anybody who's successful is basically lucky. And to me, I was like, I don't know if I necessarily believe that. I feel like everybody has the ability to change.

• 34:21Speaker 01

  You do have the ability to change. The question is, do you have the ability to direct that change? And I think he is correct. I know he is correct that we don't. But here's the catch. That idea is a worse idea for knowing that people will respond and change based on ideas. So it's one of those, it is true, and I never fight against anything that's true. But part of the reason I don't bang that drum a lot is that it's just not a super helpful idea. So I have a goal and that's human flourishing. To get to human flourishing, you have to pursue fulfillment. To pursue fulfillment, you need to act as if you can change your circumstances and make your life better

• 35:06Speaker 01

  and make the lives of others around you better. And if you go down that path, you will feel better about your life. And if you don't, you won't. Now, it is just true. I can't stop myself from saying that. I am hardwired. I've encountered these other ideas that make me want to say this.

• 35:25Speaker 01

  But great, I'm still gonna act as if I'm in control and it makes my life better. And so I have a rule. I only do and believe that which moves me towards my goals. I'm not trying to create a false picture of the world. In fact, I'm trying to get to ground truth. However, I know that humans are ridiculously bad at identifying what is actually true. Therefore, I have to steer by something that I can tell, and that's effectiveness. So how useful is an idea in getting me where I want to go? And if I, going back to one of your earliest questions, if I want to feel good about myself when I'm by myself, what do I need to believe in order to do that?

• 36:07Speaker 01

  And so even though I know I'm just responding to my environment and my biology, that's not a good overarching narrative because it de-motivates me. And so it's true. I just don't think about it. I think about things that motivate me. And that has led me to where I want to go.

• 36:24Speaker 00

  Makes total sense. Okay. So free will is an illusion, but we need to act as if we're in control and operate.

• 36:31Speaker 01

  Need, as long as you understand need as it relates to, it is a more efficient way to get to the goal I have stated, which is human flourishing. But if somebody has a different goal, then it may not be as necessary. Like obviously for Robert Sapolsky, he's got a goal that's more in line with being, he would probably sum it up as a moral compassionate being. And so he, to him, it is a moral violation to hold people responsible for their lot in life. Whereas for me, it is a moral violation to let people roam around the streets, attack people. Even though I'm like, sure, it's not your fault, but I don't care. You can't roam the streets hitting people.

• 37:15Speaker 01

  So it, everything is an echo of somebody's goal, whether they realize it or not.

• 37:23Speaker 00

  Makes sense. Okay. So you were saying that you're naturally lazy, right? And you've been able to create a billion dollar company with Quest. You've built Impact Theory. How can other people who might feel like they're naturally lazy, that they don't really feel like getting out of bed, but they still feel ambitious? What are some tips for them?

• 37:46Speaker 01

  First, you need to know exactly what your goal is. You need to care deeply about your goal. Like you have to really want it. And you can run something I call the loop of desire to reinforce that. But you have to know what your goal is. You have to really want your goal. Then you have to make sure that you're doing the things that are causing you to actually progress towards that goal. Tony Robbins talks about how progress is a foundational pillar to human happiness. Anytime you see something like that, you know, you're tapping into those evolutionary algorithms that are running in your brain. So it just feels good. And then on top of that, this needs to be something that you have a really strong why that you're doing this. So I'm doing this to help these people is gonna be the most universal why.

• 38:30Speaker 01

  There's a group of people you care about, for whatever reason you care about them, and you're pursuing this thing to help them. And now that taps into the evolutionary demand that we have, that we contribute to the group. And so if you want to stop being lazy, ironically, that's the sequence. And then one thing I'll add is you need rules in your life, just so that you can demarcate whether you're doing the thing that you should be or not. So the most important rule I ever put in my life was that once I realize I'm awake, I get out of bed in 10 minutes or less. And I did that because I would lay in bed four and five hours a day, every day. It was, I mean, looking back now, it's really crazy. The heartbreak I feel over how much time I lost.

• 39:12Speaker 01

  So finally, I was just like, this is absurd. I'm now ashamed of myself. Shame actually ended up being helpful, but it was not fun to go through. And so once I finally built up enough shame, I was like, okay, I've, the only way I can think to break this is to set a timer and be like, okay, you have to get out of bed no matter what. And that, that one simple rule has been one of the most impactful things in my life.

• 39:37Speaker 00

  Let's talk about you joining Film School. So it's no wonder that you've built this incredible video podcast that has been pioneering the industry. And Film School was really a turning point in your life where you started to really turn things around and you got really motivated by being in Film School. But I did learn that you had sort of a catastrophe in your senior year that really made you rethink the way that you approach yourself and the world. Can you share that story with us?

• 40:11Speaker 01

  Yeah. Well, so the catastrophe was just realizing that I didn't have talent. So that was gut wrenching. So I had a fixed mindset. So I believed however good I am now is how good I will be forever. And that was the mystique of Film School. It was like, hey, you're finding the best of the best. And it was like a whittling down process. Like, could you get into Film School? That was the first thing. Cause when I went to USC Film School, it was easier statistically to get into Harvard Law than it was to get into USC Film School. There were just that many people applying. And so I got in and I was like, oh, maybe I really am this brilliant filmmaker. And then you go through these series of classes, basically auditioning to see if you can be one of the four people chosen to do a senior thesis.

• 40:55Speaker 01

  And I end up being one of the four. And I was like, oh my God, I knew it. Like this is my chance. Like I'm just, everything I've ever wanted is gonna come true. I'm gonna graduate. I'm gonna get the three picture deal. I'm the next Steven Spielberg. It's gonna be incredible. And I mean, I could taste it. And then I made my senior thesis film and it was terrible, just objectively terrible. On every metric that a film can be terrible, it was terrible. And I didn't think, oh, cool. Let me break this down to what are the things that I'm not good at yet, that I need to get better at? Why was it that the earlier films that got me to be one of the four chosen? What did I understand about that style of filmmaking that I didn't understand? Cause it's actually a pretty big leap in style of storytelling. And so I was, I would say naturally, I had an intuition for silent storytelling that I did not have

• 41:39Speaker 01

  once you bring in dialogue and all of that. And so, but at the time I couldn't understand that. I was just like, oh my God, like I'm actually not good at this. I thought I was, but apparently I'm not. And so that was as close to an existential crisis as I have ever been. Because I thought that was gonna be my whole life. That was the death of a dream that I had. I mean, when you're, you know, whatever, 22, you feel like, wait, my whole life has been pointed towards this. I thought this was gonna be the next 60 years of my life and it's just dead. And then you find yourself selling insurance door to door. So I was like, whoa, it was one of those my, how the mighty have fallen. Because I went from being celebrated at Film School. I graduated second in my class.

• 42:24Speaker 01

  It was like, you know, yo, this guy's really gonna do something to actually, hold on, no. Embarrassing. Everybody knew my film was bad. It was not like, oh, this is me being hard on myself. Everyone was like, oh God, that was like a train wreck. So it was emotionally devastating and I had no idea what to do. And then thankfully, between Tony Robbins and some stuff about brain plasticity.

• 42:51Speaker 01

  And which now, of course, we would call a growth mindset, but Carol Dweck had not written that book yet, unfortunately for me. So start reading about brain plasticity, realize, wait a second, maybe it is possible to change and get better. I start teaching film and I realized, wait, I'm helping these students make their films better. Why couldn't I help myself make my own films better? And so then I was like, oh my God, this is a game of skill acquisition. And so then the things we've been talking about now start coming together as my belief system. And I realized, okay, wait a second, if, if I can get better, then this is about putting time and energy into getting better. And so I just poured myself into that, poured myself into it from a film perspective, poured myself in from

• 43:32Speaker 01

  a business perspective, and the rest is history. My life is what happens when you answer the question, how far am I willing and able to go if I get a hundred times better at a small number of things that really matter to my goals?

• 43:47Speaker 00

  This is really interesting because you basically got the motivation to get better at film. And earlier you were mentioning that this is called the loop of desire. Could you break down what that is exactly?

• 43:59Speaker 01

  Yeah, the loop of desire is really basic. So you are having a biological experience. Your brain responds to certain, certain things in a certain way. One very key thing to understand about your brain is you become whatever you repeat because of a process called myelination. So myelination is the wrapping of fatty tissue around the connections of the neurons in your brain. So any emotions you feel, any thoughts you think, they will become easier for you to think and therefore will be the things you keep repeating. So the more you repeat something, the more you repeat something. So be careful what you repeat. So understanding that, that whatever I repeat is, is going to solidify in my mind. So what if I intentionally

• 44:43Speaker 01

  repeat something positive? Cool. So let's try that. Then there is, your brain will justify whatever amplitude of emotion you display. So if you freak out, your brain goes, whoa, I guess this really matters. And so I was like, okay, well, then if I repeat a really high emotional state every time I talk about my goal, would it begin to myelinate such that now, whenever I talk about it, I get that big emotional response. So at first it felt like I was faking it. And then six months later, whenever I would talk about it, I would feel that sense of like passion and excitement. I was like, I can't believe this

• 45:24Speaker 01

  works. So be careful because you can align yourself to dumb things. So if you pick a goal that's honorable, that is legitimately exciting to you, and then talk to yourself about it, what you're going to achieve, what you're going to do, and like with that feeling of passion and excitement that you hope one day you will feel naturally. And then when you talk to other people, which is even easier than talking to yourself, same thing. You embody, embody the emotion you want to feel and do that over and over and over. And then at least in my experience, call it four to six months later, now you can just be talking about it normally and you get that sense of like, oh man, this is really important to me. This is really exciting. You're like, wow, it's so crazy because six months ago,

• 46:05Speaker 01

  I was interested, like it was legitimate. I didn't try to tie it to like, I really love grass. You know what I mean? Like it's something you already have an interest in. But by doing that, now you've got the impetus to gain the skills. And by having that initial burst of energy married with getting the actual skill set, now you can make progress. And when you're making progress, then passion kicks in. But you're not going to get to passion until you're actually able to use that skill in the real world, to get feedback from other people. You are the shout in the echo. People are telling you, hey, you're improving my life by that thing you do. That thing you do could be podcasting. That thing you could do could be building a video game like I'm doing now. It could be accounting, whatever. But people give you positive feedback. This is why so often adults are pursuing

• 46:50Speaker 01

  something that they first got that positive feedback on as a kid.

• 46:53Speaker 00

  And that's also what neuroplasticity and brain plasticity it is that you were mentioning earlier, correct?

• 46:58Speaker 01

  Yup.

• 46:59Speaker 00

  Okay. Cool. Okay, let's talk about storytelling because you went to film school, now you are running Impact Theory, which is a huge platform. And I know a lot of what you do with Impact Theory is really storytelling to bring about impact. So talk to us about what you've learned about storytelling, both at school and then of course in the real world, building Impact Theory, and how we can use storytelling in our businesses to attract customers.

• 47:26Speaker 01

  Okay, so at Quest, we had 3,000 employees and a thousand of them grew up in the inner cities. And I thought, hmm, these guys are smart, some of them smarter than me, but they're not doing anything with their lives. And when I started asking them like, hey, why aren't you doing this, that or the other, the answers that came back were just ridiculous. And so I was like, uh, this is not an intelligence problem. This is an idea problem. So I started what I then called Quest University. And I was like, let me teach you everything I know about entrepreneurship. Uh, one, it will just be good for your life. You can go on and work for any company at that. Like if you can master the skills that I'm teaching you guys, you'll be able to work anywhere. Now, my hope of course is that you stay here

• 48:10Speaker 01

  because you realize I care about your future more than your own mother, but you'll be empowered. You can go anywhere that you want. And I poured my heart and soul into it. I came early, I stayed late. And we have, we've had people start other companies that have, that are still running to this day, almost a decade later. Absolutely incredible. I love it the most. The only catch is it was only 2% of the people that I brought those ideas to. 98% did nothing. And so I really started to get obsessed with, okay, what would we have to do to reach the 98%? And I very quickly realized you have to bypass the logical centers of their brain. You can't just say, think like this, act like this. You've got to really get into the storytelling of it all. And I mean, look, when you see

• 48:55Speaker 01

  political campaigns and stuff like that, that's exactly what they're doing. They're telling a story. Stories simplify things and they focus attention. And that is the magic of storytelling. This is exactly how humans are able to come together in these gigantic, flexible groups with people they've never even met and cooperate. You have shared stories. It could be shared story of a nation state, could be shared story of a religion. But you need some sort of shared story to pass on values, to pass on identity, to give people a unified narrative. So for better or worse, humans are a meaning-making machine and stories allow you to transmit meaning. So they're just a mechanism by which you

• 49:37Speaker 01

  simplify things enough to extract meaning from. Uh, so we do it all the time. When we stub our toe on the coffee table, we tell a story. We're an idiot because we don't pay attention enough to our surroundings and that's what stubbing our toe means. Or you could tell yourself the story of, man, I'm so hardcore. I probably broke my toe just now, but I don't stop. I don't quit. I'm the kind of guy that keeps pushing forward. Right? So it all comes down to what's the story that you tell yourself about that thing? So it isn't what happens, it's what it means. And once people understand what it means, you're telling yourself that story. Someone may have said it from the outside, but you decided that that's what you were going to repeat. That's what you were going to adopt. So whether you're a marketer, whether you're just trying to lead your own team, you've

• 50:20Speaker 01

  got to tell them a story. This is why every company needs a mission. Your mission statement is about galvanizing your team. It's about telling the consumer what it means to buy your product, what they're sort of becoming a part of. And then in your marketing, you want to tell something that's simple enough that people can remember it like it's a story. And oftentimes just literally telling a story inside of your marketing is one of the most useful things that you could do. A couple of times in this interview, you've asked me to tell stories from my childhood or whatever. And so we all just resonate to stories. So in the same way that when humans look at an image, we look for eyes. When people are hearing, okay, uh, this thing happened, they're looking for the story in it. And so if you

• 51:03Speaker 01

  reveal character through it, if you reveal a moral through it, people are going to remember it way more than if it's just a list of facts. This is why humans get so bored in high school history, only to later discover through, you know, like a hardcore history episode, actually, history is amazing. But history is only amazing when you tell it like a story. If you tell it like a story, it's fascinating. You tell it like disembodied facts and figures, not interesting at all and hard to remember because that's not the architecture of the human mind.

• 51:30Speaker 00

  Yeah. Storytelling is so powerful in business and personal relationships. I feel like storytelling is a skill that everybody can improve and continually improve. So speaking of stories, I want to hear the story of you becoming an entrepreneur. Was being an entrepreneur something that you always imagined or did it kind of just happen?

• 51:48Speaker 01

  Well, it didn't just happen, but it was not something I ever thought I would do. So you heard the story of me graduating film school and things not going well. Uh, I met these two entrepreneurs and they were bang on the money. And they said, look, you're coming to the world with your hand out. And if you want to control the art, you have to control the resources. So if you want to build a studio, you want to tell your own stories, you should get into business and get rich. And I was like, oh man, that's so smart. I can't believe I didn't think about that before. Brilliant. And this is like right before the tech bubble burst. So I was like, oh word, man. I'm going to get into tech, take 18 months, build a company, sell it, all's good, be able to make my

• 52:33Speaker 01

  own movies. And that didn't work. So 18 months turned into 15 years, but it did work. And so that obviously ends up being incredible. And during that journey, I end up

• 52:47Speaker 01

  Finding stroke constructing the reason that I was gonna make films. So instead of just doing it because I like stories, it became who am I gonna help? Impact theory arises, it's literally called impact theory because my theory on how to impact people at scale is through story. And so putting empowerment at the center of it becomes the whole jam. So I got into business strictly so that I could control my own destiny. But it, I learned a very powerful lesson, which is I can guarantee you're gonna struggle, but I cannot guarantee you'll be successful. And so you better struggle well. And so I stopped asking myself what I think is the worst question people could ask, which is, what would I do if I knew I couldn't fail?

• 53:31Speaker 01

  Because failure is the most likely outcome. So I started asking myself, what would I do and love every day, even if I were failing? And so that's why impact theory is literally architected from the ground up to be the things that, man, if I'm gonna fail at something, I wanna fail at this thing. So that has improved my life immeasurably. But do keep in mind, I'm saying that after having the gigantic financial success. So if I had to do it all over again, I would very much go straight into storytelling. I would not go into business first.

• 54:08Speaker 00

  Really?

• 54:09Speaker 01

  For sure, because you, it really is true that your network is your net worth. These are gonna be the people that open doors for you and stuff. And so I'm having to completely reinvent myself. Meet all the new people, all that, and it's, it's added a decade to my journey. So I could have gotten it done a lot faster. Now, the problem is going into business allowed me to learn all these principles. So I don't waste time lamenting that I didn't do it. But I am not somebody who's like, I have no regrets. Yeah, I would do it differently, but such is life.

• 54:43Speaker 00

  So you would have started impact theory first before the software company, before Quest. You would have just went straight to impact theory if you could.

• 54:50Speaker 01

  No, I would have gone to somebody who was living the life I wanted to live, which would have been at the time in filmmaking and said, I will work harder and smarter than anyone you know. And all I ask in exchange is knowledge and connections. So I would literally live in a hovel with five other guys, eat the world's cheapest food, do whatever I had to do to get by, but so that I could be as close to that person as humanly possible. I don't wanna work for somebody who works for them. I wanna be next to them all the time, watching how they deal with the world. That, that is insanely useful. It's all the in-between stuff that you would never even know. It's how a deal is structured. It's how to talk to somebody who's being a dick in a meeting, but doing it in a way where it's like,

• 55:34Speaker 01

  they're not quite crossing the threshold where you can just call it out. Like, how do you handle things like that? Or somebody comes to you and asks for something that is clearly they're reaching beyond what they have any right to ask for, but they're kind of in a tough spot. And like, do you help them out? Do you not like? All of those things, when you're in your early twenties, man, you have no idea how to handle all that stuff. You might be shooting from the hip, but you really don't have a sense of how it's all gonna play out. And when you can watch somebody go through all of that soft stuff that's next to impossible to teach in a business school, then it's like, if you can ask the occasional question like, hey, I was really surprised the way you handled that. You're normally so hard on people, but you were really nice just then. Like, how do you know when to be hard and how do you know when to be soft?

• 56:18Speaker 01

  And if they're a thoughtful person and can be like, okay, well, let me explain why I was doing this here, why I did something completely different here and how I typically will make those decisions. And then to some extent, it's just seeing the patterns over and over and over and over and over. But you're not gonna get that when you start as a junior, junior, junior, something in a corporation where everybody's afraid of losing their job and they're lying to each other and playing politics. It's all just stupidly nightmarish. So what I always tell young people is look, money, money only monetizes once. You can only spend it one time. But knowledge and connections monetize forever.

• 56:53Speaker 00

  So good. I love that advice. Such good advice. So Quest Nutrition is a company that you started as a side hustle and you ended up selling it for a billion dollars. So I'm also growing a company called Yap Media that's doing really well. We're the number one business and self-improvement podcast network. We also have a social agency and it's doing really well. Yeah, I represent a lot of top podcasters, Jenna Kutcher, Amy Porterfield, John Lee Dumas, Russell Brunson.

• 57:21Speaker 01

  That's amazing. That, that's a stack of really cool people.

• 57:24Speaker 00

  Yeah, I got, I got great people in my network. But anyways, I couldn't imagine selling my company, but that's because I think my company's making impact and it's really aligned with my values and my future. And it feels like everything just feels so aligned and fun for me right now. But you ended up selling a company that also had a great mission. So I'm just curious, from your standpoint, what made you decide like, okay, I'm just gonna sell the company and work on something now?

• 57:50Speaker 01

  Well, the big thing was I only got into business so that I could build impact theory. So that was always self-evident. But we had had so much success and my partners and I no longer shared a vision on how to grow the company. And so it was like, well, we've been this successful. So I had been building what's now impact theory inside of Quest. It was literally called Inside Quest. And I said, let me spin out this studio into a standalone company. They agreed, spun that out and like I said, left Quest on Monday and on Tuesday was at impact theory. But yeah, that was the whole thing from the beginning. The, the guys that I was partners with back then were the ones that had said, hey, you're coming to the world with your hand out. You should get into business. So it was not a surprise to them.

• 58:35Speaker 01

  So it was a very simple transition and we've been at this now for almost a decade. It's crazy.

• 58:43Speaker 00

  So I know that we have like, just about like eight minutes or so left and I do wanna talk about the future. You have some really interesting things to say about AI. I wanna talk about your new video game. So one of the things that I read is that you say that content creation is going to completely change. You say the world as you know it, as a content creator will end in two years. Now, as a content creator, that's very scary. Why do you believe that?

• 59:10Speaker 01

  So AI tools will make it such that all of the things that we use as a moat are gonna go away. So it takes a while to master all the tools. It takes a while to get all the different people on your podcast, all that stuff. What's going to end up happening is all of this information is gonna fracture, like hyper fracture. And somebody will be able to have an idea for a video with or without a guest. I mean, you could post videos of like, here's my conversation, my imagined conversation with Elon Musk, stuff like that. And instead of actually needing to get that person on your podcast, you just have the AI spin up his personality. You ask a bunch of questions. And if you do it in a way that the audience finds more interesting than the next person, then that's gonna be what it's gonna be.

• 59:54Speaker 01

  So what's gonna end up happening is right now, it's already changed so much. You're so young, you probably don't have a sense of just how much it's already changed. But like, when I was growing up, there was, you know, whatever, five channels and that was it. And they controlled the narrative and we didn't even realize the narrative was being controlled. And then as things have gone to social, now you start things, seeing things break apart. Now, when I started podcasting, people literally like, Tom, why are you doing this? It's already played out, all the players that are there, that are gonna be there. It's, it's already decided, man. It's too late. When I started, there were 400 podcasts. There's now 6 million podcasts. So it's, it is just insane how many more podcasts.

• 1:00:37Speaker 01

  And I, I may have said 400, 400,000 podcasts. So it, the, the world has just changed absolutely dramatically. And that's gonna keep happening where the format of a podcast itself is gonna get disrupted by, you know, somebody alone with an AI doing things that nobody's ever thought of before. And the, the difficulty of production, the friction of going from idea to execution is the current moat. That's gonna go away, which means this will be more like TikTok. So instead of there being a person that has a podcast, take a Rogan or something like that, instead of that person dominating the landscape, you're gonna have like, oh,

• 1:01:18Speaker 01

  one of his episodes might pop off, but somebody else is gonna release something else that's a totally unique format that nobody saw coming. And it'll just be like that and people will just be scrolling onto the next, onto the next, onto the next. And that's gonna happen across everything. It's gonna happen across video game production, which I, trust me, I have just as much anxiety as you. But the key is to adopt AI faster than the competition. And then just remember that, one, we're moving towards an abundance reality where if AI does all of the wildly disruptive stuff that people think it's gonna do over the next eight, 10 years, it's also gonna be dropping the cost of virtually everything. So everything is just getting cheaper.

• 1:01:59Speaker 01

  Now, this takes you into a post-capitalistic society and there are big questions around what that looks like. But

• 1:02:08Speaker 01

  People will have access to the things that they want for far, far, far cheaper. Now, that doesn't mean people won't find a way to peacock through other means, because we will. But especially when you throw in the mix, brain-computer interfaces, this is all gonna get real weird. There are already people that can play video games, like proper video games, using just their brain-computer interface.

• 1:02:30Speaker 00

  Oh, my god. It's nuts. That is so nuts. And you were just saying, when you first started, 400,000 podcasts, and everyone was telling you, you know, there's no chance, it's already saturated. AI is gonna make things even more saturated. So what is your perspective about the increased competition? And, you know, if there's even a point to participate, if there's gonna be that much competition?

• 1:02:56Speaker 01

  So I think people make a mistake when they do preemptive quitting or preemptive strikes. The reality is, you wanna pay attention, you wanna be at the cutting edge, you wanna be integrating AI. Right now, AI is a phenomenal tool, and it is a terrible master. So it's not gonna be able to do things without humans yet. So people should be excited right now for this phase. It's going to allow you to do more with less. And so if you're somebody like you, that's paying attention, you've got a whole thesis, you know what you're moving towards. AI is gonna help you keep costs down, help you stay really nimble. Now, if AI starts changing the landscape, then just pay attention. Like, okay, what do we need to do to stand out? How do we add value? And yes, it's going to change things. And yes, some people are going to get smashed into little pieces.

• 1:03:39Speaker 01

  But if you're really paying attention, and if you continue to look at, where is the puck going to go? Then you'll be in better shape. Now, I've often made the quip that, yes, you should always skate to where the puck is going to go, but it's getting a little hard now, because the puck is teleporting. But it's still, it's the right idea. You wanna pay attention to, okay, predictive engine. Where is this going? What does this mean for content creation? I think there is gonna be that hyper fragmentation. I think this is really gonna be about deep communities. So part of the reason that I'm on Twitch now, doing my video game streaming, is that, yes, I'm building a video game, so I need to build a community around that. But also, historically, I've built audiences, not communities.

• 1:04:22Speaker 01

  And so this is a chance for me to really build a deep community, where the interactions are very different. And that's gonna be something that AI will have a hard time with, just because people know on the other side of this is not a person, it's AI. And so I think there will be some things that people just have a weird resonance when it's AI versus when it's a real person. So I'll be looking for opportunities like that. I'll be looking for places where I wanna lean into the humanity of it all. And I'll be looking for places where I wanna lean into the AI of it all. But because I don't push back on the way the world actually is, AI is here, AI will keep getting better. AI may slow down, but I don't think it's gonna stop. So I'm just paying attention to where it's at and how I can leverage it for now.

• 1:05:07Speaker 00

  And can you tell us more about Project Kaizen, and how it fits into your vision of impact theory and the future of content creation?

• 1:05:15Speaker 01

  Yeah, so it is impact theory, in the sense that my theory on how to impact people at scale is through entertainment. The most dominant form of entertainment right now is video games. Also, a core part of my thesis is that, who I'm focused on is 11 to 15-year-olds. So Project Kaizen is a game, if anybody's ever heard of Extraction Royale, it's an Extraction Royale game that's aimed at that 11 to 15-year-old demographic, technically 13 and up, because of SOPA laws. But that's that core demographic that's in what's known as the age of imprinting. And so trying to reach them so that we can introduce empowering ideas. So one of the characters in the game right now, which is out right now, by the way, if anybody wants to play it, it's a free-to-play game at projectkaizen.io.

• 1:06:00Speaker 01

  And Bruce Lee is one of the characters in the game. And it's an official collaboration with the Bruce Lee family. And the reason I wanted Bruce to be our launch partner was, he had a tremendous impact on my life, even though he had passed away before I was born. But he wrote a book called The Tao of Jeet Kune Do, which was about his style of martial arts. And some of the ideas in there, even though I didn't train in the martial art, the ideas were profoundly shaping for the way that I think now about mindset, and getting better, and all of that stuff. So we wanted him to be a character in the game, who's like our Morpheus, or our Obi-Wan Kenobi, the mentor character, that's giving the players advice. So yeah, really excited for people to get into it.

• 1:06:45Speaker 01

  And then the other part is the UGC aspect. So players can come in and build their own maps. And this is the very beginning of a much deeper set of tools that will build for players to build their own content.

• 1:06:58Speaker 00

  And you say that Project Kaizen is the blueprint of the creator economy. Can you help explain what you mean by that, and how it could help build communities and things like that?

• 1:07:07Speaker 01

  Yeah, so I think the way that creators need to think is, your job is to create a container for your community to come in and create. So because I think in IP, the way that we look at it is, we've created Project Kaizen, it's this gigantic sci-fi world. And inside that world, there's characters, and stories, and physics, if you will, rules of the game, the way that it all works. The conceit of our story is that everything you've ever known is a simulation. So imagine The Matrix, but there's no real world. The Matrix is the real world, there's nothing else. And in that story, that means that, you know, we're connected to other dimensions and all that kind of stuff. And that way, as players spin up their own storylines,

• 1:07:51Speaker 01

  they can be like, oh, we're from this, you know, what we call instance, a server instance, or a universe, if you wanna think of it in those terms. So we're from this universe, these are our people, this is what our world looks like. And they can literally build that up as much as they want. It could be as simple as one little floating island, it could be all the way to a planet. Not yet, but one day. And them being able to tell their own stories, and then giving the community the ability to say, hey, this person's storyline follows all of your guidelines, Impact Theory. We love it and want this to be canon in your world. And so when a story meets certain criteria, players can vote for it.

• 1:08:33Speaker 01

  And then if we approve it, then it becomes official canon within our world. And so our goal is, for them, if you know UEFN, this is what Fortnite's doing, it's absolutely brilliant, giving the players the tools from the game to build their own sort of mini-games inside of it. And so we're doing a very similar thing, much smaller scale compared to Epic, which is absolutely gigantic. But I think this is just the future, I think everybody's gonna be doing this. So it's not like, oh, we're trying to be some pale shadow of what Epic is doing. I just think this is the future. In the same way, that if you were gonna launch a video site, of course, you're gonna let people upload to it, there would be no other way, right? So that is our plan now, is to give players the ability

• 1:09:16Speaker 01

  to create unique experiences within our container.

• 1:09:19Speaker 00

  Amazing. Well, it sounds super fascinating and very exciting, and I can hear the passion in your voice about it. Tom, thank you so much for joining us on the podcast. I end the show with two questions that I ask all of my guests. And this can just come from your heart, doesn't have to be anything that we talked about today. What is one actionable thing our young improfitters can do today to become more profitable tomorrow?

• 1:09:44Speaker 01

  Always be learning, always be learning. So it should cue off of your goal. So again, your goals make demands. But I spend, on average, two hours a day, 365 days a year, every day for the last 15 years, maybe more, learning. Be a relentless learning machine.

• 1:10:03Speaker 00

  Amazing. And what is your secret to profiting in life?

• 1:10:08Speaker 01

  Well, so I'm guessing you mean that in like a more holistic stance? So for me, I know that nothing matters more than reciprocated love. So I make sure that I put a ton of time and attention into that. And then also, I manage my biology. So I get sleep, I eat healthy, I exercise, I work out. I maintain loving relationships beyond just my wife. Those things are incredibly important. And then if I can really ground this for people, guys, you have to learn how business works. Like, business has physics. And if you really wanna get good, you need to learn those physics. And they are available for anybody to learn, anyone to master. The game is really relatively simple. Learn it, learn the game, do not let yourself get overwhelmed.

• 1:10:53Speaker 01

  Just one piece at a time, pick apart the skill set, learn it.

• 1:10:58Speaker 00

  And when you say physics, do you mean like sales, marketing, finance, those kinds of things?

• 1:11:02Speaker 01

  Yes, and where it interfaces with leadership and human psychology, yes.

• 1:11:08Speaker 00

  And where can everybody learn more about you and everything that you do?

• 1:11:11Speaker 01

  At TomBilu across the socials, best place is probably YouTube.

• 1:11:15Speaker 00

  Amazing. Thank you so much for all of your time, really appreciate it.

• 1:11:19Speaker 01

  Absolutely, thank you.