Anything You Want - Book Notes

  • Why write the book at all?
    • seems he wanted to tell people about the mistakes he made, and also tell people about his story and hope they can glean some insight from it
    • also wants to learn - admits he’s a student, not a guru (great attitude)
  • What’s a personal compass, and why is it important?
    • most people blindly stumble along in life, pursuing something that others have convinced them they should want, only to realize it doesn’t make them happy
    • all that really matters is pursuing what will make you happy, and that is what your personal compass is about - it’s a personal philosophy of what makes you happy and what you think is worth doing
  • What are Derek’s philosophies, and are these applicable to everyone?
    • he says up front that these are just philosophies that have worked for him, and that they won’t be appropriate to everyone
    • business isn’t about money - it’s about making dreams come true for yourself and others
    • creating your own company is a great way to improve the world while improving yourself
    • a company is your version of utopia - a perfect world in your own eyes
    • business shouldn’t be just for personal gain, only a response to the calls for help
    • the only way to succeed is to constantly improve and invent
    • plans only go so far - you will only know what people really want until you start doing it
    • make yourself unnecessary to the running of your business
  • How did CD Baby get started?
    • Derek was a professional musician who was actually making a living doing it, but he was struggling to sell his music through the traditional distribution channels
    • so he decided to set up his own site for selling his CDs, and cobbled together something by taking bits and pieces from programming books
    • eventually friends and other musicians came to him to ask him to do the same thing for them, and things took off from there
  • If things were taking off, what was the problem?
    • didn’t want to run a business, he was already living his dream life as a professional musician, and he didn’t want anything to distract from that
    • the solution was to take an ‘unrealistically utopian approach’, and basically try to make it small instead of make it big
    • this involved being the opposite of ambitious, so he dreamt up a utopian vision of music distribution and made it a mission statement
    • the moral of the story is: ‘what you make it a dream come true for yourself, it’ll be a dream come true for someone else too’
  • How did the business model for CD Baby develop?
    • simply asked how the local record store made money
    • this involved the record store taking a flat cut of $4 for every CD, while the musician was free to set his/her own price and keep everything else
    • so he did the same for CD Baby, plus a $35 setup fee for each album
    • moral of the story is: business models shouldn’t be complicate, and should never take more than a few hours’ work. start simple and use common sense
  • So this was a big disruption/revolution in the music business, right?
    • it was only called that after CD Baby was successful - before it was just some guy doing things differently
    • when you’re on to something great, it won’t feel like a revolution, it’ll just feel like uncommon sense
  • CD Baby became like a hit song, and it started promoting itself. What was so different about this vs. other, failed projects?
    • for whatever reason, the service really resonated with people, nothing to explain it really
    • so instead of trying to create demand, suddenly he was trying to manage the huge demand
    • the lesson is that it doesn’t pay to be persistent in doing what’s not working, but rather it pays to be persistent in making improvements and inventing
    • if the world’s response to your idea is anything less than people being happy to pay for it, it’s time to go back to the drawing board
  • How should someone avoid becoming overcommitted or too scattered, either in business or life?
    • simple: if your reaction is anything less than “HELL YEAH, that would be awesome!”, then say no
    • this has the bonus effect of allowing us to drop everything to that rare occurrence when a HELL YEAH opportunity presents itself
  • How did the plan for CD Baby change?
    • a customer asked him for any new releases, and up to that point he had thought of it just like a credit card processing service, not a store. so he saw the opportunity and started acting more like a store
    • then when iTunes came along, they asked him to be a digital distributor and the business changed again
    • moral of the story is: no business plan survives first contact with customers
  • For CD Baby, how was having no money and no investment an advantage?
    • that meant he didn’t have to worry about pleasing anyone but his customers, and by not having any money to waste, you never waste money
    • the moral of the story is that everything a business does is for its customers, and all decisions should be made with that in mind
    • if a decision doesn’t help customers, then it’s the wrong decision!
    • aka the way to grow a business is to focus entirely on existing customers, and if you thrill them, they will tell everyone
  • When should you start a business?
    • now. it doesn’t matter if you have no money and your vision is grand, sweeping, and world changing - 1 percent of your grand vision is enough to start
    • the only criteria is that what you’re doing be actually useful, and that doesn’t need funding
    • starting small means you focus 100 percent of your energy on actually solving real problems for real people, and sets a strong foundation, letting you change in an instant if those first customers need that
  • What are ideas worth?
    • nothing unless they are executed
    • ideas are a multiplier - meaning that the quality of the idea multiplies by the quality of execution, so a great idea brilliantly executed may make $10,000,000, but a great idea poorly executed may make only $1000
  • What is the value of corporate structure, if any?
    • none, it’s all pretty much unnecessary and pushed by sales people who use scare tactics
    • ie. you don’t need terms and conditions, privacy policies, an official employee review plan, etc…
    • to see you don’t need this, imagine the thousands of businesses out there that do just fine without any of it
  • Should a company focus on landing big clients, or cultivating many small ones?
    • stick to focusing on the little guy, and actively reject the big client
    • why? because big clients are fickle and will practically own you, and you won’t be your own boss any more
    • listening to the opinions of the majority will allow you to stay in touch with what most people want, not just one big client
  • Why should you look to proudly exclude people?
    • because you obviously can’t please everybody, proudly saying no to those people you don’t want, you will win the hearts of the people you do want
    • for CD Baby, this manifested itself when big record labels wanted to promote big acts on the site, and he would turn them down in order to make sure the independent musicians kept the maximum exposure
  • Why didn’t CD Baby run any advertising?
    • goes back to the utopian ideal - don’t start a business just to make money
    • does your utopian ideal include having banner ads all over your website? are your customers asking for more banner ads?
    • if it doesn’t help your customers, then don’t do it
  • How does imagining different scenarios help you in business, and in life?
    • gives you the freedom to imagine the many different options available to you, and realize that there isn’t just one way to do things, either in business or life
    • imagining different scenarios and different situations and how you would approach them opens up a world of possibilities and different approaches you could possibly take
    • like when making a business plan: imagine your business only requires $1000, then imagine you have ten times as many customers, then that you have to execute it without a website, etc…
    • or in life: imagine you live in New York and are obsessed with success, or that you’re traveling the world, or that you’re confident and an extrovert, or that your kids are your life, or that you’re spending a few years in seclusion
  • Do you need a big vision or plan?
    • no! as long as you stay focused on helping people right now, the grandiose vision doesn’t matter
  • How much do you need to analyze your business?
    • not much, the only analyzing you need to do is make sure you’re helping people, you’re profitable, and that you’re both happy
    • for CD Baby, when people would ask MBA-type things, he would just say that there’s money in the bank, he’s helping his friends, and he’s doing fine, and that’s all that matters
  • How should you grade yourself?
    • different for everyone, but it’s important to figure this out up front in order to make sure your’e staying focused on what’s honestly important to you
    • for Derek, it’s how many useful things he creates, and whether or not those things need his creative input
  • How can you ensure the survival of your business?
    • that shouldn’t be the point - the point is to solve problems for people, so if the problem is solved, there isn’t a need for the business any more
    • the rule is that you should care about your customers more than the survival of the business
    • many businesses keep the problem around so they can sell you a cure (i.e. health insurance companies, pharmaceutical companies)
  • What does it mean to operate like you don’t need the money?
    • strangely, if you run your business like you don’t need the money, people are happier to pay you
    • conversely, if you run your business like you’re doing it for the money, people sense it and it’s a huge turnoff
    • so the moral is to run your business like you don’t need the money, and it will most likely come your way
  • What happens when a business (or the government, for that matter) punishes everyone for one person’s mistake?
    • you’re punishing future customers for one person’s stupid mistake
    • like the shoe bomber - because of that one stupid incident, everyone who flies on a plane has to take their shoes off in security
    • a better tactic is to simply deal with the individual and remember that you can’t prevent bad things from happening, then move on
  • Why shouldn’t you ignore the tiny details in your business?
    • because often, those are the ones that will really thrill people
    • big, massive action plans aren’t what is going to actually help people, but taking care to improve a little detail might have a huge affect
    • in his experience, when someone raved about CD Baby it was always about the little, fun human touches they often did
  • What was the hiring/firing policy and CD Baby?
    • he would just ask existing employees if they had friends who needed work, then hire them without meeting them
    • the idea went that you don’t know how someone is going to be while on the job, so you have to hire them first, then fire them later if things didn’t work out
    • the moral is that it’s OK to be casual about your hiring and firing processes
  • What is a good rule of thumb to handle growth?
    • simply, prepare to double, but don’t just do more of the same, streamline processes to handle twice as many customers, profit, employees, etc…
    • the moral is that instead of giving off a desperate ‘we can’t handle this’ vibe, you give off a welcoming ‘come on in, everyone’s welcome’ vibe
  • What does it mean to be, not to have, and why is this important?
    • the whole point of doing anything is because it makes you happy, not because you have something
    • there is an untold joy in learning and doing certain things, and even if it is inefficient for you to learn something yourself and do it yourself, if it makes you happy, then you should do it
    • this is expressed in that it ultimately matters what you want to be (a great programmer, a skilled entrepreneur, etc…), not what you have (millions in the bank, a successful company, etc…)
  • Why is it important not to promise anything you can’t fully control?
    • because it could end up screwing you - ala iTunes and the $200,000 mistake where the outcome wasn’t totally controlled by CD Baby, but rather by Apple
    • this sets you and your customers up for disappointment, and erodes trust if you can’t deliver
    • so, the moral of the story is: never promise a customer you can do something if it is beyond your control to deliver
  • What is the self-employed trap, and how to avoid it?
    • the self-employed trap: you try and do everything yourself, so you end up overworking yourself and not enjoying the freedom that comes with owning your own business
    • for Derek, this happened and he then learned to ‘delegate or die’ - aka make it so that he was unnecessary to the running of the company
    • he did this by calling a meeting of the employees every time someone had a question. he would answer the question and explain the philosophy behind it, then ask someone down to put it in a comprehensive manual… after a few months of this, there were no more questions and everyone knew how to handle things
    • this leads to a big difference between being self employed and being a business owner: when you are self employed and take time off, your business takes a hit, whereas the opposite is true if you’re a true business owner
    • the rule: if you could leave for a year and your business is better than you left it, you’re doing the right thing
  • What role should the founder, CEO, president, etc… play?
    • whatever you want it to be! there is (or there shouldn’t be) no rule for what a CEO should do, but rather, the best thing about being the boss is that you can make your role into whatever you want it to be
    • in fact, this is a necessity because if you start doing things you don’t like (aka investors, banking, media, etc…), you will lose interest in the business and the whole thing will suffer
    • the moral is to do what you love most (because that’s what it is all about, right?), and hire others to do those things you don’t want to do, but they love doing
  • How should you delegate while trusting that person and making sure the job gets done?
    • trust, but verify
    • that means trust the person to get his or her job done, but also verify that it gets done, especially if the task is crucial
  • Is there such a thing as over-delegation?
    • yes! it is called abdication, not delegation
    • this happened with CD Baby when he let the employees choose a profit sharing plan, and the employees chose to give all the profits back to themselves, leaving the business with nothing
    • then when he cancelled the profit sharing plan, all the employees hated him for it
    • this led to the realization that there is a big difference between delegating and abdicating: abdicating is to surrender power or responsibility completely, which isn’t what you want to do, especially with crucial parts of the business
  • When should you sell?
    • short answer: you’ll know when you know
    • for Derek, he was tired of running a company with 85 employees, and all his plans and projects for the company didn’t excite him like they used to, and all required massive effort for relatively little pay off
  • Why did he give CD Baby to charity?
    • because he has enough - enough stuff, enough money, enough whatever
    • important distinction: you can always have more, but few people ever have enough
    • for Derek, the less he owns, the happier he is because it gives him the ‘priceless freedom to live anywhere’
    • when selling the company, he just wanted to make sure he has enough for a simple, comfortable life, and the rest he wanted to go to helping people
    • so he transferred all the company assets into a trust that pays him 5% of its value every year, and he can’t touch that money
  • How is your business your own dream come true?
    • it is your utopia, your perfect world - like a piece of art, your business is a reflection of you, and what your goals are for it
    • in the end, it doesn’t matter what your goals are, there will always be lots of people telling you you’re doing it wrong, so the only thing that matters is that you’re doing what makes you happy
    • in Derek’s experience, as the company got bigger he got less happy, which led to the realization that he was much happier with five employees than eighty-five, and happiest when he was working alone
    • the point is that whatever you make, it is your creation, so you should make it your own personal dream come true
Written on June 6, 2015