Sivers, Derek. Anything You Want

Sivers, Derek. Anything You Want
DerekSivers-AnythingYouWant-318x450

  1. Ten Years Of Experience In One Hour
    1. From 1998 to 2008, I had this wild experience of starting a little hobby, accidentally growing it into a big business, and then selling it for $22 million.
    2. People ask me about that experience, so I tell stories about how it went for me.
    3. People ask my advice on how to approach situations in their lives or businesses, so I explain how I approach things.
    4. I’m not really suggesting that anyone should be like me.
    5. This is most of what I learned in ten years, compacted into something you can read in an hour.
    6. I hope you find these ideas useful for your own life or business.
  1. What’s Your Compass?
    1. Most people don’t know why they’re doing what they’re doing.
    2. Don’t be on your deathbed someday, having squandered your one chance at life, full of regret because you pursued little distractions instead of big dreams.
    3. In the following stories, you’ll notice some common themes.
      1. Business is not about money
      2. Making a company is a great way to improve the world while improving yourself.
      3. When you make a company, you make a utopia. It’s where you design your perfect world.
      4. Never do anything just for the money.
      5. Don’t pursue business just for your own gain. Only answer the calls for help.
      6. Success comes from persistently improving and inventing, not from persistently promoting what’s not working
      7. Your business plan is moot. You don’t know what people really wnt until you start doing it.
      8. Starting with no money is an advantage. You don’t need money to start helping people.
      9. You can’t please everyone, so proudly exclude people.
      10. Make yourself unnecessary to the running of your business.
      11. The real point of doing anything is to be happy, so do only what makes you happy.
    4. What these statements mean?
    5. Well… I don’t love talking about myself, but for the lessons to make sense, I have to tell you my tale.
  1. Just Selling My CD
    1. The story began in 1997.
    2. My bank account was always low, but never empty.
    3. I made a CD of my music, and sold fifteen hundred copies at my concerts.
    4. Music distribution was an awful racket.
    5. It’s not that distributors were evil.
    6. Bu it was hard! In 1997, PayPal didn’t exist, so I had to get a credit card merchant account, which cost $1,000 in setup fees and took three months of paperwork.
    7. Finally, though, I had a BUY NOW button on my website!
    8. When I told my musician friends about my BUY NOW button, one friend asked, “Could you sell my CD too?”
    9. I thought about it for a minute and said, “Sure. No Problem.” I just did it for a favor.
    10. Then two other friends asked if I could sell their CDs.
    11. Two popular music leaders announced it to their mailing lists.
    12. This was meant to be just a favor I was doing for a few
  1. Make A Dream Come True
    1. Selling my friends’ CDs was a starting to take up a lot of time.
    2. So, I thought that by taking an unrealistically utopian approach, I could keep the business from growing too much.
    3. I wrote down my utopian dream-come-true distribution deal from my musician’s point of view.
      1. Pay me every week
      2. Show me the full name and address of everyone who bought my CD. (Because those are my fans, not the distributors)
      3. Never kick me out for not selling enough. (Even if I only sell 1 CD every five years, it’ll be someone to buy.)
      4. Never allow paid placement. (Because it is not fair to those who can’t afford it)
    4. This is t! That’s my mission.
    5. Those four points were like a mission statement.
    6. The key point is that I wasn’t trying to make a big business.
    7. When you make a business, you get a to make a little universe where you control all the laws.
    8. When you make it a dream come true for yourself, it’ll be a dream come true for someone else, too.
  1. A Business Model With Only Two Numbers
    1. Like most people, I had no idea what to charge for my service.
    2. I asked the woman at the store, “How does it work if I sell my CD here?”
    3. She said, “You set the selling price at whatever you want. We keep a flat $4 cut. And we pay you every week.”
    4. So I went home and wrote on my new cdbaby.com website, “You set the selling price at whatever you want.
    5. Because it was taking me aboutforty-five minutes of work to add a new album to the site, I also had to charge $25 per album as compensation for my time (shows you how much I thought my time was worth in those days).
    6. And that’s it! Six years and $10 million later, those same two numbers were the sole source of income for the company: a $35 setup fee per album and a $4 cut per CD sold.
    7. A business plan should never take more than a few hours ofwork—hopefully no more than a few minutes.
  1. This Ain’t No Revolution
    1. Five years after I started CD Baby, when it was a big success, the media said I had revolutionized the music business.
    2. People think a revolution needs to involve loud provocations, fists in the air, and bloodshed.
    3. When you’re onto something great, it won’t feel like revolution.
  1. If It’s Not A Hit, Switch
    1. For the first time in my life, I had made something that people really wanted.
    2. Before that, I had spent twelve years trying to promote my various projects trying every marketing approach, networking, pitching, pushing. It always felt like an uphill battle, trying to open locked or slamming doors.
    3. But now . . . Wow! It was like I had written a hit song.
    4. Once you’ve got a hit, suddenly all the locked doors open wide.
    5. So what’s the lesson learned here?
    6. We’ve all heard about the importance of persistence.
    7. We all have lots of ideas, creations, and projects.
    8. Present each new idea or improvement to the world.
    9. Don’t waste years fighting uphill battles against locked doors.
  1. No “Yes”. Either “Hell Yeah!” or “No”
    1. You can use this same rule on yourself if you’re often overcommitted or too scattered.
    2. When you say no to most things, you leave room in your life to throw yourself completely into that rare thing that makes you say, “Hell yeah!”
    3. For every event you get invited to, every request to start a new project, if you’re not saying, “Hell yeah!” about it, say no.
    4. We’re all busy. We’ve all taken on too much. Saying yes to less is the way out.
  1. Just Like That, My Plan Completely Changed
    1. When I first started CD Baby, I thought it was just a credit card processing service.
    2. It was supposed to be a website that musicians would use to say, “Go here to buy my CD.”
    3. The day I launched cdbaby.com, my second customer was a guy in the Netherlands.
    4. New releases? I didn’t understand. I asked why he wanted to know which new people are using my service to charge credit cards.
    5. He replied, “Oh, sorry; I thought it was a store.”
    6. A store? Oh! Interesting. He thinks I’m a store!
    7. And just like that, my plan completely changed.
    8. Five years later, when the iTunes Music Store launched, Apple asked us to be a digital distributor.
    9. And just like that, my plan completely changed again.
    10. Anytime you think you know what your new business will be doing, remember this quote from serial entrepreneur Steve Blank: “No business plan survives first contact with customers.”
  1. The Advantage of No Funding
    1. Having no funding was a huge advantage for me.
    2. A year after I started CD Baby, thedot-com boom happened.
    3. Most business owners I knew would tell you about their businesses by talking about their second round of funding, their fancy encrypted replicatedload-balancing database server, their twenty- person development team, their nice Midtown office with a pool table, and their weekly promotion parties.
    4. I’m so glad I didn’t have investors.
    5. I’d get weekly calls from investment firms, wanting to invest in CD Baby.
    6. They’d say, “Don’t you want to expand?”
    7. I’d say, “No. I want my business to be smaller, not bigger.”
    8. I went to the bookstore and got a $25 book on PHP and MySQL programming.
    9. Even years later, the desks were just planks of wood on cinder blocks from the hardware store.
    10. Never forget that absolutely everything you do is for your customers.
    11. None of your customers will ask you to turn your attention to expanding.
  1. Start Now. No Funding Needed.
    1. Watch out when anyone (including you) says he wants to do something big, but can’t until he raises money.
    2. If you want to be useful, you can always start now, with only 1 percent of what you have in your grand vision.
    3. For example, let’s say you have a vision of making an international chain of enlightened modern schools.
    4. If you want to make a movie recommendation service, start by telling friends to call you for movie recommendations.
    5. Want to start a new airline? Next time you’re at the airport when a flight is canceled, tell everyone at the gate that you’ll lease a small plane to fly to their destination if they will split the costs. (This is how Richard Branson started Virgin Atlantic Airways.)
    6. Starting small puts 100 percent of your energy into actually solving real problems for real people.
    7. Since I had already built a website for my own CD, the first version of CD Baby took me only a few days to make, and it did almost nothing.
    8. That’s it. For the first year, that’s all the site did, and that’s all it needed to do to become profitable.
    9. I spent only $500 to start CD Baby.
    10. So no, your idea doesn’t need funding to start.
  1. Ideas Are Just A Multiplier Of Execution
    1. It’s so funny when I hear people being so protective of ideas (especially people who want me to sign anon-disclosure agreement before they tell me about the simplest ideas).
    2. To me, ideas are worth nothing unless they are executed.
    3. To make a business, you need to multiply the two components. The most brilliant idea, with no execution, is worth $20. The most brilliant idea takes great execution to be worth $200,000,000
    4. That’s why I don’t want to hear people’s ideas. I’m not interested until I see their execution.
  1. Formalities Play On Fear. Bravely Refuse.
    1. A year after starting CD Baby, when it was going pretty well, I got a call from a friend who was setting up his own similarweb-based
    2. I said, “Huh? I don’t have any of that legalese stuff. I’ve never hired a lawyer.”
    3. Shocked, he said, “That’s crazy! What if some kid buys a CD from you, then kills himself? What if you get sued over that?”
    4. I said, “Then no stupid footnote legalese would protect me anyway, so I’ll worry about it if it happens.”
    5. Do you passionately love the “Terms & Conditions” and “Privacy Policy” pages on other websites?
    6. After CD Baby grew to fifty employees, all thebusiness-to-business service companies started pitching me on how I needed an official employee review plan, sensitivity training, Terms and Conditions postings, and all this corporate crap.
    7. Never forget that there are thousands of businesses, like Jim’s Fish Bait Shop in a shack on a beach somewhere, that are doing just fine without corporate formalities.
    8. As your business grows, don’t let the leeches sucker you into all that stuff they pretend you need.
  1. The Strength Of Many Little Customers.
    1. Many small entrepreneurs think, “If we can just land Apple, Google, or the government as a client, we’ll be all set!”
    2. Software companies often do this.
    3. But this approach has many problems.
      1. You have to custom-tailor your product to please a very few specific people.
      2. Those people might change their minds or leave the compay.
      3. Whom are you really working for?
      4. If you do land the big client, that organization will practically own you.
      5. By trying so hard to please the big client, you will lose touch with what the rest of the world wants.
    4. Instead, imagine that you have designed your business to haveno big clients, just lots of little clients.
    5. So much of the music business is actually the starbusiness—people hoping to catch the coattails of a redundant megastar.
    6. When you build your business on serving thousands of customers, not dozens, you don’t have to worry about any one customer leaving or making special demands.
  1. Proudly Exclude People.
    1. You know you can’t please everyone, right?
    2. But notice that most businesses are trying to be everything to everybody.
    3. You need to confidently exclude people, and proudly say what you’re not.
    4. The Hotel Café, a folk- androck-music venue in Los Angeles, is a no-talking
    5. When CD Baby got popular, I’d get calls from record labels wanting to feature their newest, hottest acts on our site.
    6. I’d say, “Nope. They’re not allowed here.”
    7. The record label guys would say, “Huh? What do you mean not allowed? You’re a record store! We’re a record label.”
    8. I’d say, “You can sell anywhere else. This is a place for independents only: musicians who chose not to sign their rights over to a corporation. To make sure these musicians get the maximum exposure they deserve, nomajor-label acts are allowed.”
    9. It’s a big world.
    10. Have the confidence to know that when your target 1 percent hears you excluding the other 99 percent, the people in that 1 percent will come to you because you’ve shown how much you value them.
  1. Why No Advertising?
    1. I got a call from an advertising salesman saying he’d like to run banner ads at the top and bottom of cdbaby.com.
    2. I said, “No way. Out of the question. That would be like putting a Coke machine in a monastery. I’m not doing this to make money.”
    3. He said, “But you’re a business. What do you mean you’re not trying to make money?”
    4. I said, “I’m just trying to help musicians. CD Baby has to charge money to sustain itself, but the money’s not the point. I don’t do anything for the money.”
    5. This goes back to the utopianperfect-world ideal of why we’re doing what we’re doing in the first place. In a perfect world, would your website be covered with advertising?
    6. When you’ve asked your customers what would improve your service, has anyone said, “Please fill your website with more advertising”?
    7. So don’t do it.
  1. This Is Just One Of Many Options.
    1. I used to take voice lessons from a great teacher named Warren Senders.
    2. Then he’d say, “OK, now do it up an octave.”
    3. “Uh . . . up an octave? But I can’t sing that high!”
    4. “I don’t care! Do it anyway! Go! One, two, three, four.”
    5. I’d sing the whole song again, in screeching, squeaking falsetto, sounding like an undead cartoon mouse.
    6. Then he’d say, “OK, now do it down an octave.”
    7. “Down an octave? But I don’t think I can!”
    8. “Doesn’t matter! Go! One, two, three, four.”
    9. I sounded like a garbage disposal or lawn mower, but he made me sing the whole song that way.
    10. Then he’d make me sing it twice as fast.
    11. Tom Waits. Then he’d tell me to sing it like it’s 4 a.m. and a friend woke me up. And then he’d give me many other scenarios.
    12. After all of this, he’d say, “Now, how did that song go again?”
    13. I’m taking an entrepreneurship class now.
    14. We analyzed a business plan for amail-order pantyhose company
      1. “Ok, make a plan that requires only $1000. Go!”
      2. “Now make a plan for ten times as many customers. Go!”
      3. “Now do it without a website. Go!”
      4. “Now make all your initial assumptions wrong, and have it work anyway. Go!”
      5. “Now show how you would franchise it. Go!”
    15. You can’t pretend there’s only one way to do it.
    16.  Same thing with your current path in life.
      1. “Now you’re living in New York City, obsessed with success. Go!”
      2. “Now you’re a free spirit, backpacking around Thailand. Go!”
      3. “Now you’re a confident extrovert and everyone loves you.Go!”
      4. “Now you’re married and your kids are your life. Go!”
      5. “Now you spend a few years in relative seclusion, reading and walking. Go!”
  1. You Don’t Need A Plan Or A Vision.
    1. Do you have a big visionary master plan for how the world will work in twenty years?
    2. Don’t feel bad if you don’t. I never did.
    3. A year and a half after starting CD Baby, it was just me and John, my first employee, running it out of my house
    4. “I think there’s a chance that this thing might be huge one day, so we better start preparing for that now.
    5. Years later, after I had a hundred thousand artists andeighty-five employees, John would often get a good laugh out of this e-mail I sent him in 1999.
    6. Journalists would ask, “What’s yourlong-term goal for CD Baby?”
    7. I’d say, “I don’t have one. I surpassed my goals long ago. I’m just trying to help musicians with whatever they need today.”
    8. So please don’t think you need a huge vision. Just stay focused on helping people today.
  1. “I Miss The Mob.”
    1. I was in Las Vegas for a conference, taking a taxi from the airport to the hotel.
    2. He said,“Twenty-seven ”
    3. “Wow! A lot has changed since then, huh?”
    4. “Yeah. I miss the mob.”
    5. “Huh? Really? What do you mean?”
    6. “When the mafia ran this town, it was fun.
    7. I told this story a lot at CD Baby.
    8. I’d just say, “I have no idea.
    9. They’d tell me that if I analyzed the business better, I could maximize profitability. Then I’d tell them about the taxi driver in Vegas.
    10. Never forget why you’re really doing what you’re doing.
  1. How Do You Grade Yourself?
    1. In New York City, there are dozens of buildings that say TRUMP on them.
    2. We all grade ourselves by different measures.
      1. For some people, it’s a simple as how much money they make.
      2. For others, it’s how much money they give.
      3. For some, it’s how many people’s lives they can influence for the better.
      4. For others, it’s how deeply they can influence just a few people’s lives.
    3. For me, it’s how many useful things I create, whether songs, companies, articles, websites, or anything else.
    4. How do you grade yourself?
    5. It’s important to know in advance, to make sure you’re staying focused on what’s honestly important to you, instead of doing what others think you should.
  1. Care About Your Customers More Than About Yourself.
    1. At a conference in Los Angeles, someone in the audience asked me, “What if every musician just set up their own store on their own website? Since that’d be the death of CD Baby, how do you plan to stop that?”
    2. I said, “Honestly, I don’t care about CD Baby. I only care about the musicians.
    3. He was shocked.
    4. To me, it was just common sense.
    5. But evenwell-meaning companies accidentally get trapped in survival mode.
    6. It’s kind of like the grand tales in which the hero needs to be prepared to die to save the day.
    7. That’s the Tao of business: Care about your customers more than about yourself, and you’ll do well.
  1. Act Like You Don’t Need The Money
    1. Banks love to lend money to those who don’t need it.
    2. If you set up your business like you don’t need the money, people are happier to pay you.
    3. It’s another Tao of business: Set up your business like you don’t need the money, and it’ll likely come your way.
  1. Don’t Punish Everyone For One Person’s Mistake
    1. The little diner near me has these big warning signs posted everywhere.
      1. “We reserve the right to refuse service to anyone for any reason.”
      2. “All orders are final! Absolutely no refunds!”
      3. “No cell phones. No Photos. No Videos.”
      4. “No loitering! Restroom for customers only!”
      5. “All violators will be persecuted to the fullest extent of the law!”
    2. That poor business owner needs a hug.
    3. When I was six, I attended a strict little school in Abingdon, England.
    4. Several years ago, one guy tried to light his shoes on fire on a plane.
    5. As a business owner, when you get screwed over by someone, you might be tempted to make a big grand policy that you think will prevent your ever getting screwed over again: One employee can’t focus and spends his time surfing the Web.
    6. It’s important to resist that simplistic, angry, reactionary urge to punish everyone, and step back to look at the big picture.
    7. When one customer wrongs you, remember the hundred thousand who did not.
  1. A Real Person, A Lot Like You.
    1. My friend Sara has run a small online business out of her living room for twelve years.
    2. Recently, one of her clients sent her aten-page scathing e-mail, chopping her down, calling her a scam artist and issuing other vicious personal insults, saying she was going to sue Sara for everything she’s worth as retribution for the client’s mishandled account.
    3. Devastated, Sara turned off her computer and cried.
    4. On Sunday, she spent about fivehours—most of the day—carefully addressing every point in this ten-page e-mail; then she went through the client’s website, learning everything about her, and offered all kinds of advice, suggestions, and connections.
    5. The next day, she called the client to try to talk through the situation with her.
    6. My friend Valerie was using an online dating service.
    7. My friend Valerie was using an online dating service.
    8. We were at her computer when I asked her how it was going.
    9. I felt for those guys, each one pouring out his heart, projecting his hopes onto Valerie, hoping she’d reply with equal enthusiasm, hoping she might be the one who would finally see and appreciate him.
    10. She said, “Ugh. Losers. I get, like, ten of these a day.” Then she deleted all of them, without replying.
    11. When we yell at our car or our coffee machine, it’s fine because they’re just mechanical appliances.
    12. It’s dehumanizing to have thousands of people passing through our computer screens, so we do things we’d never do if those people were sitting next to us.
    13. Even if you remember it right now, will you remember it next time you’re overwhelmed, or perhaps never forget it again?
  1. You Should Feel Pain When You’re Unclear.
    1. E-mailblasts are the best training for being clear.
    2. CD Baby had about two million customers.
    3. When writing ane-mail to everyone, if I wasn’t perfectly clear, I’d get twenty thousand confused replies, which would take my staff all week to reply to, costing me at least $5,000 plus lost morale.
    4. Writing thate-mail to customers—carefully eliminating every unnecessary word, and reshaping every sentence to make sure it could not be misunderstood—would take me all day.
    5. Unfortunately, people writing websites don’t get this kind of feedback.
    6. I see new websites trying to look impressive, filled with hundreds of puffy, unnecessary sentences.
  1. The Most Successful E-Mail I Ever Wrote
    1. When you make a business, you’re making a little world where you control the laws.
    2. When I first built CD Baby, every order resulted in an automatede-mail that let the customer know when the CD was actually shipped.
    3. After a few months, that felt really incongruent with my mission to make people smile.
      1. “Your CD has been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow..”
      2. “A team of 50 employees inspected your CD and polished it to make sure it was in the best possible condition before mailing.”
      3. “Our packin specialist from Japan lit a candle and a hush fell over the crowd as he put your CD into the finest gold-lined box that money can buy.”
      4. “We all had a wonderful celebration afters and the whole party marched down the street to the post office where the entire town of Portland waved “Bon Voyage”! to your package, on its way to you, in our private CD Baby jet on this day, Friday, June 6th.”
      5. “I hope you had a wonderful time shopping at CD Baby. We sure did. Your picture is on our wall as “Customer of the Year””
      6. “We’re all exhausted but can’t wait for you to come back to CDBABY.COM!!”
    4. That one silly e-mail, sent out with every order, has been so loved that if you search Google for “private CD Baby jet,” you’ll get almost twenty thousand results.
    5. When you’re thinking of how to make your business bigger, it’s tempting to try to think all the big thoughts and come up with world-changing massive-action
  1. Little Things Make All The Difference.
    1. If you find even the smallest way to make people smile, they’ll remember you more for that smile than for all your other fancy business-model
    2. Here are some things that made a huge difference on the CD Baby website:
    3. We answered our phone within two rings,always—7 m. to 10 p.m., seven days a week.
    4. Phones were everywhere, so even if the customer service rep was busy, someone in the warehouse could pick up.
    5. Every outgoinge-mail has a “From:” name, right?
    6. Sometimes, after we had done theforty-five minutes of work to add a new album to the store, the musician would change his mind and ask us to do it over again with a different album cover or different audio clips.
    7. At the end of each order, the last page of the website would ask, “Where did you hear of this artist? We’ll pass them any message you write here.”
    8. Also at the end of each order, there was a box that would ask, “Any special requests?” One time, someone said, “I’d love some cinnamon gum.”
    9. Even if you want to be big someday, remember that you never need to act like a big boring company.
  1. It’s OK To Be Casual
    1. My hiring policy was ridiculous. Because I was “too busy to bother,” I’d just ask my current employees if they had any friends who needed work.
    2. The thought was that it’s almost impossible to tell what someone’s going to be like on the job until he’s actually on the job for a few weeks.
    3. To be fair, this was amail-order CD store, so most of my employees were in the warehouse.
    4. The first time I did that I found Ryan. The second time, I found Jason. Both guys are amazing and are key people at CD Baby to this day.
    5. Don’t try to impress an invisible jury of MBA professors. It’s OK to be casual.
  1. Naive Quitting
    1. My first real job was as the librarian at Warner/Chappell Music.
    2. After two and a half years, though, I decided to quit to be afull-time
    3. Since I had never quit a job before and didn’t know how, I did what seemed to be the respectful and considerate thing to do: I found and trained my replacement.
    4. My boss just looked a little stunned, then said, “Uh. Well. OK. We’ll miss you. Tell her to see HR about the paperwork.”
    5. Ten years later, I was running CD Baby, and for the first time, an employee told me he needed to quit.
    6. I said, “Drag. Well. OK. I wish you the best! Who’s your replacement?” He looked confused.
    7. I said, “Have you found and trained a replacement yet?”
    8. He looked a little stunned, then said, “No . . . . I think that’s your job.”
    9. Now I was stunned. I asked a few friends and found out he was right.
    10. There’s a benefit to being naive about the norms of theworld—deciding from scratch what seems like the right thing to do, instead of just doing what others do.
  1. Prepare To Double
    1. CD Baby doubled in size every year for the first six years.
    2. Because the business needed a warehouse for the CDs, I always had to buy more shelving.
    3. But no matter what business you’re in, it’s good to prepare for what would happen if business doubled.
    4. Notice that “more of the same” is never the answer.
    5. Never be the typical tragic small business that gets frazzled and freaked out when business is doing well.
  1. It’s About Being, Not Having.
    1. Being a singer:
    2. Since I was fourteen, I was determined to be a great singer.
    3. For eleven years, from the ages of fourteen totwenty-five, I took voice lessons, and practiced at least an hour a day.
    4. When I wastwenty-five, I recorded my first album.
    5. Attwenty-eight, I started noticing that my voice was getting good!
    6. Attwenty-nine, I had done it.
    7. Point is: It’s not that I wanted to get it done and have good vocals.
    8. Being a producer:
    9. I wanted to record my album myself, to learnrecording-studio engineering and production, because I thought that would be a really rewarding and empowering thing to know how to do—like building your own house.
    10. Friends and mentors said that was ridiculous, that I should just hire a great engineer, producer, and studio.
    11. I took the few years to learn it myself, and it was one of the most rewarding experiences of my life.
    12. Being a programmer:
    13. When I started CD Baby, I knew only some basic HTML, no programming.
    14. Since I couldn’t afford to hire a programmer, that meant I had to learn it myself.
    15. As the company grew, everyone was surprised that I still did all the programming myself.
    16. In the last few years, my employees got furious that new features were not being added as fast as they wanted, because I still insisted on doing all the programming myself.
    17. Being, not having:
    18. When you want to learn how to do something yourself, most people won’t understand.
    19. But that’s forgetting about the joy of learning and doing.
    20. You might get bigger faster and make millions if you outsource everything to the experts.
    21. In the end, it’s about what you want to be, not what you want to have.
    22. To be something (a good singer, a skilled entrepreneur, or just plain happy) is the real point.
    23. When you sign up to run a marathon, you don’t want a taxi to take you to the finish line.
  1. The Day Steve Jobs Dissed Me In A Keynote
    1. In May 2003, Apple invited me to their headquarters to discuss getting CD Baby’s catalog into the iTunes Music Store.
    2. I flew to Cupertino, California, thinking I’d be meeting with one of Apple’s marketing or tech people.
    3. We all went into a little presentation room, not knowing what to expect.
    4. This was huge to me, because until 2003, independent musicians were always denied access to the big outlets.
    5. Then the Apple guys showed us the software we’d all have to use to send them each album.
    6. I raised my hand and asked if it was required that we use their software.
    7. The Apple guys said, “Sorry, you need to use this software; there is no other way.”
    8. That meant we’d have to pull each one of those CDs off of the shelf again, stick it in a Mac, and cut and paste every song title into that Mac software.
    9. They said they’d be ready for us to start uploading in the next couple of weeks.
    10. I flew home that night, posted my meeting notes on my website,e-mailed all of my clients to announce the news, and went to sleep.
    11. When I woke, I had furiouse-mails and voice mails from my contact at Apple: “What the hell are you doing? That meeting was confidential! Take those notes off your site immediately! Our legal department is furious!”
    12. There had been no mention of confidentiality at the meeting and no agreement to sign.
    13. Applee-mailed us the iTunes Music Store contract.
    14. I decided we’d have to charge $40 for this service to cover our bandwidth and the payroll costs of pulling each CD out of the warehouse, entering all the info, digitizing and uploading the music, and putting the CD back in the warehouse
    15. Five thousand musicians signed up in advance, each paying $40.
    16. Within two weeks, we got contacted by Rhapsody, Yahoo! Music, Napster, eMusic, and more, each saying they wanted our entire catalog.
    17. Maybe you can’t appreciate this now, but the summer of 2003 was the biggest turning point that independent music has ever had.
    18. But there was one problem. iTunes wasn’t getting back to us.
    19. I gave optimistic apologies, but I was starting to get worried, too.
    20. A month later, Steve Jobs did a special worldwide simulcast keynote speech about iTunes.
    21. Four minutes in, he said something that made my pounding heart sink to my burning stomach: “This number could have easily been much higher, if we wanted to let in every song.
    22. Whoa! Wow. Steve Jobs had just dissed me hard!
    23. OK. That’s that. Steve changed his mind. No independents on iTunes.
    24. So it was time to do the right thing, no matter how much it hurt. I decided to refund everybody’s $40, with my deepest apologies.
    25. Since we couldn’t promise anything, I couldn’t charge money in good conscience.
    26. The very next day, I got our signed contract back from Apple, along with upload instructions.
    27. We started encoding and uploading immediately.
    28. But I never again promised a customer that I could do something that was beyond my full control.
  1. My $3.3 Million Mistake
    1. Starting when I was a teenager, my dad would occasionally send me things to sign for the family business.
    2. Four years before I started CD Baby, as I was recording my first album, I needed to borrow $20,000 to buy studio equipment.
    3. So I did. Because my band was called Hit Me, I called the company Hit Media Inc.
    4. Four years later, I was living in Woodstock, New York, and started this little hobby called CD Baby.
    5. The first time I got a check addressed to “CD Baby,” I brought it down to the bank and told the teller, “I need to set this up as a new business, so let’s open a new business account.”
    6. She said, “Oh you don’t need to do that. You can just make it an alias on your Hit Media account.”
    7. Four years later, CD Baby was doing really well: a few million dollars in sales, half a million dollars in net profits. I paid my dad back the $20,000 I had borrowed.
    8. I called up my accountant in January. “OK. I got all the Quicken books balanced. Should we file early this year?”
    9. He said, “Oh, you don’t need to file. CD Baby is just a line item on your dad’s company’s tax return.”
    10. I said, “Uh . . . what?”
    11. “You didn’t know that your dad’s company owns ninety percent of CD Baby?” “Uh . . . what?”
    12. “You should talk to your dad.”
    13. Yes, it turns out that when I borrowed the $20,000 eight years earlier, I didn’t realize that I got the $20,000 by selling 90 percent of Hit Media Inc. to my dad’s company.
    14. FFFFffff . . . SSSSssss . . . RRRRrrrr . . . Oh, what a horrible sinking feeling.
    15. I couldn’t be mad at my dad. He was doing me a favor back then and thought I knew what I was signing.
    16. What made it even worse is that I couldn’t just buy the business back for the original $20,000.
    17. The IRS wouldn’t allow that.
    18. In the end, I had to pay $3.3 million to buy back that 90 percent of my company.
  1. Delegate Or Die: TheSelf-Employment Trap
    1. Mostself-employed people get caught in the delegation trap.
    2. You’re so busy, doing everything yourself.
    3. Here’s my little tale of how I broke into the delegationmind-set:
    4. In 2001, CD Baby was three years old. I had eight employees, but I was still doing “everything else” myself, working 7 a.m. to 10 p.m., seven days a week.
    5. Every five minutes, my employees had a question for me:
    6. “Derek, some guy wants to change the album art after it’s already live on the site. What do I tell him?”
    7. “Derek, can we accept wire transfer as a form of payment?”
    8. “Derek, someone placed two orders today, and wants to know if we can ship them together as one, but refund him the shipping cost savings.”
    9. It was hard to get anything done while answering questions all day.
    10. I hit my breaking point.
    11. After a long night of thinking and writing, I got myself into the delegationmind-set.
    12. The next day, as soon as I walked in the door, someone said, “Derek, someone whose CDs we received yesterday has now changed his mind and wants his CDs shipped back.
    13. This time, instead of just answering the question, I called everyone together for a minute.
    14. “Yes, refund his money in full.
    15. I asked around to make sure everyone understood the answer.
    16. Ten minutes later, a new question.
      1. Gather everybody around.
      2. Anwer the question and explain the philosophy.
      3. Make sure everyone understands the process.
      4. Ask one person to write it in the manual.
      5. Let everybody know they can decide this without me next time.
    17. After two months of this, there were no more questions.
    18. Then I showed someone how to do the last of the stuff that was still my job.
    19. Now I was totally unnecessary.
    20. I had even taught the employees my thought process and philosophy about hiring new people.
    21. I’d call in once a week to make sure everything was OK.
    22. Because my team was running the business, I was free to actually improve the business!
    23. While I was away, my company grew from $1 million to $20 million in four years, and from eight toeighty-five
    24. There’s a big difference between being self-employed and being a business owner.
  1. Make It Anything You Want
    1. After your business has been up and running awhile, you’ll hit an interesting crossroads.
    2. Everyone assumes that as the owner of the company, you’ll be the traditional CEO, having high- powered lunches with otherhigh-powered CEOs and doing all the big business deals.
    3. Never forget that you can make your role anything you want it to be.
    4. I loved sitting alone and programming, writing, planning, andinventing—thinking of ideas and making them happen.
    5. If you do this, you’ll encounter a lot of pushback and misunderstanding, but who cares?
    6. On a similar note, people also assume that you want to bebig-big-big—as big as can be.
    7. Happiness is the real reason you’re doing anything, right?
    8. The funny thing is, I didn’t want CD Baby to grow at all.
    9. When people would ask, “What are you doing to grow your company?”I’d say, “Nothing!
    10. Make sure you know what makes you happy, and don’t forget it.
  1. Trust, But Verify
    1. In 2005, CD Baby’s main business was doing digital delivery of music to all the digital music retailers: iTunes, Amazon, Napster, Rhapsody, MSN, Yahoo!, and fifty more.
    2. I built a system that did most of the work, but it still required someone to run the outputs, connect hard drives, and ship them to the retailers.
    3. The key point was that we had to get every album delivered to every company, every week, no matter what.
    4. His first few weeks, I watched closely to make sure everything was going well.
    5. A few months later, I started hearing a lot of complaints from musicians, saying that their music hadn’t been sent to these companies.
    6. I called the guy in charge of it and asked what was going on. He said, “Yeah, I’ve been really backed up. It’s been really busy.”
    7. I said, “What’s rule number one? The sole mission of your job?“
    8. He said, “I know. Every album to every company every week no matter what. But I’ve been swamped. I just couldn’t.”
    9. I flew up to Portland and let him go.
    10. This job was so crucial to the company’s survival that I decided to do it myself for awhile—notjust do it, but build a system that wouldn’t let mistakes go unnoticed again.
    11. I learned a hard lesson in hindsight: Trust, but verify.
    12. Remember it when delegating. You have to do both.
  1. Delegate, But Don’t Abdicate
    1. Delegation doesn’t come naturally to any of us.
    2. When they asked, “How should we organize all the rooms in the new office?” I said, “Any way you want to do it is fine.”
    3. When they asked, “Whichhealth-care plan should we go with?”
    4. When they asked, “Whichprofit-sharing plan should we go with?”
    5. A local magazine voted CD Baby “Best Place to Work” in the state of Oregon.
    6. Six months later, my accountant called me and said, “Did you know that your employees set up aprofit-sharing program?”
    7. I said, “Yeah. Why?”
    8. He said, “Did you know that they’re giving all of the profits of the company back to themselves?” Oops.
    9. When I canceled theprofit-sharing program, I became a very unpopular guy.
    10. Then I realized that there’s such a thing asover-delegation.
    11. I thought of trying to repair relationships with each of theeighty-five employees over hundreds of hours of talking.
    12. So I considered firing everyone and hiring a whole new crew.
    13. In the end, I did what was best for my clients and me: I retreated into solitude, staying at a friend’s house in London, and focused entirely on programming some major new software features for CD Baby.
    14. I learned an important word:abdicate.
    15. Lesson learned too late: Delegate, but don’t abdicate.
  1. How I Knew I Was Done
    1. I thought I would never sell CD Baby.
    2. In 2007 I did aground-up rewrite of the website from scratch.
    3. After a successful relaunch and Christmas rush, I was looking at my plans for 2008 and beyond.
    4. The next week, I got calls from three companies, each asking if I’d be interested in selling.
    5. But just to beopen-minded, that weekend I opened my diary and started answering the question, “What if I sold?”
    6. This time it was different.
    7. I realized that the bigger learning and growing challenge for me was letting go, not staying on.
    8. Surprised by this, I asked Seth Godin’s advice.
    9. I called Jared Rose, my business coach, and asked him to grill me about this big decision.
    10. As with any breakup, graduation, or move, you emotionally disconnect, and it all feels as if it’s in the distant past.
    11. Unfortunately, as with a divorce, the paperwork took another seven months.
    12. It was never about the money.
    13. I went to bed that night (January 18, 2008) and slept longer than I had in months.
    14. Then I woke up full of detailed ideas for my next company, but that’s a different story.
    15. I’ve been asked a few times by other entrepreneurs, “How do you know when it’s time to sell?” My answer is, “You’ll know.”
  1. Why I Gave My Company To Charity
    1. Kurt Vonnegut and Joseph Heller were at a party at a billionaire’s extravagant estate.
    2. Kurt said, “Wow! Look at this place! This guy has everything!” Joseph said, “Yes, but I have something he’ll never have. . . . Enough.”
    3. When I decided to sell CD Baby, I already had enough.
    4. So I didn’t need or even want the money from the sale of the company.
    5. I created a charitable trust called the Independent Musicians Charitable Remainder Unitrust.
    6. Then, when Disc Makers bought CD Baby, they bought it not from me but from the trust, turning it into $22 million cash to benefit music education.
    7. It’s not that I’m altruistic. I’m sacrificing nothing.
    8. I get the deeper happiness of knowing that the lucky streak I’ve had in my life will benefit tons ofpeople—not just me.
    9. But most of all, I get the constant priceless reminder that I have enough.
  1. You Make Your Perfect World
    1. I started CD Baby focused on the importance of making adream-come-true perfect world for musicians.
    2. Business is as creative as the fine arts.
    3. No matter which goal you choose, there will be lots of people telling you you’re wrong.
    4. Even if what you’re doing is slowing the growth of yourbusiness—if it makes you happy, that’s OK.
    5. You’ll notice that as my company got bigger, my stories about it were less happy.
    6. Whatever you make, it’s your creation, so make it your personal dream come true.