Book Notes: Anything You Want – 40 Lessons for a New Kind of Entrepreneur by Derek Sivers

5 stars, and a “Must Read” recommendation if you are in business or thinking about being in business.

A super-fun and refreshing quick read that will take you 1-2 hours to breeze through, but you’ll want to linger in some sections to take some notes. It is a collection of stories from Derek Sivers’ experiences starting a passion project (CD Baby) that eventually sold for $22M, and his takeaways are satisfyingly unconventional. Many you will not learn in any textbook.

Read on for insight on business plans, customer service, hiring, delegation, taking on investors, outsourcing, overcommitting, and making sure your dream doesn’t become your nightmare.

Summary Notes:

Dedicated entirely to Seth Godin. This book only exists because of his encouragement.

(Seth, I also thank you for encouraging Derek to write this book!)

I hope you find these ideas useful for your own life or business. I also hope you disagree with some of them. Then I hope you e-mail me to tell me about your different point of view, because that’s my favorite part of all. (I’m a student, not a guru.)

(Warning: Derek will actually receive your email!)

On answering your, “why”:

Don’t pursue business just for your own gain. Only answer the calls for help.

If you set up your business like you don’t need the money, people are happier to pay you. When someone’s doing something for the money, people can sense it, like they sense a desperate lover. It’s a turnoff. When someone’s doing something for love, being generous instead of stingy, trusting instead of fearful, it triggers this law: We want to give to those who give.

How do you grade yourself? 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.

That was my lesson learned. I’m happier with five employees than with eighty-five, and happiest working alone. Whatever you make, it’s your creation, so make it your personal dream come true.

No matter which goal you choose, there will be lots of people telling you you’re wrong. Just pay close attention to what excites you and what drains you. Pay close attention to when you’re being the real you and when you’re trying to impress an invisible jury. Even if what you’re doing is slowing the growth of your business—if it makes you happy, that’s OK.

On business plans:

Your business plan is moot. You don’t know what people really want until you start doing it.

(This lines up with Marc Randolph’s principle of “There is no such thing as a good idea.” Read more about this at #6 in this post. It also contrasts with Peter Thiel’s advice on planning for success on page 77-78 of Zero to One, see more about that in my review of that book.)

A business plan should never take more than a few hours of work—hopefully no more than a few minutes. The best plans start simple. A quick glance and common sense should tell you if the numbers will work.

(Even though your business plan is “moot” per the quote above, a SIMPLE plan still has value.)

remember this quote from serial entrepreneur Steve Blank: “No business plan survives first contact with customers.”

You can’t pretend there’s only one way to do it. Your first idea is just one of many options. No business goes as planned, so make ten radically different plans.

On embracing constraints. They are your advantage. Hockey is more fun with boards.

Starting with no money is an advantage. You don’t need money to start helping people.

“If it’s not a hit, switch.” Don’t try to create demand.

Instead of trying to create demand, you’re managing the huge demand.

On being spread too thin:

use this same rule on yourself if you’re often overcommitted or too scattered. If you’re not saying, “Hell yeah!” about something, say no. When deciding whether to do something, if you feel anything less than “Wow! That would be amazing! Absolutely! Hell yeah!” then say no.

(Another version of this advice I have in mind: rate the opportunity on a scale of 1-10, and you can’t use 7. If it does not score 8 or above, it is not a “Hell yeah!” Derek has another book by that same title.)

On taking on outside money:

I’m so glad I didn’t have investors. I didn’t have to please anybody but my customers and myself. No effort was spent on anything but my customers.

On outsourcing vs DIY:

Since I couldn’t afford a programmer, I went to the bookstore and got a $25 book on PHP and MySQL programming. Then I sat down and learned it, with no programming experience. Necessity is a great teacher.

But that’s forgetting about the joy of learning and doing. Yes, it may take longer. Yes, it may be inefficient. Yes, it may even cost you millions of dollars in lost opportunities because your business is growing slower because you’re insisting on doing something yourself. But the whole point of doing anything is because it makes you happy!

On putting the customer 1st:

Make every decision—even decisions about whether to expand the business, raise money, or promote someone—according to what’s best for your customers. If you’re ever unsure what to prioritize, just ask your customers the open-ended question, “How can I best help you now?” Then focus on satisfying those requests.

I got a call from an advertising salesman saying he’d like to run banner ads at the top and bottom of cdbaby.com. 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.” He said, “But you’re a business. What do you mean you’re not trying to make money?” 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.”

All employees knew that as long as we weren’t completely swamped, they should take a minute and get to know the caller a bit. Ask about her music. Ask how it’s going. Yes, it would lead to twenty-minute conversations sometimes, but those people became lifelong fans.

Phones were everywhere, so even if the customer service rep was busy, someone in the warehouse could pick up. All anyone had to do was say, “CD Baby!” Customers loved this!

(Just pick up the phone!)

On not despising small beginnings:

If you want to be useful, you can always start now, with only 1 percent of what you have in your grand vision. It’ll be a humble prototype version of your grand vision, but you’ll be in the game. You’ll be ahead of the rest, because you actually started, while others are waiting for the finish line to magically appear at the starting line.

(See Zechariah 4:10 “Do not despise these small beginnings, for the Lord rejoices to see the work begin.”

On becoming too sophisticated:

After CD Baby grew to fifty employees, all the business-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. I got such joy out of saying no to all of it.

Sometimes MBA types would ask me, “What’s your growth rate? What’s your retained earnings rate as a percentage of gross? What are your projections?” I’d just say, “I have no idea. I don’t even know what some of that means.

LOLOLOL.

Even if you want to be big someday, remember that you never need to act like a big boring company. Over ten years, it seemed like every time someone raved about how much he loved CD Baby, it was because of one of these little fun human touches.

Don’t try to impress an invisible jury of MBA professors. It’s OK to be casual.

There’s a benefit to being naive about the norms of the world—deciding from scratch what seems like the right thing to do, instead of just doing what others do.

Reason from First Principles.

On how to use your imagination to find new business plans (or life plans!). Create scenarios like:

Now you’re a free spirit, backpacking around Thailand. Go!

On lack of ambition:

Do you have massive ambitions to revolutionize your industry? Don’t feel bad if you don’t. I never did.

Journalists would ask, “What’s your long-term goal for CD Baby?” I’d say, “I don’t have one. I surpassed my goals long ago. I’m just trying to help musicians.”

On building a legacy, and avoiding sunk cost fallacy:

He was shocked. He had never heard a business owner say he didn’t care about the survival of his company.

(Is it always wise to aim for “built-to-last” type companies?)

On preventing bureaucracy:

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. Instead of just firing or reassigning that person to more challenging work, the company installs an expensive content-approving firewall so that nobody can go to unapproved sites ever again. It’s important to resist that simplistic, angry, reactionary urge to punish everyone, and step back to look at the big picture.

On responding to unreasonable requests:

I wanted to say yes but let him know that this was really hard to do, so I made a policy that made us both smile: “We’ll do anything for a pizza.” If you needed a big special favor, we’d give you the number of our local pizza delivery place. If you bought us a pizza, we’d do any favor you wanted. When we’d tell people about this on the phone, they’d often laugh, not believing we were serious. But we’d get a pizza every few weeks.

On hiring policies:

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. Someone always did, so I’d say, “Tell them to start tomorrow morning. Ten dollars an hour. Show them what to do.” And that was that.

On building in excess capacity to increase sales, and not running too lean:

if your internal processes are always designed to handle twice your existing load, it sends an attractive “come on in, we’ve got plenty of room” message.

On delegation, building a system, and operations manuals (Delegate or Die!):

To be a true business owner, make it so that you could leave for a year, and when you came back, your business would be doing better than when you left.

1. Gather everybody around.
2. Answer the question and explain the philosophy.
3. Make sure everyone understands the thought process.
4. Ask one person to write it in the manual.
5. Let everybody know they can decide this without me next time.

After two months of this, there were no more questions. … I showed someone how to do the last of the stuff that was still my job. As part of learning it, he had to document it in the manual, and then show it to someone else, too. (Learn by teaching.) Now I was totally unnecessary. I started working at home, not going into the office at all.

Never forget that you can make your role anything you want it to be. Anything you hate to do, someone else loves. So find that person and let her do it.

Understand personality types, and what makes them tick.

Trust, but verify. Remember it when delegating. You have to do both.

Good parenting advice, too 🙂

there’s such a thing as over-delegation. I had empowered my employees so much that I gave them all the power. After a complete communication breakdown, it was eighty-five people (my employees) against one (me). I became the scapegoat for all of their dissatisfaction.

If you enjoyed these notes, you’ll also enjoy my notes on Peter Thiel’s Zero to One.