In the Maker’s Lab with James Altucher

In this episode

One thing I always try to ask myself when I write anything, even just an article, is, is there some reason I’m afraid to hit publish? And if I’m not afraid, I won’t publish it. Because if I’m not afraid, that means I’m just saying something everyone else is saying.

 

Fred Pinto

Thanks for doing this.

 

James Altucher

I really appreciate it.

 

Fred Pinto

Yeah, of course.

 

James Altucher

I like your name too, Fred Pinto. It feels like a comic book name.

 

Fred Pinto

Oh, nice. I like that. I like comic books.

 

James Altucher

It’s like you’re the secret identity of some superhero, Fred Pinto.

 

Fred Pinto

It’s like. It’s like Clark Kent, almost.

 

James Altucher

Like, where does Pinto come from? Is it like Italian?

 

Fred Pinto

It’s Portuguese. Yeah, it’s originally, it’s a Jewish Portuguese family that took on a Portuguese name to hide their identity during the Inquisition. Yeah.

 

James Altucher

That’s very interesting. So, you know, your ancestors way back then?

 

Fred Pinto

Well I know that history kind of but then it gets to a point like 17th century like we kind of lose a lot of records and we don’t really have good records of like what their family name originally was. We don’t really know. We know they lived in a small town called something Del Pinto, and that’s why they just took the name of that town.

 

James Altucher

Okay. All right. Good.

 

Fred Pinto

Yeah, What about Altucher?

 

James Altucher

I actually don’t really know where it comes from. Like, I used to think it came from Ellis Island, but apparently it did. And I found out, and I don’t know because my grandfather’s name was Greenberg. And then for some reason, he changed it to Altucher, and I have no idea why he would fix it in my name.

 

 

Fred Pinto

So that was an individual decision.

 

James Altucher

Yeah. And I don’t know why. Yeah.

 

Fred Pinto

Oh, man. The family histories, man. I heard they’re really interesting sometimes.

 

James Altucher

Well, it is very interesting. Which is why I think in today’s digital age, I really encourage people to write a memoir. Because, even if nobody reads it, think of the gift you’re giving your great, great grandkids. Hmm. Like, wouldn’t you like to read your great, great grandfather’s autobiography?

 

Fred Pinto

Yeah, big time.

 

James Altucher

Even if it was 20 pages.

 

Fred Pinto

Yeah. All those. Little puzzle pieces that you figure out.

 

James Altucher

Yeah.

 

Fred Pinto

No, it would be really cool. Yeah, you’re right. Like the voice, like the audiobook. That would be really cool.

 

James Altucher

I have no idea why my grandfather, who I knew when I was young, when he died, I mean, I was ten years old. It’s like I have no idea why he made some of the decisions he did, which I’d love to ask him. Now.

 

Fred Pinto

Yeah, and that information is like, lost forever.

 

James Altucher

Yeah.

 

Fred Pinto

That’s what’s cool about this era with the podcasting and everything. Like, any of us can just create these libraries of content, right? Recorded content and video content, and then we just pass it on to future generations.

 

James Altucher

Yeah, yeah. No. And, and I don’t think enough people take advantage of that. Like, it’s one thing when you post an Instagram photo like “Oh, we’re celebrating here”. But I’d really like to know what were the hard decisions that my ancestors had to make because, you know, like your ancestors they had to  decide, okay, we’re going to live and we’re going to change your name and this is how we’re going to do in this. So we’re going to survive this. We’re gonna convince people who are sincere, like there was a lot of decisions they had to make that were life changing, that affected all their descendants.

 

 

Fred Pinto

So true. And so much of history is speculative because of that. Right? We know a few facts here and there, and we have to invent narratives in between. But we don’t really know. We don’t really know the actual mechanics.

 

James Altucher

That’s interesting too. Like for instance, we all take we all just assume that George Washington was a great human being. You know, President of the United States, he gave up after two terms. He refused the title of king blah, blah, blah. But, you know, that’s because our perspective in context was he was a great American. That’s what we learned in school. But there’s another history where he owned slaves. He chased after escaped slaves and so on. So other people may not share our perspective. We’re not taught that in school. And we don’t really spend the time learning that as adults. So why should we?

 

Fred Pinto

I feel like we could we can explore a lot of this stuff in fiction or like in like we would have a TV series about it and it turns out he was like this total Grinch, you know? And then he’d make all these offhand comments and we just be turned off. It would change that sort of heroic figure we get from the history books.

 

James Altucher

But you’re right, a lot of this stuff does get explored in fiction, like Brad Meltzer, for instance. Speaking of George Washington, Brad Meltzer just wrote a book about a novel about his basically George Washington’s FBI. He had his own internal intelligence group and use that in the Revolutionary War and so on. It was it was interesting. But he doesn’t know. The history is not very clear. So he had to do it as a novel.

 

Fred Pinto

Yeah, it’s kind of cool. And we kind of do that anyway, right? Even though we know, like, even when we know the facts, we’ll go back after the fact and like, rewrite narratives that kind of selectively sequence the facts and we’ll leave this stuff out and will emphasize this aspect of it. So we kind of do that anyway.

 

James Altucher

Right. I mean, everything has has some context based on what you’re trying to explore. Like Ryan Holiday’s a great example. You know, you’ve had him on your podcast where he looks at Stoics. He’s looking at it in the context of how were they as philosophers, but they also had to make some very more morally, you know, ambiguous decisions in many cases.

 

Fred Pinto

Absolutely. What’s cool about Ryan is that he really knows the lives of the Stoics do not just like what they wrote. So I thought like – I asked him a question about, you know, they didn’t really emphasize empathy very much or like transcendence. They were very, like, serious and dour. He goes, Well, yeah, maybe if you read the books, you’ll get that impression. But if you look at their lives, they were husbands and fathers and members of the community and artists. And so they had empathy. They had like if you look at the details of their lives as models, it paints a way broader picture than what you’d get from just reading the philosophy book. And that was such a good point.

 

 

 

James Altucher

Yeah, that’s absolutely true. I mean, because now when you think of “Oh, someone’s very stoic, you think that means like they can handle tragedy and grief and so on”. You don’t really think of the philosophy. You think of like just the meaning of that word in in the English language. But but, you know, Ryan’s right like one, you know, as he always points out, you know, some of them were slaves, some of them were emperors. And there’s a lot of emotional spectrum in between.

 

Fred Pinto

Big time. So I want to talk about your journey. I mean, this process of preparing for these podcasts is always amazing because I kind of get the delve into the world of a really interesting human being. And your case, your career reads, it reads like a really fun but also kind of crazy roller coaster ride. I mean, you built and sold many companies. I think you’re over 20 companies founded or co-founded going back to the nineties, and I hope I’m not aging you too much, but I’m kind of in the same boat-

 

James Altucher

Going back to the eighties. When I was a kid.

 

Fred Pinto

Eighties, even. Oh my God. Right. And you’ve run a hedge fund. You were a seed investor in Buddy Media, which sold to Salesforce for over $700 million. You’ve kind of done it all. You hear this term “serial entrepreneur” these days, like everybody’s a serial entrepreneur. But it must be funny for you because you’re actually a serial entrepreneur and you’ve been for four decades.

 

James Altucher

And you really want to meet a cereal entrepreneur, like an entrepreneur who invented a new cereal. Like that, would be fun. I feel like cereal’s like a done product. Like Kellogg’s and Quaker Oats and so on, they did the whole thing. But it’ll be interesting now if someone made a new cereal. But anyway, so it’s just a thought.

 

Fred Pinto

Right? Yeah, the phonetic aspect of it for sure. But you also had a lot of the ups and downs that come with that kind of a journey you build. I mean, you tell the story of how you built at some point very early in your career a personal fortune of $50 million and lost it a few years later. Yeah, living a kind of a rockstar entrepreneur life. You seemed to have a very experimental, like freewheeling approach to entrepreneurship in life. Where does that come from? Is it something have you always been this way, or is it something you discovered and developed along the way?

 

James Altucher

I think it’s more something I discovered along the way. Like, you know, experimental means a couple of things. One, it means you try new things. So that’s always been part of my sensibility. I’ve always been interested in trying new things. But the notion of an experiment as like in a scientific way, that’s something I had to learn along the way. And that’s as a result of going broke not just once, but several times after having made money that I didn’t really you know, an experiment is a way you can safely test a theory without harming yourself. So, you know, they didn’t just sort of, you know, when they make a vaccine, for instance, or when they make a medicine, they test it out on mice and then they test it out on human tissue. They do a lot of experiments before they start, like gulping down large quantities of some new medicine which could kill you. And so an experiment is always, I have this idea and very I’m going to nibble a little. I’m going to I’m going to figure out a way to test out this theory as well as I can. Like, maybe I have a theory like : Oh, I could sell a new kind of cereal to kids; Well, okay, Don’t just raise $50 million and have an ad in the Super Bowl. Make something and see if your kids like it or someone else’s kids like it. And you know, that’s an experiment, for instance. Or you think people might like a book that you would write. Well, don’t just spend years writing the book and then put it out there, and then you find out nobody likes it. Maybe write some articles on that topic. This way you experiment not only with the topic to see if people respond to it, but also you learned the craft of writing, which is a hard craft, and you get better and better at that by with these experiments. So I think early on when I was doing a lot of I started off as an entrepreneur, I really didn’t have any clue what I was doing. Like I made so many mistakes. But then after I didn’t realize that you the journey continues after you sell your company. And I figured, okay, well, now I’m just going to keep on doing it. And I’m super smart because I did this. And instead of just experimenting on my next idea, I was going all in on every idea. And what happens when you go all in on every hand in poker, you’re going to be not playing poker for too long. You’re going to go broke. Yeah. My my. Oh, So experimenting is an important way to kind of build your knowledge, whenever it is in. You don’t have to be an entrepreneur. You know, Dip the water as you try new things in your career, whether it’s being an entrepreneur or an employee or trying side hustles or whatever. And particularly for entrepreneurship, experiments tell you what won’t work, and that’s very important for entrepreneurs.

 

Fred Pinto

Yes. So so what are those triggers that you look for? So maybe like earlier in your career, like maybe the approach of going all in on everything and then developing this perspective that it’s really about, you know, testing and, and building smaller things and seeing what the feedback is. What are some of the triggers or the markers that you look for before you decide, okay, I’m going I’m going deeper here or I’m scaling back or I’m going in a different direction.

 

James Altucher

Well, and I think this is a little bit true for everyone. But for me, it was unfortunately even too true. I have to really love something in order to want to do it for a job or a career or start a company or whatever I have to be. I love something to the point of obsession and maybe even addiction. And I’ve noticed when I’ve tried to start businesses that were really just about the money, those businesses did not work. I mean, my first successful business was in the mid-nineties, so I had been using the Web since a few weeks after the first Web server was created. The World Wide Web: WWW. And so I knew, you know, when I moved to New York City in 1994, there was maybe like five people in New York City who knew how to build a website. And so I was able – and I was all in, in a sense that I love the Internet. I loved this idea of the Web. I didn’t know it was going to be this big commercial medium. I thought maybe it would be an artistic medium. And so I started doing what I considered to be, you know, using the web creatively to make creative kinds of websites. And then as companies started to realize they needed to be on the web, I very quickly realized every company in the world is going to need a website. And so my very first business, I kind of accidentally got into it. I didn’t really want to start a business, but a friend of mine had a failing a CD-ROM company. I won’t describe what CD-ROMs are, but you can look that up. It’s the digital whatever. And it was failing and he wanted some help. I agreed to help him out, but I said, I’m not leaving my job. I have a great job. I love my job. And I was really wanting to do more creative things with my life. And I felt being an entrepreneur wasn’t interesting to me. But as as it went, you know, he I showed him the web and said, don’t do the CD-ROM stuff anymore. Everyone’s gonna’ need, a web site. And so simultaneously, American Express, dot.com, they needed a Web site. They asked their accounting firm, Arthur Andersen, which no longer exists, how to do it. Arthur Andersen asked an ad agency, the ad agency as a consulting firm. The consulting firm asked my brother in law, who is the guy I was helping? And my brother in law asked me and I said, Yeah, let’s do American Express dot com. I had $0 in the bank. I had never had a single dollar in the bank in my life. And suddenly we’re getting paid this enormous amount of money, to me at that time, to do American Express dot com and a light bulb went off and they said, ah, I can have some money and still have my job because when you’re younger you have energy. I would work all day at my job and, and then at night build websites and one after the other. Every company needed a website and I was very good. Like, believe it or not, this is an actual discussion. You could have a companies at the time they would say to you, Why do we need a website? What’s it for? And then somebody actually has to sell them and that would be me sell them on the idea that they needed to make a website. And if this is what the future is going to look like.

 

Fred Pinto

Yeah, I feel like we were like the evangelist was like, No, no, no, this is where business is going. This is where culture is going. You we had to actually convince people that that technology was going to be a thing. And it’s just so hard to even, you know, go back into that mindspace because when you look at today how deeply embedded everything is within technology, almost like a time capsule, like thinking back to that time where when you mentioned the CD rom, like the once upon a time we thought these things would last for we thought the world was going to be like that. I mean, as you look at the rate of change just in our lifetime, it’s pretty unbelievable where we are.

 

James Altucher

Yeah, it’s true, because it was only a few decades ago. Again, the 1990s is not that long ago that, you know, people had no idea what this web thing is. This was a common thing. Nobody would ever said, oh, I’m never putting my credit card onto the computer. That’s ridiculous. And, you know, and then you had, you know, these enormous IPOs, like then it became financial. Like nobody understood what the Web was, but they were like, oh, if I add a dot com to my name, my market valuation of the stock market’s going to go way up. And and then, of course, there was the Internet bust and everybody who either lost money because they were all in on the Internet or they concluded that the Internet was a fad. So a lot of people were still thinking this Internet thing is just junk, there’s no users. Because there were no there weren’t a lot of users back in 2001-2002, even though you already had the beginnings of Amazon, Google, Yahoo and all those, the Internet didn’t hit a billion users until about 2005. And that’s when you start to see social media like Facebook, Twitter and so on start to get created and grow social media companies. Before then, nobody remembers Geocities or Friendster or even MySpace. Really. It was with 2005-2006. That’s when social media started developed because finally there were a billion users worldwide who use the Internet. Now you could put your credit card in and there were cybersecurity firms, there was social media. There was e-commerce, like it became a mature industry, but it took a while. I mean, people don’t recognize that either.

 

Fred Pinto

Credit card was huge. I remember because, like, that was a big bottleneck. It was like, there’s a lot of activity on the web. And then it was like, I’ll never put my credit card on the Internet. There’s just no way like the security aspect that took like years to really for us to cross that threshold.

 

James Altucher

Yeah. And it was a lot of, a lot of little experiments along the way. And fortunately there weren’t a billion users because then, you know, they all would have lost money on their credit cards and some credit card fraud and then the Internet maybe would have gone away. Who knows? But so I was a passionate believer, though, like I really love the idea of the web. The very first website I did was HBO.com and I convinced them that since they also do such amazing original TV shows, they should do original web shows. And they said – the CEO of HBO said to me: “Knock yourself out, do whatever you want”. So I made little mini websites for all their TV shows. So it was like a normal marketing website. And then I made an what I thought was an HBO style web show, which maybe was the first podcast or web show out there. I called it “Three” and it was at HBO.com/3 a.m. obviously doesn’t exist anymore and it was me interviewing people in New York City at three in the morning, like on a Wednesday night, because if you were out at New York City at three the way on a Wednesday night, not a Saturday night, where everybody’s out alone on a Wednesday night, you’re up. I found out pretty quickly you’re up to no good. And I did maybe, you know, and then I would put up for interviews for them a week and there would be a nice design and sometimes very rarely, but sometimes there be video and it would take an hour to download. But I did that for about two and a half years for them. But that led to me doing, you know, yes, I did American Express dot com and some other very corporate sites but I quickly realized that when you want to start a business, you try to niche down as much as possible until it’s the intersection of many things that you love and you could build a real brand for yourself. So my company became known for doing entertainment websites. So I did HBO dot com, but I also did many record labels. You could tell even maybe by the way I look, I did a lot of gangster rap record labels and groups and a lot of movie studios and so on. And that was my first real successful company.

 

Fred Pinto

So how do you how do you go from the world of entertainment to the world of finance? Because you’ve done it. You’ve done a lot on the on the on the finance side as well. How did you make that sort of leap? It’s unusual to see that.

 

James Altucher

Yeah. So I sold that first company and I saw – then I figured, Oh, well, I’m a genius because I sold this company and everyone kept asking me, like, what Internet stock should we buy? What Internet stocks? Like, nobody knew anything then. And I knew less than everybody else about investing. I knew nothing. I knew nothing about all the basic principles of investing. And so I made all this money and then I very quickly lost all of it. And I made cash like I cashed out, like I wasn’t just holding paper in the company that acquired mine. But then I put it all back into like Internet stocks thinking “Oh, you know, the Internet is here to stay”. So this the one important thing about investing, you could be completely right and then lose all your money. So I said to us, the Internet is here to stay and it’s going to keep growing. Nothing’s going to stop this from exponential growth for the next 20 years or more. And I can invest all my money in Internet stocks and get really, really rich, even though I already was, because I had sold that company, I had went from $0 to generationally rich. I didn’t have enough self-awareness to realize “Oh, this is fine. You don’t need to become double rich. Rich is enough”. And so I basically went broke by investing. And so I said, okay, well, this is –  First off, I can’t ignore the fact that I was super depressed. I mean, I thought “Oh, my gosh, I wasn’t really smart after all. I had won the lottery and you can’t win the lottery twice. And this is it. Like I’m just done”. And I bought a nice apartment in New York City and I was losing that and I was just losing everything and lost the respect of everybody around me. And I was just really ashamed of myself all the time and just super, almost suicidally depressed. And when I did realize I didn’t know anything about investing. So I spent my time reading about the history of investing, biographies of great investors, learning lots of investing strategies. And I was originally a software guy by training, that’s why I was using the web for so long from the early days. And so I wrote software to test different investing strategies. And now A.I. is a big thing, but I have been working on AI for four decades and I was using A.I. to test different ideas in the stock market and see if I could write software that could trade automatically. And because I was learning so much and absorbing so much and then using software to test things. And I also had this entertainment background, I combined my interests, which is something that I encourage everyone to always just combine and find the intersection of things because that’s where you’ll be the best in the world. And I became a writer about investing, and at the same time other people were investing with me because I was writing all this software to invest and writing about that software and, so I started a hedge fund on one side and on the other side of my life I was writing about investing because I had absorbed so much. I had read like hundreds of books by this point about investing, and it still took years to kind of climb back out of the hole. But, you know, he I would say the one thing about investing versus being a hedge fund manager is that a hedge fund is an actual business and so you have to do all the normal business things like you have to do sales and marketing and I didn’t really like that aspect of it. I didn’t enjoy the money business. And so that’s why I say you have to really be passionate and love what you’re doing. Like I made a living at it, but it’s not like that – I was successful at it and I was it helped me be a good writer about investing and being a good writer about investing helped me on the investing side as well, because it gave me all sorts of access to companies and other great investors and so on. But I wasn’t really good at marketing myself and raising money for my fund, so that’s where I didn’t succeed at that.

 

Fred

It’s a very interesting Gen-X, a storyline of like the exuberance of the dot com and then and then and then the ups and downs of that and then after that, having to sort of like build a real business like or like just go down to the fundamentals. But between the two, because I hear you about the sort of a theme that I keep seeing in your life story is reinvention. You seem to constantly reinventing yourself and you sort of went through that, first big sort of, let’s call it failure and with all the sort of the social aspects of that as well. And to me that’s a very interesting theme that I want to hear you talk about a little bit is the whole idea of failure or risk or I mean; maybe because of the school system, maybe because of parenting styles or maybe just like scarcity mindset, a lot of us are raised with a paralyzing fear of failure, and it’s hard to take on a certain level of risk or adventure when we’re stuck in these fears. I mean, who knows what people could do if they weren’t so scared of failure? Right? And very, very often this expresses itself as a sensitivity to negative talk around them. So the social aspect of failure as well. Right. People tell you shouldn’t do this or you can’t do this or you don’t have the experience or you don’t have the schooling. You talk in your in your TED talk about people who lose their jobs and who need to reinvent themselves, but they don’t have the courage or they don’t feel like they have the schooling, they don’t feel like they have the background for it. How do you frame and especially this sort of moment in your life when you had to kind of rebuild yourself all along more, let’s call it more fundamental lines, or you have to gain more self-awareness. How do you kind of frame the issue of risk and failure? And as part of that, also, how do you deal with the social aspects of people telling you can’t or you shouldn’t or this is not for you?

 

James Altucher

Yeah, all good questions, because this is so – particularly like right now. I mean, it used to be this sort of mythology of a career where you would get good grades in school, you’d go to a good college, you’d get good grades in college, you’d go to a graduate school, and then you would get a job at a good company or maybe you’d be a doctor or a lawyer. Eventually you’d rise up. And after many years you would retire and have enough money saved. And this was like the American dream. And risk was sort of carved out of that equation. Like all you needed to do was what I just said. And you have this riskless career heading into a nice retirement. And of course, that myth was never true, and it’s even less true now. I mean, but even back then, oh, if there was a recession, it doesn’t matter how loyal your company was, you were going to get laid off and then what were you going to do? And, you know, I would say the economy is far bigger and far greater now than it ever was before, even though, you know, we have our certain problems now, problems always seem bigger than they are and when you take a historical view. But there’s so much change that happens in people’s careers now, people turn over jobs much more frequently. They turn over entire careers and industries, and there’s many more startups because the cost of doing a startup has gone down considerably. Like you needed to raise millions of dollars a few years ago to make a big website. Now, you could ask Chat-GPT to make the website for you, and then it’s just WordPress with the millions of templates and use Gum Road to do your e-commerce and Substack to manage your email list and on and on. There’s so many opportunities to create entirely unique and new businesses for almost $0. And that’s really what’s wonderful for experimenting. But in terms of risk and career, I think at times I’ve managed that well. At times I haven’t managed it well. But risk is the most important thing entrepreneurs need to think about. Really anybody. But let’s we’ll talk about entrepreneurship because it’s not – Having a great idea – It’s not that easy to have a great idea and of course, to do experiments to validate that your idea is correct. But once you have the idea and once you start your business, the only thing the entrepreneurs should really be concerned with after that is risk. Because, you know, again, I’ll use poker as an analogy. The key to being successful at poker or as an investor is to simply stay in the game as long as possible. And you do that by mitigating risks. So, you know, one way to mitigate a risk as an entrepreneur is, oh, you have an idea for a product, maybe don’t raise $2 million to make the product, why don’t you do a service first? So sometimes, like, for instance, I made websites for companies. Well, later on there were products that made websites for companies like WordPress and so on. But since I didn’t have any money to start with and I wrote a lot of software myself to help me make websites, but I was a service business and I was profitable from day one. And if a client ever fired me for one of my customers fired me, then I would, you know, have to scale back employees. But that was my main risk. I never really was in risk of going out of business as long as I had even one client left. But, you know, so because a service business you don’t have to spend all this money upfront making a product or where you can then bleed to death by not selling your product. I only hired people when I had clients. Fortunately at that time, I never really had to scale back because more and more companies needed websites. So it was a good business to be. And that of course, is another way to mitigate risk, is finding an industry that’s growing exponentially and that minimizes risk considerably. If I was going to go into the air conditioning business, believe it or not, that was that’s a lot more risky than in the 1990s going into the making “websites business”, although for many people didn’t seem that way because the Internet seemed risky. But, you know, there are so many ways as an entrepreneur to mitigate risk, maybe – Take the podcast business; You built up an entire community of people interested in entrepreneurship that gives you comfort that you could start a podcast and have listeners pre-baked into this, and then you could call advertisers and say: “I have this community, maybe you could be interested in advertising”, or however, you know, you develop your podcast, you know. Again, mitigating risk is the key, and that’s the main thing I’ve probably learned from failing so many times is that you have to figure out how what techniques to use to mitigate risk. So here’s a valuable technique: “When you when you tell an idea to someone, most people are going to say to you, Oh, yeah, that’s a great idea. Go for it. You should really do that. That sounds really great. I would use that product if you made it”. All your friends tell you that. And even some people, not your friends. But that’s not valuable information. That is useless. It’s almost placebo information because you make the product. And guess what? “Oh, you know, I was planning on buying it, but I’m buying this other thing this year. I’ll buy your thing next year” or whatever, and everybody will have excuses. So you don’t really know anything when people give you positive feedback. But if someone says, I would not use what you’re describing, then you can ask why. And they say: “Well, it seems really hard for me. I don’t I’m not like… What do I need this product for when I already spend 24 hours a day with other products? Why are you going to now give me a new product” or, you know, whatever. I have one friend. He had an experience where he developed a software that detects viruses and his roommate from college was the decision maker, the CTO of a major like top five Internet company. He goes to the CTO, they bring out all their, you know, people in the tech group. He brings all his employees and the CTO of this major Internet company says “Oh my gosh, if we had, your software would save us 40 million a year. If you just include these features, we’ll buy it”. So he goes back, he raises money, he includes those features. He goes back to one of his best friends who’s the CTO, and the guy says: “Oh, you know, it’s not in our budget for this year, cause next year”. And of course the guy never bought it and it’s because he had other things he was buying that was saving 50 million a year instead of 40 million a year. And you know, again, negative feedback is a valuable tool that people will take advantage of to use. Let’s say you’ve been into real estate, right, Fred? You’re a real estate person?

 

Fred Pinto

Yeah. A little bit.

 

James Altucher

And so if you’re, let’s say you’re a real estate agent and you’re selling a house and everyone passes through and say, Oh, yeah, we love this, we’ll let you know, we’ll call you. It looks very good. We love it. Of course, they never call. But if someone says, you know what I just went out back, the basement is filled with like rats or whatever. Now you have something you can deal with, You can mitigate the risk. You can remove the rats from the basement or find out why they’re there. And now you’ve mitigated risk. And that’s why negative information is more valuable than positive information.

 

Fred Pinto

Yeah, negative feedback is huge. Like people today. We want positive reinforcement. Positive feedback only. But you’re right. Like then the positive feedback there could be, not lies, but I mean, you can sort of make reality more pleasant than it actually is. Whereas the negativity, at least you have a little bit of truth in there. So I’ve heard that in negotiation tactics as well, when the person tells, you know, when you’re when you’re when you’re trying to close a deal, the person is telling, you no, that’s an opportunity for them, to tell you the truth. Also reminds me of a piece of advice I heard from Bill GROSS, who’s a guy who’s built multiple unicorns. And this is somebody, I was in an event where he was talking and somebody in the crowd asked him, like, how do you innovate? How have you built so many innovative companies? Where do you get all these innovative ideas? And he says: “Without a doubt, our number one source of innovative ideas was always the place where companies are taught to sort of neglect or look away from, and that is customer complaints”. Customer complaint is the place where you will get all of the ideas for product innovation that you’ll ever need because your customers are telling you they’re giving you negative feedback. That negative feedback has a lot of information in there, how you can make the product better, how you can make the user experience better. So I think that’s a really important lesson for entrepreneurs. I think today there’s a lot of the environment tends to slant very positive around entrepreneurship stuff online because, we all want to feel good, we all want to give positive feedback, we all want. But the negative feedback is really, really important to sort of listen to as well because you’ll get a lot of and I think if you approach it as a learner, as you clearly do with your experimental, freewheeling approach, you kind of look at everything as a test and everything is an experiment. The failure, which you’ve talked about also like Thomas Edison, you know, he didn’t fail 10,000 ways. He just learned 10,000 ways that didn’t work to find the one way that does work. It’s it seems sort of almost like empirical scientist mindset of : no experiment is lost, you know, when you haven’t succeeded at something that is extremely valuable information that you can then use to kind of kind of design your next experiment.

 

James Altucher

You know, and by the way, the technique you just described of you looking at reviews, what are the customer complaints. This is a great way, if you’re thinking of writing a book, look at the category that you’re interested in writing a book for, and you look at the reviews for every book that’s kind of a bestseller in that category and see what the readers don’t like about the book. So here’s a book. It’s already a bestseller, but some readers don’t like X, Y, and Z. Well, now write a book that includes X, Y, and Z, and you’ve got better than a bestseller.

 

Fred Pinto

Wow that’s a cool idea.

 

James Altucher

So it almost seems like when you say, oh, get negative information, to me, it almost seems like, oh, don’t have any ideas until people start shooting things down. But you can have ideas and start experimenting. You know, like I said, let’s use the book example; write an article, see what people say about the article. Did it get a lot of engagement? That’s that’s a good thing because it’s very active. It’s not just people saying good job. It’s like a by the way, if people just like an article, that’s not good information, that’s like everybody telling you, hey, go for it sounds good. But if people retweet or reshare or you can see that they’re sending it to their friends, then that’s valuable information because they’re actually doing something. But negative information, again, is even more valuable: “Oh, I love this, but you didn’t do – I wish you would talk about this, this and this. Oh, you talked about negotiating, but what about these other techniques? I would love to hear about that”. And so here you’re doing an experiment. Instead of writing an entire book, you’re writing an article, and then you’re looking for the negative comments to see what you can learn from them. You know, I did a book once called The Power of No, and it’s probably behind me somewhere. And what I did was, I wrote an article first called The Power of No. And I described, you know, maybe in this article, I described ten ways that you could say I’m very bad at saying no to things. And so I had to learn. And that’s usually the case with entrepreneurship or book writing or anything, is that first is very difficult and then you solve the problem and now you have knowledge which you can either use to make a company or write a book or whatever it is. So saying no is very difficult for me. So I wrote an article, which was my story, and I learned to say no, and it got a huge amount of engagement. So that gave me confidence. Okay, this is going to be a good book and people specifically offered their own ideas too, like: “this is how I say no, this is how I say no”. So that gave me information about things I didn’t include that I could try for myself and then write that story and include that in the book. And that book was a major bestseller.

 

Fred Pinto

Hmm. That’s really cool. So how – I mean, I’m interested in your process of how you set up. You talk about your hundred experiment strategy. When you start being really interested in something, you’ll just do a bunch of experiments and start to learn from them. How do you set that up? How formally do you set it up in order to extract the learning? Or is it just I always get a sense with you that you’re like, you’re constantly trying a million things, but do you also layer in a little bit of order in that process, were like: “okay, this is what I’m trying to test. I’m trying to write a book”?

James Altucher

Yes.

 

Fred Pinto

Okay, So do you do sort of sequence it logically to kind of – you set it up for learning, right? You’re not just like…

 

James Altucher

As much as you possibly can. I mean, it’s with each domain in life, it’s a little different. Like writing a book is a great example because you can first write a tweet and then you could write an article and you’ll get you write more than one article, by the way. And so you could just test different ideas that are going to be included in the book, different stories, which stories were interesting to people, which stories were not interesting to people, which concepts are interesting to people? And so on. But like there was one period, and this is kind of, you know, I’ve done, like you said, my career sort of been a rollercoaster. And that’s really for better or for worse. Sometimes I look back and I say to myself, I wish I had just done one, had one interest that I loved the whole time and, you know, pursued that because you become – there’s a to becoming a jack of all trades, master of none. But there was a six year period where every night, pretty much seven nights a week, I would go up on stage and do stand-up comedy and to the point where I owned part of a comedy club and I got really just obsessed with comedy. I would watch comedy all day. I would I would write comedy. And so there’s a lot of ways you can experiment in comedy. So, for instance, I was having trouble with one liners and just coming up with really quick comebacks. And so I went on a New York City subway, which is probably the most unfriendly audience you could have, because they’re just trying to get home from work. They don’t want to hear some guy making bad jokes. And I would do, from one stop to the next, I would do an entire I would try to do an entire set of comedy, and then I would switch cars on the next stop and do it again. And I videotaped myself. I mean, I had someone follow around and videotape, and then I was able to look at it later. Okay. What types of one liners were working for me? What wasn’t what type of behavior was working for me, what type of engagement with people was working for me, what wasn’t working. And by the way, and this was an experiment, I figured, hey, this was kind of interesting. This is almost like a late night talk show. I had this audience on a New York City subway. What else is in a late night talk show? Well, there’s usually a celebrity guest and a musical guest. So I had a friend of mine who had just written a book. I had him come on the subway with me and I interviewed him on the subway. And then we talked to other people sitting around us what they thought of this person. And then I found a guy who was busking, you know, just hitting like garbage cans, like drums in, so that he was really good at it. And so I had a musical guess. And so this experiment turned into, you know, a 20 minute video that I packaged as a late night show and I sent to an agent and. He said, Not interested, but that’s fine. That was an experiment of making my own late night TV show with this unusual format. You know, kind of like a late night show, but you just switched a couple of things and it’s like your own version of a late night show. Yeah. And it didn’t cost me anything. And I had a whole package I could send to an agent. It didn’t work out, but in some other universe, maybe it could work out. And that was an experiment that in a variety of ways that I was able to. And by the way, at the very least, I have a story to tell. And that was the result of all those. The whole thing was a failure. Very few people laughed at my jokes and I didn’t get to make a show, but I learned something about comedy and I have a story to tell.

 

Fred Pinto

Yeah. Like sometimes the skills that you acquire, right, you’ll be able to use in another context. Now that’s what that jack-of-all-trades approach. I mean, we’re taught in the schools that in a lot of ways your approach is almost diametrically opposed to what we’re taught in the school system, which is essentially like learn via regurgitation or like just a set like the series of tasks that you’re supposed to execute in one particular way. And you kind of specialize, right? You just get better and better at a narrower, narrower set of things. Your approach in a lot of ways is the opposite of that. It’s like, you know what, I’m just going to like keep experimenting, learn, pick up skills, pick up skills all over the place, pick up knowledge all over the place. And then eventually you might, you know, use that productively for, you know, a business or something. But there’s also a little bit of fun. Like you’re also, like, you’re using kind of the passion as a North star for deciding whether you want to do something or not. How much of it is like, okay, it needs to turn into a business, need to turn to a show, and how much of it is also like you’re having fun along the way also?

 

James Altucher

Well, that’s a good question. And I think sometimes I’ve, you know, focused too much on the things I love instead of, you know, particularly early on, like, you know, oh, I have to keep thinking about making money and building a business and so on. Like sometimes I get too obsessed with what I love. I’m willing to sacrifice a lot. I don’t… You have to always keep a balance in life between, you know, your family life, your career life and the things you love. And hopefully they all can intersect sometimes, but they’re not always going to intersect. And I think I was, you know, particularly during those comedy years, I always wonder, what if I had just focused on, you know, investing in businesses and starting businesses, maybe, you know, I would have made my own Uber or whatever, but I didn’t do that. I just focused on comedy to the suppression of everything else. And sometimes that works out like I’ve been a writer for a very long time, and always, in my down moments, I’ve had a consistent cash flow from writing and, you know, but I love being – I love for pursuing things I’m passionate about. And you’re right. When you learn a new set of skills or what you do when you start to master something, it translates into other areas of your life. So, for instance, if I have to give a talk to a very corporate, talk about entrepreneurship or leadership or negotiation or sales or whatever, I would say now I’m about ten times better than I used to be because I, for six years did standup comedy every night. Stand up. Comedians are probably, in some ways the best public speakers. They know how to move, they know how to speak, they know how to tell stories, and they know the right moments to pause and be funny. So just even a tiny bit of comedy skills are able to help with public speaking. And this is an important thing to you don’t have to be the best in the world at everything you do. A lot of people, they won’t do something unless they give you the best in the world at it. But it’s very easy to learn the skills to be in the top 1% of the world. So let’s take a game like chess, for instance. There’s 600 million people around the world who play chess. So to be in the top 1%, you have to be in the top 6 million chess players, which, okay, get a coach for a few months, read a book and read some books and do some studies. You’ll get into the top one or 2%, and that means you’re better at this one thing than anybody, you know. And it’s worthwhile to get good at things because then it helps you to stand out. I’ll give an example. One of my daughters was having trouble getting into college, and by the way, I was against all my daughters or all my kids going to college. I’m not a big believer in the benefits right now of college education versus the cost and the time, but some trouble getting into college. So I said, why don’t we try something instead of you trying to compete to get into whatever college, you know, that you’re having trouble getting in to take a year off and do some interesting things. So I said you could maybe, you know, you could take chess lessons, you could work for some charity. You could take racecar driving lessons. There’s not many women in racecar driving, professional racecar driving and on and on. I came over, so we came up with ideas together and she decided: “Okay, I’m going to get racecar driving lessons”, which cost almost nothing. She got a professional racecar driver’s license, participated in some races. Guess what? A year later, she got into every single school like that she applied to. So if you stand out, you’ve become simply in the top 1% of something and then you stand out, you’re different. And that’s what people want: different. You know, better to be the only than the best. And that’s a very important thing.

 

Fred

It’s a very interesting model because it used to be you’re exactly right. It used to be if I’m not going to be, you know, a professional, let’s say, or if I’m not going to make a living at something, there’s kind of no point. Right. But again, with your approach, it’s a lot more multifaceted. You can pick up, you know, 10, 20, 30 of these skills really, and then kinda set yourself apart in a different way and then have perhaps options that might not be available to somebody else. When you say, like hunt for intersections, right, then you start to have all these different – and it kind of reminds me of another idea that you have: the spokes and wheel approach, right, where it’s like, okay, you have an industry that you’re interested in, right? That there’s not just the industry. Like racecar driving would be a good example. You’ve got so much so many different activities around racecar driving. You’ve got the graphic design, you’ve got the fashion element, you’ve got the psychology element, you’ve got that social element, right? So all of a sudden, your daughter, for example, has got skill and she’s got that, you know, a little bit of penetration of that world. She can start hunting for intersections and find maybe something a little bit more unique where she can bring to that niche that’s not, you know, readily available to somebody else who didn’t have this approach.

 

James Altucher

Right. You’re exactly right. And like being in the top 1% of some category or the top 2%, the top 3% doesn’t matter. You understand enough of the nuances that you’re in that community. You’re in that subculture, but you don’t have to be a professional racecar driver. I’m just going to continue with this example. Like you said, you could be on the fashion side of it, or you can have a podcast where you interview race car drivers. I mean, there’s a huge, you know, NASCAR community podcast. And I mean, they do very well. So you could you could be a podcaster, you could write a book about it. You could be an agent or, you know, work on a crew if you love it that much or who knows, create a reality show around it. Who knows? There’s there’s no end. And that’s you’re right. That’s I call it the spoken wheel approach, which is the wheel is the race car driving. But most people think, oh, there’s only one spoke. I mean, a race car driver or not, there’s actually 50 or 100 spokes, as many as you could think of that create the wheel where you can actually move forward in your life. So, again, let’s look at, you know, chess is a very interesting example because in the pandemic there was that TV show, The Queen’s Gambit. Chess got there, became a mini chess boom, and also everyone was home and they had nothing to do. So a lot of a new generation of kids and even adults who wanted to learn more got obsessed with chess. And so, you know, some people started streaming on Twitch. They’re not the best chess players in the world. They’re just they’re streamers and they play online chess and they’re streaming it. But they have good personalities and they’re engaging and they maybe they’re they help teach the game. And so finally, for the first time ever, people who weren’t in the top ten of chess are making millions of dollars playing it because of Twitch. So because they there’s, you know, or YouTube or whatever or writing books about it or writing blog posts about it or writing a newsletter about it, There’s a really good newsletter. It’s called Huddle Up by Joe Pompliano. He was like a bond trader before the pandemic. During the pandemic, you know, people started working at home and he was always obsessed with sports but he was you know, he went to college, studied business, then started working at a bank and became a bond analyst or trader. I forget exactly what he was doing. But now he had some time. So he started a newsletter taking the intersection of these things he was passionate about what is the finance of sports. So when, for instance, let’s say somebody buys or requires a basketball team, well, how did they value it at $3 billion? What were the metrics and how does that compare to how other basketball teams were valued or how what’s the breakdown of how people make money if they do the entertainment at halftime in the Super Bowl? Do they make money? No. It turns out they don’t make any money. Why would they do that? What other metrics are they benefiting from? And so every day or three times a week, fascinating stories about the intersection, business and sports, which nobody had ever really covered before in kind of a media format. So that’s where the intersection of multiple things becomes extremely valuable.

 

Fred Pinto

And I also. Yeah that’s really – it’s a really good example of that spoke and wheel approach. And also hunting for intersections. When you have these diverse interests.

 

James Altucher

Yeah and let me just say one other thing. If you’re in the top 10% of, let’s say finance and you’re in the top 10%, not even the top 1%, you’re in the top 10% of sports, of knowledge about sports. While the intersection means you’re in 10%, times 10% means you’re in the top 1% in the intersection. So finding the intersections is a shortcut to being in the top 1% of a category. You make the category with the intersection.

 

Fred Pinto

So very often I find like a lot of your interest in technology in some way, you tend to have a lot of sort of different passions that are connected to the technology and like your style, your story. I wouldn’t surprise to see that you change your mind a lot about different technologies. I don’t say this in a negative way and things evolve so quickly. If you didn’t change your mind, it’d be kind of weird, right? Oh, you change your mind, you flip flop. I mean, things evolve extremely quickly. The expression, right? “Changing your mind is proof that you still have one”.

 

James Altucher

That’s a good quote.

 

Fred Pinto

For example, your views on crypto change quite a bit. You were a very early investor in crypto. You called it a fad, a scam, a Ponzi scheme

 

James Altucher

Well, actually the very first thing was – so I used to do these Q&A on Twitter every Thursday for a decade I did this. So like around around 2013, I think in like February or March, when one of my readers asked me on Twitter: “What do you think of Bitcoin?” And I said: “it’s a fad. It’s probably a fad”. And so that’s what I thought of it at the time. And Naval Ravikant, who’s really into crypto and is a big angel investor, and in fact, he’s the founder of AngelList and he called me up and said: “Come to New York in a week. Let me sit down with you and explain Bitcoin to you”. And he did. And I was like: “Oh, this could be really great”. I completely changed my mind on it at that point. And then a month later, in May of 2013, I created for myself a store which we only accepted Bitcoin, and there was one product in the store which was a prerelease version of my book Choose Yourself, which I was releasing Choose Yourself a month later, in June. But this was May, and I said, I’m going to sell the first for Bitcoin: only 0.1 Bitcoins. Bitcoin was $60 at the time, so it was like $6. People were paying for a PDF of this prerelease version of my book, Choose Yourself. And that’s how I was able to experiment. It’s got a little bit more familiar with Bitcoin and some of the positives and the negatives, by the way. And, I also then learned to is it’s going to be easy for people to use. Do people actually understand, you know, how Bitcoin is used? Is it easy to, to build a store that accepts Bitcoin if your people are using this as a currency? So I learned a lot in this process, but I use that also to help market my book because then CNBC had me on. Maybe I was the first person to create a bitcoin store for for books. CNBC had me on and the anchor even said: “Are you sure you didn’t do this as a marketing thing?” And I’m like: “Well, I’m on national TV right now, so it works”.

 

Fred Pinto

Cool so it was also an experiment in a sense. And I’m curious, do you remember what Naval said. I follow Naval a lot I think he’s really, really brilliant and wise individual. Do you remember something that he said or a perspective about about crypto or Bitcoin that changed your mind about the whole technology and how you can use it?

 

James Altucher

Yeah, Yeah, I think he did several things. One is he totally explained to me kind of how money has evolved over the centuries and the problems. Basically, money evolves every time there’s a set of problems that can’t be solved with the current money system. And you know, he explained what some of those problems might be in today’s day and age. So, for instance, let’s say you wire money to someone in another country. Well, it goes from your bank to your local Federal Reserve Bank to the Federal Reserve to the swift wiring system, and then all the way down through the central bank, to your friends bank. And it’s like missing for two or three days. It’s like in the process, you know, your money was sent, it’s going to get there and you call your friend: “You get the money yet?”.

 

Fred Pinto

And I always wonder: “somebody has my money, somebody has it for these 5 days” you know?

 

James Altucher

And there’s fees every step of the way. So there’s a huge amount of fees baked into the monetary system right now. And there’s potential for mistake every step of the way. And that’s happened. And there’s also potential for a lack of privacy every step of the way, which also occurs in countries. And so these are some basic problems or even if I just want to send money from me to you and these were all problems that crypto solves. And by the way, it’s not just with money, but crypto sales are with the sending of any kind of information. And money his point was : money is information. And I thought that just by itself was very valuable. So nobody even to this day knows how successful or unsuccessful Bitcoin will be. But there are – it did wake me up to the fact that there are many problems of which what I just described was just one of them. But there are many problems in the way the current system is just set up. Another problem is like right now we see this in the economy. The Fed has been raising interest rates. Well before that, the Fed had been during the pandemic, the Fed was decreasing interest rates and printing money. So why should I let someone else decide a whim? What the value of the dollars in my pocket will be? Because when they print trillions of dollars, the value of my money changes and I had no control over that. Well, Bitcoin, you know, of course there’s a fixed supply. So, you know, value changes in Bitcoin based on supply and demand; based on market forces, but not based on the whims of a single individual. So that was another big problem.

 

Fred Pinto

The whole Central Bank aspect of interest rate. I suppose the issue I have is that interesting perspective. I suppose an issue I have with Bitcoin being used as a currency and I’m far from being an expert, but it’s the whole security and the value goes up and down so much. I remember even as a lawyer you know when clients wanted to pay me in Bitcoin and I’m just like, “I’d rather just get dollars because I don’t understand what you’re giving me. I don’t know what you’re thinking, you know, 100 times more. I don’t know if you’re paying me 10%.” I don’t know if the security goes up and down so much.

 

James Altucher

I agree with you. I don’t know. I don’t know. At the end of the day, if Bitcoin will be the currency of the world. I kind of doubt it. But there’s other uses of crypto and blockchain and this is just this is still a maturing industry. Like, remember the Internet, which started in the seventies, didn’t have a billion users until 2005. Well crypto started in 2009. And around the world now, there’s a couple hundred million users, but there’s not a billion users yet. We’re not going to really know the use cases. There are. I can think of thousands of other use cases for crypto, but we’re not going to really know what’s widely used until we get to that tipping point, which is at the billion user moment. And now, I mean, will Bitcoin succeed? I don’t know, but some cryptos will succeed and succeed wildly from where they are now. I firmly believe. But there’s a lot of problems too. Like even now when I have to move Bitcoin from one exchange – or crypto in general – from one exchange to another, there are difficulties in the way and it’s not that easy to create a Bitcoin only store, for instance. And you know there’s a lot of hurdles. It still is a maturing industry, so there’s a lot of hurdles still that it needs to go through.

 

Fred Pinto

I like that perspective. I like the idea of use cases, right? It’s like we want to talk about the technology as a whole. Well as a whole, it’s very hard until you get to that tipping point of like you’ve got hundreds of millions or billions or a lot of the small logistical issues have been figured out. It’s very hard to have like general opinions about a new, radically new technology like that in bulk. It’s really about the specific use cases. There may be certain things like maybe in the collectibles market, and NFT, maybe we’re already starting to see some of those use cases, but it’s very hard to predict. I completely agree with you, like where it’s going to be in 20 years. I mean, the technology is going to mature. There’s going to be regulatory advances or roadblocks. It’s very hard to predict where those are going to be. And as the uses go up. Yeah.

 

James Altucher

And there are some use cases where you absolutely need crypto technology to do this use case. So you mentioned NFT’s and collectors. I don’t really like that use case so much, but if you take the exact idea of an individual item being valuable on a blockchain as opposed to the whole currency and the whole blockchain itself, you think of tickets. So if I’m the New York Knicks and I sell you a ticket, I’m let’s say I sell to you for $100. Now you go sell it to some scalper for $200, and then the scalper in the street sells it for $500 on the night of the game. Well, I’m the New York Knicks. I only made $100. The scalper made $500. And by the way, then the guy who bought it from the scalper doesn’t even know for sure if he’s going to get into the game because maybe the Knicks invented something to prevent scalpers from selling tickets. So you can make something like that. An NFT. And now the Knicks get a commission every time it’s sold and it’s all legit and scalpers are fine and the customers are satisfied and so on. So, you know, ticketing is a major use case that is not being used at all right now, like companies are just beginning for – I’ve talked to a couple of basketball team owners on my podcast about this and they said: “Oh yeah, we would love – we’re building a company for that right now”. But I don’t know if anybody’s actually doing this yet, but that will be will be a major use case as just one example used case.

 

Fred Pinto

Yeah, I love the authentication, right. So the perfect authentication aspect.

 

James Altucher

And the commissions, like you could track the whole. Like the New York Knicks should benefit every time a scalper shows it, a sports team should benefit. So there’s ways to do that. Now, someone asked you: “Well, why can’t you just make a centralized database to do that?”. Sure, you could do that, but then you’re stuck with just sports tickets. Maybe there’s other use cases that will be discovered as this because crypto is this much broader, more general technology. Other use cases will be discovered along the way, just like it was with the internet gathered. The Internet is going to be used to send email. Well, guess what? Now you can send images, then videos, then dollars and cents and so on. Like the use cases for the internet evolved over time.

 

Fred Pinto

Absolutelyas somebody who chronicles technology and has seen technology markets kind of evolve and you have your own experiences with AI. What are your kind of very preliminary perspectives on Chat-GPT and how it’s going to kind of reshape creative markets?

 

James Altucher

Yeah, great question. And I’ve been involved, like I mentioned earlier, I was involved with Quantitative Finance in a way that I use artificial intelligence for investing. But earlier than that, I mean, I went to graduate school for computer science. I worked on a little bit. I worked on the computer that eventually got acquired by IBM and became Deep Blue, which was the first computer to be the world chess champion in 1997. So I have a deep experience with a lot of these things, and Chat-GPT is very interesting, but people should understand it’s not – it’s never going to be intelligent. It’s not going to be like a conscious intelligence. Here’s what Chat-GPT does, and I’ll just simplify it : When you type into the Google query box. If I start typing, you know, New York and then I write K and it’ll fill out New York Knicks, like it’ll fill it out right in the search query box, like it’ll guess what you were trying to say. And then you just have the other characters and it says it, so it figures out whenever I, whenever I see these letters, probably this person intends to write these letters next and it gives me the option to just hit return. So Chat-GPT does the same thing, except much, much more impressively, it takes all of everything ever written from books, Wikipedia, ???, Facebook updates. It takes everything ever written in history. And then when someone types in, you know. You know what? What is the climate going to be in the future? Jackie Beatty stops you and says, Oh, here’s what the climate will be in the future. Now, it’s not figuring it out. It’s just on all the trillions of pieces of text it has. It’s bringing out what probably the next words are that okay is a good response.

 

Fred Pinto

I was going to ask you, it’s like, is it fair to say that it’s kind of almost like a probabilistic reconstruction of where that exploration should go? And is that maybe why sometimes it reads as a little bit generic? It’s because it’s that.

 

James Altucher

Absolutely. Because also it’s not going to take chances. It’s not going to do first off, here’s why here. Here’s what it did. And I don’t want to get so much into the details, but for a good year and a half, it took all this massive text and all it did was use supercomputers to crunch all that text into millions and millions and millions and millions and millions of categories. So if it takes, you know, you take Bob Dylan lyrics and it says, oh, if someone is – if I see a sentence that is a Bob Dylan lyric, it instantly knows, okay, this is in the category. Bob Dylan, maybe this is in the category, girls with red hair. Maybe this is in the category of people lying in bed and their hair is shining because of the sun. And so there’s millions of categories. It figures out the context and everything of what the query is about. And then if it says, Oh, come up with another lyric like a Bob Dylan lyric, it already knows all about Dylan lyrics and all the other categories. So it says, okay, well, I’m going to come up with a girl who I’m in bed with who’s got this hair. Maybe I’ll put in another color, maybe I’ll have a different thing, something else that rhymes with bed. Or maybe they’re sitting someplace else, like on a bus or whatever. I don’t know. But it also is a category of romantic lyrics, and then it might come up with a bad lyric. And so for a year and a half also, after the initial chatbot model was done that GPT two or three or whatever it is, they used manual labor. You know, workers in Kenya, they were paying $2 an hour to, to sit, to basically chat with the pre-chatbots and say this response is good, this response is good, this response is bad, this response is bad. And so it learned with – so the first stage was unsupervised learning where it divided everything, the categories. Second stage was supervisor inning where humans would tell it. That’s a good kind of response. That’s a bad kind of response. And it learned after a year and a half of millions of entries what good responses were and what bad responses were. And now when we use chat shipped today, we’re part of the experiment. Still, it’s learning what’s good and what’s bad, what’s going to engage the user and what won’t engage the user. And so it’s always going to get better. Okay, so now to your question, that’s how Chat-GPT works. It’s just probabilistic. Some parts of it are on some supervised learning, some parts of it is supervised learning now going forward. Absolutely. It’s going to change every industry and I’m not saying this in this like, oh, I can do no wrong sort of way. But look, if you’re a logo designer and you outsource and people outsource their logos to you on Upwork or Fiverr or whatever, instead of doing one job a week, you can do ten jobs a day because of mid journey in daily and Chhat-GPT and so on. And it doesn’t mean you’re going to be fired because if I’m, I don’t know anything about graphic design, if I want to make a logo, I’m not going to really trust a non-human. I still want a human to like hold my hand through this. I want to tell a human: “Oh, I need a logo that’s like – make a logo of me like Albert Einstein is a little bit and blah, blah, blah”. And then they’ll use the different AI programs and interface for me and send me a logo. Maybe they can charge $20,000 for a logo. Maybe they can only charge 200, but they’re going to be a lot more productive. AI is going to drastically increase productivity in probably every industry, and it’s a good thing. That’s a good thing. People aren’t going to net. That means more companies will start. That means more people will be hired net. The net result will be more jobs created. People are worried: “Oh, my job is going to be taken by by A.I.. It won’t be in”. In the long run, more jobs will exist, more high paying good jobs will exist in the future. Then now, because of AI, I worry about this. I think all writers I mean like it. Will nobody be interested in me writing a book anymore? Not that that is like a source of income for me, but I like to write and but I people always, if you want to beat AI, just be unique and have a unique life and have unique stories because A.I. is only learning from the past.

 

Fred Pinto

Right. And it’s almost going to force us to be more human. Because, like you said, it’s not going to take chances. And at the end of the day, we’re still trying to create value for humans, right? So is it almost going to force us this is a question I wonder. I wonder what you think about that, James. Is it almost going to force us to be more unique and more human in our in our in the creative chances that we take? Because if we don’t if we try to be generic, we’re not going to be able to be as productively and efficiently generic as an A.I.. But if we’re really human to human

 

James Altucher

Yeah. I mean, let’s say let’s say you’re a local newspaper of some local town in a suburb of wherever, Cleveland. I don’t know. I’m making your life. And andokay, you should you should fire all your reporters because the reporter used to go to the city council meeting and then say what happened in an article? Well, now Chat-GPT can already do that better. It can summarize the transcript and in a relatable way. That’s a you give it, you know, parameters. This is what a journalist writes about. We could only be 500 words and good sentences and so on. And also Chat-GPT knows all the laws ever passed by the city council in its history. So it’ll be able to relate that into the article. But what if you want to keep your job at the local newspaper? Oh, maybe you go up to somebody, you investigate some city council person who was involved in a scandal or maybe have a conflict of interest on the decision that was just made. And now you bring your own. Let’s say you’re trying to get some source to talk to you. You bake them a cake and now they now they talk to you for whatever reason. So you have to find ways to you know, A.I. is not going to contact or find a source that’s going to tell them secret information. You know, you know, think of the history of The Washington Post, one of the greatest newspapers ever. Okay. The most famous thing that ever happened to The Washington Post was during President Nixon’s career, it was Watergate. Bob Woodward and Bernstein, famous reporters now, because of the movie All the President’s Men, played by Robert Redford and Dustin Hoffman, they had a source called Deep Throat who had inside information on what Richard Nixon was up to. A.I. is never going to be able to do investigative journalism like that. As opposed to just reading a transcript.

 

 

That’s right. That’s right. We’re running out of time. I just I just want you to chime in quickly. You had this this really hilarious public spat with Jerry Seinfeld and relates to some pretty interesting thoughts that you have around cities and how they’re declining. And I know you’re a proud New Yorker, you’ve been living there for a long time and you’ve identified some trends that worried you about it and they were pretty compelling to me in general when you look at the fate of cities and the future of cities. So increased prices, cost of living and rising vacancies, which eventually translates into rising deficits. I don’t know if you saw just today, you know, the state of California is defaulting on some – decided not to be some kind of a big federal loan during COVID. I mean, you’re starting to see these rising deficits even at the state level. Then eventually companies leaving, especially in the wake of remote work. And all of this kind of creates a situation where very easily you get one factor like a pandemic, and they can very easily become kind of inhospitable to the human population. And so you wrote a piece about this in the New York Post titled : New York Is Dead Forever. A little bit of drama in there. And then for people who don’t know. So Seinfeld comes out, writes a column in response to you saying: “okay, well, so you think New York is dead”. He calls you a putz. I mean, this is kind of really hilarious back and forth with this. And his core argument is that cities are resilient, cities have grit. And then you answered back to him again in the post and you wrote, you know, if urban areas stay on their current trajectory, young people will find other places to flourish without having to move to cities. There’s this really hilarious, kind of back-and-forth aspect to it. I know that you had a lot of fun with it. I understand a lot of this was during the pandemic, but now that we’re kind of post-pandemic, where do you land on the issue of cities? Do you still have the same perspective and is there anything you want to add in this kind of back-and-forth with Seinfeld?

 

James Altucher

I wrote that in August 2020, and it was really just a regular post. I didn’t think anything of it but one thing I always try to ask myself when I write anything, even just an article, is, is there some reason I’m afraid to hit publish? And if I’m not afraid, I won’t publish it. Because if I’m not afraid, that means I’m just saying something everyone else is saying. And I’m not taking any – I’m not pushing the envelope in any way. And I was a little bit afraid. I paused before I hit publish and asked myself: “What am I afraid of here?”. And I was afraid because, I’m a very optimistic person and all my articles are usually very, very optimistic. Like the way I described AI now you know, nobody is going to lose their job and so on. I mean, net, there will be more jobs in the future than in the past. But this was the one article where I wasn’t I didn’t really have a solution. I presented a problem. I didn’t know what the solution was. I was not optimistic. I wasn’t necessarily pessimistic, but I didn’t know what the solution was going to be. Hence that title, York City is Dead Forever. Like, I couldn’t figure out what was going to turn things around. And I’ll just stick to New York City as an example. I love New York City. I’m from New York City. I lived there for most of my life. I’m good friends with the mayor of New York City, Eric Adams. He’s been on my podcast a bunch of times, including after that article came out where we discussed it and, you know, but then millions of people read this article is the most viral article I’ve ever even seen, let alone write. I mean, Joe Rogan talked about it on his podcast, Rush Limbaugh, when he was alive, he read it word for word on his radio show. Glenn Beck read it word for word on his show. So of course, New Yorkers were very upset about this. Andrew Cuomo sent an email to 10 million people saying I was wrong when he was governor of New York and then, you know, Seinfeld – and I was getting death threats, like when the article first came out, death threats almost one per second. Then I thought it did die down. But a week later, Jerry Seinfeld, in the only op-ed that he’s ever read in his life, has a full page in The New York Times trashing me. So the one thing is, though, and people go back and forth, but New York City takes 100 billion in order to just open the doors at the beginning of the year, you need $100 billion a year to run New York City and a lot of – where does the money come from? A lot of it comes from taxing, you know, companies that rent office space in Midtown and then their employees so on and their services and so on. Midtown is the big commercial area of New York City. And people were signing my article like: “Who cares about commercial real estate? It’s the young people that make a city thrive”. Okay, that’s true. But New York City will go bankrupt if commercial real estate shuts down. And we’re seeing enormous vacancies, more than ever people just didn’t come back to work. Now, some companies claim that they did, but on the whole, most companies do not have the same number of people now that they had before the pandemic. Everybody went remote. Commercial real estate people are moving out of the most expensive floors in New York City because they just don’t need to rent that much space. That’s happening. And it’s happening in every city. It’s happening in San Francisco, it’s happening in London, it’s happening in Chicago. So is my article correct or incorrect so far? Yes, you see people eating in restaurants, yes, kids are there more than ever and so on. But the main point I was making is that what are you going to do when you can find firefighters, garbage men, police, teachers, you know, which is a problem that California constantly experiences. But now New York City is experiencing it and it’s two and a half years later; everything I said in the article has been coming true. So, you know, we’ll see. I hope to God New York City is alive and well forever. I have kids that live there. I have – my familie’s there. I love New York. I’m a big fan of Eric. Now, I’ve known him since he way before he was mayor. Now he’s mayor. I’m very happy for him. And look, Seinfeld has his opinion, but he wrote his opinion from, you know, a mansion in the Hamptons with his three Porsches parked in the garage like, I don’t know what – And he didn’t really address the issues. He said, people always are going to want to love coming to work. He’s never had a corporate job in his life. People don’t like going to a cubicle every, you know, five days a week and being forced to listen to the conversations of the person in the next cubicle.

 

Fred Pinto

And that is a real tug of war. There’s a real tug of war. A lot of companies downsizing their office space and adopting hybrid models. I mean, there’s these things are still playing out in the market.

 

James Altucher

So the hybrid models are what – that’s what’s going to work. But that is a negative for a city like New York City that depends on every single dollar of commercial real estate.

 

Fred Pinto

Absolutely. Very interesting. For me, the interesting thing to follow –

 

James Altucher

But that was a very painful time for me, I have to say, because so many people hated me. I had never experienced that before. And like, I even had like family members write entire articles against me saying, oh, he was like this as a kid –

 

Fred Pinto

Isn’t that strange like shooting the messenger. Like you’re just pointing out a problem. If somebody has a clear answer to the problem, like, answer; Maybe I’m wrong. It’s almost like attacking you personally is not something that I really understand. If you’re pointing out some rational issues that you notice that very clearly, if you know that the commercial sort of the tax base is slowly, slowly departing a city that’s going to lead to sort of financing issues. Have you had any experts come in and really like respond to like to the details of it, or was it just kind of this shoot the messenger, a kind of kind of response?

 

James Altucher

It was 100% shoot the messenger. And, because I just presented real facts that were happening at that time and it was a 100% shoot the messenger. And I don’t know, I had to really – I could deal with it when it’s a million people, a million strangers who said: “Oh, this guy is an idiot. Don’t listen” I can handle that. But it was like a lot of people I had known through my different careers and I don’t know, it was a way for some people to just, I don’t know, lash out. And it was it was painful for me for a while. I didn’t realize that that existed. And I kind of had to, you know, deal with it. But of course, I dealt with it. And, you know, I hope the article doesn’t come true, but so far it’s – and people even tag me : “It looks like J. Altucher was right” And I never respond to those either. I’m not trying to say I’m hoping for New York City to be dead. I was just presenting facts in that article, and I’m a storyteller, so I think that emotionally got people riled up.

 

Fred Pinto

Right. You’re not a fan of that reality that you’re describing. You’re just saying, like there’s an issue here and we need to think about this.

 

James Altucher

Yes.

 

Fred Pinto

It’s very interesting. So as a serial re-inventor, that’s almost how I see you. Any reinventions ahead? What does the future look like for you? Any new space that you’re really passionate about, any kind of reinventions of yourself in your life that you kind of see moving into the future?

 

James Altucher

Well, I really love the online education space. And look, I don’t know if that means I’m going to start a business in that, but or invest in it or what I did was my version of experiments. I just launched an online course on Udemy. So just to kind of try this out and even though online education has been around for 20 years, but I’ve never made an online course like this, I made a course: Write and publish a book in 30 days. And so I gave all my kind of best tips of writing and very specific techniques about how you can write a unique book, unique to you in just 30 days and publish it, because I’ve benefited a lot from mainstream publishers, but also I’ve been a huge proponent of self-publishing. And so I was able to combine interests again in an area where I’m, maybe an expert, and make a course and I just want to see how it does and and learn from it, because I think A.I. is going to have a lot to do with online education in the future. I think the model that we currently have with public education is completely broken all the way through college and graduate school and so on. People used to argue with me on this, but now it’s more acceptable conversation. I mean, I once wrote a book 40 Alternatives to College, which was the number one book on Amazon for college education, in the category for college. But I’m very interested in this area. I’m also, you know, as someone who’s, I’m over the age of 50, I’m 55 years old, and I also during the pandemic, returned to things that I used to be good at when I was younger, to see if I could still be good at it. And everyone says: “Oh, no, you can’t be good at those things anymore. You’re too old”. But I’m trying to, you know, I’m a nationally ranked master at chess since I was a kid, and I’m trying to get back to that level and, so far, it’s not going that well. But I am having fun and it’s and I’m learning a lot and and will say it’s been an interesting ride and I hope I can prove that people are wrong, that when you’re older, you can return to your first loves.

 

Fred Pinto

That’s really cool. So a reinvention could also be a return. And going back to something.

 

James Altucher

Yeah, absolutely.

 

Fred Pinto

It’s not just a straight line.

 

James Altucher

Because that gives you a story. Yeah, it doesn’t. It doesn’t just mean you get good at what you used to be good at. It means you now learned how to get good at something. And so there’s all these layers.

 

Fred Pinto

So you keep writing chapters. You keep writing chapters in that story. So the story of James the chess master is not over.

 

James Altucher

Hopefully not. Well, see.

 

Fred Pinto

I love it. James, thank you so much. I had a ton of fun. I could keep talking to you for hours. Thank you so much for doing that.

 

James Altucher

Fred I had a lot of fun too. And look, if you have if any of your listeners have any questions for me, I try to respond to all emails, altucher@gmail.com. They can feel free to email and you really prepared well you ask a lot of great questions. You got me thinking. You probably changed my mind about some things as well. So thank you so much for having me on the show. I really, really appreciate it.

 

Fred Pinto

Thanks a lot. We’re going to take you up on that little informal Q&A. I know I have a ton more questions for you. It’s been a lot of fun learning from you during this during this time together. Thanks a lot, James.