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Leif Hansen:  Biznik Live, collaboration beats competition.

Hello, everybody, and welcome back after a short holiday, to Biznik Live, this is Leif Hansen and I am broadcasting from a very windy Seattle, Washington.  I think I just saw three cats fly by my front window here.  Well, Biznik Live connects you with nationally recognized authors whose powerful ideas will help you make successful choices for your business.  And in just a minute we’re going to be talking with Guy Kawasaki, author of “Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition”.  After the first half of our conversation, you’re going to have a chance to ask Guy questions yourself through the BlogTalkRadio chatroom or by calling (347) 884-8009.

In addition to today’s awesome guest, Guy Kawasaki, we’ve got three more amazing authors lined up this month;  Daniel Pink of “A Whole New Mind”, Barry Libert of “Barack, Inc.” and Matthew Fraser of “Throwing Sheep”.  So I really look forward to having you guys each Wednesday at 10:00 am Pacific Standard Time and at seeing you at Biznik.com.
 
So about today’s guest, Guy Kawasaki is managing director of Garage Technology Ventures, an early-stage venture capitalist firm and a columnist for Entrepreneur Magazine.  Previously, he was an Apple Fellow at Apple Computer and Guy is also author of nine books including “Reality Check”, which we’re focusing on today, “The Art of the Start”, “Rules for Revolutionaries”, “How to Drive Your Competition Crazy”, “Selling the Dream” and “The Macintosh Way”.  He has a BA from Stanford University and an MBA from UCLA as well as an honorary doctorate from Babson College.

Guy is also co-founder of Alltop, which you might think of as an online magazine rack, or if you’re a geek, as an aggregator for top contents across the blogosphere and other sources.  And he also has been father, speaker and hockey addict.  So Guy, are you there?

Guy Kawasaki:  Yes, I am.

Leif Hansen:  And where are we catching you today?

Guy Kawasaki:  I am in San Francisco, in a hotel, the Palace actually, because it’s Macworld Expo here.  Actually, I signed books in Microsoft’s booth yesterday.

Leif Hansen:  Oh, fun!  How did that go?

Guy Kawasaki:  It was fun.  It was a very ironically situation where Steve Jobs isn’t at Macworld and Guy is, but in the Microsoft booth.  Who would have thought that would ever happen.

Leif Hansen:  So that is very interesting.  Have you been getting any flack for that or comments about that?

Guy Kawasaki:  A few here and there. 

Leif Hansen:  What’s been one of the most exciting things you’ve seen at Macworld?

Guy Kawasaki:  I have to say, you may find this a little bit ridiculous, but I found this great backpack in the, I don’t know how you pronounce the company.  It’s Booq.

Leif Hansen:  I guess it would be “book”.

Guy Kawasaki:  I guess.  Yeah, I guess backpacks have books.  So it’s the Booq booth have this great backpack that not only holds your laptop but has a very special area for a digital SLR and I need to carry both.  And so that was my find of the show so far.  Then last night I had dinner with the people from the Microsoft Office team.  And so I had some question about Entourage answered.

Leif Hansen:  Oh, nice.

Guy Kawasaki:  Yeah.  And the third thing, I met the people from TextExpander.  I think the company’s name is SmileOnMyMac.  And TextExpander is one of these things where you type in a couple of letters and it expands to a whole paragraph of answers.  So I got some of my questions about that answered.

Leif Hansen:  Cool.  Direct source.

Guy Kawasaki:  Yeah.  Can’t get much better than that.

Leif Hansen:  Seriously.  I was thinking about your book this morning, I think it’s one of the most practical, excellent business books you can get right now.  But I was thinking on the off chance that somebody didn’t like, it’s still so big that it can serve as a reality check by just whacking somebody upside the head with it.

Guy Kawasaki:  That would definitely be a felony, yes.  My previous book was “The Art of the Start” and it is twice as thick.

Leif Hansen:  So it’s twice as thick as “Reality Check”?

Guy Kawasaki:  Yeah.  “Reality Check” is 474 pages and “The Art of the Start” was about 220, 230.

Leif Hansen:  Wow!  So are you going go for a full bible for us next?

Guy Kawasaki:  No, I think this is it.  Basically I’ve tapped out all my knowledge.

Leif Hansen:  I kind of doubt that.

Guy Kawasaki:  No, I’m not being modest.

Leif Hansen:  Well you’ve got a number of years.  You’re going to continue to grow and things are going to change exponentially I’m sure.

Guy Kawasaki:  I would hope so.  Thank you.  We’ll see.

Leif Hansen:  So what kind of response are you getting to this book?  And give us a quick summary for those who haven’t had a chance to check it out yet.

So this isn’t the kind of book that you read once, you put down and you never return to.  This is more the kind of book that you read one chapter at a time over the course of probably years because you don’t need everything at that moment.  So at the moment you’re raising funds, there’s a whole section about raising funds.  But six months from now, you may be invited to serve on a panel and there’s a chapter about how to be a great panelist.  And six months after that you may be asked to moderate a panel, there’s a chapter about how to moderate a panel.  And it just goes on and on 94 times.  There are 94 chapters.

Leif Hansen:  Yeah.  I’m not going to lie and say that I’ve read the whole thing.  I’ve read the first third and then I’ve done some skimming.  And speaking of so many points, for our entrepreneurs that are listening out there in this current economic climate, what would be let’s say three top pieces of advice or action points that you would choose out of there to share with somebody right now?

Guy Kawasaki:  In this economic environment, the good news is it’s cheaper than ever to start a company because of MySQL, WordPress, Rails, PHP, all that kind of stuff.  So the biggest piece of advice I can give an entrepreneur now is you either believe or you don’t.  And if you’re an entrepreneur that’s going to start a company only when all the conditions are right, the economy is doing well, commercial real estate is cheap, there’s a lot of people who are well qualified to hire, sales are easy, everybody is buying everything and it’s a large market and there’s no competition.  Basically I just defined mission impossible.  That’s never going to happen.

So it’s easy to be an entrepreneur in a good time where everything is getting funded.  It’s much harder to be one now.  But arguably, these kinds of times create better companies than the days where if you had a PowerPoint pitch you could raise $5 million.  It’s a very different world.

Leif Hansen:  All right, well what about another one?

Guy Kawasaki:  Piece of recommendation?  Then my recommendation, there’s sort of two classic plans in tech startups.  Plan A is you raise a boatload of venture capital, you assure the investor that you’re going to ship in six months and conservatively speaking you’ll have a million registered users by the end of seven months.  So because you know conservatively you’re going to have a million users you get three collocation sites, three IT staffs, three customer service shifts.  They build up this great infrastructure because God knows you’re going to have a million people in seven months.

And then six months go buy and you’re still six months from shipping.  And at the end of seven months, instead of having a million registered users you have zero but you still have all the infrastructure.  So then, you have to raise another round and the venture capitalist will give you the benefit of the doubt one more time.  Then you finally ship a year later and guess what, even though your conservative estimate was a million, you get 10,000.

So at that point, the venture capitalist fires the CEO and comes up with this brilliant idea of taking two dogs and his portfolio, putting them together and trying to get, to completely switch metaphors, you get two dogs in your portfolio.  You put them together and you end up with a pig with lipstick.  So that’s plan A and that’s how it happens most of the time.

Plan B would be two guys in a garage, two girls in a garage, a guy and a girl in a garage, they raise $100,000 or $250,000 credit cards, friends, fools, family.  They prototype in their garage.  They use MySQL.  They host it at Media Temple, S3, Amazon Web Services, Salesforce.com or whatever.  They don’t have any room full of servers.  They don’t have an IT staff.  They don’t have all this bandwidth that they’ve dedicated to themselves and space and all that.

And then they, knock on wood, they go from 10,000 to 15,000 to 25,000 month to month.  And then they raise money to expand the business because now they do need more people.  Which is very different than raising money to finish a product and hire people in anticipation of conservative one million installed race.  So that would be my second piece of advice.

And then third piece of advice is you can’t let the bozos grind you down.  You cannot listen to all these people who say it can’t be done, it shouldn’t be done, it’s a lousy time to start the business.  You either believe or you don’t believe.

Leif Hansen:  Yeah.  You seem to be someone who definitely has passion about what you’re doing and don’t get intimidated by the bozos.  What’s your secret?  What does Guy do when he wakes up in the morning?  Do you have those days where you wake up and you just don’t want to get out of bed or the voices are there inside your head of you can’t do this and you’re crazy?

Guy Kawasaki:  I would be lying and almost everybody would be lying if they said they didn’t have doubts.  Everybody has doubts.  There are doubts when you have a low traffic day, there are doubts when your server won’t respond.  I mean that’s life.  I bet you Bill Gates had doubts.  Steve Jobs had doubts.  The question is not whether you have any doubts, the question is if in those days that you have doubts, you still keep pushing and that’s the test.  So some of being a good entrepreneur is just to be in denial.

Leif Hansen:  What gives you that kind of courage to be in denial?  The courage to be denial or to not listen to the doubt?

Guy Kawasaki:  Well some of it is just plain stubbornness.  It’s a very good question that I’ve never figured out the answer to is like when do you know it’s not going to work and you shut it down.  That is a very hard question because you read about these things where Fred Smith is on his last payroll.  He goes to Las Vegas, wins $15,000, makes another payroll, FedEx and the company now this huge success.  So should’ve he had given up or should’ve he gone for that one last shot?  Maybe the reason why we know that story because it doesn’t happen that often.

Leif Hansen:  Yeah.  And I remember in one of your chapters in “Reality Check” talks about how you really can’t predict the whole concept of the close system and open system.  And there’s really no totally closed, predictable system.

Guy Kawasaki:  No, there really isn’t.  A lot of it is you just have to believe and take the shot.  I don’t know if there’s any other way to do it.

Leif Hansen:  Yeah.  Well I’m going to go ahead.  We’ve got a ton of people joining us in the chatroom and on the phone.  So I’m going to self sacrificially give up all my questions here and jump in.  So let’s see, one of our first questions here from Andrew Lippert says, “Guy, what is the next project you plan to take on?”

Guy Kawasaki:  I don’t have any next projects planned right now.  Frankly, doing Alltop and Garage is pretty much full time, more than full time.  So honestly, no, I have nothing on the horizon.

Leif Hansen:  And that’s one of the things that you emphasize in the book, isn’t it.  That you really need to keep a certain focus and not try and add on a million projects and widgets to your site or your business or whatever.

Guy Kawasaki:  Yeah.  And that is one of the hardest things too.  For example with Alltop, some people are asking us, “Why don’t you make it a social networking site?”  So now, people create profiles and then they come and they rate things like Digg.  And then you get scored for how many times you rate things that are popular.  And then you have pictures and then you can have dating and all that.  And we don’t want to do any of that.

Leif Hansen:  Maybe.

Guy Kawasaki:  Yeah.  Maybe if we can be sponsored by Hooters, there’s a lot of opportunities there.  So do we make it a social networking site?  Do we add all that profile, passwords and registration or do we just keep it what it is?  You come in, you look for news and you leave.  So it’s that kind of question that happens everyday.

Leif Hansen:  Yup.  You heard it here folks.  Alltop to be sponsored by Hooters.  [Laughter]  So another question here from Dan McComb from Biznik.  “Is it possible to build a successful Web 2.0 company completely by bootstrapping?  That is by avoiding outside funding all together.”

Guy Kawasaki:  Absolutely.  Without question.  You can make the case that Hot or Not did that, PlentyofFish did that, Fark did that.  That’s the model.  When I got to know James Hong and Marcus Frind, that’s where I said, “Wow!  These guys are on to something.”  And in a sense I think Y Combinator also proves the point, because Y Combinator gives you $15,000, $20,000, $25,000.  And a lot of those companies have reached, raked in profitability with $15,000 or $25,000 so it can be done, absolutely.

Now the flip side is if you raise $5 million, does it guarantee you success?  And the answer to that is absolutely not.

Leif Hansen:  A bit of a tangent but I was thinking maybe you might want to say something about using social media particularly we all know that you’re a big time Twitter evangelist and how you actually use that to market and get the word out.  Do you want to say something about your passion for Twitter?

Guy Kawasaki:  Yeah.  I’m a late comer to Twitter.  I started using Twitter in September of 2007.  So it’s been about a year or so or a little more than a year.  And I now have 44,000 close friends on it.  I don’t think I could do Alltop without Twitter because the Twitter suggest topics, they suggest feeds for the topics.  They also spread the word about Alltop.  For me, Twitter is this amazing marketing weapon that you can reach hundreds of thousands of people basically immediately and free.  And yes, if you had unlimited budget you’d advertise on the Super Bowl and probably waste all your money.  So Twitter for me is like a poor man’s Super Bowl commercial.  It can’t get much better than that.

Leif Hansen:  It’s not as easy though for the rest of us to get that kind of following on Twitter or maybe our business isn’t directed to related to, you know.  Here you are aggregating all these news feeds and people are pinging you on that.  What type of businesses do you think are best suited to use Twitter?

Guy Kawasaki:  Well you described something, right?  So it takes something that is primarily online.  It also takes something that people can easily share, quickly share.  But at an extreme, if I were Joe the plumber, assuming I got licensed and paid my back taxes, could I use Twitter.  You know that’s kind of a stretch honestly.  But anything that has a digital footprint, that doesn’t have geographic boundaries should be able to use Twitter.

Now, I’m going to give you some big company examples but I think small companies could be inspired by these.  So Amazon has this thing where they push out sales announcements or sales Tweets and that’s been successful for them.  Dell has done that with clearing hardware.  ComcastCares uses it to monitor what people are saying about Comcast can help their customers.  Now all of  those are large companies but they’re doing small company things.  They’re servicing their customers, their offering specials, all this. 

It helps to have 44,000 followers, there’s no question about that.  But I really have two answers for that.  One is, yes, it is an unfair advantage but entrepreneurship is about unfair advantages.  Entrepreneurship is not about creating a level playing field.  Entrepreneurship is making the field tilt towards you.  So it would be like saying to Michael Jordan, “Jordan, the only reason people buy your basketball shoes is because you’re Michael Jordan.  And if you were Joe Schmoe they wouldn’t buy the Air Schmoe.”  Well, yeah, that’s true.  So what do you want Michael Jordan to do?

Leif Hansen:  Say, “Can you play a little less good?”

Guy Kawasaki:  Yeah.  “Could you suck so that you don’t have an unfair advantage selling shoes?”  The whole point is to have an unfair advantage.  So in my case, I started in the computer business in 1983, so it’s roughly 25 years later – 25th anniversary of Macintosh, right?  So it took me 25 years to get to this point where I could get 44,000 followers by whatever means.

And so, yeah, it’s an unfair advantage but I’ve been doing it for 25 years to get that unfair advantage.  At this point do you want me to say, “Yeah, guys, it’s unfair.”  I’m not going to use that advantage?  Don’t be an idiot.

Leif Hansen:  Good point.  And there’s got to be some sort of strategy where you can get similar followers but I think like you say, it really does depend on your industry whether it makes sense or not.

Guy Kawasaki:  Yeah.

Leif Hansen:  I’m curious; Biznik is a social networking site.  And we’re looking at different advertising models as well as many social networking sites.  The very nature of a social networking site is this place where you want to be safe and authentic.  And you want things to be organic and you want to have genuine offers to your people that aren’t in a rut marketing and that really are a good match.  What are some alternatives to advertising that you see as successful business models for social networks?

Guy Kawasaki:   Somebody just sent a Tweet saying, “I’m picturing you in a Hooters’ outfit.”

[Laughter]

Leif Hansen:  That’s great!  Well pictures will be sent to the show.  No, I was kidding.  Go ahead.

Guy Kawasaki:  So I think that the advertising model for any social network is very challenging.  And people are making the case that even for MySpace and Facebook which are the successes in social networking.  It’s a challenging business.  Now obviously they have the page views but, I don’t know.  Even with billions of page views, not enough people click on them or the CPM’s are too low or whatever.  So if Facebook and MySpace can’t do it, how the hell is anybody going to do it?  And that is a very good question.

I don’t know how you could do it but I think that in many social networks, what’s the most interesting business is digital goods.  So when my friends at XAT, this is an online chat site that has millions of users and billions of page views.  So they sell things like in the middle of a chat session you can pay a few pennies or something and, I’m not making this up.  You can put in a message so that a hippo walks across the chatroom and then poops out your message.

Leif Hansen:  Oh, I’ve been looking for that! 

[Laughter]

Guy Kawasaki:  Yeah.  Something you’ve always wanted right? Yeah.  Literally, the hippo would walk across the chat session and then poop out, you know, “Check out Alltop.”  And you pay, I don’t know, a nickel for that.  So your laughing, I’m laughing but I’ll tell you what man…

Leif Hansen:  They’re making money.

Guy Kawasaki:  Those nickels add up.  So with Gaia Online, I guess Facebook has these digital goods too.  You buy somebody a bouquet of roses or you get the new sword, whatever it is.  I think that’s interesting because if you think about it, you have infinite inventory with no spoilage and basically infinite margin.  You pay some college kid, I don’t know, $20 an hour to design a new bouquet of roses and you sell it for a nickel unlimited times.  Wow!  I like that business.

Leif Hansen:  That’s good.  And someone just also mentioned, Gianna Borgine says, “Speaking of digital goods, what’s your take on virtual worlds like Second Life?”  And obviously Second Life is doing something similar where they’re selling fashions and clothes and digital products and that way.

Guy Kawasaki:  Yeah, I’ve never done this virtual world thing because I have so much trouble managing my real world that I don’t need another world to manage. 

Leif Hansen:  There could be a virtual Guy with a Hooters’ top on though.

[Laughter]

Guy Kawasaki:  Could be.  I’ll license that.  I have never used the virtual world.  Twitter is as virtual as I get.

Leif Hansen:  Yeah.  So we’ll take that answer.  So we’ve got a ton of calls coming in, we won’t go into further into the potential of Second Life.  I’m going to be taking some calls so I’m going to call off the area codes and if you’re in that area code, be ready to ask your question.  So we’re starting with a 415 area code.  415 you are on the air.  Do you have a question for guy?

All right, we’re going to try the next one and if his happens again then we’re going to stick with our text questions.  OK, I’m going to move into area code (484) 638 and you are now live.  Do you have a question for guy?

All right, yup.  This is a problem, this is a limitation with this technology that I’ve found.  So let’s see.  Sal Brown asks, “I’m new to blogging and looking for any insights and tips you might have about blogging.”

Guy Kawasaki:  OK, so I’ll give you everything you need to know in three words about blogging.

Leif Hansen:  Nice.

Guy Kawasaki:  And I won’t even charge you for it.  [Laughter]  The three words are, write good, well I’ll use a better word, shiitake.  The key to all of blogging is write a good shiitake.  It’s not SEO black magic.  It’s not the keywords in your URL.  It’s not the H4 header.  It’s not all the stuff and trying to figure out what Matt Cutts is thinking about what gives you better ranking in Google and all that.  Just write good shiitake.  That’s all you need to know.  And if you want more advice just go to blogging.alltop.com.

Leif Hansen:  Yeah.  And I think you go into some blogging into “Reality Check” too.

Guy Kawasaki:  Yes.

Leif Hansen:  A related question from Judd Ree here is “Guy, how can individual blog entries get on Alltop?”

Guy Kawasaki:  It can’t.  We only take feeds and we permanently aggregate a feed.  So if you have a blog and you have a feed, we’ll take the feed and we stick it in Alltop.  And unless you have not posted for 28 days, we continue to display your post.  There is no way for you to put just one post in there.  I mean, yeah, I guess could put you in Alltop and then take you off manually.  But the goal of Alltop is that we aggregate feeds as opposed to post or as opposed to sites.  So if you have a site, Apple.com is not in Alltop.  Apple.com’s RSS feeds further down the page are.

Leif Hansen:  In different categories.

Guy Kawasaki:  Yeah.  Google or DMOZ is a directory of sites.  We aggregate feeds.  It’s different.

Leif Hansen:  Got you.  And can you maybe tell us a little bit, those who aren’t familiar with Alltop as far as how it does sort of float the best content to the top or measure traffic?  How is it all organized?

Guy Kawasaki:  So Alltop is a digital magazine rack.  And to use the magazine rack analogy, if you go to Borders or Barnes and Noble, you walk in the store and you see these racks of magazines and they’re organized.  There’s the home section, the celebrity section, sports section, news section, wood working section, boating section and car section.  And so essentially we have the same thing.  Our sections are called topics.  So we have wine, food, autos.  We have 450 topics right now ranging from autism and ADHD to Zoology.  And so when you come to any of those topics, we have aggregated the best blogs and sites with feeds about those topics.  We display the five most recent stories.  If you mouse over the headline of the story, you’ll see the first paragraph of the story.

Leif Hansen:  Got you.  You’re offering a very needed service right now with people having information overload.  I mean we’re inundated with information and in the context of our audience, if you’re an entrepreneur, there’s just so much changing and happening particularly in the tech world.  What I think I hear you saying is that you’re offering us a way to scan this massive amount of information and find the top information for industry, the news and things like that.

Guy Kawasaki:  Yes.  And this is a very good example.  So if you went to Google and typed in “entrepreneur” you would find, I don’t know, 35 million matches.  But it would be Entrepreneur Magazine, it would be because Michael Arrington used the word “entrepreneur” in TechCrunch.  It would be because the University of Massachusetts announced the summer entrepreneurship course, all that.  Who knows, 35 million of them.  So if you wanted to keep on top of the topic of entrepreneur, wow!  Google search is not so efficient.

If you went to startups.alltop.com where we have aggregated the blogs and site about entrepreneurship for you, it would be a much more efficient search.  Because the assumption is if you go to startups.alltop, you’re interested in what’s happening in startups and entrepreneurship.  That is very different than just searching for the keyword “entrepreneur” which could be the magazine, it could be Michael Arrington’s column, it could be the University of Massachusetts’ summer course.  And many of those matches are irrelevant to what you’re trying to find.

Leif Hansen:  That’s great.  We’ve got dozen of questions coming in here and I just want to say quickly on that note, a great example of what Guy was talking about for how effective Twitter is.  Is that the number of people that have joined this chat and this show is exponentially, the same with Timothy Ferriss because he uses Twitter too.  Simply by the fact that it’s a now sourcing tool.  Guy was able just to go “click” join me now and look at all of you here now.  So think of how you can use that for your business.

Leif Hansen:  Hello and welcome back to Biznik Live, everybody.  I’m your host Leif Hansen and this is our fourth show in our series on “Surviving and Thriving Amidst Economic Uncertainty”.  Biznik Live connects you with nationally recognized authors whose powerful ideas will help you make successful choices for your business. 

So in just a minute, we’re going to be talking with author Van Jones about his inspiring and potentially revolutionary new book “Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems”. 

Since Van had a previous interview backed up to this one and he said he be calling in a few minutes after 10:00, I decided to invite Gabriel Scheer, founder of the widely successful Seattle Greendrinks in for a chat.  If you’re unfamiliar with Greendrinks, go to Greendrinks.org or to SeattleGreendrinks.org.

Leif Hansen:  Right on!  So tell us a little bit about how Seattle Greendrinks is going and what your next event is.

Gabriel Scheer:  Well Seattle Greendrinks is doing really well.  And we are one of a larger global community of over 400 Greendrinks worldwide.  Our next event is…

Leif Hansen:  Wow!

Gabriel Scheer:  Yeah.  Yeah, it’s quite a big movement.  But our next event is the regular Greendrinks which takes place the second Tuesday of every month.  And we meet every second Tuesday.  Really, just an informal social gathering to bring together the community and these days it tends to be rather large.  We tend to be about 400 or 500 people but it’s a great way to connect with others and meet people and really figure out who else is doing what in the community.

Gabriel Scheer:  Sure.  Well basically, this a side project that’s really come up in part because of Van’s influence and sort of some of his speeches over the last few years.  And then also, just looking at the broader community here in Seattle and what the perception of need is.  And in talking to a variety of people, we’ve come to this point of realizing that what we really need is a physical home.  A place where the environmental community, and that’s really is broadly understood as possible, can come together and connect.  And more specifically, to connect around new ideas and new technologies and new economies.

Leif Hansen:  Oh, that’s great!  Wow!  So it’s basically takes some of the energy that Biznik has going on of focusing, of collaboration and people supporting each other but with a green emphasis and in a physical space.  Getting people together to innovate and think of ideas and support each other.  That is awesome!

Leif Hansen:  That is excellent.  Well, you know I’m going to give you an unexpected opportunity to share a little bit more about what you’re planning on doing.  And maybe what your needs are because I’ve got an issue here where we have so many people calling in to talk with Van and to listen to this show that he is not I think able to call in.  So I’m going to call him on the other line and I’m going to give you the mic.  Yo!  Take the mic!  And tell us a bit more about what your needs are and what some of your next steps are.  That would be great.  I’ll be right back in!

I think that some of the core components to this space and to making it a success will be connecting both the people with the ideas with the people who have the resources.  Whether it’s financial resources, whether it’s experience in starting business.  And sort of nurturing new ventures from start to actual fruition and into something that can produce new things.  And again, we’re really focusing on a combination of on one hand, the technology side – green tech and all the associated, you know, solar power, wind power, methane capture, you name it.  All the different green energy technologies but also into really more hard goods, manufactured goods.

Leif Hansen:  Awesome.  All right!

Gabriel Scheer:  That’s actually what we’re working to do.

Leif Hansen:  Thank you so much, Gabriel, for giving that and for covering me there.  Van, are you on right now?

Van Jones:  I am on.  Can you hear me?

Leif Hansen:  Excellent!  Yes, we can hear you.  And let me just give you a quick introduction.  Van Jones is the Founder and President of Green For All, a national advocacy organization based in Oakland, California.  Green For All is committed to building an inclusive green economy strong enough to lift millions of people out of poverty.  He’s a tireless advocate championing green collar jobs and opportunities for the disadvantaged people.  And he’s committed to creating green pathways out of poverty while greatly expanding the coalition fighting global warming.

Van Jones:  I’m doing well.  I’m excited.  We had a tremendous grassroots push around my book “The Green Collar Economy”.  And literally, hundreds and hundreds of grassroots organizations, labor unions, environmental groups, all pushed the email out and bought multiple copies.  And we got the book onto The New York Times Bestseller List.  So “The Green Collar Economy” is the first book by an African-American environmental writer ever to get on to the bestseller list.  So that’s a huge community victory.  I’m excited about that and definitely excited about next week and all the opportunities that hopefully the new election will open up.

Van Jones:  Yeah.  We went from number, like sub-3,000 on Amazon to number 12 on The New York Times in about four days just based on the grassroots, netroots activism.  And I think it just shows that there are huge networks of networks.  They’re hungry for change, ready for change, powering the Obama phenomenon, powering the green jobs movement.  And I think we’re going to surprise ourselves on how well we do once we have a different DC configuration.

Van Jones:  I think it’s really great that I’m on with one of my heroes who create the whole Greendrinks movement.  That really is essentially the underlying strategy.  I mean I for years have gone to different causes, I’ve met people, I’ve collected business cards.  And over time, you get a sense of who the keen nodes in the network are.  You know who are the people who are respected, and I’ve tried to earn the respect of people I respect.  And at a particular moment you can sometimes ask them all to take action at the same time.

Van Jones:  I think that’s right.  And I think that a lot of times people, “What’s the magic formula?”  Well the formula is only magic in hindsight, you know.

Leif Hansen:  “What did you do right?”

Van Jones:  Exactly.  But I do believe that, yeah, because of YouTube, because of the blogosphere, because of email, we do have the ability to go around.  Ordinarily, if you’re a first time author, especially you’re a black guy with green book that nobody’s ever heard of that before.  You’ve got to be on Oprah Winfrey or spend a million bucks to get on The New York Times Bestseller List.

Leif Hansen:  Yes.

Van Jones:  And we were able to do it essentially for free through viral marketing.  And I think that’ll be increasingly the way things get done

Van Jones:  I think the most important thing to do is to understand where we are in the big picture.  The big picture, we are at the end of particular moment in the US economy.  For the past 20 or 30 years, both political parties, not just George Bush, both political parties have sold us on the idea that we can run the US economy forever based on a consumption, not production.  Based on debt and not thrift and savings like our grandparents and based on environmental destruction as opposed to environmental restoration.  That is a definition of a non-sustainable approach to our national economic life and it just came to a crashing end.

Leif Hansen:  Wow!  Your tagline for your book is about two problems but as I was reading your book, I realized there’s really more like about six or seven problems.  This focus that you have is aimed at social injustices, it’s aimed at the energy crisis, it’s aimed at the economic crisis, the job crisis.  And obviously the environmental crisis but also a crisis of meaning.  I think people are, and you talk about some in your book, people are feeling like their jobs, their just kind of cogs on a wheel on a machine that’s breaking, that’s broken.  And so you’re also helping this focus on green job is bringing meaningful work.  Can you talk a little bit about that?

People are covering the holes in their lives with these flat screen TV’s and plug in the holes in their lives with these iPod earbuds and we stick ourselves in these cars and drive ourselves around.  Guess what?  It’s not working and thank goodness it’s kind of come to an end.

Now guess what?  The last time we did a stimulus, we did a stupidest stimulus probably in the history of the world.  Because we passed out all these checks to people, just willy-nilly, everybody ran down to Wal-Mart, bought flat screen TV’s.  We stimulated the economy in China where they make those flat screen TV’s.  We didn’t stimulate our own economy.

And then also, in the renewable energy field, solar panels don’t make themselves, they don’t put themselves up, neither do wind turbines.  Everything that’s good for the environment and global warming is also a job and therefore can be good for the economy.  That’s what the book is about but it’s also going to be I think the biggest economic play for little guys and big guys in the economy.

Van Jones:  Right.  The most important thing I can say is that for too long we’ve thought about green as this expensive, cumbersome, guilt ridden thing we’re supposed to do but usually don’t.  And I think that it’s time for us to think about the green economy less as a place to spend money, more as a place where people can earn money and save money.  And putting that on as an entrepreneur, greening up one’s business it mainly means running your business the way your grandma would have run it, with a real attention toward thrifts, towards savings, towards reducing waste.

A lot of times a utility company will come and do energy audits for free, the same with water conservation.  There are all kinds of small things you can do and then guess what?  That’s something else that can be a bragging point to customers, certainly any entrepreneur that’s seeking to sell their services to cities, wanting city contracts.

Leif Hansen:  Excellent.  So just to see if I’m hearing your right, the two primary threads, the first is sort of the like grandma.  You said just becoming more thrifty and thinking of how you can become more green in your actual practices.  But then also being able to advertise your sustainable focus and maybe add services is going to give you a competitive edge when you’re marketing yourself to be able to toot that horn a little bit.

Leif Hansen:  The free-range chickens, then you had the chicken eggs, then you had the organic free-range chickens, then you’ve got the chickens that we take to Hawaii on vacations every couple of months and kind of moving them up. 

So we actually need to open up to some questions.  So it’s our time to jump in the second half here.  If you’ve got questions you can call (347) 884-8009.  I’ve already got a few listeners on.  We’ll find out if they have questions.  You can also send a message to BiznikCatalyst@gmail.com or use the chat widget within the BlogTalkRadio.

Van Jones:  You know when I called in I was talking to you but you couldn’t hear me.  There might be something going on with the service there.

Leif Hansen:  Yeah.  I’m unmuting the microphone.  I’ve got a couple more here from (206) 349 and then one that just came on.  We have a question here from (206) 999.  Do you have a question for Van?

Leif Hansen:  Can you introduce yourself for us first?

Mike:  Sure, my name is Mike.  I’m in Seattle.

Van Jones:  Hi, Mike!

Mike:  Hi!  And I’ve got a couple of questions.  One, you mentioned the flat screen TV’s.  And I thought I saw a note on the front of the paper the other day about more chemicals pouring into the atmosphere than we expected.  That weren’t in our previous global warming formulas based on flat screens and also the melting permafrost.  Sending a lot of stuff up into the atmosphere that’s going to rapidly accelerate global warming.  And it just talks about how do we put the breaks on if the economy hasn’t already been in tow.  How do we put the breaks on the manufacturing of all the goods and things that are really hurting us.

Van Jones:  Obviously, you try to educate consumers and hope they do better but at the end of the day, markets work according to rules.  And right now the rules are wacky.  In that if you to try to do a clean, green, organic, etc., you’re going to get punished by the competitor across the street doing it the cheap dirty way.  And so what we want to be able to do is to get the government to stop being on the side of the problem makers in the US economy.  And instead, get on the side of the problem solvers in the US economy. 

What that would require, number one, we need to stop paying the polluters and make the polluters pay.  Right now polluters in our economy get a triple subsidy.  First of all, we’re talking about big oil, big coal, we write them big checks every year, subsidizing that way.  Giving them all kinds of tax breaks, tax credits that kind of stuff.  Number two, we defend them all around the world through the Pentagon.  Spending trillions of dollars to protect our right to spend trillions of dollars to buy this stuff, and then we let them pollute for free.

Van Jones:  Part of that is just making sure that as you do your fixing and flip strategy that you not only advertise in the normal places, in the normal ways.  But also make sure that you are advertising on the environmental parts of the Internet and the environmental publications.  Everybody doesn’t care about green yet so number one, you got to target those green conscious consumers.  But the other thing is a green home is a healthier home.  A green home is a more energy efficient and therefore less expensive to run home.  A green home wastes less water.

Leif Hansen:  Yeah.  Isn’t that just strange that there’s been so much guilt around it?  It’s seems that it should be a natural marketing point.  Like you said, there’s health benefits, there’s economic benefits.  It’s benefiting in every single way.  So I think the answer to that man’s question is just simply that it’s all over the place.  You just need to make it really clear.

Van Jones:  Yeah.  And I think if somebody could just break out a calculator and say, “This is how much money you’re going to save on water and energy over the course of 20 years versus the standard home.”  So that the home might look “more expensive” because of some of these green amenities but if you actually look at it, you’re likely to own this home for 15 years, seven years, 20 years.  Over the life of the mortgage, this home is actually probably 20% or 30% cheaper than the other home.  And that’s not counting the fact that you’re not likely to get asthma and cancer and other things in a green home.

Van Jones:  It’s all over the place and unfortunately, it is a necessary outcome of success.  People keep going, “Oh my God!  I can’t tell the Sierra Club commercial from the commercial.  It’s terrible!”  Well it is terrible…

Leif Hansen:  Can you first describe, Van, what greenwashing is for those of us that might not be familiar with the term?

Well it’s inevitable.  We’re going to go through a phase where those people who are committed to the dirty, polluting status quo who’s no longer…  Remember, we beat them.  They used to spend their time trying to confuse us about whether there was a problem at all.  Whether global warming was real, whether you should take these environmental nutcases seriously.  They try to confuse us about the problem.  We beat them, they lost, Al Gore beat them. 

And now, they spend their time trying to confuse us about the solutions.  Can we have clean coal and all these other fantastical notions or we’re going to actually have to have real clean energy and solar, wind, geothermal, etc.

That is not Chevron’s job, that’s not going to be the government’s job.  That should be civil society’s job to make sure that an awakening public is not put back to sleep by the false lies and lullabies from the pro-polluters.  But in fact are further awakened and empowered by an engaged civil society.  That’s our job.

Leif Hansen:  Yeah, you hear that technology innovators out there?  What about creating a little widget on a website where users can rate the environmental and discuss the environmental impact of your products and service.  And they can just easily plug that in.  There’s a little opportunity for you.

I’m going to jump to a couple of questions here.  We have from area code 360, number starting 371.  Did you have a question for Van?

Van Jones:  Well, the great thing is that we have a number of organizations that have emerged recently that are committed to a job generating, carbon-cutting pathway for America.  One of them is a group called 1Sky, 1Sky.org.  1Sky is passionate about getting ordinary people engaged in changing congress.  Engaging with your congress people, with your local congressional office to get congress to do the right thing on carbon in a way that creates jobs and help save the earth. 

I encourage everybody to get involved with 1Sky.  Certainly my organization GreenForAll.org, we don’t have numerals in ours.  There’s a numeral in 1Sky, there’s no numeral in Green For All, it’s all letters, GreenForAll.org is another organization, it’s mine.  Definitely want people to help, get involved, all signed up there.  There’s also the Apollo Alliance and other organizations that are national in scope that are trying to get people directly involved.  So I encourage people to reach out to groups like that.

For instance, each school district – and I know in the Seattle area there’s been real progress there but every school district should have 25% requirement that the food there is local and organic.  Every public utility should be cooperating doing creative financing to help people weatherize their homes, put up solar panels, and do energy retrofits.  And then pay that back on the bill over time.  So because weatherization and solarization sources pay for themselves in energy savings, there’s a great financial opportunity there to let people get solar panels up right now when we need them to start cutting carbon and pay it back on their utility or through their property taxes.

Leif Hansen:  Excellent.  Gosh, thank you, Van.  We did have a question that you covered a little bit, but if you can maybe say a bit more.  We have a question from MyNewPeace who says, “How can we get our local schools to go green?”  And you had said something about the 25% food being organic.  Any other things that you would want to say about that?

But the great thing about schools is they are community centers and they can be a locus of real empowerment in terms of education mobilization and also entrepreneurship.  Often, since I’m talking about high school students, we should be turning all of our high schools into green business microenterprise incubators.

We don’t have time to waste.  Everything single asset and resource that we have in our community should be mobilized for a clean energy revolution that puts people to work, cuts carbon.  Let the United States be the world leader not in pollution but in solutions.

Leif Hansen:  Yeah.  What if we took all of the high school gym classes, took all of their energy, and tapped it for – we could power the entire planet, huh?

Leif Hansen:  Yeah, or find a way to tap into the hormones of teenagers.  There’s got to be some way to do that, right?

Van Jones:  Exactly.  That’s a renewable resource right there.

Leif Hansen:  All right.  So here’s another question.  By the way, we are about three minutes over the time you’ve committed.  Is it OK if we go keep going with a few more questions?

Van Jones:  Yeah.  I can do one more question then I have to go.  But I’d love to come back maybe after the election and talk a little bit more.

Leif Hansen:  Excellent.  All right.  So the question is, “Do you have some advice about how to harness the power of viral marketing to build a business?”  So basically returning back I guess to some of what you did for your book.  A little bit more specific on how to actually harness that.

But I believe that the best salesperson you’re ever going to have is not the salesperson on your payroll, it’s the salesperson in your Rolodex.  And treating your entire Rolodex like a sales force, a potential sales force is a real break through in the direction of figuring out how you’re going to actually move a product.

Now what I would argue is that almost anybody calling into this show, is that if look at their email address book and they look at their cellphone has a to die for sales force for what they’re trying to get done.  But they’re not thinking about it in that way.  Now they also, most of the people, they would be happy to help in any way and will love to do and wouldn’t take a penny to help most of the people in their Rolodex.

Leif Hansen:  Excellent.  I hate to tie it back to a little bit of self-promotion here but I cannot think of a better tie-in to Biznik.com.  In that, Biznik is about business networking that doesn’t suck.  We don’t want to be about a fake transparency or greenwashing.  It’s really about genuine connection and collaborating. 

And why we’re excited to get together with you is to help you out because we love your book.  And there’s a thread on the site talking about your book and we want to help promote it.  And you can also add some buzz by getting people involved who already love your book and your cause with Biznik.  We’re tying that together so it all helps each other out and we need to not be fake but have genuine passion underneath this and that’s what’s exciting about you.

Leif Hansen:  Thank you, Van.  So the best way for them to get a hold of you, I believe there’s VanJones.net and the Green For All community site?

Van Jones:  That’s right.

Leif Hansen:  That’s right?

Leif Hansen:  Excellent and I think, Van, you were probably listening in when Gabriel was telling us his idea of trying to get people into a physical space in different cities.  Who are interested in collaborating, innovating and incubating their green ideas.  I think that’s an awesome idea.  If we had more time I’d love to hear if you have other companies and think tanks that are trying to do that.  But we’ll blog about that and talk about that on the site.  And thank you so much for your time and look forward to seeing you the rest of guys at Biznik.com.  Take care everybody!

Van Jones:  Thank you.  Bye-bye.

Leif Hansen:  Thanks, Van.  Bye-bye.

In just a minute, we’re going to be talking with Timothy Ferriss, author of the widely acclaimed book, “The 4-Hour Workweek.”  We’re going to be hearing his advice for entrepreneurs and other indie biz free agent types, particularly in the context of the current economic craziness.

I really forward to connecting with you guys today in the second half of the show and later on biznik.com.

Hello, Tim.  Welcome to Biznik Live.

Timothy Ferriss:  Thank you for having me.  My pleasure.

Leif Hansen:  It’s great to have you here.  As you are the world traveler, where in the world is Timothy Ferriss today?

Timothy Ferriss:  Tim Ferriss is in San Francisco, one of my favorite places in the world.

Leif Hansen:  That’s home for you, right?

Timothy Ferriss:  Yes, it is home.  It is close to home as I have at the moment since Francisco Bay area would be what I would call home for the last seven or eight years.  Yes, I can drive my Fuson within two hours, and it’s just a fantastic place.

So I wanted just to start by saying that a ton in your book I found very refreshing.  It’s like a wake up call, a paradigm shift, and it’s just so easy to buy into the whole concept of -why are we buying into this deferred life plan?  Why are we postponing our whole life and buying into this century-old 9 to 5 and then live the rest of your life maybe at the end of your life if you even make it that far?  Just the concept of finding your goals and your dreams, the 80-20 Pareto Principle.

My partner has a company, 80-20 Vision, so I’m very familiar with the idea that 80% of our productivity comes from 20% of our time; and then that the other 20% gets eaten up by 80% of our time.

It seems like what was most controversial in your book, for me and when I read other reviews and blogs, is the chapter on automating and the different ways that you can do that to generate streams of income in your life.

So before I even ask a question about that, could you summarize for our listeners what that chapter is about and do you think that’s affected at all by the current economic climate?

The book is cut into four sections: definition, elimination, automation and then liberation.  The first portion looks at different tools and metrics, commission your life differently.  The elimination section focuses on as you might guest with moving as much to track as possible before you try to organize to plan anything.

And then the automation chapter really looks at – some people, I think, misinterpret the automation chapter as about creating a business that is 100% automated.  That is one application of it but out of its core, the automation chapter is about taking whatever remains after you eliminate and creating rules and processes so that those facets of your life or your business work as elegantly, as seamlessly as possible without you as a bottleneck.  So that is the basic.

Then liberation talks about mini retirements and taking advantage of mobility and geo-arbitraging and things like that.

Timothy Ferriss:  Sure.  Yes, no problem.

That is the snapshot of automation, and I’ll let you continue on with whatever question you might have.

Leif Hansen:  I guess the second part of that is, with the current economic climate, it’s like a stage five river ride out there and a lot of people are uncertain.  A lot of those automation systems seem to rely on newer technologies and marketing yourself.  It seems like some of that could be affected by the economy right now.  Do you think that is true, and have you seen that yourself?  Just what are your thoughts on that?

So micro-testing will be one approach.  The second, I talked about in the case that you are in an entrepreneur or a freelancer, how to market your services or test different business models and so forth online.

So for example, in June, I took 90% of my foreign take and put it into a cash equivalent.  I took it out of the market completely.  Actually, it was not even six months.  It was three months ago.  And I have an almost all fixed income portfolio, and most people would expect me to have a comfort level of let’s say 20%.  Maybe there’s absolutely no way I would panic.  So I’m very low risk.  But I do test extreme options, and I think that that is a very valuable tenet for people who don’t have large budgets for marketing.

So I think that whether you look at a smaller enterprise or a single-man shop or if you look at extremely large companies, I speak to Fortune 500 companies also interested in setting up rules and processes that take out error and redundancy and static because you need to make better use of your resources in a recession.  If you can’t hire more people that you have bigger sales goals, you need to get greater output per person.  You have to spend less time wasting time.

So I think that they are actually equally relevant and most likely more relevant and important as we go into a recession which seems inevitable.

Timothy Ferriss:  I’ll just cover it very briefly.  I think that we are effectively in a recession.  If you look at the monthly job creation versus population growth and so forth, but I don’t think that’s actually that worrisome.  And particularly for entrepreneurs, I think it’s actually in some cases a very big thing.

So I think it’s actually a very good thing for entrepreneurs.  I would also emphasize for people who are panicking about market losses.  In fact, I’ve also lost money in the market but you actually haven’t lost it unless you sold it what you had.  So if the value on paper of your equity portfolio has declined, you haven’t lost any money unless you sold it all.  And I actually -

Timothy Ferriss:  Yes.  Are we live?

Leif Hansen:  Yes, great.  All right.  Thanks for calling back in here, Tim.  Do you want to continue what you were saying there?

Timothy Ferriss:  Yes, I’ll continue.  So maybe eBay and Skype are laying off employees.  That could be why I dropped off.

I think it’s a very good thing for entrepreneurs.  And for that reason, I really don’t think in most cases that freelancers don’t need to be concerned with enormous macroeconomic movements very much in general.  So that would be my short commentary on economics.

Leif Hansen:  It’s very complex obviously.

Timothy Ferriss:  It is but I figure there are some really smart people I deal with regularly, economists or whatnot.  I think that we’ll see the market rebound significantly, probably third quarter of 2009, so I’d say just hold on there.

Timothy Ferriss:  The top two pieces of advice, I would say: Number one is test, test, test.  So when I mention micro-testing, there are excellent tools out there right now for testing and split-testing.

Split-testing, I just mean if you have, let’s say, a website or a newsletter and you want to test the click-through rate based on a specific headline or a specific closing tagline that you can do that for free.  There are excellent tools out there.  So whether that’s Google website optimizer or whether that’s Optimus, there are a number of others that you can use.

I would also say really start looking at expanding.  I’m sure a lot of people listening to this are based online primarily.  I would consider people to start looking at offline options in some cases.  One of the best ways to drive traffic and therefore conversions in my opinion is going to where the channels are emptiest.  And in that case, it’s often radio or television.  You can look at remnant advertising agencies, whether that’s Manhattan Media or there are quite a few of them, some of them I detailed in the book.  And you can get full-page advertisements, half-page advertisements, 90-second, 60-second spots for 80 or 90% off of retail especially in a recession when people are going to be cutting back on advertising budgets dramatically.  There’s going to be a plummeting phenomenon in advertising costs.

But if I had to give a separate recommendation, it would be to do ruthless 80-20 analysis.  You mentioned it earlier.  Just to put in concrete terms, really focus on the critical fuel and eliminate or ignore the trivial money.  Meaning, identify the 20% of customers that are producing 80% of your profit.  Identify the 20% of products or services that you offer that are producing 80% of your profit.  And either get rid of the rest or stop spending time on them.  And really profile this product and customers that work and try to duplicate them.

Timothy Ferriss:  I don’t think looking at it is hard.  I think putting the elimination into practice is difficult for people who are unaccustomed to having uncomfortable conversations.  So I really think that success in almost anything, certainly interpersonal, can be measured at the number of uncomfortable conversations you’re willing to have.  That will be number one.

The second reason it’s difficult is because people will often use prior investment of time, energy, of income, let’s just say the extent, a year developing a portfolio of 10 products, they’ll be loathe to eliminate eight of those two because they’ve invested that time.  But it does not make sense that I would just look at that as a testing period.

Timothy Ferriss:  It’s really primarily ego-driven.  I’ve battled with that myself.  It was not easy.  In my own case, I’ve looked at 120 wholesale customers, recognized it, I thought eight of them were producing more than 95% of my profit, and I think it was five actually.  Of those five, there were two or three who were professional ball-breakers.  I’m not going to sugar-coat the term.  They were pains in my ass and they would berate me and my employees, and they just took great pleasure in being difficult to work with and having unreasonable demands.  And I realized it was carrying over into my personal life.  It would keep me up at night.  I took it as a cost of business.  Customers’ are always right.

Two of them immediately corrected course and changed their behavior entirely.  One flipped out and I said, “Thank you very much.  Have a nice life.”  That one period of 24 hours right into that had a greater impact on my quality of life than almost anything else I did revenue related.

Leif Hansen:  That’s powerful.

Leif Hansen:  Well, you know what?  I want to follow up on that and I have another dozen questions of my own but I know we have a bunch of questions coming in and calls coming in.  So I just want to let you guys know that of course you can use the Google Talk client.  If you use Biznik Catalyst, you can ask questions, you can use the chat client on the site here.  You can also call in (347) 884-8009.  We can take two or three questions here.

I’m going to start with a question that I have from somebody in the chat room who says, Scott Clark saying, “Tim, I’ve had horrible luck outsourcing to India even following your tips and books.  Any further advice for outsourcing to get success?”

There’s a new company I’ve been using for several months now called Ask Sundays.  If you go to tryasksunday.com, they are based in India and the Philippines but you call through a New York number and they speak very good English.  It’s worth taking a look at.  That’s the best as a concierge type of service but they also have projects.  So if you go to tryasksunday.com, that’s a very good one to look at.

So I would encourage you to look not only in India or at Elance but also at Craigslist and in other countries as well.  The Philippines is, I think, an upcomer.

Dan McComb:  Yes, hello.

Leif Hansen:  Hello there.  Who are we speaking with?

Dan McComb:  It’s Dan McComb, the cofounder of Biznik.

Leif Hansen:  Right on, Dan.  Thank you for calling.

Dan McComb:  Yes, I wanted to call in and say hello to Tim.  I’m looking forward to meeting you at Biz Tech Day Conference in San Francisco on October 27.

Timothy Ferriss:  Thanks for calling in.  For sure, I’ll be there.

Dan McComb:  Yes, it’s going to be fun.  Tim’s going to be speaking at the event and I’m going to be on the panel down there too, so lots of fun for those of you who are in San Francisco.  It would be great to meet you down there.

I wanted to ask you, Tim, a question.  You mentioned that actually some businesses are going to do well and some are going to have a harder time in the economy that’s coming up.  So I wondered if you could be specific about that.  Are there some types of businesses that should do well in the coming downturn and others that we should be worried about?

Large businesses are going to have lots of problems.  But as a result of that, I think entrepreneurs who have large companies, Fortune 500 types of companies, as their primary customer base are going to have challenges ahead, particularly if they’re selling very high-end products or services.  So if you’re dealing with brand name blue chip companies and you’re selling what might be considered a nice to have but not have to have service or product, I think that you could be looking at hard times.  And they should adapt to that by perhaps looking at lower market products for smaller or medium-size businesses.

So I think that for people who are looking for a very quick exit in a startup, this is not the ideal time to have limited cash on hand if you have a very high burn rate.

So those will be two examples.  But I don’t think the competition is a bad thing.  As Darwinian as it sounds, I do think that the companies that deserve to exist will do very well.  But I think it’ll be up to the entrepreneurs to be extremely agile and recognize when some things are not working and adapt to that.

Timothy Ferriss:  Sure.

Leif Hansen:  Yes, go ahead.

Dan McComb:  One more is, speaking of being extremely agile, the idea in the 4-hour workweek, I love your ideas which by the way I think are really excellent and interesting, but one that just need pause is the idea that we should be outsourcing a lot of work to other countries.  I think we have a lot of service providers, sort of one-person businesses.  Should they be worried as stuff like that goes out and sent out to work overseas or is that something that they can ride as well?  How does that fit in with the small Indie business guys?

Because, number one is, this is a phenomenon; this is a fundamental shift that is not stopping.  It’s not like the book invented the flatness of a new competitive global marketplace.  So this is something that you can either take advantage of or be victimized by essentially.  If you were to look at it from a different perspective, let’s just say you forget about, and this is what I encourage a lot of entrepreneurs to do also, is rather than getting let’s say assistants in India or in addition to getting assistants in places like India or the Philippines, Canada, etc., let’s just say that you have a service that is going to find more large-capped clients in a place like the UK versus the US right now.  The same technologies allow you to sell your services in pounds to people in London that allows someone in the Philippines to sell their services to you in the US.

So it’s not quite a zero-sum game, and I think that there are many more benefits than detriments to US economy if we embrace it properly rather than resisting something that’s going to continue to expand whether we wanted to or not.

We have Scott Clark. Drew Curtis and I, being Scott Clark, wonder when you’re coming back to Lexington to go horse racing.

Van Neau from Seattle hopes that you can come and wondering if you would be willing to do a workshop in Seattle.

A man named Marty is saying that he outsources to needy relatives, so actually outsourcing is a paradigm for him to connect to people that need it more.  A little comment on that last conversation.

I’m just going to basically say -

Timothy Ferriss:  I can answer a few more questions after we stop recording so it just isn’t that finite.

Second is I would say to cultivate optimism and recognize that if you test properly what you invest in, it has a very high likelihood of succeeding, of having an exceptional ROI.  In the last seven years, I never lost money on a roll-out campaign and that’s not because I’m good at divining the future and guessing.  In fact, generally, what I think is going to work best does not.  It’s because I test very methodically.

So I’ll just encourage people to embrace experimentation on very small scales to determine what works and to be very optimistic.  We’re going into a very, very exciting land grab type period for entrepreneurs in a recession.  I think that there will be more opportunities and not fewer.