James Altucher Ideas, Investing and Entrepreneurs



In this episode of the 20 minutes VC, host Harry Stebbings interviews prolific entrepreneur and author James Altucher. Altucher shares insights from his multifaceted career, which spans from running hedge funds and venture capital funds to writing 17 books and being an angel investor in about 30 companies. He emphasizes the importance of creativity and helping others by addressing societal pain points rather than focusing on business alone. Altucher also discusses his daily habits for success, his approach to investing alongside smarter VCs, and the potential of companies like Uber to become trillion-dollar enterprises. The conversation touches on the value of idea generation, the benefits of online learning over traditional university education, and the importance of being adaptable in one's career. Harry wraps up by thanking Hiring Screen for their assistance in his recruitment process.

Summary Notes

Introduction to James Altucher

  • James Altucher has founded and sold companies with eight-figure exits.
  • He serves on the board of a billion-dollar revenue company.
  • He has experience in writing for prominent publications, managing hedge funds, venture capital funds, and being an angel investor.
  • James is also an accomplished author with eleven books, including a Wall Street Journal bestseller.

"James has started and sold several companies for eight figure exits. He's on the board of a billion dollar revenue company."

This quote highlights James Altucher's successful entrepreneurial background and his experience with high-value companies.

The Concept of 20 Minutes VC

  • The 20 minutes VC podcast aims to provide quick, insightful snapshots into the venture capital world.
  • The concept is designed for busy individuals who value concise and informative content.

"I love the idea of just the concept, the 20 minutes VC."

James Altucher expresses his appreciation for the podcast's format, which aligns with the fast-paced nature of the venture capital industry.

James Altucher's Diverse Career

  • James has had approximately 15 distinct careers, including roles as a computer programmer, TV show creator, company founder, and investor.
  • He has been involved in multiple sectors, from technology to finance, and has written extensively.
  • James currently enjoys his creative work, which includes writing and podcasting daily.

"I've had like 15 different, completely different careers."

This quote illustrates the breadth of James Altucher's professional experience across various industries.

Addressing Society's Pain Points

  • James focuses on societal issues such as job dissatisfaction, fear of change, financial struggles, and the challenge of self-reinvention.
  • He seeks to help people by sharing his experiences in dealing with similar problems.
  • His personal approach to writing has opened up more business opportunities for him.

"The real pain points are, I'm scared. I don't like my job. I don't know how to reinvent myself."

James identifies core societal challenges that he aims to address through his writing and podcasts, emphasizing the emotional and practical struggles people face.

Authenticity in Business and Writing

  • James's transparency in writing has built trust with his audience, leading to more business success.
  • His personal style has attracted opportunities, such as meetings with high-level executives at major tech companies.

"People know what they see is what they get. They could just trust me right off the bat."

This quote reflects James's belief that authenticity in writing fosters trust and can lead to greater business success.

Advice for Aspiring Writers

  • James suggests platforms like Quora for beginners to start writing and answering questions.
  • He emphasizes the importance of reading and writing extensively to improve communication skills.
  • To be a good writer, one must consume and produce a significant amount of written content.

"In order to be a good writer, you have to do two things only. You have to read a lot and you have to write a lot."

James offers practical advice for becoming a better writer, underscoring the need for both consumption and creation of written material.

James Altucher's Reading Habits

  • James prefers reading books over online content for quality fiction and nonfiction.
  • He reads high-quality fiction for writing style and high-quality nonfiction for ideas.

"I only read books. I don't want to sound snooty about it."

James explains his preference for books over online content, highlighting his focus on quality writing and ideas.

Training the Idea Muscle

  • James discusses the concept of the "idea muscle" and how it can be developed through writing.
  • He references Stephen King's experience with a bicycle accident, which prevented him from writing and impacted his ability to generate ideas.

"Stephen King, who's one of the best selling writers of all time, whether you like his writing or not, just the fact remains, 500 million people love his writing, so there's something going on there."

James uses Stephen King's success to illustrate the importance of continuous writing practice in cultivating the ability to generate ideas.## The Importance of Exercising the Idea Muscle

  • Writing down ideas regularly is crucial as it's like exercising a muscle.
  • Not using the idea muscle can lead to atrophy, similar to muscles in the body.
  • The exercise involves writing down ten ideas a day, which can be more challenging than it seems.
  • The goal isn't necessarily to come up with good ideas but to keep the idea muscle active.
  • Consistently practicing this can lead to a few valuable ideas among many.

"If you don't come up with ideas after, like, let's say, two weeks, your idea muscle has atrophied."

This quote emphasizes the necessity of regular mental exercise to keep the idea-generating ability sharp, likening it to physical muscles that weaken without use.

"The purpose is not to come up with a good idea. The purpose is just to exercise that idea muscle."

This quote clarifies that the exercise's objective is to maintain the capacity to generate ideas, not necessarily to produce immediately useful ones.

Execution as a Subset of Ideas

  • Execution is often said to be everything, but it's actually a part of the idea process.
  • Having an idea is the first step, followed by generating ideas for the next steps towards execution.
  • Writing down next steps helps in understanding how to pursue good ideas.

"Execution is just a subset of ideas."

The quote suggests that execution is part of the broader process of idea generation, implying that good execution stems from a well-developed idea.

Writing Ideas for Fun and Practice

  • Writing ideas can be a fun exercise and doesn't always have to serve a practical purpose.
  • Generating plot ideas for a friend's TV show serves as an example of practicing idea generation for enjoyment.

"Sometimes my ten idea list will turn into a post, but like, I did an idea list yesterday that I'll never use."

This quote illustrates that not all ideas generated through the exercise need to be actionable; some can be for personal enjoyment or practice.

Investing Strategy and Recognizing Strengths

  • Acknowledging one's own limitations is crucial in developing an investment strategy.
  • Leveraging personal strengths, such as being friendly and well-connected, can provide investment opportunities.
  • Investing alongside venture capitalists who are smarter or more experienced can be beneficial.
  • It's important to invest with those who will likely continue investing in subsequent rounds.

"I always like to invest with people smarter than me."

The quote stresses the importance of recognizing one's own intellectual limitations and the strategic advantage of partnering with more knowledgeable individuals in investments.

"I've sort of outsourced the due diligence to them."

This quote highlights a strategy of relying on the expertise of more experienced venture capitalists to handle the detailed analysis of potential investments.

Sector Preferences in Investments

  • The speaker does not have specific sector preferences for investments.
  • Relies on the judgment of smarter, more knowledgeable venture capitalists when it comes to sector-specific investments.

"If someone's smarter than me and he says, look at this great biotech, they cure cancer, then I just say, my automatic reflexes count me in."

This quote reflects the speaker's trust in the expertise of others when it comes to sector-specific investments, indicating a reliance on their judgment rather than his own expertise.

Co-Investing and the Power Law of Returns

  • Co-investing with top venture capitalists is a key strategy.
  • The speaker avoids naming specific venture capitalists to respect their privacy.
  • Venture capital is viewed as not necessarily requiring hard work but rather smart co-investing.
  • Acknowledges the power law of investing, where a few investments may yield the highest returns.

"I almost don't want to say who I co invest beside just because I don't want their investors to think it's sort of their business."

This quote shows respect for the privacy and business relations of the venture capitalists the speaker co-invests with.

"You just have to make sure you at least get the power law."

The quote emphasizes the importance of being part of investments that have the potential for significantly higher returns, adhering to the power law dynamic in venture capital.

Criteria for Great Investments

  • Being in a prime location like Silicon Valley provides exposure to numerous investment opportunities.
  • Investing in what is popular and talked about can be a successful strategy.
  • Assessing the potential of a startup can involve looking at the experience of the CEO, revenues, profits, and future profitability.

"I don't think you need any vision of the future because look, don't invest in kind of a social network for left handed people like, there's stuff that there are businesses out there that are obviously bad."

This quote suggests that not all ideas are worth pursuing and that one doesn't need to predict the future to identify potentially bad investments.

"You just want to make sure you're co investing with people who have done that kind of work to increase the ods of success for themselves."

The quote highlights the importance of investing with experienced individuals who have a track record of increasing the odds of success in their investments.## Measuring Personal Success

  • Personal success is determined by daily actions rather than predictions of the future or changes to the past.
  • The focus is on maintaining physical health, surrounding oneself with positive people, exercising the "idea muscle," and practicing gratitude.
  • Success is seen as a preparation for the future by engaging in these four practices daily.

"So my own success is will today I try to do things that keep me physically healthy? Will I be around positive people? Will I exercise my idea muscle? And will I be grateful for the little that I have?"

The quote emphasizes the speaker's belief that success is about daily habits that promote well-being in various aspects of life. These habits are seen as investments in one's future success.

The Future of Uber

  • Uber is projected to become a trillion-dollar company due to its fundamental nature as a logistics company.
  • The company's potential extends beyond its current model of transporting people to possibly offering various services for money.
  • The advancement in technologies such as driverless cars will enable Uber to expand into new service areas like grocery delivery.

"So they're going to be an entire slice of kind of the world's GDP at some point."

The speaker predicts that Uber will significantly impact the global economy by expanding its logistics services to encompass a broader range of activities.

Daily Habits for Success

  • A daily habit includes activities that contribute to physical, emotional, mental, and spiritual health.
  • The speaker emphasizes the importance of consistency in these daily practices.

"Well, it's doing these four things, making sure I always do this quasi math. Am I 1% doing something for my physical health, for my emotional health, for my mental health, for my spiritual health, and that daily habit, I never do a day without it."

This quote highlights the speaker's commitment to a daily routine that balances various aspects of personal well-being, suggesting that this balance is key to their definition of success.

Alternative Approaches to Education

  • The speaker questions the value of traditional college education in light of the availability of free online learning resources.
  • The financial burden of college education is seen as a significant disadvantage, especially when it locks individuals into careers they may want to change.
  • Practical skills can be acquired and monetized without incurring debt, offering an alternative path to success.

"So why would anybody pay $100,000 or $200,000 for an education when you can get an education for free?"

The quote challenges the conventional wisdom of pursuing expensive college degrees by pointing out the availability of free educational resources online.

The Impact of Student Loan Debt

  • The speaker is critical of the $1.4 trillion student loan debt burden, which can restrict career flexibility and lead to unhappiness.
  • The speaker suggests that changing careers is a natural part of life and that being handcuffed by debt to an unwanted career is detrimental.

"They're stuck and it's horrible. How many times have you changed career?"

This quote reflects the speaker's concern about the negative impact of student loan debt on personal freedom and career satisfaction.

Life Experiences vs. College Education

  • The speaker advocates for gaining real-world experiences, such as building schools in impoverished countries, as more valuable than the traditional college experience.
  • The belief is that real-world experiences offer better opportunities for learning, networking, and understanding adult life.

"Go to Thailand for six months and build a school for impoverished children and you'll learn about the real world and you'll make friends and you'll network all you want in doing that from country to country."

The quote suggests that hands-on experiences in different cultures provide more practical knowledge and social opportunities than a college education.

Social Aspects of University Life

  • The speaker argues that social benefits of university can be surpassed by engaging in community service and networking in diverse environments.
  • The speaker shares a personal perspective on friendships, noting that age does not define their social circle.

"So go to Guam and build schools for kids who don't have schools. It's all going to be people your age who are taking a year off or maybe people a little older than you who are in between college and career. You'll socially is even much better than college."

This quote suggests that alternative paths to university can offer superior social experiences and opportunities to build a diverse network of friends and contacts.## College Experience and Value

  • College is likened to a continuation of a "fake world" that doesn't represent real life.
  • The speaker suggests that college may not be the most exciting option due to the potential for large amounts of debt.
  • There is a critique of the effectiveness of college education, noting that much of what is learned is quickly forgotten.
  • The conversation implies that there are alternative ways to gain skills and socialize outside of the college environment.

"So college is like just, again, four years, continuation of this fake world that you're never going to see again."

This quote expresses the speaker's view that college does not accurately reflect the real world and may not be a necessary experience for everyone.

"You have so many exciting opportunities in front of you, and the least exciting is to be kind of handcuffed to enormous debt."

The speaker is warning against the financial burden of college, suggesting that it may limit future opportunities.

"48 hours after you leave a college lecture. You're going to remember nothing from that college lecture unless you've trained yourself in memory techniques."

The speaker is highlighting the inefficiency of traditional college lectures in terms of long-term knowledge retention.

Online Learning and Alternative Education

  • Online courses are presented as valuable and practical alternatives to traditional college education.
  • The speaker endorses websites like linda.com and udemy, suggesting they offer immediately applicable skills.
  • It is claimed that taking a few online courses can enable a person to start charging for services and make money.

"And they're fantastic."

This quote is a straightforward endorsement of the quality of online courses offered on platforms like linda.com and udemy.

"I can guarantee you, you take three classes on linda.com, the very next day you can start charging for your services and making real money."

The speaker is asserting the practicality and immediate applicability of skills learned through online courses.

Podcasting and Interviews

  • The speaker discusses the joy and excitement of interviewing various notable figures on their podcast.
  • The speaker reflects on the memorable experience of visiting Tony Robbins' house and the impressive presence of Robbins.
  • The speaker emphasizes the personal connection and friendship developed with guests like Scott Adams through the podcast.

"Oh, my God, it's so hard because I don't have a guest on unless I know I'm going to enjoy it."

This quote highlights the speaker's enthusiasm for their podcast guests and the personal enjoyment they derive from the interviews.

"Flew down to Tony Robbins house was an amazing experience."

The speaker shares a memorable experience from their podcasting career, showcasing the unique opportunities it provides.

  • The speaker talks about their investment strategy and timing, focusing on periods with low valuations like 2009-2010.
  • A recent investment in a seed round is discussed, along with the impressive growth in valuation of the company.
  • The conversation touches on the concept of a tech bubble, with the speaker arguing that investments in innovative services that have the potential to connect billions of people are not indicative of a bubble.

"I put money in at a $6 million valuation. That was their seed round. They just raised money at a $250,000,000 valuation."

The speaker is illustrating the significant return on investment from a seed round to a much higher valuation in a subsequent round.

"A bubble is when the only reason something is higher today is because it was higher yesterday."

The speaker provides a definition of a market bubble, differentiating it from investments based on the actual value and potential of a service.

Personal Advice and Encouragement

  • The speaker praises the host for their interviewing skills and encourages them to pursue a life of excitement and adventure instead of going to college.
  • The conversation ends with a personal note of encouragement, suggesting that there are rewarding paths outside of traditional education.

"Harry, I'm really impressed that you're 18 years old. You do a really good job and you're a good interviewer, and I hope you don't go to college and instead do things that are really exciting and adventurous with your life."

The speaker is complimenting the host's abilities and suggesting that they may find fulfillment and success without following the traditional path of attending college.

Hiring and Recruitment Technology

  • The host thanks a recruitment technology company for their efficient and effective service in finding a suitable assistant.
  • The technology is praised for its ability to quickly produce a list of candidates with a scoring system to determine suitability.

"Their algorithms. Let me select all the requirements I needed in an assistant and in just 15 minutes produced an amazing list of the candidates, each with an individual score."

This quote explains how the recruitment technology works and emphasizes its speed and effectiveness in the hiring process.

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