Tim Ferriss Has the X Factor
Less is more for Tim Ferriss. The author of the 4-Hour book series has become a global success thanks to his knack for self-promotion, feel for what's in demand and a hands-off approach to management. By Amy Birchall
Author and entrepreneur Tim Ferriss has been described as the ultimate life hacker.
He's made a career of pushing the boundaries of personal efficiency, productivity and what he calls lifestyle design – identifying your values and designing a work life around them.
His personal experiments include figuring out how to work for just four hours a week while generating enough income to travel the world, gaining 15kg of muscle in 28 days and outsourcing all time-zapping tasks, such as email management, to virtual assistants overseas.
He works for himself and delegates tasks when necessary, earning millions of dollars in the process.
Ferriss, 36, is best known for his 4-Hour book series: The 4-Hour Work Week, The 4-Hour Body and The 4-Hour Chef. He's also an adviser to companies such as Facebook, Twitter and Evernote, a Princeton University guest lecturer in high-tech entrepreneurship and a national Chinese kickboxing champion.
While The New York Times has described Ferriss as "somewhere between Jack Welch and a Buddhist monk", success hasn't always come easily.
For those unfamiliar with Ferriss's work, the manuscript for his first book, The 4-Hour Work Week, was rejected 26 times. Ferriss, the optimist, viewed rejection as an opportunity to develop.
Speaking to Mt ahead of his Australian tour next month (he will speak at a series of AIM-sponsored events around the country), Ferriss explains: "When you've received 26 rejections, you might as well get 36 or 46.
"I was refining my pitch as I went. So in my meetings, even though they [publishers] didn't necessarily purchase the book, I was getting closer each time," he says.
The San Francisco-based entrepreneur's approach to business and life is based on the Pareto principle, which dictates that 80 per cent of results come from 20 per cent of effort.
Ferriss has successfully applied this principle to learning new languages in six months (he speaks five), becoming the first American in history to hold a Guinness world record in tango, and in marketing his books (all three have reached No.1 on The New York Times Best Seller list).
But in 2001 – before he became one of Fast Company's Most Innovative Business People and the seventh most powerful personality in Newsweek's 2012 Digital 100 Power Index – Ferriss was an ordinary university graduate.
After studying East Asian studies at Princeton University, he worked in sales at a data storage company. Frustrated by what he saw as inefficiencies in the business, Ferriss spent his time in the office building an online sports nutrition supplements company, BrainQUICKEN. He was laid off a year later, but that seemed irrelevant – by 2004 his online business was making him more than $40,000 a month.
Like many business owners, Ferriss worked long hours. It wasn't until his then-girlfriend presented him with a plaque that said, "Business hours end at 5pm", that he realised money had little value without time (he explains that most people don't want a million dollars; they want the lifestyle that they think comes with having a million dollars).
Ferriss travelled overseas, figured out his business could perform better without his constant interference and – just one nervous breakdown later – returned home to write his first book, The 4-Hour Work Week.
Ferriss says while some of his success can be attributed to luck, serendipity and good timing (The 4-Hour Work Week was published just as Twitter was gaining popularity, for example, giving Ferriss, a natural self-promoter, an outlet to market his work on his own terms) it would have been impossible without good products.
"You can use good marketing and sales to put a book on a bestseller list for one week. The 4-Hour Work Week was on The New York Times Best Seller list for four years straight. It's still, as of last month, on The New York Times Best Seller list for the seventh year. Marketing can make a very big splash in the first week or two, but the product needs to stand on its own, whether it's a start-up or a book or anything else," he says.
Ferriss's success has not come without criticism. One particularly venomous blogger, Matt Forney, wrote that Ferriss is "the patron saint of lazy asses", claiming that his readers "don't want to be told that the only way to achieve anything in this world is to toil for it".
Others have questioned the validity of his claims in The 4-Hour Work Week, and the science behind his diet and exercise recommendations in The 4-Hour Body.
In The 4-Hour Body, for example, Ferriss recommends an unconventional diet free of fruit and most carbohydrates, plus a weekend cheat day – known to Ferriss and his fans as "Faturday" – where eating huge quantities of junk food is not just acceptable, but encouraged.
Ferriss isn't one to indulge people who he calls "haters". If he can't outsmart his critics (in 2010 he wrote a blog post titled "Tim Ferriss Scam! Practical Tactics for Dealing with Haters" in a bid to outrank his detractors' websites) he ignores them. He says the best revenge is letting negative people continue living with their resentment and anger, while he continues to lead a happy and fulfilling life.
Ferriss is also an adviser to some of the most successful start-up companies of the past decade, including Facebook, Twitter and Evernote, as mentioned, as well as Shopify and StumbleUpon. He has been with some of these companies from pre-seed money to valuations of more than $1 billion, and claims his success rate, which he defines as not losing money, is more than 90 per cent. But he won't put his name behind any product. Start-ups must meet strict criteria before he is willing to invest.
"I look for a consumer-facing product that I could personally become a power user of. It has to be something that I understand exceptionally well," he explains. "The product also needs to be simple, but differentiated enough for me to take them from say, a niche market of early adopters in San Francisco, to mainstream in the United States and then international."
He chooses to invest in products he would use regularly, that can be pitched to media outlets such as The New York Times, and that have an impressive growth trajectory.
"Even though I started with many of these companies when they were considered small, their growth rates were, month-on-month, very astonishing. I prefer to pour gasoline on something that's already working, as opposed to trying to get something from standstill to movement," he says.
The last criterion is that lessons learnt in the start-up must be able to help at least two other start-ups in his portfolio.
"That's how I actually end up adding more value over time as my portfolio grows, which a lot of investors struggle to do," Ferriss says. "I'd say less than 10 per cent of start- ups that I choose that satisfy all of these criteria have negative outcomes. Not all of them have a home-run outcome, but I very rarely lose money. With Twitter and Facebook and Evernote and Uber and 20-plus others, it's been a very effective model."
Chief product officer at ecommerce platform Shopify Harley Finkelstein says Ferriss, an adviser to the company since 2009, has played a significant role in Shopify's success – Shopify powers 60,000 online retailers, including General Electric and Amnesty International.
"[Ferriss] has been invaluable in the growth of our business," Finkelstein said. "Back when no one knew about us, we were brainstorming with him. He challenged us to prove that building an online business was in fact as easy as we claimed. In order to accomplish that, and under Tim's guidance and leadership, we created the Shopify Build- a-Business competition. Now, it's one of the most important things we do.
"This helped Shopify 'cross the chasm' in terms of pushing Shopify's brand to a mainstream audience. It was risky, but Tim knew it would succeed – it was entirely consistent with his track record for PR and marketing. Simply put, Tim is our secret weapon."
Ferriss says he plans to work more closely with start-ups and explore innovative funding approaches from now on given he's finished writing the 4-Hour series.
"I think venture capital is going to change a lot in the next six months," he says. It's a not-so-subtle clue to his next project. Ferriss recently announced on his blog he plans to raise an entire round of financing (between US$500,000 and US$1 million) for one company, the name of which had not been announced at the time of writing.
According to Ferriss, the benefits of financing in this way include extensive media exposure, no minimum ownership for venture capitalists and no obligation to put him on the board.
He explains the theory behind this idea on his blog: "Once VCs [venture capitalists] see you succeed, you are in a massive position of strength and will probably receive unsolicited term sheets. This flips the tables. If you want optimal leverage for a larger round (say $5-$10 million total), raising a small amount with me makes sense."
One of the most valuable lessons in The 4-Hour Work Week for managers and executives is learning how to unplug. Ferriss, who recently returned from a four-week holiday to Indonesia without access to phones or email, explains:
"Being constantly plugged in pretty much removes any appreciation of what you have, and if you can't appreciate what you have, nothing you ever get will make you happy. If you're having difficulty managing email and it's harder to manage now than it was a year ago, and it's going to be harder in one month's time, clearly something needs to change.
"The way I approach unplugging, or even just not checking emails in the first hour of the day, is as an experiment. Don't look at it as a permanent change, look at it as an experiment for 24 hours, or 48 hours and look at the results. Test it, qualify the results and look at what became of it. What most people find is that they can go off email for the majority of the day and even manage up and manage their bosses without too much fall-out."
Not surprisingly, Ferriss's measures for managing email are more extreme than those of the average office worker. While on a four-week holiday to Colombia, Panama and Jordan, he set up an automatic reply to all emails that read: "Thank you for your email. Sadly, it will be deleted. To regain sanity, I am taking a break from email until March. If still relevant, please email me again in the month of March."
Ferriss says while there are more demands on his time now than when he wrote The 4-Hour Work Week, he still takes his own advice.
"I've had to get better at using these tools and sticking to a lot of fundamentals, like these, from The 4-Hour Work Week compared to when I wrote it," he says.