Scott Allen: Hi! This is Scott Allen, About.com Entrepreneurs Guide and I am here with Tim Ferriss, author of The 4-Hour Workweek (Compare Prices). One of the things that I talk a lot about on About.com is how to try to find that balance as an entrepreneur, because there have been so many studies done on this that show that the typical entrepreneurs are working 70 and 80 hours a week. The traditional take on this is something like, “Hey, that’s fine. We all know it’s a trade-off because we are investing that time, hopefully for the pay back in the future, or that it’s a trade-off for flexibility.” You may have to work 80 hours a week and work late into the night, but you get to take off in the middle of the day to do stuff with your kids. You don’t have to answer to anybody or file for it a month in advance if you want to take vacation.
We would all love to get to the point of working a 4-hour workweek and a lot of us would like to just get to the point of working a 40-hour workweek, and making the living we'd like to make and having the rest of it available.
But Tim has lived it, is living it and is sharing the good word in his book and starting to get some other media coverage here too. In the interest of getting my readers (and myself) closer to that 4-hour workweek, I’m here talking to Tim Ferriss. Tim, welcome.
Tim Ferriss: Thank you very much for having me.
Scott: Tim, why don’t you give a little bit of background about your entrepreneurial history?
Tim: I graduated from undergraduate on the East Coast in 2000. A friend of mine sold his company, BlueMountain.com, for close to $480 million, which made it seem like a very good idea to move to Silicon Valley, which I promptly did, and I initially worked putting in 80-hour weeks at a storage and networking company. So I worked high-tech in technical sales, and in a very exciting entrepreneurial environment, but it was exactly what I came to know afterwards as an overwork ethic.
Due to improper management it became a results-by-volume type of environment. So I was checking Outlook, hitting Send/Receive 100-200 times per day and I even slept under my cubicle on a number of occasions. I spent Thanksgiving on orders from above, sending email to prospects and it was a bleak picture. But I was excited to do it at the time, but very quickly realized that it was entirely unsustainable. The company itself ended up imploding in 2001 and before that I thought that I could do a better job of creating and managing a company and certainly wanted the freedom that every entrepreneur has in mind, when they initially take that first step towards establishing themselves as a business owner.
And I ended up moving into pharmaceutical design, so I had some background that helped me gather biochemists to look at designing and licensing different drug designs to big pharma. That ended up being extremely difficult to do and capital intensive.
So by a number of different circumstances, I ended up becoming involved in sports nutrition design and manufacturing. And that company ended up doing extremely well, where as I was the second lowest paid employee at the start-up, which I found out when an Excel spreadsheet was accidentally forwarded to the entire office -- the only person paid lower than I was, was a receptionist, putting in a 20 hours a week, and I was putting in 80 hours. I was making twice per month, what I had been making for a year, but I was actually more miserable, because I had less time and was at that point I realized: 1) most business models are entirely unscalable, and 2) most entrepreneurs are business managers and not business owners, and 3) that income has really no practical value if you don’t have control and possess time.
So in mid-2004, I left the country and spent 15 months traveling over more than 20 countries, conducting experiments in automation and outsourcing. And I was able to push both to some very curious extremes. I got to where I was checking email once every 14 days, instead of 100 times per day, and I was still receiving a volume of 1500-2000 emails a week.
And surprisingly enough, simultaneously, the profit for my company went up by 30%. So, I really took a step back during that period. I interviewed people who were finding their own life hacks and realized that if you recognize that there isn’t just one currency -- income -- that, in a digital world, you have three currencies: you have time, income and mobility in descending order. And if you really master the time and mobility components, it’s possible to live like a $500,000 investment banker of ten years ago, worth $50,000 today. And that brings us to what I call lifestyle design. So I propose that rather than long-haul career planning, which someone like Randy Komisar who's a general partner at Kleiner Perkins venture capital – he would call that "the deferred life plan". So rather than trying to accumulate enough money so you can stop doing whatever you are doing for retirement, which is inherently flawed in a lot of ways.
How you redistribute time in life, throughout life in your day-to-day existence, really represents your ideal life-style? And that experience, I guest lecture at Princeton was here and the students recommended that I put my experience in a book and that is how “4-hour workweek” came to be.
And The 4-Hour Workweek, the title itself, is really not an exaggeration. It’s possible especially as an entrepreneur to get to the point where you spend two to four hours a week on a business that is, for all intensive purposes, entirely automated.
Scott: One of my personal entrepreneurial heroes has always been Richard Branson. Is he touching on some of that? One of the big things with him is not only lifestyle design, but turning it into a marketing thing to go and do the things that you love to do like speed across the English Channel, that sort of thing. And I know that he is also well-known for the fact that he takes a month out of every year and spends it on his private island in the Caribbean.