Forecasting The Next Financial Crisis with William D. Cohan

TWS 6 | Financial Crisis


Wall Street guys are always going to be able to outrun the regulators, but the regulators are still going to have the last word. A former senior Wall Street M&A investment banker for seventeen years, William D. Cohan shares his wisdom on the relationship between Wall Street and the entrepreneur. The New York Times bestselling author of three non-fiction narratives about Wall Street, he reveals the risks in investing in initial public offerings and the lessons learned from the financial crisis of 2008. Learn from William’s insights on the regulation of the capital markets today and bond markets as the probable solution for the economic turmoil.

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Forecasting The Next Financial Crisis with William D. Cohan

We are talking about entrepreneurship. This is going to be a different angle on it. Follow us on social media. I’m going to be doing a YouTube review of my thoughts in regards to my guest now and what I wanted to learn from that. Make sure you go and check out our YouTube Channel, YouTube.com/paradigmlife. Let’s get to my guest, William D. Cohan. He is a columnist for Bloomberg View and Vanity Fair. He is the author of several books. He has a new one coming out. The books that he has available is Why Wall Street Matters and also The Last Tycoons, The Secret History of Lazard Frères & Co. He also wrote the House of Cards, A Tale of Hubris and Wretched Excess on Wall Street and also The Price of Silence: The Duke Lacrosse Scandal, the Power of the Elite and the Corruption of Our Great Universities. You can imagine this is going to be some awesome dialog and conversation. With further ado, I welcome my guest, William Cohan.

William, welcome to the show. My first question is given your experience with Wall Street, what is the relationship between Wall Street and the entrepreneur?

Some of these tech companies, these so-called unicorns, a lot more tech companies are able to obtain capital that they need in other ways besides going public from hedge funds, venture capital firms, private equity firms and funds from all sorts of sovereign wealth funds. There are all sorts of new and different ways. There are also other exchanges and other private capital marketplaces that have started to provide companies with capital that they need, in ways that are new and different than their existing core delaying the inevitable IPO. You’ll see Uber, even though it didn’t achieve the lofty goals that underwriters and the company may have hoped by being valued at something like $100 billion. It still was valued at $74 billion, which for an IPO and raising more than $8 billion in an IPO is still one of the largest of all times. The consequence of companies getting capital elsewhere and being able to delay what used to be the only way a company could get the capital it needed is that these IPOs are bigger and more of an event that they used to be in the past. Which unfortunately can allow for the process to be manipulated and retail investors taking it on the chin often happens. The dynamics on Wall Street in raising capital have been changing for some time. With the internet, I’m sure they’ll change even more.

With Uber specifically and I can’t speak to the more recent ones, but I know that there were a number of articles written after the IPO where Uber was losing money. They weren’t profitable and they required more and more rounds of funding. The IPO became a necessity in essence because I know that there were some end investors, there are some articles written about end investors not necessarily getting their investment back yet. With that as something I see in smaller companies that are raising capital, it’s more for not necessarily to be profitable right away but down the road. Is that an occurrence that’s happened in the past or is that more of a recent phenomenon?

It often becomes about the story and the industry that you’re in. You may be too young to recall one in 1999, 1998 but a lot of companies were trying to go public that had no business being public and were far from profitable. They were able to do it because investors couldn’t get enough of that company at the time after the collapse of the tech market and the tech bubble in March of 2000 combined with 9/11. A year and a half later, the capital market dried up for that risk. It’s like Rasputin, it came back from the dead. It keeps coming back and investors are willing to suspend their disbelief.

Nobody rings a bell at the top of the market. Click To Tweet

You’ll have an example of Amazon where it had years and years of losses and investors kept having faith and bidding up the price of the stock. Now, it is profitable and increasingly profitable. They’ve got other business lines like the Cloud business that they have, AWS that drives a lot of their profitability. Sometimes investors get rewarded for this blind faith. Other times, they get their head handed to them. By and large, the tech companies that are coming public now are older and are closer to profitability, and are bigger and more substantial than what was going on many years ago. That doesn’t mean that there aren’t risks for investors. Investing in IPOs is a risky thing to do. The Wall Street underwriters make it seem tempting and delicious, “You have to buy Lyft, you have to buy Uber.” That’s their job. They’re expert salesmen. It’s an investors’ job to be the caveat emptor, to be wary of what these guys are selling because ultimately, they’re benefiting themselves and their institutional investors and the early investors and not the people who are buying the IPO.

I know you’ve talked quite a bit in your books and also interviews you’ve done regarding how Wall Street is set up and one of the primary reasons why 2008 happened. Do you see the regulation of the capital markets changing as it relates to how they’re raising capital, the leverage that they’re using and the risks that they’re taking?

After the financial crisis in 2008, there’s obviously the regulatory environment tightened up considerably. We went from relatively Laissez-faire regulation to Dodd-Frank Laws, Volcker Rule and also some new regulations that were implemented. Basically, that all ended with the election of Donald Trump and now it’s pretty much being rolled back. It’s not exactly clear how it’s being rolled back but there’s the sense that there’s much less regulation now and deregulation is the way it’s going to be for the time being. Companies are taking advantage of that as best they can. On Wall Street, the Fed is the new regulator of all these Wall Street banks, the big ones, and the Federal Reserve. They’re not allowing any mergers. None of these big firms can do transformative mergers.

They haven’t been able to do that for more than ten years now. This is probably some pent-up strategic demand among these Wall Street firms for how they’re to potentially compete going forward. Until the fed allows them to do these mergers, they are not going to be able to. Other regulations are being loosened. Some capital requirements, the kinds of business lines they can be in, all of that is being loosened up to some degree. If you ask people on Wall Street, they say, “That’s great. It’s about time.” The post-financial crisis regulations were too restrictive. You ask good politicians like Elizabeth Warren and Bernie Sanders, they want to know do more. They don’t want to loosen these restrictions and these regulations. There’s always a pendulum. It was too loose before the financial crisis. Now that has to be tightened up so that “never happens again.” Now you could argue that it’s too loose again, that it was too tight. Wall Street types are never happy with any regulation.

If you were speaking on behalf of the typical investor, would you say that the lessons that came from some of the turmoil in 2008, 2009, the dot-com crash or earlier, aren’t necessarily an issue? That we’ve learned those lessons and that the growth that deregulation often creates is sustainable and there aren’t any unintended consequences?


TWS 6 | Financial Crisis

Financial Crisis: The dynamics on Wall Street in raising capital are changing and have been changing for some time. With the internet, they’ll change even more.


I don’t think either investors or bankers or executives at banking firms ever learned their lesson about the financial crisis. They’re all in the business of trying to make as much money as they possibly can all the time. Whatever the capital markets permit, the regulatory environment permits or the business environment permits, they will push it to the max to try to make as much money as they can. I’ve written extensively over the last years about how frankly I see the problem repeating itself. The problem that got us into the financial crisis in 2007 and 2008 is being repeated now several years later. You can write about it until you’re blue in the face. Frankly, investors are buying up securities that are too risky and not getting compensated enough for the risk they’re taking.

That’s unfortunate, the way it all starts all over again. That’s part of driven by the Federal Reserve’s policy of keeping interested rates very low for a long period of time which was probably a strategy that made sense when we were in the peak of the financial crisis. Now, all these years later, unfortunately, it drives investors to take risks they’re not getting properly compensated for. That’s exactly what happened last time around several years ago and here we are doing it again. Do people learn lessons? No, they don’t. Will the next one happen exactly the way the last one did? No, it won’t. Will there be another financial crisis? Absolutely, you can bank on. It’s probably sooner rather than later.

I’m hearing you say that this is more a regulatory issue than anything else because obviously if there are certain rules and you have incentives of the Wall Street bank. They want to receive compensation and be rewarded for their efforts. They’re following rules to the best of their abilities. The regulation side of things is where the lynchpin is or am I misinterpreting that?

That’s right. Essentially, Wall Street is a Darwinian war pit where the battles are played out every day. It’s a zero-sum game. There can only be one winner as we used to say. One of the firms I worked at, “It wasn’t enough for you to succeed. Others had to fail.” Bankers, traders and corporate execs, all of those, they’re going to do whatever they can to make as much money as they can that is legal. The crime as I’ve written about the 2008 financial crisis is not what was illegal about what was legal. There’s this human nature involved. They get rewarded to take big risks with other people’s money. That’s exactly what they’re going to do. I don’t blame them for doing their business, for taking the risks that they take, for using other people’s money to do it, to produce the products they produce. What I think to your point exactly is that if you don’t have a cop on the beat like if there were no speed limits on the highway and no state cops coming after you if you drive too fast, people would drive 120 miles an hour or faster. The roads would be much more dangerous. They drive drunk. Wall Street is no different. Human nature is human nature. There are regulations for a reason. People are required to wear seatbelts. They’re required to drive when they’re not drunk. They’re required to drive and not text. They’re required to drive within the speed limits.

Do some people disregard those laws and get caught for it? Yes. Do some people disregard those laws and not get caught for it? Yes. By and large, most people obey the law and that’s what happens on Wall Street. If you don’t have the laws, if you say, “There is no speed limit. You don’t have to wear a seat belt. You can drive when you’re drunk or drive while you’re texting,” then people would probably do that. There’ll be a lot more accidents and danger. The roads will become weaponized. That’s what is going to happen on Wall Street as we begin to pull back from the 2010 Dodd-Frank Laws and the other rules and regulations that are put in place in the Obama administration. You have to recognize that when you do that, you’re allowing the animal spirits to run free, which allows Donald Trump to make claims about how great the economy is doing, but there are going to be consequences. There always are and there always have been. To think otherwise is historical and people thought that somehow the rules of economics had been lifted in 2006 and 2007. It wasn’t true as we found out in 2008 and we’re going to find that out again.

When the tide goes out, you can see who's wearing a bathing suit. Click To Tweet

There are a couple of things going through my mind based on these awesome comments and insights, which is the entrepreneur, they’re quick and they’re agile typically. They’re coming up with an idea here, an idea here and you look at the speed in which technology is allowing society to evolve. You go to the regulation side of things, it’s hard to catch up. I can’t remember which documentary it was. It was giving a snippet of the regulators. Those at the SEC in certain roles that were essentially over a certain element of Wall Street that was taking excessive risk. There’s one person in that role. I’m sure it’s bigger. The government obviously is renowned for not being able to keep up with how fast everything else is going. Do you think that is a characteristic of what’s going on or is that maybe a misinterpretation?

It’s clear that politicians certainly do not understand what goes on Wall Street. Regulators probably do, but they’re definitely outnumbered. On the other hand, there are a lot more regulators floating around these firms than there ever used to be, especially the big firms. Now that they’re regulated by the fed. There are Fed people who go who have offices at these firms. They can go to board meetings. They could look at loan portfolios. They can pretend credit judgment conversations. This is definitely a new world post-2010. Are some of that being rolled back? Yes. There are articles constantly now and fed comments constantly about whether or not there’s too much leverage in the system where the companies are taking on too much debt, which of course they were encouraged to do by the fed because interest rates were kept so low.

AT&T has $180 billion of debt now. It’s the most indebted company on the planet. Is that too much debt? Maybe if the economy stays strong, it’s not. If the economy begins to stumble, there’ll be defaults on that debt and AT&T could go into bankruptcy. It’s not inconceivable. They have $180 billion of debt. That’s a lot of debt and it’s unforgiving. GE has $100 million to $1 billion of debt. Companies are bulked up on debt in part because of interest-expenses taxed deductible so that means appealing from a tax basis and interest rates are very low and are being kept low by the Feds. Trump is job loaning about interest rates and trying to keep the Feds from raising.

The Wall Street guys are always going to be able to outrun the regulators, but the regulators are going to have the last word. They can party for a while and then they have to come with their head in their hands asking for a bailout or to be rescued or saved as happened in 2008. You’d think that Wall Street would be more contrite and want to change what they do and how they reward people. I’ve written 100 pieces about how the compensation system on Wall Street should be changed, but nobody wants to change it so it doesn’t change. That’s what’s going to lead us down into the well again. It’s not going to end. It never does. It won’t this time either. People can’t see that. Nobody rings a bell at the top of the market. Because in the end, we’re taking the punch bowl and going home. Unfortunately, it seems to come out of nowhere and people will be amazed, yet there are breadcrumbs all along. There have been plenty of breadcrumbs.

They’re seeing in hindsight once it all happens.


TWS 6 | Financial Crisis

Financial Crisis: The problem that got us into the financial crisis in 2007 and 2008 is being repeated now, eleven or twelve years later.


The smart people who prepare themselves to be safe as Warren Buffett says, “When the tide goes out, you can see who’s wearing a bathing suit.” We’re at the end of all very long bull market for both stocks and bonds. Companies would be wise and investors would be wise to prepare themselves for a downturn.

I appreciate your insight. This has been awesome. You make comments about the bond market and the common thing we saw the last several years, which is essentially companies taking on debt because of low interest rates, buying back stock. It’s essentially propped up in essence stock prices to an extent. Obviously, the consequences, loading the company with a tremendous amount of debt. With that, do you identify the bond market as one of those potential areas that could be the match for this turmoil or do you maybe see other areas that are out of sync or are unease relative to others? I’ve looked at what caused the crisis in 2008, 2009, where it was the mortgage market. Now looking at where we’re at, are you looking closely in the bond market or other sectors and areas?

If you look at the past financial crisis, it’s when the credit markets seize up, that things get bad. In other words, when people can’t borrow the money they need for a car or a house or to build their business or the money markets. If that all seizes up, if somebody throws sand into the gears of the credit markets, that’s when the financial crises are at their worst. I am very worried about that this time around. Bond prices are very high. Yields are very low and have been for close to ten years now. It’s dangerous to invest in the bond market right now. People can lose an awful lot of money even though it seems like it should be safe.

There are all sorts of excesses going on in the bond market. In the loan market, credit markets where investors are so desperate to get a higher yield because Treasury Securities are yielding so little that go, they’re taking risks without getting the proper rewards, as we talked about before. That is a recipe for disaster. The corporate bond market is now something like $10 trillion of issuance. It was $5 trillion in 2008. You’ve seen a doubling of issuance as a result of interest rates being low for so long. Bonds fluctuate in value as risks are perceived to change. Just look at the bonds of Tesla and GE bonds, it goes on and on.

Can companies turn things around and can discounted bonds be a good investment? Yes, but they can also be a bad investment. They can also go the other way and that happens often and repeatedly. I’m not sure what the catalyst is going to be. There are plenty of things that are going crazy now in the capital markets, in the debt markets. Auto loans defaults are at an all-time high. Corporate debt is at an all-time high. Defaults are relative lows and that means they can only go one direction. I’m worried about it. It could be like a broken clock that strikes twice a day too.

If somebody throws sand into the gears of the credit markets, that's when the financial crises are at their worst. Click To Tweet

The signs are out there. There are breadcrumbs everywhere. It’s just it hasn’t happened.

Nobody rings the bell at the top of the market. There are two sides to every part of the market. There’s always somebody every day, every minute. When a trade happens, there’s one person who believes that what they bought is going to go up from here. There’s another person that sold it because they believe it’s going down from here. That happens every minute of every day. The aggregate of all of the trading and all of the thinking and all of those bets is the market.

I’m not sure if you’ve read Howard Marks’ new book. I heard him speak and it was interesting where you had this whole emotion that helps human beings work in an emotional side and a rational side. You look at all the rational things that we’ve talked about. This doesn’t make sense. There’s very little rationale as far as why things continue to grow and not correct. It seems like most of that is driven by emotion and wanting more of this and more of that. Obviously, with the gains that the Primary Index has had since the financial crisis, I would say the average investor is continuing to ride the wave and don’t see that there is a crashing of that wave that is on the horizon. I think the greater the emotion builds, it will be interesting to see what happens this go around because the capital markets are a lot bigger than they were in 2007.

You can bank on the fact that it is going to happen, we just don’t know when.

I know that you’re always paying attention to this and your insight was hugely valuable. What are some ways that the audience can follow you or keep up with the analysis that you’re making on? What’s going on in the economy and in markets?


TWS 6 | Financial Crisis

Financial Crisis: Politicians certainly did not understand what goes on on Wall Street.


I have a website, WilliamCohan.com. People can follow along there. I have a new book coming out in July. Put Google Alerts up. Wherever it pops up, it will pop up. I’m a believer in organic, not feeding people what I write. If they come by it organically, that’s great. If they don’t, it’s okay. So be it.

Are you on Twitter or social media anywhere?

I’m on Twitter, @WilliamCohan.

Your insight is awesome. Obviously, you have the experience to back up why you think and perceive the way that you do. Keeping up to speed with what you continually see can be valuable for investors.

Thank you for having me. I appreciate it very much.

It’s been a pleasure. Thanks again, William. I appreciate it.

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About William D. Cohan

TWS 6 | Financial Crisis

William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch and JPMorganChase, is the New York Times bestselling author of three non-fiction narratives about Wall Street: Money and Power: How Goldman Sachs Came to Rule the World; House of Cards: A Tale of Hubris and Wretched Excess on Wall Street; and, The Last Tycoons: The Secret History of Lazard Frères & Co., the winner of the 2007 FT/Goldman Sachs Business Book of the Year Award. His book, The Price of Silence, about the Duke lacrosse scandal, was published in April 2014 and was also a New York Times bestseller. His new book, Why Wall Street Matters, was published by Random House in February 2017. He is a special correspondent at Vanity Fair and a columnist for the DealBook section of the New York Times. He also writes for The Financial Times, The New York Times, Bloomberg BusinessWeek, The Atlantic, The Nation, Fortune, and Politico. He previously wrote a bi-weekly opinion column for The New York Times and an opinion column for BloombergView. He also appears regularly on CNN, on Bloomberg TV, where he is a contributing editor, on MSNBC and the BBC-TV. He has also appeared three times as a guest on the Daily Show, with Jon Stewart, The NewsHour, The Charlie Rose Show, The Tavis Smiley Show, and CBS This Morning as well as on numerous NPR, BBC and Bloomberg radio programs.
He is a graduate of Phillips Academy, Duke University, Columbia University School of Journalism and the Columbia University Graduate School of Business. He grew up in Worcester, Massachusetts and now lives in New York City with his wife and two sons.


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Facts And Fallacies On Becoming Wealthy with Dr. Greg S. Reid

TWS 5 | Fallacies On Becoming Wealthy


Dr. Greg S. Reid, the author of Wealth Made Easy, questions a lot of the ways in which he was taught about wealth and pursuing your purpose and dreams. Dr. Reid says that many of those are actually fallacies on becoming wealthy. He shares his understandings on wealth and success throughout the decade which he highlights in his book and reveals how he mastered his own business by seeing things from a different viewpoint. As he explains why he was not bought into network marketing, he stresses how people need to understand the value of things that are already considered invaluable and capitalize on them.

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Facts And Fallacies On Becoming Wealthy with Dr. Greg S. Reid

In this season where we are talking about entrepreneurship, I have no one better to talk about that subject than Dr. Greg S Reid. He is our guest. He is the author of the Think and Grow Rich series and the Founder of the Secret Knock event. He is the New York Times best-selling author of Three Feet from Gold, which he wrote with Sharon Lechter and also Thoughts Are Things, which he wrote with Bob Proctor and Stickability: The Power of Perseverance. His new book, Wealth Made Easy, is a big paradigm shift for Greg. I enjoyed the interview and you are going to as well. There are lots of counterintuitive ideas that we bring up in some of the discoveries that he made. He calls into question a lot of the ways in which he’s taught about wealth, pursuing your purpose and pursuing your dreams that may not be as true as you think. I’m going to provide some commentary, in addition to the interview itself, on some thoughts and things that I learned from the interviews. Make you head over to YouTube and search for The Wealth Standard Podcast. You should see our channel come up.

Greg, thank you for taking the time. You’ve got a lot of stuff going on. We’re blessed and grateful to have you on. I was thinking we start off with talking about your book but why don’t you to tell us about the movie you have coming out?

For people that don’t know me, I’ve been publishing about 78 books in 45 different languages. I did one a few years ago called Think and Grow Rich “Stickability”: The Power of Perseverance. I went to a café, I sat down and there was Frank Shankwitz. He started a nonprofit called Make-A-Wish. At the end of the interview, I go, “Frank, I got to know. What did you ask for?” He goes, “No one ever asked me.” I said, “I want to be the guy who grants your wish. What do you want?” He said, “I want my story to be told so my grandkids will know I did something.” It took several years and millions of dollars from a knucklehead that knows nothing about movies and we launch nationwide in theaters called Wish Man.

What’s the URL for that, so people can learn where it’s playing near them?

You can Google it anywhere. It’ll pop up. It’s WishManMovie.com.

My niece had cancer a few years ago. They did a whole thing. She went to Europe with my brother and his other kids because of Make-A-Wish. That’s an incredible foundation so to hear that story, that’s exciting. You being on the front lines to hear it all was a huge blessing.

It’s always the stories behind the story. You’re talking about the end result. People don’t know his story when he was twelve years old and abandoned and all the different stuff he has gone through his life. The whole moral of this movie is that everyone can be a hero. If a Florida cop with no money could do one act of kindness and have a ripple effect, we can give a homeless guy a pair of socks. We can do something to be a value to other people.

It’s interesting how life sometimes starts out with us being interested in ourselves. After self-interest and after what’s in it for us, it completely shifts to the true fulfillment and achievement comes from making the most difference in other people.

Where would we get a better kick from, getting a dollar an hour raise at work or watching your kid accomplish some great feat? We always get more energy and exhilaration from other people’s success. For some reason, we’re selfish animals. Some people get selfish behavior, like myself making this movie by granting other people’s wishes and doing stuff. It’s like a two-edged sword. I know we’re talking about one of my books, Wealth Made Easy.

TWS 5 | Fallacies On Becoming Wealthy

Wealth Made Easy: Millionaires and Billionaires Help You Crack the Code to Getting Rich

The most recent one and obviously, 78 is quite the feat. I had a question that may be transitioned from the movie to the book. I know the book is taking a different spin because the title is Wealth Made Easy. You can assume what it would be about. However, from what you discovered, there’s a lot of counter-intuitiveness to what wealthy is, what rich is and what those people think and do. That’s my first question is what is your understanding of wealth and success relative to what you’ve learned from this most recent project?

Out of all the books, I’ve written and every time I ever talked about wealth and money, 100% I was wrong. I’m going to be very clear. What this book did was it gave me a new paradigm where I saw things from a different perspective. What I did is I sat down with people who are $100 million to billions. I said, “How did you do it? I don’t care about what you’ve read or what you ate. What did you do?” I realized that I could sit with people for three hours and three days. At the end of it, I go, “What you’re saying is you did this.” I reduced it down to one page. They go back exactly it. I went, “Great.” I went to the next person and the next person. Everybody’s wealth path is one page long. If you want to know how oil works or the internet or something treasure to goldmine, this book delves into each category so the regular person would go, “That’s how it works,” and that’s what we did.

What’s the counter-intuitiveness of it? It sounds like everything’s changed for you. Your understanding of what success was and wealth was throughout a couple of decades now makes a massive shift in one book. How would you summarize that in a page?

I will do it in a little bit longer because you’re getting to the end of the story. If you’re watching a movie and you’ve got to sit for an hour and a half and you get to the end of it, that’s what we’re getting to right now. What’s interesting is I sat down with one multibillionaire. I asked him, “Why are you a billionaire and I’m not? I’m just as smart as you. I take as much action.” He looked at me and said, “That’s easy. The problem is that you believe all the lies that you spread to the world. You are the person who brings people down. You are the person who keeps everyone broke and we appreciate it. Would you do us a favor and continue that message? You’re the purveyor of the greatest lie that was ever told, ‘Go find your passion and the money will follow.’ Keep making more bumper stickers and t-shirts. We love when you tell people that.”

I looked at him and said, “What do you mean?” He pulled out a phone that had a meme on it. The one of mine says, “Follow your passion and not a paycheck.” He goes, “That’s why you’re broke. Here’s your problem. You’ll find a welder who works their whole life. They’re admirable. They retire with some money. They go to a Tony Robbins seminar. They get fired up and open a yogurt shop because it’s their passion. 95% of businesses that fail the first year isn’t because they’re not passionate or taking action. He’s a welder, not a yogurt guy. What’s cool? When they go under, it’s their baby. They’re passionate. They hold on so much, so long, they don’t let go. They pull their house, their car, and their boat. We come in and buy that for pennies on the dollar. God bless. Keep that momentum going.” I go, “What are you talking about?”

He goes, “We’re a game of Frogger. We ride a log. As soon as it dips, we jump to the next log. We can never go down with the ship. We don’t care. It’s business. We capitalize on all these opportunities and we get so much wealth, we use that money to finance our passion. You guys do it in reverse. We own the coliseums and the football teams that everyone following their passion have given their lives for a couple of million dollars out in the field. It’s such a different thing. The sheiks in the desert, the Getty’s, they have no passion for crude oil. Waste management has no passion for dirty diapers and rotten cheese. They aggregate dealers have no passion for building the freeways but they built every university, the ballet, the art and everything that you know and love. Stop your thinking and change the way you look at things.”

How have you identified their forte? Maybe you don’t call it passions, but strengths or their experiences because that makes sense.

The rabbit hole that you’re about to go down to is what I used to teach and that is incorrect. It is not that. Almost everyone fell into something, ask backward and they capitalize on it. What happens is this, “What if God in the universe was very generous? What if everything we ever asked for, everything we ever prayed for, was given to us but we didn’t like the packaging so we send it away?” The only thing billionaires do differently is they don’t mind the way it comes to them. Let me give an example. If I said to God, “I need $100, please. I’ll do anything for $100.” A pickup truck pulls up in front of my car and says, “I’m running late. Do me a favor. Get all these aluminum cans out off the back. You can take them and cash them in.” It’s worth $100. You go get those stinky things out. I prayed. I asked. It was delivered. I didn’t like the packaging. I send it on its way.

Successful people have reticular activator. They say, “Be careful what you ask for because you might get it.” They’re not so particular of how those are brought. How much passion did the guy who created the cardboard box or the trash bag have? All the things that the richest people in the world did, they didn’t have passion and talents but they saw an opportunity, a desire and a need that was gone unfulfilled. They stepped in and did something about it and they’re the people that we tell the stories about.

Start looking at what other people are doing and add your own spin to it rather than reinventing the wheel. Click To Tweet

Looking at their ability to see the world that way, wouldn’t you consider that a strength that is coming from the experience? It’s capitalizing on understanding what human behavior is. People are looking for solutions but also, people pursue their passions. They’re driven by their emotions. They don’t have those in check. Experiencing what made them successful, how have you taken that and started to master your own businesses?

My entire life has changed. It’s almost incomprehensible how much it has changed in that part. It’s interesting because I started seeing things from a different viewpoint. I’ve sat down with this other billionaire guy. I said the same thing, “Why are you building on that?” He goes, “It’s because you’ll see the same situation as we do, but you don’t have the wealth mindset.” I said, “Give me an example.” He says, “Here’s a guy that wants to buy a plane. There’s another that wants to sell a plane. If you’re such a nice guy, you’re going to put the two together.” I go, “Yeah.” H goes, “You’re an idiot. Here’s what we do. We are very clear in our intention. We go to the guy and say, ‘I understand you want to sell your plane. I don’t know anyone that wants to buy one but if I find someone, will you give me a 20% commission?’ He goes back, “Yeah. Get rid of this plane.” You go to the other person and say, “I don’t know anyone that wants to sell the plane but if I find you that, will you give me free airline tickets to Hawaii once a year?” He goes, “Yeah.” It’s the exact same action except one has a wealth mind and the other doesn’t.”

It’s like the broker of opportunity.

I can keep going back. 100% of every billionaire I met did not go into a passion-filled industry. They found an opportunity and they capitalize on it. The founder of Chick-fil-A, $1.4 billion, Truett Cathy. Before he died he goes, “I had those little tiny restaurant called The Dwarf. I had two seats on the thing. I have no idea of that making this chicken sandwich would go on.” It’s the same thing for the next person and the next person. No one sat there and said, “I’m the great mobile home park guru because I have so much passion for mobile homes.These are the people that are truly the wealthy people that have changed our environment and our surroundings. I say we put our guns down and start on what is possible around us. I’ll give you an example.

I have always turned down an industry called network marketing. I was probably the biggest anti-network marketing guy in my whole life. I was 54 and I was anti. I finally got a product. I started doing it. I crushed it. They send me whole barrels of money. I tell my friends. Now, I found a new organization and I became the president of it. I’m going to get behind it full force because I see an opportunity of something I was shooing away before. I also look back and go, “How many millions of dollars have I walked away from because I didn’t like the packaging in which it came?”

Why were you so afraid of that industry? What was the mental thing going on where you are not necessarily in or bought into network marketing?

I kept seeing the same result. People would start something and build it. The companies would have a sketch and they would shift it out. People have to go back and start over. I saw the way that the industry was run. It’s interesting, even in the movie industry. When I went into it, I go look, “I cannot change Hollywood. I know nothing about Hollywood nor can I change it, but I can change the distribution.” It’s the most powerful part, but no one’s even paying attention to it. My movie is the first one in the history of the world that I know of that closed the distribution that no one ever did. When we did books, it’s the same thing. Sharon Lechter and I took Three Feet from Gold. We did a joint venture deal with a company called Barnes & Noble bookstores where they published our book, the first one in history. We did a JV deal with them. Who’s got a bigger email list, Barnes & Noble or me? I realized that by using these leverage points, amazing things and opportunities would start coming our way.

What are some other actual things that readers would gain by understanding your new perspective or paradigm?

I’ll give an example. It’s the power of dirt. It’s interesting talking to Steiner, the guy who started Steiner Sports, all those sports memorabilia. They were selling shoes like Derek Jeter for $300 because everyone wanted an autograph. They realized when there was dirt on them and they were game-used, they could see it for $3,000. When they started tearing down the stadium, he would go and buy the dirt and all of a sudden, package it with pens and keychains and made I can’t even tell you how much money. While everyone else was throwing away and taking to the dump, one other person saw millions of dollars.

TWS 5 | Fallacies On Becoming Wealthy

Fallacies On Becoming Wealthy: Using accessible leverage points brings in more amazing opportunities.


That billionaire I interviewed, I said, “How did you make your billion dollars in the dirt?” He says, “Time plus land is money.” I go, “What do you mean?” All I do is look for a town that’s growing 25% a year. Go on Google maps. You can find it anywhere. I look for Broadway, Main Street. I draw a line out eight miles and I buy the dirt. I rent that dirt to farmers who pay the lease, so it’s free. I get vegetables. As the town continues to grow, it ends up on my plot. If I’m on Main Street, that’s what I sold to the big-box stores for 800 times what I paid the billion dollars.” Every one of these wealth hacks, you read and go like, “That’s how it works.”

Seeing the future, it is a skill set that has made a lot of people a lot of money. Where does that start?

You cannot see in the future, “I’m not going to buy into that. I’m sorry.” That’s for some of these people. Other people see an opportunity and they go for it. They have no idea. If this was true, it means my space should be the greatest success story of all time. That’s not true. What we do differently from visionaries is we’re like a quarterback. We never throw the football where the wide receiver is standing. We throw it downfield and let the wide receiver run to it. We call it being kind to your future self. What we do is an actionable step now that, down the road will have the success blueprint. If you go on my stuff, I would like the most popular kid in town and that’s awesome but people don’t see that a few years ago, I started winding up and throwing the football and now it’s all coming to me. The whole idea is that I’ve been throwing a football in the field for years. Coincidentally, they’re all coming down at the same time. It looks cool, but the real realities are there was a lot of preparation behind it.

Are you saying that a visionary is important? There are those that have those type of ideas that can see things that others don’t. Yet, if it was only them executing those ideas, you’d ultimately have different results than if you had others that were part of the team helping to execute.

Being first to market is an old brand type concept from the horse and buggy days. It’s not true. Right now, no one wants to be the first to market. That’s the kiss of death. If you look at even Amazon, how great it turned out when Alibaba came, it instantly is a success. They, being second to market, put all the working things that worked for them and put right to the jump to the front of the line. When you start seeing this being first to market, if you’re smart, you should start looking at what other people are doing in having some success or failure and adding your own spin to it, rather than reinvent the wheel.

Talk about your role with the movie. I’m assuming you haven’t made a movie before, but yet you had the idea. How did you pull that off?

I didn’t have an idea. Frank, the Founder of Make-A-Wish had the idea. That’s his dream. I sat there and said, “I will grant your wish.” That’s it.

Is it safe to say that you extracted the idea from him?

It was his idea. I asked him what his wish was. His wish was to have his story to be told into a movie. I granted that wish. What I did was I said, “Sign over your life rights. The only challenge is I have never made a movie, but I will make it happen.” I had no idea what I was doing. I got on the internet. I Googled people that won Oscars and people that make movies. I went and met with everyone. I ask, “How does the game work?” I duplicated those actions and here we are. Everyone lives in this. This is my one thing. When I want to be a best-selling author, I didn’t go to people who wrote great books. I don’t want to be a great writing author. I went to Barnes & Noble. I bought every best-selling book. I called those people and said, “How did you do that?” That’s who I sought counsel from.

The only thing billionaires do differently is they don't mind the way things they ask for comes to them. Click To Tweet

When I went to Africa and climbed the summit, Mount Kilimanjaro, I did not ask a dope-smoking surfer down here to take me up to the mountain. I found a surfer that had climbed it 900 times. Wherever they put their blueprint, I put my blueprint. I follow their successful actions. Compared to these guys, I’m insignificant. In my world, I had gone and 10X it in this last year by simply taking these same actions that they’ve taught me, but doing something crazy and applying it.

Let’s add in a couple of things. I know you have a ton going on. I appreciate your valuable time. What would you say regarding the idea that very wealthy and successful people are book readers? That they are always reading and always trying to get an idea. Is there any truth to that?

It’s an absolute and utter lie. If you’re back in the horse and buggy days and you lit your house with candles, it was probably true. You see all these lying memes too. These lying memes say, “Wealthy people have big libraries and poor people have big TVs.” It’s all lies. The whole thing it comes down to is people that consume information, there are the people that are the trendsetters and the successful people. For example, I’ve written more books than I’ve probably read. I read the information every day on my phone. I get news updates. I’m pretty knowledgeable and hanging out with scientists and all these amazing people. I realize that it’s the consumers of information that are successful. It doesn’t make a difference with the modality or the medium in which you get them.

What are you looking for in that information?

One of the people I interviewed was the Founder of Priceline. We do something called info-sponging. He was reading an article one time. It’s arbitrary information. He was talking about how fruits and vegetables go bad. Once they’re done, it’s a useless product. He was reading another one about the way of travel. When the airline closes the doors, you can’t fill that seat anymore. He says, “I got something here.” He put those two together. He took two completely different things, info-sponge and put them together. That’s what we do. We’re all buying Ebony magazine. Over here, I’ll buy a Latina Light. Over here, I’ll buy Science Today and over here is Discovery Magazine. I put all this information to my head, especially stuff I’m not knowledgeable about because now I have a little bit of it and maybe I can start seeing things a little bit different. All we know is all we know. If all we do is put the same content and information, then that’s all we’ll have access to.

What are you up to next? You have your movie. You said you had a few more books that were coming.

I did a book release. It’s called The Tokens, an international bestseller. The Wealth Made Easy is crushing it. Wealth Made Easy is my favorite book. If I could recommend one book, it would be that. After that, it’s Three Feet From Gold.

You told us that all the other books were lies. This one was the one that had your paradigm shift.

It’s when it comes to wealth. The other parts were talking about passion, success and a little bit of purposeful life. That part of it is true. What I thought it was important to make money is you follow your passion to a paycheck. That’s what I wrote. It’s not true. The passion part is still there. The purpose part is still there. The wealth part isn’t there. You might get rich but you won’t be wealthy. It’s two different things. I’ve got a book coming out with Sharon Lechter. She and I wrote a book called Three Feet from Gold. We got our follow up. It’s called Success and Something Greater.

TWS 5 | Fallacies On Becoming Wealthy

Fallacies On Becoming Wealthy: The medium of how information is acquired does not make any difference in attaining success. What matters are the consumers of information.


Napoleon Hill, right before he died, was going to write a book called Success and Something Greater and never got it done. He passed away. The foundation and the family gave Karen and me that title. We have Think and Grow Rich Success and Something Greater coming out, where we sat down with amazing humans. They would give their secret sauce towards a life of sustained abundance. That comes out on September 14th in Vegas for the event. On the 15th, I get a star on the Walk of Fame in Las Vegas in front of the Paris Hotel on the sidewalk. We got a book called The Mastermind Association and it’s at MastermindAssociation.com, where we’ll teach you how to run a Mastermind group. If I went down the list, it would be too much. Google Greg Reid, you’ll love it. You’ll laugh and you’ll cry. You’ll tell your friends.

Thank you again for all of your time. Hopefully, it’s intrigued and piqued the interest of our readers. Are there any final words?

You didn’t see this coming, did you?

I always look at life as a paradox. There are so many paradoxes in life where we think a certain way but it turned out to be the opposite.

That seems to be life’s journey right now is to keep going on this thing. I want to unlearn because there’s this thing called facts of fiction. We’re taught so many things as truth, but there’s no such thing as truth. This is what we believe to be true at the given time. At one time, the world was flat. That was a truth and a fact. There was a time when you can’t catch AIDS from a toilet seat and people believe that. There was a time that Pluto was a planet. It’s the stuff that we’ve been taught over the years. Just because it’s put into our head doesn’t mean it’s true. What I like to do is unlearn and learn from myself from truth and reality.

It sounds like there was a lot of unlearning in writing this book. It will be cool to see how that influences the other stuff that you’re doing.

Thanks for having me on.

Thanks, Greg.

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About Dr. Greg Reid

TWS 5 | Fallacies On Becoming WealthyDr. Greg Reid is a nationally renowned wealth and business expert, CEO and author of Wealth Made Easy. Dr. Reid is a world-renowned speaker, filmmaker, and entrepreneur known for his giving spirit and knack for translating complicated situations into simple, digestible concepts. He has published, coauthored, and been featured in more than 50 books, 28 bestsellers in 45 countries, five motion pictures, and featured in countless magazines. Dr. Reid demonstrates that the most valuable lessons we learn are also the easiest ones to apply. He is the Founder and CEO of the – Secret Knock, an exclusive event and professional collaboration community focused on partnership, networking, and business development. Secret Knock is strictly invite-only and includes well-known executives, entrepreneurs, artists, and professional athletes. It was named a “Can’t-Miss Conference for Entrepreneurs” by Forbes and Inc. Recently, Reid was hand-selected by The Napoleon Hill Foundation to help carry on the teaching found in the bible of personal achievement: Think and Grow Rich.


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Understanding The Laws Of Human Nature with Robert Greene

TWS 04 | Laws Of Human Nature


A successful entrepreneur doesn’t exist without people. However, sometimes, we tend to have a problem dealing with others. In reality, people are social animals and it is important to know how to get along with people. Robert Greene, an international bestselling author, talks about his recent book, The Laws of Human Nature. In his book, Robert walks us through to becoming a master in whatever field we’re in and teaches us how to manage our own and other people’s behavior. Moreover, Robert shares how this book will help us reassess who we are and rethink some of our own behavior patterns.

Watch the episode here:

Listen to the podcast here:

Understanding The Laws Of Human Nature with Robert Greene

My guest is none other than Robert Greene. I’m so fortunate to get to interview and learn from some fascinating individuals. Robert Greene is right there at the top. He boasts six New York Times number one bestsellers. Those titles are The 48 Laws of Power, The Art of Seduction, Mastery, The 33 Strategies of War and The 50th Law who he wrote with the rapper, 50 Cent. He’s also the author of the book The Laws of Human Nature. A successful entrepreneur doesn’t exist without other people. I don’t believe a fulfilling life is possible without other people. The nature of a human being, our drives, instincts, emotions and behavior, have been studied by literally millions. Yet humanity continues to be rife with the dark side, war, murder, abuse, bullying, infidelity, divorce, bankruptcy, corruption, depression, anxiety and the list goes on. Even though we have made incredible strides in an array of areas, that snare still remains elusive. What does that have to do with you and what does that have to do with entrepreneurship? It’s no secret that a lot of businesses fail. That’s not the initial intention. The amount is much more than those that succeed. That ideas without execution are worthless and that execution without other people, other humans is like assuming a successful investment is a lottery ticket. Get the book, The Laws of Human Nature, by Robert Greene. Let’s go ahead and welcome my special guest, Robert Green.

TWS 04 | Laws Of Human Nature

The Laws of Human Nature

It is truly an honor to have Robert on the show. Robert, thank you so much for joining us. This is one of those amazing interviews that at least I’ll benefit from it and be excited about it. 

Thanks, Patrick. I hope I can live up to the hype.

You’ve made such a difference in my life, as well as those that have influenced me. I found your book The Laws of Human Nature fascinating. You’ve written so much. This is your sixth book. The first thing that came to my mind, as far as what to ask you, is the circumstances that inspired you to write the book and some of the elements that perhaps weren’t in the previous books that you wrote. What was the backstory to that?

There are several channels that go into what influenced the book. In Mastery, I had Chapter Four on social intelligence. The basic idea was to, as a book, teach you how to become a master in whatever field you’re in. You’re not going to be great at whatever you do unless you also know how to get along with people because we’re social animals. You could be technically brilliant. You could be a consummate computer hacker. If you offend people left, right and center, you’ll never get funded, etc. I wanted this to be an element of what you need to master. You need to master people as a skill. I got a lot of feedback from readers. They enjoyed that chapter, but the main thing was, “Robert, we need more. It wasn’t enough. It was juicy, it was tantalizing, but we need more.” I thought, “Maybe I’ll respond to my readers. I will expand this into an entire book.”

There were other things going on as well. My first book came out several years ago, The 48 Laws of Power. Since then, I’ve done a lot of consulting with powerful people, all different fields. I’ve had a lot of experiences helping people with their problems. I’ve seen these themes in which people don’t understand the basic elements of human psychology. It leads to all kinds of problems. They hire the exactly worst kind of employee based on their résumé, based on their charm and based on their looks. All kinds of problems ensue. They partner with the worst kind of business partner, who ends up being so aggressive that they push them out or they get involved in an intimate relationship with someone who ruins their life. Why are people so bad at these choices? They’re not good at understanding people. They’re not paying a deep enough attention. They’re only looking at the surfaces.

Based on Mastery and based on my experience with consulting, I thought about the deep need out there to help people understand certain basics about human psychology and what governs human behavior. There are certain patterns I’ve seen in my own life and I’ve seen in the people I deal with. These patterns are what I ended up calling human nature, unconscious forces that govern a lot of what we do that we’re not even aware of. I want to make you the reader of these forces inside you so you can break your own bad habits. I want you to be able to see them in other people so you can understand others on a much higher level and be able to influence them instead of always being frustrated by the people you’re dealing with.

It’s one thing that I’ve definitely associate it with that most people can because we tend to look at the world and assume other people look at the world the same way. Getting back to the premise of the book, what have you seen as the result of somebody who has read it and where it’s made an impact?

I haven’t gotten a lot of feedback, but I have been getting some. One of the main themes, which is not too surprising but it wasn’t exactly what I expected, is it’s making people think a lot about themselves. They’re reading the book and they’re reading about narcissism, they’re reading about envy or aggression. They’re going, “I have some of these traits in myself. I’m not as great as I thought I was. I thought that I was this nice person who’s always considered thinking about other people. Maybe that’s not true. Maybe I need to reconsider some of my own flaws, my own dark side,” my shadow side as I call it.

One of the main effects is it’s making people reassess who they are and rethink some of their own behavior patterns. I went through that in writing the book. I’m writing a chapter on narcissism and I’m going, “You’re more narcissistic than you think.” It’s an eye-opener as I was seeing traits that I was writing about in myself. The number one thing that stood out in people reading the book so far is that it’s held up a mirror to them. It made them focus on themselves instead of always pointing blame at other people. Always blaming others for the problems in their life, looking at themselves and saying, “Maybe in some ways, I’m the source of some of these patterns that are going on.” That’s been the main impact.

If you become aware of yourself at a deeper level, you form conclusions based on an understanding of what’s right and what’s wrong, what’s good or what’s bad. Does that change? Your frame of reference is as far as what life is about hasn’t changed. You’ve become more aware of yourself and maybe more of your flaws. Is there anything else? That’s going to be somewhat disappointing. This is one of the things I got from it, is more understanding of the context of life and what life is about, which oftentimes is one of those things that we’re not always aware of, at least on a short-term basis. Does that resonate with some of the feedback you’ve gotten?

You need to master people as a skill. If you offend people left, right, and center, you'll never get funded. Click To Tweet

It’s not intended to make you depressed, hate yourself or dislike yourself. It’s meant to have the opposite effect, which is a lot of the feedback that I’m getting. You’re aware of some of these tendencies that are innate to all of us, you can start to begin to change yourself. You can start getting out of denial. I have a chapter on envy, where I say that this is rooted in human nature. The human brain operates by comparing. That’s how our knowledge is formed. That’s what neuroscientists have discovered. As a social animal, what this means is not only are we comparing information from the environment but also we’re continually comparing ourselves to other people around us. If you look at yourself in the course of a day, you have to admit that you’re continually comparing yourself to your peers to how much money they make, how much respect they’re getting, how much attention they’re getting on social media, etc. You can’t help it because that’s how the human brain works. That’s where envy stems from.

If you’re continually aware of what other people have and it looks like they have more than what you have, you’re going to have feelings of envy. You’re going to disguise it to yourself. You’re going to disguise it in the form of, “That person doesn’t deserve his success. He’s not worth it. He’s not good.” You’re going to criticize them. Maybe you’ll even take action against them, without ever realizing that envy is the source of your emotions. I want to tell the reader there’s nothing wrong with feeling envy. There’s nothing wrong with being a human being. There’s nothing wrong with feeling aggressive or being self-absorbed. I want to take the guilt out of all of this. I simply want to shine the spotlight on who you are, so that you can maybe take that mechanism of comparing yourself to others and turn it into positive, which is what each chapter in the book ends with. It’s how you can take this quality and turn it into something productive and positive. If that’s the moral component or the goodness component, then that may be it.

Instead of constantly comparing yourself to others who are better than you, why not compare yourself to others who have it worse than you so that you can feel some gratitude for the success that you’ve had or the family that supports you? Look at people who have less. Sometimes the people you are envying, if you got to know them, you would realize that their life is quite miserable. They’re not as happy as they seem. On social media, people always give the impression that they’re taking the most wonderful vacations and they’re meeting the most fabulous people. If you got to know them, their lives are as boring as you can possibly imagine. Maybe there’s no need to envy them. On and on, it’s how you can take this comparing mechanism and make use of a better human being out of it.

In your experience in writing the book and researching, was there anything that you became aware of that made an impact on you, or maybe changed the direction of the book?

I always go into books with an open mind. I have a bias. My bias tends to be somewhat negative. I have a somewhat negative view of human nature. If you know my books, you recognize that. I didn’t want that to govern this book that I wrote. I want it to be open-minded. I want to read books like Steven Pinker’s book, who’s much more optimistic than I am. It’s to shed a light on to some ideas that I don’t share, but that I don’t end up branding a book that’s pure confirmation bias. There were things in the process of opening it up that did surprise me. I did a chapter on aggression. I read a lot about anthropology and the sources of aggression in human beings. It was quite surprising for me to realize that our hunter-gatherer ancestors going back thousands of years ago were violent and aggressive.

TWS 04 | Laws Of Human Nature

Laws Of Human Nature: Compare yourself to others who have it worse than you so that you can feel some gratitude for the success that you’ve had.


There’s this notion of the happy tribe member, living off the land and being so happy and all that. There were extremely high murder rates. There were wars going on, constant skirmishes, high degrees of envy, murder and violence within the tribe. I had that predisposition to maybe think that, but this was quite shocking for me to realize. A problem that we have is we tend to want to think of us humans as being these ultra-sophisticated creatures who created the internet, who are sophisticated and far removed from our primitive past. I don’t believe that. We’re still slaves to this primitive past. I kept an open mind. A lot of the research I had confirmed these ideas.

I look at how DNA and what we’ve come to understand as far as it’s concerned. There is a degree of sophistication that’s different than our predecessors. At the same time, our instinctive nature seems to be very similar. In this day and age, it seems like the accountability factor to who we should be or how we should be happy or what we should wear or whatever is much higher than it was before. We’re driven more, in a sense. At the same time, there are these natural things about us that are there. Oftentimes we consider that a flaw. Do you consider that a flaw? Do you consider these natural attributes, tendencies or drives to be what they are and not good or bad?

Nothing is good or bad. It’s human nature. The problem that we face is that things evolve back in hundreds of thousands of years ago for a purpose. We evolved as social animals that had to have an extremely tight cohesive group in order to survive because humans are physically weak. We could only survive by working within numbers in groups. We developed extremely high empathic powers where we could sense, before the invention of language, the emotions of other people around us without ever having to say anything. This viral vulnerability that we humans have, it was so much a part of our survival. It’s not very adapted to 21st-century life.

What it means is, we’re so open to the ideas and opinions of other people. We see that on social media. It becomes hard for us to detach ourselves, think for ourselves, and think rationally instead of always being moved by the tribes that we belonged to, by the heated political discussions of the people we always agree with. It’s hard for us to divorce ourselves because this is bred into us, wired into our brains. It served a function thousands of years ago. We no longer are living in groups of 30 people. A lot of the things that evolved early on aren’t adapted to 21st-century life. That’s what causes us so many problems.

You mentioned about your interactions with high-level, influential people. You see a lot of these elements of human nature at the highest levels, lowest levels, and in between. In the end, in an understanding of this, what does that give someone? They become aware that they’re individuals. They become aware of themselves. It’s not necessarily a part of an abstract group, but it’s the individual and their character, their makeup, and their desires. When a person becomes aware of that, how does life change?

You're more narcissistic than you think. Click To Tweet

Become aware of all of the laws of human nature in the whole book?

It’s how they become more aware of themselves as it relates to their human nature.

It revolutionizes them. That’s the whole point of the book. You should change everything that you do, everything that you think. It should have a radical effect on the reader. I don’t write books that are soft little, “Maybe I’ll think about this.” I want to go inside your head and change how you look at the world. Take for example, Law Number Seven about how to influence people. I argue that people are naturally defensive. Normally, you’re locked inside of your own mind. You’re always thinking about your own desires, your own wishes. You want them to fund your startup for instance. You think, “My startup is so wonderful. I’m going to give them a great pitch and they’re going to love it. That’ll work.” You’re working against human nature because people are naturally defensive. They don’t have any reason to support you. They’re not naturally your allies. There has to be something in their own self-interest.

We are all overworked. We are all overtasked in the world. We have one more person coming at us, trying to influence and telling us about our idea of, “I can’t take it.” You’re never going to realize this. You’re going to go give them your pitch and say, “That’s wonderful.” Two days later and three days later, you don’t hear anything. A week later, two weeks later, you realize they’re not interested at all. It’s because you didn’t understand something basic. The people you deal with have an opinion about themselves. I go into this in the book. I explained how that opinion is formed. We all have certain basics about how we think of ourselves. We think of ourselves as morally good. We think of ourselves as autonomous that we control our own lives. We think of ourselves as intelligent, at least relatively intelligent for the field that we’re in. Though the other aspects of that opinion that might depend on the individual like, “I am super self-reliant,” or “I’m a rebel. Nobody tells me what to do.”

If you go in there with your pitch or your idea and you somehow challenged that idea, you somehow make people feel like maybe they’re not so intelligent or maybe they don’t know what they’re doing. It’s not your intention but you’re implying it. You’re going to make them defensive instead of lowering their resistance. It’s going to make it harder for you to try and get to them. You have to understand that you need to set things up before you hit people with your idea. You need to lower their resistance. You need to validate who they think they are. People generally do have good qualities. If you validate them, if you make them feel that they are intelligent, that they are moral, they’re not going to be as resistant to you.

TWS 04 | Laws Of Human Nature

Laws Of Human Nature: We’re so wrapped up in ourselves that it takes an effort to think inside the mindset of the person that we’re dealing with and how they look at the world.


It’s simply getting outside of your own mindset and your own self-absorption. It’s thinking about the other person’s needs, thinking about what they’re missing in life, and give them validation. The whole game has changed 180% right there. You’d be shocked at how many high-level CEOs, powerful people in the entertainment industry, never use this basic idea. They’re violating that law continually. It’s understandable because we’re so wrapped up in ourselves that it takes an effort to think inside the mindset of the person we’re dealing with and try and get inside their way of looking at the world. If you’re able to do that to some degree on all of these laws that I talked about, it will change everything that you do.

Our life, in large part, is our relationships. Most satisfaction and happiness comes from that. I want to make sure that we hit on this. One of our instrumental relationships to happiness is our partner. Would you talk about the section in the book where you go into masculine and feminine, men and women?

It’s the chapter that people ask the least about. I’m trying to cover all aspects of human nature. One of the key aspects is our gender, our sex, and how we relate to it. I was deeply influenced by my research by a famous psychologist named Carl Jung, who talks about anima and animus. I’m thinking of this in reference to, and so is he, the intimate partners that we choose in our love relationships. It also affects our work relationships. In the work world, we all have to deal with men and women. Men are working for female bosses who might have been always been working for male bosses. It also influences the work world. What Jung discovered was, a man in his earliest years begins in relationship to his mother. In those first two years, 98% of his contact is powerfully physically only with the mother. That female feminine presence, her female feminine energy is different than a man’s.

I don’t care how politically correct we want to get. Men and women are biologically different. That energy from the woman, the mother, he takes inside of himself. She becomes a part of him. It has a deep impact. When you’re one or two years old, you are so vulnerable. You are so open to influence. A young boy interjects that presence of the mother. It becomes a part of who he is. It becomes a part of perhaps some of her qualities. If she’s a gentle, loving person or she’s maternal, not all mothers are alike and they don’t have to be, that becomes a part of him. He carries that within himself. As he goes through life, Jung called that part for a man an anima. It’s like a little woman that lives inside of the man that came from the mother. It can also be influenced by sisters. It’s primarily from the mother.

He carries that little mother figure within him. It influences forever throughout his entire life, his choices in the women that he wants to partner with. He may be looking for someone like that mother figure, who has that nurturing quality that he has in himself but he never developed or if his mother didn’t pay him attention. This is a common pattern. Let’s say she was narcissistic, was more self-absorbed and not such a good mother. He’s going to spend his life looking for a woman who is similar to his mother, oddly enough, who is self-absorbed in the perverse idea that he will be able to turn it around and make that relationship work as if you could go back in the past and rewire his mother. It doesn’t make logical sense but Jung, who studied thousands of married couples, found this pattern over and over again.

The human brain operates by comparing. That's how our knowledge is formed. Click To Tweet

The woman has the same thing with the man. It’s called the animus. It’s the father figure. That energy isn’t as direct and early on as powerful as the boy and the mother, but it’s still powerful. She takes the side of herself. She internalizes the presence of that man. That male can become a voice in her. A lot of animus figures that women carry are critical because a lot of father figures or men will tend to be critical of the woman. She’ll internalize these critical voices that Jung compared to a bunch of judges in her head, always judging her for her looks, judging her for not being good enough at this or that. She’ll make odd choices based on her relationship to her father. I talked in the book about Jacqueline Kennedy Onassis, who’s one of the classic figures in this. She had a father who was a total seducer, a total rake. He could never be faithful to any woman. Her parents in fact divorced. She loved him. He loved her. They were devoted. They were extremely close.

Throughout her life, she constantly was partnering with men who were the mirror image of her father. John F. Kennedy cheated on her left, right and center. Aristotle Onassis cheated on her left, right and center. They’re powerful men like her father. She couldn’t break that pattern. The other element of the chapter that’s important is to make you realize that men have a deep feminine part of their personality that comes from the mother figure. Women have a masculine side of their personality that comes from the father figure. You’re either in deep denial of that aspect of who you are. In which case, you repress it and it comes out in weird ways or you’re able to integrate that part into your character and make it something strong and powerful. A man who can still be manly and masculine but uses his empathetic side, who can use some of that kindly maternal energy from the mother, will be a better person, a better man for integrating all of these parts of his personality. I can go on and on, but this is just to give you an idea.

The male and female relationships that exist, whether it’s in the workplace or whether it’s in social circles or your intimate relationships, they’re biologically different. It’s not instinctive that a man can empathize to that level with a woman. You’re saying that, because it’s not instinctive, becoming aware of it, observing and understanding and learning about it, is going to improve the way in which you embrace your feminine side, your masculine side, vice versa and the person that you’re engaging with. What’s the significance of observing? It’s not necessarily observing yourself, your nature and what compels you, but also in all of the different environments that you’re in, being aware and observing others. If you were to sum up in one sentence, you’ll probably be along those lines from I’m assuming, what does that give you? Why is that important to somebody?

There are many aspects and many ways to answer that question. First of all, as a social human, it’s essential that you develop the skill to cut off your internal monologue and observe the people around you. A lot of people in the world, are not only finding problems dealing with people. There’s a lot of loneliness in our culture. You may be doing okay in your career, but your relationships are brittle. They’re not deep. They’re not fulfilling. A lot of it is because you’re not paying deep attention to the people around you. You’re not understanding them. You’re more about yourself and what your own needs. Other people can sense that. It creates these lukewarm relationships. Also, because you’re not paying deep attention, you’re making all kinds of mistakes in your career. Being able to get outside of yourself and observe people is essential to surviving in the world, to building better relationships, and to have more success in your career. Everything depends on your social and political skills if you’re working in an office. The moment you put three human beings together in a room, politics intervenes. Already, you have egos and you have to think in these terms. You need to be able to observe people.

Some scientists estimate that 95% of human communication is nonverbal. The way people smile, their fake smiles. It’s how to differentiate a fake smile from a real smile, how to sense when people are smiling but there’s some underlying resentment there is powerful. How people when you first walk up to them, their body language reveals whether they’re excited to see you or not. You’re missing all of that information. You’re walking around as if you had blinders on your eyes. What’s the point of being a social animal if you’re not observing? If you do not see this language of nonverbal communication, you’re continually misreading people. You think that smile that they give means they like your project, your idea or they like you, but they don’t. You’re missing that. It’s not that difficult to learn how to develop the skill. The other element of it is that being so self-absorbed is depressing. You’re always wrapped up in your own problems.

TWS 04 | Laws Of Human Nature

Laws Of Human Nature: Building better relationships are essential to surviving in the world today and to be more successful in your career.


It becomes a sinkhole that you go deeper and deeper into. Being able to observe people is like therapy. You get outside yourself. You get outside your little problems, your little world and your little obsessions. You involve yourself more deeply with other people. You will find that you won’t feel as depressed as you were. You’ll also find that people are quite interesting. A lot of the reason that you’re not paying attention is you think that you are more interesting than other people. Your thoughts, your desires are more important than others. If you reverse this and you start becoming a better observer in life, a little light bulb will go on in your head and you’ll go, “That person who works at Starbucks and serves me coffee every day, they’re much more interesting than I think they are. They have an inner life. They have weirdness. They have dreams that are strange. They’re doing things on the side that are interesting.”

People are interesting. They’re like characters in a book or a movie. That’s how I want you to think about it. We go to movies because we are voyeurs. We get to go inside the lives of other people and go, “What is that person thinking? That’s an interesting character. Is he a psycho killer or not?” We’re fascinated. Think of the people you deal with like characters in a movie. They might be a psycho killer for all you know or they might not be, but they’re interesting. Getting outside yourself will make you a better person or make you feel happier or make your life easier. It will also contribute greatly to your creative skills. The ability to get outside of yourself and inside of other people loosens the mind up. You no longer have all of your preconceptions about, “This person is good. This person is bad.” You’ll learn to relax and be in the moment and go, “I’m not going to judge this guy that I’m talking to. Instead, I’m going to listen.” It has an overall effect. I talked about this in Mastery. People who are socially aware are often more creative. They don’t have these rigid mental categories. I could go on and on, but the benefits of becoming a better observer in life are infinite.

We’ve focused the podcasting guests, interviews and topics around the idea of entrepreneurship as well as the environment of capitalism. The reason why I was adamant to have you on is that you have success and failure in business, as well as in society, due to your understanding of relationships as far as what I have experienced. With what you’ve observed with the entrepreneur world, the startup world, the business world, and the success and failure there, how do you see your book making an impact in those who either are in the process of running a business or starting a business or bringing on partners? What do you see is the impact of your book on the success of ventures in general?

It should have a huge impact. I could go through the laws. Law Number One should make you more aware of how emotions govern your decision so you can become more rational and make better decisions. The laws about how to judge people, how to judge their character, I have his chapter on character, will mean you won’t hire exactly the wrong person to partner with. You can’t believe how many times people hire exactly the wrong person to be their partner and the misery that causes. This goes back to the Bible. It’s very much ingrained in human nature. You will stop making bad choices.

I have an important chapter on grandiosity. This is a problem that affects entrepreneurs. I know because I worked for one. I was on the board of directors of a publicly traded company. The CEO was the classic entrepreneur who started from scratch. He’s charismatic and brilliant, but he wouldn’t listen to other people. He thought he had all the answers himself. He was a bit of a narcissist. That idea that you’re God and you can do anything is what destroyed him. It’s a little bit of the complex that Elon Musk has. This chapter will make you realize that success is the worst thing that can happen to you in many ways. It makes you think you have the golden touch. It makes you think that luck wasn’t involved, that other people didn’t help you, that you’re some god figure that can snap your fingers and get whatever you want. It’s an illusion. It will help that way.

Nothing is good or bad. It's human nature. Click To Tweet

I have a chapter on authority. I maintain that humans respond to a certain primal type of authority figure. It almost goes back to chimpanzees. It’s rooted in who we are. I laid out for you the paradigm for the 21st century of how we relate to authority figures and what we will consider a powerful person who has these certain traits. This is a person who is empathetic, believe it or not, that cares deeply about the employees, involves them creatively, leads from the front, and that leads by example. He’s not expecting people to do the work that he or she is not willing to do. It’s a person that has a vision. Having a vision is essential to being a leader. You can have a vision like Elon Musk and not be able to execute it. That’s another problem.

A lot of leaders in the world, with quarterly reports and all the pressures that we feel in the stock market, or if you’re a publicly traded company, are only reacting to things that happen month by month. What people want and desperately need in a leader is the ability to see a year down the road, two years down the road, to have an overall vision for where the company is headed. I preached this over and over again to that entrepreneur that I talked to you about. “Where is the company headed? What is the brand? This brand has to adapt because tastes have changed from a few years ago.” He never listened to me. The ship went down. I would’ve saved the sinking ship. It was a key element.

All the chapters are important, but another chapter deals with knowing the zeitgeist, knowing the spirit of the times. Think of the times that we live in like a wave. It’s cresting and falling. A lot of people are riding that wave, or they’re behind it a little bit. They fall back. You want to be ahead of that wave. You want to be ahead of where the times are. You want to be five or six months a year ahead of where people are going. That’s genius level. That’s a true vision. You create something like Steve Jobs created the iPad that revolutionizes the tech world because you’re thinking a year or two years ahead down the line. I have a chapter on how to read the zeitgeist and how to understand the spirit of the times. I could go through all the chapters. To an entrepreneur, this should be like a big juicy steak for them.

Robert, this has been incredible. Thank you so much for your valuable time. You could see how much you enjoy having these conversations, how much you enjoy writing and talking about things that make a difference. I’m excited for our readers to read the book. Can you give out ways in which they can also follow you, to be aware of other things that you’re working on or if you’re active on social media? What’s the best way for someone to follow you?

I have a website. It’s PowerSeductionAndWar.com. Those are the titles of my first three books, The 48 Laws, The Art of Seduction, Strategies of War. There I have links to the book that I did with 50 Cent. I co-wrote a book with 50 Cent, to Mastery, to my new book, to my Twitter and Instagram accounts. That’s probably the best resource. There’s also a link if you want to try and email me as well.

Robert, thank you again for your time. I hope to talk to you some other time.

I would love to, whenever you want. I really enjoyed it.

Important Links:

About Robert Greene

TWS 04 | Laws Of Human NatureRobert Greene is the author of the New York Times bestsellers The 48 Laws of Power, The Art of Seduction, The 33 Strategies of War, The 50th Law, and Mastery.

In his sixth book, The Laws of Human Nature, he turns to the most important subject of all – understanding people’s drives and motivations, even when they are unconscious of them themselves.




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What It Takes To Be A Successful Entrepreneur with Brandon Bliss

TWS 3 | Successful Entrepreneur


Being a successful entrepreneur takes a lot of time, hard work, and dedication. Once you’ve got a taste of success, it’s hard to go back and make everything work. Brandon Bliss, CEO of Orbit Medical, tells more what it takes to become a successful entrepreneur. Brandon talks about why it is crucial to take risks and execute your ideas to succeed in whatever business you’re doing. Furthermore, he shares some of the best books you can start reading that will help you gain wisdom to run your business. Learn more on what it takes to be successful as Brandon reveals how he got to where he is now.

Watch the episode here:

Listen to the podcast here:

What It Takes To Be A Successful Entrepreneur with Brandon Bliss

Thank you for reading this episode. You are going to get a kick out of this. First, I wanted to say how thankful I am for the response that I’ve received based on the kickoff episode. Hearing from all of you has inspired me a great deal. I’ve heard transformation stories of those who had realizations and an impact based on, “Things I listened to on the show,” that changed their life. Opportunities for business, for investment and for changing the way they manage their finances, it’s been incredible to hear those. I start to incorporate some of the ideas that have come from these interactions.

Thank you so much. Keep them coming. Leave reviews on iTunes. That is helpful because it gets the word out. Email me. For now, use the Patrick@PatrickDonohoe.com. I’ll try my best to respond to you directly. As far as feedback is concerned, it’s what your experiences have been, what you have liked, what you would like to see more of. That simple feedback means a great deal to me. I’m going to change a few things because of it. First thing, I’m going to try to do some more feedback based on my opinion of the subject matter, as well as the guest and why I have this specific guest on and also some commentary around financial strategy. There are a lot of you who enjoyed the Financial Fridays that we did last season, although we did not do them every week. There was a lot of feedback in regards to the content there. Thank you for pointing that out. I’m humbled by all of you who are taking what has changed my life and those who I know as clients. It means the world to me to know that you have taken action on certain principles and certain strategies and taking them to heart and done something about it. Thank you from the bottom of my heart.

Let me get to the guest. He’s the CEO of Orbit Medical. Brandon is someone I grew up with in Central Connecticut. I’ve known him since my childhood. I consider him one of my best friends. He has inspired me over the years. He is exemplary of this idea of our theme this season, which is entrepreneurship. Brandon has gone through a lot in his business career. It’s indicative of what happens through overcoming obstacles and facing challenges. Within business and entrepreneurship, you’re going to face the gamut, regardless of what industry it is. This is the medical industry. Specifically, medical supplies is a highly regulated industry. Oftentimes, you deal with things that are completely out of the blue.

Brandon and his passion and desire to achieve and also receive that sense of fulfillment that comes from achievement is going to be the perfect guest. We’ll probably tell some jokes and some childhood stories and probably memories that he doesn’t want to relive or maybe I don’t either. We had some great times growing up. We have kept in touch. He lives close to me now. It’s going to be awesome for you to see maybe a different side of me, but also talk to somebody that I have a great deal of respect for, that has inspired me probably more than he realizes. Let’s talk to my good friend who’s the CEO of Orbit Medical, Brandon Bliss.

For this episode, we’re talking about entrepreneurs and entrepreneurship. I always say I have special guests, but this guy is a special guest. Brandon is the CEO of Orbit Medical. Brandon and I grew up together in Central Connecticut. The reason why I wanted to have Brandon on the show is that I’ve had tremendous admiration for him for a long time, starting when I was young. Our friendship over the years has evolved in business, has provided an outlet for me to talk about my business, the challenges that I face and ideas. Brandon is a wealth of information. He has also experienced a lot of success in business and the challenges that most businesses face. We had a conversation about like, “I got to this level. How did you get to this level?”

Everybody wants to be with whoever's winning. Click To Tweet

Our parents were entrepreneurs. Our parents didn’t tell us to do this. Yet, we wound up in this situation. Us seeing each other grow up and the experiences that we had together growing up, and seeing where we’re at now are cool to reflect on. We’re going to do a little bit of that to begin, and then get into his business background and talk about what he has seen in the marketplace as far as successful entrepreneurs and what makes a successful entrepreneur. First off, I know you don’t do podcasts. I try to make it so we’re having one of our normal discussions.

I’m terrified, but I’m happy to get this one under my belt. Thanks for having me.

Thanks for coming on. Let’s start maybe along the lines of the discussion we had. Our parents weren’t entrepreneurial. We grew up in a normal, lower middle-class set of circumstances. We both chose different careers. You’re in the medical field of finance. Yet at the same time, we decided to do our own thing or at least wound up doing our own thing. As you look back, how have you pieced it together? What are some of the things that made you want to do that and why you’re doing what you’re doing now?

I’m not exactly sure why I’m wired the way I am, but it goes back even to childhood where my buddies were lifeguards, my buddies were flipping burgers and I was like, “I’m not doing that. I’m going to make way more money, open my own landscaping company, work half the time and outsource the work to my brothers or other buddies.” I’ve always not done well working for other people. I prefer to be in charge. I’m wired that way. I’ve always gravitated to that. Even out of college, I studied Finance at the University of Utah. I took a job in sales. One of my buddies recruited us. I had a lot of success. I quickly became one of the top salespeople. They started throwing equity at me so I wouldn’t leave. I got a taste of owning businesses as opposed to working for other people. Once you’d get a taste of that, it’s hard to go back. I would do everything I could to get additional equity and buy out people or take advantage of circumstances so that I had more upside. That’s what I’ve been doing. Along that whole way, I diversified as quickly as I can and started trying to get equity in other businesses and get the money working for me.

One thing that I connected, which is a similarity of us, is you are successful in football. You played football for a couple of years and looking at hockey. Sometimes the drive to excel and succeed and win translates into other areas of life. You’ve always had that characteristic. Business and excelling and succeeding come with its challenges and failures as well. It’s proportional in some cases. How has that tenacity and that drive that we experienced, maybe in sports, played into that?

TWS 3 | Successful Entrepreneur

Successful Entrepreneur: Once you’d get a taste of owning businesses as opposed to working for other people, it’s hard to go back.


It crosses over well. If you’re going to compete at the higher levels of any sport, you have to have an edge. You have to be super competitive and you want to win. You hate losing. If you can translate that, you bring that into your business, compete at that level and make your competitors nervous about going up against you. You keep your foot on the gas the whole time, innovating and finding better ways to compete. Usually, the outcomes are positive. You capture market share and you retain talent. Everybody wants to be with whoever’s winning. That has served me well here. I was much more successful in high school in sports than I ever was in college. I tried hard. The time you have to put in, the dedication, the hard days, the pain you feel, all that stuff will help you take the punches when you start businesses or you’re trying to get companies to the next level. Sports will set you up. There are many setbacks in sports. There are many injuries or disappointments or heavy hard losses that you’re going to experience in that business. You’re going to fail. You’re going to get punched. You’re going to have three snakes coming at you at once. You’ve got to maneuver through it and be tough and not give up. If you’re tough, you win sometimes.

With businesses, you’ve had more experiences here. When I see success in somebody, an entrepreneur or a business or an investor or someone who’s successful in general, you tend to have two camps. You tend to have those that have only experienced success. You have those that have experienced a proportional amount of hardship. What I’ve seen from that point going forward, the failures I tend to see are those that have experienced lots of success, get punched in the face and don’t know how to react. As you’ve looked at other businesses and as you’ve been involved with your own and employees in general, where have you seen that dynamic?

It reminds me of that E-Myth book where everybody wants to have some success but works for someone else, and thinks they can duplicate it and do it elsewhere. There are a few experiences in my life where I’ve seen people go down that path and crash and burn and I think about why that happened. It’s easy to read books and maybe watch other people do things. If that individual, that CEO, that founder can’t surround himself with the right people, if he can’t execute on the plan and get enough cashflow coming in to survive until he can figure out exactly how to compete, most of the time it doesn’t work. That’s why many businesses fail. The number of people that can execute on that are few and far between. There are a lot of people with big ideas and can work in a big organization and contribute and do well. To take risks and the punches and to go off and do it on your own and then execute, if you haven’t done it or you haven’t been part of someone that’s done it and you’re right there, it’s hard.

You look at these tech startups. I’m involved with some of them. I’ve put money into them. This is my tuition in this world. I’m not successful in investing. These are your subscription-based tech companies that are doing rounds of funding and trying to hit it big. Has that founder done it himself? Can he raise the capital? Can he execute? Can he hit the different milestones that they need to get the scale so that someone will acquire them? That’s hard. Most will never ever do it. I learned that the hard way. I learned that in the process of investing in them. It can be applied to all different businesses. People may even have passion, but if they cannot connect the dots, if they don’t have those dynamic chameleon-like social skills to be able to put it all together until the cashflow stabilizes, it doesn’t work.

From a people perspective, since we’re young, you couldn’t work for other people. That’s oftentimes the cause of people going out on their own. They can’t work for this person. They can’t work for that person. Talk about your experience with understanding people. An entrepreneur that goes out on his own, that can’t work with other people is another big red flag. Even though you can’t work for a boss per se, how have you seen the ability for successful entrepreneurs as it relates to the relationships and communication and having people that are part of their organization?

If people are interested in your opinion, they'll ask. Otherwise, you shouldn't offer your counsel until they're ready to listen. Click To Tweet

I was in bed watching The Profit, this CNBC show. You see this guy, Marcus, he goes into these businesses. He’s dealing with entrepreneurs that are most of the time rough around the edges. They have not been able to scale or execute or make any money. They’re in dire straits. He comes in and puts in his people and his processes. He’s got the psychology thing understood. He knows how to get people in the right lanes and get it going. It was awareness. Most entrepreneurs, a lot of them like me, Alpha male, Type-A-driven, athlete, they can only take businesses so far unless they get the right people around them and step back and stop controlling everything and become aware of where they’re good and where they’re not good and empower people to scale. Some guys or gals can become aware of that. Other ones, it’s a disaster because no one ever helps them. They don’t engage a coach. They don’t engage a mentor that will open their eyes to the next level of what has to happen to get to the next level.

I’ve had partners like this. I’ve had phenomenal sales guys that have equity in a business, that grew it, scaled it but it topped off. The ops weren’t where they needed to be. They ran out of money, the investors pulled and they could not get outside of themselves and get the people on the team to continue to the next level. It comes down to how coachable is that person and how grounded and how stable. Are they emotionally stable? If they’re not, if they’re erratic, if they’re irrational and they’re all over the place, people eventually don’t want to work with them.

I don’t know if you’ve ever read Ego Is the Enemy by Ryan Holiday. That’s such a good book. He’s written a few books, but his two primary ones are Ego Is the Enemy and The Obstacle Is the Way. He’s an incredible writer. I went back and read a few parts of the Ego Is the Enemy. That’s one of the biggest dangers. When you succeed, it’s naturally ingrained in us. It’s like, “I succeeded. Look at me.” That’s one of the most dangerous periods of time too. When you reach that status, you don’t want to experience the other side of the spectrum. When you hit that status, that’s when you have a tremendous amount to lose because nobody likes the person that is masking failure. Even though you’ve achieved a level and in order to achieve the next level, you’re still going to experience failure. You’re still going to experience challenges. There’s going to be new. If you start to equate success with not failing first, it’s going to be a slippery slope.

This has been my experience. My biggest failures have come from making a mistake where the organization is failing in certain aspects and masking it. It starts to hide certain things because people know. There’s this power of vulnerability, especially from a leadership perspective. If people know that you’re fallible, people know that you fail and that you’re okay with it and you realize that’s part of the equation, it makes them comfortable as well. What I’ve connected is that my failures often come from me doing things that I should not be doing. An entrepreneur or a business owner has certain attributes and characteristics and specific roles and responsibilities attached to that. If they start to deviate outside of that and do things they shouldn’t be doing, especially if they’re other people’s responsibilities, that is where the whole ecosystem starts to break down.

TWS 3 | Successful Entrepreneur

Ego Is the Enemy

This company I’m CEO of has 140 employees. I’ve grown up with this company. I was part of the original team in 2003 that started it. I’ve gone all the way until now in the same company. We’ve grown as leaders and failed over and over it again as we figure out how to make money. We lie to ourselves. We pretend we don’t have problems. We turf build. We create silo. We do all stupid things that hurt the business and prevent us from growing and doing what we need to do. Getting rid of that behavior or being vulnerable and admitting, “I wet the bed there. I totally messed up. This is the outcome. I want to share that with you as a team so that you don’t make the same mistake I did. Let me fall on the sword here,” people love that. If people are more willing to say, “I need help here. I’m not the right person for this position. I need to bring somebody in,” we can start moving forward. If I had learned these lessons several years ago, I’d be well-off. I’m not as well-off as I wish I was.

The point is there’s no way you would have understood that unless you went through the experience to be aware of it.

I beat myself up. In hindsight, “I should have done this, this and this or I could have executed this turnaround quicker if I would have done this, this and this.” It’s unfair for others and for myself to beat yourself up over that. There’s a lot of could-haves and should-haves. I wish I learned the lessons quicker so I could be better and faster. A quote came to my mind. I like Dwayne “The Rock” Johnson. In my office, my favorite quote I have in a big frame wall says, “The wolf is always scratching.” He tells a story when he was young, they were in Hawaii. He was poor. They couldn’t meet their rent and the landlord was always coming in to knock on the door and ask for the rent. They were close to eviction all the time. He’s done well now, but he’s taken that same fear and used that as a weapon or as motivation in his life to never ever take his foot off the gas, to stay hungry. He says, “The wolf is always scratching.” That means somebody’s always trying to knock him off his horse. Someone’s always trying to beat him, be the next best actor, beat him in this role or that role. He’s like, “You have to stay on edge, hungry, competitive.” In my company, we use the word 212. You have to keep it at 212. That’s the boiling point of water. It’s that extra degree of intensity that allows you to be super competitive and hard to beat. If you’re an entrepreneur, you’ve got to keep that edge somehow.

This is from a principle standpoint. Everyone wants to be successful. It’s naturally ingrained in us. It’s not this one-time event. It’s something that happens over and over. Once a person gets to one point, they may achieve something but they’re still thirsty for the next achievement and the next one. The sooner you’re aware of that, the much easier the path is going to be. The point of me explaining that is entrepreneurs don’t have to mean to start a business. It doesn’t mean that you have to go out on your own. It doesn’t mean you have to build a team. It’s also important to understand that it’s desiring to be successful and knowing that it’s okay to be successful, but success isn’t the same for everyone. How, in your business, have you helped employees feel that sense of success? What I’ve discovered is everyone has specific talents and strengths. We’re all different. Every human being is different. As you discover those, as you become aware of those, especially as an employer, as you align the role and responsibility of employees to those strengths, that’s where you tend to have the most amount of happiness and success. My question to you would be, what are some of the ways in which you’ve discovered your own strengths and pinpointed those and focused your role and responsibility around that, but also for employees?

I’m not a TV guy. I try to read as many books as I can get my hands on. I notice you have a nice library. I read a ton of books. I try to get as much knowledge as I can from people that have already gone down this path and hear from their failures, their successes. I try to adopt some of those things. That’s one thing. I made the plunge and engaged with coaches and consultants, mentors. I have some mentors that don’t charge me anything but have been kind enough to take me under their wing and give me pointers. I try to meet frequently with them and have candid conversations with me in what my personality type is like and where my roadblocks are, what I can’t see exactly as clear as I need to.

I pay for a coach that gets into all my business and helps me understand and interviews my network and figures out, “This is what you think your problems are. This is what the people closest to you think your problems are, including your wife. You’re lying to yourself if you think this isn’t true.” That’s a hard pill to swallow, but you want to experience growth. That’s what you have to do. You have to be willing to work on yourself harder than you do at any job. Hopefully, in that process, you recognize what you were born to do, what are these natural strengths that you don’t have to work that hard at developing, and stay in that lane as much as you can. There are a lot of guys that have written a lot of books that are way smarter than me. I’ve read that over and over again, but it didn’t sink in until the coach is analyzing your personality profile and reviewing what your peers or your network are telling you.

Be willing to work hard and sometimes long in the beginning. Later on, you can balance things correctly. Click To Tweet

You’re like, “I need to stay in this lane and I need to delegate. Even though I can do this person’s job better or do that same role better than they can, I have to discipline myself to step out and be okay with them doing it their way and stay out of their way.” As much as that’s hard for me because I want to coach them and tell them how to do it and follow up and repeat myself over and over again. It does no good. They have to do it themselves their way. If they are interested in your opinion, they’ll ask. Otherwise, you probably shouldn’t offer your counsel until they’re ready to listen. That’s what I’ve done. You’ve got to work on yourself, become aware of where you’re supposed to do, your strengths and then stay in that lane as much as possible and supplement the other parts with good people, attract the best people in each of these different marketing, sales, operations and finance and get them what they need and stay out of their way and support them.

Have you ever heard of John Boyd? He’s one of those early personal development business guys. He was a Vietnam War pilot. He had this business theory called OODA Loop. It’s a feedback loop. OODA is an acronym. It stands for Observe, Orient, Decide, Act. The observation comes from the feedback. In war, what he would do is he’d observe all the feedback that’s coming at him, whether it’s instruments, whether it’s where the planes are. Orient himself as it relates to what’s going on in the environment, make a decision on what to do, act and keep on repeating it. The idea is most people hate feedback. They’re afraid of what they’re going to look like if the feedback isn’t good. At the same time, feedback is feedback. If you get that feedback, you’re able to orient yourself appropriately and then make a decision and act and continue to do that.

Oftentimes, we’re our own feedback. We lie to ourselves. We say things are better than they are. We say, “I’m good. They’re not. It’s their fault, not mine.” We don’t take responsibility. There are some human tendencies there. As it relates to employees and feedback, everyone does a job and they get results from that job. I have discovered that there is a way to help a person understand that there are strengths and good about them and that their level of happiness and success and fulfillment is when they’re doing what’s in that zone the majority of the time. The only way they can discover what those strengths are is by taking assessments. I’m not sure which ones you’ve done in the past. There are a million of them out there: Myers-Briggs, StrengthsFinder, Gallup. There are ways in which we can discover things about ourselves and look to the past and get the feedback. The sooner we can accept the feedback and the sooner we can accept that there are a lot of things that we could do but there are only a handful of things that we’re good at. Those good things will align with our happiness and success, the sooner you do that, even before you become an entrepreneur and do your own business, discovering that is going to give you what all the stuff that you’re looking for anyway.

In the end, it’s like, “Is it a pile of money that you want? Are you willing to sacrifice 30 years of unhappiness to get a pile of money so that you can be happy? Is it figuring out a way to be happy right now and be successful right now?” That’s one of the feedback I got from a listener was in relation to the definition of wealth. She was referring to Dave Ramsey. His programs and people are wealthy at the end of these programs. They didn’t go on vacation. They drove a five-year-old Camry for many years. They took the bus and sat next to smelly people. They vacation at the Holiday Inn. They sacrificed all the happiness to have wealth, which is a pile of money. I don’t think that’s wealth. Having a great experience, doing what you love and being happy in doing that is the true measure of a successful entrepreneur. It’s utopia-ish. That’s not realistic, but the reason we’re doing this season is that everyone has the drive to be successful, to achieve wealth, to achieve those levels. The sooner they can understand the principles behind it, the sooner they’re going to be able to take some action and get some results. 

Figuring out that why like, “What it is you were born to do? Who are you supposed to become? What drives you to the deepest levels of happiness?” each individual person’s going to have to ask themselves those questions and seek those answers. I’m in the middle of my journey, so I don’t have much to say on that. I’m more aware now than I was even several months ago in thinking about those bigger deeper questions. I’ve got teenagers in my house. I’m turning 40. I have some years left and I want to accomplish some things. I want to be successful. I thought I wanted this pile of money, but I realize that a pile of money doesn’t do much. I’ve got money and it doesn’t give me the fulfillment that I thought it would. What is it that I want to do with the strengths and with the time I have? How do I give back? How do I create jobs and bless other people’s lives?

TWS 3 | Successful Entrepreneur

Successful Entrepreneur: You go to work on yourself, become aware of what you’re supposed to do and your strengths, and then stay in that lane as much as possible.


I’ve got mentors and coaches that have more years of experience, more financial independence than I do. I’m listening to their philosophies carefully and trying to decide what mine will be. It’s a cool journey. I enjoy the ride. It’s fun. Anybody that wants to start a business and go through it, even if it doesn’t work, it’s still an awesome experience. As long as you are responsible with that risk and you’re not putting your family’s life in jeopardy and you have a side hustle or side business that may grow into something bigger, then go for it. That’s great.

That’s part of the growth cycle.

You’re in America. It’s the best place in the world to do that. You might as well take advantage of where you were born and the opportunities and access to capital here and do something.

Let’s end with some of your favorite books that have inspired you, aside from my book. I’ve told the story before of a good friend introduce me to Rich Dad Poor Dad. That was you. You told me, “You need to read these two books.” It was Rich Dad Poor Dad and Millionaire Next Door. I read them both. I was like, “I like this one. This one sucks. I don’t want to drive some 1975 Chevy for the rest of my life.”

I was the opposite. Kiyosaki and his stuff, it was great. It helped shape my way of thinking. In a different life, I should have been an investment advisor or wealth manager. I enjoy personal finance and studying the strategies. I’m self-taught. That’s why Millionaire Next Door and Millionaire Mind hit me hard. I was like, “I could do that.” I grew up blue-collar. I didn’t have everything handed to me. I’m self-made. I connected a lot with the real millionaires in America and identified with that. I said, “I can live this way but be comfortable and make sure I’m investing and saving and building assets so that I can have fun, live life and be happy along the way, but also accumulate a bunch of wealth.” I do love that book.

Create an environment of respect where you treat people how you want to be treated. Click To Tweet

At different phases of my career, different books have impacted me. When I first became CEO in 2011 or ’12 of this organization, we had gone through a tough situation. I was thrown into this massive adversity. I read the Zappos book, Tony Hsieh and his group, Delivering Happiness. I was creating a culture in a business. His culture was awesome. I tried to duplicate some of his things. That book had a big impact on me for a number of years. Ready, Fire, Aim is a sales book. It taught me how sales is the lifeblood of any business. If you’re going to get anything right, get sales flying through the door. Revenue buys you time to fix operations. I came from sales. I started in sales. I had a passion for sales. I was trying to teach myself how to be a CEO, which is a challenging transition. I’ve taken that to this company and to the other companies I’m involved with. I don’t care about all the other stuff until sales is like, “Don’t mess with their juju. Get them their comp plans. Get them in a good place where they’re bringing revenue in.” That book hit me at the right time.

Michael Masterson is the author. I told the story in the book where I worked with one of his companies. I told the story when I first met him and my experience in his office in South Florida. He’s an amazing business person. That’s a powerful book, Ready, Fire, Aim.

I read all the Tony Robbins books, all the Dave Ramsey books, including his last book, where he talks about the last step, “Once you pay your house off, this is how you build your legacy.” I enjoyed that book. Brian Tracy and his books are always good, the mindset books.

What do you consider are some of your driving business principles? A driving business principle could be courage. It could drive or tenacity. It could be customer first. As you’ve looked at the evolution of your business, what do you consider are some of those top principles?

TWS 3 | Successful Entrepreneur

Ready, Fire, Aim: Zero to $100 Million in No Time Flat

At Orbit, this company I work for, we have what some people call a credo or your core values. Deciding that upfront is a huge part of it. The words that we have on ours tell you who we are and how we think. 212 is one of those little words on there. You have to be willing to work hard and sometimes long in the beginning. Later on, you can balance things correctly. You’re taking care of business at home so you can take care of business at work and be your best without distractions. That’s important. It’s coming together as a team and creating an environment of respect where you treat people how you want to be treated. In our company, we don’t use bad language. We’re conservative. We don’t yell at each other. We have crucial conversations, but we try to have a high level of respect so that they will pour their heart into the business. It’s a win-win for both the employee and for the management team and the company. That’s another one, continuously improving.

There’s this guy I studied for years. Jim Rohn is his name. He had ingrained in my head to work harder on yourself than you do at your job. We have continuous improvement. We want to continuously work on ourselves, knowing that there are better ways of doing everything we do. We haven’t discovered them yet. Every year, we find more and more nuggets that we should have found much sooner that would’ve allowed us to monetize our ideas so much quicker but we didn’t. It’s that culture of continuous improvement and getting people comfortable working on themselves and not sensitive about it or not willing to do it like, “That’s hard to do.” If you can create that culture, your business can evolve quickly. Those are a few that come to mind.

In the beginning, if you’re a startup, you’ve got to hustle. You’ve got to bootstrap. You’ve got to work extremely hard until you have enough contracts, enough cash coming in the door, and then you stabilize things. You work on efficiencies. Jim Collins books. Those are other books that had a big impact at a certain period in my life or How to Win Friends & Influence People. Those ones come to mind. They’re classics. You’ve got to read the Covey books. You’ll crank the efficiency. You’ll squeeze that wrench and become more efficient over time, but you got to hustle in the beginning.

The hustle comes first. The efficiency, there’s never an end to it.

The last thing that I feel important to say is the best leaders that I’ve been around have this arrogance about them. They also have this humility where they realize that they need to get people around them and they need to stay in their lane. I’ve learned that these last few years as we’ve failed in a lot of different areas. We tried things and fell on our face. It did not work. I go before my team and say, “It was an awesome, valiant effort but a bad decision. It’s my bad. My tail is between my legs. Let’s course correct and go a different way.” You’ve got to be okay with that. Some of my most successful partners in some of my businesses, you’ve got to learn from them, ask them questions, take their strengths and shorten your learning curve so that you can be more effective quicker. Instead of trying to learn it yourself and trial and error every single time, you’ve got to shorten that gap with better people around you. Get your network where it needs to be.

We’ve talked extensively about this over the last few years. There’s a turning point in business. When you look in others, you look more for their failures then you look for their actual wins, not from competition or, “You failed, therefore you’re not relevant.” It’s the lessons that can be learned through somebody going through failure that is profound. You taught me through some of the stuff that you did about certain insurance that you can get for these events that could protect you here would save me in a few different areas. I now look for where people fell short and what they did because of that and where they succeeded. You don’t know what you don’t know. Leverage comes in many different forms. One of the best leverage, especially for entrepreneurs and business owners, is that you look where others have failed massively who came back. You don’t want to find the people that failed and gave up. You want to find the failure where they came back and why, what did they learn, what were those lessons.

We can continuously work on ourselves, knowing that there are better ways of doing everything we do. Click To Tweet

They were humble enough to share those with you. That’s why these mastermind groups and these groups come together, you can learn from people that came back, beat the odds and now are sharing their story and helping other people. That’s where I’m at in my career. I’m trying to surround myself with these winners that can help me avoid some of the mistakes. At this size of my company, I’m trying to scale it to the next level. Utah is cool. There are a lot of good entrepreneurs here, a lot of people that take big risks. There’s learning. It’s energizing. It helps me keep my saw sharp and stay hungry and remember the wolf is always scratching. Any success I’ve had, it could go away quickly. I need to keep pushing and taking the punches, moving forward. Hopefully, at the end of the day, I’m happy and loving life and doing what I want to do.

You did a great job for your first show.

I’m grateful that it’s done and behind me. In the next one, I promise I will be more prepared and hopefully say something that’ll help your readers.

We’ll have you on again for a second one.

Thanks for having me.

TWS 3 | Successful Entrepreneur

Successful Entrepreneur: Surround yourself with winners that can help you avoid some of the mistakes.


Thanks for reading. Thanks for participating in this season. We’ve had some guests that are in different fields and different positions of life, talking about more of the philosophical points of entrepreneurship. This is a practical show. In the coming ones, we have some cool guests. Both of Milton Friedman’s sons will be on. Milton Friedman was the Founder of the Chicago School of Economics and wrote a lot of books in relation to freedom and capitalism that play right into the idea of entrepreneurship. This season is going to be awesome. I hope you can take what you’re reading and apply that, even if you’re out of business or working for somebody else. Apply some of those principles and taking action on that, whether that’s discovering more about you, whether that’s understanding the importance and dynamics of relationships, especially professional relationships. I hope you got some nuggets of wisdom. I can’t wait for what you have in store for the remaining episodes of our seasons. Thanks for your support. Brandon, thank you. We’ll see you in the next episode.

Important Links:

About Brandon Bliss

TWS 3 | Successful EntrepreneurBrandon Bliss is President and CEO of Orbit Medical, a large home medical equipment company. He started with the company as an entry level sales representative and was made partner after only two years. He has been the President and CEO since 2011. Brandon has extensive experience in start-ups, business management, project management, employee development, recruiting, sales, and operations. In his current role, he works with every department of the company as they continue to expand and open new Orbit Medical offices across the country.

Brandon lives in Salt Lake City with his wife and their five children.


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Community: The Third Pillar Of A Successful Wealth-Creating System with Raghuram Rajan

TWS 02 | Community


The development of every country is different because each country has a different set of resources, strengths, and weaknesses. Raghuram Rajan, one of Time Magazine’s 100 Most Influential People, goes in-depth on why community matters. As he dives into the three pillars of the most successful wealth-creating system, learn how Raghuram views entrepreneurship, intrapreneurship, and the individual development now and then. An author of three bestselling books, he gives his insight on the wealth gap and the rise of poverty, how communities see things differently and make a subsequent change, and the status of today’s central influence.

Listen to the podcast here:

Community: The Third Pillar Of A Successful Wealth-Creating System with Raghuram Rajan

The world is changing daily. New technology, businesses, toys, games and movies, yet there is a growing concern about the gap between the wealthy and the poor. Presidential candidate Andrew Yang proposes UBI, Universal Basic Income. Alexandria Ocasio-Cortez proposes sweeping centrally-driven reform, but it begs the question, “What is the root of the problem? Why would we give the government even more power when their initiatives of the past have always fallen short of expectations?” My guest may be unfamiliar to most of you, but his resume is beyond impressive. He was featured in Inside Job when he was Chief Economist at the IMF, International Monetary Fund. It’s where he openly challenged Alan Greenspan, then the Chairman of the Federal Reserve, at the iconic Jackson Hole Economic Summit in 2005. The challenge was a controversial paper he wrote that cited the excessive risk-taking of certain investors with no corresponding consequence. He was scoffed at by almost everyone there but was vindicated when the world financial system almost collapsed because of what he claimed.

He was named as one of the 100 Most Influential People in the World by Time Magazine and has written three bestselling books, Fault Lines: How Hidden Fractures Still Threaten the World Economy, Saving Capitalism From The Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity, and The Third Pillar: How Markets and the State Leave the Community Behind. He’s Dr. Raghuram Rajan, a former Governor of the Reserve Bank of India. He’s also the former Vice Chairman of the Bank for International Settlements. He is the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago.

This season, we’re talking about entrepreneurship and intrapreneurship, the development of the individual and the difference they can make in their own life and the life of others. I felt that Dr. Rajan’s perspective of the role of community as part of the global landscape is compelling and it reinforces what individuals can achieve in a certain environment. The wealth gap and the rise of poverty is an issue. The typical narrative is that the society safety net, i.e. welfare and money is the solution. That method is easy but ultimately, it’s a Band-Aid, a short-term solution if anything. The lasting change for all individuals requires a mindset change and only the individual can do that. Not a handout, not a paycheck that they don’t earn, but them themselves making that mindset change. I hope you enjoy this second episode of season two of the show. If you like it, don’t forget to spread the word. Leave your review in iTunes and please share this episode on Facebook, LinkedIn or Instagram and get the word out especially for Dr. Rajan and his book.

It is such an honor to have Raghuram Rajan on the show. I’m excited to be discussing your book, but also discussing your perspective on where we stand as an economy and a society. Thanks for taking the time to join us.

Thanks for having me.

You have such an impressive list of accolades. Where did your drive to pursue the career path that you’re on right now come from? What were some of the defining events in your life that impacted the way that you see it?

Different people have different views on where you are. Where I have contributed has been in the area of both economic theorizing and research as well as economic policymaking. If you look from the beginnings, I would say it comes from growing up in a poor country and asking, “Why on earth are we poor? What is it that we’re doing, which keeps us this way?” I had been to other countries that were much richer and trying to figure out what the difference was. It certainly wasn’t the caliber of the people. It seemed to be something else that was making a difference and to that extent, that was in many ways the motivating force behind getting into economics.

TWS 02 | Community

The Third Pillar: How Markets and the State Leave the Community Behind

My wife is from a third world country and when you live in certain circumstances, you tend to accept the circumstances as they are, but once you see the contrast, that’s when those questions begin. What are some of the general conclusions you came to as an answer to that question?

It’s an evolving process. “The question’s always remained the same. The answers change.” I’ve seen the answers change to this question, “Why are we poor?” The answer’s changed over my lifetime. I have a somewhat different set of answers than I would have had as a twenty-year-old. As a young person, you think it’s all about some people having appropriated all the fruits and that’s part of the answer, but it doesn’t explain why they need to keep it for themselves. Why there aren’t more opportunities for everyone else. The easy answer to that point is let’s tax the rich. Let’s spread it all around and we’ll be fine and then you realize the answer’s a little more complicated.

You have to figure out how you create opportunities for everybody. That’s to my mind the real question. How in every country do we create the possibility for everybody to reach their limits? That means first creating capabilities in people. We’re not born as fully-fledged adults with a Ph.D. degree. We acquire all of this on the way. How do we create the environment? That’s where my book on the community, how do we create an environment that enables you to get to that place? Once you have those capabilities, how does the system create incentives for you to use them in the best way possible? How does it make sure that some people don’t appropriate most of the fruits and it’s more widely spread? How do we keep a level playing field both at the beginning, but also along the way? That seems to me the systemic questions we have to answer. It’s not clear to me as I grow older that it’s a menu where we pick pieces from the menu, “I like this, I like that.” It seems more like an equilibrium where a bunch of things happens together and you have to make compromises. “I like this and I like that, I don’t like something,” but that’s part of the reason or that’s how you enjoy the things that you enjoy. You have to give up some other things for that.

I want to talk about some of your past and some of the experiences that you’ve had over the last several years, specifically you’ve been in the positions of authority and influence. Let’s dive into The Third Pillar book that you came out with because I think they all tie together. Would you mind explaining first what the pillars are, specifically what that third pillar is and why you decided to focus the book around that pillar?

To some extent, I was looking at what I thought was possibly the most successful wealth-creating system we’ve had in history, which was the postwar liberal market society. That has three words, liberal, market and I would say, democracy is the third word. Liberal means the state which allows people to flourish. A state which is limited but does what it’s supposed to do to maintain law and order. The market is well understood. That to my mind is the second pillar. There’s society, there’s a community working through democracy to keep the system free, fair and open to everyone. The third pillar in my view is community, but it also implies democracy. It also implies a broader society, which essentially works together.

When you have these, you have the conditions for success as a society. Some people want democracy, but they don’t want markets. Some people want government and democracy, but they don’t want markets. In my mind, the three hold together. The first part of the book is trying to tell you why the three fit together. For example, an independent private sector flourishing in a competitive market is important because it acts as an independent source of the bar. It balances the mighty bar of the state. That balance is important, otherwise an overweening state has a tendency of becoming authoritarian. No matter what democratic structures you have, the state which is unbalanced by other parts.

Look around the world. When you see Turkey led by Erdoğan who has few constraints on his authority. You understand the private sector in Turkey is not much of restraint and understandably because the state controls many levers over the private sector, whether its ability to take away credit or its ability to refuse permissions here and there. You need a more open, flourishing competitive market where you can have the likes of the New York Times or The Washington Post holding the administration in check. You can have a Fox News holding the previous administration in check. You need these independent private sector powers. I’m not saying it’s ideal in the United States, I’m saying that the private sector is more independent than the other countries.

Your perspective is interesting, but I also believe it may not be the perspective that’s held by everyone. You have enjoyed a seed at seeing the world from many different places. I look at those that are in the community and how they’re viewing the challenges and the imbalance because most would agree that there’s an imbalance. When it comes to the environment, what you and I understand as the best environment and what a person that’s had no experience leading Central Indiana or Central Florida, having a limited perspective on things, they would want the same thing in the end. Yet they’re all disagreeing on the environment because that’s where you come in with a lot of AOC and Bernie Sanders and this notion of communism, which is a community. It comes to that third pillar. How has your experience over the years shaped the perspective on how strong you feel about a specific type of environment to allow this third pillar to be as influential as the other two pillars essentially?

How well you will do income-wise is not the same thing as how well you will do happiness-wise. Click To Tweet

It’s not my feelings. What is clear even in the United States, which is a country by many counts doesn’t emphasize the community anymore. Even now, you find that community matters. Some powerful work by Raj Chetty, an economist at Harvard, shows that which community you grew up in essentially determines what your income will be for the rest of your life. He does this by looking at kids that move between communities. You moved from a community which is low down on the performance scale to a community which is much higher up in the performance scale. It makes a world of difference in your life chances. Community matters even in the United States, where some people would argue the community is deemphasized.

Why does it matter? Because it gets you the start in terms of your early education, the early schooling you go to, the values you espouse, your identity, your sense of who you are and your ambitions. You talked about some places in rural Indiana, the ambitions of kids there and I’ve talked to a bunch of them are quite different from the ambitions of kids in New York City. In that sense, it does matter and it does set how well you will do going forward in your life. How well you will do income-wise is not the same thing as how well you will do happiness wise. There are differences between the two. In general, if we want capitalism to work, people, wherever they are in the country, should have the feeling that it works reasonably well for them. They’re not doomed right from the beginning because of where they started.

That’s our challenge because the requirements for participating in the capitalist economy have been increasing because of technological change. The skills you require are far higher than the skills a kid required 100 years ago. A high school education no longer cuts it. How do you get the skills that you need in the communities you’re growing up in? We can’t bring everybody to San Francisco and New York City. You have to have much more community-centered development. The problem is that it’s a vicious circle. When economic activity leaves a community, the big employer in town closes down. What follows is everything else starts breaking down. Your social relationships start breaking down, marriages break down, more divorces, more teenage pregnancies and more drug use. Your school starts breaking down and then you have a much lower chance of succeeding in the economy. Not just you, but your kids.

It’s a vicious circle. How do we break that vicious circle? We’ve had many areas like this in the country in the past, but they’re increasing. The question is how do we reverse this process? The answer is not lower interest rates. Similarly, it doesn’t mean have more fiscal spending. It typically means much more targeted, often bottom-up processes by which we rebuild activity in the community. Bring more jobs, employees and new skills. That means community involvement. It also means outside support, but we need to be much cleverer about this then we’ve been so far.

Maybe go through some of the research that you went through to prove out or to support your thesis. The world is rapidly evolving and you make certain claims regarding how the things of life are becoming much easier, whether it’s the food we have, transportation, or entertainment. It’s unprecedented as you compare it to 100 years ago or even 50 years ago. An individual’s fulfillment and their positive experience of life are being involved in making a difference and contributing in a sense. What things did you do to support some of the methods and direction of strengthening this third pillar?

TWS 02 | Community

Community: Because of technological change, the easy jobs in the middle are gone. You’re left with a choice of either the low-skill job or the high-skill job.


The phenomenon I’m pointing to is mental level phenomena. You point to a number of studies which point in the same direction, but the job of somebody writing a book like this is to write it all together to say, “Here’s the big picture.” The big picture can be summarized in one big causal factor. One pillar which is weakened therefore cannot respond. The causal factors, technological change is making such a huge impact on our life. In previous environments of strong technological change, the Industrial Revolutions, for example. Society responded in a big way and said, “Here are the things that have been touched by technology. Here’s how we should respond.” For example, in the Second Industrial Revolution. When you had big auto factories, chemical factories being set up. In the United States, you had a massive high school movement, which created a large number of high schools, but also made high school education free so that kids could go and get that education.

What is interesting is that there was also a time of a lot of immigration, but the immigrants who came into the United States were not well-schooled. They were experienced carpenters, they experienced plumbers. They had the experience, but they didn’t have schooling. They were not appropriate for the factories where you needed to know trigonometry to set the angles right in a machine that the kids that had gone through high school knew how to do. That’s how America dealt with the Second Industrial Revolution and many Americans benefited from that. I would argue that we need to figure out what the appropriate response this time is also. What you see is because of technological change, the easy jobs in the middle. The ones that required even a high school education. That was the technological revolution of the past and you could get decent incomes with that education.

Those jobs are disappearing. The manufacturing jobs, which were well-paid, unionized jobs, even the jobs and services. The job of a clerk who used to you have to know accounting, you have to know how to add and subtract and so on, used to fill large ledgers. That job doesn’t exist. It’s been automated. These jobs in the middle are gone. You’re left with a choice of either the low-skill job, you’re a security guard somewhere or the high-skill job. You’re a consultant at McKinsey. In between, it’s a long ladder, but there’s also not many on that ladder because the in between jobs are gone. How do we position people now for those jobs higher up in the ladder? How do we position them with the strongest skills?

That has become the central question. The problem is it all starts with the community. My colleague Jim Heckman at the University of Chicago was a Nobel Laureate in economics says, “By the time you’re five years old, you’re basically done for life in terms of your trajectory.” Because you had the early childhood health support that you need to keep you healthy through life. You’ve learned some of your habits. Your vocabulary is different depending on whether you grew up in a professional household or in a household which is poor where parents don’t talk that much. Sometimes there is a strong correlation between income levels and how much you can afford to have time to prepare your kids. Therefore, the life chances of that kid, even by age five, are different depending on how they grew up. In this world where it matters, for you to get those good jobs, you have to have that early preparation.

You have to go through a decent high school to be able to manage in college. It’s not enough that college has opened their doors to you. You can spend six years and dropout. One of the biggest problems in US education is the high dropout rate from college. These kids dropout with huge debt. Part of the problem is they’re not well-prepared for college in the first place. How do we get them that preparation? It starts with the community. That’s why I say we need to repair our community first in order to have a chance in this technological revolution.

Discovering happiness or fulfillment is the general desire of everyone to an extent. Click To Tweet

What are some of the ideas that may move the needle? It is quite an undertaking. One of your areas of expertise is behavioral science and how human beings behave in large part is habitual or subconscious. That’s where you’re making claims of where we derive our vocabulary, where do we drive our opinions on certain things. It’s not like you snap a finger, make an argument and suddenly people have a different way of viewing the world. From a community standpoint, making that shift, what are some of the ways that you see at least the majority of the community seeing things differently and making the subsequent change?

It’s a great point you make because it’s something that can’t happen from the outside. Somebody’s clicking their fingers out and say, “You’re the community, you got to pull yourself up.” What you see again and again is it comes from inside. You have to maximize the chances of it coming from inside, but you can’t force it from the outside. It’s a few people getting together. In the book, I talk about the Bilston Community in Chicago, which basically was crime-ridden. The number of deaths 100,000 was approaching the deaths in Germany during the height of World War II. There were drug wars in every part of the strip there. As one of the community activists told me, change came when they found a body outside one of the six churches and said, “This can’t go on anymore.”

The Pastor asked, “Who amongst you is willing to stand up? Who amongst you is willing to take the first step?” A bunch of young men came together and one of them volunteered to take on the task of community revival. The first task was essentially bringing down the crime. With that level of crime, no employer wanted to come in. They also did interesting things to arrest the crimes. For example, they found that much of the crime was localized in a few bars. They petitioned the city of Chicago to close down those bars in the neighborhood. They found that one of the problems was people didn’t want to call when they saw crime because they feared the criminals would go after them “Why are you ratting on us?”

They got a whole bunch of people to call the police at the same time and say, “There’s a crime here in progress.” They also persuaded them to get out of their houses. Crime flourishes in dark spaces, get out, light it up, come up and crowd the criminals out. It was a community effort, which brought down some of the crime. They did things like saving the local bank, which was going out of business. This combination of things helped them become more attractive and to some extent, they’re paying a modest price for that as a whole a lot of businesses are coming in. A lot of people from outside want to live in the Bilston neighborhood because it seems much more attractive. They are getting a little bit of gentrification. That’s not entirely a bad thing. There are some bad aspects to it in enforcing some old-time residents out, but they are going in the right direction.

TWS 02 | Community

Janesville: An American Story

It’s a perfect example. At the same time, you look at the root cause of that happening. It was a dead body in front of a church. Have you found in your analysis of the things that typically you have these events happen, like these earthquakes that shake a person and make them realize, the pain of staying the same is worse than the pain of changing and making changes. Did you see that as a fundamentally dynamic as far as how communities make the changes and adjustments that will strengthen their core and that pillar?

I’m not sure every community needs to have that wake-up moment. Some will, whether it’s drug abuse, crime or a large employer shutting down. There will be different triggers for them to see that, “Things can’t go on this way. We have to change.” There’s a nice book, Janesville, on how the big employer in town GM shutdown in Wisconsin Town and how the community came together. She leaves it where the community is trying to put things back together, but it’s not successful thus far. Since then, Janesville seems to have made some progress and things are a lot better than they were. In fact to the extent that the community police are issuing parking tickets. That’s a sign of development. You have so much traffic that parking tickets are being issued. More broadly, I would say the reason I emphasize Bilston is I want to say that communities that are far down and plagued by poverty, drug abuse and crime have found ways to lift themselves.

I see this in poor India that there are villages that decide, “We’re not going to depend on the use of government coming in and digging irrigation tanks and irrigation ditches for us, we’re going to do it.” It’s that old frontier mentality in the US that we’re going to do it because there’s nobody else is going to do it for us. That is a mentality, but in a developed country, there are many sources of help also. I’ve been talking, for example, to the Federal Reserve Bank of Philadelphia where they have an entire department which is trying to energize some of these community efforts. Bringing communities together, getting them to learn from each other. There are many sources. There’s a lot of wealth in this country and that wealth is sometimes in private philanthropic ways, for example, the Kaiser Foundation in Tulsa. In public ways we have something called the Opportunity Zone set up by this administration, which essentially offers tax benefits if you invest in communities that are falling behind.

There is help available, but it’s hard for Washington or some far away state capitol to understand what needs to be done in the community. The planning on what needs to be done has to become much more internal. Who would know that the significant problem in Bilston was a crime, that once you dealt with the crime, other magic would happen? It’s trying to figure out what are the two or three key impediments that if I fix it, it will set it back on a virtuous cycle and reverse the vicious cycle that locals know far better. There are many examples, some of which I cite in the book, but elsewhere of people thinking, “What can we do that’s different? What can we do to get the community engaged?” There will be failures, but it’s a way out which is easier in a developed country where the key is attaching yourself back to the national economy.

These are fascinating points. It’s something I think about a lot. I know that there are many others that are asking similar questions as to how is this wealth gap going to end up. It’s moving, but is it moving in the right direction? That’s where you have the primary narrative that exists that the federal government is the power of influence that should be fixing this problem and it continues to build. There’s a lot of movement, especially with the large part of the Democratic Party where the solution isn’t necessarily going back to communities.

The solution is using central powers to influence change through Universal Basic Income or redistribution of wealth. I look at how significant the claims you’re making. You’re trying to solve symptoms with those central-influence initiatives instead of the actual root of the issue. The world is evolving and just to see what the world has done in the last few years is incredible. You look at the central powers, it’s not reasonable for them to adapt to the rate of change that’s occurring because they’re far away and by the time a decision needs to be made, it’s too late.

I look at the significance of your perspective and what you’re making claims on as something that would move the needle. That was the intention of the United States in the beginning, wasn’t it? The reason for the 10th Amendment was to keep powers more local than federal. There are many other questions I have as a follow up to this, but I’d love to see how you’ve looked at the state of the United States when it comes to the immense amount of government power that exists. Their adoption of this role to solve problems and to make everything right. Do you see other signs of how this central influence is shrinking or do you see that there are still issues to be resolved there?

The development bar for every country is different because each country has a different set of resources, capabilities, and impediments. Click To Tweet

I don’t want to argue to your earlier point that there is no rule for the central government. Since Gerald Ford, every president has been the education president. How are we doing on education? Not very well. We need to figure out alternative approaches. I would agree very much with your thinking that central is difficult because the problem that each place faces is different. Some one size fits all policy device in Washington is not going to work. As support, central is fine. As a prime mover, it’s probably not what the doctor ordered for the country. This chimes well with the resilience and the self-empowerment of people, which has always been true in the United States.

I worry that in these communities, empowerment is feeling that sense of empowerment. That also leads to a different problem, which is that you look to the nation for your identity and for your answers, rather than for the people around you. That’s true in a number of countries. It’s growing in India also. When you start looking for the nation as a resolution and you become more nationalist in spirit. Nationalism is not a bad thing, but nationalism which looks for the enemy as the reason for your problems becomes problematic. It’s easy to point fingers outside, point fingers at minorities within the country, but that’s really no solution because it’s not them who are holding you back. It’s you that has to change. Part of the reason why I emphasize it back to the roots approach is it seems to me we need to rediscover identity back in our communities.

When I say this too many cosmopolitan people who dwell in big cities, they laugh. They say, “We left those communities long back.” In the United Kingdom, 80% of people still identify with their village or their town as their community. They’re not the rootless people that sometimes we see in cities. I’m not saying that’s a bad thing to be a citizen of everywhere, but there are many people who are a citizen of somewhere. It seems to me that they need to find ways to address their problems and we need to think about how that can best be done. This is why I say balance. It’s not all the central government. It’s not all the community. It’s not all the markets. Some balance between the three, which is going to help us get out of our problems.

The fact that this is not the United States problem. It’s a problem in France, in Germany, in China and it’s a problem in India suggest that we need a model for the world of the future. That’s in a sense what I’m trying to propose. At some level, some people have decided that, “Where’s the big tax? Where is the big government program?” These are all milk toast, but there is a big idea here which is let us focus on being a centralized government and governance as the way forward, rather than put more burden on a centralized government in a fractured society yet.

I love how you describe the community in which certain things take place. Going to the original proper role of government was to essentially protect this environment. That’s where obviously the Scottish Enlightenment had much influence on the Founding Fathers to develop the constitution and develop the environment in which commerce was to take place. We’ve gone away from that and it’s understandable. At the same time, there’s always a price to pay and we’re paying it because of how people believe things should be. I look at the future and it’s incredible what human beings have been able to create the potential in one mind can change the world and it could change a community.

TWS 02 | Community

Community: It’s a balance between the central government, the community, and the markets which is going to help us get out of our problems.


That’s an environment where you essentially have handouts or you have this theory that you should be taken care of. I don’t know if it ever leads to a person to discovering happiness or fulfillment, which is the general desire of everyone to an extent. That’s where you look at the examples that you cited, whether it’s Chicago or other places where people face adversity and figure out how to make adjustments and thrive because of that. It’s so inspiring but it comes down to the notion of forest and trees, because a forest is an abstract, forest doesn’t exist. A community is also abstract. It’s a group of people. The individual right and the protection of their rights is due to what the individual can create in the right environment if that’s what the overall consensus is.

I look at your experience and you obviously had a front row seat at the financial crisis of 2008 and 2009 and you saw what happens in how decisions at high levels can impact the entire world, which it did. Being a part of a higher education program at the University of Chicago, you come into these conclusions. It isn’t just you waking up in the morning and saying, “I’m going to write a book about this third pillar.” That’s why I find it fascinating how much you’ve experienced where things succeed and where things fail. I’m a fan and I appreciate all the work that you’ve done. Where do you propose your theories? What are you trying to achieve with this book other than getting the ideas out there? Do you have some initiative that you’re trying to push forward?

I’m starting that process and it starts first by publicizing the ideas, but then people start calling you and say, “Come talk to us. We were doing this stuff.” I’m learning more because there are many different ways that communities are coping. I got a call from a group at the World Bank, which is dealing with coal-dependent communities across the world and how they’re dealing with the fact that coal is largely on its way out. How do they recover and what different ways are different groups across the world doing it? This is a powerful way if they figure out what best practices are of trying to spread the word across the world. Here is how they have coped in Austria. Here’s how they coped in Australia. Therefore, let’s figure out whether you can do some of these things.

Part of what I want to do is figure out how you can emphasize more of the success and make it happen more widely. I do want to say that part of this comes from my experience in development. I said I grew up thinking why we are poor? As I looked at development and I studied it, one of the most interesting findings in development is the low explanatory power of influence from outside to how a country develops. You would think a lot of money coming into the country from countries that are giving money from across the world should make this country grow fast. It doesn’t.

For a variety of reasons, it has low power. What happens is when a country like South Korea says, “We’re going to make a change.” The development bar for every country is different because each country has a different set of resources, capabilities and impediments. It’s when they figure out that they need to make a change, it is when the rest of the world can be helpful by buying their goods, trading with them and so on. That idea has percolated into this book, that when you look at successful communities, we don’t know what the recipe is because the recipe is something they figure out because they’re close to the problem. You do know that it often has to come from inside.

Thank you for sharing. I wish you the best. It’s something that is a growing challenge. Humanity is fascinating to observe sometimes where we’re at and we’ve become a global community essentially because of the ease of communication. Sometimes ideas are where most of the power comes from. Getting an idea in a person’s head and then getting it to get out of their head if it’s the wrong idea or unprincipled idea, that’s a big challenge. I look at intellectuals such as yourself and other powers of influence, not necessarily from a central government standpoint, but whether it’s a media or authors that are rising to the challenge.

I was at a financial conference up in Whistler, Canada. Ray Dalio with Bridgewater and a massive hedge fund. The majority of his thoughts were directed toward taking some of his understanding of capitalism, free markets and being able to institute that in Central Connecticut to improve the poverty and crime situation there. It’s one of those things where the problems are getting to the point where they’re boiling over. People like yourself are making and going to make a difference.

Thank you very much. I do hope to stay engaged. I hope we get more people to start thinking about these issues.

Thank you, Dr.Rajan. It’s wonderful having you on and I wish you all the best.

Thanks for taking the time.

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About Raghuram Rajan

TWS 02 | CommunityRaghuram Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. He was the Governor of the Reserve Bank of India between 2013 and 2016, and also served as Vice-Chairman of the Board of the Bank for International Settlements between 2015 and 2016. Dr. Rajan was the Chief Economist and Director of Research at the International Monetary Fund from 2003 to 2006.

Dr. Rajan’s research interests are in banking, corporate finance, and economic development, especially the role finance plays in it. He co-authored Saving Capitalism from the Capitalists with Luigi Zingales in 2003. He then wrote Fault Lines: How Hidden Fractures Still Threaten the World Economy, for which he was awarded the Financial Times-Goldman Sachs prize for best business book in 2010. His most recent book, The Third Pillar: How Markets and the State hold the Community Behind was published in 2019.

Dr. Rajan was the President of the American Finance Association in 2011 and is a member of the American Academy of Arts and Sciences and the Group of Thirty. In 2003, the American Finance Association awarded Dr. Rajan the inaugural Fischer Black Prize for the best finance researcher under the age of 40. The other awards he has received include the Deutsche Bank Prize for Financial Economics in 2013, Euromoney magazine’s Central Banker of the Year Award 2014 and The Banker magazine’s Global Central Banker of the Year award in 2016. In that year, Time magazine chose Dr. Rajan as one of the 100 most influential people in the world.


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