Introducing The Founder Mindset: Tim Ferriss on Experiments, Risk, and Freedom

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0:21Hi everyone, it's Adi Ignatius, editor-at-large at Harvard Business Review and co-host of IdeaCast. I'm dropping into your feed today to let you know about a show from our friends at Harvard Business School. It's called The Founder Mindset, and it's hosted by serial founder and Harvard Business School senior lecturer Reza Satchu. The show is a masterclass in what it really takes to be a successful founder. In each episode, Reza sits down with some of the world's most successful entrepreneurs, including Reese Witherspoon, Kevin O 'Leary, Galen Weston, and more, and pushes them to break down exactly how they commit, decide, and build for impact.

0:57Today, we're sharing Ray's recent conversation with Tim Ferriss, the entrepreneur, investor, best-selling author of the 4-Hour Workweek, and host of one of the world's most influential podcasts. You'll hear Tim reflect on experimentation, his approach to calibrated risk-taking, and how he makes decisions under uncertainty. Plus, he'll explain why curiosity and learning have shaped nearly every chapter of his career. Before you give it a listen, make sure to follow the Founder Mindset with Reza Satchu wherever you get your podcasts.

1:50Every year at Harvard Business School, hundreds of students compete to gain entrance into my class, one of the most popular courses on campus, the founder mindset. For those who make the cut, I take them on a journey, challenging them to take risks, make commitments, and most importantly, learn judgment. One of the most popular aspects of the course are the guests we bring in, outstanding entrepreneurs who've had a truly profound impact on the world. Now, I'm sharing my conversations with some of these founders on our show. I'm Reza Satchew, and this is The Founder Mindset.

2:48Shopify, and Duolingo. His playbook isn't about reckless bets. It's about calibrated risk, smart experiments, and learning faster than the competition.

3:03Tim Ferriss, welcome to the Founder Mindset. Thanks for having me. So most people, they look at you and they think, wow, what a remarkable story, how many things you've done. You must take so much risk, and therefore there's some combination of risk management or luck that has allowed you to do all of these things very well

3:23Tim Ferriss:what's your reaction there's certainly a luck component but i i get a bit frustrated with anyone who attributes all their outcomes to hard work or 100 to luck i mean i think it's rarely 100 one or the other there's a luck factor i would say on the risk side i from the very beginning coming from a family without a ton of money where money was always an issue, have been hypervigilant about minimizing losses. I really don't view myself as a risk taker. It's such a remarkable thing because most people would look at your life and they'd say, this fellow has done so many things that are different that he must have sought a tremendous amount of risk.

4:03And so this concept that this is not you jumping off a cliff in the shark infested waters in the middle of a hurricane, It is not that. It is actually someone who is calculating risk at all times and who isn't paralyzed by that risk.

4:18Tim Ferriss:Yeah, and I think I've, by luck, certainly by the grace of timing in some cases, benefited from the angel investing. When you are trying to think systematically about investing, you have to interrogate your own thinking and be willing to change your own thinking. Recognize what type of bets are recoverable versus irrecoverable. So I think the, if anything, and maybe this would be unexpected, but the angel investing has made me more bold in running more experiments. because I just realized like most things aren't going to work out, but you don't need to get a lot of things right to have an amazing life and build an amazing business.

4:59One of the things around risk calibration is ultimately we're trying to figure out is, okay, what's my downside and what's my upside? Now, human psychology is such that people tend to overestimate their downside. And so one of the things you talk about is we need to define our fears, okay, as opposed to what we, you know, what everyone here at Harvard Business School is doing this, which is defining their goals. Tell me why the concept of defining your fears is so important to actually calibrating risk. Yeah.

5:29Tim Ferriss:So the fear setting exercise, which you're describing, people can find it for free online. It was important to me personally because I grew up in a family with all sorts of mental health challenges, addiction, overdoses, depression you name it and struggled with a lot of that myself and i would get into these ruminative ruminative loops that catastrophized so to try to turn down the volume on that came to fear setting through stoic philosophy and found it incredibly helpful just for peace of mind was the concept that once you define your fear you were able to realize that you could manage through it yeah yeah but it's a lot like goal setting right you want like specific measurable realistic timeline blah blah blah it's applying the same thing to what could be like a nebulous cloud of concerns and anxiety and i would imagine if you were to ask a lot of the students in your sections you know what are your fears do this exercise they might come up blank but if i were to say what's the thing that you would do if you knew you could not fail right what would that be and it doesn't have to be from the menu of options that's coming straight out of the class it could be anything maybe it's being a screenwriter who the hell knows like what is that thing and then since you're not already committed to that you've told yourself i can't do that for some set of reasons so let's interrogate those reasons so is that the assumption so when you explore these new things yeah is that how you're approaching it yeah it is you deciding you want to be a tango dancer.

7:07There's obviously risk that that's not going to happen. Yeah, sure. Okay. But your definition is something different. Yeah.

7:14Tim Ferriss:I mean, the risk for me is largely, I mean, I could expand on this, but the probability of an irreversible negative outcome. And most of the risk, I think that students at a place like HBS would fear is some type of reputational hit, being judged by others. Well, they're looking left and right. right and the fact of the matter is most people aren't thinking about you at all or thinking about themselves that way understanding that theoretically is very different from screwing around with tango and doing that for six months and then doing this that and the other thing and realizing very few things matter and if they don't work out that's fine you just keep experimenting and as long as you have a have engineered for yourself a timeline so that you know when you will decide if this is pass fail and if it's fail move on to the next thing as long as you've done that and you don't keep it open-ended i think it's very hard to fail in the long term if you're if if you are choosing your projects for maximizing learning and developing relationships that transcend that given project or startup whatever it's i just think it's really it's a lot harder to lose long term than people realize.

8:28So it must be true that you have confidence in your ability to see things that others don't see.

8:35Tim Ferriss:I have confidence in my ability to wade into waters that I think are plausibly interesting without worrying too much about it. Now, I have a phrase which is sort of served me well in my founder journey, which is if and doubt, act. Now, what people think that means, they sort of say, well, that's nonsense. I mean, mean you don't know what to do and you're just going to make an action? No, no, no. What most people do is when they're in doubt, they just stay the course, but they don't make an active decision to stay the course, right? They're sort of like deer in headlights. So my point is you may want to stay the course, but you're making an active decision in your mind, I'm staying the course.

9:09So I can test my judgment, okay? What are the frameworks that you have in place to enable you to make rapid decisions under uncertainty that are risk calibrated, but that need to be

9:20Tim Ferriss:done timely yeah i would say it's it's more a rule a policy than a framework but for me the cognitive load of having lots of pending decisions is worse than making some mistakes unless this is a clear one-way door meaning irreversible that's very very it's going to be very expensive slash punishing if it's a problem just make a decision right i don't need to think about where i'm going to sit on flight for very long right i don't need to think about hotel worst case it's a crabby hotel and i can't sleep that's fine like i'll get over it it saves time for the things that matter yeah yeah exactly and uh also i mean this is true with it applies i i keep bringing up the angel investing because i think it's a microcosm of the macro in the sense of how you make decisions around like bet sizing right so if i'm if i'm making very big bets for me then I'm almost certainly going to take longer to make those decisions.

10:18Tim Ferriss:But if I've made a decision in advance, like a meta decision that in a certain area, there's no way that I can predict who's going to be the winner. So I'm just going to spray and pray and it's going to be 25K, 50K. It's not worth me doing four calls with that founder, right? It's like, unless there are clear disqualifiers, I should just get some chips on the table and you can do that with a lot of. categories of decisions yeah well it's interesting because what you're arguing for some set of decisions you just make them because you're trying to save time but also it strikes me that what you're also saying is there's value to making decisions yeah there's value there's value to making decisions where i would take a step further as for as much as possible in my life and i do see this across hundreds of people i've interviewed the more you can make default and automatic, the better.

11:12Tim Ferriss:So that could be intermittent fasting, right? Yeah. We're both doing that. One, the health around it is so positive. But two, it's just a set of rules that are very easy to follow. Yeah. So I don't have to think about it that much. It's the simplicity of that that works. Right. And Tony Robbins has said that complexity is the enemy of execution. I think that's really, really true. Because if you look at what I try to do, at least with the books, and I do this with the podcast too, but I'm thinking about practical behavioral change. One thing you talked about where I think we have a disconnect is you talk about how valuable options are to you.

11:53Now, of course, every option has a value, no question. Okay. I'll take the other side of it and say that we live in a society where, generally speaking, people overvalue options and undervalue commitment. Yeah. I would agree with that. And so what you see is a decline in marriage, a decline in home ownership, a decline in people going to church. And certainly at HBS where I see it most acutely is in them making decisions around their career paths that are completely inconsistent with the impact that they want to have and the learning that they want to have. But it enables them to preserve all options.

12:32Yep. Okay. And so I call it the curse of optionality. And so effectively, you never actually see what you're capable of when you commit. So my argument is commitment is actually a superpower, not a sacrifice. And yes, by definition, commitment means you are cutting off some options. But I'm curious whether that resonates with you and how do you think about that in terms of maximizing options?

12:54Tim Ferriss:Yeah, I think they're totally compatible. There is definitely, and I do think this is partially a product of my childhood and feeling trapped in certain ways and dealing with a bunch of horrible stuff, that I was like, I don't like the feeling of being trapped. So having optionality is something that gives me peace of mind. But for me, optionality does not mean anything and everything for undefined periods of time. and even if i am for instance looking for feedback with split testing on say the title and subtitle of the four-hour work week where i tested it through google adwords did all this stuff in bookstores with like a clicker to determine what cover i picked up more than others but here's the here's the takeaway from that is i i had already decided on six to ten titles and subtitles that i felt good about and then it was choosing among those six to ten i was not going into the ether and asking what should I do.

13:48Tim Ferriss:So you had a frame of reference. I had a frame of reference. Yeah. Yeah. And then also you can actually run a lot of experiments in parallel. So you don't have to have any superimposed mutual exclusivity where it's like, okay, I'm only going to do this startup for X period of time. And then if it doesn't work, then I'm going to try my hand at writing. Like one of your students came to me with this dilemma. And I was like, well, based on what you're telling me about the scope of the writing, it sounds like something you do in the evenings and on the weekend. So you can do both. I mean, you're going to really have to figure out self-care because you'll be burning the candle at both ends.

14:24Tim Ferriss:But if you're signing up for this entrepreneurial journey, I mean, you're kind of signing up for burning the candle at both ends, no matter what. So you can run those things in parallel, but there's no through line. I think you have a problem, right? So if you have true north, which for me would be learning skills, developing relationships with the assumption that even if something fails per se like the four hour chef my third book was boycotted by just about everybody because it came out through amazon publishing and scared it out of everybody in the publishing world a team i worked with on that houghton mifflin hmh i ended up working with for my next two books and ended up working well this is your point around the cost of it's not irreversible failure meaning what happens in these situations is even when you fail you learn a fair amount You have a commitment to a mindset.

15:15How do you think you're able to not just see things differently, but to trust the process or the mindset? And is it really around the experimentation? I mean, that's part of it, but I can try to flesh it out.

15:27Tim Ferriss:So I would say also I need to give credit to a teacher of mine, actually taught at HBS for a long time, named Ed Schau. He was a Princeton. He was a Princeton for high-tech entrepreneurship, ELE 491. I still have all my notes. It's good to see that a teacher can still have long-term input. Yeah, I'm still in touch with Ed. And he, I think, modeled for me. He was the first person I came across in real life who on some level was an exemplar of what I wanted to do. So former congressman for Silicon Valley, former competitive figure skating athlete, ended up teaching computer science at Stanford because no one else, I think somebody had bailed last minute.

16:10Tim Ferriss:And he's like, sure, I'll try to teach this thing. Or computer science way back in the day. He's taken a number of companies public, focused on teaching, and continues to do all these different things. So tons of learning. He wasn't a specialist looking to be top 1 % in one domain. If you're in the top 25 % of two things that are rarely combined, and you put those together, could be computer science plus law degree, it could be, who knows. Suddenly you can be the one person who is the go-to source for a very, very narrow specialty. So for you, the idea that you could be good at multiple things felt like a life better lived than being excellent at one thing.

16:50Tim Ferriss:I think it's a safer and more competitively advantageous approach for most people. If you want to try to be in the NBA and go up against LeBron James, like, good luck. I mean, it's very few people who are going to be able to do that. If you want to be the top 1 % in concert cello players or the top 1 % in fill in the blank, any one thing, it's incredibly difficult to, I think, have the company building potential or the impact possibility that you can have by combining, say, being in the top 25 % of two things that are rarely combined. By putting those together, I guess what you're arguing is effectively you're in the top 1 % of whatever those two things are.

17:33Yeah.

17:34Tim Ferriss:And also for me, if you look at my chronology, this is a way of getting to your question. It might look like I'm hopping around a lot and I suppose I am, but it's not because I just get bored and then look for the next thing. it's often because i feel like i started in a blue ocean where uh maybe i could count cards with a like a single deck blackjack table and then suddenly it gets really crowded and all of a sudden that strategy doesn't work right the the deck is stacked against me and that at that point i'm like i don't i don't uh fetishize hard games yeah i like i like easy yeah sure why not so so So if you think about, I mean, you have found blue oceans in the past.

18:19What are the next set of, where do we see blue oceans going forward?

18:22Tim Ferriss:Oh, boy. It's really personal. I think there are blue oceans everywhere. Like, for instance, I think that a few years ago, everything had Web3 in its deck if it was a startup. And then for a while, it was VR. Then it was AR. Now it's AI. Like everybody sprinkles a little pixie dust of AI in their deck. And evaluations go immediately up. Yeah. And things are completely bananas. So I would say it's not chasing that for me. I mean, I placed a few bets in the sector, but I look for things that once were sexy that are no longer sexy, which is why I started building my email list 10 years ago, whatever it was, when everyone's like, email's dead.

19:05Right.

19:05Tim Ferriss:I'm like, I don't think so. Like email's dead until people have to get a job. And then email is alive and well. so i think you can excavate and reinvigorate the old in addition to looking for the new i think there's gonna be a lot of pushback to digital overwhelm and i'm curious what forms that'll take like how might you bet on that if i think about for you what the next 10 years looks like okay sort of what would be fun impactful where are you going to lean into their whatever you know your set of superpowers that you have and what are we solving for what does that like what does that look like i'm not totally sure uh i'm in part and maybe this is a cop-out but like whenever i feel like i have a reliable five-year plan i feel like to have such a want to change it well i feel like to have something that i feel i could execute perfectly i'm operating so well within my sphere of comfort yes that i'm just not aiming correct but i would say because what you're minimizing is what you might learn in that five-year journey, which might actually change.

20:09Tim Ferriss:Yeah, and things, I mean, the conditions change very quickly too. So I would say something that I've been thinking a lot about, and that's part of the reason I came in yesterday and had a dinner with a bunch of biotech folks, is how I might use my audience now that the technology is available for this to do distributed scientific studies. Yeah, that's very interesting. So how could I do that? I would need to obviously figure out how to shield myself in the hyper-litigious world of the United States. And is this sort of around the longevity trend or just broadly speaking? Could be just about anything.

20:44Tim Ferriss:So, I mean, for instance, if I wanted to take a plausible vagus nerve stimulator that could aesthetically have these various effects. Okay. Well, including, say, boosting HRV, heart rate variability. Well, could I give people instructions for how to assemble this thing? this is where i have to cover my ass in the u.s then ship them an aura ring or a whoop band something like that and have a potentially this is available now like an at-home self blood draw kit i just did this the other week i'd never seen it's remarkable just stick it on your shoulder and yeah turn it into a vial and then you've got your sample and held people accountable so it wasn't it's we're using quantifiable metrics instead of self-reporting right and it's highly customized potentially yeah you could you could really with enough with a with an n that is large enough if you have enough people participating like you could you could potentially parse some really really interesting signals from that right so and that's the kind of thing that it's like if i went to go through academic channels for that which i've done for 10 plus years 15 years it takes forever you're leveraging potentially your your your listeners yeah yeah and there are there are good reasons why it takes a long time to do certain things like irb and human ethics and all that i get it but i'm not giving anyone like the next thalidomide like we'd be dealing with something that has pretty good side effect profile and uh one of the biggest challenges for any scientific study is subject recruitment.

22:27Tim Ferriss:They might recruit 20 people, and honestly, it'll take them a year and a half to do it. But I can do that in minutes. I also recognize limitations of something like I'm describing, right? Very hard to placebo control, blah, blah, blah. But correlations, if they're strong enough, still like smoking and cancer as an example, can be informing. In some ways, you're trying to simplify your life, but you're also trying to do hard things. yeah this one i would like to do because if i can do it it provides and this is where i get the most payoff maybe is doing something that then other that inspires other people to try different things so if i could do that and maybe leads to publication where it's i'd be pretty nice to be the co-author of a study i've never done that and i would want other people with audiences to start to think about.

23:17Tim Ferriss:It's like, okay, let's read about cystic fibrosis. Let's read about this. Let's read about Genzyme. Let's study a couple of case studies so you understand what you could do with your audience besides shilling the latest tchotchke. Like you could actually - Yeah, have a meaningful impact. Have a huge impact, right? Because you could recruit very specific demographic psychographics profiles. And to do that through normal academic channels is very, very difficult. Okay, so this is a pretty exciting. I mean, if this is something where I could imagine, you know, I have a thesis that most people want to live a life of impact where they're having a positive impact on the people they care about, and that can be as broad as the world.

23:57Tim Ferriss:Does that resonate with you? Yeah, it resonates. It definitely resonates. I mean, I would say that if I can leave the world, hopefully maybe a handful of people better off than they were beforehand, great. I just like how many people at all of Harvard can tell me, you know, Alexander the Great's full name? Probably two or three. So the greatest conqueror the world has ever known. So I don't have any, I don't harbor any illusions or delusions of having people remember my name. Well, I think this is supposed to speak to your point where it probably frees you from the shackles of thinking about what everyone is thinking about.

24:32Tim Ferriss:It does that. And also, to give credit where credit is due, I think about this a lot. You know, Seth Godin, I have tremendous respect for. He said, in effect, it's easy to hide behind the big. Like solve world hunger. Have an impact of billion people, whatever it might be. But he said you can't hide behind the small. So it's like, okay, you want to impact a billion people? go out next week and impact 10 people and tell me exactly what you did so i tend to maybe assume is not the right word but in my experience like if you start small and that allows you to go from to bias towards action as opposed to just patting yourself on the back for these big grand dreams then it's like jane goodall didn't start out as jane goodall and marky legs she spent decades yeah like in the field doing stuff that nobody gave a shit about If you are able to prove something out on a smaller scale, I feel like you can very often push that into some type of scale.