Tom Bilyeu: The Secret to Surviving Any Setback in Business | Entrepreneurship | YAPClassic

22:22Oh, wow, this is an insecurity, not anything positive or empowering. This is an emotion designed to mask the underlying thing.

22:30Hala Taha:I know that you talk, or at least in the past, you've mentioned before, you might have changed your approach to this, but you take a first principles approach to thinking. Can you talk to us about what that is? Yeah. And if I ever change my first principles approach, you should be the first to come punch me in the mouth. Okay, I just didn't wanna say you do it and you don't do it anymore. No, no, I totally get it. So first principles is quite literally the only way to think. It is at its simplest. It is trying to get to the fundamental base reality that we all live in, which we are shockingly bad at, and I can explain why later.

23:05But the idea is don't reason from analogy, reason up from physics. So the great example of this is Elon Musk saying, hey, for us to make a electric car that is priced to a place where the average person can afford it, we have to completely reinvent the way the batteries are made. Now, when they went around to everybody, everyone was just like, but this is the cost of batteries. And he was like, well, does it violate the laws of physics to lower the cost of batteries? It might. If you go and look at what it costs to get it out of the ground and all that stuff and to mine it, and you may be like, yeah, this is just it, and there's no way to get any cheaper.

23:41But when he looked at it, he realized, whoa, there's like all these markups along the way. We could actually get closer to the source. We can do them for a lot cheaper. Cool. Same thing happened to me at Quest. We took our formulation for a protein bar to the manufacturers and they said, this bar can't be made. And we're like, hold on, does manufacturing this bar actually violate the laws of physics? Like that doesn't seem true. And so we went and looked at it and long story short, we realized what was happening is because the government subsidized corn, Everybody used high fructose corn syrup in their products as a sweetener.

24:14It's cheap, it's delicious. So all the equipment that had been manufactured over like the last 70 years could be made with the assumption that all the products that would run on it would have high fructose corn syrup. So this government intervention had all these downstream effects that nobody thought of. So when we said, well, wait, it's not that the bar can't be made, it's that we would have to engineer our own equipment. And so by being willing to engineer our own equipment and becoming our own manufacturer, suddenly it wasn't impossible. It was just impossible with that equipment. And so by thinking from first principles of, okay, this bar only takes a certain amount of pressure to put down.

24:52The bar has a certain viscosity. The bar has a certain level of stickiness. So what could we re-engineer on the equipment to deal with the deviations from a standard product to our product? And once you engineer equipment with those different tolerances, now it produces just fine. And that ends up being one of the reasons that we are very successful. So that's thinking from first principles. You're not allowing anybody to hand you a frame of reference. When people say think outside the box, what they mean is you've been handed a frame of reference. You see the entire world through that frame of reference.

25:25And you don't realize it's artificially limited because it's all shorthand. It's all analogy. Instead of saying, well, hold on, this is just how we view the world. It's not necessarily how the world actually is. And so let me, again, go back down to base physics and build up from that. And if you sell an info product or something like that, start with human psychology and build up from that. But don't let anybody tell you something is impossible unless it legitimately violates the laws of physics.

25:55Hala Taha:What do you mean start with human psychology for info products? Because I think I have a lot of like online entrepreneurs listening. Yeah, I had a feeling. so yeah I don't want people to feel like this is an exercise where it's like oh my god do I really have to go back to uh quarks and bosons and you know all that stuff which we don't even fully understand anyway so most of the time when I'm running this experiment it's for something for sales and marketing and so forget all the early stuff just get to how does the human mind operate what do people look for in products like what is the truth the inescapable truth of the human mind mind.

26:34So like, for instance, people don't make decisions rationally, they make them emotionally. I mean, I can just tell you that from the architecture of the human mind standpoint, that is true. And so once you get to that, it's like, oh, well, you may want to sell this product on features and benefits, but it won't work because that's not the architecture of the human mind. So now instead of like, if you're looking at somebody else in your field and you think, well, they're doing it as good as it can be done. Well, not necessarily. What are they missing in terms of their approach that would allow you to get more bang for your buck.

27:07If you go back to, instead of the frame of reference that they're handing you and go, what do I know to be true about the way the human mind works? Now you can do something better. You can do something different and win because you're building up from universal truths about how people think.

27:26Hala Taha:Such good advice. I feel like that's going to be really helpful for everybody who's tuning in. So I want to move on to your personal journey. I feel like a lot of your philosophies about life came from your own struggles and learning from them and things like that. So when I did research about what you were like as a child and a teen, it turns out that you self-describe yourself as somebody who is naturally lazy. And I'd love to learn about, you know, what you were like as a child and a teen and what kind of self-respect or lack of self-respect that you had for yourself back then.

28:05Hala Taha:Yeah, bam, seven days. That's all it took me to go from idea to a$500 million storefront. No tech team, no coding, just my LinkedIn knowledge, a business idea, and Shopify. Here's what most people don't realize about starting a business. The idea is never the hard part. The setup is where people stall and procrastinate. They overthink the design, the checkout flow, and then months pass along with nothing to show for it, but you're a good idea. Shopify removes all that friction. Their templates and AI tools get you a beautiful, functional site set up fast. And when someone's ready to buy, Shopify checkout is so smooth that more customers actually follow through.

28:44Hala Taha:Returning buyers can check out in a single click with ShopPay, for example. And if you hit a wall at any point with your build, they've got a built-in AI assistant sidekick that's there to help. Not an FAQ page, an actual assistant that helps you build, troubleshoot, and keep going. And the proof is right there, Yap Fam. On the How We Profit series, the founders I've been talking to who are doing millions of dollars in their e-commerce business, they sell on Shopify. So if a business idea has been sitting in the back of your head, collecting dust, stop waiting. Take action. Just do it. All you need is the idea because Shopify handles the rest.

29:19Hala Taha:Start your free trial at shopify.com slash profiting. Again, that's shopify.com slash profiting. Go to shopify.com slash profiting to start building your dream business today.

29:34Hala Taha:Yeah, fam, you know what makes me feel extra profiting, getting luxury quality without the luxury pricing. I'm trying to be smarter with my money these days, but I still love things that look expensive, are high quality, and actually last. And Quince has totally nailed this. Quince has become my new obsession. They make elevated essentials for women, men, and kids, from clothing and jewelry to home goods like bedding. And they have really reasonable pricing. I recently got this gorgeous Italian leather laptop backpack from Quince. It's in cognac. And my travel bags have gotten totally destroyed from all the travel this year.

30:06Hala Taha:And I was looking at all these designer websites, and I just couldn't justify spending$2 ,000 or$3 ,000 on a backpack that was just going to get ruined from all the travel. But then I came across this beautiful backpack from Quince. It was only$150, and it's that got that quiet luxury vibe without that designer price tag, which I absolutely love. Quince also has 100 % European linen pants, dresses and tops that are lightweight, effortless to style, and start at just$32. They've also got 14K jewelry and cashmere style starting at$50. And the reason why their prices are so good is because Quince works directly with ethical factories and cuts out the middleman.

30:41Hala Taha:So you get high quality pieces without the inflated retail prices. Plus, it's good for the world. Make your summer wardrobe feel easier. Go to quince.com slash profiting for free shipping on your order and 365 day returns. Now available in Canada too. That's quince.com slash profiting for free shipping and 365 day returns. Q-U-I-N-C-E dot com slash profiting. Quince.com slash profiting. Okay, so that went in interesting waves. So when I was young, I felt very confident in myself, but I absolutely lacked self-awareness of any kind. And then as I began to develop self-awareness, I became incredibly self-conscious and very insecure and then was afraid that I wasn't going to be able to achieve the goals that I wanted to achieve because I wasn't good at the things I needed to be good at.

31:33And I, at the time, just by default, had a fixed mindset. So I believe that my talent and intelligence were fixed traits and life was just about making the most of what I had. Now, the honest answer is we are 50 % hardwired. Like half of what you're going to be able to achieve is grounded by just the hand that you've been dealt, but 50 % is malleable. And so I started really focusing on the part that I could change and not worrying about whatever was hardwired. It is what it is. And so what can I do with that part that I could change? And once I started leaning into that, then it was like, okay, I didn't need to believe I was special.

32:11I just needed to believe that I was average and that the average human is actually designed. That's what I call the only belief that matters. The average human is designed to get better. So if you put time and attention into getting good at something, you will actually get good at that thing. You just have to put the time and attention in. So then it's like, okay, well, my goal makes a demand that I be good at X, Y, Z thing. Am I willing to go get good at it? Because I could. Certainly, just assume you can get 100 times better at anything. Am I willing to put the time and energy to get 100 times better?

32:43And is 100 times better going to be good enough? And if it is and you're willing, then you go down that path. And if it's not, you either stop pursuing that thing or you find a partner that can be good at the thing that you've decided you're not going to invest in. But really getting the lay of the land of how the human animal actually works was freakishly liberating for me because I didn't have to believe I was born special, but it was incredibly encouraging to know that I could get better in any aspect of my life.

33:12Hala Taha:I want to dig on this a little bit because I thought this was one of the most interesting things that I learned about you is that you feel that free will is an illusion, or you've at least said that. Yeah, no, again, good to hedge your bets. But yes, free will is an illusion though. And I mean, is an illusion. And if you don't believe me, read the book Determined. It is, it's an unrefutable take. People will try to refute it, but if you read the whole book, I mean, he really does. Is that Robert Sapolsky? Robert Sapolsky? Yes. I had him on the show and we talked about it. Yeah. So good, man. So good.

33:51You've got good guests. I like it. I'm in good company here.

33:53Hala Taha:Yeah. So yeah, Robert Sapolsky, absolutely brilliant. it's just a horrifying truth that we all think we have free will, but we really don't. But I don't think it matters. And I think if you let it influence your life, it will drive you crazy. You need to act as if you have free will. It's the only logical way because here's why that matters. Even though we are automata that are just responding to things, we do respond to ideas and we are changeable and we are changed by our surroundings. This is why culture just keeps getting better and better and better, because as we learn more, we're able to do more.

34:32But there is no ability to escape your biology. It's just not possible. Like, even the most monk of monks has not escaped their biology. They've leveraged their biology in a pretty fascinating way, but they have not escaped their biology. And so just as nobody can will themselves to fly, they cannot will themselves to think a thought that they've never thought. If they could, then I would say, please solve quantum physics because that's in need of a solve. And if they then say, well, but I'm not smart enough. It doesn't have to do with free will. Yes, it does. You're just telling me that you're limited by your biology, which we already agree on.

35:06So, yeah, I wouldn't spend a lot of time there, but it is true.

35:11Hala Taha:Yeah. So basically what you're saying is that even though there might be biological factors, environmental factors, like our own personal history that impacts all of our decisions, we have the ability to change, right? We have the ability to improve and things like that. Yeah. When I talked to Robert Sapolsky, he was really adamant that like nothing is in our control. And he basically was saying that, you know, if somebody is poor and poor 20 years later, it's not their fault. If somebody is obese and cannot lose weight, it's not their fault. If somebody has a drug addiction, it's not their fault.

35:44Hala Taha:It is their biology. It is like out of their control, like basically saying that anybody who's successful is basically lucky. And to me, I was like, I don't know if I necessarily believe that. I feel like everybody has the ability to change. You do have the ability to change. The question is, do you have the ability to direct that change? And I think he is correct. I know he is correct that we don't. But here's the catch. That idea is a worse idea for knowing that people will respond and change based on ideas. So it's one of those, it is true, and I never fight against anything that's true. But part of the reason I don't bang that drum a lot is that it's just not a super helpful idea.

36:29So I have a goal, and that's human flourishing. To get to human flourishing, you have to pursue fulfillment. To pursue fulfillment, you need to act as if you can change your circumstances and make your life better and make the lives of others around you better. And if you go down that path, you will feel better about your life. And if you don't, you won't. Now, it is just true. I can't stop myself from saying that. I am hardwired. I've encountered these other ideas that make me want to say this. But great, I'm still gonna act as if I'm in control and it makes my life better. And so I have a rule.

37:09I only do and believe that which moves me towards my goals. I'm not trying to create a false picture of the world. In fact, I'm trying to get to ground truth. However, I know that humans are ridiculously bad at identifying what is actually true. Therefore, I have to steer by something that I can tell and that's effectiveness. So how useful is an idea in getting me where I wanna go? And if I, going back to one of your earliest questions, if I wanna feel good about myself when I'm by myself, what do I need to believe in order to do that? And so even though I know I'm just responding to my environment and my biology, that's not a good overarching narrative because it demotivates me.

37:53And so it's true. I just don't think about it. I think about things that motivate me. And that has led me to where I want to go.

38:01Hala Taha:Makes total sense. Okay, so free will is an illusion, but we need to act as if we're in control and operate from it. Need, as long as you understand need as it relates to, it is a more efficient way to get to the goal I have stated, which is human flourishing. But if somebody has a different goal, then it may not be as necessary. Like obviously for Robert Sapolsky, he's got a goal that's more in line with being, he would probably sum it up as a moral, compassionate being. And so he, to him, it is a moral violation to hold people responsible for their lot life. Whereas for me, it is a moral violation to let people roam around the streets, attack people.

38:45even though I'm like, sure, it's not your fault, but I don't care. You can't roam the streets hitting people. So everything is an echo of somebody's goal, whether they realize it or not.

39:00Hala Taha:Makes sense. Okay, so you were saying that you're naturally lazy, right? And you've been able to create a billion dollar company with Quest. You've built Impact Theory. How can other people who might feel like they're naturally lazy, that they don't really feel like getting out of bed, but they still feel ambitious, what are some tips for them? First, you need to know exactly what your goal is. You need to care deeply about your goal. Like you have to really want it and you can run something I call the loop of desire to reinforce that, but you have to know what your goal is. You have to really want your goal.

39:38Then you have to make sure that you're doing the things that are causing you to actually progress towards that goal Tony Robbins talks about how progress is a foundational pillar to human happiness. Anytime you see something like that, you know you're tapping into those evolutionary algorithms that are running in your brain. So it just feels good. And then on top of that, this needs to be something that you have a really strong why that you're doing this. So I'm doing this to help these people is gonna be the most universal why. There's a group of people you care about for whatever reason you care about them, and you're pursuing this thing to help them.

40:11and now that taps into the evolutionary demand that we have that we contribute to the group. And so if you want to stop being lazy, ironically, that's the sequence. And then one thing I'll add is you need rules in your life just so that you can demarcate whether you're doing the thing that you should be or not. So the most important rule I ever put in my life was that once I realized I'm awake, I get out of bed in 10 minutes or less. And I did that because I would lay in bed four and five hours a day every day. It was, I mean, looking back now, it's really crazy. The heartbreak I feel over how much time I lost.

40:48So finally, I was just like, this is absurd. I'm now ashamed of myself. Shame actually ended up being helpful, but it was not fun to go through. And so once I finally built up enough shame, I was like, okay, the only way I can think to break this is to set a timer and be like, okay, you have to get out of bed no matter what. And that one simple rule has been one of the most impactful things in my life.

41:14Hala Taha:Let's talk about you joining film school. So it's no wonder that you've built this incredible video podcast that has been pioneering the industry. And film school was really a turning point in your life where you started to really turn things around and you got really motivated by being in film school. but I did learn that you had sort of a catastrophe in your senior year that really made you rethink the way that you approach yourself and the world. Can you share that story with us? Yeah, well, so the catastrophe was just realizing that I didn't have talent. So that was gut-wrenching. So I had a fixed mindset.

41:55So I believed however good I am now is how good I will be forever. And that was the mystique of film school. It was like, hey, you're finding the best of the best. And it was like a whittling down process. Like, could you get into film school? That was the first thing. Because when I went to USC film school, it was easier statistically to get into Harvard Law than it was to get into USC film school. There were just that many people applying. And so I got in and I was like, oh, maybe I really am this brilliant filmmaker. And then you go through these series of classes, basically auditioning to see if you can be one of the four people chosen to do a senior thesis.

42:31And I ended up being one of the four. And I was like, oh my God, I knew it. Like, this is my chance. Like, I'm just everything I've ever wanted is gonna come true. I'm gonna graduate. I'm gonna get the three-picture deal. I'm the next Steven Spielberg. It's gonna be incredible. And I mean, I could taste it. And then I made my senior thesis film and it was terrible, just objectively terrible. On every metric that a film can be terrible, it was terrible. And I didn't think, oh, cool, let me break this down to what are the things that I'm not good at yet that I need to get better at? Why was it that the earlier films that got me to be one of the four chosen, what did I understand about that style of filmmaking that I didn't understand?

43:07Because it's actually a pretty big leap in style of storytelling. And so I was, I would say naturally, I had an intuition for silent storytelling that I did not have once you bring in dialogue and all of that. And so, but at the time I couldn't understand that. I was just like, oh my God, like I'm actually not good at this. I thought I was, but apparently I'm not. And so that was as close to an existential crisis as I have ever been, because I thought that was going to be my whole life. That was the death of a dream that I had. I mean, when you're, you know, whatever, 22, you feel like, wait, my whole life has been pointed towards this.

43:42I thought this was going to be the next 60 years of my life. And it's just dead. And then you find yourself selling insurance door to door. so I was like whoa it was one of those my how the mighty have fallen because I went from being celebrated at film school I graduated second in my class it was like you know yo this guy's really gonna do something to actually hold on no embarrassing everybody knew my film was bad it was not like oh this is me being hard on myself everyone was like oh god that was like a train wreck so it was emotionally devastating and I had no idea what to do. And then thankfully, between Tony Robbins and some stuff about brain plasticity, and which now, of course, we would call a growth mindset, but Carol Dweck had not written that book yet, unfortunately for me.

44:35So start reading about brain plasticity, realize, wait a second, maybe it is possible to change and get better. I start teaching film and I realized, wait, I'm helping these students make their films better. Why couldn't I help myself make my own films better? And so then I was like, oh my God, this is a game of skill acquisition. And so then the things we've been talking about now start coming together as my belief system. And I realized, okay, wait a second. If I can get better, then this is about putting time and energy into getting better. And so I just poured myself into that, poured myself into it from a film perspective, poured myself in from a business perspective, and the rest is history.

45:12My life is what happens when you answer the question how far am I willing and able to go if I get a hundred times better at a small number of things that really matter to my goals.

45:24Hala Taha:This is really interesting because you basically got the motivation to get better at film. And earlier you were mentioning that this is called the loop of desire. Could you break down what that is exactly? Yeah, the loop of desire is really basic. So you are having a biological experience. Your brain responds to certain things in a certain way. One very key thing to understand about your brain is you become whatever you repeat because of a process called myelination. So myelination is the wrapping of fatty tissue around the connections of the neurons in your brain. So any emotions you feel, any thoughts you think, they will become easier for you to think and therefore will be the things you keep repeating.

46:08So the more you repeat something, the more you repeat something. So be careful what you repeat. So understanding that, that whatever I repeat is going to solidify in my mind. So what if I intentionally repeat something positive? Cool. So let's try that. Then there is your brain will justify whatever amplitude of emotion you display. So if you freak out, your brain goes, whoa, I guess this really matters. And so I was like, okay, well, then if I repeat a really high emotional state, every time I talk about my goal, would it begin to myelinate such that now, whenever I talk about it, I get that big emotional response.

46:52So at first it felt like I was faking it. And then six months later, whenever I would talk about it, I would feel that sense of like passion and excitement. I was like, I can't believe this works. So be careful because you can align yourself to dumb things. So if you pick a goal that's honorable, that is legitimately exciting to you, and then talk to yourself about it, what you're going to achieve, what you're going to do. And like with that feeling of passion and excitement that you hope one day you will feel naturally. And then when you talk to other people, which is even easier than talking to yourself, same thing.

47:25You embody, embody the emotion you want to feel and do that over and over and over. and then at least in my experience, call it four to six months later, now you can just be talking about it normally and you get that sense of like, oh man, this is really important to me. This is really exciting. You're like, wow, it's so crazy because six months ago, I was interested. Like it was legitimate. I didn't try to tie it to like, I really love grass. You know what I mean? Like it's something you already have an interest in. But by doing that, now you've got the impetus to gain the skills. And by having that initial burst of energy married with getting the actual skillset, Now you can make progress.

48:01And when you're making progress, then passion kicks in. But you're not gonna get to passion until you're actually able to use that skill in the real world to get feedback from other people. You are the shout and the echo. People are telling you, hey, you're improving my life by that thing you do. That thing you do could be podcasting. That thing you could do could be building a video game like I'm doing now. It could be accounting, whatever. But people give you positive feedback. This is why so often adults are pursuing something that they first got that positive feedback on as a kid.

48:30Hala Taha:And that's also what neuroplasticity and brain plasticity is that you were mentioning earlier, correct? Yup. Okay, cool. Okay, let's talk about storytelling because you went to film school. Now you are running Impact Theory, which is a huge platform. And I know a lot of what you do with Impact Theory is really storytelling to bring about impact. So talk to us about what you've learned about storytelling, both at school and then, of course in the real world, building impact theory and how we can use storytelling in our businesses to attract customers. Okay. So at Quest, we had 3000 employees and a thousand of them grew up in the inner cities.

49:11And I thought, hmm, these guys are smart. Some of them smarter than me, but they're not doing anything with their lives. And when I started asking them like, Hey, why aren't you doing this? That or the other, the answers that came back were just ridiculous. And so I was like, this is not a intelligence problem. This is an idea problem. So I started what I then called Quest University. And I was like, let me teach you everything I know about entrepreneurship. One, it will just be good for your life. You can go on and work for any company at that. Like if you can master the skills that I'm teaching you guys, you'll be able to work anywhere.

49:44Now, my hope, of course, is that you stay here because you realize I care about your future more than your own mother, but you'll be empowered. you can go anywhere that you want. And I poured my heart and soul into it. I came early. I stayed late. And we've had people start other companies that are still running to this day almost a decade later. Absolutely incredible. I love it the most. The only catch is it was only 2 % of the people that I brought those ideas to. 98 % did nothing. And so I really started to get obsessed with, okay, what would we have to do to reach the 98 %? And I very quickly realized you have to bypass the logical centers of their brain.

50:25You can't just say, think like this, act like this. You've got to really get into the storytelling of it all. And I mean, look, when you see political campaigns and stuff like that, that's exactly what they're doing. They're telling a story. Stories simplify things and they focus attention. And that is the magic of storytelling. This is exactly how humans are able to come together in these gigantic, flexible groups with people they've never even met and cooperate. You have shared stories. It could be shared story of a nation state, could be shared story of a religion, but you need some sort of shared story to pass on values, to pass on identity, to give people a unifying narrative.

51:04So for better or worse, humans are a meaning-making machine, and stories allow you to transmit meaning. So they're just a mechanism by which you simplify things enough to extract meaning from. So we do it all the time. When we stub our toe on the coffee table, we tell a story. We're an idiot because we don't pay attention enough to our surroundings, and that's what stubbing our toe means. Or you could tell yourself the story of, man, I'm so hardcore. I probably broke my toe just now, but I don't stop. I don't quit. I'm the kind of guy that keeps pushing forward, right? So it all comes down to what's the story that you tell yourself about that thing?

51:41So it isn't what happens, it's what it means. And once people understand what it means, you're telling yourself that story. Someone may have said it from the outside, but you decided that that's what you were gonna repeat, that's what you were going to adopt. So whether you're a marketer, whether you're just trying to lead your own team, you've gotta tell them a story. This is why every company needs a mission. Your mission statement is about galvanizing your team. It's about telling the consumer what it means to buy your product, what they're sort of becoming a part of. And then in your marketing, you want to tell something that's simple enough that people can remember it like it's a story.

52:14And oftentimes just literally telling a story inside of your marketing is one of the most useful things that you could do. A couple of times in this interview, you've asked me to tell stories from my childhood or whatever. And so we all just resonate to story. So in the same way that when humans look at an image, we look for eyes. When people are hearing, okay, this thing happened, they're looking for the story in it. And so if you reveal character through it, if you reveal a moral through it, people are going to remember it way more than if it's just a list of facts. This is why humans get so bored in high school history only to later discover through, you know, like a hardcore history episode.

52:53Actually, history is amazing. But history is only amazing when you tell it like a story. If you tell it like a story, it's fascinating. You tell it like disembodied facts and figures, not interesting at all and hard to remember because that's not the architecture of the human mind.

53:07Hala Taha:Yeah, storytelling is so powerful in business and personal relationships. I feel like storytelling is a skill that everybody could improve and continually improve. So speaking of stories, I wanna hear the story of you becoming an entrepreneur. Was being an entrepreneur something that you always imagined or did it kind of just happen? Well, it didn't just happen, but it was not something I ever thought I would do. So you heard the story of me graduating film school and things not going well. I met these two entrepreneurs and they were bang on the money. And they said, look, you're coming to the world with your handout.

53:43And if you want to control the art, you have to control the resources. So if you want to build a studio, you want to tell your own stories, you should get into business and get rich. And I was like, oh man, that's so smart. I can't believe I didn't think about that before. Brilliant. And this is like right before the tech bubble burst. So I was like, oh word, man, I'm going to get into tech, take 18 months, build a company, sell it, all's good, be able to make my own movies. And that didn't work. So 18 months turned into 15 years, but it did work. And so that obviously ends up being incredible.

54:19And during that journey, I end up finding stroke constructing the reason that I was going to make films. So instead of just doing it because I like stories, it became who am I going to help? Impact theory arises. It's literally called impact theory because my theory on how to impact people at scale is through story. And so putting empowerment at the center of it becomes the whole jam. So I got into business strictly so that I could control my own destiny. But I learned a very powerful lesson, which is I can guarantee you're going to struggle, but I cannot guarantee you'll be successful. And so you better struggle well.

54:59And so I stopped asking myself what I think is the worst question people could ask, which is what would I do if I knew I couldn't fail? Because failure is the most likely outcome. So I started asking myself, what would I do and love every day, even if I were failing? And so that's why impact theory is literally architected from the ground up to be the things that, man, if I'm going to fail at something, I want to fail at this thing. so that has improved my life immeasurably but do keep in mind I'm saying that after having the gigantic financial success so if I had to do it all over again I would very much go straight into storytelling I would not go into business first really for sure because you it really is true that your network is your net worth these are going to be the people that open doors for you and stuff And so I'm having to completely reinvent myself, meet all the new people, all that.

55:59And it's added a decade to my journey. So I could have gotten it done a lot faster. Now, the problem is going into business allowed me to learn all these principles. So I don't waste time lamenting that I didn't do it. But I am not somebody who's like, I have no regrets. Yeah, I would do it differently. but such is why.

56:20Hala Taha:So you would have started Impact Theory first before the software company, before Quest. You would have just went straight to Impact Theory if you could. No, I would have gone to somebody who was living the life I wanted to live, which would have been at the time in filmmaking and said, I will work harder and smarter than anyone you know. And all I ask in exchange is knowledge and connections. So I would literally live in a hovel with five other guys, eat the world's cheapest food, do whatever I had to do to get by. but so that I could be as close to that person as humanly possible. I don't wanna work for somebody who works for them.

56:55I wanna be next to them all the time watching how they deal with the world. That is insanely useful. It's all the in-between stuff that you would never even know. It's how a deal is structured. It's how to talk to somebody who's being a dick in a meeting but doing it in a way where it's like they're not quite crossing the threshold where you can just call it out. Like how do you handle things like that? or somebody comes to you and asks for something that is clearly they're reaching beyond what they have any right to ask for, but they're kind of in a tough spot. And like, do you help them out?

57:27Do you not? Like all of those things, when you're in your early 20s, man, you have no idea how to handle all that stuff. You might be shooting from the hip, but you really don't have a sense of how it's all gonna play out. And when you can watch somebody go through all of that soft stuff that's next to impossible to teach in a business school, then it's like, if you can ask the occasional question, like, hey, I was really surprised the way you handled that. You're normally so hard on people, but you were really nice just then. Like, how do you know when to be hard and how do you know when to be soft?

57:54And if they're a thoughtful person and can be like, okay, well, let me explain why I was doing this here, why I did something completely different here and how I typically will make those decisions. And then to some extent, it's just seeing the patterns over and over and over and over and over. But you're not gonna get that when you start as a junior, junior, junior, you're something in a corporation where everybody's afraid of losing their job and they're lying to each other and playing politics. It's all just stupidly nightmarish. So what I always tell young people is, look, money only monetizes once.

58:23You can only spend it one time, but knowledge and connections monetize forever.

58:30Hala Taha:So good. I love that advice. Such good advice. So Quest Nutrition is a company that you started as a side hustle and you ended up selling it for a billion dollars. So I'm also growing a company called Yap Media that's doing really well. We're the number one business and self-improvement podcast network. We also have a social agency and it's doing really well. Yeah. I represent a lot of top podcasters, Jenna Kutcher, Amy Porterfield, John Lee Dumas, Russell Brunson. That's amazing. That's a stack of really cool people. I love it. That's amazing. I got great people in my network. But anyways, I couldn't imagine selling my company, but that's because I think my company's making impact and it's really aligned with my values and my future.

59:13Hala Taha:And it feels like everything just feels so aligned and fun for me right now. But you ended up selling a company that also had a great mission. So I'm just curious from your standpoint, what made you decide like, okay, I'm just going to sell the company and work on something new? Well, the big thing was I only got into business so that I could build impact theory. So that was always self-evident. but we had had so much success and my partners and I no longer shared a vision on how to grow the company and so it was like, well, we've been this successful so I had been building what's now Impact Theory inside of Quest it was literally called Inside Quest and I said, let me spin out this studio into a standalone company they agreed, spun that out and like I said, left Quest on Monday and on Tuesday was at Impact Theory but yeah, that was the whole thing from the beginning the guys that I was partners with back then were the ones that had said, hey, you're coming to the world with your handout.

1:00:07You should get into business. So it was not a surprise to them. So it was a very simple transition. And we've been at this now for almost a decade. It's crazy.

1:00:20Hala Taha:So I know that we have like, just about like eight minutes or so left. And I do want to talk about the future. You have some really interesting things to say about AI. I want to talk about your new video game. So one of the things that I read is that you say that content creation is going to completely change. You say the world as you know it, as a content creator, will end in two years. Now, as a content creator, that's very scary. Why do you believe that? So AI tools will make it such that all of the things that we use as a moat are going to go away. So it takes a while to master all the tools.

1:00:57It takes a while to get all the different people on your podcast, all that stuff. What's going to end up happening is all of this information is going to fracture, like hyper fracture. And somebody will be able to have an idea for a video with or without a guest. I mean, you could post videos of like, here's my conversation, my imagined conversation with Elon Musk, stuff like that. And instead of actually needing to get that person on your podcast, you just have the AI spin up his personality. You ask a bunch of questions. And if you do it in a way that the audience finds more interesting than the next person, then that's going to be what it's going to be.

1:01:30So what's going to end up happening is right now, it's already changed so much. You're so young, you probably don't have a sense of just how much it's already changed. But like when I was growing up, there was, you know, whatever, five channels and that was it. And they controlled the narrative. And we didn't even realize the narrative was being controlled. And then as things have gone to social, now you start things, seeing things break apart. Now, when I started podcasting, people literally like, Tom, why are you doing this? It's already played out. All the players that are there that are going to be there.

1:02:01It's already decided, man, it's too late. When I started, there were 400 podcasts. There's now 6 million podcasts. So it is just insane how many more podcasts. And I may have said 400 ,000 podcasts. so it the world has just changed absolutely dramatically and that's going to keep happening where the format of a podcast itself is going to get disrupted by you know somebody alone with an AI doing things that nobody's ever thought of before and the the difficulty of production the friction of going from idea to execution is the current moat that's going to go away which means this will be more like TikTok.

1:02:43So instead of there being a person that has a podcast, take a Rogan or something like that, instead of that person dominating the landscape, you're going to have like, oh, one of his episodes might pop off, but somebody else is going to release something else that's a totally unique format that nobody saw coming. And it'll just be like that. And people will just be scrolling onto the next, onto the next, onto the next. And that's going to happen across everything. It's going to happen across video game production, which I trust me, I have just as much anxiety as you. But the key is to adopt AI faster than the competition.

1:03:17And then just remember that one, we're moving towards an abundance reality where if AI does all of the wildly disruptive stuff that people think it's going to do over the next, say, 10 years, it's also going to be dropping the cost of virtually everything. So everything is just getting cheaper. Now this takes you into a post capitalistic society and there are big questions around what that looks like, but people will have access to the things that they want for far, far, far cheaper. Now that doesn't mean people won't find a way to peacock through other means because we will. But especially when you throw in the mix brain computer interfaces, this is all going to get real weird.

1:04:01There are already people that can play video games, like proper video games, using just their brain computer interface.

1:04:07Hala Taha:Oh my God. It's nuts. That is so nuts. And you were just saying when you first started 400 ,000 podcasts and everyone was telling you, you know, there's no chance it's already saturated. AI is going to make things even more saturated. So what is your perspective about the increased competition? And, you know, if there's even a point to participate if there's going to be that much competition? So I think people make a mistake when they do preemptive quitting or preemptive strikes. The reality is you want to pay attention. You want to be at the cutting edge. You want to be integrating AI right now.

1:04:43AI is a phenomenal tool and it is a terrible master. So it's not going to be able to do things without humans yet. So people should be excited right now for this phase. It's going to allow you to do more with less. And so if you're somebody like you that's paying attention, you've got a whole thesis, You know what you're moving towards. AI is going to help you keep costs down, help you stay really nimble. Now, if AI starts changing the landscape, then just pay attention. Like, okay, what do we need to do to stand out? How do we add value? And yes, it's going to change things. And yes, some people are going to get smashed into little pieces.

1:05:16But if you're really paying attention and if you continue to look at where is the puck going to go, then you'll be in better shape. Now, I've often made the quip that, yes, you should always skate to where the puck is going to go, but it's getting a little hard now because the puck is teleporting. But it's still, it's the right idea. You want to pay attention to, okay, predictive engine. Where is this going? What does this mean for content creation? I think there is going to be that hyperfragmentation. I think this is really going to be about deep communities. So part of the reason that I'm on Twitch now doing my video game streaming is that, yes, I'm building a video game, so I need to build a community around that.

1:05:55But also historically, I've built audiences, not communities. And so this is a chance for me to really build a deep community where the interactions are very different. And that's going to be something that AI will have a hard time with just because people know on the other side of this is not a person, it's AI. And so I think there will be some things that people just have a weird resonance when it's AI versus when it's a real person. So I'll be looking for opportunities like that. I'll be looking for places where I wanna lean into the humanity of it all. And I'll be looking for places where I wanna lean into the AI of it all.

1:06:28But because I don't push back on the way the world actually is, AI is here. AI will keep getting better. AI may slow down, but I don't think it's gonna stop. So I'm just paying attention to where it's at and how I can leverage it for now.

1:06:44Hala Taha:And can you tell us more about Project Kaizen and how it fits into your vision of impact theory and the future of content creation? Yeah, so it is impact theory in the sense that my theory and how to impact people at scale is through entertainment. The most dominant form of entertainment right now is video games. Also a core part of my thesis is that who I'm focused on is 11 to 15 year olds. so project kaizen is a game uh if anybody's ever heard of extraction royale it's an extraction royale game that's aimed at that 11 to 15 year old demographic technically 13 and up uh because of sopa laws but um that's that core demographic that's in what's known as the age of imprinting and so trying to reach them so that we can introduce empowering ideas so one of the characters in the game right now which is out right now by the way if anybody wants to play It's a free-to-play game at projectkaizen.io.

1:07:37And Bruce Lee is one of the characters in the game. And it's an official collaboration with the Bruce Lee family. And the reason I wanted Bruce to be our launch partner was he had a tremendous impact on my life, even though he had passed away before I was born. But he wrote a book called The Tao of Jeet Kune Do, which was about his style of martial arts. And some of the ideas in there, even though I didn't train in the martial art, the ideas were profoundly shaping for the way that I think now about mindset and getting better and all of that stuff. So we wanted him to be a character in the game who's like our Morpheus or Obi-Wan Kenobi, the mentor character that's giving the players advice.

1:08:19So yeah, really excited for people to get into it. And then the other part is the UGC aspect. So players can come in and build their own maps. And this is the very beginning of a much deeper set of tools that will build for players to build their own content.

1:08:34Hala Taha:And you say that Project Kaizen is the blueprint of the creator economy. Can you help explain what you mean by that and how it could help build communities and things like that? Yeah. So I think the way that creators need to think is your job is to create a container for your community to come in and create. So because I think in IP, the way that we look at it is we've created Project Kaizen. It's this gigantic sci-fi world. And inside that world, there's characters and stories and physics, if you will, rules of the game, the way that it all works. The conceit of our story is that everything you've ever known is a simulation.

1:09:11So imagine the matrix, but there's no real world. The matrix is the real world. There's nothing else. And in that story, that means that we're connected to other dimensions and all that kind of stuff. And that way, as players spin up their own storylines, they can be like, oh, we're from this, you know, what we call instance, a server instance or a universe, if you want to think of it in those terms. So we're from this universe. These are our people. This is what our world looks like. And they can literally build that up as much as they want. It could be as simple as one little floating island.

1:09:45It could be all the way to a planet, not yet, but one day. And them being able to tell their own stories and then giving the community the ability to say, hey, this person's storyline follows all of your guidelines impact theory. We love it and want this to be canon in your world. And so when a story meets certain criteria, players can vote for it. And then if we approve it, then it becomes official canon within our world. And so our goal is for them, if you know UEFN, this is what Fortnite's doing, is absolutely brilliant, giving the players the tools from the game to build their own sort of mini games inside of it.

1:10:26And so we're doing a very similar thing, much smaller scale compared to Epic, which is absolutely gigantic. But I think this is just the future. I think everybody's going to be doing this. So it's not like, oh, we're trying to be some pale shadow of what Epic is doing. I just think this is the future in the same way that if you were going to launch a video site, of course, you're going to let people upload to it. There would be no other way, right? So that is our plan now is to give players the ability to create unique experiences within our container.

1:10:56Hala Taha:Amazing. Well, it sounds super fascinating and very exciting. And I can hear the passion in your voice about it. Tom, thank you so much for joining us on the podcast. I end the show with two questions that I ask all of my guests. And this can just come from your heart. Doesn't have to be anything that we talked about today. What is one actionable thing our young and profiters can do today to become more profitable tomorrow? Always be learning. Always be learning. So it should cue off of your goal. So again, your goals make demands. But I spend, on average, two hours a day, 365 days a year, every day for the last 15 years, maybe more, learning.

1:11:37Be a relentless learning machine.

1:11:40Hala Taha:Amazing. and what is your secret to profiting in life? Well, so I'm guessing you mean that in like a more holistic stance. So for me, I know that nothing matters more than reciprocated love. So I make sure that I put a ton of time and attention into that. And then also I manage my biology. So I get sleep, I eat healthy, I exercise, I work out. I maintain loving relationships beyond just my wife. Those things are incredibly important. And then if I can really ground this for people, guys, you have to learn how business works. Like business has physics. And if you really wanna get good, you need to learn those physics.

1:12:20And they are available for anybody to learn, anyone to master. The game is really relatively simple. Learn it, learn the game. Do not let yourself get overwhelmed. Just one piece at a time, pick apart the skillset, learn it.

1:12:34Hala Taha:And when you say physics, do you mean like sales, marketing, finance, those kinds of things? Yes. And where it interfaces with leadership and human psychology. Yes. And where can everybody learn more about you and everything that you do? At Tom Bilyeu across the socials. Best place is probably YouTube. Amazing. Thank you so much for all of your time. Really appreciate it. Absolutely. Thank you.