This episode was a recording of a conversation that Erik Torenberg from Product Hunt held with author/investor/entrepreneur Tucker Max, back in March 2015. Tucker Max is the author of I Hope They Serve Beer in Hell, Assholes Finish First, and recently Mate: Become the Man Women Want. He was also an angel investor for nearly five years before recently giving up investing to focus on his own startup: Book in a Box.
Before diving in, Erik alludes to the fact that Tucker Max is "widely hated" in some corners of the internet. Erik thinks that's unfair: "It's weird that you can judge people who you've never met, based on something someone else said, who you've also never met." He proposes an analogy that in the same way we ought to "buy locally" we should also "judge locally". "Judge what you know so you can judge with authority... Meet the person to confirm whether or not they suck."
How Tucker Max got into technology investing:
Tucker has lived in Austin, Texas for the last five or six years. He's been investing in tech companies since around 2010. He's invested in about 50 companies to-date. He says, "the obvious, easy way to get into investing is to have money." Also, people knew him for his writing, so it was easy to get attention. He points out that rappers like Chamillionaire and Nas have taken a similar approach. People from other fields are moving into tech. Once you have an audience, people in tech want to talk to you. The tech world is good at a lot of things, but struggles at marketing, branding, selling, and telling stories, which are the exact skills that Tucker possesses.
Erik asks, what is Tucker's "ultimate dream or vision" behind his decision to become an angel investor:
Tucker says he's lucky to have sold enough books to not have to work if he doesn't want to. He's always just followed what he finds interesting and he felt that people in tech were doing awesome things: "You have this community of people who are builders, and optimists, and positive, and are willing and able to make changes to the world that help people." For him, it's fun to simply be a part of that.
Tucker's first exposure to technology:
No one was willing to publish his writing in 2002 so he learned HTML and put up a website (before MySpace or Friendster existed). He built his own online platform and audience before anyone was talking about either of those things. After a few years, he realized he was better at using the internet for self-promotion than any author in the field.
Tucker's investment thesis:
Tucker tries to stay in his "lane," and only invest in areas where he has expertise. He talks about passing on investing in Bohemian Guitars because he doesn't "know shit about guitars." He contrasts that with an investment he made in Partender, a company which makes inventory management software for bars. He grew up in the restaurant business and was a bartender for many years. He says, "I called them and said I want to put money in right now. I want to be an advisor. Here's everything I can bring. I knew immediately it was going to be a hit."
Tucker's thoughts on the book industry:
"Nobody reads." Tucker says half the people who bought his books didn't read them. People buy books for social signaling or other reasons. Companies can track how people read e-books and most people don't finish the books they start. According to Tucker, 80% of people quit reading The Goldfinch by page 200. He says his own books have a relatively higher finish rate because "they are meant to be funny and entertaining." His books are entirely designed to keep your attention. Most academic or intellectual books are written for the author to signal something to the world, not to actually captivate readers.
Erik points out that Goodreads sold to Amazon in 2013 for a reported $200 million and asks if Tucker see's other opportunities for tech companies in the book industry:
Tucker brings up this post by Ben Thompson as a way to think about the current state of content industries. There are three places for technology to focus: creation, distribution, and discovery. He says no one is doing book discovery right. Everyone has bad incentives. Authors and distributors are trying to sell books, not help people discover the best ones. Book recommendations needs to come from a trusted source and discovery needs to be about matching people to their tastes, not telling them what is "good" or "bad". "I think 50 Shades of Grey is terrible, but 100 million women disagree with me."
For this reason, Tucker thinks Product Hunt's book discovery channel could work, but he wouldn't structure it exactly like Product Hunt's main channel. Book discovery has to be curated to fit the user. Product Hunt was built with Ryan Hoover literally curating a list of products that fit an aesthetic, which a lot of people shared. What is that aesthetic going to be for the books channel? He worries "people will say, oh I'm supposed to like this book, and they'll upvote it, and it will be a boring crappy book."
Tucker explains his new startup:
Tucker had just launched his new company, Book in a Box, on Product Hunt and says he probably made $70,000 off of Product Hunt alone. "I owe you guys drinks or dinner," he jokes. Book in a Box provides "writing and publishing as a service." If you have an idea for a book but you're either too busy or just not a good writer, they will do everything for you. They charge $15K and spend a few hours on the phone with you, gathering ideas for your book and organizing them into an outline. Next, they conduct and record a lengthy interview with you. An editor converts the transcript of that interview into book prose. Book in a Box handles the entire publishing process and presents you with a finished book.
The company started because Tucker met Melissa Gonzalez at a dinner, an entrepreneur in the retail industry. She had an idea for a book but she was dyslexic and didn't have time to sit down and write it. Tucker says he laughed at her when she asked him how she could publish a book without writing it. It sounded like: "I want to be in the NBA, how can I do that without being good at basketball?" After he lectured her "like an asshole," she rolled her eyes and said, "In my job, I solve problems. Are you going to solve my problem, or lecture me about hard work?"
Tucker obsessed about that conversation and realized she was right. "A book is about getting an idea out of one person's head and into a medium where it can go to millions of others." Writing is a skill that is distinct from thinking. Why couldn't he help Melissa transmit her ideas from thoughts to speech to page? He decided to test this thesis with Melissa and help her write a book. Tucker says the book ended up getting a lot of media attention which helped her retail consultancy acquire business. "She's gotten a 1000x return on her book."
Could a Y Combinator model work for the publishing industry?
Tucker says "A YC model is really fucking stupid for content." He's referring to the way YC takes an investment in companies and agrees to help them grow for a stake in their success. Book in a Box instead takes an upfront fee and does not get a share of any of their book's profits. He says it's too hard to pick winners in books, especially in non-fiction because authors aren't solely motivated to sell lots of books. Books can help authors generate leads, establish authority, raise speaking fees, etc. Melissa only sold 500 copies of her book, but made millions of dollars off the direct impact on her consultancy. For Book in a Box, there's no way to really share in this less tangible upside. Tucker says, "Every entertainment business in the business of picking winners is going to be beaten out by the company that's in the business of managing the process for creators."
Could Tucker's past persona negatively impact his success as an entrepreneur?
Tucker says his own books are about the "stupid things I did in my 20s." His attitude is that if people don't like him, they don't have to work with him. "There's a lot of reasons not to like me, and that's fine." He accepts both the good and bad consequences of the choices he's made in the past. Tucker is now married with a kid and a big night out for him "is going to a wine tasting."
Some final thoughts:
On deal flow: "It's really easy to get deal flow if you're famous in a separate area." Tucker went to tech conferences and built relationships. "I'm really good at building relationships with good people... even though I'm an asshole."
On being a writer: "I don't think being a writer is a status symbol anymore. Saying shit people care about and doing things that matter is a status symbol." Tucker says the people best positioned to do well publishing books are people who have learned something in other fields, not literary novelists. He says Erik and Ryan could write a book teaching people how to build internet communities, for example.
On tech advice: Tucker doesn't blog or give out too much advice because whenever he comes up with something he "sees that Paul Graham wrote the same thing better, six years ago." His biggest advice is "learn how to pitch... Entrepreneurs tell terrible stories even when they have great stories to tell."
On Shark Tank: "I would love to be on Shark Tank, except I would never take any of those terrible fucking deals."