Tim FerrissGary Keller — How to Focus on the One Important Thing | The Tim Ferriss Show
EVERY SPOKEN WORD
115 min read · 22,865 words- 0:00 – 3:31
Intro
- TFTim Ferriss
Optimal minimal. At this altitude, I can run flat-out for a half-mile before my hands start to shake. Can I ask you a personal question? Now would seem an appropriate time. What if I give you alchemy? I'm a cybernetic organism, living tissue over metal endoskeleton. The Tim Ferriss Show. This episode is brought to you by ShipStation. If you've ever sold anything online or if you sell anything online, then you know what a pain in the ass the shipping process is. It's time-consuming, it's expensive, you're always copying and pasting orders from different sites, trying to figure out the best carrier, so on and so forth. It's such a hassle. And in a previous life, I shipped tens of thousands of units overseas, domestically, overnight, ground, every possible carrier. It drove me bonkers. ShipStation was created to make your life easier. I wish I had had it when I [laughs] was in the biz, so to speak. It has the most five-star reviews of any shipping software, 4.9 out of five for Magento users, 4.8 out of five for Shopify users, 4.5 out of five for BigCommerce users. It goes on and on. Whether you're selling on eBay, Amazon, Shopify, or more than 100 other popular selling channels, ShipStation lets you access all of your orders from one simple dashboard. ShipStation works with all of the major shipping carriers, locally and globally, including FedEx, UPS, and the major local couriers like USPS. ShipStation will recommend the best carrier for your needs so that you know that you're always getting the best deal. They even offer discounts on shipping costs that are available to, say, you as a one-person shop that would normally be thought of as reserved for large Fortune 500 companies. So there are a lot of benefits. No other shipping platform makes shipping faster, easier, and more affordable. And right now, Tim Ferriss Show listeners get to try ShipStation free for 60 days when you use promo code Tim. It's risk-free. You can start your free trial without even entering your credit card info. Just visit shipstation.com, click on the microphone at the top of the homepage, and type in Tim, T-I-M. That's shipstation.com, enter promo code Tim. Check it out, shipstation.com, promo code Tim. [upbeat music] This episode is brought to you by Ring. This season can be a whirlwind of deliveries, visitors, and holiday travel, so it's the best time of the year to upgrade your doorbell and keep an eye on home, no matter where the holidays take you. I'm traveling a ton, and this is key for me. Ring helps you stay connected to your home from anywhere, so if there's a package delivery or a surprise visitor, you'll get an alert and be able to see, hear, and speak to them all from your phone. If you're on the go this season, whether it's across town or across the country, you can check in any time for some much-needed holiday peace of mind. I've personally used Ring for years now. It catches and records all the regular stuff, like deliveries and so on, but it's also saved my ass a few times catching weirdos and weird things. Ring is key to my peace of mind. And as a listener of The Tim Ferriss Show, that's you, you have a special holiday offer on a Ring Welcome Kit available right now. With the Ring Video Doorbell 2 and Chime Pro, the Ring Welcome Kit has everything you need to keep an eye on home, no matter what this holiday season brings. With Ring, you're always home. Just go to ring.com/tim.
- 3:31 – 9:49
Gary Keller’s early path: from aspiring musician to choosing real estate
- TFTim Ferriss
That's ring.com/tim. Check it out. Additional terms may apply, and this offer is for US residents only. That is ring.com/tim. [upbeat music] Well, hello, boys and girls, ladies and germs, monks and monkfish. Welcome to another episode of The Tim Ferriss Show. This is your host, [laughs] I don't think I've ever said that before, Tim Ferriss, and it is my job every episode to attempt, do my best to deconstruct world-class performers from different fields of all different types to find out what their routines are, what their self-talk is like, what types of tools they use, and so on and so forth. My guest today is Gary Keller. This is a name that's come up a lot in the last few years in my friend circles, and particularly since moving to Austin. Gary is the co-founder, chairman, and CEO of Keller Williams, also known as KW, the world's largest real estate franchise by agent count. In 2019, KW, which also ranks number one in units and sales volume in the US, was named by Fast Company the most innovative company in real estate. In 2015, Keller began driving KW's evolution into a technology company, now focused on building the real estate platform that agents, buyers, and sellers prefer. He's competing, you may note, head-to-head with multi-billion dollar venture-backed companies. The difference among many, so I should say one of many differences, is that he's using his own money, which I just love. [laughs] Keller is also the best-selling author of The ONE Thing, subtitled The Surprisingly Simple Truth Behind Extraordinary Results. We talk about this quite a bit in our conversation. The Millionaire Real Estate Agent, The Millionaire Real Estate Investor, and SHIFT. You can find him on Facebook at Gary Keller, and you can also find his new podcast, which is called Think Like a CEO, on all of your podcast platforms. Think Like a CEO, which he hosts with Jay Papasan, is described thusly on Apple Podcasts. Think Like a CEO weaves a narrative of the business and life lessons, including developing business strategies, hiring the right people, developing a culture that truly puts people first. You can find it, as I mentioned, on Apple Podcasts, Spotify, or wherever you typically find your podcasts. Now, without further ado, please enjoy my wide-ranging conversation with Gary Keller. [upbeat music] Gary, welcome to the show.
- GKGary Keller
Thank you, Tim. Happy to be here.
- TFTim Ferriss
I have heard your name dozens, hundreds maybe, of times-
- GKGary Keller
Sure
- TFTim Ferriss
... uh, since moving to Austin, and certainly heard the name many times before that. Uh, and th- that relates to, uh, much of your work in the written word, and I think we'll get to that. But I wanted to start with something I came across in doing research for this conversation, and feel free to fact-check, 'cause you don't want to believe everything you read on the internet, of course.
- GKGary Keller
[laughs]
- TFTim Ferriss
But [laughs] , uh, I wanna talk about your childhood a little bit, and maybe your later childhood.
- GKGary Keller
Sure, sure.
- TFTim Ferriss
So it, it seems like it was the summer before your junior year that your dad had you shadow appointments with a banker, an attorney, and a realtor. And then-
- GKGary Keller
And a lawyer.
- TFTim Ferriss
And a lawyer.
- GKGary Keller
Yeah, a lawyer. Yeah, no, you said it right. Accountant, and a lawyer, and a banker, and a realtor.
- TFTim Ferriss
Got it.
- GKGary Keller
There were four of, four of them.
- TFTim Ferriss
Mm-hmm.
- GKGary Keller
Yep.
- TFTim Ferriss
And uh, so I'd like to talk about that, if you, if you took anything in particular away from that, and also a quote from your dad which was... Or in effect, uh, when he passed on to you, he, he s- he said that anyone he knew a- who had any money either made it in real estate or put it in real estate. So could you talk about that period of time-
- GKGary Keller
Yeah
- TFTim Ferriss
... and what's, what impact that had on you?
- GKGary Keller
Yeah, you know, it's interesting. I thought I w- actually, in high school I thought I was gonna be a rock musician, and I gave no thought to college whatsoever. And the summer after I graduated from high school, I, um, came home one night after our band had performed, and my mother and dad, who were both educators, were waiting up for me. A little spooky. I had to turn the lights on, and there were my parents in the dark [laughs] sitting there in the den.
- TFTim Ferriss
[laughs]
- GKGary Keller
But, uh, I just plopped down on the couch, Tim, and I s- and I, uh, uh, and I said, "You know, I don't think it's gonna work out. I, I, I'm not that good, and I'm not motivated to practice enough to overcome that I'm not any good." And my, and my parents just looked at me, and I think they knew that, by the way. And both being educators, um, my dad said, "Well, we actually applied to a college and you were accepted, if you'd like to go." And [laughs] I said, "Really? Where?" And they said, "Baylor University." I went, "Cool." I'd been there once, 'cause I had an older sister who had just started going there. And, uh, so that was kinda it. So my, my, uh, that's how, that's how I got to college. And, um, the, at the end of my s- sophomore year, beginning of my junior year, that summer my dad, um, uh, I, he said, "You probably should get a major." [laughs] And I went, "Uh, okay." I w- I, you know, I hadn't given it any thought. And, um, I love, and I love to tell this story to the kids when I teach, 'cause I said, "Maybe you can relate to the fact that I was clueless about everything." And, um, so Dad said, "Well, um, why don't I set you up to, uh, spend some time with some guys?" So it was an accountant, a banker, a lawyer, and a realtor. And the, um, I liked the realtor, Tim, and I liked it, I liked it because it was entrepreneurial, it was very people-oriented. He didn't have a tie on. Uh, he didn't, he wasn't in a stuffy, corporate-feeling environment. Um, right? All those, all those sound reasons why you should choose a profession, right? Uh, but, uh, anyway, that appealed to me. Got back to college, uh, thinking re- you know, real estate and what that guy did was something that was very appealing to me. And Baylor University had just announced they were launching, that semester of my junior year, first semester, a real estate degree program, and it was in real estate and insurance. So that's kind of... So I, so I, I, I signed up, and, um, you know, the rest is kinda history. So I got my degree in, in real estate and came out, interviewed on a couple of places, and landed in Austin.
- 9:49 – 12:01
Rejected by New York Life: the assessment that pushed him into real estate
- TFTim Ferriss
Let's, let's talk about, and this is maybe one of those places, uh, New York Life for a second, because I, y- I would assume, and again, this is a dangerous business assuming things, but that you are a spectacularly good at selling or at least persuading-
- GKGary Keller
[laughs]
- TFTim Ferriss
... uh, conveying ideas. And y- my understanding is that you were put through some type of assessment, uh-
- GKGary Keller
Mm-hmm
- TFTim Ferriss
... could you... Yeah, what happened?
- GKGary Keller
Yeah, that was in my, that was in, in college. And, uh, my senior year, my degree plan was in the marketing department, and it was real estate and insurance. So, um, you know, the college, they don't, they don't teach you, uh, much of anything about leaving the, the college other than teaching you how to interview. So one of the guys that came on campus was with New York Life, and I didn't real- I later discovered that that guy... I thought I was interviewing with New York Life, the corporation, but I actually was interviewing with the, the top New York Life salesperson in the area. [laughs] And, um, so anyway, so I went to the interview and, uh, they gave me a behavioral profile assessment. And I got a, what felt like a form letter, uh, a couple of weeks later that said I didn't match the profile of their successful salespeople, and so I would not be made an offer to join them. And the funny thing is, I was so mad about that, that I chose real estate. [laughs]
- TFTim Ferriss
[laughs]
- GKGary Keller
I was furious. I mean, you know, I have a degree, right? I have a degree in real estate and insurance. I go to interview for my job, a- and they tell me I'm not q- I, I don't have the, the, the job match requirements. It's almost like, right, you got a, a degree in law or whatever, and then when you got out, the law firms all told you, "You're really not a good match to be a lawyer." It was kind of a, it was kind of a, you know, freaked me out a little bit, right? But I, I tend to, to, to respond pretty strong to that kind of stuff. So I got really mad, and then I just interviewed real estate companies. [laughs]
- TFTim Ferriss
And, and, uh, when did you strike out on your own? How did that- Uh, how was that catalyzed?
- 12:01 – 13:42
Starting in Austin and “doing it by the book” to sell quickly
- GKGary Keller
Well, that was in, uh, '83. So when I got out of, when I got out of college and interviewed, I, I interviewed two firms. I chose the one in Austin, Texas. Um, and had been here, I think, maybe once or twice before with my family. But it-- I drove here and, uh, interviewed with the firm, liked them, agreed to go to work there, and, um, start literally, you know, launched, launched my, my career, if you will, through, um, uh... I guess that would be after the end of the su- yeah, it'd be the end of the summer. Yeah. So did that. And, um, by the-- I sold, I sold six houses my first 30 days in a city that I'd only been in a couple of times before. Because I'm-- I kind of believe in business by the book a little bit. You know, my, my-- One of the things that... And I don't know where this came from, Tim, but, um, I, I had a pr- well, I had a professor make a profound statement once, and he said, "Mr. Keller," he says, [chuckles] "people have lived before you. You, you might wanna study what they know before you go out and start doing your thing." And that, that, that make, that makes a lot of sense to me, right? So, uh, I studied how-- While I was still in college, I was reading the books and studying how to be a successful realtor. So when I hit the ground, uh, in a c- in a city that I knew, you know, maybe two people in, um, I just did everything by the book. Sold six houses, closed five of them, got my picture in the paper. Woo-hoo. But I just-
- TFTim Ferriss
What do you mean by the book in that case?
- GKGary Keller
Well, meaning, meaning that, uh, that I went to, I went to the books. I went to the books of the best real estate, um, trainers at that time.
- TFTim Ferriss
I see. The, the-
- GKGary Keller
And I-
- TFTim Ferriss
By the book meaning following the playbook of the people at the time-
- GKGary Keller
Mm-hmm
- TFTim Ferriss
... who were well-respected.
- 13:42 – 18:06
From rookie success to management conflict: tests, recruiting, and learning to lead
- GKGary Keller
I- I- Ex- exactly. I, I, that's exactly what I did. So I outlined all of that, created a, a plan for myself, and then just executed on the plan. And, um, and things went well. The, the funny thing is, is at the end of my... I guess it was the, uh, end of the 11th month of my first full year, calendar year, my manager came in and said, um, "Y- you're gonna be the rookie of the year. You know, you're, you're, you're 22 years old." This is... Or, yeah, no, 23. "This is amazing. It's awesome." And I went, "Nah, I'm outta here." And she goes, "What do you mean?" I'm, and I'm saying, "Well, I hit all my goals. I made the amount of money that I wanted to make, bought a condo, got a dog, uh, got a new car, got some Cerwin-Vega tower speakers that were, like, four feet tall and, you know. And so I'm done. I'm gonna go take a month off." So I, I, I left. Anyway, came back, and I discovered that I was really kind of a closet trainer, meaning that I was over there helping people, and I've been in the business a year, a year and a half, I'm helping people. And, um, I think I just came by that naturally, Tim. So long story short, I ended up applying for a, a management position in the largest firm in the city at the time. And the owner said, uh, "I am not gonna hire you."
- TFTim Ferriss
Why not?
- GKGary Keller
Once... Well, once again, I'm getting rejected, right? Um, he said no one liked me. And, [laughs]
- TFTim Ferriss
[laughs]
- GKGary Keller
And, you know, I... The truth is, is, is that's probably correct, but, but here's what I said to him, and I remember it as clear as day. I said, "I understand that, but I come into the office and the receptionist is doing her nails, and I have, I have clients coming in, and silly me, I thought the environment was supposed to s- you know, support my goals. So I ask her to put it away, and she gets mad at me. And then I go around the corner, and there are agents, and they've got all their smelly food out, and it's a mess, and it's right by the reception area. And I, I ask them to clean it up or, you know, put it away or something because, silly me, I thought the environment was supposed to support me. And they don't like me doing that. But" I said, "if you hire me, um, they'll like me, and we'll all make more money." And he said, "I'm not hiring you." And I don't know where the, and I don't know where this came from. You know, it's, uh, you know, but somewhere deep inside, that was offensive to me. And so I said, "Well, give me a test. If I pass it, you have to hire me." And I, I don't think anyone ever talked to this multimillionaire-
- TFTim Ferriss
[laughs]
- GKGary Keller
... you know, businessman. And so he actually got a sheet of paper out. He wrote down the things that I need to accomplish, handed it to me, and said, "Go do it." And I had no training in what he'd asked me to do, and, and, and I had no support, right? I wasn't getting paid for it. I was just entrepreneurially, uh, gonna go out and achieve this list to get a job. Well, I think he blew me off and forgot about it. I don't know. But he-
- TFTim Ferriss
What were some of the things on the list?
- GKGary Keller
Well, it was things like, uh, go recruit people to the firm. Uh, right? But here I am, a salesperson with no training in that, right? And then the other one was teach, and we'll see what your ratings will be like. It was just a series of, of hurdles that I w- I was told to go do. And I did. My first recruit was actually out of a bookstore. I was in the B. Dalton bookstore, and I saw a woman that was looking at the real estate section, and I went over and said, "Can I help you?" [laughs] And, uh, and she goes, "No." And, and I, I was taken back, right? I said, "I'm so sorry," and I walked away. And a little while later, she came over to me and she said, "Hey, you know, I, I wanna apologize. I, I thought you were trying to pick me up or something." And I said, "Well..." Because I'm a smart aleck, Tim. I said, "Well, the thought crossed my mind." Uh, but I said, "No." I said, "Actually, I have a degree in real estate. I sell real estate, uh, and I, I love learning, and I've, I've literally read or browsed almost every book on these shelves regarding real estate. So I thought I could just help you." And she said, "Well, I'm thinking about getting into real estate." And so [laughs] that was one of the things on my list I had to go accomplish, right? So, um, checked that off the box. And, uh, it's really cool. When we later started our firm, she was one of the, the first 20 agents to, to come join us. But so that was it. So that, the, what, what essentially, uh, I then did that for, uh, about a year and a half to two years. Well, it was easily two years now that I think about it. Um- And
- 18:06 – 24:59
The breaking point: pay policy changes, quitting, and founding Keller Williams
- GKGary Keller
they, they, um... The company did something that, that I didn't like, and I went in to resign. Uh, because the owner had promised me, when he hired me, he sent me to the goat pastures outside of Austin. They call it Round Rock now, but it was goat pasture, and he didn't give me where all the growth was going, 'cause he'd already hired a manager for that he said. Well, turns out that, um, tho- he hired three managers, and none of them could ever launch that office, and he just had to eat the lease for three years before he could get out of it. Me, on the other hand, went up to Round Rock, Georgetown, and built a business that's still there today. Hugely successful. But he didn't, he then did something that created, uh, a problem in my office. So I went in the, I went in one morning at, like, 6:30 and said I, "I quit." I said, "I'm gonna go back. I'm gonna build it back after you tore it down, and then I'm out of here." Now the tables reverse though, Tim, and, and the, this owner says, "Well, what would it take to keep you?" And I just thought that was, wow, full circle, if you will, right?
- TFTim Ferriss
[laughs]
- GKGary Keller
No one likes you, and I'm not hiring you to what will it take to keep you? So I wrote a number on a sheet of paper, and it, it was the largest sum that he'd ever guaranteed anybody, and, uh, he, he agreed. [laughs] He said, "Okay."
- TFTim Ferriss
How did you come up with the number? Did you already have it in your mind before you walked into the office?
- GKGary Keller
No. No, I went to quit.
- TFTim Ferriss
All right.
- GKGary Keller
I had gone in to quit. I was... I didn't know... And, and this is all back to what was the starting of Keller Williams.
- TFTim Ferriss
Right.
- GKGary Keller
I had no plans, Tim. I just, you know, I, I'm not gonna be talked to that way. I'm not gonna be treated this way. Uh, I'm not gonna build something and then you, because you're the, you're the boss, uh, that you can just tear it down and do that. And so I was, I was leaving. Um, no, I just wrote a, a big, I just wrote a big six-figure number that I knew he wouldn't pay, or I thought he wouldn't pay.
- TFTim Ferriss
[laughs]
- GKGary Keller
And, and then of course he paid, right? So I, I went out and, um, uh, s- and launched that business for him. And-
- TFTim Ferriss
Can you say, and if you can't, I understand, but can you say what he did that was so disruptive or damaging to your office?
- GKGary Keller
Yeah, it's real simple. And this is all leading up to your question of, so how do we start Keller Williams? So-
- TFTim Ferriss
Yeah, I'm in no rush
- GKGary Keller
... um, yeah, so what happened was he had a policy and guideline manual, and the policy and guideline manual for all of his offices in three cities, uh, had a clause in it that said that if the company changes the pol- a policy, you have 48 hours to give notice that you don't agree with the policy. Otherwise, you're now under the policy. And so on Christmas Eve, he went to all his offices and, and changed a policy about how people got paid.
- TFTim Ferriss
[laughs] Oh.
- GKGary Keller
Right? So-
- TFTim Ferriss
That is a terrible, terrible move. Wow.
- GKGary Keller
It was. It was. And in fact, the policy had to do with what happens when people leave, which I thought was really interesting. Anyway, so I had built this highly, uh, successful business with literally no, no new people. These were all really, um, seasoned vets, uh, great people, and they weren't gonna take this, so they left. And literally it, it, it destroyed, it... What he did destroyed the office. And so I went to him and said, "Okay, I quit. Um, I, I'll go back and, and put it back the way it was, but when I get it there, I'm out of here." And that's when he said, "Well, what will it take to keep you?" Um, and I, I wrote a number down, and he said, "Okay, I'm gonna put you in charge of, of VP in charge of expanding the company, and your first job is to go back and rebuild that business." So I went back and rebuilt it, and then I got sent to another location in Austin down south. And about, I would say maybe a month and a half into that at most, um, he called me up out of the blue and wanted to know what I'd done for him. Now understand that my office was in an office building in South Austin, and I was in the broom closet, and I know it was the broom closet because there were brooms in it. Uh, and it did have a window, however, and they gave me a folding table for my desk, a folding table for, as a credenza, if you will. Uh, and then they gave me, um, uh, two, two folding chairs and a flip chart and a phone and said, "Go, go, go build another company." Well, I did, and, uh, had I stayed, this was, was in 1983, had I stayed, he owed, he owed me a huge bonus, but it was never about the money, so I, you know, in the end, and so I just quit, you know? And I didn't know what I was gonna do. That's the thing. I, I really didn't know. I just, I just knew that I wasn't gonna work for someone who talked to people that way. And the other thing that was going on in his firm were there were, there were men and women who had been with him a long, long time, and he had promised them, um, you know, compensation in the form of stock or profits interest, and w- what was happening was now he was taking all that back. He was undoing all of that and trying to pull everything back into himself. And I saw the writing on the wall, 'cause I'm looking up going, "Well, what's my future with a guy like that?" And I, you know, in other words, I too could work for 20 years for a guy like that and then have him pull the rug out and not have anything. That's the way I, I internalized that. So I quit. And, um, my wife at the time, I had b- I'd been married now for approximately a year and a half, and my wife, uh, became his assistant. And she was already in the firm, and, um, she'd actually, um, uh, had been an administrative assistant in the firm, and so she, he recruited her to come work directly for him. So I, the comp... We, uh... So I, so I, end of the day, he called me and treated me that way. I went in, I went in the next day and quit, and this time I didn't name a price. I just said, "I'm done." And, uh, I gave him all the names of all the people I had recruited and all the info I had on them, and it was a, it was a, I think approximately it was 14 people, and they were all terrific, terrific real estate, um, agent prospects, and, um, I just gave him the list. If I, if I'd have just, um, stayed a little longer, he'd have owed me a huge bonus check. But I, but I, I didn't care about it And I, I walked out, and there was a gentleman that was in the commercial area of that company called Joe Williams. And I approached Joe and I said, "Why don't we form t- uh, two companies? I'll form a residential, you form commercial. We'll each own, you know, 50% of each, and we'll go build this." And the commercial company never took off, but, but the residential side, uh, took off immediately and, um, n- never lost money. We had borrowed $44,000 to launch the business, and we paid that back in a little over a year. And to this day, uh, we have no operational debt on the company. I've never borrowed or... money, and I've never taken any outside money, uh, to build Keller Williams. We all did it by internal cashflow.
- 24:59 – 32:05
Debt, “smart money,” and the red-light/green-light discipline
- TFTim Ferriss
And now, is there... Aside from having the cashflow to do that, uh, since a, a lot of people in many industries will leverage and borrow-
- GKGary Keller
Mm-hmm
- TFTim Ferriss
... uh, what were the main reasons, if there were others, a- aside from just having plentiful cashflow, uh, for not taking on debt to try to grow faster?
- GKGary Keller
Man, that's a, that's a wonderful question. You know, um, I'll, I'll, I'll cheat, and I'll give you a quote from Robert Kiyosaki, which is, "Assets feed me, liabilities eat me." And I... That mantra kind of plays in my head a little bit, that if you have to borrow money, it means you can't afford what you're fixing to buy. E- Even though that's... By the way, that's not true, right? It's, it's not true. I, I definitely have u- I use debt to buy real estate when it makes sense. Uh, I u- I use debt when it, it makes sense to buy a business. So I'm, I'm not the no debt guy, but I, I do come from a, of a position of, um, I wanna be, I wanna be smart with money such that money doesn't leave me, and, and debt's a way to do that. So I... Other than that, it, it... The, the reality is, is that it, it didn't take a lot of money to build a real estate business because real estate's one of the few careers where you can come in as a job, and then as you generate more income, you just get rid of... You start shedding the jobs, and it naturally leads to a business with employed people. I don't know if that makes sense, but, but you can literally leverage your way all the way from being a salesperson to owning a business. Um, I contrast that to, like, the, uh, the people that do the maintenance in this building. There's no natural path from being a m- uh, you know, being the maintenance crew on a building to owning the building. It's not na- It's not a natural path. It doesn't lead d- to that. But in real estate, it, it actually does. You, you can literally... You do all the jobs from day one, and as you lever up and bring in other people, so you, you ultimately get rid of all the jobs. So maybe that helps explain why d- I actually didn't need the capital. I didn't need it because, um, I was, I was organically growing and generating more cashflow.
- TFTim Ferriss
And, and my understanding is that... And you can correct me if I'm, if I'm off on the, uh, timeline for this, but two or so years later, KW, right?
- GKGary Keller
Yep.
- TFTim Ferriss
Keller Williams-
- GKGary Keller
Mm-hmm
- TFTim Ferriss
... is the largest office in Austin. And-
- GKGary Keller
Yep, that's right
- TFTim Ferriss
... uh, as, as you mentioned, you don't necessarily need a lot of cash to get started or to enter the game of real estate. So it's a very competitive, it's a very competitive industry. Uh-
- GKGary Keller
Yes, it is
- TFTim Ferriss
... to, to what do you attribute your ability to not, not only become the largest office, and obviously that's expanded to nationwide and, and so on-
- GKGary Keller
And worldwide
- TFTim Ferriss
... and worldwide. Uh, what... But in that first two years, let's just say-
- GKGary Keller
Mm-hmm
- TFTim Ferriss
... to, to what do you attribute your ability to stand out and grow so effectively?
- GKGary Keller
Well, I understood value. So what I understood was is that the real estate agent has the, has the relationship with the client, and the real estate brokerage company has a relationship with the agent. And I, I understood exactly what the value proposition needed to be to attract and retain really terrific people. So I understood that. And the, the way I like to say it is, um, Keller Williams was my third business, if you think about it, because I'd already launched two businesses for my former, uh, boss. So-
- TFTim Ferriss
You'd been learning on someone else's dime, so to speak.
- GKGary Keller
Yes. Absolutely, and best way to learn, right? Uh, so I, I was intimate... I had intimate knowledge with the financials and what it cost, and I understood how much, uh, revenue I had to generate in order to cr- you know, cross the hurdle, uh, into pr- positive cashflow. And so I just knew it, so I, I set the business up that way. I kinda play a game that, that I call red light, green light, and, um, meaning that if I'm doing well, uh, then green light, keep, keep, keep going that direction. If something happens, the... I, I don't keep hitting the green light, right? If something happens that should cause me to pause in any way, uh, particularly from a financial standpoint, then I'm gonna hit red light fast, and I'm gonna back up and ask the question, um, what do I need to do? What did I do wrong? Whatever. What happened? So the, the, the, the building of a real estate company, you can generate all the cashflow you need to do that. Even in these times right now of... You know, I, I have competitors who have raised over a billion dollars and are just spending the money like crazy in the real estate space. But what I understand is it doesn't take all that money to do that. It takes smart money more than it takes a lot of money.
- TFTim Ferriss
Oh, for sure. I mean, there's no, uh, certainly no lack of, uh, examples of companies that have pissed away [laughs] hundreds of millions of dollars or more. I, I, I'd love-
- GKGary Keller
That's right
- TFTim Ferriss
... to hear an example, if you could give one, of, uh, a time when you ... saw the red light or hit the red light, and then how you did a post-game analysis?
- GKGary Keller
Well, um, probably the, the biggest red light that I had to hit early on was the commercial side red light. And it, 'cause it never made a profit, and we would literally just take the money that I was earning from the company I started and hand it to the other company that was being run by my partner. And he's a good guy, he's a great guy, uh, Joe Williams, just the salt of the earth, uh, um, just a, just a wonderful human being. But, uh, it was losing money, and I hit the red light immediately and said, "I'm not gonna give you any more money." And, uh, his response was, "Well, how am I gonna pay the bills?" And my response was, "Exactly. Exactly. I- how are you, how are you going to pay your bills?"
- TFTim Ferriss
Yeah.
- GKGary Keller
And, and then he voluntarily shut the company down, uh, within a few months.
- TFTim Ferriss
How did that-
- GKGary Keller
So that was-
- TFTim Ferriss
How did that conversation... If you don't mind me, I apologize for the interruptions-
- GKGary Keller
Hmm
- 32:05 – 42:53
Partnership ‘disagreements’: buy-sell agreements, divorce, and legal safeguards
- GKGary Keller
... uh, that, that you can see doesn't have a plan, uh, that it can execute successfully on. So i- it was really that simple. They were separate businesses, and I wasn't obligated to give the money, so I just stopped. I hit the red light, and I just stopped. Um, and so that's kinda, you know, the, uh... I, I would say if you're, if you wanna ask the question of what have you learned over time, not what did you learn from that-
- TFTim Ferriss
Mm-hmm
- GKGary Keller
... was that, um, your, your agreements between you and your partners, uh, I call them disagreements because the only time you're gonna read it is when you disagree.
- TFTim Ferriss
Right. [laughs]
- GKGary Keller
And-
- TFTim Ferriss
That's so true. Yeah, right
- GKGary Keller
Yeah. It's a... A- and that, that really informs the way you look at a document when you call it a disagreement, uh, because it's there to, it's, it should be there to, to deal with it when you dis- deal with things when you disagree. Otherwise, if you agree, you never read the document.
- TFTim Ferriss
Yeah.
- GKGary Keller
You never go back to it. Yeah.
- TFTim Ferriss
That's, that's genius. Yeah.
- GKGary Keller
Yeah. Well, the-
- TFTim Ferriss
That's a great way to reframe it.
- GKGary Keller
Well, and the biggest issue, the... I, I find the biggest issues are who has control, who, who's the decision maker, can that decision maker be relieved from that if you have to, uh, how are you gonna handle, um, cash flow if there's profit, are you gonna distribute it monthly, quarterly, annually, never? What, what are you, what are you gonna do? And then the other one is the dissolution, and that is what happens if this isn't working out and one of you needs to buy the other one out? One of the things that happened to me was... So we, we ended up forming this firm, and in '80- in February of '84, and I'd now been married, uh, less than three years, uh, the company was just a little over one year old, and, um, my, my wife of, of that, at that time said she didn't love me and she'd never loved me. And, uh, we, we headed to divorce. And they, they started out at a million-dollar valuation on a one-year-old company [laughs] that if you took me out of it would be worthless. Uh, and I, I didn't... I ended up negotiating my divorce with my former boss. So if, if you wanna read between the lines and think about that, you're welcome to do so. Uh, right?
- TFTim Ferriss
Yeah.
- GKGary Keller
I turned to my attorney and said, "Why am I taking the deposition of that guy?" And my attorney just looked at me. He says, "Well, time will reveal all." And, and it did, by the way. But the, the agreement to break up, right, if someone passes away or if someone wants to sell, um, to me, that becomes one of the biggest clauses in those agreements. And, and candidly, you'd be really, really, you know, smart at th- on, at this because this is where people go, "Oh, we're gonna... We get along. We're good friends," or whatever, "We're gonna found a company together." And they look up later, and they realize that they don't have a disagreement.
- TFTim Ferriss
Yeah.
- GKGary Keller
They basically have an agreement. And that-
- TFTim Ferriss
This is so important. Yeah.
- GKGary Keller
Yeah. Yeah, they don't have it. They have no means of reconciliation. They have no means of parting without bankrupting the other business. So what happened to me was, uh, when it got to the divorce, uh, I had a buy-sell agreement, by the way, and it would've meant that I would've... I, I could've gone into my, uh, bank account and written a check for what I owed under the, under the buy-sell agreement.
- TFTim Ferriss
Can you define for people who don't know what that means, a buy-sell agreement?
- GKGary Keller
Mm-hmm. Sure. That simply means that, uh, if I'm one of the partners and I want out, uh, what, what happens, right? D- does the, uh, does the document address that at all? Can I sell the stock to anybody? Uh, does, does the company have to buy it? Uh, if the company has to buy it or wants to buy it, what are the terms of that? Or are there no terms, and it's just strictly a cash deal? What happen... Does that make sense?
- TFTim Ferriss
Yeah. Mm-hmm.
- GKGary Keller
Okay. That's a, that's basically a buy-sell. Uh, uh, it's a, it's a prearranged way that, that things are gonna go if you decide to part company for any reason or you need to part company for any reason. Well, I had one, Tim, but the, the judge in the case says, "Well, okay, I see you have a buy-sell agreement. Um, who represented you, Mr. Keller?" And I said, "My attorney standing here." He said, "Who represented her?" And I said, "My attorney's standing here." And they threw it out
- TFTim Ferriss
Uh, yeah
- GKGary Keller
Because we had used the same attorney. Good attorney, and he hadn't cheated anybody. It was a, it was a fair buy-sell agreement. But, um, they, they threw it out.
- TFTim Ferriss
Yeah. This is... I want to underscore a couple of really, really important things that you're saying. So number one is whether it's, uh... I mean, particularly I would say in, in personal relationships like a marriage, how critical it is to have separate counsel, right? For the, for-
- GKGary Keller
That's right
- TFTim Ferriss
... for a million and one reasons. And then also, uh, the, a pattern that's come up in a lot of these interviews, which is from the outside looking in, many, uh, many interviewees who are viewed as risk-takers are actually experts in capping the downside, uh-
- GKGary Keller
That's right. That's right
- TFTim Ferriss
... and are very good at thinking through the worst case scenarios and, uh, pl- setting plans, if-then plans for, for v- the divorce proceedings-
- 42:53 – 53:06
Reinventing franchising: regional representatives, rights in contracts, and the french-fry lesson
- TFTim Ferriss
Mm-hmm. So let's, let's actually, uh, sh- I, I'm gonna, I'm gonna veto my, my earlier pivot and, and talk about that for a second because I, I wanna spend a good amount of time talking about focus because you are famous for your ability to focus.
- GKGary Keller
[laughs]
- TFTim Ferriss
Uh, but before we get to that, you're talking about this franchise document, and I, I know very little about real estate. But, uh, a, a friend of mine, when I was doing prep for this, said that you redefined franchising through regional ownerships, and then he went on to say how the company's made more money year on year since they started in '85. I think at one point it was like 40% per year for a decade or something. I mean, really incredible growth.
- GKGary Keller
Yeah.
- TFTim Ferriss
But could, could you talk about, so you have the franchise document. You, you also innovated in terms of, uh, model, as, as I understand it. What does redefined franchising through regional ownerships mean? If that's accurate.
- GKGary Keller
Well, that's-
- TFTim Ferriss
Yeah
- GKGary Keller
... yeah. Um, so you actually asked a couple of questions in all that.
- TFTim Ferriss
I did. It's my, my tendency. [laughs]
- GKGary Keller
But let... No, no, no. I, I just wanna, uh, so let's talk about that regional. So when we, when we as a company were ready to go out of, out of state, if you will, um, we, we began to study how others had done it, and we discovered that in the real estate industry, and in other industries as well, that the, at the time, they, they did what's called master franchises. So, uh, franchising, remember, is, is just another vehicle, uh, financial vehicle, right? If you don't have the money, franchise and ask other people to come in and front the cost that it would've been had you employed them. So that's, that's one of the ways you keep from having to borrow money, understand, is, is you could use franchising and essentially use other people's money. I had actually expanded into four cities, and all of them did great as long as I showed up, and then, and then when I didn't show up, they all started failing. So I took a year off in '89, and one of the things... And, and, and, and began to document the business, and because the... There's an incredible story about, uh, the McDonald's brothers and, and behind the Golden Arches that really just changed my, my world, and one of them was around franchising, and the other one was about, uh, building a successful model. And the franchising part was that we looked into it, and we discovered that the way that franchising had been done was flawed, and that was called the master franchise approach. So Dairy Queen was a perfect example. So Dairy Queen at one time was like, you know, the kick-butt take name, um, fast food place in America, and what they had done is they had sold the, um, the, the, the rights for the franchises, the, what you would call, uh, the regional franchises, to then be the franchisor of the franchisees. So the parent company wasn't... All it was franchising was, you know, these regional, um, uh, businesses to then go, and they would sell franchises, and they would support the franchises. So if you were to-
- TFTim Ferriss
Okay, just, just to restate so I understand. So you might have, like arbitrarily, let's just say you cut the country into four quadrants. You have four regional people.
- GKGary Keller
Yep.
- TFTim Ferriss
Those are your only kind of direct reports who pay you, and then they have a downline of sorts where they then go out.
- GKGary Keller
That's right.
- TFTim Ferriss
But you're only interacting with those... You only have agreements with those four regional, uh, franchisees who then become franchisors-
- GKGary Keller
That's right
- TFTim Ferriss
... meaning they're granting these licenses to other people.
- GKGary Keller
That's right, and it's called sub-franchising. And, and I, so I, I read the Dairy Queen story because when McDonald's came out with their playground, that was actually an amazing value hack, right? I mean, they, they, they, they realized that if they could get the kids, uh, wanting to, to come to McDonald's, the parents, you know, would take them, right? And there's a playground. So there was a famous meeting where the, these, uh, master franchisors, if you will, the sub-franchisor, uh, met, and I don't know how many there were, uh, in it, but they met, and they decided that they didn't wanna do the playgrounds. That-
- TFTim Ferriss
This is for Dairy, for Dairy Queen or for McDonald's?
- GKGary Keller
Uh-huh. For, for Dairy Queen.
- TFTim Ferriss
For Dairy Queen.
- GKGary Keller
Mm-hmm. So McDonald's was doing it, and, uh, and, and really, you know, making inroads fast. Um, and so Dairy Queen calls a meeting and says, "Hey, we need to, our franchisees need to be putting in playgrounds." And the sub-franchisors, the regional people, said, "No, not gonna do it." And, um, by the way, that was the beginning of, of Dairy Queen sliding into, uh, a, a, a much smaller company than they could've been, and they never, they never really recovered from that. Um, so I read that, and I, my, my, um, uh, my plan then was I'm not gonna, I'm not gonna repeat that. So we did a, we did what's called a regional representative agreement. So the financial opportunity is the same. So we have 31 regions in the US and Canada, and those are owned by individuals and, but they're not sub-franchisors. They are simply representatives. So they have the, the same job description of a sub-franchise. They have the same financial opportunity of a sub-franchise. They don't have the authority.
- TFTim Ferriss
Mm-hmm. And I would imagine the franchise document that you have prevents the type of logjam [laughs] if you were to-
- GKGary Keller
Mm-hmm
- TFTim Ferriss
... say, "We want to install playgrounds at the Uh, in, in your offices, so, uh, you know metaphorically speaking, in those 31, uh, the home office has the ability to, uh, insist, let's, let's say on certain types of things that they wouldn't run into the same type of Dairy Queen problem.
- GKGary Keller
We, we, we have... That's, that's, that's right. Without having to go into the weeds on, on documents, you, you said that very well. The, the document, uh, lays out the rights of the franchisor. Be- And the reason is because, uh, if there is, if a right isn't acknowledged in that document, the judge will automatically give it to the franchisee.
- TFTim Ferriss
Yep.
- GKGary Keller
If it's a, if it's an unstated, uh, right, uh, then the l- the courts will, will take it away. So you, it's, it again, it-
- TFTim Ferriss
If it's not ex- if it's not explicitly assigned to you, KW, the franchisor, it will be, um-
- GKGary Keller
Automatically assigned
- 53:06 – 1:04:09
What the ‘year off’ really was: documenting the model and building the franchise platform
- TFTim Ferriss
That's incredible. So the, this then brings us back to the year off in '89. I have a, a bunch of questions about that. So '89, uh, paint a picture for how the business is doing, because I'm sure a lot of people are thinking to themselves, "Man, I'd love to take a year off. My business is hectic." How in the hell did [laughs] Gary-
- GKGary Keller
Yeah
- TFTim Ferriss
... take a year off in '89? How, how did you decide to do that? Was there a straw that broke the camel's back? And then practically speaking-
- GKGary Keller
Let's talk-
- TFTim Ferriss
Yeah, how to do it?
- GKGary Keller
Okay. So let's, let's te- let's, um... Keep me on track here, but-
- TFTim Ferriss
I will
- GKGary Keller
... I wanna go, I wanna go back, and I wanna, I wanna build to that, to the moment of '89 so you'll understand what happened.
- TFTim Ferriss
Mm-hmm.
- GKGary Keller
So in, um, so we launch in, in 80- in the last quarter of '83. Um, I end up in February of '84, uh, becoming, you know, going through a divorce, and, and now I am in debt because I, um, I, I had to sign... I didn't have the cash, so I had to sign a note. Uh, and then I had to take out an insurance policy in case I died, uh, my, my former spouse got paid. And then within a year, Joe Williams came in and said he has to sell his shares, um, in the residential company. Uh, we'd already shut the other one down, commercial down, but he needed to sell his shares because he'd bought a lot of real estate. The markets... This is now '87, right? This is '88. The markets are, are crashing, and, um, he doesn't wanna go bankrupt, and he didn't, to his credit. He did not. He's just a standup guy. But he came to me and said, "Hey, I need to sell the shares." So all of a sudden, I didn't have the cash, so I have to sign a note to the banks, take out another insurance policy. [laughs] So essentially, whether I live or die, everyone's gonna get their money Does that make sense?
- TFTim Ferriss
It makes sense.
- GKGary Keller
Yeah. And the way I kind of describe it, w- particularly when I'm talking to kids, is that, um, it was like I'd been going through life hopping, you know, seven feet and fell in a 10-foot hole. And the... It... This is, this... That, that right there b- has become the central theme of my life since that happened because I'd been going through life and competing as a businessperson in a sort of organic progressive way. In other words, it's the next thing I should do, so I do there, I go there, but I wasn't on an exponential path. In other words, I wasn't running my business, uh, out of a business plan that would deliver exponential growth. I was living off of an organic plan. And I looked down and I realized, "Oh my gosh, it's gonna take me 10 years under this current, you know, [laughs] uh, earnings path I'm on, maybe sooner but not much, before I'm debt-free," and that depressed the heck out of me, and so I got really creative. Then, then one last thing happened. Then one of my competitors, uh, with, uh, a RE/MAX office set up shop down the street, and they were a lot less expensive than what we did, and I had five of my top 10 producers leave the firm. And, and I had, I had grown to over 70 associates. The, the economy, um, uh, going down, uh, took me to 38 associates. We were still profitable, nicely profitable. And then I lost five of the top, of the top 10, and so now I'm at 33 associates, and then they came back and they got my bookkeeper, my receptionist, and my relocation coordinator.
- TFTim Ferriss
Man, that sounds like a really hard 12 to 18-month period. [laughs] Yeah.
- GKGary Keller
Yeah, so absolutely. So what... So now I just wanna set the stage for '89. So now what's happened is I'm in debt up to my eyeballs, the market is crashing, right? And my competitors are taking my people. So I'm literally sitting at the desk with no one, no one to run the business other than me, and I'm in desperate need of a plan that would actually help me hop higher. And so I, I created that plan, and one year later, um, we were the largest real estate company in Austin, and one... the next year, we sold more real estate than anyone, and the next year after that, I paid everybody off in cash. And I w- I was, I was, I was 31 years old. I was, um, uh, at to- towards the end of 31, by the way. Uh, I, I paid everyone off in cash. I was debt-free, and I was the number one real estate company in my city.
- TFTim Ferriss
So that plan was the plan that you drafted during your year off. Is that right? Or-
- GKGary Keller
No. No.
- TFTim Ferriss
No?
- GKGary Keller
No, that's... No, that's a separate issue. So-
- TFTim Ferriss
Oh, it's a separate issue. Okay.
- GKGary Keller
It's a separate issue. So the, so the, the plan is what, uh, it ultimately created a model that I could go teach other people and I could franchise that model. So let's... So then let's go to, um, uh, '80, '88, '87, '88. So I go around the, the state of Texas and I'm, I'm showing how I'm doing business, and people are buying, at that time, license agreements, 'cause I wasn't franchising at the time. So they bought license agreements, and the agreement said if I ever franchise, um, you have to come become a franchisee or have the right to buy your business.
- TFTim Ferriss
What is the... Could you clarify what the difference is? So licensing, they're paying a percentage just to use your name?
- GKGary Keller
Yep.
- TFTim Ferriss
And that's it.
- GKGary Keller
Yep. And you're s- licensing to use your name and systems, but you don't really have any control or influence-
- TFTim Ferriss
I see
- GKGary Keller
... with the li- with the license versus franchising. So the, um... So I was using a simple license agreement. Well, I was, I was literally traveling four days a week, right? If it was Monday, I'm in San Antonio. If I'm in Houston, it's Tuesday. I mean, it, that... I was living my life that way and, and all the businesses that we launched were, were successful and profitable. And me, I'm thinking I'm a genius, so I, I come home, and then they all fail. And so what I did was I did two things. Number one is I hired an individual, and, uh, that individual... This is... Now, now we're getting to '89, okay? So I then, I then take that year off, if you will. I'm not franchising. I'm not licensing. I'm not doing anything. I've hired a manager to run my Austin operation. So I have the freedom, and I hired a gentleman and gave him a video recorder, a, an audio recorder, uh, notebook and pen, and a camera, and I said, "I want you to follow me around, and I'm going to go launch another office, and I want you to document every little thing that I do."
- TFTim Ferriss
That is brilliant.
- GKGary Keller
W- no. That's the, that's the french fry story.
- TFTim Ferriss
Yeah.
- GKGary Keller
That, that was that.
- 1:04:09 – 1:10:55
Analog planning in a tech-driven company: the month-at-a-glance calendar system
- TFTim Ferriss
I wanna talk about the flip chart that you mentioned, uh, at the beginning of the conversation when you were-
- GKGary Keller
Uh-huh
- TFTim Ferriss
... in the, in the broom closet.
- GKGary Keller
Yep.
- TFTim Ferriss
So, so you... KW is very heavily investing in technology. It's, it's, uh, in many respects-
- GKGary Keller
Yes
- TFTim Ferriss
... becoming a technology company.
- GKGary Keller
Yep.
- TFTim Ferriss
Yet my understanding is you still use a paper month-at-a-glance calendar-
- GKGary Keller
Yep
- TFTim Ferriss
... and a pencil. What, what is the story behind that?
- GKGary Keller
You know, the, um... I believe that... And I, I didn't always believe this, right? It, it's, you learn as, as you, you go, and if you learn, you grow, right? Um, and I, I'm, I, I'm, I'm having trouble visualizing my life, and I get this month at a glance, and instantaneously I can see where all my energy this month is going. I can see how I'm investing my life. And so I, I, I begin this practice back in my 20s of using this month at a glance, and I can see everything at one time, right? And I use an eraser because if you erase, you must replace. So I, I go through the month, and I kind of mark, you know, what I, what I think I should be doing on these days in order to hit my personal and professional and financial goals. And I'm, I'm happy to erase if I need to. But by doing it this way, if it was important to do it, I can't... it can't disappear. I have to move it someplace else in my calendar. So it's really a simple... this, this simple idea that I don't, I don't... I really struggle with the idea of doing planning off of a, um, uh, a, a technology-based, uh, day-timer. Sim- for that reason only. I'll tell you a funny story. Um, um, uh, there's a, there's a, a, a guy by the name of Larry Bragg, and he was, uh, the, um, uh, a lead singer for, uh, Tower of Power. And, uh, I didn't know him personally, but, uh, I was coming back from Vegas, uh, on a trip, and I'd gotten to the Southwest Airlines, um, you know, gate early, and there was only one guy in front of me, and I recognized him as the lead singer of Tower of Power. And then I looked down, and he had a briefcase, and it had a tag that said Tower of Power on it, right? [laughs] And I went, "Okay, I'm pretty s- I'm pretty sure this is Larry," right? So I say, "Excuse me." You know, I just introduced myself, and we had a great talk, 'cause I'd just seen them perform, uh, a year earlier in Austin. And, um, so we had a great conversation. Somehow we turned to, uh, Kenny Loggins was coming to Austin to a concert, and, um, in a venue that, that, that, that we love and, and, and support. And And Larry, and h- somehow it came out and, and, and Larry used to, had sung with Kenny Loggins and loved him. And he said, "Man, I'd like to catch that show. My family's still there." And I said, "Well, I can, I can, I can get you in." He said, "Well, what date is that?" And, uh, I knew the date off the top of my head, and I said it, and then he pulls out his electronic calendar and starts going through it. And I went, "Whoa, whoa, whoa, whoa, whoa, whoa, whoa. Hold it. You, you've gone to the dark side?" And he's laughing, he's going, "What do you mean?" I said, "Okay, let's have, let's have a, a gunfight at the O.K. Corral. You put your phone back down, and I'll lay my calendar out here. And when, when I say go, and I'll go one, two, three, go. When I say go, we both reach for our guns and see who's the first one who can shoot." He just looked at me and I said, "Let's do it. Let's see what happens." So he says, "Okay." So I go, "One, two, three, go." I just pick up my calendar, pull it open, and go, [calendar bangs] "There it is." And he's still trying to get into his phone, right? And then I said, "And oh, by the way, I can tell you what I'm doing tomorrow at 3:00. I can tell you what I'm doing, um, two weeks from now. I can tell you what I did, everything I did last week," and I'm just, I'm just peppering him with my vision for my life, and he's still fumbling, trying to get to the, to, to see if he could even go to the concert. Which he did, by the way, and it was awesome, and he and Kenny hung out afterwards.
- TFTim Ferriss
Where does your, uh, month-at-a-glance calendar live? Is it something that's-
- GKGary Keller
It's right in front of me.
- TFTim Ferriss
Is it in your, on your wall in your office? Is it...
- GKGary Keller
No, no, I carry it, no, I carry it with me.
- TFTim Ferriss
You carry it with you.
- GKGary Keller
I carry it with at all times, everywhere. It never leaves my side, actually. It's in my backpack.
- TFTim Ferriss
[laughs]
- GKGary Keller
But I create a da- I created kind of a daily worksheet, so as the day is going on, I don't actually need my calendar per se, right? Because I'm working off of that. But the second that I need to do planning, I got to get back to a mon- I have to see the month. And it, I can flip easily and look at the other months, right? And for me, when I'm planning out time off and vacations and other things, it really helps for me to see the spacing of my life, to see the things that I'm doing that give me energy, to see the things that take energy away from me, so that I can alwa- I can always be fine-tuning, uh, my life, uh, quick- quickly at a glance. So anyway, it's just a, it's a really good, it's a good way to do it. It does fly in the face of, um, you know, the way that other people look at time and, and using electronics, uh, or digital time management systems. But I, I just can't get rid of it because it makes me, it makes me so aware of my life.
- TFTim Ferriss
Yeah.
- GKGary Keller
I, I can't, I-
- TFTim Ferriss
I think that's, I think that's really important to underscore, right? It's not just about the ef- the efficiency and speed. It's about the-
- GKGary Keller
No, that's right
- TFTim Ferriss
... awareness that it cultivates.
- GKGary Keller
Well, that's actually all. That's, the speed was just a funny joke that happened, but the, [clears throat] it really is more about my ability to see everything at a glance. And it's easy for me then to see [clears throat] how many times, uh, in, you know, in the last 30 days or looking forward to the next 30 days I have planned, um, right, to, to, back in the day, to go to lunch with my son, right?
- TFTim Ferriss
Mm-hmm.
- GKGary Keller
I can, I can actually see it. I can add it up and show you quickly s- at a glance. I can say, "Well, we did that three times last month. Uh, this month looks like we have it planned for five," blah, blah, blah, blah, blah. So give, for me personally, it gives me great vision, if you will. Uh, and so I can, I can manage my energy, and I can always make sure that I have enough time set aside for the things that really matter. And I can see that better at a glance when I'm looking at a bigger picture. And that's the only, that's the value. That's the only value.
- 1:10:55 – 1:13:59
Time blocking like a movie: protecting the few hours that matter most
- TFTim Ferriss
Let's, let's talk a little bit about spacing, two things you mentioned, spacing and energy. Uh, I, I don't know if you still think about, uh, treating your time like going to the movies. Uh-
- GKGary Keller
Mm-hmm
- TFTim Ferriss
... this is something I came across, which I thought was-
- GKGary Keller
Mm-hmm
- TFTim Ferriss
... uh, very helpful as a, as a comparison. Could you, could you speak to what you mean by that?
- GKGary Keller
Oh, well, that one is about time blocking.
- TFTim Ferriss
Yeah.
- GKGary Keller
So the, the, yeah. So the, it... [sighs] In the, I'll just speak for myself. The, the, it is very hard to have a perfect day every day. And as, as the research will, will tell you, that, um, uh, willpower is on will call, right? It's not, you, you don't have a steady stream of willpower. Um, when you wake up in the morning, and it doesn't matter what time, you know, if you got up at 6:00, if you got up at noon, th- when you wake up, this, these are your power hours. Um, and I used to tell people, "Look, the goal is to have a great day by noon." In other words, get everyth- get everything that matters, that is important to you, get it done. Don't put it off, get it done, and then let the events of the morning drive your afternoon. Uh, and so time blocking is just this idea of you pre-planning, uh, your time. Because if, if you needed to exercise, then, and that's what you want to do, you're gonna have to find the time to do it, and then you're gonna have to block that out. The, the movie analogy was, um, [clears throat] was this idea that you don't really need to time block more than two or three hours a day around your c- your core activity for your business, whatever that is. You don't, you're, you're not equally effective all day long. So what you want to do is you want to find a, you want to make sure that, that the world doesn't infringe on the time, uh, that you've, that, that you know you need to give, uh, for whatever it is is the key that makes your professional life run. And so I, I just time block
- TFTim Ferriss
And it's-
- GKGary Keller
And I encourage it. Go ahead.
- TFTim Ferriss
No, I was just gonna say, and those two to three hours, uh, are like a film, right? I mean, if, if that is-
- GKGary Keller
Yes
- TFTim Ferriss
... you're, if you-
- GKGary Keller
Yes
- TFTim Ferriss
... go to see a movie, you're there exclusively to see a movie, so you turn off your cellphone. You get-
- GKGary Keller
Yep
- TFTim Ferriss
... snacks in case you're hungry.
- GKGary Keller
Yes.
- TFTim Ferriss
You might make-
- GKGary Keller
Yes
- TFTim Ferriss
... a pit stop in the bathroom beforehand. You do all of that so it can be, you can have an uninterrupted two to three hours.
- GKGary Keller
That's it. That's exact- You said it perfectly.
- TFTim Ferriss
Yeah.
- GKGary Keller
That's exactly what it is.
- TFTim Ferriss
And, uh, I th- it's, uh, it's, it's kinda wild to think how much... If I look back at t- periods when I've been able to time block that way successfully, consistently, and by consistently, uh, I mean even for two weeks, how much can get done if you set aside the equivalent of one movie-
- GKGary Keller
Oh, yeah
- 1:13:59 – 1:38:46
The ONE Thing: the focusing question and how it applies to life, work, and hiring
- TFTim Ferriss
... to single task [laughs] on one important thing. It's, it's really remarkable, and I think that's a, uh, perhaps a good segue to, uh, the focusing question, right?
- GKGary Keller
Mm-hmm.
- TFTim Ferriss
And this is, this is in, uh, your book, The ONE Thing, which has come up-
- GKGary Keller
Yes
- TFTim Ferriss
... over and over and over again with, uh, interviewees on this podcast, uh, particularly those, uh, who are in the sort of growth phase i- and citing it as extremely important in the first... It's always important, I mean, this question, but the particularly important in the kinda make or break it years in the, the, the first handful of years for entrepreneurs that I've interviewed on this podcast.
- GKGary Keller
Absolutely.
- TFTim Ferriss
Could you, uh, tell us about the focusing question, but perhaps how you got to the focusing question?
- GKGary Keller
You know, the, um, so if we, if we just talk for a second about the focusing question, right? Which is, what's the one thing I can do such that by doing it, everything else is either easier or unnecessary? It's, it's, it's an understanding that you can't do two important things at the same time. You could, you could te- definitely multitask, but the second that something really matters to you a lot, um, you don't multitask. You, you, you, you hone in on that, and you, you, you do that thing. Um, so the, the, the, the idea of the focusing question is, are you present in the moment? Now, you don't do this every day minute by minute, where you say, "Well, what's the most important thing I can do right now? What's the one thing I can do right now? What's the one thing I can do right now?" But it is kind of a way of life, meaning that, um, if you make your moments matter, right, matter as in you, you're appropriate in the right moment, everyth- every- everything falls into place for you. So the whole idea behind the focusing question was to keep, when it matters, when it's important to you, making sure that, that you're doing the priority right now that will lever your life, grow your life, expand your life, right? And, and it's the, it's the idea that if you, you know, if two people are standing in the same spot, and one has a clear focus and understands the thing they need to be doing right now in order to get where they wanna go, their st- their next step is an appropriate step. For the individual who doesn't know what they should do, they're, they're most likely gonna take the wrong step, and then another wrong step, and another wrong step. And over time, they're, they are worlds apart. So the, everything that we talk about, from calendars to setting goals, to creating plans, all of that is, is to, is so that you get one thing, and that is in the moment right now, you're doing the thing that matters most, such that by doing it, what you're fixing to do next will either be easier or could turn out to be unnecessary.
- TFTim Ferriss
And, uh, so, so I wanna, I wanna comment on a few things here. First is for people who are maybe, uh, in the, in Portugal listening to this, fixing to do something is getting [laughs] ready to do it.
- GKGary Keller
[laughs]
- TFTim Ferriss
And, uh, the, uh, the second is, uh, how powerful th- this question is and how important the phrasing is. Uh, what's the one thing I could do such that by doing it, everything else would be easier or unnecessary? Because, and I, and I'd, I'd, I'd love to just hear you kind of riff on this, but a lot of people listening to this, and I'll, I'll plead guilty myself also, very often end up with a to-do list, which is this spontaneously generated-
- GKGary Keller
Yep
- TFTim Ferriss
... uh, non-hierarchical-
- GKGary Keller
Yep
- TFTim Ferriss
... brain splatter of-
- GKGary Keller
Yep
- TFTim Ferriss
... tasks.
- GKGary Keller
Yep, yep.
- TFTim Ferriss
And, uh-
- GKGary Keller
We all do that
- TFTim Ferriss
... you may then just proceed in a given day, if you don't give any thought to it, to start knocking those off in order top to bottom, even though they're not ordered in, in terms of importance. And the such that it makes everything else, uh, easier or unnecessary is the key, right? Because you're, you're finding that lead domino that kinda knocks everything else over. Um, and in that, I'd love to, to hear maybe some of the results or effects that you've seen in, in your life as a result of, of using this or f- or for your company, for that matter.
- GKGary Keller
Mm-hmm.
- TFTim Ferriss
Um, like how do you suggest people use this? Do they think about it for the week and then set something to remind them on a, on a daily basis? Do they do it the m- the night before and then write it down? What's the protocol for actually implementing this?
- GKGary Keller
Well, um, remember, it, and we said it in the title of the book, and that is The Surprisingly Simple Truth Behind Extraordinary Results. So this is, to, in my mind, the concept of the one thing is like adult Play-Doh. It's, it, it's, it's a ser- this is a, a nuclear idea. It i- it is a, a, a- An extraordinary idea in order to get extraordinary results. If you're inappropriate in the moment, the next moment you have not set up to succeed, so you're behind, right? And so we have to be appropriate in our moments. So, and I under- I think I understand, under- I've always understood that, um, naturally, to be honest. Uh, but I think at some point, and I couldn't pinpoint it, my... I, I grabbed it as an idea and began to aim my life around that. And so simple ways to think about it is, uh, I come home, I pull in the garage, what's the one thing I can do with my wife when I walk in the door such that by doing it, everything else for the rest of the night will be easier or unnecessary? And the answer is go find her and kiss her. That's the answer, and it's actually that simple. Uh, on a weekend, what's the one thing I can do such that by doing it, everything else would be easier or unnecessary? So the one thing is, is I wake up in the morning and make a quick list of things I need to do around the house, and I do that because I know that my wife, um, is gonna make a list for me.
- TFTim Ferriss
[laughs]
- GKGary Keller
And so the one thing I can do such that by doing it my weekend is, is better is to make that list and go knock it out. That's the right thing, right? The, uh... my dog. What's the one thing I can do with my dog, uh, in the morning such that by doing it everything else is easier or unnecessary? By the way, the answer with our dog, Millie, is always the same. Get on the floor and hug her, right? That's what she wants, and as long as I do that, life is great. If I don't do that, well, everything else is, is, is irrelevant to the dog. She wants, she just wants me to love her. So I'm, I'm just giving you a variety of different ways, right? Um, what's the one thing I could do with my diet such that by doing it everything else would be easier or unnecessary? What's the one thing I can do?
- TFTim Ferriss
Mm-hmm.
- GKGary Keller
That affects my cholesterol, affects my heart, affec- affects everything about me, right? And for me is, the one thing is eat vegetarian.
- TFTim Ferriss
Mm-hmm.
- GKGary Keller
So that becomes the one thing for me. So I'm just giving you a variety of different-
- 1:38:46 – 2:02:11
Saying no, using proxies, and thinking big: habits, support systems, and a billboard message
- TFTim Ferriss
And we, we've been discussing up to this point primarily how to say yes to the right things, and, uh, it's, it's not necessarily a long list, but how to hone in and say yes to the right things. Do you say, uh, no categorically to anything across the board? Uh, are there any decisions that you've made along the lines of, "I'm not going to do X"? And I'll, I'll give you a personal example just because, uh, I find it, uh, incredible how s- stress-removing these things, these types of categorical decisions have been for me. So I, I used to stress about, uh, this is probably 2008, 2009, speaking engagements. I didn't particularly enjoy speaking engagements generally. Sometimes I did. And I found myself traveling all over the place. It was similar to your travel schedule, right? The four days a week, like one day in Houston, one day in San Antonio, et cetera.
- GKGary Keller
Yep.
- TFTim Ferriss
And, uh, furthermore, because I didn't have any strict policies because I never expected to be invited to speak, uh-
- GKGary Keller
[laughs]
- TFTim Ferriss
... be- before the first book, I found myself, uh, and my assistants constantly negotiating one-off deals. And then one of my friends said to me, who is, who does next to no public appearances, he said, "Yeah, I have a simple rule. I either do, do full retail, I never negotiate. They pay my list price or it's a, a, a no-go, or I do unpaid for groups and causes I care about." He said, "I do nothing in between. I never negotiate." And if, and he said, "If someone pays me a, a, an absurdly high rate, that becomes my new high water mark," right? [laughs]
- GKGary Keller
[laughs]
- TFTim Ferriss
Like, that becomes the new retail price. And I remember coming away from the call thinking, that is so simple and so profound, and I implemented that, and it just removed this gigantic energy suck for me.
- GKGary Keller
Yes.
- TFTim Ferriss
And so I've started to make more rules like that, right? And, uh-
- GKGary Keller
Exactly
- TFTim Ferriss
... I'm curious if you have anything you categorically just decline.
- GKGary Keller
Pretty much everything.
- TFTim Ferriss
[laughs]
- GKGary Keller
No, I'm, I, I know, I know that sounds a little weird to say that, but if, the people around me would probably confirm that.
- TFTim Ferriss
Yeah.
- GKGary Keller
That, that essentially, uh, anything that's a distraction or anything that interferes with, with what I, what I deem as, as, uh, my path or my relationships or whatever, I just say no. I mean, I literally, I am, I am, I am a definite no person, right? Uh, time is a big issue for me, and we have a limited amount of it. And so saying no to talking to people is, right? I, the, I have this saying in my head that says that people that work with me are more important than people that don't.
- TFTim Ferriss
Mm-hmm.
- GKGary Keller
And so I, [laughs] the fact that you and I are talking right now, my team will tell you the, "You must really love Tim."
- TFTim Ferriss
[laughs] Well, I appreciate you making the time.
- GKGary Keller
Because I w- I say no to everyone. This is, this is the only one I've done, and I just say no to everybody, categorically no. B- and the reason is because when I woke up this morning, uh, talking to that individual was not on my game plan. So at the end of the day, if talking to that person, if I have a spare moment and it's a kindness I can do, love to do that, love to do that. But given my life and how big it is, there aren't m- there aren't many of those moments, you know? 'Cause I look up and I go, "Hold on, I have a spare minute. I need to go hug my wife again." I mean, that's the way I th- think about it. I need to, I need to go hang out with my dog more, right? I need to go do whatever that is within my, my list or at least within my focus categories of the things that matter most to me. So I'm, I'm a very much a no man. I just say it over and over and over and over and over again.
- TFTim Ferriss
Do you have any preferred or default language that you, that you like to use or that you tend to use?
- GKGary Keller
[laughs]
- TFTim Ferriss
How, how do you convey that to people? And let, let's, let's assume it's not, you know, Joe Blow from Muckety Muck Incorporated, who is just a random inbound, because I'm imagining you have filters for that type of thing, and even if you didn't, you would just ignore it. Uh, but let's say, uh, an old friend you've kind of drifted away from manages to somehow get ahold of you and invites you to be on the such and such board of some type, and you're like, "Ah," you know, and you listen to, uh, your, A, it's not on your list, B, you don't really wanna do it, doesn't feel good. Um, what do you s- what do you say?
- GKGary Keller
Well, I, I'm, I'm, I'm fairly direct about it, but I'm, I, I believe in the love, tough love sandwich approach, right? So, you know, I say, "Hey, Tim," uh, typically this is in a text or an email, right? Because I don't, I, I don't allow people to talk to me, uh, get to me via a phone or standing in front of me, because that, that then becomes awkward, and now I have to deal with it on their time schedule instead of mine, which throws my schedule off, throws my focus off or throw... right? So my standard line is, [clears throat] you know, "Hey, Tim." This is me typing it something. And it says, "Hey, Tim. I really appreciate you thinking about me. Um, to be honest with you, I would love to say yes, but the problem is..." And I have several scripts after this. "... problem is, if I say yes to you, I have to say yes to other people. And because I don't have time to say yes to everybody, I have to say no to everybody. And I, I, I'm, I'm so sorry, uh, but, um, I just can't do this. Um, good luck." [laughs] I mean, or, or here's so... [clears throat] "Have you tried Tim Ferriss?"
- TFTim Ferriss
[laughs]
- GKGary Keller
Right? Uh, I'll, I'll definitely, you know, if there's some, if there's someone else. But that's kind of a standard line for me.
- TFTim Ferriss
Yeah.
- GKGary Keller
My, my line is... You were looking for a script.
- TFTim Ferriss
Yeah.
- GKGary Keller
And the s- the, the underlying script would be, "I can't say yes to everybody, so I'm gonna have to say no."
Episode duration: 2:02:22
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