CD Baby’s Derek Sivers on Asia and Its Rising Middle Class [Exclusive Interview]

By Spun Counterguy on February 12, 2014

According to this year’s Forbes’ list of Best Countries for Business, the United States and other Western countries are becoming more hostile to entrepreneurs and job creators. This has many looking towards setting up shop in more welcoming countries. With Singapore and Hong Kong in the top ten and other Asian countries on the rise, one man is trying to help the Western business mind understand the East’s.

Meet Derek Sivers– founder of CD Baby, a regular speaker at TED Talks, author, musician and now the force behind Wood Egg’s 16-country guide to Asia. Derek took time out of his awesome life to chat about the books, how he ticks and how we can start ticking.

Brophisticate: Considering all the hats you’ve worn in your young life, why entrepreneurial guides now?

Derek Sivers: A few years ago, I moved to Singapore. Out of my apartment on the 51st floor, I could see both Indonesia and Malaysia. But I knew nothing about Indonesia, nothing about Malaysia, or Vietnam, or Taiwan, or Sri Lanka, or Cambodia, or Myanmar. I wanted to get to know them the way I know the 50 states in the U.S.

At first I was just “touristing” around these countries, looking at things, talking to people. But it wasn’t focused enough. I wasn’t learning fast enough. I wanted to get deeper insights.

So they say the best way to learn something is to teach it, right? I figured if I committed to producing 16 books per year about these 16 countries in Asia, it’d be an ongoing learning experience, and a great way to eventually really understand these different cultures.

What sets your guides apart from the others out there currently?

The other books I’ve seen about business in these countries are very, very dry and over-simplified. Reports on GDP, permits, tax laws and such. They tell you to hold a business card with two hands, never give 4 white flowers as a gift, or whatever. But they don’t get into WHY. They don’t really explain the mindset, or describe life through the eyes of a local person. I want deeper understanding.

And lastly, for countries like Indonesia, Sri Lanka, Myanmar, Cambodia, or Mongolia – there were basically no books at all about business or culture in these countries! Plenty on China, Japan, and India, but so few on the rest. So it seemed worth doing.

So make the case for why a potential entrepreneur should take a serious look at Asia.

See Hans Rosling’s great fact-based case that Asia – in particular the massive populations of China and India – will all be of middle class wealth in our lifetime:

I like Jim Rogers’ point when he says that every hundred years or so there’s a shift of power centers in the world. And the best way that you and your descendents can take advantage of it is to be there in the middle of it. He says that if you were smart in 1714, you moved to France. If you were smart in 1814, you moved to England. If you were smart in 1914, you moved to America. And if you’re smart in 2014, you moved to Asia. He’d probably say China, but I think almost anywhere in Asia will do. It’s the rising tide of this whole region. It’s soon to be the richest part of the world, and soon after, that also means the best universities will be here, which means the best scientists will be here, and more.

So if you think long-term, it may be difficult now, and you may struggle to get even a decent little business going. But over the years, it grows, and you’re well established for long-term growth.

What are some of the biggest mistakes you’ve seen Western businesspersons make?

Almost everyone bashes in here, all full of bravado, thinking that they’ll show these idiots how it’s done. But they slowly find that nothing’s working out. Thing is, people are too polite to tell them they’re an offensive ass, and are generally avoided.

But people who come here full of humility, ready to really listen and learn, and committed long-term to helping, can really thrive.

You yourself have lived in or visited many of the countries covered. Can you share some things you saw that blew your mind or changed your way of thinking?

I also bashed in full of bravado, but luckily didn’t make too much of an ass of myself before quietly taking the time to understand the different mindset.

Even without leaving America, think of the mindset difference between a two American 20-year-olds. One is a privileged rich kid whose parents pay for everything, who will inherit the family fortune, and is spending his time hanging out, getting high, playing video games, and following his bliss. The other grew up with a single mother doing two jobs, a racial minority who taught her kid you have to fight hard to succeed in this life, to overcome the hurdles and disadvantaged beginnings, you’ll have to focus, work as hard as you can, and make as much money as you can to succeed and get a nice life. That kid studies and works every waking hour to get into a great school, then a graduate degree, then a great job afterwards. That kid can’t just hang out and aimlessly follow his passion.

That’s the generalized difference in mindset between most Americans and most Asians I’ve met. Most Asian cultures (except maybe Japan) have grown from poverty to prosperity only in the last generation or two – while their parents were alive. So their parents really instilled this workaholic “go make a lot of money” work ethic into them.

Also, there’s no Social Security here, so it’s the children’s job to take care of the parents when they get older. Follow your passion? No, that’s bad for the family. Start a company? No, too risky. Get a good job. Play it safe. Do what’s best for the family, not for you. That mindset takes a while to really understand its different implications.

If I may play devil’s advocate for a minute- there’s a lot of concerns about Asia at the moment- military tensions among the various countries, internal tensions regarding corruption, human rights and pollution, to name a few. In your mind, how does the potential of doing business in the region outweigh these risks?

Rule #1 of investing is “Risk = Potential Reward”.

Think of what America must have been like in 1890, and how much those early investors thrived by being the one to go from comfortable England into the rough wild lawless new land.

If you want super-safe, you can set up a business in Switzerland or Sweden. If you like risk and adventure, and the potential upside from going where others won’t, then Myanmar, Indonesia, India, and China may be more your style.

I’m not going to try to convince anyone to go to Asia. I don’t care either way. But for those that do, I’m happy to share what I’ve learned.

Just going by your public image, you seem like a person who’s shrugged off fear, dove right into the world, worked your butt off and is having a lot of fun doing it. And as you’ve alluded to, a lot of young people who’ve grown up well in the States seem to lack the ambition that existed in generations past to create their own destinies. For you what was the impetus that made you see life as an endless supply potential opportunity?

I really, really, REALLY wanted to be a famous, or at least successful, musician. When I decided at 14 that this is what I wanted more than anything, it was like deciding to be an Olympic athlete. I knew that this is something that a million people want, but only one in a million gets, so I was going to have to work harder than everyone else to get it.

That fierce focus led to everything else. It got me to read the best books about learning a successful mindset. It led me to a lifestyle of focus, eliminating distractions, and spending most of my time working.

The books made all the difference in the world to me. Getting those philosophies into my head made everything in life easier.

For those dreamers reading this and ready to get off the couch, what are a few titles that you really think were exceptional in your personal development?

You never know which book might hit you the hardest.

For me, Tony Robbins’ “Awaken the Giant Within” was the biggest influence. Also some old books from the 1930s like “The Success System that Never Fails” by William Clement Stone, “Think and Grow Rich” by Napoleon Hill, and “How to Win Friends and Influence People” by Dale Carnegie. Tim Ferriss said that for him it was “The Magic of Thinking Big” by David Schwartz.

If you go to my book page [you’ll see] my highest recommendations at the top. So scroll through those and see which descriptions hit you. Then read my notes to get an idea of it, and get the whole book if it sounds like your kind of subject.

So…what are the after-parties like at TED Talks?

Oh I’m too much of an introvert for those. I attend the conference and chat all day with people, then after dinner I’m socially exhausted and go back to my hotel room. I’m not the up-til-3am type. More the up-at-5am type.