Discover the Techniques Behind the World’s Fastest-Growing Companies | Peter Diamandis & Salim Ismail

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James altucher: [00:00:00] So welcome once again, Peter Diamandas. You've been on my show like 10 times, so many great books. And Salim Ismail. Uh, you're gonna be, you're the, you're the author of Exponential Organizations, but now you guys are co-authoring exponential Organizations 2.0.

Salim: new playbook for

James altucher: again? I always

Salim: x growth and impact.

Peter Diamandis: it's the.

James altucher: And as I was reading your first book, which is sold over a million copies and described so well how organizations and companies be and how society has become exponential. Peter, it really reminded me of your book Abundance, I think written around the same time, which showed this optimistic and, and very prophetic view of, of humanity, which is that because of all these exponentially growing technologies, life is gonna be just much better.

And you go into that more deeply in this exponential organization's 2.0.

Peter Diamandis: Yeah, we're, we're living in a different world these days and people have to realize it. And [00:01:00] it's not your, your father's old business world. Uh, you know, exponential technologies, computation sensors, networks, ai, robotics, 3D printing, synthetic biology, ar, vr, blockchain, all these technologies on their own and in convergence are reinventing, uh, life and they're reinventing how you build and run companies, and it's extraordinary.

And the ability to take what used to be scarce and make it abundant. Um, and so many examples and we'll talk about it, but you know, for us it's really about how we are building new companies, uh, for the next, you know, decades ahead

James altucher: Yeah, and, and the decades prior, because you look at. You look at the past 20 years and we've seen linear companies like, like Kodak for instance, go bankrupt and outta nowhere. Photo companies like Instagram be worth billions and the same, you know, that's just one classic [00:02:00] example, which you mentioned in in your first book.

And of course there's Google, Airbnb, Uber, Palantir, so many companies that using the, these exponential growth techniques have become multi-billion, even trillion dollar companies over the past 20 years. Like it's amazing how fast these companies have have grown in terms of the history of corporations.

Like what's, and that means industries are growing exponentially too, not just companies. What's changed?

Salim: Yeah, so, uh, James, we, we put the first book together and Peter was a deep collaborator in that first book in 2014, and it was actually built on abundance in that thinking, because when you think about business, almost all business for 10,000 years is focused on scarcity, right? If you didn't have scarcity, you didn't have a business.

And we're seeing new, a new breed of organization emerge that's actually based on abundance. Uh, Airbnb tapping to an abundance of extra bedrooms, lying around or Uber or tapping into cars that are sitting around 94% of the time. And essentially what this book did in [00:03:00] 2014, it laid down the organizational paradigm of how do you organize for a business models around abundance.

And that was the starting point. We now have 10 years of data on, on case studies, on how people have. Use this model and the benefits behind it. And there's a really important economic thesis that underpins all of this, which is, has to do with demand and supply you. You're optimizing for both of, you're building a business obviously, and hopefully you're on the right side of that equation.

The internet came along and did something interesting and allowed us to drop the cost of demand exponentially, right? Online marketing, referral marketing, uh, every Silicon Valley company is trying to go for an a viral loop, and that actually brought the cost of acquisition down to near zero. In the exponential organization world, these ex soso, as we call them, have learned how to drop the cost of demand, uh, supply exponentially.

So if you take Airbnb, the marginal cost of adding a room to their inventory is near zero. If you're Hyatt, you have to build a hotel, right? And same thing with ways. And so there's this entirely new [00:04:00] breed of companies that are coming into legacy marketplaces with a very low marginal cost of supply, which is an existential threat for the incumbents.

James altucher: It, it, it's so fascinating cuz you're right. I didn't think of it that way. But every other company beforehand there was scarcity. Like, oh, we need McDonald's. Because there, if I was on a long driving trip, there wasn't really enough food along the way. Like, I couldn't turn off a rest, stop and find a restaurant or, you know, almost everything.

It's like I have to go to the store because I don't have enough nails or hammers. I gotta go to the store and find a store that has a hammer in it. But now, like you say, with Airbnb, everybody's got, or not everybody, but millions of homes are empty sometimes if the, if the owner's on vacation or if that's a second home or if they even have an extra room, there's millions of empty rooms and,

Peter Diamandis: Airbnb,

James altucher: Airbnb owns none of those rooms.

[00:05:00] That's a key part of your exponential organizations is that these companies don't own. The, the assets that they sell. And that's a fascinating part too. They, they've organized and created an interface

Salim: and the rationale for this comes

James altucher: but they don't own the abundance.

Salim: which you may have heard, you digitize, and then you go into a deceptive phase, then you disrupt it, and you democratize, and you demonetize. And you dematerialize. Right? So as we turn the world more and more into, well, you're, go ahead,

James altucher: What does D materialize mean?

Peter Diamandis: to materialize, my friend, is that you're don't have a Kodak camera around your neck anymore. It's become an app on your phone. So your collection of records and books are not physical things. They become apps and data on your phone. So we're talking, we're talking about turning atoms into bits, and when you turn atoms into bits, the cost of replicating those bits is near zero.

The cost of transmitting them is near zero, so the marginal cost is [00:06:00] near zero and they can go every place, and that's changing the world at an extraordinary rate. And so the whole idea of an exponential organization is a new type of company. It's been around and it's, they're becoming more and more dominant.

And our goal here is to teach entrepreneurs who are starting a company. Like if you're gonna start a company now, you really, there's, you know, there's, uh, 11 things you need to do that all these exponential organizations have proven over and over and over again. You have to do, um, if you want to really survive and thrive in the decade ahead.

And likewise, if you're an older company, if you wanna survive this decade, you've got to transform at least parts of yourself into an exponential org. And so this new this, this new playbook breaks this down into, uh, what's called having a massive transformative purpose, and then five internal and five external attributes.

And we talk about those and give the examples. [00:07:00] And it's, it's, for us, it's about how do we make the world uplift humanity? How do we turn. Scarcity into abundance. How do we demonetize everything? And this is a chance to really create, uh, an extraordinary future.

James altucher: Uh, I have a, I have a question and I want to get into these, starting with the massively transformative purpose. I, I, I like the idea, I, when I read about it in the first book, I like, it was, it was interesting to me, but what's gonna happen to entrepreneurs who want to create a, a soda company or a toothpaste company, kind of an old school type of

Salim: No, it, we think it

James altucher: that gonna not gonna

Salim: It's just that those, you're, let's say you're selling a soda stream and you're coming up with that idea, right? It's, you can now information enable it, use subscription models or use, uh, different approaches for the digital aspect of it. And you can see companies starting to do that.

BMW took that horrible step of putting a subscription on the seat heaters in the cars, which really didn't go down very well. Uh, but in general, [00:08:00] we think more and more, They

James altucher: because they were creating scarcity rather than tapping

Salim: just doesn't work, especially with the paradigm that I've spent a ton of money for the car and now you want me to pay for the seat heater that's already built in.

Uh, that was kind of a little absurd. But overall takes say, uh, autonomous cars, they're, they're coming a little bit more slowly then we wanted, but clearly we're going to go to a per kilometer model where some car will pick me up, take me somewhere, and, and drop me off for some price. Now I don't have to own a car.

Right. So access versus ownership is a key piece of this. This new models. So if people want to build a new model today, they're doing much more of that new model, and a great place to look is what happened in the music industry where you had six or eight major music studios selling scarcity, selling the cassette, the cd, the dvd.

Then we digitize music. Pretty much they all disappeared. Now we have two platforms, iTunes and Spotify, selling you abundance on a subscription model. And we think that kind of, uh, transformation is going to [00:09:00] happen to education and healthcare and energy and transportation in all the major industries out there.

James altucher: So, okay. I'm an entrepreneur. I'm hearing this. I wanna start, uh, this sounds great. I wanna start an exponentially growing company. First step is come up with a massively transformative purpose, and you give great examples of that in the book. What are some more

Salim: So we des define an MTP as a, what fundamental problem are you trying to solve? It's the Simon Sinek question of why do you exist, right? You have to be able to answer that question, uh, going forward if you want to kind of see, uh, attract people, build a community, et cetera. So the MTP is the most powerful and most important piece of this, uh, uh, equation.

Um, and once you have that, it gives, it tells you how to focus your company during hypergrowth. It becomes really easy for recruiting because everybody wants to join that purpose-driven organization, and it allows you then, as the, as the [00:10:00] foundation stone of, of the organization to then focus on that on a non-stop basis as you're building.

And Peter, you may have your own thoughts on mtp.

Peter Diamandis: Y Yeah. So a massive transformative purpose as the entrepreneur, as the founder, or the founding team. Um, and the company can be the same. It's what you wake up with as your mission. It's what is so big emotionally charged that it is a driver. Like I'm in awe. I want to create this extraordinary thing. I was just on, on, um, uh, a Zoom with Tim Ellis, who's the CEO of Relativity Space.

That's 3D printing rockets, right? The 3D printing 95% of a rocket and, and their big mission is to be able to manufacture. Anything on the surface of Mars or the moon, including the rockets to get back. And they're starting with 3D printing rockets, and it's driven them. And any engineer [00:11:00] who's looking to try and, uh, do something, people want purpose in life.

They want significance. And so, you know, you can go and join Tim Ellis at Relativity and be part of that mission. You can go and join, um, Elon at SpaceX and be on a mission to take humanity to Mars. So it's, it having an mtp, um, that is compelling, um, and, and audacious, uh, is gets the best employees to come work for you.

Right. And it, it, it gives you a target to shoot for it. Also, one other thing, if I could, James, we're entering a world of a massive abundance of opportunity, more opportunities than ever before. Right. I could do this and this and this and these investments and so forth. And how do you, in this, in this drowning and abundance of opportunities moment, how do you select what you do and don't do? Um, and your MTP is a filter through which you decide this is in line with M T P. I'm gonna do

Salim: This is an important historical [00:12:00] point here where when we put the book together 10 years ago, we actually analyzed 200 of the fastest growing unicorns and said, how are they doing it? How is TED scaling so quickly using community? Or Uber tapping into other people's cars, et cetera. And we tap, we kind of iden, we labeled the model essentially.

We didn't invent anything. We just kind of labeled what people were doing and, but, and bar none, every single one of them had some fundamental problem that they were trying to solve. Articulated clearly. Uber, everybody's private driver. Google's obviously is very famous, and we found all of these had something like that in place that allowed them to scale and acted at the anchor for everything.

James altucher: You know, what I thought was interesting was use Cisco as a negative example. So Cisco obviously, um, is in the category of an exponentially transformative or, you know, an exponential organization like in the nineties. You couldn't get connected to the internet without a Cisco [00:13:00] router. So, so you mentioned like in your, in 1.0, the 1.0 version of your book, uh, they could have had a slogan like connect everybody everywhere.

And instead they had some more linear type of description and that became part of their d n A and limited them.

Salim: so the.

James altucher: So what, what, what was it then?

Peter Diamandis: It was like, you know, increased shareholder value and so forth. I mean, who gets excited about that, right? I mean, does the, do you, does the, do you get the person to come and work for you instead of Google by, by that mission or by something that is compelling? You know, it's, it's an emotional, TPS should have an emotional connection.

James altucher: that's so strong that it can actually tr build the company. Meaning, you know, that's why Cisco's not as big as Google right now, because from the beginning, their mission

Salim: Yeah. A great example, even a better

James altucher: put it in their D N A.

Salim: Became hyper successful, but they didn't have that fundamental purpose to keep them to the next level. And [00:14:00] over time, people got lost as to what they were trying to do and the whole thing imploded.

So the MTP is the, the, the key one. I think if it's worth it, we should

James altucher: So what like,

Salim: very quickly the attributes overall in the model. And then we can talk about how to build one. So the, we found all of these had an mtp. Then we found five externalities that these companies were using to scale very quickly, and it allows them to keep a really small feature footprint.

And so Uber doesn't hire its own staff. So when is staff on demand? As much as possible, don't hire employees. Use the external workforce so that you retain maximum flexibility and agility. The second, which is C, which is MAPS to the acronym scale, is community and crowd. X prizes famous for incentive prizes to into the crowd, TED leverages community and so on.

And we found most of these fast-growing organizations had tapped into community or crowd in one way or the other. Crowdfunding sites, for example, the A is algorithms. [00:15:00] And AI and algorithms. Clearly today, if you're not using ai, you're going to be outta business in the next, uh, few years. And therefore, artificials ai, leveraging data science, et cetera, is a key part of that.

And if you can make that part of your product even better, the way Google has, et cetera. Uh, the, the, the fourth one is L or leveraged asset. Uh, Airbnb tapping into other people's assets. Cloud computing is the quintessential prototype. In fact, we declare the birthplace of the XO when Amazon Web Services launched and allowed you to take computing off the balance sheet and make it a variable cost right?

And then companies could scale with the demand rather than having to make a huge investment in fixed cost beforehand. And then the final one is engagement, uh, which is digital marketing techniques and keeping track of your customer NFTs as a permanent cookie and program mobility of your customer base, incentive prizes, gamification techniques, et cetera, that keep you connected in real time with your entire user base.

So those are five [00:16:00] externalities that these companies use, one or more of very small feature, footprint, and scale Very fast.

Peter Diamandis: And, and we'll go and we'll go through these, you know, we'll go through each of these in, in, uh, in different, I mean, it's, the important realization is that these 10 attributes are the ones that are. Being used and you could see them clearly used, they all feed into each other. And it's what is, is reinventing how we do business, uh, digitally.

And I think, uh, one of the things I'd be excited about if I were at the beginning of a startup or planning on a startup is how many of these would I incorporate in from the beginning and how would I design my business around it?

James altucher: And C, could we just see in terms of just understanding, could we just like walk through Uber and see how an exponentially growing company like Uber made use of scale? So as staff on demand, clearly the drivers, uh, they don't, they're not employee Uber drivers

on employees of Uber.

Salim: and let's start with the [00:17:00] mtp, which is everybody uses private

driver. Right. Everybody should have a private driver. Okay. That's the mtp that becomes the umbrella mission. Uh, then you have staff on demand. Uh, then you have community. Because the drivers become a community of their own.

They're tapping into the crowd. By extending this offering into the broader, uh, ecosystem, anybody can sign 'em to be a driver, et cetera. Uh, then they, you move to algorithms, heavy use of algorithms to match driver and passenger and artificial intelligence

Peter Diamandis: ai.

Salim: did built deep into the product. To match what drivers have the right, um, uh, rating compared to you who's closest, et cetera, right?

Then they're leveraging their, the cars aren't their own cars. They're leveraging the ownership of other people's cars. Uh, and then finally, engagement is their engaging with the community in very powerful ways. Discounts with American, if you have an Amex card, you get discounts. Per month, et cetera. And they're keeping the community and the overall broader crowd engaged with in different techniques.

So they're using all of those fives in different [00:18:00] ways.

James altucher: Plus the ranking. You know, dri, the drivers are ranking the customers and the

customers are ranking the drivers. So there's a little bit of

Salim: whole thing is gamified very powerfully. Uh, then there's five internal mechanisms. Okay? Um, one is interfaces. How do you interface with all those drivers? What's the, the technology that you use to do that? The second is dashboards, uh, realtime metric business metrics.

The third is experimentation and risk taking, which is the whole lean startup kind of thinking of constantly testing assumptions and inculcating a culture of risk taking inside the organization. The fourth one is autonomy. Decentralizing decision making, decentralizing the org structure as much as possible.

And then the final one is social technologies like Slack, yammer, chatter, Asana, et cetera, to keep heavy collaborative, uh, capabilities peer-to-peer, uh, operational capabilities inside the company as much as possible. And that those last five were the internal attributes that mapped to the acronym [00:19:00] ideas.

Uh, and so, uh, Uber uses almost all of those in different ways. They're constantly testing different pricing models, uh, uh, the surge pricing test, and they can essentially ab test on lots of different aspects of the service that they offer.

James altucher: Yeah, and it's uh, you know, Uber, Airbnb, all these companies. I mean, what are some of the other examples that you've seen since

Salim: So, uh, I'll, the highest rated one that we ever saw was GitHub. Right. So GitHub is a platform to allow developers to collaborate and they employ all 11. Uh, their MTP is social coding because you can code much better in a social environment. People look over your shoulder, they've implemented ranking. The most fascinating thing about GitHub is that if you're a software developer in Silicon Valley today, your, uh, salary has no bearing on the degree you got the.

University you went to or the grades you achieved, it's a hundred percent what is your GitHub rating, which is [00:20:00] a peer-to-peer meritocracy where people rate your code and you grade other people's code. And so the value of a computer science degree is now essentially zero because, uh, your capability of coding is much more determined by your GitHub rating.

James altucher: I knew it when I got that computer science degree that eventually it'd be worth nothing.

Salim: over and above that that are so compelling. Right. And I think that's what you can, people can bring to the market in an interesting way. So, uh, GitHub was the highest rated, and then Microsoft bought it for like seven and a half billion dollars a few years ago. I remember talking to the accounting partner that was managing this acquisition for Microsoft, and he's freaking out because he's like, what do I put on the balance sheet?

They have basically no workforce. They have no assets and they have no intellectual property, and he's literally trying to kill the deal because he can't figure out how to reconcile this. At the balance sheet level. And finally, Satya Nadella just says, you know, just fricking make it work. We're, cuz they're really valuing the community.

30 million developers in all the storehouses of, uh, millions of lines of code is incredibly powerful. [00:21:00] Do they have revenues? They do. They offer, um, membership models in a freemium model, if I remember right.

Peter Diamandis: So James, the, the point here is, and we can talk through each, each of these in in particular, um, these attributes are, there's a game plan for each of them, and they each feed on each other. And again, what Salim said earlier, this is about how do you, you know, in one sense, how do you tap into 8 billion people out there, find those most interested in supporting your business?

And that can be in marketing, what you do. It can be creating content for what you do. It can be coding for what you do and turn that crowd into community that are serving you at near zero marginal cost. Right? Um, and then how do you. Uh, actually [00:22:00] use AI to gather that data and make it usable. How do you create interfaces that allows the crowd and your community to, uh, plug into what you're doing?

And all these elements are driving massive return. So over the last 10 years, what we tracked was those companies that are using these attributes that are exponential organizations versus those companies that are not. There is about a 40 x shareholder return. Um,

Salim: can I talk through this cuz uh, James, with your background, I think this, this might be really powerful. So

Peter Diamandis: Yeah. Let's go, let's get the numbers.

Salim: the Fortune 100 and we ranked among this model. Right. So we scoured, we went through every company, Walmart, uh, Proctor and Gamble said to what extent are they purpose driven?

To what extent are they leveraging community, which extent are they leveraging algorithm? And we scored them all. And we came up with an index and I did a segment on cnbc, squawk Box, presenting this index, essentially measuring the how purpose-driven, flexible, adaptable, [00:23:00] scalable, the org structures of these big companies.

Um, and it was a marketing effort, et cetera. We just did a seven year trail analysis and said, okay. How did they do? And what we'd done was we tracked the top 10 most flexible in agile companies of the Fortune 100 over seven years, and the bottom 10, the least flexible, the least agile, et cetera. And then we compared the results and it was astounding.

The revenue growth of the top 10, uh, compared to the bottom 10, was three x over the seven years. Profitability, 6.4 x, return on equity 11 times. Uh, but the killer with shareholder returns cagr, um, Uh, compounded on your growth rate was 40 x higher for the top 10 compared to the bottom 10, and we literally had to triple check to make sure we have the numbers right, because it sounds absurd.

So we have very, very clear evidence. And the umbrella thesis is really simple, right? As the external world becomes more volatile, your ability to adapt is gonna drive market value. Uh, and that's true for any company going forward.[00:24:00]

James altucher: So do you, uh,

publish a regular index?

Salim: frankly, we, to the wrong business model, we should have done nothing but create a hedge funder index fund outta this. So, uh, it's something we'll start doing as we go for it.

James altucher: And how does a company like Walmart though, hear all this and say, okay, well now we're gonna be, we're not gonna digitize all our information and, and become an exponential company. Like, they're basically no one's gonna want, this is my worry. No

Salim: well, you don't have to do all of them,

James altucher: A store.

Salim: for example, Uh, do they use OKRs internally? Do they tap into community at all? And most of these big companies don't. Do they use algorithms? They better start. Right. So, uh, we've been, Peter and I have been, almost everything I've done over the last eight to 10 years since the book come out is yell at boards of Fortune 500 companies.

Thanks. And Peter is the same. Um, we started with, we've worked with Proctor and Gamble, Unilever, TD Ameritrade, black Decker, et cetera. [00:25:00] One key tool set that we've solved, um, is solving what I call the immune system problem. Uh, before doing singularity and meeting Peter, I was the head of innovation at Yahoo, running their incubator, and I found them the more disruptive an idea we came up with, the less the company could handle it and the antibodies attacked.

Because all big companies are focused on predictability and efficiency, and so we focused on solving this immune system problem. We actually have a 10 week engagement that we run inside a big company that hacks culture at scale and it shifts the default. No answer if you're try anything disruptive in the organization to a yes.

And we've done that 60 times now with big companies.

Peter Diamandis: You know, uh, one of the attributes, uh, Salim keeps on saying algorithms, you know, it's ai, which is really the, the, the attribute here. Um, we're gonna have two kinds of companies at end of this decade, James. It includes the webcast business as well, and the podcast business as well. And it's companies that are fully utilizing AI across [00:26:00] every aspect of what they do.

And companies are out of business. It's gonna be that dramatic, right? So it's gonna be, you know, AI's not gonna put any company out of business. It's gonna be another company utilizing AI that's, uh, fully, it's gonna put you outta business. And so one of the things that we're talking to large corporations and small corporations is how are you. Um, how are you building this into every aspect, uh, every element from engineering to marketing, to finance, um, you know, to comms, everything. Uh, and it's true across the board here. You know, one of the things, let me just take a second, cuz this can be feel overwhelming for some, you know, the book comes out on June the sixth.

Uh, and, uh, it is broken down into a very organized fashion. Like, this is what we mean by social technologies or autonomy or experimentation. This is how companies are using [00:27:00] it. These are the platforms or apps that you can use to incorporate it into your own company. Here are case studies or companies that are using it successful, right?

So it's, it's very, it's it's meant to be a playbook for companies. In fact, one of the things that we're doing, Um, uh, you know, is to make this available as far and wide as possible. So on June the sixth, uh, we're going to be holding a three hour workshop, uh, for free, for anybody who wants, you'll get free access to the book.

Um, we've also built an ai, which you can talk to the book, uh, we're calling it Ray Kay in, in honor of Ray Kurzwell. And you can talk to the book about your business and ask it questions like, how do I incorporate, you know, dashboards or interfaces into my business? This is what I do, who I am, or how would I defend myself against another exo?

Or how would I disrupt my competition? And [00:28:00] so we're gonna do that three hour workshop, give you access to the ai, give you free copy of the book. That's on June the sixth. Um, any listeners who are interested, uh, you can go to dand.com/exo. And register. Um, and for us, it's gonna be a chance to help get this model out there.

It's about creating efficiency and uplifting the world.

James altucher: how did you,

Salim: What we, yeah, what we did was

James altucher: AI for the

Salim: chat, G P T and a few of the other models out there, stability, ai, et cetera, and we merged several of them together, and then we loaded up the entire corpus of the book, all the. Uh, interviews that we've done, et cetera. So there has a rich content depth to it.

We're also gonna be loading up 700 case studies that we've, uh, put together over the years. And essentially you can then query the book and say, okay, I'm a shipping company. How would I implement ai? Uh, and it literally scan all over that and come back to you and go, here's what you need to do. And so we're super excited by that.

It's the first living book because a key part of this is we're gonna just keep it updated with all the case studies [00:29:00] and all the new, uh, information that we find, new stats, et cetera. And this will be the first fully living book that you can interact completely interactively with

Peter Diamandis: James, you know how insanely difficult it is to write a book right now on AI or on any of these technologies? Cause it's

James altucher: because

Peter Diamandis: every single day. It's crazy. It's crazy.

James altucher: I mean, this is, this is a,

Peter Diamandis: yeah.

James altucher: but here's a question, like, and this is, this is related, like even starting a company in the AI space, once you start it, you realize there's 50,000 competitors to it That day that launched or all the companies that would've been your customers also launched.

The, that ai, like it's almo, AI's changing so fast. You almost can't start a company using ai.

Peter Diamandis: But you can use it, right? So one of the things that every company has that's uniquely its own is its data, right? It's has its own data, its own set of customers, it's got its unique ecosystem. And what you want to be doing is [00:30:00] not necessarily building another AI system, but finding the AI elements. Um, that will serve you, your data and your customers.

One of the recommendations, for example, that I make in the book, in the AI in algorithms chapter is that, uh, the traditional companies, even a startup right now, should have what I call a Chief AI officer. And your chief AI officer isn't someone creating a large language model or coding, um, AI algorithms.

It is someone who understands what's out there, who's doing what, how things are changing, and then going and creating partnerships. It's a strategic advisor to the CEO and the leadership team on check this out. Look, let's talk to these partners. Let's utilize this right now, this new version is better, right?

Because exactly you said it's changing so rapidly that you need somebody who is in the thick of it watching, learning consuming constantly.

James altucher: Well, like take what you just said. You, you, you [00:31:00] took all this data, that was your book, basically the case studies, the interviews, the text of the book itself, and you made an AI model so that people can say, Hey, I have a shipping company. How can AI help me with my finances, et cetera, et cetera. How, why isn't that a business?

Like you could take, there's 2 million books out there. You can say, Hey, everybody, we'll, we'll make an AI version of your book so anybody can talk to

Salim: is actually setting up their own company to do this. Right. You've written a bunch of books. I imagine having instant AI access in a queryable form to all of them would be amazing.

James altucher: Yeah. And then, but, but there's no moat because like

Peter Diamandis: Yes. There's no mode,

James altucher: as soon as I, as soon

Salim: But the mote is the, the, the text and, and the experiences that are unique to your world that are so profound. So, for example, companies that have rich data sets will do very well going

Peter Diamandis: right? So, So you could take [00:32:00] all of your podcasts, right? Uh, that you've done, James, and, and did, you know you have those digitized, transcribed, and fed into, uh, you know, uh, your own, uh, your own ai. I'm doing it. I'll do it eventually for my own podcast moonshots. And it will be something you can query that someone can go and, and learn about.

So it's just the way we're gonna learn and interact is changing and, um, it's just the speed is, is almost inconceivable and it's getting faster year on year.

James altucher: And, and it's all revolves around the fact that, you know, companies now have assets like information or. Or they, they service information like Dropbox stores information, or they dematerialize physical objects and turn them into information like you mentioned earlier, Peter, with you could take records and now they're just digital streams on an app on your phone.

And so, so it's all [00:33:00] revolves around how quickly can you put things in an information form because AI takes information, organizes it in some way, and spits out something that

Salim: Yeah, take your take for example, your Apple Watch or your Fitbit, right? You have, you have a stream of data coming

Peter Diamandis: the informa, the.

Salim: a very large, uh, set of customers, millions of people. And you could create some incredibly prescriptive models for how to operate on that data, your Fitbit or Apple watcher to say, listen, you're kind of sedentary too long based on the data.

You need to take a 10 minute walk right now. Uh, and that's the kind of thing we expect to see thousands of coming up, uh, in this new world.

James altucher: Okay, so let's say I'm an entrepreneur. What are the

Salim: So we covered the first one, which is MTP number one. What fundamental problem do you wanna solve? Is it cure cancer, solve transportation like the ways guys did or whatever. Pick that fundamental problem and articulate that statement in into an MTP step. [00:34:00] Peter, you want to cover that?

James altucher: and, and how do I pick that problem?

Peter Diamandis: Well, it's what? It's so, yeah, it's, so for me, this is about an emotional energy. Doing anything big and bold in the world is hard. Right? And if you're doing something just to make money, uh, you're likely to fail. You've gotta be doing something because there is a massive emotional energy and desire and it comes in two forms.

Either something awe, like, you know, for me, my first 10 companies were all in the space world driven by my desire to open the space frontier. Right? You know, creating zero G in Space Adventures, international Space University, and Saids and xprize and all of those things were driven by the, I'm gonna help open the space frontier.

And then there's this, this, uh, you know, the other side of the equation is pain. Um, if, like, I refuse to let this go on, and for me, the idea that we're gonna, you know, get old and die at 85 or 90 or a hundred, It was like, you know, I call bullshit. No, I'm gonna fight against the [00:35:00] dying of the light. And so all the companies I've been building and investing now a half a billion dollars of capital towards is, is longevity, age reversal.

You know, it's, it's basically, I'm gonna crush the healthcare system and reinvent it. So there's an emotional energy there because you, you need to connect with that. And it comes from a passion and a purpose. And once you've got that general area, then you're going to, you know, find people who share that passion and purpose with you.

And then you're gonna start to figure out, okay, um, I'm gonna build a community, a crowd, and what is the thing we're gonna do that makes a, uh, you know, a massive difference in that, in that area. So

Salim: Peter's actually

Peter Diamandis: begin with

Salim: entire generative AI interaction to help you develop your M T P, so we'll be giving access to that in the workshop. Yeah.

Peter Diamandis: Yeah, there. Yeah. So you'll, you'll, you'll, you'll get that when on the, on our three hour workshop. It'll help you, um, it use, [00:36:00] it uses, you know, g p T four, uh, as an engine to help you find your, uh, your, uh, mtp and then help you, uh, create your moonshot. And then actually to plan your moonshot. Like what do you have to achieve in not 10 years, but five years in one year, in the next three months, and what should I be doing right now?

James altucher: And what, what about industries though? Where, like, let's say biotech, you mentioned cure cancer. So biotech is obviously an exponentially growing, uh, industry of which there are many exponential organizations in biotech. But let's say I'm a regular guy. I might not be able to create a biotech, but maybe I can, I can create, I guess a

Salim: Yeah, let me, let me give you an example. We actually had

James altucher: what are, what other

Salim: on at Singularity University originally who wasn't, didn't come from a biotech space, but he loved the idea of curing things with all of these new genetic breakthroughs, et cetera. So you formed a company like called Cure [00:37:00] Together, where patients could collapse into a community and share their conditions and say, I've, I've got this condition, Crohn's disease, this is what I'm trying.

And by aggregating data across a large group of patients, share sharing similar afflictions, they were able to share data in a really powerful way across the board, right? And so things like that can be done very powerfully leveraging community. And you don't have to have an expertise in biotech to do that.

You're just bringing together the, the entire ecosystem in that way. So there's a lot of ways to play in the space.

James altucher: Right. And so that's how he, he created the staff on demand and the crowd and the community

Salim: exactly. So it's say, Hey, you've got the, yeah, you've got these

James altucher: other people's assets, like leveraging their diseases.

Salim: and he seems to be a month ahead of you in his treatment process.

So you guys connect. Right. So there's a ton of things you can do that are very rich there.

James altucher: Hmm.

Peter Diamandis: Yeah, there's a listen, biology and medicine's [00:38:00] become a digital science, um, and it's AI is being applied. We're gonna see more progress in healthcare and, and biotech from AI than anything else. Um, and so listen, not every exponential org is going to be using all these attributes. Um, uh, a dear friend of mine, Alex Aronoff, who's the CEO of In Silical Medicine based out of Hong Kong and Dubai, um, talk about exponential organization, they have built.

Um, a massive autonomous lab that's driven by AI and robotics. That's operating lights out 24 7, meaning there's no humans in the loop. All the experiments are being designed and run by ais and robotic pipetting and everything going on 24 7, and it will run massive ex uh, parallel experiments, right?

Gather the data and then be able to identify which of the experiments you'd be done next, what's the promising information, and then [00:39:00] license that out for, you know, drug discovery. So you're going to have, um, uh, companies that use, you know, three or four, some will use all 10, uh, but companies that are gonna be successful in this decade are most definitely, uh, going to be

Salim: Can I, can I give you James an example of a killer one that we've seen just to bring, so there's a company out of China called Guzi, which is, uh, sells use cars. And you look at used cars and you're like, okay, how would I make that 10 x better? Like you maybe have a better app or better warranties or delivery service, but it's not that obvious how you disrupt it.

Fundamentally what they do is they show up to somebody who wants to sell a car. They gather 250 data points, video photographs. They take an audio of the engine and pass it through a machine learning filter. They can detect exactly the quality, the engine by the ions and the sound. So they come up with a real-time price for the, what they think the car is worth.

Show it to the seller and they say, we'll give you [00:40:00] 10% less than this in cash right now. Seller goes, yeah, here. Then they go to somebody who wants to buy a car and they go, here's the price from our engine. We'll sell it to you for 10% more. That's the model. Um, in seven years, they captured 80% of the used car market in China, 80% from a standing start.

They sell 2 million cars a month. Right, so you can use new approaches to completely shred old marketplaces, and we're gonna see tons of these emerging over the next few years.

James altucher: That's a fascinating example. And what about an example? Sometimes you learn more from examples also that, that fail. So where's something where you see where they maybe had an, they were in an exponential industry, but they didn't quite

Salim: of failure

James altucher: your methods

Salim: failure modes of an exo are just as strong as the failure modes of any other. It's just that the cost of starting is so low, and because you've kept an early small feature footprint, and you're constantly testing and iterating your upside, chances are much higher. We'll give you an example.

One of our favorite EXOS was [00:41:00] quirky, right? So if you're a p and g or Unilever, it took about three days to get from new idea to product on sale in a Walmart shelf. Uh, you, uh, quirky was doing this, that exact process, new idea to sale product on sale at Walmart in 29 days. Like unbelievable for that industry, which is again, a very traditional industry.

Now they got. They, they just had, um, an army of

James altucher: are they doing it?

Salim: suggesting new ideas. They published exactly where the money was going. If you bought something labeled, the distributor gets this much, the inventor gets this much, et cetera, uh, they would go to Walmart and say, here's some ideas. We can bring it to market.

They had operations in China to manufacture these things so they could go. They just cut through every part of the product cycle by 10 x. Where they failed was after the first three or four products. Uh, Ben Kaufman, who's a friend of both Peters and mine, um, the CEO got excited and tried to do 50 at the same time.

And basically the thing imploded, right? So the, so the, in that case, uh, over eagerness really was the, was the problem. But many of [00:42:00] these have the traditional failure modes, but you have a stronger chance of success, uh, because you're iterating and learning constantly because of the experimentation, uh, characteristic.

Peter Diamandis: Can we

James altucher: in some of the external externalities, you mentioned how the cost of acquisition of a customer has gone to zero, which is, which is very important in this digital world cuz now you could reach people all over the world in in seconds. But could that potentially create a race to the bottom in marketing where

Salim: we're already

James altucher: trying to reach 8 billion customers at the same

Salim: hu It's cutting through the signal to noise ratio today and marketing's a massive problem for everybody.

Yeah, no, this is a really great, so, you know, in 2005, Chris Anderson from Wired Magazine, long of long tail frame, wrote a book free positing that as we move to an information age, almost every business model will go to free or free freemium type models or ad supported or something. Kevin Kelly read [00:43:00] that and then wrote a rebuttal, and the blog post is titled Better Than Free.

And in this blog post, he identifies eight ways of adding value if the base information is free. Findability, accessibility, personalization, or three of them, to give you an example. And we think what he's done there is defined and identify the business models of the 21st century, the business models of a digital age, and pretty much every product or service like Airbnb gives you findability.

Uh, Google is giving you personalization in many cases, et cetera. And we find that almost all. Digital business models fit one of those and we think that's it. We document those in the book and we basically say, these are the prescriptive ones to follow. Pick one of these and go after it and look at similar ideas that you can take new information sets, bring them to market with this new idea, leveraging community as much as possible.

James altucher: I guess it's very interesting because take something like Tesla, like people wondered out loud, why did Elon Musk give away all the IP for Tesla [00:44:00] for free? Uh, it's because he's providing the accessibility to the actual car. He's making the car. It doesn't matter if I have the ip, I'm not gonna make the car by myself.

Peter Diamandis: Well, he also is creating a standard, and if other people adopt it on charging stations for example, then it just makes his life easier in that regard. Right. And it's been said before, it's not a car he's selling, it's an app with wheels, so to speak, that's upgraded on a regular, on a regular basis. You know, a few of these things go together.

Um, and it's important like the attributes of, you know, interface and dashboard, experimentation, autonomy. Let me hit on a couple of these things. Experimentation is so critically important and so much easier now than ever before. If you're starting, and this is, I'm just adamant about the companies I advise and the companies I invest in.

And I start. You need to have an experimentation mindset from the beginning. You know, in the old way of doing it, it was, the [00:45:00] expert knew exactly what the right answer was. I call it the tyranny of confidence. They were so confident and they would say, you know, it has to be this color, it has to look like this, and who the hell actually knew?

And today, you don't need to know, you need to run the experiment. So we have a whole segment in the book on how to write a great, how to run a great experiment. Right. Um, interviewed a, a friend of mine, Jeff Holden, who was the Chief Product Officer at Uber and also at, um, at, uh, Amazon. And he talks about what is a great experiment, what is not a great experiment.

We interviewed, um, uh, uh, which yeah, Astra Teller, who is the head of Google X, right? Who does go through the same process of helping people design experiments. And in order to be running experiments, you need to be willing to fail. Inside your organization and you need to give your organization autonomy, right?

Um, and autonomy is the hardest thing for a large scale company to do. To say, okay, we're gonna [00:46:00] flatten out the organization and we're going to give you, you know, the ability to go run whatever experiments you want in order to do that in order. And this is how the pieces come together. In order for you to have people in your organization be autonomous, be able to run experiments, there needs to be that clear, massive, transformative purpose that mtp, that guiding North star, that people are running experiments with autonomy to get us there in things that align in that direction.

If you didn't have that, you know, all of a sudden people at SpaceX are now trying to create, you know, God knows what lawnmowers, um, but at the end of the

day,

Salim: now 10 years of data of what works and what does. In, in to Peter's example, GE uh, pulled, did the biggest corporate training exercise in history. They trained 60,000 managers on lean startup thinking and constantly testing assumptions, but they didn't implement autonomy. And so the whole initiative essentially yielded very little because they hadn't given them freedom to think and, and operate by [00:47:00] themselves.

Right? And so you, the refining over the years, the interdependencies and the prerequisites to implementing some of these ideas, you need dashboards before you can allow, uh, experiments to run, et cetera.

James altucher: And so like,

Salim: Yeah, so, uh, I'll use an

James altucher: that a little bit more?

Salim: at Will, which is streaming music to allow you to focus and put your brain in an alpha state. The, uh, will Heshel, the founder, publishes, uh, on to all stakeholders, including investors. Uh, what's the current acquisition cost of a customer? What's the churn? Um, how many days before an average somebody signs up to before they become a paying customer?

What the overall trajectories of growth of the business, and that's published to all external and internal stakeholders, and it's real time. Uh, because if you're having exo something goes right or something goes wrong, you want to know as fast as possible. So businesses are now being instrumented. Forget quarterly reports, et cetera.

They're being instrumented in real time [00:48:00] to deliver business metrics to the C-suite. Uh, and then on the inside we're using the, the idea of tracking team and individual performance, the use of OKRs or objectives and key results. Uh, John DOR wrote the seminal book called Measure What Matters. Um, and we found that almost all exos use that.

Capability and that technique to manage the teams and manage individuals. So that's what we mean by dashboards, internal and external and internal dashboards to track the business.

Peter Diamandis: When you have dashboards that, uh, that your team can view, uh, everybody can measure each other's performance, right? You can't hide. You're in charge of this and you're in charge of hitting these numbers. So for example, in my own companies, right, there is a weekly meeting where the dashboards are reviewed and everybody knows, have they hit, you know, targets for every week, and have they hit their numbers?

And if they're running experiments, we want [00:49:00] to tie the experiments back to the dashboards. Like, did that experiment work? Did it move the

Salim: And if not, what did you learn?

Peter Diamandis: Was it worth it? Or do we kill it again?

Salim: Google has taken the craziest step. They've made their O K R system internally totally transparent to everybody. So if I'm at Google, I can actually look up any other Google employees, uh, historical performance and what their current objectives are, right? And that's a huge level of courage of internal trans, uh, transparency.

James altucher: Is that a lot of stress for the employees? Like, oh my gosh, everyone's looking at the fact that I slowed down this

Salim: And then if I wanna work with some other team, I can look up their objectives and make sure we're aligned. Right? So actually windows down it, it makes the internal operations much more efficient. Cause I know exactly who to partner and team up with that are trying to do similar things.

Peter Diamandis: You know, James, we're, the whole ethos around an exo is it's the efficiency and [00:50:00] output ultimately per human, um, in the organization. And we're gonna start to see billion dollar revenue companies being run by three individuals,

James altucher: Right. You, you predict that in the, in the book and, uh, or in, in exponential organizations 2.0. And it's fascinating because I think people are under the assumption, the old school assumption that, oh my gosh, if I start a company, I need to raise millions of dollars and then hire a lot of people. And just all of those assumptions are, are wrong.

Salim: Yeah, literally it's all

James altucher: necessarily wrong, but you could do it better.

Salim: has changed in the last four or five years, and it's, and therefore all the precepts we had even 10 years ago are out of date. Uh, and really you, you know, we, we looked at this, one of Peter's friends put out a tweet about this.

You'd have a CEO that was also a coder in helping code the AI that held a vision and held the business model a, an operations person that made sure all the AI. Uh, uh, auto G p T type of bots were running effectively, um, and a product person, and [00:51:00] that's pretty much all you need, uh, with what, with most online products and services.

And then the execution was mostly handled and automatically, uh, derived.

Peter Diamandis: Yeah. So again, it's a different world of business coming and it's only accelerating, right? The speed. We're gonna, one of the metrics I talk about in my last book, uh, the Future's Faster You, uh, than you think is we're gonna see as much progress in the next decade. Uh, James, as we saw in the past century, All right.

And it's, it's accelerating. There's more capital at work, there's more people connected, there's more access to compute and memory and ai. Um, you know, a friend of mine who's the top 3D printing entrepreneur out there is just showing me what their, his machines are making this Avi Reichental. And it's like, you know, it's 10 times faster and cheaper, mixed use materials, mixed colors.

[00:52:00] It's insane. Um, and so our manufacturing is becoming bespoke and fast and personalized.

James altucher: well, what if someone's listening to this and they're thinking and they're getting stress because they're thinking, boy, I am. I'm not gonna be able to start an exponentially growing company, and am I gonna be left behind in all of this? Or I'm not gonna be able to be? You know, it's one thing starting one, a lot of people will be employees of one, but

Salim: There absolutely is. And there's

James altucher: a, fear of being left behind somehow?

Salim: you think you're gonna be left behind, or if you think you're not, you're right. Whichever one you pick. Right.

Peter Diamandis: Yeah. And, and James, this is the reason we're doing this three hour workshop. Again, I just wanna plug it one more time. It's free. You'll get access to this book. The book is a step-by-step playbook. You'll get access to the AI again for free. Come and join us. Uh, it's June the sixth. If you're hearing this podcast after June the sixth, I'm sure you'll get a recording.

But [00:53:00] if you join us on June 6th, it's live. And you can, um, interact with us on this. And we're gonna walk through in a much more methodical phase what to do, how to implement each one of these attributes. If you're a large corporation, how to think about these attributes because you need to be. Um, and just go to dm andis.com/exo register.

Uh, and you know, this is where, you know, my massive transformative purpose, my personal one, is to inspire and guide entrepreneurs to create a hopeful, compelling, and abundant future for humanity. And this is directly in line with my m t p. It's where I get my joy.

Yeah, sure. So if I ask you the question, and I, I do this with entrepreneurs and CEOs and [00:54:00] whomever. I say, if you looked at the most successful people on the planet, you know, the Steve Jobs, Elon Musk, Mahama, Gandhi, you know, Martin Luther King, whatever leader you want, and you said what made them successful?

Was it the money they had? Was it the technology they had, the friends they had, or was it their mindset? Um, you know, everybody agrees it's their mindset, right? The way that they handled opportunity or failure or problems is your mindset. It's the neural net. You have a hundred billion neurons in your brain.

That's your neural net. And so if mindset is the most important thing you have, then the question is, what mindset do you have? Where did you get it? And what mindset do you need to have for the decade ahead, either as a mom, a dad, an entrepreneur, a ceo? What is the mindset? So in the, in the book, um, and this is a lot of the work that I'm doing, um, right now, uh, James, I focus in with Salim on, on a number of core [00:55:00] mindsets.

Um, a curiosity mindset being fundamentally critical, right? Ask great questions and abundance mindset. In abundance mindset that we're living in a world where instead of if you have friends coming over and you have to slice your pie into thinner and thinner slices cause they're more mouths to feed. No, no, we're just gonna bake more pies.

Right? It's our ability to use technology to create more and more of what everything, including time. We can get to that if you want, you know, an exponential mindset. You know how, you know, 30 doublings is a billion times faster. Um, a moonshot mindset, uh, of going 10 times bigger in the world where everyone else is going 10%, and then ultimately a gratitude mindset.

And, and these mindsets are, are core for being a great leader. So we close the book on these mindsets again, how to think about them, what to be doing. Yeah.

James altucher: I think that's critical. Cause like when you said how you, you have a. A personal, massive, massively transformative purpose. [00:56:00] I think everybody needs that kind of personal m t P.

Peter Diamandis: Yeah, it drives me, it drive it, it helps me decide what I do and don't do. So I get, I get just super pumped about, you know, uh, with Salim, how do we help? I mean, we're gonna have a huge audience from around the world on this, on this, uh, training, on this three hour training. It's like, let's help people make the world a better place.

Let's give 'em the tools to understand how they use their capital and their intelligence. We all are given one thing in common. 8 billion people we're all given, you know, 24 hours in a day, seven days in a week, 365 in a year. I don't care who you are. That's what you got. And it's how you use that time.

That matters more than anything else. So let's help people use that time.

James altucher: Well, I mean, I'm so excited for version 2.0 of the book. I was a fan and, and am a fan of. The version that came out in 2014, exponential organizations learned so much from it. And uh, now you're going to have the book 2.0 coming out [00:57:00] June 6th. You have the seminar, diamandas, D e d i a m n D I s I S.

Peter Diamandis: don't d i dia. M a n ds.com. D amanda.com/e exo. And you can register there June the sixth. It goes from 8:00 AM to 11:00 AM um, Pacific time. Uh, so it's over the lunch in, in, uh, east Coast and over dinner in Europe.

James altucher: Well, it sounds really exciting. I mean, good luck on all of these things, and I'm exci once again. Peter, you've excited me about the next decade, last decade. You excited me about the decade we just had. Now I'm excited for the next decade.

Peter Diamandis: Thank you, buddy.

James altucher: all this exponential stuff happening. So, uh, and really critical for every entrepreneur.

There's so many opportunities, but it honestly, it's too many opportunities. It's difficult to navigate. And so hopefully your, your seminar in book Will, will give a, a kind [00:58:00] of guide to navigating all this, whether you're an employee, an entrepreneur, or a customer of, of all these technologies.

Peter Diamandis: Yeah, it's, uh, it is the, for me, it's the most exciting time ever to be alive. So what are you gonna do with all of this power that you have? How are you gonna make the world a better place? How are you gonna make a dent in the universe? That's our conversation.

James altucher: How would you advise a government, like let's say a city government, how would you advise them to think in this way? [00:59:00] That's great. Well, again, exp, exponential Organizations 2.0, uh, and. Join them June six diamandas.com/exo. June six, eight 8:00 [01:00:00] AM Pacific time. Looking forward to it. I'll be attending that myself. So I hope you guys do a great job and I'm sure you will. But thanks once again for coming on the podcast. It's really exciting stuff.

Peter Diamandis: you, James for sharing this.