How the Author of Atomic Habits ACTUALLY Makes Money | James Clear

The book has to sell itself in 7 seconds right then when they see it in the airport or they're walking through the bookstore.

This year at Craft and Commerce, Kit's annual conference, we had James Clear, the bestselling author of Atomic Habits, back on the stage.

12 months to hit the first million, and then we did the second million in like half the time.

The last time he stood up there, that book hadn't even come out yet.

Great positioning is really about tying your take or your product to the desires that people already have.

Nobody knew it would go on to sell over 30 million copies.

The only way a book really sells millions of copies is through word of mouth.

We get into book launches, what makes a great product.

Nothing matters more in the making of a book and probably most products or businesses than—

Email lists and newsletter growth.

I have this dream of sending an email and having a million people open it.

You have the largest single author newsletter in existence, over 4 million subscribers.

People come and read the newsletter each week to have like a check-in or to be reminded of the same things I need to be reminded of.

At one point, someone in the audience asks, what is your mission of life?

Small question.

You know, my current answer is that—

When you were here last on the stage, Atomic Habits hadn't even come out yet.

Yeah.

What expectations did you have for the book? What would've been a success?

Yeah.

So actually that talk, well, first, hi everybody. Good to be here. Thanks for having me back. Thrilled to be back. And Nathan is one of the entrepreneurs I respect most and a friend.

And so yeah, I'm just I'm just happy to be here, so thanks for having me. That talk, actually, I give the, it's kind of like the early stage Atomic Habits talk, but I use, there's like 4 steps in the book for the 4 Laws of Behavior Change, but I use different terms for it in that talk.

In that talk.

'Cause I was still playing with the manuscript at the time, and I had a different, it was like noticing, wanting, doing, liking. It was a different phrasing, same steps, but anyway, very early.

Yeah, I had 3 numbers in mind. So the first number was I thought, all right, if I can sell 5,000 copies, I won't at least, I'll at least feel like it's not a failure. 5,000?

Yeah. And then—

That was the day?

No, I'm kidding.

Yeah. And then the real number that I thought was, can I sell 100,000 copies in the first year? That was, I felt like that was a real stretch goal, but my email list was about, when the book came out, so when I signed the book deal, it was 220,000.

When the book came out, it was like 440, 450. And so I thought, all right, if I have this audience and I work really hard and I work on it for a year and I do a bunch of interviews and whatever, maybe I could sell 100,000. That felt like the stretch goal.

And then I thought, can I sell a million copies ever? And if you stretch the timeline out, I was like, okay, can I do 40,000 a year for 20 years or something like that? And so I didn't know if I was going to be able to hit those other 2, but those were the numbers that were in my head.

I definitely never thought it'd be a million in a year or a million in a month.

Yeah. How many did it end up selling in the first 12 months?

We hit, it was right around a million, a million 3, a million 8, something like that.

It was somewhere around that million mark. I think it took about 12 months to hit the first million, and then we did the second million in like half the time, and then it took off from there.

Yeah. And so now you're over 30 million copies sold. Which is impressive in itself.

Yeah.

Crazy.

I think there's a crazier stat about it. Um, to the best of your ability to calculate and verify this, of the top 100 bestselling books of all time, or like most copies sold of all time, where do you think, as best as you can tell, Atomic Habits sits in that?

I think it's, I think it's somewhere between, it's somewhere between number 70 and number 90, something like that.

It's hard to, it's hard to know exactly. Nobody keeps a list like that, but it's—

And like, what are a few of the books that would be ahead of that? We're talking like Harry Potter.

Harry Potter books, the Lord of the Rings. Yeah, the Bible.

Like, there's, it's like—

But those are the types of books I'm talking about. It's not within the behavior change or self-improvement categories we're talking about.

I think it's the youngest book on that list, the most recent one to come out.

Yeah, whatever. However it's measured, it's crazy. I was at the Audible offices last year and we met with the CEO.

And while I was there, I was like, can you guys just do me a favor? Can you just look at the number?

Like, you don't have to tell me what books are around it, but just if you look at the sales from the last 5 years, can you just tell me where I am?

And I was like, is it number 3 or number 5 or what? And he had some guys look it up and they were like, oh, it's number 1.

And the CEO was like, for North America?

They're like, no, worldwide. And he was like, for nonfiction? They're like, no, all books. And he looked at me and was like, that's crazy.

I was like, yeah, it's unbelievable. So certainly beyond what anybody could reasonably expect.

It's been wild.

Yeah. Um, so, so many of us in here have written books and all of that, but, uh, or want to write books, but I know that everybody is thinking about marketing and growth and all of that. And so I'm curious what ideas you've learned from the launch of the book and then, you know, all the, the mini launches you've done in between and everything else that you feel like are more timeless marketing ideas that would apply to any product no matter what you're launching.

Well, I feel like the first thing is just having a really high standard. Almost nothing matters more in the making of a book and probably most products or businesses than making the best book possible. Nothing is going to do more work than that. And so ultimately, every marketing strategy is easier when you have a great product.

And I think you should just pour as much energy and effort you can into making it great.

And in most areas of life, good enough is good enough, but every now and then it's not good enough. And like, you pick a project where you say, I really want to do this to the very best of my ability. And I tried to be that way about every little detail about the book. Like, for example, you know, each chapter has a first sentence and first impressions are important, and I want to kick the chapters off in a really solid way.

And so I went to the New York Times, and at the time they had a little panel on the sidebar of the website where you could see their most popular or most read articles. I think it was most popular and most emailed, I think is what the categories were. And so I hired a software developer to scrape those lists for like 30 days to find out what are the most emailed or most popular articles on the New York Times. And then I just went to each link and pulled the first sentence from every article and put them all in a spreadsheet. I had like maybe 200. And then I looked through those and say, okay, can I try to figure out what are the patterns for articles that do really well? How do they start their sentences off, what does this look like? And then some of it wouldn't work, but sometimes you find something that is a really good fit for how to kick off a certain chapter and you say, oh, I could take that structure and make it work for this as well. And I think it's that level of detail, that level of granularity, but just applied to almost everything in the process to try to do it as well as you can. And if you take that seriously, you can end up with a really great product.

I always say that I think 50% of the success of the book is what you see on the COVID It's the positioning, it's the category, the topic that you choose, and it's title and subtitle.

The other 50% is like 1,000 details that all need to be finely polished and come together. But yeah, those are, I think that's one of the first things is having an incredibly high standard.

Let's talk about positioning and packaging for a little bit, 'cause we, what is it, a year and a half ago, sat down in Las Vegas to talk about my book and dive into the positioning and packaging. I was actually writing a different book. And then you sent me a 20-minute Loom video afterwards.

It was like, hear me out.

Don't write this book, write that book. What were some of the positioning things that you're looking for when you're like, oh, this book is gonna sell for a long time versus this one might have an uphill battle?

A lot of these are just direct response copywriting principles, but it's very hard to try to convince somebody to have a new desire or that the new thing that you're creating is supposed to be important. Instead, what you want to do is tap into a desire that people already have.

So there's a chapter later in Atomic Habits where I write about, I talk about deliberate practice.

And it could have been a book about deliberate practice where I mention habits, but instead it's a book about building better habits where I mention deliberate practice. And I think the difference in how those 2 books would sell is enormous. If you're not familiar with deliberate practice, if you don't know the concept, you got to unpack it for 30 seconds and explain it. And You don't get 30 seconds with a potential reader or a potential customer. The book has to sell itself in 7 seconds right then when they see it in the airport or they're walking through the bookstore. And just by virtue of growing up in society and being a part of culture, you know that building good habits is favorable and breaking— having bad habits is unfavorable. And I don't have to convince anybody of that topic. I just need to convince you, hey, if you're only going to read one book on the topic, like, this is the one to read.

And I think that's a very different sell.

And so as an author, I feel like it's a good sign if you can find 2 or 3 or 4 books that are similar to what you want to write that have already sold a million copies, because it means there's an appetite for that. And now your job is to say, okay, this is the timeless, enduring desire that I'm going to tap into.

How do I make it my own? How do I have a unique angle or a different line of attack or something where people feel like Okay, I know exactly why I would buy this. It taps into something I already want, but I haven't quite heard it put that way before. And that's what makes it fresh.

So I think great positioning is really about tying your take or your product to the desires that people already have.

Yeah, that makes sense. Okay, so with everyone here using email and investing in that, we've got to talk about email. I believe, to the best of my ability to verify, You have the largest single author newsletter in existence. Um, there's companies that have bigger email lists, uh, but what, you're over 4 million subscribers?

That's crazy.

That's, um, yeah, I, uh, I think actually, I think I told Sean Blocks here somewhere.

I think I told Sean many years ago. I've told some other people too that I, it was like maybe 10 years ago.

I said, I kind of have this dream of sending an email and having a million people open it.

That was what I was shooting for, and we did it. So it was crazy.

Worked out.

Yeah.

I don't know if it's the biggest or not, but it's certainly far bigger than I ever thought it would be. And yeah, I sometimes am still surprised. I'm like, why are you guys reading? Just read the book.

Why are you reading this every week?

What else do you need? But I have been surprised to see that it's a very human experience.

We need to be reminded. I think people come and read the newsletter each week to have a check-in or to be reminded of the same things I need to be reminded of.

I struggle with all the same stuff that I write about.

It's kind of annoying how often I feel like I should read Atomic Habits, but that's part of it.

Yeah, so the list has grown a lot.

Yeah.

Obviously, the single best growth tactic for a newsletter is to sell a few million copies of a book and then people will subscribe from there.

But only probably about, what do you think, 20% of the list growth is directly from Well, there's multiple calls to action in Atomic Habits at the end of each part, and then there's maybe 3 or 4 that are kind of sprinkled throughout to join the newsletter. And I would say about, we tried to calculate it, it's about 10% of the people who read the book sign up through one of those.

Something that's attributable to the book, right?

Yeah. So that's, I mean, that's 2 million subscribers right there. But like half the list is not from that.

And honestly, like, I don't know how many, many people have unsubscribed at this point. So probably if 2 million come from the book, there's probably like 5 million that have signed up through other ways and the list is just at 4 now or whatever.

But yeah, SEO, Instagram, Twitter was really strong for me for a while. I find that, you know, I've been doing this for a while now, right?

Like my first article was November 12th, 2012.

And about every 2 years, the source of traffic changes on the website. I had a, there was like a vintage, like 2014-ish where Quora was like a really big driver for me. They had this feature where you could, they had like a blog feature.

I would write on my article, write on my website, and then paste it into Quora and syndicate it there.

Right.

And if it did well, Quora, if it was one of their top articles of the week, they would email it out to their full user base.

And so I just kept the links into my website, and sometimes you'd get 40,000 visits in a day or something if it blew up. But that doesn't exist anymore. They deprecated that feature. So things change fast, but those are some of the ones that have been big over the years.

Is there anything that you see working either for list growth for yourself or for some of the authors that you're working with that's driving list growth well?

I feel like a lot of you are more savvy than I am now at this point. Like Gannon came up to me yesterday and was talking to me about Instagram strategy and stuff. I thought a lot of those ideas made sense. There are a lot of people in this room who are very sharp with the current tactics and tools.

I still feel like In the long run, everything ends up getting gamified. It's all like, all the Instagram comments are like, comment habits and I'll DM you my whatever.

It's like everything becomes a hack or a strategy for the algorithm at some point.

And so ultimately it always boils back down to like, who's actually sharing the best ideas and who's generating the best content.

And so I really do feel like it's almost boring to say that you should spend more time like creating stuff that is of extreme value, but I think you should. And then the tools are always just going to be changing and fluctuating. But yeah.

Yeah, that makes sense. Now, when you think about driving people from a book to the newsletter, if you were either, what are the things that worked really well inside of Atomic Habits specifically? Or if you're working with another author that you're like, ooh, make sure that you have this in there in order to close that loop to the newsletter.

Yep. I like all of the, if you consider each platform in your business as like an asset, so like your Instagram account is an asset, your Twitter account, your newsletter, your podcast, whatever. I, whatever the little points are, I almost view 'em like nodes in a spider web. And I always want everything to be cross-pollinating and cross-promoting, connected to each other. So, you know, each post I put on Instagram has a link back to the, you know, to the website and each article that, or each newsletter that goes out has links to social and back and forth. And, you know, just not just in like 1 or 2 ways, but in like 15 ways. And the book links to the newsletter and the newsletter links to the book and blah, blah, blah, blah, blah.

So the more that you can tighten that, I think the better. And you can't just do it once or twice.

You gotta do it like every time. But collectively, I think that ends up passing a lot back and forth. So I encourage authors to do that, to try to cross-pollinate their platforms.

I think that the web has become more platform-centric and more siloed than it used to be. There's kind of people who are like, I do podcasts and I do TikTok, but I don't really watch YouTube. Or I do YouTube and I browse on Instagram, but I never log into X or whatever. And so in order to stand out, I feel like you have to be so good.

All the platforms are really mature now. And I think that probably what that means is you need to choose carefully. I think rather than trying to be everywhere, pick one or two that work best for you and then double down on that.

I would say that general strategy of early on when things aren't working well, you should test widely, explore broadly. Once you find something that works, double down on that and do it more.

Keep doing it until it stops working, which you would be surprised how often people don't do that. You know, like, why am I still doing interviews about Atomic Habits? It's still working. You know, it's like, don't stop until it stops working. And then once it stops working, go back to step 1 and explore broadly again.

I remember this was like real early on. I read this article, it was 50 ways to drive traffic to your website. And so over the next like 3 or 4 months, I tried all 50.

None of them worked.

And I was like, am I just an idiot? Or like, what's, you know, what's going on?

And eventually I tried some other things that weren't on that list that did work for me.

But it's really frustrating in the beginning to try these things that, you know, everybody says are going great and it doesn't stick for you. And I think some of it is sometimes strategies are good for certain types of content and not others. Sometimes strategies are good for certain types of people and not others. You want to do things that play to your strengths.

And eventually through enough experimentation, you find the things that overlap with your strengths and your content and your style, and you can make it your own. But it requires some persistence to figure out what those things are and then double down on what works.

Yeah. Okay, I want to talk about Author's Equity, and then I want to go to questions from the audience.

Okay.

When you build a personal brand, it can only go so far. Yours has gone one of the furthest we've ever seen, but it still has some level of limitation as the scale of business and all of that. Now, what made you make the switch and say, okay, I want to found a publishing company, and then let's get into the scale that that is starting to achieve?

Well, I did it because, well, first of all, it's not just me.

We have a great team and I'm just a co-founder. It's part of a group of really awesome people. But I did it because I felt like it was the right thing to do.

Everybody has been, all authors have known this to be true for at least, I'd say, 10 or 15 years, which is it kind of feels like you're getting a raw deal now. The world has changed. Publishing was invented and created and rose to prominence pre-internet, and we are very obviously post-internet now, and everybody owns their audience, and the author has more power than ever before. But under traditional deals, the publisher is still keeping 70% of the profit. And when Atomic Habits came out, I did 200 interviews in the first 6 months, and 196 were booked by me, and 4 were booked by the publisher. And I wasn't upset about it because I knew that was what it was going to be like going in. But you do kind of feel like if I'm the one who wrote the book, and I'm the one doing all the heavy lifting and promoting it. Why are you guys making all the money? And so it just felt like something needed to change. But if you're in the publisher's position and you're the one making 70% of the profit, you're not gonna be like, you know what? You guys are right. We'll give you more money. Instead, you're just like, no, it's not quite like that. Like, yeah, things are different, but we still do X, Y, and Z. And so it just took a startup to come in and kind of reset the scales and change the industry to say, there's a better way to do this now.

Well, the thing that I think is crazy is you're going into Penguin Random House and pitching the team there, the CEO there, and the executive team and saying, this needs to change. And they're saying, I'm sorry, it can't. And then Madeline, the CEO, ends up leaving Penguin Random House to co-found and to found Authors Equity. So she's like, I can't change it from the inside, but you're right.

Atomic Habits goes well, so of course they want to talk about doing a second book.

And I was like, all right, this time I think I'm going to try to do this the right way.

And so I asked for all these things that I thought were very reasonable. I thought some really compelling arguments.

I probably went over the top, right? I wrote like 6 pages about it and handed it to them and said, everybody read this, and whatever.

And they didn't have any good replies, but they said, we're not going to do it. And Madeline, to her credit, she was CEO of Penguin at that time, and she says now, she's like, I found myself after work was over siding more with the authors. But in my current seat, I couldn't do that. And she has a history of being kind of on the forefront of publishing.

She went to Amazon and helped launch the Kindle.

She, early in her career, built one of the first websites that sold books on the internet.

So she's been at these inflection points before, and I think she realized things have changed. And so a year or two later, she decides to leave, and she was like, all right, what do you think about doing all this stuff that you said we should be doing? And it's been great.

She brought her number 2 and we brought Don Weisberg, who is the CEO of Macmillan. And it's so much better that they're doing it than if I was doing it.

I thought for a minute, oh, maybe I should found this company myself, but I would've been terrible at it. They're amazing at it.

And she knows all the people who are just straight killers in the industry.

And so they've put together this amazing team and it's worked out really well.

Yeah, that's amazing. Okay, so Authors Equity has published what, 25 books?

We're probably closer to like 50 now, 40 nonfiction.

Then we've got other stuff happening too. There's romance lines and some other stuff that I'm not involved in.

And then you have this idea of the Atomic Habits tipping point.

Yeah. What is that? Yeah, I tell the team, I'm waiting for the Atomic Habits inflection point, which is the month that Author's Equity sells more copies than Atomic Habits does. And it almost happened like 2 months ago.

I think it'll happen sometime this year.

But I had this realization where I was like, I worked really hard on Atomic Habits for, it took somewhere between 3 to 6 years to write, built the audience and the platform for 10 years, and it went as well as it could possibly go. It's the bestselling book in the world for the last 5 years. And in 18 months, the publisher's almost outpacing it.

Right.

And you just realize, oh, some businesses scale very differently than others.

It doesn't matter how hard you work as an author, you're never going to outwork a publisher. The publisher's publishing new books every month. You just can't keep up with the pace.

So that's not to say one is better or worse than the other. It's just, it's interesting to think about for all of our businesses, the leverage that we have in certain ways and which businesses and which projects compound and scale in different ways than others do. And I was excited. I mean this sincerely, I would do Authors' Equity even if it failed.

It is a project that I would be proud to be a part of, even if it doesn't work, because I think the industry needs it.

And I think the publishers need somebody to push them and say, the current setup is not right.

We need to have a new modern setup that works for the current reality. But I don't think it will fail. I think it'll be a really great business.

Yeah, I think the traction in just a year and a half is very impressive. So when I think about having the level of, uh, audience and attention, you can direct it towards any number of things in order to launch a business.

Right.

And I, the thing that I love about Author's Equity as a business is that you're focused specifically on businesses or on, on books that will sell more copies, hopefully in year 2 than year 1.

Yeah.

And so these are the timeless books. And so you end up building these assets and a lot of friends of ours like Ryan Holiday and Josh Kaufman and others have talked about this idea of books as annuities. Ones that just keep selling. And so you end up directing your attention and your reputation and your time towards something that's not a short-term cash flow play, but this long-term enduring project.

I think writing books is funny. You know, there's this stereotype like, oh, don't be a writer. You'll never make any money. Um, I think writing books is one of the best business models. Now, it's, that's only true at the top end, right? It's like a power law game.

You know, the top 1% of books probably sell like half the copies. or maybe the top 0.1%. But if I was going to describe to you a business that requires no software updates, no updating once the product is made, you write it once and then it's ready.

Yeah, Kit has the same thing.

We don't— Yeah, sure. Can scale effectively infinitely, you can translate into any language, you can spread all around the world.

Atomic Habits is in like 68 languages or something.

Has no customer service. If somebody doesn't like it, they don't come to me. They go to Barnes Noble, they send it back to Amazon.

I never hear about it.

And it's just like, it has some incredible qualities and it also has a very long half-life. You don't have to update the book. It just keeps selling and persisting. I would say probably some of the only things that are better, like we've joked before, a bank is probably better.

I think music is probably better, like a hit song that if you wrote a, if you're the Beatles or something like that, probably is more persistent than a book would be.

But it's a—

We had to dig to come up with options at dinner a few weeks ago.

Yeah. It's a great, it's a great business.

Yeah, I love it.

Okay.

Let's take, uh, some questions from the audience. We have a mic right here in the center.

You want to step right over there?

So if you want to step up to the mic, feel free to form a line as well. Um, and then we will take as many questions as we can. Um, we can't see you, but we believe that you're there. We can see the glow of your badge.

So we can hear the warmth in your voice.

Awesome.

Is this on?

Is it working? Okay. Hey, thanks for this. My name is Brian. I know you can't see me.

Hey.

I got 2 questions. The second one is quick, but the first one is, I think Atomic Habits was so successful because of the way that you were able to simplify things. So I'm curious to hear what your process is for taking the models, frameworks, and ideas, and then distilling them into something simpler.

Yeah, that's a great question. Thank you. Part of it, I think, just appeals to my personality. I like compressing things. I think it's kind of like a game. So I'll I've talked about this before. At one point I had 12 chapters for Atomic Habits, and so I wrote chapter 1, chapter 2, chapter 3 on an index card and laid them all out on the ground.

And then I went to my bookshelf and I grabbed whatever books were relevant for that chapter. Usually it was like 3 or 4 or 5 books, and they were all stacked right there. And then I thought, all right, how can I take everything that's genuinely useful out of these books and compress it into this single chapter so that if you just read this chapter, you no longer have to read that book.

And I think that's a good measure for what makes a book great, is like, how many other books can you make irrelevant? And you're maybe never totally going to get there, but I think it's a good thing to strive for. So I like that. I think it's kind of fun for my brain, I guess. So part of it is, I think it just appeals to my style. Also, you would be surprised, There's not that much to take away most of the time. There's just a lot of fluff in a lot of writing. Mine too. You have to be ruthless about it. The first version of Atomic Habits was 710 pages or something like that, and eventually it got cut down to the finished copy is like 230. And yeah, I repeated myself a lot, whatever. I really didn't want you to be able to say, oh, this book could have been a blog post.

So I kind of did the opposite and wrote like 3 books and then made sure it was condensed into one.

So I think part of it's a commitment to being really high signal, really low noise. And then there's some stuff that's just like playing with structure, playing with the structure of sentences. You can say a lot in a single sentence. If you make it a game and you have a paragraph and then you're like, how could I say that in a tweet? You can often get it compressed without losing very much.

So I don't know that there's any magic to it other than just coming back to it again and again and iterating, compressing, compressing, compressing.

I also think there's something that's, uh, reading really widely is a big part of it. Um, there's this quote about Emerson where they say he reads like a hawk scanning a field for prey. And sometimes I felt like that's like kind of how I was trying to be, you know, like I'm not reading a book to like get the whole book. I'm like trying to find like, what are the 2 best pages that I can take out of this and compress and, you know, insert it into there. So it's a very different style of reading.

Um, that leads to that sort of expression. What's your other question?

Yeah, I, uh, got a little gift for you here.

Okay.

Delusional Confidence, if you don't mind me coming up and handing it to you.

That's all right. Yeah.

Yeah, we're good.

Bring it on up. Thank you. All right.

All right. Okay. Next up.

All right. Hi. Thank y'all so much for your conversation. I, my name is Crystal and this is my I think 4th year to come to this conference, and I've met so many incredible people here. There's a lot of relationships that have started here, so please lean into all the people that you're meeting. I know that you 2 met in, you know, a similar situation of just wanting to invest in yourselves and learn and get better. So I'm curious, over the years, how have you created lasting entrepreneur friends? that you continue to invest in those relationships? What does that look like for y'all?

I think the retreats are a huge part of it.

We saw each other first at WDS.

We met at a conference like this, but then we also put together a group of, I don't know, 6 to 8 people that we met at that conference or at other places and started hosting a retreat each year where we would get us together for 2 days or 3 days and just talk about how to grow our businesses and what we were dealing with and whatever. How do you write a good book and all that stuff? And yeah, those, just having a single touchpoint once a year, I think is great.

And then following each other's work. I look back at some of those retreats and it's crazy to see where everybody ended up now. And I'm like, yeah, I knew he was good. But it's fun.

It's really fun to be part of the journey with people who are doing exceptional work. So I think just having even just a single touchpoint once a year where you get together in person is great.

Yeah. And those retreats don't have to be something fancy. Like our first one was a bunch of us going to Barrett's family cabin. You drove over, a bunch of us flew into Atlanta and we all showed up there in person. We just kept investing in each other's businesses. And you could say like, maybe we got really, really lucky with the group that we pulled together, or maybe we really intentionally invested in each other and like, That was the result. But like, you just have to form and build that group and find, you know, 6 or 8 people who you're going to say like, okay, we're going to like really invest in each other to get to the point where—

I think there's also, um, I try, you know, I never want anybody that I'm friends with to feel like there's pressure to promote, you know, what I'm working on or whatever. And like, we, we tried to be very clear about that. Like, we were there for each other, but like, there's no expectation that it turns into some business outcome.

We were mostly just there for each other first. And especially over the long arc, we've been able to see this over 10-plus years now.

People's businesses grow at different rates and people have different moments in the spotlight and people choose different projects. They wind one thing down and then spin another thing up. And I think it's fun to be there for all of it. And it's also really important to not get envious about it at some point. You know, like there's, you know, there are points where you're in the lead and there are points where you feel like you're way behind. And it's not, it's not really about that. Um, it should just be fun to be in the game together.

And, um, so I think we've had a group that's been pretty good about that.

Yep.

And a bunch of us got to sit out on a patio. It was Ryan, James, Caleb, Barrett, and like we were just hanging out a little bit ago.

So supposedly Nathan's running a conference for hundreds of people, but But I was sitting out in the sun this afternoon.

Yeah.

Thanks, Crystal.

Hi, James and Nathan Barry. I'm Ellie from Taiwan. This is my second time to be here.

Thanks for coming.

Very nice to meet you. I've noticed something interesting from running a 30-day creation challenge. Most people don't quit because they lack discipline. They quit because they start comparing themselves. to others. In Atomic Habits, identity is built through repeat actions. How can creators protect their identity while creating in public?

How can you protect your identity while operating in public?

Yes.

I think it has to be about the craft and about I find it really, it's tricky to say this because comparison can be very useful. You know, like the way that you develop taste around things is by comparing. How do you know if your YouTube video is good or not?

Well, it's because you've seen good ones and you can compare what you're making to what was good.

Like Ira Glass has that famous quote about the gap between what you make and what your taste is. And especially early in your career, there's a gap between what you're skill level is at and what you're able to create and what your taste is at and what you know good work looks like. And you have to keep putting reps in to close that gap. And so part of it is just knowing that that is true, but I think it can be very useful to compare specific things, YouTube thumbnails, squat form in the gym, I don't know, strategies for building your email list, whatever. And it's very unhelpful to compare big broad things. Your marriage, your net worth, your, you know, the state of your life. Like, if you think about anything long enough, you can convince yourself it's terrible. And so, um, I think keeping it in a narrow bound, uh, and saying, all right, I'm just going to compare this little thing and see if I can try to figure out a way to improve, that can be helpful.

Um, but once you get big, it's not helpful.

You know, you're comparing a huge aspect of your life to somebody else's success, but then you don't see all the trade-offs that they're making to make that a reality. If you're not going to compare the whole picture, if you don't want to swap everything, then it's not a fair comparison. So I think that's part of it. And then this is timeless advice that I need to be told just as much as everybody else, but don't compare to other people, compare to yourself.

Stop trying to be better than other people, just try to be better than you were yesterday.

And that's really the only long-term game anyway. is, can I be better than I was before? And if you keep the focus internal, then you improve. If you keep the focus external, then you compare and it just becomes a spiral where you get trapped in that mode of thought.

I think there's a lot of thinking about the game that you're playing and being deliberate about that. Game selection really matters. And I don't know who it's a quote of, but play stupid games, win stupid prizes. And so like, think about those games that people are playing. You're like, oh, I don't wanna play that game. I wanna play my own game. I wanna do it for the love of the craft, for the impact that I can have. And that's gonna bring a lot more joy than saying, oh, I'm playing for a specific set of numbers or a very specific outcome.

We talked about this yesterday a little bit. Um, I have a friend who told me, you know, for our business, we like to draw a box around our ideal day. And then inside of that ideal day, we say, okay, how can we make the business as big as possible, reach the most people, make the biggest impact?

But not outside of it.

And I think a lot of the time what happens is you don't draw a box.

You don't think about how do I want my days to look?

And so then you just fall into the same comparison everybody else does.

Oh, whose list is growing the fastest?

Who raised the most money?

Who has the most revenue?

And you just start comparing stuff that leads to a daily life that you didn't want anyway. But if you start by saying, how do I want my days to look? Then you're playing your own game, to your point, and you can start to say, Yeah, like somebody else is growing faster, but that's fine because I'm—

this is what I want my days to look like.

I think Charlie Munger has that quote where he says, someone will always be getting richer faster than you.

This is not a tragedy. Like, it's fine. Play your own game.

I love it. Thank you for the question. Hey guys, I'm Jonathan. On the topic of game selection, James, you chose to play the game of going with the traditional publisher when you already had, I think, around 200,000 subscribers when you signed the deal, which is a very substantial amount. Can you walk us through the thought process of going that approach instead of self-publishing?

Yeah, I almost self-published. I thought about it for like a year. Um, that's a little wild to think about how different things might've played out. Yeah.

Yeah.

I ultimately, the reason I did it, uh, was because, well, it was kind of twofold. One, um, I decided that I was going to try to hit the list. And at that point now, sometimes still very, very hard, a self-published book can get on.

It was still pretty unlikely, but then it was a 0% chance.

And so I thought, all right, if I want, from a business standpoint, I could self-publish future books and I'll try to traditionally publish this one, become a New York Times bestseller, and then I can have that status symbol for the rest of my career rather than doing the inverse and self-publishing 20 and then 15 years from now trying to be a bestselling author.

So I thought, all right, probably better to try to get the status symbol earlier. That was part of the thinking.

The second thing was I'd never written a book before. I didn't even really know that I wanted to be an author. And so I thought, well, let me try to find some people who've at least done this well before. So my agent, publisher, people who had put out really good books, and they can help coach me along the way. And I did find a good team, and I got a lot of good advice from them at various points.

And I think there's no doubt that Atomic Habits was the best thing that I had written when it came out. It was an order of magnitude better than the blog posts and things I was writing on my own. So having a team that helped with that process did lead to a better outcome.

So those were kind of the 2 main things that I was thinking at the time. The, on the other side, the reason that I was considering self-publishing is I had this story where I said, well, how much would I really be giving up anyway? You know, like if I'm on Amazon Audible, isn't that most of the books people sell?

Like, what am I losing? Maybe 10%?

of sales. And now, interestingly, 10 years later, the full arc of this since I co-founded Author's Equity, I actually have real numbers for it now because we have a number of popular self-published books that have moved over to Author's Equity now. Almanack and overall Ravikant was self-published.

Now it's published with Author's Equity. Simple Path to Wealth sold 500,000 copies self-published. Now it's published with Author's Equity.

Don't Believe Everything You Think, same thing. So anyway, by looking at the numbers for those books, You give up probably at least 25% of your sales if you're self-published by not being in airports, bookstores, Barnes Noble, et cetera.

If it goes well, like Simple Path to Wealth is my favorite example of it.

He moved over to us. We got it into Barnes Noble and airports and all these other places. As soon as the book went omnichannel and it was available everywhere, the Amazon and Audible sales also lifted. Because it's almost like each book that's out in the world is kind of like a little billboard and the profile of the book raised. He hit the New York Times list the first week with us. And now I think he's 2.6x his weekly sales.

We've doubled his weekly sales.

So that's kind of best case scenario. But you do give up meaningful distribution by self-publishing. You get to maintain control, you get to make more money per copy, but— But you give up meaningful distribution. And in the long run, the only way a book really sells millions of copies is through word of mouth.

And so I feel like as an author, you probably don't want to hamstring your distribution because that's where the real success potentially lies.

Awesome.

Thanks.

Great.

Thanks.

Look forward to working with Authors Equity.

Yeah.

I signed with Authors Equity. I'm a big fan. It's amazing.

Yeah, we're publishing Nathan's book this fall.

Hi, I'm Dr. Tiffany Shelton. I am a neuropsychologist. I work with women to build systems. So I have read Atomic Habits. I usually read it like once or twice a year, but I have a writer's question to that effect. Since I read it so much, I've noticed that you can't really go a paragraph in that book without getting some sort of metaphor, analogy, or story. Like, I think that's what helps make it so digestible. As a writer though, in the process, do you have any tips on how How you mine for those stories, like the cycling story or the nurse that noticed her father-in-law had this stroke? And do you put a time limit on yourself of how long you look for the perfect story, metaphor, or analogy for each point you want to share without dragging out the writing process?

Sure. Yeah, no, it's fair. I mean, at some point deadlines have to get met. I've blown every deadline that's been given to me, but I In theory, they sound nice. I keep an open bank of stories and ideas in—

I use Evernote because I've been doing it forever, but you would use Notion now.

Okay, so very common nonfiction writer format is story, study, lesson.

That's like Malcolm Gladwell did it that way with his book. It's been done by many, many science writers.

Lead off with some kind of story, Explain the study or the science, and then finish with some type of takeaway. I would say I started doing it that way, and now it's, I would say it's almost more like story-principle-lesson or story-principle-examples. That's kind of most of the chapters in Atomic Habits follow that structure. The stories are really helpful because that's what everybody remembers. I used to lead with the studies more, and nobody cares. They want it to be scientifically grounded, but nobody remembers them. And so I think I want it to be scientifically based.

I want it to be true, but the reader wants the story to express and distill the idea.

So usually what I have is I have one or the other. I have either the principle or the takeaways that I want people to get, and I just think, oh, this is a clever idea.

I hope I write an article about this someday. Or I have a story that I thought, wow, that sounded really cool. I don't have an idea to pair with it yet, but I like that story.

So most of the notes in my file are one of those 2 things.

And every now and then I'll just go through them and start to match them up and say, oh, this, like, maybe this is a story that could fit here.

Um, and it helps to have a big bank.

You know, if you have 200 stories and you have 100 ideas, one of them probably matches up and could make a good, good article.

I remember I read an article, um, like 3 years before I wrote the article. I read this piece in the New York Times, and it mentioned, there was one sentence that mentioned this Greek figure, Milo of Croton.

And it was this story about how he raised a calf from birth, and he would lift the calf each day, and each day he got a little bit stronger as the cow grew.

And I was like, oh, that's an interesting story.

I should kick that off. And it sat there for 3 years before I had an idea that I was like, perfect. This is the Milo of Croton won, and then I wrote the article and went on the website or whatever.

So it's just a long time for those to get paired up. When I was working on the book, I probably had 80% of them already kind of mapped out, and then I had to go in search of the 20% of stories that I needed. And I don't have a perfect answer for you other than to say, I just tried to read as widely as I could to surface a bunch of stuff.

Then eventually things kind of come together.

I do think AI can be helpful for this. I used it the other day. I said, I needed like, I thought an airplane crash story would be like a good start for this piece I was thinking about. And I was like, what are 5 airplane crashes that most people don't know about, but, you know, were interesting or whatever? And 2 of them I had heard of, but 3 I had not. And so I was like, one of them, I went to the Wikipedia.

I was like, this is great. This is a perfect. So I think it can be good for some of those research tasks like that to pull, pull out certain things.

Awesome. Thank you so much.

Yeah, thank you.

Hey, thank you, Nathan and James, for this amazing conversation that we can all be a part of. I have a simple question, or maybe it's not, but what is different about authors' equity? I have a book coming out next year. It's traditionally published, but I'm in this, I'm playing a game. It's the long game. It's going to be a fun game and an infinite game.

Yeah.

But So I'm kind of curious, what is, what is different with—

Can I take this one really quick?

Yeah, go ahead. Yeah.

The author side?

Yeah.

Yeah.

What's your experience been?

Um, so first, the, the royalties are inverted. So after the expenses of the book, which we work very closely on, the author makes 70% versus the publisher making 30%. So that's almost a perfect inversion of the traditional model. There's way more control. So we're talking cover design, all of this stuff, a lot of details in it. The team that you work with is handcrafted around the book. And so that means that instead of the acquiring editor who happened to be the person who bid the most to get the book, also being the person who shapes the book, if you don't have a good fit there, that's really rough. Whereas in this case, Authors Equity hired an editor specifically for this project. I used one editor to develop the initial concepts. We Made a ton of progress together. I learned a lot from him. Then we got to a point where we were kind of stuck. And so I went back to Madeline and I said, hey, I think it's time for a new editor. And she was like, great. I have this other guy, his name's Zach. He's amazing. Let's get him in. And then for the next 6 months, Zach and I worked together and we achieved another level of progress on the book. That was really good.

Which you couldn't do in a traditional deal. You'd have to blow the deal up and move to a different imprint or whatever.

It'd be a mess. The other thing is I have heard over the last decade, creator after creator talk about how they had all these great ideas for marketing and everything else, and they went to their publisher and they were maybe able to get half of one idea through. I go to these marketing meetings with Authors Equity and I'm like, hey, what's working right now? And they're like, okay, so Joseph Nguyen did this thing on TikTok marketing that worked, so we turned that whole thing into a system because we learned from him. Here's what's working. And I'm like, okay, I mean, I'm immersed in the creator economy as much as anyone, and I'm taking notes in these meetings with the publisher. Of like what's working in marketing, how Amazon ads are working, like all of these things. So I am showing up to a masterclass about what's working in book marketing every, uh, you know, every month that we meet. And that is just an absolute, like, reversal of what normally happens. Uh, and I think it's just because, you know, like Madeline and the rest of the Authors Equity team, they've been in the publishing world for decades and they know who all the best people are. And so when they went and Started a new thing. They said, great, let's just add, it'll take you. You know, there's only what, 15 to 20 people on the team?

But they are probably the highest talent density group that I've been a part of. They just picked all the best people and, you know, were able to bring them together.

Yeah.

And I would say there's a lot of downstream effects that people don't realize of inverting the royalty model. And one of my favorites is being able to use advertising, uh, to point to the book. So James, I'll let you talk about that one.

Um, yeah, so, um, Because Author's Equity is a profit share, we can run ads from the top of the profit share rather than trying to run ads on our cut. Like Penguin or Harper or whoever, if they're going to run Facebook ads, they're thinking, okay, we only get to keep $4 a book.

So to get this to be profitable is very hard. But we have a lot of profitable campaigns going on right now for Amazon ads and Facebook ads and so on. And we're moving thousands of extra copies every week for authors because of it. And it's just because the profit share model allows for it rather than the author trying to do it out of their little slice or the publisher trying to do it out of their little slice. And so that's been helpful too.

I think Nathan's answer was great. The way I would summarize it is, what do you give up? Why would you not go with author's equity?

There's no advance. That's the single biggest difference.

What do you gain? You make 2 to 3x more per copy sold.

Arguably, I think the best team in the industry to make the best possible book.

You get the widest possible distribution. We've only been publishing for 18 months. We have more books for sale in Target than Simon Schuster does. That shouldn't even be possible.

But that is just a function of the team being so good and having all the right connections. And then the last thing is, it's very, as you mentioned, it's author-centric, it's author-led.

So everything is the author. The author is the one who has final say on the COVID on the title, on the subtitle, on how much you want to spend on the marketing budget, all of it. And so it's a realization that authors have more power now than they ever had before, and authors have a bead on the audience more than they've ever had before. They own the direct relationship with their readers more than they ever had before.

And so naturally they should be the ones making the majority of the profit and driving many of the decisions.

Now, we still have opinions and we have a really talented team, so I think we can provide a lot of value, Um, I, man, before Authors' Equity launched, I tried so many different arguments to get Penguin or whoever to do this. I came up, I had spreadsheets like explaining how much value I thought each person provided and why. And I, publishers still do meaningful things. Um, but I think the answer is they deserve about 30% of the money.

Um, and so this is a new model that represents that.

I love that.

We have just a few minutes left. And thank you, Nick. Um, we're going to make time for the, the, I think it's 3 questions in line.

Let's do these 3.

Um, so we'll do those, those 3. Go ahead.

Hi, I'm Michelle from Chicago. I love your books. For someone reinventing their business after already building an audience, what daily habits matter most for rebuilding momentum without burning out?

The ones that come to mind immediately, I say some kind of habit of reflection review. You know, I, I'm, many of you're probably like me. I have a really strong work ethic. And that's great. Working hard is really helpful, but it also can become a crutch. You know, at some point that became my answer to any problem.

If I faced a problem, I was like, well, I'll just work my way out of it.

And you can do that for a little while, but if you're already working hard, maybe you can grind and work 10% harder, but you can't work 10x harder.

You can't work 100% harder.

And so at some point you need to make time to ensure that you are working on the thing that is the highest and best use. And there's no way to just, if you just keep your head down and work really hard, it's so unlikely that you'll work on the best thing today. So you have to create a little bit of space to step outside and above the business and say, is this really the highest and best use of my time?

Am I focused on the right thing?

So habit of reflection review. I would, I mean, it's a little bit weird, but I would say a habit of working out or something to reset yourself. I had so many days early in my entrepreneurial career, even now, where you feel like, man, this day was just a waste.

I didn't get anything done. But at least I got a good workout in and I can feel decent about myself and go to bed and wake up again tomorrow and try, you know, try again.

So something to balance yourself. And then the last one I would say is, I would say reading, but it's not, I don't mean it just as books. Almost every thought that you have is downstream from what you consume. So we don't usually give it that kind of weight, but when you choose who to follow on social media, you're choosing your future thoughts because that's what's going to fill up the feed in 2 weeks or a month or whatever.

When you choose what podcast to listen to or what book to read, you are choosing your future thoughts.

And so the more carefully that you curate that diet of what you're consuming, the more carefully you curate what you're putting in, the better the outputs are. If you want better, more creative, more productive thoughts for the business, you need better, more creative, more productive inputs for what you take in. So I'd say habit of reflection review, some kind of working out or something to balance yourself and try to improve your consumption habits.

Thank you. I also am an author and I would love to gift you my book.

Yeah, let's do it. You got it right now?

Yep.

All right. Thanks, Michelle.

Thank you.

Go ahead.

Hi, this is Sarah from Taiwan and 4 of the Taiwanese with Ellie. And nice to meet you, Nathan and James. Your book, Atomic Habits, helps people to find out their identity. And my work, I'm an author of Life Strategy Equation. And my work is to help people find out their strengths, passion, and value. through this equation. So my question for you and Nathan is that, what is your mission of life?

Small question.

Yeah, it's because it's my topic of the book. It's my title of the book.

Yeah.

Yeah.

Thanks for making it easy. I, you know, it's an ever-changing answer, but my current answer is that in a business sense, at least, I'm really trying to increase the distribution of great ideas in the world. And so, you know, for me individually, that means the best stuff that I come across, what I read and write and share, I'm trying to share the best ideas that I can find. And that doesn't mean it's the only way to do it. And it may not even be the best way to do it, but it's the best that I've found so far. And so I'm going to try to share that. And Author's Equity, I think, is a chance for me to try to do that at a wider scale. Where I'm not only trying to spread the best ideas I have, but also the best ideas that other people have. And, you know, ideas are really powerful and having the right one or the right mindset coming across the right idea at the right time can change the shape of a business or even the shape of your life.

And so the more that I can spread good ideas in the world, I think the better I feel about that.

You know, I experienced a lot growing up of just the impact of the lack of money. And how much that of stress and anxiety that causes. And I feel like over the last couple of decades, I learned that making money is a skill and that that's a level of pain and anxiety that you don't have to go through. I feel like I, I can step back and observe the world and the physics of business and how money works. And so, uh, that's Kit's mission is to make it easy to earn a living as a creator. And I think with this book, um, What I'm really trying to do is to map out everything that I've learned. And the, the target audience for this book is like 14-year-old me, but, uh, I'm really happy for all of you to read it as well, because I want people to have complete financial freedom and to have the clarity, uh, on how to get there.

And if you want more on that, Ladders of Wealth is out in December.

Yeah, I will have that. And thank you, Nathan, for creating the kit.com. I'm the user from 2021. So I think I'm the loyal user for your platform.

Yeah.

And I will share you my book later, Jim. Thank you.

Thank you. All right, Gloria, saving the best for last.

Well, just a quick question. Do you work with authors who've already been self-published? Like, they've published maybe a whole bunch of books themselves?

Yeah, yeah, yeah. I mean, Author's Equity has Probably published 40-ish books so far, and I would say maybe 8 to 10 of those have been self-published, which we've transitioned over and got retail distribution for and scaled them out or made an updated edition or whatever.

And then another 30 are your typical sign a deal and write a new book and so on. So yeah, I think it's for everybody, and hopefully at some point it will be for everybody.

And the thing that I would say from talking to you and Madeline Is, and so if anyone's wondering what type of pitch is compelling to Authors Equity, because you guys can't take unlimited books, right? You can only produce so many.

I would argue part of the issue with traditional publishing is that scale and quality, it's very hard for those to coexist. So Penguin publishes 1,000 books a year, Harper publishes 500 books a year, Simon Schuster publishes 500 books a year. If you're going to publish that many, it's just hard for some parts of it to not feel like manufacturing.

The next book is always coming down the pipeline. So if you want the high-touch, carefully crafted, a lot of interaction with the team and really care about each product, you can't do a ton.

So we'll probably do, right now we're doing 25 or 30 a year, maybe it's 50, but it's not 500.

Yeah. So the big things that I've heard you say that matter are, is this a book that you can put real marketing resources behind, but really will it sell more copies in year 2 than year 1? Does it have The opportunity to be a timeless book that's going to keep building over time. What other things would you say that you'd be looking for in a book that would be a good fit for Author's Equity?

I mean, I usually say there's kind of 3 big boxes I like to see checked. Like, one is some type of platform. And of course, every publisher wants to see, oh, who has a huge podcast or who has a big newsletter? But I actually think it's deeper than that. It's not just about, do you have a big audience? It's also the act of growing an audience.

is evidence that the ideas resonate and they actually have something.

And that, for me, that's almost more important is if your content has been run through a filter, then you can trust that it's good and the book actually has legs. So some type of platform content that's been run through a filter. The second thing is like, do you actually have something meaningful to say in the chapters? A lot of people have like, they're really good marketers. They have a big audience.

They have a good, like a catchy title, But can you actually deliver at the chapter level?

And then I would say the third thing is the positioning, the packaging, the vessel for the book. Do you have a compelling angle on it? Many people have written about habits before Atomic Habits came out. Calling a habit atomic would've been kind of weird. You might've said little or small or something like that, but you wouldn't have said, I have an atomic habit. And that's good.

that was like a new angle, a fresh angle that I could have where I could own that phrase, own that real estate.

And even though most of the ideas in the book have been covered in many places for hundreds of years, the packaging of it was fresh enough. I hear from a lot of readers who say, I already do things like this, or I've always believed stuff like this, but I've never quite heard it put that way.

And I think that's a good way of trying to A good way of trying to describe what are you looking for.

I like that. Well, James, we should let people go to happy hour now and all of that. But a couple of things. First, thanks for being a good friend for the last like 14 years. Thanks for publishing my book. Thanks for being Kit's number one customer. Appreciate all of that. And thank you for making the trip back to Boise to hang out with all of us.

Yeah, thank you. I appreciate the opportunity. And I'll let you guys go with just kind of one, one parting thought, which is I feel like in a lot of ways, the 2 timeframes that matter most in life are 10 years and 1 hour. And 10 years is shorthand for all the big meaningful stuff in life. Pick whatever it is for you, but raising kids that you're proud of or building a successful company or having a thriving marriage or getting in the best shape of your life, whatever the thing is, it's probably a multi-year, sometimes a multi-decade quest. And 1 hour is shorthand for how can you do something in the next hour that feeds that 10-year vision? You know, how can you do something today that pays off for you in a decade? And I think if you can live in those 2 frames of mind, if you can both think longer term than most people will, and also still have that bias towards short-term action and not let the days go by, you know, if you can find a way to, to never let a day pass without doing something that's going to pay off for you in a decade, you can end up in a really good spot.

And usually it doesn't take 10 years. Usually you only got to wait 2 or 3 and you're surprised by how much progress you made.

So Thank you all. Appreciate it.

And, uh, it's always fun to hang out with entrepreneurs.

So thanks.

Thank you.

If you enjoyed this conversation with James, check out episode 129, where I bring on both James and Madeline McIntosh, who is the former CEO of Penguin Random House US, and now James's co-founder at Authors Equity. They break down the way publishing actually works today and how they're changing and reinventing the industry. Like the video if you enjoyed it, hit subscribe on YouTube or wherever you're listening, and I'll see you next week.