#144 The Creator Pivot - Khe Hy on laying people off, collapsing course demand, seasons of creativity, and having zero change in net worth in eight years (Pathless Path Podcast)

[00:59] Paul: Welcome to The Pathless Path. I'm Paul Millerd, and in this podcast, we examine the invisible scripts that run our lives and dare to imagine new stories for work and life. So today I am talking with good friend and I would say one of my path role models, Khe Hyerd. Second time on the podcast, maybe third time, I'm not quite sure, but definitely has injected his ideas wisdom into many of the different episodes and my conversations with people. Want to talk about his recent sort of scaling back of new business ventures and sort of the mindset and emotions behind that. And I'm sure we'll riff on a bunch of other things.

Excited to dive in again, K. Thanks for having me.

[01:51] Khe Hy: And I was so excited I got to meet your daughter before. So that's why we're here, right? We're here for the people we love, the listeners, our families, our lovely spouses, and we're both girl dads.

[02:05] Paul: Yeah, it's amazing. And I think this is something that's actually hard to convey. So I've visited you at your home in the middle of the day in California and like your kids are running around, you're there. Like you're getting to see them every day. And I don't think people realize how powerful that is and like how big of a motivating factor that is. Um, maybe set the scene of like that and like how that's been so vital for you.

Yeah. Because I think you take it seriously and lean into it.

[02:42] Khe Hy: It's, uh, so I'll tell you, I'll tell you two things. One, You know, we, we're gonna jump right in here and we won't spend my background. We'll spare the listeners my background, but just the one piece of information that you need to know is that I worked on Wall Street for a long, long time, 14 years. And then I quit to not really become a creator, but I ended up being a creator. So that was 8 years ago. And I say this, Paul, because I had this moment.

I, every time May 4th rolls around, it's like, that's when I walked out of the offices. So there's kind of this demarcation of the calendar and so on. And so May 4th is around the corner. And I'm like, wow, it's been 8 years.

[03:25] Paul: Maybe we'll release this on May 4th or May 5th, because I like tequila.

[03:31] Khe Hy: So the thing that I realized is, you know, I don't— I'm not one of those people that like tracks my net worth and all that. But like every maybe 4 months, you know, something will make me go in like taxes or estimated payments or something like that. And I did it. I went in recently and I was like, oh damn, my net worth is exactly the same as it was 8 years ago. And it was a nice number. So like, we're good and all that stuff.

But Something hit me is that a lot of the bozos that I used to work with, you know, when I left, my net worth was significantly higher than theirs. But 8 years staying on and me being off, they not only did they catch up, they like wildly surpassed me. And I felt like shit about myself in that brief moment.

[04:32] Paul: Really? Yeah. This is so interesting because I've experienced this too. I was sort of doing the calculations of what I would have made in the past. For me, it's May too, for me. So it's 6 years coming up.

I'm 2 years behind you and I'm probably down like a couple million dollars.

[04:54] Khe Hy: Oh yeah.

[04:55] Paul: Yeah. On like missed out earnings. But The reality is I couldn't have actually made that money because, like, I couldn't continue on anymore.

[05:04] Khe Hy: Yeah, yeah.

[05:06] Paul: Well, and that's the same, but at the same time, like, I feel crappy because, like, that past identity, there's a certain mourning of that identity. And also it's this weird thing, like, I think you're maybe a little better off financially than me. Like, I honestly feel like I can't actually afford to be friends with some of my old friends. And that is like, that kind of saddens me. It's just a harshness of how the world works today.

[05:37] Khe Hy: Oh man. Yeah. And I think for me it's less the identity, and I do feel lucky that I, I can to, to an extent afford to be friends with a lot of my friends. Some of them are, you know, doing like, you know, $20,000 vacations. It's like, sorry. But I think—

[05:58] Paul: Well, you're on vacation most days anyway, so you don't need the vacation.

[06:01] Khe Hy: Yeah. And I live by the beach, so. But I think for me, the thing that it's less the identity, for me it was actually like the dollar amount. I'm like, oh wow, like I could have had like an extra $5 million or something. And I'm like, wow, that's like, you know, that's a lot of money. And But it's not the money itself.

Obviously it is a lot of money, the money itself, but it's the temporary sense of self-worth that that gives me, right? And that's the thing that like, it doesn't last long because you started off with like, I was like, I see my kids every day, super present, super chill, like my best hours, like, 4 or 5 hours a day for 8 years. Like, my daughter once saw me wore a suit. Once, one time she saw me, she's like, why are you dressed like Barack Obama? I'm like, that's what she thinks suits are for presidents. Like, uh, so I would never trade it, but I want to— you know, this conversation is all about— and our friendship and our tweeting and our social is all about just being real with people.

The, like, It sucks sometimes when you're just like, wait, that person was below average, but they just stayed.

[07:24] Paul: Yeah. I think it's weird because those moments also dissipate too. Does this happen for you? Like the longer you're on this path, it's like, oh, I see you. I see that weird thought, that like feeling. Fear of the uncertainty of the future.

And it's like, I know you'll go away. I just need like a good night's sleep.

[07:47] Khe Hy: Yeah. Yeah. I think that I have a lot. I'm just more grounded in, in who I am. I think that Chris, actually, one of your guests or guest podcast bloggers, he said to me once, he's like, okay. And Chris, I hope you're okay with me sharing this.

He said, okay. He's like, you know what impresses me about you? And he's like, it's not your writing, it's not the way you can build an audience, and it's not your entrepreneurship skills. I'm like, well, what am I then if it's not those three things? And he said, it's that you're crystal clear about what you want and what you don't want. And I said to him, like, wow, that is— that's a cool compliment, especially from someone like Chris, who is— he doesn't suffer fools.

[08:37] Paul: No. Yeah, he's been super supportive of my path too. What do you think it is about the money then that has been hard for you?

[08:50] Khe Hy: I think, and we'll tie this to the business, I think there's still some part of me, maybe it's 10%, 15%, maybe you can't measure it with a number. It's a non-zero but non-majority part of me that likes winning. And, and again, you have to decide what game you're playing. So like, you can't win a game that you opted out of, right? Because you're not in the game anymore. But the brain— and, and so the— and I think the winning comes from like, it's, it's an egoic desire, right?

Um, so I think that when it flares up, like I do, I'm a competitive person. And, you know, I'm intense about certain things, especially when I'm passionate, when I'm in it, right? And I think that in this case, it's like, there is, there's still some percentage of me that is anchored to a quote unquote traditional definition of winning. And, and, and there's a few things like, well, that's not your definition, right? I'm definitely winning by my own definition. But I think there is a part that's like, it's like I could, you know, it's like, I think there's two things.

It's like, I know that if I had stayed, I would have won that game.

[10:18] Paul: But you already won.

[10:20] Khe Hy: I know, but I think it's like, it's the comparison part of it, right? It's like, winning is always gonna be a relative thing. Thing, right? And so you will always— there's always someone you can beat and there's always someone you will lose to, right?

[10:36] Paul: This is, this is interesting to me because I don't experience this at all. Yeah, like, I don't, uh, I don't feel this. And I sometimes think I'm an alien. Like, I'll talk to people and they'll tell me, like, don't you think about this? And it's like, oh, I never thought I could like think bigger. I think it's— but this could be my own fears.

I think I do have some fear of success that I have not figured out.

[11:03] Khe Hy: Interesting.

[11:03] Paul: Yeah.

[11:04] Khe Hy: And maybe I'm not saying you're doing this, but maybe there is a disassociation to this. And I think, I mean, it's, or maybe you, you know, like there are people, there are a handful of people that say they're like, oh, look at, you know, Paul, and look at like Lawrence. Yo, like, they, they like genuinely don't care about this game, like whatever this game is. And I, and I'm not— I would be lying if I'm like, I care a little. Like, I, it— I don't care enough that it alters my behavior, but I do care enough that it can still rankle me.

[11:46] Paul: Well, and I think there's a— and I've talked to Lawrence quite a bit about this. I think the thing is, like, we're not trying to not care. Like, this is just our default state.

[11:57] Khe Hy: Yeah.

[11:59] Paul: So I talked to somebody like Danny Miranda, and I'll be like, whoa, he thinks so bold. And then I'll literally go through the exercise of like, how do I like take a little piece of that and inject it into who I am? Mm.

[12:13] Khe Hy: Yeah, yeah, yeah, yeah. And I look at Danny, and Danny is a great example. I see a lot of myself in Danny, or when I was his age.

[12:27] Paul: Yeah.

[12:27] Khe Hy: You know, that intensity, that just like, I'm going to do this at all costs. And part of, for me, not— I'm not speaking for Danny. Part of it for me was like, I was majorly insecure. And so being so intense, being so competitive was my method of overcompensating for my own insecurities that I had in my 20s. I'm much less insecure about a lot of things in my 40s. I'm definitely insecure about some things still.

And so I look at a younger me and I'm like, oh, you were doing that because you were so insecure. And now you feel more comfortable. But I think like, I bet that— so that was 40-year-old K looking at 20-year-old K. I think 60-year-old K will look at 40-year-old K and be like, man, you were really insecure in your 40s relative to where you are in your 60s. And part of that is just the wisdom of aging, right?

[13:25] Paul: So I'd love to reflect a little on your journey. I've always like looked to you as a role model. And it's— you've given me so much permission, I think, even without explicitly giving me that. Just like when I came across your story, it's like, oh, somebody doing something that feels like good. And you're just like early on in your journey, you, you did a bunch of side gigs and stuff, but more or less you were just hanging out on the internet, sending out a newsletter and then helping tons of people. How did you give yourself permission to exist in that state?

Because I know you were spending a lot of money too. And that like, that really triggered me knowing how much you would spend on like your podcast and coaching. I was spending like zero. I was like, I need to break even every year. And my net worth was like $200 grand when I left.

[14:20] Khe Hy: Yeah, yeah, yeah, yeah. Well, I will. So part of it, and I think this is like a very important thing that I'm very open with sharing with creators, like I had multiple years on BlackRock, in BlackRock, making over 7 figures and my lifestyle never caught up to that anywhere close. And I'm a very— I would— some people would say aggressive, I don't think I'm aggressive, but I'm a very aggressive investor. Like, I'll put like 60, 70, 80% of my net worth in stocks like S&P 500. I don't buy— I don't like speculate or anything, but like I keep very little cash and I invest very heavily.

Always.

[15:12] Paul: Yeah, that's an interesting thing too. I, I keep a lot more cash. I think I'm actually trying to work through this now. For me, for some reason, cash, even though like like worst case, it's going to go down 20, 30% in the market. It's just like, oh, cash is what I can buy my freedom. That's like further runway.

Whereas like, I don't know, if I put it in investments, it's like dead to me.

[15:37] Khe Hy: Yeah. Well, I'll give you this. We're probably getting a little off course here. But like, again, to show you the level of my aggressiveness in investing, is I borrow money, I borrow cash. The reason why I don't keep cash is when I need cash, I borrow it against my stock portfolio. Just to keep your money invested for the long term and not have to pay taxes like when I sell, like not have to buy and sell and buy and sell and buy.

So I've, I have been investing in the S&P 500 since I was 16 years old. I'm 43 and I've never sold a share. So I've never—

[16:14] Paul: think your net worth is too high now?

[16:18] Khe Hy: Um, if I want to die with zero, it is. I think it depends on when. I'm not— I have very little liquidity, so like I'd have to sell it, I'd have to pay a lot of taxes. And a lot of it is in the retirement accounts. I don't think it's too high because I spend I'm a pretty high spender, mostly on living expenses. I live in like very expensive places by choice.

Um, and you rent, you rent, so it's flexible. Yeah. Uh, so I can dial it up and down. Um, and like we love to travel. Like I don't like stuff, like I have a 5-year-old Acura, like I'll drive that thing until it falls apart. The most expensive piece of clothing I own is like 4 $60 t-shirts.

So like, I don't really like stuff that, that much. But, you know, we have my kids go to public school, but we have it. Our rent will always be a disproportionately high part of our living expenses and a second amount. The thing is, when you work for yourself, you have a lot of freedom to travel. And we take advantage of that freedom to travel. And we do not have that, like, I think because I started traveling often later in life, like more like, like, I never had that like youth hostel mentality, because I went to college, and then I started working and like, immediately I could stay at like pretty nice hotels, like when I was 22.

But I only had one week of vacation. So, so I never like, I never slept at traveling. And I think as a 43-year-old with two kids, like, it's kind of, I refuse to go back. Like, I can't go back.

[18:14] Paul: Yeah, I love that. It's kind of like Ramit Sethi's Rich Life, right? I think that's so helpful for me and Angie because we spend like very little on some things. But when it comes to travel and flexibility and like doing things that make our life better, we're like all in. We're just like, just spend.

[18:36] Khe Hy: I spent— when we spend a lot of money, my wife and I, on coaching, getting coached. So we get coached individually, we get coached as a couple, we go to retreats, I get professional coaches. So like, I spend a lot of money on coaching as well, getting coached.

[18:56] Paul: What What's the best coaching you think you've been surprised by or gotten the most out of?

[19:06] Khe Hy: Oh, by far, couples. It's not therapy because we have— they're not licensed therapists, but it's basically therapy. Couples by far. I think the thing that I've realized about marriage is— I think that, you know, I grew up, I grew up, um, I'm Asian, um, like there is, uh, and I'm gonna speak in general terms, but at least what I saw in Asian culture, Asian representation of marriage, is that there was a factor of pragmatism in it. Convenience in them. And there was an opening for that marriage to be— I don't want to say loveless, but absent of love in seasons, right?

And that was okay, right? I think, like, to me, that's an— that's like a baseline picture of marriage. Now, obviously, I don't want that for myself, But when it's your baseline, you also don't, you don't view that baseline as being bad, right? It's just that it's average, right? And so I think there's part of my conditioning there. And then my wife's parents, they were divorced.

They got remarried, very different household. And so we bring all of these, like, you know, Carl Jung, until you make the unspoken spoken, it will dictate your life and you'll call it fate. We bring a lot of unspoken into our marriage. They're unspoken in how we see ourselves. And they're unspoken in how we see our marriage or our idealized version of our marriage. Then you put in the things of like 10 years, we've been married 11 years.

So like, you know, the, the everydayness of marriage starts to seep in, right? There's not that fiery passion of your youth. Kids add a whole new wrinkle of needs and demands on your time. Long-winded way of saying that, like, I think that you're fighting. I think marriage fights, like, and I don't like to use like fighting analogy, but there is an element of marriage of like swimming upstream. Especially in like the young kid, young children phase of life, because they take all your energy.

[21:39] Paul: Yeah. And there's— it's— I sense there's just sort of a default script that many people are running with marriage. And if you do that, it's almost like that is destined to fail. It's kind of how I think about the default path of work.

[21:53] Khe Hy: Yeah.

[21:53] Paul: If you just blindly follow it and aren't intentional with it, Like, it's not a good strategy.

[21:59] Khe Hy: Yeah. And there's two default scripts that are colliding.

[22:03] Paul: Yeah.

[22:03] Khe Hy: Right. And it's not like 1 1 2. It's like 1 1 3. Because there's all these different permutations that where you, you might be in sync in one and out of sync in the other and grossly in confrontation with a third.

[22:19] Paul: Yeah. Angie and I sometimes don't even have the words for what we're talking about because we grew up in different cultures and different languages.

[22:27] Khe Hy: Yeah. Yeah.

[22:28] Paul: And It was kind of an advantage from the beginning because some of the— we sort of had to create our own script because there was no default to go into because we just grew up in different worlds.

[22:39] Khe Hy: Yeah, yeah.

[22:41] Paul: But yeah, it's a, it's a constant journey of just reflection and figuring it out.

[22:47] Khe Hy: Totally.

[22:49] Paul: So I want to go back to your path. So you did, you did a bunch of stuff. If people want to dive in more in detail to your path, there's the first podcast we did, which dives into that journey a little bit more. You wrote a bit for Quartz, you were doing coaching, you were doing the Rad Reads newsletter, and you built up a steady following. At some point you decided you were going to scale up and go all in on the course. Talk to me about how you were thinking about that.

At the beginning of when that was starting to take off.

[23:26] Khe Hy: Yeah. So September of '19, we did our first productivity course. It was called Supercharge Your Productivity Cohort 1. It was kind of like a big group coaching thing. And I did it. It was fun.

The students liked it. It was easy to sell because it was the first time like I hadn't asked my list for money.

[23:55] Paul: Yeah.

[23:55] Khe Hy: And, you know, so that was September of '19. I started Rad Reads in '15, in 4 years. So I had sent— I'd been in their inbox for 4 years every week, and not once, with the exception of Patreon, but that doesn't count, not once had I asked, like, hey, I have something to sell you. So the first time I did, I think, like, I think we sold 15 seats and I think 15 of them were like, finally we get to thank Kay and let's just buy the thing he's selling.

[24:24] Paul: Right.

[24:25] Khe Hy: Right. And it was kind of a productivity course around the app called Notion. So we did that. I'm like, oh, that was cool. That was fun. That was pretty easy.

Um, I felt alive and like the money was nice. Right. So immediately threw another one together. Another one, made more money, same amount of fun, made the product better. Always felt like for me, if I was going to do products, like I had to, I had to feel like 100, like I gave it like 110%, 150%. I had to be so proud to attach my name to something that I was asking people to pay significant.

I think it was $800 at the time. So then it just keeps going and going and going. And then I didn't realize it at the time, but if I were to notice what was happening, what was happening was I was getting all these signs, some were direct and some were indirect, that's like, the way you make more money at this is by becoming better at marketing. And I didn't realize it at the time, it was just happening. So what does that mean? Like, I, somewhere in the middle, like maybe around the third, version, they were like every 3 or 4 months, just so people can like think of the staging.

Someone's like, you should really learn copywriting. Like copywriting is, it's like people on the internet are obsessed with it, but like no one else talks about it. So I'm like, oh, copywriting, okay. And this is where a few confluence of factors came in. The first was that I'm pretty adaptable. And so if you're like, if someone was like, hey, you need to go learn AI and make a course on ChatGPT, like, I could do it.

I'm not arrogant. I wouldn't make a ton of money, but like, I know I could do it because I would just show up, right? So I'm adaptable. B, the game part that we were talking about, like, copywriting is a little bit like when you get into marketing, when you get into copywriting, you start to like You start to reverse engineer the game a bit, and that's why some people hate copywriting, and that's why some people love copywriting, right? If you like to reverse engineer the game, you'll love copywriting. If you hate the game, you'll hate copywriting, right?

And so those things all started to like trickle in, and there was a giant overarching factor, gigantic COVID. COVID made everyone seem like a genius in the entrepreneurial land.

[27:06] Paul: It's so true. I have a good story about this.

[27:08] Khe Hy: Go.

[27:11] Paul: So I had some tooth issues and I had, I had a tooth extracted and I had like an infection and I was like literally like really sick for like 3 or 4 months. And during this time, my consulting skills course, 2.5x in revenue and started, started making like $7,000 a month. And I'm literally like, just like sleeping every day and like struggling with my health and go to the hospital. It was very bizarre. But yeah, this was spring 2020.

[27:40] Khe Hy: Exactly. I said it made every— especially if you were an online business, it made you look like— I remember turning to my wife, Lisa, and saying, I don't know what it is, but entrepreneurship's really easy. Uh, everything you did, you created a new product, like everyone wanted to buy it. It was just, it was shooting fish in a barrel. So all these—

[28:04] Paul: turns out everyone just had too much savings and too much time.

[28:08] Khe Hy: Exactly, too much savings, too much time. Uh, and so, but it's easy to see that in, in hindsight. Yeah, but while we were in it you're just seeing this like hockey stick growth. Like if I'm doing it from memory, I think that the cohorts, it was like 15, $10 grand, $20 grand, $40 grand, $80 grand, $100 grand, $130 grand, $150 grand with this, not the same amount of effort, but what felt like the same amount of effort. So you're just watching this thing go up and you're just like, oh my— it's kind of like the, what do they call them, the frontiersmen that found gold, right? They're like, oh my God, I found the thing!

You, you, you hit it, right? And to use entrepreneur speak, you got product-market fit. And so what do you, what do you do when you have product-market fit? You throw gasoline on the on the thing, right? That's what the traditional, that's what the traditional playbook says. And it's very, very intoxicating because again, you were, there's so many factors happening.

Like the creator economy became a thing. So like, not only were you making all this money, but all these people around you were being, were like pointing fingers at you. You're kind of like a new, you're like the cool entrepreneur. Right? And so like all this like confluence of events, it's so fucking easy to do. Everyone's telling you how awesome you are.

Um, you just, you're still living the life that you purport that you want, you know, like you don't have to go to the office and all of that. And it's intoxicating.

[29:56] Paul: I think I got lucky because one, I had the health challenges all of 2022. Or all of 2020. Billy Bros and Tiago Forte reached out to me at the end of 2020 and said, you got to join this accelerator. Your Strategy U course can take off. You got to turn it into cohort-based course. And I would— I felt that.

I felt the glow of being chosen. I felt the, the like feeling of, oh my gosh, I can make a ton of money. And I reflected for a day. I also had a parasite. I had a parasite at the time in Mexico. So I think like all these challenges helped me out a little, but I was like, well, what am I going to do if I have more money?

It's like, I'm going to write. And so I decided to write my book. And I think I got lucky in that I didn't go any further down that path. And writing the book forced me to even write more clearly what I was really doing. But yeah, I will, like, 100% honest, like, when I saw you doubling down and doubling down, like, I was kind of worried about you, but I didn't know how to— like, I wouldn't know how to, like, say that to you.

[31:12] Khe Hy: Yeah.

[31:13] Paul: Like, maybe I should have reached out. Like, I was just like, oh, this is getting bigger. Like, I feel like that's not him. But you also don't know because it's like, well, I'm sure Kay has it figured out.

[31:25] Khe Hy: Yeah, I mean, I think that it's hard to know in the moment, because like I said, I think intoxicating is the right word. And again, like, I think in, in my quote unquote defense, like, working hard was like going from like 30 hours a week to 40 hours a week, you know, it wasn't like 100 hours a week, like many other, like, online entrepreneurs. And I was still— all of my non-negotiables were still protected. Like, I was still surfing every morning, you know. Um, but yeah, like, you know, I think that's the thing.

[32:05] Paul: If, if you had sent, like, if you had sent your newsletter, I've stopped surfing because there's more, like, there's more hustle in the morning, I would have been— I would have been like, all right, I gotta fly to California.

[32:16] Khe Hy: Yeah. Yeah, and look, there have been— I think the biggest one was I used to stop working at about 5:15 PM, and once that phase happened, I would basically eat dinner with my kids, and then I would work from like— I'd eat with dinner from like 5:15 to 6, and then I'd work from like 6 to 7:30. And that was probably the biggest, uh, change. The other thing, Paul, was that there, there was a promise that is half true, half not true. And the promise is that as you grow a team, you can stop doing the things that you don't want to do. Right.

And I think I've seen you and Paul, uh, not Paul, uh, Johnny Millerd have, and Marie have some of these conversations. I think that it's partially true, right? So what are things that I don't like doing? I don't like operations. I don't like anything with process. I like most things with creativity.

I like most things with social, like the fun, not the like rote part of it. Um, and I love live events. So if you think about it, like I was actually able to hand off almost everything like when Supercharge Your Productivity was humming, like I would show up to the lecture like 20 minutes before, deliver a 2-hour lecture. And then like I hadn't, it was like the prof, like the famous professor at the college. Like they just, they just like walk into the crowded lecture hall and then like someone hands them like a piece of paper and they give their thing that they've given 100 times and then they walk out and then like, Everything else happens, like facilitation, TAs, like all that. Like I had, I had an amazing team running all that stuff.

And so to some extent, like it was kind of cool to be like, I haven't like created a Zoom event in like 5 years, 3 years.

[34:27] Paul: That's nice.

[34:28] Khe Hy: Right. I haven't like, I haven't like launched a Slack group. I don't even really write in ConvertKit anymore. More. Like I write in Notion and then someone puts it in ConvertKit. So like there is that trade-off.

I think the thing that that trade-off misses is, uh, which I wrote in that post, is organizational complexity. So you pay a complexity tax, right? So what's the complaint? Like I have Justworks. I have to like make decisions on like how much we're going to subsidize for healthcare. I have to make decisions about which 401k provider.

To provide. That's like at the organizational level. And then you have all these employees with all these different needs. They have work needs, they have professional needs, they have emotional needs, they have— and if you're a caring boss, you absorb a lot of that. If you're a dickish boss, you just like tell them to go screw themselves. And I was definitely more on the caring side, so So it is this, like, it's this weird tension where it's like, I look at the course creators that stayed like one person and a VA.

And like, I'm like, yo, you do a lot of $10 work.

[35:42] Paul: Right.

[35:43] Khe Hy: And like, I just, I, I, I'm almost rather take on that organizational complexity than do $10 work, but that's a personality thing.

[35:53] Paul: Yeah, I think I've tried to optimize or automate away a lot of the stuff. So I think you actually can get around it by like design. I'm relentless about designing work around what I actually want to do. Yeah, right. So I try to eliminate all the $10 and $100 work and I probably give up upside. Yeah, right.

But I'm consciously doing that such as the only engagement I need to do with my like consulting skills training. Business is like $1,000 work.

[36:27] Khe Hy: Yep.

[36:28] Paul: So like people have to apply in a form to work with me. It tells them the pricing, they opt in, I send them back a form, and then I say I don't do phone calls. And they're like, well, we have to talk to you. I'm like, it's okay, I don't— yeah, yeah, I'm not gonna do this project, right? So I think if you're going to do things on your own, you need to figure out what you actively drop ball on.

[36:52] Khe Hy: Yeah, yeah.

[36:53] Paul: And you have to be like, because if you're going after everything, the creep of $10 and $100 work is inevitable.

[37:01] Khe Hy: Yep, yep, absolutely. And you have to be— it's this weird thing because like, I don't— that there, if you're going to run a one-person business, there is a, there's a limit to how much money you can make. And you have to be okay with that. I think people will look at like Justin Walsh, for example, and they'll be like, well, Justin Walsh makes, I don't know, you know, I'm just based on his tweets, like he makes $2 million a year or $1.5 million a year. I'm like, yes, but Justin Walsh is like the Google of solopreneurs. Like for every Justin Walsh, there's like 10,000 people that can't even break even.

Yeah.

[37:41] Paul: And even just look at me, my, my incomes over the last 6 years are like $32,000, $40,000, $24,000, $70,000. Like, then last year was crazy. It was like $249,000. But I don't know what it will be this year and the next year. And it like, I'm pricing in a good probability that it will go down too. But that is, I'm thriving.

[38:08] Khe Hy: Yeah.

[38:08] Paul: But like, if you want to make more money, it's just very hard on your own.

[38:12] Khe Hy: Yeah, it's very hard to make money by yourself. And I think the myth, like the— and Justin is not promoting this myth, but there's a, there's a narrative, especially on Twitter, that it's like very possible. And the reality is like no matter how you skin it, there's— it's just the math just breaks down unless you can charge— even if you can charge people $5,000 an hour, the math breaks down really quickly.

[38:39] Paul: Books though. Books, books just keep selling.

[38:42] Khe Hy: That's true.

[38:43] Paul: Yeah, this is the best passive income I've ever had. Literally not just retweeting people.

[38:49] Khe Hy: I love it. I love it.

[38:51] Paul: But I thought I was going to sell like $500, 500 copies. So I have no idea what I'm doing or how to help anyone else do this.

[38:58] Khe Hy: So that's awesome. And again, a testament that like there's going to be there's value in playing outside the traditional game, like you and I will agree on that. I haven't been fully convinced on the book side for myself to not play the traditional game. Maybe that's a conversation for some other time. But also, there is— I think you also have to have a sanguine look at like what's in your realm of possibility, right? And I think people will look at Justin and they'll be like, that's in my— it is in your realm of possibility, but please probability adjust it.

[39:45] Paul: Yeah, it's funny. I look at people like him and I'm instantly thinking, okay, what are the traits he has that I definitely don't have, right? And it's sort of a relentless hustle and commitment towards making a lot of money. And it's like, I don't actually have that. I should not apply his playbooks to my life. But there's always things I can learn from those people.

Totally. I'm always asking the question of like, what's the 80/20 version I can apply and still integrate it in like my way?

[40:16] Khe Hy: Yeah, absolutely.

[40:17] Paul: So you scale up, it was going well. I think it was really cool just to see you bring people in and give them freedom too and give them flexibility. Schedules, I was definitely inspired by that, but it seems like just demand for cohort-based courses was a headwind. Profitability wasn't really scaling. So talk to me about that.

[40:44] Khe Hy: Yeah, look, I had all the best, purest intentions, right? Like I wanted to be fully remote. I wanted to have cultures of transparency. I wanted to have unlimited vacation, like all the stuff that like people, you know, in the same way that I didn't blaze a traditional path in my own employment, I didn't want to— I wanted to blaze my own path in how I ran a business. Right. We didn't have a workday, right?

We had 30-hour work weeks. We didn't— very little communication and no emailing internally. You only had to check Slack a couple of times a day. And we all, like, it was an earnest effort to do all that. And we did that. Like, we lived those values.

I think a few things, the biggest one was that the demand for cohort-based courses collapsed. And in hindsight, it collapsed in January of 2022. And then it fell off a cliff. And I think people were like, oh, it's going to collapse and then stay this just like stay the same at a lower level. But like it collapsed and then January 2023 hit and then it collapsed like even more. And so, you know, I give myself grace in that.

Like, I don't think there was an execution problem. There. There definitely wasn't a product quality problem. People love our course, all right? We had super low refund rates. Like, people talk about it all the time.

People love the course. You've seen it on Twitter. Um, so we didn't have a product problem, we just had a demand problem. And the demand problem was the— exacerbated by a cost problem, which we had kind of grown our cost base in anticipation of future growth. And what we were served with instead was just a dramatic collapse. Now I'll tell you that what I realized later was kind of like once, you know, there's a few course creators that I've talked to who are like, everything collapsed so quickly.

That there was no like, should we keep doing, like, should we wait and see? There was no time for that because things felt like 90%. You can't wait and see, like, you were literally not going to make payroll, right? And so there was a lot of freedom in the abruptness of it because there was no deciding, like, the decision was made for you. Like, your product is not viable now. And so you have to take a really hard decision.

And I had to let go of 3 people like 2 weeks after I had offered them full-time employee benefits. And then you're like, what the fuck do I do now? Right? And we could talk about what do I do now. I think the thing that I realized in hindsight was, you know, I think for me, Paul, I think part of it goes back to like this element of playing a game. Like, I like the game of business.

I think that there is, and that's why I like building this up because there was like, oh, I'm going to play by my own rules. I'm going to like do shit that people think is weird. And, and, and I want to build it the way I want to build a company that I would want to work for. Right. And, and I'm really proud of what we what we did there. I think my personality is like, I like the business side of things.

I don't love it. Like, if, if all I did was sit and create in isolation, that would make me very unhappy. But if I had like a 10-person team, and I was just being a CEO, like allocating work the whole time, that would make me very unhappy as well. I don't know what my ideal mix is of those two types of activities. It feels like being 80% creative, 20% businessy is like the right mix. And I would put marketing under the business, the business side of things.

But I could also just be experiencing a lot of like, I have like some corporate PTSD of like what happened, right? Like I thought I was on top of the world. And then I had to like, fire half my team, right, in like a span of 6, you know, 8 weeks, and then deal with the ensuing uncertainty. So I don't know, like, am I just having this like reclusive, like be really small company of one moment now because of the whiplash that I just experienced? And like, or is that my steady state? Or am I just Okay, and I just, I'm a very, I'm emergent to myself, right?

Like my tastes and preferences are emergent to even me.

[45:59] Paul: Yeah, the way I sort of conceive of my path now is that there will be seasons. Yeah. And I'll shift in and out of them. I think that's what's made me hesitant to start like a thing because it would kind of undermine the natural flow of like the ups and downs The creative bursts. Yeah. You texted me.

You felt like you had to, like, quit. Hmm.

[46:25] Khe Hy: What is—

[46:26] Paul: is this quitting again? Like, 8 years later?

[46:30] Khe Hy: I think that there is— there is a part of where it's the intoxication, right? I think I got intoxicated on Wall Street and then I felt the hangover. And then I started something new. I think there's a similar pattern here is I got intoxicated by some of, you know, at a much smaller scale, right? But it's still, right, intoxication is intoxication. And there is like a, you know, like a cleansing or purging or a fasting that follows a period of that, like where you give space for your true, your clearest thoughts to emerge.

You give space for your purest intentions to, to emerge. So I do feel that. And honestly, I feel just really beat up by the whole— like, I feel like emotionally beat up from the whole, the whole process of it.

[47:33] Paul: How are the convos with your team? That must have been really hard.

[47:37] Khe Hy: Yeah, I mean, you know, laying people— I did have to lay people off when I worked on Wall Street, but then you're like, you're like a messenger for, you know, for the shareholders.

[47:48] Paul: They're making a lot of money though, so it's like—

[47:50] Khe Hy: Yeah, I think here the hard— I mean, there was a few parts. It's like laying people off. I mean, layoffs usually happen in a recession, but like this one feels different than some of the other ones this recession. So that's one. But I think the hardest thing was like, like I, I didn't hold— I felt— and I know it's not true, but this is what I felt. I felt like I had not upheld my end of the deal, right?

Because a lot of people were like, look, I could go join this, you know, I could make a lot more money, have way more benefits and all that. But I'm choosing— I like— I'm making a bet on you. And I feel— I felt very disappointed that I did not— I felt like I let them down. Like I didn't uphold my end of that bargain. And then there was just the reality of just like, yeah, it's like, I hope— like, I recognize it's not easy to get a job in the middle, you know, in this environment. So those were the feelings.

But I tried to do— I was extremely generous on severance where, like, you know, speaking with peers and stuff, they were like, you're crazy, dude. I'm like, no, I think this is the right thing to do.

[49:14] Paul: That's how you know you're on the right path when people are telling you you're crazy. That's usually a good sign.

[49:20] Khe Hy: That's a, that's a good point. So, and for the most part, everyone is still like, you know, I'm a reference. I'm like forwarding them like, hey, you know, check out this person, my friend's hiring part-time on this, like, talk to them, I'll put in a good word. So I'm still a part of their careers.

[49:41] Paul: That's great.

[49:41] Khe Hy: Because they've asked me to stay a part of their career. So to me, I feel good that like I did, like, given difficult situations, I did the best that I could. Yeah. And never forgetting the human side of it all.

[49:54] Paul: Yeah. And what's the last month been like, kind of digesting this?

[50:00] Khe Hy: So the last month, it's been— I mean, I feel so creatively alive and inspired, right? I think I had spent a good chunk of the past 3 years where Every free moment I had went into every free creative, every creative juice that I had went into marketing. And I realized that like, I think I had a double-edged sword of like, I'm a pretty good marketer. And so when you're good at, like, it would've been better if I sucked at marketing. 'Cause when you're good at marketing, you're like, well, like, I don't want to do this thing, but I'm, you know, I'm good at it. It adds value.

But now that I'm freed, like, from the burdens of marketing, I'm like, I fucking hate marketing. I would much rather write you like a 3,000-word, like, well-written, well-thought-out long-form blog post that could basically be a chapter of a book than a 3,000-word sales page where you're like, make sure you needle their pain in paragraph 7 and make sure your H2s are like less than 80 characters, you know, like all that bullshit. Like, I didn't realize, you know, like fish in the water. I didn't realize how draining that was. There's two things I didn't realize were so draining. The organizational complexity that we talked about, there's like someone always needed you.

And then the, which felt very like Wall Street-y, like you're just like, it was on a different scale, but like that like, oh, someone always needs to talk to me. And then the second one being the like, wow, marketing sucked all the creative oxygen out of the room. And so both of those are gone now. So, you know, I've been like cranking out like 3,000-word blog posts like in a week. Like I didn't write a 3,000-word blog post in, in 3 years. And I've written 3.

[52:02] Paul: I've been reading them. I definitely feel the energy. I was like, yeah, okay. I was like, K's back.

[52:10] Khe Hy: And, you know, and again, it's like, it's a season, so it feels good. I will say, though, like, you know, we still have one employee and one contractor. And, you know, it's like, there's still overhead. And so there is still some pressure to make money beyond feeding myself. And that's, that definitely feels very challenging cuz you don't want to just jump into something just because you can make money. It's like the quickest way to make money.

That's the worst place to be in. But it is cha— man, like it is very, very challenging regardless of what industry you're in, regardless of whether you're a small company or a large company, it is very, very challenging. To make money right now?

[53:00] Paul: The, the interesting thing I've experienced is I never went to cohort. I actually did 2 cohorts of 2 different courses and then shifted all to self-paced courses and I didn't see the big spike, but it's basically been a steady increase since 2020. Like I've not had any decline.

[53:21] Khe Hy: That's awesome.

[53:23] Paul: Which is pretty interesting. I think part of it is I'm not selling into the tech ecosystem. Yeah. Whereas the rest of the economy is a lot more robust right now than the rest of the economy.

[53:35] Khe Hy: But yeah, just another data point on what's the average price point on the self-paced.

[53:44] Paul: I think like my average sales price is somewhere around like $350 to $400.

[53:50] Khe Hy: I think I feel like that's a good— that's a good price point. I think the $1,000 and Like, that's like, like when something's $500 and up, people are like, oh, that's a big expense. But like under $300, it still feels like, you know, like two, like two nice dinners or whatever, you know, however, however someone would justify it, especially. And I think this is the other thing that I've been struggling with is as I've gotten older and more mature in my own creative journey, in my own life, teaching people skills like productivity is the ultimate promise of productivity is like you'll make more money if you're more productive. And I'm just not interested in teaching people how to make more money.

[54:38] Paul: This is why I wrote a book. Yeah, I think you should write one too.

[54:41] Khe Hy: Yes, I think I'm, I'm, I'm firing up the wheels. Like, I'm not interested in— I, I— and any successful info product business, I suspect, needs to have some anchor like some road back to it needs to be like, I made more money because of this thing. And I think that, that just sets me up to fail in— if I— by staying in info products.

[55:07] Paul: I do think people do underestimate making money from books. Like, you can make—

[55:12] Khe Hy: I think you're—

[55:14] Paul: you can make $7 to $8 a book. Yeah, what I'm seeing now. And I think you're email list is probably more powerful than a publisher's network.

[55:25] Khe Hy: Yeah, yeah. I see. My thing about the, the book, uh, going— and feel free to, to, to punt this conversation— but the one, the one thing about the book, because there is this traditional versus self-paced, self, like, Pathless Path approach to it. For me, the— and I've seen these, some of these debates, but like It is the like getting on radio, getting on like local shows, like, like, I feel like, like, let me ask you, it doesn't matter.

[55:58] Paul: Nobody, nobody buys books from radio. People buy books from Ali Abdaal, and Ali Abdaal will do a video about your book regardless of who you publish with.

[56:08] Khe Hy: Yeah. Well, yeah, yeah.

[56:10] Paul: All you, all you need from what I've seen is 10 people like Ali Abdaal.

[56:16] Khe Hy: 10. So like 10 influencers. Yeah.

[56:18] Paul: And you're way better at that than me. And you're more— you're better at marketing than me. You would absolutely crush it. It's just nobody has the counterfactuals. I think this is where I challenge you is like I would just ask yourself, like, what do you gain from doing it on your own? And like, who might you inspire?

[56:41] Khe Hy: Yeah, yeah, it's a—

[56:43] Paul: and the other, the other option is you can do it with somebody like Scribe.

[56:49] Khe Hy: Like, they have a full staff that can like help you break into stuff.

[56:52] Paul: But yeah, I don't know, I think this is changing. Yeah, I think this is changing so rapidly. The values of— the value of like authentic influencers like you who will put their name behind stuff and recommend stuff That is the value all a publisher can offer now is basically a network of those people who keep agreeing to publish with them.

[57:15] Khe Hy: Yeah.

[57:16] Paul: The publisher doesn't add anything.

[57:18] Khe Hy: Yeah. Yeah. Interesting. But don't you think that like, like writing for the New York Times, like get like writing, I mean, that's obviously like writing an op-ed for, for the New York Times or getting excerpted by the New York Times. Do you think that has not—

[57:34] Paul: do you—

[57:35] Khe Hy: well, hey, you, you— are you saying that that— like, I'll give you an example. Like, when CNN wrote like a profile piece on me, it was like 10,000 subscribers overnight.

[57:46] Paul: Yeah, but you have them on your email list already. Yeah, I would just say grow your email list.

[57:53] Khe Hy: Yeah, yeah. Well, I mean, that's definitely, that's definitely a priority now.

[57:58] Paul: Um, I think like this is a very abstract conversation. Like, when people talk about this stuff, it's all about the what if. And like, I think people think these traditional publishers have magical powers. They will literally do nothing for you.

[58:13] Khe Hy: Yeah, no, I've seen that.

[58:14] Paul: I think at a certain level of advance, maybe they'll do something, but what the high advance does is raise the stakes on you, and you're like, shit, I'm gonna give this launch all out. I'm gonna go all out. I literally didn't put any effort into a launch, and I've already sold 20,000 books.

[58:31] Khe Hy: Things.

[58:32] Paul: Yeah, yeah. And now I have leverage in the market. You can sell your book to a publisher. They're all trying to buy my book now, um, but they can't afford me. Yeah, yeah, because they don't have anything to offer.

[58:48] Khe Hy: No, you— these are all, these are all great. And I think what really resonated is like, it's like everyone's always like, well, what if you got in the New York Times? Or like James Clear got on Good Morning America or like all that. And it's like, A, you can't just like rebut with like one example like that. And B, there's probably things that are way more impactful, closer to reach than those things. And I do agree, because it's funny, it's like I know a lot of traditional published authors and they always come to me and they're like, they're like, so how do I do video shorts?

And like, if you're asking me how to do video shorts, you're barking up the wrong tree. Like, and so it's funny, it's like you just assume that they like push a button and then you're like, you know, you're like on like 100 podcasts. It's like, no, it's like, first of all, like I can get, I could probably with effort, I could get myself on 100 podcasts. I don't need a publisher to get me on 100 podcasts.

[59:52] Paul: People would be storming down the door to promote your stuff. You have given so generously, like you're like an uber example compared to me. Like you've been doing it far. It's true. You've been doing it far longer. You never ask for anything.

You're always trying to support people. I don't think it matters what path you went. It would succeed either way. But I think you have a very, like, beautiful message worth sharing. And I think the only thing that matters is that it gets in the hands of people. Because I think what I've found is the audience for this kind of writing, and it's still surprisingly rare, is very large and very appreciative.

[01:00:38] Khe Hy: Yeah.

[01:00:39] Paul: And they don't want a rad productivity book. They want, like, Kate They want K pouring his soul into his pages and like letting it rip. And I don't know if a publisher and editor will let you do that because they're trying to hit a mass market of like middle-aged moms.

[01:00:59] Khe Hy: Yeah, yeah, no, it's a good point. And I've made it very clear I am not writing— if anything, I might write in like a why I'm walking away from productivity book, like the anti-productivity book.

[01:01:11] Paul: I think that would be really cool.

[01:01:13] Khe Hy: I don't want to write— I don't really want to write a how-to book.

[01:01:16] Paul: So here's the— here's the thing. Nobody would have touched my book. No one would have given me a publishing offer.

[01:01:24] Khe Hy: Was it because of the topic or because of your audience size?

[01:01:27] Paul: No, I didn't have a big enough audience. And they're not evaluating quality of writing or ideas. They're evaluating just like metrics. And my, my framing and ideas did not fit into anyone's bucket. The New York— I have outsold The New York Times work writers.

[01:01:48] Khe Hy: Oh yeah, I'm sure.

[01:01:49] Paul: I've crushed them. They're working for major institutions with big-time publishers.

[01:01:56] Khe Hy: Yeah, well, it's like, like, those books are what, like 10,000? Like, I always remember this, like, a, a good— a publisher considered a good book 5,000 copies for nonfiction. I'm like, Oh my God, I wrote some.

[01:02:11] Paul: I think 4% sell more than 1,000.

[01:02:18] Khe Hy: Wow, 4%.

[01:02:19] Paul: Yeah, there's a lot of books that get published. I mean, like, companies like Simon Schuster, like, write $10,000 checks to pretty much anyone who's in an executive position in New York.

[01:02:29] Khe Hy: Yeah, right.

[01:02:30] Paul: And they just, like, get them to write books, and they're never all that good. Um, but you have like— your book will crush because you've A/B tested your writing over and over again. You have an authentic message and it matters.

[01:02:46] Khe Hy: Yeah. Oh man. All right, I got my marching orders. I'm excited. I am. I do believe that I am entering a season of creativity.

I love it. And I feel really good about that. And it's funny because that's— I'm leaving a season of productivity. Like, even if you told me that, like, you know, we've delayed the next launch of Supercharger Productivity to next January just to like give us some time to see how things shake out. But, but every day that goes by when I'm not thinking about that product is like there's a lightness to it. And again, it's not dismissing.

It was a great product for its time. For my season of life with incredible colleagues who built it. I'm not taking away any of that, but I think the season, uh, it feels like I don't, I don't even really write about productivity anymore. So like, why would I teach a productivity course when I, I like, the only time I write about productivity is when I want to sell my productivity course. That should tell me everything I need to know about myself.

[01:03:57] Paul: Yeah. And that's the hard thing, right? Because we evolve and change as people, but we're still trying to make it work on these paths.

[01:04:06] Khe Hy: Yeah, yeah. Like you've heard me say, like, I want to be a creator for 30 years, like, like where it's actually like making a living off of it. I'll probably do it for longer because like I always think like, like Ram Dass, you know, the late guru, like if he was around now, he would be the most prolific. Like, there's, there's 10,000 hours of his audio tapes on the internet. Alan Watts.

[01:04:34] Paul: Uh, yeah.

[01:04:36] Khe Hy: And so I want to be like that. Like, I want to be like those guys where it's like, you even like monetization is not even— it's like, I have a message and I want to get the message out. Yeah.

[01:04:48] Paul: And I think it's It's pretty wild. I mean, you've been on this path 8 years. When I quit my job, I literally found myself so lonely. Not lonely, I had friends, I had family, but there was no one around that was like doing this stuff. And now it's increasing, but it's still so early. And so early.

Yeah, I'm pumped to continue to watch your journey.

[01:05:13] Khe Hy: And I do think— do you— I think that there is I think that there's another shakeout coming too, unfortunately, because, you know, that COVID era was— it was a— it was— I don't want to call the economic era around COVID was fake. It was inflated by like too much attention, stimulus checks.

[01:05:39] Paul: Yeah, I think I think the people that find a connection with creativity ultimately end up experiencing something that matters in their lives, and they're going to protect that and find a way to bring it forth. Can they make money from it? I don't know. I think the revealed preferences over time— most people quit these journeys and most people prefer high incomes in the knowledge economy. So yeah, and then you're just left with the crazy ones like us.

[01:06:09] Khe Hy: Yeah. Exactly. Exactly. I, I, we, I'm happy to recruit more and more, you know, but I think the cool thing is that I hope like I'm very transparent. I try my hardest to be like, this is not a journey for everyone.

[01:06:29] Paul: Yeah.

[01:06:29] Khe Hy: Like there is a lot like you. Everything from the, you know, a very tricky one in the United States, health care, to, to the loss of identity or not the loss of identity, but the inability to be put in an identity bucket, to the volatility of cash flow, to the weird tax things that you need to do, to the fact that it's like really hard to get a mortgage, like The, the odd, like, and I think that's kind of cool too, because it, the system is kind of meant to shake you out. If, like you said, revealed preferences. If you don't truly want to do this, the system will shake you out. Yeah.

[01:07:17] Paul: I'm like, your first healthcare over here. And yeah, I've had all sorts of healthcare craziness, but I love figuring it out. I love being on the edge.

[01:07:27] Khe Hy: Yeah. Yeah. And kudos to you, man. Healthcare, navigating healthcare for yourself is hard.

[01:07:34] Paul: You know, I just got rid of insurance. It made it a lot easier.

[01:07:38] Khe Hy: Yeah. Yeah. I just told my wife that and like we have dental and she's like, I can't find a dentist. Like just call the best one and just offer cash. See what they say.

[01:07:47] Paul: It's so much easier once you figure that out. It's often cheaper.

[01:07:51] Khe Hy: Yeah.

[01:07:52] Paul: I mean, we could go down a rabbit hole, but, um, Anyway, that's probably a good point to stop. I appreciate you stopping by The Pathless Path. You're always welcome. Appreciate you sharing your journey. Excited for what you're going to create. I will support your book no matter who you publish it with.

But yeah, I do think that would be a gift to the world.

[01:08:17] Khe Hy: Yeah. No, thank you. You've been— you've been such a, such a role model. And, and like I said, you and— I think it's like you and Lawrence, like, they're the two purest rippers. Like, purest, right? Like, my shit's still a little laced with like some lingering capitalist, you know, anxiety and greed in it.

Uh, capitalist hunger, we'll call it. But like, you— and you're like the, the, the, like, the cleanest Molly, you know, that like, um, that I, I, I think Lawrence is that.

[01:08:58] Paul: I still do like the— I still do like these consulting workshops, and I'm like trying to charge a lot of money, and I'm just like, man, Lawrence is the purest. His, his episode is great. Um, his episode is great. People want to check that out, I'll link that up, and you can learn from the master.

[01:09:16] Khe Hy: Yeah. Lawrence Yeo from More to That is world-class talent.

[01:09:23] Paul: Amazing. Well, thank you.

[01:09:24] Khe Hy: If you're a Smalley out there.