What happens when a self-described "not very good" venture capitalist discovers he has an extraordinary gift for coaching the world's most successful CEOs? Joe Hudson joins Infinite Loops to share his unconventional journey from Alaska fishing boats to Hollywood directing to Silicon Valley boardrooms, ultimately finding his calling in helping high-performers unlock their deepest potential.
This conversation dives deep into Joe's revolutionary three-center approach to human development—working with the head, heart, and nervous system simultaneously to create lasting transformation, and MORE!
I hope you enjoy this conversation as much as I did. We’ve shared some highlights below, together with links & a full transcript. As always, if you like what you hear/read, please leave a comment or drop us a review on your provider of choice.
— Jim
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Highlights
Should as a Version of Shame Obligation
“…what I typically do is I will take a look at the 10 things in their lives that they've wanted to have changed for a decade that hasn't changed. And I'll point out that all of those are shoulds. I'll point out how should is a version of shame obligation, which actually creates stagnation. And so it's just a really ineffective way of actually getting what you want. Shoulding yourself just doesn't work. And you don't need to be a scientist. You can just look at your 3- year-old or your 5-year-old and say, ‘you should do that’ and then see how they react.”
The Failed VC Revelation
Joe Hudson: As a venture capitalist, the number one thing that you have to invest in is great entrepreneurs because everything pivots, everything changes. The markets shift, the technology changes. So you need a great entrepreneur. It's the number one thing. There is no idea so good bad management can't fuck it up. My psychology was I needed to be needed. And so, I was investing in CEOs who needed me, which is horrible. What you really want is those who don't need you at all.
Jim O'Shaughnessy: At all.Joe Hudson: At all. And who listen but don't need you. That I would say the best CEOs are like, 'I'm listening to you, but I don't need you. And there's ten more just like you.'
Hyper Successful, Driven by Passion
“Uber successful folks — they at the same time feel like they're better than most people and they hold a deep shame inside of them. So both of those two things are happening at once. They're subtly putting themselves above folks and at the same time there's something that they're trying to prove to the world that they're good enough. And so that component is there for a lot of hyper successful. There is probably 20 to 30% of the hyper successful people just fully driven by passion and love and curiosity. And how did I get here? This is great. I'm glad this is happening. But, I understand there's some luck to this and worked out and I'm passionate, I'm obsessed, but I'm not. I'm not.”
I Love Fear
“To me, fear is like an amazing signal in the system. Fear is telling me, ‘oh, I am not taking care of myself in some way.’ Fear is telling me that ‘I'm not on. I'm not aligned in my purpose.’ Right? There's this great thought process which is even a man with a gun doesn't have power over a person who's not scared to die. And if you're deeply living in your alignment, then the consequences don't particularly matter. I would step in front of a car for my kid in a heartbeat. I wouldn't care about the consequences. That's because that's such a deeply aligned thing in me. And so, if I'm in fear, man, there's something I'm not aligned with. That's a signal. I love fear. I love that. And there's almost no quicker path to becoming who you want to be in the world, just to finding your own freedom than following that fear, than going into the places that you're scared.”
Reading List
Prometheus Rising; by Robert Anton Wilson
Quantum Psychology; by Robert Anton Wilson
Zen and the Art of Motorcycle Maintenance; by Robert Pirsig
Mind Over Back Pain; by John Sarno
Molecules of Emotion; by Candace Pert
Adventures of a Bystander; by Peter Drucker
The Love Song of J. Alfred Prufrock; by T.S. Eliot
The Enlightened Brain; by Andrew Newberg
🤖 Machine-Generated Transcript
Jim O'Shaughnessy: Well, hello, everyone. It's Jim O'Shaughnessy with yet another Infinite Loops. I was just saying to my guest, Joe Hudson, who is the coach to some of the greatest CEOs in the world, a lot in Silicon Valley, how excited I am, because when I was going through his methodology and watched some of his videos, I thought, wow, we're kind of brothers from different mothers. Joe, you've had an incredible—you have something that I love seeing on a CV that most people don't, and that is you've had a really varied background. You were doing fishing in Alaska, you taught at Head Start, you directed TV in Hollywood. Then you were a VC, you ran a philanthropic organization. I think that kind of background allows for all sorts of insights that you wouldn't have if you just were doing one thing forever.
But as I was going through your material, I thought of the quote by Proust, and so let's start there. He said, "It is always thus impelled by a state of mind that is destined not to last, we make our irrevocable choices."
Joe Hudson: Haven't heard that one. That's lovely. Oh, my goodness. I love that.
Jim O'Shaughnessy: I thought you would.
Joe Hudson: Oh, my goodness. Yeah. That's a great quote.
Jim O'Shaughnessy: It seems to me that everyone smiles and laughs at that because the truth of it kind of instantly hits you when you hear it. What I'd love to hear from you is you approach coaching in a very different way than traditional executive coaches. So if you wouldn't mind, let's just talk about that. And I'd love to hear directly from you about your process.
Joe Hudson: Yeah. So that's a lot. That's a big topic. The main thing, I think that is—I don't know if it's unique, but the main thing for me about coaching is that everything that I do, it needs to be a form of self-development. It needs to be a way that I see myself more clearly. Venture capital was that for me. Art was that for me. Teaching was that for me. Teaching is that for me now. So whatever I'm doing, I know I won't do it for very long unless I'm learning about myself and developing as a human. Because if that's not there, then I just lose interest. That's always been what I was born—I was born interested in that. And so it's always been some version of that, and so that's the main piece for me.
The secondary piece is I really see that if a person has a pattern in their life, you're going to see it in the business, you're going to see it in their relationships, you're going to see it in their relationship with themselves. And they're all reflections of one another. And so I might start with somebody, a CEO, talking about how to fix their marketing firm, the marketing part of their business, and maybe two of the things they can just go and execute on and one, they don't, they can't execute on. And that's immediately where we're going to delve deeper into. Okay, what's the perspective issue? That is always going to be changing that if we look at more deeply, we can see the pattern that's holding them back.
And typically when you find those patterns and you unlock them, it doesn't just unlock the marketing firm, it unlocks everything. So for instance, today I was working with a CEO having a hard time owning his wants. If you have a hard time really feeling and owning your wants, you're probably not going to be great at accountability. You're probably going to be very self-sufficient. You're not going to really be able to empower your team. And so if you flip that switch and maybe you find it because you're having a hard time with accountability, or maybe you find it because your team doesn't feel safe because they don't know what you want, so they're just trying to make you happy, but they don't know how, so they feel anxious.
But when you find it and you unlock it, it'll switch many, many parts of the business.
Jim O'Shaughnessy: You know, I often think that when you—I'm a big art fan as well and one of the observations I've always had is you almost always see the artist in their art. And when you're reading a book, there's a great quote. I can't remember who said it, but it was "whether you're writing about a banker or a baker or a street sweeper, you're writing about yourself." And I'm taking a crack at writing fiction right now. I've written four books. I've never written fiction. And it's really fun, but it's also really daunting.
Joe Hudson: You really like daunting because the smile on your face—how alive you got when you talked about doing this, so clearly daunting excites you.
Jim O'Shaughnessy: It does, it really does. Well, you know, it's one of those things where—what you help people with. It seems to me a lot of people that I've interacted with and that have come to me for advice, it seems they get locked in. They get locked in. And I think there's a lot of evolution in that primarily because coherence of character is really important to people, which kind of leads to the illusion of the need for control, which kind of, when you want to control things, you really aren't going to understand them, in my opinion. I think you've got to just be curious and say, "Wow, that's something I didn't know."
How do you approach somebody who's in that "I should do this, I ought to do this, but I don't want to do this"?
Joe Hudson: Yeah, that's a good one. So what I typically do is we'll take a look at the ten things in their lives that they've wanted to have changed for a decade that hasn't changed. And I'll point out that all of those are shoulds.
Jim O'Shaughnessy: That's really cool.
Joe Hudson: And so I'll point out how "should" is a version of shame obligation, which actually creates stagnation. And so it's just a really ineffective way of actually getting what you want. Shoulding yourself just doesn't work. And you don't need to be a scientist. You can just look at your three-year-old or your five-year-old and say, "You should do that" and then see how they react.
Jim O'Shaughnessy: No.
Joe Hudson: And so whenever we use that kind of force with ourselves or others, it's the cheapest, dirtiest fuel that you can use. So why not use more efficient fuel? And wants are far more efficient fuel. So then the next thing that you have to then approach with them is, "Okay, but if I just did what I wanted, I'll just lay on the couch and drink beer all day." And so I'll propose the following experiment. I'll say, "Look, let's find out if that's true. Let's take a week and you do only what you want to do. Don't do anything that you don't want to do." And I did that experiment myself. And they all come across the same thing that I came across at some point. And for me it was, I was in the kitchen looking at a trash can. I do not want to take out the trash. I also did not want to smell the trash. So here I am. I'm only going to do what I want to do, but I don't want to take out the trash and I don't want to smell the trash. I literally sat there perplexed for more minutes than I would like to count, going, "Well, what do I do? Because I'm not doing anything I don't want to do." And I realize that the enjoyment of something is part what you're doing, but it's part how you're doing it. And so the question came to me, "How do I want to take out the trash? Or how do I want to live with the smell?" And I was like, "Oh, I want to take out the trash. I don't want to live with that smell."
And so then "How do I want to do that in a way that I'm going to enjoy?" And then that flipped the narration. Because what happens when your brain is saying, "This is the thing I want, this is the thing I don't want," we're in binary thinking, which is very fear-based. So oftentimes the question is, "Well, I don't want to work out." "Okay, cool, I should work out." "Okay, well, if you had to work out in a way you wanted to, what would that look like?" And then that opens up the mind to wonder and possibility that before was always just a very A or B situation, which never works.
Jim O'Shaughnessy: Yeah. I say all the time, to the point of people pointing out to me saying, "Jim, will you just stop saying that? We get it," but I think one of our big problems is that we are deterministic thinkers. Either/or. Yes/no, black/white. But we're living in a probabilistic world. And then I usually tag on, "Hilarity or tragedy often ensue." And it seems weird to me that we have these unwritten game rules. Are you a fan of Robert Anton Wilson?
Joe Hudson: I don't know who that is.
Jim O'Shaughnessy: Oh, I think you'd love him. Going through your stuff, I can highly recommend all of his work. I'd start with "Prometheus Rising" and "Quantum Psychology." I think you'd really enjoy what he does. Essentially his idea is that we all live in a world of unwritten game rules. If you've never played poker and you start to play poker—
Joe Hudson: Yeah. Beautiful.
Jim O'Shaughnessy: Are those game rules controlling us and getting us into this deterministic line of thought? Is it just because that's the way we evolved? What's the key?
Joe Hudson: So to me, the bigger mistake is thinking that it's logical and not emotional. And so if you look at the decision-making apparatus in our neurology, it happens mostly in the emotional center of our brain. There's some that happens pre-emotional center and that's nervous system, like the way we jump away from a snake. But generally our decision-making patterns happen in the brain. And if you damage that part of their brain, they cease to make decisions even though their IQ stays the same. So it'll take them a half an hour to decide what color pen to use. And so their life falls apart because they can't make decisions, because we're actually making emotional decisions. And what that means is we're making a decision because we want to feel one way or another. We're switching on our phone because we don't want to feel a way or because we want to feel a way. We are having that cigarette because we want to feel a way or not feel a way. We're productive because we want to feel a way. And so if you think about your life as how many things have you done to feel loved or to not feel like a failure, or to feel like you're contributing or to not feel scared or afraid, you can start seeing, "Oh, wow, all my decisions are made this way." And I think that's the part that's unseen. And so how that particularly pertains to what you were saying is that what I notice is when people go into fear and they might not even be aware of it. But a couple things happen to our decision-making apparatus. The first one is we do black and white thinking. The second thing we do is we have a false end. And that's a really important one. So we think "If I do that I might get fired." But we don't think what happens after we get fired.
Jim O'Shaughnessy: Right.
Joe Hudson: And then the other thing is when we're—even if you think "I have to make a decision," there's fear in play. Today, you've made a thousand choices. We're not going to call them decisions, but they all happen naturally. If you go, "Oh my gosh, I have to really make a decision here," you're already scared of the consequences. So you're already in the game and the emotion is already running the show and the clarity doesn't come through logic, the clarity comes through looking forward to every emotional experience. If I can't wait to feel like a failure, if I can't wait to feel sad, if I can't wait to feel loved, then my decision-making becomes really clear. And so learning that is tremendous freedom.
Jim O'Shaughnessy: Yeah. As one who for decades was an empirically driven quantitative investor, I nevertheless totally understand. In fact, I've said back in my asset management days, I said, "You know, the four horsemen of the investment apocalypse are fear, greed, hope, and ignorance." And only one of them—ignorance—is not an emotion. We are so controlled by fear, in my opinion, that it blocks out so much of the world from us. And ignorance isn't an emotion.
Joe Hudson: But it's caused by one.
Jim O'Shaughnessy: Good point, good point. Let's talk about that for a minute.
Joe Hudson: Oftentimes there's a choice to—I wouldn't say there's a choice to stay ignorant, but I would say that there is a fear of feeling some way that makes ignorance preferable. I don't want to have to go into a whole new world and learn something. I don't want to feel the fact that I'm wrong, that I don't know what I'm talking about. I don't want to feel like I might have to upend my entire world because of my ignorance.
Jim O'Shaughnessy: That's really insightful. And you know, it seems to me there's a great quote, "The smartest thing I ever did was stop being smart." And literally it opened up my world. And I just got in the habit of saying, "I don't know." And in asset management, most people looked at me like, "Are you trying to commit career suicide here?" And so I learned to add, "I don't know, but I'm going to try and find out."
And the interesting dichotomy here to me is that so much of the super high performers in any industry in life, basically they're driven by an insatiable curiosity. And the idea also though, that what I don't know just fills up—I can't even put a geographic size on it because, you know, maybe the universe. And so to me it's kind of like, "Wow, all the stuff I don't know, that just for me, it's like, but I get to learn about. And how cool is that?" Why is that not the dominant drive in our human OS?
Joe Hudson: I think it is. I think that it just gets derailed by critical parents.
Jim O'Shaughnessy: Okay.
Joe Hudson: Yeah. So I think if you look at babies and there's a study about when they smile and they smile most when they're playing and learning. That's when they—and we are all curious and it's our nature to be curious. But if you get told that you are going to be punished if you're excited, if you get told you're going to get punished if you're wrong, if you have a critical parent with their own critical voice and they're projecting all that onto you, they're making you make sure that you're right, that you performed well, then that becomes an override to the curiosity. Some people, their curiosity is so strong that it doesn't affect them as much. And some of them, they learn to use curiosity to be the performer to please the parent. But generally, we're all naturally curious.
Jim O'Shaughnessy: Totally. And you know, that's the whole beginner's mind. And I like the segue to—we had the natural curiosity kind of beaten out of us. Have you read "Zen and the Art of Motorcycle Maintenance" by Robert Pirsig?
Joe Hudson: Yeah.
Jim O'Shaughnessy: Remember there's a great passage in there where he talks about where kids are just naturally doing what they want, but they're doing what their parents, what their teachers, what society tells them to do and be so that they are useful members of society. And to me, you know, when I was younger, it took me a long time to realize it, but one of the subtle messages I got from my parents was "make everything look effortless." And that really messed me up for the early part of my career because it was like, "But this is hard."
Joe Hudson: What was their survival mechanism? What made looking effortless important to their survival or what made that important to them? Do you know?
Jim O'Shaughnessy: Yeah, I think I do. My grandfather was incredibly successful in the oil industry. For a time, he had the world's largest privately owned oil company called Globe Oil and Refining. And he ended up giving away 95% of his own fortune during his own lifetime. So he had a 75-year jump on all those pledge guys. But so—
Joe Hudson: I know this is weird to ask, but is this Texas, Oklahoma area or was he international?
Jim O'Shaughnessy: International. And, but the beginning was Oklahoma, Texas, those areas.
Joe Hudson: Interesting.
Jim O'Shaughnessy: And then he was an amazing—I was incredibly lucky because I'm the youngest in my generation and I'm 65 now. So that shows you how old all my cousins are. But he was born in 1885 and he was the only grandparent that I ever knew. And he'd lost my grandmother. And so I grew up in St. Paul, Minnesota, where he lived even though the oil was elsewhere. His wife said, "You can run anywhere in the world with your company you want, but we're living in St. Paul, Minnesota, because that's where we're living."
Joe Hudson: Anyway, so—
Jim O'Shaughnessy: Yeah, exactly. But anyway, so I got a chance to learn a lot from him. So maybe I don't know if it was out of fear, but almost out of respect, deference to him. I see him—
Joe Hudson: I could see how in his business, how making it look easy would be an important aspect in that business. I find that a lot of leaders of what I'll call commodity-driven businesses, it's really important that they feel calm, collected and it's easy. If I look at farmers of 10,000-plus acres, they have that same demeanor. I can see why it would be important.
Jim O'Shaughnessy: Yeah. And so I won't lie, it actually helped a lot when I was really young. It actually helped a lot. But then, you know, I started to understand that this is pissing me off. What I'm doing is hard. And no one seems to be acknowledging that. And then I kind of thought to myself—I'm a big journal keeper. I've kept journals for most of my adult life, all of my adult life. And that was one of the common themes that I realized that I kind of wanted that acknowledgment. "Hey, you're working really hard here." And I never got it. But getting over that was really helpful because, you know, it was much more true to what was actually going on in my life.
Do you think that there is an underlying—I'm a huge rabbit hole diver. And one of the things that we have an internal AI at O'Shaughnessy Ventures and we're doing in silico A/B tests. And so one of the things that—and these are for things that we want to see what people like. And one of the first group of the sims that we developed, we all developed them on various OCEAN scores from the Big Five. Do you think there is a commonality between the people that you're coaching? Is there an underlying pattern to the behavior?
Joe Hudson: Yeah. So first of all, let's geek out if you want a rabbit hole. Let's geek out on the Big Five for a second. The idea behind the Big Five, at least at one point was that here are these five metrics that are supposed to stay consistent through a person's lifetime, their adult lifetime. O of OCEAN is openness. C is conscientiousness. E is extroversion. A is agreeableness and N is neuroticism. And so they know that psychedelics actually change the openness score over time. We have our week-long program, we change neuroticism by almost a standard deviation 33 months after the retreat is finished. So the first thing I'd say about the OCEAN scores and my experience personally is that those things, some of those things do change. They're prone not to. They're the more entrenched pieces, but they do change. And so I just want to say that because a lot of people, when they listen to the OCEAN, they think that this is this part of me that can't be changed. And there's even, if I recall correctly, there's even studies that women in general are more agreeable than men. But I am confident that there are some cultures where that is not true. So I haven't seen the studies that actually have looked culturally to see if some of these things that are very true in some areas aren't true in other areas. So with all that said.
What I've seen is that it's more of—as far as what OCEAN scores, it depends on the type of business. So for instance, tech entrepreneurs almost always score high on openness. They're thinking about something that most people don't think are possible, that they think is going to be possible. That requires a pretty high openness. But if I'm dealing with CEOs who are commodity-based manufacturers, there's no consistency in openness at all. And so I think that there's, if I'm dealing with hedge fund managers, more openness generally, especially the ones who are at the top of the—not running one revenue stream of a hedge fund, but actually thinking about the whole thing. And then there's usually—so for instance, in a hedge fund, typically there's the person who's creative ideas and then the person who basically hedges the bet or sizes the bet. There's the bet thinker and the sizer of the bet and they have different aspects. So there's a lot of ways to think about it that way as far as across all. And there's definitely more or less neurotic. I do notice that the neurotic CEOs don't last as long. They just want to cash out usually as a higher neurotic score than the ones who are, "I want—I'm going to be here forever."
Jim O'Shaughnessy: Harry Singleton.
Joe Hudson: Yeah, like "This is my life's work and why would I cash out? This is what I'm here to do." Which is probably your grandfather, it sounds like. And so the neurosis score kind of tells you how quickly they're going to duck out if they're going to cash out. And then typically those folks then burn out for two to five years in their pajamas and beat themselves up for not doing the next thing. I'm sure you have a couple dozen friends who fall into that category.
Jim O'Shaughnessy: Yep.
Joe Hudson: So that's more about neuroticism. The one thing that I see that kills almost all CEOs except for there's one that there's kind of an exception. But it's agreeableness. They can't be highly agreeable. Most CEOs can't be highly agreeable because you're going to have to piss off people. You can't be too conflict avoidant and be successful. You will blow up at some point. And so most CEOs are not highly agreeable. That would be one of the ones that I would say I've seen introverted and extroverted. Most of them are more extroverted as far as that they can go out and be in the public but it doesn't mean they resource. The real introverted extroversion particular piece of it to me is do you resource with people or do you resource by yourself? And I see both in that. So I don't see really a change in that. And conscientious and non-conscientious. Totally different. I've seen very successful non-conscientious fly-by-the-hip CEOs and then ones that are—and both can be successful depending on the business. So I don't think OCEAN score is that much. But what I can say is that the super high achieving—super high achieving—they seem to fall into two categories. The one category is—and they would all like to think they're in the one category of course but the one category is—actually far less so. Most of them have the—I mean uber successful folks. They at the same time feel like they're better than most people and they hold a deep shame inside of them. So both of those two things are happening at once. They're subtly putting themselves above folks and at the same time there's something that they're trying to prove to the world that they're good enough. And so that component is there for a lot of hyper successful. There is probably 20 to 30% of the hyper successful people just fully driven by passion and love and curiosity. And "How the hell did I get here? This is great. I'm glad this is happening. But I understand there's some luck to this and it worked out and I'm passionate, I'm obsessed, but I'm not—there's no part of me trying to prove myself or I don't drive that shame or think I'm better than."
And so a lot of my work with some CEOs is getting them from point—from the "I'm better than" and that deep shame to "Oh, this is—I'm just following my calling, my drive."
Jim O'Shaughnessy: Yeah. Just treating myself as the patient here. I think I started life on that first definition.
Joe Hudson: Yeah.
Jim O'Shaughnessy: My father was pretty good at making fun of me. Two of his better lines were—I had had some horrible thing happen in my early career and I was up at my parents' house and I was chatting with my mom and he walked in and he goes, "Why are you looking so glum?" And I explained to him what had happened and he kind of paused and smirked a little bit and said "I wouldn't worry about it too much, Jim, you have a remarkably re-inflatable ego." Then another one of his lines was he goes—and this is when I was a kid—he was like, "Jim, have you ever heard of what they call an inferiority complex?" And I went, "No Daddy, what is that?" He explained it to me and I went, "Why are you telling me this, dad?" He goes, "Well Jim, because I think you have a superiority complex." But I think I started there. I think I'm now in the other camp.
Joe Hudson: Yeah.
Jim O'Shaughnessy: How do you help your clients wherever they start? How do you get them into the passion, joy, love?
Joe Hudson: So I see the way I work with the human system is that I think about it as three centers. You could call it the head, heart, gut center. You could call it the prefrontal cortex, the nervous system, and the emotional center of the brain. Lots of ways to think about it. But it's generally the three things that drive us is the nervous system response, the emotional response, and the intellectual response. And so intellectually, the trick is to see through the personalness. The move is to see that it isn't about you. And so most of the pain, if you look at somebody who's deeply depressed or deeply narcissistic or has borderline personality, the more sick in most realms we get psychologically, we're just thinking about ourselves more and more and more and more. And if you look at whether it's human development scales or the Buddhist awakening scales or Christ consciousness or whatever, any kind of deep healing often comes through seeing through the self, seeing that you are one with everything, or seeing that the problem that you think you have, you're not going to have in ten years. It's any way that gives you space away from the self creates a lot of healing and by extension, space from any thought that you have. Meaning, "Oh, that's a thought. That's not me. Oh, look at that thought. It doesn't mean I'm a bad person because I have that thought. It's just a thought. Look at that thing." And so that's what you do in the head state of mind.
And then the heart, the emotional center of the brain. The work is to learn how to invite and love all the emotional experiences. Because most of the time when we're putting ourselves above, it's to protect ourselves emotionally. If I judge you, it's because I'm trying not to feel something. I'm trying not to feel a part of myself, and I'm trying not to feel part of you. So anytime I'm putting myself above somebody, it's a protection mechanism to not feel an emotional experience. So it's an invitation into feeling all of the feelings that come up if you can't make yourself better than the other person. And typically that means feeling into shame, which is the stagnation emotion that stagnates deeply. And so if you think about shame, it's—you're a little kid on a couch. This is my famous, my favorite, somewhat irreverent example. You're sitting on a couch, you're a little kid, you're with your aunts, and you fart and the aunts laugh. You're going to keep on farting. It's free. If you sit on the couch and you fart and your aunts shame you, you're going to hold it in. And so that shame is designed to make you stop crying, stop getting angry, stop being yourself on some level, stop being just naturally who you are. And so you have to really work on that shame to be able to see through that. And then on the nervous system level, it's all about being under attack. Typically somebody in that situation is constantly looking for the attack because a lot of the attack is coming from their own thoughts, their own self-critical head, talking to them. "Why didn't you do that? Why'd you—so stupid." And so it's really about learning how to allow the nervous system to feel pleasure, to not always be in a state of attack. And so the more that you allow the nervous system to feel pleasure, the more you learn to love and experience all these emotions that seem like they're hard, but they're actually not hard. They're just the resistance to them is hard. And then to see through the sense of self or see through your thoughts, especially the negative self-talk, the voice in your head, then that's basically what moves people.
Jim O'Shaughnessy: One of the tricks that I learned a while back was I started when I was facing something that was particularly vexing me, I would start asking myself and writing—I think writing by hand is a really important thing because it engages different parts of the brain.
Joe Hudson: Yeah, there's a lot of studies on that, by the way. Newberg is a—I think he had "The Enlightened Brain" or something like that. And he talks about free-form writing and how that's—
Jim O'Shaughnessy: Yeah, but one of the questions that I would ask myself was "What would a disinterested observer think about this situation? And what would he or she say to me?" And it really worked for me. But then I brought it up to my wife. We were having an argument about something and I said, "Well honey, let's look. What do you think a disinterested observer—" She got so mad at me.
Joe Hudson: She did.
Jim O'Shaughnessy: She was like, "What the fuck are you talking about? This is about me and you. What do you mean disinterested? Are you saying you're a disinterested observer? No, no."
Joe Hudson: How long ago was this when you were still in the "better than" phase?
Jim O'Shaughnessy: Probably at the transition point. I was doing a lot of—fear is—or anger rather is fear's watchdog, I think. And so another thing was when I was younger. I was a very emotional person. And one of the things I—through experience, I was like, back to the "Never let them see you sweat. Don't make everything look easy." I realized that for maybe most of my twenties, I was repressing the hell out of anger, out of frustration, out of all of those things led me to—are you familiar with the work of John Sarno?
Joe Hudson: I am. It's been a while.
Jim O'Shaughnessy: Yeah. He's the mind-body guy.
Joe Hudson: Yeah. Okay.
Jim O'Shaughnessy: And he was a doctor here in New York at NYU. Rehabilitation medicine. And he was pissed off that he wasn't helping anybody. At that time, I think it was in the fifties or sixties, most of the complaints that came in were back pain, things like that.
Joe Hudson: Oh, I do know his work, absolutely.
Jim O'Shaughnessy: Yeah. And so he realized, "You know what? This has nothing to do with the physical structure of these people's bodies. This is all somatic." But everyone hates the word psychosomatic. And so his books really unlocked it for me because when I read them, I'm like, "Oh, holy shit. I'm on every page of this book."
Joe Hudson: Right, right, totally.
Jim O'Shaughnessy: And then, you know, as I continued to be really interested in that and how we embody or we suppress a lot of these things. And it takes a toll on us, on our bodies in particular. Because what Sarno said basically, was when you repress especially anger and rage. And he also has shame on there. The real you has to express it somehow. So how does it express it? Through physical problems with your body.
Joe Hudson: And negative self-talk.
Jim O'Shaughnessy: And negative self-talk. And they reinforce each other. And so this is when I guess I was in my thirties and I woke up one morning with a frozen neck. And people who are just listening to us and not watching won't see me do this. But I couldn't move my neck any more than this. And I'm only moving it a degree or two here. And so I did what everyone would do. I went to all the doctors, they gave me the cortisone shots. Nothing worked. One guy put me in traction. And I'm sitting there in pain because it was a closet traction system. So I had to put a chair in between my closet. My wife came in and just started laughing at me. And so anyway, I'm at the bookstore and I find Sarno's book "Mind Over Back Pain." And the first time I read it, I'm really not kidding you. I was so disgusted I literally threw the book across the room.
Joe Hudson: That was your first expression of anger. Congratulations.
Jim O'Shaughnessy: Exactly. Well, I came to understand that's very intuitive of you because I'm like, "That is such bullshit. This guy is just—he has no idea what he's talking about." And then I thought, "You know what, I better read it again." By the seventh time I'd read it, I saw myself on every page and guess what happened? My neck pain completely disappeared.
Joe Hudson: Yeah, we in our in-person retreats—the one that changes the neurosis score—we do anger expression because exactly—and I've seen it totally change people's physical world because if I say to you, "Hey, stop feeling right now, really actually try to not feel any emotion," every one of your muscles has to constrict. So if I am not living with anger, then I'm constantly constricting. And so you'll see people when they start moving their anger or their sadness or their fear, their whole life changes. And not just their body, it's also their relationship. Everything changes.
Jim O'Shaughnessy: Yeah. And one of the things as I was reading your work was you're really good at micro expressions, body language, etc., and that was something that always fascinated me as well. And talk to us a little bit about how do you help people kind of see that in themselves?
Joe Hudson: So before I do it, there's this one little thread that we have which I think probably with your audience and people thinking about being better than others, one little thing I want to point out is when I heard what your wife did in response, "What do you mean a disinterested observer?" Typically a pattern that I see that—and this would point to a probability of this pattern. When you were in that state of feeling better than, then there was a subtle way in which you were the smart one and your wife was the emotional one or you were—there's this thing. And so anything that dismissed her emotionally, "disinterested" would be the exact thing that she would—"No, I'm not." And it sounds like you're very lucky—I was to have a very strong-willed wife who was like—very lucky. I know my emotional world has some validation. So "No, I'm not gonna buy your crap."
Jim O'Shaughnessy: Right.
Joe Hudson: So we're lucky enough. And so to me what I noticed is that when people are in that relationship and they're like "I'm better and you're the emotional one and I'm the logical one and I'm—" that they're in that relationship together because they're trying to actually find that balance of what you did with the back pain, having this emotional life with this intellectual life. And I don't know if it happened for your wife, but probably as you went through this transition, your wife also became a little more in the intellectual space and all of a sudden you were communicating better. And that's a really common pattern that I see happen as somebody comes out of that world of better than and shame.
Jim O'Shaughnessy: Yeah. And the interesting thing to me is—well, all of this is interesting to me, but you know, let's talk about fear for a little bit. I think, you know, how the one ring to rule them all. I think that fear, maybe after interacting with your stuff, I think shame might be an equal partner up there. But what is it about our operating system? Our human OS? Why is fear such a prominent part of—you know, there's a great quote, "Fear grabs, gratitude releases, fear controls, gratitude surrenders, fear repels, gratitude attracts." And that was another huge change that I made in my life. Luckily, early on was just to become incredibly grateful for everything. And God, did my life change amazingly.
Joe Hudson: Yeah, I think it changes even more when we're grateful for fear.
Jim O'Shaughnessy: Okay.
Joe Hudson: Instead of—the resistance of fear is just fear of fear. You're just meta-fear, meta. You're not—I'm not even going to hedge my bet. I'm just going to double down on fear. To me, fear is an amazing signal in the system. Fear is telling me, "Oh, I am not taking care of myself in some way. Fear is telling me that I am not aligned in my purpose." There's this great thought process which is even a man with a gun doesn't have power over a person who's not scared to die. And if you're deeply living in your alignment, then the consequences don't particularly matter. We all know—most of us, I would step in front of a car for my kid in a heartbeat. I wouldn't care about the consequences. That's because that's such a deeply aligned thing in me. And so if I'm in fear, man, there's something I'm not aligned with. That's a signal. That's fantastic. Thank you. So to me, I love fear. I love that. And there's almost no quicker path to becoming who you want to be in the world, just to finding your own freedom than following that fear, than going into the places that you're scared. So it's not just a signal. It also is a direction. "Oh, I'm scared of that thing. Let's go. I'm scared of that emotion. Let's go feel that emotion. I'm scared of that conversation. Let's go have that conversation." Those are all the places I'm going to grow the most.
Jim O'Shaughnessy: Yeah. That reminds me of Joseph Campbell's line, "The treasure you seek is in the cave you fear to enter."
Joe Hudson: Exactly.
Jim O'Shaughnessy: And for me, I think that it's the—I passionately believe we need both Apollo and Dionysus. We need both Sparta and Athens. And it's that synthesis of those views that I think help you really progress and avoid—we need both Spock and Dr. McCoy, for those who liked Star Trek.
Joe Hudson: But it also seems often represented in the mind. The prefrontal cortex. The very logical but not particularly attached to the body. The emotional—the Kirk. The emotional part of our body that's actually making the decisions. Actually the captain of the ship. And then there's the id, "God damn it, Doctor." Which is that nervous system level. "No, this is my gut reaction." It's oftentimes those characters or those personas in society or the Republicans and Democrats, or they're all—they're actually just representations of parts of our own psyche.
Jim O'Shaughnessy: My friend Rory Sutherland says that the prefrontal cortex thinks it's the boss, but it's actually the press office. The boss is the emotional part of your brain. I always loved that.
Joe Hudson: It's the commentator. You're right.
Jim O'Shaughnessy: And I often put up on Twitter, you know, this gif of this kid going "because of reasons." Because I honestly believe that many of the decisions that we make are emotionally based.
Joe Hudson: Yes.
Jim O'Shaughnessy: And then we paper them over after making the decision.
Joe Hudson: Absolutely. Yeah. There's evidence.
Jim O'Shaughnessy: We paper them over with rationality.
Joe Hudson: Oh, well, there's evidence of that. There's also this other relevant evidence you talk about. You know, the consciousness is in the—the consciousness of the creators in the creation. We talked about that earlier. So as it turns out, highly rational people. Really, really smart people can convince themselves of very illogical things and are more prone to do it than not smart people, as it turns out. And if you're an investor, you get to see this all the time. It's "Here's this person. They're totally logically consistent, very illogically consistent in what this is going to make a very bad investment." But they cannot see it because they see themselves as so logical.
Jim O'Shaughnessy: Right.
Joe Hudson: You've seen this, right? So what's interesting to me is so look at AI really, really smart people. And there's the consciousness that hallucinates every once in a while is completely illogical. There's the consciousness of the creator in the creation. It's amazing. And you just, yeah, you see that all the time. But absolutely.
Jim O'Shaughnessy: I think that the—I love that bit about the smart people are actually the easiest to fool themselves.
Joe Hudson: Yes.
Jim O'Shaughnessy: And it's because they're so smart they build steel-man arguments that are like, you can't get in. There's not even an edge to get in. And I'm reminded of the guy, and I don't remember his name, but he was super smart psychologist, psychiatrist who wrote about why people fall for con men. And the book was published on basically the same day that he learned that he'd lost everything because his investments were all with Bernie Madoff.
Joe Hudson: Oh, he even knew it. On some level, he even knew, right.
Jim O'Shaughnessy: He had to. Because Peter Drucker, I'm not—I don't—I'm not a big read management books. But one of Peter Drucker's books is great and it's called "Adventures of a Bystander." And it's little vignettes of all the people that he dealt with over his career. And one of my favorites was this Ernest Friedberg who was a merchant banker in London in the thirties. And he had these young pups who were the go-to guys. They were the superstars and he had hired them to run his Friedberg and company. And so they got a chance at this great deal. And it turned out, spoiler alert, the guy was a total fraud. But everyone in the city was investing with this guy. They were just delighted that they got a chance to invest with this guy. And Friedberg sat in the meeting with them and at the end of it they were like, "How much should we put in? Can we do the whole max?" And he goes, "We're not putting a dime in. That guy's a fraud. And frankly, young men, I'm really shocked that you don't know that." And they're taken aback. And they're like, "What do you mean?" And he goes, "That man knew the answer to every question. No honest man does." And later, of course, it turned out that the guy was a total fraud. And so how much of that do you see in your work? Because you're obviously, you're dealing with the right half of the bell curve here. And these are super bright, ambitious people. How do you deal with when you see, "Oh, they've turned—they've logicked themselves into a logic box that they can't escape from"?
Joe Hudson: So that's a great question. There's a couple things. First of all, I solve the problems that people want to solve with them. I help people solve the problems that they think they have, not the ones that I think they have. So what I notice about the human system is that the more we refine, the more sensitive we are, the less that we are willing to accept. So I understand myself a little bit more, therefore, I'm more sensitive, therefore I won't put up with more behaviors. I'm not going to put up with somebody lying to me, or I'm not going to put up with me lying to myself. So typically, I want to meet the person where they are and work on what they want to work on, because their intelligence of where they should go next and what's motivating them is they understand themselves more than I ever can on some level. Just like the Bernie Madoff guy, he knew something. My job is just to get him in touch with that knowing. It isn't to tell him what I know. And so in that process, I don't really care where they're blinding themselves, because I know eventually if they keep on doing the work, they will run into that and go, "Okay, wait, no, this is where I'm—" And sometimes I'll say, "Oh, I noticed that thing over there. My thesis is X, and if I'm right, you'll see Y in the next couple months, years." And then when it happens, there's some trust that's been built in there. "What else do you see?" And so there might be something like that happens, but I don't need that to happen. I'm just interested in following them. And so that's a really big part of the work I do. And then the other piece is that if I see something where they're mentally blocked, I just usually go to one of the other centers. I'll go to the emotions or I'll go to the nervous system. Because the—just like the Madoff guy. Madoff. I can't—but he actually called himself Madoff. I never thought about that.
Jim O'Shaughnessy: Right. I know. I love it. Nightly whiplash.
Joe Hudson: Exactly. I'm John E. Scam artist.
Jim O'Shaughnessy: I'm Joe Jail.
Joe Hudson: Exactly. So the heart knows something in him knew. So I'll just say "Let's not—let's move away from the mind for a second. What is your—let's work on the nervous system. Let's work on the emotions." Because to some degree, if that person knew, he was very smart writing about con men, knew the Madoff thing on some level. Because if he was working on it, most likely the reason he didn't admit it to himself is because he didn't want to have that feeling of being wrong or whatever it is. And so if he had made friends with the feeling of being wrong, if he had said, "Oh, wow, being wrong isn't bad. If I don't resist it, being wrong is a signal. Being wrong is actually something that allows me to have more freedom. If I allow it," then the whole thing wouldn't have happened. So typically that's the other thing is just get some of the other emotional—get some of the other intelligences on board, not just the mental intelligence. I think that the study is something like we get less than 20 bits of information from the brain in a second, but we get 40,000 bits of information from the body that we have, nervous system, brain, many brains in the gut and in the heart. And so there's just—there's other information. And you see it if a professional basketball player isn't thinking when they're playing, there's a whole other way of considering. And so just bring them into that.
Jim O'Shaughnessy: And one of the pioneers in explaining that was a woman named Candace Pert who wrote a book called "Molecules of Emotion." And she basically, she was a biologist, and she identified that when a strong emotion hit us, literally a cascade of neuropeptides go throughout the entire body. And that the challenge, like the Proust quote that I read to you at the beginning of our chat is to wait the 90 seconds for those to clear. And as you put it, just, "Oh, that's an interesting emotion." One of the things that I did was I gave them colors and it was like, "Oh, I'm seeing red. Okay. I wonder why, why am I so pissed off? What could it be?" You know, contentment and happiness was yellow. And I won't go through my entire system. But I definitely think that the tri-part way of looking at it is super important. What do you do for the—with the client who's resistant, who's like, "Yeah, no, you—we're gonna—"
Joe Hudson: I don't work with them.
Jim O'Shaughnessy: Oh, good for you. Okay, great.
Joe Hudson: Yeah, I have X amount of bandwidth. And I'm gonna go where I'm gonna have the biggest impact.
Jim O'Shaughnessy: What's funny is Sarno did the same thing. Because he was a medical doctor. And he was all about, "Okay, here's my thesis, my hypothesis. I want to test it, see what the results are, see if it's confirmed or negated, etc." But then he did something after looking at all of the data over a long period of time. And he made the decision, "I am only going to treat patients who accept that it could be a problem that they're having with emotions rather than a physical problem." And his success rate soared. Because he realized, "Well, wait a minute, I'm not going to change this person if he absolutely just does not believe or is open to this possibility." So I'm happy to hear you say that. That's really smart.
Joe Hudson: There is an exception to that rule, but it's—everybody hits resistance in the path. There's no way that you go through all of the transformation without moments of resistance.
Jim O'Shaughnessy: Sure.
Joe Hudson: And there are—there's also a personality type that I call the "endurer." I am in that personality type where there's usually physical components to them as well. But there's what I would call the endurer personality type, which is "I will win by taking it." So—
Jim O'Shaughnessy: And "I'm gonna die on that hill." Would that be the right metaphor or analogy?
Joe Hudson: The way I'd say their childhood was, "The only way I got to maintain a sense of self is by resisting you. Mom, dad." So they just learned to resist. And part of that is, part of their job is to—that personality structure resists coaching. They need to prove that the coach is wrong. So that even though they might come in and very willing and they're willing to do the work, there's going to be certain places where they dig their heels in and they're just like, "I am not going there." And so I have maybe ten or twelve tools that I'll use with somebody who's in that moment of resistance. But generally all of the tools are to take all the force away to let them see that they're playing the game with themselves, not with me. Or it's like a Chinese thumb lock. You have to—when someone's like this with you have to go the other way. And so somebody who's absolutely won't do it, I'll literally take the other side of it. I'll be like, "You're right, you shouldn't do it. What are you doing? This is a horrible thing," and then they'll resist against the other side because they're just geared to resist. So I'll just take the other side and then they can resist me all they want. And then it takes them to the same—so there's some hacks like that, but generally it's to see that there's a wisdom in what they're—you're trying to maintain a sense of self that you didn't get to maintain as a kid. I'm with you. I want you to have that.
Jim O'Shaughnessy: Yeah. So what was your aha moment when you decided, "You know what, I've done all these cool things in my life now I think I can be a really effective coach." What inspired that?
Joe Hudson: It didn't. That never happened. That moment never happened. What happened was I was a not very good investor.
Jim O'Shaughnessy: Okay.
Joe Hudson: So as a venture capitalist, the number one thing that you have to invest in is great entrepreneurs because everything pivots, everything changes. The markets shift, the technology changes. So you need a great entrepreneur. It's the number one thing. There is no idea so good bad management can't fuck it up. And so you really—and I unfortunately, my psychology was I needed to be needed. And so I was investing in CEOs who needed me, which is horrible. What you really want is those who don't need you at all.
Jim O'Shaughnessy: At all.
Joe Hudson: At all. And who listen but don't need you. That I would say the best CEOs are like, "I'm listening to you, but I don't need you. And there's ten more just like you." That's the—and so I made some investments that weren't so good and the only way out was to coach the CEOs. And so I was looking at all these tools, business tools, marketing and sales that I saw were good but could be even better if they were modes of self-discovery. Meaning if you market to somebody and you give them an epiphany, then they're going to buy from you. If you sell somebody and you make them think about their business differently, they're going to buy from you. So if I feel connected more deeply to myself or you after the end of a conversation, we're more likely to do business together. So all these modes of self-discovery just increase the business tools. They just made them more effective. And so I started teaching my CEOs that and started coaching them and then some of them became successful and all of a sudden there was more people interested in me coaching them than I—and so I started a course like a just a twelve-person CEO course kind of thing. And three months later there was another group of fourteen people who wanted it. And then at some point I was like, "This is just far more my calling, this is, than being a venture capitalist." And so that's how it moved.
Jim O'Shaughnessy: That's very cool because I think a lot of roadblocks are self-imposed. And by that I mean I love hearing you say, "Yeah, no, I was a shitty investor, but I was really good at coaching these CEOs" because one of the things that, and by the way, you're right about that you want to invest—ideas are great, I love ideas. But you gotta love the person who you're putting the money on. Because I can't tell you the number of times when I've got the jockey wrong. I got the right race, I got the right horse, I got the right track conditions, but I had the wrong jockey. It's just like totally you just—when am I ever going to learn this?
Joe Hudson: And the funniest thing is it was the first thing I was told, you know, my mentor was like "Number one, golden rule venture capital. There is no idea so good, bad management can't fuck it up." And it took me another ten years to realize what that meant is it is all about the entrepreneur is all about. And then maybe a little bit of the C-suite after that. But it's really all about that CEO.
Jim O'Shaughnessy: Totally agree. And as I was listening to you though, what I heard you say when you were talking about how you got into coaching and they just were continuing to line up at your door and you're like, "Wow, I'm good at this." I think that obviously a huge part of that is trust. Because I can't—if there's no trust, I don't work.
Joe Hudson: If there's no trust, you can't really. I have—I would take it as far as I am lucky enough in my life where I'm at right now that I will neither hire nor do business with somebody I do not trust even. I mean, honestly, it's like an iron rule of mine now. Because life's too short.
Jim O'Shaughnessy: Yeah.
Joe Hudson: I highly recommend that to someone who's just getting started. Go a lot quicker, a lot farther if you only work with people you trust.
Jim O'Shaughnessy: Let's keep on that for a minute. Let's assume one of our listeners is just getting started out. They're bright, they're ambitious. You know, they have all these things. What other advice would you give or things for them to contemplate to help them avoid a lot of the heartache?
Joe Hudson: Any pattern you have in your business that lasts over three months is a personal, internal pattern. Any negative pattern you have in your business is an internal pattern. And if you work on either the external or the internal, but preferably both at the same time, you have an opportunity to fix your business and to have a better relationship with yourself. That would be one of the things that I would say.
Jim O'Shaughnessy: Yeah.
Joe Hudson: Only work with—in every—the one excuse you never want to make is "I'm not working with somebody great." Because always work with great people. And there'll be a thousand reasons not to. And I don't know any of them that have ever paid off for more than a three or six month run. Any kind of long-term relationship, if you're not with great people, the downside is so tremendous compared to the upside of going through whatever mayhem you have to go through to get that great person and that great person for whatever reason. It is not correlated with how much you have to pay them.
Jim O'Shaughnessy: That—it's so interesting that you say that. That is so true. And it took me forever to figure that out.
Joe Hudson: That's a weird one, isn't it?
Jim O'Shaughnessy: It's really weird.
Joe Hudson: If you pay a lot. There's maybe a higher chance that you can find greatness, but greatness doesn't have to be—it doesn't have to be—
Jim O'Shaughnessy: It's the whole correlation causation thing. There are people who, the incentive structure, Charlie Munger always banged on about that and he was right. You know, if you really want to understand something in business or in life, look at the incentives that are in place. And one of the things that you just pointed out, it's not always money. As a matter of fact, it very rarely is money.
Joe Hudson: Yep. I was just talking to a guy who runs a hedge fund that's growing, and he said, "One of the things about my business is that everybody has the fuck-you number, that when they make it, they're going to leave. And so retaining talent is a challenge." And I said, "I absolutely disagree with you. If your people come to your hedge fund and they feel like they're better people at the end of the year, they'll stay." That they're incentive. If the only way that's true is if their incentive for being there is only money.
Jim O'Shaughnessy: 100% true. And, you know, you can have those—I always point out to people that compounding works both ways. Everyone wants to talk about compounding. I never thought about positively, but you can negatively compound too. You got to think about that side of the equation.
Joe Hudson: Oh, my God.
Jim O'Shaughnessy: So good, because what you said to your hedge fund manager is absolutely true. When I figured that out and would hire people and I still do it at the company today, I would say, "Listen, it'd be great if this turns out to be your bag and you're with us forever. But what I want from you is if you ever do leave here, you leave here in a frame of mind that you didn't have when you joined here. By that, I mean that you learn something here, some insight about yourself or about what drives you or whatever it happens to be." But you're so right. If they're about the number. That's why those things drive me crazy, because they're all over social media. "What's your fuck-you number? What?" Or even "What's the number?" I hate, hate, hate that way of thinking because there is no number in my—at least not for me. I can't—what, I'm gonna golf? My wife would kill me.
Joe Hudson: I don't have a number. I just have the objective of not being killed by my wife. There you go.
Jim O'Shaughnessy: Yeah, I really hate that "I'm still doing this, but my wife would kill me otherwise."
Joe Hudson: Yeah, it's—yeah, I mean there's enough studies that show that autonomy is more important than money, that recognition is more important than money. I think self-development is more important than money for people. I noticed that. I mean our business is not super lucrative. It's not one of the—my personal business is very lucrative. But the course business and all that we do, it makes good money. We get to support people and we get to pay them a good wage. But it's not hedge fund or AI world money. And everybody who works for us is passionate. I mean we just had our quarterly review company-wide all hands and every single person was in tears at some point during that call. And people are deeply grateful that they get to do this work in the world and they get to support what we do. It's—I think everybody, if they didn't have to worry about money and there are actually a couple people who don't have to worry about money who dedicate to this. So it doesn't—I think money is way—money is the surrogate for what we really want.
Jim O'Shaughnessy: Could not agree more. Money's an information system, plain and simple.
Joe Hudson: That's a good way to say it.
Jim O'Shaughnessy: And the people always get the quote wrong. They always say the, you know, "Money is the root of all evil." That's not the quote. The quote is "The love of money is the root of all evil." And I just see it so oftentimes. But when I was still in asset management, I'll tell you, when I got to know my clients, the most successful people I can count on both hands, the number of those clients who told me they did it because they wanted the money. Everyone else, it was "No, I was just—I was obsessed by this. I was passionate about this." It had very little to do with money.
Joe Hudson: Even the people who say that they were doing it for the money, my experience is they weren't. They were doing it to win. They were just passionate about winning and money was how they kept score.
Jim O'Shaughnessy: Yeah.
Joe Hudson: My experience is that the way I tell the story is that I had a girlfriend in college and she was good tennis player and the coach set one of those baskets that you pick up the balls with said "Serve it, hit it" and she hit it maybe two out of five times. And then he took the basket away, put a quarter down in the middle of where the basket was and said, "Serve it, hit it," and she didn't hit the quarter once. And he said, "Yeah, but you would have hit the basket every time." That's great. And money is the basket, the quarter is the passion, the mission, the wanting to win, the beating the competition, whatever it is that drives you. Money is always—if you're aiming for money, you're not going to hit it very often.
Jim O'Shaughnessy: You mentioned your quarterly meeting with all of your teammates. Does it ever get weird when you're dealing with people who are looking at every micro expression you might make?
Joe Hudson: You know, so the number one thing that we teach, so if—it's not on our website, but if somebody's been working with us for a while and they want to coach, we have a way that they can do that. We call it "old students." And the number one rule in old students is that it is your job to get back to unconditional love. And so the work isn't about me being able to read micro expressions. The work is about me being able to love you unconditionally. And so if the micro expressions are for manipulation or to read you or anything like that, and we never teach how to do that. That comes from knowing yourself. If you—you can get it other ways, you can train yourself into it. Or you can have an alcoholic father, and that helps to train you in it because you need to know exactly what's going on with that person. Buddhist monks also happen to be really great with micro expressions because they've just done the inner work. So if you do the inner work, that comes out. So we don't ever teach that. We teach everything as inner work. And the inner work is, "How do I get back to unconditional love? Maybe I have to go get angry. Maybe I have to get sad. Maybe I have to take apart my thoughts. Maybe I have to draw a boundary. Maybe I have to—" There's maybe a thousand things. But my job is, if I am working with you as a client, is to show up in unconditional love.
Jim O'Shaughnessy: That's a really interesting observation about Buddhist monks. I've been to a lot of monasteries. Buddhist monasteries. And the reason I've been to a lot of them is because when I was 27 and visiting Hawaii with my wife, we walked into a Buddhist monastery. And I kid you not, the entire—the vibe, the energy of the place was literally very different. I just relaxed. And I'm like, "Okay, this is pretty cool. I want to know more about that" and what I found. For me, what I found so cool though was just interacting with the monks. We're in Bhutan, same thing. Interacting with the monks, it's just the most energizing experience, at least for me. Because they're always laughing about everything and it's just such a wonderful experience.
Joe Hudson: It's the same in our business. We laugh. In a meeting there's got to be—in an hour meeting there's got to be at least ten to fifteen minutes of laughter.
Jim O'Shaughnessy: Oh, we could get along. Because that—exactly. You know it. If I don't do buttoned up well.
Joe Hudson: Neither do I.
Jim O'Shaughnessy: That lost me a lot of clients to be fair, when I was on Wall Street because it's just like, "Oh come on man." And it gets back to money. It seems to me money is the last taboo. People will tell you all about their sex life and everything else.
Joe Hudson: I have exactly that line. Money is the biggest taboo in our society because they'll tell you how they have sex, but they will not tell you about their credit card debt.
Jim O'Shaughnessy: Yeah. And boy did I learn that. When we still took individual clients we moved to institutional and registered investment advisors. But in the early days of my first company we took directly high net worth individuals. And literally after five years of doing that, I figured out "Oh, my real job here is to be a psychiatrist and psychologist."
Joe Hudson: Oh yeah. Because I won't work with clients like that. Meaning every client that I work with has to have a project that they're actively trying to make happen in the world. So I won't work for—I get regularly I get calls from second generation wealth that are summering in Aspen and wintering and whatever.
Jim O'Shaughnessy: Trustafarians.
Joe Hudson: Yeah. Or I mean maybe they don't have a burning—they don't have something that will drive them through the discomfort.
Jim O'Shaughnessy: See, I have a thesis about that and my thesis about that is that a lot of those kids, their source of wealth is an irrevocable trust and managed by others. And I think the message that is sending that child from the parents is "I don't trust you. I don't trust that you will make good choices." So a lot of that I tease. But there's a serious issue there and that serious issue is that person. Basically the message they're getting from their parents is "We value the money more than we value you."
Joe Hudson: I think that is one of several components to it.
Jim O'Shaughnessy: Yeah.
Joe Hudson: Control.
Jim O'Shaughnessy: Oh yeah.
Joe Hudson: Obviously there's a control. Some of the best I've ever seen. So I've gotten to spend time with multi-generational wealth. One of the best I've ever seen is you get into the—you get to—you get the trust and you get your basically a relatively good standard of living. But if you start a business from scratch that got over X millions of dollars, then you got to control the trust.
Jim O'Shaughnessy: Yeah.
Joe Hudson: So there was an actual avenue to controlling the trust. And then the other thing that I've seen work really well and there's a couple, this is mostly in Europe, but there's a couple families in America that I've seen do it where when the kid hits 25, 27 years old, they follow the eldest of the business, family business, for two years. They don't talk during any meetings, but there's always thirty minutes set aside after the meeting to discuss what happened. So they're actually training them on the part of the business that they're going to be having. Not that—they're training them how to be a great top of a business person which is different than different avenues in the business. And then the next two years they're with the next group of levels in the family and then the next two years and then they start going the other way on it. Does that make sense? Meaning that—
Jim O'Shaughnessy: Yeah, yeah, no, totally.
Joe Hudson: And it's brilliant. I think it's a really brilliant way to keep a family business alive and healthy.
Jim O'Shaughnessy: Yeah. I had a different experience. My uncles who were running the oil company after my grandfather died. Boy, they really wanted me to work for the family business. And I loved my uncle, the guy who was the CEO. But it took me a long time to tell him, "Uncle John, I just am not an oil guy. This whole stock market thing I just find absolutely fascinating because it's the ultimate puzzle to me." And so one of the things that I did was I never encouraged any of my kids to want to be in what I did. Now my son ended up asking for an internship but literally I made it really hard on him. And by that I mean I was like, "Okay, you can work for us, but you have a sell-by date and you're not working for me, you're going to work for this guy over here." And what was interesting about what happened was literally, I don't know, six weeks into it, one of the head of my trading, who my son was doing a lot of work with, came into my office and he's like, "You know, I think he's the best intern we got here. He goes, I don't know if it's a genetic thing or whatever it is, but you got to pay him" because we always paid all of our interns. But I told my son, "No, I'm not paying you." And so, but it was really cool because he ended up being a big part of my business that we ultimately sold. But it was all because that was what he clearly was good at and really wanted to do, etc., but it was the advocacy of the people who he worked for that ultimately they literally came into my office, the president of the company, the head of trading and the head of research came in and they're like, "You said he had a sell-by date. No fucking way. We got to hire him." And I'm like, "Perfect."
Joe Hudson: Yeah, that's the way. The one thing I will say about the families where they teach, the ones that I've seen, they're more like conglomerates. Meaning they're not in a business, they're in multiple businesses.
Jim O'Shaughnessy: Yeah, yeah, it's tricky. Because I tended—I had my radical phase where it was kind of like, you know, I'm not gonna ever encourage my kids to follow my passions because they have—they're gonna have, hopefully if I've done my job, they're going to have their own passions. And it shouldn't even put it that way. "Done my job." Basically if I let them evolve as human beings. When we had our first child, my son, we were 24. And my wife and I talked a lot about what—how do we want to raise our children? And kind of the line that we came up with that really stuck in both of our heads was "We want to raise great adults." And if you want to raise great adults, guess what you can't do? You can't say "Because I said so, because I'm big and you're little, because you live in my house, my rules." You have to engage with them and be like, "Okay, so you want that? Why, why do you want that? What do you hope to achieve from that?" And it just worked better for us. So I think there's lots of—I used to be the guy in Prufrock's "The Love Song of J. Alfred Prufrock" T.S. Eliot. "I will come back, I shall tell you. I will convince you all." And then the other, his respondent says, "That isn't what I meant at all."
Joe Hudson: Exactly. That's right. So, yeah. I feel like the number one job of a parent is to make them—to allow them to know that they're unconditionally loved. And then the second job I have experienced is to teach them how to listen to themselves. I love that. I don't want—I don't want kids who listen to me. I want kids who listen to themselves.
Jim O'Shaughnessy: Yeah. And that was another thing, you know, when you have that kind of desire. It sounds like we have similar—we had similar goals. My kids used to come to me as their own personal Google. I love a lot. And I'm—if I read something, I can pretty much retain it. But rather than tell them, I just, we had a huge library and I just pointed at it and said, "Look it up in there." And what's interesting, they really were unhappy with me when they were children and I did that to them. But all three of my kids all point to that as saying, "Wow, thank you for doing that." Because in the course of looking up that Talleyrand was the French representative at the Congress of Vienna that ended the Napoleonic wars, they learned of all this other cool stuff. And I wonder, what do you think about that? It's a little off coaching, but one of the things that I thought was cool about books and encyclopedias and stuff is you had to wade through a lot of different stuff to get what you were looking for. Now in AI, you can just go, "This is what I want. Give it to me." Do you think that—is there a way to do that in our era?
Joe Hudson: Yeah. So it's an interesting—that's a really great question that I think there's two "listening to yourselves" part. One part is to actually be sensitive to your whole body system. And I think that, and then there's also the wandering, the thing that you learn by wandering and how important wandering is. And I think the tool of AI can help with both and can hurt with both. And just like the tool of social media or the tool of television or the tool of radio, they can educate you. They can expand your brain and they can decrease your capacity. And it's really about how we use them. And eventually everybody figures out a way to use any kind of communication technology to be addictive. So somebody will absolutely figure out how to make an addictive AI. AI, I think, has the first chance of making—so addiction basically runs off of dopamine. Most modern addiction runs off of dopamine. I think that AI has a chance to start working on serotonin and oxytocin and—I think that there's ways that we can interact. I think that if a lot of people had a chance to hang out in that Buddhist monastery a lot, they would. And I think they would pick that over People magazine. And so I think there's a way that AI that's talking to hundreds of millions of people a day now can speak to them potentially. There's a way that potentially that could speak to them the way the Dalai Lama would speak to them, or the way a great coach would, or the way somebody who's spent a lot of time developing their consciousness would. And so I think that we have that ability and I think that has the capacity to be more compelling than the addictive version of AI that is doubtlessly going to be coming.
Jim O'Shaughnessy: 100% on that same page with you. I think that there's a lot of reasons for it, but the military guys say it's dual use. A lot of things are dual use technologies. You can, to be the geeky AI guy for a moment, you can maximize the objective function for revenue, or you can maximize the objective function for human flourishing. And guess what's going to happen? Both are going to exist.
Joe Hudson: I do believe that this may be the first technology where the financial winner is the one that pushes flourishing. I don't think there was a chance to do that for television or radio or Internet or social media, because there wasn't the—you couldn't control the response to that. You can now. So there, I think there's a chance there's a better business case.
Jim O'Shaughnessy: Our entire company, O'Shaughnessy Ventures, is a bet on that point of view. We definitely agree with you. We think that there is, for the first time we have a technology that—what's the old joke about missionaries? They went to do good but did well. I think that this now presents a business model that has never existed in the past. And I 100% agree it can—now I think you're absolutely right saying that most people are going to use it to addict people to it. But I think you can do well and do good at the same time with the whole serotonin model.
Joe Hudson: Yeah, I do. I think that might actually be more compelling than the addictive model. We'll see. Because what I notice is that when people feel connected—if you just look at the—this is what I'd say. You know, the rat park experiments.
Jim O'Shaughnessy: Right.
Joe Hudson: So put a rat by themselves, they'll become addicted. Put a rat in a rat park where they feel connected, where they feel like their needs are met, then they're going to stay in the rat park and they're not going to be addicted. The game is to build the rat park. Build the thing that actually creates the serotonin and the oxytocin and the connection through AI and then that hopefully will be more compelling completely.
Jim O'Shaughnessy: Well, I have a lot of bets hoping that you're right.
Joe Hudson: Great. Thank you for doing that.
Jim O'Shaughnessy: I can't believe—but we've already been talking with each other for an hour and a half here. I find that when time slips away, I'm really grooving with whoever I'm talking to. But now my producers are—they always say, "Jim, God damn it, when you like talking to somebody, we're gonna put somebody in the room with you that pulls you away." But this has been absolutely delightful. Joe, what a pleasure.
Joe Hudson: Pleasure to be with you.
Jim O'Shaughnessy: And for me, we have our traditional final question here. At least I think it's fun. We're going to make you the emperor of the world. But you can't kill anyone and you can't put anyone in a re-education camp. You might be able to put them in that rat park, but no re-education camps. What we are going to do is we're going to hand you a magic microphone. And you can say two things into it that will incept the entire 8.2 billion people on earth for whatever their next morning is. They're going to wake up and they're going to say, "I just had these two great flashes of insight. And unlike all the other times I'm going to actually act on both of these things." What are you going to incept in the world's population?
Joe Hudson: The first one is "Beneath what you think, you are inherently good."
Jim O'Shaughnessy: I love that.
Joe Hudson: To explain that one a bit. I think if when people recognize that they behave in just really beautiful ways. If they really once they really see that and then the second thing would be incept the whole world. "I love my emotions."
Jim O'Shaughnessy: That's great. Wow. I can have to even think about that one for a while.
Joe Hudson: But I like everybody woke up, we're like, "My emotions are awesome." That would change the world really quickly.
Jim O'Shaughnessy: It would. I think you're right. I think you're right. Joe. People can find you in your courses.
Joe Hudson: The best way is to sign up for the mailing list on artofaccomplishment.com because that's going to tell you all the podcasts and the YouTube and the X and all the way there. We have now so many ways to get involved so that we have different ways for people. We have free hour and a half courses so they can taste it. We have smaller courses, bigger courses. We have so much to offer. Multiple newsletters, podcasts, YouTube channels. So the best way is just sign up for the mailing list on the homepage and then you'll get informed of all the other stuff and you get to pick what works for you.
Jim O'Shaughnessy: Fantastic. Joe, thank you so much for coming on. This has been a blast for me.
Joe Hudson: Pleasure.
Jim O'Shaughnessy: Really, really great to meet you and chat.
Joe Hudson: So good to be with you as well.
Jim O'Shaughnessy: Thanks. Bye-bye.
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