248: James Clear On How To Create The Right Habits To Grow Your Business

248: James Clear On How To Create The Right Habits To Grow Your Business

Today I’m thrilled to have my buddy James Clear back on the show. James’ most recent book, Atomic Habits, hit the New York Times bestseller list and the last time I checked, it was the #8 best selling book on all of Amazon.

In today’s episode, we’re going to take it up a level and discuss how to build good habits and break bad ones when it comes to business. We’ll discuss tactics that James has uncovered over the years from studying the habits and routines of entrepreneurs, artists, athletes and high powered individuals.

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What You’ll Learn

  • How to get on the New York Times Bestseller list
  • How to develop the proper habits to follow through on a business idea
  • The best way to start a new habit
  • How to make a habit easy to adopt
  • How to fight procrastination

Other Resources And Books


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Steve: You’re listening to the My Wife Quit Her Job Podcast, the place where I bring on successful bootstrapped business owners and delve deeply into the strategies they use to grow their businesses. Now today I have James Clear on the podcast for the second time. And if you don’t remember James, he is a New York Times bestselling author and an expert on habits. So in this episode, we’re going to talk about developing good habits in the context of growing a successful business.

But before we begin, I want to give a quick shout out to Klaviyo who is a sponsor of the show. Klaviyo is the tool that I use to build real quality customer relationships with my e-commerce store. And because all my transactions and email correspondence is tracked in Klaviyo, I can easily build meaningful customer relationships by listening, understanding, and taking cues from my customers and delivering personalized marketing messages. So for example, with one click of a button, I can easily send a specific and targeted email to all customers with a lifetime value of over 100 bucks who purchased red handkerchiefs in the past year.

And it is for this reason why over 10,000 brands have switched over to Klaviyo. Right now they’re running this cool docuseries called Beyond Black Friday where they discuss successful marketing strategies that their customers are using that you can emulate with your business. So, head on over to Klaviyo.com/beyondbf to check it out, once again that’s K-L-A-V-I-Y-O.com/beyondbf.

I also want to give a shout out to Privy who is also a sponsor of the show. Privy is the tool that I use to build my email list for both my blog and my online store. Now what does Privy do? Well, Privy is an email list growth platform and they manage all of my email capture forms. And I use Privy hand-in-hand with my email marketing provider. Now they’re a bunch of companies out there that will manage your email capture forms, but I like Privy because they specialize in e-commerce. Right now I’m using Privy to display a cool wheel of fortune pop up. Basically a user gives their email for a chance to win valuable prices in our store. And customers love the gamification aspect of this. And when I implemented this form, email signups increased by 131%.

I’m also using their new cart saver pop up feature to recover abandoned carts as well. And bottom line, Privy allows me to turn visitors into email subscribers, which I then feed to my email provider to close the sale. So head on over to Privy.com/Steve and try it for free. And if you decide you need some of the more advanced features, use coupon code MWQHJ for 15% off. Once again, that’s P-R-I-V-Y.com/Steve. Now onto the show.

Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m thrilled to have my buddy James Clear back on the show. And in case you missed him last time, James is on the podcast back in Episode 202, where we broke down his strategies on how to build a blog that gets millions of visits per month. But in today’s episode, we’re going to take it up a level and discuss how to build good habits and break bad ones, tactics that James has uncovered over the years from studying the habits and routines of entrepreneurs, artists, athletes, and high powered individuals. And I’m proud to say that James’s most recent book Atomic Habits has hit the New York Times bestseller list. And at one point, I think he was the number eight best-selling book on all of Amazon. And with that, welcome to the show James. How are you doing today?

James: Yeah, I’m doing well. Thanks so much for having me back. It’s good to talk to you.

Steve: Yeah. So first off congrats on the book.

James: Thank you.

Steve: I’m actually just curious what it takes to hit the New York Times bestseller list these days. Is there a strategy for doing so? Is there a way to game it?

James: So, there are two answers here. So the first answer what does it take? I can only tell you what it took for me. So, the kind of high level was I wrote two articles a week on Jamesclear.com starting in 2012. I did that for like three years and build my platform up and got an audience of I think it was around 200, 250,000 email subscribers around that point after about three years. And I leveraged the size of that platform that audience to get introduced to agents and publishers. And we put together a book proposal that took about three months and pitched it to, I think 17 or 19 publishers, I think it was 19. And I think we got meetings with seven.

So I flew to New York for a week, went and met with all these publishers with my agent. We were lucky; we had a good amount of interest. So we got bids from four and then ended up selecting our favorite one out of the bunch. And then I signed the contract to write the book in a year, became very apparent that I needed more time than that. And so, I went back and asked for an additional year and they very kindly gave it to me. So, it took me two years of writing and research. That was easily the hardest part, like the biggest and the most suffering. I felt like it was really hard to write under contract. I felt like there were a lot of expectations to produce something great. I was really worried that people wouldn’t enjoy it or that the publisher wouldn’t think it was good enough.

I handed that in actually three months late from the extended deadline, so two years and three months of writing and then we spent nine months planning to launch and marketing and prepping and doing interviews and all that stuff, getting the book on the publisher side. They were getting it type set and printed and all that type of thing. And then the book released, the three months before launch, I did 85 interviews in like 10 weeks or 12 weeks, something crazy like that, a bunch of blog posts, emails to my own audience, basically any and every favor I could call in, I was like working on that.

And that culminated with a bunch of exposure on launch day. I was on CBS This Morning and did a TV segment. So just like a ton of marketing push, in addition to trying to write like a really fantastic book. And all of that came together and we had a really great launch week and then ended up hitting the New York Times bestseller list and then we hit it again. So, the first time was we were number five in advice and how to, and then the second time and still right now, it’s number three in business. And so yeah, the book the launch has done really well but that’s what it looked like for me. So that’s the — really and I give that whole process because it was definitely not like a one week thing, I mean it was like…

Steve: Oh, yeah, I know that. I was just kind of curious how many books you actually have to sell. It’s in like the first week, right?

James: Yeah. So they have two different types of lists. The first one is calculated weekly and the second one is calculated monthly. And so we ended up hitting both, so one is based on weekly sales ones based on monthly sales. For weekly sales, it does depend on what category you’re in. So some categories like general nonfiction like memoirs, and things like that, I’m not sure what the numbers are for that. I think they’re actually a little bit lower from what I’ve heard from people, but I don’t know for sure than what you need in like advice and how to, which is the category I was in.

And this gets a little bit to your question of like is there a way to game it or not? Certainly, many people have tried, I was not really interested in doing some of those things that are I guess you would say like on the margin of like, oh, is this allowed or not? Some people, some speakers will try to do things like buy — I won’t name any names but there are people who bought like 10,000 or 20,000 copies and then have them sitting in their garage. And so they’re like they bought the book so that it would look like that number of sales came through during the first week and they could get on the list but they didn’t actually go to readers or anything like that.

So I was like really adamant about every copy we sell needs to go to an actual person, or stuff like you’ll see a lot of speakers will trade their fee for books. So, they’ll say I’ll come talk but if you do it in these three months when I’m prepping for launch then you won’t have to pay me, you can just buy 500 books instead or something like that. So people will try to do stuff like that. There’s some really weird services that you could hire. I don’t actually know if they still exist because I think the New York Times became savvy to them but for a while, people would pay like they’ll pay a service, I don’t know, 10, 20, $30,000, I don’t know how much it was, it was definitely in the tens of thousands.

And that company would have like a bunch of little — they would have people go out to different stores and buy individual copies of books or place individual orders on Amazon. Now, you were really buying like 10,000 copies through that company, but they would have their employees place them all as individual orders. So, they all looked like they were individual people buying and they would spread them out across the country and stuff. And all of that stuff is just like a lot. I mean, first of all, I just don’t know it’s a good way to spend your time or whether it’s ethical or not. But also it’s all just an effort to try to get on the list.

Now some of the bestseller lists like I think USA Today, we hit the New York Times, the Wall Street Journal bestseller list, the USA Today list, Publishers Weekly, the Independent Booksellers list and some of them are strictly based on sales. Like I’m pretty sure the Publishers Weekly list and the USA Today list are like whatever book sells the most copies that’s the number one book. Now the New York Times list is a little bit of a black box. I mean it’s the most elite list to be on and nobody quite knows how it works. But from what I can tell, you as a seller how many copies you need to sell, I think 10,000 is roughly the minimum kind of rule of thumb you’ll hear people throw out.

Now that doesn’t guarantee you’re going to get on because it depends on what week you’re launching and how many copies other books are selling that week. But as a rule of thumb, if you do 10,000 in a week, then that’s kind of the bear in the game. Now, just because you have that many sell does not mean that you’re going to get on the list, and the New York Times will sometimes make an editorial decision and say, this is not the kind of book that we want to have on here. Well, we think that the way you got these sales looks a little suspicious.

And so, like I’ve heard from people who, I heard from one author who sold 4,000 individual copies, and then they had one company that purchased 6,000 copies. So they thought, hey, I sold my 10, like, I should be in the running here. But I think the New York Times looks at that and they think, well, really, you sold like 4,001 because you just had like one big customer that said, yes. And so, if they’re comparing, say that person to somebody else who sold 10,000 individual orders, I think they tend to give the nod to the person who has the more individual readers.

Steve: Interesting.

James: And so, authors love to complain about it because there are a lot of authors that think they should have been on because they had certain number of sales, they didn’t know they got taken off or whatever. And whether that was true or not who knows, because nobody knows exactly what numbers The New York Times is getting each week and how many sales other books made. But once you make it, now I’m like, yeah, it’s great. I love that. I think it’s awesome. So it’s funny to be on the other side.

Steve: I felt comfortable asking that question because I knew you’re not the type of person to game the system.

James: A lot of people do it and I guess you could make an argument for it. If you were like, well, if I get on the list then and my main thing is speaking, like for me, speaking is a small portion of my business, I don’t really do that much of it. But I guess if you were like a full time one, people find ways to rationalize it. They’re like, oh, well, I’ll just buy my way in the list for 20 grand and then I’ll be able to charge more at every speaking event into the future because I can say I’m New York Times bestseller. So I think people rationalize it that way.

But for me, again separate from the ethical considerations which I think are questionable in themselves but could you really be proud of it? I don’t know. Like I mean, I just spent six years building an audience and three years writing a book and planning this launch. I mean, I put everything I possibly had into it. And it felt great to hit the list because there was so much sacrifice before it. But if I knew that I had just gotten there because I wrote a check, I feel like it would be a totally different experience.

Steve: I hear you.

James: And so in a sense, I wouldn’t have wanted to do it anyway, even if I had a good business reason, which I don’t. But even if I did, I feel like it would have taken away from it. So anyway, I’m kind of going on about it. But it’s a little bit of a black box, but I can say that it feels fantastic if it works out in your favor.

Steve: So let’s switch gears a little bit and talk about habits. And what I wanted to do actually was frame our talk in the context of starting or growing a successful business because a lot of my readers and listeners, they start out strong, but they kind of fizzle out in the long run if they don’t see immediate gains. And so, what I was hoping to do actually is maybe use your book as a framework. How does one develop the proper habits to follow through on a business idea until things finally start taking off?

James: Yeah, that’s a great question. So I mean, first of all, just from a high level, I like to think about habits is what I call like the compound interest of self-improvement. And the reason I like that phrase, habits are the same way that money multiplies through compound interest, you save up a little bit, it doesn’t feel like much in the beginning. In many cases, that compound interest curve is like really flat, almost like a plateau and then the hockey stick portion is only years or decades down the line. So it doesn’t feel like much at first, but then you turn around two or five or 10 years later, and it’s like, wow, this really added up. I think habits are kind of like that as well.

The same way that money multiplies through compound interest, the effects of your habits can multiply as you repeat them over time. And on any given day, the same way that saving 10 bucks doesn’t really feel like much, making a choice that’s like 1% better or 1% worse, a little bit improved, a little bit better habit or a little bit worse habit, it doesn’t really feel like much. What’s the difference between eating a burger and fries for lunch, or eating a salad? It’s not really a whole lot on any given day; your body looks the same in the mirror at the end of the night the scale doesn’t really change. But it’s only when you look back five or 10 years later and you’re like, oh wow, that choice of what I ate for lunch really does matter.

And so, this is one of the core philosophies of Atomic Habits, one of the core ideas in the book, this idea of how can we try to find ways to get 1% better each day? And if you can capture those small advantages, if you can master those little habits day in and day out, then you can end up with a really remarkable or powerful result in the long run. And I think that not only applies to our lives, but it certainly applies to our businesses. If you can just try to find a way to get a little bit of a 1% margin for improvement daily in something you do or monthly in the financial state of your business, I mean, that can really add up over the broad span of time.

Steve: And what does that look like in the context of a business? Like what is like a 1% gain or something that you might do? You can talk about your blog, or how you built up an audience for example.

James: Sure. Yeah. So I think the first thing is, you don’t need to do something more than what you’re already doing. You just need to find a way to show up more consistently than you have before. So, in other words, you don’t need to increase the intensity. I’m not saying for then, this is I’m focusing on the very beginning. Now, what’s the first thing I do? Like I’m not saying well, you need to write a radically better blog post, or you need to become massively better at sales calls, or you need to massively improve your skills at writing a sales page. What I am saying though, is let’s find a way to make it easy to show up and do those things more consistently than you’ve done before. So it’s kind of like yeah, you could do the same workout at the gym, but let’s just make sure you miss fewer workouts. So, that’s the first piece.

So in the context of my business, I wrote a new article every Monday and Thursday for the first three years and it was really that consistency, it was really that writing habit that set me on a different trajectory as a writer and an entrepreneur. And that was the thing that made it possible for me to build this audience and get the book deal and so on.

Steve: Okay, so I mean it’s easy to say that right? But how do you make sure you start that schedule? How do you have self-control to do that?

James: Okay, so I want to answer this in two ways, I want to come back to the self-control piece. So, the first part is I like to suggest people utilize what I call the two minute rule. So you take whatever habit you’re trying to build, whatever habit is relevant for your business whether it’s writing blog posts or making podcasts or making sales calls or whatever and scale it down to just the first two minutes. So, read 40 books a year becomes read one page, or call 20 clients every month becomes make one sales call, or do yoga four days a week becomes take out my yoga mat, so whatever the habit is you scale down to just the first two minutes.

Now, sometimes it sounds silly to people because especially with like health examples, I’ll say something like there’s a reader of mine, he end up losing over 100 pounds. And one of the things he did was he went to the gym but he didn’t allow himself to stay for longer than five minutes. It feels like well, that sounds ridiculous, like going to the gym for five minutes isn’t going to get you in shape. But what you realize is that he was mastering the art of showing up and this is a crucial thing about any habit business related or otherwise, a habit must be established before it can be improved.

And so, if you don’t become the type of person who goes to the gym for five minutes, you don’t have a chance to be the type of person who works out for 45 minutes, four days a week, or if you don’t become the type of person who makes one sales call, you don’t have the chance to be the person who makes 20 sales calls every month, month in and month out. And so we’re trying to scale it down to that I guess we call it a gateway habit, the thing that initiates the response. And let me give you maybe another example here. So, I like to refer to these moments as decisive moments, these two minutes that kind of determine the next chunk of time or get you moving in the right direction, get a little bit of momentum.

So for me, there’s a moment every morning where I sit down at my computer and either I open up Evernote and I start working on the next article I’m going to write, or I go to ESPN and I check latest sports news. And what happens in the next hour of my day is really determined by what happens in those like 45 seconds. It’s like if I can master that decisive moment of opening up Evernote and starting to write, then I’ve got a productive hour in front of me. And I think that no matter what your business looks like, they’re going to be four, five, maybe eight or 10 of those decisive moments throughout each day. And if you can just put your energy into mastering that, then you can have a productive day, you can have a more effective time working on your business. So that’s the first lesson master those decisive moments.

The second piece comes back to your question about self-control. And this is I think the common narrative for habits, for productivity, for effectiveness is you just need to want it more, you need to try harder, you need grit and perseverance. You need to work smarter. You need to make sure that you try to optimize things. And certainly working hard is valuable and it’s an important skill. But if you look at some of the research on self-control, and I cover this more in chapter seven of Atomic Habits, a lot of the research will show that the people who exhibit the highest self-control who you look at from the outside and you’re like, wow, they must have a lot of willpower, actually, the thing that distinguishes them from most other folks is that they operate, live and work in an environment that has fewer temptations, so they are able to exhibit more willpower simply because they’re being tempted less.

And I think that that is the lesson to take away from this is what’s the best way to improve my willpower? What’s the best way to make it more likely that I’ll show up and do the right thing each day? It’s not to push harder, or to just try harder or to say work more. The solution, the best lever to pull is to redesign your environment so that you’re tempted less. Put the objects that prompt your good behaviors in more obvious locations, reduce the friction of taking a good task, and put the objects that derail you or distract you in less obvious locations and reduce or increase the friction of doing something unproductive. And we can talk more about that.

Steve: It’s funny because I’m just thinking about all this in the context of raising my kids right now. And we were kind of picking and choosing our kids’ friends based on like both their personality and their work ethic because we want our kids to hang out with those other kids who are trying really hard hoping that it’ll just kind of rub off on them really. It means, it’s the environment that they’re in.

James: That’s actually a brilliant strategy because children are master imitators which anybody who has a two year old can tell you that, right? Like you say a cuss word and then they pick it up instantly, even if you don’t want them to, or they imitate whatever you do. But as children age, they continue to imitate but they tend to stop imitating their parents as much and start imitating their peers much more. And so there’s a great book called The Nurture Assumption by Judith Rich Harris that talks about the influence of peer groups on how children grow up.

And parents have a significant influence too, but that influence is largely genetic, it’s largely passed down through the genes. But the way that parents can influence, one of the best levers they can use to influence their children is by choosing what city you live in, where you go to school, what extracurricular you’re a part of, in other words, choosing what other kids they get exposed to. And so, your strategy there of trying to pick their friends by what their friends’ habits are is a smart one. We pick up all kinds of habits from the people around us, and often we want to do the things that our peers are doing. And so that’s a good way for parents to subtly shape or at least influence in a little way the habits of their kids. You can’t control it totally, but that’s actually probably more effective than trying to force them to do something you want.

Steve: But you’re not always going to be in the ideal environment, right. So there’s got to be a little bit more to this.

James: Yeah, absolutely. So in the book, I offer four different strategies for building good habits and breaking bad ones. And I’ll just go over real quickly here. There are tons of examples in the book of course, but we can go over a few of them as they relate to business in this conversation. But before I do, I’ll just say that not all four of these will always be working for you. And so, you can really look at them as like a toolbox or a set of strategies that you can rely on. And when one thing isn’t working in your favor, maybe you pull on the other three levers, and that’s enough to get you to do the more productive or more effective action.

Steve: Let me cut just a little bit. One common thing, at least that I have a problem with is procrastination.

James: Yeah. So, let me give you all — let me give these four and I’ll give you some examples related to procrastination. And procrastination is a really broad topic, right? Like, there’s a million ways you could procrastinate, but I’ll just go over some common ones. So, the four stages that I like to break a habit into, and again, this is all in detail in the book. But just real quickly, I break a habit…

Steve: Better to hear it from you the man himself.

James: Sure, yeah, yeah. Well, so cue, craving, response, reward, these are the four stages. So, there’s some kind of cue that precedes the habit, which is like a prompt that gets you to pay attention to what’s going on, something that’s happening in your environment. There’s a cue that picks up your attention. I’ll give you an example in a second. Second, there’s a craving there’s some kind of interest rotation of that cue, what it means. And based on what you think it means, you take a particular action. So that’s the response, which is the third stage. And then finally, your action delivers some kind of result. There’s some type of reward or consequence that comes after that.

So for example, let’s say you walk into the kitchen and you see a loaf of bread on the counter, it’s in the morning, so the loaf of bread, visual cue, so that’s first stage. Your prediction is, oh, I want to make some toast or that would be tasty. And so you take out a piece of bread, put in the toaster, that’s the response, pops up a minute later, you get the toast, you get to eat it. That’s the reward. Okay so cue, craving response, reward. No you can just as easily imagine that at a different time say, 10 minutes later after you’ve eaten breakfast, you walk back into the kitchen and you see that loaf of bread.

And now the cue has a different meaning, your state has changed, you’re full instead of hungry, and so you interpret that cue in a different way. Now your craving is not there, it’s not existing, interpreted as so there’s the bread but I’m not hungry now. And so you don’t take the same response. So, this type of thing is happening all day long. We’re taking in cues; we’re making predictions about what to do next, or taking action, and then getting some kind of outcome or result. So, from those four stages, we can have a step for each stage for making it easier to build good habits and harder to fall into bad ones. So, I call these the Four Laws of behavior change.

And the first law is to make it obvious. So you want the cues of your good habits to be obvious and available and visible. The second laws to make it attractive, the more attractive a habit is, the more likely you’ll fall into it and perform it. The third law is make it easy. So the more easy, frictionless, convenient a behavior is, the more likely you are to do it. And the fourth law related to reward is make it satisfying. The more satisfying and enjoyable an experience is, the more you want to repeat it again in the future. And if you want to — so those four make it obvious, make it attractive, make it easy, make it satisfying explain how to build a good habit.

And if you want to break a bad habit, you just invert them. So rather than make the cues obvious, you want to make it invisible, make it unattractive, make it difficult, make it unsatisfying. And so, let’s go through a couple of examples of what this looks like for procrastination since you mentioned that.

Steve: Real quick though, making something attractive, the thing here is a lot of what’s involved in creating a business kind of sucks, right? It’s boring. So I’m kind of curious, maybe once you address the procrastination question, how do you make something that’s really mundane and boring, attractive?

James: Yeah, it’s a great question. Well, so I’ll just answer that right now then we come back to procrastination is a larger topic. So, make it attractive, there are a couple of different things that influenced this. So first of all, let me answer and I’ll give you a quick tactic before I talk about the kind of the overarching thought here. So, quick tactic for making something more attractive, you can use the strategy that’s called temptation bundling. And so, the idea is you stack something you want to do, something you enjoy doing with the thing that you know you need to do.

So, one of the examples I give in the book, there’s this guy, he was an engineering student, and he knew that he needed to be exercising more but he also knew that he liked watching Netflix and probably liked it too much. And so, he linked up his computer to a stationary bike so that Netflix would pause if the bike was not running. So happy cycling the whole time if you want to watch a 30 minute show or something. And that’s a good way of forcing yourself to do the unattractive thing or making the unattractive thing which in this case was cycling more attractive because it meant hey, now I get to watch Netflix.

And you can do that with a bunch of things like if you are really bad with your email inbox and you feel like you never focus on that. I heard of a woman who she only gets a pedicure if she works on overdue emails while she’s getting it. So like reward yourself by doing the thing you don’t want to do. Another one, Katie Milkman, who’s the researcher at the Wharton School, University of Pennsylvania, she was the one who came up with this name temptation bundling. And she realized that she really wanted to read The Hunger Games. She got like really obsessed with the book series when it came out. And so she made a rule for herself where she was only allowed to read The Hunger Games while she was on the treadmill at the gym.

And so, those kinds of strategies are ways to make the unattractive thing more attractive. And you can do that in different ways. Like the one that’s real, I think some habits that are really good; this is really good for what I would call habits of avoidance, so things like don’t drink alcohol for 30 days, or don’t spend money on Amazon, or don’t go out to eat and stay at home and make a meal instead. And habits like that are inherently difficult, because you’re just resisting temptation. It’s like all you’re doing is not doing something and so that doesn’t feel good. You just have to sit with this craving. But you can flip it on its head a little bit.

And so one of my readers, he and his wife, they wanted to eat out less and save money by cooking more. And so normally they’re just resisting the temptation to go to dinner to go out to eat at the restaurant. But instead, what they did was they set up a little savings account and they labeled it trip to Europe. And then anytime they stayed home and cooked dinner instead of going out to the restaurant, they would transfer $50 over to the savings account. And so, they still had to put the work in of cooking the meal, but they got the immediate enjoyment of seeing the savings account grow. And that’s really the ultimate lesson that I’m sharing here with this temptation bundling strategy is how can you give yourself a little bit of an immediate enjoyment from something else while you’re doing the difficult thing.

And so, there obviously this depends on what is enjoyable to you. But like from a business standpoint, there was someone that I worked with who he hated taking these meetings, these calls, and he really just didn’t like being inside all day, he didn’t like being hunched over to his desk. And so he changed it so that he only took meetings while going on a walk through the park that was near his office. And so taking a meeting meant he got to go outside and go for a walk. And it can be in large or small ways, but anytime you get an immediate bit of satisfaction and enjoyment with it, suddenly the unattractive thing becomes a little more attractive.

Steve: I just wanted to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in e-commerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online. Now, this course is free and can be obtained at Mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s my Mywifequitherjob.com/free. Now back to the show.

I’m just looking back in my childhood right now and I think my mom did this to me. I really hated piano, I hated it. But she would take me to ice cream after every single piano lesson. And after a while, I started looking forward to them just for the ice cream.

James: Yeah, playing piano meant getting ice cream.

Steve: Yes.

James: It’s like reframed what that cue or what that habit meant in your mind. That’s really smart.

Steve: My parents were good.

James: Yeah, so that’s one way to think about how to make it attractive. But there’s a broader conversation here, which I think is really important for entrepreneurs, certainly it was very important in my business kind of narrative and story, which is that the social environment really changes what habits are attractive to us and which ones are unattractive. Like when I was a kid, and I don’t know that any kid grows up thinking, wow, I’d really like to think more about email funnels and like workflows thing.

No kid is thinking that, but now it’s kind of exciting and interesting to me. And part of that is because my skills have improved. But another big part of it is that I get rewarded for having a big email list, and not just like financially with the business, but also people will praise you for it or congratulate you on it or ask you, how did you do that? That’s interesting, how did you grow that? And all those social signals increase the attractiveness of thinking about the conversion rate and how I design forms and how can I improve this a little bit more.

And so, my point is the thing that we’re rewarded for, the thing that we get little markers of social status for or respect from others for naturally becomes more attractive and that is dependent on not only on your results, but also on the group or tribe that you’re a part of. Like I could be around a bunch of people, like people I went to some of my friends from college or things like that, they don’t think about email list, they don’t know about it, they don’t care about it. And so, in that group, I can throw out a number and they’re like, well great, I guess that’s good for you but it doesn’t mean anything; it doesn’t have any status associated with it.

And so, it would be less attractive for me to work on those things when I’m hanging around that group. We hang out for other reasons, but it’s not as important there because I’m not as rewarded for it. And so…

Steve: So that kind of just circles back to your environment point that you made earlier.

James: Yes. But earlier, when I was giving examples, I was talking mostly about the physical environment. And this, I would say is mostly about the social environment, and both are crucial factors for building better habits. So, let me come back to the procrastination question you asked and I’ll give some physical environment examples. But just to wrap up the social environment idea, we are all part of multiple tribes. Some of those tribes are large, like what it means to be American, or what it means to be French, or Australian. And some of them are small, like what it means to be a neighbor on your street, or a member of your local CrossFit gym, or a volunteer at the local school.

And all of those tribes, large and small, have a set of shared expectations for how you act as a member of that tribe. And you can see this in people’s habits all over, all day long. So, you walk onto an elevator and you’re in this little tribe of like three people. And the expectation is you turn around to face the front, if you face the back of the elevator it’s a little weird, it’s not what people are expecting. Or you go to a job interview and maybe there are four people interviewing you, and you’re sitting there and the expectation is you’re going to wear a suit and a tie or a dress or something nice. Now, it doesn’t have to be that way, you could face the back of the elevator, or you could wear a bathing suit to a job interview. But we don’t do that, because it violates the shared expectations of the group.

And so, the point here is that when habits go with the grain of the tribe that you’re in, they’re very attractive. And when they go against the grain of the tribe that you’re in, they’re very unattractive. And so one way to kind of hack your habits or to increase the odds that you’ll do the thing you want to do is to join a group where your desired behavior is the normal behavior, because if its normal in that group, then it will become attractive for you to do it because doing so helps you fit in. And this was huge for me as an entrepreneur because I did not have any entrepreneurs in my family and really didn’t have any close friends who were entrepreneurs either. I kind of vaguely knew that some people run businesses but I didn’t have anybody to look to.

And so, for the first like three to six months that I started out, I just emailed a ton of people well over 100 that were already doing the kind of thing that I wanted to do, but they were already full time. And I just asked if they wanted to chat on Skype. And most of them said no, but I would say like, maybe 30 or so said yes. And so, by the time I got six months in, now I had a few dozen people that if I had a problem, or if I was dealing with — had an idea, I could go to them with the questions I had. And I could also see what like what are they doing normally, what are their habits daily? And I didn’t have to consciously ask that question, right? You just kind of soak it up as you’re part of a tribe, as you’re part of a group, you see what everybody else around you is doing. And then you start to imitate and do those things because that’s the normal thing to do there.

You see this all the time, people jumping like across the gym, and then they start to eat paleo and they buy a certain type of knee sleeves and a certain brand of workout shoes, and they’re picking up all these other habits that they never really thought about doing but that’s just what people do in that particular tribe.

Steve: Yeah, in the context of business then, that’s why it’s key to go to conferences and events where you can meet other likeminded entrepreneurs. At least that’s how I started taking off in my business. It started when I started going to events.

James: 100%, and so I did those Skype calls. Then I went to my first conference about six months in. And what was really nice for me in that case was that I already knew like maybe 10 people from those Skype chats and those emails that were going to be there. And so I didn’t go in cold. I had like a couple people I can hang out with or talk to at least, which was nice. And then of course, I met a bunch of other people from those conferences. So, I did some conferences for the first two or three years, and then the last couple of years I’ve started to host my own events which are small usually like eight people or so. But it’s a really great high touch way to see, soak up all of that kind of implicit knowledge that everybody else has about what they do and why they do it and all that type of thing.

But the overarching point there is, no matter what habit you’re trying to build, the habits that are normal within your tribe will be attracted to you, because they help you fit in, they help you belong. And we all have a deep desire to belong.

Steve: So James, I don’t mean to skip around, but this question just kind of popped into my mind also. One thing that I see among people who are just kind of starting out in business is they’re looking for quick wins. And oftentimes, the payoff is like many years later, but it’s painful for those many years, right? You got to get used to what I call like the suck. So how — if you’re not getting immediate gratification, how do you train yourself to kind of persist?

James: Yeah, that’s such a great question. And it’s really it’s not just business, I mean, it’s central to all habits, right? There’s kind of this plateau in the beginning. So the analogy that I like to use, the metaphor that I like to bring up is the story of an ice cube. So, say you’re in a room and the room is cold, it’s like 25 degrees, ice cube sitting on the table and you can see your breath and slowly the temperature starts to increase 26, 27, 28, 29, still this ice cube is sitting there like nothing’s changed 30, 31, and then all of a sudden you get to 32 degrees and you hit this phase transition, the ice cube begins to melt.

There is one degree shift, no different than all the other one degree shifts that came before it but suddenly something new happens. And I think that in many cases, the process of achieving a change or building a business, it’s like that because you’re stuck on this plateau of latent potential early on, you’re putting work in, your banking reps and effort and time and energy and you don’t really have anything to show for it. The ice cube still hasn’t melted. But if you’re willing to stick with it, then you hit this phase transition. And so the question that you had is like, well, how do you get through that period?

I think first of all, just knowing that it happens is helpful. It helps reset your expectations a little bit, because a lot of the time we think that progress should be linear, that we put a little bit of work in and we get a little bit of results. So if we put a lot of work in, we’ll get a lot of results. But actually, it’s not this like 45 degree angle linear progression. It’s more like that hockey stick or compound curve that I mentioned before, where you’re kind of stuck on this plateau for a while, and all the greatest gains are delayed. So that’s the first thing.

The second thing though, I think that this is one of the reasons that small habits really matter, perhaps the deeper purpose why they matter, which is they reinforce a particular type of identity, they reinforce being a certain kind of person. And so, like in the book, I use this phrase, the goal is not to run a marathon; the goal is to become a runner. The goal is not to write a book, the goal is to become a writer. And I think we could say that about entrepreneurship as well. Like the goal is not to build a business, the goal is to become an entrepreneur, to be that kind of person, to be a creator, or to be financially independent or to have that identity.

And I think the way to foster that identity is through small wins, through small habits on a daily basis. And so in a sense, every action you take is kind of like a vote for the type of person you want to become. It’s like you’re these little habits, or how you embody up being a particular type of person, or having a particular type of identity. So, every day that you make your bed, you embody the identity of someone who’s clean and organized, or each time that you write one sentence, you embody the identity of someone who is a writer, or every time you make a sales call, you embody the identity of someone who is good at selling. And so, on any given day, those little actions don’t count for very much, but each time you do them, it’s like casting a vote, building up a little mound of evidence that this is who I am.

And I think that ultimately, true behavior changes identity change because it’s like it’s one thing to say I want this, I want a million dollar business, I want to have a best-selling book, I want to have a popular blog, but it’s something very different to say I am this, I am an author, I am a blogger, I am an entrepreneur. Because once you believe that about yourself, you really aren’t even pursuing behavior change anymore. You’re just acting in alignment with the type of person that you already believe that you are. And so, I think the way to get through those, to get through the suck as you call it, to get through those periods where it’s really difficult and you don’t have the results that you want is to focus on fostering that identity.

Even if you’re not happy with how your body looks, and you still want to lose weight and all you could do after a long day of travel was five pushups before you collapsed on the bed, well, maybe that’s not the result you want. Maybe you’re still in the suck from that standpoint, but you did those five pushups and at least you’re the type of person who doesn’t miss workouts. At least you’re the type of person who foster that identity. And I think that on the hard days in business, that’s what I try to remind myself of like how can I show up and cast a vote for the desired identity even if the results are still long in the future.

Steve: So, it means you just try to show up, even if showing up in this particular case isn’t spending a lot of time or whatever, you’re just out of habit working on your business, even if it’s not a whole lot at that given moment?

James: You’re trying to cast a vote for being the type of person that you want to be, rather than worrying about what the results are in that moment. And I think that there are all kinds of ways that you can show up in small ways, and I think we all either have done this or know someone who does this where you waste time on frivolous things. You just like putter around and do a bunch of little things that don’t make much difference and that’s different than what I’m talking about, that feels like a waste of time. But what I’m talking about is taking a small action that reinforces your desired identity, the long term identity of you or your business that you want to foster and the type of person you want to become.

Steve: It sounds like step one is to actually figure out what that is right?

James: I think so. And that’s what I talk about in chapter two of the book. I think it’s a very central question to ask yourself. Now, the good news is, I don’t think it needs to be that hard. I think most people know, they may not — questions like what identity do you want? Or what are your values? Those are like big questions and sometimes they’re hard to answer. But I think most people do know what kind of results they want. So you can just say, well, do you want to — maybe you want to lose 40 pounds in six months, or maybe you want to double your income this year, or something like that.

And once you get a pretty clear picture of the result that you want, then you can sort of reverse engineer it and ask yourself, well, who is the type of person that could lose 40 pounds? Well, maybe it’s the type of person who doesn’t miss workouts. Or who’s the type of person that could double their income? Well, maybe it’s the type of person who creates one new product each month or something like that. And once you reverse engineer the outcome, and ask yourself that question, who is the type of person that could achieve that, then you become a little more clear on what that identity might be.

Steve: Like if I want to become a New York Times bestselling author, I would probably follow in your footsteps and then set aside time to write two days a week and be consistent about that for three years, for example?

James: That’s a great example of scaling it down. It is like, who is the type of person that could write a New York Times bestseller? Well, it might be the type of person that has a really big email list, like hundreds of thousands of people that they could tell about the book when it comes out. Okay, well, who is the type of person that could have an email list of 500,000 people? Well, maybe it’s the type of person that writes every week. And so then that becomes the identity that you’re trying to build. I just want to be the type of person who writes every week.

And that line of questioning I think leads you more — it leads you a little bit away — what it does is it clarifies the fact that your outcomes in life are a lagging measure of your habits, right? The number of email subscribers I have is a lagging measure of my writing habit, and your weight is a lagging measure of your eating habits, your bank account is a lagging measure of your financial habits, you’re really just trying to figure out who, how do I need to show up each day to get that long term outcome that I’m looking for?

Steve: Right. And then adopting the little detailed habits of that individual to get what you want, or in the case of writing a book, the writing part is just one little habit, and all these little habits that you do if we were to delve deeper into your life James, all that add up to where you are today.

James: Right. And the things that we were talking about earlier, like optimizing your environment, or choosing the right tribe, or tweaking little elements of that, the two minute rule and scaling it down, all of those are strategies for building those habits that surround that core identity of I want to be the type of person who writes every week.

Steve: Right. James, I think that’s actually a good point to conclude this interview because we’ve already been chatting for quite a while. Where can people find more about your book? Where can they get it?

James: Yeah, thanks so much for chatting, I enjoyed the conversation. So, the book is called Atomic Habits and you can get it at Atomichabits.com. And on that page, I have a couple like bonus downloads and stuff too. There’s a guide on how to apply the ideas to parenting, a guide on how to apply the ideas to business. There’s a cheat sheet for kind of the core ideas in the book and just kind of like a one pager you can look at and review a template for tracking your habits. Anyway, so all of that is at Atomichabits.com.

Steve: What’s funny about this is just our little chat today has kind of reinforced my parenting style a little bit because I’ve been pushing my kids hard because I want to get into the habit of feeling like they’re smart and at the top of their class. And I talked to certain people and they think I’m crazy, but maybe that just means I need to change my environment a little bit.

James: Nice. Well, congratulations. I’m glad that habits are on top of mind and important for you. I think there’s something all parents should think about deeply and really all people. I mean, they impact all of our lives.

Steve: And just for the benefit of listeners here, I’ve actually read James’ book and it’s excellent. And I was just kind of playing dumb in the interview today because I want to highlight some of the key points that resonated with me. But thanks a lot James for coming on the show. I really appreciate your time.

James: Wonderful. Thanks Steve.

Steve: All right. Take care.

Hope you enjoyed that episode. Now when it comes to being successful in business, consistency is the key and the concepts that James talked about in this episode will allow you to make your business part of your routine. For more information about this episode, go to Mywifequitherjob.com/episode248.

And once again, I want to thank Privy for sponsoring this episode. Privy is the email capture provider that I personally use to turn visitors into email subscribers. They offer email capture, exit intent, and site targeting tools to make it super simple as well. And I like Privy because it’s so powerful and you can basically trigger custom pop-ups for any primer that is closely tied to your ecommerce store. Now, if you want to give it a try, it is free. So, head on over to Privy.com/Steve, once again, that’s P-R-I-V-Y.com/Steve.

I also want to thank Klaviyo which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned cart sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So head on over to Mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s Mywifequitherjob.com/K-L-A-V-I-Y-O.

Now I talk about how I use these tools on my blog, and if you’re interested in starting your own e-commerce store, head on over to mywifequitherjob.com and sign up for my free six-day mini course. Just type in your email and I’ll send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job Podcast where we’re giving the courage people need to start their own online business. For more information, visit Steve’s blog at www.Mywifequitherjob.com.

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One thought on “248: James Clear On How To Create The Right Habits To Grow Your Business”

  1. David Crabill says:

    There were so many great examples and metaphors in this episode. I especially liked the metaphor about the ice cube, and how that relates to seeing progress in business. Also, I liked the discussion about surrounding yourself in environments where people reward you (through recognition) for doing the things you want to do… for instance, in my family, there are almost no entrepreneurs, so for many years I had no support in my business. Joining online communities and going to conferences could have changed that, but I didn’t know how important it was.

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