Principle one: Look for messy jobs.

Principle two: Be wary of work from home.

Principle three: Be proficient with AI tools.

Principle four: Work in the biomedical sector.

Principle five: Run experiments.

Principle six: Gather data.

Principle seven: Get a hands-on job in the energy sector.

Even if a hundred thousand people attend a wedding, the marriage is ultimately between two people.

No matter how many people surround you, the deepest relationship is ultimately between you and God.

పెళ్లికి లక్ష మంది హాజరైనా, పెళ్లి జరిగేది ఇద్దరికే. నీ చుట్టూ ఎందరున్నా, అసలైన సంబంధం ఉండేది నీకూ దేవునికీ మధ్యనే.

— Sadhguru Subrahmanyam

धर्माधर्मौ सुखं दुःखं मानसानि न ते बिभो ।
न कर्ताऽसि न भोक्ताऽसि मुक्त एवाऽसि सर्वदा ॥ ६ ॥

dharmādharmau sukhaṃ duḥkhaṃ mānasāni na te bibho |
na kartā’si na bhoktā’si mukta evā’si sarvadā || 6 ||

Righteousness and unrighteousness, pleasure and pain are purely of the mind and are no concern of yours. You are neither the doer nor the reaper of the consequences, so you are always free (liberated). ||chapter 1, Verse 6||

You are an integral and indivisible part of the Totality viz., the Absolute Self and all action which appears to have been done by you, emanate from the Totality. In the vast ocean, each wave thinks that it is rising up by its own power and competes with other waves. It is a wrong notion. The wave is moved by the energy of the entire ocean and is only a witness of its rise and fall. We are all the waves of the ocean of the Infinite Consciousness. The body-mind complex is an imagination of the mind just like the bodies seen in a dream. All the activities done by the body are categorised as virtuous or sinful by the mind based on its conditioning. The virtuous acts or sinful acts are supposed to result in joy or sorrow. When once we realise that we are not the doers, we cannot also experience the results of the acts. Thus, as the results of the actions cannot bind us, the Infinite Reality, we are always free and ever liberated. It is the acts done in one birth that bind us so that we have to take birth again and again to reap the fruits of the actions. When once we disclaim the body-mind complex as ours and thus the doership, we can never be subject to birth and death. We remain ever free.

OpenRouter data (August 10):

· Agentic tokens: 7.3 trillion weekly. · Human tokens: 1.4 trillion.

Agents use 5x more tokens. They’ve grown 14x since February.

Why? Over 85% of agentic tokens are cached. Load once. Iterate. Never restart.

Cheaper per cycle. But memory is now the bottleneck—not compute.

Meanwhile, the median enterprise doubled output. The top decile? 17x. In tech, 32.5x.

Legal workers? 108x Codex adoption since February.

Zapier, Make, N8N—down double-digits. Gumloop, AI-native—up.

Agents didn’t enhance your workflow tools. They replaced them.

The gap isn’t between early and late adopters anymore. It’s between those building for agents and those still building for chat.

Source: a16z Charts of the Week – Winds of Thematic Change at https://www.a16z.news/p/charts-of-the-week-winds-of-thematic

1. Understand the System: Read the manual. Read everything in Depth. Know the Fundamentals. Know the road map. Understand your tools. Look up the details
2. Make it Fail: Do it Again. Start at the Beginning. Stimulate the Failure. Don’t Simulate the Failure. Find the uncontrolled condition that makes it intermittent. Record everything and find the signature of intermittent bugs. Don’t trust Statistics too much. Know that “that” can happen. Never throw away a Debugging tool.
3. Quit Thinking and Look: Get Data First. Don’t just do Complicated repairs based on guess game. See the Failure. See the Details. Build Instrumentation in. Add Instrumentation on. Don’t be afraid to Dive-in. Watch out for Heisenberg. Guess only to focus the Search.
4. Divide and Conquer: Narrow the Search with successive Approximation. Get the Range. Determine which side of the Bug you are on. Use Easy-to-use test patterns. Start with the Bad. Fix the bugs you know about. Fix the noise first.
5. Change One Thing at a Time: Isolate the key factor. Grab the brass bar with both hands (i.e., understand what’s wrong before fixing). Change one test at a time. Compare it with a good one. Determine what you changed since the last time it worked.
6. Keep an Audit Trail: Write down what you did in what order and what happened as a result. Understand that any detail could be the important one. Correlate Events. Understand that audit trails for design are also good for testing. Write it Down!
7. Check the Plug: Question your assumptions. Start at the Beginning. Test the Tool.
8. Get a Fresh View: Ask for Fresh Insights (aka explaining the problem to a mannequin/dummy). Tap expertise. Listen to the voice of Experience. Know that help is all around you. Don’t be Proud. Report symptoms (not theories). Realize that you don’t have to be Sure.
9. If you don’t Fix it, it Ain’t Fixed: Check that it’s actually/really fixed. Check that it’s really your fix that fixed it. Know that it never just goes away by itself. Fix the Cause. And, fix the Process.

1. Everyone belongs to a tribe and underestimates how influential that tribe is on their thinking.

2. What people present to the world is a tiny fraction of what’s going on inside their head.

3. Prediction is about probability and putting the odds of success in your favor. But observers mostly judge you in binary terms, right or wrong.

4. We are extrapolating machines in a world where nothing too good or too bad lasts indefinitely.

5. There are limits to our sanity. Optimism and pessimism always overshoot because the only way to know the boundaries of either is to go a little bit past them.

6. Ignoring that people who think about the world in unique ways you like also think about the world in unique ways you won’t like.

7. We are pushed toward maximizing efficiency in a way that leaves no room for error, despite room for error being the most important factor of long-term success.

8. The best story wins.

9. We are swayed by complexity when simplicity is the real mark of intelligence and understanding.

10. Your willingness to believe a prediction is influenced by how much you want or need that prediction to be true.

11. It’s hard to empathize with other people’s beliefs if they’ve experienced parts of the world you have not.

12. An innocent denial of your own flaws, caused by the ability to justify your mistakes in your own head in a way you can’t do for others.

13. An underappreciation for how small things compound into extraordinary things.

14. The gap between knowing what to do and actually getting people to do it can be enormous.

15. We’re bad at imagining how change will feel because there’s no context in dreams.

16. We are blind to how fragile the world is due to a poor understanding of rare events.

17. The inability to accept hassle, nonsense, and inefficiency frustrates people who can’t accept how the world works.

Family Treasure

1. Get a blank book

2. Ask each family member over 50 to write down life advice that their descendants in 500 yrs should know

3. Keep passing it down

4. You now have a family treasure that gets more useful over time.

Airplane Mode Hack

• “If you’re stuck on an annoying call, put your phone on airplane mode instead of hanging up.

• The other person sees “call failed” instead of “call ended”.

Reframing Your Day

• “Instead of feeling that you lost the day after a bad morning,

• Reframe each day as 4 quarters:

• morning

• midday

• afternoon

• evening

• If you blow one quarter, just get back on track for the next one.

Fail small, not big - Gretchen Rubin

Keeping your Cool

• “If someone insults you during a meeting, pretend like you didn’t hear them the first time.Politely ask them to repeat themselves. They’ll either repeat the insult and look rude or realize their mistake and apologize.”

Venting at Work

• Be careful who you vent to at work. Just because they listen, it doesn’t mean that they are your friend or have your best interests at heart.

If you ever want software online for free, don’t search for “free”.

• Search for “open source” to avoid limited trial versions and malware.

“e.g.” and “i.e.” are not the same

• e.g. = for example

• i.e. = in other words

Email Address Hack

• Add “+1”, “+2” before the @ in your email address

• Websites will register it as a new email, but still send mail to your normal address.

• Makes organizing accounts or free trials easy.

Example:

Primary: pavanyara@gmail(dot)com

pavanyara+1@gmail(dot)com

On Arguments

• “What proof would it take to change your mind?”. If they can’t give you an answer, then stop wasting your time.

Anger and Mistakes

• “Getting angry at people for making mistakes doesn’t teach them not to make mistakes. It teaches them to hide their mistakes.”

• Society is addicted to expectations, our emotional well-being is at risk if we always attach success to results
• Reflecting on his book, Think like a Monk, he prioritized and valued the shared effort put into it, you can’t control the result from there

• Lesson #2: You can’t always find joy and happiness but you can always find meaning and service

• “When you feel like you’re a part of the solution, the problem affects you less. When you’re trying to heal and help others, you heal yourself in the process.” – Jay Shetty

• There is a toxic positivity movement – everything is not always fine, solutions can require struggle

• Lesson #3: Remind yourself of the gifts brought by terrible situations (like Covid and quarantine)

• Jay reflects on his inability to travel and do various activities with his loved ones because of the pandemic. But during this period, he found that the absence of a busy life actually made his relationships deeper

• Lesson #4: We have to learn to celebrate people while they are alive

• Never opt out of an opportunity to say you love or miss your closest relationships – you’ll never regret it

• Always know where you stand with your loved ones

• Don’t let milestones dictate your outflow of love – don’t reserve personal communication

• Lesson #5: Look at how we are controlled by fear

• “If we’re controlled by fear, we’re in the mode of ignorance” – Jay Shetty
• Setting a goal alleviates the fear of failure; it helps you celebrate incremental success

• Lesson #6: Digital friendships can go deeper than you think

• Shared goals and passions can overpower boundaries set by physical distance

• Lesson #7: Anything can be done in 48 hours

• If you truly want something to happen, you will make it happen

• Lesson #8: There’s never a better time to learn than when you’re not sure what’s going on

• Therapy helps you make sense of your past and coaching helps you build your future

• Lesson #9: When you don’t get what you want, you get more of what you need

• When you’re too attached to what you want, you’ll never be open to what you need

• Lesson #10: Solitude is as necessary as community

• Energy preservation and internal solitude helps fuel your engagement in the community; they are not independent of each other

• Lesson #11: Invest in energy first, expertise second

• Energy is coachable, expertise will only get you so far

• Lesson #12: The mind has to be used by you for what you want to believe

• We can convince our minds to make the most of every situation
• If you can actively see the value in discomfort, you will maintain a much healthier mental state

• Deliver to the world what you would buy if you were on the other side
• If you do this, you’ll earn respect, trust, and love from others

• Acquire new wisdom daily

• You want to be a lifelong learner, only then will you be successful in life
• “You are not going to get very far in life based on what you already know”
• Warren Buffett is successful because he is a learning machine and spends about half his day reading

• Study history

• Be aware of what happened before you were alive to get a sense of where things are now
• Cicero is famous for saying, “A man who doesn’t know what happened before he was born goes through life like a child.”

• Learn the big ideas in your domain and other disciplines

• Then interweave them in a mental latticework so you can use them in everyday situations

• Live below your means

• Mozart spent more money than he made and lived a miserable life because of it

• Appeal to interest, not to reason

• If you want to persuade someone, appeal to their interests

• Avoid working under people who you don’t admire or want to be like

• You want to work under people you admire so you follow into their footsteps

• Have a checklist routine -If there’s a process or procedure you perform often, have a checklist of each step to avoid errors

• There are 2 types of knowledge:

• Planck knowledge: people who really understand the subject
• Chauffeur knowledge: people who can just repeat what they have heard

• If you want to become successful in a specific domain, you must have an intense interest in that area

• The only way to be really good in something is to be obsessed with it
• “An intense interest of the subject is indispensable if you are really going to excel”

• Have a lot of assiduity

• Sit down on your ass until you accomplish what you’re set out to do
• Look for partners that have an assiduity mindset

• View every mischance as an opportunity to behave well and learn something

• “Your duty was not to be submerged in self-pity, but to utilize the terrible blow in a constructive fashion”

• Live a life in which your heroes would be pleased with your actions

• Go through life anticipating trouble and be ready to perform adequately when it arrives

• Be a person people can trust

Mental Models

• Inversion: Reverse the idea or task to get a new perspective on it

• For instance, it’s hard to answer the question “what does it take to be successful in life?” but it’s easy to answer the question “what does it take to fail in life?”

• Iron prescription: Avoid extreme ideologies and don’t be entitled to have an opinion on a subject unless you can state the arguments against your position better than the people do who are supporting it

• Avoid self-serving bias: You should not believe that you are entitled to do whatever you want to do

• Avoid self-pity: Self-pit is disastrous behavior and should be avoided

• Avoid perverse incentives system: Structure your incentives incredibly carefully or you will get undesired outcomes

• Avoid perverse associations: Don’t work for people you don’t admire

• We are all subject to the control of authority figures so try and figure out how to work under people you really admire

Paradoxically, by being disposable, you free yourself. You make it easier for yourself to grow into a higher-level role and you make it easier for yourself to change the projects you work on. He suggests 10 specific things one can do:

📕 Document your knowledge.

🏁 Document your long-term plans.

🤝 Document your meetings. Keep (public, within the team) notes for all meetings you attend, listing who was there, what was discussed, and any conclusions.

🚶♂️Bring others to meetings. If not a 1-on-1.

🔧 Train people around you.

🎓 Identify and train your replacement.

🔑 Give power to the people. Trust them to do the right thing.

📧 Do not make yourself the point of contact. Establish mailing lists.

💼 Delegate.

🏫 Always be learning.

• Thundering herd aka Dogpile,Cache-Stampede Wikipedia
• Noisy neighbour Wikipedia
• Nosy neighbour
• Retry storm Microsoft Retry Storm Antipattern
• Banding
• Dimensions of doom. HoneyComb notes
• Load shedding. Keeping Netflix Reliable Using Prioritized Load Shedding
• Circuit Breaker. Wikipedia
• Haunted Graveyard
• Flapping
• Death spiral
• Verbalmatic

Two out of these three have to trigger for me to say YES:

1. KNOWLEDGE: Will I learn something?

2. FUN: Is it fun?

3. MONEY: Is it financially worthwhile

Link to FS blog post: https://fs.blog/great-talks/multidisciplinary-approach-thinking-peter-kaufman/

Peter Kaufman is one of the most successful businessmen of our time, and yet few people have ever heard of him. He’s the CEO of Glenair, an aerospace company based in California, and the editor of Poor Charlie’s Almanack, a book about Charlie Munger.

This speech was to the California Polytechnic State University Pomona Economics Club. The transcript and audio are reproduced here with the permission of Peter Kaufman. As with many “conversational” talks given without notes, it’s better to listen to the audio to pick up on subtleties that won’t come across in the lightly edited transcript. In essence, the talk has a simple takeaway.

Using a true multidisciplinary understanding of things, Peter identifies two often overlooked, parabolic “Big Ideas”: 1) Mirrored Reciprocation (go positive and go first) and 2) Compound Interest (being constant). A great “Life Hack” is to simply combine these two into one basic approach to living your life: “Go positive and go first, and be constant in doing it.”

Thankfully, you can learn most of the required Tech Lead responsibilities and skills from books, blogs, or talks and start practicing them right away.

The are only two questions you should ask yourself:

• Which Tech Lead skills should I focus on?

• What are the best resources for each skill?

This guide is the answer to both. It’s a collection of the most effective resources on the various aspects of tech leadership, which, combined with mindful practice, will help you to become a successful Tech Lead!

2. A curated and opinionated list of resources for Chief Technology Officers and VP R&D, with the emphasis on startups and hyper-growth companies.

3. A curated list for software developers to transition to an engineering management role.

• Alex Hughes Book Notes
• Allen Cheng Book Summaries* 
• Blas Moros “The Rabbit Hole”
• Derek Sivers
• Durmonski
• Michael Parker Book Notes
• Paul Minor Book Summaries
• The Investor Field Guide Book Club
• Jason Zweig Book Recommendations
• Patrick Collison Bookshelf
• Book Recs
• Keith Rabois Reading List
• Master Investors Reading List
• David Perell
• The Investors Podcast Book Summaries

Blogs

• Paul Graham
• Marc Andreessen
• Morgan Housel
• Brain Pickings
• Farnam Street
• James Clear
• First Round Capital
• Jim Collins
• Naval Ravikant: How to Get Rich
• Investor Amnesia Sunday Reads
• Howard Marks Memos
• Ray Dalio Principles
• Aswath Damodaran Investing Tools

Startup Advice

• Sam Altman Startup Playbook
• Y Combinator
• AngelList
• Master List of Startup Articles

Talks

• The Best of Charlie Munger

• Donald T Valentine Early Bay Area Venture Capitalists: Shaping the Business and Industrial Landscape

• Anthony Deden | Grant Williams | Real Vision

• Astro Teller, X|Failure, innovation, and engineering culture |

• William McRaven 2014 University of Texas Commencement Speech

• Russell Ackoff

• Billionaire Charles Koch: Building and Running an Empire

• Claude Shannon: Creative Thinking

• “Creativity in Management” by John Cleese

• Bill Gurley Runnin’ Down a Dream: How to Succeed and Thrive in a Career You Love

• Warren Buffett: University of Florida Business School Lecture

• Rich Barton: Empower People with Information

• Yen Liow Mastery: Learning How To Learn

• Peter Kaufman on The Multidisciplinary Approach to Thinking

• Li Lu Foreword to Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger

Awesome Memos

• A curated list of amazingly #awesome and interesting #memos

Leadership/Management

• Awesome List of resources on leading people and being a manager

Others

• Amazon Investor Letters
• Benjamin Graham Lectures
• The Idea Maze
• Warren Buffett Partner Letters
• CEO Letters
• Michael Mauboussin Reports (Compiled by Clark Square Capital)
• Austin Value Capital Great Investors Compilation
• Fortune Magazine Archive
• Better Explained
• Good Reading 10th Anniversary
• Obscure Reddit PDF’s
• Brian Langis Investment Resources
• Kalani Scarrott Investing Compilation
• Kevin Gao Investing Compilations

Free Coures

• Free Online College Courses, Compiled by FreecodeCamp
• The 100 Most Popular Free Online Courses (2021 Edition) by ClassCentral
• Learn Anything Courses
• Awesome CS Courses
• The Book of Secret Knowledge - A collection of inspiring lists, manuals, cheatsheets, blogs, hacks, one-liners, cli/web tools and more.

In a post - The Tech Stack of a One-Man SaaS:

• treat infrastructure as cattle instead of pets

• choose boring technology

• Moved DigitalOcean to Linode because of stability issues. Then moved to AWS due to a good deal.

• Migrations were relatively easy because the infrastructure was described via Terraform and Kubernetes manifests.

• Stack

• Python/Typescript

• Django/React/NextJS/Celery/Bootstrap 4

• Clickhouse/PostgreSQL/Redis/RDS

• Terraform/Docker/K8s/GitHub Actions

• AWS/Cloudflare/Let’s Encrypt/Namecheap

• Prometheus/Grafana/Sentry/Loki

• Fastmail/Sendgrid

• GitHub/PyCharm/VS Code/Poetry/Yarn/Invoked

A Hackernews discussion shares similar experiences by other successful one-person SaaS founders.

Tim Ferriss: So time billionaires. What does that refer to?

Graham Duncan: I was listening to a guy introduced a speaker a while ago. And he was saying people don’t really understand the difference between billionaires and millionaires. He said a million seconds is like 11 days. A billion seconds is 31 years. And I remember that …

Tim Ferriss: Oh, shit. That’s a hell of a way to think about it.

Graham Duncan: Right?

Tim Ferriss: Wait. Can you say that one more time?

Graham Duncan: A million seconds is 11 days. A billion seconds is slightly over 31 years. And I was thinking about – Tyler Cowen has a thing about cultural billionaires –

Tim Ferriss: Marginal Revolution?

Graham Duncan: Yeah. In one of his books, he talks about cultural billionaires. I feel like in our culture, we’re so obsessed, as a culture, with money. And we deify dollar billionaires in a way that – it’d be nice to co-opt that term the way Tyler Cowen did with cultural billionaires. And I was thinking of time billionaires that when I see, sometimes, 20-year-olds – the thought I had was they probably have two billion seconds left. But they aren’t relating to themselves as time billionaires. And I was thinking about how if you could – what would Rupert Murdoch, who’s worth $20 billion – he’s 87 years old. What would he pay if he could take the next five years of someone’s 20-year-old healthy body, mind, etc.? And for that 20-year-old, how would they price it? Because I was thinking at various points of my career, I might have sold the next five years for something.

And over time, my pricing has gone vertical because the next five years, if I were to lose – and the key to this question is that you can’t sell the five at the end of your life. You gotta sell them right now. I don’t know how I’d price it because my kids are of a certain age that they’ll never be again. But I don’t know that I live every day that way. But I aspire to. So I was trying to capture – I heard Tim Urban on your podcast. And I started reading his stuff. And I find his writing style and the topics he is interested in just amazing. He has this concept of life calendar. And I bought his life calendar. He sells it as a poster. And what he does is he puts a week – he does a circle for each week. So he has 52 circles on the horizontal and then 90 rows so that you can see a 90-year life in weeks. And what’s startling about the picture – again, to this question of how long is a billion seconds – is how short it actually is.

1. The ability to empathize with people who disagree with you is one of the most underrated skills. Rather than asking, “Why would someone think that?” you’ll get farther asking, “What have they experienced in life that I haven’t that would cause them to think that?”

2. Peoples’ desire to have an opinion far exceeds the number of things that need to be opined on. “I don’t know” is a phrase that should be praised for its honesty, not belittled for its detachment.

3. Intelligence is great, but it’s easily muffled by four things: Ego, the inability to change your mind, the inability to communicate with others, and the unwillingness to compromise with a team.

4. Psychologist and economist Daniel Kahneman once said, “The idea that what you don’t see might refute everything you believe just doesn’t occur to us.” Take this seriously and you realize that few things matter more than being open-minded and surrounding yourself with people from different backgrounds and experiences.

5. Past success always seem easier than it was, because you now know how the story ends, and you can’t unremember what you know today, when trying to remember how you felt in the past.

6. Learning how to lose gracefully, without being ruined and while learning something new can be far more valuable than learning how to be right.

7. Your skill isn’t that important. What matters is your skill relative to your competitors. This is as obvious as it is overlooked – especially in investing, when you often don’t really know who your competitors are.

8. The coworkers I’ve gotten the best work done with are rarely the smartest or the most experienced, but the nicest and easiest to work with. Emotional intelligence can be so much more important than book intelligence. I wish they’d teach this in school.

9. There’s often a negative correlation between experience and humility. The more experience you gain, the more you see how less precision and more room for error is vital in a game where we overestimate skill and underestimate luck.

10. Most complicated things have a simple explanation. If you can’t understand something when you were the intended audience, the person who wrote it is either bad at communicating or intentionally deceptive.

11. Expectations can change faster than outcomes, so the successful businesses, investors and people are often in some state of, “Eh, whatever.”

12. The people who add the most to financial journalism are those who would be writing the same stuff even if no one were reading. They just love what they do, and passion is more powerful than a profit motive. This is true in many fields. The number of people on the Forbes Richest list who “were never in it for the money” is quite high.

1. Sales is a lot like golf. You can make it so complicated as to be impossible or you can simply walk up and hit the ball. I’ve been leading and building sales orgs for almost 20 years and my advice is to walk up and hit the ball.

2. Sales is about people and it’s about problem solving. It is not about solutions or technology or chemicals or lines of code or artichokes. It’s about people and it’s about solving problems.

3. People buy 4 things and 4 things only. Ever. Those 4 things are time, money, sex, and approval/peace of mind. If you try selling something other than those 4 things you will fail.

4. People buy aspirin always. They buy vitamins only occasionally and at unpredictable times. Sell aspirin.

5. I say in every talk I give: “All things being equal, people buy from their friends. So make everything else equal, then go make a lot of friends.”

6. Being valuable and useful is all you ever need to do to sell things. Help people out. Send interesting posts. Write birthday cards. Record videos sharing your ideas for growing their business. Introduce people who would benefit from knowing each other, then get out of the way, expecting nothing in return. Do this consistently and authentically and people will find ways to give you money. I promise.

7. No one cares about your quota, your payroll, your opex, your burn rate, etc. No one. They care about the problem you are solving for them."

There is more than 100 trillion dollars in the global economy just waiting for you to breathe it in. Good luck.

You have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction that you can make. You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence.

If you want to be the best tennis player in the world, you may start out trying and soon find out that it’s hopeless—that other people blow right by you. However, if you want to become the best plumbing contractor in Bemidji, that is probably doable by two-thirds of you. It takes a will. It takes the intelligence. But after a while, you’d gradually know all about the plumbing business in Bemidji and master the art. That is an attainable objective, given enough discipline. And people who could never win a chess tournament or stand in center court in a respectable tennis tournament can rise quite high in life by slowly developing a circle of competence—which results partly from what they were born with and partly from what they slowly develop through work.

If you want an average successful life, it doesn’t take much planning. Just stay out of trouble, go to school, and apply for jobs you might like. But if you want something extraordinary, you have two paths:

1. Become the best at one specific thing.

2. Become very good (top 25%) at two or more things.

The second strategy is fairly easy. Everyone has at least a few areas in which they could be in the top 25% with some effort. In my case, I can draw better than most people, but I’m hardly an artist. And I’m not any funnier than the average standup comedian who never makes it big, but I’m funnier than most people. The magic is that few people can draw well and write jokes. It’s the combination of the two that makes what I do so rare. And when you add in my business background, suddenly I had a topic that few cartoonists could hope to understand without living it.

1. Inversion: Avoiding stupidity is easier than trying to be brilliant. Instead of asking, “How can I help my company?” you should ask, “What’s hurting my company the most and how can I avoid it?” Identify obvious failure points, and steer clear of them.

2. Doublespeak: People often say the opposite of what they mean, especially in political language. It allows people to lie while looking like they’re telling the truth. As George Orwell famously wrote in 1984, “War is peace. Freedom is slavery. Ignorance is strength."

3. Theory of Constraints: A system is only as strong as its weakest point. Focus on the bottleneck. Counterintuitively, if you break down the entire system and optimize each component individually, you’ll lower the effectiveness of the system. Optimize the entire system instead.

4. Preference Falsification: People lie about their true opinions and conform to socially acceptable preferences instead. In private they’ll say one thing. In public, they’ll say another.

5. Faustian Bargain: A man once sold his soul to a demon in exchange for knowledge. At first, it seemed like a smart trade. But the man lost in the long-run. Tragically, what the man lost was more valuable than what he earned. In short, he won the battle but lost the war.

6. Mimetic Theory of Desire: Humans are like sheep. We don’t know what we want, so we imitate each other. Instead of creating our own desires, we desire the same things as other people. The entire advertising industry built on this idea.

7. Mimetic Theory of Conflict: People who are similar are more likely to fight than people who are different. That’s why Civil Wars and family feuds create the worst conflicts. The closer two people are and the more equality between them, the greater the potential for conflict.

8. Talent vs. Genius: Society is good at training talent but terrible at cultivating genius. Talented people are good at hitting targets others can’t hit, but geniuses find targets others can’t see. They are opposite modes of excellence. Talent is predictable, genius is unpredictable.

9. Competition is for Losers: Avoid competition. Stop copying what everybody else is doing. If you work at a for-profit company, work on problems that would not otherwise be solved. If you’re at a non-profit, fix unpopular problems. Life is easier when you don’t compete. (Hint: don’t start another bottled water company).

10. Secrets are Hidden in Plain Sight: Most people think of secrets as Easter eggs. They assume that if a secret is important, it’s necessarily going to be hard to find. The best ideas can come from things that are so well-known that they aren’t well-seen.

11. The Never-Ending Now: The structure of our social media feeds blinds us to history, as it causes us to live in an endless cycle of ephemeral content consumption. The structure of the Internet pulls people away from age-old wisdom.

12. Demand Curves Slope Down: The harder something is to do, the fewer people will do it. For example, raise the price of a product and fewer people will buy it. Lower the price and more people will buy it. Economics 101.

13. Look for Things That Don’t Make Sense: The world always makes sense. But it can be confusing. When it is, your model of the world is wrong. So, things that don’t make sense are a learning opportunity. Big opportunities won’t make sense until it’s too late to profit from them.

14. The Wisdom of Paradox: Logic is the key to scientific truths, but paradoxes are the key to psychological ones. When it comes to the human condition, the deepest truths are often counter-intuitive. When you find two opposites that are both true, start exploring.

15. Law of Shitty Click-Through Rates: Most marketing strategies have a short window of success, as click-through rates decrease as tactics mature. For example, the first banner-ad has a click-through rate of more than 70%. Now we avoid them with ad-blockers.

16. Russell Conjugation: Journalists often change the meaning of a sentence by replacing one word with a synonym that implies a different meaning. For example, the same person can support an estate tax but oppose a death tax — even though they are the same thing.

17. Opportunity Cost: By reading this tweet, you are choosing not to read something else. Everything we do is like this. Doing one thing requires giving up another. Whenever you explicitly choose to do one thing, you implicitly choose not to do another thing.

18. Overton Window: You can control thought without limiting speech. You can do it by defining the limits of acceptable thought while allowing for lively debate within these barriers. For example, Fox News and MSNBC set limits on what political thoughts they consider acceptable, but in the grand scheme of things, they’re both fairly conventional. The political spectrum stretches far beyond the ideas they entertain, but ideas outside their limits are shunned.

19. Planck’s Principle: Science doesn’t progress because people change their views. Rather, each new generation of scientists has different views. As old generations pass away, new ideas are accepted and the scientific consensus changes.

20. Bike-Shed Effect: A group of people working on a project will fight over the most trivial ideas. They’ll ignore what’s complicated. They’ll focus too much on easy-to-understand ideas at the expense of important, but hard to talk about ideas. For example, instead of approving plans for a complicated spaceship, the team would argue over the color of the astronaut’s uniforms.

21. Table Selection: This idea comes from poker, where you’re advised to choose your opponents carefully. That means you shouldn’t compete against the best people. You don’t need to get good at doing difficult things if you get good at avoiding difficult things. If you want to win, pick an easy table and nail your execution.

22. Goodhart’s Law: When a measure becomes a target, it ceases to be a good measure. One hospital took too long to admit patients so a penalty was given for 4+ hour wait times. In response, ambulance drivers were asked to slow down so they could shorten wait times.

23. Gall’s Law: A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system.

24. Hock Principle: Simple, clear purpose and principles give rise to complex and intelligent behavior. Complex rules and regulations give rise to simple and stupid behavior.

25. Parkinson’s Law: Work expands to fill the time available. People don’t want to look like they’re lazy, so they find extra tasks to tackle, even if they’re trivial. If you have six months to complete a project, it will take six months to complete. Set deadlines accordingly.

26. The Second Law of Thermodynamics: The world tends towards disorder. That’s why your room becomes messier and messier over time. It’s also why an engine converts only ~35% of its energy into useful work. Time moves towards increasing one direction: increasing entropy.

27. The Paradox of Specificity: Focus isn’t as constraining as it seems. In the age of the Internet, when everybody has Google search and personalized social media feeds, differentiation is free marketing. The more specific your goal, the more opportunities you’ll create for yourself. Narrowing your aperture can expand your horizons.

28. Emergence: When things interact, they often birth new, unpredictable forms. Therefore, the sum total of a system is more than its competent parts. As a system evolves, its structure can transform — just like how water becomes cold water until it turns into ice.

29. Occam’s Razor: If there are multiple explanations for why something happened and they are equally persuasive, assume the simplest one is true. In the search for truth, remove unnecessary assumptions. Trust the lowest-complexity answer.

30. Hickam’s Dictum: The opposite of Occam’s Razor. In a complex system, problems usually have more than one cause. For example, in medicine, people can have many diseases at the same time.

31. Hormesis: A low dose of something can have the opposite effect of a high dose. A little bit of stress wakes you up, but a lot of stress is bad for you. Lifting weights for 30 minutes per day is good for you, but lifting weights for 6 hours per day will destroy your muscles. Stress yourself, but not too much.

32. Robustness Principle: Be conservative in what you do, be liberal in what you accept from others. It’s a design guideline for software and a good rule for life: Hold yourself to a higher standard than you hold others to.

33. Legibility: We are blind to what we cannot measure. Not everything that counts can be measured, and not everything that can be measured counts. But people manage what they can measure, so society repeats the same mistakes.

34. Horseshoe Theory: Extreme opposites tend to look the same. For example, a far-right movement and a far-left movement can be equally violent or desire a similar outcome. People on both sides are more similar to each other than they are to people in the center.

35. Availability Cascade: A self-reinforcing cycle that creates collective beliefs. An idea will gain traction once it enters the mainstream, which triggers a chain reaction, which causes lots of people to adopt it not because it’s true but because it’s popular.

36. Creativity Begins at the Edge: Change starts away from the spotlight. Then, it moves towards the center. That’s why the most interesting ideas at a conference never come from the main stage. They come from the hallways and the bar after sunset

37. The Copernican Principle: The more we learn about astronomy, the less it seems that earth is special. It’s a small part of the universe, and each human is a small part of the earth. We are all spinning through the solar system — nowhere near the beginning or end of time.

38. Personal Monopoly: Corporations reward conformity, but the Internet rewards people who are unique. If you work in a creative field, strive to be the only person who does what you do. Find your own style, then run with it. Create intellectual real estate for yourself.

39. The Paradox of Consensus: Under ancient Jewish law, if a suspect was found guilty by every judge, they were deemed innocent. Too much agreement implied a systemic error in the judicial process. Unanimous agreement sometimes leads to bad decisions.

40. Penny Problem Gap: Economists assume demand is linear, but people’s behavior totally changes once an action costs money. If the inventors of the Internet had known about it, spam wouldn’t be such a problem. If sending an email cost you $0.001, there’d be way less spam.

41. The Invisible Hand: Markets aggregate knowledge. Rising prices signal falling supply or increased demand, which incentivizes an increase in production. The opposite is true for falling prices. Prices are a signal wrapped in an incentive.

42. Base Rate: The average outcome for an event over time. They’re like batting averages for life, and they work best with big sample sizes. For example, if you’re starting a business, avoid the restaurant business where margins are low and competition is high.

43. Circle of Competence: Define the limits of your knowledge. Hint: the limits are smaller than you think. That’s because being an expert in one area doesn’t make you an expert in anything else. Be clear about what you know and don’t know.

44. Convexity: If you want to be lucky, look for opportunities with big upsides and low downsides. In addition to increased optionality, your errors will benefit you more than they harm you. Convex payoffs let you tinker your way to success and innovation.

45. The Go-For-It Window: Large gaps between accelerating technologies and stagnating social norms create lucrative new business opportunities. But they are only available for a short time when people can capitalize on the difference between the real and perceived state of the world. For example, 2007 was the perfect time to launch the iPhone, but Google Glasses launched too early.

46. Via Negativa: When we have a problem, our natural instinct is to add a new habit or purchase a fix. But sometimes, you can improve your life by taking things away. For example, the foods you avoid are more important than the foods you eat.

47. The Medium Is the Message: We pay too much attention to what is being said. But the medium of communication is more impactful. For example, the Internet’s impact on humanity has a bigger influence than anything that’s said on the Internet.

48. Resource Curse: Countries with an abundance of natural resources such as diamonds and fossil fuels tend to have less economic growth and worse development than countries with fewer natural resources.

49. The Paradox of Abundance: The average quality of information is getting worse and worse. But the best stuff is getting better and better. Markets of abundance are simultaneously bad for the median consumer but good for conscious consumers.

50. The Map Is Not the Territory: Reality will never match the elegance of theory. All models have inconsistencies, but some are still useful. Some maps are useful because they’re inaccurate. If you want to find an edge, look for what the map leaves out.

51. Baker’s Dozen: The key to good hospitality is to delight your guests with an unexpected gift. If you run a hotel, leave a chocolate on the bed. If you run a bakery, give your customers one extra bagel. If you write a tweetstorm, share an extra idea.

~ Steven Pressfield

In 1949, Charlie Munger was 25 years old. He was hired at the law firm of Wright & Garrett for $3,300 per year, or $29,851 in inflation-adjusted dollars as of 2010. He had $1,500 in savings, equal to $13,570 now.

A few years later, in 1953, Charlie was 29 years old when he and his wife divorced. He had been married since he was 21. Charlie lost everything in the divorce, his wife keeping the family home in South Pasadena. Munger moved into “dreadful” conditions at the University Club and drove a terrible yellow Pontiac, which his children said had a horrible paint job. According to the biography written by Janet Lowe, Molly Munger asked her father, “Daddy, this car is just awful, a mess. Why do you drive it?” The broke Munger replied: “To discourage gold diggers.”

Shortly after the divorce, Charlie learned that his son, Teddy, had leukemia. In those days, there was no health insurance, you just paid everything out of pocket and the death rate was near 100% since there was nothing doctors could do. Rick Guerin, Charlie’s friend, said Munger would go into the hospital, hold his young son, and then walk the streets of Pasadena crying.

One year after the diagnosis, in 1955, Teddy Munger died. Charlie was 31 years old, divorced, broke, and burying his 9 year old son. Later in life, he faced a horrific operation that left him blind in one eye with pain so terrible that he eventually had his eye removed.

It’s a fair bet that your present troubles pale in comparison. Whatever it is, get over it. Start over. He did it. You can, too. It is The Cinderella Principle.

• Learn how to learn from those you disagree with, or even offend you. See if you can find the truth in what they believe.

• Being enthusiastic is worth 25 IQ points.

• Always demand a deadline. A deadline weeds out the extraneous and the ordinary. It prevents you from trying to make it perfect, so you have to make it different. Different is better.

• Don’t be afraid to ask a question that may sound stupid because 99% of the time everyone else is thinking of the same question and is too embarrassed to ask it.

• Being able to listen well is a superpower. While listening to someone you love keep asking them “Is there more?”, until there is no more.

• A worthy goal for a year is to learn enough about a subject so that you can’t believe how ignorant you were a year earlier.

• Gratitude will unlock all other virtues and is something you can get better at.

• Treating a person to a meal never fails, and is so easy to do. It’s powerful with old friends and a great way to make new friends.

• Don’t trust all-purpose glue.

• Reading to your children regularly will bond you together and kickstart their imaginations.

• Never use a credit card for credit. The only kind of credit, or debt, that is acceptable is debt to acquire something whose exchange value is extremely likely to increase, like in a home. The exchange value of most things diminishes or vanishes the moment you purchase them. Don’t be in debt to losers.

• Pros are just amateurs who know how to gracefully recover from their mistakes.

• Extraordinary claims should require extraordinary evidence to be believed.

• Don’t be the smartest person in the room. Hangout with, and learn from, people smarter than yourself. Even better, find smart people who will disagree with you.

• Rule of 3 in conversation. To get to the real reason, ask a person to go deeper than what they just said. Then again, and once more. The third time’s answer is close to the truth.

• Don’t be the best. Be the only.

• Everyone is shy. Other people are waiting for you to introduce yourself to them, they are waiting for you to send them an email, they are waiting for you to ask them on a date. Go ahead.

• Don’t take it personally when someone turns you down. Assume they are like you: busy, occupied, distracted. Try again later. It’s amazing how often a second try works.

• The purpose of a habit is to remove that action from self-negotiation. You no longer expend energy deciding whether to do it. You just do it. Good habits can range from telling the truth, to flossing.

• Promptness is a sign of respect.

• When you are young spend at least 6 months to one year living as poor as you can, owning as little as you possibly can, eating beans and rice in a tiny room or tent, to experience what your “worst” lifestyle might be. That way any time you have to risk something in the future you won’t be afraid of the worst case scenario.

• Trust me: There is no “them”.

• The more you are interested in others, the more interesting they find you. To be interesting, be interested.

• Optimize your generosity. No one on their deathbed has ever regretted giving too much away.

• To make something good, just do it. To make something great, just re-do it, re-do it, re-do it. The secret to making fine things is in remaking them.

• The Golden Rule will never fail you. It is the foundation of all other virtues.

• If you are looking for something in your house, and you finally find it, when you’re done with it, don’t put it back where you found it. Put it back where you first looked for it.

• Saving money and investing money are both good habits. Small amounts of money invested regularly for many decades without deliberation is one path to wealth.

• To make mistakes is human. To own your mistakes is divine. Nothing elevates a person higher than quickly admitting and taking personal responsibility for the mistakes you make and then fixing them fairly. If you mess up, fess up. It’s astounding how powerful this ownership is.

• Never get involved in a land war in Asia.

• You can obsess about serving your customers/audience/clients, or you can obsess about beating the competition. Both work, but of the two, obsessing about your customers will take you further.

• Show up. Keep showing up. Somebody successful said: 99% of success is just showing up.

• Separate the processes of creation from improving. You can’t write and edit, or sculpt and polish, or make and analyze at the same time. If you do, the editor stops the creator. While you invent, don’t select. While you sketch, don’t inspect. While you write the first draft, don’t reflect. At the start, the creator mind must be unleashed from judgement.

• If you are not falling down occasionally, you are just coasting.

• Perhaps the most counter-intuitive truth of the universe is that the more you give to others, the more you’ll get. Understanding this is the beginning of wisdom.

• Friends are better than money. Almost anything money can do, friends can do better. In so many ways a friend with a boat is better than owning a boat.

• This is true: It’s hard to cheat an honest man.

• When an object is lost, 95% of the time it is hiding within arm’s reach of where it was last seen. Search in all possible locations in that radius and you’ll find it.

• You are what you do. Not what you say, not what you believe, not how you vote, but what you spend your time on.

• If you lose or forget to bring a cable, adapter or charger, check with your hotel. Most hotels now have a drawer full of cables, adapters and chargers others have left behind, and probably have the one you are missing. You can often claim it after borrowing it.

• Hatred is a curse that does not affect the hated. It only poisons the hater. Release a grudge as if it was a poison.

• There is no limit on better. Talent is distributed unfairly, but there is no limit on how much we can improve what we start with.

• Be prepared: When you are 90% done any large project (a house, a film, an event, an app) the rest of the myriad details will take a second 90% to complete.

• When you die you take absolutely nothing with you except your reputation.

• Before you are old, attend as many funerals as you can bear, and listen. Nobody talks about the departed’s achievements. The only thing people will remember is what kind of person you were while you were achieving.

• For every dollar you spend purchasing something substantial, expect to pay a dollar in repairs, maintenance, or disposal by the end of its life.

• Anything real begins with the fiction of what could be. Imagination is therefore the most potent force in the universe, and a skill you can get better at. It’s the one skill in life that benefits from ignoring what everyone else knows.

• When crisis and disaster strike, don’t waste them. No problems, no progress.

• On vacation go to the most remote place on your itinerary first, bypassing the cities. You’ll maximize the shock of otherness in the remote, and then later you’ll welcome the familiar comforts of a city on the way back.

• When you get an invitation to do something in the future, ask yourself: would you accept this if it was scheduled for tomorrow? Not too many promises will pass that immediacy filter.

• Don’t say anything about someone in email you would not be comfortable saying to them directly, because eventually they will read it.

• If you desperately need a job, you are just another problem for a boss; if you can solve many of the problems the boss has right now, you are hired. To be hired, think like your boss.

• Art is in what you leave out.

• Acquiring things will rarely bring you deep satisfaction. But acquiring experiences will.

• Rule of 7 in research. You can find out anything if you are willing to go seven levels. If the first source you ask doesn’t know, ask them who you should ask next, and so on down the line. If you are willing to go to the 7th source, you’ll almost always get your answer.

• How to apologize: Quickly, specifically, sincerely.

• Don’t ever respond to a solicitation or a proposal on the phone. The urgency is a disguise.

• When someone is nasty, rude, hateful, or mean with you, pretend they have a disease. That makes it easier to have empathy toward them which can soften the conflict.

• Eliminating clutter makes room for your true treasures.

• You really don’t want to be famous. Read the biography of any famous person.

• Experience is overrated. When hiring, hire for aptitude, train for skills. Most really amazing or great things are done by people doing them for the first time.

• A vacation + a disaster = an adventure.

• Buying tools: Start by buying the absolute cheapest tools you can find. Upgrade the ones you use a lot. If you wind up using some tool for a job, buy the very best you can afford.

• Learn how to take a 20-minute power nap without embarrassment.

• Following your bliss is a recipe for paralysis if you don’t know what you are passionate about. A better motto for most youth is “master something, anything”. Through mastery of one thing, you can drift towards extensions of that mastery that bring you more joy, and eventually discover where your bliss is.

• I’m positive that in 100 years much of what I take to be true today will be proved to be wrong, maybe even embarrassingly wrong, and I try really hard to identify what it is that I am wrong about today.

• Over the long term, the future is decided by optimists. To be an optimist you don’t have to ignore all the many problems we create; you just have to imagine improving our capacity to solve problems.

• The universe is conspiring behind your back to make you a success. This will be much easier to do if you embrace this pronoia.

1. A life-long program of self-study
2. Keeping a diary/journal
3. Scribbling notes immediately
4. Keeping “indexed portfolios” (notes/summaries of what you’ve read or heard)
5. Testing beloved concepts – make a note, immediately, if you come across a thought or idea that is contrary to something you currently believe. Absorb it, study it and don’t let it go until you conclude that you need to change your mind or if the thought or ideas is wrong
6. Learning lessons by heart
7. Seeking to earn the approval of great men (dead or alive)
8. The humility to seek not fame (as in, wisdom flows into the humble man like water flows into a depression)

How do we prepare for a world that often changes drastically and rapidly? We can preserve our optionality.

We don’t often get the advice to keep our options open. Instead, we’re told to specialize by investing huge hours in our passion so we can be successful in a niche.

The problem is, it’s bad advice. We live in a world that’s constantly changing, and if we can’t respond effectively to those changes, we become redundant, frustrated, and useless.

Instead of focusing on becoming great at one thing, there is another, counterintuitive strategy that will get us further: preserving optionality. The more options we have, the better suited we are to deal with unpredictability and uncertainty. We can stay calm when others panic because we have choices.

Optionality refers to the act of keeping as many options open as possible. Preserving optionality means avoiding limiting choices or dependencies. It means staying open to opportunities and always having a backup plan.

Ultimately, preserving optionality means paying attention and looking at life from multiple perspectives. It means building a versatile base of foundational knowledge and allowing for serendipity and unexpected connections. We must seek to expand our comfort zone and circle of competence, and we should take minor risks that have potentially large upsides and limited downsides.

Paradoxically, preserving optionality can mean saying no to a lot of opportunities and avoiding anything that will prove to be restrictive. We need to look at choices through the lens of the optionality they will give us in the future and only say yes to those that create more options.

Preserving your optionality is important because it gives you the flexibility to capitalize on inevitable change. In order to keep your options open, you need diversity. Diversity of perspective, thought, knowledge, and skills. You don’t want to find yourself in a position of only being able to sell something that no one wants. Rapid, extraordinary change is the norm. In order to adapt in a way that is useful, keep your options open.

Notes:

• Financial wellbeing can’t be measured by merely looking at how much you earn. The gap between what you earn and how much you avoid offsetting those earnings is the figure that matters most.

• Spending more when your income rises is as tempting as eating more after you exercise. It feels earned and justified. This is doubly true for spending because people’s lifestyle expectations are driven by their peers. When everyone spends more, you feel entitled to spend more.

• Wealth, at every income level, has less to do with your gains and more to do with your ability to leave gains alone without cashing them in.

• Learning to contently live with less has the same effect as growing your income, but it’s often easier and more in your control. This is an opportunity for financial advisors to add value, though it has more to do with psychology than finance.

• Money is often a negative art. It has a lot to do with the actions you don’t take and things you avoid.

• Everything has a price, and prices aren’t always clear. The price of exercise isn’t just the workout; it’s avoiding the post-workout appetite. Same in finance. The price of building wealth isn’t just the trouble of earning money; it’s avoiding the post-earnings urge to spend what you’ve accumulated.

The Original Column

Inside every adult lurks a graduation speaker dying to get out, some world-weary pundit eager to pontificate on life to young people who’d rather be Rollerblading. Most of us, alas, will never be invited to sow our words of wisdom among an audience of caps and gowns, but there’s no reason we can’t entertain ourselves by composing a Guide to Life for Graduates.

I encourage anyone over 26 to try this and thank you for indulging my attempt. Ladies and gentlemen of the class of ‘97:

Wear sunscreen.

If I could offer you only one tip for the future, sunscreen would be it. The long-term benefits of sunscreen have been proved by scientists, whereas the rest of my advice has no basis more reliable than my own meandering experience. I will dispense this advice now.

Enjoy the power and beauty of your youth. Oh, never mind. You will not understand the power and beauty of your youth until they’ve faded. But trust me, in 20 years, you’ll look back at photos of yourself and recall in a way you can’t grasp now how much possibility lay before you and how fabulous you really looked. You are not as fat as you imagine.

Don’t worry about the future. Or worry, but know that worrying is as effective as trying to solve an algebra equation by chewing bubble gum. The real troubles in your life are apt to be things that never crossed your worried mind, the kind that blindside you at 4 p.m. on some idle Tuesday.

Do one thing every day that scares you.

Sing.

Don’t be reckless with other people’s hearts. Don’t put up with people who are reckless with yours.

Floss.

Don’t waste your time on jealousy. Sometimes you’re ahead, sometimes you’re behind. The race is long and, in the end, it’s only with yourself.

Remember compliments you receive. Forget the insults. If you succeed in doing this, tell me how.

Keep your old love letters. Throw away your old bank statements.

Stretch.

Don’t feel guilty if you don’t know what you want to do with your life. The most interesting people I know didn’t know at 22 what they wanted to do with their lives. Some of the most interesting 40-year-olds I know still don’t.

Get plenty of calcium. Be kind to your knees. You’ll miss them when they’re gone.

Maybe you’ll marry, maybe you won’t. Maybe you’ll have children, maybe you won’t. Maybe you’ll divorce at 40, maybe you’ll dance the funky chicken on your 75th wedding anniversary. Whatever you do, don’t congratulate yourself too much, or berate yourself either. Your choices are half chance. So are everybody else’s.

Enjoy your body. Use it every way you can. Don’t be afraid of it or of what other people think of it. It’s the greatest instrument you’ll ever own.

Dance, even if you have nowhere to do it but your living room.

Read the directions, even if you don’t follow them.

Do not read beauty magazines. They will only make you feel ugly.

Get to know your parents. You never know when they’ll be gone for good. Be nice to your siblings. They’re your best link to your past and the people most likely to stick with you in the future.

Understand that friends come and go, but with a precious few you should hold on. Work hard to bridge the gaps in geography and lifestyle, because the older you get, the more you need the people who knew you when you were young.

Live in New York City once, but leave before it makes you hard. Live in Northern California once, but leave before it makes you soft. Travel.

Accept certain inalienable truths: Prices will rise. Politicians will philander. You, too, will get old. And when you do, you’ll fantasize that when you were young, prices were reasonable, politicians were noble and children respected their elders.

Respect your elders.

Don’t expect anyone else to support you. Maybe you have a trust fund. Maybe you’ll have a wealthy spouse. But you never know when either one might run out.

Don’t mess too much with your hair or by the time you’re 40 it will look 85.

Be careful whose advice you buy, but be patient with those who supply it. Advice is a form of nostalgia. Dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it’s worth.

But trust me on the sunscreen.

How much attention should you pay to your competitors?

This short handbook will provide you with the theory, practical advice and case studies you need to stop yourself from reaching for the dice.

Table of Contents

• Chapter 01: Some – but not too much – Economics
• Chapter 02: Pricing Psychology: What is your product worth?
• Chapter 03: Pricing Pitfalls
• Chapter 04: Advanced Pricing
• • Chapter 05: What your price says about you (and how to change it)

“It was my master,” said the prisoner. “I thought I could outdo everybody in the world in wealth and power, and I amassed in my own treasure-house the money due to my king. When sleep overcame me I lay upon the bed that was for my lord, and on waking up I found I was a prisoner in my own treasure-house.”

“Prisoner, tell me, who was it that wrought this unbreakable chain?”

“It was I,” said the prisoner, “who forged this chain very carefully. I thought my invincible power would hold the world captive leaving me in a freedom undisturbed. Thus night and day I worked at the chain with huge fires and cruel hard strokes. When at last the work was done and the links were complete and unbreakable, I found that it held me in its grip.”

~ Tagore, Gitanjali, verse 31

Global 2000 company IT needs.

Silicon Valley enterprise startups often focus on the needs of other mid-stage tech companies as customers, rather than the large enterprises that make up much of the business world by revenue. There are probably a dozen $10B+ enterprise software companies to build that are unique to the largest companies of the world that most Silicon Valley founders are never exposed to (UIPath is a good example of a company serving such a need).

I would love to see the following analysis:

• A map of repetitious tasks, spreadsheets, and manual data extraction by function in the Fortune 500.

• Budget breakdown of current software spend, by function, by line, in the Fortune 500.

• A view of what Accenture, CapGemini, and Deloitte keep building over and over for large enterprises. Undoubtedly a subset of these custom consulting projects can be turned into SaaS software.

• A tougher analysis to do is to ask what internal software projects various tech companies are working on. If you can get the list from 3-4 companies, you will undoubtedly see a few internal tool or product examples that should be built as a SaaS product for everyone.

More RPA and NoCode.

RPA (basically tools anyone can use to create programmatic APIs on top of legacy software) and NoCode/LowCode (letting anyone build an app with a spreadsheet as a database representation) are the biggest shifts in enterprise software since the cloud. In a few years, aspects of RPA and NoCode are likely to be incorporated into an increasing proportion of enterprise applications as a standard tool set. While the early leading apps of this area (e.g. UIPath, Airtable, …) make great headways, additional players like Notion, Parabola, Retool, and Simpo continue to take on additional uses cases. There is a lot more room for new players tackling specific use cases or verticals, or add on apps like Rossum or Instabase for NLP and data extraction into NoCode tables and apps like Airtable, or RPA apps like UIPath.

NoCode and RPA are likely to become more verticalized in terms of both function that uses them, and market served. More companies in these markets will emerge in 2020 and beyond.

Strominger had an illustrious career and seminal achievements to his credit in his long tenure at Harvard and still wants to pursue science and work on hard problems.

This is what he says:

“Some people like to play chess; some people like to play bingo; and some like to watch TV; they’re all games. Science is a more complicated game. You have to pull information from various sources. That’s the game I like to play.”

Work

Over his long career, Strominger has authored nearly 1,000 papers and earned about 30 prestigious awards, including many honorary degrees. But he’s especially proud of what he calls his “legacy”: more than 200 students who have become prominent scientists, among them 12 Harvard professors, 12 National Academy of Sciences members, and two Nobel laureates.

“He was working on bacterial cell walls when I joined his lab and was just starting to work on the immune system,” said Springer. “He has always been driven to want to make discoveries, to do important things, and he urged me to work on important scientific problems. But he was also a real mensch, always interested in my personal life.”

Strominger’s scientific excitement has been a constant in his life, said his son, Andrew Strominger, the Gwill E. York Professor of Physics. “I remember as a kid how happy and excited he was about his work,” he said. “When it comes to his work, he peps up and gets excited even now.”

“I have never worked alone,” said Strominger. “I’ve always had good people to work with since the beginning. Looking at the lists of those scientists who worked in my lab cheers me up.”

Asked what advice he has for young scientists, Strominger highlighted the importance of choosing a problem to solve. “Science is a great thing to do,” he said. “Think carefully about what you want to work on, get advice, and work hard. It’s fun, much better than chess.”

Oh, they’d say, and then after a pause to digest this revelation, they’d ask: What makes a startup a good investment?

So I would explain that what makes a startup promising, not just in the eyes of investors but in fact, is growth. Ideally in revenue, but failing that in usage. What they needed to do was get lots of users.

How does one get lots of users? They had all kinds of ideas about that. They needed to do a big launch that would get them “exposure.” They needed influential people to talk about them. They even knew they needed to launch on a tuesday, because that’s when one gets the most attention.

No, I would explain, that is not how to get lots of users. The way you get lots of users is to make the product really great. Then people will not only use it but recommend it to their friends, so your growth will be exponential once you get it started.

At this point I’ve told the founders something you’d think would be completely obvious: that they should make a good company by making a good product. And yet their reaction would be something like the reaction many physicists must have had when they first heard about the theory of relativity: a mixture of astonishment at its apparent genius, combined with a suspicion that anything so weird couldn’t possibly be right. Ok, they would say, dutifully. And could you introduce us to such-and-such influential person? And remember, we want to launch on Tuesday.

It would sometimes take founders years to grasp these simple lessons. And not because they were lazy or stupid. They just seemed blind to what was right in front of them.

• Paul Graham source

Source: https://twitter.com/tobi/status/1210242184341000192

Notes:

I realize everyone’s twitter feed looks different. But I’ll go ahead and subtweet two conversations that I see going by right now:

a) How the heck did Shopify get so big this decade and

b) You have to work 80 hours a week to be successful.

Thread/

• Shopify grew up very far from the primary places where people build companies. For its founders, this company was our first real Job. If the startup ecosystem is a Darwinian struggle for survival, Ottawa is the Galapagos islands.

• This meant that by ignorance, and later increasingly deliberate we were able to build Shopify entirely differently to the way contemporary tech companies were build. Lets look at some examples

• I’ve never worked through a night. The only times I worked more than 40 hours in a week was when I had the burning desire to do so. I need 8ish hours of sleep a night. Same with everybody else, whether we admit it or not.

• For creative work, you can’t cheat. My believe is that there are 5 creative hours in everyone’s day. All I ask of people at Shopify is that 4 of those are channeled into the company.

• Now true - some people, myself included, need a few hours to wind up and wind down for those to occur. Right now I’m procrastinating on twitter instead of writing my summit talk for instance. Reddit and HN are my siren calls.

• That’s fine. We are not moist robots. We are people and people are awesome. What’s even better than people are teams. Friends, that go on journeys doing difficult things.

• When I hire someone at Shopify we can make the assumption that we work together for a decade. There are a lot of things that changes. And most of Shopify’s advantage comes from there. For example:

• The value equation changes entirely. In some places average tenure is only 18 months. Yes, you might want to work everyone 80 hours to make that work. On-boarding is expensive so you skip it. You need value day 1. The relationship is exploitative.

• We don’t need that. We can hire on future potential and help people get there quickly. Junior employees are put together with seasoned vets and sometimes coaches to help them get there. We are all on the same side of the table and want the same.

• If we can help a young engineer or designer to get 10 years of career advancement in a single wall clock year, then we do it. If the student is ready, the teachers will appear. We get to share in that additional skill for the rest of that decade.

• Besides hiring (and sometimes sadly firing), It’s my believe that companies can only become better by the individuals in the company getting better. The skill of the company is the sum of the individuals skills and context. “Company” is purely a collective term.

• Context is the most important. The type of projects that high context teams can do are vastly different from low context teams. That’s where all the innovation comes from. And that’s also why some areas mostly produce fairly shallow apps now.

• None of that is even about product, or market fit, or timing. Its all about people. Treating everyone with dignity and not falling into the fallacies and trappings of some orthodoxy. Don’t do things the way people with agenda tell you to. Do what makes sense.

• Shopify build a profitable lifestyle company before it took investment. I think that was a key ingredient of our success. I learned from @dhh that VC by default is not a good strategy.

• But I also think that you have to always re-validate your decisions. Not taking VC for 6 years eventually got invalidated for Shopify because it got clear that it was a venture. After that we took VC and that was the right thing in our case.

• We took VC investment in 2010 but we didn’t change the company. We got better in many respects but changed no opinion on how to work together, hire, or form teams.

• Because those were our own bets based on what kind of company we, the founders, wanted to work for. @danielweinand always said: lets not build a company that we wouldn’t want to work for in 10 years time.

• Future regret minimization is a powerful force for good judgement.

• While we did work hard (whatever that means in tech) in the early days, we also always took time to play. We had a FIFA tournament going. looser had to drive this weeks load of Ebay’d second hand server to our data center in Toronto.

• Going public was yet another funding event. We threw a party (themed: we qualified for the big leagues. Because its the beginning not a destination). And again didn’t change that much. No one bought a lambo. We just kept working on the problem we fell in love with.

• I’m home at 5:30pm every evening. I don’t travel on the weekend. I play video games alone, with my friends, and increasingly with my kids. My job is incredible, but its also just a job. Family and personal health rank higher in my priority list.

• I’m deeply in love with the problem that Shopify solves. Every few seconds a new entrepreneur has their first sale: a life changing event. I get to work with some of the smartest people in the world to cause more of that. The stories that I hear from our customers blow my mind.

• We don’t burn out people. We give people space. We love real teams with real friendship forming. We understand the power of individual potential and proximity. Even our floor plan is designed to give small teams a pod all to themselves.

• And that’s why people show up to work as their authentic selves. With all their quirks and skills and ideas. They tell us what they see and how it relates to the mission. They work on those ideas. Shopify enables them, but they drive the company forward.

• This worked great for us, but feels dissonant with the black/white and zero-sum conversations that I’m reading about. Gray thinking is important and not everything is an absolute.

• Take your own path, judge the tools people offer you wisely. Then pick and choose what fits.

According to Elad Gil, startups are hard but there are a few moments in every startup life that feels magical and make the whole grind worth it for moments. Some of these magical startup moments include:

• Your first customer payment.
• Your first magic executive.
• That special customer thank you.
• The sale.
• The reunion.

I would also add

• first execution or first-gone-live moment
• first time customer recognizes the value

What else is magical?

• via Thomas A. Limoncelli’s excellent ACM queue column on APIs

• Why is my Linux instance not booting after I changed its type to C5 or M5?

See https://aws.amazon.com/premiumsupport/knowledge-center/boot-error-linux-m5-c5/

• Make sure enaSupport instance attribute is enabled

aws ec2 describe-instances –instance-ids instance_id –query “Reservations[].Instances[].EnaSupport“

• Make sure both ENA and NVMe modules are installed

modinfo ena

lsinitrd /boot/initramfs-$(uname -r).img|grep nvme

• Mount EBS volumes using UUID/Label instead of device name

/dev/sda1 -> UUID=“ca774df7-756d-4261-a3f1-76038323e572”

-Charlie Munger 2008

1. Saying “I’ll be greedy when others are fearful” is much easier than actually doing it.

2. The gulf between a great company and a great investment can be extraordinary.

3. Markets go through at least one big pullback every year, and one massive one every decade. Get used to it. It’s just what they do.

4. There is virtually no accountability in the financial pundit arena. People who have been wrong about everything for years still draw crowds.

5. As Erik Falkenstein says: “In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves.”

6. There are tens of thousands of professional money managers. Statistically, a handful of them have been successful by pure chance. Which ones? I don’t know, but I bet a few are famous.

7. On that note, some investors who we call “legendary” have barely, if at all, beaten an index fund over their careers. On Wall Street, big wealth isn’t indicative of big returns.

8. During recessions, elections, and Federal Reserve policy meetings, people become unshakably certain about things they know nothing about.

9. The more comfortable an investment feels, the more likely you are to be slaughtered.

10. Time-saving tip: Instead of trading penny stocks, just light your money on fire. Same for leveraged ETFs.

11. Not a single person in the world knows what the market will do in the short run. End of story.

12. The analyst who talks about his mistakes is the guy you want to listen to. Avoid the guy who doesn’t – his are much bigger.

13. You don’t understand a big bank’s balance sheet. The people running the place and their accountants don’t, either.

14. There will be seven to 10 recessions over the next 50 years. Don’t act surprised when they come.

15. Thirty years ago, there was one hour of market TV per day. Today there’s upwards of 18 hours. What changed isn’t the volume of news, but the volume of drivel.

16. Warren Buffett’s best returns were achieved when markets were much less competitive. It’s doubtful anyone will ever match his 50-year record.

17. Most of what is taught about investing in school is theoretical nonsense. There are very few rich professors.

18. The more someone is on TV, the less likely his or her predictions are to come true. (U.C. Berkeley psychologist Phil Tetlock has data on this).

19. Related: Trust no one who is on CNBC more than twice a week.

20. The market doesn’t care how much you paid for a stock. Or your house. Or what you think is a “fair” price.

21. The majority of market news is not only useless, but also harmful to your financial health.

22. Professional investors have better information and faster computers than you do. You will never beat them short-term trading. Don’t even try.

23. How much experience a money manager has doesn’t tell you much. You can underperform the market for an entire career. And many have.

24. The decline of trading costs is one of the worst things to happen to investors, as it made frequent trading possible. High transaction costs used to cause people to think hard before they acted.

25. Professional investing is one of the hardest careers to succeed at, but it has low barriers to entry and requires no credentials. That creates legions of “experts” who have no idea what they are doing. People forget this because it doesn’t apply to many other fields.

26. Most IPOs will burn you. People with more information than you have want to sell. Think about that.

27. When someone mentions charts, moving averages, head-and-shoulders patterns, or resistance levels, walk away.

28. The phrase “double-dip recession” was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of “financial collapse” in 2006 and 2007. It did come.

29. The real interest rate on 20-year Treasuries is negative, and investors are plowing money into them. Fear can be a much stronger force than arithmetic.

30. The book Where Are the Customers’ Yachts? was written in 1940, and most still haven’t figured out that financial advisors don’t have their best interest at heart.

31. The low-cost index fund is one of the most useful financial inventions in history. Boring but beautiful.

32. The best investors in the world have more of an edge in psychology than in finance.

33. What markets do day to day is overwhelmingly driven by random chance. Ascribing explanations to short-term moves is like trying to explain lottery numbers.

34. For most, finding ways to save more money is more important than finding great investments.

35. If you have credit card debt and are thinking about investing in anything, stop. You will never beat 30% annual interest.

36. A large portion of share buybacks are just offsetting shares issued to management as compensation. Managers still tout the buybacks as “returning money to shareholders.”

37. The odds that at least one well-known company is insolvent and hiding behind fraudulent accounting are high.

38. Twenty years from now the S&P 500 (SNPINDEX:^GSPC) will look nothing like it does today. Companies die and new ones emerge.

39. Twelve years ago General Motors (NYSE:GM) was on top of the world and Apple (NASDAQ:AAPL) was laughed at. A similar shift will occur over the next decade, but no one knows to what companies.

40. Most would be better off if they stopped obsessing about Congress, the Federal Reserve, and the president and focused on their own financial mismanagement.

41. For many, a house is a large liability masquerading as a safe asset.

42. The president has much less influence over the economy than people think.

43. However much money you think you’ll need for retirement, double it. Now you’re closer to reality.

44. The next recession is never like the last one.

45. Remember what Buffett says about progress: “First come the innovators, then come the imitators, then come the idiots.”

46. And what Mark Twain says about truth: “A lie can travel halfway around the world while truth is putting on its shoes.”

47. And what Marty Whitman says about information: “Rarely do more than three or four variables really count. Everything else is noise.”

48. The bigger a merger is, the higher the odds it will be a flop. CEOs love empire-building by overpaying for companies.

49. Investments that offer little upside and big downside outnumber those with the opposite characteristics at least 10-to-1.

50. The most boring companies – toothpaste, food, bolts – can make some of the best long-term investments. The most innovative, some of the worst.

• What I want to talk to you about today is the difference between gifts and choices. Cleverness is a gift, kindness is a choice. Gifts are easy – they’re given after all. Choices can be hard. You can seduce yourself with your gifts if you’re not careful, and if you do, it’ll probably be to the detriment of your choices.

• How will you use these gifts? And will you take pride in your gifts or pride in your choices?

Tomorrow, in a very real sense, your life – the life you author from scratch on your own – begins.

How will you use your gifts? What choices will you make?

Will inertia be your guide, or will you follow your passions?

Will you follow dogma, or will you be original?

Will you choose a life of ease, or a life of service and adventure?

Will you wilt under criticism, or will you follow your convictions?

Will you bluff it out when you’re wrong, or will you apologize?

Will you guard your heart against rejection, or will you act when you fall in love?

Will you play it safe, or will you be a little bit swashbuckling?

When it’s tough, will you give up, or will you be relentless?

Will you be a cynic, or will you be a builder?

Will you be clever at the expense of others, or will you be kind?

• I will hazard a prediction. When you are 80 years old, and in a quiet moment of reflection narrating for only yourself the most personal version of your life story, the telling that will be most compact and meaningful will be the series of choices you have made. In the end, we are our choices. Build yourself a great story. Thank you and good luck!

Being kind is fundamentally about taking responsibility for your impact on 
the people around you. It requires you be mindful of their feelings and 
considerate of the way your presence affects them.

http://boz.com/articles/be-kind.html

Branch mispredict 5 ns

L2 cache reference 7 ns

Mutex lock/unlock 25 ns

Main memory reference 100 ns

Compress 1K bytes with Zippy 3,000 ns

Send 2K bytes over 1 Gbps network 20,000 ns

Read 1 MB sequentially from memory 250,000 ns

Round trip within same datacenter 500,000 ns

Disk seek 10,000,000 ns

Read 1 MB sequentially from disk 20,000,000 ns

Send packet CA->Netherlands->CA 150,000,000 ns

Notes:

• We buy a book, we know what we’re getting. There is no other “business model” at play. No other information being (necessarily, relatively) sold. This clarity of contract is especially lucid in physical form. The book has edges. The transaction has edges. The transaction completes. Given time, we complete the book. It has an ending. Contracts are clear. Usually, there’s no tracking.

• The immutability of printed books is their superpower. Remember this, because it’s from this immutability that books derive their dead-simple “contract.”

Attention Monsters: Things that Eat Attention

• The main adversary of books and book publishing is: Anything that eats attention.

• A simple heuristic for determining if something is an attention monster: “Free” apps built around advertising models tend to become attention monsters.1 Especially if they’ve taken on a lot of venture capital, a tendency even further exacerbated if they’re a public company.2

• Instagram is a great example. The more you scroll, the more money they make. Consider the “agreement” into which you’ve entered with the application the next time you find yourself mindlessly scrolling. What’s keeping you there? Why are the algorithms showing you what they’e showing? What benefits are you accruing? What do you feel the need to post what you’re posting? For what are are you trading your time and mental energy?

• over time, attention monster methods of consuming user attention become more aggressive the larger the user base becomes. A once simple contract (“connect with your friends online,” “post photos with cool filters,” et cetera) into which we may have entered with a free app begins to change by small degrees when that app or publication is pushed to increase profitability

• Publications are another example. Most legacy or incumbent news organizations like The New York Times fall into this bucket.

• In contrast, publications like The Information or Stratechery or The New Consumer — recently founded publications — are entirely subscriber based, and thereby shed themselves of attention gorging.

• Netflix is another example, which stated “Sleep is our competitor”. Their internal doctrine might be like - Netflix must become a downtime habit humans cannot live without. The service must become a teat, an irreplaceable and inexhaustible binge conveyance.

Contracts and habits

• Here are two big takeaways that are relevant to our contracts, attention monsters, and books discussion:

1. True behavior change is identity change.
2. “Motion” is the act of researching; “action” is getting your reps in. Never mistake the two.

• Carrying a Kindle and blocking most media on my phone are two core pieces to my system of maintaining, believing in, and strengthening my identity as a “reader

Reading and Attention

• A great book should leave you with many experiences, and slightly exhausted at the end.

• The critical insight is that deep reading is an active exhaustion, the result of burned calories, not the passive exhaustion of an underused body and mind.

” and maintaining what I consider “healthy” contracts with apps and media.

Link: https://youtu.be/UbpARgj6xk0

Prof. Sanjay Bakshi’s note/memo on the topic - How to build your own BRK memo

Charlie Munger says

“It is not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it – who look and sift the world for a mis-priced bet – that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have odds. And the rest of the time, they don’t. It’s just that simple.”

“Experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. A few major opportunities, clearly recognisable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.”

Much is made of the relative strength of small insects as compared to that of humans. For example, a leafcutter ant can carry about 50 times its weight; whereas an average human can only carry about half its weight. The standard reasoning goes that an ant scaled to the size of a human would retain this strength-weight advantage, giving a 200-pound ant the ability to lift 10,000 pounds. In actuality, however, an ant scaled to this size would only be able to lift about 50 pounds, assuming it could move at all. The effect of gravity at small scales is miniscule, but the effect increases exponentially with the mass of an object. This underscores the basic lesson of the scaling fallacy—systems act differently at different scales.

• Via Anshul Khare from the book - Universal Principles of Design.

What is it?

Intentionally limiting your diligence in order to avoid decision paralysis in a world where everything, if you dig deep enough, is more complicated than it seems.

Quoting Brent Beshore’s post - Investors and Operators - Lessons i’ve learned from both worlds:

All Businesses are loosely functioning disasters, and some are profitable despite it.

At 30,000 feet, the world is beautiful and orderly. On the ground, it’s chaotic and confusing. Nothing ever goes to plan. Surprises lurk around every corner. Things are constantly breaking. Someone is always upset. Mistakes are made daily. Expecting anything less is being out of touch with reality. And remember, just because you’re now aware of it doesn’t change reality. It was that way before, you just didn’t realize it.

Don’t feel bad about that, though, it’s not just you. The stars themselves form as a result of the properties of atoms, the specific features of each star set by the chance distribution of ripples of condensation through clouds of dust and gas. Our sun wasn’t required to be where it is, with the luminosity it has — it just happens to be there, and our existence follows from this opportunity. Our species itself is partly shaped by the force of our environment through selection, and partly by fluctuations of chance. If humans had gone extinct 100,000 years ago, the world would go on turning, life would go on thriving, and some other species would be prospering in our place — and most likely not by following the same intelligence-driven technological path we did.

And if you understand the mediocrity principle, that’s OK.

The reason this is so essential to science is that it’s the beginning of understanding how we came to be here and how everything works. We look for general principles that apply to the universe as a whole first, and those explain much of the story; and then we look for the quirks and exceptions that led to the details. It’s a strategy that succeeds and is useful in gaining a deeper knowledge. Starting with a presumption that a subject of interest represents a violation of the properties of the universe, that it was poofed uniquely into existence with a specific purpose, and that the conditions of its existence can no longer apply, means that you have leapt to an unfounded and unusual explanation with no legitimate reason. What the mediocrity principle tells us is that our state is not the product of intent, that the universe lacks both malice and benevolence, but that everything does follow rules — and that grasping those rules should be the goal of science.

-P Z Myers, Biologist: 2011 Edge Annual Question Response

Source: https://medium.com/helium-mvc/programming-principles-for-early-stage-startups-1215ad14bcb8

1. Never use a short word when a long one will do.
   • The first rule is to complicate first and then obfuscate
2. Everyday euphemisms are the way forward
3. Disregard the grammar you learnt at school
4. There is no such thing as too much emotion
5. If you produce something simple, rebrand it so no one will know what it is
6. Do not limit yourself to words that are in the dictionary
7. There is no such thing as too much metaphor and cliché in one sentence
8. Ignore Rule 1

“When I work I have no sunk costs. I like changing my mind. Some people really don’t like it but for me changing my mind is a thrill. It’s an indication that I’m learning something. So I have no sunk costs in the sense that I can walk away from an idea that I’ve worked on for a year if I can see a better idea. It’s a good attitude for a researcher. The main track that young researchers fall into is sunk costs. They get to work on a project that doesn’t work and that is not promising but they keep at it. I think too much persistence can be bad for you in the intellectual world.”

• Danny Kahneman

“Any kind of important book should immediately be read twice, partly because one grasps the matter in its entirety the second time, and only really understands the beginning when the end is known; and partly because in reading it the second time one’s temper and mood are different so that one gets another impression; it may be that one sees the matter in another light.” –Arthur Schopenhauer

quotes on reading

• “Not all readers are leaders, but all leaders are readers.” - Harry S. Truman

• “The problem with being too busy to read is that you learn by experience (or by your men’s experience), i.e. the hard way. Thanks to my reading, I have never been caught flat- footed by any situation, never at a loss for how any problem has been addressed (successfully or unsuccessfully) before. It doesn’t give me all the answers, but it lights what is often a dark path ahead.” - James N. Mattis

• “Turn every page. Never assume anything. Turn every goddam page.” - Robert Caro in The Secrets of Lyndon Johnson’s Archives: On a Presidential Paper Trail

• Chess master and tutor Bruce Pandolfini “is teaching [his students] how to think. ‘My goal,’ he says, ‘is to help them develop what I consider to be two of the most important forms of intelligence: the ability to read other people, and the ability to understand oneself.’”

• Li Lu on Charlie Munger: “When Charlie thinks about things, he starts by inverting. To understand how to be happy in life, Charlie will study how to make life miserable; to examine how business[es] become big and strong, Charlie first studies how businesses decline and die; most people care more about how to succeed in the stock market, Charlie is most concerned about why most have failed in the stock market. Charlie constantly collects and researches the notable failures in each and every type of people, business, government, and academia, and arranges the causes of failures into a decision-making checklist for making the right decisions. Because of this, he has avoided major mistakes in his decision making in his life and in his career. The importance of this on the performance of Buffett and Berkshire Hathaway over the past 50 years cannot be emphasized enough.”

• Robet Caro in

Q: How do you still win in a packed category? I feel like it’s a lot harder to win now than it was 10 years ago.

J: Winning what? Winning who? Winning it all? Taking everything? That’s an insurmountable mountain of intimidation right there. Don’t do that to yourself.

How about just making something that can sustain itself? Why do you need to win it all? Why would you ever want to make it that hard on yourself?

Build something good, keep your costs low, keep your growth in check, hold back your expectations, find some customers, charge them money for your good/services, make more than you spend, and you’ll buy yourself another day, or week, or month, or year in business. Just aim to stay open, don’t aim to win anything from anyone. Staying afloat is a win for yourself.

Just start there. The odds are still against you, but they’re a whole lot better than trying to win it all.

For example, to subscribe to a twitter feed of a favorite username, try this URL - https://rsshub.app/twitter/user/pavanyara_ - to get timeline.

Since this is open source, you can also self deploy in your VPS or use as a NPM package.

There are two big problems that plague rescue efforts at big companies: history and trust…

All of which helps explain why technology rescues at bigger, older companies are so difficult. One is constantly fighting against history…To a large extent “be agile” is almost synonymous with “trust each other.” If you’re wondering why large companies have trouble being agile, it is partly because it is impossible for 11,000 people to trust each other the way 5 people can. That is simply reality. Until someone can figure out the magic spell that allows vast groups of people, in different countries, with different cultures, speaking different languages, to all trust each other as if they were good friends, then people in the startup community need to be a lot more careful about how carelessly they recommend that larger companies should be more agile.

It turned out, though, that Mr. Iger had a fierce will under that gentlemanly exterior. Early on, he began getting up at 4 a.m. to outwork everyone else and he still does. He sets out his exercise clothes the night before, so he doesn’t have to turn on the lights in his closet and thus wake up his wife, Willow Bay, a former Estee Lauder model and broadcaster who is now dean of the USC Annenberg School of Communication and Journalism. He leaves out a coffee mug for Ms. Bay and warms up some milk for her coffee before he tackles the VersaClimber.

“I never viewed myself as exceptional,” Mr. Iger says over salmon and a glass of red wine at the Napa Rose restaurant in Disneyland. “And so whenever I got a job, I was relying on hard work more than anything and a level of enthusiasm and optimism. When I went to ABC Sports, everybody there went to Stanford or Dartmouth or Columbia.

“Ithaca College, O.K.? I didn’t have an inferiority complex but I knew I wasn’t one of them. I didn’t wear Gucci shoes. I didn’t wear Brooks Brothers clothes. I couldn’t afford any of that stuff, but I knew I had a work ethic that was prodigious. And what happened early on is people started relying on me because they knew if they asked me to get something done, including Roone Arledge” — the ABC executive — “I would get it done.

“So suddenly I realized, well, wait a minute. I may not be special in certain ways. But when it came to getting things done, I was special. And that’s actually driven me throughout, you know?”

Actually, Mr. Iger’s book is a primer on how much you can achieve if you keep your ego in check. In an era of brutish and ego-driven leadership in the White House, Silicon Valley and in many other countries around the world, Mr. Iger doesn’t lead with his ego or try to drive the other alphas out of the herd.

“You have to have an ability to subjugate your own ego,” he says. “It serves you well when you’re rising and then even when you have risen, there are going to be times when you just have to put that away.”

1. No company or investment strategy is proven until it’s survived a calamity.
2. Independence is one of the most under-appreciated assets. Relinquishing it should be done sparingly and with eyes wide open of its cost.
3. “Magic made them. Only math will save -them”.
4. Everyone wants crazy vision combined with corporate decorum. Rarely are those two things found in the same person.
5. Good products do not automatically create good businesses, especially if part of the product’s consumer appeal is that the business sells it for less than the cost of its production.
6. Every business has three main stakeholders: Customers, employees, and shareholders. You can ignore any one of those for a while, but eventually all three have to be cared for

Good work finds the way between pride and despair.

It graces with health. It heals with grace.

It preserves the given so that it remains a gift.

By it, we lose loneliness: we clasp the hands of those who go before us, and the hands of those who come after us;

we enter the little circle of each other’s arms,

and the larger circle of lovers whose hands are joined in a dance,

and the larger circle of all creatures, passing in and out of life, who move also in a dance, to a music so subtle and vast that no ear hears it except in fragments.

• Wendell Berry

Surgeon Don Miguel Ruiz had a near-death experience that caused him to rethink the way he had been living. He developed a set of four agreements with himself to help him life a more fulfilling life:

1. Be impeccable with your word.
2. Don’t take anything personally. Don’t swallow poison.
3. Don’t make assumptions.Ask questions.
4. Always do your best.

• The first agreement is to be impeccable with your word. It sounds very simple, but it is very, very powerful. Why your word? Your word is the power that you have to create.

• Taking things personally makes you easy prey for these predators, the black magicians. They can hook you easily with one little opinion and feed you whatever poison they want, and because you take it personally, you eat it up. You eat all their emotional garbage, and now it becomes your garbage. But if you do not take it personally, you are immune in the middle of hell. Immunity to poison in the middle of hell is the gift of this agreement.

• If others tell us something we make assumptions, and if they don’t tell us something we make assumptions to fulfill our need to know and to replace the need to communicate. Even if we hear something and we don’t understand we make assumptions about what it means and then believe the assumptions. We make all sorts of assumptions because we don’t have the courage to ask questions.

• Just do your best — in any circumstance in your life. It doesn’t matter if you are sick or tired, if you always do your best there is no way you can judge yourself. And if you don’t judge yourself there is no way you are going to suffer from guilt, blame, and self-punishment. By always doing your best, you will break a big spell that you have been under.

1. When you’re preparing, think about your audience.

• Before diving into the information, ask yourself: Who will be in the room? Why are they there? What do they need? Be specific in your answers. Identify the audience’s needs, both spoken and unspoken, and craft a message that speaks directly to those needs.

2. Right before you speak, refocus your brain.

• Remind yourself that you are here to help your audience. Be firm with your brain. Tell yourself, “Brain, this presentation is not about me. It is about helping my audience.” Over time (usually between four and six presentations), your brain will begin to get it, and you will become less nervous.

3. While you’re speaking, make eye contact.
   • The best way to connect to your audience is by speaking to them as individuals. How? By making sustained eye contact with one person per thought. (Each thought is about one full clause.) By focusing at one person at a time, you make each person in the room feel like you are talking just to them.

Software design at most tech companies and startups tend to be surprising than what you would expect in general. Most startups do not use any of the standard architecture plans - UML, 4+1 model, ADR, C4 or dependency diagrams - but simple diagrams. Most often than not, they do not employ hands-off IT architects or enterprise architects, but experienced hands who drive the design process. Lastly, majority of them do not follow any strict/common architecture patters, referenced in the software architecture literature.

The author notes that peer engineers at FANG companies tend to share a simple approach to design and implementation - simple, jargonless software design over architecture patterns

1. Start with the business problem
2. Brainstorm the approach
3. Whiteboard your approach
4. Write it up via simple documentation with simple diagrams
5. Talk about trade-offs and alternatives.
6. Circulate the design document within the team/organization and get feedback

The author also shares few tips on getting better at designing systems

1. Pull over a teammate and whiteboard your design approach
2. Write up your design in a simple document and share it with your team, asking for feedback
3. Design it two different ways and contrast the two designs.
4. Be explicit about trade-offs you make, why you made and what is optimized for. 5.Review other’s designs. Do it better

Takeaway:

The best software design is simple and easy to understand. The next time you’re starting a new project, instead of thinking, “How will I architect this system, what battle-tested patterns should I use and what formal methodology should I document it with?”, think “How can I come up with the simplest possible design, in a way that’s easy for anyone to understand?”.

It has a core product framework along with plugins to manage storage and updating of data files. Though it is written in Python, it can support any language including Javascript, Ruby, HTML, CSS etc, through CookieCutter templates.

Link: http://datakit.ap.org

“I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain”

• Dune by Frank Herbert

Man lives by time. Inventing the future has been his favorite game of escape. We think that changes in ourselves can come about in time, that order in ourselves can be built up little by little, added to day by day. But time doesn’t bring order or peace, so we must stop thinking in terms of gradualness. This means that there is no tomorrow for us to be peaceful in. We have to be orderly on the instant.

It is only then [when the mind is completely still] that the mind is free because it is no longer desiring anything; it is no longer seeking; it is no longer pursuing a goal, an ideal—which are all the projections of a conditioned mind. And if you ever come to that understanding, in which there can be no self-deception, then you will find that there is a possibility of the coming into being of that extraordinary thing called creativity.

“All the work that I have done in my life will be obsolete by the time I’m 50…Apple II is obsolete now, Apple Is were obsolete many years ago. The Macintosh is on the verge of becoming obsolete in the next few years.

“This is a field where one does not write a Principia which holds up for 200 years. This is not a field where one paints a painting that will be looked at for centuries or builds a church that will be admired and looked at in astonishment for centuries. No, this is a field where one does one’s work and in 10 years it’s obsolete and really will not be usable in 10 or 20 years.

“It’s sort of like sediment of rocks. … You’re building up a mountain and you get to contribute your little layer of sedimentary rock to make the mountain that much higher, but no one on the surface, unless they have X-ray vision, will see your sediment. They’ll stand on it, it’ll be appreciated by that rare geologist, but no, it’s not like the Renaissance at all. It’s very different”

This game is about not sticking your neck out too far on a trade or a deal, lest it be chopped off. It’s about keeping one’s hands and feet inside the vehicle at all times and making the most of the ride. It’s about ignoring the temptation of easy scores or the shortcuts that promise fast riches.

Its about realizing that everything has a cost, “cheap” is expensive and as for “free”? Free is deadly

Not cutting legal or ethical corners.

Not accepting the envelope of cash or the hidden commission.

Not trusting anyone who doesn’t seem to have their story straight or their act together.

Not betting on underdogs or turnarounds or longshots.

It’s about the hustle, but the hustle with good intentions, the hustle that gets you in the right doors or onto the right phone calls.

It’s about associating with A-Listers only – and recognizing the C-Listers who want to bring you down with them.

This is the only game where wealth and success is GUARANTEED – all you have to do is put your head down, do what you think is right and try your best. And be there. Building while the market gives you nothing, so that when it finally does – and it will – you get to go along.

It’s about blocking and tackling, doing the little things that the other guys won’t: Following up, showing up, reading more and starting earlier and taking mental notes and formulating your own personal list of do’s and don’ts so that you have a frame of reference at every crossroads (and there will be many).

Street Life will break you down at times but over the long haul it will be good to you. Provided you don’t take the detours or cheat to get ahead. Provided you don’t fall off or get taken out before your time.

Because the final rule, and the most important one, is this:

Outlast the bastards.

1. Be Impeccable With Your Word.

2. Don’t Take Anything Personally.

3. Don’t Make Assumptions.

4. Always Do Your Best.

“Sadly, many people spend their entire lives focusing on the wrong questions. They may pursue money, when they really want happiness. They may pursue the respect of people whose favor is really not worthy of being sought. So before you succumb to the temptation to immediately spring to work on the answer, always stop and first ask, “What’s the real question here?” Often the question that seems obvious may not be the question that leads to effective action.”

~ Edward B. Burger and Michael Starbird, The 5 Elements of Effective Thinking

Again, some things are really cynical, others are long observations on different jobs.

Before you start writing code…

• Spec First, Then Code
• Write Steps as Comments
• Gherkin Is Your Friend to Understand Expectations
• Design Patters Are Used to Name Solution, Not Find Them
• Thinking Data Flow Beats Patterns
• The Magic Number Seven, Plus Or Minus Two
• Cognitive Cost Is The Readability Killer
• Learn The Basics of Functional Programming

Testing Software

• Unit Tests Are Good, Integration Tests Are Gooder
• Testing Every Function Creates Dead Code
• Tests Make Better APIs
• Make Tests That You Know How To Run On The Command Line
• Good Languages Come With Tests

Documenting your code

• Documentation Is A Love Letter To Your Future Self
• The Function Documentation Is Its Contract
• If A Function Description Includes An “And”, It’s Wrong
• Good Languages Come With Integrated Documentation

Writing code

• Be Ready To Throw Your Code Away
• Future Thinking Is Future Trashing
• Don’t Use Booleans As Parameters
• Beware of Interface Changes
• It’s Better To Let The Application Crash Than Do Nothing
• If You Know How To Handle It, Handle It
• Types Say What Your Data Is
• If Your Data Has a Schema, Use a Structure
• Don’t Mess With Things Outside Your Project

More:

• https://blog.juliobiason.net/thoughts/things-i-learnt-the-hard-way/
• https://blog.juliobiason.net/books/things-i-learnt/

I.Codebase. One codebase tracked in revision control, many deploys

II.Dependencies. Explicitly declare and isolate dependencies

III. Config. Store config in the environment

IV. Backing services. Treat backing services as attached resources

V. Build, release, run. Strictly separate build and run stages

VI. Processes. Execute the app as one or more stateless processes

VII. Port binding. Export services via port binding

VIII. Concurrency. Scale out via the process model

IX. Disposability. Maximize robustness with fast startup and graceful shutdown

X. Dev/prod parity. Keep development, staging, and production as similar as possible

XI. Logs. Treat logs as event streams

XII. Admin processes. Run admin/management tasks as one-off processes

Selected excerpts:

That’s what I’m interested in talking about today. Because if I’ve learned one thing, it’s that technology doesn’t change who we are, it magnifies who we are, the good and the bad.

Our problems – in technology, in politics, wherever – are human problems. From the Garden of Eden to today, it’s our humanity that got us into this mess, and it’s our humanity that’s going to have to get us out.

If you want credit for the good, take responsibility for the bad

But whether you like it or not, what you build and what you create define who you are.

It feels a bit crazy that anyone should have to say this. But if you’ve built a chaos factory, you can’t dodge responsibility for the chaos. Taking responsibility means having the courage to think things through.

Graduates, at the very least, learn from these mistakes. If you want to take credit, first learn to take responsibility.

Be a builder

In other words, whatever you do with your life, be a builder.

You don’t have to start from scratch to build something monumental. And, conversely, the best founders – the ones whose creations last and whose reputations grow rather than shrink with passing time – they spend most of their time building, piece by piece.

Builders are comfortable in the belief that their life’s work will one day be bigger than them – bigger than any one person. They’re mindful that its effects will span generations. That’s not an accident. In a way, it’s the whole point.

Graduates, being a builder is about believing that you cannot possibly be the greatest cause on this Earth, because you aren’t built to last. It’s about making peace with the fact that you won’t be there for the end of the story.

You won’t be ready

Fourteen years ago, Steve stood on this stage and told your predecessors: “Your time is limited, so don’t waste it living someone else’s life.”

Here’s my corollary: “Your mentors may leave you prepared, but they can’t leave you ready.”

When the dust settled, all I knew was that I was going to have to be the best version of myself that I could be.

I knew that if you got out of bed every morning and set your watch by what other people expect or demand, it’ll drive you crazy.

So what was true then is true now. Don’t waste your time living someone else’s life. Don’t try to emulate the people who came before you to the exclusion of everything else, contorting into a shape that doesn’t fit.

It takes too much mental effort – effort that should be dedicated to creating and building. You’ll waste precious time trying to rewire your every thought, and, in the mean time, you won’t be fooling anybody.

Graduates, the fact is, when your time comes, and it will, you’ll never be ready.

But you’re not supposed to be. Find the hope in the unexpected. Find the courage in the challenge. Find your vision on the solitary road.

Don’t get distracted.

There are too many people who want credit without responsibility.

Too many who show up for the ribbon cutting without building anything worth a damn.

Be different. Leave something worthy.

And always remember that you can’t take it with you. You’re going to have to pass it on.

But the best way to find solitude is, quite simply, by walking alone. Newport pays tribute to Abraham Lincoln’s time at the Soldiers’ Home cottage in North DC as a reprieve from the busyness of the White House, as well as Friedrich Nietzsche’s long sojourns in the Italian Alps. These times of withdrawal provided both men the space and time necessary to make hard decisions and produce great works. As Newport puts it, we need solitude to flourish, for “humans are not wired to be constantly wired.” Likewise, Henry David Thoreau, one of Newport’s constant companions, would walk to town rather than using a horse and wagon, thus exemplifying technological minimalism. In fact, Thoreau calculated how the hours it took him to walk from Walden pond to Concord offset the amount of labor hours it would have taken him to afford the wagon. Tragically, we have surrendered this calculus, Newport argues, to the purveyors of the attention economy. We’ve traded our souls for a few small conveniences, and we need long periods of solitude to recenter the self that is now scattered across the digital landscape.

With respect to conversation, Newport distinguishes between high-bandwidth and low-bandwidth communication. He argues that conversation is a high-bandwidth form of communication that is far more suited to our evolutionary development as social beings than the salvos of data with which social media pummel us. How ironic, Newport notes, that our fixation with the “like” button prevents us from truly knowing what we like. By liking another, we fail to know others. Indeed, by depriving ourselves of face-to-face contact with others, we widen the sea of angst that no amount of “likes” can ever hope to bridge. This phenomenon is borne out by research into college-age students, who experienced a radical increase in anxiety-related disorders around 2011, the same year that smartphones became widely available to consumers and teenagers began owning their own phones.

Source: https://lareviewofbooks.org/article/walking-alone-on-digital-minimalism/#!

1. Seek Wealth, Not Money or Status

The difference between wealth, money and status.

Nivi: You probably know Naval from his Twitter account.

We’re going to be talking about his tweetstorm on “How to get rich (without getting lucky).” We’re going to go through most of the tweets in detail, give Naval a chance to expand on them and generally riff on the topic. He’ll probably throw in some ideas that he hasn’t even published before.

Naval’s the co-founder of AngelList and Epinions. He’s also a prolific tech investor in companies like Twitter, Uber, and many more.

I’m the co-founder of AngelList with Naval. And I co-authored the Venture Hacks blog with him back in the day.

Naval: The How To Get Rich tweetstorm definitely hit a nerve and went viral. A lot of people say it was helpful and reached across aisles.

People outside of the tech industry, people in all walks of life, people want to know how to solve their money problems. Everyone vaguely knows that they want to be wealthy, but they don’t have a good set of principles to do it by.

Wealth is assets that earn while you sleep

Nivi: What’s the difference between wealth, money, and status?

Naval: Wealth is the thing that you want. Wealth is assets that earn while you sleep. Wealth is the factory, the robots, that’s cranking out things. Wealth is the computer program that’s running at night, that’s serving other customers. Wealth is even money in the bank that is being reinvested into other assets, and into other businesses.

Even a house can be a form of wealth because you can rent it out, although that’s probably a lower use of productivity of land than doing some commercial enterprise.

So, my definition of wealth is much more businesses and assets that can earn while you sleep.

Wealth buys your freedom

The reason you want wealth is because it buys you your freedom. So, you don’t have to wear a tie like a collar around your neck. So, you don’t have to wake up at 7:00 AM, and rush to work, and sit in commute traffic. So, you don’t have to waste away your entire life grinding all your productive hours away into a soulless job that doesn’t fulfill you.

So, the purpose of wealth is freedom. It’s nothing more than that. It’s not to buy fur coats, or drive Ferraris, or sail yachts, or jet around the world in your Gulfstream. That stuff gets really boring and really stupid, really fast. It’s really so that you are your own sovereign individual.

You’re not going to get that unless you really want it. The entire world wants it and the entire world is working hard at it.

To some extent it is competitive. It’s a positive sum game, but there are competitive elements to it. Because there’s a finite amount of resources right now in society. To get the resources to do what you want, you have to stand out.

Money is how we transfer wealth

Money is how we transfer wealth. Money is social credits. It is the ability to have credits and debits of other people’s time.

If I do my job right, if I create value for society, society says, “Oh, thank you. We owe you something in the future for the work that you did in the past. Here’s a little IOU. Let’s call that money.”

That money gets debased because people steal the IOUs. The government prints extra IOUs. People renege on their IOUs. But money is trying to be a reliable IOU from society that you are owed something for something you, or someone who gave you the money, did in the past.

We can transfer these IOUs around. So, money is how we transfer wealth.

Status is your rank in the social hierarchy

There are fundamentally two huge games in life that people play. One is the money game. Because money is not going to solve all of your problems, but it’s going to solve all of your money problems. I think people know that. They realize that, so they want to make money.

But at the same time, many of them deep down believe that they can’t make it. They don’t want any wealth creation to happen. So, they virtue signal by attacking the whole enterprise by saying, “Well, making money is evil. You shouldn’t do it.”

But they’re actually playing the other game, which is the status game. They’re trying to be high status in the eyes of other people watching by saying, “Well, I don’t need money. We don’t want money.”

Status is your ranking in the social hierarchy.

Wealth is not a zero-sum game. Everybody in the world can have a house. Because you have a house doesn’t take away from my ability to have a house. If anything, the more houses that are built, the easier it becomes to build houses, the more we know about building houses, and the more people that can have houses.

Wealth is a very positive sum game. We create things together. We’re starting this endeavor to create this piece of art that explains what we’re doing. At the end of it, something brand new will be created. It’s a positive sum game.

Status is a very old game

Status, on the other hand, is a zero-sum game. It’s a very old game. We’ve been playing it since monkey tribes. It’s hierarchical. Who’s number one? Who’s number two? Who’s number three? And for number three to move to number two, number two has to move out of that slot. So, status is a zero-sum game.

Politics is an example of a status game. Even sports is an example of a status game. To be the winner, there must be a loser. I don’t fundamentally love status games. They play an important role in our society, so we can figure out who’s in charge. But fundamentally, you play them because they’re a necessary evil.

On an evolutionary basis, if you go back thousands of years, status is a much better predictor of survival than wealth is. You couldn’t have wealth before the farming age because you couldn’t store things. Hunter-gatherers carried everything on their backs.

So, hunter-gatherers lived in entirely status based societies. Farmers started going to wealth-based societies. And the modern industrial economies are much more heavily wealth-based societies.

People creating wealth will always be attacked by people playing status games

There’s always a subtle competition going on between status and wealth. For example, when journalists attack rich people, or attack the technology industry, they’re really bidding for status. They’re saying, “No, the people are more important. And I, the journalist, represent the people, and therefore I am more important.”

The problem is that to win at a status game, you have to put somebody else down. That’s why you should avoid status games in your life because they make you into an angry combative person. You’re always fighting to put other people down, to put yourself and the people you like up.

Status games are always going to exist. There’s no way around it, but realize that most of the time, when you’re trying to create wealth, you’re getting attacked by someone else, and they’re trying to look like a goody-two shoes.

They’re trying to up their own status at your expense. They’re playing a different game. And it’s a worse game. It’s a zero-sum game, instead of a positive sum game.

2. Make Abundance for the World Wealth isn’t about taking something from somebody else—it’s about creating abundance for the world.

Ethical wealth creation makes abundance for the world

Naval: I think there is this notion that making money is evil, right? It’s rooted all the way back down to “money is the root of all evil.” People think that the bankers steal our money. It’s somewhat true in that, in a lot of the world, there’s a lot of theft going on all the time.

The history of the world, in some sense, is this predator/prey relationship between makers and takers. There are people who go out and create things, and build things, and work hard on things.

Then there are people who come along with a sword, or a gun, or taxes, or crony capitalism, or Communism, or what have you. There’s all these different methods to steal.

Even in nature, there are more parasites than there are non-parasitical organisms. You have a ton of parasites in you, who are living off of you. The better ones are symbiotic, they’re giving something back. But there are a lot that are just taking. That’s the nature of how any complex system is built.

What I am focused on is true wealth creation. It’s not about taking money. It’s not about taking something from somebody else. It’s from creating abundance.

Obviously, there isn’t a finite number of jobs, or finite amount of wealth. Otherwise we would still be sitting around in caves, figuring out how to divide up pieces of fire wood, and the occasional dead deer.

Most of the wealth in civilization, in fact all of it, has been created. It got created from somewhere. It got created from people. It got created from technology. It got created from productivity. It got created from hard work. This idea that it’s stolen is this horrible zero-sum game that people who are trying to gain status play.

Everyone can be rich

But the reality is everyone can be rich. We can see that by seeing, that in the First World, everyone is basically richer than almost anyone who was alive 200 years ago.

200 years ago nobody had antibiotics. Nobody had cars. Nobody had electricity. Nobody had the iPhone. All of these things are inventions that have made us wealthier as a species.

Today, I would rather be a poor person in a First World country, than be a rich person in Louis the XIV’s France. I’d rather be a poor person today than aristocrat back then. That’s because of wealth creation.

The engine of technology is science that is applied for the purpose of creating abundance. So, I think fundamentally everybody can be wealthy.

This thought experiment I want you to think through is imagine if everybody had the knowledge of a good software engineer and a good hardware engineer. If you could go out there, and you could build robots, and computers, and bridges, and program them. Let’s say every human knew how to do that.

What do you think society would look like in 20 years? My guess is what would happen is we would build robots, machines, software and hardware to do everything. We would all be living in massive abundance.

We would essentially be retired, in the sense that none of us would have to work for any of the basics. We’d even have robotic nurses. We’d have machine driven hospitals. We’d have self-driving cars. We’d have farms that are 100% automated. We’d have clean energy.

At that point, we could use technology breakthroughs to get everything that we wanted. If anyone is still working at that point, they’re working as a form of expressing their creativity. They’re working because it’s in them to contribute, and to build and design things.

I don’t think capitalism is evil. Capitalism is actually good. It’s just that it gets hijacked. It gets hijacked by improper pricing of externalities. It gets hijacked by improper yields, where you have corruption, or you have monopolies.

3. Free Markets Are Intrinsic to Humans We’re the only animals who cooperate across genetic boundaries, because we can track credits and debits in voluntary exchanges.

Free markets are intrinsic to the human species

Naval: Overall capitalism [meaning free markets] is intrinsic to the human species. Capitalism is not something we invented. Capitalism is not even something we discovered. It is in us in every exchange that we have.

When you and I exchange information, I want some information back from you. I give you information. You give me information. If we weren’t having a good information exchange, you’d go talk to somebody else. So, the notion of exchange, and keeping track of credits and debits, this is built into us as flexible social animals.

We are the only animals in the animal kingdom that cooperate across genetic boundaries. Most animals don’t even cooperate. But when they do, they cooperate only in packs where they co-evolve together, and they share blood, so they have some shared interests.

Humans don’t have that. I can cooperate with you guys. One of you is a Serbian. The other one is a Persian by origin. And I’m Indian by origin. We have very little blood in common, basically none. But we still cooperate.

What lets us cooperate? It’s because we can keep track of debits and credits. Who put in how much work? Who contributed how much? That’s all free market capitalism is.

So, I strongly believe that it is innate to the human species, and we are going to create more and more wealth, and abundance for everybody.

Everybody can be wealthy. Everybody can be retired. Everybody can be successful. It is merely a question of education and desire. You have to want it. If you don’t want it, that’s fine. Then you opt out of the game.

But don’t try to put down the people who are playing the game. Because that’s the game that keeps you in a comfortable warm bed at night. That’s the game that keeps a roof over your head. That’s the game that keeps your supermarkets stocked. That’s the game that keeps the iPhone buzzing in your pocket.

So, it is a beautiful game that is worth playing ethically, rationally, morally, socially for the human race. It’s going to continue to make us all richer and richer, until we have massive wealth creation for anybody who wants it.

Too many takers and not enough makers will plunge a society into ruin

Nivi: It’s not just individuals secretly despising wealth, right? There are countries, groups, political parties that overtly despise wealth. Or at least seem to.

Naval: That’s right. What those countries, political parties, and groups are reduced to is playing the zero-sum game of status. In the process to destroy wealth creation, they drag everybody down to their level.

Which is why the U.S. is a very popular country for immigrants because of the American dream. Anyone can come here, be poor, and then work really hard and make money, and get wealthy. But even just make some basic money for their life.

Obviously, the definition of wealth is different for different people. A First World citizen’s definition of wealth might be, “Oh, I have to make millions of dollars, and I’m completely done.”

Whereas to a Third World poor immigrant just entering the country, and we were poor immigrants who came here when I as fairly young, to the United States, wealth may just be a much lower number. It may just be, “I don’t have to work a manual labor job for the rest of my life that I don’t want to work.”

But groups that despise it will essentially bring the entire group to that level. If you get too many takers, and not enough makers, society falls apart. You end up with a communist country.

Look at Venezuela, right? They were so busy taking, and dividing, and reallocating, that people are literally starving in the streets, and losing kilograms of body weight every year just from sheer starvation.

Another way to think about it is imagine an organism that has too many parasites. You need some small number of parasites to stay healthy.

You need a lot of symbiotes. All the mitochondria in all of our cells that help us respirate and burn oxygen. These are symbiotes that help us survive. We couldn’t survive without them.

But, to me, those are partners in the wealth creation that creates the human body. But if you just were filled with parasites, if you got infected with worms, or a virus, or bacteria that were purely parasitical, you would die. So, any organism can only withstand a small number of parasites. When the parasitic element gets too far out of control, you die.

Again I’m talking about ethical wealth creation. I’m not talking about monopolies. I’m not talking about crony capitalism. I’m not talking about mispriced externalities like the environment.

I’m talking about free minds, and free markets. Small-scale exchange between humans that’s voluntary, and doesn’t have an outsized impact on others.

I think that kind of wealth creation, if a society does not respect it, if the group does not respect it, then society will plunge into ruin, and darkness.

4. Making Money Isn’t About Luck Making money isn’t about luck. It’s about becoming the kind of person who makes money.

Making money isn’t about luck

Naval: Obviously, we want to be wealthy, and we want to get there in this lifetime without having to rely on luck.

A lot of people think making money is about luck. It’s not. It’s about becoming the kind of person that makes money.

I like to think that if I lost all my money and if you drop me on a random street in any English-speaking country, within 5, 10 years I’d be wealthy again. Because it’s a skill set that I’ve developed and I think anyone can develop.

In 1,000 parallel universes, you want to be wealthy in 999 of them. You don’t want to be wealthy in the 50 of them where you got lucky. We want to factor luck out of it.

There’s four kinds of luck that we’re talking about. This came from a book. Pmarca, Marc Andreessen, wrote a blog post about it.

1. Blind luck

The first kind of luck you might say is blind luck. Where I just got lucky because something completely out of my control happened. That’s fortune, that’s fate.

2. Luck from hustling

Then there’s luck that comes through persistence, hard work, hustle, motion. Which is when you’re running around creating lots of opportunities, you’re generating a lot of energy, you’re doing a lot of things, lots of things will get stirred up in the dust.

It’s almost like mixing a petri dish and seeing what combines. Or mixing a bunch of reagents and seeing what combines. You’re generating enough force and hustle and energy that luck will find you.

We, as a group, you could argue, got together because of that. Nenad had put up these great videos online, I saw them on Twitter. In that sense, he generated his own luck by creating videos until people like me keep finding him.

3. Luck from preparation

A third way is that you become very good at spotting luck. If you are very skilled in a field, you will notice when a lucky break happens in that field. When other people who aren’t attuned to it won’t notice. So you become sensitive to luck and that’s through skill and knowledge and work.

4. Luck from your unique character

Then the last kind of luck is the weirdest, hardest kind. But that’s what we want to talk about. Which is where you build a unique character, a unique brand, a unique mindset, where then luck finds you.

For example, let’s say that you’re the best person in the world at deep sea underwater diving. You’re known to take on deep sea underwater dives that nobody else will even attempt to dare.

Then, by sheer luck, somebody finds a sunken treasure ship off the coast. They can’t get it. Well, their luck just became your luck, because they’re going to come to you to get that treasure. You’re going to get paid for it.

Now, that’s an extreme example. The person who got lucky by finding the treasure chest, that was blind luck. But them coming to you and asking you to extract it and having to give you half, that’s not luck.

You created your own luck. You put yourself in a position to be able to capitalize on that luck. Or to attract that luck when nobody else has created that opportunity for themselves. When we talk about “without getting lucky,” we want to be deterministic, we don’t want to leave it to chance.

In 1,000 parallel universes, you want to be wealthy in 999 of them

Nivi: Do you want to elaborate a little bit more on the idea that in a 1,000 parallel universes you want to get rich in 999 of them? I think some people are going to see that and say, “that sounds impossible, it sounds like it’s too good to be true.”

Naval: No, I don’t think it’s impossible. I think that you may have to work a little bit harder at it given your starting circumstances. I started as a poor kid in India, so if I can make it, anybody can, in that sense.

Now, obviously, I had all my limbs and I had my mental faculties and I did have an education. There are some prerequisites you can’t get past. But if you’re listening to this video or podcast, you probably have the requisite means at your disposal, which is a functioning body and a functioning mind.

And I’ve encountered plenty of bad luck along the way. The first little fortune that I made, I instantly lost in the stock market. The second little fortune that I made, or I should have made, I basically got cheated by my business partners. It’s only the third time around has been a charm.

And, even then, it has been in a slow and steady struggle. I haven’t made money in my life in one giant payout. It’s always been a whole bunch of small things piling up. It’s more about consistently creating wealth by creating businesses, including opportunities and creating investments. It hasn’t been a giant one-off thing.

Wealth stacks up one chip at a time, not all at once

My personal wealth has not been generated by one big year. It stacks up little bit, chips at a time. More options, more businesses, more investments, more things that I can do.

Same way that someone like Nenad, illacertus, he’s building his brand online. He’s building videos. It’s not like any one video is going to suddenly shower him with riches overnight. It’s going to be a long lifetime of learning, of reading, of creating that’s going to compound.

We’re talking about getting wealthy so you can retire, so you have your freedom. Not retire in the sense that you don’t do anything. But in the sense that you don’t have to be any place you don’t want to be, you don’t have to do anything you don’t want to do, you can wake up when you want, you can sleep when you want, you don’t have a boss. That’s freedom.

We’re talking about enough wealth to get to freedom. Especially thanks to the Internet these days, though, opportunities are massively abundant. I, in fact, have too many ways to make money, I don’t have enough time. I have opportunities pouring out of my ears and the thing I keep running out of is time.

There’s just so many ways to create wealth, to create products, to create businesses, to create opportunities, and to, as a byproduct, get paid by society that I can’t even handle it all.

5. Make Luck Your Destiny Build your character in a way so luck becomes deterministic.

Nivi: I think it’s pretty interesting that the first three kinds of luck that you described there are very common cliches for them that everybody knows. And then for that last kind of luck that comes to you out of the unique way that you act, there’s no real cliche for it.

So, for the first three kinds, there’s “dumb luck,” or “blind luck.” That’s the first kind of luck. The second kind of luck there’s the cliché that “fortune favors the bold.” That’s a person who gets lucky just by stirring the pot and acting. The third kind of luck, people say that “chance favors the prepared mind.”

But for the fourth kind of luck, there isn’t a common cliché out there that matches the unique character of your action, which I think is interesting and perhaps an opportunity and it also shows that people aren’t necessarily taking advantage of that kind of luck the way they should be.

Naval: I think also at that point, it starts becoming so deterministic that it stops being luck. So, the definition starts fading from luck to more destiny. So, I would characterize that fourth one as you build your character in a certain way and then your character becomes your destiny.

Build your character so opportunity finds you

One of the things I think that is important to making money, when you want the kind of reputation that makes people do deals through you. I use the example of like, if you’re a great diver then treasure hunters will come and give you a piece of the treasure for your diving skills.

If you’re a trusted, reliable, high-integrity, long-term thinking deal maker, then when other people want to do deals but they don’t know how to do them in a trustworthy manner with strangers, they will literally approach you and give you a cut of the deal or offer you a unique deal just because of the integrity and reputation that you have built up.

Warren Buffett, he gets offered deals, and he gets to buy companies, and he gets to buy warrants, and bailout banks and do things that other people can’t do because of his reputation.

But of course that’s fragile. It has accountability on the line, it has a strong brand on the line, and as we will talk about later, that comes with accountability attached.

But I would say your character, your reputation, these are things that you can build that then will let you take up advantage of opportunities that other people may characterize as lucky but you know that it wasn’t luck.

Nivi: You said that this fourth kind of luck is more or less a destiny. There’s a quote from that original book that was in Marc’s blog posts from Benjamin Disraeli, who I think was the former prime minister of the UK. The quote to describe this kind of luck was, “we make our fortunes and we call them fate.”

You have to be a little eccentric to be out on the frontier by yourself

There were a couple other interesting things about this kind of luck that were mentioned in the blog post, I think it’ll be good for the listeners to hear about is that, this fourth kind of luck can almost come out of eccentric ways that you do your things and that eccentricity is not necessarily a bad thing in this case. In fact, it’s a good thing.

Naval: Yeah, absolutely. Because the world is a very efficient place, so, everyone has dug through all the obvious places to dig and so to find something that’s new and novel and uncovered, it helps to be operating on a frontier.

Where right there you have to be a little eccentric to be out on the frontier by yourself, and then you have to be willing to dig deeper than other people do, deeper than seems rational just because you’re interested.

Nivi: Yeah, the two quotes that I’ve seen that express this kind of luck in addition to that Benjamin Disraeli one, are this one from Sam Altman where he said, “extreme people get extreme results.” I think that’s pretty nice. And then there’s this other one from Jeffrey Pfeffer, who is a professor at Stanford that, “you can’t be normal and expect abnormal returns.” I’ve always enjoyed that one too.

Naval: Yeah. And one quote that I like which is the exact opposite of that is, “play stupid games win stupid prizes.” A lot of people spend a lot of their time playing social games like on Twitter where you’re trying to improve your social standing and you basically win stupid social prizes which are worthless.

Nivi: I guess the last thing that I have from this blog post is the idea that by pursuing these kinds of luck especially the last one, basically everything but dumb luck, by pursuing them you essentially run out of unluck. So, if you just keep stirring the pot and stirring the pot, that alone you will run out of unluck.

Naval: Yeah, or it could just be reversion to the mean. So, then you at least neutralized luck so that it’s your own talents that come into play.

6. You Won’t Get Rich Renting Out Your Time You won’t get rich renting out your time, because you can’t earn non-linearly.

You won’t get rich renting out your time

Nivi: Next you go into more specific details on how you can actually get rich, and how you can’t get rich. The first point was about how you’re not going to get rich: “You are not going to get rich renting out your time. You must own equity, a piece of the business to gain your financial freedom.”

Naval: This is probably one of the absolute most important points. People seem to think that you can create wealth, and make money through work. And it’s probably not going to work. There are many reasons for that.

But the most basic is just that your inputs are very closely tied to your outputs. In almost any salaried job, even at one that’s paying a lot per hour like a lawyer, or a doctor, you’re still putting in the hours, and every hour you get paid.

So, what that means is when you’re sleeping, you’re not earning. When you’re retired, you’re not earning. When you’re on vacation, you’re not earning. And you can’t earn non-linearly.

If you look at even doctors who get rich, like really rich, it’s because they open a business. They open like a private practice. And that private practice builds a brand, and that brand attracts people. Or they build some kind of a medical device, or a procedure, or a process with an intellectual property.

So, essentially you’re working for somebody else, and that person is taking on the risk, and has the accountability, and the intellectual property, and the brand. So, they’re just not gonna pay you enough. They’re gonna pay you the bare minimum that they have to, to get you to do their job. And that can be a high bare minimum, but it’s still not gonna be true wealth where you’re retired.

Renting out your time means you’re essentially replaceable

And then finally you’re actually just not even creating that much original for society. Like I said, this tweetstorm should have been called “How to Create Wealth.” It’s just “How to Get Rich” was a more catchy title. But you’re not creating new things for society. You’re just doing things over and over.

And you’re essentially replaceable because you’re now doing a set role. Most set roles can be taught. If they can be taught like in a school, then eventually you’re gonna be competing with someone who’s got more recent knowledge, who’s been taught, and is coming in to replace you.

You’re much more likely to be doing a job that can be eventually replaced by a robot, or by an AI. And it doesn’t even have to be wholesale replaced over night. It can be replaced a little bit at a time. And that kind of eats into your wealth creation, and therefore your earning capability.

So, fundamentally your inputs are matched to your outputs. You are replaceable, and you’re not being creative. I just don’t think that, that is a way that you can truly make money.

You must own equity to gain your financial freedom

So everybody who really makes money at some point owns a piece of a product, or a business, or some kind of IP. That can be through stock options, so you can be working at a tech company. That’s a fine way to start.

But usually the real wealth is created by starting your own companies, or by even investors. They’re in an investment firm, and they’re buying equity. These are much more the routes to wealth. It doesn’t come through the hours.

You want a career where your inputs don’t match your outputs

You really just want a job, or a career, or a profession where your input is don’t match your outputs. If you look at modern society, again this is later in the tweetstorm. Businesses that have high creativity and high leverage tends to be ones where you could do an hour of work, and it can have a huge effect. Or you can do 1,000 hours of work, and it can have no effect.

For example, look at software engineering. One great engineer can for example create bitcoin, and create billions of dollars worth of value. And an engineer who is working on the wrong thing, or not quite as good, or just not as creative, or thoughtful, or whatever, can work for an entire a year, and every piece of code they ship ends up not getting used. Customers don’t want it.

That is an example of a profession where the input and the outputs are highly disconnected. It’s not based on the number of hours that you put in.

Whereas on the extreme other end, if you’re a lumberjack, even the best lumberjack in the world, assuming you’re not working with tools, so the inputs and outputs are clearly connected. You’re just using an ax, or a saw. You know, the best lumberjack in the world may be like 3x better than one of the worst lumberjacks, right? It’s not gonna be a gigantic difference.

So, you want to look for professions and careers where the inputs and outputs are highly disconnected. This is another way of saying that you want to look for things that are leveraged. And by leveraged I don’t mean financial leveraged alone, like Wall Street uses, and that has a bad name. I’m just talking about tools. We’re using tools.

Computer is a tool that software engineers use. If I’m a lumberjack with bulldozers, and automatic robot axes, and saws, I’m gonna be using tools, and have more leverage than someone who is just using his bare hands, and trying to rip the trees out by the roots.

Tools and leverage are what create this disconnection between inputs and outputs. Creativity, so the higher the creativity component of a profession, the more likely it is to have disconnected inputs and outputs.

So, I think that if you’re looking at professions where your inputs and your outputs are highly connected, it’s gonna very, very, hard to create wealth, and make wealth for yourself in that process.

7. Live Below Your Means for Freedom People living far below their means enjoy a freedom that people busy upgrading their lifestyles just can’t fathom.

People living below their means have freedom

Nivi: Any other big things you should avoid, other than renting out your time?

Naval: Yeah, there are two tweets that I put out that are related. The first one I was talking about where someone, like, how your lifestyle has to upgrade, shouldn’t get upgraded too fast. And that one basically said, people who are living far below their means enjoy a freedom that people busy upgrading their lifestyles just can’t fathom.

And I think that’s very important, just to not upgrade your lifestyle all the time. To maintain your freedom. And it just gives you freedom of operation. You basically, once you make a little bit of money, you still want to be living like your old self, so that just the worry goes away. So, don’t run out to upgrade that house, and lifestyle, and all that stuff.

The most dangerous things are heroin and a monthly salary

Let’s say you’re getting paid $1,000 an hour. The problem is, is that when you go into a work lifestyle like that, you don’t just suddenly go from making $20 an hour to making $1,000 an hour. That’s a progression over a long career.

And as that happens, one subtle problem is that you upgrade your lifestyle as you make more, and more money. And that upgrading of the lifestyle kind of ups what you consider to be wealth, and you stay in this wage slave trap.

So, I forget who said it, maybe it was Nassim Taleb. But he said, “The most dangerous things are heroin, and a monthly salary.” Right, because they are highly addictive. The way you want to get wealthy is you want to be poor, and working, and working, and working.

Ideally, you’ll make your money in discrete lumps

And this is for example how the tech industry works. Where you don’t make any money for ten years, and then suddenly at year eleven, you might have a giant payday.

Which is by the way one reason why these very high marginal tax rates for the so-called wealthy are flawed because the highest risk-taking, most creative professions you literally lose money for a decade over your life, while you take massive risk, and you bleed, and bleed, and bleed.

And then suddenly in year eleven, or year fifteen, you might have one single big payday. But then of course Uncle Sam show up, and basically say, “Hey, you know what, you just made a lot money this year. Therefore, you’re rich. Therefore, you’re evil and you’ve got to hand it all over to us.” So, it just destroys those kinds of creative risk taking professions.

But ideally you want to make your money in discrete lumps, separated over long periods of time, so that your own lifestyle does not have a chance to adapt quickly, and then you basically say, “Okay, now I’m done. Now I’m retired. Now I’m free. I’m still gonna work because you got to do something with your life, but I’m gonna work on only the things that I want, when I want.” And so you have much more creative expression, and much less about money.

8. Give Society What It Doesn’t Know How to Get Society will pay you for creating what it wants, but doesn’t know how to get, and delivering it at scale.

Give society what it wants, but doesn’t know how to get—at scale

Nivi: You’re not gonna get rich renting out your time. But you say that, “you will get rich by giving society what it wants, but does not yet know how to get at scale.”

Naval: That’s right. So, essentially as we talked about before, money is IOUs from society saying, “You did something good in the past. Now here’s something that we owe you for the future.” And so society will pay you for creating things that it wants.

But society doesn’t yet know how to create those things because if it did, they wouldn’t need you. They would already be stamped out big time.

Almost everything that’s in your house, in your workplace, and on the street used to be technology at one point in time. There was a time when oil was a technology, that made J.D. Rockefeller rich. There was a time when cars were technology, that made Henry Ford rich.

So, technology is just the set of things, as Alan Kay said, that don’t quite work yet [correction: Danny Hillis]. Once something works, it’s no longer technology. So, society always wants new things.

Figure out what product you can provide and then figure out how to scale it

And if you want to be wealthy, you want to figure out which one of those things you can provide for society, that it does not yet know how to get, but it will want, that’s natural to you, and within your skillset, within your capabilities.

And then you have to figure out how to scale it. Because if you just build one of it, that’s not enough. You’ve got to build thousands, or hundreds of thousands, or millions, or billions of them. So, everybody can have one.

Steve Jobs, and his team of course figured out that society would want smartphones. A computer in their pocket that had all the phone capability times 100, and be easy to use. So, they figured out how to build that, and then they figured out how to scale it.

And they figured out how to get one into every First World citizen’s pocket, and eventually every Third World citizen too. And so because of that they’re handsomely rewarded, and Apple is the most valuable company in the world.

Nivi: The way I tried to put it was that the entrepreneur’s job is to try to bring the high end to the mass market.

Naval: It starts as high end. First it starts as an act of creativity. First you create it just because you want it. You want it, and you know how to build it, and you need it. And so you build it for yourself. Then you figure out how to get it to other people. And then for a little while rich people have it.

Like, for example rich people had chauffeurs, and then they had black town cars. And then Uber came along, and everyone’s private driver is available to everybody. And now you can even see Uber pools that are replacing shuttle buses because it’s more convenient. And then you get scooters, which are even further down market of that. So, you’re right. It’s about distributing what rich people used to have to everybody.

But the entrepreneur’s job starts even before that, which is creation. Entrepreneurship is essentially an act of creating something new from scratch. Predicting that society will want it, and then figuring out how to scale it, and get it to everybody in a profitable way, in a self-sustaining way.

9. The Internet Has Massively Broadened Career Possibilities The Internet has massively broadened the possible space of careers, by allowing you to scale any niche obsession.

The Internet has massively broadened the possible space of careers

Nivi: Let’s look at this next tweet, which I thought was cryptic, and also super interesting, about the kind of job or career that you might have. You said, “The internet has massively broadened the possible space of careers. Most people haven’t figured this out yet.”

Naval: The fundamental property of the internet more than any other single thing is it connects every human to each other human on the planet. You can now reach everyone.

Whether it’s by emailing them personally, whether it’s by broadcasting to them on Twitter, whether it’s by posting something on Facebook that they find, whether it’s by putting up a website they come and access.

It connects everyone to everyone. So, the internet is an inter-networking tool. It connects everybody. That is its superpower. So, you want to use that.

What that helps you figure out is the internet means you can find your audience for your product, or your talent, and skill no matter how far away they are.

For example, Nenad, who is Illacertus, if you look at his videos pre-internet, how would he get the message out there? It would just be … what would he do? He would run around where he lives in his neighborhood showing it to people on a computer, or a screen? Or he would try to get it played at his local movie theater? It was impossible. It only works because he can put it on the internet.

And then how many people in the world are really interested in it? Or even in interested in what we’re talking about are really gonna absorb it, right? It’s gonna be a very small subset of humanity. The key is being able to reach them.

The Internet allows you to scale any niche obsession

So, what the internet does is allows any niche obsession, which could be just the weirdest thing. It could be like people who collect snakes, to like people who like to ride hot air balloons, to people who like to sail around the world by themselves, just one person on a craft, or someone who’s obsessed with miniature cooking. Like, there’s this whole Japanese miniature cooking phenomenon. Or there’s a show about a woman who goes in people’s houses, and tidies it up, right?

So, whatever niche obsession you have, the internet allows you to scale. Now that’s not to say that what you build will be the next Facebook, or reach billions of users, but if you just want to reach 50,000 passionate people like you, there’s an audience out there for you.

So the beauty of this is that we have 7 billion human beings on the planet. The combinatorics of human DNA are incredible. Everyone is completely different. You’ll never meet any two people who are even vaguely similar to each other, that can substitute for each other.

It’s not like you can say, “Well, Nivi, just left my life. So, I can have this other person come in, and he’s just like Nivi. And I get the same feelings, and the same responses, and the same ideas.” No. There are no substitutes for people. People are completely unique.

So, given that each person has different skillsets, different interests, different obsessions. And it’s that diversity that becomes a creative superpower. So, each person can be creatively superb at their own unique thing.

But before that didn’t matter. Because if you were living in a little fishing village in Italy, like your fishing village didn’t necessarily need your completely unique skill, and you had to conform to just the few jobs that were available. But now today you can be completely unique.

You can go out on the internet, and you can find your audience. And you can build a business, and create a product, and build wealth, and make people happy just uniquely expressing yourself through the internet.

The space of careers has been so broadened. E-sports players, you know, people making millions of dollars playing Fortnite. People creating videos, and uploading them. YouTube broadcasters. Bloggers, podcasters. Joe Rogan, I read, true or false, I don’t know, but I read that he’s gonna make about $100 million a year on his podcast. And he’s had 2 billion downloads.

Even PewDiePie… there’s a hilarious tweet that I retweeted the other day. PewDiePie is the number one trusted name in news. This is a kid I think in Sweden, and he’s got three times the distribution of the top cable news networks. Just on his news channel. It’s not even on his entertainment channel.

Escape competition through authenticity

The internet enables any niche interest, as long as you’re the best at it to scale out. And the great news is because every human is different, everyone is the best at something. Being themselves.

Another tweet I had that is worth kind of weaving in, but didn’t go into this tweetstorm, was a very simple one. I like things when I can compress them down because they’re easy to remember, and easy to hook onto. But that one was, “Escape competition through authenticity.”

Basically, when you’re competing with people it’s because you’re copying them. It’s because you’re trying to do the same thing. But every human is different. Don’t copy.

I know we’re mimetic creatures, and René Girard has a whole mimesis theory. But it’s much easier than that. Don’t imitate. Don’t copy. Just do your own thing. No one can compete with you on being you. It’s that simple.

And so the more authentic you are to who you are, and what you love to do, the less competition you’re gonna have. So, you can escape competition through authenticity when you realize that no one can compete with you on being you. And normally that would have been useless advice pre-internet. Post-internet you can turn that into a career.

10. Play Long-term Games With Long-term People Pick an industry where you can play long-term games with long-term people. All returns in life come from compound interest over many turns of the game.

Play long-term games with long-term people

Nivi: Talk a little bit about what industries you should think about working in. What kind of job you should have? And who you might want to work with? So, you said, “One should pick an industry where you can play long-term games with long-term people.” Why?

Naval: Yeah, this is an insight into what makes Silicon Valley work, and what makes high trust societies work. Essentially, all the benefits in life come from compound interests. Whether it’s in relationships, or making money, or in learning.

So, compound interest is a marvelous force, where if you start out with 1x what you have, and then if you increase 20% a year for 30 years, it’s not that you got 30 years times 20% added on. It was compounding, so it just grew, and grew, and grew until you suddenly got a massive amount of whatever it is. Whether it’s goodwill, or love, or relationships, or money. So, I think compound interest is a very important force.

You have to be able to play a long-term game. And long-term games are good not just for compound interest, they’re also good for trust. If you look at prisoner’s dilemma type games, a solution to prisoner’s dilemma is tit-for-tat, which is I’m just going do to you what you did last time to me, with some forgiveness in case there was a mistake made. But that only works in an iterated prisoner’s dilemma, in another words if we play a game multiple times.

So, if you’re in a situation, like for example you’re in Silicon Valley, where people are doing business with each other, and they know each other, they trust each other. Then they do right by each other because they know this person will be around for the next game.

Now of course that doesn’t always work because you can make so much money in one move in Silicon Valley, sometimes people betray each other because they’re just like, “I’m going to get rich enough off this that I don’t care.” So, there can be exceptions to all these circumstances.

But essentially if you want to be successful, you have to work with other people. And you have to figure out who can you trust, and who can you trust over a long, long period of time, that you can just keep playing the game with them, so that compound interest, and high trust will make it easier to play the game, and will let you collect the major rewards, which are usually at the end of the cycle.

So, for example, Warren Buffett has done really well as an investor in the U.S. stock market, but the biggest reason he could do that was because the U.S. stock market has been stable, and around, and didn’t get for example seized by the government during a bad administration. Or the U.S. didn’t plunge into some war. The underlying platform didn’t get destroyed. So, in his case, he was playing a longterm game. And the trust came from the U.S. stock market’s stability.

When you switch industries, you’re starting over from scratch

In Silicon Valley, the trust comes from the network of people in the small geographic area, that you figure out over time who you can work with, and who you can’t.

If you keep switching locations, you keep switching groups… let’s say you started out in the woodworking industry, and you built up a network there. And you’re working hard, you’re trying to build a product in the woodworking industry. And then suddenly another industry comes along that’s adjacent but different, but you don’t really know anybody in it, and you want to dive in, and make money there.

If you keep hopping from industry to … “No, actually I need to open a line of electric car stations for electric car refueling.” That might make sense. That might be the best opportunity. But every time you reset, every time you wander out of where you built your network, you’re going to be starting from scratch. You’re not going to know who to trust. They’re not going to know to trust you.

There are also industries in which people are transient by definition. They’re always coming in and going out. Politics is an example of that, right? In politics new people are being elected. You see in politics that when you have a lot of old-timers, like the Senate, people who have been around for a long time, and they’ve been career politicians.

There’s a lot of downside to career politicians like corruption. But an upside is they actually get deals done with each other because they know the other person is going to be in the same position ten years from now, and they’re going to have to keep dealing with them, so they might as well learn how to cooperate.

Whereas every time you get a new incoming freshman class in the House of Representatives, which turns over every two years with a big wave election. Nothing gets done because of a lot fighting. “Because I just got here, I don’t know you, I don’t know if you’re going to be around, why should I work with you rather than just try to do whatever I think is right?”

So, it’s important to pick an industry where you can play long-term games, and with long-term people. So, those people have to signal that they’re going to be around for a long time. That they’re ethical. And their ethics are visible through their actions.

Long-term players make each other rich

Nivi: In a long-term game, it seems that everybody is making each other rich. And in a short-term game, it seems like everybody is making themselves rich.

Naval: I think that is a brilliant formulation. In a longterm game, it’s positive sum. We’re all baking the pie together. We’re trying to make it as big as possible. And in a short term game, we’re cutting up the pie.

Now this is not to excuse the socialists, right? The socialists are the people who are not involved in baking the pie, who show up at the end, and say, “I want a slice, or I want the whole pie.” They show up with the guns.

But I think a good leader doesn’t take credit. A good leader basically tries to inspire people, so the team gets the job done. And then things get divided up according to fairness, and who contributed how much, or as close to it as possible, and took a risk, as opposed to just whoever has the longest knife… the sharpest knife at the end.

Returns come from compound interest in iterated games

Nivi: So, these next two tweets are, “Play iterated games. All returns in life, whether in wealth, relationships, or knowledge come from compound interest.”

Naval: When you have been doing business with somebody, you’ve been friends with somebody for ten years, twenty years, thirty years, it just gets better and better because you trust them so easily. The friction goes down, you can do bigger, and bigger things together.

For example, the simplest one is getting married to someone, and having kids, and raising children. That’s compound interest, right? Investing in those relationships. Those relationships end up being invaluable compared to more casual relationships.

It’s true in health and fitness. You know, the fitter you are, the easier it is to stay fit. Whereas the more you deteriorate your body, the harder it is to come back, and claw your way back to a baseline. It requires heroic acts.

Nivi: Regarding compound interest, I think I saw retweet something a while back. Maybe it was from Ed Latimore. It went something along the lines of, “Get some traction. Get purchase, and don’t lose it” [correction: the tweet is by @mmay3r]. So, the idea was to gain some initial traction, and never fall back, just keep ratcheting up, and up.

Naval: I don’t remember it exactly. But I think that was right. Yes, it was like, “Get traction, and don’t let go.” It was a good one, yes.

11. Pick Partners With Intelligence, Energy and Integrity Picking partners with high intelligence, energy and integrity is the three-part checklist that you can’t compromise on.

Pick business partners with high intelligence, energy and integrity

Naval: In terms of picking people to work with, pick ones that have high intelligence, high energy, and high integrity, I find that’s the three-part checklist that you cannot compromise on.

You need someone who is smart, or they’ll head in the wrong direction. And you’re not going to end up in the right place. You need someone high-energy because the world is full of smart, lazy people.

We all know people in our life who are really smart, but can’t get out of bed, or lift a finger. And we also know people who are very high energy, but not that smart. So, they work hard, but they’re sort of running in the wrong direction.

And smart is not a pejorative. It’s not meant to say someone is smart, someone else is stupid. But it’s more that everyone is smart at different things. So, depending on what you want to do well, you have to find someone who is smart at that thing.

And then energy, a lot of times people are unmotivated for a specific thing, but they’re motivated for other things. So, for example, someone might be really unmotivated to go to a job, and sit in an office. But they might be really motivated to go paint, right?

Well, in that case they should be a painter. They should be putting art up on the internet. Trying to figure out how to build a career out of that, rather than wearing a collar around their neck, and going to a dreary job.

And then high integrity is the most important because otherwise if you’ve got the other two, what you have is you have a smart and hard working crook, who’s eventually going to cheat you. So, you have to figure out if the person is high-integrity.

And as we talked about, the way you do that is through signals. And signals is what they do, not what they say. It’s all the non-verbal stuff that they do when they think nobody is looking.

Motivation has to come intrinsically

Nivi: With respect to the energy, there was this interesting thing from Sam Altman a while back, where he was talking about delegation, and he was saying, “One of the important things for delegation is, delegate to people who are actually good at the thing that you want them to do.”

It’s the most obvious thing, but it seems like… you want to partner with people who are naturally going to do the things that you want them to do.

Naval: Yeah. I almost won’t start a company, or hire a person, or work with somebody if I just don’t think they’re into what I want them to do.

When I was younger, I used to try and talk people into things. I had this idea that you could sell someone into doing something. But you can’t. You can’t keep them motivated. You can get them inspired initially. It might work if you’re a king like Henry V, and you’re trying to get them to just charge into battle, and then they’ll figure it out.

But if you’re trying to keep someone motivated for the long-term, that motivation has to come intrinsically. You can’t just create it, nor can you be the crutch for them if they don’t have that intrinsic motivation. So, you have to make sure people actually are high-energy, and want to do what you want them to do, and what you want to work with them on.

Integrity is what someone does, despite what they say they do

Reading signals is very, very important. Signals are what people do despite what they say. So, it’s important to pay attention to subtle signals. We all know that socially if someone treats a waiter, or waitress in a restaurant really badly, then it’s only a matter of time until they treat you badly.

If somebody screws over an enemy, and is vindictive towards them, well it’s only a matter of time before they redefine you from friend to enemy, and you feel their wrath. So, angry, outraged, vindictive, short-term thinking people are essentially that way in many interactions in real life.

People are oddly consistent. That’s one of the things you learn about them. So, you want to find long-term people. You want to find people who seem irrationally ethical.

For example, I had a friend of mine whose company I invested in, and the company failed, and he could have wiped out all of the investors. But he kept putting more and more personal money in. Through three different pivots he put personal money in until the company finally succeeded. And in the process, he never wiped out the investors.

And I was always grateful to him for that. I said, “Wow, that’s amazing that you were so good to your investors. You didn’t wipe them out.” And he got offended by that. He said, “I didn’t do it for you. I didn’t do it for my investors. I did it for me. It’s my own self-esteem. It’s what I care about. That’s how I life my life.” That’s the kind of person you want to work with.

Another quote that I like, I have a tweet on this. I think I read this somewhere else, so I’m not taking credit for this. But I kind of modified it a little bit. Which is that “self-esteem is the reputation that you have with yourself.” You’ll always know.

So, good people, moral people, ethical people, easy to work with people, reliable people, tend to have very high self-esteem because they have very good reputations with themselves, and they understand that.

It’s not ego. Self-esteem and ego are different things. Because ego can be undeserved, but self-esteem at least you feel like you lived up to your own internal moral code of ethics.

And so it’s very hard to work with people who end up being low integrity. And it’s hard to figure out who is high integrity and low integrity. Generally, the more someone is saying that they’re moral, ethical, and high integrity, the less likely they are to be that way.

It’s very much like status signalling. If you overtly bid for status, if you overtly talk about being high status, that is a low status move. If you openly talk about how honest, reliable, and trustworthy you are, you’re probably not that honest and trustworthy. That is a characteristic of con men.

So, yeah, pick an industry in which you can play long-term games with long-term people.

12. Partner With Rational Optimists Don’t partner with cynics and pessimists. Their beliefs are self-fulfilling.

Don’t partner with pessimists

Nivi: Let’s do this last tweet. You said, “Don’t partner with cynics, and pessimists. Their beliefs are self-fulfilling.”

Naval: Yes. Essentially, to create things, you have to be a rational optimist. Rational in the sense that you have to see the world for what it really is. And yet you have to be optimistic about your own capabilities, and your capability to get things done.

We all know people who are consistently pessimistic, who will shoot down everything. Everyone in their life has the helpful critical guy, right? He thinks he’s being helpful, but he’s actually being critical, and he’s a downer on everything.

That person will not only never do anything great in their lives, they’ll prevent other people around them from doing something great. They think their job is to shoot holes in things. And it’s okay to shoot holes in things as long as you come up with a solution.

There’s also the classic military line, “Either lead, follow, or get out of the way.” And these people want a fourth option, where they don’t want to lead, they don’t want to follow, but they don’t want to get out of the way. They want to tell you why the thing is not going to work.

And all the really successful people I know have a very strong action bias. They just do things. The easiest way to figure out if something is viable or not is by doing it. At least do the first step, and the second step, and the third, and then decide.

So, if you want to be successful in life, creating wealth, or having good relationships, or being fit, or even being happy, you need to have an action bias towards getting what you want.

Partner with rational optimists

And you have to be optimistic about it. Not irrationally. You know, there’s nothing worse than someone who is foolhardy and chasing something that’s not worth it.

That’s why I say rational optimist. But you have to be rational. Know all the pitfalls. Know the downsides, but still keep your chin up.

You’ve got one life on this planet. Why not try to build something big? This is the beauty of Elon Musk, and why I think he inspires so many people, it’s just because he takes on really, really big audacious tasks. And he provides an example for people to think big.

And it takes a lot of work to build even small things. I don’t think the corner grocery store owner is working any less hard than Elon Musk, or pouring any less sweat and toil into it. Maybe even more.

But for whatever reason, education, circumstance, they didn’t get the chance to think as big, so the outcome is not as big. So, it’s just better to think big. Obviously, rationally, within your means, stay optimistic.

The cynics and the pessimists, what they’re really saying, it’s unfortunate, but they’re basically saying, “I’ve given up. I don’t think I can do anything. And so the world to me just looks like a world where nobody can do anything. And so why should you go do something because if you fail, then I’m right, which is great. But if you succeed, then you just make me look bad.”

We’re descended from pessimists

Nivi: Yes, it’s probably better to be an irrational optimist, then it is to be a rational cynic.

Naval: There’s a completely rational frame on why you should be an optimist. Historically, if you go back 2,000 years, 5,000 years, 10,000 years, two people are wandering through a jungle, they hear a tiger. One’s an optimist, and says, “Oh, it’s not headed our way.” The other one says, “I’m a pessimist, I’m out of here.” And the pessimist runs and survives, and the optimist gets eaten.

So, we’re descended from pessimists. We’re genetically hardwired to be pessimists. But modern society is far, far safer. There are no tigers wandering around the street. It’s very unlikely that you will end up in total ruin, although you should avoid total ruin.

Much more likely that the upside is unlimited, and the downside is limited. So, adapting for modern society means overriding your pessimism, and taking slightly irrationally optimistic bets because the upside is unlimited if you start the next SpaceX, or Tesla, or Uber, you can make billions of dollars of value for society, and for yourself, and change the world.

And if you fail, what’s the big deal? You lost a few million dollars of investor money, and they’ve got plenty more, and that’s the bet they take on the chances that you will succeed.

It made sense to be pessimistic in the past. It makes sense to be optimistic today, especially if you’re educated and living in a First World country. Even a Third World country. I actually think the economic opportunities in Third World countries are much larger.

The one thing you have to avoid is the risk of ruin. Ruin means stay out of jail. So, don’t do anything that’s illegal. It’s never worth it to wear an orange jumpsuit. And stay out of total catastrophic loss. That could mean that you stay out of things that could be physically dangerous, hurt your body.

You have to watch your health. And stay out of things that can cause you to lose all of your capital, all of your savings. So, don’t gamble everything on one go. But take rationally optimistic bets with big upside.

BOCTAOE

Nivi: I think there’s people that will try and build up your ideas, and build on your ideas, no matter how far fetched they might seem. And then there are people who list all of the obvious exceptions, no matter how obvious they are.

And fortunately in the startup world, I don’t even really get exposed to the people that are giving you the obvious exceptions, and all the reasons it’s not going to work. I barely get exposed to that anymore.

Naval: That’s what Twitter is for. Scott Adams got so annoyed by this that he came up with a phrase, an acronym, which is “but of course there are obvious exceptions”, BOCTAOE. And he used to pin that acronym at the end of his articles for a while.

But Twitter is overrun with nitpickers. Whereas exactly as you were pointing out, Silicon Valley has learned that the upside is so great that you never look down on the kid who’s wearing a hoodie and has coffee on his shoes. And just looks like a slob because you don’t know if he’s going to be the next Mark Zuckerberg, or the next Reid Hoffman.

So, you’ve got to treat everybody with respect. You’ve got to look up to every possibility, and opportunity because the upside is so unlimited, and the downside is so limited in the modern world, especially with financial assets and instruments.

13. Arm Yourself With Specific Knowledge Arm yourself with specific knowledge. It can’t be trained but it can be found by pursuing your genuine curiosity.

Arm yourself with specific knowledge

Nivi: Do you want to talk a little bit about the skills that you need, in particular specific knowledge, accountability, leverage and judgment. So, the first tweet in this area is “Arm yourself with specific knowledge accountability and leverage.” And I’ll throw in judgment as well. I don’t think you covered that in that particular tweet.

Naval: If you want to make money you have to get paid at scale. And why you, that’s accountability, at scale, that’s leverage, and just you getting paid as opposed to somebody else getting paid , that’s specific knowledge.

So, specific knowledge is probably the hardest thing to get across in this whole tweetstorm, and it’s probably the thing that people get the most confused about.

The thing is that we have this idea that everything can be taught, everything can be taught in school. And it’s not true that everything can be taught. In fact, the most interesting things cannot be taught.But everything can be learned. And very often that learning either comes from some innate characteristics in your DNA, or it could be through your childhood where you learn soft skills which are very, very hard to teach later on in life, or it’s something that is brand new so nobody else knows how to do it either, or it’s true on the job training because you’re pattern matching into highly complex environments, basically building judgment in a specific domain.

Classic example is investing, but it could be in anything. It could be in judgment in running a fleet of trucks, it could be judgment in weather forecasting.

So, specific knowledge is the knowledge that you care about. Especially if you’re later in life, let’s say your post 20, 21, 22, you almost don’t get to choose which specific knowledge you have. Rather, you get to look at what you have already built by that point in time, and then you can build on top of it.

Specific knowledge can’t be trained

The first thing to notice about specific knowledge is that you can’t be trained for it. If you can be trained for it, if you can go to a class and learn specific knowledge, then somebody else can be trained for it too, and then we can mass-produce and mass-train people. Heck, we can even program computers to do it and eventually we can program robots to walk around doing it.

So, if that’s the case, then you’re extremely replaceable and all we have to pay you is the minimum wage that we have to pay you to get you to do it when there are lots of other takers who can be trained to do it. So really, your returns just devolve into your cost of training plus the return on investment on that training.

So, you really want to pick up specific knowledge, you need your schooling, you need your training to be able to capitalize on the best specific knowledge, but the part of it that you’re going to get paid for is the specific knowledge.

Specific knowledge is found by pursuing your curiosity

For example, someone who goes and gets a degree in psychology and then becomes a salesperson. Well if they were already a formidable salesperson, a high grade salesmanship to begin with, then the psychology degree is leverage, it arms them and they do much better at sales.

But if they were always an introvert never very good at sales and they’re trying to use psychology to learn sales, they’re just not going to get that great at it.

So, specific knowledge is found much more by pursuing your innate talents, your genuine curiosity, and your passion. It’s not by going to school for whatever it is the hottest job, it’s not for going into whatever field investors say is the hottest.

Very often specific knowledge is at the edge of knowledge. It’s also stuff that’s just being figured out or is really hard to figure out.

So, if you’re not 100% into it somebody else who is 100% into it will outperform you. And they won’t just outperform you by a little bit, they’ll outperform you by a lot because now we’re operating the domain of ideas, compound interest really applies and leverage really applies.

So, if you’re operating with 1,000 times leverage and somebody is right 80% of the time, and somebody else is right 90% of time, the person who’s right 90% of the time will literally get paid hundreds of times more by the market because of the leverage and because of the compounding factors and being correct. So, you really want to make sure you’re good at it so that genuine curiosity is very important.

Building specific knowledge will feel like play to you

So, very often, it’s not something you sit down and then you reason about, it’s more found by observation. You almost have to look back on your own life and see what you’re actually good at.

For example, I wanted to be a scientist and that is where a lot of my moral hierarchy comes from. I view scientists sort of at the top of the production chain for humanity. And the group of scientists who have made real breakthroughs and contributions that probably added more to human society, I think, than any single other class of human beings.

Not to take away anything from art or politics or engineering or business, but without the science we’d still be scrambling in the dirt fighting with sticks and trying to start fires.

My whole value system was built around scientists and I wanted to be a great scientist. But when I actually look back at what I was uniquely good at and what I ended up spending my time doing, it was more around making money, tinkering with technology, and selling people on things. Explaining things, talking to people.

So, I have some sales skills, which is a form specific knowledge that I have. I have some analytical skills around how to make money. And I have this ability to absorb data, obsess about it, and break it down and that is a specific skill that I have. I also just love tinkering with technology. And all of this stuff feels like play to me, but it looks like work to others.

So, there are other people to whom these things would be hard and they say like, “Well, how do I get good at being pithy and selling ideas?” Well, if you’re not already good at it or if you’re not really into it, maybe it’s not your thing, focus on the thing that you are really into.

This is ironic, but the first person to actually point out my real specific knowledge was my mother. She did it as an aside, talking from the kitchen and she said it when I was like 15 or 16 years old. I was telling a friend of mine that I want to be an astrophysicist and she said, “No, you’re going to go into business.”

I was like, “What, my mom’s telling me I’m going to be in business. I’m going to be an astrophysicist. Mom doesn’t know she’s talking about.” But mom knew exactly what she was talking about.

She’d already observed that every time we walk down the street, I would critique the local pizza parlor on why they were selling their slices a certain way with certain toppings and why their process of ordering was this way when it should have been that way.

So, she knew that I had more of a business curious mind, but then my obsession with science combined to create technology and technology businesses where I found myself.

So, very often, your specific knowledge is observed and often observed by other people who know you well and revealed in situations rather than something that you come up with.

14. Specific Knowledge Is Highly Creative or Technical Specific knowledge tends to be creative or technical. It’s on the bleeding edge of technology, art and communication.

Specific knowledge can be taught through apprenticeships

Naval: To the extent that specific knowledge is taught, it’s on the job. It’s through apprenticeships. And that’s why the best businesses, the best careers are the apprenticeship Or self-taught careers, because those are things society still has not figured out how to train and automate yet.

The classic line here is that Warren Buffett went to Benjamin Graham when he got out of school. Benjamin Graham was the author of the Intelligent Investor and sort of modernized or created value investing as a discipline. And Warren Buffett went to Benjamin Graham and offered to work for him for free.

And Graham said, “Actually, you’re overpriced, free is overpriced.” And Graham was absolutely right. When it comes to a very valuable apprenticeship like the type that Graham was going to give Buffet, Buffet should have been paying him a lot of money. That right there tells you that those are skills worth having.

Specific knowledge is often highly creative or technical

Specific knowledge also tends to be technical and creative. It’s on the bleeding edge of technology, on the bleeding edge of art, on the bleeding edge of communication.

Even today, for example, there are probably meme lords out there on the Internet who can create incredible memes that will spread the idea to millions of people. Or are very persuasive – Scott Adams is a good example of this. He is essentially becoming one of the most credible people in the world by making accurate predictions through persuasive arguments and videos.

And that is specific knowledge that he has built up over the years because he got obsessed with hypnosis when he was young, he learned how to communicate through cartooning, he embraced Periscope early, so he’s been practicing lots of conversation, he’s read all the books on the topic, he’s employed in his everyday life. If you look at his girlfriend, she’s this beautiful young Instagram model.

That is an example of someone who has built up a specific knowledge over the course of his career. It’s highly creative, it has elements of being technical in it, and it’s something that is never going to be automated.

No one’s going to take that away from him, because he’s also accountable under one brand as Scott Adams, and he’s operating with the leverage of media with Periscope and drawing Dilbert cartoons and writing books. He has massive leverage on top of that brand and he can build wealth out of it if he wanted to build additional wealth beyond what he already has.

Specific knowledge is specific to the individual and situation

Nivi: Should we be calling it unique knowledge or does specific knowledge somehow make more sense for it?

Naval: You know, I came up with this framework when I was really young. We’re talking decades and decades. It’s now probably over 30 years old. So, at the time specific knowledge stuck with me so that is how I think about it.

The reason I didn’t try and change it is because every other term that I found for it was overloaded in a different way. At least specific knowledge isn’t that used. I can kind of rebrand it.

The problem with unique knowledge is, yeah, maybe it’s unique but if I learn it from somebody else it’s longer unique, then we both know it. So, it’s not so much that it is unique, it’s that it is highly specific to the situation, it’s specific to the individual, it’s specific to the problem, and it can only be built as part of a larger obsession, interest, and time spent in that domain.

It can’t just be read straight out of a single book, nor can it be taught in a single course, nor can it be programmed into a single algorithm.

You can’t be too deliberate about assembling specific knowledge

Nivi: Speaking of Scott Adams, he’s got a blog post on how to build your career by getting in, say, the top 25 percentile at three or more things. And by doing that, you become the only person in the world who can do those three things in the 25th percentile.

So, instead of trying to be the best at one thing, you just try to be very, very good at three or more things. Is that a way of building specific knowledge?

Naval: I actually think the best way is just to follow your own obsession. And somewhere in the back of your mind, you can realize that, actually, this obsession I like and I’ll keep an eye out for the commercial aspects of it.

But I think if you go around trying to build it a little too deliberately, if you become too goal-oriented on the money, then you won’t pick the right thing. You won’t actually pick the thing that you love to do, so you won’t go deep enough into it.

Scott Adams’ observation is a good one, predicated on statistics. Let’s say there’s 10,000 areas that are valuable to the human race today in terms of knowledge to have, and the number one in those 10,000 slots is taken.

Someone else is likely to be the number one in each of those 10,000, unless you happen to be one of the 10,000 most obsessed people in the world that at a given thing.

But when you start combining, well, number 3,728 with top-notch sales skills and really good writing skills and someone who understands accounting and finance really well, when the need for that intersection arrives, you’ve expanded enough from 10,000 through combinatorics to millions or tens of millions. So, it just becomes much less competitive.

Also, there’s diminishing returns. So, it’s much easier to be top 5 percentile at three or four things than it is to be literally the number one at something.

Build specific knowledge where you are a natural

I think it’s a very pragmatic approach. But I think it’s important that one not start assembling things too deliberately because you do want to pick things where you are a natural. Everyone is a natural at something.

We’re all familiar with that phrase, a natural. “Oh, this person is a natural at meeting men or women, this person is a natural socialite, this person is a natural programmer, this person is a natural reader.” So, whatever you are a natural at, you want to double down on that.

And then there are probably multiple things you’re natural at because personalities and humans are very complex. So, we want to be able to take the things that you are natural at and combine them so that you automatically, just through sheer interest and enjoyment, end up top 25% or top 10% or top 5% at a number of things.

15. Learn to Sell, Learn to Build Learn to sell. Learn to build. If you can do both, you will be unstoppable.

Learn to sell, learn to build

Nivi: Talking about combining skills, you said that you should “learn to sell, learn to build, if you can do both, you will be unstoppable.”

Naval: This is a very broad category. It’s two broad categories. One is building the product. Which is hard, and it’s multivariate. It can include design, it can include development, it can include manufacturing, logistics, procurement, it can even be designing and operating a service. It has many, many definitions.

But in every industry, there is a definition of the builder. In our tech industry it’s the CTO, it’s the programmer, it’s the software engineer, hardware engineer. But even in the laundry business, it could be the person who’s building the laundry service, who is making the trains run on time, who’s making sure all the clothes end up in the right place at the right time, and so on.

The other side of it is sales. Again, selling has a very broad definition. Selling doesn’t necessarily just mean selling individual customers, but it can mean marketing, it can mean communicating, it can mean recruiting, it can mean raising money, it can mean inspiring people, it could mean doing PR. It’s a broad umbrella category.

The Silicon Valley model is a builder and seller

So, generally, the Silicon Valley startup model tends to work best. It’s not the only way, but it is probably the most common way, when you have two founders, one of whom is world class at selling, and one of whom is world class at building.

Examples are, of course, Steve Jobs and Steve Wozniak with Apple, Gates and Allen probably had similar responsibilities early on with Microsoft, Larry and Sergey probably broke down along those lines, although it’s a little different there because that was a very technical product delivered to end users through a simple interface.

But generally, you will see this pattern repeated over and over. There’s a builder and there’s a seller. There’s a CEO and CTO combo. And venture and technology investors are almost trained to look for this combo whenever possible. It’s the magic combination.

If you can do both you will be unstoppable

The ultimate is when one individual can do both. That’s when you get true superpowers. That’s when you get people who can create entire industries.

The living example is Elon Musk. He may not necessarily be building the rockets himself, but he understands enough that he actually makes technical contributions. He understands the technology well enough that no one’s going to snow him on it, and he’s not running around making claims that he doesn’t think he can’t eventually deliver. He may be optimistic on the timelines but he thinks this is within reasonableness for delivery.

Even Steve Jobs developed enough product skills and was involved enough in the product that he also operated in both of these domains. Larry Ellison started as a programmer and I think wrote the first version of Oracle, or was actually heavily involved in it.

Marc Andreessen was also in this domain. He may not have had enough confidence in his sales skills, but he was the programmer who wrote Netscape Navigator, or a big chunk of it. So, I think the real giants in any field are the people who can both build and sell.

I’d rather teach an engineer marketing than a marketer engineering

And usually the building is a thing that a sales person can’t pick up later in life. It requires too much focused time. But a builder can pick up selling a little bit later, especially if they were already innately wired to be a good communicator. Bill Gates famously paraphrases this as, “I’d rather teach an engineer marketing, than a marketer engineering.”

I think if you start out with a building mentality and you have building skills and it’s still early enough in your life, or you have enough focused time that you think you can learn selling, and you have some natural characteristics or you’re a good salesperson, then you can double down on those.

Now, your sales skills could be in a different than traditional domain. For example, let’s say you’re a really good engineer and then people are saying, well, now you need to be good at sales, well, you may not be good at hand-to-hand sales, but you may be a really good writer.

And writing is a skill that can be learned much more easily than, say, in-person selling, and so you may just cultivate writing skills until you become a good online communicator and then use that for your sales.

On the other hand, it could just be that you’re a good builder and you’re bad at writing and you don’t like communicating to mass audiences but you’re good one-on-one, so then you might use your sales skills for recruiting or for fundraising, which are more one-on-one kinds of endeavors.

This is pointing out that if you’re at the intersection of these two, don’t despair because you’re not going to be the best technologist and you’re not going to be the best salesperson, but in a weird way, that combination, back to the Scott Adams skill stack, that combination of two skills is unstoppable.

Long term, people who understand the underlying product and how to build it and can sell it, these are catnip to investors, these people can break down walls if they have enough energy, and they can get almost anything done.

Nivi: If you could only pick one to be good at, which one would you pick?

Naval: When you’re trying to stand out from the noise building is actually better because there’re so many hustlers and sales people who have nothing to back them up. When you’re starting out, when you’re trying to be recognized, building is better.

But much later down the line building gets exhausting because it is a focus job and it’s hard to stay current because there’s always new people, new products coming up who have newer tools, and frankly more time because it’s very intense, it’s a very focused task.

So, sales skills actually scale better over time. Like for example, if you have a reputation for building a great product, that’s good, but when you ship your new product, I’m going to validate it based on the product. But if you have a reputation for being a good person to do business with and you’re persuasive and communicative then that reputation almost becomes self-fulfilling.

So, I think if you only had to pick up one, you can start with building and then transition to selling. This is a cop-out answer, but I think that is actually the right answer.

16. Read What You Love Until You Love to Read You should be able to pick up any book in the library and read it.

Read what you love until you love to read

Nivi: Before we go and talk about accountability and leverage and judgment, you’ve got a few tweets further down the line that I would put in the category of continuous learning.

They’re essentially, “there is no skill called business. Avoid business magazines and business class, study microeconomics, game theory, psychology, persuasion, ethics, mathematics and computers.”

There’s one other comment that you made in a Periscope that was, “you should be able to pick up any book in the library and read it.” And the last tweet in this category was, “reading is faster than listening, doing is faster than watching.”

Naval: Yeah, the most important tweet on this, I don’t even have in here unfortunately, which is, the foundation of learning is reading. I don’t know a smart person who doesn’t read and read all the time.

And the problem is, what do I read? How do I read? Because for most people it’s a struggle, it’s a chore. So, the most important thing is just to learn how to educate yourself and the way to educate yourself is to develop a love for reading.

So, the tweet that is left out, the one that I was hinting at is, “read what you love until you love to read.” It’s that simple.

Everybody I know who reads a lot loves to read, and they love to read because they read books that they loved. It’s a little bit of a catch-22, but you basically want to start off just reading wherever you are and then keep building up from there until reading becomes a habit. And then eventually, you will just get bored of the simple stuff.

So you may start off reading fiction, then you might graduate to science fiction, then you may graduate to non-fiction, then you may graduate to science, or philosophy, or mathematics or whatever it is, but take your natural path and just read the things that interest you until you kind of understand them. And then you’ll naturally move to the next thing and the next thing and the next thing.

Read the original scientific books in a field

Now, there is an exception to this, which is where I was hinting with what things you actually do want to learn, which is, at some point there’s too much out there to read. Even reading is full of junk.

There are actually things you can read, especially early on, that will program your brain a certain way, and then later things that you read, you will decide whether those things are true or false based on the earlier things.

So, it is important that you read foundational things. And foundational things, I would say, are the original books in a given field that are very scientific in their nature.

For example, instead of reading a business book, pick up Adam Smith’s The Wealth of Nations. Instead of reading a book on biology or evolution that’s written today, I would pick up Darwin’s Origin of the Species. Instead of reading a book on biotech right now that may be very advanced, I would just pick up The Eighth Day of Creation by Watson and Crick. Instead of reading advanced books on what cosmology and what Neil Degrasse Tyson and Stephen Hawking have been saying, you can pick up Richard Feynman’s Six Easy Pieces and start with basic physics.

Don’t fear any book

If you understand the basics, especially in mathematics and physics and sciences, then you will not be afraid of any book. All of us have that memory of when we were sitting in class and we’re learning mathematics, and it was all logical and all made sense until at one point the class moved too fast and we fell behind.

Then after that we were left memorizing equations, memorizing concepts without being able to derive them from first principles. And at that moment, we’re lost, because unless you’re a professional mathematician, you’re not going to remember those things. All you’re going to remember are the techniques, the foundations.

So, you have to make sure that you’re building on a steel frame of understanding because you’re putting together a foundation for skyscraper, and you’re not just memorizing things because you’re just memorizing things you’re lost. So the foundations are ultra important.

And the ultimate, the ultimate is when you walk into a library and you look at it up and down and you don’t fear any book. You know that you can take any book off the shelf, you can read it, you can understand it, you can absorb what is true, you can reject what is false, and you have a basis for even working that out that is logical and scientific and not purely just based on opinions.

The means of learning are abundant, the desire to learn is scarce

The beauty of the internet is the entire library of Alexandria times 10 is at your fingertips at all times. It’s not the means of education or the means of learning are scarce, the means of learning are abundant. It’s the desire to learn that’s scarce. So, you really have to cultivate the desire.

And it’s not even cultivating you’ve to not lose it. Children have a natural curiosity. If you go to a young child who’s first learning language, they’re pretty much always asking: What’s this? What’s that? Why is this? Who’s that? They’re always asking questions.

But one of the problems is that schools and our educational system, and even our way of raising children replaces curiosity with compliance. And once you replace the curiosity with the compliance, you get an obedient factory worker, but you no longer get a creative thinker. And you need creativity, you need the ability to feed your own brain to learn whatever you want.

17. The Foundations Are Math and Logic If you understand mathematics and logic, you have the basis for understanding everything else.

The ultimate foundations are math and logic

Naval: Foundational things are principles, they’re algorithms, they’re deep seated logical understanding where you can defend it or attack it from any angle. And that’s why microeconomics is important because macroeconomics is a lot of memorization, a lot of macro bullshit.

As Nassim Taleb says, it is easier to macro bullshit than it is the micro bullshit. Because macroeconomics is voodoo-complex-science meets politics. You can’t find two macroeconomists to agree on anything these days, and different macroeconomists get used by different politicians to peddle their different pet theories.

There are even macroeconomists out there now peddling something called Modern Monetary Theory which basically says, hey, except for this pesky thing called inflation, we can just print all the money that we want. Yes, except for this pesky thing called inflation. That’s like saying, except for limited energy, we can fire rockets off into space all day long.

It’s just nonsense, but the fact that there are people who have “macroeconomist” in their title and are peddling Modern Monetary Theory just tells you that macroeconomics as a so-called science has been corrupted. It’s now a branch of politics.

So, you really want to focus on the foundations. The ultimate foundation are mathematics and logic. If you understand logic and mathematics, then you have the basis for understanding the scientific method. Once you understand the scientific method, then you can understand how to separate truth from falsehood in other fields and other things that you’re reading.

It’s better to read a great book really slowly than to fly through a hundred books quickly

So, be very careful about reading other people’s opinions and even be careful when reading facts because so-called facts are often just opinions with a veneer [of pseudoscience] around them.

What you are really looking for are algorithms. What you are really looking for is understanding. It’s better to go through a book really slowly and struggle and stumble and rewind, than it is to fly through it quickly and say, “Well, now I’ve read 20 books, I’ve read 30 books, I’ve read 50 books in the field.”

It’s like Bruce Lee said, “I don’t fear the man who knows a thousand kicks and a thousand punches, I fear the man who’s practiced one punch ten thousand times or one kick ten thousand times.” It’s that understanding that comes through repetition and through usage and through logic and foundations that really makes you a smart thinker.

Learn persuasion and programming

Nivi: To lay a foundation for learning for the rest of your life I think you need two things, if I was going to try and sum it up. One, practical persuasion and two, you need to go deep in some technical category, whether it’s abstract math, or you want to read Donald Knuth’s books on algorithms, or you want to read Feynman’s lectures on physics.

If you have practical persuasion and a deep understanding of some complex topic, I think you’ll have a great foundation for learning for the rest of your life.

Naval: Yeah. In fact let me expand that a little bit. I would say that the five most important skills are of course, reading, writing, arithmetic, and then as you’re adding in, persuasion, which is talking. And then finally, I would add computer programming just because it’s an applied form of arithmetic that just gets you so much leverage for free in any domain that you operate in.

If you’re good with computers, if you’re good at basic mathematics, if you’re good at writing, if you’re good at speaking, and if you like reading, you’re set for life.

18. There’s No Actual Skill Called “Business” There’s no actual skill called business. Avoid business schools and magazines.

There’s no actual skill called “business”

Naval: In that sense, business to me is bottom of the barrel. There’s no actual skill called business, it’s too generic. It’s like a skill called “relating.” Like “relating to humans.” That’s not a skill, it’s too broad.

A lot of what goes on in business schools, and there is some very intelligent stuff taught in business schools – I don’t mean to detract from them completely – some of the things taught in business school are just anecdotes. They call them “case studies.”

But they’re just anecdotes, and they’re trying to help you pattern match by throwing lots of data points at you, but the reality is, you will never understand them fully until you’re actually in that position yourself.

Even then you will find that basic concepts from game theory, psychology, ethics, mathematics, computers, and logic will serve you much, much better.

I would focus on the foundations, I would focus with a science bent. I would develop a love for reading, including by reading so-called junk food that you’re not supposed to read. You don’t have to read the classics. That [reading] is the foundation for your self-education.

Doing is faster than watching

Nivi: What did you mean when you said that “doing is faster than watching?”

Naval: When it comes to your learning curve, if you want to optimize your learning curve… One of the reasons why I don’t love podcasts, even though I’m a generator of podcasts, is that I like to consume my information very quickly.

And I’m a good reader, or a fast reader and I can read very fast but I can only listen at a certain speed. I know people listen at 2x, 3x, but everyone sounds like a chipmunk and it’s hard to go back, it’s hard to highlight, it’s hard to pinpoint snippets and save them in your notebook, and so on.

Similarly, a lot of people think they can become really skilled at something by watching others do it, or even by reading about others doing it. And going back to the business school case study, that’s a classic example.

They study other people’s businesses, but in reality, you’re going to learn a lot more about running a business by operating your own lemonade stand or equivalent. Or even opening a little retail store down the street.

That is how you’re going to learn on the job because a lot of the subtleties don’t express themselves until you’re actually in the business.

For example, everyone’s into mental models these days. You go to Farnam Street, you go to Poor Charlie’s Almanack, and you can learn all the different mental models. But which ones matter more? Which ones do you apply more often? Which ones matter in which circumstances? That’s actually the hard part.

For example, my personal learning has been that the principal-agent problem drives so much in this world. It’s an incentives problem. I’ve learned that tit-for-tat iterated prisoner’s dilemma is the piece of game theory that is worth knowing the most. You can almost put down the game theory book after that.

By the way, the best way to learn game theory is to play lots of games. I never even read game theory books. I consider myself extremely good at game theory. I’ve never opened up a game theory book and found a result in there where I didn’t think, “Oh, yeah, that’s common sense to me.”

The reason is that I grew up playing all kinds of games and I ran into all kinds of corner cases with all kinds of friends, and so it’s just second nature to me. You can always learn better by doing it on the job.

The number of “doing” iterations drives the learning curve

But doing is a subtle thing. Doing encapsulates a lot. For example, let’s say, I want to learn how to run a business. Well, if I start a business where I go in every day and I’m doing the same thing, let’s say I’m running a retail store down the street where I’m stocking the shelves with food and liquor every single day, I’m not going to learn that much because I’m repeating things a lot.

So, I’m putting in thousands of hours, but they are thousands of hours doing the same thing. Whereas if I was putting in thousands of iterations, that would be different. So, the learning curve is across iterations [not iterations].

So if I was trying new marketing experiments in the store all the time, I was constantly changing up the inventory, I was constantly changing up the branding and the messaging, I was constantly changing the sign, I was constantly changing the online channels that are used to drive foot traffic in, I was experimenting with being open at different hours, I had the ability to walk around and talk to other store owners and getting their books and figure out how they run their businesses.

It’s the number of iterations that drives the learning curve. So, the more iterations you can have, the more shots on goal you can have, the faster you’re going to learn. It’s not just about the hours put in.

If you’re willing to bleed a little every day, you may win big later

It’s actually a combination of the two, but I think just the way we’re built and the way that the world presents itself, the world offers us very easily the opportunity to do the same thing over and over and over again. But really, we’d be better served if we went off and found ways to do new things from scratch.

And doing something new the first time is painful, because you’re wandering into uncertain territory and high odds are that you will fail. So you just have to get very, very comfortable with frequent small failures.

Nassim Taleb talks about this also. He made his fortune, his wealth by being a trader who basically relied upon black swans. Nassim Taleb made money by losing little bits of money every day and then once in a blue moon he would make a lot of money when the unthinkable happened for other people.

Whereas most people want to make little bits of money every day and in exchange they’ll tolerate lots of blow-up risk, they’ll tolerate going completely bankrupt.

We’re not evolved to bleed a little bit every day. If you’re out in the natural environment, and you get a cut and you’re literally bleeding a little bit every day, you will eventually die. You’ll have to stop that cut.

We’re evolved for small victories all the time but that becomes very expensive. That’s where the crowd is. That’s where the herd is. So, if you’re willing to bleed a little bit every day but in exchange you’ll win big later, you will do better.

That is, by the way, entrepreneurship. Entrepreneurs bleed every day.

They’re not making money, they’re losing money, they’re constantly stressed out, all the responsibility is upon them, but when they win they win big. On average they’ll make more.

19. Embrace Accountability to Get Leverage Embrace accountability. Society will reward you with leverage.

You have to have accountability to get leverage

Nivi: Why don’t we jump into accountability, which I thought was pretty interesting and I think you have your own unique take on it. So the first tweet on accountability was, “Embrace accountability and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.”

Naval: Yeah. So to get rich, you’re going to need leverage. Leverage comes in labor, comes in capital, or it can come through code or media. But most of these, like labor and capital, people have to give to you. For labor, somebody has to follow you. For capital, somebody has to give you money or assets to manage or machines.

So to get these things, you have to build up credibility and you have to do those under your own name as much as possible, which is risky. So accountability is a double-edged thing. It allows you to take credit when things go well and to bear the brunt of the failure when things go badly.

Take business risks under your own name

So in that sense, people who are stamping their names on things aren’t foolish. They’re just confident. Maybe it turns out to be foolish in the end, but if you look at a Kanye or an Oprah or a Trump or an Elon or anyone like that, these people can get rich just off their name because their name is such powerful branding.

Regardless of what you think of Trump, you have to realize that the guy was among the best in the world at just branding his name. Why would you go to Trump Casino? Used to be because Trump. Why would you go to a Trump tower? Because of Trump.

When it came time to vote, I think that a lot of voters just went in and said, “Trump.” They recognize the name, so the name recognition paid off.

Same thing with Oprah. She puts her brand on something, her name on something and it flies off the shelves, and it’s like an instant validator.

These people also take risks for putting their name out there. Obviously Trump is now probably hated by half or more than half of the country and by a big chunk of the world as he sticks his name out there.

By putting your name out there, you become a celebrity, and fame has many, many downsides. It’s better to be anonymous and rich than to be poor and famous, but even famous and rich has a lot of downsides associated with it. You’re always in the public eye.

A well-functioning team has clear accountability for each position

Accountability is quite important, and when you’re working to build a product or you’re working in a team or you’re working in a business, we constantly have drummed into our heads how important it is to be part of a team. Absolutely agree with that.

A lot of our training socially is telling us to not stick our necks out of the crowd. There’s a saying that I hear from our Australian friends that the tall poppy gets cut. Don’t stick your neck out, but I would say that actually a really, really well-functioning team is small and has clear accountability for each of the different portions.

You can say, “Okay, this person’s responsible for building the product. This person’s responsible for the messaging. This person’s responsible for raising money. This person’s responsible for the pricing strategy and maybe the online advertising.” So if somebody screws up, you know exactly who’s responsible. While at the same time if something goes really well, you also know exactly who’s responsible.

If you have a small team and you have clearly delineated responsibilities, then you can still keep a very high level of accountability. Accountability is really important because when something succeeds or fails, if it fails, everybody points fingers at each other, and if it succeeds, everybody steps forward to take credit.

We’ve all had that experience when we were in school and we got a group assignment to do. There were probably a few people in there who did a lot of the work. Then there are a few people who just did a lot of grandstanding or positioning to do the work. We’re all familiar with this from a childhood sense, but it’s sort of uncomfortable to talk about.

People who can fail in public have a lot of power

Clear accountability is important. Without accountability, you don’t have incentives. Without accountability, you can’t build credibility. But you take risk. You take risk of failure. You take risk of humiliation. You take risk of failure under your own name.

Luckily in modern society, there’s no more debtors’ prison and people don’t go to jail or get executed for losing other people’s money, but we’re still socially hard wired to not fail in public under our own names. The people who have the ability to fail in public under their own names actually gain a lot of power .

For example, I’ll give a personal anecdote. Up until about 2013, 2014, my public persona was an entirely around startups and investing. Only around 2014, 2015 did I start talking about philosophy and psychological things and broader things.

It made me a little nervous because I was doing it under my own name. There were definitely people in the industry who sent me messages through the back channel like, “What are you doing? You’re ending your career. This is stupid.”

I kind of just went with it. I took a risk. Same with crypto. Early on, I took a risk.

But when you put your name out there, you take a risk with certain things. You also get to reap the rewards. You get the benefits.

20. Take Accountability to Earn Equity If you have high accountability, you’re less replaceable and you can get a piece of the business.

Accountability is how you’re going to get equity

Naval: Accountability is important because that’s how you’re going to get leverage. That’s how you’re going to get credibility. It’s also how you’re going to get equity. You’re going to get a piece of the business.

When you’re negotiating with other people, ultimately if someone else is making a decision about how to compensate you, that decision will be based on how replaceable you are. If you have high accountability, that makes you less replaceable. Then they have to give you equity, which is a piece of the upside.

Taking accountability is like taking equity in all your work

Equity itself is a good example because equity is also a risk-based instrument. Equity means you get paid everything after all the people who need guaranteed money are paid back.

If you look at the hierarchy of capital in a company, the employees get paid first. They get paid the salary first. In legal [bankruptcy] proceedings, the salaries are sacrosanct. If you’re a board member and the company spends too much money and has back salaries to pay, the government can go after you personally to pay back the salaries. The employees get the most security, but in exchange for that security, they don’t have as much upside.

Next in line would be the debt holders who are maybe the bankers who lend money to the company for operations and they need to make their fixed coupon every month or every year, but they don’t get much more upside beyond that. They might be making 5, 10, 15, 20, 25% a year, but that’s what their upside is limited to.

Finally there are the equity holders. These people are actually going to get most of the upside. Once the debt holders are paid off and the salaries are paid off, whatever remains goes to them.

But if there isn’t enough money to pay off the salaries and the debt holders, or if there’s just barely enough to pay off the salary and the debt holders, which is what happens with most businesses, most of the times, the equity holders get nothing.

The equity holders take on greater risk, but in exchange, they get nearly unlimited upside. You can do the same with all of your work. Essentially, taking accountability for your actions is the same as taking an equity position in all of your work. You’re taking greater downside risk for greater upside.

Realize that in modern society, the downside risk is not that large. Even personal bankruptcy can wipe the debts clean in good ecosystems. I’m most familiar with Silicon Valley, but generally people will forgive failures as long as you were honest and made a high integrity effort.

There’s not really that much to fear in terms of failure, and so people should be taking on a lot more accountability than they actually are.

Nivi: Is accountability actually fragile or do you really just mean that we’re hardwired not to fail in public, so it just feels like it’s a fragile thing?

Naval: I think it could actually be fragile. An example of accountability is you’re an airplane pilot. As a captain, you’re taking on accountability for the entire plane.

Let’s say that something goes wrong with the aircraft. You can’t later blame it on anyone else. You can’t blame it on the steward or the stewardess. You can’t blame it on the copilot. You’re the captain. You’re responsible for the ship. If you screw up, you crash the ship, and there are immediate consequences.

In the old days, the captain was expected to go down with the ship. If the ship was sinking, then literally the last person who got to get off was the captain. I think accountability does come with real risks, but we’re talking about a business context.

The risk here would be that you would probably be the last one to get your capital back out. You’d be the last one to get paid for your time. The time that you’ve put in, the capital that you’ve put into the company, these are what are at risk.

Even if a business fails and your name’s on it, that’s not as bad as if it turns out to be an integrity issue. Bernie Madoff, for example, Madoff investments, that name is never going to be good again in the investment community. You could be Bernie Madoff’s great-great-great-grandson. You are not going to go into the investment business because he ruined the family name.

I think these days the accountability risk with a name happens more around integrity, rather than it does around purely economic failure.

Accountability is reputational skin in the game

Nivi: The big takeaway for me on accountability is that you will be rewarded directly in proportion with your accountability. I also think this is why people like Taleb rail against CEOs who get rewards without accountability.

Naval: Yeah. Taleb’s Skin In The Game is required reading. If you want to get anywhere in modern life and understand how modern systems work, then Skin In The Game would be near the top of my list to read.

Accountability, skin in the game, these concepts go very closely hand in hand. I think of accountability as reputational skin in the game. It’s putting your personal reputation on the line as skin in the game.

Accountability is a simple concept. The only part of accountability that may be a little counterintuitive is that we’re currently socially brainwashed to not take on accountability, not in a visible way.

I think there are ways to take on accountability where every member of a team can take on accountability for their portion. That is how you get a well-functioning team while still putting credits and losses in the correct columns.

21. Labor and Capital Are Old Leverage Wealth requires leverage. Labor and capital are older forms of leverage that everyone is fighting over.

Our brains aren’t evolved to comprehend new forms of leverage

Nivi: Why don’t we talk a little bit about leverage?

The first tweet in the storm was a famous quote from Archimedes, which was, “Give me a lever long enough and a place to stand and I will move the Earth.”

The next tweet was, “Fortunes require leverage. Business leverage comes from capital, people and products with no marginal costs of replication.”

Naval: Leverage is critical. The reason I stuck in Archimedes quote in there is… normally I don’t like putting other people’s quotes in my Twitter. That doesn’t add any value. You can go look up those people’s quotes. But this quote I had to put in there because it’s just so fundamental. I read it when I was very, very young and it had a huge impression on me.

We all know what leverage is when we use a seesaw or a lever. We understand how that works physically, but I think what our brains aren’t really well-evolved to comprehend is how much leverage is possible in modern society and what the newest forms of leverage are.

Society overvalues labor leverage

The oldest form of leverage is labor, which is people working for you. Instead of me lifting rocks, I can have 10 people lift rocks. Then just by my guidance on where the rock should go, a lot more rocks get moved than I could do myself. Everybody understands this because we’re evolved to understand the labor form of leverage, so what happens is society overvalues labor as a form of leverage.

This is why your parents are impressed when you get a promotion and you have lots of people working underneath you. This is why when a lot of naive people, when you tell them about your company, they’ll say, “How many people work there?” They’ll use that as a way to establish credibility. They’re trying to measure how much leverage and impact you actually have.

Or when someone starts a movement, they’ll say how many people they have or how big the army is. We just automatically assume that more people is better.

You want the minimum amount of labor that allows you to use the other forms of leverage

I would argue that this is the worst form of leverage that you could possibly use. Managing other people is incredibly messy. It requires tremendous leadership skills. You’re one short hop from a mutiny or getting eaten or torn apart by the mob.

It’s incredibly competed over. Entire civilizations have been destroyed over this fight. For example, communism, Marxism, is all about the battle between capital and labor, das kapital and das labor. It’s kind of a trap.

You really want to stay out of labor-based leverage. You want the minimum amount of people working with you that are going to allow to use the other forms of leverage, which I would argue are much more interesting.

Capital has been the dominant form of leverage in the last century

The second type of leverage is capital. This one’s a little less hardwired into us because large amounts of money moving around and being saved and being invested in money markets, these are inventions of human beings the in last few hundred to few thousand years. They’re not evolved with us from hundreds of thousands of years.

We understand them a little bit less well. They probably require more intelligence to use correctly, and the ways in which we use them keep changing. Management skills from a hundred years ago might still apply today, but investing in the stock market skills from a hundred years ago probably don’t apply to the same level today.

Capital is a trickier form of leverage to use. It’s more modern. It’s the one that people have used to get fabulously wealthy in the last century. It’s probably been the dominant form of leverage in the last century.

You can see this by who are the richest people. It’s bankers, politicians in corrupt countries who print money, essentially people who move large amounts of money around.

If you look at the top of very large companies, outside of technology companies, in many, many large old companies, the CEO job is really a financial job. They’re really financial asset managers. Sometimes, an asset manager can put a pleasant face on it, so you get a Warren Buffet type.

But deep down, I think we all dislike capital as a form of leverage because it feels unfair. It’s this invisible thing that can be accumulated and passed across generations and suddenly seems to result in people having gargantuan amounts of money with nobody else around them or necessarily sharing in it.

That said, capital is a powerful form of leverage. It can be converted to labor. It can be converted to other things. It’s very surgical, very analytical.

If you are a brilliant investor and give $1 billion and you can make a 30% return with it, whereas anybody else can only make a 20% return, you’re going to get all the money and you’re going to get paid very handsomely for it.

It scales very, very well. If you get good at managing capital, you can manage more and more capital much more easily than you can manage more and more people.

You need specific knowledge and accountability to obtain capital

It is a good form of leverage, but the hard part with capital is how do you obtain it? That’s why I talked about specific knowledge and accountability first.

If you have specific knowledge in a domain and if you’re accountable and you have a good name in that domain, then people are going to give you capital as a form of leverage that you can use to then go get more capital.

If you have specific knowledge in a domain and if you’re accountable and you have a good name in that domain, then people are going to give you capital as a form of leverage that you can use to then go get more capital.

Capital also is fairly well understood. I think a lot of the knocks against capitalism come because of the accumulation of capital.

22. Product and Media are New Leverage Product and media are the leverage of new wealth. Create software and media that work for you while you sleep.

Product and media are the new leverage

Naval: The most interesting and the most important form of leverage is this idea of products that have no marginal cost of replication. This is the new form of leverage.

This was only invented in the last few hundred years. It got started with the printing press. It accelerated with broadcast media, and now it’s really blown up with the Internet and with coding.

Now, you can multiply your efforts without having to involve other humans and without needing money from other humans.

This podcast is a form of leverage. Long ago, I would have had to sit in a lecture hall and lecture each of you personally. I would have maybe reached a few hundred people and that would have been that.

Then 40 years ago, 30 years ago, I would have to be lucky to get on TV, which is somebody else’s leverage. They would have distorted the message. They would taken the economics out of it or charged me for it. They would have muddled the message, and I would have been lucky to get that form of leverage.

Today, thanks to the Internet, I can buy a cheap microphone, hook it up to a laptop or an iPad, and there you are all listening.

Product leverage is where the new fortunes are made

This newest form of leverage is where all the new fortunes are made, all the new billionaires. The last generation, fortunes were made by capital. That was the Warren Buffets of the world.

But the new generation’s fortunes are all made through code or media. Joe Rogan making 50 to a 100 million bucks a year from his podcast. You’re going to have a PewDiePie. I don’t know how much money he’s rolling in, but he’s bigger than the news. The Fortnite players. Of course Jeff Bezos and Mark Zuckerberg and Larry Page and Sergey Brin and Bill Gates and Steve Jobs. That is all code-based leverage.

Combining all three forms of leverage is a magic combination

Now, the beauty is when you combine all of these three. That’s where tech startups really excel, where you take just the minimum, but highest output labor that you can get, which are engineers, and designers, product developers. Then you add in capital. You use that for marketing, advertising, scaling. You add in lots of code and media and podcasts and content to get it all out there.

That is a magic combination, and that’s why you see technology startups explode out of nowhere, use massive leverage and just make huge outsize returns.

Product and media leverage are permissionless

Nivi: Do you want to talk a little bit about permissioned versus permissionless?

Naval: Probably the most interesting thing to keep in mind about the new forms of leverage is they are permissionless. They don’t require somebody else’s permission for you to use them or succeed.

For labor leverage, somebody has to decide to follow you. For capital leverage, somebody has to give you money to invest or to turn into a product.

Coding, writing books, recording podcasts, tweeting, YouTubing, these kinds of things, these are permissionless. You don’t need anyone’s permission to do them, and that’s why they are very egalitarian. They’re great equalizers of leverage.

As much as people may rail on Facebook and YouTube, they’re not going to stop using it because this permissionless leverage, where everyone can be a broadcaster, is just too good.

The same way you can rail upon Apple for having a slightly closed ecosystem in the iPhone, but everyone’s writing apps for it. As long as you can write apps for it, you can get rich or reach users doing that, why not?

The robot army is already here—code lets you tell them what to do

I think of all the forms of leverage, the best one in modern society … This is glib. This is a little overused. This is why I tell people learn to code. It’s that we have this idea that in the future there’s going to be these robots and they’re going to be doing everything.

That may be true, but I would say that the majority of the robot revolution has already happened. The robots are already here and there are way more robots than there are humans, it’s just that we pack them in data centers for heat and efficiency reasons. We put them in servers. They’re inside the computers. All the circuits, it’s robot minds inside that’s doing all the work.

Every great software developer, for example, now has an army of robots working for him at nighttime, while he or she sleeps, after they’ve written the code and it’s just cranking away.

The robot army is already here. The robot revolution has already happened. We’re about halfway through it. We’re just adding in much more of the hardware component these days as we get more comfortable with the idea of autonomous vehicles and autonomous airplanes and autonomous ships and maybe autonomous trucks. There’re delivery bots and Boston Dynamics robots and all that.

But robots who are doing web searching for you, for example, are already here. The ones who are cleaning up your video and audio and transmitting it around the world are already here. The ones who are answering many customer service queries, things that you would have had to call a human for are already here.

An army of robots is already here. It’s very cheaply available. The bottleneck is just figuring out intelligent and interesting things to do to them.

Essentially you can order this army of robots around. The commands have to be issued in a computer language, in a language that they understand.

These robots aren’t very smart. They have to be told very precisely what to do and how to do it. Coding is such a great superpower because now you can speak the language of the robot armies and you can tell them what to do.

Nivi: I think at this point, people are not only commanding the army of robots within servers through code, they’re actually manipulating the movement of trucks, of other people. Just ordering a package on Amazon, you’re manipulating the movement of many people and many robots to get a package delivered to you.

People are doing the same things to build businesses now. There’s the army of robots within servers and then there’s also an army of actual robots and people that are being manipulated through software.

23. Product Leverage is Egalitarian Labor and capital are limited to the people who control those resources. But products reach global markets.

Product leverage is a positive sum game

Naval: Labor and capital are much less egalitarian, not just in the inputs, but in their outputs.

Let’s say that I need something that humans have to provide like if I want a massage or if I need someone to cook my food. The more of a human element there is in providing that service, the less egalitarian it is. Jeff Bezos probably has much better vacations than most of us because he has lots of humans running around doing whatever he needs to do.

If you look at the output of code and media, Jeff Bezos doesn’t get to watch better movies and TV than we do. Jeff Bezos doesn’t get to even have better computing experience. Google doesn’t give him some premium, special Google account where his searches are better.

It’s the nature of code and media output that the same product is accessible to everybody. It turns into a positive sum game where if Jeff Bezos is consuming the same product as a thousand other people, that product is going to be better than the version that Jeff would consume on his own.

Status goods are limited to a few people

Whereas with other products, that’s not true. If you look at something like buying a Rolex, which is no longer about telling time. It’s a signaling good. It’s all about showing off, “I have a Rolex.” That’s a zero sum game.

If everybody in the world is wearing a Rolex, then people don’t want to wear Rolexes anymore because they no longer signal. It’s canceled out the effect.

Rich people do have an advantage in consuming that product. They’ll just price it up until only they can have Rolexes. Then poor people can’t have Rolexes and Rolexes resume their signaling value.

The best products tend to be targeted at the middle class

Something like watching Netflix or using Google or using Facebook or YouTube or even frankly modern day cars. Rich people don’t have better cars. They just have weirder cars.

You can’t drive a Lamborghini on the street at any speed that makes sense for a Lamborghini, so it’s actually a worse car in the street. It just turned into a signaling good at that point. Your sweet spot, where you want to be, is somewhere like a Tesla Model 3 or like a Toyota Corolla is an amazing car.

A new Toyota Corolla is a really nice car, but because it’s mainstream, the technology has amortized the cost of production over the largest number of consumers possible.

The best products tend to be at the center, at the sweet spot, the middle class, rather than being targeted at the upper class.

Creating wealth with product leads to more ethical wealth

I think one of the things that we don’t necessarily appreciate in modern societies is as the forms of leverage have gone from being human-based, labor-based and being capital-based to being more product and code and media-based, that most of the goods and services that we consume are becoming much more egalitarian in their consumption.

Even food is becoming that way. Food is becoming cheap and abundant, at least in the first world, too much so to our detriment. Jeff Bezos isn’t necessarily eating better food. He’s just eating different food or he’s eating food that’s prepared and served theatrically, so it’s almost like more of again the human element of performance.

But the labor element out of food production has gone down massively. The capital element has gone down massively. Even food production itself has become more technology-oriented, and so the gap between the haves and the have-nots is getting smaller.

If you care about ethics in wealth creation, it is better to create your wealth using code and media as leverage because then those products are equally available to everybody as opposed to trying to create your wealth through labor or capital.

You want to use the product that is used by the most people

What I’m referring to here is scale economies. Technology products and media products have such amazing scale economies that you always want to use the product that is used by the most people. The one that’s used by the most people ends up having the largest budget. There’s no marginal cost of adding another user, and so with the largest budget, you get the highest quality.

The best TV shows are actually not going to be some obscure ones just made for a few rich people. They’re going to be the big budget ones, like the Game of Thrones or the Breaking Bad or Bird Box, where they have massive, massive budgets. They can just use those budgets to get to a certain quality level.

Then rich people, to be different, they have to fly to Sundance and watch a documentary. You and I aren’t going to fly to Sundance because that’s something that bored rich people do to show off. We’re not going to watch a documentary because most of them just aren’t actually even that good.

Again, if you’re wealthy today, for large classes of things, you spend your money on signaling goods to show other people that you’re wealthy, then you try and convert them to status. As opposed to actually consuming the goods for their own sake.

Nivi: People and capital as a form of leverage have a negative externality and code and product have a positive externality attached to them, if I was going to sum up your point.

Capital and labor are becoming permissionless

I think that capital and labor are also starting to become a little more permissionless or at least the permissioning is diffuse because of the Internet. Instead of labor, we have community now, which is a diffused form of labor. For example, Mark Zuckerberg has a billion people doing work for him by using Facebook.

Instead of going to raise capital from someone who’s rich, now we have crowdfunding. You can raise millions and millions of dollars for a charity, for a health problem or for a business. You can do it all online.

Capital and labor are also becoming permissionless, and you don’t need to necessarily do it the old fashioned way, where you have to go around and ask people for permission to use their money or their time.

24. Pick a Business Model With Leverage Ideally, you should pick a business model with network effects, low marginal costs and scale economies.

Scale economies: the more you produce, the cheaper it gets

Nivi: One more question about leverage. Do you think a choice of business model or a choice of product can also bring a kind of leverage to it?

For example, pursuing a business that has network effects. Pursuing a business that has brand effects. Or other choices of business model that people could manipulate that just give you free leverage.

Naval: Yeah, there’s some really good microeconomic concepts that are important to understand.

One of those is scale economies, which is the more you produce of something the cheaper it gets to make it. That’s something that a lot of businesses have, Basic Economics 101.

You should try and get into a business where making Widget Number 12 is cheaper than making Widget Number 5, and making Widget Number 10,000 is a lot cheaper than the previous ones. This builds up an automatic barrier to entry against competition and getting commoditized. That’s an important one.

Zero marginal cost of reproduction: producing more is free

Another one is, and this is along the same lines, but technology products especially, and media products, have this great quality where they have zero marginal cost of reproduction. Creating another copy of what you just created is free.

When somebody listens to this podcast or watches a YouTube video about this, it doesn’t cost me anything for the next person who shows up. Those zero marginal cost things, they take a while to get going because you make very little money per user, but over time they can really, really add up.

Joe Rogan is working no harder on his current podcast than he was on Podcast number 1, but on Podcast number 1,100 he’s making a million dollars from the podcast whereas for the previous one he probably lost money; for the first one. That’s an example of zero marginal cost.

Network effects: value grows as the square of the customers

Then, the most subtle but the most important is this idea of network effects. It comes from computer networking. Bob Metcalfe, who created Ethernet, famously coined Metcalfe’s Law, which is the value of a network is proportional to the square of the number of nodes in the network.

If a network of size 10 would have a value of a 100, a network of a size 100 would have a value of 10,000. It’s not just 10 times more, it’s 100 times more, because of the square; the difference is the square.

You want to be in a network effects business, assuming you’re not number two. If you’re number one in network effect business, you win everything. Example: if you look at Facebook, your friends and family social networking protocol. Who’s their competitor? Nobody, because they won everything through network effects. Which is why when people say, “Well, I can just switch away from Facebook,” they don’t realize that network effects create natural monopolies. They’re very, very powerful things.

Network effect businesses are natural monopolies

One of the dirty secrets of Silicon Valley is that a lot of the winning businesses are natural monopolies. Even ride-sharing tends towards one winner-take-all system.

Uber will always have better economics than Lyft, as long as it’s moving more drivers and more riders around. Something like Google, there’s basically only one viable search engine. I do like DuckDuckGo, privacy reasons, but they’re just always gonna be behind because of network effects. Twitter: where else would you go for microblogging? Even YouTube has weak network effects, but they’re still powerful enough that there’s really no number two site that you go to, to consume your video on a regular basis. It even turns out in e-tail, Amazon Prime and kind of the convenience of stored credit cards and information creates a powerful network effect.

In a network effect, each new user adds value to the existing users

What is a network effect? Let’s just define it precisely. A network effect is when each additional user adds value to the existing user base. Your users themselves are creating some value for the existing users.

The classic example that I think everybody can understand is, language. Let’s say that there’s 100 people living in the community and speak 10 different languages, and each person just speaks one of those 10. Well, you’re having to translate all the time; it’s incredibly painful. But if all 100 of you spoke the same language, it would add tremendous value.

The way that community will play out is, 10 people start off speaking 10 languages, and let’s say one extra person learns English. Well, now all of a sudden, 11 people know English, so the next person comes in to learn a new language is probably going to chose English. At some point, let’s say English gets to 20 or 25 people, it’s done. It’s just going to own the entire language marketplace, and the rest of the languages will get competed out.

Which is why, long-term, the entire world is probably going to end up speaking English and Chinese. China’s closed off on the Internet, but the Internet itself is a great leveler, and people who want to communicate on the Internet are forced to speak English because the largest community of people on the `Internet speaks English.

I always feel bad for my colleagues who grew up speaking foreign languages in foreign countries, because you don’t have access to so many books; so many books just haven’t been translated into other languages. If you only spoke French, or you only spoke German, or you only spoke Hindi, for example, you would be at a severe disadvantage in a technical education.

Invariably, if you go and get a technical education, you have to learn English just because you have to read these books that have this data that has not been translated. Languages are probably the oldest example of network effect.

Money is another example. We should all probably be using the same money, except for the fact that geographic and regulatory boundaries have created these artificial islands of money. But even then, the world tends to use a single currency as the reserve currency at most times; currently, the US dollar.

Zero marginal cost businesses can pivot into network effect businesses

Network effects are a very powerful concept, and when you’re picking a business model, it’s a really good idea to pick a model where you can benefit from network effects, low marginal costs, and scale economies; and these tend to go together.

Anything that has zero marginal costs of production obviously has scale economies, and things that have zero marginal costs of reproduction very often tend to have network effects, because it doesn’t cost you anything more to stamp out the thing. So then you can just create little hooks for users to add value to each other.

You should always be thinking about how your users, your customers, can add value to each other because that is the ultimate form of leverage. You’re at the beach in the Bahamas or you’re sleeping at night and your customers are adding value to each other.

25. Example: From Laborer to Entrepreneur The continuum from laborer to real estate tech company goes from low to high specific knowledge, accountability and leverage.

Laborers get paid hourly and have low accountability

Naval: The tweetstorm is very abstract. It’s deliberately meant to be broadly applicable to all kinds of different domains and disciplines and time periods and places. But sometimes it’s hard to work without a concrete example. So let’s go concrete for a minute.

Look at the real estate business. You could start at the bottom, let’s say you’re a day laborer. You come in, you fix people’s houses. Someone orders you around, tells you, “Break that piece of rock. Sand that piece of wood. Put that thing over there.”

There’s just all these menial jobs that go on, on a construction site. If you’re working one of those jobs, unless you’re a skilled trade, say, a carpenter or electrician, you don’t really have specific knowledge.

Even a carpenter or an electrician is not that specific because other people can be trained how to do it. You can be replaced. You get paid your $15, $20, $25, $50, if you’re really lucky, $75 an hour, but that’s about it.

You don’t have any leverage other than from the tools that you’re using. If you’re driving a bulldozer that’s better than doing it with your hands. A day laborer in India makes a lot less because they have no tool leverage.

You don’t have much accountability. You’re a faceless cog in a construction crew and the owner of the house or the buyer of the house doesn’t know or care that you worked on it.

General contractors get equity, but they’re also taking risk

One step up from that, you might have a contractor, like a general contractor who someone hires to come and fix and repair and build up their house. That general contractor is taking accountability; they’re taking responsibility.

Now let’s say they got paid $250,000 for the job. Sorry, I’m using Bay Area prices, so maybe I’ll go rest of the world prices, $100,000 for the job to fix up a house, and it actually costs the general contractor, all said and done, $70,000. That contractor’s going to pocket that remaining $30,000.

They got the upside. They got the equity but they’re also taking accountability and risk. If the project runs over and there’s losses, then they eat the losses. But you see, just the accountability gives them some form of additional potential income.

Then, they also have labor leverage because they have a bunch of people working for them. But it probably tops out right there.

Property developers pocket the profit by applying capital leverage

You can go one level above that and you can look at a property developer. This might be someone who is a contractor who did a bunch of houses, did a really good job, then decided to go into business for themselves and they go around looking for beaten down properties that have potential.

They buy them, they either raise money from investors or front it themselves, they fix the place up, and then they sell it for twice what they bought it for. Maybe they only put in 20% more, so it’s a healthy profit.

So now a developer like that takes on more accountability, has more risk. They have more specific knowledge because now you have to know: which neighborhoods are worth buying in. Which lots are actually good or which lots are bad. What makes or breaks a specific property. You have to imagine the finished house that’s going to be there, even when the property itself might look really bad right now.

There’s more specific knowledge, there’s more accountability and risk, and now you also have capital leverage because you’re also putting in money into the project. But conceivably, you could buy a piece of land or a broken-down house for $200,000 and turn it into a million dollar mansion and pocket all the difference.

Architects, large developers and REITs are even higher in the stack

One level beyond that might be a famous architect or a developer, where just having your name on a property, because you’ve done so many great properties, increases its value.

One level up from that, you might be a person who decides, well, I understand real estate, and I now know enough of the dynamics of real estate that rather than just build and flip my own properties or improve my own properties, I’m gonna be a massive developer. I’m going to build entire communities.

Now another person might say, “I like that leverage, but I don’t want to manage all these people. I want to do it more through capital. So I’m gonna start a real estate investment trust.” That requires specific knowledge not just about investing in real estate and building real estate, but it also requires specific knowledge about the financial markets, and the capital markets, and how real estate trusts operate.

Real estate tech companies apply the maximum leverage

One level beyond that might be somebody who says, “Actually, I want to bring the maximum leverage to bear in this market, and the maximum specific knowledge.” That person would say, “Well, I understand real estate, and I understand everything from basic housing construction, to building properties and selling them, to how real estate markets move and thrive, and I also understand the technology business. I understand how to recruit developers, how to write code and how to build good product, and I understand how to raise money from venture capitalists and how to return it and how all of that works.”

Obviously not a single person may know this. You may pull a team together to do it where each have different skill sets, but that combined entity would have specific knowledge in technology and in real estate.

It would have massive accountability because that company’s name would be a very high risk, high reward effort attached to the whole thing, and people would devote their lives to it and take on significant risk.

It would have leverage in code with lots of developers. It would have capital with investors putting money in and the founder’s own capital. It would have labor of some of the highest quality labor that you can find, which is high quality engineers and designers and marketers who are working on the company.

Then you may end up with a Trulia or a RedFin or a Zillow kind of company, and then the upside could potentially be in the billions of dollars, or the hundreds of millions of dollars.

As you layer in more and more kinds of knowledge that can only be gained on the job and aren’t common knowledge, and you layer in more and more accountability and risk-taking, and you layer in more and more great people working on it and more and more capital on it, and more and more code and media on it, you keep expanding the scope of the opportunity all the way from the day-laborer, who might just literally be scrappling on the ground with their hands, all the way up to somebody who started a real estate tech company and then took it public.

26. Judgment Is the Decisive Skill Everything we’ve discussed so far has been setting you up to apply judgment.

In an age of infinite leverage, judgment becomes the most important skill

Nivi: We spoke about specific knowledge, we talked about accountability, we talked about leverage. The last skill that Naval talks about in his tweetstorm is judgment, where he says, that “Leverage is a force multiplier for your judgment.”

Naval: We are now living in an age of nearly infinite leverage, and all the great fortunes are created through leverage. Your first job is to go and obtain leverage, and you can obtain leverage through permission by getting people to work for you, or by raising capital.

Or you can get leverage permissionlessly by learning how to code or becoming good communicator and podcasting, broadcasting, creating videos, writing, etc.

That’s how you get leverage, but once you have leverage, what do you do with it? Well, the first part of your career’s spent hustling to get leverage. Once you have the leverage, then you wanna slow down a bit, because your judgment really matters.

It’s like you’ve gone from steering your sailboat around to now you’re steering an ocean liner or a tanker. You have a lot more at risk, but you have a lot more to gain as well. You’re carrying a much higher payload. In an age of infinite leverage, judgment becomes the most important skill.

Warren Buffett is so wealthy now because of his judgment. Even if you were to take away all of Warren’s money, tomorrow, investors would come out of the woodwork and hand him a $100 billion because they know his judgment is so good, and they would give him a big chunk of that $100 billion to invest.

Everything else you do is setting you up to apply judgment

Ultimately, everything else that you do is actually setting you up to apply your judgment. One of the big things that people rail on is CEO pay. For sure there’s crony capitalism that goes on where these CEOs control their boards and the boards give them too much money.

But, there are certain CEOs who definitely earned their keep because their judgment is better. If you’re steering a big ship, if you’re steering Google or Apple, and your judgment is 10 or 20 percent better than the next person’s, society will literally pay you hundreds of millions of dollars more, because you’re steering a $100 billion ship.

If you’re on course 10 or 20 percent of the time more often than the other person, the compounding results on that hundreds of billions of dollars you’re managing will be so large that your CEO pay will be dwarfed in comparison.

Demonstrated judgment, credibility around the judgment, is so critical. Warren Buffett wins here because he has massive credibility. He’s been highly accountable. He’s been right over and over in the public domain. He’s built a reputation for very high integrity, so you can trust him.

A person like that, people will throw infinite leverage behind him because of his judgment. Nobody asks him how hard he works; nobody asks him when he wakes up or when he goes to sleep. They’re like, “Warren, just do your thing.”

Judgment, especially demonstrated judgment, with high accountability, clear track record, is critical.

Judgment is knowing the long-term consequences of your actions

Nivi: Let’s define judgment. I would define it as knowing the long-term effects of your decisions, or being able to predict the long-term effects of your decisions.

Naval: It’s funny. My definition of wisdom is knowing the long term consequences of your actions, so they’re not all that different. Wisdom is just judgment on a personal domain.

Wisdom applied to external problems I think is judgment. They’re highly linked. But, yes, it’s knowing the long term consequences of your actions and then making the right decision to capitalize on that.

Without experience, judgment is often less than useless

Judgment is very hard to build up. This is where both intellect and experience come in play.

There are many problems with the so-called intellectuals in the ivory tower, but one of the reasons why Nassim Taleb rails against them is because they have no skin in the game. They have no real-world experience, so they just apply purely intellect.

Intellect without any experience is often worse than useless because you get the confidence that the intellect gives you, and you get some of the credibility, but because you had no skin in the game, and you had no real experience, and no real accountability, you’re just throwing darts.

The real world is always far, far more complex than we can intellectualize. Especially all the interesting, fast-moving edge domains and problems, you can’t get there without experience. If you are smart and you iterate fast, it’s not even you put 10,000 hours into something, but you take 10,000 tries at something.

The people with the best judgment are among the least emotional

If you are smart and you have a lot of quick iterations, and you try to keep your emotions out of it, the people with the best judgment are actually among the least emotional. A lot of the best investors are considered almost robotic in that regard, but I wouldn’t be surprised if even the best entrepreneurs often come across as unemotional.

There is sort of this archetype of the passionate entrepreneur, and yeah, they have to care about what they’re doing, but they also have to see very clearly what’s actually happening. The thing that prevents you from seeing what’s actually happening are your emotions. Our emotions are constantly clouding our judgment, and in investing, or in running companies, or in building products, or being an entrepreneur, emotions really get in the way.

Emotions are what prevent you from seeing what’s actually happening, until you can no longer resist the truth of what’s happening, until it becomes too sudden, and then you’re forced into suffering; which is sort of a breaking of this fantasy that you had put together.

Nivi: To try and connect some of these concepts, I would say that, first, you’re accountable for your judgment. Judgment is the exercise of wisdom. Wisdom comes from experience; and that experience can be accelerated through short iterations.

A lot of the top investors often sound like philosophers

Naval: And the reason why a lot of the top investors, a lot of the value investors, like if you read Jeremy Grantham, or you read Warren Buffet, or you read up on Michael Burry, these people sound like philosophers, or they are philosophers, or they’re reading a lot of history books or science books.

Like what are they doing, shouldn’t they be reading investment books. No. Investment books are the worst place to learn about investment, because investment is a real-world activity that is highly multi-variate, all the advantages are always being competed away. It’s always on the cutting-edge.

What you actually just need is very, very broad-based judgment and thinking. The best way to do that is to study everything, including a lot of philosophy. Philosophy also makes you more stoic, makes you less emotional, and so you make better decisions; you have better judgment.

The more outraged someone is, the worse their judgment

One simple thing is I see … I go out on Twitter and it seems like half of Twitter is outraged at something at all times. You can go within someone’s Twitter feed and get at least some semblance of what it must be like to be in their head all the time.

The more outraged somebody is, I guarantee you, the worse their judgment is. If someone’s constantly tweeting political outrage, and just see like an angry person getting into fights, you don’t want to hand this person the keys to your car, let alone the keys to your company.

27. Set an Aspirational Hourly Rate If outsourcing a task will cost less than your hourly rate, outsource it.

Set and enforce an aspirational hourly rate

Nivi: We covered the skills that you need to get rich. That was specific knowledge, accountability, leverage, judgment, and life-long learning. Let’s talk a little bit about the importance of working hard and valuing your time.

Naval: No one is going to value you more than you value yourself. You just have to set a very high personal hourly rate and you have to stick to it. Even since I was young, I just decided I was worth a lot more than the market though I was worth, but I started treating myself that way.

Always factor your time into every decision. How much time does it take? Oh it’s gonna take me an hour to get across town to get this thing. I value myself at a $100 an hour; that’s basically throwing $100 out of my pocket. Am I going to do that?

You buy something from Amazon; they screwed it up, you have to return it. Is it worth your time to return it? Is it worth the mental hassle? Keep in mind that you have less work hours, you have less mentally high-output hours. Do you want to use them to run errands and solve little problems, or do you want to save them for the big stuff?

All the great scientists were terrible at managing their household life. None of them had a clean, organized room, or made all their social events on time, or sent their thank you cards.

You can’t penny pinch your way to wealth

You can spend your life however you want, but if you want to get rich, it has to be your number one overwhelming desire. Which means, it has to come before anything else; which means you can’t be penny-pinching. This is what people don’t understand.

You can penny-pinch your way to a basic sustenance. You can keep your expenses low, maybe retire early and not spend too much. That’s perfectly valid. But we’re here to talk about wealth creation. If you’re going to do that, then that has to be your number one overwhelming priority.

My aspirational rate was $5,000/hr

Fast forward to your wealthy self and pick some intermediate hourly rate. For me, believe it or not, back when you could have hired me … Which now obviously you can’t, but back when you could have hired me … this was true a decade ago or even two decades ago, before I had any real money. My hourly rate, I used to say to myself over and over is, $5,000 an hour. Today when I look back, really it was about $1,000 an hour [back then].

Of course, I still ended up doing stupid things, like arguing with the electrician, or returning the broken speaker, but I shouldn’t have, and I did a lot less than any of my friends would. I would make a theatrical show out of throwing something in the trash pile, or giving it to Salvation Army, rather than trying to return it, or handing something to people rather than trying to fix it.

I would argue with my girlfriends, and even today it’s my wife, “I don’t do that. That’s not a problem that I solve.” I still argue that, with my mother, when she hands me little to-do’s. I just don’t do that. I would rather hire you an assistant. This was true even when I didn’t have money.

If you can outsource something for less than your hourly rate, do it

Another way of thinking about something is, if you can outsource something or not do something for less than your hourly rate, outsource it or don’t do it. If you can hire someone to do it for less than your hourly rate, hire them. That even includes things like cooking. You may want to eat your healthy home cooked meals, but if you can outsource it, do that instead.

I know some people will say, “Well what about the joy of life? What about getting it right just your way?” Sure, you can do that, but you’re not gonna be wealthy because now you’ve made something else a priority.

Paul Graham basically said it pretty well for Y Combinator startups, he said, “You should be working on your product and getting product-market fit. And you should be exercising and eating healthy.” That’s about it. That’s all you have time for while you’re on this mission.

Your hourly rate should seem absurdly high

Set a very high hourly aspirational rate for yourself and stick to it. It should seem and feel absurdly high. If it doesn’t, it’s not high enough. Whatever you picked, my advice to you would be to raise it. Like I said, for myself, even before I had money, for the longest time I used $5,000 an hour. And if you extrapolate that out into what it looks like as an annual salary, it’s the multiple millions of dollars per year.

Ironically, I actually think I’ve beaten it. I’m not the hardest working person; I’m actually a lazy person. I work through bursts of energy where I’m really motivated with something. If I actually look at how much I’ve earned per actual hour that I’ve put in, it’s probably quite a bit higher than that.

28. Work As Hard As You Can Work as hard as you can. Even though what you work on and who you work with are more important.

Work as hard as you can

Naval: Let’s talk about hard work. There’s this battle that happens in Twitter a lot between, should you work hard and should you not. David Hauser’s (correction: David Heinemeier Hansson) on there saying, “It’s like you’re slave driving people.” Keith Rabois is always on there saying, “No, all the great founders worked their fingers to the bone.”

They’re talking past each other. First of all, they’re talking about two different things. David is talking about employees and a lifestyle business, which is fine. Your number one thing in life, if you’re doing that, is not getting wealthy. You have a job, you also have your family, you also have your life.

Keith is talking about the Olympics of startups. He’s talking about the person going for the gold medal and trying to build a multi-billion dollar public company. That person has to get everything right. They have to have great judgment. They have to pick the right thing to work on. They have to recruit the right team, and they have to work crazy hard. They’re basically engaged in a competitive sprint.

If getting wealthy is your goal, you are going to have to work as hard as you can. But hard work is absolutely no substitute for who you work with and what you work on. What you work on is probably the most important thing.

What you work on and who you work with are more important

Finding Product-Market-Founder Fit to expand on Marc Andreessen’s definition, he came up with Product-Market Fit. I will add Product-Market-Founder Fit, which is how well you are personally suited to that business. The combination of that three, that should be your overwhelming goal.

You can save yourself a lot of time if you pick the right area to work in. Picking the right people to work with is the next most important piece. Third comes how hard you work. They’re like three legs of a stool; if you shortchange on any one of them, the whole stool’s gonna fall down. It’s not like you can pick one over the other that easily.

The order of operations when you’re building a business, or even building your career, is first figure out, “What should I be doing? What is something where there is a market that is emerging? There’s a product that I can build that I’m excited to work on and something where I have specific knowledge and I’m really into it?”

Second, surround yourself with the best people possible, and no matter how high your bar is, raise your bar. You can be working with other people who are great enough. There’s someone greater out there to work with, you should go work with them.

I advise a lot of people who are looking at which startup to join in Silicon Valley. I say, “Basically pick the one that’s going to have the best alumni network for you in the future.” Look at the PayPal mafia. They worked with a bunch of geniuses, so they all got rich. Just try and pick based on the highest intelligence, energy, and integrity people that you can find.

Finally, once you’ve picked the right thing to work on and the right people to work with, then you work as hard as you can.

Nobody really works 80 hours a week

Now, this is where the mythology gets a little crazy. People who work 80, 120 hour weeks, a lot of that’s just status signaling. It’s showing off. Nobody really works 80 to 120 hours a week sustained at high output with mental clarity. Your brain breaks down. You just won’t have good ideas.

Really, the way people tend to work most effectively, especially in knowledge work, is they sprint as hard as they can while they’re working on something, and they’re inspired and they’re passionate; and then they rest. They take long breaks.

It’s more like a lion hunting and much less a marathon runner running. You sprint, then you rest, you re-assess, and then you try again. What you end up doing is you end up building a marathon of sprints.

Inspiration is perishable

Nivi just made the point to me on the side that inspiration is perishable, which is a very good point. When you have your inspiration, do it right then and there. This happens to me a lot with my tweetstorms. I’ve actually come out with a whole bunch of additional tweetstorms besides the ones that are already out there, but sometimes I just hesitate, or I just pause, and it just dies.

What I’ve learned is, if I’m inspired to write a blog post or to publish a tweetstorm, I should probably do it right away. Otherwise, it’s not going to get out there; I won’t come back to it. Inspiration is a beautiful and powerful thing, and when you have it, just seize it.

Impatience with actions, patience with results

People talk about impatience. When do you know to be impatient? When do you know to be patient? My glib tweet on this was, “Impatience with actions and patience with results.” I think that’s actually a good philosophy for life.

Anything you have to do, just get it done. Why wait? You’re not getting any younger. Your life is slipping away. You don’t want to spend it waiting in line. You don’t want to spend it traveling back and forth. You don’t want to spend it doing thing that you know ultimately aren’t part of your mission.

When you do them, you want to do them as quickly as you can while you do them well, with your full attention. But then you just have to give up on the results; you have to be patient with the results because you’re dealing with complex systems, you’re dealing with lots of people.

It takes a long time for markets to adopt products. It takes time for people to get comfortable working with each other. It takes time for great products to emerge as you polish away, polish away, polish away. Impatience with actions, patience with results. As Nivi said, inspiration is perishable. When you have inspiration, act on it right then and there.

If I have a problem that I discover in one of my businesses that needs to be solved, I basically won’t sleep until at least the resolution is in motion. This is just a personal failing, but if I’m on the board of a company, I’ll call the CEO. If I’m running the company, I’ll call my reports. If I am responsible, I’ll get on there, right then and there, and solve it.

If I don’t solve a problem the moment it happens, or if I don’t start moving towards solving it when it happens, I have no peace. I have no rest. I have no happiness until that problem is solved; so solve it as quickly as possible. I literally won’t sleep until it’s solved. Maybe that’s just a personal characteristic, but it’s worked out well in business.

29. Be Too Busy to “Do Coffee” You should be too busy to “do coffee”, while still keeping an uncluttered calendar.

Be too busy to “do coffee” while keeping an uncluttered calendar

Naval: Then we squander our time with the death of 1,000 cuts. Another tweet I had was, “You should be too busy to do coffee, while still keeping an uncluttered calendar.” People who know me, know that I’m famous for simultaneously doing two things. One is having a very clean calendar. I have almost no meetings on it.

There are people that I meet with, when they see my calendar they almost weep, while at the same time, I am busy all the time. I’m always doing something. It’s usually “work-related” but it is whatever the highest impact thing is that needs to be done at that time and that I’m most interested or inspired about. But the only way to do that is to constantly, ruthlessly decline meetings.

People want to do coffee and build relationships, and that’s fine early in your career when you’re still exploring. But later in your career when you’re exploiting, and there are more things coming at you than you have time for, you have to ruthlessly cut meetings out of your life.

If someone wants to do a meeting, see if you can do it with a phone call instead. If they want to do a phone call, see if they can do it with an email instead. If they want to do with email, see if they can do with a text message instead. If they’re text messaging, you should probably be ignoring most text messages unless they’re urgent, true emergencies.

One has to be utterly ruthless about dodging meetings. When you do do meetings, do walking meetings, do standing meetings. Keep them short, keep them actionable, keep them small. Any meeting with eight people sitting around at a conference table, nothing is getting done in that meeting. You are literally just dying one hour at a time.

Nivi: “Doing coffee” reminds me of a old quote, I think from Steve Jobs, when they asked him, “Hey, why doesn’t Apple come to conventions?” Or “Why don’t you come to my convention?” His response was, “Well, then because we wouldn’t be here working.”

Naval: Yeah, I used to have a tough time turning people down for meetings, but now I just tell them outright. I just say, “Look, I don’t do non-transactional meetings. I don’t do meetings without a strict agenda. I don’t do meetings unless we absolutely have to.”

Nivi used to do this. He would email people when they would ask Nivi and I for a coffee meeting, to get to know you. He would say, “We don’t do meetings unless it’s life and death urgent.” And then that person has to basically respond, “Yeah, it’s life and death urgent” or there’s no meeting.

People will meet with you when you have proof of work

When you have something important or something valuable, other busy, interesting people will meet with you. Your calling card has to be, “Hey, here’s what I’ve done. Here’s what I can show you. Let’s meet and I’ll be respectful of your time if this is useful to you.”

I find that there are very busy important people who will take your meeting, but you have to come with a proper calling card. All the people who tweet and who email famous or rich people saying, “Hey, if I could just get one meeting with you,” and they’re vague about it, they’re not going to get anywhere in life.

You have to build up the credibility. When, for example, an investor in the tech business and the venture business looks at a startup, the first thing they want to see is, they want to see some evidence of product progress. They don’t just want to even see a slide deck, they want to see a product progress, because the product progress is the resume for the entrepreneur. It is the unshakable, unfake-able resume.

You have to do the work. To use a crypto analogy, you have to have proof of work. If you have proof of work, and you truly have something interesting, then you shouldn’t hesitate to put it together in an email and send it to somebody. Even then, when you’re asking for a meeting, you wanna be super actionable about it.

Networking is overrated even early in your career

But I would say, even if you yourself haven’t made it yet, if you think you’re going to make it by going out and networking and doing a whole bunch of meetings, you’re probably incorrect. Yes, networking can be important early in your career, and yes you can get serendipitous with meetings, but the odds are pretty low.

As we spent time talking about earlier, when you are just meeting people and hoping to get that lucky break, you’re relying on Type One Luck, which is Blind Luck, and Type Two Luck, which is Hustle Luck.

But what you’re not getting, is Type Three or Type Four Luck, which are the better kinds where you spend time developing a reputation, working on something; developing a unique point of view, and being able to spot opportunities that others can’t.

A busy calendar and a busy mind will destroy your ability to do great things in this world. If you want to be able to do great things, whether you’re a musician, or whether you are an entrepreneur, or whether you’re an investor, you need free time and you need a free mind.

30. Keep Redefining What You Do Become the best in the world at what you do. Keep redefining what you do until this is true.

Keep redefining what you do until you’re the best at what you do

Nivi: We just finished talking about the importance of working hard and valuing your time. Next there’s a few tweets on the topic of working for the long term. The first tweet is, “Become the best in the world at what you do. Keep redefining what you do until this is true.”

Naval: If you really want to get paid in this world, you want to be number one at whatever it is that you’re doing. And it can be niche, that’s the point. It can literally be, you’re getting paid for just being you.

At this point some of the more successful people in the world are that way. Oprah gets paid for being Oprah. Joe Rogan gets paid for being Joe Rogan. They’re being authentic to themselves.

So what this tweet is trying to say simultaneously is that you want to be number one, but you want to keep changing what you do until you’re number one. You can’t just pick something arbitrary. You can’t say, “I’m going to be the fastest runner in the world and now you got to beat Usain Bolt.” That’s too hard of a problem.

But what you can do is you can keep changing what your objective is until it arrives to your specific knowledge, your skills sets, your position, your capabilities, your location, your interests. And then converges to making you number one.

When you’re searching for what to do you actually have two different foci that you have to keep in mind at all points. And one of those is, “I want to be the best at what I do.” And a second is, “What I do is flexible so that I am the best at it.”

Until you arrive at a comfortable place where like, “Yes this is something I can be amazing at while still being authentic to who I am.” And this is not going to be an overnight discovery. It’s going to be a long journey but at least you know about how to think about it.

Find founder-product-market fit

The most important thing for a company is to find product-market fit. I would say the most important thing for entrepreneur is to find founder-product-market fit. Where you are naturally inclined to build the right product which has a market and that’s a three focus problem. Which is you got to make all three of those work at once.

If you want to be successful in life you just have to get comfortable managing multi-variate problems, multiple objective functions at once. And this is one of those cases where you have to map at least two or three at once.

31. Escape Competition Through Authenticity Competition can make you play the wrong game. No one can compete with you on being you.

Competition will trap you in a lesser game

Nivi: This reminds me of your tweet about escaping competition through authenticity. It sounds like part of this is a search for who you are.

Naval: It’s both a search, and a recognition because sometimes when we search our egos, we want to be something that we are not. And our friends and family are better at telling us actually who we are, or looking back at what we’ve done is a better indicator of who we are.

Peter Thiel talks a lot about how competition is besides the point. It’s counterproductive. We’re highly memetic creatures, we copy what everybody else is doing around us. We copy our desires from them.

If everyone around me is a great artist, I want to be an artist. If everyone around me is a great business person, I want to be a business person. If everybody around me is a social activist, I want to be a social activist. That’s where my self-esteem will come from.

You have to be a little careful when you get caught up in these status games, you end up competing over things that aren’t worth competing over. So, Peter Thiel talks about how he was going to be a law clerk because he was in law school and everybody around him wanted to be a law clerk for a Supreme Court Justice or some famous judge. And he got rejected and that’s what made him go into business. It helped him break out of a lesser game into a greater game.

So, sometimes you get trapped in the wrong game because you’re competing, and the best way to escape competition, to get away from the specter of competition, which is not just stressful and nerve-wracking but will also drive you to just the wrong answer, the way to escape competition is to just be authentic to yourself.

No one can compete with you on being you

If you are fundamentally building and marketing something that is just an extension of who you are, no one can compete with you on that. Who’s going to compete with Joe Rogan or Scott Adams? It’s impossible. Is somebody else going to come along and write a better Dilbert? No, is someone going to compete with Bill Watterson and create a better Calvin and Hobbes, no. They’re being authentic.

This is easiest to see in art. Artist are by definition all naturally authentic. But even entrepreneurs are authentic. Who’s going to be Elon Musk, who’s going to be Jack Dorsey? These people are authentic and the businesses and products that they create are authentic to their desires and their means.

If somebody else came along and started launching rockets I don’t think it would faze Elon one bit. He’s still going to get to Mars because that’s his mission, insane as it seems, that’s the one he set for himself, he’s going to accomplish it.

So, authenticity naturally gets you away from competition. Does it mean that you necessarily want to be authentic to the point where there’s no product-market fit? It may turn out you’re the best juggler on the unicycle but maybe there isn’t that much of a market for that even with YouTube videos. So you got to adjust that somehow until you find product-market fit.

But at least lean towards authenticity, towards getting away from competition. And competition automatically leads towards copy-catting and often towards just playing completely the wrong game.

In entrepreneurship, the masses are never right

Especially in entrepreneurship the masses are never right. If you see a lot of people tweeting about what a great market to enter is, or you see journalist talking about a company is terrible, they don’t know anything. If the masses knew how to build great things and create great wealth we’d all already be done. We’d all already be rich by now.

So, in a sense when you see a lot of competition, sometimes that indicates to you that the masses are already here, so it’s already competed over too much and there’s nothing here, or it’s the wrong trend to begin with.

On the other hand if it’s completely empty, if the whole market is empty and there’s no one there, that can also be a warning indicator that you’ve gone too authentic and not enough on the product-market fit part of founder-product-market fit.

So there’s a balance. You have to find it. But generally most people will make the mistake of paying too much attention to the competition and being too much like the competition and not being authentic enough, and the great founders tend to be authentic iconoclasts.

Combine your vocation and avocation

Nivi: I hate to bring up the Scott Adams skill stack one more time but I’ll still bring it up. Do you think one way of getting to authenticity is just by not necessarily adding some random skills that you think might be important but just really finding five or six various skills that you already authentically do and just stacking them on top of each other and not even in any purposeful way. If you are expressing who you are, you’re going to be expressing all these little five or six different skills anyway.

Naval: That’s really where life is going to lead you anyway. Long term, if you are good and successful at what you do you will find that whatever your hobbies were, you’re almost doing them for a living. As Robert Frost said, combine your vocation and your avocation. What you love to do and what you do, do. So I think you’ll find yourself there anyway.

And you’re right about the skill stack. Everyone’s got multiple skills we aren’t all one-dimensional creatures even though that’s how we have to portray ourselves in our online profiles to get employed. You meet somebody and they say, “I’m a banker.” Or, “I’m a bartender. Or “I’m a barber.” What have you, all the b’s.

But people are multivariate. They have a lot of skills. One banker might be good at finance another one might be good at sales. A third one might be just good at macroeconomic trends and have a feel for the markets. Another one might be really good at picking individual stocks. Another might just be good at maintaining relationships rather than selling new relationships. Everyone’s going to have their various niches and you’re going to have multiple niches, it’s not going to be just one.

So over time you will find, as you go through your career both you will gravitate towards the things that you’re good at, which by definition are almost the things you enjoy doing, otherwise you wouldn’t be good at them. You wouldn’t have put in the time.

And other people will push you towards the things that you’re good at because your smart bosses and your smart co-workers and your smart investors will realize, “Okay you’re really world class in this thing and you’ll recruit somebody else with that other thing.” So, ideally you want to end up specializing in being you.

32. Play Stupid Games, Win Stupid Prizes Competition will blind you to greater games. You’re one step away from a better market.

Businesses that seem like they’re in direct competition really aren’t

Nivi: I think when you’re being authentic, you don’t really mind competition that much. Yeah, it pisses you off and it inspires some fear and jealousy and all the other emotions that come along with it, but also you don’t really mind because you’re more oriented towards the goal and the mission and worst case you get some ideas from them. And there’s often ways to work with the competition in a positive way and it ends up increasing the size of the market for you.

Naval: Yeah sometimes it depends on the nature of the business. Silicon Valley tech industry businesses tend to be winner-take-all. At least the good ones. And so when you see competition it can make you fly into a rage because it really does endanger everything you’ve built.

Whereas if I was opening a restaurant and a more interesting version of the same restaurant opens up in a different town that’s fantastic I’m just going to lift from them what’s working and drop what I can see that they have already figured out is not working. So it does depend to some extent on the nature of the business.

That said, even the businesses that seem that they’re often in direct competition really aren’t. They can end up adjacent or slightly different. You’re one step away from a completely different business and sometimes you need to take that one step and you’re not going to be able to take it if you’re busy fighting over a booby prize.

You’re playing a stupid game you’re going to win a stupid prize. It’s not obvious right now because you’re blinded by competition, but three years from now it’ll be obvious.

My first company got caught up in the wrong game

To give a simple example, when I was first starting companies, one of my first ones was called Epinions which was an online product review site for all the products out there that was independent of Amazon and that space eventually turned into TripAdvisor and Yelp which is where we should have gone.

We should have done more local reviews because there’s more value to having a review of a scarce item like a local restaurant that it is of an item like a camera which was going to have a 1000 reviews on Amazon.

But before we could get there we got caught up in the whole comparison shopping game and so we ended up merging with DealTime and we competed with mySimon and Bizrate which became Shopzilla and PriceGrabber, NexTag and a whole bunch of these price comparison engines. And we’re all caught in fierce competition with each other and that whole space went to zero because it turns out that Amazon won e-tail completely. So there was no need for price comparison, everyone just went to Amazon.

But we got the booby prize because we were caught in the competition with a bunch of our peers when really we should have been looking at what the consumer really wanted and being authentic to ourselves which is reviews, not price comparison. And gone more and more into more and more esoteric items that needed to be reviewed where customers had less and less data and wanted reviews more badly. If we had stayed authentic to ourselves we would have done better.

33. Eventually You Will Get What You Deserve Apply specific knowledge with leverage and eventually you will get what you deserve.

On a long enough time scale you will get paid

Nivi: We’re still talking about working for the long term, the next tweet on that topic is “Apply specific knowledge with leverage and eventually you will get what you deserve.” I would also add to that apply judgment, apply accountability and apply the skill of reading.

Naval: This one is just a glib way of saying that it takes time, even once you have all of these pieces in place, there is an indeterminate amount of time that you’re going to have to put in. And if you’re counting you’ll run out of patience before it actually arrives.

So you just have to make sure that you give these things a proper time, life is long, and Charlie Munger had some line on this. Somebody asked him about making money and he reinterpreted that and he said what the questioner was actually asking was, “How do I get rich like you but faster before I end up as a really old guy?”

And everybody wants it immediately but the world is an efficient place, immediate doesn’t work. You do have to put in the time. You do have to put in the hours and so I think you just have to put yourself in the position with the specific knowledge, with the accountability, with the leverage, with the authentic skill set that you have to be the best in the world at what you do.

And then you have to enjoy it and just keep doing it and keep doing it and keep doing it and don’t keep track and don’t keep count because if you do you will run out of time. I can look back at my career and the people two decades ago I had identified as brilliant and hardworking but hadn’t thought much more about it, they’re all successful now, almost without exception.

On a long enough time scale you do get paid but it can easily be 10 or 20 years. Sometimes it’s five and if it’s five or three and a friend of yours got there it can drive you insane. But, those are exceptions. And for every winner there’s multiple failures.

One thing that’s important in entrepreneurship is you just have to be right once. You get many, many shots on goal. You can take shot on goal every three to five years, maybe every 10 at the slowest or once every year at the fastest depending upon how you’re iterating with startups but you really only have to be right once.

What are you really good at that the market values?

Nivi: My little equation is that your eventual outcome will be equal to something like the distinctiveness of your specific knowledge times how much leverage you can apply to that knowledge times how often your judgment is correct times how singularly accountable you are for the outcome times how much society values what you’re doing. And then you compound all of that with how long you can keep doing it and how long you can keep improving it through reading and learning.

Naval: That’s actually a really good way to summarize it. It’s probably worth even trying to sketch that equation out.

That said, people try to then apply mathematics to what is really philosophy. So I’ve seen this happen in the past where I say one thing and then I say another thing that seems contradictory if you treat it as a math equation.

But it’s obviously in a different context and then people will say, “Well you say that desire is suffering,” you know, the Buddhist saying, and then you say, “All greatness comes from suffering. So does that mean all greatness come from desire?” Well this isn’t math people, you can’t just start carrying variables around and forming absolute logical outputs. You have to know when to apply things.

I think that is very useful to understand but at the same time one can’t get too analytical about it. It’s what a physicist would call false precision. When you take two made up estimates and you multiply them together and you get four degrees of precision and those decimal points don’t actually count. You don’t have that data. You don’t have that knowledge. In a model, the more estimated variables you have, the greater the error in the model.

So, just adding more and more complexity to your decision making process actually gets you a worse answer. You’re better off just picking the single biggest thing or two. For example, what am I really good at according to observation and according to people that I trust, that the market values?

That alone, those two variables alone are probably good enough because if you’re good at it you’ll keep it up. And if you’re good at it you’ll develop the judgment. And if you’re good at it and you like to do it eventually people will give you the resources and you won’t be afraid to take on accountability. So all the other pieces will fall in place.

Product-market fit is inevitable if you’re doing something you love to do and the market wants it.

34. Reject Most Advice Most advice is people giving you their winning lottery ticket numbers.

The best founders listen to everyone but make up their own mind

Nivi: Regarding the guy who gets rich in five years, one of the tweets that you had on the cutting room floor was: avoid people who got rich quickly, they’re just giving you their winning lottery ticket numbers.

Naval: This is generally true of advice anyway, which is it’s back to Scott Adams, systems not goals. If you ask a specific person what worked for them very often it’s just like they’re reading out the exact set of things worked for them which might not be applicable for you. They’re just reading you out their winning lottery ticket numbers.

It’s a little glib. There is something to be learned from them. But you can’t just take their exact circumstance and map it onto yours. The best founders I know, they listen and read to everyone. But then they ignore everybody. And they make up their own mind.

They have their own internal model of how to apply things to their situation and they do not hesitate to discard information. If you survey enough people all the advice will cancel to zero.

You do have to have your own point of view and when something is sent your way have to very quickly decide, is that true? Is that true outside of the context of what that person applied it in? Is it true in my context? And then do I want to apply it? You have to reject most advice but you have to listen to and read enough of it to know what to reject and what to accept.

Even in this podcast you should examine everything. If something does not feel true to you put it down, set it aside. If too many things seem untrue, delete this podcast.

Advice is maxims you can recall later, when you get your own experience

Nivi: I think the most dangerous part of taking advice is that the person that gave it to you is not going to be around to tell you when it doesn’t apply any longer.

Naval: I view the purpose of advice as a little different than most people. I just view it as helping me have anecdotes and maxims that I can then later recall when I have my own direct experience and say, “Ah that’s what that person meant.”

90% of my tweets are actually just maxims that I carve from myself that are then little mental hooks to remind me when I’m in that situation again, like, “Oh I’m the one who tweeted, if you can’t see yourself working with someone for life, then don’t work with them for a day.” So, as soon as I know that this person is not going to be someone that I’m going to be working with 10 years from now then I have to start extricating myself from that relationship or just not investing that much more effort into it.

So, I use my tweets and other people’s tweets as maxims that help compress my own learnings and be able to recall them. The brain space is finite, you have finite neurons, so you can almost think of these as pointers, addresses, mnemonics to help you remember deep-seated principles where you have the underlying experience to back it up.

If you don’t have the underlying experience then it just reads like a collection of quotes. It’s like it’s cool, it’s inspirational for a moment, maybe make a nice poster out of it but then you forget it and move on. So, all of these are really just compact ways for you to recall your own knowledge.

35. A Calm Mind, a Fit Body, a House Full of Love When you’re finally wealthy, you’ll realize it wasn’t what you were seeking in the first place.

When you’re wealthy, you’ll realize it wasn’t what you were seeking

Nivi: The last tweet on the topic of working for the long term is that “When you’re finally wealthy, you’ll realize it wasn’t what you were seeking in the first place. But that’s for another day.”

Naval: That’s a multi-hour topic in of itself. First of all I thought it was a really clever way to end the whole thing because it disarms a whole set of people who say, “What’s the point of getting rich?” Because there’s a lot of people who just like the status signal, virtue signal, against the idea of wealth creation or making money. So it was just a good way to disarm all of them.

But, it’s also true. In that the things that you really want in life, yes money will solve all your money problems but it doesn’t get you everywhere.

The first thing you realize when you’ve made a bunch of money is that you’re still the same person. If you’re happy, you’re happy. If you’re unhappy, you’re unhappy. If you’re calm and fulfilled and peaceful you’re still that same person. I know lots of very rich people who are extremely out of shape. I know lots of rich people who have really bad family lives. I know lots of rich people who are internally a mess.

A calm mind, a fit body and a house full of love must be earned

So, I would lean on another tweet that I put out which is actually, when I think back on it, I think it’s my favorite tweet of mine. It’s not necessarily the most insightful, it’s not necessarily the most helpful. It’s not even the one I think about the most but when I look at it there’s such a certain truth in there that it just resonates. And that is that “A calm mind, a fit body and a house full of love. These things can not be bought. They must be earned.”

Even if you have all the money in the world you can’t have those three things. Jeff Bezos still has to workout. He still has to work on his marriage or whatever his next relationship is. And his internal mental state is still going to be very much not controlled by external events. It’s going to be based on how calm and peaceful he is inside.

So I think those three things, your health, your mental health and your close relationships are things that you have to cultivate and can probably bring you a lot more peace and happiness than any amount of money ever will.

Practical advice for a calmer internal state

So, that’s what I meant. Now, how to get there is actually a tweetstorm that I still need to put out. I’ve been working on it. I have probably a hundred tweets on it. It’s just very hard to say anything on the topic without getting attacked from 50 different directions, especially these days on Twitter. So I’ve been hesitant to do it because I want to target it for a very specific kind of person.

There’s a bunch of people who don’t believe that working on your internal state is useful. They’re too focused on the external. And that’s fine, there’s nothing wrong with that, they should do that and that’s who the how the get rich tweetstorm is for. There’s a bunch of people who believe that the only thing worth working on is complete liberation, like you become the Buddha, and they’ll attack anything in the middle as being useless. That’s fine too but most people aren’t there.

So, what I want to do is to create a tweetstorm that is just very practical advice for everyday people who want to have a calmer internal state. A set of understandings, realizations, half truths and truths, that if you were to imbibe them properly, and again these are just pointers to ideas that you already have and experiences that you already have. That if you keep these top of mind, slowly but steadily it will help you with certain realizations that will lead you to a calmer internal state. That’s what I want to work on.

Fitness is another big one, I’m just not the expert there. There are plenty of good people on Twitter that who are better fitness than me.

A lot of divorces happen over money, a lot of battles happen over internal anger

And I think a loving household and relationships actually automatically falls out of the other things. If you have a calm mind and if you’ve already made money, you should have a good relationship. There’s not reason why you shouldn’t. A lot of divorces actually happen over money, unfortunately that’s just the reality of it, so having money removes that part of it.

A lot of external battles happen because you’re internal state is not good. When you’re naturally internally peaceful you’re going to pick less fights. You’re going to be more loving without expecting anything in return and that will take care of things on the external relationship front.

Nivi: So, money solves your money problems. Money buys you freedom in the material world, I think that was a tweet from your cutting room floor, and money lets you not do the things that you don’t want to do.

Naval: Yeah to me the ultimate purpose of money so you do not have to be in a specific place at a specific time doing anything you don’t want to do.

36. There Are No Get Rich Quick Schemes Get rich quick schemes are just someone else getting rich off you.

There are no get rich quick schemes

Nivi: We skipped one tweet because I wanted to cover all of the tweets on the topic of the long term. And the tweet that we skipped was, “There are no get rich quick schemes. That’s just someone else getting rich off you.”

Naval: This goes back to the world being an efficient place. If there’s an easy way to get rich it’s already been exploited. And there are a lot of people who will sell you ideas and schemes on how to make money but they’re just always selling you some $79.95 course or some audiobook or some seminar .

Which is fine, everyone needs to eat. People need to make a living. They might actually have really good tips but if they’re giving you actionable, high quality advice that acknowledges that it’s a difficult journey and will take a lot of time, then I think that’s realistic.

But, if they’re selling you some get rich quick scheme whether it’s crypto or whether it’s an online business or seminar they’re just making money off you. That’s their get rich quick scheme. It’s not going to necessarily work for you.

We don’t have ads because it would ruin our credibility

One of the things about this whole tweetstorm and podcast is that we don’t have ads on here. We don’t charge for anything. We don’t sell anything. Not because I don’t want to make more money, it’s always nice to make more money, we’re doing work here. But, because it would completely destroy the credibility of the enterprise. If I am saying, “Hey I know how to get rich and I’m going to sell that to you.” It’s ruins it.

When I was young and I was studying up on the topic one of my favorite books on the topic was actually called, How To Get Rich by Felix Dennis, the founder of Maxim Magazine, billionaire who passed away. And he had a lot of crazy stuff in there but he had some really good insights too.

But whenever I read something my him or by the GoDaddy founder, Bob Parsons, or Andrew Carnegie. You read stuff by people who are already very wealthy and they clearly made their wealth in other fields, not by selling the how to get rich line, they have a credibility. You just trust them.

And they’re not trying to make money off of you. They are obviously trying to win some status and some ego, right, you always have to have a motivation for doing something. But, at least that is a cleaner reason why they’re probably not lying. They’re probably not fooling you. They’re not snowing you.

Every founder has to lie to every employee

At some level every founder has to lie to every employee of the company that they have. Where they have to convince them that it’s better for you to work for me than it is to do what I did and go work for yourself. So I’ve always had a hard time with that.

Which is why the only honest way, in my companies I’ve recruited entrepreneurs and I tell them, “You’re going to get to be entrepreneurial in this company and the day the you’re ready to go start your own next thing I’m going to support you. I’m never going to get in the way of you starting a company. But this can be a good place for you to learn how to build a good team and build a good culture, how to find product-market fit to perfect your skills and meet some amazing people while you figure out exactly what it is you’re going to do, because positioning, timing, deliberation, are very important when starting a company.”

But what I’ve never been able to do is look them in the face and say, “You must be at your desk by 8 AM.” Because I’m not going to be at my desk by 8 AM, I want my freedom. Or say to them that you’re great at being a director today and you’ll be a VP tomorrow. Putting them into that cold career path track because I don’t believe in it myself.

Anyone giving advice on how to get rich should have made their money elsewhere

If anyone is giving advice on how to get rich and they’re also making money off of it, they should have made their money elsewhere. You don’t want to learn how to be fit from a fat person. You don’t want to learn how to be happy from a depressed person. So, you don’t want to learn how to be rich from a poor person but you also don’t want to learn how to be rich from somebody who makes their money by telling people how to be rich. It’s suspect.

Nivi: Anytime you see somebody who’s actually gotten rich following some guru’s advice on getting rich, just remember that in any random process, if you run it long enough and if enough people participate in it you will always get every single possible outcome with probability one.

Naval: There’s a lot of random error in there and then also, this is why you have to absolutely and completely ignore business journalists and economist academics when they talk about private companies.

I won’t even name names but when a famous economist rails on Bitcoin or when a business journalist attacks the latest company that’s IPO’ing, it’s complete nonsense. Those people have never built anything, they’re professional critics. They don’t know anything about making money. All they know is how to criticize and get pageviews. And you’re literally becoming dumber by reading them. You’re burning neurons.

I’ll leave you with a quote from the Nassim Taleb that I liked where he said, “If you want to be a philosopher king first become a king then become a philosopher. Not first become a philosopher and then become a king.”

Nivi: I’m glad you brought up Taleb because I was going to finish this by saying just remember the title of his first book which is Fooled By Randomness.

Naval: One of the reasons why we’re a little vague in this podcast is because we’re trying to lay down principles that are timeless as opposed to just giving you the winning lottery ticket numbers from yesterday.

37. Productize Yourself Figure out what you’re uniquely good at and apply as much leverage as possible.

Figure out what you’re uniquely good at and apply as much leverage as possible

Nivi: You summarized this entire tweetstorm with two words. “Productize yourself.”

Naval: Productize and yourself. Yourself has uniqueness. Productize has leverage. Yourself has accountability. Productize has specific knowledge. Yourself also has specific knowledge in there. So all of these pieces, you can combine them into these two words.

Whenever you’re doing anything in business, if you’re looking towards the long-term of getting wealthy you should ask yourself, “Is this authentic to me? Is it myself that I am projecting?” And then, “Am I productizing it? Am I scaling it? Am I scaling with labor or with capital or with code or with media?” So it’s a very handy, simple mnemonic.

What is this podcast? This is a podcast called Naval. I’m literally productizing myself with a podcast.

Nivi: You want to figure out what you’re uniquely good at, or what you uniquely are, and apply as much leverage as possible. So making money isn’t even something you do, it’s not a skill. It’s who you are, stamped out a million times.

Find hobbies that make you rich, fit and creative

Naval: Making money should be a function of your identity and what you like to do. Another tweet that I really liked was… this was not mine, somebody else put this up. They said “Find three hobbies. One that makes you money, one that keeps you fit, and one that makes you creative.”

I would change that slightly. I would say one that makes you money, one that makes you fit, and one that makes you smarter. In my case, my hobbies would be reading, making money as I love working with startups. Either investing in them, brainstorming them, starting them. I just love that ideation and initial creation phase around startups.

Then on the hobby that keeps you fit, I don’t really have one. Closest thing I have is yoga, but that’s where I sort of fell apart. I think people who, early in life, discover something like surfing or swimming or tennis or some kind of a sport that they continue doing throughout most of their life are very luck because they found a hobby that will make them fit.

This transcript has been edited for clarity.

1. Design for ethics. Bake your values into your creations.

API Design

1. Your API has users, thus it has a user experience. In every decision you make, always keep the user in mind. Have empathy for your users, whether they are beginners or experienced developers.
2. Always seek to minimize the cognitive load imposed on your users in the course of using your API. Automate what can be automated, minimize the actions and choices needed from the user, don’t expose options that are unimportant, design simple and consistent workflows that reflect simple and consistent mental models. 1

“There is no path to truth. Truth must be discovered, but there is no formula for its discovery. What is formulated is not true. You must set out on the uncharted sea, and the uncharted sea is yourself. You must set out to discover yourself, but not according to any plan or pattern, for then there is no discovery. Discovery brings joy—not the remembered, comparative joy, but joy that is every new. Self-knowledge is the beginning of wisdom in whose tranquility and silence there is the immeasurable.” – Krishnamurti

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Definitions

1. “Patsy” is defined as someone who is “easily taken advantage of, especially by being cheated or blamed for something.”

2. “naïvety” is defined as " a state of having a lack of experience, understanding or sophistication, often in a context where one NEGLECTS PRAGMATISM IN FAVOR OF MORAL IDEALISM"

3. They means that a naïve man believes that the world is a fair and moral place and he is not being fooled, even when the odds of that happening are monumentally higher than those of the other alternative.

This man is not “PRAGMATIC,” a term that’s defined as someone who “evaluates theories or beliefs in terms of the success of their practical application.” That is, a naïve man is not a practical man who would see the world as it truly is. Such a naïve man is “morally idealistic” who does not assume ulterior motives in others when he deals with others.

Being naïve in life in general may not cause you much harm if you’re lucky. But being naïve in financial markets virtually guarantees significant harm, and even ruin.

Games for Patsies

1. IPOs

   • If you are buying into IPOs, you are a pasty in the game. Why?
     • Information Asymmetry. The insiders know more than you. You are not an insider.
     • Timing. They decide when to come to market and will come only in “more favorable” circumstance. “Less favorable” for you.
     • Scarcity. Create artificial scarcity by limiting the quantity of shares and the hype.

2. Heavy Promotions

   • Anything that’s being heavily promoted where the person doing the promotion has financial incentive to pitch you, even if the product is unsuitable, is toxic
   • Case in point: Most investment advice. All over-promotional managements talking up stock, indulge in aggressive accounting to trap investors.Most credit rating opinions and audit opinions.
   • Default position you should take is not to trust them blindly. If you, then you are the patsy in the game.

3. Spotting Frauds

   • People who are pragmatic and do not take anything at face value, and are not prone to give into what Robert Cialdini calls “authority bias” and bias from “social proof,” are well positioned to spot frauds well before other “believers” who will turn out to be patsies in the game.
   • Case in point: Here, Markopolos is Fat Tony. He doesn’t believe other investors. He doesn’t believe the auditors. He doesn’t believe the claimed performance. Indeed, he thinks the performance is just too good to be true. And he believes that if something’s too good to be true (like landing 99 heads in a row in a “fair” coin), then it probably is.

4. You Fooling Yourself

   • Patsy in the Game: That game can be a single player game.
   • Richard Feynman was right when he said that “the first principle is that you must not fool yourself and you are the easiest person to fool.

Take for example of what happens when you are invested in something and new evidence comes that ruins your hypothesis. Maybe the business is no longer as good as you thought. Maybe the management is really not as good as you thought or maybe the valuation model was wrong. There could be so many reasons which can ruin any investment hypothesis. The correct thing to do, in such situations, is to recognize the mistake, scramble out of it, and then try not to make that type of mistake again.

Well, the normal outcome, as many of us know, is the opposite. And this happens for reasons we may label as “commitment bias,” “endowment effect,” “psychological denial,” “blind overconfidence” etc etc. We may give this type of tendency all sorts of names, but the reality is that we are really good at fooling ourselves into believing the unbelievable despite contrary evidence.

When we choose to ignore overwhelming evidence showing that we were wrong and continue to stay invested in situations which just don’t make sense anymore, how different are we from that naïve school kid who continued to believe that the coin was fair even after it had landed heads 99 times in a row?

We are not that different at all. And by not being different from that naïve kid, we become a patsy in the game.

Each of us has two types of intelligence, known as fluid and crystallized. Fluid intelligence is our capacity to reason and solve novel problems, independent of knowledge from the past, and it peaks earlier in life. Crystallized intelligence is the ability to use skills, knowledge and experience; it shows rising levels of performance well into middle age and beyond. According to Georgia Tech psychology professor Phillip Ackerman, the best way for older adults to compensate for declines in youthful “fluid” intelligence is to select jobs and goals that optimize their “crystallized” knowledge and skills.

For instance, while the field of software coding favors the young and fluid, managing projects and the business can shift the needed skills to an older profile.Consider the career of Diane Greene, who spent her 20s and early 30s organizing windsurfing races and working for Coleman, the camping equipment company. At 33, she earned a master’s degree in computer science and pronounced herself ready for a “grown-up’s job.” In 1998, at age 43—late by Silicon Valley’s youth-centric standards—Ms. Greene cofounded the software company VMware and then led it for a decade. In 2015, Google acquired another company she started and, at age 60, put her in charge of one of its most important businesses, Google Cloud (a position from which she stepped down in January).

What about creativity and innovation? That realm must belong to the young, with their exuberance and fresh ideas, right? Not necessarily. For instance, the average age of scientists when they are doing work that eventually leads to a Nobel Prize is 39, according to a 2008 Northwestern University study. The average age of U.S. patent applicants is 47.

Take Ken Fisher, who today runs Fisher Investments, a stock fund with $100 billion under management and 50,000 customers. After graduating from high school, he flunked out of a junior college. “I had no particular direction,” he said. He went back to school to study forestry, hoping for a career outdoors, but switched to economics and got his degree in 1972. In his early 20s, he hung out his shingle as a financial adviser, following his father’s career. To bring in extra money, he took construction jobs, and he played slide guitar in a bar. But he also read and read: “Books about management and business—and maybe thirty trade magazines a month for years,” he says. By the time he reached his 30s, an idea had gelled that would make him his fortune. As he puts it, during that period of reflection, “I developed a theory about valuing companies that was a bit unconventional.”

Tales of late bloomers are found in every walk of life and often feature an under-appreciated talent that emerged more slowly than the standard expectations. As a high school athlete in San Mateo, Calif., the New England Patriots’ legendary quarterback Tom Brady, winner of six Super Bowls, wasn’t on the radar of most college recruiters. Though he made the team at highly rated Michigan, he had to compete to become the starting quarterback in both his junior and senior years. He was only the 199th player selected in the NFL draft in 2000. A year later, when the Patriots’ starting quarterback was sidelined by injury, Mr. Brady, by then 24, finally got his big chance—and emerged over the course of that season as the spectacular success that he’s been ever since.

How many of us were overlooked in our school years, or dismissed early in our careers, or are dismissed even now? What gifts and passions might we possess that haven’t yet been discovered but that could give us wings to fly? Record-setting astronaut Scott Kelly, who has spent more than five hundred days in space, the most of any American, said he was so bored in high school that “I finished in the half of the class that made the top half possible.” Billionaire Diane Hendricks, daughter of dairy farmers, sold houses in Wisconsin, married, divorced, then 10 years later met her next husband, Ken, a roofer. The two maxed out their credit cards to start ABC Supply, a source for windows, gutters, and roofing material. Today Ms. Hendricks presides over a company worth $5 billion.

International star Andrea Bocelli began singing opera when he was 34. Martha Stewart was 35 when she started her catering business in a friend’s basement, and 42 when her first book of recipes was published. Toni Morrison published her first novel, “The Bluest Eye,” at 39 and won a Pulitzer Prize for “Beloved” at 56 and the Nobel Prize in Literature five years later. J.K. Rowling was a divorced mother on public assistance before she created Harry Potter at age 35. Tom Siebel founded his first big tech company, Siebel Systems, at 41, and his second, C3, at 57. Famous movie villain Alan Rickman owned a graphic design studio for years before he got his first taste of fame at 42 for his role as Hans Gruber in “Die Hard.”

“There are no second acts in American lives,” wrongly observed “The Great Gatsby” author F. Scott Fitzgerald. But Fitzgerald was an early blooming snob: He attended Princeton and was already a famous literary success in his mid-20s. But that was his peak. By his 30s, Fitzgerald was spiraling downward. He must have met all kinds of late bloomers and second acts who were on their way up. He died a bitter man at 44, the same age that Raymond Chandler began to write detective stories. Chandler was 51 in 1939, the year his first book, “The Big Sleep,” was published.

A Ghurka rifleman escaped from a Japanese prison in south Burma and walked six hundred miles alone through the jungles to freedom. The journey took him five months, but he never asked the way and he never lost the way. For one thing he could not speak Burmese and for another he regarded all Burmese as traitors. He used a map and when he reached India he showed it to the Intelligence officers, who wanted to know all about his odyssey. Marked in pencil were all the turns he had taken, all the roads and trail forks he has passed, all the rivers he had crossed. It had served him well, that map. The Intelligence officers did not find it so useful. It was a street map of London.

To take on this ambitious set of missions we’ve been discussing, we have to get better at managing risk and increase our decision velocity. My friend General Hyten and others have talked many times about how we have to move faster in all aspects of our acquisitions. He couldn’t be more correct. As I close out my career with NASA, this is the one area where I didn’t make as much progress as I had hoped, but I thought I’d share my view on this topic as the leader of NASA.

Risk Management

We sell something on the benefit a mission or program or budget request provides. But that benefit rarely gets discussed after the initial approval, and we become focused on the risks associated with accomplishing the effort.

Risk is simply a discussion between likelihood and consequence.

There are many components of risk. What I’ve learned is that over-focus on one component without balancing these risk components is a challenge. I’m guilty of this myself.

For instance, maniacal cost control can lead to a penny-wise/pound-foolish mentality.

Too much focus on schedule will cause a mission to launch before it’s ready, when maybe a little more time and dollars would’ve saved the mission.

Too often technical risk is tempered by saying, “we’ve always done it that way,” without the appropriate understanding of the requirements

The obvious risks – cost, schedule, and technical – are challenging enough to balance. Now add in the multiple external stakeholders we all have, and it gets more complicated.

The cycle can be vicious.

Think about it. We make a mistake, which is going to happen when taking on such challenges. We do an internal investigation and fix it, usually through a new process so it never happens again.

Then, depending on the severity of the mistake, we have external stakeholders – IG, OMB, GAO, or an august independent review board – come into play. Then they give us another set of recommendations and track our implementation of these into our processes. That’s how the FAR becomes so thick and the 5000 series and 7120 series documents become so thick. It’s why we get the reporting requirements from OMB and Congress.

It becomes more about the process and not the product. Even more concerning is often the process BECOMES the product.

Don’t get me wrong. Some of this is WELL EARNED. Most of us in any leadership position have experienced something where we immediately knee jerk to corrective action, and we should. But we also need the DOES NOT APPLY option. Yes, all our governing documents are “Tailorable,” but WOW, just try to do that. Did I mention we also hire folks to make sure those “shall” statements get done?

Decision velocity

All this process simply crushes decision velocity.

But we can elevate risk decisions early and relieve the teams. Even better, we can delegate risk back to the right folks.

Your teams will protect you as a leader, but sometimes you have to accept the risk for them so they can move on. But again, this needs to be elevated early. Example: GAO letter with allocations.

Protecting against risk and being safe are not the same thing. Do you think in today’s environment we would do Apollo? Do you think we would ever launch the first shuttle with crew?

Summary

The activities I described that we want to do will require an “eyes wide open” approach to risk management and decision velocity. The bigger picture benefit must be remembered. This has to recognized by all the stakeholders in the system – the executing organization – in this case NASA – but also the Administration, Congress, and the public.

I’m reminded of the quote from British Structural Engineer A.R. Dykes, who defined engineering:

“Engineering is the art of modeling materials we do not wholly understand, into shapes we cannot precisely analyze, so as to withstand forces we cannot properly assess, in such a way that the public has no reason to suspect the extent of our ignorance.”

That is risk management. What we are about to embark on with the plan we’ve shown and rolled out in the budget is going to take a change in risk management culture. What we do will never be without risk, but we never want to take risk without ensuring the bigger picture benefit is there.

I tell my senior leaders:

Managing is doing things right.

Leadership is doing the right things.

Both are important and apply to risk as well.

We, as a nation, must balance risk management to risk leadership. Follow the risk management process to address risk but balance this with risk leadership, which looks at the bigger picture effort benefit to any risk we assume.

It’s also important as a “risk leader” to recognize when your team needs you to relieve them of the risk, otherwise they will continue to work it as “risk managers”

From a risk management perspective, the safest place to be is on the ground. From a risk leadership perspective, I believe that is the worst place this nation can be.

Leadership is moving human presence farther away than we’ve ever been before and pushing the boundaries of scientific knowledge and discovery. We want “civilization changing” level impacts. THAT is larger benefit of what we do. This means we will have to take risks to accomplish such audacious goals. Well understood and thoughtful risks, but risks nonetheless.

We are poised as a nation to do that in the next decade – from the ISS to the Moon to the beginnings of humanity’s first trip to mars. The WILL is there in NASA, our industry teams, and our international partners.

My charge to each of you as I depart is “strive every day to be a risk leader.” This amazing endeavor will never be without risk, however, remember the benefit – we will change the world.

Thank you.

[personal] Notes via @highscalability:

Protecting against risk and being safe are not the same thing. Risk is just simply a calculation of likelihood and consequence. Would we have ever launched Apollo in the environment we’re in today? Would Buzz and Neil have been able to go to the moon in the risk posture we live in today? Would we have launched the first shuttle with a crew? We must move from risk management to risk leadership. From a risk management perspective, the safest place to be is on the ground. From a risk leadership perspective, I believe that’s the worst place this nation can be.

Q: How much time do you spend reading in a typical day?

Charlie: Oh, it’s huge. I read myself to sleep every night. I read enormously. I like doing it. Not only that, what I found very early in life was that once I learned to read and handle elementary math, I really didn’t need professors or anything. I could figure out almost anything I wanted better from the written material than from having some professor tell it to me, because he’d be going too fast or too slow or telling me something I already knew or didn’t want to know. And so of course I like doing it by reading.

You look at [Andrew] Carnegie and [Benjamin] Franklin, they had a few years of primary school, they learned everything by themselves by reading. Whatever they needed, they just learned. It’s not that hard. Imagine educating yourself by firelight, no lamps, no electricity, after a day’s brutal work. Our ancestors had it tough.

On destroying his own best-loved ideas

Part of the reason I’ve been a little more successful than most people is I’m good at destroying my own best-loved ideas. I knew early in life that that would be a useful knack and I’ve honed it all these years, so I’m pleased when I can destroy an idea that I’ve worked very hard on over a long period of time. And most people aren’t.

Q: Most people hate that.

Charlie: Yes. But actually, I know how much power and wealth is in it, so I like it. Plus that’s enlightenment. Power, wealth and enlightenment. Not a bad combination.

Q: Why is it so hard to overturn entrenched ideas?

Charlie: It’s insane. I’m fixing a lot of insanity. But that’s my standard thing. I don’t know how to do anything complicated. I know how to avoid insanity, even if it’s conventional. That’s all I know. I don’t even try to be smart. I just try and be not insane and pay no attention to the traditions.

on “Money Sense”

What most people don’t understand, and this is from a lifetime of experience, and Warren and I have reached exactly the same conclusion: At the top, you need a certain kind of a mind that automatically makes sense about investments and money. Warren calls it the money sense. “The money mind,” he calls it. And what I have discovered in a long lifetime is that people have it or they don’t, and if they don’t have it, you can’t create it. It can’t be just taught to somebody. You just have it. You either have it or you don’t. And one of our secrets [at Berkshire Hathaway] has been that we try and throw the power to people who have it. It’s almost an inherited knack. It’s like a gift. You just automatically generate it.

But, you know, once you realize that some people have the knack and other people don’t and that people with very high IQs, many of them lack the knack —so you can’t solve your problem if you want correct thinking by just hiring the bright people, because they do many dumb things.

Once you’ve got that insight, which is a big one, something follows. And that is that if you’re not a prodigy but just have this knack, and if you use the knack to avoid all the big standard asininities of life, just invert the normal thinking problems, I’m just going to, over a broad range of disciplines, I’m just going to avoid all the asininities and I’m going to do that better than other people, then you can become enormously powerful.

On Rationality

Q: Someone once asked you what accounts for your investing success, expecting a long complex answer, and you famously replied, “I’m rational.” So how do you define rationality?

Charlie: People who say they are rational [should] know how things work, what works and what doesn’t, and why. That’s rationality. It doesn’t help if you just know what’s worked before, because if you know why, then you’ll be better at it. So rationality is: Across a broad range of disciplines, you know what works and what doesn’t and why.

On avoiding stupidities

Q: But why isn’t Berkshire easier to emulate?

Charlie: We’re talking about very simple ideas of just figuring out the standard stupidities and avoiding them. And I actually collect them!

Some people collect stamps. I collect insanities and absurdities. And then I avoid them, and it’s amazing how well it works, because I’ve gone by [the examples of] all these people that are more talented than I am…

Charliend it’s a way for mediocre people to get ahead and it’s, it’s not much of a secret either. Just avoid all the standard stupidities. There are so many of them, and so many brilliant people do it.

Being a prodigy is hard. I’m not trying to be a prodigy, I’m just trying to avoid the inanities, including the inanities of the prodigies!

….That enables a man of moderate abilities and moderate work habits to get so much more than his logical deserts. Think of the talent it takes to make a lot of money.

On Obituary epitaph

Q: I wouldn’t ask most people this, but I’m sure you won’t mind. What would you want the first paragraph of your obituary to say?

Charlie: Both Warren and I feel it’s our moral duty to be as rational as we can possibly be. A lot of people who are brilliant in some ways tend to make these utterly asinine decisions in other ways. We both tend to collect the asininities of the world in a kind of checklist. And we try to avoid everything on the checklist.

1. Set strategy
2. Deliver capital to pursue that strategy
3. Build team to execute
4. Communicate the hell out of the strategy internally and externally
5. Hold people accountable

via @patrick_oshag podcast with @wolfejosh

Somewhere along the way Marc Andreessen went from being pmarca to @pmarca. He took down his popular blog, and years later took up tweetstorming. Which means you can keep up with his current thoughts on Twitter — and also catch up on them (in the form of tweets, podcasts, and op-eds) here.

• .PDF (for printing): http://bit.ly/pmarcablogebookpdf
• .EPUB (for Nook, iBooks, Kobo etc.): http://bit.ly/pmarcablogebookepub
• .MOBI (for Kindle): http://bit.ly/pmarcablogebookmobi

If you marry, you will regret it; if you do not marry, you will also regret it; if you marry or if you do not marry, you will regret both; whether you marry or you do not marry, you will regret both.
Laugh at the world’s follies, you will regret it; weep over them, you will also regret it; if you laugh at the world’s follies or if you weep over them, you will regret both; whether you laugh at the world’s follies or you weep over them, you will regret both.
Believe a girl, you will regret it; if you do not believe her, you will also regret it; if you believe a girl or you do not believe her, you will regret both; whether you believe a girl or you do not believe her, you will regret both.
If you hang yourself, you will regret it; if you do not hang yourself, you will regret it; if you hang yourself or you do not hang yourself, you will regret both; whether you hang yourself or you do not hang yourself, you will regret both.
This, gentlemen, is the sum of all practical wisdom.

Either/or; a fragment of life,
Author:
Søren Kierkegaard

Nobody tells this to people who are beginners, and I really wish somebody had told this to me.

All of us who do creative work, we get into it because we have good taste. But it’s like there is this gap. For the first couple years that you’re making stuff, what you’re making isn’t so good. It’s not that great. It’s trying to be good, it has ambition to be good, but it’s not that good.

But your taste, the thing that got you into the game, is still killer. And your taste is good enough that you can tell that what you’re making is kind of a disappointment to you. A lot of people never get past that phase. They quit.

Everybody I know who does interesting, creative work they went through years where they had really good taste and they could tell that what they were making wasn’t as good as they wanted it to be. They knew it fell short. Everybody goes through that.

And if you are just starting out or if you are still in this phase, you gotta know its normal and the most important thing you can do is do a lot of work. Do a huge volume of work. Put yourself on a deadline so that every week or every month you know you’re going to finish one story. It is only by going through a volume of work that you’re going to catch up and close that gap. And the work you’re making will be as good as your ambitions.

I took longer to figure out how to do this than anyone I’ve ever met. It takes awhile. It’s gonna take you a while. It’s normal to take a while. You just have to fight your way through that.

— Ira Glass

Source: Ira Glass on Storytelling

―Mitch Albom, The Time Keeper

As a culture — you’re right. We seem somehow bored with thinking. We want to instantly know. And there’s this epidemic of listicles. Why think about what constitutes a great work of art when you can skim the “20 Most Expensive Paintings in History?” And I’m very guided by this desire to counter that in myself because I am, like everybody else, a product of my time and my culture. And I remember, there’s a really beautiful commencement address that Adrienne Rich gave in 1977 in which she said that an education is not something that you get but something that you claim.

And I think that’s very much true of knowledge itself. The reason we’re so increasingly intolerant of long articles and why we skim them, why we skip forward even in a short video that reduces a 300-page book into a three-minute animation — even in that we skip forward — is that we’ve been infected with this kind of pathological impatience that makes us want to have the knowledge but not do the work of claiming it. I mean, the true material of knowledge is meaning. And the meaningful is the opposite of the trivial. And the only thing that we should have gleaned by skimming and skipping forward is really trivia. And the only way to glean knowledge is contemplation. And the road to that is time. There’s nothing else. It’s just time. There is no shortcut for the conquest of meaning. And ultimately, it is meaning that we seek to give to our lives.

We’re told, “Go make money. Go buy a big house.” Again, external multi-player competitive game.

When it comes to learn to be happy, train yourself to be happy, completely internal, no external progress, no external validation, 100% you’re competing against yourself, single-player game.

We are such social creatures, we’re more like bees or ants, that we’re externally programmed and driven, that we just don’t know how to play and win at these single-player games anymore.

We compete purely on multi-player games.The reality is life is a single-player game. You’re born alone. You’re going to die alone. All of your interpretations are alone. All your memories are alone.

You’re gone in three generations and nobody cares. Before you showed up, nobody cared. It’s all single-player.

Models

• Feedback loop. To understand a situation, I need to look at what is coming in to the situation, but I also have to pay attention to history. If what has happened historically tends to intensify (rich get richer), it’s a positive feedback loop. Positive feedback loops can always be driven both ways. If what has happened historically tends to diminish (thermostat), it’s a negative feedback loop. Thinking in SystemsQuality Software Management: Volume 1, Systems Thinking.

• Finite state machine. The world responds differently to the same inputs at different times. Think about discrete “states”. Inputs move the the world to a new state. (Feedback Loop)

• Program. Sometimes I can make sense of the world as a recipe, a sequence of steps that always apply.

• Subroutine. I can break the recipe into parts and give the parts names. This lets me understand the whole while deferring details. (Succession, Model).

• Recursion. A particularly powerful way of breaking programs into parts is to have a part refer to itself. (Self-reference)

• Input/process/output. Another way to break up a program is first to think of getting the inputs ready, then processing the inputs, then preparing the outputs.

• Test. Another way to break up a program is first to think about what it looks like from the outside, its input/output behavior. This thinking takes the physical form of a test. Tests can also be written after the program already exists. (Succession, Model)

• Model. Another way to break up a problem is to emphasize parts for the moment and ignore other parts. “This is a just a model,” tells me it’s okay to ignore some details for the moment (but not too long). The powerful thing about models for me is that when I’m using one, I don’t have to think from scratch, I can say “what would this model say about the situation?” I’m actually thinking, but I stop being overwhelmed.

• Object. Rather than have a program being a sequence of steps that operates on external data, another way of dividing a program up is to have bits of data and steps live together.

• Pattern. Programs are mighty specific. Sometimes the world rhymes but it doesn’t repeat. A patterns lets me capture the rhyming but leave some details to be worked out later. (Model)

• Fractal. Some things that look infinitely complicated actually result from the same rules working at different scales. (Model) Fractal Geometry of Nature.

• Scarcity/sufficiency. The same people behave completely differently depending on whether they believe resources are scarce or sufficient. The Mountain People. The Forest People.

• Refactoring. From early in programming I was taught design and then implementation. Refactoring, adding design information to existing code, relieved my anxiety about making mistakes. Refactoring. (Succession)

• Scientific method. Make hypotheses (beliefs) explicit and deliberately try to falsify them. The New Organon.

• Net present value. A dollar today is worth more than a dollar tomorrow. Spend later and earn sooner.

• Options. Owning the right to buy (sell) something provides more leverage than owning the thing itself.

• Hero’s journey. I avoid panic in tough situations by stepping back and seeing the situation as part of a story. The Writer’s Journey.

• Gaussian distribution. The tug-of-war between two negative feedback loops results in a clear spike in a histogram of samples with some values a little higher and a little lower.

• Power-law distribution. A pure positive feedback loop results in lots of tiny samples and a few really, really, really large samples. The more samples, the more “really”s (i.e. no Central Limit Theorem).

• Assembly line. Oh, this big job of making can be broken down into a sequence of relatively-autonomous steps. The steps can be parallelized and/or batched for economies of scale. (Succession)

• Just in time manufacturing. Each step in the assembly line produces both things and feedback about the making of the things. Reduce batch sizes to increase the proportion of information to things. (Optimization) Toyota Production System.

• Buffer. A buffer or inventory between steps reduces the variance communicated between steps. This both good if it keeps the second step going and bad if it prevents the first step from improving. The Goal.

• Reversibility. To make progress with large, complicated, unpredictable system, quit killing yourself trying to predict the unpredictable. Instead, make all decisions reversible (even if this seems expensive). (Optimization) Reversibility.

• Convex/concave. Distinguish between high-risk/high-reward situations with compounding payoffs and low-risk/low-reward situations with diminishing payoffs. (Optimization, Derivatives) Convexity for Programmers.

• Derivatives. Figure out where things stand now, how things are changing, and how fast that change is changing. Intervene at the appropriate level.

• Metric. From a desired change, derive a measurement that will change if the desired change happens. Beware of “grabbing the speedometer” or “teaching to the test”.

• Optimization. Get from a current situation towards a desired situation in small steps.

• Local maxima. During optimization, be aware of when further progress in small steps is impossible because of diminishing returns. Be prepared to reverse progress for a while to get on a slope with a higher maxima. (Diminishing returns).

• Pareto. Measure and rank potential improvements. One is likely to contain much more potential than all the others combined. Continue until nothing stands out. (Power law distribution, local maxima, optimization).

• Tradeoff. There are no solutions, only tradeoffs. Move from “this is how we do things” to “more of this means less of that, therefore in this situation we do things thusly”. Also known as “it depends, but on what?”. The Secrets of Consulting.

• Transcendence. If you don’t like the answers offered by today’s tradeoff, change the shape of the curves.

• Negotiation. The process of discovering what you really care about most while helping someone else discover what they care about most. At the end, if there’s an intersection, you have a deal. In any case, both parties learn. (Tradeoff, Transcendence)

• Succession. Don’t choke down the whole salami. Eat one slice at a time. Choose the next slice after finishing the previous slice.

• Indirect approach. When faced with opposition, move so that your goal is ambiguous. (Succession) Strategy.

• Accountability. Offer trustworthiness by accounting for your actions and consumption without blame

• Manipulation. The attempt to induce someone else to make a decision without full freedom or information.

• Authenticity. To be unapologetically and fully yourself. Terrifying at first. Sometimes painful if someone doesn’t like your authentic self. Better than the alternatives. (see also Boundaries)

• Bids. Relationships are built out of a sequence of bids for attention, which can be responded to by turning towards, turning against, or turning away. The balance of towards versus against or away predicts the longevity of the relationship. The Relationship Cure.

• Detachment. Being in this moment, not the future or the past, not the antecedents or the consequences.

• Preferential attachment. The rich get richer. The complex get complexier. Makes no sense some times. Tough. Linked.

• Self-reference. The ultimate programmer trick. Referring to a thing inside itself, as this note does. Gödel, Escher, Bach: An Eternal Golden Braid.

• Operant conditioning. Skinner was a narrow-minded idiot. Incentives are far more nuanced than this. (Feedback Loop, not) Punished By Rewards.

• Maslow’s hierarchy. You have to take care of basic needs like security before belonging and aspiration matter. (Scarcity/sufficiency)

• Emergence. Big, complicated things aren’t designed whole. Optimize, escape local maxima, work at various scales. (Optimization, Local Maximum, Fractal)

• Affordance/mapping. Design interfaces that invite their available actions (affordances) and use consistent mappings from one space to another (left is left and right is right or up is loud and down is quiet). The Design of Everyday Things.

• Paradigm. What we see is colored by what we expect. Deliberately changing what we expect can change what we see. The Structure of Scientific Revolutions.

• Rewriting. Change the structure without changing the meaning. I learned this with trig identities. (Succession)

• Bayes. Rather than search for certainty, work to reduce uncertainty. I’m only ten years into trying to understand Bayes and I only really can apply it to poker. The Theory That Would Not Die.

• Invalidation. You can’t prove anything about the world true, you can only prove it false. The Logic of Scientific Discovery.

• Variance. You can play well and lose and play badly and win. Don’t keep score by winning and losing. Keep score by playing well and learning to play better. (Detachment)

• Butterfly effect. Small actions can have large effects. If I want to have large effects, look for or create positive feedback loops that amplify my actions.

• Diminishing returns. Be aware of when what were previously fruitful efforts no longer product the same payoff. Switch. (Convex/concave, Feedback loop).

• The Chasm. When communicating an innovation, you can’t get everyone on board at once. Start with the novelty vampires, then the rational risk takers, then the majority (I lose interest before the majority). Crossing the Chasm.

• Metaphor. Think about one topic by thinking about another. There’s a source topic, a destination topic, a mapping between the two, and the danger of carrying it too far. Saying “abstract thought is metaphorical” is metaphorical–thought is electro-chemical goo. (Model) Women, Fire, and Dangerous Things.

• Moral hazard. Think about what people would do if they were selfish bastards, even if they aren’t. If someone has an incentive, no matter how base, to act badly, either rejigger the incentives or keep your eyes open.

• Exponential depletion. When someone says, “There are 200 years of coal in the ground at current rates of consumption,” alarm bells should shriek. Depending on how fast consumption is growing, that might be 50 years or 30 years or even 10 years. Same goes for startup runway and consumption of any non-renewable resource. What’s in the bank versus compounded consumption rate.

• Graph. If I can translate a complicated problem into a graph, then there are all sorts of operations I can perform on the graph that translate back to the original problem (need to catalog these). (Model)

• Queueing. Divide the world into tasks, stations, and queues (Graph). Think of how the world is divided, and how it could be divided. Think about the distribution of sizes of tasks, arrival of tasks, changing queue size. Measure latency, throughput, and variance.

• Punctuated equilibrium. Change doesn’t happen steadily. Things will look stable then jump to a new “stable”. “It’s been stable” is not an argument that it won’t change. “It’s been growing” is not an argument that it will keep growing forever (Exponential depletion).

• Half life.

Techniques

When I get stuck, these are specific things I do that can unstuck me.

• Implication. Hold your nose and do the math. Set aside “this is what I believe” or “this is what I would prefer”. Apply a model or analogy first, then analyze the results. Boundaries. Be clear about what is my responsibility and what is not my responsibility. “I just got difficult feedback. How much is about me and how much is about the person giving the feedback?” Waiting. Timing matters. If you are waiting for something specific, then waiting is an action. Contrarian. You can’t create more impact than someone else by doing what they do. You either have to be better than they are or you have to do something different. I prefer to do something different. One simple heuristic is if someone says, “Obviously…” I always ask myself what would happen if the opposite were true. The greater the fury behind the “obviously”, the longer I’ll spend considering the counterfactual. Usually this leads to dead ends, but when it doesn’t, you won’t have any competition until it’s too late. Isolation. When faced with a big, complicated, confusing situation (like tracking down a weird bug), first turn it into a small, simpler, still-confusing situation. Binary search is efficient but it’s hard not to try to understand first. Phase shift. If you’re stuck doing A and then B, try doing half of A, the second half of A and the first half of B together, then the second half of B. (Implement-Test)(Implement-Test) becomes (Test-Implement)(Test-Implement). (Requires a cycle as a prereq). Believe the Market. When one of my theories (see above) predicts that people will act in one way but a bunch of reasonable people act in a different way, I ask, “What theory would explain their behavior?” (I also use this on myself when I behave in ways I don’t like.) Thompson Sampling. “A little nonsense/now and then/is relished by/the wisest man”. Put a little investment, occasionally, into even bad ideas, just in case. Reverse causality. When someone says, “This person is senior so they write the meeting summary,” I immediately say, “Maybe they look senior because they write the meeting summaries.” Try writing the summary yourself and see if people treat your like you are senior. What I Learned Writing This I spent hundreds to thousands of hours learning each topic. I use many of these ideas to avoid being overwhelmed in complex or ambiguous situations. I use the ideas to generate more ideas. “Well, if this situation is convex, then that implies we should…” There are more links between the ideas than I suspected. Succession, in particular, is absolutely fundamental. There seems to be a distinction between models and techniques. The techniques are now habits. I don’t have to call them up consciously. To Do For each, could talk about definition, example, limitations, reference, application, personal history (both when first encountered and when useful), example-of, syllabus), connections between. Have deep and shallow “learn more” links. Have illustrations (pictures) as well as examples. I’m missing a “how I use this to think” section, either a concrete example or something more pattern-y: patterns I look for, patterns I avoid, how I apply. I should write up one idea “completely”. What does “complete” mean? To what purpose? For whom? Wait for feedback. Order and group. Wait for suggestions. What is this good for? Wait for readers to tell me how they found it helpful.

Consider, then, the sum total of our accumulated knowledge as constituting an island, which I call the Island of Knowledge. A vast ocean surrounds the Island of Knowledge, the unexplored ocean of the unknown, hiding countless tantalizing mysteries. As the Island of Knowledge grows, so do the shores of our ignorance—the boundary between the known and unknown. Learning more about the world doesn’t lead to a point closer to a final destination — whose existence is nothing but a hopeful assumption anyways — but to more questions and mysteries. The more we know, the more exposed we are to our ignorance, and the more we know to ask.

–Howard Marks Hong Kong, October 26, 2018

1. Go through the Production-Grade Infrastructure Checklist to make sure you’re building the right thing.
2. Define your infrastructure as code using tools such as Terraform, Packer, and Docker. Make sure your team has the time to master these tools (see DevOps Resources).
3. Build your code out of small, standalone, composable modules (or use the off-the-shelf modules in the Infrastructure as Code Library).
4. Write automated tests for your modules using Terratest.
5. Submit a pull request to get your code reviewed.
6. Release a new version of your code.
7. Promote that new version of your code from environment to environment.

Joseph Heller, a funny writer now dead, and his friend were at a party given by a billionaire on Shelter Island.

The friend asked, “Joe, how does it make you feel to know that our host only yesterday may have made more money than your novel ‘Catch-22’ has earned in its entire history?”

And Joe said, “I’ve got something he can never have.”

And his friend asked, “What on earth could that be, Joe?”

And Joe said, “The knowledge that I’ve got enough.”

I also thought I’d be good at certain things. Competing a 100 hours a week won’t be one of them, because there’ll always be someone else that can do a 110 hours. But being recognized for what the things I can bring to the table are, in terms a certain investment perspective, a certain discipline, a certain risk aversion that maybe other people didn’t have would be a good thing. All I would say is try to hold out. If you have to work for a couple of years to get the next offer or to get int business school, fine. But remember, your goal’s not to be working a 100 hours a week, your goal is to get into a situation that recognizes you for who you are. If you ever are going to work that hard, try and have it be on your nickel, try to be an entrepreneur, and at least you’re doing it for you, not for somebody else who … You can hold you a better accountable than you can hold a boss accountable. And if you do work that hard at least the rewards will also go to you, so if you can, be an entrepreneur, especially if you’re gonna work that hard.

There are certain times when intuition can be correct. For instance, Kahneman explained, chess players and married couples generally have accurate intuition.

“Intuitions of master chess players when they look at the board [and make a move], they’re accurate,” he said. “Everybody who’s been married could guess their wife’s or their husband’s mood by one word on the telephone. That’s an intuition and it’s generally very good, and very accurate.”

According to Kahneman, who’s studied when one can trust intuition and when one cannot, there are three conditions that need to be met in order to trust one’s intuition.

The first is that there has to be some regularity in the world that someone can pick up and learn.

“So, chess players certainly have it. Married people certainly have it,” Kahnemen explained.

However, he added, people who pick stocks in the stock market do not have it.

“Because, the stock market is not sufficiently regular to support developing that kind of expert intuition,” he explained.

The second condition for accurate intuition is “a lot of practice,” according to Kahneman.

And the third condition is immediate feedback. Kahneman said that “you have to know almost immediately whether you got it right or got it wrong.”

When those three kinds of conditions are satisfied, people develop expert intuition.

“But unless those three conditions are satisfied, the mere fact that you have an idea and nothing else comes to mind and you feel a great deal of confidence — absolutely does not guarantee accuracy,” he added.

A checklist of sales tactics for your side projects.

The Side Project Sales Checklist is a comprehensive, chronologically ordered list of sales tactics that you can try with your next side project. The list is free and open source so feel free to suggest your own additions anytime.

Pre-Launch

This section pairs nicely with the Pre-Launch section of the Marketing Checklist, so be sure to check that out too.

Competitor Research

Move fast. Speed is one of your main advantages over large competitors. - Sam Altman, President of YCombinator

• Find out what your competitors’ sales funnels are like (sign up and go through as much of their process as possible).
• Determine your competitors’ key lead generation strategies (see the list of lead generation strategies below).
• Find out the experience level of your competitors’ salespeople (look for listings on job boards or at employee Linkedin accounts).
• Make a list of your competitors’ customers (see these tools for researching competitors):

Finding competitors’ customers

• Check their Twitter followers, mentions.
• Look through their Facebook fans.
• Find people who follow them on Linkedin.
• Check their website. Some companies list customer stories on their websites.

Customer Research

Research is formalized curiosity. It is poking and prying with a purpose. - Zora Neale Hurston, Novelist

• Talk to potential customers in your contact list. Get their feedback on your idea, ask them if they might be interested.
• Attend meetups or conferences for your target market.
• Reach out to your competitors’ customers, find out what they like/don’t like.
• Find blogs and trade journals potential customers might read.

Sales Funnel Setup

The top salesperson in the organization probably missed more sales than 90% of the sales people on the team, but they also made more calls than the others made. - Zig Ziglar, Author and Speaker

• Know the difference between prospects, leads, opportunities, and customers.
• Create an ideal sales funnel diagram, experiment with alternatives.
• Set up a Customer Relationship Manager (CRM) or spreadsheet to store leads (see this list of CRMs).
• List your key lead generation strategies and their costs.

Lead generation strategies

• Paid advertising

• Content marketing (blog posts and social media)

• SEO

• Cold outreach (calls, emails, Linkedin messages)

• Event marketing (conferenes, meetups, sponsored events)

• Create multiple cold email messages to test.

• Create a cold sales call script.

• Practice your cold sales call script with a friend or mentor.

Lead Capture/Generation

Your customers are the lifeblood of your business. Their needs and wants impact every aspect of your business. - John Rampton, Serial Entrepreneur

• Set up a new leads email list and signup form (see this list of email marketing tools).
• Set up on-site messaging to capture leads and engage customers (see this list of live chat tools).
• Add new lead signup form to company blog posts and social media accounts.
• Buy email or lead lists.
• Find email addresses with a tool like Hunter.
• Find email addresses on public social media profiles.
• Scrape websites with lists of leads using a tool like import.io.

Post-Launch

This section pairs nicely with the Post-Launch section of the Marketing Checklist. Sales and marketing are really two sides of the same coin, so you’ll probably need a little of both.

Direct Outreach

You should be talking to a small number of users who are seriously interested in what you’re making, not a broad audience who are on the whole indifferent. - Jessica Livingston, Founding Partner at Y Combinator

• Send early access notification to leads identified in research.
• Send a coupon code to potential leads to let them try your product free or at a discount.
• Send a coupon code to close friends and family members to let them try your product.
• Reach out to your social media followers, ask them to try your product.
• Cold call ~20 people who might be good customers.
• Ask your current customers for introductions to other potential customers.
• Offer a referral bonus to current customers who send you new leads.
• Start an email campaign to prospects and leads.

Running a sales email campaign

• Send three cold emails per day over 7 days. Experiment with messaging, take note of what works.
• Send three follow up emails per day for 7 days. Experiment with messaging, take note of what works.
• Scale it up. Find more prospects, set up an automated drip campaign, rinse and repeat every month.
• There’s also a really comprehensive how-to article here.

Recurring

• Make cold calls.
• Send email campaign.
• Connect with potential customers on social media, reach out when they accept.
• Find/create a personal sales mantra and repeat it weekly before doing your sales tasks.
• Meet with a “real” salesperson. Learn from their energy, successes, and failures.
• Follow up with leads and current customers to make sure things are going well.

Optimizations

• Set up tracking for different lead generation channels in order to:

• Determine ROI (return on investment) of lead generation methods

• Determine average cost of acquisition

• Identify blockages in your sales funnel (where are people dropping off?).

• Survey new customers about your sales process, see if they have suggestions (see this list of survey tools).

• Determine your average customer’s lifetime value (LTV) and cost of acquisition (CAC).

• Implement a lead scoring system to determine your best prospects.

• Focus your outreach efforts only on the highest quality prospects.

• A/B test your cold email and phone messaging.

• Upsell current customers on new offerings.

• Collect and display testimonials from current customers.

• Record your sales calls and critique them alone or with a friend.

A checklist of tactics for marketing your side projects.

The Side Project Marketing Checklist is a comprehensive, chronologically ordered list of marketing tactics and ideas that you can try with your next side project. The list is free and open source so feel free to suggest your own additions anytime.

Pre-Launch

This section pairs nicely with the Pre-Launch section of the Sales Checklist, so be sure to check that out too.

Competitor Research

I have been up against tough competition all my life. I wouldn’t know how to get along without it. - Walt Disney

• Make a list of competitors (see this list of tools to research competitors).

Competitor data to collect

• Link to their website.
• “One-liners” and taglines competitors use.
• Pricing and business model.
• Blog/RSS link.
• Social media links.
• Key employees on social media.
• Subscribe to RSS feeds of your competitors’ blogs.
• Follow your competitors and their key employees on social media.
• Monitor competitors’ websites for changes.

Site monitoring tools

• Site Alerts
• Versionista
• Page Delta
• Subscribe to industry newsletters, magazines, trade journals etc.
• Use Google Trends to do initial demand and search volume research (check out this article for specific tips).

Customer Research

If we knew what we were doing it wouldn’t be called research. - Albert Einstein

• Find people in your contact list who might be future customers. Get their feedback on your idea.
• Attend meetups or conferences for your target market.
• Meet another entrepreneur who has a similar or competitive product.
• Make a list of your competitors’ customers:

Finding competitors’ customers

• Check their Twitter followers, mentions.
• Look through their Facebook fans.
• Find people who follow them on Linkedin.
• Check their website. Some companies list customer stories on their websites.
• Reach out to your competitors’ customers, find out what they like/don’t like.
• Create an “early access” list for potential future customers.

Public Relations Preparations

• Create list of tech, startup, and industry blogs.
• Create list of local small business journals (eg: Crain’s Chicago).
• Create list of local bloggers and journalists in your industry.
• Create a “Media Kit” page (check out this example).

Website Setup

• Come up with a name and domain name.
• Write a site tagline and elevator pitch.
• Create a logo (see this list of logo creation tools).
• Set up a landing page (see this list of landing page tools).
• Create “About” and “Contact” pages.
• Create Pricing page (see this list of pricing models):

Pricing ideas

• Create a free or trial tier for your paid product.
• Offer a 100% satisfaction/money-back guarantee.
• Make product invite-only to start.
• Offer free/discounted access for early adopters/beta testers.
• Add social media follow links to landing page.
• Set up analytics to learn about who signs up, bounces, etc.

Analytics platforms

• Google Analytics
• Mixpanel
• Kiss Metrics
• Webmaster Tools
• Set up on-site messaging to capture leads and engage customers as they land on your site (see our list of live customer chat tools).
• Test your website for common SEO, speed and security problems like broken links, missing page titles and insecure pages (see Checkbot).

Email Setup

See this list of email marketing tools for services that make managing email easier.

Email is the Jason Bourne of online: somebody’s always trying to kill it. It can’t be done. - Unknown

• Set up email address to send and receive emails.
• Set up email list and signup form.
• Create a standard email template for your brand.
• Create transactional emails for when users sign up/purchase.

Blog Setup

Content Marketing is all the marketing that’s left. - Seth Godin

• Choose a blogging platform (see this list of blogging platforms for your side project).
• Research keywords that you’d like your site/blog to rank for.

Keyword research tools

• Ahrefs

• SpyFu

• SEMrush

• KeywordTool.io

• Moz Keyword Explorer

• KWFinder

• Google Keyword Research

• Create anchor posts or pages for keywords you’d like to rank for.

• Have a blog post brainstorming session (see this big list of blog post ideas).

• Add email signup form or link to all blog posts.

• Add social media follow links to all blog posts.

Social Media Setup

Social media is the ultimate equalizer. It gives a voice and a platform to anyone willing to engage. - Amy Jo Martin, CEO of Digital Royalty

• Search for availability of names on social networks using KnowEm.
• Choose the social media accounts you’ll use.

Major social media platforms:

• Facebook

• Twitter

• Linkedin

• Pinterest

• Instagram

• Snapchat

• YouTube

• Standardize profile image, background photo, links and call to action across social channels.

• Put premium content behind “pay with a tweet”.

Post-Launch

This section pairs nicely with the Post-Launch section of the Sales Checklist. Sales and marketing are really two sides of the same coin, so you’ll probably need a little of both.

Free Promotional Channels

I don’t care how much money you have, free stuff is always a good thing. - Queen Latifah

• Post your product on directories and review sites (Matt McCaffrey has compiled a great list on Github or you can use a service like Instaaa).
• Write and distribute a Press Release (here’s a comprehensive guide from Wajeez, or you can use one of these distribution tools).
• Write and distribute an eBook, exchange it for email signup.
• Write and distribute a white paper, exchange it for email signup.
• Give free access to influential bloggers in the industry.
• Build a “best of” page with your best blog posts that you wrote or contributed to other sites (ProBlogger calls this a “Sneeze Page”).
• Make sure all blog posts have high quality images (see this list of free stock image sites).
• Create an online course or guide around your product/industry (be sure to check out this list of course management tools).
• Run an influencer marketing campaign.
• Run a link-building campaign.

Link building strategies

• Skyscraper campaign
• Ego baiting
• Interview/expert Q&A post
• Guest posting
• Broken link building
• Get interviewed on podcasts
• Become a source on Help a Reporter Out
• More strategies on Backlinko.com

Link building tools

• Ahrefs - Two-week free trial
• Majestic
• Rank Signals - Free
• SEMrush
• Serpstat - Free limited account

Paid Promotional Channels

You must spend money to make money. - Plautus, Ancient Roman playwright

• Try a few social, search, and commission-based advertising platforms (see this big list of advertising platforms if you aren’t sure where to start).
• Sponsor a local meetup or conference for your target customers.
• Sponsor podcasts your customers might be listening to.
• Sponsor/advertise an industry newsletter (check out Newsletter.city).
• Set up a user referral marketing system.

Referral marketing platforms

• Harry’s Prelaunchr (free, open source)

• CleverTap (offers a free tier)

• Expect Referrals

• Frederick

• Genius Referrals

• InviteBox

• InviteReferrals

• Referral Candy

• Viral Loops

• Girafi

• Campaigned

• Run an engagement contest with prizes or free products for winners.

• Run retargeting ads to target users who have been to your site before.

Recurring

Blogging

Blogging is like work, but without coworkers thwarting you at every turn. - Scott Adams, Creator of Dilbert

• Build/update publishing calendar for your blog.
• Regularly post blog posts on your blog(s).
• Solicit guest posts from early customers and fans of your product.
• Repurpose existing blog posts:

Repurposing blog posts

• Record/post video of you reading the post on YouTube.
• Turn posts into a podcast.
• Create an infographic based on the post.
• Create a presentation of your post (see the list of presentation software below).
• Promote your blog content:

Blog promotion techniques

• Send post to your email list.
• Promote on your social media.
• Email friends and relatives, ask them to share if relevant.
• Send to other bloggers for feedback, ask to share if they like it.
• Add your latest blog post or landing page to your email signature.

Email

Any email that contains the words ‘important’ or ‘urgent’ never are, and annoy me to the point of not replying out of principle. - Markus Persson, aka “Notch”, creator of Minecraft

• Send a regular email newsletter with blog posts, use cases, customer stories, etc.
• Promote email list on social media.
• Send 20 cold emails per week to connect with early customers and get direct feedback.
• Send new users a personal email introducing yourself.

Social Media

We have technology, finally, that for the first time in human history allows people to really maintain rich connections with much larger numbers of people. – Pierre Omidyar, Founder of eBay

• Schedule regular social media content (try these social media tools to help automate the social media process).

Content ideas

• Show what happening “behind the scenes” (eg: pictures of your workspace, in-development features, etc.).
• Blog posts from your blog (or partners’ blogs).
• Special offers or discounts.
• Relevant news, advice, or blogs.
• Funny or inspiring quotes.
• Polls or questions for your followers.
• Suggested books.
• Useful tools or websites.
• Join Facebook and Linkedin groups where your product might be beneficial.
• Send exclusive offers to Linked
  In/Facebook Group owners.
• Join Twitter chats related to your industry/product.
• Give early users discounts for taking pics with your product.

Public Relations

The art of publicity is a black art; but it has come to stay, and every year adds to its potency. – Thomas Paine

• Ask bloggers with list articles to add your site to their content.
• Reach out to small business journals, reporters, bloggers. Inform and ask for coverage.
• Reach out to podcasters, try to get featured on their show.
• Find professors and students with .edu sites to link to your content (good for SEO).
• Find reviews or lists of similar products. Ask to be added or leave a comment about your product.
• Guest post on other blogs.

Guest posting

• Build a list of blogs that are a good fit for your product and accept guest posts. Save their contact form/information.
• Write a few posts on your own blog first (to use as a demonstration).
• Create a list of “pitches,” blog post ideas with a title and one paragraph summary that might grab bloggers.
• Pitch the blogs one idea each. See what they respond to.
• Help promote your posts via social media, email lists, etc.
• Reach back out in a month and try another pitch. Try to become a “regular”
• Leave non-spammy comments on blog posts related to your industry or product.
• Join and participate in forums related to your product or industry.

External Sites

• Answer relevant questions on Q&A community sites (check back regularly)

Q&A Communities

• Stack Overflow
• Quora
• Industry or geographically specific forums
• Product Hunt For more information on how to launch here, read this.
• Leave comments on Slideshare presentations.
• Review industry-related books on Amazon, Goodreads.
• Register to be notified of topics on Reddit and Hacker News with F5Bot.
• Create/publish presentations relevant to your industry.

Presentation Software

• Google Slides
• Prezi
• Slides.com
• Slideshare

Optimizations

• Run a customer poll (can also generate content for your blog or social media channels).
• Create another side project to promote your product (read more).
• A/B test your landing/payment pages (check out this introduction to A/B testing).
• A/B test email newsletters and promotions.
• Implement Twitter cards on your blog posts.
• Implement rich snippets in Google search results.
• Analyze user signup flow (check out the teardowns here).
• Test your website on multiple platforms, make sure speed is good.
• Use Website Grader to pinpoint website improvements.
• Create and track weekly traffic and growth goals.
• Time social media posts and email newsletters to when your audience is most likely to respond.
• Make sure each page on your site has a clear call-to-action.
• Audit and improve your conversion rate (see this checklist for detailed steps you can take)
• Set up automatic analytics reports to be emailed to you each week.
• Experiment with various signup form locations, colors, and sizes.
• Add “Exit Intent” popup to your blog/site.
• Create an FAQs page.
• Verify your website’s tags are correct with Google Tag Assistant.
• Watch a first time user use your product.
• Collect and display testimonials from happy users.
• Survey or poll your users for feedback (see our list of survey tools for lots of great options at any budget).
• Use Monkey Test It to find bugs and broken links of your site. Set up an alert to notify you on breakage.
• Use Checkbot on your website to test for and fix SEO, speed and security problems.

1. Keep coding.
2. Focusing only on the work, not the people.
3. Measuring your value by your output
4. Expecting without expressing.
5. Leaving the team out of commitments
6. Mistaking directing for leading
7. Avoiding hard conversations
8. Stop learning your craft

Summed up, what I’ve learned from these people is to follow your own way, always. Figure out the right units of exploration, embrace strange intersections, and carefully consider what could go wrong. Rest when you need it, be dogged and aggressive when the situation calls for it, but just keep going. Do it all with respect for others and as much trail magic as you can muster.

When discussing technologies to support learning and education, my mentor Seymour Papert often emphasized the importance of “low floors” and “high ceilings.” For a technology to be effective, he said, it should provide easy ways for novices to get started (low floor) but also ways for them to work on increasingly sophisticated projects over time (high ceiling).

For a more complete picture, we need to add an extra dimension: wide walls. It’s not enough to provide a single path from low floor to high ceiling; we need to provide wide walls so that kids can explore multiple pathways from floor to ceiling.

— Mitchel Resnick

This gives us a lens through which evaluate tools:

• Low floor: how easy is it to learn?
• Wide walls: how inclusive is it? How many different use-cases does it serve?
• High ceiling: does it scale with growth?

Most programming tools focus exclusively on creating a high ceiling. By choosing the other two neglected dimensions, Scratch has carved out a durable niche for itself. It is widely used in intro-to-programming courses, beginner robotics, after-school classes… any place a simple but open-ended programming model is needed.

How can your product focus on:

Lowering the floor — becoming simpler, cheaper, “good enough” Widening the walls — serving an ignored audience or market

Source: http://gordonbrander.com/pattern/low-floor-wide-walls-high-ceiling/

• Behavioral economics teaches that people are overconfident: They believe they know more than they do, or they assume their knowledge is more precise than it is.

• Behavioral economists say that confirmation bias leads most people to seek out evidence supporting what they already believe or to ignore data that might disprove their beliefs.

• Behavioral economics says investors are myopic: Short-term losses or costs can blind them to the pursuit of longer-term rewards.

• Behavioral economists say you should inform your decisions with the base rate, or the best available historical evidence of how likely an outcome is.

• Extensive research documents unconscious biases, or factors that shape our behavior below the level of awareness.

• Most people tend to be unrealistically optimistic, overestimating how likely they are to have good fortune and underestimating how many bad things will happen to them.

• The disposition effect leads investors to sell their winning stocks too soon and hold onto their money-losing positions too long.

• The sunk-cost fallacy leads many people to keep trying to justify a past decision even after it’s become obvious that it was a mistake.

• Research in dozens of countries around the world shows that investors almost everywhere keep most of their stock portfolios in shares of local companies instead of spreading their bets worldwide. This “home bias” leaves them underexposed to the benefits of global diversification.

• Research shows that many people are prone to “status-quo bias” or investing inertia, preferring to leave their current portfolio in place even when they might be better off switching to other choices.

• Behavioral economics shows that people are predictably bad at estimating probabilities: They tend to overestimate the likelihood of rare events and underestimate the frequency of common events.

• Many people exhibit what’s called the bias blind spot, or the tendency to see clearly that other people’s behavior isn’t optimal while remaining oblivious to our own shortcomings.

• Experiments in behavioral economics show that most people are prone to anchoring. People who compare prices to the last digits of their Social Security number, for instance, are willing to pay more for something if their final digits are high.

• Experiments have shown for decades that people tend to draw sweeping conclusions from extremely small samples of data.

• Decades of data show that investors may overreact to relatively minor fluctuations in the stock market.

1. Synthesize new ideas constantly. Never read passively. Annotate, model, think, and synthesize while you read, even when you’re reading what you conceive to be introductory stuff. That way, you will always aim towards understanding things at a resolution fine enough for you to be creative.

2. Learn how to learn (rapidly). One of the most important talents for the 21st century is the ability to learn almost anything instantly, so cultivate this talent. Be able to rapidly prototype ideas. Know how your brain works. (I often need a 20-minute power nap after loading a lot into my brain, followed by half a cup of coffee. Knowing how my brain operates enables me to use it well.)

3. Work backward from your goal. Or else you may never get there. If you work forward, you may invent something profound–or you might not. If you work backward, then you have at least directed your efforts at something important to you.

4. Always have a long-term plan. Even if you change it every day. The act of making the plan alone is worth it. And even if you revise it often, you’re guaranteed to be learning something.

5. Make contingency maps. Draw all the things you need to do on a big piece of paper, and find out which things depend on other things. Then, find the things that are not dependent on anything but have the most dependents, and finish them first.

6. Collaborate.

7. Make your mistakes quickly. You may mess things up on the first try, but do it fast, and then move on. Document what led to the error so that you learn what to recognize, and then move on. Get the mistakes out of the way. As Shakespeare put it, “Our doubts are traitors, and make us lose the good we oft might win, by fearing to attempt.”

8. As you develop skills, write up best-practices protocols. That way, when you return to something you’ve done, you can make it routine. Instinctualize conscious control.

9. Document everything obsessively. If you don’t record it, it may never have an impact on the world. Much of creativity is learning how to see things properly. Most profound scientific discoveries are surprises. But if you don’t document and digest every observation and learn to trust your eyes, then you will not know when you have seen a surprise.

10. Keep it simple. If it looks like something hard to engineer, it probably is. If you can spend two days thinking of ways to make it 10 times simpler, do it. It will work better, be more reliable, and have a bigger impact on the world. And learn, if only to know what has failed before. Remember the old saying, “Six months in the lab can save an afternoon in the library.”

Two practical notes. The first is in the arena of time management. I really like what I call logarithmic time planning, in which events that are close at hand are scheduled with finer resolution than events that are far off. For example, things that happen tomorrow should be scheduled down to the minute, things that happen next week should be scheduled down to the hour, and things that happen next year should be scheduled down to the day. Why do all calendar programs force you to pick the exact minute something happens when you are trying to schedule it a year out? I just use a word processor to schedule all my events, tasks, and commitments, with resolution fading away the farther I look into the future. (It would be nice, though, to have a software tool that would gently help you make the schedule higher-resolution as time passes…)

The second practical note: I find it really useful to write and draw while talking with someone, composing conversation summaries on pieces of paper or pages of notepads. I often use plenty of color annotation to highlight salient points. At the end of the conversation, I digitally photograph the piece of paper so that I capture the entire flow of the conversation and the thoughts that emerged. The person I’ve conversed with usually gets to keep the original piece of paper, and the digital photograph is uploaded to my computer for keyword tagging and archiving. This way I can call up all the images, sketches, ideas, references, and action items from a brief note that I took during a five-minute meeting at a coffee shop years ago–at a touch, on my laptop. With 10-megapixel cameras costing just over $100, you can easily capture a dozen full pages in a single shot, in just a second.

Be humble. You may be wrong.

Be hard working. You may be luckier.

Be kind. You may be remembered.

Be generous. Others may reciprocate.

Be curious. You may stay teachable.

Be trustworthy. You may see further.

Be forgiving. You may feel lighter.

Be yourself. You will be happier.

Some heuristics to make decisions. Please add your own and challenge these.

1. Schedule time to think.

2. When considering options, watch your heart rate.

3. If all things are equal take the road less travelled (i.e., hard decisions easy life, easy decisions, hard life.)

4. No decision is sometimes the best path. If you can’t get comfortable deciding, the answer is to explore the tension not force a decision.

5. Instead of fight or flight, gather info. Think about what you can do to get the information you need to make a better decision.

6. Saying no is more important than saying yes.

7. Use time to filter people and ideas. The majority of the time you don’t need to be an early adopter.

8. Look for win-win decisions. If someone absolutely has to lose, you’re likely not thinking hard enough or you need to make structural/environmental changes.

9. When stuck work back to first principles and build up.

10. The rule of 5. Think about what the decision looks like 5 days, 5 weeks, 5 months, 5 years, 5 decades.

11. Let other people’s hindsight become your foresight.

12. Avoid things the best version of yourself will regret.

13. Ask what information would cause you to change your mind. If you don’t have that information, find it. If you do, track is religiously.

14. Focus on collecting feedback to calibrate your ability to make this decision.

15. If you’re outside your circle of competence and still have to make a decision, ask experts HOW they would make the same decision not WHAT they would decide.

16. Lean into (not away from) what’s making you uncomfortable.

17. Put things on a reversibility/consequence grid —irreversible and high consequence decisions likely require more time. The rest of the time you can usually go fast.

18. Identify the 2-3 variables that really matter and break them down to unearth assumptions and get the team on the same page.

19. Fast decisions should never be rushed.

20. Too much information increases confidence not accuracy.

21. Avoiding stupidity is easier than seeking brilliance.

22. Walk around the decision from the perspective of everyone implicated (shareholders, employees, regulators, customers, partners, etc.)

23. Some warnings signs that increase the likelihood of stupidity are (environment, the pace of change, rushing, physically tired, hyper-focus, authority, consensus-seeking behavior).

24. Own the decision. (If you make decisions by comittiee have one person sign their name to the decision - someone needs to own it.)

25. Decisions are nothing without execution.

26. Ask yourself “and then what?”

Most of us asymmetrically asses the “benefits we receive and the obstacles we must overcome in many areas of life”. We feel we face more headwinds and obstacles than every one else - which breeds resentment. We also undervalue the tailwinds that help us - which leaves us ungrateful and unhappy.

Not only do we tend to over-emphasize the obstacles, but we also tend to think that the obstacles “I” face are more difficult than those faced by “others”. We manufacture inaccurate ideas to support the notion that other groups have it easier than we do, that their headwinds are less or their tailwinds greater, even when there is no objective evidence that this is the case.

On the spur of the moment, with no particular psychological or literary theory in mind to justify it, I developed my Rule of 50:

Give a book 50 pages. When you get to the bottom of Page 50, ask yourself if you’re really liking the book. If you are, of course, then great, keep on reading. But if you’re not, then put it down and look for another. (Always keep in mind that there’s nothing to stop you from going back to it later, whether that might be in six days or six years. Or 60 years. There is many a book that I couldn’t get into the first time, or even two, that I tried to read it, and then, giving it one more chance, totally fell under its spell. The book obviously hadn’t changed - but I had.)

When you are 51 years of age or older, subtract your age from 100, and the resulting number (which, of course, gets smaller every year) is the number of pages you should read before you can guiltlessly give up on a book. As the saying goes, “Age has its privileges.”

And the ultimate privilege of age, of course, is that when you turn 100, you are authorized (by the Rule of 50) to judge a book by its cover.

source: https://www.theglobeandmail.com/arts/books-and-media/nancy-pearls-rule-of-50-for-dropping-a-bad-book/article565170/

(Thread) Heuristics for deciding on meetings. Please feel free to add yours / challenge mine.

1. If you wouldn’t do it right now, say no.

2. Say no to everything outside of work hours you wouldn’t call your partner and bail on dinner for.

3. Say no to all recurring meetings with the exception of ones from your boss if you have one. Tell people you’ll opt-in on a per-agenda basis.

4. Cut all meetings in 1/2

5. If you’re in a meeting and it’s clearly pointless, politely excuse yourself.

6. Keep an internal calculation of what your time is worth. Raise this every year.

7. If you’re going for the drink, don’t go.

8. If you’re the smartest person in the room, you’re in the wrong meeting.

9. Even if you can’t get out of a meeting, rather than sit there an be bored or make a grocery list, become a detective and see what you can learn from/about everyone else in the meeting.

10. If everyone is on their phone or laptop at the meeting, leave. The decision has already been made.

11. If you’re talking to signal how smart you are just shut up.

12. If you’re going to “add value” to someone else’s idea, just skip the meeting. That type of stuff is best-done one-on-one and not in a group setting where you reduce the motivation of the other person. (See signally how smart you are (11) and shut up.)

Think of it this way: Each week you get 10,000 minutes to live your life (it’s actually 10,080 minutes, but let’s round for simplicity). If these 10,000 minutes represent 100% of your week, then each minute is 1 basis point (i.e. one hundredth of a percent). If you sleep 7 hours a night that’s 2,940 minutes or ~30% of your week. If you work 40 hours, that’s another 2,400 minutes or 24% gone. Therefore, if you spend 5 minutes reading one of my posts, that’s 5 basis points of your week that you are allocating to me. I know that doesn’t sound like much, but when you consider the endless amount of content competing for your attention, it’s amazing.

Knowing When To Trade

1. The key to changing your worldview on time is knowing when to trade it for money. Obviously, if you don’t have much money, you don’t have many options for trading, but as you gain wealth, this tradeoff will become more relevant. The traditional way to think about when to trade your money for your time has been to pay for anything that is below your hourly wage. This explains how one could justify paying for a cleaning or laundry service. I generally agree with this, but it can be expanded.
2. You should also trade your money for anything that you would regret missing on your deathbed. If you can imagine yourself regretting skipping an event in your final days of life, then you should trade money for it today. This worldview is something I only adopted recently, but it has made my decision-making process so much easier when it comes to tradeoffs like these. For example, I would probably spend money to visit a good friend, but I wouldn’t spend money to have a nice car. I will (hopefully) remember seeing my friend on my deathbed, but the car? No chance. ``

While I worked with Danny on a project, many things amazed me about this man whom I had believed I already knew well: his inexhaustible mental energy, his complete comfort in saying “I don’t know,” his ability to wield a softly spoken “Why?” like the swipe of a giant halberd that could cleave overconfidence with a single blow.

But nothing amazed me more about Danny than his ability to detonate what we had just done.

Anyone who has ever collaborated with him tells a version of this story: You go to sleep feeling that Danny and you had done important and incontestably good work that day. You wake up at a normal human hour, grab breakfast, and open your email. To your consternation, you see a string of emails from Danny, beginning around 2:30 a.m. The subject lines commence in worry, turn darker, and end around 5 a.m. expressing complete doubt about the previous day’s work.

You send an email asking when he can talk; you assume Danny must be asleep after staying up all night trashing the chapter. Your cellphone rings a few seconds later. “I think I figured out the problem,” says Danny, sounding remarkably chipper. “What do you think of this approach instead?”

The next thing you know, he sends a version so utterly transformed that it is unrecognizable: It begins differently, it ends differently, it incorporates anecdotes and evidence you never would have thought of, it draws on research that you’ve never heard of. If the earlier version was close to gold, this one is hewn out of something like diamond: The raw materials have all changed, but the same ideas are somehow illuminated with a sharper shift of brilliance.

The first time this happened, I was thunderstruck. How did he do that? How could anybody do that? When I asked Danny how he could start again as if we had never written an earlier draft, he said the words I’ve never forgotten: “I have no sunk costs.”

To most people, rewriting is an act of cosmetology: You nip, you tuck, you slather on lipstick. To Danny, rewriting is an act of war: If something needs to be rewritten then it needs to be destroyed. The enemy in that war is yourself.

After decades of trying, I still hadn’t learned how to be a writer until I worked with Danny.

I no longer try to fix what I’ve just written if it doesn’t work. I try to destroy it instead— and start all over as if I had never written a word.

Danny taught me that you can never create something worth reading unless you are committed to the total destruction of everything that isn’t. He taught me to have no sunk costs.

Original Source: https://www.valuewalk.com/2018/02/collection-investment-resources/

Collection of investment resources

Thanks to the Internet I have managed to put together a collection of investment resources. Below are various articles, books, speeches, videos to anybody interested in becoming a better investor. Some are all-time classics, and others are just articles that I enjoyed reading. The collection is not complete and I will update it when times permit. Why am I doing this? First, I wanted to gather some of the most important investment material under one roof. Second, somehow stuff gets lost on the Internet.

The resources are not simply about investing. It is about becoming a better human being. Learning from the success and failure of others is the fastest way to get smarter and wiser without a lot of pain.

The best thing a human being can do is help another human being know more.

– Charlie Munger, Berkshire Hathaway Annual Meeting, 2010

The resources are classified by alphabetical order.

Allan Mecham (Arlington Value Management)

• Manual of Ideas – Allan Mecham Interview (pdf)
• The 400% Man (Marketwatch)
• Is This The Next Warren Buffett? (Forbes)
• The Oracle of Salt Lake City (ComplianceX)
• Arlington Capital Presentation – Avoid the Deadly Sins (pdf)
• Arlington Value 2013 Letter (pdf)
• Arlington Value 2014 Letter (Valuewalk)
• Arlington Value 2015 Letter (pdf)

Benjamin Graham (Father of Value Investing)

• “Securities in an Insecure World” San Francisco speech transcript in 1963 (PDF) (Thanks to Jason Zweig for transcript/copy and comments)
• Should Rich But Losing Corporations Be Liquidated? (Forbes)
• Books:
  • Security Analysis 6th edition
  • The Intelligent Investor: The Definitive Book on Value Investing

Bill Ackman (Pershing Square)

• Graham & Doddsville Winter 2015 (PDF)
• What’s Eating Bill Ackman? (Institutional Investor)

Bill Gates (Microsoft/Cascade Investment)

• 1998 Warren Buffett & Bill Gates Discuss Innovation, Business and Success (Youtube)
• 2009 Warren Buffett & Bill Gates on Capitalism, Financial Crisis and America (Youtube)
• This Man’s Job: Make Bill Gates Richer (WSJ)

Bill Gross (PIMCO/Janus)

• Bill Gross June Investment Outlook: How to Make Money (Janus Henderson)

Bill Nygren (Oakmark Fund)

• Bill Nygren: “Value Investing Principles and Approach” (Talks at Google)
• 11 Questions With Oakmark’s Bill Nygren And Win Murray (Forbes)

Bruce Berkowitz (Fairhome Funds)

• Why Bruce Berkowitz Still Likes Stocks Others Hate (Video, Bloomberg)
• After the Apocalypse (Barron’s)
• Betting Big, Winning Big: Interview With Bruce Berkowitz, CEO of Fairholme Capital Management (Barron’s)
• The Manager of the Decade award (Morningstar)

Carl Icahn (Icahn Enterprises)

• Carl Icahn’s Dealbook Conference Interview (Youtube/NYT)

Charlie Munger (Berkshire Hathaway)

• The Psychology of Human Misjudgement speech (pdf)
• Boom and Bust Is Normal (10 min) (BBC/Youtube)
• A Conversation with Charlie Munger and Michigan Ross – 2017 (Script) (Youtube/The Ross School of Business)
• Books:

• Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger by Peter D. Kaufman
  Charlie Munger: The Complete Investor by Tren Griffin
• Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger by Janet Lowe

Daniel Kahneman

• Don’t Blink! The Hazards of Confidence (NYT)
• A Conversation With Daniel Kahneman; On Profit, Loss and the Mysteries of the Mind (NYT)

David Einhorn (Greenlight Capital)

• Book: Fooling Some of the People All of the Time, A Long Short by David Einhorn

David F. Swenson (Chief Investment Officer, Yale University)

• The Money Management Gospel of Yale’s Endowment Guru (NYT)
• In College Endowment Returns, Davids Beat the Goliaths (NYT)
• A Conversation with David Swensen (CFR)
• Books:
  • Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment
  • Unconventional Success: A Fundamental Approach to Personal Investment

Elon Musk (Tesla Motors, SpaceX)

• Elon Musk: The Architect of Tomorrow (Rolling Stones Magazine)
• Book: Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future by Ashlee Vance
• Elon’s Email to SpaceX Employees Regarding Taking The Company Public

Ed Thorp (Princeton/Newport Partners)

• Ed Thorp: the man who beat the casinos, then the markets (FT)
• Podcast: Ed Thorp talks with Barry Ritholtz on the Masters in Business
• Ed Thorp Interview at Context Summits Miami 2017 (Youtube)
• The House Always Wins. Then He Came Along (NPR)
• Edward Thorp’s 20% Annual Return For 30 Years (Forbes)
• Book: A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market

Francois Rochon (Giverny Capital)

• The Art of Investing: Analyzing Numbers and Going Beyond – (Talks at Google)

Henry Singleton (Teledyne Inc.)

• Henry Singleton Forbes 1979 article
• Teledyne and Dr. Henry Singleton, Case Study in Capital Allocation (pdf)
• The Manual of Ideas on Business Leader Henry Singleton (Youtube)
• Henry E. Singleton, a Founder Of Teledyne, Is Dead at 82 (NYT)
• Emulate Henry Singleton (Grant’s Interest Rate Observer)
• The Brain Behind Teledyne, A Great American Capitalist (NY Observer)
• Corporations: Teledyne’s Takeoff (Time)
• A Case Study In Financial Brilliance by Leon G. Cooperman (Valuewalk)
• A Conglomerate That Works (NYT)

Howard Marks (Oaktree Capital)

• Howard Marks’ letters at OaktreeCapital.com
• Howard Marks: “The Most Important Thing – Origins and Inspirations” (Talks at Google)
• Podcast: Interview with Howard Marks: Masters in Business
• Oaktree’s Howard Marks on Market Warning, Risks, FAANGs (Youtube/Bloomberg)
• Oaktree’s Howard Marks: Keep Calm and Invest On (Youtube/Bloomberg)
• Book: The Most Important Thing

George Soros

• George Soros – I Would Rather Call Myself An Insecurity Analyst (The Acquirer’s Multiple)

Guy Spier (Aquamarine Fund)

• An Interview with Famed Value Investor Guy Spier (DoughRoller)
• My $650,100 Lunch with Warren Buffett (Time)

Indexing

• The Silent Road to Serfdom: Why Passive Investing is Worse Than Marxism (Sanford C. Bernstein & Co./Bloomberg)
• Are Index Funds Communist? (Bloomberg)

Irving Kahn (Kahn Brothers & Company)

• Irving Kahn, Oldest Active Wall Street Investor, Dies at 109 (NYT)
• A Dozen Things I’ve Learned from Irving Kahn about Value Investing and Business (25iq)
• How to Play the Market: Irving Kahn (Bloomberg)
• 108-year-old investor: ‘I doubled my money in 1929 crash – and I’m still winning’ (Telegraph)
• The 100-Year-Old on Wall Street (NPR)
• 106-year-old stockbroker talks shop (CNN)

Jamie Dimon (JPMorgan Chase)

• Lessons from the CEO Warren Buffett turns to for guidance (CNBC)
• Jamie Dimon talk (Stanford Graduate School of Business)

Jeff Bezos (Amazon)

• Jeff Bezos and brother Mark give a rare interview about growing up and secrets to success (Summit/Youtube)
• Jeff Bezos’ guide to life (TechCrunch)

Jeffrey Gundlach (DoubleLine Capital)

• Jeffrey Gundlach: The Man Behind The Millions (Buffalo News)

Jeremy Grantham (Grantham, Mayo, Van Otterloo & Co. LLC)

• Jeremy Grantham’s letters at GMO.com

Jim Chanos (Kynikos Associates)

• Chanos: Is a big change underway in global capitalism?
• Transcript of Jim Chanos’ appearance on CNBC (CNBC)

Jim Simons (Renaissance Technologies Corp.)

• Jim Simons, the Numbers King (The New-Yorker)
• Billionaire Mathematician James Simons Flopped the First Time He Invested (Bloomberg)
• The mathematician who cracked Wall Street (TED Talk)
• “World’s Smartest Billionaire:” James Simons is Cal Alumnus of the Year for 2016 (California Magazine)

Joel Greenblatt (Gotham Asset Management)

• On Value Investing: A Conversation with Joel Greenblatt with Howard Marks (Youtube/Wharton)
• Joel Greenblatt’s Market Secrets (Intelligent Investing With Steve Forbes) (Forbes)

Joel Tillinghast (Fidelity)

• Joel Tillinghast Finds Big Returns in Small Stocks (Barron’s)

John Malone (TCI & Liberty Media)
Articles & Letters

• John Malone: Flying Solo (The New Yorker – February 7, 1994)
• AT&T Completes the Acquisition of TCI (NYT, March 10, 1999)
• Cable’s Darth Vader Is Back (Forbes)
• National Western Stock Show Citizen of the West John Malone known for loyalty, can-do Western spirit (Denver Post)
• Liberty Media Company History (Liberty Media)
• Largest Land Owner (Land Report 100)
• CNBC’s full interview with Liberty Media’s John Malone (CNBC)

Jorge Paulo Lemann (3G Capital)

• What I Learned at Harvard (PDF, Santangel’s Review)
• Jim Collins Interviews Jorge Paulo Lemann (Youtube/Havard Business School 2016)
• Nitin Nohria Interviews Jorge Paulo Lemann and Warren Buffett (Youtube/Havard Business School 2017)
• Book: Dream Big by Cristiane Correa

Lei Zhang (Hillhouse Capital)

• Lei Zhang’s Lecture at Columbia Business School (Link 1, link 2)
• The Chinese Billionaire Zhang Lei Spins Research Into Investment Gold (NYT)
• Zhang Lei has Lunch with the FT (Financial Times)
• Hillhouse Capital Zhang Lei: the best investment does not need to quit (Netease, Translated from Chinese)

Li Lu (Himalaya Capital)

• Li Lu —Know What You Don’t Know (Graham & Doddsville)

Lou Simpson (Former CIO for Geico and current Chairman of SQ Advisors)

• A Q&A with renowned investor Lou Simpson (Kellogg Insight)
• A Dozen Things I’ve Learned from Lou Simpson About Investing and Business (25iq)
• Some insight on Lou Simpson and how he works (Value Investing World)
• Lou Simpson and portfolio construction (Value Investing World)
• The Next Warren Buffett (Forbes)
• A Maestro of Investments in the Style of Buffett (NYT)
• Lou Simpson WSJ Interview

Mark Cuban (Entrepeneur, Owner of the Dallas Mavericks, Shark Tank)

• Mark Cuban In Conversation With Kyle Bass (Real Vision/Youtube)

Mark Sellers

• Mark Sellers Speech to Sellers Capital Investors, June 9, 2007 (Pdf)
• So You Want To Be The Next Warren Buffett? How ís Your Writing? (Pdf via Manual of Ideas)

Monish Padrai (Padrai Funds/Dhandho Funds)

• Mohnish Pabrai Lecture at Boston College Nov 2017 (Youtube/Carroll School of Mgmt)
• Why Mohnish Pabrai Likes GM, Fiat, and Southwest Air (Barron’s)
• How A Chinese Economic Policy Could Save Club Med Countries (Forbes)
• More blog, articles and books by Monish (Chai with Padrai)

Morningstar

• Losing My Religion (Excellent article)

Nassim Nicholas Taleb (Author of Fooled By Randomness and The Black Swan)

• Nassim Nicholas Taleb (Talks at Google)
• Nassim Taleb and Daniel Kahneman discusses Antifragility at NYPL (Youtube/NYPL)

Paul Singer (Elliott Management)

• The World’s Most Feared Investor (Bloomberg)
• The David Rubenstein Show: Paul Singer (Youtube/Bloomberg)
• Inside Elliott Management: How Paul Singer’s Hedge Fund Always Wins (Fortune)

Peter L. Bernstein

• A (Long) Chat With Peter L. Bernstein by Jason Zweig
• Our Interview with Peter L. Bernstein (Advisor Perspectives)
• Obituary: Peter L. Bernstein; Influential Economic Historian (WP)
• Peter L. Bernstein on Risk (McKinsey & Company)
• The Big Interview: Chuck Jaffe talks to Peter L. Bernstein, author of “Capital Ideas Evolving” (Marketwatch)
• Interview With Peter Bernstein | Betting On The Market (PBS)
• Book: The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk
• Book: The Four Pillars of Investing: Lessons for Building a Winning Portfolio

Peter Lynch (Fidelity Investments’ Magellan Fund)

• Peter Lynch Interview – Picking Stocks & Investing (Youtube)
• A Wall Street legend explains why it ‘disturbs’ him when people tell him they ‘play the market’ (Business Insider)
• Interview With Peter Lynch | Betting On The Market (PBS)
• Peter Lynch — Charlie Rose

Ray Dalio (Bridgewater Associates)

• How Hegemons Fall (Morningstar)
• Populism: The Phenomenon(Pdf) (Daily Observations)
• How to build a company where the best ideas win (TED Talk)
• A Conversation with Ray Dalio and Michael Milken (MilkenInstitute/Youtube)
• How The Economic Machine Works (Bridgewater/Youtube)
• Tony Robbins interviews billionaire Ray Dalio (Tony Robbins/Youtube)
• Ray Dalio: There is Nothing That is Very Attractive
• Hedge Fund Trader Ray Dalio Best Trading Techniques
• Dalio discussing his investing principles at the Bloomberg Markets 50 Summit with Erik Schatzker (Bloomberg/Youtube)

Seth Klarman (Baupost Group)

• Seth Klarman – The Value of Not Being Sure (PDF)
• The Collected Wisdom of Seth Klarman (Santangel’s Review)
• Legendary Investor Is More Worried Than Ever (WSJ)
• Seth Klarman OID Interview March 2009 (PDF)
• Harvard Business School Interview with Seth Klarman
• The Oracle of Boston (The Economist)
• 1991 Barron’s Interview

Stanley Druckenmiller

• CNBC’s full interview with Stanley Druckenmiller (CNBC)

Ted Weschler (Berkshire Hathaway)

• Interview with Warren Buffett’s investment manager Ted Weschler (Business Insider)
• Warren Buffett’s money managers, Todd Combs and Ted Weschler, speak (Yahoo)
• Buffett’s three T’s (CNBC)

Todd Combs (Berkshire Hathaway)

• 10 Questions: Todd Combs (FSU/Vires Magazine)
• What it’s like working for Warren Buffett (CNBC)
• Warren Buffett’s money managers, Todd Combs and Ted Weschler, speak (Yahoo)
• Buffett’s three T’s (CNBC)

Tom Russo (Gardner Russo & Gardner)

• Learning from Superinvestors: The Wisdom of Tom Russo (Latticework)

Vanguard

• How risk, reward & time are related

Warren Buffett (Berkshire Hathaway)

• The Superinvestors of Graham-and-Doddsville (pdf) (If you’ve never read this essay before, please read it. It may be the most important essay ever written in the world of investing. )
• Buffett Partnership Letters -1957-70 (PDF)
• Warren Buffett’s Letters to Berkshire Shareholders (BRK home website)
• Warren Buffett’s first tax return (PBS)
• Buffett Standford Seminar 1978 (PDF)
• Warren Buffett’s 1950s Articles in the Commercial and Financial Chronicle
• Warren Buffett’s 1962 Letter to Barron’s
• 1972 Buffett Letter to Sees Candies (PDF)
• 1999 Fortune Magazine Interview. Stock expectations and the Internet (Fortune by Carol Loomis)
• Warren Buffett on PBS NewsHour Part 1, Part 2 (PBS)
• Warren Buffett – HBO Documentary
• Warren Buffett brilliantly explains how bubbles are formed (Business Insider)
• Interview: John Templeton Warren Buffett Robert Wilson (Youtube)

Walter Schloss (Walter & Edwin Schloss Associates)

• Sixty-Five Years on Wall Street (Pdf, Grant’s Interest Rate Observer via Grahamanddoddsville.net)
• Walter & Edwin Schloss Associates interview (Outstanding Investor Digest via CSinvesting)
• Benjamin Grahamand Security Analysis: A Reminiscence (Pdf va CSinvesting)

Will Danoff (Fidelity Investments)

• The $108 Billion Man Who Has Beaten the Market Link 1, Link 2 (WSJ)

William N. Thorndike

• William Thorndike: “The Outsiders” (Talks at Google)
• Book: The Outsiders

INTRO

“I don’t want anything from anyone, so boredom is the only thing that drives me to do anything”

• Naval recommends Skin in the Game by Nassim Taleb
• Rick and Morty is the only TV show he watches

“Reality is really interesting for the most part” “TV’s just a slow method of consuming nonfiction. Reading is a lot faster.”

Why are so many people leaving SF?

• A combination of the taxes, it’s not the cleanest city, and there’s a huge homeless problem
• It’s a chosen home for the tech industry, and it’s not going to disappear anytime soon
• With companies where everyone is working remotely, it’s hard to do creative work where everyone needs to synchronize

India

• They have a lot of corruption, bureaucracy, and high taxes making it hard to build things there
• It should be doing a lot better than it is with the large amount of STEM graduates
• “The only way you can sell something, is if you yourself believe in it”
• This is what Elon Musk does all day long
• “If you truly believe in what you’re selling, no one can compete with you on that scale”

EDUCATION

• The education system is very industrialized
• It was developed. and still is this way to some degree, to breed obedient factory workers
• Educating people is very hard – especially when you need to do it cheaply, and all at the same time
• Teachers are teaching a curriculum that’s been negotiated over decades and decided upon by politicians, courts, parents, and unions – this doesn’t make it efficient
• Maybe it’s time we provide students with free tablets, that educate students about what THEY actually want to learn
• We have the technology now, where the software can figure out you’re intellectual levels in different subjects (math, science, etc.)
• Naval doesn’t manage his own crypto, he goes through funds

“Self conflict is a complete waste of time”

• All judging, and arguing with yourself is pointless
• Guilt is society’s voice speaking in your head
• How do you put your brain in debug mode?
• You won’t stop having thoughts, and you can’t control your thoughts, but you can stop them from running away like a freight train

ANGER

• “We didn’t evolve to be angry all the time”
• Anger hurts YOU first and foremost
• “Anger is a hot coal that you hold in your hand while you wait to throw it at somebody else”
• Notice every time your angry, how much it hurts you
• When you don’t want an emotion, it doesn’t arrive with the same intensity
• To deal with procrastination, ask yourself – “Am I going to have to do this at one point or another?”
• If the answer is yes, do it anyway
• Another tip is to work on the second most important thing you’re doing
• Ask why you’re procrastinating, really get to the bottom of it

OSHO

• A philosophical mystic that Naval has enjoyed reading
• He’s a great thinker on enlightenment, peace, truth, and self examination
• Check out the book The Sun Rises in the Evening

How did Naval meet Kapil Gupta

• Kapil tweeted at him
• Vegan food technology companies
• It’s only a matter of time before we can either 3D print meat or create food that tastes enough like meat that causes society to slowly shift away from eating meat
• When this happens, people in the future will probably judge us for killing so many animals for food

The Bay Area

• A positive – Has the highest concentration of brilliant people, and also the natural beauty
• A negative – the amount of the monoculture/ group think , the lack of independent thinkers
• What makes someone smart?
• Genetics is the biggest component
• Intellectual curiosity is an important trait to cultivate
• “If you’re just curious as to how things work, and are more concerned with figuring it out correctly than being right, then you put yourself in a very powerful position”

Kanye for president?

• He has a very good shot at winning
• Social media has really changed who can run for president
• “We’re going to see celebrity presidents a lot more”
• Presidents within decades will be wearing cameras, and we’ll be able to tune into the president’s channel to see what he’s up to
• Naval has noticed the “blue check marks” on Twitter are the least interesting people

“Your mind isn’t unfocused. It’s just focused on something that another part of your mind wan’ts it to be focused on. This creates self-conflict.” “Your mind is doing exactly what you want it to do at all times”

What would Naval tell his 23 year old self?

• Do everything you’re going to do, but with less emotion and less angst

Longevity

• We’re the first generation with smart phones/the internet, but we’re probably the last generation before they figure out, or “crack”, longevity
• “If there’s one thing that does kill you early, it’s stress. So chill out.”

Incarciration

• “It’s basically one monkey putting another monkey in a cage.”
• Maybe we can create another solution – perhaps we have an exile society where we can put prisoners

Tips for public speaking

• Record and watch yourself to catch your flaws
• Know your subject cold, and don’t feel the need to rehearse
• If you know your subject, just talk

Tips for marriage

• Marriage is not dead – it’s the institution you enter into to have children. If you’re not going to have children, you should really think twice about marriage.
• Get married based on compatibilty of values

Random

• Naval is not doing any public speaking this year
• He only wants to speak on platforms he can control

Self confidence vs. IQ vs. Emotional Intelligence

• IQ can be traded for Emotional Intelligence – if you’re really smart you can figure out your emotions

“An intelligent person, over time, will end up confident”

• How does Naval deal with failure?

• These days, he tries not to have too many goals

• “If you don’t have goals, you can’t fail to meet them”

• You don’t have to deal with anyone you don’t want to – just walk away

• “The trick to doing anything, is first cultivating a desire for it”

• Mathmatics is the language of nature

• It’s human beings reverse engineering things encoded into nature

• Humans have no overarching responsibility or purpose for living

• We all can create and follow our own meaning

• “I’m not trying to do anything important. I’m just doing what I feel like. If I like it, I’ll be good at it.”

• Yoga and reading – “If you want to find me, I’m usually on my yoga mat with a book”

• Naval doesn’t watch movies

• At some point you realize your life is limited, do you want to waste it watching a movie?

• “Your emotions may get taken for a ride, but once your emotions get taken for a ride a bunch of times… you know the feeling already”

• Can only one cryptocurrency survive in the end?

• There will be many survivors, but the economic value will be concentrated at the top

• The most valuable cryptocurrency will be more valuable than all the others

• The second most valuable cryptocurrency will be more valuable than third through the last put together

• Intelligence and hard work will get you very far

• Stop thinking in terms of “careers”

• Develop skills, and do what you want to do at that time to get paid

• The idea of a having a lifelong career is going away

• If you want money – “Give the world something it wants that it does not yet know how to get”

• You have to like what you’re doing though – if you don’t like it, someone who does will out compete you

• Everyone should know how to sell

• You can probably tell who’s going to be a good sales person when they’re 10 years old

• Reading Jiddu Krishnamurti has made Naval realize how little he knows about himself

• Naval has recommended Total Freedom in the past

• Naval recommends The Power of Now

• Check out the book Siddhartha

• Naval is really enjoying The Sun Rises in the Evening by Osho

• How to have a good relationship

• Be totally selfish

• If you can’t keep doing it 50 years from now – don’t do it today to impress someone

• Blockchain Technology is the most inetresting thing right now

• Happiness is something we can learn

• You shouldn’t count on life after death

• You’ll probably be happier in this life if you don’t expect it

• It’s worth the investment to have a good “proposal story” with your girlfriend

• In a sense, life is indistinguishable from a dream – everything eventually disappears

• This reality will one day be gone

• Are we living in a simulation?

• It doesn’t matter and it wouldn’t change your life

• Naval really loves his Airpods

• Some people think they might somehow cause brain tumors, but Naval thinks it’s unlikely

• There’s no scientific evidence

How do you find your life partner?

• Be worthy of a worthy mate – work on yourself

• The data shows the life of the average person throughout the world is getting better

• A lot of unhappiness comes from comparing current events to past events

• Intermittent fasting has worked very well for Naval

• He doesn’t think he does it often enough, but when he does, he’ll only eat dinner

• The benefits really start after 16 hours of fasting

• Best way to learn how to learn?

• Read a lot and read things you like

Miscelli

• Naval does the happy body routine for his workouts
• Check out Stories of Your life and Others
• Naval sleeps about 5 hours a night

IT’S STATISTICALLY LIKELY WE’RE IN A SIMULATION

• Naval
  • On a long enough period of time, its probable an advanced civilization will create a simulation…and since the universe has been around for such a long time, it’s probably already happened
  • There are similarities between Buddhism and the simulation hypothesis
  • The Buddhists say we’re all one thing, in the simulation hypothesis, we’re all made of the same code
  • Reaching enlightenment is equivalent to realizing we’re in a simulation
• Scott
  • “The fact that we’re observed in this conversation is the only thing that makes it real”
  • “Reality doesn’t exist unless there’s a observer”
  • Wave particle duality doesn’t collapse unless there’s an observer

DO WE HAVE FREE WILL?

• Scott – No. Our brain is a moist computer and it does what it has to do given the inputs
• Naval – Also no, but it doesn’t mean things are predetermined. We have to move forward to figure out what’s going to happen

STRATEGIES FOR SUCCESS

• Q: On a scale of 1-10, how does Naval rate the below in terms of being necessary for success?
• Hard work – 3 or 4
• “For general people, going through life, just trying to be successful, hard work doesn’t matter that much”
• “What you do, and how you do it, is so much more important than how hard you do it”
• Your network – 8/9 when you’re starting out
  • “Create work that can be seen and recognized, and the network emerges”
  • Intelligence – No answer
• “The number one thing you can have is general intelligence, because general intelligence allows you to get good at everything else”
• “If you’re smart, and question everything, you’ll eventually figure everything else out at a good enough level” – this can apply to nutrition, fitness, your sales skills, really anything
• Intelligence and open mindedness are everything

ENTREPRENEURSHIP

• You can tell with certain people, that they will be a “winner” – it’s just a question of when
• It’s hard to tell which businesses will work, lots of businesses fail
• Why are we betting on businesses instead of people with venture capital?
• Warren Buffet invests in natural monopolies
• One reason Coca Cola is a massive business – the sugar and caffeine is addictive
• It also has zero taste memory, so you don’t get sick of drinking it
• “He invests in natural monopolies that are basically addictive drugs”
• Amazon replaced cold packs for their grocery delivery with frozen water bottles
• This results in a small dopamine rise in the brain due to a free product

DECENTRALIZATION

• Humans are cooperators- we build networks like language, Uber, and the US dollar
• We cooperate better than any other species
• Our networks need to be controlled, because there’s always cheaters
• Networks have historically been run by individuals, elites, or companies etc.
• Blockchains bring a new form of government
• How do they work? – A piece of code is run on the cloud, with a need for a resource, like storage, for example
• Anyone who contributes storage into the network, would get paid
• Anyone who needed storage out of the netwok, would have to pay
• All the transactions would be tracked in a ledger – that’s a blockchain – a piece of code in the cloud that nobody owns. It punishes cheaters (those who use too much storage/break the rules) and rewards people who bring lots of storage reliably
• Blockchains will build “permissionlessly programmable uncensorable networks” – Naval
• This is unlike our current money system where we have to have a third party’s permission for a transaction
• We are replacing the banks with code
• “The way Amazon treats you, imagine if your bank treated you that way”
• Uncensorable means where you don’t have a gatekeeper
• “At some level, all laws are contractual social self-censorship”
• Naval – “They still haven’t been able to shut down Bittorrent, how would they shut down Bitcoin”
• Could Bitcoin ever become illegal?
• Naval – Probably not. It’s just code, which is just speech. “You can’t make code illegal anymore than you can make speech illegal”
• Bitcoin is just insurance against politicians. “It only has value because it’s not controlled. The moment you have a cryptocurrency that is controlled by a democracy, a mob, an elite, whatever, it has no value.”

ON HAVING KIDS

• Naval doesn’t think it gets enough credit

“You get this amazing wholesome release when your genes are finally replicated”

• Scott views it in a different way, he only has step children

His value is in the fact that his ideas are reproduced through books and other content, which is then passed on

CONSCIOUSNESS

• Scott
• “Consciousness is the ability to broadcast your expectations and judge how close you were to being right. It’s the friction between what you think, and what actually happens. That’s all you’re really experiencing.”
• We’re most conscious while in pain or while we’re really happy
• When things are going as we expect, we resort to our lowest level of consciousness
• Naval
• The brain/mind is a machine that takes past memories and uses them to predict the future. Below that is just raw consciousness – awareness.

WHAT WOULD A NAVAL/SCOTT UNIVERSITY TEACH?

• Naval
• Naval would teach a class on persuasive writing
• He recommends Scott’s article – The Day You Became a Better Writer
• He would also have them check out the Dale Carnegie School of Persuasion
• Naval would encourage students to learn a system of figuring out the optimal nutrition for themselves
• There’s so much disagreement out there on what an optimal diet should look like, it’s almost like politics
• Some sort of fun mathematics
• Technology is applied science which is applied math
• Fitness – find some sport that you love to do
• He’d drop history
• Scott
• He would teach good strategy – strategy for your own life and other things
• There’s obvious “good strategies” for things like business and politics that can be taught
• COOPERATION
• “Cooperation is the human advantage. Anytime you can cooperate with more humans, you win.” – Naval
• The more people you can work with, the richer you will be
• Naval – “Never declare anyone your opponent – lots of times the people we think are our enemies, are not, and it’s just a one way street. Just assume you don’t have enemies.”

INTRO

Check out Naval’s latest tweet storm on how to create wealth.

• Each tweet is written, so it can stand alone – this was deliberate, it makes the entire tweet storm randomly accessible
• This Periscope will be discussing that
• “Everyone pretends like they don’t want to make money, but in reality, everyone does want to make money”
• Money buys you freedom in the material world
• It won’t make you happy, but it will solve a lot of your external problems
• There are many people who are attached to not being happy/making money, so sometimes it’s difficult to talk about these topics
• These people don’t want to feel bad about their choices, so they tend to shut down these conversations
• “Everyone in the world can be happy, and everyone in the word can be wealthy”
• It’s just a matter of education, know-how, and effort

OWNERSHIP VS. WAGE WORK

• If you’re getting paid for renting out your time, you can make good money, but you won’t make the kind of money that can really give you freedom – the passive income that can make you money while you’re on vacation
• You want to own equity – “If you don’t own equity in a business, your odds of making money are slim” – Ownership is important

PRODUCTIZE YOURSELF

• If you can only remember two words from the tweet storm – PRODUCTIZE YOURSELF
• How you package yourself in a product

“Create a product out of whatever it is that you naturally and uniquely do really well”

• If you compete at being someone else, you won’t be the best in the world at it, and in turn you won’t get rewarded properly for it

COMPOUND INTEREST

• Compound interest – keeps adding on itself, so that you end up with thousands of times your original investment
• Compound business relationships – people trust you when you have shown yourself in a visible, and accountable way, to be a high integrity person. This can apply to your reputation, as it’s compounded over time
• If you’ve worked with the same person for a long enough time, the good relationship is compounded to a place where trust tends to dominate

“In the intellectual domain, compound interest rules”

• “When you find the right thing to do, and people to work with, invest deeply into that, and stick with it for decades” – THAT’S how you make the big bucks

HOW DO YOU ESCAPE THE 9-5?

• It’s difficult
• You get suck into being busy, and the job chews into all your time – it makes it hard to work on anything else
• Find a career/job/education where you will end up in a business where the inputs and outputs are disconnected
• 2000 years ago, the inputs and outputs were connected – effort=result
• Nowadays – we have knowledge worker jobs
• A good developer can write a good piece of code that will generate millions of dollars over the next few years

“Navigate towards a career where you’re tracked on the output”

• Sales is a good example, or product building etc.
• NOT a customer service role

CAN 7 BILLION PEOPLE ALL PRODUCTIZE THEMSELVES?

• Yes
• Assume everyone had maximum education and practical knowledge
• Naval thinks if this were the case, within 5 years everyone would be independently wealthy, robots would be doing the manual work, and we’d all be doing creative work
• Wealth is not a zero sum game – it’s a positive sum game
• 7 billion people can have 7 billion products

SKIN IN THE GAME: HIDDEN ASYMMETRIES IN DAILY LIFE

• Written by Nassim Taleb. The best book Naval has read in 2018

SALES SKILLS

• Sales skills are a form of specific knowledge
• You can be trained, but there’s such a thing as a natural, and it’s easy to identify one
• How to improve? – read Influence: The Psychology of Persuasion by Robert Cialdini
• The book talks about strategies we can use to persuade people
• CLASSR
• Consistency – people want to be consistent with their past actions
• Liking – if someone likes you, they’re more likely to be persuaded by you, so be nice to people
• Authority – you’re more likely to listen to a doctor for medical advice than a non-doctor
• Scarcity – we want what’s scarce
• Social Proof – monkey see, monkey do
• Reciprocity – people always want to repay you
• “Persuasion is one of foundational skills that everyone should learn”

ADDITIONAL FOUNDATIONAL SKILLS PEOPLE SHOULD HAVE IN ADDITION TO PERSUASION

• Basic mathematics – probability and statistics are important for personal finance
• Basic accounting
• Calculus – understand rates of change, be able to measure the change in small discrete/continuous events

SPECIFIC KNOWLEDGE

• Specific Knowledge – A combination of unique traits from your DNA, combined with your unique upbringing and your response to it
• Figure out what it was you were doing as a kid, almost effortlessly, that you didn’t even really consider a skill, but people around you would notice

PROGRAMMING

• Is not a commodity skill
• In the future, computers will not write code – coding is a general AI task
• It is not likely to be automated in our lifetimes
• The top coders in the world can make billions of dollars of value, while a not so good coder can well, create no value
• The spread is so large

WHAT WOULD NAVAL MAJOR IN TODAY IF HE WERE TO GO TO COLLEGE?

• Learn things in college that you can’t learn by yourself
• Mathematics, programing, physics, medicine etc.
• If you can learn STEM disciplines on your own, you may not need to go to school
• One of the advantages of a college education is an alumni network

DESIRES

• We all have many desires in life
• When you’re desires are split up, you create anxiety, and this forces you to lose focus
• Pick the one thing you care about more than anything, and ignore everything else
  • “If you’re going to make money, it has to be your number one desire”
  • “It’s very, very hard to be successful in business while trying to live a well rounded life”

DECISION MAKING

• Naval’s 3 decision making heuristics
• When faced with a difficult choice, if you can’t decide, the answer is no
• Modern society is filled with options – “We are biologically built to not realize how many choices there are, because we evolved in tribes of ~150 people, where if you pass up one choice, the second one never comes along”
• When you choose something, you often get locked in for a long time
• Only say yes when you’re pretty certain
• If you have to create a pro/con list – the answers no
• If you have 2 choices to make, and they’re relatively equal (it’s 50/50), take the path that’s more difficult and more painful in the short term
• Short term pain, means long term gain
• Our brain tends to overvalue the choice with short term happiness, and is trying to avoid the one with short term pain
• Lean into the pain
• “Most of the gains in life come from suffering in the short term, so you can get paid in the long term”
• “Hard choices, easy life. Easy choices, hard life.”
• In times of interpersonal conflict, make the choice that will leave you more equanimous (internally calm)
• Peace of mind is a precursor to happiness
• Happiness is one of those things that can’t be chased directly – if you do chase it, you’re chasing pleasure
• Pleasure is just a high, which you eventually come crashing down from
• “If you actually want to be happy and content, that comes from peace”

BE IMPATIENT AND WILLFUL

• Naval hates wasting time – he’ll often leave a dinner/party at a moments notice if he feels it’s a waste of time
• “The moment I figure out something is a waste of my time, I leave immediately”
• After looking back now, Naval realizes most of his past business trips were a waste of time
• “Business trips are almost never worth it”
• “Value your time, it’s all you have”

FAILURE

• “If you didn’t have failure, you’d never improve”
• Failure causes us to change, and through that, we get growth
• If you always got what you wanted, you’d probably be married to your high school sweetheart and be a manager at your first job

99% OF EFFORT IS WASTED

• Most of what you’ve learned in school, doesn’t really apply to your life now – sure you learned from it, but according to goal oriented life, only about 1% of the effort you put in pays off
• In most aspects of life, try to find the thing you can go all in on with compound interest
• In dating – the minute you think the relationship won’t lead to marriage, you should probably end it
• Be more conscious of what’s a waste of your time
• “When you find that 1%, go all in, and forget about the rest”

THE LAST TWEET IN NAVAL’S TWEET STORM

• “When you’re finally wealthy, you’ll realize that it wasn’t what you were seeking in the first place. But that’s for another day”
• Making money won’t make you happy
• Making money will solve your money problems – it removes a set of things that are in the way of making you happy
• Happiness comes from peace
• To be happy – “You truly have to believe that happiness is a choice you make and a skill you can develop” – It is NOT an intrinsic quality
• You can improve your happiness baseline, just like you can improve your fitness
• “The first step to being happier, is to believe you can be happier”

“I have a principle I live by. Never go through the front door unless you’ve got a back door, and the hardest thing to get people to do is to not commit themselves to one course of action but to think about what you’re going to do next. Playing chess with my father, I give him credit for that. I learned, if you haven’t thought three moves ahead and what if he does this and what if that happens, in today’s world you can’t predict what’s going to happen. You can take chances, but you never, ever play the game without an out. Maybe that’s from being a history major, studying everybody in history who has failed to have a back door, whether it’s Hitler, Napoleon and down the list. If you take a chance, always have a back door. That’s the fun of it.”

“I make it a practice never to read what people are saying about me, because if you read what they say and care, they’ve won. It’s necessary that you insulate yourself from what others think. The greatest ideas you will ever have are the ones that other people don’t understand. And if you’re in that position, and you care too much about what they think, you will not do the right thing. And therefore, I purposefully have long ago decided that if I live by the moral code that I want to live by, then what people think of me is not so important, because I’m doing what I believe is right and I’m not trying to hurt other people. So long as my success, such as it is, does not come at the expense of other people, then I’m happy and I don’t mind if they don’t agree with me.”

“McCaw’s approach to making money is indirect. It’s how you create and build value. If you do that, there are lots of ways to make money. You’re not going to make money very long if you’re not creating value.”

what are the keys to Craig McCaw’s impressive and numerous business successes?

• He always retained business flexibility and had a “back door” which could be used if things didn’t quite go to plan. Time and again, Craig McCaw showed a rare willingness to change business plans on a dime – which is an asset in “the highly volatile and evolving world of telecommunications.

• Trust the people hired to run the business. McCaw delegated meaningful amounts of authority to them, and then get out of their way. In his later companies, Craig McCaw has almost managed to turn this skill into an art form, giving his managers objectives and then leaving them to figure out the best way to achieve that. He also fully supported any decisions they made, and insisted they go ahead and make decisions without getting his approval.

• McCaw always retained control in every business enterprise he became involved in. That allowed him to move the companies in the best direction without interference.

• Take risks, and don’t be afraid of building a company which will require significant amounts of capital to grow in the future. Time and again, Craig McCaw has taken risks analysts discouraged or others thought foolish. Yet, his vision of the future has proven to be unerringly accurate. That has delivered a significant competitive advantage to him.

• Maintain a low public profile. Craig McCaw tried to stay “under the radar screens” for as long as possible. That allowed him to develop projects more fully before subjecting them to public scrutinyy – which vastly enhanced the quality of his ideas.

• Embrace impossible ideas and take unconventional paths. Craig McCaw has been termed a visionary simply because he’s spotted business opportunities other people assumed were worth little. He achieves that by refusing to get too caught up in details, and looking at things from the customers perspective rather than the businessman’s perspective.

• Focus first and foremost on creating value for the customer – even if that requires huge expense. Craig McCaw always steadfastly refused to cut corners whenever anything involving the quality of the product delivered to customers was concerned.

• Go for huge payoffs in substantial markets. Craig McCaw has always focused on large multi-billion dollar markets.”

• “Keep it simple. Invariably, McCaw found simple solutions for complex problems while everyone else looked for complex solutions that were unworkable.

• Pursue excellence. Craig McCaw defines that as the one thing that gives real meaning to life.

“What lies ahead for Craig McCaw? Expect the unexpected. He could spend years staying on course, expanding his companies and enjoying the result. But just as his face begins to appear again on the covers of magazines that celebrate his triumphs, look for a change. He hates routine. He gets restless when a venture begins to succeed and his presence is less essential. Having built and sold two national companies, McCaw could wake up one morning and decide to sell one or all of his present companies. He could pull in new partners, raise his bets and propose something even more exciting, built around something bigger than the parts of his disparate enterprises. No one can yet say what McCaw’s final legacy will be. It could be his known companies or some embryonic venture kept off the radar. Whichever, it will bear the influence of a great and wholly American entrepreneur. Putting the stamp of his unique personality on business, keeping private his secret places, resisting the powerful pull to be conventional, playing the wizard to a dumbfounded audience – Craig McCaw’s greatest achievement may simply be staying true to himself."

Excerpt From: BusinessNews Publishing. “Summary: Money from Thin Air: Review and Analysis of Corr’s Book.”

1. Over time, I’ve changed my views on wealth. When I was in my early 20s, I wrote it off as something I would figure out later. When I started a company at 27, I figured that my stock as founder would be good enough. I was wrong in both. Here’s what I’ve learned…

2. “The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Nicholas Taleb

3. FIRE (Financial Independence, Retire Early) changed my view on money. When your net worth is 25x your annual expenses, or when your passive income to expenses ratio is 5:1, you’re considered financially independent. The Basics of FIRE.

4. Why wait for Universal Basic Income (UBI) when you can create it for yourself? What would you do with the freedom and flexibility it offered you?

5. “If you don’t find a way to make money while you sleep, you will work until you die.” — Warren Buffet.

6. You can reach FIRE by minimizing your expenses and/or maximizing your income. Do both but focus your energy on the latter. It’s better to get paid for your

7. When taking risks, limit your downside while having considerable upside. I like to go “all in” when the downside is limited/close to zero, which allows me to swing for the fences.

8. While the riskiest route, the biggest upside is by starting your own company. Most entrepreneurs have a 15-year career span before they get burned out. Take as many calculated swings as you can within that window. Opportunity cost is too high to work on things that go nowhere.

9. A less risky route is to create passive income aka the “side hustle”. @jwmares does a great job of highlighting the four different types of side businesses here: the 4 kinds of side businesses you can start

10. Take concentrated bets, instead of diversifying across hundreds. “I learned that if I could have 10 or 15 uncorrelated bets, and they’re all about the same return, that I could cut my risk by 75% or 85%" - @RayDalio

11. Buying a house is a consumption expense, not an investment. After calculating taxes, upkeep, etc, you will get similar returns by investing in the S&P 500 with 99% less work Nontraditional approach to wealth management - Fabrice Grinda

12. You don’t have to be a billionaire to take advantage of the same strategies. For example, it’s possible to pay $150 in taxes on an income of $150K: $150,000 Income, $150 Income Tax - Root of Good.

13. Success is not how much time you spend doing what you love, but how little time you spend doing what you hate.

14. The biggest regret of those on their deathbed? Courage to live a true life to yourself, not working so hard, courage to express feelings, staying in touch with friends, and letting yourself be happier. The 5 Things People Regret Most On Their Deathbed.

15. The wealthiest people in the world value experiences, relationships, happiness, freedom, flexibility, and having a sense of purpose. This is the “new wealth” that we should accumulate in our lifetime.

1. Generate an origin certificate from the crypto tab of the Cloudflare dashboard.
2. Import the certificate to AWS Certificate manager in the us-east-1 region, even if your API is located in a different region. If you are prompted for the certificate chain you can copy it from here.
3. Add your custom domain in the API Gateway console and select the certificate you just added. Check the AWS support article for more information on how to do this. It usually takes about 45 minutes for the custom domain to finish initializing. Once it’s done it will give you a new Cloudfront URL. Go ahead and make sure your API still works through this new URL.
4. Go to the Cloudflare DNS tab and setup a CNAME record pointing to Cloudfront URL you just created.
5. Switch to the crypto tab and set your SSL mode to “Full (Strict)”. If you skip this step you’ll get a redirect loop.

Quoting from the article:

…investing is not the study of finance. It’s the study of how people behave with money. And behavior is hard to teach, even to really smart people. You can’t sum up behavior with formulas to memorize or spreadsheet models to follow. Behavior is inborn, varies by person, is hard to measure, changes over time, and people are prone to deny its existence, especially when describing themselves.

…The finance industry talks too much about what to do, and not enough about what happens in your head when you try to do it.

…This report describes 20 flaws, biases, and causes of bad behavior I’ve seen pop up often when people deal with money

Biases:

• Earned success and deserved failure fallacy: A tendency to underestimate the role of luck and risk, and a failure to recognize that luck and risk are different sides of the same coin.

I like to ask people, “What do you want to know about investing that we can’t know?” Years ago I asked economist Robert Shiller the question. He answered, “The exact role of luck in successful outcomes.” If I say, “There are a billion investors in the world. By sheer chance, would you expect 100 of them to become billionaires predominately off luck?” You would reply, “Of course.” But then if I ask you to name those investors – to their face – you will back down. That’s the problem.

The same goes for failure. Did failed businesses not try hard enough? Were bad investments not thought through well enough? Are wayward careers the product of laziness?

Some people are born into families that encourage education; others are against it. Some are born into flourishing economies encouraging of entrepreneurship; others are born into war and destitution. I want you to be successful, and I want you to earn it. But realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.

• Cost avoidance syndrome: A failure to identify the true costs of a situation, with too much emphasis on financial costs while ignoring the emotional price that must be paid to win a reward.

Every money reward has a price beyond the financial fee you can see and count. Accepting that is critical. Scott Adams once wrote: “One of the best pieces of advice I’ve ever heard goes something like this: If you want success, figure out the price, then pay it. It sounds trivial and obvious, but if you unpack the idea it has extraordinary power.” Wonderful money advice.

• Rich man in the car paradox.

The paradox of wealth is that people tend to want it to signal to others that they should be liked and admired. But in reality those other people bypass admiring you, not because they don’t think wealth is admirable, but because they use your wealth solely as a benchmark for their own desire to be liked and admired.

• A tendency to adjust to current circumstances in a way that makes forecasting your future desires and actions difficult, resulting in the inability to capture long-term compounding rewards that come from current decisions.

Things change. And it’s hard to make long-term decisions when your view of what you’ll want in the future is so liable to shift.

This gets back to the first rule of compounding: Never interrupt it unnecessarily. But how do you not interrupt a money plan – careers, investments, spending, budgeting, whatever – when your life plans change? It’s hard.

There is no solution to this. But one thing I’ve learned that may help is coming back to balance and room for error. Too much devotion to one goal, one path, one outcome, is asking for regret when you’re so susceptible to change.

• Anchored-to-your-own-history bias: Your personal experiences make up maybe 0.00000001% of what’s happened in the world but maybe 80% of how you think the world works.

And that’s a problem. When everyone has experienced a fraction of what’s out there but uses those experiences to explain everything they expect to happen, a lot of people eventually become disappointed, confused, or dumbfounded at others’ decisions.

A team of economists once crunched the data on a century’s worth of people’s investing habits and concluded: “Current [investment] beliefs depend on the realizations experienced in the past.”

Keep that quote in mind when debating people’s investing views. Or when you’re confused about their desire to hoard or blow money, their fear or greed in certain situations, or whenever else you can’t understand why people do what they do with money. Things will make more sense.

• Historians are Prophets fallacy: Not seeing the irony that history is the study of surprises and changes while using it as a guide to the future. An overreliance on past data as a signal to future conditions in a field where innovation and change is the lifeblood of progress.

The cornerstone of economics is that things change over time, because the invisible hand hates anything staying too good or too bad indefinitely. Bill Bonner once described how Mr. Market works: “He’s got a ‘Capitalism at Work’ T-shirt on and a sledgehammer in his hand.” Few things stay the same for very long, which makes historians something far less useful than prophets.

The most important driver of anything tied to money is the stories people tell themselves and the preferences they have for goods and services. Those things don’t tend to sit still. They change with culture and generation. And they’ll keep changing.

The further back in history you look, the more general your takeaways should be. General things like people’s relationship to greed and fear, how they behave under stress, and how they respond to incentives tends to be stable in time. The history of money is useful for that kind of stuff. But specific trends, specific trades, specific sectors, and specific causal relationships are always a showcase of evolution in progress.

• The seduction of pessimism in a world where optimism is the most reasonable stance.

Most promotions of optimism, by the way, are rational. Not all, of course. But we need to understand what optimism is. Real optimists don’t believe that everything will be great. That’s complacency. Optimism is a belief that the odds of a good outcome are in your favor over time, even when there will be setbacks along the way. The simple idea that most people wake up in the morning trying to make things a little better and more productive than wake up looking to cause trouble is the foundation of optimism. It’s not complicated. It’s not guaranteed, either. It’s just the most reasonable bet for most people. The late statistician Hans Rosling put it differently: “I am not an optimist. I am a very serious possibilist.”

• Underappreciating the power of compounding, driven by the tendency to intuitively think about exponential growth in linear terms.

The danger here is that when compounding isn’t intuitive, we often ignore its potential and focus on solving problems through other means. Not because we’re overthinking, but because we rarely stop to consider compounding potential.

Physicist Albert Bartlett put it: “The greatest shortcoming of the human race is our inability to understand the exponential function.”

The counterintuitiveness of compounding is responsible for the majority of disappointing trades, bad strategies, and successful investing attempts. Good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that kill your confidence when they end. It’s about earning pretty good returns that you can stick with for a long period of time. That’s when compounding runs wild.

• Attachment to social proof in a field that demands contrarian thinking to achieve above-average results.

Here’s the thing: Most attempts at contrarianism is just irrational cynicism in disguise – and cynicism can be popular and draw crowds. Real contrarianism is when your views are so uncomfortable and belittled that they cause you to second guess whether they’re right. Very few people can do that. But of course that’s the case. Most people can’t be contrarian, by definition. Embrace with both hands that, statistically, you are one of those people.

• An appeal to academia in a field that is governed not by clean rules but loose and unpredictable trends.

A hard reality is that what often matters most in finance will never win a Nobel Prize: Humility and room for error.

• The social utility of money coming at the direct expense of growing money; wealth is what you don’t see.

Wealth, in fact, is what you don’t see. It’s the cars not purchased. The diamonds not bought. The renovations postponed, the clothes forgone and the first-class upgrade declined. It’s assets in the bank that haven’t yet been converted into the stuff you see.

But that’s not how we think about wealth, because you can’t contextualize what you can’t see.

You can laugh. But the truth is, yes, people need to be told that. When most people say they want to be a millionaire, what they really mean is “I want to spend a million dollars,” which is literally the opposite of being a millionaire. This is especially true for young people.

A key use of wealth is using it to control your time and providing you with options. Financial assets on a balance sheet offer that. But they come at the direct expense of showing people how much wealth you have with material stuff.

• A tendency toward action in a field where the first rule of compounding is to never interrupt it unnecessarily.

When volatility is guaranteed and normal, but is often treated as something that needs to be fixed, people take actions that ultimately just interrupts the execution of a good plan. “Don’t do anything,” are the most powerful words in finance. But they are both hard for individuals to accept and hard for professionals to charge a fee for. So, we fiddle. Far too much.

• Underestimating the need for room for error, not just financially but mentally and physically.

Ben Graham once said, “The purpose of the margin of safety is to render the forecast unnecessary.”

People underestimate the need for room for error in almost everything they do that involves money. Two things cause this: One is the idea that your view of the future is right, driven by the uncomfortable feeling that comes from admitting the opposite. The second is that you’re therefore doing yourself economic harm by not taking actions that exploit your view of the future coming true.

But room for error is underappreciated and misunderstood. It’s often viewed as a conservative hedge, used by those who don’t want to take much risk or aren’t confident in their views. But when used appropriately it’s the opposite. Room for error lets you endure, and endurance lets you stick around long enough to let the odds of benefiting from a low-probability outcome fall in your favor. The biggest gains occur infrequently, either because they don’t happen often or because they take time to compound. So the person with enough room for error in part of their strategy to let them endure hardship in the other part of their strategy has an edge over the person who gets wiped out, game over, insert more tokens, when they’re wrong.

• A tendency to be influenced by the actions of other people who are playing a different financial game than you are.

Few things matter more with money than understanding your own time horizon and not being persuaded by the actions and behaviors of people playing different games.

This goes beyond investing. How you save, how you spend, what your business strategy is, how you think about money, when you retire, and how you think about risk may all be influenced by the actions and behaviors of people who are playing different games than you are.

Personal finance is deeply personal, and one of the hardest parts is learning from others while realizing that their goals and actions might be miles removed from what’s relevant to your own life.

• An attachment to financial entertainment due to the fact that money is emotional, and emotions are revved up by argument, extreme views, flashing lights, and threats to your wellbeing.

It helps, I’ve found, when making money decisions to constantly remind yourself that the purpose of investing is to maximize returns, not minimize boredom. Boring is perfectly fine. Boring is good. If you want to frame this as a strategy, remind yourself: opportunity lives where others aren’t, and others tend to stay away from what’s boring.

• Optimism bias in risk-taking, or “Russian Roulette should statistically work” syndrome: An over attachment to favorable odds when the downside is unacceptable in any circumstance.

Nassim Taleb says, “You can be risk loving and yet completely averse to ruin.”

The idea is that you have to take risk to get ahead, but no risk that could wipe you out is ever worth taking. The odds are in your favor when playing Russian Roulette. But the downside is never worth the potential upside.

A key point here is that few things in money are as valuable as options. The ability to do what you want, when you want, with who you want, and why you want, has infinite ROI.

• A preference for skills in a field where skills don’t matter if they aren’t matched with the right behavior.

• Denial of inconsistencies between how you think the world should work and how the world actually works, driven by a desire to form a clean narrative of cause and effect despite the inherent complexities of everything involving money.

Accepting that everything involving money is driven by illogical emotions and has more moving parts than anyone can grasp is a good start to remembering that history is the study of things happening that people didn’t think would or could happen. This is especially true with money.

• Political beliefs driving financial decisions, influenced by economics being a misbehaved cousin of politics.

The point is not that politics don’t influence the economy. But the reason this is such a sensitive topic is because the data often surprises the heck out of people, which itself is a reason to realize that the correlation between politics and economics isn’t as clear as you’d like to think it is.

• The three-month bubble: Extrapolating the recent past into the near future, and then overestimating the extent to which whatever you anticipate will happen in the near future will impact your future.

Most of the time, something big happening doesn’t increase the odds of it happening again. It’s the opposite, as mean reversion is a merciless law of finance. But even when something does happen again, most of the time it doesn’t – or shouldn’t – impact your actions in the way you’re tempted to think, because most extrapolations are short term while most goals are long term. A stable strategy designed to endure change is almost always superior to one that attempts to guard against whatever just happened happening again.

If there’s a common denominator in these, it’s a preference for humility, adaptability, long time horizons, and skepticism of popularity around anything involving money. Which can be summed up as: Be prepared to roll with the punches.

Jiddu Krishnamurti spent years giving spiritual talks. He became more candid as he got older. In one famous talk, he asked the audience if they’d like to know his secret.

He whispered, “You see, I don’t mind what happens.”

That might be the best trick when dealing with the psychology of money.

The key thing in economics, whenever someone makes an assertion to you, is to always ask, “And then what?” Actually, it’s not such a bad idea to ask it about everything. But you should always ask, “And then what?” ~ Warren Buffett

Two things. First, in 1703 the mathematician Gottfried von Leibniz told the scientist Jacob Bernoulli that nature does work in patterns, but “only for the most part.” The other part—the unpredictable part—tends to be where things matter the most. That’s where the action often is.

Second, Pascal’s Wager. In making decisions under conditions of uncertainty, the consequences of being wrong must carry more weight than the probabilities of being right. You begin with something that’s obvious. But because it’s hard to accept, you have to keep reminding yourself: We don’t know what’s going to happen with anything, ever. And so it’s inevitable that a certain percentage of our decisions will be wrong. There’s just no way we can always make the right decision.

That doesn’t mean you’re an idiot. But it does mean you must focus on how serious the consequences could be if you turn out to be wrong: Suppose this doesn’t do what I expect it to do. What’s going to be the impact on me? If it goes wrong, how wrong could it go and how much will it matter?

Pascal’s Wager doesn’t mean that you have to be convinced beyond doubt that you are right. But you have to think about the consequences of what you’re doing and establish that you can survive them if you’re wrong. Consequences are more important than probabilities.

…Risk-taking is an inevitable ingredient in investing, and in life, but never take a risk you do not have to take.

-Peter Bernstein

Today’s post is an unrolling of his latest tweet thread on How to Get Rich (without getting lucky):

• Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

• Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.

• Ignore people playing status games. They gain status by attacking people playing wealth creation games.

• You’re not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom.

• You will get rich by giving society what it wants but does not yet know how to get. At scale.

• Pick an industry where you can play long term games with long term people.

• The Internet has massively broadened the possible space of careers. Most people haven’t figured this out yet.

• Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.

• Pick business partners with high intelligence, energy, and, above all, integrity.

• Don’t partner with cynics and pessimists. Their beliefs are self-fulfilling.

• Learn to sell. Learn to build. If you can do both, you will be unstoppable.

• Arm yourself with specific knowledge, accountability, and leverage.

• Specific knowledge is knowledge that you cannot be trained for. If society can train you, it can train someone else, and replace you.

• Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now.

• Building specific knowledge will feel like play to you but will look like work to others.

• When specific knowledge is taught, it’s through apprenticeships, not schools.

• Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.

• Embrace accountability, and take business risks under your own name. Society will reward you with responsibility, equity, and leverage.

• The most accountable people have singular, public, and risky brands: Oprah, Trump, Kanye, Elon.

LEVERAGE

• “Give me a lever long enough, and a place to stand, and I will move the earth.” - Archimedes
• Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).
• Capital means money. To raise money, apply your specific knowledge, with accountability, and show resulting good judgment.
• Labor means people working for you. It’s the oldest and most fought-over form of leverage. Labor leverage will impress your parents, but don’t waste your life chasing it.
• Capital and labor are permissioned leverage. Everyone is chasing capital, but someone has to give it to you. Everyone is trying to lead, but someone has to follow you.
• Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep.
• An army of robots is freely available - it’s just packed in data centers for heat and space efficiency. Use it.
• If you can’t code, write books and blogs, record videos and podcasts.
• Leverage is a force multiplier for your judgement.

SKILLS

• Judgement requires experience, but can be built faster by learning foundational skills.
• There is no skill called “business.” Avoid business magazines and business classes.
• Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers.
• Reading is faster than listening. Doing is faster than watching.
• You should be too busy to “do coffee," while still keeping an uncluttered calendar.
• Set and enforce an aspirational personal hourly rate. If fixing a problem will save less than your hourly rate, ignore it. If outsourcing a task will cost less than your hourly rate, outsource it.
• Work as hard as you can. Even though who you work with and what you work on are more important than how hard you work.
• Become the best in the world at what you do. Keep redefining what you do until this is true.
• There are no get rich quick schemes. That’s just someone else getting rich off you.
• Apply specific knowledge, with leverage, and eventually you will get what you deserve.
• When you’re finally wealthy, you’ll realize that it wasn’t what you were seeking in the first place. But that’s for another day.

In my new career teaching investing and investment fund entrepreneurship at Kase Learning, one of the most important things I teach is my story and the many, many lessons that can be learned from it.

I launched a tiny hedge fund with only $1 million under management in January 1999, running the entire business myself from my laptop on a rickety Ikea desk in a corner of my bedroom for the first five years. But I learned fast, worked around the clock, made some good decisions and, frankly, got lucky over the first dozen years, during which I nearly tripled my investors’ money in a flat market and grew to three hedge funds and two mutual funds with $200 million under management.

And then I screwed it up over the next seven years, seizing defeat from the jaws of victory. My funds chronically underperformed, which led to assets shrinking to $50 million and, eventually, the decision to close my funds last September.

You might think the single more important and valuable thing I teach during my Lessons from the Trenches investing bootcamp is how I achieved such success in my first dozen years.

But you’d be wrong. While there are of course many important lessons I teach about this early period in my investing career that will benefit those who seek to achieve similar success, I believe the most valuable thing I teach is what happened afterward.

Studying mistakes and failures

“Huh?” you might ask. “Why should I study mistakes and failures?”

Here’s why: If you want to learn anything difficult (investing, surgery, flying a plane, etc.), don’t just study success: Spend an equal amount of time studying mistakes and failures. As Charlie Munger says, “Invert, always invert” and “All I want to know is where I’m going to die so I never go there.” (I discussed this way of thinking in my commencement address two years ago at my alma mater, Eaglebrook; video here, text with appendiceshere.)

During my two years at Harvard Business School, I read ~300 case studies and pretty much every one featured a heroic protagonist, facing a difficult issue, but almost every time reaching the right decision and achieving great success. I can’t recall a single one in which the protagonist made wrong decisions and screwed it all up. It’s absolute negligence on the part of HBS (and, to be fair, pretty much every other business school I suspect) to teach success 99% of the time. That’s not how the world works — everyone makes mistakes and suffers setbacks. In addition, if you want to make good decisions, it’s critical to be able to rule out bad ones, which means you need to study them!

How to avoid a similar fate

After I finished teaching my personal tale of woe during the recent bootcamp, one of my students asked a wonderful, simple question: “What steps can I take to prevent this from happening to me?”

My quick answer was: “Don’t become successful.”

After the laughter subsided, I added: “And don’t go to Harvard … and graduate with high honors …twice!” (More laughter.)

But I was actually serious, as I explained:

I think being super successful educationally, and then being super successful in the first part of my investing career led to my downfall in many ways. Here are two:

First, an overabundance of hubris (going to Harvard tends to instill that) led me to launch my fund in January 1999 with almost no relevant experience — I had a good general business and entrepreneurial background, but hadn’t worked a day in the finance or investment industries.

I fancied myself a true value investor, following the principles of Warren Buffett and Munger, but I now see that I was little more than a late-’90s bull market genius. For example, I made six times my money in AOL stock in 1998, which led me to believe that I was God’s gift to investing. (I can’t tell you how many young investors today remind me exactly of myself back then!)

I shouldn’t have been managing my own money, much less anyone else’s, much less launching a hedge fund until I’d gotten some real experience in this apprenticeship-based business. But instead I took a shortcut.

While I was able to overcome my lack of experience for a number of years, I made some big mistakes, both as an investor and entrepreneur, which eventually caught up with me.

Second, nailing the internet bubble and then the housing bubble (which culminated in being featured in a “60 Minutes” segment in December 2008 that won an Emmy and CNBC calling me “The Prophet” filled me with hubris (which had become even worse after more than a decade of great success), which blinded me to risks and led to many bad decisions.

Perhaps the worst is that I thought I was a good macro prognosticator and market timer. Thus, instead of just focusing on finding a dozen or so cheap stocks, which is all I did in my early days, I instead formed the opinion that the market was ahead of itself and might plunge at any moment, as it had in 2008-09. Worse yet, I acted on this view, positioning my portfolio defensively, with lots of cash and a big short book, waiting for the market meltdown that never came. Needless to say, this was exactly the wrong positioning during this long, complacent bull market.

To succeed, you have to be better than ever before

The reason I call Kase Learning’s core program Lessons from the Trenches is that it’s a battle. This long bull market combined with the rise of indexing and the increasing sophistication of supercomputers has made the job of investors and fund managers much harder. So, to succeed, you have to be better than ever before: do even more in-depth research, do better analysis, be more patient and disciplined, etc.

Most importantly, you have to constantly be moving rapidly up the experience curve, studying both successes and failures. There are only two ways to get experience: learning from veterans (like me) or stumbling around on your own, making mistakes and getting scars on your back. Which do you prefer?

Original Published at Yahoo Finance

“Julian Roberts had said it best, ‘What is your edge?’ When having a bear and a bull discuss a stock at his shop he would constantly say,

‘What do you know that the market doesn’t?’

‘What is in your process that gives you an edge, trading-wise or research-wise?’

‘What makes you see things differently?’

‘Where you see the reality rather than the perception of reality?r’

And if you are just starting out or you are still in this phase, you gotta know its normal and the most important thing you can do is do a lot of work. Put yourself on a deadline so that every week you will finish one story. It is only by going through a volume of work that you will close that gap, and your work will be as good as your ambitions.”

― Ira Glass

Your problem with Vim is that you don’t grok vi.

You mention cutting with yy and complain that you almost never want to cut whole lines. In fact programmers, editing source code, very often want to work on whole lines, ranges of lines and blocks of code. However, yy is only one of many way to yank text into the anonymous copy buffer (or “register” as it’s called in vi).

The “Zen” of vi is that you’re speaking a language. The initial y is a verb. The statement yy is a simple statement which is, essentially, an abbreviation for 0 y$:

0 go to the beginning of this line. y yank from here (up to where?) $ up to the end of this line. This can also be expressed as dd P (delete the current line and paste a copy back into place; leaving a copy in the anonymous register as a side effect). The y and d “verbs” take any movement as their “subject.” Thus yW is “yank from here (the cursor) to the end of the current/next (big) word” and y’a is “yank from here to the line containing the mark named ‘a’.”

If you only understand basic up, down, left, and right cursor movements then vi will be no more productive than a copy of “notepad” for you. (Okay, you’ll still have syntax highlighting and the ability to handle files larger than a piddling ~45KB or so; but work with me here).

vi has 26 “marks” and 26 “registers.” A mark is set to any cursor location using the m command. Each mark is designated by a single lower case letter. Thus ma sets the ‘a’ mark to the current location, and mz sets the ‘z’ mark. You can move to the line containing a mark using the ’ (single quote) command. Thus ‘a moves to the beginning of the line containing the ‘a’ mark. You can move to the precise location of any mark using the (backquote) command. Thusz will move directly to the exact location of the ‘z’ mark.

Because these are “movements” they can also be used as subjects for other “statements.”

So, one way to cut an arbitrary selection of text would be to drop a mark (I usually use ‘a’ as my “first” mark, ‘z’ as my next mark, ‘b’ as another, and ’e’ as yet another (I don’t recall ever having interactively used more than four marks in 15 years of using vi; one creates one’s own conventions regarding how marks and registers are used by macros that don’t disturb one’s interactive context). Then we go to the other end of our desired text; we can start at either end, it doesn’t matter. Then we can simply use da to cut or ya to copy. Thus the whole process has a 5 keystrokes overhead (six if we started in “insert” mode and needed to Esc out command mode). Once we’ve cut or copied then pasting in a copy is a single keystroke: p.

I say that this is one way to cut or copy text. However, it is only one of many. Frequently we can more succinctly describe the range of text without moving our cursor around and dropping a mark. For example if I’m in a paragraph of text I can use { and } movements to the beginning or end of the paragraph respectively. So, to move a paragraph of text I cut it using { d} (3 keystrokes). (If I happen to already be on the first or last line of the paragraph I can then simply use d} or d{ respectively.

The notion of “paragraph” defaults to something which is usually intuitively reasonable. Thus it often works for code as well as prose.

Frequently we know some pattern (regular expression) that marks one end or the other of the text in which we’re interested. Searching forwards or backwards are movements in vi. Thus they can also be used as “subjects” in our “statements.” So I can use d/foo to cut from the current line to the next line containing the string “foo” and y?bar to copy from the current line to the most recent (previous) line containing “bar.” If I don’t want whole lines I can still use the search movements (as statements of their own), drop my mark(s) and use the x commands as described previously.

In addition to “verbs” and “subjects” vi also has “objects” (in the grammatical sense of the term). So far I’ve only described the use of the anonymous register. However, I can use any of the 26 “named” registers by prefixing the “object” reference with " (the double quote modifier). Thus if I use “add I’m cutting the current line into the ‘a’ register and if I use “by/foo then I’m yanking a copy of the text from here to the next line containing “foo” into the ‘b’ register. To paste from a register I simply prefix the paste with the same modifier sequence: “ap pastes a copy of the ‘a’ register’s contents into the text after the cursor and “bP pastes a copy from ‘b’ to before the current line.

This notion of “prefixes” also adds the analogs of grammatical “adjectives” and “adverbs’ to our text manipulation “language.” Most commands (verbs) and movement (verbs or objects, depending on context) can also take numeric prefixes. Thus 3J means “join the next three lines” and d5} means “delete from the current line through the end of the fifth paragraph down from here.”

This is all intermediate level vi. None of it is Vim specific and there are far more advanced tricks in vi if you’re ready to learn them. If you were to master just these intermediate concepts then you’d probably find that you rarely need to write any macros because the text manipulation language is sufficiently concise and expressive to do most things easily enough using the editor’s “native” language.

A sampling of more advanced tricks:

There are a number of : commands, most notably the :% s/foo/bar/g global substitution technique. (That’s not advanced but other : commands can be). The whole : set of commands was historically inherited by vi’s previous incarnations as the ed (line editor) and later the ex (extended line editor) utilities. In fact vi is so named because it’s the visual interface to ex.

commands normally operate over lines of text. ed and ex were written in an era when terminal screens were uncommon and many terminals were “teletype” (TTY) devices. So it was common to work from printed copies of the text, using commands through an extremely terse interface (common connection speeds were 110 baud, or, roughly, 11 characters per second – which is slower than a fast typist; lags were common on multi-user interactive sessions; additionally there was often some motivation to conserve paper).

So the syntax of most : commands includes an address or range of addresses (line number) followed by a command. Naturally one could use literal line numbers: :127,215 s/foo/bar to change the first occurrence of “foo” into “bar” on each line between 127 and 215. One could also use some abbreviations such as . or $ for current and last lines respectively. One could also use relative prefixes + and - to refer to offsets after or before the curent line, respectively. Thus: :.,$j meaning “from the current line to the last line, join them all into one line”. :% is synonymous with :1,$ (all the lines).

The :… g and :… v commands bear some explanation as they are incredibly powerful. :… g is a prefix for “globally” applying a subsequent command to all lines which match a pattern (regular expression) while :… v applies such a command to all lines which do NOT match the given pattern (“v” from “conVerse”). As with other ex commands these can be prefixed by addressing/range references. Thus :.,+21g/foo/d means “delete any lines containing the string “foo” from the current one through the next 21 lines” while :.,$v/bar/d means “from here to the end of the file, delete any lines which DON’T contain the string “bar.”

It’s interesting that the common Unix command grep was actually inspired by this ex command (and is named after the way in which it was documented). The ex command :g/re/p (grep) was the way they documented how to “globally” “print” lines containing a “regular expression” (re). When ed and ex were used, the :p command was one of the first that anyone learned and often the first one used when editing any file. It was how you printed the current contents (usually just one page full at a time using :.,+25p or some such).

Note that :% g/…/d or (its reVerse/conVerse counterpart: :% v/…/d are the most common usage patterns. However there are couple of other ex commands which are worth remembering:

We can use m to move lines around, and j to join lines. For example if you have a list and you want to separate all the stuff matching (or conversely NOT matching some pattern) without deleting them, then you can use something like: :% g/foo/m$ … and all the “foo” lines will have been moved to the end of the file. (Note the other tip about using the end of your file as a scratch space). This will have preserved the relative order of all the “foo” lines while having extracted them from the rest of the list. (This would be equivalent to doing something like: 1G!GGmap!Ggrep foo1G:1,‘a g/foo’/d (copy the file to it’s own tail, filter the tail through group, and delete all the stuff from the head).

To join lines usually I can find a pattern for all the lines which need to be joined to their predecessor (all the lines which start with “^ " rather than “^ * " in some bullet list, for example). For that case I’d use: :% g/^ /-1j (for every matching line, go up one line and join them). (BTW: for bullet lists trying to search for the bullet lines and join to the next doesn’t work for a couple reasons … it can join one bullet line to another, and it won’t join any bullet line to all of its continuations; it’ll only work pairwise on the matches).

Almost needless to mention you can use our old friend s (substitute) with the g and v (global/converse-global) commands. Usually you don’t need to do so. However, consider some case where you want to perform a substitution only on lines matching some other pattern. Often you can use a complicated pattern with captures and use back references to preserve the portions of the lines that you DON’T want to change. However, it will often be easier to separate the match from the substitution: :% g/foo/s/bar/zzz/g – for every line containing “foo” substitute all “bar” with “zzz.” (Something like :% s/(.foo.)bar(.*)/\1zzz\2/g would only work for the cases those instances of “bar” which were PRECEDED by “foo” on the same line; it’s ungainly enough already, and would have to be mangled further to catch all the cases where “bar” preceded “foo”)

The point is that there are more than just p, s, and d lines in the ex command set.

The : addresses can also refer to marks. Thus you can use: :‘a,‘bg/foo/j to join any line containing the string foo to its subsequent line, if it lies between the lines between the ‘a’ and ‘b’ marks. (Yes, all of the preceding ex command examples can be limited to subsets of the file’s lines by prefixing with these sorts of addressing expressions).

That’s pretty obscure (I’ve only used something like that a few times in the last 15 years). However, I’ll freely admit that I’ve often done things iteratively and interactively that could probably have been done more efficiently if I’d taken the time to think out the correct incantation.

Another very useful vi or ex command is :r to read in the contents of another file. Thus: :r foo inserts the contents of the file named “foo” at the current line.

More powerful is the :r! command. This reads the results of a command. It’s the same as suspending the vi session, running a command, redirecting its output to a temporary file, resuming your vi session, and reading in the contents from the temp. file.

Even more powerful are the ! (bang) and :… ! (ex bang) commands. These also execute external commands and read the results into the current text. However, they also filter selections of our text through the command! This we can sort all the lines in our file using 1G!Gsort (G is the vi “goto” command; it defaults to going to the last line of the file, but can be prefixed by a line number, such as 1, the first line). This is equivalent to the ex variant :1,$!sort. Writers often use ! with the Unix fmt or fold utilities for reformating or “word wrapping” selections of text. A very common macro is {!}fmt (reformat the current paragraph). Programmers sometimes use it to run their code, or just portions of it, through indent or other code reformatting tools.

Using the :r! and ! commands means that any external utility or filter can be treated as an extension of our editor. I have occasionally used these with scripts that pulled data from a database, or with wget or lynx commands that pulled data off a website, or ssh commands that pulled data from remote systems.

Another useful ex command is :so (short for :source). This reads the contents of a file as a series of commands. When you start vi it normally, implicitly, performs a :source on ~/.exinitrc file (and Vim usually does this on ~/.vimrc, naturally enough). The use of this is that you can change your editor profile on the fly by simply sourcing in a new set of macros, abbreviations, and editor settings. If you’re sneaky you can even use this as a trick for storing sequences of ex editing commands to apply to files on demand.

For example I have a seven line file (36 characters) which runs a file through wc, and inserts a C-style comment at the top of the file containing that word count data. I can apply that “macro” to a file by using a command like: vim +‘so mymacro.ex’ ./mytarget

(The + command line option to vi and Vim is normally used to start the editing session at a given line number. However it’s a little known fact that one can follow the + by any valid ex command/expression, such as a “source” command as I’ve done here; for a simple example I have scripts which invoke: vi +’/foo/d|wq!’ ~/.ssh/known_hosts to remove an entry from my SSH known hosts file non-interactively while I’m re-imaging a set of servers).

Usually it’s far easier to write such “macros” using Perl, AWK, sed (which is, in fact, like grep a utility inspired by the ed command).

The @ command is probably the most obscure vi command. In occasionally teaching advanced systems administration courses for close to a decade I’ve met very few people who’ve ever used it. @ executes the contents of a register as if it were a vi or ex command. Example: I often use: :r!locate … to find some file on my system and read its name into my document. From there I delete any extraneous hits, leaving only the full path to the file I’m interested in. Rather than laboriously Tab-ing through each component of the path (or worse, if I happen to be stuck on a machine without Tab completion support in its copy of vi) I just use:

0i:r (to turn the current line into a valid :r command), “cdd (to delete the line into the “c” register) and @c execute that command. That’s only 10 keystrokes (and the expression “cdd @c is effectively a finger macro for me, so I can type it almost as quickly as any common six letter word).

A sobering thought

I’ve only scratched to surface of vi’s power and none of what I’ve described here is even part of the “improvements” for which vim is named! All of what I’ve described here should work on any old copy of vi from 20 or 30 years ago.

There are people who have used considerably more of vi’s power than I ever will.

Website: https://www.bvp.com/portfolio/anti-portfolio

Highlights:

1. Love what you do or stop doing it. The price of hating your life is too high.

“I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.” — Steve Jobs, Stanford, 2005

“I stopped pretending to myself that I was anything other than what I was, and began to direct all my energy into finishing the only work that mattered to me. Had I really succeeded at anything else, I might never have found the determination to succeed in the one arena I believed I truly belonged.” — J. K. Rowling: Harvard University, 2008

“I implore you to not fear what you are drawn to, for rejecting that is to stymie the very patterns that make you, well, you. Imagine the torture of putting yourself through that. No matter how much money you make, you will not be happy spending your time imagining the path you wished you’d chosen.” — Max Londberg: University of Oregon, 2013

2. Success and failure. Decide for yourself what these ideas mean to you.

“If everybody followed their first dreams in life, the world would be ruled by cowboys and princesses.” — Stephen Colbert: Northwestern University, 2011

“David Letterman wanted to be Johnny Carson, and was not, and as a result, my generation of comedians wanted to be David Letterman. And none of us are. My peers and I have all missed that mark in a thousand different ways. But the point is this: It is our failure to become our perceived ideal that ultimately defines us and makes us unique. It’s not easy, but if you accept your misfortune and handle it right, your perceived failure can become a catalyst for profound reinvention.” — Conan O’Brien: Dartmouth College, 2011

“If you don’t fail, you’re not even trying. My wife told me this great expression, ‘To get something you never had, you have to do something you never did.” — Denzel Washington: University of Pennsylvania, 2011

3. Open Up. Explore. Question habits. Listen up. Change.

“Because as my grandmother used to tell me, every time a fool speaks, they are just advertising their own ignorance. Let them talk. If you don’t, you just make them a victim, and then they can avoid accountability.” — President Barack Obama: Howard University, 2016

“As you start your journey, the first thing you should do is throw away that store-bought map and begin to draw your own.” — Michael Dell: University of Texas at Austin, 2003

4. Explore. The good stuff is worth looking for

“One of the greatest gifts you can give yourself, right here, right now, in this single, solitary, monumental moment in your life, is to decide, without apology, to commit to the journey, and not to the outcome.” — Joyce DiDonato: Juilliard School, 2014

“Just because something doesn’t confirm your existing beliefs does not mean it’s a hoax. The smartest and most successful people I know are the people who are constantly evolving, always learning. And some of them, believe it or not, are smart enough to occasionally change their minds.” — Stephanie Ruhle: Lehigh University, 2017

“If you love only yourself, you will serve only yourself. And you will have only yourself. So no more winning. Instead, try to love others and serve others, and hopefully find those who love and serve you in return.” — Stephen Colbert: Northwestern University, 2011

“So how do you know what is the right path to choose to get the result that you desire? And the honest answer is this: You won’t.” — Jon Stewart: College of William and Mary 2004

5. Forget about it. Sometimes a short memory is your very best friend.

“Fall forward. Reggie Jackson struck out 2,600 times in his career, the most in the history of baseball. But you don’t hear about the strikeouts. People remember the home runs. Fall forward. Thomas Edison conducted 1,000 failed experiments. Did you know that? I didn’t know that because the 1,001st was the light bulb. Fall forward. Every failed experiment is one step closer to success.” — Denzel Washington: University of Pennsylvania, 2011

“I wish someone had said to me that it’s normal to feel lost for a little while.” — Ira Glass: Goucher College, 2012

“Rehearsal’s over. You’re going out there now, you’re going to do this thing. How you live matters. You’re going to fall down, but the world doesn’t care how many times you fall down, as long as it’s one fewer than the number of times you get back up.” — Aaron Sorkin: Syracuse University 2012

Polonius Advice

Give thy thoughts no tongue,
Nor any unproportioned thought his act.
Be thou familiar but by no means vulgar.
Those friends thou hast, and their adoption tried,
Grapple them unto thy soul with hoops of steel,
But do not dull thy palm with entertainment
Of each new-hatch’d, unfledged comrade.
Beware of entrance to a quarrel, but being in,
Bear ’t that th’ opposèd may beware of thee.
Give every man thy ear but few thy voice.
Take each man’s censure but reserve thy judgment.
Costly thy habit as thy purse can buy,
But not expressed in fancy—rich, not gaudy,

…Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.

— William Shakespeare: Hamlet (Act I, Scene iii)

A professional investor for over three decades, he recently shared his wisdom on Twitter over a thread of 26 tweets. In this dispassionate and non-judgmental delivery, he imparts some amazing insights and wisdom for investors. They have all been reproduced below.

I don’t know how the market will perform this year. Or the next year. I don’t know if stocks will be higher or lower in 5 years. Indeed, even though the probabilities favour a positive outcome, I don’t know if stocks will be higher in 10 years.

On the other hand…

I DO know that, according to Forbes, “since 1945…there have been 77 market drops between 5% and 10%, and 27 corrections between 10% and 20%”. I know that market corrections are a feature, not a bug, required to get good long-term performance. I know that during these corrections, there will be a host of “experts” on business television, blogs, magazines, podcasts and radio warning investors that THIS is the big one. That stocks are heading dramatically lower, and that they should get out now, while they still can. I know that given the way we are constructed, many investors will react emotionally and heed these warnings and sell their holdings, saying they will “wait until the smoke clears” before they return to the market. I know that over time, most of these investors will not return to the market until well after the bottom, usually when stocks have already dramatically increased in value. I think I know that, at least for U.S. investors, no matter how much stocks drop by, they will always come back and make new highs. That’s been the story in America since the late 1700s. I think I know that this cycle will repeat itself, with variations, for the rest of my life, and probably for my children’s and grandchildren’s lives as well. Massive amounts of data have documented that while the world is very chaotic, the way humans respond to things is fairly predictable. I don’t know if some incredible jump in evolution or intervention based upon new discoveries will change human nature but would gladly make a long-term bet that such a thing will not happen. I don’t know what exciting new industries and companies will capture investor’s attention over the next 20 years.

But…..

I think I know that investors will get very excited by them and price them to perfection. I do know that perfection is a very high hurdle that most of these innovative companies will be unable to achieve. I think I know that they will suffer the same fate as the most exciting and innovative companies of the past and that most will crash and burn. I infer this because “about 3,000 automobile companies have existed in the United States” and that of the remaining 3, one was bailed out, one was bought out and only one is still chugging along on its own. I know that, as a professional investor, if my goal is to do better than the market, my investment portfolio must look very different than the market. I know that, in the short-term, the odds are against me but I think I know that in the long-term, they are in my favour. I do know that by staking my claim on portfolios that are very different than the market, I have, and will continue to have, far higher career risk than other professionals, especially those with a low tracking error target. I know that I cannot tell you which individual stocks I’m buying today will be responsible for my portfolio’s overall performance. I also know that trying to guess which ones will be the best performers almost always results in guessing the wrong way. I know that as a systematic, rules-based quantitative investor, I can negate my entire track record by just once emotionally overriding my investment models, as many sadly did during the financial crisis. I think I know that no matter how many times you “prove” that we are saddled with a host of behavioral biases that make successful long-term investing an odds-against bet, may people will say they understand but continue to exhibit the biases. I think the reason for the persistence of these “cognitive mirages” is that up to 45% of our investment choices are determined by genetics and cannot be educated against. Read: Why do individuals exhibit investment biases? I think I know that if I didn’t adhere to an entirely quantitative investment mythology, I would be as likely—maybe MORE likely—to giving into all these behavioral biases. I don’t know exactly how much of my success is due to luck and how much is due to skill.

But I do know that luck definitely played, and will continue to play, a fairly substantial role.

I don’t know how the majority of investors who are indexing their portfolios will react to a bear market.

I think I know that they will react badly and sell out of their indexed portfolio near a market bottom. I think I know that the majority of active stock market investors—both professional and aficionado—will secretly believe that while these human foibles that make investing hard apply to others, they don’t apply to them. I know they apply to me and to everyone who works for me.

Finally, while I think I know that everything I’ve just said is correct, the fact is I can’t know that with certainty and that if history has taught us anything, it’s that the majority of things we currently believe are wrong.

“The speed of information really doesn’t make any difference to us. It’s the processing and finally coming to some judgment that actually has some utility…it’s a judgment about the price of a business or a part of a business, a security, versus what it’s essentially worth. And none of that involves anything to do, really, with quick information. It involves getting good information…. We’re not looking for needles in haystacks or anything of the sort…We like haystacks, not needles, basically. And we want it to shout at us.” –Warren Buffett (1994

• Erstwhile popular blog, not updated in last couple of years.
• Twitter CLI client, https://github.com/orakaro/rainbowstream
• Git Standup, https://github.com/kamranahmedse/git-standup
• Rq, Record Query - A tool for doing record analysis and transformation, https://github.com/dflemstr/rq
• AsciiCinema, https://github.com/asciinema
• A cat clone with wings, https://github.com/sharkdp/bat
• Visidata, with super powers, https://github.com/saulpw/visidata
• Curl-size, https://github.com/egoist/curl-size
• RipGrep, https://github.com/BurntSushi/ripgrep
• jq, https://github.com/stedolan/jq
• autojump, https://github.com/rupa/z
• notif tool, https://github.com/variadico/noti
• tmux, https://github.com/tmux/tmux/wiki
• glances, https://nicolargo.github.io/glances/
• rtv, https://github.com/michael-lazar/rtv
• discurses, https://github.com/topisani/Discurses
• tg, telegram client, https://github.com/vysheng/tg
• PDFtk, https://www.pdflabs.com/tools/pdftk-the-pdf-toolkit/
• gdb+peda, https://github.com/longld/peda
• CLI diassembler, https://github.com/radare/radare2

“To laugh often and much; to win the respect of the intelligent people and the affection of children; to earn the appreciation of honest critics and endure the betrayal of false friends; to appreciate beauty; to find the beauty in others; to leave the world a bit better whether by a healthy child, a garden patch, or a redeemed social condition; to know that one life has breathed easier because you lived here. This is to have succeeded.” –Ralph Waldo Emerson

• I have never, ever borrowed a penny. So I have zero credit record. No loans, no mortgage, nothing. Ever. When I had no money, I rented. I have an allergy to borrowing and a scorn for people who are in debt, and I don’t hide it. I follow the Romans’ attitude that debtors are not free people.

• Better to miss a zillion opportunities than blow up once. I learned this at my first job, from the veteran traders at a New York bank that no longer exists. Most people don’t understand how to handle uncertainty. They shy away from small risks, and without realizing it, they embrace the big, big risk. Businessmen who are consistently successful have the exact opposite attitude: Make all the mistakes you want, just make sure you’re going to be there tomorrow.

• Don’t invest any energy in bargaining except when the zeros become large. Lose the small games and save your efforts for the big ones.

• There’s nothing wrong with being wrong, so long as you pay the price. A used-car salesman speaks well, they’re convincing, but ultimately, they are benefiting even if someone else is harmed by their advice. A bullshitter is not someone who’s wrong, it’s someone who’s insulated from their mistakes.

• Money can’t buy happiness, but the absence of money can cause unhappiness. Money buys freedom: intellectual freedom, freedom to choose who you vote for, to choose what you want to do professionally. But having what I call “fuck you” money requires a huge amount of discipline. The minute you go a penny over, then you lose your freedom again. If money is the cause of your worry, then you have to restructure your life.

• The best money I’ve ever spent has been spent on books. The stupidest thing I’ve ever spent money on? Books. Also, I cannot understand why anyone would spend any amount to enhance their social status.

• If nobody’s paying my salary, I don’t have to define myself. I find it arrogant to call yourself a philosopher or an intellectual, so I call myself a flaneur and I refuse all honors. As Cato once said, it’s better to be asked why there is no statue in your name than why there is one.

George Orwell’s six rules of writing:

• Never use a metaphor, simile or other figure of speech which you are used to seeing in print.
• Never use a long word where a short one will do.
• If it is possible to cut a word out, always cut it out.
• Never use the passive where you can use the active.
• Never use a foreign phrase, a scientific word or a jargon word if you can think of an everyday English equivalent.
• Break any of these rules sooner than say anything outright barbarous.

Imagine three twenty-something guys working on a startup that has more lines of code than dollars in the bank. They’re working out of an apartment and spend most evenings eating ramen noodles from the same MSG-laden box. They work approximately equal hours (too many). They suffer approximately equal stress (more than they ever expected). They bear approximately equal responsibility for not tanking the company through poor performance. They each accept dramatic pay-cuts relative to easier, better jobs which they could sleepwalk their way into. Next door, there are another three guys, eating ramen, etc etc.

Now, it seems to me like the three guys behind Door #1 are very similar to the three guys behind Door #2. However, in one case they’re all co-founders, and in one case they are two co-founders and a first employee. Those are very, very different statuses for the third guy. The third co-founder gets mentioned in press hits about the company. The third co-founder can call himself a co-founder, a status of value in an industry (and society) which is sometimes obsessed with status. The third co-founder cannot get excised from the cap table without that being mentioned as a subplot in the eventual movie.

The first employee will not usually get mentioned. The first employee gets no social status of particular esteem. The first employee will not have a seat at the table – literally or figuratively – when the eventual disposition of the first employee’s equity is decided. The first employee’s equity stake is approximately 1/6 to 1/40th (or less!) of what the third co-founder’s was. Well, theoretically. 0.5% is 1/40th of 20% in engineering math, not in investor math, because investors can change the laws of mathematics retroactively. 0.5% of millions of dollars is sometimes nothing at all. (This is one of the least obvious and most important things I have learned from HN.)

If you’re good enough to be a first employee, you’re probably epsilon away from being good enough to be a third co-founder. There may be good reasons to prefer being an employee… but think darn hard before you make that decision.

How to delete large s3 buckets

• set expiration policy to 1 day on the target s3 bucket.
• do not choose any prefix.

• Audio Link
• Transcript Link

Reproducing the copy here, because it is wisdom personified in simple terms:

Spencer Hoff: Thank you for coming. Today we’ve got Mr. Peter Kaufman, CEO of Glenair, who wrote this book, Poor Charlie’s Almanac about Charlie Munger. It’s an excellent book, best book I’ve ever read by far in my life. He serves on the board of Daily Journal with Mr. Charlie Munger and he’s going to give us a few words today. So please welcome Mr. Peter Kaufman everybody.

Peter Kaufman: Thank you. Now I’m happy to talk about a subject. I was asked to talk about the multidisciplinary approach to thinking. So I’ll start out with that. But if you guys get bored or something and say ‘Well I thought we were supposed to have fun listening to this today.’ You can raise your hand and say ‘Could you talk about leadership or team building or business strategy or ethics or something else?’ I gave a talk recently at Google, in fact I’ve given three talks at Google. And the first talk I gave they said ‘What are you going to talk about?’ And I said, ‘Well, what do you want to talk about?’ They said, ‘About whatever you want. What do you usually talk about?’ Well I usually talk about leadership, culture, team building, strategy, ethics. And they said, ‘We don’t hear about that team building crap. We get that all the time. We want to hear about self-improvement.’ So I will mix in with our multidisciplinary topic a little bit of self-improvement as well. Is that OK?

OK.

So why is it important to be a multidisciplinary thinker? The answer comes from the Austrian philosopher Ludwig Wittgenstein who said, ‘To understand is to know what to do.’ Could there be anything that sounds simpler than that? And yet it’s a genius line, to understand is to know what to do. How many mistakes you make when you understand something? You don’t make any mistakes. Where do mistakes come from? They come from blind spots, a lack of understanding. Why do you need to be multidisciplinary in your thinking? Because as the Japanese proverb says, ‘The frog in the well knows nothing of the mighty ocean.’ You may know everything there is to know about your specialty, your silo, your well, but how are you going to make any good decisions in life…the complex systems of life, the dynamic system of life…if all you know is one well?

So I tried to learn what Munger calls, ‘the big ideas’ from all the different disciplines. Right up front I want to tell you my trick was, because if you try to do it the way he did it you don’t have enough time in your life to do it. It’s impossible. Because the fields are too big and the books are too thick. So my trick to learn the big ideas of science, biology, etc., was I found this science magazine called Discover Magazine. Show of hands, anybody here ever heard of Discovery magazine? A few people. OK. And I found that this magazine every month had a really good interview with somebody from some aspect of science. Every month. And it was six or seven pages long. It was all in layperson’s terms. The person who was trying to get their ideas across would do so using good stories, clear language, and they would never fail to get all their big ideas into the interview. I mean if you’re given the chance to be interviewed by Discovery magazine and your field is nanoparticles or something, aren’t you going to try your very best to get all the good ideas into the interview with the best stories etc. Okay. So I discovered that on the Internet there were 12 years of Discover magazines available in the archives. So I printed out 12 years times 12 months of these interviews. I had 144 of these interviews. And I put them in these big three ring binders. Filled up three big binders. And for the next six months I went to the coffee shop for an hour or two every morning and I read these. And I read them index funds style, which means I read them all. I didn’t pick and choose. This is the universe I’m going to own the whole universe. I read every single one.

Now I will tell you that out of a hundred and forty four. If I’d have been selecting my reading material, I probably would have read about 14 of them. And the other 130? I would never in a million years read six pages on nanoparticles. Guess what I had at the end of six months? I had inside my head every single big idea from every single domain of science and biology. It only took me 6 months. And it wasn’t that hard because it was written in layperson’s terms. And really, what did I really get? Just like an index fund, I captured all the parabolic ideas that no one else has. And why doesn’t anybody else have these ideas? Because who in the world would read an interview on nanoparticles? And yet that’s where I got my best ideas. I would read some arcane subject and oh my god I saw, ‘That’s exactly how this works over here in biology.’ or ‘That’s exactly how this works over here in human nature.’ You have to know all these big ideas. Or there is an alternative, find somebody who did what I did and just get all the ideas from them. Now when I was your age and I was in school I thought the asymmetry of it was very unfair because I had to do all the work. So every time I go back and meet with a group of students I change the asymmetry around. I did all the work for you…

I have 30 examples in here of models that I derived from what I call my ‘three buckets’. Let’s see if I’ve got my three buckets in here. I do. I do have my three buckets. Ok. So this is how I use ideas that no one else in the world uses and yet I can be comfortable that they’re right. A statistician’s best friend is what? A large relevant sample size. And why? Because a principle derived from a large relevant sample size can’t be wrong can’t it? The only way it could be wrong is if the sample size is too small or the sample itself is not relevant.So I want to tell you what my three buckets are where I drive my models, multidisciplinary models. Number one is 13.7 Billion years in science. Is that a large sample? It’s the largest one in the whole universe. There is no larger sample. Because what is it? It’s the inorganic universe. Physics. Geology. Anything that’s not living goes in my bucket number 1. 13.7 billion years

Bucket number 2 is three and a half billion years in science. It’s biology on the planet Earth. Is that a big sample size? Is it relevant? We’re biological creatures. Let me ask you this, inorganic, bucket number one, is it relevant? We live in. So bucket Number one we live in, 13.7 billion years. Bucket number two is what we’re part of, biology. 3.5 billion years. And number three is twenty thousand years of recorded human history. That’s the most relevant of all. That’s our story. That’s who we are.

So we’re going to take a couple of examples here of multidisciplinary thinking. We’ll ask this question, is there a simple two word description that accurately describes how everything in the world works? That would be very useful wouldn’t it if you know how everything works in just two words? So we go to bucket number one. How does everything work? We go to Newton’s Third Law of motion, we’re getting very multidisciplinary here. Does anybody in the room know what Newton’s third law motions says? (Answer: “For every action there is there will always be an equal and opposite reaction.”) That’s beautiful. He wins one of my pens here for answering that question correctly. I always give out rewards. It’s like operant conditioning from psychology, right? So there you go.

Yes if I put this bottle of water on this table, Newton’s third law of motion says that if the bottle pushes down the table with ‘force X’, and it also strangely says that the table pushes back with equal ‘force x’. That’s very strange. But you know how long that’s been true? 13.7 billion years that’s been true. Now what if I push down twice as hard, what does the table do? Well if I push down twenty one and a half times hard? What does the table do? Twenty one and a half! OK. Now is there a good word, a catchall word to describe what we’re talking about here when this pushes down and this thing pushes back? Yeah, it’s reciprocation isn’t it? But it’s not mere reciprocation. It’s perfectly mirrored reciprocation. The harder I push, the harder it pushes back. Does everybody buy that? That’s bucket number one. That’s how the world works. It’s mirrored reciprocation. Everything in the inorganic universe works that way.

We go to bucket number 2. I’m going to introduce a little humor into this. Even though this is dog, pretend it’s a cat. OK? This is a cat for the time being. Mark Twain said that a man who picks up a cat by its tail will learn a lesson he can learn in no other way. What does this cat going to try to do? It’s going to do what? (Answer: “Attack you.”) Yeah it’s going to try and scratch me right with its sharp claws. And why? It doesn’t find being picked up by its tail very agreeable does it? Now what if I start swinging this cat around by its tail. What does the cat do now? Now it’s trying to scratch my eyes out. It said, ‘You escalated on me pal, I’m going to escalate back on you.’ Does that sound a lot like mirrored reciprocation? But what if instead of doing something disagreeable with this cat we do something very agreeable with us this cat? And this cat’s sitting here and we come over and we gently pick it up by its tummy and we put it in our crook of our elbow and we gently stroke it. Does the cat try and scratch us? What does it do? It licks our hands. And as long as I sit here and stroke it, it’s going to continue to try and lick my hand. It wants to show me what? ‘I like this. This is agreeable. You’re a good guy. Keep it up man!’ It’s mirrored reciprocation isn’t it? If I act in a disagreeable way to the cat, the cat acts in a disagreeable way back, and mirrored. If I act in an agreeable way. What do you think we’re going to find when we go to bucket number three? It’s exactly the same thing isn’t it? Your entire life. Every interaction you have with another human being is merely mirrored reciprocation. Now you’re going to say to yourself ‘This is too simple. Can’t be this simple.’ It is this simple! It doesn’t mean it’s not sophisticated. This is a very sophisticated model we just derived isn’t it? We did a multidisciplinary didn’t we? We looked into the three largest sample sizes that exist, the three most relevant, and they all said exactly the same thing. Do you think we can bank on that? 100 percent we can bank on that.

So if you think about things being complex as being sophisticated like most people do, you think the more complex it is the more sophisticated it is. I want you to remember, as best you can, what I’m about to say it’s very very important. Albert Einstein once listed what he said were the five ascending levels of cognitive prowess. No there’s nobody in this room that doesn’t want to be level number one. Right? That’s why we’re here. You don’t want to be level number five. You want to be level number one. Wait until you hear what these levels are, it’s going to blow your mind. So number 5 he said, at the very bottom, was smart. OK. That’s the lowest level of cognitive prowess is being smart. The next level up, level 4, is intelligent. Level 3, next up, is brilliant. Next level up, level 2 he said is genius. What? What’s higher than genius? He must have that backward. No he doesn’t. Wait until you hear what number one is according to Albert Einstein. We just demonstrated it. Number one is simple. Simple transcends genius.

Why is simple….the right kind of simple…better than genius? Because you can understand it! I bought this book I usually take it when I’m giving a talk like this. It’s the Ethics by Spinoza. Spinoza’s ethics book was written by a true genius. And guess what? You can’t understand anything in it. But can you understand what I walked you through, mirrored reciprocation? OK.

Now because this is an economics club right. Everybody here interested in economics? So let’s give an example of a model derived, multidisciplinary, same way we did before, but is just about as pure an economic model as you can find. So now we’re going to ask the question, what’s the most powerful force that we as human beings, both as individuals and groups, can potentially harness towards achieving our ends in life?

Ok. We go to bucket number one. We ask, what’s the most powerful force in bucket number one? I’m going to quote Albert Einstein again. He said, ‘The most powerful force in the universe is compound interest.’ But that’s not all he said about compound interest. He not only said that it’s the most powerful force in the universe, he said it’s the greatest mathematical discovery of all time. He said it’s the eighth wonder of the world. And he said that those who understand it get paid by it and those who don’t pay for it. He said all these things, Albert Einstein, about compound interest. Now what’s a good working definition of compound interest? I will propose one. You can have your own, but this is mine. I say compound interest is dogged incremental constant progress over a very long time frame. Is that a fair definition? Alright? I think that’s the answer from bucket number 1. The most powerful force that could be potentially harnessed is dogged incremental constant progress over a very long time frame.

We go to bucket number 2. Three and a half billion years of biology. What’s the most powerful force in three and a half billion years a biology? It’s the machine of evolution. How does it work? Dogged incremental constant progress over a long time frame. This is the beauty of deriving things multidisciplinary. You can’t be wrong! You see these things lined up there like three bars on a slot machine. Boy do you hit the jackpot.

What do you think we’re going to find when we go to bucket number three? Twenty thousand years of human experience on earth. You want to win a gold medal in the Olympics. You want to learn a musical instrument. You want to learn a foreign language. You want to build Berkshire Hathaway. What’s the formula? Dogged incremental constant progress over a very long time frame. Look how simple this is. This is above genius. It’s absolutely above genius because you can understand it. This isn’t somebody drawing all these formulas and things up here about, you know, how numbers multiply and amplify over time. The problem that human beings have is we don’t like to be constant. Think of each one of those terms. Dogged incremental constant progress over a very long time frame. Nobody wants to be constant. We’re the functional equivalent of Sisyphus for pushing his boulder up the mountain. You push it up half way, and you go, ‘Awe, I’ll come back and do this another time.’ It goes back down. ‘I’ve got this great idea, I’m going to really work hard on it.’ You push it up half way and,’ Awe, you know I’ll get back to this next month.’ This is the human condition. In geometric terms this is called variance drain. Whenever you interrupt the constant increase above a certain level of threshold you lose compounding, you’re no longer on the log curve. You fall back onto a linear curve or god forbid a step curve down. You have to be constant. How many people do you know that are constant and what they do? I know a couple. Warren Buffett and Charlie Munger. Everybody wants to be rich like Warren Buffett Charlie Munger. I’m telling you how they got rich. They were constant. They were not intermittent.

Let me give you an example of why intermittency is perhaps the most important thing in your lives whether you realize it or not. We’ll begin with the example of bringing home a puppy from the pet shop. Brand spanking new puppy from the pet shop. And the kids are so excited, they’re so excited. What’s your goal of bringing home this puppy to your household? I say it’s to have an engaged contributing all-in new member of your household. And night number one, how are we doing? It’s a disaster. This thing’s over in the corner shaking like a leaf. It’s anything but engaged. It’s anything but contributing and it’s anything but all-in. It’s shaking like a leaf. Human beings are really good at solving this problem. We know we need to create a calm, reassuring, secure, and safe environment.

We know that even though this puppy can’t understand what we’re saying, we need to communicate in soothing tones. And we also know that we need to provide food and water for this puppy. But underlying all these things, stitching them all together, we really know we have to be constant don’t we? You can’t not feed the puppy one day or what happens? Well the puppy freaks out. The puppy becomes neurotic puppy. It doesn’t know whether it can trust you or no not. This trust that this puppy needs to go all-in is dependent upon you being constant in these behaviors. Does everybody except that? So if we are constant, usually in about seven days more or less, if we are (constant) this little puppy will trot over to our side and it will attach itself to us. And for the rest of its life it will be willing to die for us. That puppy just went all-in didn’t it. Now did it go all-in because it’s our idea that we want an engaged contributing all-in new member of our household? It doesn’t even know what our idea is does it? Why did it just go all in? It was the puppy’s idea!

Now let me tie this to your lives. I did this at Google and they really couldn’t figure out what I was doing. And then afterwards they said ‘You know that was really good. Your eight dollar crystal ball that’s really a good trick. So I’ll do my eight dollar crystal ball trick. And I told them…I had rows bigger than this one, full of the smartest people in the world. And I said guess what I’m going to do with my eight dollar crystal ball? I said, I’m going to do a psychic reading of anybody in this room. Anybody. And I said to Google, ‘If you think that I’ve got a stooge in the room where I’ve got this prearranged. I don’t. Go out in the corridor and bring somebody in. I’ll do the psychic reading.’ This eight dollars I spent on Amazon, the best money I ever spent. So I’m going to select you. What’s your name? (Answer: “Emily”) We’re going to take Emily, we’re going to do a psychic reading of Emily right in front of you. You’re going to believe this. I’m going to nail this. You’re all going ‘This guy’s a nutcase.’ Spencer’s going, ‘Man why did I invite this guy?’ Just be patient Spencer, this is good stuff. I’ll pull it off. So I’m going to tell Emily what she’s been looking for for her whole life. Is there anybody here who thinks I can do this? Well wait until you hear my answer and then for the rest of your life you’re all going to go, ‘I know what everybody in the world is looking for.’ Emily, your entire life you’ve been on a quest, an odyssey, a search for that individual that you can 100 percent absolutely completely trust. But who’s not just trustworthy, but principled, and courageous, and competent, and kind, and loyal, and understanding, and forgiving, and unselfish. I’m right aren’t I? (Answer: “Dead on”) You know what else my eight dollar Crystal Ball tells me? If you ever think you may have encountered this person, you are going to probe and probe and test and test to make sure that they are real, that you’re not being fooled. And the paradox is that it looks like you’re probing for weakness but you’re not. You’re probing for strength. And the worst day of your life is if instead of strength you get back weakness. And now you feel betrayed. You know why? You’ve got to start your search all over again. It’s the worst thing in the whole world isn’t it? Does everybody here agree with me on this? Look how simple this is.

Here’s your 22 second course in leadership. That’s all it takes. You don’t have to go to business school. You don’t need books. You don’t guest speakers. All you have to do, is take that list that’s in Emily’s head and every single other person in this room, every single other person in the whole world, has this list in their head. Trustworthy, principled, courageous, competent, loyal, kind, understanding, forgiving, unselfish. And in every single one of your interactions with others, be the list! Remember how that puppy went all in? You do this with the other human beings you encounter in life. They’re all going all in and not because it’s your idea. Most people spend all day long trying to get other people like them. They do it wrong. You do this list, you won’t be able to keep the people away. Everybody’s going to want to attach to you. And be willing to do what? Just like them puppy, they’d be willing to die for you. Because you are what they’ve been looking for their whole lives. This is pretty profound isn’t it?

Look at this picture. I love this picture. Does this woman look like she’s having a good time. OK. So I helped teach this high school class in Los Angeles, and the first class of each semester, a brand new group just like you guys, and I make them go through the following exercise. And believe me just like my eight dollar Crystal ball, afterwards you’re going to go ‘I’m really glad I hear that. Because now I really understand things at a level I didn’t understand them before.’ And to understand is to what? To know what to do.

This will clear up all your blind spots about yourself and other human beings. I asked the group, show of hands, how many of you think all human beings are alike? Why? (Answer: “We all have the same basic needs. We express them differently. Tremendous diversity in how we go about meeting them, but ultimately (inaudible).”) You get two pens! That’s a beautiful answer. So we’re going to identify what those needs are. What’s your name? (Answer: “Craig”) Craig nailed it. Show of hands. How many of you want to be paid attention to? I mean is there really anybody here who doesn’t want to be paid attention to? You’re a different kind of human being if you are. OK. How many of you want to be listened to? How many of you want to be respected? How many of you want meaning satisfaction fulfillment in your life in the sense that you matter? And then I tell the high school kids, number five. I put it number five, even though it’s the most important of the five I put it last, because if I put it first you wouldn’t raise your hands because it’s awkward. They’re just going to think I’m weird. But then they do raise their hand because I soften them up. How many you want to be loved? Everybody’s exactly the same. The only difference is, as Craig said, is the strategy the that they’re employing to try to get to fulfill those needs. OK.

Now I’m going to tell you the strategy that dogs use. The dog’s to be very unhappy with me for telling you this. I’m ratting them out. So when your dog is in the backyard and he goes to the fence between your house and the next house and he talks to the dog next door, I’m going to tell you what he says, no one has ever divulged this before. You’re the first group to hear this. Your dog says to the dog next door, ‘Can you believe how easy it is to manipulate human beings and get them to do whatever you want them to do for you?’ And the dog next door goes, ‘I know it’s a piece of cake.’ And your dog says ‘Yeah. All you have to do is every single time they come home, you greet them at the door with the biggest unconditional show of attention that they’ve ever gotten in their whole life. And you only have to do it for like 15 seconds and then you can go back to doing whatever you were doing before and completely ignore them for the rest of the evening.’

However you do have to do this every single time they come home. And what will the person do? They’ll take care of them. They’ll do anything for this dog. OK? Now do you think that this woman feels she’s being paid attention to? And listened to? And respected? Do you think she’s getting meaning satisfaction and fulfillment? Do you think she matters to this dog? And do you think she thinks this dog loves her? And what does the dog get in return? Everything.

All you have to do, if you want everything in life from everybody else, is first pay attention, listen to them, show them respect, give them meaning, satisfaction, and fulfillment. Convey to them that they matter to you. And show you love them. But you have to go first. And what are you going to get back. Mirrored reciprocation. Right? See how we tie this all together? The world so damn simple. It’s not complicated at all! Every single person on this planet is looking for the same thing. Now why is that we don’t act on these very simple things?

So I have an example I use with the class, my elevator example. I’m famous for my elevators story. You’re standing in front of an elevator. The doors open. And inside the elevator is one solitary stranger, you’ve never met this person before in your whole life. You walk into the elevator you have three choices for how you’re going to behave as you walk into this elevator. Choice number one you can smile say ‘good morning’. And I say, at least in California, if you do that 98 percent of the time the person will smile say good morning back. You can test it. OK. My guess is you’re going to find that 98 percent of the time that people say ‘good morning’. Choice number two, you can walk in and you can scowl and hiss at this stranger in the elevator. And they have no idea why you’re scowling and hissing at them. And I say 98 percent of the time, they may not his back at you, but they will scowl back at you. And option number three. This is where the wisdom comes. You can walk into the elevator and you can do nothing. And what do you get 98 percent of the time if you walk into an elevator and you do nothing from that stranger in the elevator? Nothing. It’s mirrored reciprocation isn’t it? But what did you have to do? You have to go first. And you’re going to get back whatever you put out there.

This is why these bars are full of people at 2:00 a.m. drowning their sorrows. Knocking down these drinks. ‘When’s the world going to give me something man? When am I going to get mine?’ Well what did you ever do? Did you ever get up of the morning and smile at the world? No. You either did nothing or you scowled and hissed at the world. You’re getting back exactly what you would expect to get back if you understood how the world really works. Which is why we study multidisciplinary things right? We can’t be wrong on this can we? It’s all mirrored reciprocation. So what do you want to do? You want to go positive, you want to go first. What’s the obstacle? There’s a big obstacle. This is an economics club. Certainly you have all heard of Daniel Kahneman, Nobel Prize winner in economics. Behavioral economics. And what did he win his Nobel Prize for? For answering the question, why would people not go positive and not go first when there’s a 98 percent chance you’re going to benefit from it, and only a 2 percent chance the person’s going to tell you to ‘screw off’ and you’re going to feel horrible, lose face, and all the rest of that. And that’s real. That’s why we don’t do it. He said there’s huge asymmetry between the standard human desire for gain and the standard human desire to avoid loss. Which one do you think’s more powerful? 98 percent versus 2!

Now I gave this same talk at Fairfax up in Toronto, Prem Watsa’s outfit. It’s the Berkshire Hathaway of Canada. And I said ‘Of all people in the whole world, you guys should not be making this mistake.’ Why? Because you’re in the insurance business. How does insurance work? You’re supposed to spend 2 percent to protect 98 percent, right? Look what you’re doing. You’re spending 98 percent to protect against the 2 percent probability that somebody makes you look foolish. Lou Brock set the Major League record for stolen bases with the St. Louis Cardinals many years ago. And he once said, ‘Show me a man who is afraid of appearing foolish and I’ll show you a man who can beat every time.’ And if you’re getting beat in life, chances are it’s because you’re afraid of appearing foolish. So what do I do with my life? I risk the two percent. I was so proud the other day, I was reading Bono on Bono. Bono’s the lead singer of U2. He’s the only other person I’ve ever encountered in my entire life, and I asked all my cronies, ‘Has anybody else ever encountered this elevator model before?’ ‘No. No that’s yours Peter.’ And I said, ‘You know how I said 98-2? Guess who’s got the exact same model? Bono! Well he doesn’t have 98-2, he’s got 90-10.’ Those are his numbers 90-10. Can I be wrong on this? That guy is really squared away. I hope some day I’m as squared away as he is. It’s incredible to think, he figured it out. That’s why that guy’s had such a great life. He goes, ‘You know I know 10 percent of people are going to screw me. That’s OK. If I’m not willing to be vulnerable and expose myself to that 10%, I’m going to miss the other 90%.’ Does that makes sense? Now Charlie Munger one day, you know he turned my whole life upside. I was over at his house one day. (He said) ‘Peter, I’ve been hearing about you going around giving all these talks. You don’t have to go around the country telling people how to make more money.’ I said, ‘Well that’s not what I do Charlie.’ I was very nimble on my feet. I said there’s a catch. I do tell how to make more money… By the way you do these things that get people all in and whatnot, you’ll make all the money there is to be made. You really will. That’s not why I’m here. I’m here to give you the second half of the message, which is how to be a good person! What’s your name? (Answer: “Albert”) Albert, How many lifetimes do you have Albert? (Answer: “One”) That’s correct, you get a pen. You see Albert lucked out, he got an easy question. Is your lifetime important to you Albert? (Answer: “One of the most important. Absolutely)

Now what do we know in economics, it’s an economics model, what do we know we need to use as our decision making prism whenever something is both finite, like one, and important like your life? How do we have to make decisions? You had Mankiw here right? He didn’t talk about opportunity cost? Have you all heard of opportunity cost? It’s the classic illustration of opportunity cost. You have a finite number of something, it’s important. If you’re doing ‘A’ with it, it means what? It means you’re not doing B or C or D or E. What do you have to do? You have to evaluate all the different alternatives and pick the one that’s most optimal. Is that fair? So you’ve got one lifetime. How do you want to spend your one lifetime? Do you want to spend your one lifetime like most people do, fighting with everybody around them? No. I just told you how to avoid that. And in exchange have what? A celebratory life. Instead of an antagonistic fighting life. All you have to do is go positive, go first, be patient enough. You know we have to be patient for a week with this puppy. You know all along it usually takes for a human being to do all the probing and testing that Emily was going to do and to find out that you’re for real? It takes six months. This is why nobody does it. ‘Oh it takes too long.’ Compared to what? Look at the plan B that everybody uses. It’s terrible! It doesn’t work. They spend their whole lives fighting with everybody.

The three hallmarks of a great investment are superior returns, low risk, and long duration. The whole world concentrates on Category 1. But if you’re a leader of any merit at all, you should be treating these three as what? Co-priorities. How do you get low risk and long duration? Win-Win. This is the biggest blind spot in the business. People are actually proud of a win-lose relationship. ‘Yeah we really beat the crap out of our suppliers.’ You know, ‘We’ve got these employees for…you know, we’ve go them on an HB1 visa, they can’t work anywhere else for three years.’ They’re proud of it! Total Win-Lose. You take game theory (link 1, 2) and you insert the word lose in any scenario in game theory and what do you have? A suboptimal outcome. What happens you insert win-win in any game theory scenario, what do you get? Optimal every time. What must you necessarily do if you’re interested in achieving Win-Win frameworks with your important counterparties in life? You must understand the basic axiom of clinical psychology, which I know because I multidisciplinary. I also learned psychology. The basic axiom of clinical psychology reads, ‘If you could see the world the way I see it, you’d understand why I behave the way I do.’ That’s pretty good isn’t it? Now there’s two corollaries to that axiom. And I say if you buy the axiom, which you should, you must buy the two corollaries as well because they’re logical extensions. They’re undeniable. Corollary number one, if that axiom is true and you want to understand the way someone’s behaving, you must see the world as they see it. But corollary number two, if you want to change a human being’s behavior and you accept that axiom, you must necessarily, to get them to change, change how they see the world. Now this sounds impossible. It’s not really that hard. You take a business. Most employees of a business see the world as employees. What if you could get them to see the world instead through the eyes of an owner? Do you think that’s going to change how they behave? It totally changes how they behave. Employees don’t care about waste. Owners do. Employees don’t self-police or place. Owners do.

This is the secret to leadership. The secret to leadership is to see through the eyes of all six important counterparty groups and make sure that everything you do is structured in such a way to be win-win with them. So here are the six. Your customers, your suppliers, your employees, your owners, your regulators, and the communities you operate in. And if you can truly see through the eyes of all six of these counterparty groups and understand their needs, their aspirations, their insecurities, their time horizons. How many blind spots do you have now? Zero. How many mistakes are going to make? You’re going to make zero. People don’t think this is possible. It’s really easy. To understand to know what to do. So I’m going to wrap up here I’ve only got like two minutes. There’s this great African proverb. It’s the definition of win-win. ‘If you want to go quickly go alone, if you want to go far go together.’ Live your life to go far together. Don’t live it to go quickly alone. Most people grow up wanting to go quickly go alone. It doesn’t work. You wind up like Ebenezer Scrooge in A Christmas Carol. You get to the end of your life. Yeah you’re rich, you’re powerful, you’re famous, and you want a do over because you realize at the end of your life, ‘I didn’t live my life right.’ I don’t have what really matters. What really matters is to have people pay attention to you, listen to you, and respect you, show you matter, and to love you. And to have it be genuine, not bought. Does that makes sense?

And I’ll leave you my last bit of wisdom. There’s another proverb, it’s a Turkish Proverb. ‘No road is long with good company.’ The essence of life is to surround yourself, as continuously as you can, with good company. Like I have today. You’re marvelous company. But how did I get that? I had to earn it didn’t I? I’m not just some guy you picked off the street. I earned the privilege of coming here and the privilege of being with you. It gives me what? It gives me meaning in my life. It makes me feel I matter. To have people listening to me. This is my strategy for getting those five thing. You can develop your own strategy and I hope it involves going positive and going first. Thank you.

Simplicity is a very powerful construct. Henry Thoreau recognized this when he said, “Our life is frittered away by detail . . . simplify, simplify.” Einstein also recognized the power of simplicity, and it was the key to his breakthroughs in physics. He noted that the five ascending levels of intellect were, “Smart, Intelligent, Brilliant, Genius, Simple.” For Einstein, simplicity was simply the highest level of intellect.”

• Why you stink at fact-checking. The Moses Illusion demonstrates what psychologists call knowledge neglect – people have relevant knowledge, but they fail to use it.

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Daniel Kahneman told his financial advisor he didn’t want to get rich. He just wanted to continue living like he had.

“She told me, ‘I can’t work with you,’” Kahneman wrote.

I asked Kahneman about the incident a few years ago. “She was very puzzled in the context of somebody coming to get financial advice and not trying to get richer,” he said. “I’m not sure that I’m all that unusual. Many people retired on pensions and are perfectly satisfied with it and they are not desperate to have more.”

• How Hedge Funds Get Rich. Nick, shows with his R program, that no matter what initial capital you give the hedge fund to start with, the hedge fund will become richer than you since its real talent is transferring your wealth into its coffers. And, one of the better ways to get rich is to pay lower fees.

The moral of the story is that fees matter, a lot. When it comes to investing, a little more in fees can go a long way (for those charging them). So though 2% (or 1%) might sound small now, within a short time frame it can add up very quickly. I recommend keeping your average fees below 0.1% across your portfolio. Thank you for reading!

• A list of command line tools for manipulating structured text data. A github compilation of cli tools manipulating text formats including CSV, XML, HTML, JSON, INI, etc. This HN discussion packs additional tools and HN-sytle comments. I’ve always been fascinated by unix cli tools and I can’t count the number of times they’ve helped me build my career :)

Some tools I’ve used time and again include: cut, join, paste, sort, uniq, awk , csvkit, q, textql jq,

Other noteworthy github collections are:

• 🖥 📊 🕹 🛠 A curated list of command line apps

• Awesome CLI Apps

• Awesome Shell

• The Art of Command Line

• Awesome OSX Cli

FaaS, because why not?

• GO Functions as a Service. Running a Go application on AWS Lambda is easier than ever, once you figure out how to configure Lambda, API Gateway and 10 or other “serverless” services to support the Go functions. This is a boilerplate app with all the AWS pieces configured correctly and explained in depth. See the docs folder for detailed guides about functions, tracing, security, automation and more with AWS and Go.

Suddenly you are closer to the 2nd half of your life than than ever. You hair starts turning gray and you are less confident of things around you - career,friends, family and society at general. And, you get to think deeply about people and things that you experience at times. You no longer tend to take things for granted - health, family, friends, career, relations, hobbies.

In this context, chanced up on these three articles today:

Life is Short

Source: PG’s popular essay on Life

Relentlessly prune bullshit, don’t wait to do things that matter, and savor the time you have. That’s what you do when life is short.

If you ask yourself what you spend your time on that’s bullshit, you probably already know the answer. Unnecessary meetings, pointless disputes, bureaucracy, posturing, dealing with other people’s mistakes, traffic jams, addictive but unrewarding pastimes.

As I’ve written before, one byproduct of technical progress is that things we like tend to become more addictive. Which means we will increasingly have to make a conscious effort to avoid addictions—to stand outside ourselves and ask “is this how I want to be spending my time?”

One heuristic for distinguishing stuff that matters is to ask yourself whether you’ll care about it in the future. Fake stuff that matters usually has a sharp peak of seeming to matter. That’s how it tricks you. The area under the curve is small, but its shape jabs into your consciousness like a pin. The things that matter aren’t necessarily the ones people would call “important.” Having coffee with a friend matters. You won’t feel later like that was a waste of time.

If life is short, we should expect its shortness to take us by surprise. And that is just what tends to happen. You take things for granted, and then they’re gone. You think you can always write that book, or climb that mountain, or whatever, and then you realize the window has closed. The saddest windows close when other people die. Their lives are short too.

The usual way to avoid being taken by surprise by something is to be consciously aware of it. Cultivate a habit of impatience about the things you most want to do. Don’t wait before climbing that mountain or writing that book or visiting your mother. You don’t need to be constantly reminding yourself why you shouldn’t wait. Just don’t wait.

I can think of two more things one does when one doesn’t have much of something: try to get more of it, and savor what one has. Both make sense here. How you live affects how long you live. Most people could do better. Me among them.

The Tail End

Source: Tim Urban’s Essay - The Tail End

Instead of measuring your life in units of time, you can measure it in activities or events. If I’m 35, then assuming that the average Indian life is about 70 years old, then I’ve about another 30-35 years left to live - which means:

• in sports parlance, about 9 cricket world cups, 9 football world cups, 9 olympics left

• if I travel a week every year, then I’d have been to 35 different places in rest of the life time.

• if I spend 5 days a week working for another 10 years, then I have about 2500 working days left.

• if I spend 2 days a month for another 10 years with parents, then I have about 240 days to spend time with them

  When you look at that reality, you realize that despite not being at the end of your life, you may very well be nearing the end of your time with some of the most important people in your life.

The three takeaways are:

1. Living in the same place as the people you love matters.

2. Priorities matter. Your remaining face time with any person depends largely on where that person falls on your list of life priorities. Make sure this list is set by you—not by unconscious inertia.

3. Quality time matters. If you’re in your last 10% of time with someone you love, keep that fact in the front of your mind when you’re with them and treat that time as what it actually is: precious.

The days are long but the decades are short

Source: Sam Altman’s reflections on turning 30

About 36 life nuggets from Sama covering life, family, friends, career, health, money, hiring and more…

1. Never put your family, friends, or significant other low on your priority list. Prefer a handful of truly close friends to a hundred acquaintances. Don’t lose touch with old friends.

2. Life is not a dress rehearsal—this is probably it. Make it count. Time is extremely limited and goes by fast. Do what makes you happy and fulfilled. Don’t spend time trying to maintain relationships with people you don’t like, and cut negative people out of your life.

3. How to succeed: pick the right thing to do (this is critical and usually ignored), focus, believe in yourself (especially when others tell you it’s not going to work), develop personal connections with people that will help you, learn to identify talented people, and work hard. It’s hard to identify what to work on because original thought is hard.

4. On work: it’s difficult to do a great job on work you don’t care about. And it’s hard to be totally happy/fulfilled in life if you don’t like what you do for your work. Work very hard—a surprising number of people will be offended that you choose to work hard—but not so hard that the rest of your life passes you by. Aim to be the best in the world at whatever you do professionally. Even if you miss, you’ll probably end up in a pretty good place. Figure out your own productivity system—don’t waste time being unorganized, working at suboptimal times, etc. Don’t be afraid to take some career risks, especially early on. Most people pick their career fairly randomly—really think hard about what you like, what fields are going to be successful, and try to talk to people in those fields.

5. On money: Whether or not money can buy happiness, it can buy freedom, and that’s a big deal. Also, lack of money is very stressful. In almost all ways, having enough money so that you don’t stress about paying rent does more to change your wellbeing than having enough money to buy your own jet.

6. Talk to people more. Read more long content and less tweets. Watch less TV. Spend less time on the Internet.

7. Don’t waste time. Most people waste most of their time, especially in business.

8. Have clear goals for yourself every day, every year, and every decade.

9. However, as valuable as planning is, if a great opportunity comes along you should take it. Don’t be afraid to do something slightly reckless. One of the benefits of working hard is that good opportunities will come along, but it’s still up to you to jump on them when they do.

10. Go out of your way to be around smart, interesting, ambitious people. Work for them and hire them (in fact, one of the most satisfying parts of work is forging deep relationships with really good people). Try to spend time with people who are either among the best in the world at what they do or extremely promising but totally unknown. It really is true that you become an average of the people you spend the most time with

11. Minimize your own cognitive load from distracting things that don’t really matter. It’s hard to overstate how important this is, and how bad most people are at it. Get rid of distractions in your life. Develop very strong ways to avoid letting crap you don’t like doing pile up and take your mental cycles, especially in your work life.

12. Keep your personal burn rate low. This alone will give you a lot of opportunities in life.

13. If you think you’re going to regret not doing something, you should probably do it. Regret is the worst, and most people regret far more things they didn’t do than things they did do.

14. Exercise. Eat well. Sleep. Get out into nature with some regularity.

15. Go out of your way to help people. Few things in life are as satisfying. Be nice to strangers. Be nice even when it doesn’t matter.

16. Tell your parents you love them more often. Go home and visit as often as you can.

17. This too shall pass.

18. Learn voraciously.

19. Do new things often. This seems to be really important. Not only does doing new things seem to slow down the perception of time, increase happiness, and keep life interesting, but it seems to prevent people from calcifying in the ways that they think. Aim to do something big, new, and risky every year in your personal and professional life.

20. Don’t screw people and don’t burn bridges. Pick your battles carefully.

21. Forgive people.

22. Don’t chase status. Status without substance doesn’t work for long and is unfulfilling.

23. Be grateful and keep problems in perspective. Don’t complain too much. Don’t hate other people’s success (but remember that some people will hate your success, and you have to learn to ignore it).

24. Be a doer, not a talker.

25. Given enough time, it is possible to adjust to almost anything, good or bad. Humans are remarkable at this.

26. Think for a few seconds before you act. Think for a few minutes if you’re angry.

27. Don’t judge other people too quickly. You never know their whole story and why they did or didn’t do something. Be empathetic.

28. The days are long but the decades are short.

Colin Powell has a rule of thumb about making tough decisions that I feel is helpful when facing such situations. He says that every time you face a tough decision you should have no less than forty percent and no more than seventy percent of the information you need to make the decision. If you make a decision with less than forty percent of the information you need you are shooting from the hip and you will make too many mistakes.

The second part of the decision making rule is what surprises many leaders. They often think that they need more than seventy percent of the information before they can make a decision. But, I explain to them, if you get more than seventy percent of the information you need to make the decision then the opportunity has usually passed and someone else has beaten you to the punch.

This is also finally the year when people start to wake up and realize they care about serializability, because Jeff Dean said its important. Michael Stonebraker, meanwhile, has been shouting for about 20 years and is very frustrated that people apparently only care when _The Very Important Googlers_say its important.

• This is how Cambridge Analytica’s Facebook targeting model really worked. The whole point of a dimension reduction model is to mathematically represent the data in simpler form. It’s as if Cambridge Analytica took a very high-resolution photograph, resized it to be smaller, and then deleted the original. The photo still exists — and as long as Cambridge Analytica’s models exist, the data effectively does too.

• Lessons for building AI-Driven Products. 1. Track how the market is using AI technology 2.Follow the trends in deep learning research 3. Cut through the AI hype — focus on practical use cases 4. Be obsessed with customer-centric data 5. Build a usable product with a simple model before exploring complicated AI models 6. Iteratively build use cases where AI directly impacts a metric 7. Build Breadth-first (Data/Pipeline/Model) instead of Depth-first (AI model) 8. Ensure your product fails gracefully 9. Insist on AI model explainability 10. Establish clear communication with your teams — know the fundamentals and language of data and ML.

The top HN comment, on this topic, summarizes as follows: As someone who is a product manager in the commercialized AI SaaS space, the most important pieces of feedback I would give a new PM here:

1. Don’t let your -brilliant- colleagues try to force their -brilliantly complex- solution of a problem - clearly define market problems, and don’t let the team try to go the route of trying to force fit a solution to a market problem. Market problems come first.

2. Frame the market problems appropriately for your ML/AI teams, and practice trying to frame the problem from a variety of angles. Framing from different angles promotes the ‘Ah-ha’ moment in terms of the right way to solve the problem from the ML side.

3. Don’t commit serious time to a model before having a naive solution to benchmark against. Always have a naive solution to compare against the AI solution. ‘Naive’ here may be a simple linear regression, RMSE, or multi armed bandit/Thompson sampling.

Techniques

• Don’t keep a schedule. By not keeping a schedule, you can always work on whatever is most important or most interesting, at any time. The idea came from A Perfect Mess book.

  If you have at any point in your life lived a relatively structured existence – probably due to some kind of job with regular office hours, meetings, and the like – you will know that there is nothing more liberating than looking at your calendar and seeing nothing but free time for weeks ahead to work on the most important things in whatever order you want.

• Keep three and only three lists: a Todo List, a Watch List, and a Later List

• Into the Todo List goes all the stuff you “must” do – commitments, obligations, things that have to be done. A single list, possibly subcategorized by timeframe (today, this week, next week, next month).

• Into the Watch List goes all the stuff going on in your life that you have to follow up on, wait for someone else to get back to you on, remind yourself of in the future, or otherwise remember.

• Into the Later List goes everything else – everything you might want to do or will do when you have time or wish you could do.

• If it doesn’t go on one of those three lists, it goes away.

• Each night before you go to bed, prepare a 3x5 index card with a short list of 3 to 5 things that you will do the next day.

• And then, the next day, do those things.

• People who have tried lots of productivity porn techniques will tell you that this is one of the most successful techniques they have ever tried. Once you get into the habit, you start to realize how many days you used to have when you wouldn’t get 3 to 5 important/significant/meaningful things done during a day.

• Then, throughout the rest of the day, use the back of the 3x5 card as your Anti-Todo List.

• And then at the end of the day, before you prepare tomorrow’s 3x5 card, take a look at today’s card and its Anti-Todo list and marvel at all the things you actually got done that day. Then tear it up and throw it away. Another day well spent, and productive.

• Structured Procrastination.

  The gist of Structured Procrastination is that you should never fight the tendency to procrastinate – instead, you should use it to your advantage in order to get other things done. Generally in the course of a day, there is something you have to do that you are not doing because you are procrastinating. While you’re procrastinating, just do lots of other stuff instead.

All procrastinators put off things they have to do. Structured procrastination is the art of making this bad trait work for you. The key idea is that procrastinating does not mean doing absolutely nothing.

Structured procrastination means shaping the structure of the tasks one has to do in a way that exploits this fact. The list of tasks one has in mind will be ordered by importance. Tasks that seem most urgent and important are on top. But there are also worthwhile tasks to perform lower down on the list. Doing these tasks becomes a way of not doing the things higher up on the list. With this sort of appropriate task structure, the procrastinator becomes a useful citizen. Indeed, the procrastinator can even acquire, as I have, a reputation for getting a lot done.

• Strategic Incompetence.

The best way to to make sure that you are never asked to do something again is to royally screw it up the first time you are asked to do it. Or, better yet, just say you know you will royally screw it up – maintain a strong voice and a clear gaze, and you’ll probably get off the hook.

• Do email exactly twice a day – once first thing in the morning, and once at the end of the workday. Allocated half an hour or whatever it takes, but otherwise, keep your email client shut and your email notifications turned off. Only doing email twice a day will make you far more productive for the rest of the day. The problem with email is that getting an email triggers that same endorphin hit I mentioned above – the one that a mouse gets when he bonks on the button in the cage and gets a food pellet. Responding to an email triggers that same hit.

• When you do process email, do it like this:

• First, always finish each of your two daily email sessions with a completely empty inbox.

• Second, when doing email, either answer or file every single message until you get to that empty inbox state of grace.

• Third, emails relating to topics that are current working projects or pressing issues go into temporary subfolders of a folder called Action.

• Fourth, aside from those temporary Action subfolders, only keep three standing email folders: Pending, Review, and Vault.

• Don’t answer the phone. Let it go to voicemail, and then every few hours, screen your voicemails and batch the return calls. Say, twice a day. Have two cell phones with different numbers – one for key family members, your closest friends, and your boss and a few coworkers, and the other for everyone else. Answer the first one when it rings, but never answer the second one.

• Hide in an IPod. People, for some reason, feel much worse interrupting you if you are wearing headphones than if you’re not.

• Start the day with a real, sit-down breakfast.

• Only agree to new commitments when both your head and your heart say yes. If you get that little adrenaline spike (in a good way) when you think about it, then your heart is saying yes. The corollary, of course, is that when your head says no and your heart says yes, your mouth should generally say yes as well :-). But not when your head says yes and your heart says no

• Do something you love.

• Human beings cannot comprehend very large or very small numbers. It would be useful for us to acknowledge that fact.

• Happiness is complicated. There are two components. One is strongly genetic; the second is a question of how you feel at any moment. I am pretty content, but I had a very pessimistic mother, and I’ve always been known as a pessimist.

• There is a powerful idea that we should want to be richer. I went to a financial advisor in the States and said: “I don’t really want to get richer, but I would like to continue to live like I do.” She said: “I can’t work with you.”

• Collaboration is not only more creative, it is more fun. Amos Tversky, my research partner, and I were better together than on our own. We sort of knew that. Mostly it was extremely pleasant not trying to work everything out yourself.

• Many people now say they knew a financial crisis was coming, but they didn’t really. After a crisis we tell ourselves we understand why it happened and maintain the illusion that the world is understandable. In fact, we should accept the world is incomprehensible much of the time.

• Motives are rarely straightforward. When the war started my father was chief of research for a company that was part of L’Oréal in Paris. The owner of L’Oréal was also a main funder of the fascist party in France, and antisemitic. But he protected my [Jewish] father during the war when he was taken by the Nazis.

• Despite 45 years of work in the field, I am still inclined to make over-confident predictions.

• System 1 and System 2.

Fast thinking is, I think, most of the way that we think. It’s what your memory delivers to you. You start talking, and you talk. You don’t have to deliberate about one word and then the other. You walk. You don’t deliberate and decide to put one foot in front of the other.

Most of what we do sort of comes automatically. Most of what we do is highly skilled and emotional – some of it is emotional, much of it is highly skilled – and all of that is automatic. There’s just an awful lot of automatic stuff that goes on.

Then there is System 2.

If I say, “2 plus 2,” a number came to your mind. That’s System 1. If I say, “The relationship between China and Japan,” now it’s not one word that came to your mind, but a whole set of words, a whole set of ideas. I mentioned that, you were thinking islands, you were thinking war, you were thinking navies.

You might have been thinking about the history of China and Japan. A lot happened that you were not… it happened at once. Those are not explicit thoughts, but you are ready for a whole topic, as soon as I mention something. That’s System 1.

I mention the word “mother,” “your mother” – you are having an emotion. That’s System 1.

There’s an awful lot that System 1 does. System 1 has judgments and opinions and attitudes and impressions that are generated – like when I said, “Think of China and Japan” – that a whole lot happened at once. You were not conscious of it all at once, but your mind was ready. It was getting ready with it.

That’s the idea, that there is that thing going on in our minds, silently. Then you have System 2.

System 2 is the effortful one. It depends on the allocation of attention. It’s what we are paying attention to, mostly. It’s involved in computations. It’s involved in difficult decisions. It’s involved in controlling yourself and not telling somebody to go to hell. That demands System 2. It’s all part of effortful system.

What’s the relationship between the two of them? That’s the interesting part.

One trick is to pull a little bait and switch on your own brain. It goes like this: When the urge comes to do the counterproductive thing, don’t resist. Instead, replace.

via @nytimes article

• Tools for converting Python code to AWS Step Function json
• HAL: AWS s3-sns based single-slack-command bot to handle your VPC

Podcasts

Startups

• This Week in Startups
• Acquired
• Masters of Scale
• Exponent

VCs

• Venture Studio
• Angel
• Syndicate
• Balderton Capital Podcast
• 20 Minute VC
• Ventured
• a16z
• Greymatter

Google Searching

• Google Advanced Search Tips from HubSpot

What do these people have that the rest of us don’t? It turns out “ability” is the key word here. Beyond their level of privilege or the circumstances they were born into, the luckiest people may have a specific set of skills that bring chance opportunities their way. Somehow, they’ve learned ways to turn life’s odds in their favor.

[Wiseman] He turned these findings into a “luck school” where people could learn luck-inducing techniques based on four main principles of luck: maximizing chance opportunities, listening to your intuition, expecting good fortune, and turning bad luck to good. The strategies included using meditation to enhance intuition, relaxation, visualizing good fortune, and talking to at least one new person every week. A month later, he followed up with participants. Eighty percent said they were happier, luckier people. *

• Your brain is an incredible information-processing system and the most complex structure known to humankind. The brain has allowed us to perform extraordinary feats from discovering general relativity to painting the Sistine Chapel, from building airplanes to composing symphonies. And yet, we still forget to pick up milk on the way home. How can this be?

• We have come to believe that the human brain is a master navigator of the river of information that rages steadily all around us. And yet we often feel challenged when trying to fulfill even fairly simple goals. This is the result of interference—both distractions from irrelevant information and interruptions by our attempts to simultaneously pursue multiple goals.

• Our cognitive control is really quite limited: we have a restricted ability to distribute, divide, and sustain attention; actively hold detailed information in mind; and concurrently manage or even rapidly switch between competing goals. We can only speculate that if the neural processes of goal enactment evolved to a comparable degree as our goal-setting abilities, we would not be so encumbered by goal interference. If we could hold more information in mind and with higher fidelity, if we could cast a broader attentional net on the world around us and with greater sustainability, if we could simultaneously engage in multiple demanding tasks and transition more efficiently between them, we would not be so easily distracted and interrupted. In many ways, we are ancient brains in a high-tech world.

• Cognitive Control Limitations

  • Attention * Selectivity is limited by susceptibility to bottom-up influences. * Distribution of attention results in diminished performance compared to focused attention.
    • Sustainability of attention over time is limited, especially in extended, boring situations.
    • Processing speed limitations affect both the efficiency of allocation and withdrawal of attention.
  • Working Memory
    • Capacity, or the number of items that can be actively held in mind, is severely limited.
    • Fidelity, the quality of information maintained in working memory, decays over time and as a result of interference.
  • Goal Management
    • Multitasking is limited by our inability to effectively parallel process two attention-demanding tasks.
    • Task switching results in costs to accuracy and speed performance.

• High-Tech World. The “three “game changers” in our rapidly changing high-tech world: the Internet, smartphones, and social media. Each features, at its core, a commodity that is precious us—information. These technologies have the remarkable ability to grab our attention at any instant with an alert, notification, buzz, beep, or even simply in response to a thought that it must be time to check in and make sure that we have not missed out on anything important in the past few minutes.

• Tackling the Distracted Mind: There are two approaches by which we can diminish the negative impact of interference on our lives: changing our brains and changing our behavior.

• There is quite a wide range in the strength of evidence that has been generated for the many approaches we have considered to aid the Distracted Mind. In our opinion, only physical exercise has reached the highest level of being a truly prescriptive approach. Not far behind this are cognitive exercises, video game training, and meditation, where we see a strong signal in the accumulated scientific literature. There is a weaker signal, but a signal nonetheless, for other approaches that need more evidence to become prescriptive—drugs, brain stimulation, and neurofeedback.

This is how to increase your attention span:

• Stop multitasking: You wouldn’t try to lift 5000 pounds. Your body can’t do that. Don’t try to do your best work while checking email, texting, and posting to Instagram. Your brain can’t do that.
• Exercise: You know it’s good for your body. Guess what? Your brain’s part of your body. (Shocking, I know.) Meditate: Simply put, meditation is attention training.
• Call your mother nature: Looking at a picture of a tree is like a deep tissue massage for your brain.
• Reduce interference: Remove anything from your environment that might distract you. Batch email and social media. Extend the time between breaks to build your attention muscles.
• Having your phone out doesn’t just distract you from work — it also reduces empathy and harms your relationships.

• This Is How You Design Your Mobile App for Maximum Growth. A popular link at First Round. The agency website is Primer
• Google Apps Script that publishes a Google Sheet to Amazon S3 as a JSON file. Auto-updates on edit & maintains data types. Creates an array of objects keyed by column header. Similar tools - Airtable, Fieldbook and the recently popular sheet2site. Other open source related tools are sheetrock, http://douglasduhaime.com/posts/crud-operations-on-static-file-sites.html, https://www.johnastewart.org/coding/twine-game-data-to-google-sheets-via-javascript/, https://medium.com/@dmccoy/how-to-submit-an-html-form-to-google-sheets-without-google-forms-b833952cc175
• Where is Sci-Hub now?. Nice idea of using Sci-hub preferred tag from WikiData folks. A Node.JS Express app hosted on Heroku platform.
• The Missing UI for Elastic Search - DejaVu. Should be interesting to explore more on this self-claimed missing web UI. A good starting point would be to follow discussions at HN. The general argument against ES seems to be that it was designed for full text search but is popular as a log analyzer. Pilosa seems to be a new kid in this space.

We operate on the unthinking assumption that the person who existed ten years ago is essentially the same person who exists will exist ten years from now, perhaps who will still exist in a future life after death. No matter what philosophies or theories or belief hold as true, actually we each live our lives with the deep-rooted conviction, “I was, I am, I shall be.”

The Buddha challenged this instinctive assertion of identity. By doing so he was not expounding one more speculative view to combat the theories of others: he repeatedly emphasized that he was not putting forth an opinion, but simply describing the truth that he had experienced and that any ordinary person can experience. “The enlightened one has cast aside all theories,” he said, “for he has seen the reality of matter, sensation, perception, reaction, and consciousness, and their arising and passing away.” Despite appearances, he had found that each human being is in fact a series of separate but related events. Each event is the result of the preceding one and follows it without any interval. The unbroken progression of closely connected events gives the appearance of continuity, of identity, but this is only an apparent reality, not the ultimate truth.

We may give a river a name but actually it is a flow of water never pausing in its course. We may think of the light of a candle as something constant, but if we look closely, we see that it is really a flame arising from a wick which burns for a moment, to be replaced at once by a new flame, moment after moment. We talk of the light of an electric lamp, never pausing to think that in reality it is, like the river, a constant flow, in this case a flow of energy caused by very high frequency oscillations taking place within the filament. Every moment something new arises as a product of the past, to be replaced by something new in the following moment. The succession of events is so rapid and continuous that it is difficult to discern. At a particular point in the process one cannot say that what occurs now is the same as what preceded it, nor can one say that it is not the same. Nevertheless, the process occurs.

In the same way, the Buddha realized, a person is not a finished, unchanging entity but a process flowing from moment to moment. There is no real “being”, merely an ongoing flow, a continuous process of becoming.

• 17 productivity and focus apps/extensions from RadReadings. Looks interesting - StayFocusd, which is now redirecting to freedom; batchedinbox; Bookcision. Of the tools mentioned, I use Google Auto Advance, Evernote, keyboard expander (similar to textexpander but less powerful), onetab, instapaper (occasionally) and quitter.
• How I get work done by Marie Kondo. On the significance of things Ask yourself this, often: Is what I’m doing connected to the kind of life that will spark joy for me? By thinking through this, the steps required to have that kind of life become clearer. I really do recommend tidying. Make sure all the things in your home spark joy and that all the things have their proper place. Just getting your home in order can really make your life clearer. It can make your head clearer.

“… and it’s a sermon Jobs delivers every time an executive reaches the VP level. Jobs imagines his garbage regularly not being emptied in his office, and when he asks the janitor why, he gets an excuse: The locks have been changed, and the janitor doesn’t have a key. This is an acceptable excuse coming from someone who empties trash bins for a living. The janitor gets to explain why something went wrong. Senior people do not. “When you’re the janitor,” Jobs has repeatedly told incoming VPs, “reasons matter.” He continues, “Somewhere between the janitor and the CEO, reasons stop mattering.” That “Rubicon,” he has said, “is crossed when you become a VP.”

What should real life be about?

[...] Life is sacrifice and risk taking, and nothing that doesn’t entail some moderate amount of the former, under the constraint of satisfying the latter, is close to what we can call life. If you do not undertake a risk of real harm, reparable or even potentially irreparable, from an adventure, it is not an adventure.

...take some Fat Tony wisdom: always do more than you talk. And precede talk with action. For it will always remain that action without talk supersedes talk without action.

Why skin in the game should matter to you?

[...]learning through thrills and pleasure. People have two brains, one when there is skin in the game, one when there is none. Skin in the game can make boring things less boring. When you have skin in the game, dull things like checking the safety of the aircraft because you may be forced to be a passenger in it cease to be boring. If you are an investor in a company, doing ultra-boring things like reading the footnotes of a financial statement (where the real information is to be found) becomes, well, almost not boring.
...
When there was risk on the line, suddenly a second brain in me manifested itself, and the probabilities of intricate sequences became suddenly effortless to analyze and map. When there is fire, you will run faster than in any competition. When you ski downhill some movements become effortless. Then I became dumb again when there was no real action.
...
But if you muster the strength to weight-lift a car to save a child, above your current abilities, the strength gained will stay after things calm down. So, unlike the drug addict who loses his resourcefulness, what you learn from the intensity and the focus you had when under the influence of risk stays with you. You may lose the sharpness, but nobody can take away what you’ve learned.

What you should do if you want to “help mankind”?

Finally, when young people who “want to help mankind” come to me asking, “What should I do? I want to reduce poverty, save the world,” and similar noble aspirations at the macro-level, my suggestion is:

1. Never engage in virtue signaling;
2. Never engage in rent-seeking;
3. You must start a business. Put yourself on the line, start a business.
Yes, take risk, and if you get rich (which is optional), spend your money generously on others. We need people to take (bounded) risks. The entire idea is to move the descendants of Homo sapiens away from the macro, away from abstract universal aims, away from the kind of social engineering that brings tail risks to society. Doing business will always help (because it brings about economic activity without large-scale risky changes in the economy); institutions (like the aid industry) may help, but they are equally likely to harm (I am being optimistic; I am certain that except for a few most do end up harming).

Courage (risk taking) is the highest virtue. We need entrepreneurs.

On ethics

Start by being nice to every person you meet. But if someone tries to exercise power over you, exercise power over him.

Avoid taking advice from someone who gives advice for a living, unless there is a penalty for their advice.

Laws come and go; ethics stay.

The ethical is always more robust than the legal. Over time, it is the legal that should converge to the ethical, never the reverse.

Beware of the person who gives advice, telling you that a certain action on your part is “good for you” while it is also good for him, while the harm to you doesn’t directly affect him.

No person in a transaction should have certainty about the outcome while the other one has uncertainty.

On why you shouldn’t trust academics

Academia has a tendency, when unchecked (from lack of skin in the game), to evolve into a ritualistic self-referential publishing game.

Now, while academia has turned into an athletic contest, Wittgenstein held the exact opposite viewpoint: if anything, knowledge is the reverse of an athletic contest. In philosophy, the winner is the one who finishes last, he said.
...
In some areas, such as gender studies or psychology, the ritualistic publishing game gradually maps less and less to real research, by the very nature of the agency problem, to reach a Mafia-like divergence of interest: researchers have their own agenda, at variance with what their clients, that is, society and the students, are paying them for. The opacity of the subject to outsiders helps them control the gates. Knowing “economics” doesn’t mean knowing anything about economics in the sense of the real activity, but rather the theories, most of which are bullshit, produced by economists. And courses in universities, for which hard-working parents need to save over decades, easily degenerate into fashion. You work hard and save for your children to be taught a post-colonial study-oriented critique of quantum mechanics.
...
The deprostitutionalization of research will eventually be done as follows. Force people who want to do “research” to do it on their own time, that is, to derive their income from other sources. Sacrifice is necessary. It may seem absurd to brainwashed contemporaries, but Antifragile documents the outsized historical contributions of the nonprofessional, or, rather, the non-meretricious. For their research to be genuine, they should first have a real-world day job, or at least spend ten years as: lens maker, patent clerk, Mafia operator, professional gambler, postman, prison guard, medical doctor, limo driver, militia member, social security agent, trial lawyer, farmer, restaurant chef, high-volume waiter, firefighter (my favorite), lighthouse keeper, etc., while they are building their original ideas.

“Burn old logs. Drink old wine. Read old books. Keep old friends.”

You can define a free person precisely as someone whose fate is not centrally or directly dependent on peer assessment.

Effectively Lindy answers the age-old meta-questions: Who will judge the expert? Who will guard the guard? (Quis custodiet ipsos custodes?) Who will judge the judges? Well, survival will.

For time operates through skin in the game. Things that have survived are hinting to us ex post that they have some robustness—conditional on their being exposed to harm. For without skin in the game, via exposure to reality, the mechanism of fragility is disrupted: things may survive for no reason for a while, at some scale, then ultimately collapse, causing a lot of collateral harm.

That which is “Lindy” is what ages in reverse, i.e., its life expectancy lengthens with time, conditional on survival.

On loss aversion

What matters isn’t what a person has or doesn’t have; it is what he or she is afraid of losing.
...
The more you have to lose, the more fragile you are.

On the proper source of knowledge

[...] When I don’t have skin in the game, I am usually dumb. My knowledge of technical matters, such as risk and probability, did not initially come from books. It did not come from lofty philosophizing and scientific hunger. It did not even come from curiosity. It came from the thrills and hormonal flush one gets while taking risks in the markets.

To have friends, you’ll need to hide your money and erudition

If anything, being rich you need to hide your money if you want to have what I call friends. This may be known; what is less obvious is that you may also need to hide your erudition and learning. People can only be social friends if they don’t try to upstage or outsmart one another. Indeed, the classical art of conversation is to avoid any imbalance, as in Baldassare Castiglione’s Book of the Courtier: people need to be equal, at least for the purpose of the conversation, otherwise it fails. It has to be hierarchy-free and equal in contribution. You’d rather have dinner with your friends than with your professor, unless of course your professor understands “the art” of conversation.

Always/Never

The problem with designing a nuclear bomb is the inevitable tradeoff between reliability and safety. Schlosser explains in Command and Control:

A safety mechanism that made a bomb less likely to explode during an accident could also, during wartime, render it more likely to be a dud. The contradiction between these two design goals was succinctly expressed by the words “always/never.” Ideally, a nuclear weapon would always detonate when it was supposed to — and never detonate when it wasn’t supposed to.

You are all computer scientists. You know what FINITE AUTOMATA can do. You know what TURING MACHINES can do. For example, Finite Automata can add but not multiply. Turing Machines can compute any computable function. Turing machines are incredibly more powerful than Finite Automata. Yet the only difference between a FA and a TM is that the TM, unlike the FA, has paper and pencil. Think about it. It tells you something about the power of writing. Without writing, you are reduced to a finite automaton. With writing you have the extraordinary power of a Turing machine.

~ Manuel Blum, Advice to a Beginning Graduate Student

Slides are up at https://www.slideshare.net/adamnash/personal-finance-for-engineers-stanford-2018/adamnash/personal-finance-for-engineers-stanford-2018

1. Be patient. No matter what.
2. Don’t badmouth: Assign responsibility, not blame. Say nothing of another you wouldn’t say to him.
3. Never assume the motives of others are, to them, less noble than yours are to you.
4. Expand your sense of the possible.
5. Don’t trouble yourself with matters you truly cannot change.
6. Expect no more of anyone than you can deliver yourself.
7. Tolerate ambiguity.
8. Laugh at yourself frequently.
9. Concern yourself with what is right rather than who is right.
10. Never forget that, no matter how certain, you might be wrong.
11. Give up blood sports.
12. Remember that your life belongs to others as well. Don’t risk it frivolously.
13. Never lie to anyone for any reason. (Lies of omission are sometimes exempt.)
14. Learn the needs of those around you and respect them.
15. Avoid the pursuit of happiness. Seek to define your mission and pursue that.
16. Reduce your use of the first personal pronoun.
17. Praise at least as often as you disparage.
18. Admit your errors freely and soon.
19. Become less suspicious of joy.
20. Understand humility.
21. Remember that love forgives everything.
22. Foster dignity.
23. Live memorably.
24. Love yourself.
25. Endure.

~John Perry Barlow, 2013

You are probably more interested in the hunting process of investing than you need to be. This varies by how you invest, but it’s true at all levels. There’s too much evidence it all styles of investing that, in aggregate, we put in more effort and intelligence than is necessary. Why we do this make sense when you understand Skinner’s research on variable interval rewards. The buzz of this game is strong enough to keep us searching for the next reward, often obsessively, sometimes to our own detriment. Some rats in these experiments obsessed themselves into exhaustion, frantically waiting for food pellets nonstop for days on end. They wanted food to keep them alive, but they nearly killed themselves trying to get it. Everyone knows an investor like that. A combination of letting time do its work, and humility in how much you can and can’t control, is vital in almost all investing styles.

This is not Excel and charts. It’s dopamine and cortisol. So much of investing is not what you know, but how you behave. And behavior is hard to teach, hard to control, and hard to even come to terms with. There’s uncomfortable truth here: My best guess is that 10% of people are born natural investors, and 10% of people can’t ever be taught how to invest successfully no matter their education. The other 80% of us could improve by spending more energy on how we respond to risk and reward vs. the active chase of searching. Barry Ritholtz was once asked the greatest financial lesson he’s ever learned. “You’re a monkey. It all comes down to that. You are a slightly clever, pants-wearing primate.”

What is the greatest financial lesson you’ve ever learned?

You’re a monkey. It all comes down to that. You are a slightly clever, pants-wearing primate. If you forget that you’re nothing more than a monkey who has been fashioned by eons on the plains, being chased by tigers, you shouldn’t invest. You have to be aware of how your own psychology effects what you do. This is why we as investors sell at the bottom, get panicked. All the other lessons I’ve learned have come out of that. As has the field of behavioral economics.

Wall Street clichés, like “cut your losses and let your winners run” come back to prevent the monkey part of your brain from doing what it does. There’s a banana–I want it. That’s how chimps behave. Us humans react to greed and fear in predictable ways. We are predictably irrational. If you understand that you can take steps to prevent that–we don’t own anything in the office that doesn’t have a stop-loss on it. In 2008, we watched the market go down 40%. We figured out we’re chimps, and don’t let the chimp inside us make those chimp-like decisions.

Every good financial decision I’ve made comes from, “Wait a second, monkey boy, step back, don’t do that.” Once you realize how your own brain chemistry works against you, it gives you a chance to not panic at the bottom.

When I get stuck, these are specific things I do that can unstuck me.

1. Implication. Hold your nose and do the math. Set aside “this is what I believe” or “this is what I would prefer”. Apply a model or analogy first, then analyze the results.

2. Boundaries. Be clear about what is my responsibility and what is not my responsibility. “I just got difficult feedback. How much is about me and how much is about the person giving the feedback?” Waiting. Timing matters. If you are waiting for something specific, then waiting is an action.

3. Contrarian. You can’t create more impact than someone else by doing what they do. You either have to be better than they are or you have to do something different. I prefer to do something different. One simple heuristic is if someone says, “Obviously…” I always ask myself what would happen if the opposite were true. The greater the fury behind the “obviously”, the longer I’ll spend considering the counterfactual. Usually this leads to dead ends, but when it doesn’t, you won’t have any competition until it’s too late.

4. Isolation. When faced with a big, complicated, confusing situation (like tracking down a weird bug), first turn it into a small, simpler, still-confusing situation. Binary search is efficient but it’s hard not to try to understand first.

5. Phase shift. If you’re stuck doing A and then B, try doing half of A, the second half of A and the first half of B together, then the second half of B. (Implement-Test)(Implement-Test) becomes (Test-Implement)(Test-Implement). (Requires a cycle as a prereq).

6. Believe the Market. When one of my theories (see above) predicts that people will act in one way but a bunch of reasonable people act in a different way, I ask, “What theory would explain their behavior?” (I also use this on myself when I behave in ways I don’t like.)

7. Thompson Sampling. “A little nonsense/now and then/is relished by/the wisest man”. Put a little investment, occasionally, into even bad ideas, just in case.

8. Reverse causality. When someone says, “This person is senior so they write the meeting summary,” I immediately say, “Maybe they look senior because they write the meeting summaries.” Try writing the summary yourself and see if people treat your like you are senior.

…go down to a local drugstore and buy a very cheap notebook and start keeping track of your decisions. And the specific idea is whenever you’re making a consequential decision, something going in or out of the portfolio, just take a moment to think, write down what you expect to happen, why you expect it to happen and then actually, and this is optional, but probably a great idea, is write down how you feel about the situation, both physically and even emotionally. Just, how do you feel? I feel tired. I feel good, or this stock is really draining me. Whatever you think.

When you’ve got a decision-making journal, it gives you accurate and honest feedback of what you were thinking at that time. And so there can be situations, by the way, you buy a stock and it goes up, but it goes up for reasons very different than what you thought was going to happen. And having that feedback in a way to almost check yourself periodically is extremely valuable. So that’s, I think, a very inexpensive; it’s actually not super time consuming, but a very, very valuable way of giving yourself essential feedback because our minds won’t do it normally.

When George Shultz was secretary of state in the 1980s, he liked to carve out one hour each week for quiet reflection. He sat down in his office with a pad of paper and pen, closed the door and told his secretary to interrupt him only if one of two people called:

“My wife or the president,” Shultz recalled.