28 December 2020
I wish for you to have the time and mindfulness to reflect on the year and decade gone by – including things that brought you success, failures, peace, and fulfillment. This is also a great time to think about the future – not just 2021 but I encourage you to think and plan for till 2030 or beyond.
Where will you be in 2030?
What will you do in 2030?
What will matter the most in 2030?
What will you not be doing in 2030?
The end of man is action, and not thought, though it be of the noblest. In this world there are a lot of people who cannot touch the heart of the matter but talk merely intellectually (not emotionally) about how they would do this or do that; talk about it, but yet nothing is ever actualized or accomplished.
~ Bruce Lee in Striking Thoughts
Paul Graham writes this beautiful essay on independent thinking. It’s not easy – with social media telling us what to see, think and do. If you add conditioning – traditions, beliefs and guidance by family, friends and the schools, then thinking for oneself is extremely difficult and takes time and practice to correct.
You don’t want to start a startup to do something that everyone agrees is a good idea, or there will already be other companies doing it. You have to do something that sounds to most other people like a bad idea, but that you know isn’t. Similarly, for investors, the only valuable insights are the ones most other investors don’t share.
I wish someone had told me about this distinction (of work that requires independent-minded vs not) when I was a kid because it’s one of the most important things to think about when you’re deciding what kind of work you want to do.
Independent-mindedness seems to be more a matter of nature than nurture. Which means if you pick the wrong type of work, you’re going to be unhappy.
Conventional-minded people don’t like to think of themselves as conventional-minded. It’s just a coincidence that their beliefs are identical to their peers’. And the independent-minded, meanwhile, are often unaware how different their ideas are from conventional ones, at least till they state them publicly.
Schools generally ignore independent-mindedness, except to the extent they try to suppress it. So we don’t get anything like the same kind of feedback about how independent-minded we are.
One of the most effective techniques is one practiced unintentionally by most nerds: simply to be less aware what conventional beliefs are. It’s hard to be a conformist if you don’t know what you’re supposed to conform to.
It matters a lot who you surround yourself with. If you surround yourself with independent-minded people, you’ll have the opposite experience: hearing other people say surprising things will encourage you to, and to think of more.
Another place where the independent- and conventional-minded are thrown together is in successful startups. The founders and early employees are almost always independent-minded; otherwise the startup wouldn’t be successful. But conventional-minded people greatly outnumber independent-minded ones, so as the company grows, the original spirit of independent-mindedness is inevitably diluted. This causes all kinds of problems besides the obvious one that the company starts to suck.
You can expand the source of influences in time as well as space, by reading history. When I read history I do it not just to learn what happened, but to try to get inside the heads of people who lived in the past.
Cultivate an attitude of skepticism. More generally your goal should be not to let anything into your head unexamined. Some of the most powerful influences are implicit. How do you even notice these? By standing back and watching how other people get their ideas.
We need to look at the internal structure of independent-mindedness — at the individual muscles we need to exercise, as it were. It seems to me that it has three components: fastidiousness about truth, resistance to being told what to think, and curiosity.
Fastidiousness about truth means more than just not believing things that are false. It means being careful about the degree of belief.
It’s not enough just to have resistance to being told what to think. But if we can’t increase our resistance to being told what to think, we can at least shore it up, by surrounding ourselves with other independent-minded people.
In the most independent-minded people, the desire not to be told what to think is a positive force. It’s not mere skepticism, but an active delight in ideas that subvert the conventional wisdom, the more counterintuitive the better.
Everyone I know who’s independent-minded is deeply curious, and everyone I know who’s conventional-minded isn’t.
Is there a way to cultivate curiosity? To start with, you want to avoid situations that suppress it. One step is probably to seek out the topics that engage it. Another way to increase your curiosity is to indulge it, by investigating things you’re interested in.
You know the feeling when you ‘should have’ invested in that company. It’s happened a few times with me and I’m sure it’ll happen again in the future. But what I like is the openness with which Bessemer Venture Partners has shared the details. It also is a good reminder to jot down your decision-making process and reasons when you ‘pass’ on a company/investment.
Our reasons for passing on these investments varied. In some cases, we were making a conscious act of generosity to another, younger venture firm, down on their luck, who we felt could really use a billion dollars in gains. In other cases, our partners had already run out of spaces on the year’s Schedule D and feared that another entry would require them to attach a separate sheet.
Whatever the reason, we would like to honor these companies – our “anti-portfolio” – whose phenomenal success inspires us in our ongoing endeavors to build growing businesses. Or, to put it another way: if we had invested in any of these companies, we might not still be working.
My favourite one – In 2006 Byron Deeter met the team (Tesla) and test-drove a roadster. He put a deposit on the car, but passed on the negative margin company telling his partners, “It’s a win-win. I get a great car and some other VC pays for it!” The company passed $30 Bn in market cap in 2014. Byron paid full price for his Model X.
Tesla just touched $627 Billion valuation today!
Naval Ravikant is an entrepreneur, investor and philosopher. If you haven’t yet read about him, I suggest you start here and then carry on reading the book ‘Almanack of Naval Ravikant’.
It’s not really about hard work. You can work in a restaurant eighty hours a week, and you’re not going to get rich. Getting rich is about knowing what to do, who to do it with, and when to do it.
If you don’t know yet what you should work on, the most important thing is to figure it out.
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.
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.
Pick an industry where you can play long-term games with long-term people.
Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.
Arm yourself with specific knowledge, accountability, and leverage.
Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).
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.
Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers.
Reading is faster than listening. Doing is faster than watching.
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.
“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.
This is hard. This is why I say it takes decades—I’m not saying it takes decades to execute, but the better part of a decade may be figuring out what you can uniquely provide.
Wealth is the thing you want. Wealth is assets that earn while you sleep.
Technology democratizes consumption but consolidates production. The best person in the world at anything gets to do it for everyone.
Jelmer Pe at Venturism shares their experience of building products and how to approach experimentation. Give this a read.
Learn to Build. Learn to Sell. If you can do both you’ll be unstoppable – @naval
The only way to attain these skills is by doing. Build something. By trying. By launching. By failing and then trying again.
As an individual, learn what it’s like to launch. Start something, and tweet / blog / podcast about it as you are building. Learn from the feedback of followers. Discover the challenges that come with building a business, and get better at conquering them.
Entrepreneurship is a numbers game. Go through ~ 20+ failures before you land your venture-backed big hit, or, my preference: Build up an accumulation of smaller, bootstrapped hits.
If you are a builder like me, and materializing new ideas excites you, aim for a portfolio of smaller products or companies, each bringing in a decent amount of money.
Pick an audience / market that resonates with you.
Identify multiple critical problems they are facing and aspirations they have.
Brainstorm and select multiple ideas. Test them with your audience. See what resonates.
Build multiple MVPs. With NoCode you can build an MVP in a day. This is not hard to manage. Alternatively do a 12 in 12 challenge, focusing on one idea each month.
Achieve Product Market Fit with one or more of your products.
Three levels of customer insight:
Customer pains are useful, because they are tangible. However, I find there are more interesting levels of abstraction to people’s needs than just their problems. And if you can address those you can create something people love, not just use.
If we move a layer up (or deeper if you want) from customer pains, you’ll find their jobs to be done. The difference is subtle, but JTBD focuses on people’s goals, aspirations and challenges to get there.
JTBD are context sensitive. They have meaning in specific situations, but don’t deal with people’s higher level ambitions and attitude. This is where Zeitgeist (loosely: Spirit of the Time) comes in. The way people interact with products gives meaning to those products within that specific context.
The most overlooked part of building a startup is Distribution. Selling is about finding the right people at the right places, and offering them something that will help them, presenting it in the right way and at the right time. This requires you to be very specific about:
Who your audience is exactly (and your early adopters)
Where they hang out
When they experience the problem you solve
How to get their attention and attract them without being intrusive
Your offer and promise
The primary trait I would recruit for in the first 10 hires of any startup is resourcefulness.
I found this really post interesting for a couple of reasons – one, Fred Ehrsam really breaks down why, what and how part of governance and its role in crypto; two, governance is such a broad and complex subject so anything in this space is a great read.
Why? Governance minimization allows stakeholders to depend on a protocol. This creates a virtuous cycle of adoption, enabling scale that would otherwise be unachievable. Minimizing governance tends to make protocols more credibly neutral.
Credible neutrality is dependability. It means a stakeholder (e.g a user or a developer) can use or build on a protocol with confidence it will not change against their interests.
Credible neutrality is primary value proposition of crypto today. It’s what allows for new forms of open and predictable money. It’s what creates platforms where anyone can openly create and access new applications. Lack of credible neutrality in existing platforms makes its importance clear. It creates safety of value locked in a platform — both concrete (funds) and abstract (development time, users) — from theft, shutdown, and restriction. A total failure of credible neutrality is an exit scam.
Creating a perfect governance system is like designing a perpetual motion device. There are well-known game theoretic results which show all governance systems are both inherently unstable and fail to simultaneously satisfy all desirable properties.
Formalizing stakeholders for on-chain governance today typically occurs through simple token ownership and the governance itself through token holder voting. Tokenholder voting creates a litany of misalignment issues with the long term use of a protocol, including external pressures, value capture, time horizon mismatch and outside economic interests.
Formal governance systems can encourage action versus inaction, even when inaction is superior. Governance can also be extremely time and energy consuming.
Ultimately, if a protocol becomes sufficiently inferior to a new alternative, eventually it will be surpassed and die. This is how evolution works in nature. Individual organisms do not evolve (in the genetic code sense). Evolution occurs when copies are made with mutations. This approach has also worked in open source in the past (e.g Linux).
Most importantly, dependable individual protocols enable faster ecosystem-wide evolution because developers can use these building blocks with confidence. Imagine how much faster development of internet applications would be if every company’s code was open source, neutral, and usable by anyone.
Innovation in on-chain governance systems remains an important frontier.
Value capture = use x take rate. It may be that governance minimized protocols have higher use but lower take rates relative to a traditional company. And where that nets out economically is to be discovered.