Sunday, November 27, 2022

Little Rules About Big Things

There is rarely more or less economic uncertainty; just changes in how ignorant people are to potential risks.

You should obsess over risks that do permanent damage and care little about risks that do temporary harm, but the opposite is more common.

The only way to build wealth is to have a gap between your ego and your income.

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

A lot of financial debates are just people with different time horizons talking over each other.

It’s easy to mistake “I’m good at this” with “Others are bad at this” in a way that makes you overestimate how valuable your skills are.

It’s important to know the difference between rosy optimism and periods of chaos that trend upward.

If your expectations grow faster than your income you’ll never be happy with your money no matter how much you accumulate.

The inability to forecast the past has no impact on our desire to forecast the future. Certainty is so valuable that we’ll never give up the quest for it, and most people couldn’t get out of bed in the morning if they were honest about how uncertain the future is.

Having no FOMO might be the most important investing skill.

Few things are as valuable in the modern world as a good bullshit detector.

Most of what people call “conviction” is a willful disregard for new information that might make you change your mind. That’s when beliefs turn dangerous.

People have vastly different desires, except for three things: Respect, feeling useful, and control over their time. Those are nearly universal.

The market is rational but investors play different games and those games look irrational to people playing a different game.

There’s a sweet spot where you grasp the important stuff but you’re not smart enough to be bored with it.

A big takeaway from economic history is that the past wasn’t as good as you remember, the present isn’t as bad as you think, and the future will be better than you anticipate.

Most assholes are going through something terrible in their life. People hide their skeletons, which requires blind forgiveness of their quirks and moods because you’re unaware of what they’re dealing with.

History is driven by surprising events but forecasting is driven by obvious ones.

Pessimism always sounds smarter than optimism because optimism sounds like a sales pitch while pessimism sounds like someone trying to help you.

Every past decline looks like an opportunity and every future decline looks like a risk.

A comforting delusion is thinking that other people’s bad circumstances couldn’t also happen to you.

For many people the process of becoming wealthier feels better than having wealth.

Something can be factually true but contextually nonsense. Bad ideas often have at least some seed of truth that gives their followers confidence.

Every market valuation is a number from today multiplied by a story about tomorrow.

Comedians are the only good thought leaders because they understand how the world works but they want to make you laugh rather than make themselves feel smart.

People learn when they’re surprised. Not when they read the right answer, or are told they’re doing it wrong, but when they experience a gap between expectations and reality.

People tend to know what makes them angry with more certainty than what might make them happy. Happiness is complicated because you keep moving the goalposts. Misery is more predictable.

Getting rich and staying rich are different things that require different skills.

Money’s greatest intrinsic value is its ability to give you control over your time.

Past success always seems 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.

“Learn enough from history to respect one another’s delusions.” -Will Durant

There’s more to learn from people who endured risk than those who seemingly conquered it, because the kind of skills you need to endure risk are more likely repeatable and relevant to future risks.

Nothing too good or too bad stays that way forever, because great times plant the seeds of their own destruction through complacency and leverage, and bad times plant the seeds of their own turnaround through opportunity and panic-driven problem-solving.

Most people can afford to not be a great investor. But they can’t afford to be a bad investor.

What money can and can’t do for you isn’t intuitive, so most people are surprised at how they feel when they suddenly have more or less than before.

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.

Unsustainable things can last longer than you anticipate.

“The thing that is least perceived about wealth is that all pleasure in money ends at the point where economy becomes unnecessary. The man who can buy anything he covets, without any consultation with his banker, values nothing that he buys.” - William Dawson

Napoleon’s definition of a military genius was “The man who can do the average thing when everyone else around him is losing his mind.” It’s the same in business and investing.

It’s hard to tell the difference between boldness and recklessness, greed and ambition, contrarian and wrong.

Woodrow Wilson talked about whether something was accountable to Darwin or accountable to Newton. It’s a useful idea. Everything is accountable to one of the two, and you have to know whether something adapts and changes over time or perpetually stays the same.

Risk has two stages: First, when it actually hits. Then, when its scars influence our subsequent decisions. The recession, and the lingering pessimism that does as much damage.

Tell people what they want to hear and you can be wrong indefinitely without penalty.

Optimism and pessimism always overshoot because the only way to know the boundaries of either is to go a little bit past them.

Reputations have momentum in both directions because people want to associate with winners and avoid losers.

It’s easier to lie with numbers than words, because people understand stories but their eyes glaze over with numbers. As the saying goes, more fiction has been written in Excel than Word.

It’s easy to take advantage of people. It’s also easy to underestimate the power and influence of groups of people who have been taken advantage of for too long.

You have five seconds to get people’s attention. Books, blogs, emails, reports, it doesn’t matter – if you don’t sell them in five seconds you’ve exhausted most of their patience.

It always looks like we haven’t innovated in 10 or 20 years because it can take10 or 20 years before an innovation is an obvious success.

When and where you were born can have a bigger impact on your outcome in life than anything you do intentionally.

Most people are good at learning facts but not great at learning rules – the broad lessons from events that will apply to future events.

Everyone is making a bet on an unknown future. It’s only called speculation when you disagree with someone else’s bet.

There are two types of information: stuff you’ll still care about in the future, and stuff that matters less and less over time. Long-term vs. expiring knowledge. It’s critical to identify which is which when you come across something new.

The same traits needed for outlier success are the same traits that increase the odds of failure. The line between bold and reckless is thin. So be careful blindly praising successes or criticizing failures, as they often made similar decisions with slightly different levels of luck.

When communicating, “know your audience” easily becomes “pander to your audience.”

Most financial mistakes come when you try to force things to happen faster than is required. Compounding doesn’t like when you try to use a cheat code.

There is an optimal net worth for most people, after which not only does happiness stop increasing but more money becomes a social and psychological liability. The number is different for everyone, but is probably lower than most people think.

Risk is what you can’t see, think only happens to other people, aren’t paying attention to, are willfully ignoring, and isn’t in the news. A little surprise usually does more damage than something big that’s been in the news for months.

Innovation and economics can be miles apart. Twitter directly influences geopolitics between nuclear states and is worth half as much as Progressive Auto Insurance.

Risk management is less about how you respond to risk and more about recognizing how many things can go wrong before they actually do.

There is too much marketing (waving your arms) and not enough branding (building trust).

A lot of people don’t realize what bet they’re making. Maybe they thought they were betting on disruptive technology, but it turned out they were betting on low interest rates. Or they thought they were betting on alternative energy, but it turned out they were betting on subsidies and tax credits. Many bets don’t work not because your bet was wrong, but because you didn’t realize the bet you were making in the first place.

Housing is often a liability masquerading as a safe asset.

Asking what the biggest risks are is like asking what you expect to be surprised about. If you knew what the biggest risk was you would do something about it, and doing something about it makes it less risky. What your imagination can’t fathom is the dangerous stuff, and it’s why risk can never be mastered.

A lot of good writing makes points that people already intuitively know but haven’t yet put into words. It works because readers learn something new without having to expend much energy questioning whether it’s true. The alternatives are points that are obvious and well known (boring) or something that’s non-obvious and unknown (often takes too much effort to understand and impatient readers leave).

Emotions can override any level of intelligence.

Small risks are overblown because they’re easy to talk about, big risks are discounted and ignored because they seem preposterous before they arrive.

If you have an idea but think “someone has already done that,” just remember there are 1,010 published biographies of Winston Churchill.

No one is thinking about you as much as you are.

John D. Rockefeller was worth the equivalent of $400 billion, but he never had penicillin, sunscreen, or Advil. For most of his adult life he didn’t have electric lights, air conditioning, or sunglasses. Everything about wealth is circumstances in the context of expectations.

Read fewer forecasts and more history. Study more failures and fewer successes.

There is an optimal amount of bullshit in life. Having no tolerance for hassle, nonsense and inefficiency is not an admirable trait; it’s denying reality. Once you accept a certain level of BS, you stop denying its existence and have a clearer view of how the world works.

Most problems are more complicated than they look but most solutions should be simpler than they are.

About once a decade people forget that bubbles form and burst about once a decade.

If something is impossible to know you are better off not being very smart, because smart people fool themselves into thinking they know while average people are more likely to shrug their shoulders and end up closer to reality.

You can’t believe in risk without also believing in luck because they are fundamentally the same thing—an acknowledgment that things outside of your control can have a bigger impact on outcomes than anything you do on your own.

“Reality will pay you back in equal proportion to your delusion.” – Will Smith

A common irony goes like this:

  • Paranoia leads to success because it keeps you on your toes.
  • But paranoia is stressful, so you abandon it quickly once you achieve success.
  • Now you’ve abandoned what made you successful and you begin to decline – which is even more stressful.

Risk’s greatest fuels are leverage, overconfidence, ego, and impatience. Its greatest antidote is having options, humility, and other people’s trust.

Once-in-a-century events happen all the time because lots of unrelated things can go wrong. If there’s a 1% chance of a new disastrous pandemic, a 1% chance of a crippling depression, a 1% chance of a catastrophic flood, a 1% chance of political collapse, and on and on, then the odds that something bad will happen next year – or any year – are … pretty good. It’s why Arnold Toynbee says history is “just one damn thing after another.”

People suffering from sudden, unexpected hardship can adopt views they previously would have considered unthinkable.

It’s easiest to convince people that you’re special if they don’t know you well enough to see all the ways you’re not.

A large group of people can become better informed over time. But they can’t, on average, become more patient, less greedy, or more level-headed during periods of upheaval. That will never change.

Good ideas are easy to write, bad ideas are hard. Difficulty is a quality signal, and writer’s block usually indicates more about your ideas than your writing.

More people wake up every morning wanting to solve problems than wake up looking to cause harm. But people who cause harm get the most attention. So slow progress amid a drumbeat of bad news is the normal state of affairs.

Everything is sales.

Source –

https://collabfund.com/blog/little-rules-about-big-things/ 

Sunday, November 13, 2022

The 5-Hour Rule Used by Bill Gates, Jack Ma and Elon Musk

You just walked in the door from an exhausting day at work. You're hungry and spent, just wanting to catch your breath for a minute. You grab something to eat and then veg out in front of the TV. The next thing you know, you've just binge-watched five episodes of the latest Netflix show. While that's okay occasionally — we all need ways to decompress and shut down — this isn't a healthy habit.

That's why the most successful people in the world spend their free time learning. It's not exactly breaking news. During his five-year study of more than 200 self-made millionaires, Thomas Corley found that they don't watch TV. Instead, an impressive 86 percent claimed they read — but not just for fun. What's more, 63 percent indicated they listened to audiobooks during their morning commute.

 

Productivity expert ChoncĂ© Maddox writes, "It's no secret that successful people read. The average millionaire is said to read two or more books per month." As such, she suggests everyone "read blogs, news sites, fiction and non-fiction during downtime so you can soak in more knowledge." If you're frequently on the go, listen to audiobooks or podcasts.

 

Maybe you're thinking: Who has the time to sit down and actually read? Between work and family, it's almost impossible to find free time. As an entrepreneur and a father, I can relate — but only to an extent. After all, if Barack Obama could fit in time to read while in the White House, what excuse do you have? He even credits books to surviving his presidency.

 

President Obama is far from the only leader to credit his success to readingBill GatesWarren BuffettOprah WinfreyElon MuskMark Cuban and Jack Ma are all voracious readers. As Gates told The New York Times, reading "is one of the chief ways that I learn, and has been since I was a kid."

 

So how do they find the time to read daily? They adhere to the five-hour rule.

 

Breaking down the five-hour rule

The five-hour rule was coined by Michael Simmons, founder of Empact, who has written about it widely. The concept is wonderfully simple: No matter how busy successful people are, they always spend at least an hour a day — or five hours a work week — learning or practicing. And they do this across their entire career.

 

Simmons traces this phenomenon back to Ben Franklin, who was constantly setting aside time to learn. Franklin generally did this in the morning, waking up early to read and write. He established personal goals and tracked his results. In the spirit of today's book clubs, he created a club for artisans and trademen; they'd come together to pursue self-improvement. He also experimented with his new information and asked reflective questions every morning and evening.

 

The five-hour rule's three buckets

Today's successful leaders have embraced Franklin's five-hour rule by breaking the rule into three buckets.

 

Read: Self-made millionaires including Mark Cuban and Dan Gilbert, owner of the Cleveland Cavaliers, read between one and three hours daily. Elon Musk learned how to build rockets, which lead to SpaceX, by reading. Besides expanding your knowledge, Jack Ma, co-founder of Alibaba, says that "reading can give you a good head start; this is often what your peers cannot obtain. Compared to others, readers are more likely to know other industries' strategies and tactics."

Even if you can't commit to an hour or more of reading every day, start with 20 to 30 minutes. I always have a book with me so when I'm waiting for a meeting to start or in the waiting room of a doctor's office, I can read instead of waste time on my smartphone. You could also try audiobooks during your daily commute or when exercising.

 

Reflect: The five-hour rule also includes reflecting and thinking. This could be just staring at the wall or jotting down your thoughts. For example, Spanx founder Sara Blakely is a longtime journaler.

Focusing on the past gives you a chance to learn from mistakes you've made, as well as assess what you did correctly. As a result, you'll be better suited to achieve your goals and improve your life. In 2014, a University of Texas study found that mental rest and reflection improves learning.

Need help getting started? Schedule reflection time in your planner. I've found blocking out 15 to 20 minutes after lunch is ideal because I'm coming out of that post-lunch slump. But start small: Allocate five or 10 minutes per day, then work your way up so you're not overwhelmed.

Know the questions you want to ask. Stick with just two or three questions focused on that specific day. For example, if you attended a conference, ask, "What were the key takeaways?" and "How can I apply this to my business?"

 

Experiment: The third and final bucket is rapid experimentation. Ben Franklin and Thomas Edison became leading inventors and thinkers because of their experiments. We have Gmail because Google allowed employees to experiment with new ideas. The reason experiments are so useful is because you have facts, not assumptions. Experiments show you what's working. You can learn from your mistakes and obtain feedback from others. Best of all, experimentation isn't that time-consuming. Most of the time, you're testing through the same activities you'd perform without testing.

 

Jack Ma even recommends applying the knowledge you've learned to a real-life scenario. For example, after reading a book about collaboration and teamwork, you could take on new volunteer work to put that knowledge to use.

 

When you make learning a habit, you'll very likely be more successful and productive across different areas of your life. By investing in a reading habit, you can ensure you're growing yourself — and your company — every day.

  

Source –

https://www.entrepreneur.com/living/the-5-hour-rule-used-by-bill-gates-jack-ma-and-elon-musk/317602

Friday, October 21, 2022

A Tribute To Dhanvantri - The Healer Of Gods

On this pious occasion of Dhanteras, I take this opportunity to wish you and all loved ones a life full of good health, great wealth, happiness, prosperity and the love of near and dear ones. Happy Dhanteras and Happy Diwali.

Today we also pray to Dhanvantri, the healer of the gods and the one who gave the knowledge of Ayurveda to us. An excellent surgeon and the master of Ayurveda, he has the powers of quick healing, long life and forever youthfulness, he carries the pot of “Amrit” with him.

 While all of us know “health is wealth” it is interesting to pause and understand the meaning and significance of the name “Dhanvantri” just to reinforce that good health is indeed a great blessing. Wealth, if lost, can be regained. Not health. Trading health for wealth is a sure – lose bet.

Once again on this auspicious day, I wish and pray that the goddesses Lakshmi and Saraswati keep showering us with their blessings and Dhanvantri to bless us with great health too.

Take care, stay safe and have a great festive season.

Sunday, October 9, 2022

Your Discomfort Zone

Most of us need an external stimulus to do our best work.

It helps to have an alarm clock if you want to get out of bed before dawn.

A presentation. A deadline. A live performance. The threat of foreclosure, an upcoming review or some sort of crisis.

We can use these pressures to dig deeper, find new resources and overcome our self doubt.

The challenge is that sometimes, we pick the wrong stimulus. We choose a prompt to serve us, but we end up serving it, in a situation that hurts us (and others) instead of fuelling the work.

It’s essential to realize that our discomfort zone is a choice, there isn’t a pre-ordained roster. If you need a deadline, for example, but have discovered that those deadlines are costing you money (because shortcuts are expensive), then it’s worth doing the hard work to find a new form of discomfort.

The problem with a drop-dead deadline is that if you miss it, you’re dead.

If you need to make huge promises and add all sorts of hype, but that hype is hurting your reputation, again, it’s worth investing in a new way to poke yourself to dig deeper.

When we hear about divas, or dysfunctional managers, more often than not we see a situation where someone who should know better has chosen the wrong form of discomfort.

The argument can be made that the biggest difference between a professional, an amateur and someone who’s not even participating is their choice of discomfort.

Give it a name, call it out. Your discomfort zone is a choice, and if it’s not serving you, fix it.

Like all tools, the right one serves the professional.

Source -

https://seths.blog/2016/10/your-discomfort-zone/?

Sunday, September 25, 2022

Pick Partners With Intelligence, Energy and Integrity

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 live 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.

 

Source –

https://nav.al/intelligence-energy-integrity

Sunday, September 11, 2022

Some Rules To Be Successful

I’ve observed thousands of founders and thought a lot about what it takes to make a huge amount of money or to create something important. Usually, people start off wanting the former and end up wanting the latter.

Here are 13 thoughts about how to achieve such outlier success. Everything here is easier to do once you’ve already reached a baseline degree of success (through privilege or effort) and want to put in the work to turn that into outlier success. [1] But much of it applies to anyone.

1. Compound yourself

Compounding is magic. Look for it everywhere. Exponential curves are the key to wealth generation.

A medium-sized business that grows 50% in value every year becomes huge in a very short amount of time. Few businesses in the world have true network effects and extreme scalability. But with technology, more and more will.  It’s worth a lot of effort to find them and create them.

You also want to be an exponential curve yourself—you should aim for your life to follow an ever-increasing up-and-to-the-right trajectory. It’s important to move towards a career that has a compounding effect—most careers progress fairly linearly.

You don't want to be in a career where people who have been doing it for two years can be as effective as people who have been doing it for twenty—your rate of learning should always be high. As your career progresses, each unit of work you do should generate more and more results. There are many ways to get this leverage, such as capital, technology, brand, network effects, and managing people.

It’s useful to focus on adding another zero to whatever you define as your success metric—money, status, impact on the world, or whatever. I am willing to take as much time as needed between projects to find my next thing. But I always want it to be a project that, if successful, will make the rest of my career look like a footnote.

Most people get bogged down in linear opportunities. Be willing to let small opportunities go to focus on potential step changes.

I think the biggest competitive advantage in business—either for a company or for an individual’s career—is long-term thinking with a broad view of how different systems in the world are going to come together. One of the notable aspects of compound growth is that the furthest out years are the most important. In a world where almost no one takes a truly long-term view, the market richly rewards those who do.

Trust the exponential, be patient, and be pleasantly surprised.

2. Have almost too much self-belief

Self-belief is immensely powerful. The most successful people I know believe in themselves almost to the point of delusion.

Cultivate this early. As you get more data points that your judgment is good and you can consistently deliver results, trust yourself more.

If you don’t believe in yourself, it’s hard to let yourself have contrarian ideas about the future. But this is where most value gets created.

I remember when Elon Musk took me on a tour of the SpaceX factory many years ago. He talked in detail about manufacturing every part of the rocket, but the thing that sticks in memory was the look of absolute certainty on his face when he talked about sending large rockets to Mars. I left thinking “huh, so that’s the benchmark for what conviction looks like.”

Managing your own morale—and your team’s morale—is one of the greatest challenges of most endeavors. It’s almost impossible without a lot of self-belief. And unfortunately, the more ambitious you are, the more the world will try to tear you down.  

Most highly successful people have been really right about the future at least once at a time when people thought they were wrong. If not, they would have faced much more competition.

Self-belief must be balanced with self-awareness. I used to hate criticism of any sort and actively avoided it. Now I try to always listen to it with the assumption that it’s true, and then decide if I want to act on it or not. Truth-seeking is hard and often painful, but it is what separates self-belief from self-delusion.

This balance also helps you avoid coming across as entitled and out of touch.

3. Learn to think independently

Entrepreneurship is very difficult to teach because original thinking is very difficult to teach. School is not set up to teach this—in fact, it generally rewards the opposite. So you have to cultivate it on your own.

Thinking from first principles and trying to generate new ideas is fun, and finding people to exchange them with is a great way to get better at this. The next step is to find easy, fast ways to test these ideas in the real world.

“I will fail many times, and I will be really right once” is the entrepreneurs’ way. You have to give yourself a lot of chances to get lucky.

One of the most powerful lessons to learn is that you can figure out what to do in situations that seem to have no solution. The more times you do this, the more you will believe it. Grit comes from learning you can get back up after you get knocked down.

4. Get good at “sales”

Self-belief alone is not sufficient—you also have to be able to convince other people of what you believe.

All great careers, to some degree, become sales jobs. You have to evangelize your plans to customers, prospective employees, the press, investors, etc. This requires an inspiring vision, strong communication skills, some degree of charisma, and evidence of execution ability.

Getting good at communication—particularly written communication—is an investment worth making. My best advice for communicating clearly is to first make sure your thinking is clear and then use plain, concise language.

The best way to be good at sales is to genuinely believe in what you’re selling. Selling what you truly believe in feels great, and trying to sell snake oil feels awful.

Getting good at sales is like improving at any other skill—anyone can get better at it with deliberate practice. But for some reason, perhaps because it feels distasteful, many people treat it as something unlearnable.

My other big sales tip is to show up in person whenever it’s important. When I was first starting out, I was always willing to get on a plane. It was frequently unnecessary, but three times it led to career-making turning points for me that otherwise would have gone the other way.

5. Make it easy to take risks

Most people overestimate risk and underestimate reward. Taking risks is important because it’s impossible to be right all the time—you have to try many things and adapt quickly as you learn more.

It’s often easier to take risks early in your career; you don’t have much to lose, and you potentially have a lot to gain. Once you’ve gotten yourself to a point where you have your basic obligations covered you should try to make it easy to take risks. Look for small bets you can make where you lose 1x if you’re wrong but make 100x if it works. Then make a bigger bet in that direction.

Don’t save up for too long, though. At YC, we’ve often noticed a problem with founders that have spent a lot of time working at Google or Facebook. When people get used to a comfortable life, a predictable job, and a reputation of succeeding at whatever they do, it gets very hard to leave that behind (and people have an incredible ability to always match their lifestyle to next year’s salary). Even if they do leave, the temptation to return is great. It’s easy—and human nature—to prioritize short-term gain and convenience over long-term fulfillment.  

But when you aren’t on the treadmill, you can follow your hunches and spend time on things that might turn out to be really interesting. Keeping your life cheap and flexible for as long as you can is a powerful way to do this, but obviously comes with tradeoffs.

6. Focus

Focus is a force multiplier on work.

Almost everyone I’ve ever met would be well-served by spending more time thinking about what to focus on. It is much more important to work on the right thing than it is to work many hours. Most people waste most of their time on stuff that doesn’t matter.

Once you have figured out what to do, be unstoppable about getting your small handful of priorities accomplished quickly. I have yet to meet a slow-moving person who is very successful.

7. Work hard

You can get to about the 90th percentile in your field by working either smart or hard, which is still a great accomplishment. But getting to the 99th percentile requires both—you will be competing with other very talented people who will have great ideas and be willing to work a lot.

Extreme people get extreme results. Working a lot comes with huge life trade-offs, and it’s perfectly rational to decide not to do it. But it has a lot of advantages. As in most cases, momentum compounds, and success begets success.

And it’s often really fun. One of the great joys in life is finding your purpose, excelling at it, and discovering that your impact matters to something larger than yourself. A YC founder recently expressed great surprise about how much happier and more fulfilled he was after leaving his job at a big company and working towards his maximum possible impact. Working hard at that should be celebrated.  

It’s not entirely clear to me why working hard has become a Bad Thing in certain parts of the US, but this is certainly not the case in other parts of the world—the amount of energy and drive exhibited by entrepreneurs outside of the US is quickly becoming the new benchmark.

You have to figure out how to work hard without burning out. People find their own strategies for this, but one that almost always works is to find work you like doing with people you enjoy spending a lot of time with.

I think people who pretend you can be super successful professionally without working most of the time (for some period of your life) are doing a disservice. In fact, work stamina seems to be one of the biggest predictors of long-term success.

One more thought about working hard: do it at the beginning of your career. Hard work compounds like interest, and the earlier you do it, the more time you have for the benefits to pay off. It’s also easier to work hard when you have fewer other responsibilities, which is frequently but not always the case when you’re young.

8. Be bold

I believe that it’s easier to do a hard startup than an easy startup. People want to be part of something exciting and feel that their work matters.

If you are making progress on an important problem, you will have a constant tailwind of people wanting to help you. Let yourself grow more ambitious, and don’t be afraid to work on what you really want to work on.

If everyone else is starting meme companies, and you want to start a gene-editing company, then do that and don’t second guess it.

Follow your curiosity. Things that seem exciting to you will often seem exciting to other people too.

9. Be willful

A big secret is that you can bend the world to your will a surprising percentage of the time—most people don’t even try, and just accept that things are the way that they are.

People have an enormous capacity to make things happen. A combination of self-doubt, giving up too early, and not pushing hard enough prevents most people from ever reaching anywhere near their potential.

Ask for what you want. You usually won’t get it, and often the rejection will be painful. But when this works, it works surprisingly well.

Almost always, the people who say “I am going to keep going until this works, and no matter what the challenges are I’m going to figure them out”, and mean it, go on to succeed. They are persistent long enough to give themselves a chance for luck to go their way.

Airbnb is my benchmark for this. There are so many stories they tell that I wouldn’t recommend trying to reproduce (keeping maxed-out credit cards in those nine-slot three-ring binder pages kids use for baseball cards, eating dollar store cereal for every meal, battle after battle with powerful entrenched interest, and on and on) but they managed to survive long enough for luck to go their way.

To be willful, you have to be optimistic—hopefully this is a personality trait that can be improved with practice. I have never met a very successful pessimistic person.

10. Be hard to compete with

Most people understand that companies are more valuable if they are difficult to compete with. This is important, and obviously true.

But this holds true for you as an individual as well. If what you do can be done by someone else, it eventually will be, and for less money.

The best way to become difficult to compete with is to build up leverage. For example, you can do it with personal relationships, by building a strong personal brand, or by getting good at the intersection of multiple different fields. There are many other strategies, but you have to figure out some way to do it.

Most people do whatever most people they hang out with do. This mimetic behavior is usually a mistake—if you’re doing the same thing everyone else is doing, you will not be hard to compete with.

11. Build a network

Great work requires teams. Developing a network of talented people to work with—sometimes closely, sometimes loosely—is an essential part of a great career. The size of the network of really talented people you know often becomes the limiter for what you can accomplish.

An effective way to build a network is to help people as much as you can. Doing this, over a long period of time, is what lead to most of my best career opportunities and three of my four best investments. I’m continually surprised how often something good happens to me because of something I did to help a founder ten years ago.

One of the best ways to build a network is to develop a reputation for really taking care of the people who work with you. Be overly generous with sharing the upside; it will come back to you 10x. Also, learn how to evaluate what people are great at, and put them in those roles. (This is the most important thing I have learned about management, and I haven’t read much about it.) You want to have a reputation for pushing people hard enough that they accomplish more than they thought they could, but not so hard they burn out.

Everyone is better at some things than others. Define yourself by your strengths, not your weaknesses. Acknowledge your weaknesses and figure out how to work around them, but don’t let them stop you from doing what you want to do. “I can’t do X because I’m not good at Y” is something I hear from entrepreneurs surprisingly often, and almost always reflects a lack of creativity. The best way to make up for your weaknesses is to hire complementary team members instead of just hiring people who are good at the same things you are.

A particularly valuable part of building a network is to get good at discovering undiscovered talent. Quickly spotting intelligence, drive, and creativity gets much easier with practice. The easiest way to learn is just to meet a lot of people, and keep track of who goes on to impress you and who doesn’t. Remember that you are mostly looking for rate of improvement, and don’t overvalue experience or current accomplishment.

I try to always ask myself when I meet someone new “is this person a force of nature?” It’s a pretty good heuristic for finding people who are likely to accomplish great things.

A special case of developing a network is finding someone eminent to take a bet on you, ideally early in your career. The best way to do this, no surprise, is to go out of your way to be helpful. (And remember that you have to pay this forward at some point later!)

Finally, remember to spend your time with positive people who support your ambitions.

12. You get rich by owning things

The biggest economic misunderstanding of my childhood was that people got rich from high salaries. Though there are some exceptions—entertainers for example —almost no one in the history of the Forbes list has gotten there with a salary.

You get truly rich by owning things that increase rapidly in value.

This can be a piece of a business, real estate, natural resource, intellectual property, or other similar things. But somehow or other, you need to own equity in something, instead of just selling your time. Time only scales linearly.

The best way to make things that increase rapidly in value is by making things people want at scale.

13. Be internally driven

Most people are primarily externally driven; they do what they do because they want to impress other people. This is bad for many reasons, but here are two important ones.

First, you will work on consensus ideas and on consensus career tracks.  You will care a lot—much more than you realize—if other people think you’re doing the right thing. This will probably prevent you from doing truly interesting work, and even if you do, someone else would have done it anyway.

Second, you will usually get risk calculations wrong. You’ll be very focused on keeping up with other people and not falling behind in competitive games, even in the short term.

Smart people seem to be especially at risk of such externally-driven behavior. Being aware of it helps, but only a little—you will likely have to work super-hard to not fall in the mimetic trap.

The most successful people I know are primarily internally driven; they do what they do to impress themselves and because they feel compelled to make something happen in the world. After you’ve made enough money to buy whatever you want and gotten enough social status that it stops being fun to get more, this is the only force I know of that will continue to drive you to higher levels of performance.

This is why the question of a person’s motivation is so important. It’s the first thing I try to understand about someone. The right motivations are hard to define a set of rules for, but you know it when you see it.

Jessica Livingston and Paul Graham are my benchmarks for this. YC was widely mocked for the first few years, and almost no one thought it would be a big success when they first started. But they thought it would be great for the world if it worked, and they love helping people, and they were convinced their new model was better than the existing model.

Eventually, you will define your success by performing excellent work in areas that are important to you. The sooner you can start off in that direction, the further you will be able to go. It is hard to be wildly successful at anything you aren’t obsessed with.