Wealth Creation
Be successful in life by creating wealth, having good relationships, being fit and being happy - have an action bias towards getting what you want & be a rational optimistic about it.
Think big & the outcome will be big.
Ideally, you only work to express your creativity.
Be a maker, not just a taker.
You are not going to get rich by renting out your time - need to get paid at scale
You will be rewarded directly in proportion with your level of accountability in the business
Escape competition through authenticity. No-one can compete with you on being you.
All benefits in life come from compound interest. Wealth, relationship, health, good-will.
Self-esteem is a reputation that you have with yourself. Ego can be undeserving.
Foundation of learning is reading.
Authenticity helps you get away from competition. Know yourself, be yourself.
If you want to do great things - you need to have free time and a free mind. Busy calendar & schedule will destroy your creativity.
Be impatient with actions and patience with results.
True wealth creation
Wealth
- Businesses and assets that can earn while you sleep
- Purpose of wealth is freedom - be your own sovereign individual
- Not going to get it unless you really want it - and everyone wants it
Money game
- Money - how we transfer wealth
- Positive sum games
- Create things together
Status game
- Status - Ranking in social hierarchy
- Zero sum game
- Sports, politics
- Play an important role in our society
- Much better predictor of survival
4 kinds of luck
- Blind luck
- Hustler luck - things get stirred up in the dust
- Good at spotting luck - skilled in field and notice a break
- Rare luck
- luck finds you
- create your own luck
- deterministic - stops being luck
- unique way that you act & your character - your reputation
- More or less destiny
- Be on the frontier & dig deeper than other people
Job or career where your inputs and outputs are highly disconnected (more creative careers) - your work doesn’t scale linearly.
Internet connects everyone to everyone. You can find your audience/customers, no matter how far they are.
Long term game, everybody is making each other rich.
Short term game, everybody is making themselves rich.
Pick people to work with that have:
- High intelligence (smart)
- High energy (proactive)
- High integrity (look for signals - what they DO not what they SAY)
Be a rational optimist.
Either lead, follow or get out of the way.
Have a strong action bias.
Why not think big? One life on this planet.
Avoid risk of ruin - take rationally optimistic bets with big upsides
You hire when
- It takes more man hours than you have available (engineering work)
- You hire for skills you don't have on the team (domains specific)
Skills that you need
- Specific knowledge - you getting paid as opposed to someone else
- Accountability - why you?
- Leverage - getting paid at scale
- Judgement
Along with these, need to put in the time & hours - don’t keep track & don’t keep count - just enjoy it and keep doing it - get paid in a long enough timescale - 3/5/10/20 years
Productize Yourself
Making money - function of your identity & what you like to do
Specific knowledge
- Look at what you have already built, and built on top of it.
- You get paid for your specific knowledge
- Pursuing innate talents & passion
- Found by observation - what are you good at?
- Technical & creative - tech, art, creation - can’t be automated - product knowledge
- Follow your own obsession - keep an eye out for monetizing it
Learn to sell, learn to build - if you can do both, you’ll be unstoppable
Episode 15 - share with Garrett - related to build tech/company & selling
2 founders - 1 at sales & 1 at building (CEO + CTO combo) - Catnip to investors
Selling scales better - hiring other people, online writing marketing etc
Builder can pick up selling - time + focus
Foundational books to read
- Adam smith - wealth of nations
- Darwin - origins of species
- Watson & Crick - The Double Helix
- Richard Feynman - 6 easy pieces to start with physics
- Donal Knuth - algorithms
Built on a steel frame of a building
Principles & algorithms
Math & logic - scientific methods
Learning curve is across iterations (not repetition)
- Need to try new things in every iteration
- Gives you more shots on goal
- Bruce Lee - practice 1 punch 1000 times
Entrepreneur - bleed everyday and win big later
Accountability
- Small team with high level of accountability
- Without it can’t have incentives
- High accountability - less replaceable
- Equity holder - greater risk but most of the upside
- Reward is directly proportional to your accountability
Leverage
- Labor - Oldest form of leverage
- overvalued - how many people work there?
- Min # of people working with you
- Capital - inventions of humans in last few thousand years
- Trickier, more modern
- Pretty common these days with bigger companies
- Feels unfair - passed on through generations - accumulation
- Scales well - but hard to obtain it
- Product, Code & Media based - Products that have no marginal cost of replication
- Started with printing press, broadcast media, internet & code
- New fortunes, new generation - code or media
- Amazing scale economies
Combine all 3 - Magic ✨- all tech startups - huge outsized returns
#3 leverage is permission-less leverage - #1 & #2 are becoming permission-less based on the internet
AI revolution is here - robots & computers - command them with code language
Business Model:
- Scale economies - the more you produce something the cheaper it gets
- Tech products has zero marginal costs of reproduction
- Network effects -
- Metcalfe’s law - value of a network is proportional to square of the nodes in a network
- Facebook, Uber, Youtube, Amazon, English Language, Money
- Each additional user adds value to the existing users
- Customers add value to each other
Judgement
- Wisdom applied to external problems is judgement
- Leverage is a force multiplier for your judgement
- Once you have leverage - you want to slow down and use judgement instead
- Everything you do is setting you up to apply your judgement
- People with the best judgement are among the least emotional
Value your time
- Set high personal hourly rate
- $1,000/hour
- Outsource something or don’t do it
Focus: Find product market fit, eat healthy & be fit
- Product Market Founder Fit - how well are you suited to the business?
- Who you work with? Work with the best people possible - build strong alumni network
- How hard do you work? Work as hard as you can - sprints (not marathon)
Ignore text message unless they are true emergencies - if so, call me!
Come with a proper calling card - build up credibility - not just slide deck - product progress - proof of work!