How to Get Rich (Platform: Youtube)

Nivi

Hey, this is Nivi, you’re listening to the Naval podcast. This is one giant mega-sode that collects every episode we’ve done on getting rich, all of it based on his tweetstorm of how to get rich without getting lucky. I’ve collected them all here, because we’re going to switch topics to the new topic of happiness. On the next episode, we’ve published one of these giant mega episodes before, but this one’s even bigger. It’s about three and a half hours long. It covers all the tweets from the how to get rich tweet storm, plus all the q&a that we did after that, plus 10 minutes of bonus material at the very end, but we’ve never released, the overall sound quality of this mega sewed improves a lot after the first hour, you can find a link to a clean transcript in the show notes. Or if you go to the website, nav.al. There’s no .com at the end, I hope you enjoy. You probably know Naval from his Twitter account. And we’re going to be talking about his epic tweet storm 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 just generally riff on the topic, you’ll probably throw in some ideas that he hasn’t even published before. He’s also the co-founder of Angellist, and he opinions. He’s a prolific tech investor in companies like Twitter, Uber, and many more. And I’m the co founder Angellist with Naval. And I also co authored the venture hacks blog with him back in the day.

Yeah, the how to get rich tweetstorm definitely hit a nerve. And a lot of people say it was helpful reach across aisles and people outside of tech industry, people in all walks of life. People do want to know how to solve their money problems. And everyone vaguely knows that they want to be wealthy, but they don’t have a good set of principles to do it by

Nivi

what’s the difference between wealth, money and status.

Wealth is the thing that you really want. Wealth is assets that earn while you sleep wealth is the factory that with robots is 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, but land and actually doing some commercial enterprise. So my definition of wealth is much more businesses and assets that can earn while you sleep. But really, the reason you want wealth is because it buys you freedom. So you don’t have to wear a tie or like a collar on your neck. So you don’t have to wake up at 7am and rush to work and sit and commute traffic. So you don’t have to waste away your entire life grinding all the productive hours into a way to 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 or Gulf Stream, that stuff gets really boring and really stupid really fast. It’s really just so that you are your own sovereign individual, you’re not going to get that unless you really want it. And the entire world wants it. And the entire world is working hard at it. And 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 and to get the resources to do what you want. You have to stand out. Money is how we transfer wealth. Money is social credits, it is the ability to have credits and debits and 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. And that money gets debased because people steal the IOU, the government prints extra IO use people renege on their IO use. But really what money is trying to be is 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, and we can transfer these values around. So really, money is how we transfer wealth. There are fundamentally two huge games in life that people play. One is the money game, because money is not going to solve all your problems, but it’s going to solve all your money problems. So I think that people know that they realize that 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 this virtue signal by attacking the whole enterprise by saying, well, making money is evil, you shouldn’t do it, blah, blah, blah. But what they’re trying to do is they’re actually playing the other game, which is a 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. And then status is just your ranking in the social hierarchy. So 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. So wealth is a very positive sum game. We create things together, we’re starting this endeavor to create this hopefully piece of art that explains what we’re doing. At the end of it something brand new will be created. The positive sum 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, and it’s hierarchal 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 put them into the love status games, they play an important role in our society. So we figure out who’s in charge. But fundamentally, you play them because they’re a necessary evil. The problem isn’t evolutionary basis. Like if you go back 1000s of years status is a much better predictor of survival than wealth is, you couldn’t have wealth before the farming age before farmers because you couldn’t store things. hunter gatherers carried everything on their backs. So hunter gatherers lived entirely and status based societies, farmers started going to wealth based societies and the modern industrial economies are much more heavily wealth based societies. But there’s always a subtle competition going on between status and wealth. For example, when journalists attack which people or they attack the technology industry, they’re really bidding for status. They’re saying, No, the people are more important. And I am a journalist represents the people and therefore I am more important. The problem is that by playing these status games, to win the 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 that you like up. And they’re always going to exist, there’s no way around it. But just realize that most of the times when you’re trying to create wealth, you’re actually getting attacked by someone else. And they’re trying to look like a goody two shoes. But really what they’re doing is they’re trying to up their own status at your expense. They’re just playing a different game. And it’s a worse game. It’s a zero sum game, instead of a positive sum game.

Nivi

One thing you mentioned before the interview that stuck with me was the idea that you think everyone can become rich, and that perhaps some of the ways of getting rich or the idea of wealth is vilified by some people in other countries say, do you want to expand on that a little bit?

Yeah, I think there’s this notion that making money is evil, right? It’s like routed all the way back down to money is the root of all evil. People think that the bankers steal our money. And you know, 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. And then there are people who come along and play with a sword or a gun or taxes or crony capitalism, or communism, or what have you. There’s all these different methods of skill, even in nature, that are more parasites that there are non parasitical organisms, you have ton of parasites in you who are living off of you, and the better whether symbiotic or giving something back, but there are a lot that are just taking, that’s just the nature of how any complex system is built. But what I am focused on is true wealth creation, it’s not about taking money, it’s not about taking something from somebody else. But it’s from creating abundance. Obviously, there’s not a finite number of jobs or a finite amount of wealth, otherwise, we will still be sitting around in caves, figuring out how to divide up pieces of firewood, and you know, the occasional dead deer. So most of the wealth and civilization, in fact, not most all of it has been created. And it got created from somewhere it got created from people they got created from technology, it could have been productivity got credit from hard work. So this idea that it’s stolen is I think, this horrible, zero sum game, that people who are trying to gain status play, but the reality is, everyone can be rich. And we can see that by seeing that in the first world. Everyone is richer than almost anyone who was alive 200 years ago, 200 years ago, nobody had any biotics nobody had cars, nobody had electricity, nobody had the iPhone. So 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 Louie the 14th. France, I’d rather be a poor person today than aristocrat back then. And that’s just 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. And the 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 what happens is we would build robots, machines, software and hardware to do everything, and 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 The basics. We don’t even have robotic nurses. We have like machine driven hospitals, we’d have self driving cars, we’d have farms that are 100% automated with a clean energy. So at that point, we could use technology breakthroughs, to get everything that we wanted. And 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. But 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 deals where that you have corruption, or you have monopolies. Overall, capitalism is intrinsic to the human species. Capitalism is not something we invented. Capitalism is not even something we discovered. It is innate to us in every exchange that we have. When you and I exchanged 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 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’re the only animals in the animal kingdom that cooperate across genetic boundaries, most animals don’t cooperate. But when they do, they cooperate only impacts where they co evolved together, and they share blood. So they have some shared interest. Humans don’t have that. And 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 and 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 a game that keeps your supermarket stock, 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. And it’s going to continue to make us all richer and richer, until we have massive wealth creation for anybody who wants it.

Nivi

And it’s not just individuals secretly despising wealth, right? There’s countries groups, political parties that overtly

despise wealth, or at least seem to. That’s right. And so what those countries political parties and groups are reduced, playing the zero sum game of status and the process to destroy wealth creation, they drag everybody down to their level, which is why the US is a very popular country for immigrants, because it’s 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 lives. Obviously, the definition of wealth is different for different people, a first world citizens 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 was fairly young to the United States, wealth may just be a much lower number, it may just be like, 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 down to that level. If you get too many takers and not enough makers, society falls apart, you end up with a communist country. Luckily, Venezuela right there were so busy taking and dividing and reallocating that people literally starving in the streets and losing kilograms of body weight every year just through sheer starvation. Another way Think about it, imagine an organism that has too many parasites, you actually need some small number of parasites to stay healthy. And you need a lot of symbiotes like all the mitochondria in all of our cells that help us respirate and burn oxygen. These are symbiotes that help us survive, we can 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 and when the parasitic element gets too far out of control, you die. So you know that again, I’m talking about ethical wealth patient and the type of monopolies in the form of 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 is voluntary and doesn’t have an outsized impact on others. But I think that kind of wealth creation, if a society does not respect it, if a group does not respect it, that society will plunge into ruin and darkness. 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. You know, I like to think that if I lost all my money, and if you dropped me on a random street in any English speaking country, within 510 years, I’d be wealthy again, right because Just a skill set that I’ve developed. And I think anyone can develop, you know, in 1000, parallel universes, you want to be wealthy in 909, nine of them, you don’t want to be wealthy, the 50 of them where you got lucky. So we want to factor luck out of it, there’s really four kinds of luck that we were talking about this came from a book P. Marc. Marc Andreessen wrote a blog post about it. But there’s different kinds of luck. The first kind of luck, you might just say is like blind luck, where I just got lucky, because something completely out of my control happen, you know, that’s fortune, that’s fate, etc, then there’s luck that comes through persistence, hard work, hustle motion, which is when you’re just running around creating lots of opportunities, you’re generating a lot of energy, you’re doing a lot of things, lots of things will just 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 and you’re just generating enough force and hustle and energy that luck will find you. The third way is that you just become very good at spotting luck. So if you are very skilled in a field, you will notice when a lucky break happens in that field and other people who aren’t attuned to it won’t notice. So you become sensitive to luck. And that’s your skill and knowledge and work. And 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, and you’re known to like take on deep sea underwater divers that nobody else will even attempt to dare. And 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 gonna come to you to get that treasure, and you’re gonna get paid for it. Now, that’s an extreme example. But it’s just showing how like, the person who got lucky but find 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. So when we talk about without getting lucky, we want to be deterministic. We don’t want to leave it to chance.

Nivi

Do you want to elaborate a little bit more on the idea that in 1000 parallel universes you want to get rich and 999 of them? I think some people are going to see that and say that sounds impossible. Sounds like it’s too good to be true.

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 mean, remember, I started as a poor kid in India, right. 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. So 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. 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 got cheated by my business partners. It’s only the third time around has been a charm. And even then it has been a slow and steady struggle.

And I haven’t

made money in my life in one giant payout. It’s always been a whole bunch of small things piling up. So it’s more about consistently creating wealth by creating businesses, including opportunities, including investments, and it hasn’t been like a giant one off thing. My personal wealth has not been generated by one big year. It just stacks up little bit chips at a time, more options, more businesses, more investments, more things, I can do the same way someone like and then on the other service. He’s building his brand online, he’s building videos. And 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, this is going to compound. So we’re talking about getting wealthy so you can retire. So you have your freedom and not retire the sense that you don’t do anything. But in the sense that you don’t have to be anyplace you don’t want to be you don’t have to do anything you don’t want to do. And you can wake up when you want, you can sleep and you want you don’t have a boss, that’s freedom. So we’re talking about enough wealth to get to freedom. And especially thanks to the internet these days. those opportunities are massively abundant. I in fact, have too many ways to make money. I don’t have enough time. I literally have opportunities pouring out of my ears and the thing I keep running out of his 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 just can’t even handle it all.

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 cliche that Fortune favors the bold, that’s a person who gets lucky just by stirring the pot and acting on the third kind of luck. People say that chance favors the prepared mind. But for the fourth kind of luck, there is not really a common cliche out there that matches the unique character of your action, which I think is interesting, and perhaps an opportunity. And it also just shows that people aren’t necessarily taking advantage of that kind of luck the way they should be.

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 is you build your character in a certain way, and then your character becomes your destiny. And one of the things I think that is important to making money, if you want the kind of reputation that makes people do deals through you, you know, I use the example of like, if you’re a great diver than 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 offering you a unique deal, just because of the integrity and reputation that you built up. Warren Buffett, he gets offered deals and he gets to buy companies and he gets to buy warrants and bail out 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 and 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 advantages of opportunities that other people may characterize as lucky. But you know that it wasn’t

Nivi

luck. 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 Mark’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. 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 East centric ways that you do your things. And that he centricity is not necessarily a bad thing in this case. In fact, it’s a good thing.

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 just have to be willing to dig deeper than other people do. Deeper than seems irrational just because you’re interested.

Nivi

Yeah, the two quotes that I’ve seen that expressed this kind of luck, in addition to that Benjamin Disraeli, one or 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, and that you can’t be normal and expect abnormal returns. I’ve always enjoyed that one, too. Yeah.

And one quote that I like, which is the exact opposite of that is play stupid games win stupid prizes. Right, a lot of people spend a lot of their time playing social games, like on Twitter, where you’re just 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 just 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 unlock. So if you just keep stirring the pot and stirring the pot, that alone you will run out of unlock,

yeah, or it could just be reversion to the mean, right. So then you at least neutralize luck so that it’s your own talents that come into play.

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’re not going to get rich renting out your time, you must own equity, a piece of business to gain your financial freedom.

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 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 nonlinearly. 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 process with 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 going to pay you enough, they’re going to pay you the bare minimum that they have to to get you to do the job. And that can be a high bare minimum, but it’s still not going to be true wealth, where you’re retired. 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 is how to get rich with 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’ll be competing with someone who’s got more recent knowledge has 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 overnight, it can be replaced a little bit of a time, and that eats into your wealth creation, and therefore your earning capability. So fundamentally, your inputs are matched to your outputs, you’re replaceable, and you’re not being creative. I just don’t think that that is the way that you can truly make money. 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 if 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 you know, even investors, their investment firm and their buying equity. So these are much more the routes to wealth, it doesn’t come to the hours, you really just want a job or a career or profession where your inputs don’t match your outputs. So if you look at modern society against this little the tweetstorm. businesses that have high creativity and high leverage, tend to be ones where you can do an hour of work, and it can have a huge effect. Or you can do 1000 hours of work and 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. An engineer who’s working on the wrong thing are not quite as good or just not as creative or thoughtful, or whatever can work for an entire 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 they’re not working with tools to the inputs and outputs really connected and just using an axe or saw the best lumberjack in the world, maybe like three x better than one of the worst lumberjacks, right? It’s not going to be a gigantic difference. So you want to look for professions and careers where the inputs and the outputs are highly disconnected. There’s another way of saying that you want to look for things that are leveraged. And by leverage, I don’t mean financial leverage 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 going to be using tools and have more leverage than someone who’s just using his bare hands. And try to rip the trees out by the roots, tools and leverage or 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 going to be very, very, very hard to create wealth and make wealth for yourself in that process.

Nivi

Any other big things you should avoid other than renting out your time? Yeah, there

are two tweets that I put out that are related. So the first one is talking about, like how your lifestyle you know, has to upgrade shouldn’t get upgraded too fast. And that one said, people who are living far below their means enjoy a freedom that people busy upgrading their lifestyle, it’s just can’t fathom. And I think that’s very important. Like just to not upgrade your lifestyle all the time to maintain your freedom. And it just gives you a freedom of operation. Once you make a little bit of money, you still want to be living like your old self. So that’s just the worry goes away. So don’t want to upgrade the house and lifestyle and all that stuff. Let’s say you’re getting paid $1,000 an hour. The problem 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 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, you know, the most dangerous things are heroin and a monthly salary. Right, because they’re highly addictive. The way you want to get wealthy is you want to be poor and working and working and working. And this is, for example, how the tech industry works, where you don’t make any money for 10 years. And then suddenly, in year 11, you might have a giant payday, which is what 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 literally lose money for a decade of your life, while you take massive risks, and you bleed and bleed and bleed. And then suddenly, in year 11, or year 15, you might have one single big payday. But then, of course, Uncle Sam show up and say, Hey, you know what, you just made a lot of money this year, therefore, you’re rich, therefore, you’re evil, and you 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 can say, Okay, now I’m done. Now I’m retired, now I’m free, I’m still going to work because you got to do something with your life. But I’m going to work on only the things that I want when I want and still be much more creative expression, and much less about money,

Nivi

you’re not going to 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. That’s right. So essentially, as we talked about before, money is I owe us 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, it would need you they would already be stamped out big time. Almost everything is in your house, in your workplace and on the street used to be technology at one point in time, the time when oil was technology that made JD Rockefeller rich, it 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, once something works is no longer technology. So society always wants new things. 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 within your skill set 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 got to build 1000s, or hundreds of 1000s, 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 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 citizens 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 entrepreneurs job is to try to bring the high end to the mass market,

it starts as high end at 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, it was 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 entrepreneurs jobs start even before that, which is creation. Entrepreneurship is essentially an act of creating something new from scratch, predicting the 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.

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 broaden the possible space of careers. Most people haven’t figured this out yet.

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 in Facebook that they find, whether it’s by putting up a website, they can access it connects everyone to everyone. So the internet is an inter networking tool. It connects everybody that is a superpower. So you want to use that what that helps you figure out is that the internet means that you can find your audience for your product or your talent and skill no matter how far away they are. For example, ninad who’s illustrators? If he was in these videos, pre internet, how would we get the message out there? It would just be what we 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 a 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 interested in what we’re talking about are really going to absorb it right, it’s going to be a very small subset of humanity, the key is being able to reach them. 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, not a craft, or someone who’s obsessed with miniature cooking, like there’s this whole Japanese major cooking phenomenon, or there’s a show about a woman goes into people’s houses and tidying 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 will 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 this planet, the combinatorics of human DNA are incredible. Every one is completely different. You’ll never meet any two people who are even vaguely similar to each other that can substitute for each other. If not, you can say well maybe just left my life so I can have this other person come in. And he’s just like, maybe, and I get the same feelings, 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 skill sets, 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 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 space of careers has been so broaden eSports players, people making millions of dollars playing fortnight, people creating videos and uploading them YouTube broadcasters, bloggers, you know, a 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 like 2 billion downloads, even Pewdiepie is 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 channels, but even on his entertainment channel, 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, every one is the best at something you being themselves. Another tweet I have that is worth weaving in but didn’t go into this tweet storm was a very simple one. I like things when they can compress them down because they’re easy to remember and easy to hold on to. But that one was escape competition through authenticity. So 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 Rene Girard has an old nemesis 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 going to have. So you can escape competition through authenticity, when you realize that no one can can be with you and being you. And normally that would have been useless advice, pre internet, post internet, you can turn that into a career.

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?

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 it’s like, you know, you start out with one x 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 very important for so 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’re looking at Prisoner’s Dilemma type games. The solution to prisoner’s dilemma is tit for tat, which is I’m just going to 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 other words, we play the 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 than they do right by each other because they know this person We’ll be around for the next game. And 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 of 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 in high trust will make it easy to play the game and would 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 US stock market. But the biggest reason you could do that was because the US stock market has been stable and around and didn’t get, for example, seized by the government during a bad administration, or the US didn’t plunge in some war, the underlying platform didn’t get destroyed. So in his case, he was playing a long term game, and the trust came from the US stock market stability. in Silicon Valley. The trust comes from the network of people in this small geographic area that you figure out over time, who you can work with 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 build up a network there and you’re working hard, you’re trying to build a product and 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, no, actually, I need to open a line of electric car stations for electric car refueling, that might make sense, it might be the best opportunity. But every time you reset, every time you wander out of where you build your network, you’re gonna be starting from scratch, you’re not gonna know who to trust, they’re not gonna trust you. They’re 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 being elected. You see in politics, that when you have a lot of old timers like the Senate, people have been around for a long time, and they’ve been career politicians. And a lot of downside to career politicians is that 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 10 years from now. And they got to keep dealing with them. So they might as well learn how to cooperate where every time you get like a new incoming freshmen class in the House of Representatives, which turns over every two years, the big wave election, nothing gets done, because a lot of 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 trying 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 their ethical and their ethics are visible to their action.

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’s making themselves rich,

I think that is a brilliant formulation. Yeah, and long term game, it’s positive sum, we’re all baking the pie together, we’re trying to make it as big as possible. In a short term game, we’re cutting up the pie. Now this is not to excuse the socialists, right, the socialists, 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, the leader tries to inspire people that 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 night the sharpest knives at the end.

Nivi

So these next two tweets are play iterated games, all returns in life, whether in wealth, relationships or knowledge come from compound interest.

Yeah, when you’ve been doing business with somebody, you’ve been friends with somebody for 10 years, 20 years, 30 years, it just gets better and better, because you trust them. So easy, the friction goes down, you can do bigger and bigger things together. For example, you know, the simplest one is getting married to someone having kids and raising children. Like 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. Where’s the more you deteriorate your body, the harder it is to come back and claw your way back to a baseline that requires heroic acts.

Nivi

Regarding compound interest. I think I saw you retweet something a while back. Maybe it was from Ed latimore. It was something along the lines of get some traction, get purchase, and don’t lose it. So the idea was to gain some initial traction and never fall back. Just keep ratcheting up and up.

I don’t remember exactly. But I think that was right. Yeah, I was like, get traction and don’t let go. It was a good one. Yeah. In terms of pick people to work with 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’s smart or they’re heading 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 lives. We’re really smart but you know, can’t get out of bed or lift a finger. And we also know people who are very high energy but not That’s smart. They work hard, but they’re running in the wrong direction. and smart. It’s not a pejorative, it’s not meant to be like someone smart, someone else is stupid. But it’s more that everyone’s smart at different things. So depending on what you want to do well, you have to find someone who’s smart at that thing. And then energy, a lot of times people are unmotivated for a specific thing, but they’re not 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, you’ve got the other two, what you have is you have a smart and hardworking 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 nonverbal stuff that people do when they think nobody’s looking.

Nivi

With respect to the energy, there was this interesting thing from Sam altman A while back, where he was talking about delegation, and even 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. 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 wanted to do. When I was younger, I used to try and talk people into things I was this idea that you can 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, the fifth, you’re trying to get them to discharge 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 or what you want to work with them. 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 outrage, vindictive, short term thinking people are essentially that way in many interactions in their life, people are oddly consistent. It’s one of the things you’ll learn about them. So you want to find long term people, you want to find people who seem irrationally ethical. For example, I had one friend of mine, it was company I invested in and the company failed, and he could have wiped out all 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, like, Wow, that’s amazing that you know, you were so good to 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 message, 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 would tweet on this, I think I read this somewhere else, which is I’m not taking credit for this, but I modified a little bit, which is that self esteem is the reputation that you have with yourself, you 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 reputation 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 live 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, that is hard to figure out who’s high integrity and low integrity. Generally, the more someone is saying that their moral and ethical and high integrity, the less likely they are to be that way. It’s very much like status signaling. If you overtly bid for status. If you overly talk about being high status, that is a low status move. If you openly talk about how honest and reliable and trustworthy you are, you’re probably not that honest and trustworthy. That is a characteristic upon men, though. Yeah, picking an industry in which you can play long term games with long term people.

Nivi

Let’s do this last tweet. You said don’t partner with cynics and pessimists, their beliefs are self fulfilling.

Yeah, 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 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 like 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 will prevent other people around them for doing something great. They think their job is to shoot holes in things. And it’s okay to shoot holes and things as long as you come up with a solution. There’s also the classic like 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’s viable or not, is by doing it. But let’s 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 toward getting what you want. And you have to be optimistic about it. Not irrationally, there’s nothing worse than someone who’s just foolhardy and chasing, that’s not work. That’s not a rational optimist, but you have to be rational know all the pitfalls know the downsides, but still keep your chin up mean, 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 is 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, you know, education circumstance, they didn’t get the chance to think as big. So the outcomes not as big. So it’s better to think big, obviously, rationally within your means stay optimistic, the cynics and the pessimists. What they’re really saying and fortunate. But they’re 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.

Nivi

Yeah, it’s probably better to be an irrational optimist than it is to be irrational cynic.

Yeah, there’s a completely irrational frame on why you should be an optimist. Historically, if you go back 2000 years, 5000 years, 10,000 years, two people are wanting 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 down the street, it’s very unlikely that you will end up in total ruin. Although you should avoid total ruin. Much More likely, 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 and invest your money and they’ve got plenty more. And that’s the bet they take the chances that you will succeed. And 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 actually think the economic opportunity in third world countries are much larger. The one thing you have to avoid is the risk of ruin. Ruin means to 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 can 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. They don’t gamble everything at one go. But you take rationally optimistic bets with big upside.

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 will list out all 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.

That’s what Twitter is for. Scott Adams got so annoyed by this dedicated with the phrase an acronym, which is but of course there are obvious exceptions be Octa Oh, he and he used to like pin that acronym at the end of his articles for a while. But Twitter is just like overrun with nitpickers and words exactly as you’re pointing out Silicon Valley has learned that the upside is so great that you never look down on the slavi kid who’s wearing a hoodie and has like coffee at his shoes and just look like a slob because you don’t know if he’s gonna be the next Mark Zuckerberg or the next Reed Hoffman. So you gotta treat everybody with respect. You got to look up to every possibility and opportunity because the upside is so unlimited. The downside is so limited in the modern world, especially with financial assets and instruments.

Nivi

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. edge accountability, and leverage and all throw in judgment as well, I don’t think you covered that in that particular tweet.

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 for that 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 by building judgment in a specific domain, classic examples investing, but it could be in anything it could be in judgment in running a fleet of trucks 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 2021 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. 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 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 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 Pacific knowledge. But the part of it that you’ll get paid for is the specific knowledge. For example, someone who goes and gets a degree in psychology and then becomes a salesperson. Well, if they were already a formidable salesperson had great salesmanship to begin with, then a psychology degree is leveraged 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. 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 and compound interest really applies. And leverage really applies. So if you’re operating with 1000 times leverage, and somebody is right 80% of the time and somebody else’s right 90% of the time, the person who’s right 90% of 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 your genuine curiosity is very important. And so very often, it’s not something you sit down and 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 at the top of the production chain for humanity. And the group of scientists who have made real breakthroughs and contributions have probably added more to human society, I think, than any single other class of human beings not take away anything from art or politics or engineering or business. But without the science, you know, 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 of 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. 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 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 that actually pointed out my real specific knowledge was my mother. And 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. And 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 what she’s talking about. But mom knew exactly what she was talking about. She had already observed that every time we walked 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 was just having 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. 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, or the apprenticeship careers, because those are things that 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, and Benjamin Graham was the author of the Intelligent Investor, he 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, your overpriced, free is overpriced. And Graham was absolutely right, that when it comes to a very valuable apprenticeship, like the type that Graham was going to give Buffett, Buffett should have been paying him a lot of money. And that right there tells you that those are skills worth knowing. specific knowledge also tends to be technical and creative. So on the bleeding edge of technology and 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 very persuasive. Like, for example, Scott Adams is a good example of this. He’s 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 it in his everyday life, if you look at his girlfriend, she’s like 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. And 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 a 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,

Nivi

should we be calling it unique knowledge or this specific knowledge somehow make more sense for it? You know,

I came up with this framework when I was really young. And we’re talking decades and decades is now probably over 30 years old. And so at the time, just 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 rebrand it, the probably unique knowledge is, yeah, maybe it’s unique. But if I learned it from somebody else, that’s no 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 be taught in a single course. nor can it be programmed into a single algorithm.

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?

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 hey, actually, this obsession like 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, his observation is a good one. It’s 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, right, someone else is likely to be the number one each of those 10,000, unless you happen to be one of the 10,000 most obsessed people in the world at a given thing. But when you start going the combinatorics, of combining well number 3007, or 28, with top notch sales skills, and really good writing skills, and so on understands accounting, and finance really well, when the need for that intersection arrives, you’ve expanded now from 10,000, through combinatorics, to millions or 10s of millions, so it just becomes much less competitive. Also, there’s diminishing returns. So it’s much easier to be top 75 percentile at three or four things. That is to be literally the number one at something, I think it’s a very pragmatic approach. But I think it’s important that one not start assembling things to deliberately, because you do want to pick things where you are a natural, everyone is a natural, it’s something we’re all familiar with that phrase unnatural, oh, this person’s unnatural at meeting men, or when this person is a natural socialite, this person is a natural programmer, this person is a natural reader. So whatever you are a natural, you want to double down on that. And then there are probably multiple things, your natural hair, 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, and up top 25 or top 10 or top 5% at a number of things.

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.

You know, this is a very broad category. And but it’s two broad categories. One is building the product, which is hard. And it’s multivariate that can include design that can include development that can include manufacturing, logistics, procurement, it could 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, that’s the CTO as the programmer is the software engineer, hardware engineer. But you know, even in like a 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. Then the other side of it is the sales side. Again, selling has a very broad definition, selling doesn’t necessarily just mean selling individual customers. But it could mean marketing, it could mean communicating. It could mean recruiting, it could mean raising money, it could mean inspiring people, it could be doing PR, so it’s a broad umbrella category. 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 sales, and one of whom is world class at building. An example is called Steve Jobs and Steve Wozniak with Apple gates. And Allen probably has similar responsibility early on with Microsoft and Larry and Sergey, you know, 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 and there’s a builder and there’s a seller, there’s a CEO and CTO combo, and adventure and technology, investors are almost trained to look for this combo, whenever possible. It’s the magic combination. 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 gonna snow him on it. And he’s not running around making claims that he doesn’t think he can eventually deliver. He may be optimistic in the timelines, but he thinks it’s within reasonableness of delivery. Even Steve Jobs, developed enough product skills and was involved enough in the product that he also operated 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 the sales skills, but he was the programmer who wrote Netscape Navigator a big chunk of it. So I think the real giants in any field are the people who can both build and sell. And usually, the building is the thing that like a salesperson can’t pick up building later in life, it requires too much focus 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 paraphrase this as I would 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 still early enough in your life, or you have enough focus time that you think you can learn selling, and you have some natural characteristics for yourself, salesperson, then you can double down on those. Now your sales skills could be in a different than traditional domain. So for example, let’s say you’re 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 communicate 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 technologists, and you’re not going to be the best salesperson. But in a weird way, that combination back the Scott Adams skill stack, that combination of two 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,

when you’re trying to stand out from the noise building is actually better, because there’s so many hustlers and salespeople 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 intensive, very focused tasks. 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 evaluate 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 one, you can start with building and then transition to selling is a cop out answer. But I think that it’s actually the right answer.

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 there. Essentially, there is no skill called business, avoid business magazines, in business class, study, micro economics, 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.

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 is that simple. Everybody I know who reads a lot loves to read, and they love to read, because they read books they loved. It’s a little bit of a catch 22. But you 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 the science fiction, then you may graduate to nonfiction, 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 understand them. And then you’ll naturally move to the next thing. And the next thing and the next thing. 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. And 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. So 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 Stephen Hawking had been saying, you can pick up Richard Fineman, six Easy Pieces that start with basic physics and 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 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. And then after that, we were left memorizing equations, memorizing concepts without being able to derive them from first principles. 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 if 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 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 scarce, so you really have to cultivate that desire. And it’s not even cultivated, you have 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 that ability to feed your own brain to learn whatever you want. And to me foundational things are principles, their algorithms, their deep seated, logical understanding where you can defend it or attack it from any angle. And that’s why micro economics is important. Because macro economics, a lot of memorization, a lot of macro bullshit, as Nassim Taleb says it is easier to macro bullshit. That is the micro bullshit. Because macro economics is Voodoo complex science meets politics, you can’t find two macro economists to agree on anything these days. And different macro economists get used by different politicians to peddle their different pet theories. There are even macro economists out there now peddling something called modern monetary theory, which 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, instead of 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 macro economists in their title in our peddling, modern monetary theory just tells you that macro economics as a so called science has been corrupted. It’s a branch of politics. So you really want to focus on the foundations Foundation, 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. So be very careful about reading other people’s opinions. And even be careful about reading facts, because so called facts are often just opinions. But you know, with a veneer around them, what you really are looking for is algorithms, what you’re 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 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 1000 kicks in 1000 punches. I fear the man who’s practiced one punch 10,000 times or one kick 10,000 times. It’s that understanding that comes through repetition, and through usage and through logic and foundations that really makes you a smart thinker.

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 books on algorithms, or you want to read Fineman, 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.

Yeah, if I could 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, we’re just 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. So in that sense, business, to me is bottom of the barrel, there’s no actual skill called business. It’s too generic of a thing. It’s like a skill called relating, like relating to humans, that’s not a skill is too broad. So a lot of what goes on in business schools. And there’s some very intelligent stuff taught in business schools, I don’t mean to detract from them completely. But some of the stuff that’s taught in business school is essentially just anecdotes, they call case studies. But it’s 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. And even then, you will find that basic concepts from Game Theory and psychology and ethics and mathematics and computers and logic will serve you much, much better. So I would focus on the foundations, I would focus with 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 is the foundation for your self education.

Nivi

What did you mean when you said that doing is faster than watching?

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 now I’m a good reader, a fast reader, and I can read very fast, but I can only listen at a certain speed. I know people listen to two x three X, but everyone sounds like a chipmunk. And it’s hard to go back, it’s hard to highlight as 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 business school case study. That’s a classic example. You know, 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 running the business. For example, everyone’s now in the mental models these days, right? You go to farnam Street, you go to poor Charlie’s Almanac, and you can learn all the different mental models. But which ones matter more? Which ones do you apply more often? And which ones matter 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. You know, I’ve learned that tit for tat iterated prisoner’s dilemma is the piece of game theory that has worth knowing the most, you can literally almost put down the game theory book after that. Probably 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 was like, Oh, yeah, that’s common sense to me. Because the reason is, I just grew up playing all kinds of games. And I ran into all kinds of corner cases, all kinds of friends. And so it’s just second nature to me. So you can always learn better by doing on the job. But the doing is a subtle thing that we’re doing encapsulates a lot. So 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 with them running the retail store, that 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 1000s of hours, but they’re 1000s of hours doing the same thing. Whereas if I was putting in 1000s of iterations, that would be different. So the learning curve is across iteration. So if I was trying new marketing experiments to store all the time, I was constantly changing out the inventory. I was constantly changing out the branding and the messaging, I was constantly changing the sign, I was constantly changing the online channels that I was used to drive foot traffic in, I was experimenting with being open at different hours. If I even had the ability to walk around and talk to other store owners and getting their books and figure out how they run their business. It’s the number of iterations that drives a 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, 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. You know, Nassim Taleb talks about this. Also, he made his fortune, his wealth by being a trader who relied upon black swans. Nassim Taleb made money by essentially losing little bits of money every day. And then once in a blue moon, he would make a lot have money when the unthinkable happened for other people. Worse, most people want to make little bits of money every day. And in exchange, they’ll tolerate lots of bloke 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 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 hurt is. So if you’re willing to bleed a little bit every day, but in exchange, you win big later, you’ll 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 responsibilities upon them. But when they when they went big, on average, they’ll make more.

Nivi

So 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.

Yeah, so to get rich, you know, you’re going to need leverage. And 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. So in that sense, you know, 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 Trump or an Elan, or anyone like that, these people can get rich just off their name, because their name is such powerful branding. You know, 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 because Trump, why would you go to Trump Tower because of Trump, when it came time to vote, I think that a lot of voters just went 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 instant validated. But 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, he sticks his name out there. And 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. So accountability is quite important. When you’re working to build a product, or you’re working in a team or you’re working in a business, we are constantly drummed into our heads how important it is to be part of a team. And I absolutely agree with that. A lot of our training socially is telling us to not stick our necks out of the crowd. This is saying that I hear from Australian friends that the tall poppy gets cut, right, 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 like so you can say, Okay, this person is responsible for building the product, this person is responsible for the messaging, this person is responsible for raising money, this person responsible for the pricing strategy, and maybe their online advertising. So if somebody screws up, you know exactly who’s responsible, while at the same time, something goes really well you also know exactly who’s responsible. So if you have a small team, and you have clearly delineated responsibilities, and you can still keep a very high level of accountability, and 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, take credit. And we’ve all had that experience when we were in school, and we got like a group assignment to do. And there were people in there, there were probably a few people in there who did a lot of the work. And then there are a few people who just did a lot of grandstanding or positioning to do the work. So we’re all familiar with this from a childhood sense, but it is uncomfortable to talk about but clear accountability is important. Without accountability, you don’t have incentives. Without accountability. You can’t build credibility, but you take risk. So you take risk of failure, you take risk of humiliation, you take risk of failure under your own name, which, you know, 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 hardwired to not fail in public under our own names. And the people who have the ability to fail in public, under their own names actually gained a lot of power. For example, I’ll give a personal anecdote up until about 2013 2014. My public persona was entirely around startups and investing in only around 2014 2015 did I start talking about philosophy and psychological things and broader things? And it made me a little nervous because I was doing it under my own name. And there were definitely people in the industry who sent me emails. messages through the back channel, like what are you doing, you’re ending your career, this is stupid, and I just went with it took a risk. Same with crypto early on, it took a risk. But when you put your name out there, you take a risk of certain things, you also get to reap the rewards, you get the benefits. And 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. And if you have high accountability that makes you less replaceable. And then they have to give you equity, which is a piece of the upside. But 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. So if you look at the hierarchy of capital in a company, the employees get paid. First, they get to pay the salary first, like in the legal proceedings, you know, the salaries are sacrosanct. If you are a board member, and the company spends too much money and has back salaries to pay, the government will go after you personally to pay back the salaries. So the employees get the most security. But in exchange for that security, they don’t have as much upside. Then next in line would be the debt holders, who are maybe the bankers who lent money to the company for operations, and they need to make their fixed coupon every month or every