0:00 hey this is nivi you're listening to the navall podcast this is one giant mega sowed that collects every episode we've done on getting rich all of it based on his tweet storm 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 subs 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 ten minutes of bonus material at the very end that we've never released the overall sound quality of this mega sowed improves a lot after the first hour you can find a
0:46 link to a clean transcript in the show notes or if you go to the website nav al there's no calm at the end I hope you enjoy you probably know Nepal from his Twitter account and we're gonna 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 giving the ball a chance to expand on them and just generally riff on the topic he'll probably throw in some ideas that he hasn't even published before he's also the co-founder of angel lists and opinions he's a prolific tech investor in companies like Twitter uber and many more and I'm the co-founder evangelist navall and I also co-authored the venture hacks blog with him back in the day yeah me how to get Mitch tweet storm
1:33 definitely hit a nerve 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 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 the robots as 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 ass and into other businesses even a house can be a form of wealth because you can rent it out although it's probably a
2:20 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 tire like a collar around your neck so you don't have to wake up at 7 a.m. 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 into a soulless job that doesn't fulfill you so the purpose of wealth is freedom it's nothing more than that it's like to buy fur coats or drive Ferraris or sail yachts or jet around the world in your Gulfstream that stuff gets really boring and really stupid really fast it's really just so that you are your own sovereign individual you're not gonna get that unless you really want it and the entire world wants it and the
3:07 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 on 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 the base because people steal the IOUs the government prints extra io u--'s people Rometsch under io u--'s but really what money is trying to be it is trying to be a reliable Iowa you from society that
3:54 you are owed something for something you or someone who gave you that money did in the past and we can transfer these IOUs around so really money is how we transfer well there are fundamentally two huge games in life that people play one is the money game because money's not gonna solve all your problems but it's gonna solve all your money problems so I think that people know that they realize that so they want to make money but at the same time many of them deep down believe that they can't make it they don't want any wealth creation to happen so this virtue signal by attacking the whole enterprise by saying well making money is evil do it bottle blah but what they're trying to do is they're actually playing the other game to the status game they're trying to be high status in the eyes of other people watching by saying oh I don't need money we don't want money and then status is just your
4:40 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 just 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 create it's a positive sub-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 hierarchical who's number one who's number two who's number three and for a number three to move to number two number two has to move out of that slot so status is zero-sum game politics is
5:26 an example of a status game even sports is an example of a status game to be the winner there must be a loser I don't fundamentally love status games they play an important role in our society so we figure out who's in charge but fundamentally you play them because they're necessary evil the problem is an evolutionary basis like if you go back thousands of years status is a much better predictor of survival than wealth as 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 in 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 rich people or they attack the technology
6:13 industry they're really bidding for status they're saying no the people are more important and I the journalist represents the people and therefore I am more important the problem is that by playing these status games to win at a status game you have to put somebody else down that's why you should avoid status games in your life because they make you into an angry combative person you're always fighting to put other people down to put yourself and the people that you like up and they're always going to exist 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
7:00 game 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 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 rooted all the way back down to money's the root of all evil people think that 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
7:45 they're 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 to steal even in nature there are more parasites than there are non parasitical organisms you have ton of parasites in you who are living off of you and the better ones are symbiotic they're 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 when 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 a 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
8:32 got created from somewhere it got created from people they got created from technology a critical productivity got created from hard work so this idea that if 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 too hundred 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 the first world country than be a rich person in Louisa 14th France I'd rather be a poor person today than an aristocrat back then and that's just
9:17 because of wealth creation the engine of technologies 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 would happen 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 of the basics we'd even have robotic nurses we have like machine
10:03 driven hospitals we have self-driving cars we'd have farms that are a hundred percent automated we have clean energy so at that point we could use technology breakthroughs to get everything that we want it 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 a 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 xq-- maladies it gets hijacked by improper deals where that you have corruption or you have monopolies over all 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
10:49 exchange that we have when you and I exchange information I want some information back from you I give you information you give me information if we weren't having a good information exchange you go talk to somebody else so the notion of exchange and keeping track of credits and debits this is built into us as flexible social animals we are the only animal in the animal kingdom that cooperate across genetic boundaries most animals doesn't cooperate but when they do they cooperate only in packs where they Co evolved together and they share blood so they have some shared interests 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
11:36 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's 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 gonna continue to make us all richer and richer until we have massive wealth creation for anybody who wants it and it's not just individual secretly despising wealth right there's countries
12:22 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 king of status and the process to destroy wealth creation they dragged everybody down to their level which is why the u.s. is a very popular country for immigrants because it's the American dream anyone can come here pretty 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 of all citizens definition of wealth might be oh I have to make millions of dollars and I'm completely done where's 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 that I don't have to work a
13:08 manual labor job for the rest of my life that I don't want 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're in with a communist country look with Venezuela right they were so busy taking and dividing and reallocating that people are literally starving in the streets and losing kilograms of body weight every year just do 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 symbols like all the mitochondria in all of our cells that help us respirate and burn oxygen these are symbols that help us survive we can survive without them but to me those are partners in the wealth creation that
13:55 creates the human body but if you just were filled with parasites if you've 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 time when monopolies and that I'm not promoting capitalism I'm gonna talk about miss price externalities like the environment I'm talking about free minds and free markets small steel exchange between humans that's voluntary and doesn't have an outsize impact on others but I think that kind of wealth creation if a society does not respect it the group does not respect it that society will plunge into ruin and darkness obviously we want to be wealthy and we want to get
14:40 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 drop me on a random street in any english-speaking country within five ten years I'd be wealthy again right because it's just a skill set that I've developed and I think anyone can develop you know in a thousand parallel universes you want to be wealthy in 999 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 marca Marc Andreessen wrote a blog post about it but there's different kinds of luck the first kind of luck he might just say is that blind luck where I just got lucky
15:27 because something completely out of my control happened you know that's fortune that's fate etc then there's luck that comes through persistence hard work soeul 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 you're just generally in a force and hustle and energy that luck will find you a 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 the skill and knowledge and work and
16:13 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 dives 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 at 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 then coming to you
16:59 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 talked about without getting lucky we want to be deterministic we don't want to leave it to chance do you want to elaborate a little bit more on the idea that in a thousand parallel universes you want to get rich in 999 of them I think some people are going to see that and say that sounds impossible 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
17:44 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 podcasts you probably have the requisite means at your disposal which is a functioning body and a functioning mind and I have encountered plenty of bad luck along the way first a 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 and quitting opportunities and creating investments it hasn't been
18:30 like a giant one-off thing my personal wealth has not been generated by one a big year it just stacks up little bit chips at a time more options more businesses more investments more things that can do same way someone like in a nod gala service he's building his brand online he's building videos it's not like any one video is going to suddenly shower him with riches overnight it's going to be a long lifetime of learning of reading of creating this is gonna compound so we're talking about getting wealthy so you can retire so you have your freedom I'm not retired a sense that you don't do anything but in the sense that you don't have to be any place you don't want to be you don't have to do anything you don't want to do 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
19:15 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 this time there's just so many ways to create wealth to create products to create businesses to create opportunities and to as a by-product get paid by society that I just can't even handle it all 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 is dumb luck or
20:02 fine luck that's the first kind of luck the second kind of luck does the cliche that fortune favors the bold that's a person who gets lucky just by stirring the pot and acting the third kind of luck people say that chance favors the prepared mind but for the fourth kind of luck there 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
20:49 build your character in a certain way and then your character becomes your destiny one of the things I think that is important to making money when you want the kind of reputation that makes people do deals through you you know I use the example of like if you're a great diver then treasure hunters will come and give you a piece of the treasure for your diving skills if you're a trusted reliable high integrity long-term thinking deal maker then when other people want to do deals but they don't know how to do them in a trustworthy manner with strangers they will literally approach you and give you a cut of the deal or offer you a unique deal just because of the integrity and reputation that you've built up Warren Buffett he gets offered deals and he gets to buy companies and he gets to file warrants and bail out banks and do
21:34 things that other people can't do because of his reputation but of course that's fragile it has accountability on the line it has a strong brand on the line and as we will talk about later that comes with accountability attached but I would say your character your reputation these are things that you can build that then will let you take out advantages of opportunities that other people may characterize as lucky but you know that it wasn't 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 the kind of luck was we make our fortunes and we call them fate there were a
22:21 couple other interesting things about this kind of luck that were mentioned in the blog post I think it'll be good for the listeners to hear about is that this fourth kind of luck can almost come out of eccentric ways that you do your things and that eccentricity is not necessarily a bad thing in this case in fact it's a good thing 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 yeah the two quotes that I've
23:06 seen that expressed this kind of luck in addition to that Benjamin Disraeli one are this one from Sam Altman where he said extreme people get extreme results I think that's pretty nice and then there's this other one from Jeffrey Pfeffer who is a professor at Stanford that you can't be normal and expect abnormal returns I've always enjoyed that one too yeah and one quote that I like which is the exact opposite of that is play stupid games win stupid prizes all 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 I guess the last thing that I have from this blog post is just the idea that by
23:52 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 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 of your time you must own equity up piece of the business to gain your financial freedom this is probably one of the absolute most important points people seem to think that you can create
24:39 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 salary job even at one that's paying a lot per hour like a lawyer or a doctor you're still putting in the hours and every hour you get paid so what that means is when you're sleeping you're not earning when you're retired you're not earning when you're in 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 then private practice builds a brand and that brand attracts people or they build some kind of medical device or a procedure or a process where they've intellectual property so essentially you're working for somebody else and that person is
25:25 taking on the risk and has the accountability and the intellectual property and the brand so they're just not gonna pay you enough they're gonna pay you the bare minimum that they have to to get you good a job and that can be a high bare minimum but it's still not gonna 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 tweets term should have been called how to create wealth it's just 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 who's been taught and is coming in to replace you you're much more likely to be doing a job that can
26:11 be eventually replaced by a robot or by an AI and it doesn't have to be a wholesale replaced overnight Akemi replace a little bit of a time and that eats into your wealth creation and therefore you're earning capability so fundamentally your inputs are matched to your outputs you are replaceable and you're not being creative I just don't think that that is 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 be working 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 there in an investment for them and they're buying equity so these are much more the routes to wealth it doesn't
26:57 come to the hours you really just want a job or a career or profession where your inputs don't matter your outputs so if you look at modern society I get into later in the tweet storm businesses that have high creativity and high leverage tends to be ones where you could do an hour of work and it can have a huge effect or you can do a thousand hours of working can have no effect for example look at software engineering one great engineer can for example create Bitcoin and create billions of dollars with the value an engineer who's working on the wrong thing or not quite as good or just not a creative or thoughtful or whatever can work for an entire year and every piece of code they ship and whatnot getting used customers don't want it that is an example of a profession where the input and the outputs are highly
27:43 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 so the inputs and outputs really connected they're just using an axe or a saw the best lumberjack in the world maybe like 3x 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 this is 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 gonna be using tools and have more leverage than
28:29 someone who's just using his bare hand and try to rip the trees out by their roots tools and leverage are what create this disconnection between inputs and outputs creativity so the higher the creativity component of a profession the more likely it is to have disconnected inputs and outputs so I think that if you're looking at professions where you're inputting your outputs are highly connected it's gonna be very very very hard to create wealth and make wealth for yourself in that process any other big thing 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 beer or something like how it 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 your freedom that people busy
29:15 upgrading their lifestyles 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 your 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 that house lifestyle and all that stuff let's say you're gonna get a thousand dollars an hour the problem is that when you go into a work lifestyle like that you don't just suddenly go from making twenty dollars an hour to making a thousand dollars 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
30:01 it was nothing too late 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 well you don't make any money for ten 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 or flawed because the highest risk taking most creative professions literally lose money for a decade over your life while you take massive risk and you bleed and bleed and bleed and then suddenly in year 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
30:48 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 gonna work because you got to do something with your life but I'm gonna work on only the things that I want when I want and to be much more creative expression and much less about money 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 I could we talked about before money is IO used from society saying you did something good in the past now here's something
31:34 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 and your workplace and on the street used to be technology at one point in time at the time when oil was technology that made JD rockefeller rich there's a time when cars were technology that made Henry Ford rich so technology is just a 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
32:20 get but it will want that's natural to you and within your skill set within your capabilities and then you have to figure out to scale it because if you just build one of it that's not enough you gotta build thousands or hundreds of thousands or millions or billions of them so everybody can have one Steve Jobs and his team of course figured out that society would want smart phones computer in their pocket that had all the phone capability times a hundred 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 to and so because of that they're heavily rewarded an Apple is the most valuable company in the world 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
33:07 starts as high-end first it starts as an act of creativity first you create 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 chauffeur 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 Ober 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 job starts 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
33:53 figuring out how to scale it and get it to everybody in a profitable way in a self-sustaining way 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 lettuce by broadcast into them on Twitter whether it's by posting something on Facebook that they find whether it's by putting up a website they come in access it connects everyone to everyone so the Internet is an inter networking tool it
34:39 connects everybody that is its 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 may not who's illustrators if he was in these videos pre-internet how would he get the message out there it would just be what would he do he would run around where he lives in his neighborhood showing it to people a computer or a screen or he would try to get it played in his local movie theater it was impossible it only works because he can put it on the Internet and then how many people in the world are really interested in it or even interested in what we're talking about really gonna absorb it right it's gonna 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
35:25 weirdest thing it could be like people who collect snakes they're like people who like to ride hot-air balloons the people who like to sail around the world by themselves just one person on a craft or someone who's obsessed with miniature cooking like there's this whole Japanese nature cooking phenomenon or there's a show about a woman goes in people's houses and tidies it up right so whatever niche obsession you have the Internet allows of the scale now that's not to say that what you build will be the next Facebook 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 beings on this planet the combinatorial of human DNA are incredible everyone is completely different you'll never meet any two people who are even vaguely similar to each other that can substitute for each other it's not you can say well maybe just left my life so I can have this
36:12 other person come in and he's just like maybe and I get the same feelings let's say in 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 literally need your completely unique skill and you had to conform to just a 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
36:59 through the internet space of careers has been so broaden eSports players people making millions of dollars x 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 going to make about a hundred million dollars a year on his podcast and he's had two billion downloads even PewDiePie is a hilarious tweet that every tweeted the other day PewDiePie is the number one trusted name in news this is a kid I think in Sweden and he's got three times the distribution of the top cable news networks just on his news channel it's not even on his entertainment channel the internet enables any niche interest as long as you're the best at it to scale out and the great news is because every human is different everyone is the best at something you being themselves
37:45 another tweet I had that is worth weaving in but didn't go into this tweet storm was a very simple one I liked things from making them down because they're easy to remember it easy to hug 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 where magnetic creatures and rené girard has a whole new message theory but it's much easier than that don't imitate don't copy just do your own thing no one can compete with you on being you it's that simple and so the more authentic you are to who you are and what you love to do the less competition you're gonna have so you can escape competition through authenticity when you realize that no one can compete with you on being you and normally that would have been
38:32 useless advice pre internet post Internet you can turn that into a career 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 increased 20 percent a year for 30 years it's not that you got 30 years x 20 percent added on it was
39:18 compounding so it just grew grew and grew until you suddenly got a massive amount of whatever it is whether it's goodwill or love or relationships or money so I think compound interest is a very important force you have to go to play a long-term game and long-term games are good matches for compound interest they're also good for trust if you look at prisoner's dilemma type games the solution to prisoner's dilemma is tit for tat which is I'm just gonna 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 if 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 then they do right by each other because they know this person will be around for the next game now of course that doesn't always work because
40:03 you can make so much money in one move in Silicon Valley sometimes you betray each other because they're just like I'm gonna get rich enough of office 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 will let you collect the major rewards which are usually at the end of the cycle so for example Warren Buffett has done really well as an investor in the US stock market but the biggest reason he 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 u.s. didn't plunge in some war
40:49 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 the 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 in 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 you know 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 built your network you're
41:35 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 are 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 yeah they love them downside the career politicians that corruption but an upside is they actually get deals done with each other because they know the other person is gonna be in the same position ten years from now and they have to keep dealing with them so they might as well learn how to cooperate where every time you get like a new incoming freshman 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 gonna be around
42:21 why should I work with you rather than just try and do whatever I think is right so it's important to pick an industry where you can play long-term games and with long-term people so those people have to signal that they're going to be around for a long time that they're ethical and their ethics are visible to their action in a long-term game it seems that everybody is making each other rich and in a short-term game it seems like everybody is making themselves rich I think that is a brilliant formulation yeah in a long-term game it's positive some we're all baking acquired 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 those people who are not involved in baking the pie who show up at the end and say I
43:06 want a slice or I want the whole pie they show up with the guns but I think a good leader doesn't take credit a good leader tries to inspire people's that the team get 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 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 have 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 if 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
43:52 like that's compound interest right investing in those relationships those relations and would be 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'd deteriorate your body the harder it is to come back and claw your way back to a baseline and requires heroic acts regarding compound interest I think I saw you retweet something awhile back maybe it was from Edie Lattimore it went 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 a kid traction don't let go it was a good one yeah in terms of pick people to work with that I
44:38 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 gonna 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 are really smart but you know can't get out of bed or lift a finger and we also know people have a very high energy but not that smart so they work hard but then 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 than 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 for example someone might be really unmotivated to go to a job and sit in an
45:24 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 it got the other two what you have is you have a smart and hardworking crook who's eventually gonna 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 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
46:09 at the thing that you want 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 in this idea 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 just charge in the battle and then they'll figure it out but if you're trying to keep someone motivated for the long term but 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
46:54 them to do 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 and we badly then it's only a matter of time until they treat you badly if somebody screws over an enemy and is vindictive towards them well it's only a matter of time before they redefine you from friend to enemy and you feel their wrath so angry outraged vindictive short-term thinking people are essentially that way in many interactions in their life people are oddly consistent it's one of things you learn about them so you want to find long-term people you want to find people who seem irrationally ethical for example I had one friend of mine it was company I invested in and
47:40 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 what got 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 your investors you didn't wipe them out and he got offended by that he said I didn't do it for you I didn't do it for my investors I did it for me it's my own self-esteem it's what I care about that's how I live my life that's the kind of person you want to work with another quote that I like I would tweet on this I think I read this somewhere else which me said I'm not taking credit for this but I modified a little bit which is that self-esteem is a reputation that you have with yourself you'll always know so good people moral
48:25 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 undeserving but self esteem at least you feel like you lived up to your own internal moral code of ethics and so it's very hard to work with people who end up being low integrity that it's 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're to be that way it's very much like status signaling if you overtly bid for star if you already talked 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
49:10 probably not that honest and trustworthy that is a characteristic of conman so yeah picking an industry in which you can play long-term games with long-term people let's look at 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 go see the world for what it really is and yet you have to be optimistic about your own capabilities and your tymberlee 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
49:57 their lives they'll 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 in things as long as you come up with a solution there's also the classic like military line I will lead follow or get out of the way and these people want a fourth option well 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 things not going to work and all the really successful people I know have a very strong action bias they just do things the easiest way to figure out if something is viable or not is by doing it at least do the first step in the second step in the third and then decide so if you want to be successful in life creating wealth or having good relationships or being fit or even being happy you need to have an action bias towards getting what you want and you have to be optimistic about it
50:43 not irrationally there's nothing worse than someone who's is the foolhardy and chasing that's not work that's that's a rational optimist but you have to be rational know all the pitfalls know the downsides but still keep your chin up I 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 when 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 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 just better to think big obviously rationally
51:28 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 and you just make me look bad yeah it's probably better to be an irrational optimist than it is to be a rational cynic yeah there's a completely rational frame on why you should be an optimist historically if you go back 2,000 years 5,000 there's 10,000 years to people are wandering through a jungle they hear a tiger one's an optimist and says oh it's not headed our way the other one says I'm a pessimist I'm out of here and the pessimist runs and survives and the optimist gets eaten so we descended from
52:15 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 if 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 that'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 it made sense to be pessimistic in the past it makes sense to be optimistic today especially
53:02 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 could be physically dangerous hurt your body you have to watch your health and stay out of things that can cause you to lose all Capital all of your savings it'll gamble everything at one go but you take rationally optimistic bets with big upside 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
53:49 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'd barely get exposed to that anymore absolute way today's forum Scott Adams got so annoyed by this dude he came up with the phrase an acronym which is but of course there are obvious exceptions BOC ta OE and he used to like pin that acronym at the end of his articles for a while but twitterings just like overrun with nit pickers and which 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 on 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 Reid Hoffman so you gotta treat everybody with respect you gotta look up to every
54:36 possibility and opportunity because the upside is so unlimited the downside is so limited in the modern world especially with financial assets and instruments you want to talk a little bit about the skills that you need in particular specific knowledge accountability leverage and judgment so the first tweet in this area is arm yourself with specific knowledge accountability and leverage and I'll throw in judgment as well I don't think you covered that in that particular tweet if you want to make money you have to get paid at scale and why you that's accountability at scale that's leverage and just you getting paid as opposed to somebody else getting paid that's specific knowledge so specific
55:23 knowledge is probably the hardest thing to get across in this whole tweet storm
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