Apply specific knowledge with leverage and eventually you will get what you deserve.
On a long enough time scale you will get paid
Nivi: We’re still talking about working for the long term, the next tweet on that topic is “Apply specific knowledge with leverage and eventually you will get what you deserve.” I would also add to that apply judgment, apply accountability and apply the skill of reading.
Naval: This one is just a glib way of saying that it takes time, even once you have all of these pieces in place, there is an indeterminate amount of time that you’re going to have to put in. And if you’re counting you’ll run out of patience before it actually arrives.
So you just have to make sure that you give these things a proper time, life is long, and Charlie Munger had some line on this. Somebody asked him about making money and he reinterpreted that and he said what the questioner was actually asking was, “How do I get rich like you but faster before I end up as a really old guy?”
And everybody wants it immediately but the world is an efficient place, immediate doesn’t work. You do have to put in the time. You do have to put in the hours and so I think you just have to put yourself in the position with the specific knowledge, with the accountability, with the leverage, with the authentic skill set that you have to be the best in the world at what you do.
And then you have to enjoy it and just keep doing it and keep doing it and keep doing it and don’t keep track and don’t keep count because if you do you will run out of time. I can look back at my career and the people two decades ago I had identified as brilliant and hardworking but hadn’t thought much more about it, they’re all successful now, almost without exception.
On a long enough time scale you do get paid but it can easily be 10 or 20 years. Sometimes it’s five and if it’s five or three and a friend of yours got there it can drive you insane. But, those are exceptions. And for every winner there’s multiple failures.
One thing that’s important in entrepreneurship is you just have to be right once. You get many, many shots on goal. You can take shot on goal every three to five years, maybe every 10 at the slowest or once every year at the fastest depending upon how you’re iterating with startups but you really only have to be right once.
What are you really good at that the market values?
Nivi: My little equation is that your eventual outcome will be equal to something like the distinctiveness of your specific knowledge times how much leverage you can apply to that knowledge times how often your judgment is correct times how singularly accountable you are for the outcome times how much society values what you’re doing. And then you compound all of that with how long you can keep doing it and how long you can keep improving it through reading and learning.
Naval: That’s actually a really good way to summarize it. It’s probably worth even trying to sketch that equation out.
That said, people try to then apply mathematics to what is really philosophy. So I’ve seen this happen in the past where I say one thing and then I say another thing that seems contradictory if you treat it as a math equation.
But it’s obviously in a different context and then people will say, “Well you say that desire is suffering,” you know, the Buddhist saying, and then you say, “All greatness comes from suffering. So does that mean all greatness come from desire?” Well this isn’t math people, you can’t just start carrying variables around and forming absolute logical outputs. You have to know when to apply things.
I think that is very useful to understand but at the same time one can’t get too analytical about it. It’s what a physicist would call false precision. When you take two made up estimates and you multiply them together and you get four degrees of precision and those decimal points don’t actually count. You don’t have that data. You don’t have that knowledge. In a model, the more estimated variables you have, the greater the error in the model.
So, just adding more and more complexity to your decision making process actually gets you a worse answer. You’re better off just picking the single biggest thing or two. For example, what am I really good at according to observation and according to people that I trust, that the market values?
That alone, those two variables alone are probably good enough because if you’re good at it you’ll keep it up. And if you’re good at it you’ll develop the judgment. And if you’re good at it and you like to do it eventually people will give you the resources and you won’t be afraid to take on accountability. So all the other pieces will fall in place.
Product-market fit is inevitable if you’re doing something you love to do and the market wants it.