Eric Jorgenson
Highlights
Page: 7
Sure, he’s the CEO and a co-founder of AngelList. Sure, he previously co-founded Vast.com and Epinions, which went public as part of Shopping.com. Sure, he’s an angel investor and has invested in many mega successes, including Twitter, Uber, Yammer, and OpenDNS, to name but a few. That’s all great, of course, and it shows Naval is a world-class operator instead of an armchair philosopher. But I don’t take his perspectives, maxims, and thoughts seriously because of the business stuff. There are lots of miserable “successful” people out there. Be careful about modeling those, as you will get all the bathwater with the baby. I take Naval seriously because he: Questions nearly everything Can think from first principles Tests things well Is good at not fooling himself Changes his mind regularly Laughs a lot Thinks holistically Thinks long-term And…doesn’t take himself too goddamn seriously. That last one is important. ^ref-25440 Page: 13
Making money is not a thing you do—it’s a skill you learn. ^ref-62029 Page: 13
It’s not really about hard work. You can work in a restaurant eighty hours a week, and you’re not going to get rich. Getting rich is about knowing what to do, who to do it with, and when to do it. It is much more about understanding than purely hard work. Yes, hard work matters, and you can’t skimp on it. But it has to be directed in the right way. If you don’t know yet what you should work on, the most important thing is to figure it out. You should not grind at a lot of hard work until you figure out what you should be working on. ^ref-56318 Page: 18
Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep. ↓ An army of robots is freely available—it’s just packed in data centers for heat and space efficiency. Use it. ↓ If you can’t code, write books and blogs, record videos and podcasts. ^ref-16024 Page: 18
There is no skill called “business.” Avoid business magazines and business classes. ↓ Study microeconomics, game theory, psychology, persuasion, ethics, mathematics, and computers. ^ref-10533 Page: 19
Work as hard as you can. Even though who you work with and what you work on are more important than how hard you work. ↓ Become the best in the world at what you do. Keep redefining what you do until this is true. ^ref-44893 Page: 18
Capital and labor are permissioned leverage. Everyone is chasing capital, but someone has to give it to you. Everyone is trying to lead, but someone has to follow you. ↓ Code and media are permissionless leverage. They’re the leverage behind the newly rich. You can create software and media that works for you while you sleep. ↓ An army of robots is freely available—it’s just packed in data centers for heat and space efficiency. Use it. ↓ If you can’t code, write books and blogs, record videos and podcasts. ^ref-35590 Page: 21
Technology democratizes consumption but consolidates production. The best person in the world at anything gets to do it for everyone. ^ref-49796 Page: 22
Specific knowledge cannot be taught, but it can be learned. When I talk about specific knowledge, I mean figure out what you were doing as a kid or teenager almost effortlessly. Something you didn’t even consider a skill, but people around you noticed. Your mother or your best friend growing up would know. Examples of what your specific knowledge could be: Sales skills Musical talents, with the ability to pick up any instrument An obsessive personality: you dive into things and remember them quickly Love for science fiction: you were into reading sci-fi, which means you absorb a lot of knowledge very quickly Playing a lot of games, you understand game theory pretty well Gossiping, digging into your friend network. That might make you into a very interesting journalist. The specific knowledge is sort of this weird combination of unique traits from your DNA, your unique upbringing, and your response to it. It’s almost baked into your personality and your identity. Then you can hone it. No one can compete with you on being you. Most of life is a search for who and what needs you the most. ^ref-57465 Page: 25
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 is the hottest job; it’s not by 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 only now being figured out or is really hard to figure out. If you’re not 100 percent into it, somebody else who is 100 percent 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, compound interest really applies and leverage really applies. [78] ^ref-46488 Page: 25
You can go 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. [78] The internet enables any niche interest, as long as you’re the best person at it to scale out. And the great news is because every human is different, everyone is the best at something—being themselves. ^ref-39102 Page: 25
didn’t go into the “How to Get Rich” tweetstorm, was very simple: “Escape competition through authenticity.” Basically, 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 ^ref-54566 Page: 25
“Escape competition through authenticity.” Basically, 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. [78] ^ref-63714 Page: 26
The most important skill for getting rich is becoming a perpetual learner. You have to know how to learn anything you want to learn. The old model of making money is going to school for four years, getting your degree, and working as a professional for thirty years. But things change fast now. Now, you have to come up to speed on a new profession within nine months, and it’s obsolete four years later. But within those three productive years, you can get very wealthy. ^ref-2898 Page: 26
You do need to be deep in something because otherwise you’ll be a mile wide and an inch deep and you won’t get what you want out of life. You can only achieve mastery in one or two things. It’s usually things you’re obsessed about. [74] ^ref-64513 Page: 29
I’m not saying don’t do the 99 percent, because it’s very hard to identify what the 1 percent is. What I’m saying is: when you find the 1 percent of your discipline which will not be wasted, which you’ll be able to invest in for the rest of your life and has meaning to you—go all-in and forget about the rest. [10] ^ref-60170 Page: 29
So to get these things, you have to build credibility, and you have to do it 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. [78] Clear accountability is important. Without accountability, you don’t have incentives. Without accountability, you can’t build credibility. But you take risks. You risk failure. You risk humiliation. You risk failure under your own name. ^ref-42322 Page: 30
In the old days, the captain was expected to go down with the ship. If the ship was sinking, then literally the last person to get off was the captain. Accountability does come with real risks, but we’re talking about a business context. The risk here would be you would probably be the last one to get your capital back out. You’d be the last one to get paid for your time. The time that you put in, the capital you put into the company, these are at risk. [78] Realize that in modern society, the downside risk is not that large. Even personal bankruptcy can wipe the debts clean in good ecosystems. I’m most familiar with Silicon Valley, but generally, people will forgive failures as long as you were honest and made a high-integrity effort. There’s not really that much to fear in terms of failure, and so people should take on a lot more accountability than they do. [78] ^ref-37039 Page: 31
This is probably one of the most important points. People seem to think you can create wealth—make money through work. It’s probably not going to work. There are many reasons for that. Without ownership, your inputs are very closely tied to your outputs. In almost any salaried job, even one paying a lot per hour like a lawyer or a doctor, you’re still putting in the hours, and every hour you get paid. Without ownership, 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. ^ref-3604 Page: 31
BUILD OR BUY EQUITY IN A BUSINESS If you don’t own a piece of a business, you don’t have a path towards financial freedom. ^ref-3186 Page: 29
TAKE ON ACCOUNTABILITY Embrace accountability and take business risks under your own name. Society will reward you with responsibility, equity, and leverage. ^ref-54109 Page: 27
PLAY LONG-TERM GAMES WITH LONG-TERM PEOPLE ^ref-42461 Page: 32
We live in an age of infinite leverage, and the economic rewards for genuine intellectual curiosity have never been higher. [11] Following your genuine intellectual curiosity is a better foundation for a career than following whatever is making money right now. [11] Knowledge only you know or only a small set of people knows is going to come out of your passions and your hobbies, oddly enough. If you have hobbies around your intellectual curiosity, you’re more likely to develop these passions. [1] If it entertains you now but will bore you someday, it’s a distraction. Keep looking. I only really want to do things for their own sake. That is one definition of art. Whether it’s business, exercise, romance, friendship, whatever, I think the meaning of life is to do things for their own sake. Ironically, when you do things for their own sake, you create your best work. Even if you’re just trying to make money, you will actually be the most successful. ^ref-34149 Page: 36
Whenever you can in life, optimize for independence rather than pay. If you have independence and you’re accountable on your output, as opposed to your input—that’s the dream. [10] ^ref-41047 Page: 37
What you want in life is to be in control of your time. You want to get into a leveraged job where you control your own time and you’re tracked on the outputs. If you do something incredible to move the needle on the business, they have to pay you. Especially if they don’t know how you did it because it’s innate to your obsession or your skill or your innate abilities, they’re going to have to keep paying you to do it. ^ref-8039 Page: 38
Building any product and selling any product fits this description. And fundamentally, what else is there? Where you don’t necessarily want to be is a support role, like customer service. In customer service, unfortunately, inputs and outputs relate relatively close to each other, and the hours you put in matter. [10] ^ref-11779 Page: 38
Tools and leverage create this disconnection between inputs and outputs. The higher the creativity component of a profession, the more likely it is to have disconnected inputs and outputs. If you’re looking at professions where your inputs and your outputs are highly connected, it’s going to be very hard to create wealth and make wealth for yourself in that process. [78] If you want to be part of a great tech company, then you need to be able to SELL or BUILD. If you don’t do either, learn. Learn to sell, learn to build. If you can do both, you will be unstoppable. ^ref-8996 Page: 38
These are two very broad categories. One is building the product. This is hard, and it’s multivariate. It can include design; it can include development; it can include manufacturing, logistics, procurement; and it can 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, it’s the CTO, it’s the programmer, it’s the software engineer or hardware engineer. But even in the 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. The other side of it is sales. Again, selling has a very broad definition. Selling doesn’t necessarily just mean selling to individual customers, but it can mean marketing, it can mean communicating, it can mean recruiting, it can mean raising money, it can mean inspiring people, it could mean doing PR. It’s a broad umbrella category. [78] Earn with your mind, not your time.
Thoughts on highlight:
How does support/TSE allow for or pivoting towards acts of building or selling (influencing)? Page: 41
You start as a salaried employee. But you want to work your way up to try and get higher leverage, more accountability, and specific knowledge. The combination of those over a long period of time with the magic of compound interest will make you wealthy. [74] ^ref-65261 Page: 41
The one thing you have to avoid is the risk of ruin. Avoiding ruin means stay out of jail. So, don’t do anything illegal. It’s never worth it to wear an orange jumpsuit. Stay out of total catastrophic loss. Avoiding ruin could also mean you stay out of things that could be physically dangerous or hurt your body. You have to watch your health. Stay out of things that could cause you to lose all of your capital, all of your savings. Don’t gamble everything on one go. Instead, take rationally optimistic bets with big upsides. [78] ^ref-39840 Page: 46
There are fundamentally two huge games in life that people play. One is the money game. Because money is not going to solve all of your problems, but it’s going to solve all of your money problems. People realize that, so they want to make money. But at the same time, many of them, deep down, believe they can’t make money. They don’t want any wealth creation to happen. So, they attack the whole enterprise by saying, “Well, making money is evil. You shouldn’t do it.” But they’re actually playing the other game, which is the 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.” Status is your ranking in the social hierarchy. [78] Wealth creation is an evolutionarily recent positive-sum game. Status is an old zero-sum game. Those attacking wealth creation are often just seeking status. Status is a zero-sum game. ^ref-48921 Page: 47
Status games are always going to exist. There’s no way around it, but realize most of the time, when you’re trying to create wealth and you’re getting attacked by someone else, they’re trying to increase their own status at your expense. They’re playing a different game. And it’s a worse game. It’s a zero-sum game instead of a positive-sum game. [78] ^ref-24277 Page: 48
What are one or two steps you’d take to surround yourself with successful people? Figure out what you’re good at, and start helping other people with it. Give it away. Pay it forward. Karma works because people are consistent. On a long enough timescale, you will attract what you project. But don’t measure—your patience will run out if you count. [7] An old boss once warned: “You’ll never be rich since you’re obviously smart, and someone will always offer you a job that’s just good enough.” ^ref-6881 Page: 49
What you really want is freedom. You want freedom from your money problems, right? I think that’s okay. Once you can solve your money problems, either by lowering your lifestyle or by making enough money, you want to retire. Not retirement at sixty-five years old, sitting in a nursing home collecting a check retirement—it’s a different definition. ^ref-56653 Page: 50
The way to get out of the competition trap is to be authentic, to find the thing you know how to do better than anybody. You know how to do it better because you love it, and no one can compete with you. If you love to do it, be authentic, and then figure out how to map that to what society actually wants. Apply some leverage and put your name on it. You take the risks, but you gain the rewards, have ownership and equity in what you’re doing, and just crank it up. [77] ^ref-19087 Page: 53
The people who were at Google, then joined Facebook when it was one hundred people, and then joined Stripe when it was one hundred people? When Zuckerberg was just starting to scale his company and panicked, he was like, “I don’t know how to do this.” And he called Jim Breyer [venture capitalist and founder of Accel Partners]. And Jim Breyer said, “Well, I have this really great head of product at this other company, and you need this person.” Those people tend to do the best, risk-adjusted over a long period of time, other than the venture investors themselves. [30] Some of the most successful people I’ve seen in Silicon Valley had breakouts very early in their careers. They got promoted to VP, director, or CEO, or started a company that did well fairly early. If you’re not getting promoted through the ranks, it gets a lot harder to catch up later in life. It’s good to be in a smaller company early because there’s less of an infrastructure to prevent early promotion. [76] For someone who is early in their career (and maybe even later), the single most important thing about a company is the alumni network you’re going to build. Think about who you will work with and what those people are going on to do. [76] ^ref-18806 Page: 53
HOW TO GET LUCKY Why do you say, “Get rich without getting lucky”? In 1,000 parallel universes, you want to be wealthy in 999 of them. You don’t want to be wealthy in the fifty of them where you got lucky, so we want to factor luck out of it. But getting lucky would help, right? Just recently, Babak Nivi, my co-founder, and I were talking on Twitter about how one gets lucky, and there are really four kinds of luck we were talking about. The first kind of luck is blind luck where one just gets lucky because something completely out of their control happened. This includes fortune, fate, etc. Then, there’s luck through persistence, hard work, hustle, and motion. This is when you’re running around creating opportunities. You’re generating a lot of energy, you’re doing a lot to stir things up. It’s almost like mixing a petri dish or mixing a bunch of reagents and seeing what combines. You’re just generating enough force, hustle, and energy for luck to find you. A third way is you become very good at spotting luck. If you are very skilled in a field, you will notice when a lucky break happens in your field, and other people who aren’t attuned to it won’t notice. So, you become sensitive to luck. The last kind of luck is the weirdest, hardest kind, where you build a unique character, a unique brand, a unique mindset, which causes luck to find you. For example, let’s say you’re the best person in the world at deep-sea diving. You’re known to take on deep-sea dives nobody else will even dare to attempt. By sheer luck, somebody finds a sunken treasure ship off the coast they can’t get to. Well, their luck just became your luck, because they’re going to come to you to get to the treasure, and you’re going to get paid for it. This is an extreme example, but it shows how one person had blind luck finding the treasure. Them coming to you to extract it and give you half is not blind luck. You created your own luck. You put yourself in a position to capitalize on luck or to attract luck when nobody else created the opportunity for themselves. To get rich without getting lucky, we want to be deterministic. We don’t want to leave it to chance. [78] Ways to get lucky: • Hope luck finds you. • Hustle until you stumble into it. • Prepare the mind and be sensitive to chances others miss. • Become the best at what you do. Refine what you do until this is true. Opportunity will seek you out. Luck becomes your destiny. It starts becoming so deterministic, it stops being luck. The definition starts fading from luck to destiny. To summarize the fourth type: build your character in a certain way, then your character becomes your destiny. One of the things I think is important to make money is having a reputation that makes people do deals through you. Remember the example of being a great diver where treasure hunters will come and give you a piece of the treasure for your diving skills. If you are a trusted, reliable, high-integrity, long-term-thinking dealmaker, when other people want to do deals but 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 just because of the integrity and reputation you’ve built up. Warren Buffett gets offered deals to buy companies, buy warrants, bail out banks, and do things other people can’t do because of his reputation. Of course, he has accountability on the line, and he has a strong brand on the line. Your character and your reputation are things you can build, which will let you take advantage of opportunities other people may characterize as lucky, but you know it wasn’t luck. [78] My co-founder Nivi said, “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. In a long-term game, it’s positive sum. We’re all baking the pie together. We’re trying to make it as big as possible. And in a short-term game, we’re cutting up the pie. [78] ^ref-9756 Page: 57
BE PATIENT One thing I figured out later in life is generally (at least in the tech business in Silicon Valley), great people have great outcomes. You just have to be patient. Every person I met at the beginning of my career twenty years ago, where I looked at them and said, “Wow, that guy or gal is super capable—so smart and dedicated”…all of them, almost without exception, became extremely successful. You just had to give them a long enough timescale. It never happens in the timescale you want, or they want, but it does happen. [4] ^ref-51683 Page: 63
It’s actually really important to have empty space. If you don’t have a day or two every week in your calendar where you’re not always in meetings, and you’re not always busy, then you’re not going to be able to think. You’re not going to be able to have good ideas for your business. You’re not going to be able to make good judgments. I also encourage taking at least one day a week (preferably two, because if you budget two, you’ll end up with one) where you just have time to think. ^ref-2124 Page: 63
A contrarian isn’t one who always objects—that’s a conformist of a different sort. A contrarian reasons independently from the ground up and resists pressure to conform. Cynicism is easy. Mimicry is easy. Optimistic contrarians are the rarest breed. ^ref-49680 Page: 65
I try not to have too much I’ve pre-decided. I think creating identities and labels locks you in and keeps you from seeing the truth. To be honest, speak without identity. I used to identify as libertarian, but then I would find myself defending positions I hadn’t really thought through because they’re a part of the libertarian canon. If all your beliefs line up into neat little bundles, you should be highly suspicious. I don’t like to self-identify on almost any level anymore, which keeps me from having too many of these so-called stable beliefs. [4] ^ref-5686 Page: 67
I would combine radical honesty with an old rule Warren Buffett has, which is praise specifically, criticize generally. I try to follow this. I don’t always follow it, but I think I follow it enough to have made a difference in my life. If you have a criticism of someone, then don’t criticize the person—criticize the general approach or criticize the class of activities. If you have to praise somebody, then always try and find the person who is the best example of what you’re praising and praise the person, specifically. Then people’s egos and identities, which we all have, don’t work against you. They work for you. [4] ^ref-18098 Page: 68
The best mental models I have found came through evolution, game theory, and Charlie Munger. ^ref-51406 Page: 68
I use my tweets and other people’s tweets as maxims that help compress my own learnings and recall them. The brain space is finite—you have finite neurons—so you can almost think of these as pointers, addresses, or mnemonics to help you remember deep-seated principles where you have the underlying experience to back it up. If you don’t have the underlying experience, then it just reads like a collection of quotes. It’s cool, it’s inspirational for a moment, maybe you’ll make a nice poster out of it. But then you forget it and move on. Mental models are really just compact ways for you to recall your own knowledge. [78] ^ref-35130 Page: 74
I don’t know about you, but I have very poor attention. I skim. I speed read. I jump around. I could not tell you specific passages or quotes from books. At some deep level, you absorb them, and they become threads in the tapestry of your psyche. They kind of weave in there. I’m sure you’ve had this feeling where you pick up a book and start reading it, and you’re like, “This is pretty interesting. This is pretty good.” You’re getting this increasing sense of deja vu. Then halfway through the book, you realize, “I’ve read this book before.” That’s perfectly fine. It means you were ready to reread it. [4] ^ref-54402 Page: 76
When you first pick up a book, are you skimming for something interesting? How do you go about reading it? Do you just flip to a random page and start reading? What’s your process? I’ll start at the beginning, but I’ll move fast. If it’s not interesting, I’ll just start flipping ahead, skimming, or speed reading. If it doesn’t grab my attention within the first chapter in a meaningful, positive way, I’ll either drop the book or skip ahead a few chapters. I don’t believe in delayed gratification when there are an infinite number of books out there to read. There are so many great books. The number of books completed is a vanity metric. As you know more, you leave more books unfinished. Focus on new concepts with predictive power. Generally, I’ll skim. I’ll fast forward. I’ll try and find a part to catch my attention. Most books have one point to make. ^ref-5570 Page: 78
If you want to learn macroeconomics, first read Adam Smith, read von Mises, or read Hayek. Start with the original philosophers of the economy. If you’re into communist or socialist ideas (which I’m personally not), start by reading Karl Marx. Don’t read the current interpretation someone is feeding you about how things should be done and run. ^ref-39875 Page: 79
To think clearly, understand the basics. If you’re memorizing advanced concepts without being able to re-derive them as needed, you’re lost. ^ref-29189 Page: 79
One is our attention span has gone through the floor because we’re hit with so much information all the time. We want to skip, summarize, and cut to the chase. Twitter has made me a worse reader but a much better writer. On the other hand, we’re also taught from a young age to finish your books. Books are sacred—when you go to school and you’re assigned to read a book, you have to finish the book. Over time, we forget how to read books. Everyone I know is stuck on some book. ^ref-26651 Page: 79
We’re now in a day and age of Twitter and Facebook. We’re getting bite-sized, pithy wisdom, which is really hard to absorb. Books are very difficult to read as a modern person because we’ve been trained. We have two contradictory pieces of training: One is our attention span has gone through the floor because we’re hit with so much information all the time. We want to skip, summarize, and cut to the chase. Twitter has made me a worse reader but a much better writer. On the other hand, we’re also taught from a young age to finish your books. Books are sacred—when you go to school and you’re assigned to read a book, you have to finish the book. Over time, we forget how to read books. Everyone I know is stuck on some book. I’m sure you’re stuck on something right now—it’s page 332, you can’t go any further, but you know you should finish the book. So what do you do? You give up reading books for a while. ^ref-2549 Page: 80
I came up with this hack where I started treating books as throwaway blog posts or bite-sized tweets or posts. I felt no obligation to finish any book. Now, when someone mentions a book to me, I buy it. At any given time, I’m reading somewhere between ten and twenty books. I’m flipping through them. If the book is getting a little boring, I’ll skip ahead. Sometimes, I start reading a book in the middle because some paragraph caught my eye. I’ll just continue from there, and I feel no obligation whatsoever to finish the book. All of a sudden, books are back into my reading library. That’s great, because there is ancient wisdom in books. [6] When solving problems: the older the problem, the older the solution. If you’re trying to learn how to drive a car or fly a plane, you should read something written in the modern age because this problem was created in the modern age and the solution is great in the modern age. If you’re talking about an old problem like how to keep your body healthy, how to stay calm and peaceful, what kinds of value systems are good, how you raise a family, and those kinds of things, the older solutions are probably better. Any book that survived for two thousand years has been filtered through many people. The general principles are more likely to be correct. I wanted to get back into reading these sorts of books. [6]