#60 - The one-sided narrative of wealth and acknowledging our inner gambler
Plus: A story from 2015 about one decision
Hello, new readers and subscribers! And thank you to all those who’ve every week given this newsletter their precious time! Welcome to issue #60 of Curiosity > Certainty 👏
This week I question the narrative of wealth that I have learned growing up (and I dare say some of you as well). Follow it up with a peek into the inner gambler present in so many of us self-labeled risk-averse folks. Then I share with you a story about how one decision can free you of the burden of a thousand tiny decisions. And finally, two tiny thoughts for you to munch on. Let me know how this one goes!
Listen to those who have solved your problem (not to others like you)
Those who warn you about the dark side of wealth suffer a case of sour grapes. You should at least know.
Growing up in a middle-class Indian family I was warned that wealth brings hedonistic traps. Money feeds the ego, eats sleep, destroys happiness…
Two things wrong here.
Not being wealthy didn’t mean you were happy or modest. That correlation didn’t stand.
The ones warning you about the dark side of wealth hid from you the entire bright side. Let me tell you about that.
Andrew Wilkinson owns 40-odd businesses today. He once lost 10 million dollars by “doing something stupid.”
In 2009, project management softwares were coming up. Think the birth of SaaS, Basecamp, et cetera. Andrew built a product called Flow. Little did he realize that he was feeding David.
Around that time, Asana entered the market, backed by venture capital. Asana could outspend and out-market Flow. It was Goliath.
By the time Asana won, Andrew had bled 10 million.
The experience didn’t kill Andrew. It made him smarter. Because he had had a bad one, he now knew what a good one was like.
His approach was simple: “We take forks and we stick them in electrical sockets, and then we learn and we start calibrating”
He took this template and applied it everywhere: restaurants, hotels, agencies, coffee makers, ecommerce website builders.
As per the statutory wealth warning, he could have done drugs, bought islands, divorced and remarried thrice.
Instead he reinvested upwards of 80% of what he made. He once spent 60 grand on a charity dinner with a hedge fund manager when he wanted to do diligence on him. He funded blue-sky scientific projects that would not be funded otherwise.
Being wealthy has given Andrew a strong bias for action so much so that he advises people to hire the wrong person first because he knows they’ll learn from it. And that action bias has helped him compound his wealth.
The ones deriding wealth are not the wealthy; they’re the ones who want to be rich but cannot. There are more such people in the world than there are rich ones. No wonder the idea that wealth brings unrivaled optionality is an unpopular one.
Listen to those who have solved your problem, not just to those who have failed to.
You’re firing cannonballs blind
Do you know about your gambling problem?
Career, spouse, house, investments–you have jumped into all kinds of big decisions blind.
If you haven’t, then you will. Because you only make big bets! You’re a specialist at it.
And now in middle age as you think ahead, you wonder if you’re yet again predicting for yourself a life when you don’t understand your odds for getting it right.
You’re obsessed with predicting the future as if it were a precise thing, fully formed and ready for you.
But the future is under construction. It’s a range of possible outcomes.
How about you shift your focus from predicting the future to discovering what’s possible?
Full disclosure: There’s no one ready-made way to do that. But there’s this mental model I want to tell you about. It’s called “shooting bullets before cannonballs.” It comes from Jim Collins, the author of Good to Great. What’s next are his words.
“Imagine you have a ship bearing down on you and you have a certain amount of gunpowder and you take all your gunpowder and you put it in a big cannonball and you fire at that ship. It flies out there and it misses, and here comes the ship and you’re in trouble. You’re out of gunpowder. But suppose instead, what you did was you took a little bit of gunpowder. You put it in a bullet, you fire that bullet at the ship, it misses, but you’ve got enough time to recalibrate because you’re 30 degrees off, fire another shot, you’re 10 degrees off, recalibrate again, ping! You hit the side of the ship and now you take your gunpowder, now you put it in a cannonball and you fire it on a calibrated line of sight.”
That ship is your life. It’s everything you want to do. You can go all in and miss the mark by a mile. Or you can test it out, little by little, before taking aim.
You can design little experiments. Shadow those who’re doing what you want to do. Study those who have solved your problem. Talk to all sorts of people. Volunteer. Moonlight. Freelance.
Most jobs in 2030 haven’t been created yet. You know what's funny. That you think entrepreneurship is risky.
So stop telling yourself that you’re risk-averse. You’re anything but. You’re a hopeless gambler putting everything into that one cannonball and firing it, hoping things will turn out alright.
One decision you make makes a thousand tiny decisions for you
Your work day is littered with questions. Should we price the product at X or Y? Should we bundle 6 or 9 services? Should we target doctors or academics? A hundred questions emerge every day out of the rubble of yesterday’s choices.
You are swamped! How you wish you had to make fewer decisions!
Let me suggest something to you that offers you a way off this hamster wheel.
For that, a story about Slack I heard from Merci Grace, their ex-Head of Growth.
In 2015, when just a year and a bit old, it wasn’t clear to Slack what kind of communication platform it was. Employees would ask “Have you seen Discord?” New joinees would come with tons of ideas for the social use case of Slack. There was a lot of chatter (comparisons, suggestions, questions) around social use cases that Merci Grace had to field.
How did Merci Grace and the founding team at Slack solve the problem? By making it clear what Slack was. They said: This is a tool for work.
Merci says that this positioning made a thousand small decisions ‘instant and obvious’.
Around that time, there was an internal push for a block feature on Slack. With this framing of Slack as a communication platform for work, the perils of allowing blocking became obvious. When would you block someone–when someone is harassing you? Or you want to exclude someone from an important conversation?
Business runs on collaboration. If you’ve to block someone at work, the problem is much deeper than a messaging app can solve.
The lesson I want you to take from this example does not stop at work. It comes home with you. James Clear talks up the clarifying power of identity-based habits. ‘The key to building lasting habits is focusing on creating a new identity first,’ he says. Are you a non-smoker or someone trying to quit? Are you a giver or a taker? It makes a big difference that you know who you are when the situation arises.
Your self-image is like a product’s positioning. Teenagers and youth live through years of doubt because they’re figuring their positioning out. But once they’re clear about who they are, so many nagging questions about what to do every day answer themselves.
If you find yourself fielding a hundred burning questions every day, you just need to answer the one question you’ve not yet asked yourself.
Tiny thought #3
Our models of desire mean that we are programmed to follow the one ahead of us, who follows the one ahead of them, and so on. Until we realize (or don't) that the lot of us are caught up in an endless circle.
PS: I’m listening to Wanting by Luke Burgis. It is my introduction to Rene Girard’s mimetic theory.
Tiny thought #4
The biggest obstacle to succeed at something ought to be a dislike for the thing itself but we seem to be surprisingly good at overcoming this obstacle. We regularly end up finding ourselves doing things we dislike and would trade for a number of other things. How to become good at doing things you dislike is NOT a course topic that anyone will pay for.
***
Let me know how this issue read. See you next week!