23 Nuggets
To Become
Better
Richer
Wiser

Leverage

(This visual was inspired from Eric Jorgenson's blogpost "Building a Mountain of Levers")

Larry Page:

Find the leverage in the world so you can be truly lazy.

Naval Ravikant:

Arm yourself with specific knowledge, accountability, and leverage.…“Give me a lever long enough and a place to stand, and I will move the earth.” —ArchimedesFortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media).Capital means money. To raise money, apply your specific knowledge with accountability and show resulting good judgment.Labor means people working for you. It’s the oldest and most fought-over form of leverage. Labor leverage will impress your parents, but don’t waste your life chasing it.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.Leverage is a force multiplier for your judgment. Judgment requires experience but can be built faster by learning foundational skills.…Apply specific knowledge, with leverage, and eventually you will get what you deserve.

• Source: The Almanack of Naval Ravikant

There are three broad classes of leverage:One form of leverage is labor—other humans working for you. It is the oldest form of leverage, and actually not a great one in the modern world. I would argue this is the worst form of leverage that you could possibly use. Managing other people is incredibly messy. It requires tremendous leadership skills. You’re one short hop from a mutiny or getting eaten or torn apart by the mob.Money is good as a form of leverage. It means every time you make a decision, you multiply it with money. Capital is a trickier form of leverage to use. It’s more modern. It’s the one that people have used to get fabulously wealthy in the last century. It’s probably been the dominant form of leverage in the last century.You can see this by looking for the richest people. It’s bankers, politicians in corrupt countries who print money, essentially people who move large amounts of money around. If you look at the top of very large companies, outside of technology companies, in many, many large old companies, the CEO job is really a financial job.It scales very, very well. If you get good at managing capital, you can manage more and more capital much more easily than you can manage more and more people.The final form of leverage is brand new—the most democratic form. It is: “products with no marginal cost of replication.” This includes books, media, movies, and code. Code is probably the most powerful form of permissionless leverage. All you need is a computer—you don’t need anyone’s permission.“Forget rich versus poor, white-collar versus blue. It’s now leveraged versus un-leveraged.” [tweet]The most interesting and the most important form of leverage is the idea of products that have no marginal cost of replication. This is the new form of leverage. This was only invented in the last few hundred years. It started with the printing press. It accelerated with broadcast media, and now it’s really blown up with the internet and with coding. Now, you can multiply your efforts without involving other humans and without needing money from other humans.This book is a form of leverage. Long ago, I would have had to sit in a lecture hall and lecture each of you personally. I would have maybe reached a few hundred people, and that would have been that.This newest form of leverage is where all the new fortunes are made, all the new billionaires. For the last generation, fortunes were made by capital. The people who made fortunes were the Warren Buffetts of the world.But the new generation’s fortunes are all made through code or media. Joe Rogan making $50 million to $100 million a year from his podcast. You’re going to have PewDiePie. I don’t know how much money he’s rolling in, but he’s bigger than the news. And of course, there’s Jeff Bezos, Mark Zuckerberg, Larry Page, Sergey Brin, Bill Gates, and Steve Jobs. Their wealth is all code-based leverage.Probably the most interesting thing to keep in mind about new forms of leverage is they are permissionless. They don’t require somebody else’s permission for you to use them or succeed. For labor leverage, somebody has to decide to follow you. For capital leverage, somebody has to give you money to invest or to turn into a product.Coding, writing books, recording podcasts, tweeting, YouTubing—these kinds of things are permissionless. You don’t need anyone’s permission to do them, and that’s why they are very egalitarian. They’re great equalizers of leverage. Every great software developer, for example, now has an army of robots working for him at nighttime while he or she sleeps, after they’ve written the code, and it’s cranking away.

• Source: The Almanack of Naval Ravikant

Humans evolved in societies where there was no leverage. If I was chopping wood or carrying water for you, you knew eight hours put in would be equal to about eight hours of output. Now we’ve invented leverage—through capital, cooperation, technology, productivity, all these means. We live in an age of leverage. As a worker, you want to be as leveraged as possible so you have a huge impact without as much time or physical effort.A leveraged worker can out-produce a non-leveraged worker by a factor of one thousand or ten thousand. With a leveraged worker, judgment is far more important than how much time they put in or how hard they work."Forget 10x programmers. 1,000x programmers really exist, we just don’t fully acknowledge it. See @IDAACarmack, @notch, Satoshi Nakamoto, etc." [tweet]For example, a good software engineer, just by writing the right little piece of code and creating the right little application, can literally create half a billion dollars’ worth of value for a company. But ten engineers working ten times as hard, just because they choose the wrong model, the wrong product, wrote it the wrong way, or put in the wrong viral loop, have basically wasted their time. Inputs don’t match outputs, especially for leveraged workers.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.If you have specific knowledge, you have accountability and you have leverage; they have to pay you what you’re worth. If they pay you what you’re worth, then you can get your time back—you can be hyper-efficient. You’re not doing meetings for meetings’ sake, you’re not trying to impress other people, you’re not writing things down to make it look like you did work. All you care about is the actual work itself.When you do just the actual work itself, you’ll be far more productive, far more efficient. You’ll work when you feel like it—when you’re high-energy—and you won’t be trying to struggle through when you’re low energy. You’ll gain your time back.Forty hour work weeks are a relic of the Industrial Age. Knowledge workers function like athletes—train and sprint, then rest and reassess.Sales is an example—especially very high-end sales. If you’re a real estate agent out there selling houses, it’s not a great job, necessarily. It’s very crowded. But if you’re a top-tier real estate agent, you know how to market yourself and you know how to sell houses, it’s possible you could sell $5 million mansions in one tenth of the time while somebody else is struggling to sell $100,000 apartments or condos. Real estate agent is a job with input and output disconnected.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.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.

• Source: The Almanack of Naval Ravikant

Wisdom

Marcus Tullius Cicero:

To be ignorant of what occurred before you were born is to remain always a child.

Charlie Munger:

As long as I have a book in my hand, I don’t feel like I’m wasting time.

• Source: The Almanack of Naval Ravikant

In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time — none, zero. You'd be amazed at how much Warren reads--and at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out....I constantly see people rise in life who are not the smartest, sometimes not even the most diligent. But they are learning machines. They go to bed every night a little wiser than they were that morning. And boy, does that habit help, particularly when you have a long run ahead of you.

• Source: Poor Charlie's Almanack

Naval Ravikant (founder of AngelList):

“Reading was my first love.” [tweet]…“Read what you love until you love to read.” [tweet]…“Reading a book isn’t a race—the better the book, the more slowly it should be absorbed.” [tweet]…The genuine love for reading itself, when cultivated, is a superpower. We live in the age of Alexandria, when every book and every piece of knowledge ever written down is a fingertip away. The means of learning are abundant—it’s the desire to learn that is scarce.…The reality is, I don’t actually read much compared to what people think. I probably read one to two hours a day. That puts me in the top .00001 percent. I think that alone accounts for any material success I’ve had in my life and any intelligence I might have. Real people don’t read an hour a day. Real people, I think, read a minute a day or less. Making it an actual habit is the most important thing.It almost doesn’t matter what you read. Eventually, you will read enough things (and your interests will lead you there) that it will dramatically improve your life. Just like the best workout for you is one you’re excited enough to do every day, I would say for books, blogs, tweets, or whatever—anything with ideas and information and learning—the best ones to read are the ones you’re excited about reading all the time.…It’s not about “educated” vs. “uneducated.” It’s about “likes to read” and “doesn’t like to read.” [tweet]…If you’re a perpetual learning machine, you will never be out of options for how to make money. You can always see what’s coming up in society, what the value is, where the demand is, and you can learn to come up to speed.

• Source: The Almanack of Naval Ravikant

Patrick Collison (founder of Stripe):

[Patrick on why he reads so much]:Alan Kay says that Computer Science is like Pop Culture. He means that we sort of have no sense of history. We are just kind of we're ahistorical, we just sort of run around in some excited circles, you know, like, three year olds playing soccer, they're just all like flock towards where the ball is.There's no strategy. And I think sort of the software industry and computer science are kind of like that. And I think it's actually both a strength and a weakness. It's a strength because, even if the idea has failed five times before, nobody even knows. We just keep trying it, but eventually it does in fact work.And so again, the ahistorical sense is actually I think a strength in some ways. But it's also a weakness because there are, you know, reasons perhaps to why things have failed in the past that might be worth contemplating. And there are good ideas that nobody's implemented or executed upon yet.And so, if your challenge is: how can you be insightful, or have good ideas, or good understanding, whatever. As far as I can tell, there are kind of two ways:1. One is you can be really original, and think really hard, and you know, be really brilliant.2. Or you can cheat, and you just read lots of books. And coast off their perspective.And I think the latter is way more efficient. And much more achievable for me than the former.So that's why to read. And I guess a corollary of that, which I also kind of agree with and believe is: you should probably bias towards reading stuff that the people around you aren't reading. Because you're going to pick up the cultural perspective and all the rest of the things people around you are reading, and so you should probably seek de-correlation and read stuff that they aren't [reading].

• Source: Reid Hoffman and Patrick Collison Fireside Chat

Summit

Naval Ravikant:

The greatest superpower is the ability to change yourself. [tweet]

If you find a mountain and you start climbing [and] you spend your whole life climbing it and you get say… two thirds of the way, and then you see the peak is like way up there but you're 2/3 of the way up you're still really high up… But now to go the rest of the way you're going to have to go back down to the bottom and look for another path…Nobody wants to do that! People don't want to start over. And it's the nature of later in life that you just don't have the time. So, it's very painful to go back down and look for a new path… but that may be the best thing to do. And that's why when you look at the greatest artists and creators they have this ability to start over that nobody else does. [Examples]:[For example] Elon [Musk] will be called an idiot and start over doing something brand new—that he supposedly is not qualified for. Or when Madonna or Paul Simon come out with a new album, their existing fans usually hate it because they've adopted a completely new style that they've learned somewhere else… And a lot of times they'll just miss completely, so you have to be willing to be a fool and kind of have that beginner's mind and go back to the beginning to start over. If you're not doing that you're just getting older!

• Source: Joe Rogan Experience - Naval Ravikant

Jeff Bezos:

[Lex Friedman]:
Can you explain this day one thing? This is a really powerful way to describe the beginning and the journey of Amazon.[Jeff Bezos]:
It's really a very simple and I think age old idea about renewal and rebirth. And like… Every day is day one. Every day you are deciding what you're gonna do. And you are not trapped by what you were or who you were, or any self-consistency. Self-consistency (even) can be a trap.And so day one thinking is kind of… We start fresh every day. And we get to make new decisions every day about invention, customers, about how we're going to operate, even as deeply as what our principles are (it turns out we don't change those very often, but we change them occasionally).And when we work on programs at Amazon, we often make a list of tenets (they're a little more tactical than principles, kind of the main ideas that we want this program to embody). And one of the things that we do is we put: “These are the tenets for this program”. And, in parentheses, we always put: “Unless you know a better way”. And that idea “Unless you know a better way” is so important… Because you never wanna get trapped by dogma. You never wanna get trapped by history. It doesn't mean you discard history or ignore it— there's so much value in what has worked in the past—but you can't be blindly following what you've done. And that's the heart of day one… is: you're always starting fresh.

• Source: Lex Fridman Podcast

Robert Greene (on Niccolò Machiavelli):

The great Florentine writer Niccolò Machiavelli saw these values of consistency and order as products of a fearful culture and something that should be reversed. In his view, it is precisely our fixed nature, our tendency to hold to one line of action or thought, that is the source of human misery and incompetence.

• Source: The 50th Law

Steve Jobs:

[Steve Jobs on the Beginner's Mind]:I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.

• Source: Make Something Wonderful

Charlie Munger:

Any year that passes in which you don’t destroy one of your best-loved ideas is a wasted year.

• Source: Farnam Street