How to get rich (without getting lucky)

Naval Ravikant es un prolífico emprendedor e inversor. Fue fundador de AngelList, cuyo origen fue el blog Venture Hacks, en el que Ravikant compartía su experiencia y los entresijos del venture capital. Ha sido business angel en multitud de startups, entre ellas Uber, FourSquare, Twitter, Notion, Clubhouse, Bolt, Yammer…

Naval ha ganado visibilidad más allá de Silicon Valley como consecuencia de su labor divulgativa en diferentes medios y podcasts, pero sobre todo en Twitter. Su hilo How to get rich (without getting lucky) fue recopilado en diversos formatos hasta convertirse en un libro editado por Eric Jorgenson bajo el título “The Almanack of Naval Ravikant”. El libro está disponible gratuitamente en pdf y en la web, y ha sido traducido al español por la Colección Baelo.

Antes de dicha edición en libro, y por tanto de que su repercusión se multiplicara, las reflexiones de Naval, disponibles en su blog personal, fueron unificadas y circuladas online por su colega Babak Nivi.

Esta primera versión del hilo de tweets de Naval es de la que surgen nuestras anotaciones en el Bloc de notas de INSPIRATIO.

Wealth vs. status

Wealth buys you freedom. The purpose of wealth is freedom
People creating wealth will always be attacked by people playing status games

They’re trying to up 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

The history of the world, in some sense, is this predator/prey relationship between makers and takers. There are people who create things, and build things, and work hard on things. Then there are people who come along with a sword, or a gun, or taxes, or crony capitalism, or communism, or any method to steal
True wealth creation from creating abundance, not taking sth from sb else
If you don’t want it, that’s fine, then you opt out of the game. But don’t try to put down the people who are playing the game
Too many takers and not enough makers will plunge a society into ruin. Players of the zero-sum game of status, in the process to destroy wealth creation, drag everybody down to their level à if you get too many takers and not enough makers, society falls apart. You end up with a communist country
Getting wealthy so that you can retire, so that you can get your freedom. Not retire in the 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, do anything you don’t have to do, wake up when you want, sleep when you want, you don’t have a boss. That’s freedom
Opportunities are massively abundant

Luck

Making money isn’t about luck. It’s about becoming the kind of person who makes money
Types of luck:

Blind luck = fortune: sth out of my control happened
Luck from hustling: persistence, hard work, hustle, motion, running around creating lots of opportunities
Luck from preparation: become sensitive to luck through skill, knowledge and work
Luck from your unique character: luck finds you because you build a unique character, mindset, brand –> create your own luck

It’s going to be a long lifetime of learning, of reading, of creating that’s going to compound
Luck type 4. It starts becoming so deterministic that it stops being luck, so the definition starts fading from luck to more destiny
Build your character so that opportunity finds you

If you’re a great diver then treasure hunters will come and give you a piece of the treasure for your diving skills

Your character, your reputation, these are things that you can build that will let you take up advantage of opportunities
You can’t be normal and expect abnormal returns

Not renting your time

You won’t get rich by renting out your time. You must own equity, a piece of the business to gain your financial freedom. You need to earn non-linearly
You must own equity to gain your financial freedom. Usually the real wealth is created by starting your own companies. It doesn’t come through the hours
In professions where inputs and outputs are highly connected it’s very, very hard to create wealth
You’re not going to get rich renting out your time. You will get rich by giving society what it wants but does not yet know how to get at scale
Figure out what product you can provide and then figure out how to scale it
Figure out which thing you can provide for society, that it does not yet know how to get, but it will want, that’s natural to you, and within your skillset, within your capabilities

Online career possibilities

The Internet has massively broadened the possible space of careers. It allows you to scale any niche obsession
Your fishing village didn’t necessarily need your completely unique skill, and you had to conform to just the few jobs that were available. But today you can be completely uniqu
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 through the interne
Don’t imitate. Don’t copy. Just do your own thing. No one can compete with you on being you. You can escape competition through authenticity

Play long term

All the benefits in life come from compound interest
Long-term games are good not just for compound interest, they’re also good for trust
Every time you reset, every time you wander out of where you built your network, you’re going to be starting from scratch. You’re not going to know who to trust. They’re not going to know to trust you
It’s important to pick an industry where you can play long-term games, and with long-term people
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
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
Socialists are the people who are not involved in baking the pie, who show up at the end and say “I want a slice”
Play iterated games. All returns in life, whether in wealth, relationships or knowledge, come from compound interest

Partners

Pick business partners with high intelligence, energy and integrity
Signal is what they do, not what they say. It’s all the non-verbal stuff that they do when they think nobody is looking
All the really successful people have a strong action bias. They just do things. The easiest way to figure out if sth is viable or not is by doing it. At least do the first step, and the second step, and the third, and then decide
To create things, you have to be a rational optimist
It takes a lot of work to build even small things
For whatever reason / education / circumstance, people building small things didn’t get the chance to think as big, so the outcome is not as big. So it’s just better to think big
It is likely that the upside is unlimited and the downside is limited
You’ve got to treat everybody with respect. You’ve got to look up to every possibility and opportunity because the upside is so unlimited and the downside is limited in the modern world

Specific knowledge

Arm yourself with specific knowledge
Specific knowledge is found by pursuing your curiosity. It is found much more by pursuing your innate talents, your genuine curiosity, and your passion
Look back on your own life and see what you’re actually good at
Specific knowledge is often highly creative or technical. It’s on the bleeding edge of technology, of art and of communication
It’s not so much that it is unique, it’s that it is highly specific to the situation, it’s specific to the individual, it’s specific to the problem, and it can only be built as part of a larger obsession, interest and time spent in that domain
Instead of trying to be the best at one thing, you just try to be very, very good at three or more things –> intersection
Pick things where you are a natural. Whatever you are a natural at, you want to double down on that
Take the things that you are natural at and combine them so that you automatically, just through sheer interest and enjoyment, end up top 25%, 10% or 5% at a number of things
You build specific knowledge by taking accountability for things that other people don’t know how to do

Learn to sell and build

Learn to sell, learn to build. If you can do both, you will be unstoppable
Common Silicon Valley startup model: two founders, one of whom is world class at selling, the other one is world class at building
The real giants in any field are the people who can both build and sell
Usually the building is a thing that a salesperson can’t pick up later in life. It requires too much focused time. But a builder can pick up selling a little bit later, especially if they were already innately wired to be a good communicator

Read

Read what you love until you love to read
The foundation of learning is reading. I don’t know a smart person who doesn’t read and read all the time
Develop a love for reading
The means of learning are abundant. You really have to cultivate the desire
Schools and our educational system, and even our way of raising children, replaces curiosity with compliance. And once you replace the curiosity with the compliance, you get an obedient factory worker, but you no longer get a creative thinker. And you need creativity, you need the ability to feed your own brain to learn whatever you want
If you’re good with computers, if you’re good at basic mathematics, if you’re good at writing, if you’re good at speaking, and if you like reading, you’re set for life

Doing

It’s the number of iterations that drives the learning curve. So, the more iterations you can have, the more shots on goal you can have, the faster you’re going to learn. It’s not just about the hours you put in
You just have to get very comfortable with frequent small failures
Nassim Taleb made money by losing little bits of money every day and then once in a blue moon he would make a lot of money when the unthinkable happened for other people. Whereas most people want to make little bits of money every day and in exchange they’ll tolerate lots of blow-up risk, they’ll tolerate going completely bankrupt
If you’re willing to bleed a little every day, you may win big later
Entrepreneurs bleed every day

Accountability

Wealth requires leverage. Leverage comes in labour, comes in capital, or it can come through code or media
For labour, sb has to follow you. For capital, sb has to give you money. To get those, you have to build up credibility
A lot of our training socially is telling us not to stick our necks out of the crowd (Australian saying: “the tall poppy gets cut”)
Without accountability, you can’t build credibility
We are still socially hard wired to not fail in public under our own names. The people who have the ability to fail in public under their own names actually gain a lot of power
When you put your name out there, you take a risk with certain things. You also get to reap the rewards, you get the benefits
Accountability is important because that’s how you’re going to get credibility. And that’s how you’re going to get leverage

Accountability –> credibility –> leverage

If you have high accountability, you are less replaceable
Taking accountability is like taking equity in all your work. The equity holders take on greater risk, but in exchange they get nearly unlimited upside. You can do the same with all your work. Essentially, taking accountability for your actions is the same as taking an equity position in all of your work. You are taking greater downside risk for greater upside
You will be rewarded in direct proportion to your accountability
Accountability as reputational skin in the game. When you have accountability, you get a lot more credit when things go right. The downside is you get hurt a lot more when things go wrong. When you stick your neck out, you have to be willing to be blamed, sacrified and even attacked
Judgement and leverage tend to come later. Accountability is sth you can take on immediately
Find things that interest you and allow you to take on accountability. Don’t worry about short-term compensation
Work in a way that your outputs are visible and measurable. If you don’t have accountability, do sth different

Leverage

The oldest form of leverage is labour, which is people working for you

Stay out of labour-based leverage. You want the minimum amount of people working with you that allows you to use the other forms of leverage

The second type of leverage is capital, which is the dominant form of leverage in the last century

Capital is a powerful form of leverage. It can be converted to labour. It can be converted to other things
Capital scales 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
If you have specific knowledge in a domain and if you’re accountable and you have a good name in that domain, then people are going to give you capital as a form of leverage

Products that have no marginal cost of replication are the new form of leverage. Product leverage is where the new fortunes are made
The new generation’s fortunes are all made through code or media
The beauty is when you combine all of these three: labour, capital and code or media

Tech startups that excel: minimum but higher output labour that you can get – engineers, designers, product developers; add in capital for marketing, advertising and scaling; add in lots of code and media and content

The new forms of leverage (product, media) are permissionless. They don’t require sb else’s permission for you to use them, as labour and capital do
Coding is such a great superpower because now you can speak the language of the robot armies and you can tell them what to do
The forms of leverage have gone from being human-based to being more product, code and media-based
Pick a model where you can benefit from network effects, low marginal costs and scale economies
You should always be thinking about how your users, your customers, can add value to each other because that is the ultimate form of leverage

Judgment

Your first job is to go and obtain leverage, and you can obtain leverage through permission by getting people to work for you, or by raising capital. Or you can obtain leverage permissionlessly by learning how to code or becoming good at communication, podcasting, broadcasting, creating videos, writing, etc.
In an age of infinite leverage, judgment becomes the most important skill
Demonstrated judgment, with high accountability, is critical
Judgement is very hard to build up. This is where both intellect and experience come in play

Intellect without experience is useless – because you had no skin in the game, and you had no real experience, and no real accountability, you’re just throwing darts; the real world is far more complex than we can intellectualize

Leverage is sth that society gives you after you’ve demonstrated judgement. You can get it faster by learning high-leverage skills like coding or working with the media, which are permissionless leverage
You need very broad-based judgement and thinking
Skills that you need to get rich: specific knowledge, accountability, leverage, judgment and life-long learning

Specific knowledge, accountability, leverage, judgment and life-long learning

Hard work. Inspiration. Networking

First, pick the right area to work in. Second, pick the right people to work with. Third comes how hard you work. They’re like three legs of a stool

Pick based on the highest intelligence, energy and integrity people that you can find

Once you have picked the right thing to work on and the right people to work with, then you work as hard as you can
Inspiration is perishable. When you have it, just seize it. When you have inspiration, act on it right then and there

It’s more like a lion hunting and much less a marathon runner running

Impatience with actions and patience with results
You have to ruthlessly cut meetings out of your life. Networking is overrated

When you are just meeting people and hoping to get that lucky break, you’re relying on Type 1 Luck (Blind Luck) and Type 2 Luck (Hustle Luck)

A busy calendar and a busy mind will destroy our ability to do great. If you want to be able to do great things, you need free time and a free mind

Redefine what you do

Become the best in the world at what you do. Keep redefining what you do until this is true. It can be niche
The most important thing for entrepreneurs is to find founder-product-market fit
Avoid competing over things that aren’t worth competing over. The way to escape competition is just to be authentic to yourself
Authenticity naturally gets you away from competition. But you need to adjust somehow until you find product-market fit
Combine vocation (what you love to do) and avocation (what you do)
You want to end up specializing in being you

You will get what you deserve

Apply specific knowledge with leverage and eventually you will get what you deserve. Apply accountability, apply judgement and apply reading
Immediate doesn’t work. You do have to put in the hours
You get many, many shots on goal, but you just have to be right once
What are you really good at that the market values?
Your eventual outcome will be ≈ (distinctiveness of specific knowledge x how much leverage you can apply x how often your judgement is correct x how accountable you are for the outcome x how much society values what you’re doing) ^ (how long you can keep doing it + how long you can keep improving it through reading and learning
What am I really good at according to observation and according to people that I trust, that the market values?
Those two variables 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 judgement. 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

Productize yourself

Productize yourself

“Yourself” has uniqueness and accountability. “Productize” has leverage
Ea vix probo dicta iuvaret, posse epicurei suavitate eam an, nam et vidit menandri. Ut his accusata petentium.

Is thing authentic to me? Is it myself that I am projecting? Am I productizing it? Am I scaling it? Am I scaling with labour or with capital or with code or with media?
Figure out what you’re uniquely good at and apply as much leverage as possible
Making money should be a function of your identity and what you like to do

Invest in yourself

Try to learn sth that people haven’t quite figured out how to teach yet
Avoid repetitive drudgery
Judgement takes experience. That’ll come from taking on accountability

A calm mind, a fit body and a house full of love. These things cannot be bought. They must be earned

Varios

People living far below their means enjoy a freedom that people upgrading their lifestyles just can’t fathom. Don’t upgrade your lifestyle all the time
Set a very high personal hourly rate and stick to it
Always factor your time into every decision
If you can outsource sth for less than your hourly rate, do it
Paul Graham: “You should be working on your product and getting product-market fit. And you should be exercising and eating healthy”. That’s about it. That’s all you have time for while you’re on this mission
Your health, your mental health and your close relationships are things that you have to cultivate
There are not get rich quick schemes
The entire structure of rewarding people comes from the agricultural and industrial ages, when inputs and outputs matched up closely. The amount of hours you put into doing sth was a reliable proxy for what kind od output you’d get. Today, it’s extremely nonlinear

Basado en Naval Ravikant