Naval - how to get rich notes


"It's a positive sum game"

"Wealth is a very positive sum game. We create things together. We're starting this endeavor to create this piece of art that explains what we're doing. At the end of it, something brand new will be created. It's a positive sum game."

"Wealth isn't about taking something from somebody else—it's about creating abundance for the world."

"200 years ago nobody had antibiotics. Nobody had cars. Nobody had electricity. Nobody had the iPhone. All of these things are inventions that have made us wealthier as a species."

"The engine of technology is science that is applied for the purpose of creating abundance. So, I think fundamentally everybody can be wealthy."

"I don't think capitalism is evil. Capitalism is actually good. It's just that it gets hijacked. It gets hijacked by improper pricing of externalities. It gets hijacked by improper yields, where you have corruption, or you have monopolies."

"Sam Altman where he said, "extreme people get extreme results.""

"Jeffrey Pfeffer, who is a professor at Stanford that, "you can't be normal and expect abnormal returns.""

"And one quote that I like which is the exact opposite of that is, "play stupid games win stupid prizes." A lot of people spend a lot of their time playing social games like on Twitter where you're trying to improve your social standing and you basically win stupid social prizes which are worthless."

"You won't get rich renting out your time, because you can't earn non-linearly."

"If you look at even doctors who get rich, like really rich, it's because they open a business. They open like a private practice. And that private practice builds a brand, and that brand attracts people. Or they build some kind of a medical device, or a procedure, or a process with an intellectual property."

"People living far below their means enjoy a freedom that people busy upgrading their lifestyles just can't fathom."

"So, I forget who said it, maybe it was Nassim Taleb. But he said, "The most dangerous things are heroin, and a monthly salary.""

"Society will pay you for creating what it wants, but doesn't know how to get, and delivering it at scale."

"Like, for example rich people had chauffeurs, and then they had black town cars. And then Uber came along, and everyone's private driver is available to everybody. And now you can even see Uber pools that are replacing shuttle buses because it's more convenient. And then you get scooters, which are even further down market of that. So, you're right. It's about distributing what rich people used to have to everybody.
But the entrepreneur's job starts even before that, which is creation. Entrepreneurship is essentially an act of creating something new from scratch. Predicting that society will want it, and then figuring out how to scale it, and get it to everybody in a profitable way, in a self-sustaining way."

"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.

I know we're mimetic creatures, and René Girard has a whole mimesis theory. But it's much easier than that. Don't imitate. Don't copy. Just do your own thing. No one can compete with you on being you. It's that simple."

"Picking partners with high intelligence, energy and integrity is the three-part checklist that you can't compromise on."

"People are oddly consistent. That's one of the things you learn about them. So, you want to find long-term people. You want to find people who seem irrationally ethical."

"Don't partner with cynics and pessimists. Their beliefs are self-fulfilling."

"We all know people who are consistently pessimistic, who will shoot down everything. Everyone in their life has the helpful critical guy, right? He thinks he's being helpful, but he's actually being critical, and he's a downer on everything."

"And all the really successful people I know have a very strong action bias. They just do things. The easiest way to figure out if something is viable or not is by doing it. At least do the first step, and the second step, and the third, and then decide."

"That person will not only never do anything great in their lives, they'll prevent other people around them from doing something great. They think their job is to shoot holes in things. And it's okay to shoot holes in things as long as you come up with a solution."

"So, if you want to be successful in life, creating wealth, or having good relationships, or being fit, or even being happy, you need to have an action bias towards getting what you want."

"The cynics and the pessimists, what they're really saying, it's unfortunate, but they're basically saying, "I've given up. I don't think I can do anything. And so the world to me just looks like a world where nobody can do anything. And so why should you go do something because if you fail, then I'm right, which is great. But if you succeed, then you just make me look bad.""

"So, 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 so limited in the modern world, especially with financial assets and instruments."

"Arm yourself with specific knowledge. It can't be trained but it can be found by pursuing your genuine curiosity."

"The first thing to notice about specific knowledge is that you can't be trained for it. If you can be trained for it, if you can go to a class and learn specific knowledge, then somebody else can be trained for it too, and then we can mass-produce and mass-train people."

"So, 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 for 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 just being figured out or is really hard to figure out.

So, if you're not 100% into it somebody else who is 100% 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."

"She'd already observed that every time we walk down the street, I would critique the local pizza parlor on why they were selling their slices a certain way with certain toppings and why their process of ordering was this way when it should have been that way."

"To the extent that specific knowledge is taught, it's on the job. It's through apprenticeships. And that's why the best businesses, the best careers are the apprenticeship or self-taught careers, because those are things society still has not figured out how to train and automate yet."

"But I think if you go around trying to build it a little too deliberately, if you become too goal-oriented on the money, then you won't pick the right thing. You won't actually pick the thing that you love to do, so you won't go deep enough into it."

"So, it's much easier to be top 5 percentile at three or four things than it is to be literally the number one at something."

"I think it's a very pragmatic approach. But I think it's important that one not start assembling things too deliberately because you do want to pick things where you are a natural. Everyone is a natural at something."

"Learn to sell. Learn to build. If you can do both, you will be unstoppable."

"And usually the building is a thing that a sales person 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. Bill Gates famously paraphrases this as, "I'd rather teach an engineer marketing, than a marketer engineering.""

"Now, your sales skills could be in a different than traditional domain. For example, let's say you're a really good engineer and then people are saying, well, now you need to be good at sales, well, you may not be good at hand-to-hand sales, but you may be a really good writer.

And writing is a skill that can be learned much more easily than, say, in-person selling, and so you may just cultivate writing skills until you become a good online communicator and then use that for your sales.

On the other hand, it could just be that you're a good builder and you're bad at writing and you don't like communicating to mass audiences but you're good one-on-one, so then you might use your sales skills for recruiting or for fundraising, which are more one-on-one kinds of endeavors.

This is pointing out that if you're at the intersection of these two, don't despair because you're not going to be the best technologist and you're not going to be the best salesperson, but in a weird way, that combination, back to the Scott Adams skill stack, that combination of two skills is unstoppable."

"You should be able to pick up any book in the library and read it."

"There's one other comment that you made in a Periscope that was, "you should be able to pick up any book in the library and read it." And the last tweet in this category was, "reading is faster than listening, doing is faster than watching.""

"Everybody I know who reads a lot loves to read, and they love to read because they read books that they loved. It's a little bit of a catch-22, but you basically want to start off just reading wherever you are and then keep building up from there until reading becomes a habit. And then eventually, you will just get bored of the simple stuff.

So you may start off reading fiction, then you might graduate to science fiction, then you may graduate to non-fiction, then you may graduate to science, or philosophy, or mathematics or whatever it is, but take your natural path and just read the things that interest you until you kind of understand them. And then you'll naturally move to the next thing and the next thing and the next thing."

"Even reading is full of junk.

There are actually things you can read, especially early on, that will program your brain a certain way, and then later things that you read, you will decide whether those things are true or false based on the earlier things.

So, it is important that you read foundational things. And foundational things, I would say, are the original books in a given field that are very scientific in their nature.

For example, instead of reading a business book, pick up Adam Smith's The Wealth of Nations. Instead of reading a book on biology or evolution that's written today, I would pick up Darwin's Origin of the Species. Instead of reading a book on biotech right now that may be very advanced, I would just pick up The Eighth Day of Creation by Watson and Crick. Instead of reading advanced books on what cosmology and what Neil Degrasse Tyson and Stephen Hawking have been saying, you can pick up Richard Feynman's Six Easy Pieces and start with basic physics."

"But one of the problems is that 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."

"So, be very careful about reading other people's opinions and even be careful when reading facts because so-called facts are often just opinions with a veneer [of pseudoscience] around them.

What you are really looking for are algorithms. What you are really looking for is understanding. It's better to go through a book really slowly and struggle and stumble and rewind, than it is to fly through it quickly and say, "Well, now I've read 20 books, I've read 30 books, I've read 50 books in the field.""

"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." 

"If you have high accountability, you're less replaceable and you can get a piece of the business."

"When you're negotiating with other people, ultimately if someone else is making a decision about how to compensate you, that decision will be based on how replaceable you are. If you have high accountability, that makes you less replaceable. Then they have to give you equity, which is a piece of the upside."

"Taleb's Skin In The Game is required reading"

"Wealth requires leverage. Labor and capital are older forms of leverage that everyone is fighting over."

"This is why your parents are impressed when you get a promotion and you have lots of people working underneath you. This is why when a lot of naive people, when you tell them about your company, they'll say, "How many people work there?" They'll use that as a way to establish credibility. They're trying to measure how much leverage and impact you actually have."

"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 that you can use to then go get more capital."

"Product and media are the leverage of new wealth. Create software and media that work for you while you sleep."

"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, these 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."

"Rich people don't have better cars. They just have weirder cars."

"Bob Metcalfe, who created Ethernet, famously coined Metcalfe's Law, which is the value of a network is proportional to the square of the number of nodes in the network."

"Judgment is knowing the long-term consequences of your actions"

"There are many problems with the so-called intellectuals in the ivory tower, but one of the reasons why Nassim Taleb rails against them is because they have no skin in the game. They have no real-world experience, so they just apply purely intellect.

Intellect without any experience is often worse than useless because you get the confidence that the intellect gives you, and you get some of the credibility, but 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 always far, far more complex than we can intellectualize. Especially all the interesting, fast-moving edge domains and problems, you can't get there without experience. If you are smart and you iterate fast, it's not even you put 10,000 hours into something, but you take 10,000 tries at something."

"The people with the best judgment are among the least emotional"

"To try and connect some of these concepts, I would say that, first, you're accountable for your judgment. Judgment is the exercise of wisdom. Wisdom comes from experience; and that experience can be accelerated through short iterations."

"If outsourcing a task will cost less than your hourly rate, outsource it."



! I'm wondering about hourly rate and priorities. It seems to me that the author targets the book at young people without much burden of responsibility such as babies, family and house to take care of. Even so, I wonder if wealth is such a good priority in life…. 


"Naval: Let's talk about hard work. There's this battle that happens in Twitter a lot between, should you work hard and should you not. David Hauser's (correction: David Heinemeier Hansson) on there saying, "It's like you're slave driving people." Keith Rabois is always on there saying, "No, all the great founders worked their fingers to the bone."

They're talking past each other. First of all, they're talking about two different things. David is talking about employees and a lifestyle business, which is fine. Your number one thing in life, if you're doing that, is not getting wealthy. You have a job, you also have your family, you also have your life.

Keith is talking about the Olympics of startups. He's talking about the person going for the gold medal and trying to build a multi-billion dollar public company. That person has to get everything right. They have to have great judgment. They have to pick the right thing to work on. They have to recruit the right team, and they have to work crazy hard. They're basically engaged in a competitive sprint.

If getting wealthy is your goal, you are going to have to work as hard as you can. But hard work is absolutely no substitute for who you work with and what you work on. What you work on is probably the most important thing."

"Nobody really works 80 hours a week

Now, this is where the mythology gets a little crazy. People who work 80, 120 hour weeks, a lot of that's just status signaling. It's showing off. Nobody really works 80 to 120 hours a week sustained at high output with mental clarity. Your brain breaks down. You just won't have good ideas.

Really, the way people tend to work most effectively, especially in knowledge work, is they sprint as hard as they can while they're working on something, and they're inspired and they're passionate; and then they rest. They take long breaks.

It's more like a lion hunting and much less a marathon runner running. You sprint, then you rest, you re-assess, and then you try again. What you end up doing is you end up building a marathon of sprints."


! Now I wonder why sprints? I guess if you are doing startup, it must be a sprint - you need results in short order, because pressure to market, investors and such. But if you don't have that pressure? If you don't have investors and have product that is not time to market critical (meaning not latest and greatest, head of a spear) than no need to rush, slow iterative grind to finish, I wonder…

"Impatience with actions, patience with results"

"If I have a problem that I discover in one of my businesses that needs to be solved, I basically won't sleep until at least the resolution is in motion. This is just a personal failing, but if I'm on the board of a company, I'll call the CEO. If I'm running the company, I'll call my reports. If I am responsible, I'll get on there, right then and there, and solve it.

If I don't solve a problem the moment it happens, or if I don't start moving towards solving it when it happens, I have no peace. I have no rest. I have no happiness until
that problem is solved; so solve it as quickly as possible. I literally won't sleep until it's solved. Maybe that's just a personal characteristic, but it's worked out well in business."

"Be too busy to "do coffee" while keeping an uncluttered calendar"

"People want to do coffee and build relationships, and that's fine early in your career when you're still exploring. But later in your career when you're exploiting, and there are more things coming at you than you have time for, you have to ruthlessly cut meetings out of your life.

If someone wants to do a meeting, see if you can do it with a phone call instead. If they want to do a phone call, see if they can do it with an email instead. If they want to do with email, see if they can do with a text message instead. If they're text messaging, you should probably be ignoring most text messages unless they're urgent, true emergencies.

One has to be utterly ruthless about dodging meetings. When you do do meetings, do walking meetings, do standing meetings. Keep them short, keep them actionable, keep them small. Any meeting with eight people sitting around at a conference table, nothing is getting done in that meeting. You are literally just dying one hour at a time."

"People will meet with you when you have proof of work

When you have something important or something valuable, other busy, interesting people will meet with you. Your calling card has to be, "Hey, here's what I've done. Here's what I can show you. Let's meet and I'll be respectful of your time if this is useful to you.""

"A busy calendar and a busy mind will destroy your ability to do great things in this world. If you want to be able to do great things, whether you're a musician, or whether you are an entrepreneur, or whether you're an investor, you need free time and you need a free mind."

"Become the best in the world at what you do. Keep redefining what you do until this is true."

"Until you arrive at a comfortable place where like, "Yes this is something I can be
amazing at while still being authentic to who I am." And this is not going to be an overnight discovery. It's going to be a long journey but at least you know about how to think about it."

"The most important thing for a company is to find product-market fit. I would say the most important thing for entrepreneur is to find founder-product-market fit. Where you are naturally inclined to build the right product which has a market and that's a three focus problem. Which is you got to make all three of those work at once.

If you want to be successful in life you just have to get comfortable managing multi- variate problems, multiple objective functions at once. And this is one of those cases where you have to map at least two or three at once."

"Competition can make you play the wrong game. No one can compete with you on being you."

"Peter Thiel talks a lot about how competition is besides the point. It's counterproductive. We're highly memetic creatures, we copy what everybody else is doing around us. We copy our desires from them."

"So, authenticity naturally gets you away from competition. Does it mean that you necessarily want to be authentic to the point where there's no product-market fit? It may turn out you're the best juggler on the unicycle but maybe there isn't that much of a market for that even with YouTube videos. So you got to adjust that somehow until you find product-market fit.

But at least lean towards authenticity, towards getting away from competition. And competition automatically leads towards copy-catting and often towards just playing completely the wrong game."

"On a long enough time scale you will get paid"

"Most advice is people giving you their winning lottery ticket numbers."

"When you're finally wealthy, you'll realize it wasn't what you were seeking in the first place."

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

"Get rich quick schemes are just someone else getting rich off you."

"Anyone giving advice on how to get rich should have made their money elsewhere."

"Nassim Taleb that I liked where he said, "If you want to be a philosopher king first become a king then become a philosopher. Not first become a philosopher and then become a king.""

"Find hobbies that make you rich, fit and creative."

"I would say one that makes you money, one that makes you fit, and one that makes you smarter."

"Companies don't know how to measure outputs, so they measure inputs instead. Work in a way that your outputs are visible and measurable. If you don't have accountability, do something different."

"You always want to be giving out credit. Smart people will know who was responsible."