No. 457 — January 30, 2022
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A core component of making great decisions is understanding the rationale behind previous decisions. If we don’t understand how we got “here,” we run the risk of making things much worse.
— A Lesson in Second-Order Thinking
‘What’s the bar that you’re applying to your own work and to your own thought process … (To keep standards high) you need a forcing function. You need a reason. […] this is why even entrepreneurs starting company number four or five, should have a board of directors. And they should have people on their board who are very smart and strong-willed who will argue with them as opposed to just them doing whatever it is they’re going to do on their own. Most people need some forcing function where they’re forced to fully think things through. (Where) they’re forced to do all the work, and they’re forced to be able to defend it. And if they don’t do that, it turns into complacency and laziness. At some point, it turns into arrogance, and it becomes very destructive. And then you stop being effective.’
— I sat down with Silicon Valley icon Marc Andreessen to explore both the past and future, what he’s learned about decisions that most people miss, and the art of solving unsolvable problems. Listen on: FS (with show notes), Apple Podcasts, Spotify, YouTube.
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“The most important step in becoming successful in anything is to first become interested in it.”— Sir William Osler
There are two types of stability: passive and active. Most people don’t understand the difference until it’s too late.
A ship in the ocean is passively stable. The captain can take a nap and the power can go out and the ship will still ride out the storm. Passive stability requires no intervention. Active stability is different.
Active stability requires constant intervention. A modern jet is actively stable. It has little inherent stability without constant intervention.
Passive stability means you are default alive without an intervention. Active stability means you’re default dead unless there is an intervention.
It would be reasonably safe to be default dead if you could count on the things you need. In practice, the kindness of strangers tends to run out just when you need it most.
Consider borrowing money. Borrowed money makes you default dead. That’s not to say you shouldn’t use leverage, but it is to say that you should consider how you approach it. A lot of things must go right if you invest money you don’t have in something that gets marked to market every day. While you might be right in the long term, it doesn’t matter if you can’t survive the short term. Another consideration people often miss is considering the stability of their counterparty. If they need money at the very moment you need money, you’re both in trouble.
You never want to put yourself in a position where circumstances overtake you.
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Explore Your Curiosity
“The things people love about you aren’t necessarily the things you want to be loved for. They decide they like you for reasons completely outside your control, of which you’re often not even conscious: it’s certainly not because of the big act you put on, all the charm and anecdotes you’ve calculated for effect. (And if your act does fool someone, it only makes you feel like a successful fraud, and harbor some secret contempt for them — the contempt of a con artist for his mark — plus now you’re condemned to keep up that act forever, lest she Realize.) … At some point you have to accept that other people’s perceptions of you are as valid as (and probably a lot more objective than) your own.”
“Everything interacts and is dependent on other things. We must think more thoroughly about what we are doing, how we are doing it, and why we are doing it.”
+ Origin of the phrase ‘back to the drawing board.’
+ The Knowledge Project episodes organized by theme.
* This tiny thought is a combination of lessons I’ve learned from Peter Kaufman, Paul Graham, Tom Tombrello, and Warren Buffett.