This advice is for anybody who wants to be entrepreneurial
Nivi: Who is this advice targeted to? Is it for my Lyft driver? Is it for an Internet entrepreneur? Is it for somebody who wants to start a YouTube channel?
Naval: Because it comes from someone who’s steeped in Silicon Valley and tech companies, it’s always going to have a bias towards that.
But I think it’s good for anybody who wants to be entrepreneurial. Anybody who wants to control their own life. Anybody who wants to deterministically and reliably improve their ability to create wealth over time, is patient, and is looking at it for the long-haul.
The common mistakes people make on the path to creating wealth.
Nivi: We’ve finished discussing the tweetstorm. We’re going to spend some time on Q&A and discussing some of the tweets on the cutting room floor, that didn’t make it into the tweetstorm. My first question is:
Do you think there are some common failure modes or typical things that people do wrong when they’re trying to apply this advice?
Naval: A lot of people don’t understand what specific knowledge really is or how to quote unquote obtain it.
David and I are starting to get better at the podcast thing. It’s a new medium for both of us so we are learning and iterating quickly on what makes a good podcast interview. Any feedback – good and bad – is welcome.
This giant episode collects every interview between Naval and Nivi on How to Get Rich. These interviews are based on Naval’s tweetstorm.
The transcript has been edited for clarity.
1. Seek Wealth, Not Money or Status
The difference between wealth, money and status.
Naval is a prolific tech investor and founder of AngelList
Nivi: You probably know Naval from his Twitter account.
We’re going to be talking about histweetstorm on “How to get rich (without getting lucky).” We’re going to go through most of the tweets in detail, give Naval a chance to expand on them and generally riff on the topic. He’ll probably throw in some ideas that he hasn’t even published before.
Naval’s the co-founder of AngelList and Epinions. He’s also a prolific tech investor in companies like Twitter, Uber, and many more.
I’m the co-founder of AngelList with Naval. And I co-authored the Venture Hacks blog with him back in the day.
Naval: The How To Get Rich tweetstorm definitely hit a nerve and went viral. A lot of people say it was helpful and reached across aisles.
People outside of the tech industry, people in all walks of life, people want to know how to solve their money problems. Everyone vaguely knows that they want to be wealthy, but they don’t have a good set of principles to do it by.
Figure out what you’re uniquely good at and apply as much leverage as possible.
Figure out what you’re uniquely good at and apply as much leverage as possible
Nivi: You summarized this entire tweetstorm with two words. “Productize yourself.”
Naval: Productize and yourself. Yourself has uniqueness. Productize have leverage. Yourself has accountability. Productize has specific knowledge. Yourself also has specific knowledge in there. So all of these pieces, you can combine them into these two words.
Whenever you’re doing anything in business, if you’re looking towards the long-term of getting wealthy you should ask yourself, “Is this authentic to me? Is it myself that I am projecting?” And then, “Am I productizing it? Am I scaling it? Am I scaling with labor or with capital or with code or with media?” So it’s a very handy, simply pneumonic.
Get rich quick schemes are just someone else getting rich off you.
There are no get rich quick schemes
Nivi: We skipped one tweet because I wanted to cover all of the tweets on the topic of the long term. And the tweet that we skipped was, “There are no get rich quick schemes. That’s just someone else getting rich off you.”
Naval: This goes back to the world being an efficient place. If there’s an easy way to get rich it’s already been exploited. And there are a lot of people who will sell you ideas and schemes on how to make money but they’re just always selling you some $79.95 course or some audiobook or some seminar .
Which is fine, everyone needs to eat. People need to make a living. They might actually have really good tips but if they’re giving you actionable, high quality advice that acknowledges that it’s a difficult journey and will take a lot of time, then I think that’s realistic.
When you’re finally wealthy, you’ll realize it wasn’t what you were seeking in the first place.
When you’re wealthy, you’ll realize it wasn’t what you were seeking
Nivi: The last tweet on the topic of working for the long term is that “When you’re finally wealthy, you’ll realize it wasn’t what you were seeking in the first place. But that’s for another day.”
Naval: That’s a multi-hour topic in of itself. First of all I thought it was a really clever way to end the whole thing because it disarms a whole set of people who say, “What’s the point of getting rich?” Because there’s a lot of people who just like the status signal, virtue signal, against the idea of wealth creation or making money. So it was just a good way to disarm all of them.
But, it’s also true. In that the things that you really want in life, yes money will solve all your money problems but it doesn’t get you everywhere.
Most advice is people giving you their winning lottery ticket numbers.
The best founders listen to everyone but make up their own mind
Nivi: Regarding the guy who gets rich in five years, one of the tweets that you had on the cutting room floor was: avoid people who got rich quickly, they’re just giving you their winning lottery ticket numbers.
Naval: This is generally true of advice anyway, which is it’s back to Scott Adams, systems not goals. If you ask a specific person what worked for them very often it’s just like they’re reading out the exact set of things worked for them which might not be applicable for you. They’re just reading you out their winning lottery ticket numbers.
Nivi: We’re still talking about working for the long term, the next tweet on that topic is “Apply specific knowledge with leverage and eventually you will get what you deserve.” I would also add to that apply judgment, apply accountability and apply the skill of reading.
Naval: This one is just a glib way of saying that it takes time, even once you have all of these pieces in place, there is an indeterminate amount of time that you’re going to have to put in. And if you’re counting you’ll run out of patience before it actually arrives.
Businesses that seem like they’re in direct competition really aren’t
Nivi: I think when you’re being authentic, you don’t really mind competition that much. Yeah, it pisses you off and it inspires some fear and jealousy and all the other emotions that come along with it, but also you don’t really mind because you’re more oriented towards the goal and the mission and worst case you get some ideas from them. And there’s often ways to work with the competition in a positive way and it ends up increasing the size of the market for you.
Naval: Yeah sometimes it depends on the nature of the business. Silicon Valley tech industry businesses tend to be winner-take-all. At least the good ones. And so when you see competition it can make you fly into a rage because it really does endanger Continue reading “Play Stupid Games, Win Stupid Prizes”
Competition can lead you to playing the wrong game.
No one can compete with you on being you.
In entrepreneurship, the masses are never right.
Combine your vocation and avocation.
Competition will trap you in a lesser game
Nivi: This reminds me of your tweet about escaping competition through authenticity. It sounds like part of this is a search for who you are.
Naval: It’s both a search, and a recognition because sometimes when we search our egos, we want to be something that we are not. And our friends and family are better at telling us actually who we are, or looking back at what we’ve done is a better indicator of who we are.
Become the best in the world at what you do. Keep redefining what you do until this is true.
Find founder-product-market fit
Keep redefining what you do until you’re the best at what you do
Nivi: We just finished talking about the importance of working hard and valuing your time. Next there’s a few tweets on the topic of working for the long term. The first tweet is, “Become the best in the world at what you do. Keep redefining what you do until this is true.”
Naval: If you really want to get paid in this world, you want to be number one at whatever it is that you’re doing. And it can be niche, that’s the point. It can literally be, you’re getting paid for just being you.
While I’ve been interviewed for many podcasts, I’ve never hosted one before. David and I have been massive fans of Harry Stebbing’s 20 Minute VC so we’ve modeled Give First after it. Harry really hit his stride after about 100 episodes so my guess is it’ll take us a while to be in the same zone as he is. It’s good to have something to shoot for!
The first episode is an intro with an overview. We’ve got a steady stream of episodes coming that are already recorded, so subscribe to Give First and give us feedback.
You should be too busy to “do coffee”, while still keeping an uncluttered calendar.
People will meet with you when you have proof of work.
Networking is overrated even early in your career.
Be too busy to “do coffee” while keeping an uncluttered calendar
Naval: Then we squander our time with the death of 1,000 cuts. Another tweet I had was, “You should be too busy to do coffee, while still keeping an uncluttered calendar.” People who know me, know that I’m famous for simultaneously doing two things. One is having a very clean calendar. I have almost no meetings on it.
There are people that I meet with, when they see my calendar they almost weep, while at the same time, I am busy all the time. I’m always doing something. It’s usually “work-related” but it is whatever Continue reading “Be Too Busy to “do Coffee””
Work as hard as you can. Even though what you work on and who you work with are more important.
Nobody really works 80 hours a week.
Inspiration is perishable.
Impatience with actions, patience with results.
Work as hard as you can
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 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 Continue reading “Work As Hard As You Can”
If you can outsource something for less than your hourly rate, do it.
Your hourly rate should seem absurdly high 3:39.
Nivi: We covered the skills that you need to get rich. That was specific knowledge, accountability, leverage, judgment, and life-long learning. Let’s talk a little bit about the importance of working hard and valuing your time.
Set and enforce an aspirational hourly rate
Naval: No one is going to value you more than you value yourself. You just have to set a very high personal hourly rate and you have to stick to it. Even since I was young, I just decided I was worth a lot more than the market though I was worth, but I started Continue reading “Set and Enforce an Aspirational Hourly Rate”
Everything else you do is setting you up to apply judgment.
In an age of infinite leverage, judgment becomes the most important skill.
Judgment is knowing the long-term consequences of your actions.
Without experience, judgment is often less than useless.
The people with the best judgment are among the least emotional.
A lot of the top investors often sound like philosophers.
The more outraged someone is, the worse their judgment.
In an age of infinite leverage, judgment becomes the most important skill
Nivi: We spoke about specific knowledge, we talked about accountability, we talked about leverage. The last skill that Naval talks about in his tweetstorm is judgment, where he says, that “Leverage is a force multiplier for your judgment.”
Day laborers get paid hourly and have low accountability
General contractors get equity, but they’re also taking risk
Property developers pocket the profit with capital leverage
Architects, large developers and REITs are even higher layers in the stack
Real estate tech companies apply the maximum leverage
Naval: The tweetstorm is very abstract. It’s deliberately meant to be broadly applicable to all kinds of different domains and disciplines and time periods and places. But sometimes it’s hard to work without a concrete example. So let’s go concrete for a minute.
Day laborers get paid hourly and have low accountability
Naval: Labor and capital are much less egalitarian, not just in the inputs, but in their outputs.
Let’s say that I need something that humans have to provide like if I want a massage or if I need someone to cook my food. The more of a human element there is in providing that service, the less egalitarian it is. Jeff Bezos probably has much better vacations than most of us because he has lots of humans running around doing whatever he needs to do.
If you look at the output of code and media, Jeff Bezos doesn’t get to watch better movies and TV than we do. Jeff Bezos doesn’t get to even have better computing experience. Google doesn’t give him some premium, special Google account where his searches are better.