Naval Ravikant’s framework as a means to evaluate your career, what you are good at and what brings you joy.
“I have a very young child. I expect that my child will not get a university degree or at least not in the classic sence of having to go spend 4 years at a university and get a stamp. I expect that he won’t have a concept of a single career. I expect that he probably won’t have a normal job. He’ll be paid much more for his output, because in knowledge work which is what most work is these days, in knowledge work if you do a great job vs a good job vs an ok job, the difference to your employer in terms of what it’s worth is 0x, 10x, 100x. We’re used to tracking 9 to 5, because if someone is cutting down wood you watch them cut down the wood, they work for 8 hours give or take they cut down roughly the same amount of wood. However if they’re sitting in front of a computer and they’re writing code or they’re preparing a presentation or they’re coming up with a new product or brand strategy you know they’re writing an advertising campaign, if they write the right ad slogan you might have a 100 mio dollar product in your hand, they write the wrong ad slogan you might have a 10$ product in your hands or you might have a money loosing product in your hands. So more and more work is going creative and as it’s going creative you can’t track the inputs, you have to track the outputs. Almost everybody these days who makes a lot of money doing something, they’re essentially doing some kind of creative work that society does not yet know how to train people to do or how to replicate. Creative work by it’s nature is easily leveraged, so it’s force multiplied and it’s something that is very hard to train people how to do. If I can train you how to do something I don’t have to pay you a lot, because I can just replace you anytime I want. On the other hand if you’re a genius at something, you’re doing something that I don’t even know how the heck you do it, but you’re creating new things I have to pay you what you’re worth.”
Patrick: “So can you touch on that idea and kind of why you think if you do think curiosity should govern a lot of what people do vs say trying to fit within some widget system.”
“I’m into blockchains and cryptocurrencies, because they’re intellectually fascinating to me. I mean yeah maybe I make some money along the way, but that’s not my primary driver. Actually given how early I got into blockchains I don’t have that many coins, because it’s not the token part that’s interesting to me, it’s far more interesting to me to think about the repercussions and to understand the technology and to follow the code essentially down the rabbit hole. I think I got into it because of intellectual curiosity, and so the nice thing about that is 1 that is it’s own reward. Even if I don’t make any money 2 it means I got into it before it was hot before everybody was getting into it, right. The returns are gone by the time everybody else gets into it. And these days the markets move very very quickly. If you can figure out something that society will want before society itself en masse figures it out, that’s when you get paid. And your only chance of doing that is if you’re intellectually curious. And intellectual curiosity is different for everybody. So I cannot prescribe it to anybody. I can’t say get into drones, or get into VR, because I don’t know what’s gonna be hot or what’s not. The moment I can tell you what’s hot and I am making the convincing argument that it’s hot then at the same time millions of other people are convinced that it’s hot and by the time you get there it will be too crowded. So the only way to really succeed at an extreme level, if you care about that, and to enjoy yourself along the way, is to just go deep into something. And the nice thing about the technology industry, and by technology I mean the broad tech industry, I include biology technology, healthcare technology, all kinds of things is if you get obsessive about something that you are convinced is the future and you’re just into it because of it’s own reward and merit, first you’re gonna outwork everybody else at it, because you will be reading about it for fun when everybody else is doing it for work and then second you’ll stick with it long enough for it to materialize when everybody else will give up and third when the people show up you’ll just be the export because you have thought about it at a different level and then you get paid. Now it’s obviously risky so you don’t do this purely for career reasons. But I have at least found that on a long term basis that following my own intellectual curiosity has paid me better than trying to do what I thought would make me money.
That’s this way with most of life these days, because now we operate in a world where there are 7 billion people and we have access to almost all of them and we have access to all these countries and all these markets and all these societies and all these nation states. We’re no longer living in tribes of a 150 people with very limited opportunities. Because we have access to everything and anything I would say there is no point in trying to imitate anybody else. There is no point in trying to pick up skills for somebody else. What you really want to do is just figure out what you are uniquely the best in the world at because you just love it. And then just find out who or what needs that the most. And by the way I think that even applies in dating, marriage and relationships and working and colleagues, it applies to many aspects of life. Rather than trying to change yourself to fit the mold of whatever you happen to be, we should be more open to exploring and finding the place where we fit in perfectly and they’re missing us.
I grew up in a pretty poor household. I wanted to make money and it was really important to me. Probably too important. At the time when I said to a friend of mine I would sell sewage or apple cores to make money and luckily it didn’t turn out that way, because that would have been miserable and I realise I wouldn’t have done it, I wouldn’t have stuck with it. But maybe because there is someone out there who loves apples, right? And that person would have built the best apple farms because they would have obsessed over apples and they would have easily outcompeted me, because I would have just been in it for the money. That would have been a terrible existence the entire way for me. So I was obsessed with just making sure that I got to make some money, because I had zero. So I did get very analytical about the whole thing and had a framework back when I was like 15 years old. And I hadn’t really revisited the framework, because I’m sure it’s terrible now.
But the 3 things that I came up with were: to make money you need specific knowledge, you need leverage and you need accountability.
And what I mean by those 3 is, let me start with the simple ones, leverage is just that you need a force multiplier. Like Archimedes said give me a level long enough and a place to stand and I will move the earth. And leverage means that you know when I’m sleeping there are a 100 people working for me. When I’m sleeping there’s a 1000 servers and data centers working for me. When I’m sleeping there’s ten million dollars worth of capital being deployed that’s going into investments, that’s working for me. Those are examples of leverage.
The reason why computing and books make so many people rich is because they’re forms of leverage that are permissionless. Going back to the idea of permission networks vs not I can write a piece of code that lives on the internet. If it’s a useful piece of code I can make a lot of money of of it, because it’s leverage. The code is working for me while I’m not. So to make money you need leverage. No one gets rich renting out their own time.
The second piece for me is accountability. Accountability because if you don’t want to put your name on it, if people can’t identify that you did it they’re not going to pay you for it, so the more faceless, the more widget like the more of a large team you’re dissappearing into the less credit you get and without the credit you’re not gonna get paid. That said the credit comes with risk, accountability is not free. You’re sticking your neck out there. It’s why sales guys often or sales gals make more than engineers, because they’re sticking their necks out, some days they don’t eat, some days they eat well.
And then the last piece is actually the hardest, which is specific knowledge. Specific knowledge is knowledge that you have that lets you do something that other people do not know how to do and cannot be trained to do. If I can train you how to do something, give you a certificate, now you’re suddenly replaceable and I’m never going to have to pay you more than that exact job is worth and that job is always competitive and I’m always training other people to do it, so you’re never gonna get rich of of it. So then I was stuck with a problem at a young age, I was like leverage I gotta go into computers and tech which I loved anyway, so that was easy, because that’s a free form of leverage. Accountability means take risks, take responsibility, stick your neck out there, do things, promise things to people they don’t think are doable, then deliver them. That’s what I can do.
But the last piece was the hardest, specific knowledge, what knowledge do I specifically have that nobody else does. And the only way to build specific knowledge is you just have to love something. And if you love doing something you’re gonna put in the hours. And it took me decades to figure out what my specific knowledge was. But it turns out, looking back in time, I now realise what my specific knowledge was. I didn’t even know it at the time. But I was obsessed with a couple of things as a kid. I loved to read and I loved to read all kinds of stuff, including junk. But when I got into a topic I would just dive down and read into it. But that helps me come up to speed with new technologies and new spaces very very fast. I played a lot of war games as a kid, which makes me actually pretty good at kind of broad strategy. And I used to play a lot of role playing games, because I used to talk, which are just talk by the way. I used to sit with other kids and just talk talk talk, so I’m a good talker, right (laughs). So the combination of being good at reading, good at talking and good at strategy actually and liking computers puts me into the tech strategy business and that’s kind of where I meandered my way to and now I found that even within that the pieces of it that I like to do and I’m good at. Turns out that I am not good at managing people, I tried to do that for a long time, because I thought that was a form of leverage, I thought I could learn it, be trained how to do it. Turns out I am terrible at it, because I never liked it in the first place. I am not a people person. I don’t like to hang around lots of people. So you kind of have to know your strenghts and your weaknesses and double down, double down, double down on your strenghts. And then find the career in which those strenghts really matter and there’s always one out there for you.”