Women at Work 👩‍💻

Unlike Zero-sum game, positive-sum games can have multiple winners. For example, everyone can build leverages like Capital, Health, Labor, Judgment, etc. that eventually lead to Competitive Differentiation. You win by being better at what you do.

In zero-sum games, for someone to win another has to lose.

Why it matters: It is important to identify zero-sum games and avoid them because the resulting drama distract us from what matters strategically.

• It makes us hallucinate opportunities where none exist.
• It takes significant time to play status-games because status needs to be known, signaled, and maintained.
• Those who play zero-sum games don’t attract opportunities from long-term players.
• In zero-sum industries, prestige is given much higher weightage than merit.

In contrast: Be on the look out for and play Positive-sum Games.

What causes it: Zero-sum games are triggered by scarcity, conformity, and status-seeking.

• Competition happens when it isn’t feasible to create net-new things and there is isn’t enough money (store of value) to go around. This happens in industries like real-estate, etc.
• In some industries, success is rewarded with status instead of money (store of value), for example, in academia, news and media, identity politics, managers in a dysfunctional organization, etc. In such situations, signaling becomes a better means for advancement than actually doing the work. In contrast, incumbents play the role of gate-keepers.
• A rookie in a cricket team doesn’t resent a pro. However, when hierarchies are built without any meaningful criteria and merit, it degenerates into a zero-sum game. For a number 2 to be number 1, the number 1 must be brought down.

To break free from zero-sum games:

• Think and act independently. Don’t conform.
• Think in Building Blocks
• Build on what you’ve got.

Anti-Fragile systems not only withstand shocks but improve as a result. They learn from adversity, adapt to changing circumstances, and evolve to be more robust. For example:

• Exercise builds. Exertion burns.
• Vaccines and some exposure to diseases improves overall immunity.
• Regular bubble bursts overall weeds out the weakness in the economy

In contrast: Most systems are either fragile or at best resilient.

• Fragile things and systems are vulnerable to shocks and disruptions. For example, glass, weak minds, unprofitable businesses, etc.
• Resilient things and systems can withstand shock and return to their original state after being disrupted. For example, buildings that are designed to withstand earthquakes.

How to build anti-fragility:

• Mindset: See uncertainty and volatility as opportunities to learn.
• Prepare: Actively do things that enhance margin of safety (resilience)
  • Buy your way in Owned Network
  • Build Profitable business in a high-margin industries.
  • Avoid centralized dependencies. Build multiple entry and exit options.
  • Short term pessimism and long term optimism helps you stay focused.
  • Most importantly, be prudent because It is easier to de-grow than to grow.
• Take risks, but within your margin of safety, i.e., avoid making bets that, if unsuccessful, could lead to the Risk of Ruin.
  • Subject your system to controlled levels of stress (variety, volume or velocity) and pressure.
  • Do a pre-mortem, i.e., imagine what scenarios would lead to failure.
• Learn: Observe failures objectively to identify weaknesses and areas of improvements. Work on them.
  • Build feedback loops across the system to enable information flow.

Footnotes

• Nassim Nicholas Taleb

It’s a strategy best suited for those committed to the long game, building their Judgment and credibility in a specific field, and those devoted to cultivating their Owned Identity, business, or initiatives as their life’s work.

In fact, they are well-positioned to run their own media operations, thanks to their education, mindfulness, and thoughtfulness. They have the content ready!

Who are we talking about?

• Professionals such as academics, researchers, reporters, policy makers, consultants, analysts, and think tank members who develop deep Judgment in their study field.
• The “Fortune 50 million” rather than the Fortune 500—sustainable Work Products earning an honest living, solving specific problems for a clearly defined customer base (Niche).
• Enthusiasts and hobbyists with a profound appreciation for their chosen subject or activity using Passion work products.
• Independent media and content creators dedicated to telling the truth using Candid Communication.
• Investors who’ve spent decades building their credibility and stand to lose from short-term, opportunistic decisions.

They tend to invest in things that don’t change. They’ve built up credibility over decades and have things to lose from taking short-term, opportunistic decisions. Eventually, they tend to become Anti-fragile. For example, Amazon believes that most of their investments are focused on three evergreen factors: lower prices, more choice, and faster shipping. They avoid the Peanut Butter Manifesto.

It is not for everyone!

• Venture Capital funded products, if not profitable, may get axed (remember Google Reader), acquired (recall Posterous, Nuzzel), or simply fall out of fashion (think Orkut).
• It also fails in organizations with extractive monopolies or businesses causing negative externalities like oil or tobacco.
• This approach is not suitable for professionals in strategic industries such as law, politics, and diplomacy.
• It isn’t suitable for those who chase what’s trending online for the sake of standing out, the focus here is on enduring value, not transient trends. Fast fashion flaunting influencers and Instagram-friendly food might get attention, but they lack long-term depth.
• Beyond these categories, Candid Communication does not work for snake oil salesmen. Their modus operandi often involves altering opinions, personality traits, accents, and behaviors to suit their audience. They cherry-pick facts, favoring only those that benefit their narrative. These individuals project grand ideas without delving into the nitty-gritty of implementation, often complicating simple matters to disguise their lack of detail. Additionally, they tend to gravitate towards industries involving large sums of money but marked by low accountability.

Footnotes:

• How Jeff Bezos’s Very First Amazon Job Listing Foreshadowed His Stepping Down as CEO | Inc.com

Trust is the belief that you’ll act in a reliable and dependable way. It is earned over time through consistent behavior and actions.

Do you have built a reputation for being trusted, reliable, high-integrity, long-term thinkers in an otherwise trust-deficit ecosystem?

Even after you Buy your way in, always give more than you take from a Owned Network.

• Be present: It could be something as simple as not carrying on a conversation with yourself in your head. Instead, be there fully, listen, and care about the people you are speaking to and focus on their interests.
• Provide value to the conversation by teaching, giving a compliment, making a funny comment, or telling a story.
• Finally, be high status and don’t seek approval.

A monopoly owns its market, so it can set its own pricing. Since it has no competition, it produces at the quantity and price combination that maximizes its profit.

Unethical Monopolies: In a static world, a monopolist creates artificial scarcity (political patronage, secures a license from the state, etc.) and becomes a rent collector.

Creative Monopolies: An ethical monopoly is one with Competitive Differentiation, i.e., its so good at what it does that no other firm can offer a close substitute. For example, Google has not competed in search since the year 2000 until OpenAI launched ChatGPT in 2022.

• The world we live in is dynamic: it’s possible to invent new and better things. Creative monopolists give customers more choice by adding entirely new categories of abundance to the world.
• Apple’s monopoly profits from designing, producing, and marketing the iPhone were the reward for creating greater abundance, not artificial scarcity: customers were happy to finally have the choice of paying high prices to get a smartphone that actually works.
• The government knows this and hence we have the patent system.

Footnotes:

• Zero to One

Examples: Factly, a fact-checking media firm, is monetizing its byproduct — a searchable list of cleaned and organized government data — in the form of dataful.in.

Cashflow is the lifeblood of any profitable business.

• Poor cashflow is a Risk of Ruin. It can happen due to unviable expansion or under capitalization.
• If cashflow is good, then no matter how badly run the company might be, there is always a chance of turning its fortunes around.

Not being on top of Customer Acquisition Cost and payback can severely impact your cashflow: If your CAC is Rs. 10,000 and your Subscription costs Rs. 5,000 per year, then you’ll start earning a payback after 2 years. During this time, you’ll be effectively running a negative cashflow business.

Footnotes

• Felix Dennis

Build multiple exit and entry options even before the event happens.

Why it matters: Without leverage, you’ll be left without options, making you susceptible to extractive leadership and isolation because powerlessness corrupts.. If you don’t accept, your only other option is to exit the game.

How: Candid Communication gives you an opportunity to meet new people and through them new trends and opportunities. This leads to information asymmetry which is key for building optionality.

Given this, take clear stock of what you’ve got — Capital, Owned Network, Owned Identity, Owned Media, Labor, Judgment, etc. and see what you can build from there. You should always want to Build multiple entry and exit options. But your Lived experiences will it close and which options it might open.

Building resentment or complaining about what you’ve got is against building a life of focus and ongoing practice.

Accept what have you got and focus on what you can act on.

• Personally: Beauty, smartness, gifted ability, or lack of.
• Socially: People will behave foolishly, rudely, ungratefully, take advantage of us, and treat us unjustly.
• Situations: People won’t comply with our ethics and values.

Footnotes:

• Zero to One
• https://twitter.com/waitbutwhy/status/1571562595957489665
• Dokkodo
• Stoicism
• Good Profit, Charles Koch

A painter cannot build his own style (Build an authentic expression of yourself) until he knows the basics of Labor: color, brush, stroke, shading, etc.

Build a frame of mind that is so strong that you can build authentic expression — express your thoughts, ideas, opinions, world views, and beliefs — unapologetically without consideration of what others might think of them.

Why it matters:

• It helps with Owned Identity: Being authentic helps you differentiate yourself. No two people are alike. Everyone’s Lived experiences — context, knowledge, personality and situation is unique. By being yourself, you are differentiating. The more authentic you are, the less competition you’re going to have. It will also make your brand more real, human, and relatable.
• In a world of Artificial Intelligence generated content, being an authentic real person is Competitive Differentiation

It will also give you the superpower to fail in public and survive.

You cannot be authentic if you don’t Think and act independently. Don’t conform.

How to be authentic:

• Before expressing yourself, master the basics first.
• Curate your beliefs because beliefs define your story: who you are and what do you stand for.
• Build mental strength.
  • You should be able to focus on what needs to be done irrespective of how you feel.
  • You should be able to control your fight or flight response by proving to your physiological self that you are in a safe environment.

You cannot Build an authentic expression of yourself if you’re socially influenced, i.e., you’re changing your behavior because of someone else. We’re influenced by the sitcoms we watch, people we hang out with, the things people praise us for and what people dislike us for. Alternatively, our mimetic desires get more intense the more connected we are. There are three forms of social influence:

• Conformity: Are you changing your behavior to be like others?
• Compliance: Are you doing something because others asked you to?
• Obedience: Are you doing something because you believe you’ve no other choice?

Additionally, conventional beliefs only ever come to appear arbitrary and wrong in retrospect; whenever it collapses, we call the old belief a bubble. But the distortions caused by bubbles don’t disappear when they pop.

Building Judgment demands that you step back and think from First Principles and decide for yourself. For example, Myth-making around Journalism

Footnotes

• Zero to One – Peter Thiel

People have a tendency to attribute value to an individual or company based on their accumulated embodied cultural capital, which can be derived from either their personal identity (such as gender, ethnicity, color, race, caste, etc.) or the distinctive knowledge, perspectives, and abilities they acquire from their unique circumstances.

Why it matters: Recognizing the significance of this, identifying and embracing an Owned Identity that aligns with one’s embodied cultural capital can aid in developing a Niche that is more closely connected to their personal experiences.

• However, this advantage tends to favor those who already possess significant leverage, resulting in unequal opportunities.

How: To leverage this aspect effectively, investing in the art of storytelling can prove beneficial.

Give something of value to enter a closed Owned Network or Community of people.

Once you gain something, be paranoid and prudent to avoid losing it because to go from 10 to 1 is a 90% decrease and to go from 1 to 10 is a 900% increase. Thus, you’ll need a 50% gain to recover 33% in lost dollars.

Footnotes

• https://twitter.com/amasad/status/1619066168282841088

In a free market, a profitable product is one that participates without distortions —grants, government subsidies, political favors, donations — and creates superior value compared to other accessible alternatives while consuming fewer resources.

• It is good for customers because the product is better (superior value) and possibly cheaper (consumes fewer resources).
• It is good for business because such products create surplus (profit or time or raw materials), which can then be reinvested or used somewhere else.

Both are required because we operate in the free market and hence cannot force any stakeholder — employees, suppliers, or customers — to work with us. They’ve to voluntarily choose us.

Footnotes

• From Charles Koch’s book, Good Profit.

In times of a sensitive polarized situation, recession, downturn or personal crisis, Candid Communication allows you the superpower to fail in public and survive, give constructive criticism, and increase willingness to pay because people gravitate towards trusted Owned Identity and individuals during times of crisis.

Why it matters to your customer: Typically, in highly technical or highly creative fields, the cost of getting decisions wrong can be high.

Why it matters to you: As you grow older, Labor ceases to be a strong leverage. A younger professional can learn the skill or read up the facts faster and provide the same service at a lower rate. In the longer run, judgment determines what know-how will make you irreplaceable?

• Unlike skills and facts, judgement is something highly technical or highly creative that can only be earned out there in the field through experience.
• Judgement allows you (and you alone) to take better decisions and gives you the wisdom to navigate out of complex situations.

How to build this leverage?

• Build on what you’ve got.
• Build this leverage in a field that you really care about and are genuinely curious about or have a point of view — something specific to your Lived experiences. Something that doesn’t feel like work. Something in which, you, you alone can operate on the frontier of a field by yourself. You dig deeper than other people do, deeper than what seems rational just because you’re interested.
• Build this leverage in a field that is either highly technical or highly creative — something tangible. For example, no one became a CEO by building a career in social media marketing.
• Progressively refine your judgment through years of constant observation, note taking and forming of new associations until you are an authority. You need to be able to observe shifts in the current, as well as connect seemingly disconnected events to explain trends. Think and act independently. Don’t conform.

However, judgment is also restrictive. For example, Sachin Tendulkar has built great judgment in the game of cricket, however that does not make him a good Member of Parliament.

How to signal Judgment? Blog extensively about it. Own up your mistakes or when you change your mind. Take responsibility. Don’t scapegoat.

Examples

• Expert operators drop complexity of the system they operate because they know Complexity slows down execution.
• Expansion in social status hinders truth-seeking and thus discovery of Judgment.
• Loserthink

Footnotes:

• Tim Urban on Twitter: “I might define it like this https://t.co/rwbLTZD9JC” / Twitter
• Dokkodo
• Naval Ravikant

Money is also called capital or cash.

Why it matters:

• Money is important because it gives you to freedom to do what you want without jeopardizing the basics of life. A life without sufficient money can leads to powerlessness or ruthlessness.
• It is the most liquid form of leverage that can be converted into other forms of leverage. For example, you can hire people with Labor and Judgment, or Buy your way in to a Owned Network, etc.
• In-hand cash allows you to Build multiple entry and exit options.
• Failure to manage Cashflow leads to Risk of Ruin.

How to get capital to do business:

Below are the ways to get capital:

• Inherit it.
• Earn it. This is a deterministic path but it takes too long. Eventually, you’ll bootstrap a Profitable business and own 100% of the company.
• Borrow it from banks is generally a low probability, high risk option.
• Raise it from six sources:
• Friends and family usually invest in your idea not because they want to profit from it, but because they want to be enablers.
• Crowdfunding works well for opportunities for which good product-market fit already exists. It allows you to sell an idea to an audience prior to building it out.
• Often media startups do not generate high returns. Awards and grants are a good way to raise risk capital: risk-free money to try out the startup and see if it scales.
• After you have launched, join accelerators, to scale up quickly. Preferably seek support from accelerators who specialize in helping media startups.
• Look for high net-worth individuals or angel investors, who are invested in the idea or cause.
• Venture capitalists invest into companies in exchange for equity. They are usually hugely invested in the growth of the venture. Most for-profit VC money is looking for 30% year-on-year growth. However, most media businesses cannot provide that kind of returns.

Footnotes:

• Naval Ravikant
• The Narrow Road, Felix Dennis

For yourself

Why it matters: The most deterministic way to earn money is to either produce something — product, article, podcast, book, etc. — of value and finesse or to offer your services as a builder (skilled labor) to those someone who want to build.

• This path is deterministic because with sufficient time, determination, and focus, you can learn hard skills without seeking anyone’s permission.
• Builders tend to have a tonne of failures. However, they need one big success to make it big.

How to build builders:

• Before expressing yourself, master the basics first. Builders learn by looking at the work of others: open source, biographies, etc. Having observed, they perfect their practice by doing. Hence, much like an athletes, painters, carpenters, etc. builders keep on practicing their art. Until you get good, subsidize your building by getting a day job.
• Then you Build an authentic expression of yourself.

How to spot builders?

• While most purchase university degrees to signal capability, a better way to look for builders is to look at their work in a chronological fashion — they’ll leave behind a trail of explorations.
• Builders also have a very strong action bias.
• Finally, in conversations, builders can easily swivel between macro details (why and what) and then deep dive into the nitty-gritty (how).

At the level of a society or company

Why it matters:

• At the level of an economy, growth is instigated by enough builders and entrepreneurs who exploit an untried technological possibility to manufacture a new commodity or producing an old one in a new way.
• Strategically, ideas are content or media and don’t amount to much unless one has the will and skill to bring them to life.

The easiest way to get things done is to hire a small group of builders bounder together by a sense of mission.

Downside

You are restricted by what you cannot do.

Footnotes:

• Joseph Schumpeter
• Hackers and Painters
• The Narrow Road, Felix Dennis
• Zero to One

The only way for us to move forward is to encourage and amplify the work of people in your Owned Network who are willing to learn, to see and to commit to making things better.

The essence of maintaining work-life balance, enjoying what you do, and building a sustainable operation is having a sense of this is enough — from a sense of satisfaction.

In order to win, you’ve to first survive. Hence, always take Risk II.

• Risk is what you don’t see.
• Risk I — Risk of ruin: Risks you wont get to continue playing (survive) if you get it wrong. For example, Russian Roulette.
• Risk II — Other risks: Risks you can survive.

Often there isn’t sufficient capital to execute on broad mandates.

Reference:

• Yahoo Peanut Butter Manifesto | PDF | Leadership | Empowerment (scribd.com)
• 2006-11-18 Yahoo Peanut Butter Manifesto | PDF | Yahoo! | Google (scribd.com)

Owned Identity, Owned Network, Investments, Entrepreneurship, and Editorial Product is closer to biology than physics.

• Physics discovers and documents immutable laws that can be observed and verified.
• In contrast, biology (and evolution to be more precise) is based on chance. That’s why there are many breeds of dogs. Similarly, the same tea plant based on its environment (altitude, humidity, sunlight, etc) gives a different taste and smell.

Hence, once you discover the right fit for you, then double down after conviction.