Specific knowledge tends to be creative or technical. It’s on the bleeding edge of technology, art and communication.
Specific knowledge can be taught through apprenticeships
Naval: 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.
The classic line here is that Warren Buffett went to Benjamin Graham when he got out of school. Benjamin Graham was the author of the Intelligent Investor and sort of modernized or created value investing as a discipline. And Warren Buffett went to Benjamin Graham and offered to work for him for free.
And Graham said, “Actually, you’re overpriced, free is overpriced.” And Graham was absolutely right. When it comes to a very valuable apprenticeship like the type that Graham was going to give Buffet, Buffet should have been paying him a lot of money. That right there tells you that those are skills worth having.
Specific knowledge is often highly creative or technical
Specific knowledge also tends to be technical and creative. It’s on the bleeding edge of technology, on the bleeding edge of art, on the bleeding edge of communication.
Even today, for example, there are probably meme lords out there on the Internet who can create incredible memes that will spread the idea to millions of people. Or are very persuasive – Scott Adams is a good example of this. He is essentially becoming one of the most credible people in the world by making accurate predictions through persuasive arguments and videos.
And that is specific knowledge that he has built up over the years because he got obsessed with hypnosis when he was young, he learned how to communicate through cartooning, he embraced Periscope early, so he’s been practicing lots of conversation, he’s read all the books on the topic, he’s employed in his everyday life. If you look at his girlfriend, she’s this beautiful young Instagram model.
That is an example of someone who has built up a specific knowledge over the course of his career. It’s highly creative, it has elements of being technical in it, and it’s something that is never going to be automated.
No one’s going to take that away from him, because he’s also accountable under one brand as Scott Adams, and he’s operating with the leverage of media with Periscope and drawing Dilbert cartoons and writing books. He has massive leverage on top of that brand and he can build wealth out of it if he wanted to build additional wealth beyond what he already has.
Specific knowledge is specific to the individual and situation
Nivi: Should we be calling it unique knowledge or does specific knowledge somehow make more sense for it?
Naval: You know, I came up with this framework when I was really young. We’re talking decades and decades. It’s now probably over 30 years old. So, at the time specific knowledge stuck with me so that is how I think about it.
The reason I didn’t try and change it is because every other term that I found for it was overloaded in a different way. At least specific knowledge isn’t that used. I can kind of rebrand it.
The problem with unique knowledge is, yeah, maybe it’s unique but if I learn it from somebody else it’s longer unique, then we both know it. So, it’s not so much that it is unique, it’s that it is highly specific to the situation, it’s specific to the individual, it’s specific to the problem, and it can only be built as part of a larger obsession, interest, and time spent in that domain.
It can’t just be read straight out of a single book, nor can it be taught in a single course, nor can it be programmed into a single algorithm.
You can’t be too deliberate about assembling specific knowledge
Nivi: Speaking of Scott Adams, he’s got a blog post on how to build your career by getting in, say, the top 25 percentile at three or more things. And by doing that, you become the only person in the world who can do those three things in the 25th percentile.
So, instead of trying to be the best at one thing, you just try to be very, very good at three or more things. Is that a way of building specific knowledge?
Naval: I actually think the best way is just to follow your own obsession. And somewhere in the back of your mind, you can realize that, actually, this obsession I like and I’ll keep an eye out for the commercial aspects of it.
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.
Scott Adams’ observation is a good one, predicated on statistics. Let’s say there’s 10,000 areas that are valuable to the human race today in terms of knowledge to have, and the number one in those 10,000 slots is taken.
Someone else is likely to be the number one in each of those 10,000, unless you happen to be one of the 10,000 most obsessed people in the world that at a given thing.
But when you start combining, well, number 3,728 with top-notch sales skills and really good writing skills and someone who understands accounting and finance really well, when the need for that intersection arrives, you’ve expanded enough from 10,000 through combinatorics to millions or tens of millions. So, it just becomes much less competitive.
Also, there’s diminishing returns. 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.
Build specific knowledge where you are a natural
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.
We’re all familiar with that phrase, a natural. “Oh, this person is a natural at meeting men or women, this person is a natural socialite, this person is a natural programmer, this person is a natural reader.” So, whatever you are a natural at, you want to double down on that.
And then there are probably multiple things you’re natural at because personalities and humans are very complex. So, we want to be able to take the things that you are natural at and combine them so that you automatically, just through sheer interest and enjoyment, end up top 25% or top 10% or top 5% at a number of things.
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