There’s No Actual Skill Called “Business”

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There’s no actual skill called business. Avoid business schools and magazines.

Transcript

There’s no actual skill called “business”

Naval: In that sense, business to me is bottom of the barrel. There’s no actual skill called business, it’s too generic. It’s like a skill called “relating.” Like “relating to humans.” That’s not a skill, it’s too broad.

A lot of what goes on in business schools, and there is some very intelligent stuff taught in business schools – I don’t mean to detract from them completely – some of the things taught in business school are just anecdotes. They call them “case studies.”

But they’re just anecdotes, and they’re trying to help you pattern match by throwing lots of data points at you, but the reality is, you will never understand them fully until you’re actually in that position yourself. 

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The Foundations Are Math and Logic

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If you understand mathematics and logic, you have the basis for understanding everything else.

Transcript

The ultimate foundations are math and logic

Naval: Foundational things are principles, they’re algorithms, they’re deep seated logical understanding where you can defend it or attack it from any angle. And that’s why microeconomics is important because macroeconomics is a lot of memorization, a lot of macro bullshit.

As Nassim Taleb says, it is easier to macro bullshit than it is the micro bullshit. Because macroeconomics is voodoo-complex-science meets politics. You can’t find two macroeconomists to agree on anything these days, and different macroeconomists get used by different politicians to peddle their different pet theories.

There are even macroeconomists out there now peddling something called Modern Monetary Theory which basically says, hey, except for this pesky thing called inflation, we can just print all the money that we want. Yes, except for this pesky thing called inflation. That’s like saying, except for limited energy, we can fire rockets off into space all day long.

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Read What You Love Until You Love to Read

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You should be able to pick up any book in the library and read it.

Transcript

Read what you love until you love to read

Nivi: Before we go and talk about accountability and leverage and judgment, you’ve got a few tweets further down the line that I would put in the category of continuous learning.

They’re essentially, “there is no skill called business. Avoid business magazines and business class, study microeconomics, game theory, psychology, persuasion, ethics, mathematics and computers.”

There’s one other comment that you made in a Periscope that was, “you should be able to pick up any book in the library and read it.” And the last tweet in this category was, “reading is faster than listening, doing is faster than watching.”

Naval: Yeah, the most important tweet on this, I don’t even have in here unfortunately, which is, the foundation of learning is reading. I don’t know a smart person who doesn’t read and read all the time.

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Learn to Sell, Learn to Build

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Learn to sell. Learn to build. If you can do both, you will be unstoppable.

Transcript

Learn to sell, learn to build

Nivi: Talking about combining skills, you said that you should “learn to sell, learn to build, if you can do both, you will be unstoppable.”

Naval: This is a very broad category. It’s two broad categories. One is building the product. Which is hard, and it’s multivariate. It can include design, it can include development, it can include manufacturing, logistics, procurement, it can even be designing and operating a service. It has many, many definitions.

But in every industry, there is a definition of the builder. In our tech industry it’s the CTO, it’s the programmer, it’s the software engineer, hardware engineer. But even in the laundry business, it could be the person who’s building the laundry service, who is making the trains run on time, who’s making sure all the clothes end up in the right place at the right time, and so on.

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Specific Knowledge Is Highly Creative or Technical

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Specific knowledge tends to be creative or technical. It’s on the bleeding edge of technology, art and communication.

Transcript

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.

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Arm Yourself With Specific Knowledge

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Arm yourself with specific knowledge. It can’t be trained but it can be found by pursuing your genuine curiosity.

Transcript

Arm yourself with specific knowledge

Nivi: Do you want to talk a little bit about the skills that you need, in particular specific knowledge, accountability, leverage and judgment. So, the first tweet in this area is “Arm yourself with specific knowledge accountability and leverage.” And I’ll throw in judgment as well. I don’t think you covered that in that particular tweet.

Naval: If you want to make money you have to get paid at scale. And why you, that’s accountability, at scale, that’s leverage, and just you getting paid as opposed to somebody else getting paid , that’s specific knowledge.

So, specific knowledge is probably the hardest thing to get across in this whole tweetstorm, and it’s probably the thing that people get the most confused about.

The thing is that we have this idea that everything can be taught, everything can be taught in school. And it’s not true that everything can be taught. In fact, the most interesting things cannot be taught.

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Partner With Rational Optimists

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Don’t partner with cynics and pessimists. Their beliefs are self-fulfilling.

Transcript

Don’t partner with pessimists

Nivi: Let’s do this last tweet. You said, “Don’t partner with cynics, and pessimists. Their beliefs are self-fulfilling.”

Naval: Yes. Essentially, to create things, you have to be a rational optimist. Rational in the sense that you have to see the world for what it really is. And yet you have to be optimistic about your own capabilities, and your capability to get things done.

We all know people who are consistently pessimistic, who will shoot down everything. Everyone in their life has the helpful critical guy, right? He thinks he’s being helpful, but he’s actually being critical, and he’s a downer on everything.

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Pick Partners With Intelligence, Energy and Integrity

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Picking partners with high intelligence, energy and integrity is the three-part checklist that you can’t compromise on.

Transcript

Pick business partners with high intelligence, energy and integrity

Naval: In terms of picking people to work with, pick ones that have high intelligence, high energy, and high integrity, I find that’s the three-part checklist that you cannot compromise on.

You need someone who is smart, or they’ll head in the wrong direction. And you’re not going to end up in the right place. You need someone high-energy because the world is full of smart, lazy people.

We all know people in our life who are really smart, but can’t get out of bed, or lift a finger. And we also know people who are very high energy, but not that smart. So, they work hard, but they’re sort of running in the wrong direction.

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Play Long-term Games With Long-term People

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Pick an industry where you can play long-term games with long-term people. All returns in life come from compound interest over many turns of the game.

Transcript

Play long-term games with long-term people

Nivi: Talk a little bit about what industries you should think about working in. What kind of job you should have? And who you might want to work with? So, you said, “One should pick an industry where you can play long-term games with long-term people.” Why?

Naval: Yeah, this is an insight into what makes Silicon Valley work, and what makes high trust societies work. Essentially, all the benefits in life come from compound interests. Whether it’s in relationships, or making money, or in learning.

So, compound interest is a marvelous force, where if you start out with 1x what you have, and then if you increase 20% a year for 30 years, it’s not that you got 30 years times 20% added on. It was compounding, so it just grew, and grew, and grew until you suddenly got a massive amount of whatever it is. Whether it’s goodwill, or love, or relationships, or money. So, I think compound interest is a very important force.

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The Internet Has Massively Broadened Career Possibilities

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The Internet has massively broadened the possible space of careers, by allowing you to scale any niche obsession.

Transcript

The Internet has massively broadened the possible space of careers

Nivi: Let’s look at this next tweet, which I thought was cryptic, and also super interesting, about the kind of job or career that you might have. You said, “The internet has massively broadened the possible space of careers. Most people haven’t figured this out yet.”

Naval: The fundamental property of the internet more than any other single thing is it connects every human to each other human on the planet. You can now reach everyone.

Whether it’s by emailing them personally, whether it’s by broadcasting to them on Twitter, whether it’s by posting something on Facebook that they find, whether it’s by putting up a website they come and access.

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