The goal is that we are eventually wealthy and working for ourselves.
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 the long haul.
If you’re 80 years old, retired and running out of energy, it’s probably best to stay retired. But there are 80-year-olds who have a lot of energy, who want to do new things and live for the future.
Obviously this can apply very easily to a young person. I would say 9 or 10 years old and up.
Midlife can be the most fruitful time to apply this advice
The most difficult one is probably midlife. When we’re in our 30s, 40s and 50s, we already have a lot invested. We have a lot of obligations. Those are the years we’re earning; people are relying on us. We don’t want to change because we don’t want to admit defeat.
But that’s when it actually can be the most fruitful. It may be the most difficult pivot: You have a 9-to-5 job; you have a family relying on you.
It may seem like the things in this podcast are far too idealistic, but maybe it can inform your weekend projects. Maybe it can inform your approach to education; for example, if you’re taking an online course at night. Maybe it can inform what roles you take on at your current company, because they move you closer and closer to points of leverage, points of judgment or points where you’re naturally talented, and you’re able to be more authentic. It might cause you to take on more accountability.
Even if applied piecemeal, these principles can guide you—regardless of what stage of life you are in, short of retirement. If you’re retired, test them to see if they’re true and then teach them to your kids or grandkids.
There are many different ways to participate. It should apply to almost everybody who has a complete body, sound mind, and is looking to work.
Look up the value chain to find leverage
Nivi: One way to apply this advice is to look at who is getting leverage off of the work that you’re doing. Look up the value chain—at who’s above you and who’s above them—and see how they are taking advantage of the time and work you’re doing and how they’re applying leverage.
People naturally do this because they want to move up the corporate ladder; but that’s mostly about managing other people. You want to manage more capital, products, media and community.
People think about moving up the ladder in their organization. But they don’t often think about moving to a different organization or creating their own company to get more leverage.
You will do better in a small organization
Naval: In general, ceteris paribus—fancy Latin words for “all else being equal”—you ’ll do better in a smaller organization than a larger one.
You will have more accountability, and your work will be more visible. You’re more likely to be able to try different things, which can help you discover the thing you are uniquely good at. People will be more likely to give you leverage through battlefield promotions. You’ll have more flexibility. There will be more authenticity in how the company operates.
Here is a good progression for a career: Start in a large company and progressively move to smaller and smaller ones. It’s very hard to go from a small company to a larger company. Larger companies tend to be more about politics than merit; they’re more stable but less innovative.
The goal is that we are all working for ourselves
The long-term goal is that we are all wealthy and working for ourselves. The people working for us are essentially robots. Today that’s software robots executing code in data centers. Tomorrow it could be delivery bots, flying bots and mechanical bots—and drones—that are carrying things around.
This goes back to the idea that the best relationships are peer relationships. If there’s someone above you, that’s someone to learn from. If you’re not learning from them and improving, nobody should be above you.
If there’s somebody below you, it’s because you’re teaching them and enabling them. If you’re not doing that, then get a robot; you don’t need a human below you.
This is utopian and still a long way off, but in the not-too-distant future anybody who wants to work for themself will be able to do it.
You may have to make sacrifices and take on more risk. You may have to take on more accountability and live with less steady income. But more and more I think younger people are realizing that if they’re going to work, they’re going to work for themselves.