I. What never changes - timeless wisdom

💭 In business, politics, and war, the best-organized and most motivated minority wins. - Nassim Nicholas Taleb

When you study an ant individually, you won’t know how an ant colony works.

There is a difference between individual and group, and this property is called the emergent property of a complex system—the interactions among individuals produce effects greater than the sum of the individuals.

This phenomenon of the group/system being greater than the sum of its parts exists everywhere in our lives. In this 27-minute-read article, The Most Intolerant Wins: The Dictatorship of the Small Minority, Nassim, the author of the antifragile black swan effect, talks about it in great detail.

💭 Poor Charlie's Almanack - Advice from Charlie Munger, Warren Buffett's best friend, Berkshire Hathaway's Chairperson.

My current read is Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger. It is a book full of timeless wisdom, indeed. Here are some notes I have taken and I want to share with you.

Advice #1: Reliability and reputation are the greatest assets one can have. Do not underestimate the compound effect on building reputation and how quickly it can be destroyed in a blink.

Advice #2: Marketing and psychology involve hacking and abusing the cognitive shortcuts the brain employs to control all the signals and noises around us. The psychology of misjudgment is the most important thing to learn about as a dual-edge blade—you benefit from learning it by avoiding it yourself and exploiting it to achieve your goals.

Advice #3: In business, there is a balance between the power of scale and the great defect of scale. Any student majoring in economics can tell you about the cost of scale and how much more profitable it is when a company reaches a certain size of scale. However, as the company grows, it also becomes more bureaucratic. As you get big, you get the bureaucracy. This is unavoidable, and this is what makes the game fair - small startups achieve product-market fit, grow and become big, and then face the problem of bureaucracy.

There are two very major problems of bureaucracy - the organization thinks much slower, and the incentive of the employees is messed up. In a huge company like Sears, besides the additional layers of people it doesn't need, there is also an established way of thinking and doing things. Any new thought or idea will easily trigger the established system to turn against you. The biggest form of bureaucracy is the government of a country, and as you can see, it is way better at adding more rules and regulations than removing them and doing things slower than quicker. For the messed up incentives in a company of scale, it's very common to have the following scenario. If there is a project and my department and your department share the responsibility, the unwritten rule is that if you don't bother me, I won't bother you, and we are both happy. The proactiveness of an employee in a startup and in a huge organization can be miles apart. Still, the employees are not the ones to blame - again, the bureaucracy largely hinders progress and, hence, discourages changes.

II. What never changes - timeless wisdom

🙅‍♀️ Why I never recommend entrepreneurship to anyone

Talk to entrepreneurs you meet on a Start-Up Day or conference; it is not hard to find them overhyping on small things, smiling way too much, being overly optimistic, as if they are overdosed. Are their minds fxxxxx up?

Talk to entrepreneurs when they are drunk. Ask them why they quit their corporate jobs. You will probably see how much their eyebrows frowned and mentioning “corporate dogs,” “soullessly working for big companies,” “cannot have their lives in control,” etc.

Well, the flip side of the coin is that people with a corporate job have a way, way more stable life, probably a month of paid time off, better work-life balance, and better mental health than those entrepreneurs. Plus, you can very likely earn $5k post-tax from a corporate job if you stay in it for more than a decade. Overseeing the immense benefits of a stable corporate life, these entrepreneurs, who probably have just an idea and zero paying customers, seem delusional. What makes them so crazy?

They want to be the boss - not true. Any people in the game know that sooner or later, you will have to play the game of capitalism and the rules of free markets. These overhyped entrepreneurs, who keep their noses up to the sky and secretly slash prices to beg and win some customers, know. So, what is that?

Continue reading here…

III. Book Quotes

Here are some book quotes for you to ponder over the weekend.

Thanks for reading,

— Anthony