(Written for —https://www.linkedin.com/company/the-financial-pandora/)
Most of us in India do not know who he is. Most of us in the investing world do not know who he is. There are only a handful of people who can alter your thoughts completely when you listen to them or read their material. Naval is one such person who explains the complex principles of life with such simplicity that it will leave you inspired. There are many self-help books that talk about the principles and self-improvement in a clichéd sense. Most of them have nothing new to provide. You will not come out a better person after investing your time reading it.
However, if you had put the same time in researching about Naval or just followed him on Twitter, I’m sure the process would have been much fruitful. If not purpose, you definitely would have found your direction in life.
This write up becomes all the more important, as more people in India should read about him and soak in his ideas on living a fulfilled life. This will be an extract of some of the ideas he shares in his most famous Twitter thread ‘How to get rich without getting lucky? Before that, here’s a brief background about him.
Background and early life
Naval was born in 1974 in Delhi, India. At age 9, his family moved to Queens, New York. He attended Stuyvesant High School and later graduated from Dartmouth in computer science and economics. Naval initially thought that he’s going to become a PhD in Economics but little did he knew that his life is going to take him in the investing world where later he’ll become an icon in Silicon Valley.
In 2018, Naval was named as the Angel investor of the year which was not even shocking. Naval was an early investor in companies like Uber, Twitter, OpenDNS and like. Being a VC at heart, sourcing an opportunity, building a team around it, making businesses work and making money out of it felt like play to him and work to others.
Until 2014, Naval’s personality was limited to a high profile VC who smells opportunity in budding startups and can build a business around it as effortlessly as possible. It was only in 2014, that Naval started projecting his thoughts on life and philosophy on Twitter. It was then, people realized his true potential and how rich his thoughts were. No wonder he is good at what he does.
The success he enjoys in his professional career is a clear result of the principles he follows in his life. Let’s touch upon a few of them here…
Specific knowledge, accountability and leverage
“Specific knowledge is found much more by pursuing your innate talents, your genuine curiosity, and your passion. It’s not by going to school for whatever is the hottest job; it’s not by going into whatever field investors say is the hottest.”
Arm yourself with specific knowledge. Naval stresses the fact that specific knowledge is something which cannot be taught, but it can be learned. It is a skill which is unique to you and ingrained in your DNA. It is about figuring out what you were doing as a kid almost effortlessly but others couldn’t. That very skill is your specific knowledge and now is the time to develop it and turn it into something fruitful. Nobody can be you and so there is no question of being authentic as nobody can copy your style of work.
“Embrace accountability and take business risks under your own name. Society will reward you with responsibility, equity, and leverage”.
Be accountable in whatever you do. Take up responsibility in the work you do. Over a period of time, society will realize that accountability will develop your credibility. Everything and anything you do, you do it in your own name. You win, win under your name. You fail, you fail in public which requires a lot of guts. Give away material for free initially as you are doing a service to society. It will create your image and develop relationships that last for a lifetime. You are looking for long term followers and not short term subscribers.
“The best jobs are neither decreed nor degreed. They are creative expressions of continuous learners in the free markets”.
To scale up, you need to provide what society needs but it doesn’t know how to get. You fulfil this need and you’ll do very well. For anything to scale, it requires leverage. Leverage is a force multiplier. Naval talks about three major forms of leverage.
Labour leverage — it means other people working for you. If you have a workforce which follows you or understands your vision, it can help you scale to newer heights. On the other hand, it is also the toughest form of leverage as you need immensely impressive leadership skills to manage people. Managing people is the most difficult task at hand because not everyone works for the collective good of the organisation. A horde of such pure followers is hard to find.
Capital leverage — it means managing money and multiplying it. If you know how to manage your money, you will know how to manage other’s money. Once you do that well, society will always reward you with more money to manage and it will scale your credibility as well as your responsibilities. You own the upside as well the downside. You become trustworthy because you are accountable for every penny.
Naval says the final form of leverage is the most democratic form. They are “products with no marginal cost of replication.” In other words, the internet.
Internet leverage — If you can do something on the internet and do it in a way which provides value for your customers, then you are most likely to scale exponentially. The internet has an army of robots ready to work for you and your business. Churning out money even while you sleep. You don’t have to manage people; you don’t have to manage capital. You have to manage your art.
In Naval’s words, “Probably the most interesting thing to keep in mind about new forms of leverage is they are permissionless. They don’t require somebody else’s permission for you to use them or succeed. For labour leverage, somebody has to decide to follow you. For capital leverage, somebody has to give you money to invest or to turn into a product”.
You’re not going to get rich renting out your time
You should pick a job or a career where you are paid based on your outputs and not your inputs. Focus on the output. If you’re a wage worker, you are going to get paid based on the number of hours you put in. X number of hours means Y amount of wages. Your output is never going to get acknowledged as you’re not accountable for it. You are only accountable for the hours you have to put.
This is the worst situation one can be in and has no professional scalability.
Detach yourselves from jobs which reward input based work. Associate with profiles where the end product and its quality matters. The way you do it matters and how well you do it matters. Not how long you took to build it. There is a reason why creators have the most exponential revenue graph. They and only they are accountable for their project. Accountability and money have a direct relationship.
But there are situations where one cannot help but rent out his time to make his ends meet. In such cases, one should hold equity in businesses and go heavy on investing. As it involves capital leverage, or in other words, your money working for you.
Naval is a goldmine of rich thoughts and anecdotes. Most of his wisdom covered in this piece is adapted from the book The Almanack of Naval Ravikant compiled and edited by Eric Jorgenson. If you want to read more about him, the book is available here for free: https://www.navalmanack.com/
There are no boundaries when it comes to sharing knowledge. I’m sure after reading this you will come out as an evolved version of yourself.
Happy to share!