Framework for thinking

Motivation for this

There is no school that truly prepares you for starting something new.

However, understanding and internalizing the principles that the best founders (Jeff Bezos, Larry Page/Sergey Brin, Elon Musk, Jen-Hsun Huang) exhibited and imbued within their companies massively increases your chances of success for one main reason: it limits the number of mistakes you make.

You don’t have to make every decision correctly to have a successful company. But you need to get a few key things right. Having principles that you’ve deeply thought about maximizes the chances of getting those key things right.

The best way to develop intuition for those principles: why those principles work, how to apply them to situations, is best done with examples for how those principles allowed them to WIN.

Case study

To ground the conversation, here’s an example.

Bezos said “Your margin is my opportunity”. He believed in his own operational excellence, in his ability to cut through the noise in large, low-margin businesses like retail grocery, to outcompete the incumbents like Walmart. (The term operational excellence is a loaded term that means a lot of important things, and Bezos is a one-of-a-kind embodiment of that term. In a nutshell, it means he will execute better than anyone.)

This principle also led to Amazon being the first to develop cloud computing with AWS, not Google. Google had the best distributed compute engineers in the business through relentless pursuit of their principle: latency reduction, or making their search engine as fast as physically possible for everyone. Cloud was going to be a lower margin business than Google’s Ad Words, which is arguably one of the best business models in history.

Amazon was operating in the razor thin margin business of retail and logistics, so cloud was very attractive to them. Their incentives were therefore a lot stronger to win in this space, which is why they became the category king 👑.

As Charlie Munger says: “Show me the incentive, I’ll show you the outcome.”

Asking questions

I also believe that humans’ most remarkable trait is our curiosity. ChatGPT has read more than any human alive has ever read, and in some sense, has also digested that information. However, one of the main blockers in making LLMs smarter is their lack of ability to do extended, structured reasoning on the knowledge they have digested.

If I asked Ramanujan a math question he didn’t know the answer to, he would likely come back a week later with his thoughts on that question, or even an answer. This is because his curiosity would be piqued by that question, and it would be a seed for his curiosity to explore deeper and around that seed.

This exploration can be boiled down to the art and science of asking the right questions. Coming up with the right question to ask is usually more important than the effort one puts into answering that question.

You can think of knowledge and wisdom as a vector. Questions are the direction of the vector, and the effort put into finding an answer is the magnitude of the vector. But if the direction is off, the magnitude doesn’t matter, because all that effort is taking you away from where you actually want to be. A waste.

It’s not easy to ask the right questions. So when faced with an important decision, spend some time coming up with what the question you’re trying to answer is. Force yourself to come up with 3 questions, even if you feel happy with the first question. I cannot stress this enough.

For example, the question “what do you want to do with your life” is a very poor question. A good question is a seed for good ideas and answers. “What do you want to do with your life” only confuses me. There are two good ways to improve the question.

1. Constrain the question’s scope. Make it more specific.
2. Make it measurable (if possible).

💡 TODO: Try and come up with a better question for this. Come up with 3 different questions, write them down, and then pick the best one. Then answer it. Writing is a very good way to structure thoughts for this. Do this for small questions and large.

Within a company, there are a series of important questions to ask on a big picture level, and on a day to day execution level. Try and come up with another good question, in the direction of “what is the single most important thing for us to focus on and why?”, then try and answer it. For example, a better question is “What are the hypotheses we have right now, and which one is the most important one to test?”

Relentlessness

The top quality of EVERY good and great founder is relentlessness. You only fail when you stop, so if the mission matters, just don’t stop. Think of each day as you running an experiment, and recording the results.

If we gathered evidence that the hypothesis was correct, amazing! We made measurable progress: this could be securing an important meeting, winning over someone to our cause, shipping a feature on our website and receiving positive feedback, etc.

But if we gathered evidence that the hypothesis was wrong, that’s good too! Whether the meeting went poorly, clients aren’t happy with what we built that week, or a good team member left, we gathered data. We know more at the end of the day than we did at the start, and are now in a better position to succeed because of it.

The important thing then switches from wins per unit of effort to the rate of data collected. The more data we collect, and the faster we execute on experiments, three magical things happen.

1. The overall winnings go up. 10% success on a 100 experiments > 20% success on 20 experiments.

2. Your learnings compound. 1% learned per day = 37x improvement in a year. Exponentials are mind-blowing.

   

3. Failures are forgotten, successes add up. People have very short term memory, and it’s only getting shorter. So they don’t remember failures for longer than a few days to a week. But successes accumulate, and they lead to more success. A great recruit leads to a better contract, giving us funds and credibility, which allows us to recruit even better people.

Then coming back to the original point, there’s a cheat code here. You can use the learnings and principles of successful people to shortcut your own progress, like getting a grant in your bank account that you can then get compound interest on. So consume content and reflect on it.

The bootcamp

Two parts to this bootcamp.

1. First principles thinking

For one decision a day, whether it’s big or small, Do the three step framework. Write it in notion, whatever feels best.

1. Frame the question 3 different ways. Write it down.
2. Pick the question that feels best. Then come up with 3 different answers for it. Write these down.
3. Compare and contrast the answers and gather information as necessary. Then pick the best answer. Bold the answer and summarize why you picked that answer.

2. Consuming content

For the next month, consume one meaningful piece of content per day.

Figure out if you prefer to read or listen, then find something equivalent to a 30 lecture. This could be 30 min of a podcast/audiobook, or a chapter in a book, a blog post, etc. It could even be a conversation with someone. Then write down

1. The summary of the most important points made. Bullet point format is great cuz it’s easier to write.
2. For each point, write down why you think it’s important
3. What questions came up through the content.

• Podcast recommendations: I enjoyed this one with Aravind Srinivas chat.
• Paul graham essays, e.g. this one.
• Books: Fall in love with the problem, not the solution: here