I spent the last week meeting Entrepreneurs and Venture Capitalists in California.
I was trying to figure out what makes people in Silicon Valley and LA special.
What do they believe here that we don’t ?
I’ve lived in Singapore, New York and London….but there is something different about the West Coast.
Here’s what I learnt.
Most fortunes across history are built on change.
These days we all confuse technology with change, but if you look at entrepreneurs and billionaires like Henry Ford, Warren Buffett, George Soros, Joseph Safra, Jacob Rothschild and Steve Schwarzmann, they aren’t technology investors, they are change investors.
Each one of them saw, understood and invested in change, and benefited from it.
All of them understood changes in their economies, industries, markets and adapted and innovated. That’s how they made their money.
You don’t need to be able to program to be a billionaire today anymore than you needed to do it a decade ago.
Seek change and evolve with it
They think much bigger, and act bolder. They are thinking in multiples rather than increments. While us mortals focus on the 20%, they focus on and find solutions to get 10x.
One way they get to play for a multiple is that they think years in advance.
They think about what the world will look like five years from now.
This feel for how things will evolve let’s them be present for change, when it occurs.
One question, I try to ask myself weekly is:
How can I 10x my life ?
What are the skills and people I need to know to 10x my life.
Every single succesful entrepreneur I have met understood their edge, what they are good at, and then what they aren’t good at, and therefore should pay to get done. They are very effective at this, to the point that they can extract the greatest economies of scale.
They focus their energy on where they have the greatest competitive advantage and then leave the rest for someone else to do.
We can all put this to work in our lives too.
What are the 20% of activities that are responsible for 80% of the positive outcomes?
Once they have found their edge they make sure to exploit it. You’ll see them double and triple down on their most valuable activities, and keep investing in them and ignore everything where they don’t have an edge.
The core part of building an edge is what I have seen all billionaires do — Capex. Not just capex in their business, but capex on themselves. They make sure to continuously invest in themselves to build their edge.
Make sure to find your edge and invest in it, and say “NO” to everything else.
Sometimes this means spending four hours a day learning, meeting people who are domain experts.
For others it means finding new jobs every two years with people they can look up to.
The most successful entrepreneurs and investors don’t try to do everything on their own.
They pay for results and hold people accountable. If you can create value for them they are happy to reward you.
They know and work with the best in the industry. This means knowing what works and what doesn’t. Sometimes this means being early — for example one of the families was a very early investor in Yukos, another was an early investor in Jim Simons at Medallion.
They seek and work with high quality people regardless of what they are doing. They are agnostic to the exact innovation or style. They focus on whether it works or doesn’t and whether it will be profitable.
Seek the highest quality people you can find, and then find ways to partner with them
Their best opportunities come from their network. They know they aren’t going to come up with opportunities on their own.
They build powerful networks, listen to the experts in their network, ask questions, find more experts and keep digging until they can unearth the best opportunities.
They aren’t satisfied with the first answer they get or the first opportunity they come across.
They know that the best ideas and opportunities need to be discovered.
Invest a few hours in your network and your people weekly, that is the source of your opportunities.
They aren’t trapped in the past and what they did last year or last month. They are pragmatic and practical. They focus on the reality of where they stand now and don’t do things just because they have done them for the last decade or year.
They go where others aren’t.
Henry Ford wasn’t inventing the next horse drawn carriage.
Elon Musk didn’t just stay in Fintech after PayPal.
Jeff Bezos wasn’t starting the next hedge fund when he left D.E. Shaw.
They’d ask the question today:
Based on what I know today, what is the best use of my time, and what am I doing now that doesn’t need to be done?
We are a group of Finance veterans dedicated to helping the next generation. What I Learnt on Wall Street is focused on making you Smarter, Richer, Happier. Sign up to get our awesome ebook on Networking into any job and get our weekly VIP emails.
Change & Innovation: They focus on and invest in innovation
Play the big game: Don’t think small, think how can you do 10x or 100x
Get an Edge: Find, research and build your edge
Outsource: Don’t do everything on your own, find experts and outsource
Network: Build your network and then use it to find opportunities
Let go of the past: Don’t be tied to what you have done or said in the past, focus on the current opportunity set