Back when I was younger, I like to think I made some of the best cappuccino and espresso in the entire Bronx.

Picture this, we were at Enzo’s, a family spot with white tablecloths that somehow never stayed white for long, and a line at the bar even when the dining room was full.

Mayor Bloomberg once said Enzo’s was the best Italian restaurant in the Bronx. If that is even half true, then some small share of that compliment belongs to the crema on my shots, because the coffee was part of his experience and I was the one pulling it.

The machine looked like a chrome locomotive. It hissed like the B and D trains rolling into Fordham Road, on the way to Arthur Ave, the real Little Italy where there is still an Enzo’s. The gauge hovered near nine bars like a held breath. I would knock the portafilter against the rubber, dose, tamp just so, lock it in, listen for that first tiger striping in the stream, then count quietly in my head and let it run a little longer if the beans were fussy. Purge the wand, I never let stale milk touch the pitcher. A cappuccino lives or dies by the foam. In Albanian we call that shkuma, which is the right word because when you get it right it is not just foam, it is architecture. If you mess that up, the cappuccino is cooked as the kids say today.

But more than that, if you mess up the espresso, God forbid if it’s thin, then the espresso martini is done and that is a more expensive mistake. Because now you’ve cooked two different drinks at once.

Back then I did not think too hard about why coffee was so special, I just tried to make it as well as I could.

But since then coffee and I have gotten to know each other more like two people who keep bumping into each other. And have no choice but to become friends. The story starts in Ethiopia, which is the origin point for the two big-lineage beans, Arabica and Robusta, and also for the goat-herder named Kaldi in the ninth century for whom myth has it he noticed his animals getting lots of energy after munching the plant’s red cherries.

But the chemistry behind coffee is less folklore and more like a heist. Caffeine impersonates a molecule in your brain called adenosine. Adenosine wants you to feel done for the day. Caffeine shows up wearing adenosine’s outfit, takes the seat, keeps the lights on.

Hank Green goes into a little more depth on the chemistry of caffeine in a YouTube video. It’s a fun video, it inspired me to write this because he calls caffeine a bug poison.

But I think, for coffee, it is more nuanced than that.

If poison were the whole story, the plant would have stopped at bitter leaves. Coffee went further. It braided sweetness around the seed, scented the air, and tuned the chemistry until attention felt like clarity. Call it self improvement if you want. Hank explains the toxin to bugs well, which is mostly due to dosage. But I am arguing coffee’s trick is not menace, it is magnetism.

What made us build a civilization of morning cups was sweet fruit, memorable aroma, energy, and a seed that does no harm to humans at normal doses, and asks to be brought along.

People obliged because mornings worked better with this plant. Traders packed it’s seedlings, first in the middle east, then growers coaxed them in new soils, and by the time the boats finished crossing the oceans, the outcome was inevitable.

Coffee took root in places that were not Ethiopia and became the kind of immigrant that makes itself useful. In South America it loved volcanic soil and high altitudes and mornings that start in fog. The plant did not plan port cities or plantations or the TikTok’s with the fancy coffee setups. It slowly made itself more useful and humans did the rest.

But I noticed that this keeps happening to me in smaller, human-sized ways too.

One night at Enzo’s, a regular who loved my espresso martinis said, “Louie, did you not graduate with a computer science degree, why are you still bartending here?” It was 2008 and the job market felt like a locked door. But after that conversation, she introduced me to her son who ran a team of software engineers. He hired me.

Coffee did not write the offer letter, but it mixed into the espresso martini I crafted that made the conversation happen, which is the kind of causality that feels silly until you notice how many other things start that way.

Years later, in Bentonville, Arkansas, I walked a town square that felt like a coffee factory in disguise. I was brought there by the execs after Walmart acquired Jet, I must’ve been useful to them in some way. The Waltons have their world there, and inside that world there is serious coffee. I tasted beans people spoke about with the reverence usually reserved for aged scotch. Lineage that traces to the old stock. Small-batch lots from Central America with judges’ ribbons. A cup in a place that looks nothing like Ethiopia, linked to it by the bean, heat, water.

But each time I bump into coffee it teaches me something new.

But perhaps the most important lesson is become useful, like coffee, and doors start behaving differently.

In fact, any time I have been invited into anything it was usually because I was useful in some way. When I was invited to become a partner and help build the Small Bets community, it was not because I had a master plan. I had been living that life already, creating a handful of projects, some worked and some did not, but living the philosophy and learning. I made my first hundred thousand dollars in internet money that first year by shunning the “bet it all on one thing” VC funded path. I must’ve been useful in some way, or I wouldn’t have been invited. But more recently, that experience with helping build small bets led to being invited to help build the Act Two program.

Coffee did not know it would be hauled across oceans and planted on slopes in Colombia and Guatemala and Brazil. It iterated. A little less toxicity for the animals that help, a sweeter fruit to bribe a bird. It did not know a mayor would praise an Italian restaurant in the Bronx or that some kid behind a bar would think foam actually mattered. Coffee was only becoming more itself, more useful, more likely to be brought along.

There is a lesson there for me and for you. Nobody knows where you will be in a few years. You might end up somewhere that feels nothing like where you are now, and still every part of the path will be visible in retrospect.

So become coffee. In the thing you are doing now, get a little better each time. By becoming better you become the kind of useful that people want to bring along. And you need people to accomplish anything worth accomplishing in this world. If the shot needs twenty-eight seconds because the beans are fussy, count the seconds in your head and give it twenty-eight. If the foam invites architecture, build it. If someone needs a hand on the next release, write the doc and ship the fix. In the end, coffee is just iterating on and offering a fruit. Offer fruit.

I drank a lot of coffee to get here, over many mornings and some nights. The great secret at the end is not a secret, it’s simple. But in the end just give me some black gold. No milk. No sugar. Nothing. Just me, and the coffee, and the computer, and I’ll try my best to make something a little useful.

Thanks for reading.

—Louie

P.S. you might think me bougie about coffee after all this. There is a meme that good coffee is just coffee:

I have been all over the curve. I have had the oat milk cortado silky as satin in downtown NYC, the single-origin pour-over that tasted like a grapefruit took a philosophy class, the macchiato so tiny it felt like a secret. The Turkish coffee that can be used to tell fortunes.

But now I circle back to black. Just me and the cup. No milk, no sugar, no story besides the one the bean has to tell. And it works great.

One of the most interesting people I have come across recently is Professor Jiang Xueqin.

In one of his videos he says that wheat domesticated humans and not the other way around.

He goes on to say that the great farming revolution of 10,000 years ago, where humans stopped being hunter-gatherers and settled to cultivate land, was actually a terrible deal for humans and a great win for wheat.

Prior to settling down to farm wheat, humans had rich diverse diets and food sources all around. Afterwards, not so much. Populations exploded, humans needed far more children to cultivate their land. And in turn needed even more wheat to sustain those populations. Hunter-gatherers had better teeth because wheat grinds down your teeth. They had far less disease because early farming conditions were terrible, living next to pigs, mud, and bacteria.

But perhaps the biggest shift is that early farmers had to put in incredibly long hours on the farm.

But the wheat got taken care of, got watered, got re-planted every year by humans.

He adds “to this day, we cannot tell you, or give you a good reason, why early humans made the flip from hunter-gatherers to farmers.” He says every guess so far is wrong.

Well, I think I can tell you why humans made the flip.

You see I am convinced we humans will trade away a lot of things for a little bit of certainty. Many humans will trade away most of their time, some will trade away their relationships, their health, their freedom, just so they can be a little more certain about where the food will come from next year.

Modern full-time work arrangements aren't too different from that early deal we made with wheat crops.

That’s because modern work arrangements with many companies tend to be long hours, and not just any hours, it has to be the hours they want, maybe the very best hours of your day. 9-9-6 if you are unlucky, but 9 to 5, at least. And in most cases the work has to be away from your family, in an office. They will make you sign things that say they own everything you produce. They’ll muzzle you under threat of firing if you say the wrong thing outside of work, at least the wheat never did that. And even if that work arrangement is not great for your health, sitting down all day, nobody cares.

Do you want that bread or not?

For that little bit of certainty, look how much we give up.

I’ve been there, I know all about it. I was an early employee at a startup when my first two kids were born. As an example of what's expected, I had to jump in and fix a production issue while my wife was on the hospital bed about to give birth. I stayed home after my first baby for about a week and then it was back to 12-hour days on the wheat plantation.

Look, don’t misunderstand this, I'm not shitting on work. We gotta work, we gotta eat. And good work gives our life lots of meaning. My family has a lot today because I worked like a dog back in those days. But there has to be a better way. And look even that story about jumping on a production incident at the hospital, I was a hero to my colleagues for doing that work back then, and it makes for a good story now, so I don’t regret it.

But my bigger point is we gotta work smart, not just hard. And it’s hard for me to say that the modern full-time work arrangement is the best deal you can get.

Because I’d wager good money that if you are willing to forgo some salary, and a bit of certainty (this is the hard part!), you can probably earn close to 80% of what you’d make working for a big company on your own. With a much more flexible work arrangement. And while having lots of personal freedom.

It’s the way I’ve been living the last few years. Prior to taking the plunge to be an entrepreneur, self employed, hunter-gatherer, whatever you want to call it, I might not have believed it either. I still can't believe it honestly. But somehow it's been working out.

Indie Hackers recently ran an interview summarizing my last few years on this journey, you may find it interesting, if you’ve ever thought about this.

One of the benefits of making a living this way is that my third kid was born this year and I’ve been around the entire first six months so far. This has been an incredibly rewarding time to spend with him.

But don’t misunderstand, I'm still working. I'm still building stuff. And for sure the downside is I make less money than I used to, and maybe it's a little less certain.

But now I work a few hours in the day, a few hours at night, on my own schedule. But they are good hours on stuff I want to work on, and with people I want to work with.

One of the things I am working on right now is helping the Act Two team (the folks who built Write of Passage) by teaching a Vibe Coding track for beginners in their upcoming five-week live program.

But Act Two isn’t just Vibe Coding, although that’s my favorite lane. So far, people have already joined to start a podcast, launch a YouTube channel, write a book. A lot of creative projects getting built out. It’s less about lessons and more about building the thing: accountability, feedback, & community so you actually ship in those 5 weeks.

Obligatory sales pitch, but if you are interested: the 5 week live program starts Wednesday this week and it would be good to have you.

By the way, even if you can’t join Act Two because of timing or whatever, I put together this recording of a recent workshop I ran that walks a beginner through installing Claude Code, building a first app, and deploying it. It should help even if you’re non-technical.

But to go back to Professor Jiang for a few more seconds, if he’s right and wheat domesticated us, then wheat is like one of the first startups to find product-market fit and onboarded humanity as its labor force. The modern full-time paycheck is just the enterprise contract version of that deal. Guaranteed calories in exchange for root access to your calendar, and your best hours, and everything you make.

My tiny rebellion is simple: trade a little certainty for a lot of life, more learning curves, more shipping, more ownership, and the ability to wander off for baby giggles.

If you’re feeling farmed, maybe you should try a season of hunting (projects, not mammoths!). Worst case you come back with good stories and better teeth.

Thanks for reading.

—Louie

I got into game development these last few months and with AI to help me, this felt like a great time to do it.

Games are interesting to me because it seems like the most natural use case for AI.

It feels to me like the whole world is focused on improving AI for productivity reasons. I understand why, of course, productivity moves GDPs.

But we are trying to get this imperfect tool, AI, that is non-deterministic, that hallucinates, that makes mistakes to work on all of our critical things, to do our most critical work for us. Everyone wants to use AI in healthcare and every other part of the critical economy. Only a few people seem to care all that much to use it in entertainment, the one use case where the stakes are low and hallucinating can be considered a feature.

Anyway, my “vision” that drove me to game dev now (if you want to call it that) is that the current state of AI models is perfect for games & entertainment. Not just to help build the game but also to actually be in the game, imagine characters powered by LLMs etc.

But that isn’t the only reason I got into games the last few months.

I have always loved games. I ran teams of gamers since I was a 14-year-old and took them all the way to the Chicago Major League Gaming champions. My video game crew was in the top 10 worldwide of game battles for years on end. Video games are where I learned to lead people. It is where I learned what motivates them, what gets them to work as a team, and how to turn random strangers into champions.

Later in life these leadership skills would prove very valuable when I managed engineers. And so I owe a lot to video games.

And my friend reminded me recently that games are how primates learn critical skills. Not just primates, lion cubs learn to hunt by playing games too. So games are serious business.

But while it might be “just games” to some, to me it’s probably also a huge reason I got into computer science in the first place. Since I loved games so much, I wanted to learn how to make them from a young age.

But somewhere along the way I realized I could make a lot more money building software for big banks & hot startups and forgot about games. I think this is a common story. And it does not help that software engineers that work at game companies work long hours and make very little money; they get taken advantage of for their passions.

But while I know I would never do game dev for EA or Activision, there is still an itch back there that was waiting to be scratched to do it for myself.

Now that I have kids, I get an insane amount of joy having them to help me build games. In one game I had my daughter draw the characters, then we used AI to enhance them. My other daughter voiced over all the things that happened.

I mean, this stuff will be a real joy to me decades from now, so of course it’s worth pursuing, even if commercially who knows if I could ever make any money with games.

But having my kid understand that the music classes she is taking are not just for no reason, we can use that stuff in interesting ways, like in our game. Or that her drawing ability can drive the art direction of a real product she can play regularly on her iPad, this kind of stuff is priceless to me.

All of this would be significantly harder for me, most likely impossible, to pull off in the timeframe I have pulled it off without AI. I mean, just in a few months I have built 10+ games on top of some other apps

I’ll share below.

Here are two games that I built with heavy AI help, that are live on the web that you can try right now:

ZansCards.com

Comboku.com (working title!)

I’ve built more games, but will keep it brief for now because I have more I want to tell you about this building with AI world.

That’s because games are not all I’ve built these last few months. Here are two more things that would’ve been nearly impossible to do in the timeframe they got done without AI:

I built a full-blown Google Analytics replacement that basically has all of the functionality I could want out of a web analytics SaaS. Since I needed it to monitor traffic of my own sites, and Google analytics 4 is pretty terrible, I decided to make it a SaaS. After all, why not put more buy buttons on the internet?

Even with my experience, I estimate something like this SaaS app would’ve taken me a few months to build; I did it with AI in under a week. Of course the code AI produced is pretty average, I spent most of that week taking it from average to more than that. Most of the time was spent making it production ready, I use it on my own stuff, and it has a few other users now too.

lightweightanalytics.com

I built a voice recording & transcription app for the iPhone, I built it as a native iOS app. It is live on Apple app store.

I have never in my life built an iOS app; I never programmed Swift before. And this is a common theme with the things I’ve been able to make the last few months. I can program in a few programming languages but truthfully, I still don’t know how to program in Swift. But I learned enough just by asking AI stupid questions to build this.

But this is one of the greatest strengths of AI: there are no stupid questions.

If you ask a question about code, it’ll respond to you with “great question!” and proceed to give you a highly customized answer that is perfect for your dumb question. A human might've gotten offended if you asked such dumb questions that you could've googled and piecemeal the answer to yourself.

But probably a classically trained iOS engineer (and I envision my friend Martin, who built the entire JetDotCom shopping app by himself in 2015 in Objective-C when I say classically trained iOS engineer) would look at the Swift code Gemini, Sonnet, and I wrote and think, “Man, Louie, this is pretty average.”

I open-sourced the WalkWrite note taking app so you can see for yourself, and maybe he very well might look at it after this post and think that.

But nonetheless, Apple approved the app and it is live in the App Store. And you can use the open source version as a template and starting point with claude code, or similar agents, if you want to build an iOS app that hosts local models etc.

But regardless of the average code, the app works and solves a very real problem for me. I was paying $50 a year for Otter to transcribe my articles on my walks, and Otter was shipping my voice notes to a server for transcription. But that $50 a year, etc., is not even the real problem, the real problem is that Otter was trying so hard to do so many things when all I wanted was to transcribe my articles on my walks. My app uses a local AI model to do transcriptions on your device, state-of-the-art Whisper, and that's all it does. It's not interested in making millions as a VC backed thing, it was built in a few days with AI for me to use. If others find it useful, great.

If you are interested in the nitty gritty of all this, I recorded myself building with AI and put it up as a youtube video. In the video I built an eCommerce site for a friend, end to end, with AI in an hour. The eCommerce site will integrate with stripe, it has its own cart, built from scratch, just me and the AI. That video might be useful to see the decisions I made along the way in driving the AI agent. It is how I normally drive these agents.

So where is all of this AI stuff going?

I don’t know. I just know that at the very top meta level, if someone like me can build all this stuff in a few months, a lot more people are going to be expected to build a lot of stuff soon.

Putting on my “Charlie Munger’s multi-disciplinary hat” on: I recognize a capital-T truth here, the world is competitive, and not just markets. I mean nature itself is competitive, and as Munger said the more domains something holds true in, the more likely it is to be true nearly everywhere: and competition holds true in a lot of domains, you cannot escape competition.

So because of that, I feel certain most are only a matter of time away from being expected to produce more with AI, in most domains, one might only be able to be competitive if they are using AI well.

But what does being able to use AI well even mean?

Well it means understanding its strengths and weaknesses. To be able to take average outputs and make it better, quickly.

The truth is that AI as it stands today has lots of strengths but lots of weaknesses too.

Being able to use it well, to me, means understanding those trade-offs. Being conscious of the fact that a lot of work can probably be offloaded to AI, but not everything. Making the judgment calls as the AI agent works on my codebase is still critical; it could go off the rails in ways you cannot imagine. It will literally delete your whole codebase if you aren’t careful.

But still, it’s worth using, and it can do a lot well. So something as simple as: don’t let it run intricate and crazy git commands against your codebase, don’t let it run critical queries against your production DB if you have users, not without vetting those queries or changes anyway.

But ultimately, even though I think we are far from ASI (Artificial Superintelligence, I think this is the new marketing term for AGI) and AI replacing everything humans do, I am still very bullish on these tools. I still think they are immensely useful.

But the area they are most useful is in allowing a total newb, like me with game dev, to get somewhere fast, to bring that newb up to the average. For example, as a total newb at making music you can get some decent sound FX with AI; as a total newb at art you can get pretty decent art from AI; as a total newb at programming you can get a decent app out of AI.

But it's not just useful for areas you are a total newb, you can push AI further in ALL of these domains if you aren’t a newb in the domain, you can get AI to give you the average then spend the time to take it a level further. Like me with the Analytics SaaS app.

So this is why it's worth getting good at driving these AIs, in the domains you are a newbie in and in those that you are an expert in too.

But it’s got its limits of how far it can go; it’s up to you to find those limits. It’s also up to you to decide, OK, I’ve taken this far enough, now I need to get expert human help. I think this is the area I am most interested in.

Even in the games I am making, I dream someday I’ll be able to have something hit so I can hire or get other people involved in helping me make it even better. I dream I could hire a real musician to make some of the sound FX real, or a real artist to redo some of the art so it is unique, but I cannot start there. It is not feasible; it costs too much, and AI is too cheap.

And I suspect the same will apply to devs: a vibe-coding app maker that somehow gets to money probably dreams of getting a real engineer to fix up their security, make sure their architecture scales, and so on.

As my friend recently summed up: AI tools are a regression to the mean. If you’re below average in a domain, AI will make you average. For my friends who have never written a line of code in their life, becoming an average programmer at a the cost of a monthly subscription is a pretty good deal. But the opposite is also true, if you are above average in a domain then AI can bring down your work to be average, if you don’t intervene. You need to build up your judgment and experience to figure out where AI has reached its limits.

I think we are quickly moving from a world that had heavy constraints on expertise to get started with anything complex, to a world where the constraints now are on having good ideas. It does not mean expertise is worthless, real expertise will probably become more valuable as more things get to money.

But the other constraint in this new world of building with AIs is that it requires a willingness to take action on those ideas. And taking action is still hard.

Just because most people can, does not mean most people will make stuff with AI. As Pareto famously observed 20% of the pea pods made 80% of the peas and the other 80%, although they could make peas, stood by and produced very little.

I am observing the same thing in this new world where more people can make more stuff. Not everyone is taking advantage. There is a huge incentive-caused-blindness, some people don't want this tech to be that useful because it might hurt their job. So they play it down, say it does not work right, point out the times it deleted a database. Those tweets go ultra viral. Some people hate this stuff because they feel it's stealing from artists. Some other people find it makes slop.

It is my contrarian opinion here, from the trenches of working closely with AI, that all those takes are wrong. They’re not wrong about what they are saying, the tool might have very well dropped the DB. But they are wrong because they are blaming a tool, and putting all of that on what is basically just a useful tool.

But either way, the tools themselves won't care if some chooses to ignore them. And because so many are still ignoring them, that can be your competitive advantage.

There has never been a better time than now to be in the twenty percent of the pea pods making stuff.

— —

P.S. If you are a beginner at making apps with AI, I am teaching two free workshops this week on how to make an app in an hour with claude code.

Tuesday, 7pm ET: https://lu.ma/jztk5hdh

Thursday, 1pm ET: https://lu.ma/w46n7r5m

We will be vibe coding with the Act Two guys, Will & Dan live. This will be a sort of hands-on workshop, during that hour we will be building a very simple app, and deploying it live on the internet.

I’d love to have you if you are free.

Thanks for reading this far!

—Louie

Charlie Munger once said, “I am no prodigy, no genius, and yet if you look at my life, I was able to obtain prodigious results out of it.”

Charlie then proceeded to attribute his prodigious success in business, investing, relationships, and life to his multidisciplinary thinking.

But what does it mean to become multidisciplinary?

It may sound overwhelming, but in Charlie's own words, becoming multidisciplinary simply means "gaining at least entry-level knowledge in all the various fields and using that all the time." I equate this to taking the 101s and 102s of college classes, but in all the different majors, and finding use for the ideas.

When written like that, it sounds so simple. And it is. 

But in Charlie’s own words, “so many people either won't do it or won't take it seriously enough.”

But first, Peter Kaufman, Charlie Munger's book editor, mentee, and a billionaire himself (although I have never seen him brag about his billions), once said: 

"The beauty of deriving things in a multidisciplinary way [is that] you can't be wrong! When you see something line up [across disciplines], it is like three bars on a slot machine at the casino. Boy, did you hit the jackpot!"

To illustrate this "multidisciplinary Jackpot" idea, I will steal an example from Kaufman himself.

Kaufman once told a crowd to take copper:

We learn in the chemistry discipline that copper has a 3.0 hardness on the Mohs scale of hardness. Copper, by itself, has some desirable properties, like rust resistance, but as the Mohs scale tells us, it is not very tough. That Mohs scale of hardness goes up to 10. Baby powder is a 1, and Diamond is a 10. By the way, this rust resistance property of copper is a big reason copper is used for pipes that carry drinking water these days.

But back to the example, after you have some copper, Kaufman says to take some tin:

Tin is an even less special metal than Copper. I can scratch my tin bar with my nails. On that Mohs hardness scale, tin comes in at 1.5. But it turns out that these two metals, copper and tin, for some reason or another, are not really found anywhere near each other in nature. So you'll have to go out looking for them in different places to find them.

But a few thousand years ago, an ancestor of ours had the bright idea of finding copper and tin and then melting the two together. 

It turns out that when you melt Copper and Tin together, you get Bronze. Yes, the very same Bronze that spawned the Bronze Age. Bronze is also the very same stuff that comes after Gold and Silver in medal ceremonies.

Bronze might mean third place in the Olympics, but it turns out that bronze is a pretty special metal that has a lot of desirable properties. Here is what the Encyclopedia Britannica has to say about Bronze:

"Bronze is harder than copper as a result of alloying that metal with tin or other metals. Bronze is also more fusible (i.e., more readily melted) and is hence easier to cast. It is harder than pure iron and far more resistant to corrosion.

The substitution of iron for Bronze in tools and weapons from about 1000 BCE was the result of the abundance of iron compared with copper and tin rather than any inherent advantages of iron."

But here is the kicker: Kaufman says depending on how you mix Copper and Tin, you don't get the 1.5 hardness of tin and the 3.0 hardness of copper divided by 2, which the math discipline tells us we ought to expect about a 2.25 hardness on the Mohs scale (1.5+2.5=4.5, then divided by 2 it is 2.25). 

But instead, with Bronze on the Mohs scale, we get a hardness of 6. This defies logic.

And as Britannica tells us, Bronze was used in armor, and it is tougher than iron and even tougher than steel. 

This extra hardness, which seems to pop out of thin air when you mix these metals together, is known as an emergent property in chemistry.

But if you think about it a little bit, mixing copper with tin is not too different from mixing what you already know with some other discipline. Doing what Munger told us to do, “become multidisciplinary.” Who knows what emergent property will pop up when you take some psychology courses or learn more biology, engineering, philosophy, history, economics, physics, or math?

It turns out that mixing things together does not just work well in chemistry, as we see with copper and tin. It also holds in Biology. Mother Nature is so fond of mixing genes that it made sexual reproduction the dominant mode of producing offspring across nearly the entire animal kingdom. And it did this over asexual reproduction, which is less complex and easier to pull off. That's how much Nature values mixing things.

In fact, to pull a little more from the biology discipline, who would've thought that a bunch of single-celled bacteria banding together would eventually lead to animals, trees, and us humans? Then who would’ve thought that those things striving for survival for a few billion years would eventually lead to consciousness, free will, and thinking humans?

This is not 1+1=2, not even 1+1=6, but 1+1=1000 or more. It defies logic.

You cannot look at a bunch of bacteria and predict that in a few billion years, you’ll have us. You can only reason about that after the fact. This is an example of an emergent property in biology.

So, if emergent properties and mixing things together work so well in chemistry and biology, then why shouldn’t it work in your life? This is a jackpot idea that is lining up across multiple disciplines. It’s going to work.

But before I let you go, I want to give you one example from my own life of mixing skills together and how that's worked for me. I used to be afraid of looking foolish publically. I still am, but I got a little better, and I'll tell you how in a second.

Many are afraid of looking foolish. This is the reason why Daniel Kanhaman got the Nobel Prize in Economics: he observed that we all have some aversion to loss. From observing people, we can see that some are afraid of losing status, some are afraid of losing people, and some are afraid of losing money. In fact, losing hurts some so badly that they might never admit they ever lost.

But far worse than that, for some, just the thought of ever losing makes them never risk anything at all.

Lou Brock, who once won the Major League Baseball record for the most stolen bases, said, "Show me a guy who's afraid of looking foolish, and I'll show you a guy you can beat every time."

But even before I learned, via Kofman, that Lou Brock said that, I felt the fear of looking foolish hold me back from my potential firsthand. But I also felt it in my gut that if I could somehow overcome that fear, even a little bit, there might be a lot to gain on the other side.

So I took classes on writing and sharing online. I sought out this thing I wasn't born with, and it wasn't anywhere near me in my natural environment. And I learned as much as I could about it. I sought out people who had overcome it and others who were trying to overcome it. I became friends with many of them, and I put myself out there more. I forced myself to teach strangers, I forced myself to share, and in the process, I overcame a little bit of that fear of looking foolish.

But more than that by mixing my engineering skills with public communication skills, I feel like I inadvertently became Bronze. Things happened after that I couldn’t have predicted. In that process, I made money, made friends, and more. But more importantly, by being a little less afraid of looking foolish and now having fewer regrets, I feel more fulfilled.

Now, I can't tell you what disciplines to mix in for you to gain your emergent properties.

Only you know what disciplines to go looking for so that you can fulfill Munger’s commandment and become more multidisciplinary.

Only you know the missing ingredients you may need to search for to become Bronze, Diamond, or maybe something else entirely we don't yet know about, and that might be even tougher.

That’s all I’ve got for you for now, until next time.

—Louie

p.s. You can reply to this email directly, and I will read it.

I've taken some risk in my life, especially in the last few years.

For one, I quit a job that would've paid out over $700k in total comp in 2021 just for showing up—and maybe a million if I'd exceeded expectations.

That's a lot of money to risk leaving behind to chase your dreams of entrepreneurship.

But don't cry for me, because my story is kind of like that one Lil Wayne verse: "Hope I don't look weak, 'cause when a wolf cry wolf. You still see that wolf's teeth." Keep in mind that I got to that total comp by taking risk in the first place.

Years ago, around the midpoint of my career, I internalized that it takes risk to get ahead. After that realization, I took a leap of faith and my first big risk. I took my first huge pay cut, huge, at least for me back then. I left a reputable job at a big, stable bank, Bank of America Meryl Lynch, for an unknown startup with 20 engineers.

But that startup grew like a rocket, and then my career grew like a rocket. That startup was acquired by Walmart, which increased my compensation to the levels that I then left behind in 2021.

So, it took the risk of leaving the bank for the startup to get the personal growth that I needed to be worth much more a few years later.

It might take some level of risk for you to get the personal growth or the lifestyle you may be seeking too.

But taking risks blindly is foolish.

Mohnish Prabai, who wrote the Dhando Investor and is a student of Charlie Mungers, recently said, "The best entrepreneurs are risk reducers, not simply risk takers."

But I'd argue that it's not just entrepreneurs; the fastest career movers are risk takers and risk reducers, too. And reducing risk is what the small bets approach to entrepreneurship is all about, too.

I decided to write this piece because I'd like to inspire you to take more risks, but I’d also like for you to be prudent about that risk. That’s why I am going to recommend a few books that changed how I think about taking risks.

You may already know some of the benefits of risk-taking, but if you'd like a reminder or some more convincing, read this next section. Or, if you are convinced, skip the next section entirely for the book recommendations.

The Benefits of Risk Taking in Life

Risk taking will get you out of your comfort zone.

Risk taking may open more opportunities for you, as it did for me.

You will definitely become more resilient and robust from risk-taking. But risk-taking may even make you more antifragile. Almost all of the learnings and growth in my life came when I was out of my comfort zone and taking some level of risk.

Risk taking is the sort of thing that brings us new innovations. We find new ways to do things personally, but it can also bring more innovation to the organizations we work for or build. All of the nice things we have as a society we owe to some degree to the risk taker.

Risk taking is a muscle you were born with; our ancestors took and managed risk frequently, or you and I wouldn't be here. But like any other muscle, risk-taking has to be trained. You also become more fearless when that risk muscle gets stronger; I know I did.

The Best Books on Risk Taking

This list is the best book on risk-taking that I've come across. They are the best either because the person who wrote it took prudent risk and the lessons can be gleaned from their life story or because the author took great pains to spell out their insights on risk taking.

Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger

This book will enmesh you into the prudent risk-taking philosophy of Charlie Munger & Warren Buffet. You will get insight into both men and what's made them so succesful in the world of risk taking.

One example of a risk reduction strategy you will get from Charlie Munger is the “Too Hard Pile.” If Munger (and Buffet) did not feel they fully understood the risk they were about to take on, they simply put it to the side on a “too hard pile” and let someone else take that risk. I get good ideas for various small bets I could place, but so many of them require too much resource or have so much unknown to pull off, that now I simply say put it on the “too hard pile” and wait for one suitable for my resources and understanding today.

I think Naval, who wrote How to Get Rich Without Getting Lucky, was wrong when he said "Poor Charlie's Almanac" is like an MBA. This book is a full-on STEM + ECONOMICS + BUSINESS + MARKETING + PSYCHOLOGY++ degree. It is like the 101 + 102 (entry-level college classes) to a multidisciplinary life.

But the book itself is just the entry classes to that degree. You need to follow the rabbit hole and read the recommendations it gives you to graduate. But even just the entry classes will help you immesenly.

Also, it's good to point out that Munger was a ferocious reader. He spent most of his 99-year-old life reading. So you know the books he recommends you read aren't just going to be good. They are going to be the best ones from a lifetime of reading.

To say Charlie Munger changed my entire perspective on risk-taking since I stumbled on his ideas back in 2019 would be an understatement.

Antifragile by Nicholas Nassim Taleb

It is as if Nassmim Nicholas Taleb is somehow a direct descendant of Plato or Aristotle.

Or maybe it is even better to think of him as one of those ancient philosophers reincarnate. 

But Taleb has decided to grace us with frameworks for thinking about risk in the modern world that are impossible to find anywhere else. In his books, Taleb leaves no stone unturned in terms of risk, from the risk of over-relying on employers to financial risk, to societal risk, to life and death itself.

Taleb has written multiple books, all of which are worth reading. But this book, in particular, Antifragile, presents a very valuable idea to the risk taker. By understanding and studying things that are antifragile and emulating them where possible, the risk taker, you and I, will fare much better.

Becoming more antifragile ought to be the goal of any risk taker, not just to survive a risk so another one can come and wipe us out later, but to benefit from it and face the next one even stronger.

In my own life, he has impacted my thinking about becoming diversified about building up multiple income streams. Sometimes, when one goes down, another goes up.

Taleb takes great pains to explain his insights to us. But he himself has discovered and lived many of these ideas in a prior career as a trader. That is what makes his books so special.

Gut Feelings: The Intelligence of the Unconscious by Gerd Gigerenzer

In this book, Dr. Gerd Gigerenzer proves without a doubt that trained gut instincts, or rules of thumb, are faster and better at calculating things on the fly than even a supercomputer loaded with all the data available in the world would be.

The book itself can feel dry at some points, but it's deeply interesting how important the gut instincts you are born with are. And how important the ones you choose to train up are in your lifetime.

I spent most of my managerial life thinking that data-driven decisions were the only good way to make decisions. But this book proves without a doubt that this is simply not true. No amount of data on a spreadsheet can capture what the trained gut can capture almost instantly.

From this book, you’ll learn how gut instincts work, how they can be trained, and when to lean on them. All of which are very important tools in the risk-taking journey.

An honorable mention here is that this same author wrote a book called Risk Savvy, which I also read, but honestly, Gut Feelings is so much better and more convincing that it's all you need on this topic.

Influence by Robert B. Cialdini 

This book is not about risk taking at all. It is a book about psychology.

You might not think so, but most of the risks we face in this world come from people.

Understanding human psychology is part of prudent risk taking. Risk comes from people not behaving the way you expected, not going along with your plans, not wanting what you make, and so on.

This book, Influence, is a little long, and for most of us without any background in psychology, it should be digested slowly. But it is the best psychology book that I've ever read. Even if only a few of these ideas stick, or even if you only read half the book, I promise you will be better off in your risk-taking journey.

This book is so good that Charlie Munger gave a free copy to everyone he knew. Munger also donated a class A share of Berkshire Hathaway, at the time worth $50-70k, to the author. That same share, if the author held on to it, is worth $660k today.

Thinking in Bets by Annie Duke

Annie Duke, who had a successful poker career and won millions, wrote an incredible book about the thinking that's incredibly helpful when we're taking risks.

It's a good book on many levels, but I recommend it on this list because it is the perfect book to connect that so many things we do in life are about odds and probabilities.

Poker is one of those games that requires both skill and luck, much like life itself. But even though poker isn't exactly like the risk you & I might be taking on in life, most of the time, we won't even know our odds in life. This book is still great.

Because even if we don't know our odds, we can intuit that risk in life has some sort of odds at play, and there may still be things we can do to improve those odds. From that lens, the way of thinking that Annie Duke surfaces in this book is a valuable tool for your risk-taking toolbelt.

A mention here is the book "Little Bets," which has no real relationship to our Small Bets approach to entrepreneurship or to Annie Duke's book. It is about how many entities (comedians, artists, businesses, etc.) practice & intuit things in a low-stakes environment first, then take them to the big stage. The book is interesting, I read it. But, unfortunately, does not make my top 10.

Skin In The Game by Nicholas Nassim Taleb

This book is about the idea that someone taking a risk, who has something to lose, will find ways to navigate risks that might simply be impossible for an outsider looking in to do.

All of that is to say that you will view risk very differently when you are actually taking it rather than when you are theorizing about it. You will learn about your risks at a faster pace. You will move faster. Your organism is pre-programmed to do everything it can to navigate the risk it faces successfully, and the only way to tap into that programming is to have something at stake.

Skin In the Game will teach you an important tool that you may not consider until you are taking your risks. It will convince you that you are more powerful than you may realize when you have something on the line.

I wish I could put at least 4 of Taleb's books on this list. But then we would be missing some valuable other tools that are worth having in our toolbelt for risk-taking as well.

Genghis Khan and the Making of the Modern World by Jack Weatherford

Genghis Khan, born Temüjin, was dealt one of the worst starting hands in the world.

He was born dirt-poor in a place with little more than rocks for resources at the time. Among the Mongols, he wasn't born anywhere near the upper class; he was dark bone, their way of classifying one as dirt.

But yet he rose up to lead his people and build one of the biggest empires in history, all within one lifetime.

The amount of risk this man took in one lifetime, as described in this book, and the amount of risk he put his people through will leave you flabbergasted.

But when you come from nothing, and your people have nothing but rocks to eat, you too may consider riding horses over ice lakes through the winter for five days straight. You, too, may consider milking your horses to stay alive on that journey, only to get to the other side full of rich European Cities so you can fight a war against them. And totally destroy their armies and pillage resources so your people are no longer starving.

Will Durant, in his incredible short book "The Lessons of History," said humans spent close to two hundred and ninety thousand years inside the jungle. And so far, we humans have spent only about 10 thousand years outside of the jungle. The instincts from the jungle are too strong in humans. Almost every societal construct we’ve created since getting out of the jungle, from marriage to religion, has been to try and tame our instincts from our days in the jungle. Will Durant believed those jungle instincts simply don't serve us as well as they did and are counterproductive to a functioning society, and I agree.

But Genghis Khan would disagree. He leaned hard into those take by any means, kill or be killed instincts from the jungle. Genghis climbed from the very bottom to rule almost the entire world with a few simple principles that could’ve come right out of the jungle.

I know some people feel the world has changed today, that people are not as savage anymore. But I disagree. Don't forget, Genghis was riding over ice lakes and pillaging the world only a few hundred years ago. And you can see with the events going on in the world today that nothing’s really changed. It's simply not enough time for any type of change to occur to human nature.

This book is enlightening from a risk-taking perspective because of the amount of risk Genghis participated in, yet he died a fairly old man. Second, it proves that risk-taking is relative; he who has little to lose is liable to do crazy things. I don’t admire Genghis’s savagery. But you and I may be competing against people like that in the world at times, and recognizing that and managing for that is an important part of risk-taking.

Finally, this book makes you appreciate and want to defend the societal constructs we’ve created to try and keep the savage nature at bay.

It's worth noting that if I had more room, I would've included "The Lessons of History" by Will Durant on this list. It's kind of funny to even think of history books like these as helpful for risk-taking, but paraphrasing Will Durant here, who said it perfectly: history is the true philosophy of humans & all things. Unlike what people tell you they think or what they think they think, history is what they actually did. And we can learn a lot about risk-taking from that.

How to Fail at Almost Everything and Still Win Big by Scott Adams

This book by Scott Adams introduced the modern world to the important concept of talent stacking, which is not that different from what Charlie Munger preaches about becoming multi-disciplinary.

In his own life, Scott Adams figured out that he wasn't the best businessperson, cartoonist, or storyteller in the world, but he was pretty good at all those things. But combining them made him one of the best business cartoonist storytellers in the world, which is how he got his success with his Dilbert cartoons. 

Talent Stacking may not seem like it, but it is a risk reduction strategy because becoming the top 90% at something is a lot easier, and far more likely, than ever being able to become the top 99%. The top 99% often require natural talent that you may not have been born with.

This is an important tool to internalize for the risk taker, you and me, to find ways to increase our odds.

An honorable mention here is "The Almanack of Naval Ravikant," which frames many of these ideas about leverage, compounding, ethics, and so on in a way that is very useful to the aspiring risk taker.

The Autobiography of Benjamin Franklin by Benjamin Franklin

The conditions that created America were something special. You had these people that left crowded cities, like London, for an untamed new world.

A new world full of freedom, danger, and possibility. But all of it they had to grab on their own, and all of it entailed risk.

Benjamin Franklin will take you to that world with his own story and, in his own words, about how a boy from poverty who didn't even go to school ended up becoming so multi-disciplinary that he became world-renowned in multiple disciplines.

How he went into business with a printing press, how he opened up a newspaper. How he published an annual almanac that ultimately made him wealthy and allowed him to chase the finer things in life.

Franklin highly influenced Charlie Munger. Munger just couldn't believe that one man could go on to accomplish so much in one lifetime. And do so in an admirable way. But then Munger went on to accomplish a staggering amount in his lifetime himself too.

In my opinion, these are the people to emulate.

Franklin's story is full of risk-taking, which starts with going off on his own at a young age because of a poor family. Later in life, facing off against Native American tribes to defend the borders of Pennsylvania. Taking personal risks to help America find allies for the Revolutionary War. And to be brave enough to sign papers that declared war on an Empire. The kind of risk that Benjamin Franklin had to face in his lifetime is unlikely to be even close to the type of risk we need to face off agsinst.

And yet he prevailed at almost all the things.

A notable book mention here that will also give you a glimpse into that world, those special conditions that made America & the risks they had to take, is "Franklin & Washington: The Founding Partnership." It's a wonderful book, and George Washinton's life was an incredibly risky one, too; if you like history, it's worth reading; you'll learn some good lessons from their stories.

How to Get Rich by Felix Denis

Felix Denis wrote two incredible books, both with a similar theme of framing risk: How to Get Rich and The Narrow Road.

The unfortunate thing about How to Get Rich is its name. This book's name sounds almost silly, but it's a really great book from someone who lived it and recounts if it was all worth it.

Many people succeed in business and go on to write Books or Poetry the way Felix did later in life.

But few are as honest in their reflections as Felix Denis in this book. He came from poverty, struggled with drug abuse, played in R&B bands, worked as a window display artist, and worked as a sign painter, among other things, before realizing the folly of his ways and stumbling into the Magazine industry. Then, he masterfully took it over. Think Maxim magazine and many others.

I learned more than a few things that are useful in periods of transition from Fleix’s story, his honesty, and his insights.

I hope some of these books are helpful to you in your journey. They’ve been immensely helpful to me.

If you’ve already read some of them and they impacted your life, I’d love to hear about it. Or, if you have some recommendations for me, I’d love to hear those, too. You can reply to this newsletter, and it will reach me.

I had a call this week with a community member who was struggling to find good ideas to build out.

Finding good ideas is a common problem. And I think I've got a formula that's worked for many of us in the community. I shared it on the call with him, and I'd like to share it with you, too.

The first step in this formula for finding ideas you can build into projects is to study yourself a little bit. The second step is to find inspiration. The third step is to study the market.

But let's go through each step in depth.

On the first step, "study yourself," you'll want to put together a list of all the valuable things you've done throughout your life. It should definitely include work you did, expertise you have, industries you worked in, and things you know well that you can tap into if a good idea presents itself.

But when studying yourself, I wouldn't limit it to professional work. I'd also include hobbies and other non-commercial activities.

It might feel silly to do this exercise of listing things that you know well and have done, but it's not.

Listing out my assets in this way was exactly what I did early on in my journey when I started placing small bets.

The list of assets that I took the time to scribble into my Apple Notes inspired me to create a product to help Software Engineers in their careers. And that product ended up making me over $50k in my first year into this journey.

But that same list of assets brought other things I could do to the top of my mind many more times. That same year, I pulled from that asset list and built out several other projects. I repeat this exercise of adding to my asset list every few months. I always have some new things I can add to it. And it turns out the new things we learned the hard way tend to be especially valuable. That's where my Newsletter Launchpad came from. But it's always helpful to review and refresh this list.

Now that you've studied yourself, it's time for step two: getting inspired.

But getting inspired can be tricky because the common wisdom says the best ideas come to us in the shower. But if you wait for that, you might wait for a long time. In our community, we think the best inspiration for ideas usually comes from something external.

For example, my business partner Daniel Vassallo said that this random tweet that he stumbled upon from another creator, with a course on flipping pallets, inspired him to build out an idea.

Daniel realized he could do something similar: a brain dump of what's been working for him to grow on Twitter. Since the inspiration hit him, that project, "Everyone Can Build A Twitter Audience," has earned Daniel over a hundred thousand dollars.

Daniel couldn't have gotten that idea in the shower.* He needed to see someone else making money with a simple idea first. Then he realized he might be able to pull off something like that on a different topic, too.

But Peter Askew gets inspired to build out ideas in a whole different way.

Peter told us his inspiration is expiring domains. When a great domain is expiring, like BirthdayParties.com or DudeRanch.com, if he thinks he has what's needed to build it out into a business, he will buy it & build it. That's largely how he started selling onions on the internet. He got ahold of a good domain: Onions.com. Then he realized he could partner with a great local farm and now outranks Amazon on the search results for buying onions on the internet.

But you might get inspired to chase an idea in a whole other way, and that's good, too.

Inspiration is hard to come by. You have to take it where you find it.

—Bob Dylan

I often get inspired by talking to friends. I hear about a pain they are having, and I think, "Wait, I can create something to solve that." This article is precisely that. I spoke to a community member & was inspired to write it for you, too.

Another way to get inspired that I've found useful recently is chatting with ChatGPT. I ask it what sort of ideas might work in a given domain with my particular set of experiences, and it brainstorms with me. We can go back and forth until something inspires me.

Inspiration is an important aspect of getting good ideas to build out. Different people get inspired in different ways.

But you can try all the things I mentioned above to find inspiration for ideas you might be able to build out. Try curating your feed on your favorite social network with people who are making things. Try enmeshing yourself and talking with other builders. Try talking to friends about their problems. Try brainstorming with ChatGPT. Try looking at expiring domains.

Try as many things as you can here, and give yourself time and space to get inspired. And chances are high that if you try all of that, some things you might be able to do will come to mind.

Inspiration exists, but it has to find us working.

—Pablo Picasso

But once you're inspired, it's onto step three: study the market.

Many people are the way I used to be. They get inspired, and they just start building.

But one of my biggest regrets about all the side projects I built out when I was a full-time employee is that I wasn't rigorous about them. I did not study the market for any of my ideas, and this hurt my odds of success.

Here is an example of what I mean: I was inspired to do a side project by a friend who bought a few unlisted homes by simply knocking on people's doors and making offers. So I built something called Olive Offers, and the idea was anyone could put offers on homes even if they weren't for sale. A person can pay us a few dollars, and we send a nice, official-looking envelope with their offer to the homeowner of the home they like. Then, we get the homeowner on the site and get the negotiation going.

I thought, "I can't wait for this thing to go big so I can quit my job."

But I was wrong. I spent a few months building Olive Offers, and then no one wanted it. I even ran ads and burnt some money running traffic to it.

Now if I had done just a little bit of studying the market, I would've seen that there was at least one other guy doing this exact same thing and struggling with this same crap idea. I could've studied his traffic. I could've studied the search terms. But I went straight to building and burnt a few months of my nights and weekends, a few good dollars, and quite a bit of my motivation.

Studying the market won't guarantee success—nothing can. But it can help you decide which small bet *not* to place a little more scientifically.

Here are a few ways you can study the market.

If it's a book that you want to write, our community member Greg Lim told us to always check the Best Seller Rank (BSR) on Amazon. This is a good proxy for how well books are selling.

For example, just the other day, I was doing a little research for a potential idea and came across this great self-published book on prompting children to write.

The book had a Best Seller Rank of about 4,000 at the time of my research last week. That rank can be put into a free BSR calculator (you can Google BSR Calculator), and that will tell you that this book sells 50+ physical copies per day.

That tells me there is some demand for a book like that.

But it's not just Books. Hassan Osman told us that we can do something similar for courses on Udemy too. And, of course, just because someone else is selling well doesn't automatically mean we will, too, but it gives us some baseline of where the market is. If nothing is selling, the odds that we'll be the exception are low.

But it's not just for books and courses either. You can use search tools and Google as a proxy for how much demand there is for a software idea or any other idea you might have to build out. With a baseline, you can begin to formulate a hypothesis.

For example, if I had researched my "Unlisted Homes" idea a little more via one of the search engine tools like Ahrefs or AnswerThePublic, I would've seen another signal that it's getting searched about 30 times per month across the entire world, which is pretty terrible as a small bet.

There are other things that go into creating more rigor around placing a small bet, all of which can be guided by this step of studying the market.

For example, you can set some expectation of payoff for the time and resources you'll invest into an idea. Once you do that, you begin to form your hypothesis for the bet. You'll also want to make sure you timebox your commitment so you don't turn it into an indefinite project, and so on.

But let's go back to my failed side project example, Olive Offers, one more time. As we saw, Google tells me that only 30 people per month search for "Unlisted Homes.” I had priced my product at $19.95; for the time I was investing in building it (a few months of nights and weekends), I'd need 100 or more sales per month for a year straight to feel good about the resource investment. But given the signals, it would be pretty unreasonable for me to expect 100 or more sales per month for this product.

But this is why the three steps I shared with our community members on the call can get you 80% of the way there to find good ideas to build out.

So, let's recap our steps.

First, we study ourselves and create an asset list—or an asset stack, as we call it in the community. This list isn't the only set of things you can do. I know you can learn new things, too. But this is the list of things you can do easily without much research and with less risk. It's a good list to have handy.

Second, we find some inspiration. There are many ways to generate inspiration for ideas. As we saw, getting inspired to chase an idea you can easily pull off has its advantages. It lowers your risk of over-investing, increases your odds of a small win, and can potentially create more assets you can reuse later.

Third, we study the market a little bit and do some research. We do this to try to formulate a more realistic hypothesis about our project. We know that no amount of research can tell us with certainty if something will succeed. There is far too much randomness at play in the world of business. But still, we do the research because it helps us cap our downsides and risks.

When we do these things, we’re well on our way and working toward finding good ideas to build out.

*Daniel Vassallo wrote an in-depth piece, “Imagination is Overrated.” on why external inspiration is the best kind. And a thank you to Daniel for giving feedback that improved this piece.

I got all worked up and passionate about why the "Vitamins vs. Painkillers" is bad framing for those making & selling things online.

People who build products that resemble vitamins are usually said to be building something that's "nice to have, but not a need to have."

While people who build painkillers are said to be building things that are a "need to have."

But as someone who now makes and sells things online, I think the whole framing is B.S., and it may even be harmful.

To prove it to you, I'd like to tell you about Vitamin C.

You may or may not know, but if you don't get enough Vitamin C for long enough, you develop Scurvy.

Scurvy is a nasty disease.

But don't take it from me. I'll let a survivor from a 16th-century English voyage give you a taste of how bad Scurvy is:  "It rotted all my gums, which gave out a black and putrid blood. My thighs and lower legs were black and gangrenous, and I was forced to use my knife each day to cut into the flesh in order to release this black and foul blood. I also used my knife on my gums, which were livid and growing over my teeth..." This individual was lucky. He survived.

But, from the 16th to the 18th century, an estimated 2 million people died from Scurvy—and to think, all that from a Vitamin C deficiency.

Once people figured out why so much Scurvy was happening at sea, they started carrying oranges, limes, lemons, and anything else with Vitamin C on those long voyages.

One orange may not cure your pain or be a painkiller to you in any way while you walk past the fruit vendor.

But one orange would've been enough to save your life if you were sailing the Atlantic.

Now imagine being an orange salesman on one of those long voyages. To those people on that voyage, oranges aren't just a Vitamin that's nice to have & tastes good. It's medicine that would save their lives.

I've been building a product called smallbets.com, you probably already know. But to some people, this thing might seem like just a vitamin, a nice thing to have.

In fact, many come to our live classes about starting a newsletter, succeeding on YouTube, or how to do marketing, and many of them consume these passively—the same way you & I consume Vitamin D while taking a nice walk in the sun.

And on the surface, it can all seem like just that: a nice vitamin that tastes good.

But I've seen firsthand that this stuff can also be medicine for someone who wants to move on from their job, got laid off, or started their journey into business but is struggling to attract attention to their product.

And this gets at the heart of my problem with the "Vitamins vs. Painkillers" debate.

First of all, there is nothing great about painkillers in the long term. You can see how wrong some of the old product management blogs from the mid-2010s were in labeling products like the Amazon Echo as painkillers (just Google Vitamins vs. Painkillers).

But secondly, from experience, sometimes what's just a vitamin in one setting to one person can become life-saving medicine later to the very same person. And the only thing that changed was the voyage the person was on.

So don't listen to people who might push you away from building what might seem to them like just a Vitamin product. Build it anyway because vitamins are good for people.

But also, don't forget to look for that small group of people who might be on a long sail at sea and for whom your product is life-saving medicine. They’ll appreciate it the most.

*Shout out to my friends Terri Lonier & Chris Wong, who helped me think through this idea this week.

For those who don’t know, Terri sold 250k+ physical books back when it was hard to sell books. Terri now writes SOLO, a newsletter to help solopreneurs stand out.

And Chris and I taught people to start a newsletter & even create cohort courses in the Small Bets community together. Chris left a successful finance career behind to go off on his own and writes Unknown Unknowns.

Three Things: Intelligence, Envy, and Being Prolific.

Sometimes, you don’t get what you want out of life because you’re overthinking everything about it. Intelligence does this to you.

But being introspective enough to know that you might be overthinking and finding solutions to it is also a part of intelligence.

Morgan Housel reminds me of a great saying by Charlie Munger:

“The best way to stop people from envying your success is to deserve it.”

Of course, life is complex and doesn't always work out that way. Sometimes, we just get lucky & there isn’t much to deserve.

But sometimes, we get what we deserve, and when we do, it’s pretty glorious because no one seems to envy a ton of hard work.

Those are the people I admire most and aspire to be more like are prolific. My favorite rapper tattooed the word Prolific on his face.

People who are prolific in their writing, in what they make, and in their projects tend to eventually make some things that are pretty great.

Three Memes for some laughs this weekend.

“A Feature, Not a Bug.”

Servers Need Care, Too

When a Meme is a Good Feature.

That’s all I’ve got for you this weekend.

—Louie

P.S. You can reply directly to this email; it will get to me, and I will read it.

It's time for a story from back in the day.

Picture this: It was a time of the Super Nintendo on your tube screen T.V. 

Your dad flips off your Donkey Kong Country because there is an emergency announcement on the news. 

The grainy 27-inch family RCA now read: "Severe Weather Alert."

The newsman passes it to Linda Church at The Weather Center on channel 11. But as the camera pans out, it shows Supermarket Shoppers emptying out every single shelf in the tri-state area. 

Linda gets on and says, "Total snowfall by tomorrow morning will be 18 to 24 inches."

The first thought that crosses my mind is, "Holy moly, we aren't going to have school for like a week!" 

The next thought is, "I gotta call my cousin Johnny. We're gonna make bank!" 

But the phone's already ringing. I pick up the landline, and a crazy high-pitched voice is shouting, "Yoooo! Come sleep over tonight! So we can be ready to go in the morning!" 

My cousin, whose family emigrated to the U.S. before ours, got lucky & lived in the rich part of The Bronx, Riverdale. I live in the poor part, which was pretty much the rest of it. 

But all that didn't matter because, after this snowstorm, we were both gonna be rich.

And get this: neither one of us was old enough to work for anyone else back then. I was around 12, and my cousin 13. The legal age to work in New York, with parental permission, was 14.

But there was nothing in the books on age limits and going into business for yourself. 

The next day, we went house to house, offering to shovel stairs, driveways, and cars covered in snow. And Riverdale is packed with older home owners who either don't want to or, unfortunately, might not have the strength to clean their own driveways. So we were like heroes.

I still remember my cousin starting us off with the sales process. He is way more extroverted. He goes up to the first house and rings the bell, "Would you like us to clean your stairs and driveway? We're charging $25 for a driveway this size."

But then we'd start working, and our little arms would get tired. And I'd yell at my cousin, "Man, we need to charge more. This is a lot of work!" He'd shout back, "OK, then, you sell the next one!" 

But I've found that nothing gets an introvert like myself out of his shell, like the feeling that I might not be making enough or making what I deserve. I get fired up and immediately become a huge extrovert when it comes to money.

So, on the next house, I'd ring the bell, and I'd double the rate. 

I'd say something along the lines of, "Hello, we are shoveling stairs and driveways today. And we are charging 50 dollars for a house your size." 

Then the woman at the door would say, "50 dollars! That's a lot of money!" And she was right. It was a lot of money back in the 90s. 

But I'd respectfully respond, "I understand, ma'am. And that's OK if you can't afford it. But we just did your neighbor's house down the block, and it took the two of us 45 minutes out here in the snow. And we're pros. It might take you, by yourself, a lot longer out here. It's a lot more work than it seems." 

And then, when the woman was thinking about how much effort it all was, my cousin would jump in with the closer, "OK, look, Miss, for you, we can do it for $45. But only if we can use you as a recommendation to your neighbors if we do a good job." 

She'd reply, "Deal!" 

But then her whole house was spotless in 15 minutes and salted for anti-slip. It turns out our little arms worked extra hard when we got paid extra well. And afterward, she didn't even care how long it took us. She only cared it was done well. 

She then said, "I called my neighbor next door. They're in Florida for the winter, but they are asking if you can do their house, too? It's dangerous to let this snow freeze, and they don't want anyone to slip on their stairs. Of course, I'll pay you for it, and they'll pay me back later."

We shouted back, "Deal!" 

And the cycle continued like this, house to house, for two days until there was no more snow in anyone's driveway.

But in those few days that week, we made more money in business than our dads did with their full-time jobs.

From then on, every time it snowed until we were adults, my cousin and I went into business. I learned & re-learned sales, pricing to what the market can bear, communication, hard work, and a bunch of other things in those snowstorms.

But perhaps the best lesson I learned is that going into business can be as simple as picking up a snow shovel and getting a few customers.

And get this: those customers don't care about your age, where you immigrated from, what sort of shovel you use, what part of town you live in, how long it takes you. They don’t care about any of it.

The only thing anyone seems to care about when you're in business is that you do a great job at a fair price.

The Bootstrapped Founder Podcast:

I was recently on the podcast with Arvid. Arvid wrote multiple books on entrepreneurship & bootstrapping a business.

We had a conversation about my journey from software engineer to VC-backed entrepreneur to placing small bets as my entrepreneurial strategy.

It’s worth a listen if you have the time. I am biased, of course, but I think there are some good lessons in it.

That’s all I’ve got for you today.

—Louie

P.S. You can reply directly to this email; it will get to me, and I will read it.

I've got a bad case of "the frequency illusion."

I bought a new car, and now I see my make & model everywhere I look.

The frequency illusion is interesting because I looked at many car makes before I bought the one I bought, and yet I rarely notice those.

This "cognitive bias" was discovered in 2005. The frequency illusion occurs when you see something more often, even though it's not really there more than before. It results from two psychological processes: Selective Attention & Confirmation Bias—both of which sound bad. 

Who the hell wants "Selective Attention" and "Confirmation Bias" acting on them on a regular basis? If I, by accident, catch one more of these cognitive biases and mix it in, I'd have what Charlie Munger used to call "a lollapalooza" and might become a lost cause.

But as I thought about all this some more, it turns out I do want this frequency illusion & its biases acting on me. And maybe you do, too.

The first time I noticed myself with a bad case of "the frequency illusion" was when I put out my first product on my own, "Timeless Career Advice for Software Engineers." It made a few sales on launch. But then, almost immediately after, I noticed opportunities to promote it that had never occurred to me before I had the product.

Take this example: I replied to this post on Blind, which instantly led to 5 sales, and many more after. 

Blind can be a toxic place. Just look at some of the answers people gave the questioner.

I had never posted on the Blind social network before, but browsing it became a habit of mine from my days as an engineering manager. And on that day, when I saw that "1:1 with manager" post, I said to myself, "Self, you can answer this and be helpful! You even just put out a product that covers this!" 

And here I am answering it very earnestly (I cut my answer short for brevity):

And here they are, appreciating my answer and calling me "sensei."

But the frequency illusion was at work here. Prior to my selective attention, I was blind to this opportunity sitting right in front of me with the social network Blind (Pun intended). 

It's a minor nuisance to see your car everywhere you look because of the frequency illusion. But thank God I caught that frequency illusion after I had a product out because it made me money.

But don't you think a heightened awareness to notice places to promote your product is helpful? In fact, I've recently accepted that almost every one of these cognitive biases that we like to think of as "bad" can be immensely helpful under the right conditions and circumstances.

Take Charlie Munger's "lollapalooza," which occurs when three or more psychological biases & misjudgments are acting on you. In his book, Charlie gives an example of 5-6 of these biases being used by Alcoholics Anonymous to do God's work and cure people of alcoholism. The maestro, Munger, called these biases the "psychology of human misjudgments," but that does not do them justice. He should've called them superpowers to be harnessed under the right conditions. But if he had done that, the idea might not have become as popular, so maybe he knew exactly what he was doing.

But anyway, as I've now thought about all this some more, I came to realize that "the frequency illusion" is probably responsible for tens of thousands of dollars in sales that I've made over the last few years. Almost all the good opportunities that popped up for my stuff popped up after I had the product, and it had made some money.

In fact, like the car thing, I noticed this happening to me every time now with my products. I usually have an idea about where I'll promote a product before I make it. I'll have a thesis about how it might do, and then after it's out there and makes a few sales, I suddenly stumble on many other opportunities I couldn't have seen before I had the product. 

So what are you waiting for? Get your product out there, make a few sales, and catch a bad case of the frequency illusion. Who knows what sorts of opportunities you might start to notice that you never noticed before you had a product.

A Small Promo from Me:

We have a packed lineup of live classes coming up in Small Bets. Take a look at this list of confirmed events:

• Apr 25: Marketing Fundamentals for Non-Marketers by Daniel Vassallo

• Apr 30: Getting Started on YouTube by Aprilynne Alter

• May 02: Building and Launching macOS Apps with SwiftUI by Grace Huang

• May 06: Getting Started with Short-Term Rentals on Airbnb by Isaac French

• May 07: Gumroad Crash Course by Daniel Vassallo

• May 09: Explaining Ideas Visually by Janis Ozolins

• May 14: Intro to Google Ads by Jay Mac

• May 16: Wandering the Pathless Path by Paul Millerd

• May 21: Emerging from the Void on X by Daniel Vassallo

• May 28: Small Bets Fundamentals by Daniel Vassallo

• Jun 03: Content Marketing Fundamentals by Amanda Natividad

• Jun 04: How to Sift Through the Treasure Trove of Online Data by Steph Smith

• Jun 06: Effortless Screencasting by Aaron Francis

• Jun 13: SEO Keyword Research by Jordan O'Connor

• Jun 18: AI for the Rest of Us by Sairam Sundaresan

• Jul 02: Understanding the X Algorithm by Dagobert Renouf

• Jul 09: Growing on Substack by Elle Griffin

• Jul 16: How to Start Your First Cohort Course by Chris Wong & Louie Bacaj

• Jul 25: Building a Media Business by Arvid Kahl

• Jul 30: Understanding LinkedIn by Justin Welsh

• Aug 16: Make $500 on Upwork by Monday by Sean O'Dowd

• Sep 10: Creating Income through Real Estate by Louie Bacaj

• Sep 17: Amazon KDP Crash Course by Greg Lim

• Sep 24: Publish a Best-Selling Course on Udemy by Hassan Osman

Not counting our multiple-day classes (of which there are many), we’ve now had over 150 live classes & events at Small Bets so far.

If you're not a member yet, you can join Small Bets today with 50% off, by using code FOLLOWER at checkout.

A Small Bets mebership is a one-time payment (no recurring fees) and lets you join all the above classes and all future classes and watch all past recordings. If this interests you, it would be an honor to welcome you aboard. And if you are already a member, then I’ll see you in some of the new classes above.

Three Things: The Zuck Glow, Markets & Tired, AI Influencers

Zuckerberg is making his rounds and slowly becoming one of the world’s favorite founders.

At a time when many of the world’s other favorite founders seem to be crashing & burning their reputations.

The meme is becoming known as the “Zuck glow-up.”

And I can confirm that the Zuck glow-up seems to happen to bootstrapped founders who are succeeding constantly. It’s not just reserved for the well-known ones.

“The market can stay irrational longer than you can stay solvent.” as John Maynard Keynes famously said.

I like to remember that warning whenever I think the real estate market has to crash soon or some other market has to give in.

A fun meme that probably applies to more than just AI influencers.

But this is an interesting thing that social media brought to the forefront.

Do we think the reporters of old were better than the influencers of today?

I don’t know…

Thank you for reading!

—Louie

P.S. You can reply directly to this email, it will get to me and I will read it.

Back in 2019, I came across a guy on Twitter who wrote a book on AWS.

His AWS book was selling well, and I thought to myself, "You could probably write a similar book on Azure."

I'd worked at a startup that was early on Microsoft Azure, a competitor to Amazon AWS. I was on many late-night calls with Microsoft engineers diagnosing incidents & trying to figure out "what the hell is going on with Azure?" My teams worked heavily with Azure, too, and together, we built systems that scaled to millions of customers.

All of this led me to believe that maybe, just maybe, I could write a book on Azure. And so I started and very quickly got to about 80% done.

But then COVID hit, and I got busy at work. My teams got really busy modernizing Walmart Pharmacy Tech, and I put the book to the side for a time. Excuses, excuses, of course. Well, they’re not excuses because they're not true, but if I had just gotten the book done then, I'd now have the book and wouldn't need to tell you the rest of this sad story.

But then, in 2021, after I quit that job to pursue entrepreneurship, I thought to myself, "Wouldn't it be nice if I had that book on Azure out there? After all, it's 80% done, and it may make a few dollars. It's the perfect small bet." So I dusted it up and tried to finish it off.

But as I read through this book I'd written all the way back in 2019, I thought, "This reads like crap; you are a better writer now; you should rewrite this!" So, I tried to rewrite it, but I didn't get very far. Rewriting something you wrote a long time ago turns out to be tedious and un-enjoyable.

Then I took a course on writing books & publishing them through KDP, and I had my new friend Greg Lim, who has published many books, take a look to see if we can salvage this. If I could somehow just package what I've got, I could release it anyway. Greg told me what we had to do if I wanted to get this out, and I still couldn't do it.

But as I reflect on why I couldn't get the Azure book done, I realize that the book somewhat disgusted me now—the way your own old writing might sometimes make you cringe when you read it back. I no longer believed many of the things I was recommending in that book. It was way too flowery about Azure.

My opinion changed. I simply don't think most people even need the complexity of Azure and many of its services anymore. And so, how can I write a book recommending many of its complex services to others? I can't, and I won't.

But recently, as I reflected on all this, I got a little sad.

I got a little sad because, sure, I had missed out on some potential money I could've made over the years. I'd missed out on having some customer emails and conversations with real people on this topic.

But I was mostly sad because I'd done some great work with Azure back in the day, and it was never captured or "immortalized" somewhere. Sure, the people who worked with me back then knew, but those people are long gone in other roles & don't have the time to vouch for me in public that I know that stuff.

Those people who know that I know my stuff don't have time to enter a Twitter debate about whether Azure is worth using today and say, "You can trust Louie; he knows his stuff on this!"

But a book that would've been out for a few years, maybe with some sales and some reviews, would've gladly vouched for me, even if my opinion had changed. I got a little sad because I never got the public achievement, the recognition, the credibility, or the accolades that I could've easily had if I had just wrapped up that last damn 20%. And I like to remind myself of this story now to make sure I timebox and get my stuff out so I never have any regrets.

And so this is a cautionary tale for you too, as Naval famously said: Inspiration is perishable.

You never know; it might be now or never for your idea, too.

Two Things: The Value of Attention, Black Swan Demystified

An amazing little tidbit came out recently: the amount of revenue Instagram makes.

And that’s $32+ billion in 2021. Looking at that trend, it is probably a lot higher now.

I think this highlights the value of capturing attention, which does not seem to be going down in any way or anytime soon.

If you’ve got some time, the young scholars at Rational VC (Iman & Cyrus) had one of the best discussions on Nassim Taleb’s ideas from Black Swan I’ve ever heard.

They really geek out on this episode & explain these ideas in a way you may find enjoyable on a long walk.

Three Laughs: “Don’t start a company. Start a religion”, “Yes, But the Ads!", “Earthquakes shaking souls.”

Sam Altman, once quote Qi Lu and said:

"Successful people create companies.  More successful people create countries.  The most successful people create religions."

Based on the replies to his tweets, Sam might be getting his wish.

There are a few ways to see this: the first way I see it is that we might have ad blockers, but they’re still going to be advertised to us.

The second is that the best brands are simply advertising to us 24/7.

The recent earthquakes really have people rethinking their life choices about marriage and so on.

Thank you for reading!

—Louie

P.S. You can reply directly to this email; it will get to me, and I will read it.

Years ago, when I worked in a restaurant, as we neared the Super Bowl, many of my colleagues and customers were gambling heavily on American Football.

As an immigrant, I knew nothing about the sport or its complex rules, and I really hated gambling.

But then, one Super Bowl, my colleague and good friend John said to me, "Louie, you're the only bartender I know in The Bronx that doesn't know shit about football. We need to change that."

Then John gave me the recipe. He said, "I know you hate gambling, but here's what you're gonna do: pick a box in the Super Bowl box raffle and also place a bet on one of the teams with one of the bookies that frequents our restaurant. 

Trust me, whatever you lose in gambling, you'll make up in tips from customers after you're forced to learn the sport."

John was wise beyond his years. A combination of street and school smarts, I never questioned his advice. I just did what he said.

But I'll never forget that Super Bowl, not just because the NY Giants upset Tom Brady and the New England Patriots, who were undefeated. 

But because I made over $5 Grand gambling in that Super Bowl. And I learned every damn esoteric rule there is to know about American Football. Then, whenever my customers talked about the sport at my bar, I could conversate like the best of them. John was right, my tips went up significantly.

But I internalized something else important, too. There are few better ways to learn something than when your hard-earned money is on the line. Even if you have no control over the outcome, you'll still learn as much as you can about what's happening.

With your money on the line, you've got what Nicholas Nassim Taleb famously named one of his books after, "Skin in the Game." In it, Taleb says, "Don't tell me what you "think," just tell me what's in your portfolio."

Skin in the game explains why the betting markets, with their odds, are usually right. People who have real-life money on the line are doing real research to figure out the probabilities of certain events happening. 

But the Bronx and the streets don’t just teach you that you learn fast when your money is on the line. They also teach you that you learn even faster than that when your life is on the line. That’s how street smarts, like the type my friend John has, are built. If money on the line is metaphorical skin in the game, life on the line is as real deal as it gets.

It's like that famous saying Charlie Munger repeated often: "The rabbit runs faster than the fox because the fox is running for his lunch, but the rabbit is running for his life." The orders of magnitude of what's at stake between the rabbit & the fox just aren't the same. The fox can always find another lunch.

But just this week, a new study demonstrated what can happen when there is real skin in the game. The study said intermittent fasting increases the odds of death from heart disease by 91%.

The non-peer-reviewed study was done out of a university in China and picked up by several major news organizations. Then, it made it to the American Heart Association.

But you can bet that the people who practice intermittent fasting, with their real lives on the line, are going to pursue that research.

Within two days, the study was debunked. The researchers, academics with no skin in the game, failed to conduct a proper study. 

But just think about all that for a second.

A brand new study came out of a university, and it spread like wildfire through the media. But within a few days, it’s all debunked. It's amazing how quickly people act with skin in the game.

I think there are a few lessons from all this.

First, if you really want to learn something new fast, you've got to, unfortunately, be exposed to the downsides of being wrong in some way. Although I enjoyed the lessons I got from gambling in that Super Bowl, I never gambled on American Football again. I am $5 grand and countless more in tips up, though. And I don’t think you have to gamble to learn, but you learn faster when you have something at risk.

The second lesson is that when dealing with other people, and when you need to figure out if you can trust what they are saying. Ask yourself, "What sort of skin does this person have in the game that’s telling me all this?"

But remember, not all skin in the game is the same. There are layers of skin in the game.

Someone who is just "tawking shit" isn't the same as someone who's got their money on the line. 

And someone who's got their life on the line has ultimate skin in the game.

A Promo by Me:

Small Bets has a packed lineup of exciting live classes coming up. Take a look at just some of the confirmed events we have coming up:

• Mar 29: Spreading Ideas with Memes by Dagobert Renouf

• Apr 02: Publish a Best-Selling Course on Udemy by Hassan Osman

• Apr 03: Amazon KDP Crash Course by Greg Lim

• Apr 09: Creating Income through Real Estate by Louie Bacaj

• Apr 10: Accounting and Bookkeeping Basics by Antonio Reza

• Apr 11: Getting Started with Midjourney by Christian Heidorn

• Apr 16: Delve Into Expiring Domain Names by Peter Askew

• Apr 18: Business English Fundamentals by Jack Connor

• Apr 23: Self-Sponsor Your Own US Green Card by Archie Agrawal

• Apr 25: Marketing Fundamentals for Non-Marketers by Daniel Vassallo

• Apr 30: Getting Started on YouTube by Aprilynne Alter

• May 02: Building macOS Apps with SwiftUI by Grace Huang

• May 06: Getting Started on Airbnb by Isaac French

• May 07: Gumroad Crash Course by Daniel Vassallo

• May 14: Intro to Google Ads by Jay Mac

• May 16: Wandering the Pathless Path by Paul Millerd

• May 21: Emerging from the Void on Twitter / X by Daniel Vassallo

• Jun 04: Sift Through the Treasure Trove of Online Data by Steph Smith

• Jun 06: Effortless Screencasting by Aaron Francis

• Jun 13: SEO Keyword Research by Jordan O'Connor

• Jun 18: AI for the Rest of Us by Sairam Sundaresan

• Jul 25: Building a Media Business by Arvid Kahl

If you’re not a member of the Small Bets Community yet, you can use code FOLLOWER at checkout to get 50% off.

Three Serious Things: YC Rejects, Street Smarts, Family

The last time I wrote to you (in the No Billions edition of this newsletter), I revealed that I made it to the interview phase with YC, but they rejected me.

It is now with great honor that I find other people, like Pieter Levels, whom I admire, who were also rejected.

I love stories like this because they highlight how far you can get in life with hard work & some street smarts.

This gentleman says he made $2 million in one year, and says the three lessons he learned from his mentor are:

1) Fall in love with people

2) Fall in love with sales

3) Fall in love with numbers

Unfortunately for Richard, as an Immigrant myself, I think while these stats from the NY Times are likely accurate, they’ve got nothing to do with IQ.

And I think they have everything to do with family & upbringing. If you come from a broken home or have no extended family, it is incredibly difficult to make something of yourself.

But even if you come from nothing but have lots of family around you, you have a very real shot in this world.

Three Things for the Laughs: Meeting Jail, The Daddy of AI, The Odds

This is the sort of feature that can save a lot of people a lot of time.

This week, Satya Nadella, the CEO of Microsoft, hired the CEO of a prominent well funded AI startup to work for him.

And at the same time, he made some incredible comments to his board:

"If OpenAl disappeared tomorrow, we have all the IP rights and all the capability. We have the people, we have the compute, we have the data, we have everything. We are below them, above them, around them."

Proving that Satya Nadella is now the daddy of AI.

While this is meant to be a little funny, there is also a serious aspect to it.

It’s important to learn your odds in anything you’re doing in life.

Thank you for reading!

—Louie

P.S. You can reply directly to this email; it will get to me, and I will read it.

"I don't suspect we'll ever see a Small Bettor or Indie Hacker ever create a billion-dollar company."

I said that to a friend recently, and with over two years in the game, this is my honest assessment of the current online business space.

But this is what differentiates early-stage VC-backed startups from the bootstrapped online businesses of today—the billions.

I was an early employee and part of a successful billion-dollar startup once. So, I am not completely clueless about how firms might get to the billions. Jet ended up selling for $3.3 billion.

To illustrate the point, I want to tell you about one of our meetings at Jet. One day, at one of our all-hands, the founder proclaimed, "It's either going to be billions or body bags for us now." I remember thinking this is just the less street version of 50 Cent's mantra, "Get Rich or Die Trying." 

But for early-stage venture-backed founders, it is that mantra, even if many don't realize that's what they signed up for. 

As a venture-backed founder, you take money from a lot of rich and powerful people. Those people expect a return. And there is immense pressure to make sure you get them a return, or you tried hard to get them a return. Reputations and sometimes other things are on the line. For example, the only way the investors of Jet could've gotten a return was for the founder to flip the company for billions. Anything less than that was a failure. And Jet's founder recognized it and sacrificed a lot trying to make it happen. As a serial entrepreneur, he went into it with eyes wide open, and I respect that.

Most founders walking into venture-backed money today don't think they are making the same bargain. But they are. In that world, anything less than the billions is a failure.

But this gets at our gripe in the Small Bets community with that early-stage VC-backed model. How many founders can actually get to the billions?

My business partner, Daniel Vassallo, in his now infamous post roasting YCombinator*, the most prominent & most successful early-stage venture studio, explained how many founders get to the billions:

"YC will proudly tell you that you are more likely to end up with a billion-dollar business if you join them. That may be true. What they're more reluctant to tell you is that only about 50 companies met that expectation out of the 4,000 or so that went through their program. That's 1.25%. To be fair, that's actually quite impressive, but let's say you have the stamina and willpower to go through YC three times in your lifetime. You'd need approximately 26 lifetimes to hit the jackpot! Aha! See the problem now?

I don't know about you, but I want to be successful in this lifetime. I can't afford to rely on 26 lifetimes. But maybe you think you're special. You're not like those 3,950 dummies who failed. Maybe you are in fact special, but I wouldn't rely too much on that. Business is much more random than it seems. If business was predictable, YC wouldn't have a measly 1.25% success rate, or thereabouts...

So, the best way to find good ideas is to have many ideas, try them out, take what works, and throw away the rest. But this is not what YC wants you to do. YC wants you to pick an idea that has market pull (or the potential for it) and then dig a hole in the same spot until you reach the boiling magma. Because what if you stop digging just before you strike gold? When you're cheap and expandable, it makes sense to make you do that. You must go all in. Diversification is for your YC overlords, not for you.

The best thing I learned about business is to avoid trying to predict what will work and what won't. YC knows this. That's why they only make small bets in thousands of businesses. But YC will try to teach you the exact opposite.

...Don't be a dummy. Don't be a bet in somebody else's portfolio."

Although I wholeheartedly agree with Daniel, it is difficult for me to add to what he wrote because I actually applied for YC before I started placing my own small bets. I did not get in.

So, anything I say about YC has to be viewed from that lens, from the lens that I might just be bitter because they rejected me after the interview. (For the record, I am not bitter, but I am a YC reject.) But now, I think getting rejected from YC was a good thing for my entrepreneurial journey.

In the only podcast that my hero Charlie Munger ever did**, he roasted VCs so badly they had to cut out a good chunk of what he said from the podcast. But even the part they left in is still pretty telling. To paraphrase Charlie Munger, in the podcast, he basically said, "VCs pretend to be these great investors that are inventing the future, but in reality, they are just scattershot spraying their investments across everything. And they aren't great investors, they aren’t great anythings." As an index fund investor myself, I am not mad at VCs for their scattershot approach to investing, I think it's smart. And I don't think Charlie Munger was mad, either. He was just calling it out that they are no better than the rest of us.

But Charlie's comment on VCs gets at the heart of our beef inside the Small Bets community with locking yourself up too early as an entrepreneur. If scattershooting ideas leads to good business, then why should we, as people early in business, shun that approach? 

Sure, like I told my friend, a small bets approach might never lead to the billions. And a small bettor might never start a billion-dollar company.

But I've already seen many create diversified income streams and get their freedom from the corporate grind. I've seen many create great lifestyles for themselves. When going into business, isn’t that good enough?

*Daniel Vassallo’s post on “Why You Shouldn’t Join YCombinator.”

**Charlie Munger’s only Podcast appearance in 2023.

Three Things: Hit rate, Look the Part, Invert-Always-Invert

One thing to call out from this post is that those are the number of songs those incredible artists have released.

We don’t see the numbers they recorded that they never released.

When the grammy nominated rapper, Logic, was on with the Write of Passage community and someone asked him “What is your hit rate? How many songs do you record and how many are hits?” he said he can expect a few top 10 billboard chart-topping-song out of a 1,000+ songs that he records.

So that’s closer to a 1% hit rate, not too different from YC.

Taleb argues that if somebody looks the part too much, they probably haven’t had to struggle too much to get the part. And so, you should view them with a grain of salt.

But anybody who does not look the part probably had to do some crazy things, like work really hard, to get the part. And so you know they deserve it.

I said this to my new dentist this week. I said that I trusted him more than my previous dentist, who looked the part too much.

One of Charlie Munger’s best ideas, think in reverse. Worth watching and internalizing.

Three Laughs: Peace of Mind, Looking the part, Mom and Crypto

Sometimes, the peace of mind is worth something.

Remember that Taleb thing from above?

It’s the people with a single monitor that have to code the hardest. Not the people with this setup.

The unfortunate thing here for Mom is that USDC is a stablecoin pegged to the dollar. Unlike Bitcoin, that means it is succeeding if it can stay at a dollar.

Thank you for reading!

—Louie

P.S. You can reply directly to this email, it will get to me and I will read it.

I got two valuable lessons on politics in my life.

First, when I was a kid in The Bronx, I got invited to go to a pool in this rich neighborhood. As a kid, if your building had a pool with a lifeguard, you lived in a rich neighborhood. The neighborhood where I grew up had roaches, section 8, and food stamps.

But yes, even The Bronx, NYC, has rich neighborhoods. In a lot of ways, it's a microcosm of the rest of America and probably the rest of the world, both in wealth and politics.

Anyway, I went to this pool with my cousin. We were 11 and 12 years old. And these old ladies who were enjoying sunbathing overheard us making some political jokes. It was fun banter at first. They were teasing us a little bit. 

But then we really got into politics with them, and we said some things regarding their politics, as young wiseass kids like us did back then, and they got offended. 

But not offended in a small way, but so offended they felt compelled to tell our older relative, who was the superintendent of the building and our sponsor for that day of leisure. They told him, "Make sure their parents know. They aren't going to get very far in life talking like that." And they made it a point to complain to the board of the building about us, so we aren’t invited back.

Later that day, our older relative sat us down and, with his thick immigrant accent, said something to us that's stuck with me to this day.

He said: "You gomar! (which roughly translates to donkeys or dummies in English) 

You come here for one nice summer day. You come to enjoy this beautiful weather in this awesome Olympic-sized pool. And you can't help but bring up politics? You can't help but ruin this whole thing for yourselves for the whole summer?

Don't you think I have my politics, too? How come they all like me? Why they don't ever go to the board & complain about me? It's because I never talk politics. Ever.

They have their politics & I have mine. And we vote, and it's how we stay friends and get along."

There is a great English proverb that says, "Politics is the art of marshaling hatred." Henry Adams observed the same in America in the late 1800s: "Politics, as a practice, whatever its professions, has always been the systematic organization of hatreds."

So, the first lesson I learned early as a kid was that talking politics is not how you make friends with strangers. It is, in fact, how you ruin your fun.

Then, the second lesson came a few years later in life. I worked as a bartender in a fantastic Italian restaurant. We used to get all types of customers who used to tip very generously. 

But then, one night, I had two outstanding patrons who tipped heavily start arguing with each other over politics at my bar. It was an election year. Of course, I knew better than to take sides. 

But it didn't matter. When people are enraged like that, they want to force you to take a side. Their side.

So, long story short, I had to break them up and send them home. Neither left a tip, and neither came back. I got an average of $25 bucks from each one in tips each time they came in, and they came in at least twice a week. So that's 50 dollars a week, times 52 weeks, that's $2,600 a year from each, so I lost over $5k a year in tips from their stupid fight.

So, from that, I learned heated political debates are unprofitable. 

It makes sense. If you take a side, you’re alienating 50% of the other side who don't think like you. But even if you don't take sides and happen to be in between a heated argument, you risk alienating 100% because you didn't take their side. It's lose, lose. It is best not to let them talk heated politics in front of you at all. That’s why rules like “No politics at the bar” exist. Alcohol and politics don’t mix well, trust me. Or if you can’t set the rules, walk away.

Now, here is Google and some of Big Tech today, who have very obviously decided to take sides and bake their political biases into their products. Just this week, Google's AI, Gemini, has been showing strong political leanings. Now, this is prompting all sorts of questions about where else they may have baked these biases into.

What do you think is going to happen next with Google?

And by the way some people think all this is normal. Carl Schmidt, a famous German philosopher with a sort of checkered history, said something along the lines of "It is part of the human condition to be divided by such political questions and to be forced to take sides. Politics is the field of battle in which that division takes place. In which humans are forced to choose between friends and enemies." 

But who wants to live their life viewing 50% of the population as their enemy? Not me.

Even Peter Thiel, who has taken very public political stands, admits that: "There is something about politics that is irreducibly adversarial. The applause lines are always on how 'we are going to fight the other side.' How 'we're going to stop them.' How 'we are going to unite against them.' and so on."

As an immigrant born in communism, I can tell you it’s great to have political freedom. But do we have to bake our current opinions into everything? Do we have to keep arguing with each other at all times? And, importantly, do we have to keep amping up the stakes each round?

People used to like Big Tech companies more when they didn't bake politics into their products. When they kept their politics to themselves.

As my immigrant older cousin reminded me when I was young, “We all get to vote for a reason here.”

*A caveat: there may be times when you have to take sides on an issue. I have done it myself when I believed in something and could not stay quiet. And I’d do it again.

But there is a difference between being vocal on an issue you care about and joining a tribe permanently to go to war for all its beliefs & flaws.

Three Things: Communicating, Better Ways, Argentina

Being able to communicate well is an asset in almost every single environment where modern humans make a living. e.g., working in a startup or in a big company, starting your own thing, and on and on.

My only regret about improving my writing, storytelling, and communication skills is that I didn’t start putting in the reps sooner.

The unfortunate truth is that a lot of people are making a living this way.

Many don’t even realize there are other ways to make a living in the modern era. They may not pay as much at first, they may not be as cleanly defined, but they exist.

The advice I would give this person is not to double down with their employer, put more hours in, and assume they’ll take care of them next time. But to diversify out of needing the employer at all. To create some income streams outside of work. To find ways to survive without them.

This is, in fact, what the vast majority of the education inside of the Small Bets community is about.

S-P-A-M

#10 - Buenos Aires, The Halo Effect & Going a Little Too Far

Halo Hola from Buenos Aires, where the steaks are superb and cheap, the sun is shining almost all the time, a radically new president is bringing hope to a disastrous economy… and there are almost as many bloody mosquitoes as there are “AI” projects…

Read more

2 years ago · 5 likes · 1 comment · Prince

I enjoyed this newsletter edition by Prince, not just because he mentioned me at the bottom.

But because I learned some interesting things about Argentina & Buenos Aires that I didn’t know.

Three Laughs: Small Time Devs, Potential Health Feature, Cup of Coffee

This is interesting because Pieter Levels approach to building software offends some software engineers. And yet, he’s making millions. And Tony is right behind him, too.

But you have to understand that the world of building software as a one- or two-person team is very different from the world of a large team. So, nothing they do in building software offends me; instead, I learn from them.

And I would wager more software will be built this way, in smaller teams, going forward, not less.

This hypothetical feature would be good. It would remind everyone:

We’ve all got such limited time on this earth, so why spend it arguing with people on the internet over politics?

The perks of working from home.

Thanks for reading, and as my youngest daughter would say, “peace out” until the next issue.

I remember this one day playing on the beach as a kid by myself, I had this raggy-missing-patch soccer ball I was using as a floatie. 

We couldn't afford great balls back then. But we had great beaches. While playing, I'd throw the ball a little bit ahead of me, and I'd swim to it, then use it as a floatie to swim back.

But that day, a strong gust came, and it sent my ball flying 20 feet into the deep end of the Adriatic Sea.

Then without thinking, I started swimming to get my ball. I loved that ball. It wasn't just a floatie but a friendship maker because every kid back there loved playing a game of soccer.

But as I swam toward the ball, another strong wind hit. 

Then it was another 10 feet toward the Italian coast and away from mine for my ball. It was at this point, while I was huffing for air, that I remember vividly thinking, "Let me take a break." 

But as my feet reached down for my breather, there was no seabed to reach. 

Then I looked back, and the coastline felt a mile away. 

But if I could just reach that ball, I'd be ok. I'd used it that way a thousand times. Floating with it and kicking was how I was learning to swim. The third world had no swimming coaches. And no lifeguards. And my grandmother, back at shore, couldn't swim herself to save me.

But I had a tough choice to make. I was about to go too far. Do I go for my ball?

But of course, that's not the only time in my life where I recognized I was "in that moment." I was about to go too far and I had a choice to make. 

It happened when I got into engineering management. I remember looking back and thinking, "If I keep going on the engineering management track, I'll likely never be able to pass another leet code-style interview for a senior individual contribution again." 

But I was learning a lot about human behavior, communication, and so many other useful skills. "Fuck leet code," I thought. "I am just going to go for this management stuff."

But then this moment happened again recently when I got into business. 

I'd quit my cushy-high-paying job, and the venture-funded startup that I quit to start with some partners wasn't going as planned for me. I wasn’t making much money, and I was eating into my savings. But I saw another path. I'd just made my first few internet dollars on my own. "If I could just do more of this," I thought, "if I could just place some more small bets, then I might be able to survive as an entrepreneur."

But that was getting me further and further from the shoreline of employment. And that direction might soon make me unattractive to employers. My business partner Daniel Vassallo jokes on his Twitter profile that he's "bad for the economy." That's because he teaches people how to leave traditional employment and fend for themselves without an employer.

I decided back at that moment that I was going for freedom, even if it ultimately made me unemployable eventually.

But that day, when I swam to get that ball, I learned to recognize these "I am about to go too far" moments. 

You might find yourself in similar moments and I think it's important for you to recognize them when they happen. Decide consciously. And of course, I can't tell you what to decide. 

But I can tell you that if you're reasonably certain you can make it, and you do decide to go for it, you will find a little extra energy, a little extra power within yourself, that you never thought you had. After I reached that ball that day, I felt like I could've swam a whole lot more if I had to.

I am quoting Nipsey Hussle here, who was paraphrasing T.S. Elliot: "Only those who risk going a little too far can possibly find out how far they can go."

A Small Promo from Me:

We have a super-packed lineup of exciting live classes coming up in Small Bets. Take a look at this list of confirmed events:

• Feb 06: Publish a Best-Selling Course on Udemy by Hassan Osman 

• Feb 07: Amazon KDP Crash Course by Greg Lim 

• Feb 08: Reproducible Success Strategies & Ergodicity by Luca Dellanna 

• Feb 09: How to Start Your First Cohort Course by Daniel Vassallo et al 

• Feb 13: How to Sift Through the Treasure Trove of Online Data by Steph Smith 

• Feb 15: Make $500 on Upwork by Monday by Sean O'Dowd 

• Feb 22: SEO Keyword Research by Jordan O'Connor 

• Feb 27: Equity Crowdfunding for Solopreneurs by Sahil Lavingia 

• Feb 29: Building a Media Business by Arvid Kahl 

• Mar 03: A Practical Guide to Self-Employment Taxes by Catherine Cusick 

• Mar 11: Small Bets Fundamentals by Daniel Vassallo 

• Mar 14: Enough GPT to be Dangerous by Sairam Sundaresan 

• Mar 21: Building a Content Roadmap for SEO by Jordan O'Connor 

• Mar 26: Explaining Ideas Visually by Janis Ozolins 

• Apr 09: Creating Income through Real Estate by Louie Bacaj 

• Apr 10: Accounting and Bookkeeping Basics by Antonio Reza 

• Apr 11: Getting Started with Midjourney by Christian Heidorn 

• Apr 16: Delve Into Expiring Domain Names by Peter Askew 

• Apr 23: Self-Sponsor Your Own US Green Card by Archie Agrawal 

• Apr 25: Marketing Fundamentals for Non-Marketers by Daniel Vassallo 

• Apr 30: Getting Started on YouTube by Aprilynne Alter 

• May 06: Getting Started with Short-Term Rentals on Airbnb by Isaac French 

• May 07: Gumroad Crash Course by Daniel Vassallo 

• May 14: Intro to Google Ads by Jay Mac 

• May 21: Emerging from the Void on X by Daniel Vassallo

If you're not a member yet, you can join Small Bets today for $185 — once. This is a one-time payment (no recurring fees) and lets you join all the above classes, all future classes, and watch all past recordings. If this interests you, it would be an honor to welcome you aboard. And if you are already a member, then I’ll see you in some of the classes.

Three Things: Scale, Slow it Down, A Voyage

There’s been a huge debate on Twitter about scale.

I have so many things to say on this topic. But in an effort to keep this newsletter small, I’ll share these two links with you on what I’ve said on it already. Link 1: Scale can be bought. Link 2: The real risk is you’ll make things that help no one.

There is a lot of truth to this. No matter how good your computer hardware gets, somehow, we seem to find a way to make it slower.

My internet friend, Bojan, struck a nerve with this one.

Thank you for reading!

—Louie

P.S. You can reply directly to this email; I will read it and try to reply to everyone.

I’ll leave you with another great quote by Nipsey Hussle:

“If you look at the people in your circle and you don't get inspired, then you don't have a circle. You have a cage."

There has never been a better time to consider diversifying out of needing to work at a big tech company than now.

First, big tech companies always needed fewer people compared to past industries, but they might soon need even fewer people. I was reminded of this reality in a clip where Peter Thiel roasts Google & Big Tech*. Paraphrasing the host who says: "140 characters are nice, but they don't employ a lot of people compared to GM in its heyday."*

But Twitter now supports more than 140 characters and needs even fewer people to run. Jason Calacanis, who was there, said Twitter laid off 80% of its workforce (not 75% as was initially reported) after Elon Musk acquired it. We can argue that Twitter's ads business is declining all day, but the tech is mostly fine. And it wasn't just Twitter. Almost every big tech company has had record layoffs in the last two years, and in every one of them, the tech is mostly doing just fine.

But these layoffs at these big firms were all baked in before generative AI was even in their calculus.

Large language models and generative AI, I'd confidently say, make 80% of what software engineers do 80% faster. I know because I use the stuff to build, and not too long ago, I used to manage a lot of engineers, too.

So, what does all that mean for big companies and their expectations out of their software engineers? I am no matha-magician, but what's coming to these big companies looks a lot like asking fewer people to do more things.

Second, more competition is coming. The barrier to entry in business in terms of tech has decreased significantly, even before AI. In November 2022, in my newsletter "The End of The Tech Moats," I wrote:

"The hard truth is that much of what made Big Tech untouchable before, like building things for scale, is available to many now. And those technical challenges are far cheaper to pull off and with far fewer people needed because we can build on the shoulders of giants. [libraries, frameworks, open source, infrastructure, cloud, and now AI, etc.]

Of course, hiring software engineers who understand distributed systems still costs big bucks, but you can find them today [and you need fewer of them].

Back in the early 2010s, those people only existed in Big Tech. It took us two years at Jet in 2015 to build an eCommerce system that supported 10 million plus customers and a billion a year in sales. It had taken others over a decade to do the same before us."

So, a lower barrier to entry to get to scale means more competition for these big companies.

More competition in the tech industry will likely mean lowered margins for big companies. And more widely available and commoditized skill sets mean lower pay for software engineers. This doesn't even factor in the impacts of remote work, the fact that a company can hire from anywhere globally, and so on.

But lower margins for these big companies in the future almost certainly mean more pressure on the people there and fewer perks.

Third, the pressure and the layoffs at these big companies compound. People forget that bad things compound, too.

The likelihood that some firms can and might be disrupted by smaller, nimbler firms that need even fewer people is now much higher.

To get an idea of what hiring software engineers looks like, for a top tech firm, they sift through maybe 400 qualified people, screen down to 50, bring 10 for on-site/interview, and hire 1-2. That was our process at Jet.

This is all to say that the people working at these tech companies are capable. So when they fire and take away perks, it almost always sends a message to the remaining talent to leave, too. These moves often push away some of the best people, compounding their problems. Smart people rarely hang out in sinking ships. Big Tech's ability to hang on to that talent and acquihire talent has been a huge reason for their chokehold on the industry and the tech moats of the past.

As their top talent leaves, the odds that talent might start competing things increase, and the odds they can hang on to their edge decreases.

Don't get me wrong, I doubt the likes of Amazon, Microsoft, or Apple will get disrupted head-on in their core business, and that’s because their advantage is more than just tech. But we are already seeing a great decentralization of Big Tech, it could be a slow decline by a thousand cuts.

To summarize, first, we've got an industry that already needs fewer people than most. And now, AI is coming into the picture.

Second, a lower barrier to entry and more competition in various niches seems inevitable. Third, layoffs have already triggered some of the best talent to re-think being in a big company, and you can start to see why I am so pessimistic about the future of big tech companies. The decline may take a long time. After all, even IBM is still standing.

But it is a paradox that I am pessimistic about big tech companies, but I am very optimistic about tech skills continuing to be valuable and useful. It is just where those tech skills might be most useful may not be in the places they used to be valued most before.

You see, I believe the Cambrian Explosion of software is coming. Up until now, making software was expensive, complex, and difficult. That is why we got all this centralization into these huge companies. That's why we had tech moats.

Now, with AI, tons of software will be made. More crap software might get to money than ever before.

But that could be a very different profile of a company that needs a software engineer to clean up, extend, or do more with that software that makes money than we had in the past.

This is why so many smart people in tech that I know are diversifying out of needing a big tech company for their livelihood. This does not mean you need to quit your tech job tomorrow. They still pay well:

But it does mean that you should get yourself into a position where if they let you go, or there are fewer jobs in big tech companies in the future, you'll be ok.

Over the last two years, I have seen many people diversify out of needing a big tech company.

Just recently, I tweeted about Amazon Engeener Steve Hyunh doing this:

But I personally know a bunch of Amazon engineers in the Small Bets community alone that have done this. I am a business partner with one of them, Daniel Vassallo. Another one, Kunal Modi, I had beers with on Friday.

So what are these people diversifying out of needing a big company doing?

Many are diversifying out into media. Two former engineers I've seen on this journey doing incredibly well are Alex Xu and Gergely Orosz, with their paid newsletters and books. But more recently, my friend Franco Fernando is doing it with his newsletter: His consistency to chip away at growth over the last two years has been inspiring.

But media is not the only way. For some small-time developers like Tony Dinh:

Tony Dinh's Newsletter

My solopreneur story: zero to $45K/mo in 2 years

20 September 2021 was the first day I became unemployed and started working for myself. It’s the best decision I’ve ever made. Working for myself gives me a freedom I’ve never experienced before. Over the past two years, I have: created four small but successful products (all will be mentioned later in this post…

Read more

3 years ago · 569 likes · 73 comments · Tony Dinh

Who quit a tech company job, it meant building multiple apps and talking about them publicly on places like Twitter. And others like Daniel Nguyen and Dmytro Krasun are on the wings, using a similar model.

The recipe for success for many of these folks is to go to a place with algorithms and network effects, give away their expertise, and talk about what they are doing. This drives attention and traffic to their products. The reach, combined with solid products that people want, is the secret sauce to make it on your own.

But what if no matter what you do, you can't crack the social game, you can't get the algorithms to favor you? How, then, can you diversify?

Well, one way is to ride the organic reach of platforms with people searching for things on them. My friends Greg Lim and Hassan Osman rely on platforms like Udemy and Amazon KDP to send sales to their books and courses. They put minimal effort into social media. And any social media effort is a bonus on top of an already working model that brings in income for them.

But just because you may be in a big tech company, I'd like to remind you not to sleep on traditional businesses. There is no chance AI will disrupt real estate anytime soon. People need a place to sleep and live, so rental properties will keep working. This is how I started diversifying out of needing a big tech company for my livelihood.

But it's not just rental properties; Codie Sanchez made serious money with laundrymats and Nick Huber with storage facilities. Personally, I find those businesses to be a little too much effort for me. And I could see them pulling me too far from my strengths in general. As I said, tech skills I still think will continue to be valuable. But rental real estate, a few hours a week max, is the right level of low effort, safety, diversity, and income for me to justify investing all my surplus into it.

Diversifying out of needing a big tech company is a balance of resources, like time, effort, and capital. Depending on which resources you can put to work more, this will likely dictate your best path out.

But in my opinion, the best path of all might be to try all of it. Increase your odds of success as much as possible. That's what I did.

But I also know that using this whole Creator Economy thing to diversify out has almost become a cliche. After all, how much room is there still, and how big can it get?

According to Goldman Sachs, the creator economy could double over the next three years, from a quarter trillion dollars to half a trillion. Now I get it; compared to the big tech companies, this sounds like peanuts, but that's just the next three years. All of this is still in its infancy.

In my experience, this creator economy thing lends itself well to tech-savvy people. It's a natural option to begin to diversify.

As evidence of its infancy, from something I am familiar with, If you search for viral tweets before 2018, you'll see that almost anyone who went viral was a celebrity, prominent politician, or a company. The idea that individuals can carve out a little corner of the internet for themselves is still new.

So, the bad news is big tech companies exist in a place where they are forced to become increasingly hostile to their people. But the good news is, it has never been easier to diversify out of needing them.

And it goes without saying that diversifying out of needing a big company is going to be a little work. Nobody will give you something for nothing. But it might turn out to be the best decision you make, given what may be coming for those companies.

*The clip: Thiel: Google has $50B, doesn't innovate

A Small Promo from Me:

Ed Latimore has inspired me for a long time, since my days as a lurker on Twitter in 2020.

Ed Latimore is inspiring because he is a man of many talents - he's got a knack for mastering diverse skills, from academics to athletics and everything in between. His new ebook breaks down the universal methods he's developed over the years for effective learning.

Many of you know that I am an immigrant who came up from poverty through tech, and now I'm going after entrepreneurship. But this is a big reason I am drawn to Ed's content and wisdom. It's been relatable and useful to me the entire time. Ed came up by becoming amazing at mastering things; his unusual combination of a physics degree, his Spanish fluency, his past as a championship boxer, his mastery of social media, and getting attention are just a few examples.

Very few people can claim that range of mastery.

Ed's core approach boils down to grasping fundamentals, recognizing that teachers and books alone can't replace true understanding, and deeply analyzing problems rather than jumping to solutions.

While Ed and I have followed different paths, I believe that anyone looking to excel - whether in starting a business, learning to code, or grasping abstract concepts - can benefit immensely from adopting his learning principles. They promote simplicity over complexity and quality knowledge rather than just information volume. If you want to build better products, grow your career, raise capital, or just broaden your mind, Ed's got you covered.

Needless to say, I am a huge fan of Ed's. When he asked if I would share his free eBook with my readers, "The Five Pillars of Learning Mastery," I was happy to dig into it and recommend it to you:

Three Memes for the Laughs:

The spirit of this meme is on point.

Climate protesters threw soup on the Mona Lisa this week.

What an unfortunate way to protest and possibly lose supporters in the process, too.

This is one way to do it.

Thank you for reading!

—Louie

P.S. You can reply directly to this email; I will read it and try to reply to everyone.

I put out my first paid product on January 11th, 2022.

This was the launch tweet:

Since then, I started taking this internet game a little more seriously, earning a little over $300k in internet dollars.

But although it's been exactly two years since my first internet bucks, the money hasn't been the real win. I need to take you on a ride to understand the real win.

The last cohort of our Newsletter launchpad had 158 people live on the first night's Zoom. Can you imagine me, an awkward and introverted engineer, teaching a 3-week class that large? It's hard even for me to believe it as I write it. But here we are. Not only did it happen, but it was a ton of fun.

And that was cohort 5 of Chris and me teaching it live. Since starting, I have taught hundreds of people live and thousands through my recorded courses. Here are just the gumroad numbers for the recorded classes, not counting the stuff I taught through Small Bets.

I am not telling you all this to brag, I have a point I'd like to make, just bear with me.

In these two years, I somehow got twenty-seven thousand followers on Twitter and close to seven thousand subscribers to this newsletter. I wrote 300+ articles. 17k+ tweets. And 132 editions of this newsletter.

During that time, I learned frameworks and models I never knew about. But I did not just learn them, I put them to work. (And this is the key!) I spoke to 100+ people on one-on-one walk-and-talk calls, especially after my successful recorded engineering course. Thanks to those calls, I got a peek into countless engineering organizations at numerous companies. And I managed to help more than a few people get promoted.

But that's not all. With my partner Daniel Vassallo, we have created a support network in Small Bets with thousands of community members. And it has hundreds of lessons on skills people need for this internet game. And lessons on how people can think about entrepreneurship today, basically how they can make their first dollars online.

But recorded courses, live classes, and one-on-ones are not all I did.

I built software, too. Multiple apps, most failed (Some of you may remember ThreadX or TapeX; thank you for being on the journey with me that long if you do). But the small bets site, which is evolving into one of the best community sites I have ever seen, is perhaps the most successful piece of software so far based on usage. Our site now has its own event management system, recordings, a community directory, Discord integrations, etc. And because it's been a winner, Daniel and I have added features, each one a small bet itself.

But that's not all. I made friends on this journey. Real friends, many I talk to regularly, some I meet up with in person. I've even learned some sales and marketing. All this may not be that impressive because there are other people who are doing much better. But you gotta understand as an awkward, introverted engineer who is an immigrant and comes from poverty, I come from a huge deficit on a lot of this stuff. There are numerous fears I had to face off against on this path.

But at some point, I also fell in love with this style of entrepreneurship. The freedom and the ability to spend time with my young family. The growth. All of it. I got so much more than I thought I would from this journey.

My goal is to never take a big corporate job again. But having done that successfully for over a decade and managed many teams and people, I can confidently tell you that if I were to go back into that world, I would absolutely crush it now. No, scratch that, knowing what I know now, I would demolish it.

Now, I am bragging a little bit.

But the growth and skills I've picked up in these last two years are worth their weight in gold—skills like sales and marketing, teaching, presenting, writing, relationships, coding, product, and on and on.

But the real reason I am sharing all this with you on my anniversary of making my first few dollars on the Internet is to motivate you.

If you are on the fence about getting started in this internet game, I am a living example that you've got little to lose and a lot to gain. More even than just money. If you really do this, I am convinced you will be more valuable to the market, more anti-fragile in the world, and freer in a few years than you would've ever been sitting on the fence.

Three Things: GPT-5, Programming with AI, Community Tooling

This statement by Sam Altman, the co-founder and CEO of OpenAi, is a fairly profound one if it happens.

A lot of things could be disrupted soon.

But the things I am going to prioritize in a GPT-5 world are human first things, like communication, community, and relationships.

Now, the only thing that can compete with a Software Developer who is using AI is another Software Developer using AI.

A huge reason Daniel and I have had to build a lot of things from scratch on Small Bets, and why we will do more this year, is that while the off-the-shelf community tools are pretty good to get started, they are pretty bad long-term.

At first glance, the Small Bets site is deceptively simple, but that’s only because Daniel is proving to be an amazing product manager.

Three Memes: Vibe Shift, Thirsty for Remote Work, Silicone Valley Clip

The world is, in fact, changing fast. And Dads have good intuition and gut instincts.

I can’t blame the guy; it's better to suffer in the desert than spend hours commuting, burning fossil fuel, only to work in a cramped space and login to Zoom calls for a little more water.

A great little video clip from the comedy show Silicone Valley that is now turning out to be true for a lot of startups.

Taking less money from VCs, or no money, means you are free to run your business the way you want to and to do what you want to do.

Thank you for reading!

—Louie

P.S. You can reply directly to this email; it will get to me, and I will read that and try to reply.

Hey Team,

Happy New Year!

It's goal-setting season, so I thought I'd give you a tip that changed my life when it comes to goals.

I've got a good amount of experience in both setting personal goals and helping other people set goals. I used to set goals for my teams back when I managed lots of people. Some would get done, and some wouldn't. When I thought about the difference between the goals that got done and the ones that didn't, I was surprised that most of the time, it came down to one thing.

Why?

Software engineers, the types of folks I used to manage, have a natural love of accurate cognition and get a lot of joy out of exercising it (and probably you do, too). So when I could really connect the meaningful reasons, the "Why," to get a goal done with them, it would almost always get done. But when something was off, they didn't understand the business or didn't believe the reasons I gave them, they would almost always fail to hit the goal, or if it got done, it got done in a half-assed way.

But Charlie Munger says all modern humans have evolved to be this way now: to respect accurate cognition, to respect the "Why." Charlie even has a term for it: "Reason-Respecting Tendency." To illustrate this, Charlie likes to tell the story of Carl Braun, who had an immensely successful company designing oil refineries:

"Carl had a very simple rule in his large Teutonic company: You had to tell Who was to do What, Where, When, and Why. And if you wrote a communication leaving out your explanation of why the addressee was to do what was ordered, Braun was likely to fire you because Braun well knew that ideas got through best when reasons for the ideas were meticulously laid out."

When I got into this journey of entrepreneurship in 2021, I had all sorts of Goals for myself. But a few months in, things got so bad for me that I went to the hospital thinking I was having a heart attack. When I got there, they told me I was fine, likely just a terrible panic attack. But what gives? I was doing the work. I was chasing my goals. I thought I had my reasons, my "Why," but it turns out I didn't.

But before I tell you how I found my “Why,” first, I want to tell you another story. A story that illustrates the importance of having real "Whys" that Arnold Schwarzenegger tells in his new book "Be Useful":

"When I go to the gym these days, I will sometimes see a person wandering around, bouncing randomly from machine to machine like a Ping-Pong ball, and it’s clear they have no plan at all for their workout. I’ll go up to this person, and we’ll have a conversation. I’ve done this many times, and it always goes the same way. 

'What’s your goal coming into the gym?' I’ll ask them. 

'To get in shape,' is what they’ll usually say. 

'Yes, great, fantastic, but get in shape for what?' I will say. 

It’s an important question because not all forms of 'in shape' are created equal. Being in bodybuilder shape isn’t going to help you if you’re a rock climber. If anything, it’s going to hurt you having to carry around all that extra mass. In the same way, being in shape like a long-distance runner is useless if you’re a wrestler, where you need both raw strength and explosive quickness. 

They’ll pause, and then they’ll stammer, searching for an answer that they think I want to hear. But I stay silent, I don’t let them off the hook. Eventually, most of them give me an honest answer. 

'My doctor said I need to lose twenty pounds and get my blood pressure under control.' 'I just want to look good at the beach.' 'I have young kids and want to be able to chase them around and wrestle with them.' 

These are all great answers. I can work with each of them. Zooming in like that gives their vision some specific direction, which will help them focus on the exercises that are best for achieving that goal."

Arnold illustrates that you need real concrete "Whys" and sometimes you've got to dig a little deeper to find them.

I was reminded again early in my entrepreneurial journey: without great reasons, it doesn't matter how SMART your goals are. (Don’t get me wrong, SMART is a pretty good framework for setting goals; it says they should be Specific, Measurable, Achievable, Relevant, and Time-bound) And it doesn't matter how great your systems are. The "Reason Respecting Mind" demands its reasons, and the reasons better be good. The better the reasons, the harder that mind will work to achieve those goals. And the more frequently you remind that mind of the reasons, the more focused it gets on the goals.

In 2021, my first year in entrepreneurship, I chased my goals hard and nearly hospitalized myself but accomplished nothing meaningful. My "Reason Respecting Mind" turned on its B.S. detector and didn't believe my own aspirational grandiose reasons.

But then, in 2022, I hit my financial goal of making $100k on my own in internet money. And this year, in 2023, I hit my goal to double that to $200k.

But I am convinced I hit my goals because I found my reasons in the pits of my despair. I found real reasons why I wanted to do this and why I wanted to remain an entrepreneur:

• I want to be a free man. 

• I want to walk my kids to school and pick them up.

• I don't want to be told which office to report to, and which city to visit on behalf of my employer. 

• I'd rather my kids see me struggle chasing my dreams than rarely see me but get all the trappings of a high salary from dad. I want to set an example I can be proud of when I am on my deathbed.

• I have a finite amount of time on this earth, and I don't want 50+ hours of my time to be filled up with useless big company meetings. In a big company, whether there is enough work or not, the hours will be filled.

• I want to work hard so I can own a portion of the fruits I produce. And not in some Big Company way, where ownership means if it goes wrong, you have to stay up really late to fix everything. And if it goes great, you might get a few percentage points raise.

I found other reasons why I want to do this, too, but I don't want to bore you. And you'll need to find your own reasons for whatever you want to do.

So, with any goals you have for yourself this year, take a little time and think through your "Whys." I mean, really think through them because it’s tough to lie to your subconscious. Convincing your “Reason Respecting Mind” might be the most important thing you do to help make your goals a reality this year.

This Week’s Small Promo:

My business partner, Daniel Vassallo (a former Engineer who worked on AWS), is giving away his best-selling E-Book “The Good Parts of AWS” for free.

This is still going as of today, so grab a copy for free.

Three Things: Fast Forward, How Much Success, Starting Small

Find your reasons and go after it in 2024!

I loved this clip of Tony Hawk, the pro skater who had 4 video games made about him.

Tony met with an Activision exec & thought he might finally make a million dollars in one year. And then the exec handed him a check for $4 million for that year and told him that things are about to get way bigger than you or we ever thought.

It's hard to predict in business what some products will do. It sounds to me like both Activision and Tony were surprised.

When you get your thoughts down and out there, they sometimes turn into something bigger.

I saw first hand when I joined Small Bets, it was a single two-week course by Daniel. It evolved into a community and is now becoming a sort of university for the creator economy and getting started with online business. All of that happened one small bet at a time.

A reminder to get your stuff out there in 2024, never know where it will go.

Three Laughs: Dads, Dads, and Taxes

Dad life, a very funny music video that captures a few things about being a dad.

I wish you a happy, healthy, and prosperous 2024!

—Louie

P.S. You can reply directly to this email; it will get to me, and I will read it.

I started rooting for these newlywed couples on this show. And then my wife told me, "Don't get your hopes up. Only one out of these five couples from this season makes it."

The experts from Married at First Sight (a show on Netflix that's been running for 17 seasons) have PhDs in:

Psychology, Sexology, and Sociology, among other things.

Incredulous, I told my wife, "Only one out of these five couples make it!?" 

But then I thought to myself, how can that be? 

An 80% divorce rate? That is a higher divorce rate than even the average here in the U.S., which is already pretty high, between 40 to 50%.

But then, what are these so-called experts even doing? 

When you watch the show, the experts say things like, "This person will balance that person out." Excuse the Bronx language that went off in my head when I heard that, but "What the f*ck!?" Why are these experts matching people on some ideal state in their heads? Rather than doing it on the things that last?

My mother, who dabbles as a part-time matchmaker, has a better hit rate than these "expert" matchmakers. My mother manages a bakery and meets a ton of people from the community. Naturally, sometimes, the conversation comes up with parents who wish their son or daughter was married. And my mother gets the gears going. She has matched many couples already, 10+, and maybe there has been a 10% miss rate, not 80%. And my mother didn't even graduate from college, never mind a Ph.D. in matchmaking.  

So what the hell is going on with these "doctors" and "experts"?

One of the couples from season 12, Virginia, is this party girl, maybe 25. She matches with and marries a guy who got divorced because of his career in the military, Erik, who is 34. Erik, who is reserved, is desperate to have kids. Erik's mother is pressuring him for grandkids. And Virginia is a "maybe later" on kids but a definite no in the short term. She loves her parties. When I saw this, I thought, "What the hell? Didn't these experts ask a single question?" The experts hoped Erik would "balance" Virginia out. Excuse my Bronx language again, but when I saw that, my immediate reaction was, "Get the f*ck outta here with that sh!t."

When my mother matches someone, the first thing she looks at is the family. She asks around about the families of the two prospects. My mother inspects the trees to try and figure out what might happen to the apples. Then, she digs deeper into what each seeker would like out of life. She finds points that might be compromisable and points that are not. She matches them on similarity of the important interests, not on some ideal state. My mother somehow intuitively knows matching on the important interests is antifragile; the ideal state is fragile. My mother does all this on gut feeling. 

But Married at First Sight’s matchmaking experts and their abysmal divorce rate bring up some important points about "experts."

Too many experts are too far gone into seeking “the ideal state." 

Too much depth of knowledge in a single domain can actually be harmful when applied even a little bit outside of that domain. Many of the show's experts have PhDs in their domain, like Psychology or Sociology. But to my knowledge, there is no Ph.D. in something multi-disciplinary like matchmaking. If there is, my mother deserves one.

The show reminded me to check some of my own expertise when bringing it to a new domain. And that I should forget about the ideal state when I operate in something multi-disciplinary like entrepreneurship. And that I should try to operate more like my mother in those things than "the experts."

A Promo from Me: Three Newsletters by Students

We're entering the last week of our 3-week newsletter program on Small Bets. I wanted to highlight and promote three awesome newsletter editions published by folks in our program so far.

1. “bye 👋 brandon”

bye 👋 brandon

From Struggling Personal Trainer (65k) To Software Developer (185k) In Less Than 2 Years

Read more

2 years ago · 14 likes · 4 comments · Brandon Austin

Tech changed a lot of people's lives in the last decade-and-a-half, including mine. It's nice to see that it is still doing that; Brandon is a self-taught engineer sharing his journey. And this is a great piece by him that I recommend.

2. “UpGroves”

Going from trading time for money to building products is not an easy thing to do in entrepreneurship. Paulina shares her journey going from consulting to Indie Hacking and building products. And growing an audience to get a distribution channel for those products and all of the things that come with that.

3. Road To 10K MRR

Road To 10K MRR

The Mental Game of Entrepreneurship

According to most databases of online poker players, about 80% lose money, 15% break even, and 5% of players win money. What I lack evidence of - but strongly believe - is that a considerable percentage of those losing players are good at poker, the card game. They lose money because they're bad at poker, the mental game…

Read more

2 years ago · 3 likes · Bill Prin

Bill says most poker players lose because of the mental game. He thinks the same happens in entrepreneurship. After reading his very insightful piece, I think he’s right.

Three Memes: Ai Companions, Made by Machines, Cables

“Ai Companions” are now going viral. Enabled by the recent advancements in AI and open source.

Adam thinks it will damage the expert matchmaker’s ability to make matches even more, I think he’s right.

For reference, here is one of those “Ai Romantic Companions” enabled by this tech:

Machine-made is starting to get a brand new meaning.

As we head into 2024, my box of random cables is still going strong. I hope yours is too. You never know when you might need them.

—Louie

P.S. You can reply to this email; it will get to me, and I will read it.

According to historian Mark Jackson*, mid-life crises get triggered at around 40 for three reasons.

The first is theorized to be psychological. With 40 years of our lives gone, it’s easy to see the downward slope of the other half of our lives. And realize it is the last forty we've got.

But the second reason people sometimes have a mid-life crisis is biological.

The body begins to deteriorate—something known as sarcopenia kicks in. Sarcopenia is the involuntary loss of muscle mass and function. Muscle mass decreases approximately 3–8% per decade after age 30, and this rate of decline kicks up even higher each extra decade.

The third and biggest reason is societal. This psychological and biological middle-of-life inflection point triggers a lot of comparisons. Perhaps one hasn't accomplished what they thought they'd achieve by 40. Sometimes, society and people close to us let us know we haven't. But many of us have been compared to others our whole lives up until 40, so comparison is easy. First, with grades in school, then with annual evaluations at work.

Forgive me for going off on a tangent here, but Corporate America's end-of-year evaluations can be pretty demeaning.

God, I don't miss the "Stack Rankings." A student in my newsletter course in Small Bets recently wrote about stack rankings and used a term I hadn't heard in a while: "Rank-and-Yank." And he said at Amazon when you get "yanked," they say: "You got promoted to customer."

I thought that was great because I "yanked" myself out of all that. And I promoted myself to customer.

Good riddance to the annual evals. I once heard the founder of Jet, a startup I was a part of that sold to Walmart for $3.3 Billion, lament in our all-hands about having to receive an annual eval for the first time. He sighed and said, "I've been an entrepreneur for so long. I am just not used to these things." He didn't stay there much longer after that to get re-evaluated.

But nobody likes annual evaluations, even without the stack ranking. Those things are anxiety-inducing even if you are doing great. Even if you know you've "crushed it" all year. You're on eggshells because you're unsure how hard you "crushed it?" Will you actually get that promotion, or will they yank it from you because of some budgetary constraint by HR? Will they make good and give you that raise? Will they rank you as "exceeds" expectations and give you a bigger bonus? You'll find out, but you'll have to wait until after the holidays.

Larry Page, the co-founder of Google, once said: "Few people wake up in the morning and say, 'Oh, I wish I could go work for a company today.'"

But if you're lucky enough to be in a great company, maybe a startup, moving fast, doing something important, and you say that phrase Larry said, then enjoy that. It can make the annual evals bearable for a little while. I was once in a company that felt like we were doing important work, and then the company sold. Don't get me wrong, we all did well, but it stopped being the kind of work where you wake up and say, "Oh, I am so glad to be going to work for a big company today."

But nothing great can last forever. Even the sun will eventually implode. Google imploded quite a bit recently. The firm Larry Page tried to create as an exception to all this, the beacon of engineering prowess, has its challenges these days. They've had layoffs, which I am sure involved annual evals and some sort of "Rank-and-Yank," and now the luster is off. Perhaps the destructive behavior is a sign of a mid-life crisis? Can a company have a mid-life crisis? But now, Google's even got startup(s) running laps around them in the most important race of the modern era: Artificial Intelligence.

But also remember that a company isn't the sun. These days, companies burn out faster than ever. There is very little chance a firm will burn bright your whole career. The days of working for 30 years at a firm and then retiring are over, so make arrangements.

But Larry Page is right; most people never even say the words, 'Oh, I wish I could go work for a company today.' They wake up and go to work to get compared at the end of the year because they have to. Some have bills to pay and think there is no other way. And there might not be another way for them yet. Many have a family to feed.

But some have neighbors to compete with, too. So they stay and take the annual evals and comparisons.

But with comparison being all one knows, it's easy to spot someone doing a little better at 40 and wonder what we did wrong up to that point? This can trigger a crisis in some.

The paradox of living is that it is only after coming to terms with the fact that we might have less life left to live than we've already lived that most people actually begin to live.

But it makes sense. In his famous Stanford Commencement speech, Steve Jobs said:

"Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure — just falls away in the face of Death, leaving only what is truly important...

No one wants to die. Even people who want to go to heaven don't want to die to get there. And yet, Death is the destination we all share. No one has ever escaped it. And that is as it should be because Death is very likely the single best invention of Life...

Your time is limited, so don't waste it living someone else's life... And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary."—Steve Jobs

Some people rebel when they begin "to live." According to the historian Mark Jackson*, infidelity goes way up as people try to prove to themselves that they've still got vitality. Divorce rates shoot up. And all sorts of destructive behavior kicks up during a "mid-life crisis."

But as I approach 40, I am not going to rebel.

With a few years to go to 40, I've already made arrangements. And I think you can too if you want to, with some preparation and work. I've made arrangements, so I can't be compared to anyone else anymore, at least not in any way that matters or will impact my livelihood. It turns out that without worrying about comparison, you need to make less than you think to have a good life and be happy. The freedom to work on what you want to work on seems to make up for some of the money. Remember, I "yanked" and promoted myself.

My hero, Charlie Munger, lived to 99. He didn't have it easy early on in life. But I saw it in his last interview a few weeks before he died, he was happy as a clam with eight children, fifteen grandchildren, and seven great-grandchildren already. He despised comparison and envy, and I think that was a huge reason he ended up doing his best work and doing so well later in life.

So if you're approaching 40, and you're feeling some anxiety, but you've got your health, a family, and friends around you, then you need to remember you've already got the whole world. Now, you just need to find a way to avoid comparison, and life can look like this:

*The talk by Mark Jackson on YouTube: Life begins at 40: the biological and cultural roots of the midlife crisis.

Three Things: Crab Mentality, Finance + Health + Life, Code & GPT

Comparison is the root of a lot of evil. Crab mentality, as shared by Danny and commented on by Pieter Levels harms a lot of people.

This is true for money, true for health, and probably true for life.

Like Steve Jobs said:
”And most important, have the courage to follow your heart and intuition. They somehow already know… Everything else is secondary."

I, too, am a big fan of ChatGPT for code, it is hard, with its limited context, to get large amounts of code out of it, but it is awesome for the reasons DHH shares here.

Three Memes: Meal Prep, Death Lemonade, Google’s AI Flop

I’ve got some family & friends who are into meal prep, so I had to send them this.

There is a Lemonade made by Panera Bread that is linked to two deaths, according to a lawsuit.

It seems like Panera might be trying to capitalize on Millenials’ impending mid-life crisis.

Google recently launched an AI that is meant to compete with GPT 4, but it turns out a good chunk of the video for the demo was faked. Perhaps, Google really is having a mid-life crisis.

-Louie

P.S. You can reply to this email; it will get to me, and I will read it.

Running into Charlie Munger and his wisdom over the last two years has been life-changing. 

He recently passed away. May he rest in peace. But I want to share his most important idea and one great way I've found to apply it with you.

Munger’s ideas all came to me at a particularly tough and stressful period of my life, my transition from employee to entrepreneur. I'd later learn this was a blessing because you can completely reprogram yourself during periods of great stress.

But first, I'd like to tell you how I came into contact with Charlie's ideas.

If you want to become an entrepreneur these days, it's a good idea to find and carve out your own distribution channel(s). The ability to access even a small loyal distribution channel to test if an idea is any good is one of the biggest advantages of the modern era of entrepreneurship. A distribution channel is a reusable asset. Unlike, say, a failed idea that can suck up a lot of your time and resources and be of no use later. 

But the fact that self-built distribution channels are even possible to build today is "a Goddamn modern miracle," as Munger would say. Before this, one needed to beg someone for capital to buy ads to get any meaningful distribution.

But to have a chance of building a distribution channel, you've got to roll up your sleeves and dive into the metaphorical crap, which is the modern Internet and social media. 

But it's not all bad. There are many gems inside this overflowing river of crap.

One such gem is the countless Charlie Munger fans on the Internet curating his ideas via bite-sized tweets, newsletters, and essays. By the way, humans turn out to be the best, most reliable curators of real value on the Internet, not the algorithms. And I say this to you as a "Computer Scientist" when you find the good ones, follow humans, not algorithms.

But once I came into contact with Charlie's ideas, thanks to the Internet, I could sense in my gut they were special.

The stress of the venture-backed startup not going well did something to me two years ago. This startup was the one I quit my cushy high-paying job to start. But around that time, I became obsessed with every rabbit hole Charlie Munger recommended. I didn't just read Poor Charlie's Almanac (which has a revised Stripe press edition coming out on Tuesday) but also nearly every book Charlie recommended. I read Darwin, Pavlov, Harvey Firestone, and Benjamin Franklin. I have become friends with many more eminent dead, thanks to Charlie Munger, over the last two years.

But I won't bore you with that list. Instead, I'd like to tell you about the most important idea I picked up from Charlie Munger: 

"Become multi-disciplinary."― Charles T. Munger

In Poor Charlie's Almanac, Charlie explains how a self-described average intelligent person like him could go on to run laps around the world's best living experts. And it's all because they've got blinders on from their field of expertise. According to Charlie, most experts from one field don't bother studying and learning the basic principles of other fields. But Charlie did. He studied the 101 & 102 level classes of every field. And Charlie Munger says this is all you need.

"I believe in the discipline of mastering the best that other people have ever figured out. I don't believe in just sitting down and trying to dream it all up yourself. Nobody's that smart."― Charles T. Munger.

Charlie is why I started taking basic classes online. I've been taking basic classes in Physics, Biology, Psychology, Economics, Marketing, etc., and taking them seriously. 

"Take a simple idea and take it seriously." ― Charles T. Munger.

The blinders of 15 years of Software Engineering and a Master of Science in Computer Science started coming off me. The blinders put on me by my employers started coming off me, too. Thank God the blinders started coming off because I would've likely failed as an entrepreneur if they hadn't.

Warren Buffett said on a Berkshire Hathaway investor call from the 1990s, "I find it extraordinary that so many smart people (Academics) only study what is measurable, rather than what is meaningful." Then his friend and partner Charlie Munger looked at him and replied, "To a man with a hammer, everything looks like a nail." 

To the man who knows only the models and principles of one field, as I did for a long time, only those models and principles can be used to solve all problems.

But, having gone through it, I can tell you it's not enough to read the books and to take the courses.

"All skills attenuate with disuse."― Charles T. Munger.

As Harvey Firestone wrote in 1926 in Men and Rubber, "[People] coming out of college ... may have the latent power to think, but they have nothing [important] to think about."

We need a place to use Charlie Munger's best idea of becoming multi-disciplinary.

But the Internet turns out to have true power to help us use Charlie's multi-disciplinary approach.

I started this newsletter six months before quitting my job to become an entrepreneur. And it became a forcing function for me to have good things to write about. To grow this newsletter and my social media presence, I suddenly had a good place to use the principles I was learning from human psychology, marketing, and sales.

I needed to pull in better metaphors to become a better writer and a more useful writer. Some of those came from Physics, like the idea of friction, momentum, energy transfer, and so many others that improved my writing and seem to apply to so much more than the physical world.

And now, as an entrepreneur, I get to use Charlie's best idea everywhere. I get to use it when I am selling, in product building, in my philosophy. 

But you don't need to be an entrepreneur to use his idea of becoming multi-disciplinary. I started using them here in this newsletter and building an audience before I quit to become an entrepreneur.

But I am not the only one. 

Take my friend Aakash Gupta, who writes , an awesome product management newsletter here on Substack. He started writing that newsletter around the same time I started mine. Then, when Affirm, the company he was at, had layoffs like so many other tech companies these last few years, it impacted Aakash. But he built up his assets. He had built up a network and demonstrated competence publically. He had to build up many new multi-disciplinary skills in that process. Best of all, he flipped on the paid feature for his Substack after the layoffs and had an instant income stream and time and resources to find the perfect role for himself. 

There are so many other stories like this of the internet enabling independence. 

But this may be why Charlie Munger's ideas are so popular on the internet.

When Charlie Munger went into business, he did not do it to become rich. He did it to become independent, to become free. Wealth was simply a by-product of running laps around everyone else who chose not to think like him, using a multi-disciplinary approach.

But what of the fears of what others might think of us for sharing our ideas online? And what if we look foolish while becoming multi-disciplinary? Charlie had something to say about this, too:

"Acquire worldly wisdom and adjust your behavior accordingly. If your new behavior gives you a little temporary unpopularity with your peer group… then to hell with them."― Charles T. Munger

But his best idea can help us all carve our own path today. And it is more applicable than ever.

I'll forever be grateful to Charlie Munger for freely sharing his wisdom with me. While it's sad the world lost such a great mind recently, I suspect his ideas will go on to change countless lives for generations.

A Promo from Me:

Charlie Munger, borrowing from Medicine, once said, “In medical education, The learner is forced to ‘see one, do one, and then teach one,’ with the teaching pounding the learning into the teacher.”

Or, as the famous Chinese Proverb says: “When one person teaches another, two people learn.”

This was the reason, my friend and I decided to start teaching The Newsletter Launchpad two years ago so we could learn faster.

But now, this will be our fifth time teaching this multi-week class.

It is no exaggeration to say that we have helped hundreds of people start writing their newsletters. Over 50 newsletters were started last cohort alone.

But best of all, Cohort 5 of the Newsletter Launchpad is included with a Small Bets membership.

If you’ve been thinking about starting a newsletter, you should join Small Bets and sign up for our class. And if you are already in Small Bets, we will see you tomorrow. Chris and I, along with our classmates, will be giving feedback on every edition of the newsletters published during the cohort. We believe there is no better way to start a newsletter and improve at this internet game than this.

One Thing: My favorite share on Charlie Munger’s life.

George Mack shared his favorite Charlie Munger story.

The man was born right before the great depression in 1924 and lived through all of that with some incredible personal hardship early on.

This brings forward an important thing I’ve come to believe:

The tougher the life, the greater the wisdom that will come from it.

Three Memes: A Fun Ad, Rocks, Wake Up

I gotta admit, this is a pretty good ad.

My friend Bojan points out that there are far too many Rocks in this one picture.

My kids, whom I love very much, getting ready to annoy me as soon as I wake up on the weekends.

-Louie

P.S. You can reply to this email; it will get to me, and I will read it.