Things I’ve Learned From Naval Ravikant

Often referred to as the philosopher CEO, Naval Ravikant is the brilliant co-founder and CEO of AngelList, which specializes in helping startups, angel investors, and those looking to work for startups.

His breadth of knowledge, ability to distil complex ideas, and willingness to speak his mind are unique and enlightening. Despite only learning about him a few years ago, Naval (as he likes to go by) has influenced my beliefs on wealth, how to think, and how to live a good life.

What follows are what I believe to be his most important ideas, while adding my own insights.

Naval’s Keystone Values

Ravikant has built his life upon three core principles: health, wealth, and happiness.

Health is the foundation of everything. As the Confucius saying goes, “A sick man only wants one thing. A healthy man wants 10,000 things.” Without a strong and healthy body, little else matters.

Wealth provides freedom. Although it won’t solve every problem, it will solve your money problems, which cause stress and anxiety, while freeing up time for you to do what you want.

There’s no shortage of healthy and wealthy people, yet many remain unhappy. Without being content, he doesn’t see the point.

In addition to these tenets, his thinking is bar belled around two enduring ideas: Evolution and Buddhism. Evolution, because it's a binding principle that explains much about humans and Buddhism, because it’s the oldest most time-tested spiritual philosophy regarding our internal state.

How to Get Rich Without Being Lucky

Ravikant is perhaps best known, at least outside the startup world, for his brilliant Twitter Thread, How to Get Rich (without getting lucky). I won’t attempt to cover its 29 insights here, but I will attempt to distill its essence. I’ll expand on other parts in subsequent sections.

What makes this thread unique is it outlines a robust playbook for how to become wealthy...in less than two pages of text. But it’s not a get-rich-quick strategy. Rather, it explains how consistently doing the right things, which involves giving the world what it wants and needs, will enable you to become wealthy over time.

Yet, it’s more than that. It recommends how to educate yourself and make better decisions, who you should (and shouldn’t) spend your time with, and embedded is a philosophy for how to live a happy life.

“Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.”

There is a natural struggle between the desire for wealth, assets that consistently generate money, and status, a person’s rank in the pecking order. Yes, they often come together, but for Ravikant, wealth is unquestionably preferred.

Wealth not only provides time and freedom to pursue what you want from life. It’s also a positive-sum game. Individuals can help each other in this pursuit. Status-seeking, on the other hand, should be avoided at all costs. Why? Because it’s a zero-sum game: In order for one person to climb the social hierarchy, someone else must fall.

Naval avoids people who play status games. They aren’t happy when you do well - your gain is their loss - and you're apt to be drawn into their competitions. As he is fond of saying, “Play stupid games, win stupid prizes.”

“Play iterated games. All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.”

A simple, but profound idea. Humans are naturally drawn to short-term rewards. It’s why affairs, get-rich quick schemes, and that extra piece of cake are hard to resist. On the other hand, there is a reason Einstein said, “Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn't... pays it.”

But compound growth takes time. Warren Buffett is worth over $100 billion. However, 97% of his wealth came after he turned 65!

And compound growth doesn’t only apply to money. It applies to relationships, reputations, wisdom, and decision-making, to name a few. This is why he stresses continuous improvement. Naval not only learns as much as he can, he also lives a life of integrity while surrounding himself with people he hopes to spend the rest of his life with.

It’s also important to be wary of our ancient wiring. Those at the top of the social hierarchy frequently had more offspring, which led to a proliferation of their genes being passed on. Genes that have trickled down to us. Today, however, the energy required to rise in the pecking order can impede the rate we learn or accumulate wealth, or as Einstein implied, even reverse it. This is another reason why positive-sum games, such as wealth creation and friendships are better to pursue. They enable individuals to help each other become better versions of themselves and grow more quickly.

“Arm yourself with specific knowledge, accountability, and leverage.”

By specific knowledge, Ravikant means, “the knowledge that you cannot be trained for. If society can train you, it can train someone else, and replace you...specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now...building specific knowledge will feel like play to you but will look like work to others...specific knowledge is often highly technical or creative. It cannot be outsourced or automated.”

Said another way, specific knowledge is something unique to yourself, that you love, work hard at, and excel in.

Accountability, as Ravikant defines it, is the combination of creating a personal brand and platform, while having the willingness to take risks. “The most accountable people have singular, public, and risky brands: Oprah, Trump, Kanye, Elon.”

Leverage is a force multiplier. Initially, it was used in the form of other people. The pyramids, for example, were built on the backs of thousands of slaves. As commerce became prevalent, money amplified results. The industrial revolution created a brand new form of leverage - machines - which dramatically increased production. Today, software has joined the fray. A successful piece of code can be distributed with little effort or cost and doesn’t require permission from gatekeepers or anyone else. 

Though powerful on their own, these three qualities create a lollapalooza effect when successfully combined. Instead of their impacts being additive, together they are multiplicative, often leading to explosive results. Companies, such as Berkshire Hathaway, Google, and Tesla, along with numerous others, harnessed this approach.

For those wanting to get ahead in today’s gig economy, understanding specific knowledge, accountability, and leverage is vital.

“How to improve your judgement requires experience but can be built faster by learning foundational skills.”

The ability to make wise decisions is among the most important skills anyone can have - perhaps the most important. But it rarely happens by accident. A strong base of expertise is required. In Naval’s words: “In three easy steps, you can build a strong foundation of knowledge by recognizing your default biases, accepting your mistakes, and learning from experience. These three skills are as simple to learn and they will make you money.”

By “learning foundational skills” he means developing a high level of fluency in the cornerstone areas of knowledge. He especially stresses the hard sciences, such as math (compounding, power laws, inversion, etc.), statistics and probability (regression to the mean, sample size, randomness), physics (emergence, chaos theory), and engineering (margin of safety, leverage). Farnam Street and The Lattiicework are great resources to explore if you’re interested in learning more.

Recognizing your blind spots isn’t as straightforward. The key to reducing our biases, according to Naval, is to get our ego out of the way. Our egos don’t want to face the truth, which is why they manipulate our thinking and behaviour to get the outcome we want. The key is to try to lose our preconceived notions.

This is difficult because most biases are time-saving heuristics, developed to free our minds for more complex decisions. But when we identify as a capitalist or conservative, those beliefs unwittingly guide us toward conclusions consistent with those notions, often pushing us to be more interested in being right, than finding out what is right.

Speaking of being interested in finding out what is right, Naval believes that accepting our mistakes is a necessary step to gaining expertise. First, it just makes sense to purge outdated or incorrect beliefs. But Naval takes it a step further. He recommends making bold predictions and weeding out the failures. An idea he’s borrowed from evolution. The eminent psychologist Daniel Kahneman is one of the best practitioners of this strategy. When asked how he could start over so easily, he answered, "I have no sunk costs."

The last of Ravikant’s steps to improve judgement is learning from experience. I believe this was last because we view everything through a filter. If you lack a solid foundation of knowledge, or are unwittingly influenced by your biases, the value of your experience is diminished. In other words, the first two require hard work and dedication. Once those are acquired, experiences become more valuable.

Judgement has always been important, but not like today. Technology adds exponential levels of leverage. A stupid comment on social media can ruin a career, while a viral video or piece of code can easily reach millions. Decisions have never carried so much weight. And as Ravikant has said, “Leverage is a force multiplier for your judgement,” but the good news is you “don’t have to be perfect, just better than average.”

“Work as hard as you can. Even though who you work with and what you work on are more important than how hard you work.”

Although vital for success, hard work is not enough on its own. In his brilliant Twitter thread on how to get rich without being lucky, Ravikant states, “You will get rich by giving society what it wants but does not yet know how to get. At scale.” Another way he puts it is, “the creation of wealth is in the actual creation of value. Look around you, the world is plagued with several problems. The world is begging you for answers and solutions to their worries; why not give them something worth their while.”

In conjunction with working on projects that create value, Naval recommends choosing who you work with carefully. “If you can't see yourself working with someone for life, don't work with them for a day.”  When talented, ethical, and hard-working people come together, they’re usually much better together than apart - which accelerates their rate of compound growth, both financially and intellectually.

Happiness

The term happiness comes with some subjectivity. What Ravikant calls happiness, I may refer to as flourishing and you may consider joy. Please keep this in mind throughout.

For Naval, in order to become happier, the first step is to realize that, not unlike strengthening a muscle, you can train yourself to be happier. Research has shown that about 50% of our happiness is genetic, meaning the other half is derived from our beliefs, behaviours, and environment. It’s a skill that can be learned and developed.

The following are the measures Ravikant has taken to increase his happiness: Avoiding mood-altering foods, like sugar, alcohol, and caffeine, as well as addictive behaviours, such as scrolling through social media and playing video games. In addition, understanding that external circumstances and acquiring “things” don’t lead to happiness.

Ironically, these suggestions are not about achievement, but avoidance. Ravikant draws from Buddhism in this regard. Buddhists believe happiness is found through the elimination of suffering and unhealthy desires. Although giving into our wants feels good in the short term, they often have the opposite effect over time. This involves ensuring our habits serve us. When they don’t, we’re apt to suffer.

Counterintuitively, what Buddhists and Naval are really looking for is peace. Ravikant once commented: “Saying I want to be happy is often another way of saying I want to find peace....We say peace of mind, but what we really mean is peace from mind.”

But peace is a rare commodity in today’s world. It’s virtually impossible to eliminate all our desires. To best deal with this reality, Naval meditates regularly and tries to limit himself to one big desire at any time. He knows it’s impossible to give up every desire, so applying this principle enables him to choose where he will be unhappy.

Final Thoughts

Naval Ravikant is a unique thinker. He may not be for everyone, but he has enough ideas worth considering, that most will find a few that could improve their life. I hope this is true for you!

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