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TABLE OF CONTENTS
2025.02.09-On-Overengineering
2025.02.02-On-Autocomplete
2025.01.26-On-The-Automated-Turkey-Problem
2025.01.19-On-Success-Metrics
2025.01.12-On-Being-the-Best
2025.01.05-On-2024
2024.12.29-On-Dragons-and-Lizards
2024.12.22-On-Being-a-Contrarian
2024.12.15-On-Sticky-Rules
2024.12.08-On-Scarcity-&-Abundance
2024.12.01-On-BirdDog
2024.11.24-On-Focus
2024.11.17-On-The-Curse-of-Dimensionality
2024.11.10-On-Skill-as-Efficiency
2024.11.03-On-Efficiency
2024.10.27-On-Binary-Goals
2024.10.20-On-Commitment
2024.10.13-On-Rules-Vs-Intuition
2024.10.06-On-Binding-Constraints
2024.09.29-On-Restrictive-Rules
2024.09.22-On-Conflicting-Ideas
2024.09.15-On-Vectors
2024.09.08-On-Perfection
2024.09.01-On-Signal-Density
2024.08.25-On-Yapping
2024.08.18-On-Wax-and-Feather-Assumptions
2024.08.11-On-Going-All-In
2024.08.04-On-Abstraction
2024.07.28-On-Naming-a-Company
2024.07.21-On-Coding-in-Tongues
2024.07.14-On-Sufficient-Precision
2024.07.07-On-Rewriting
2024.06.30-On-Hacker-Houses
2024.06.23-On-Knowledge-Graphs
2024.06.16-On-Authority-and-Responsibility
2024.06.09-On-Personal-Websites
2024.06.02-On-Reducing-Complexity
2024.05.26-On-Design-as-Information
2024.05.19-On-UI-UX
2024.05.12-On-Exponential-Learning
2024.05.05-On-School
2024.04.28-On-Product-Development
2024.04.21-On-Communication
2024.04.14-On-Money-Tree-Farming
2024.04.07-On-Capital-Allocation
2024.03.31-On-Optimization
2024.03.24-On-Habit-Trackers
2024.03.17-On-Push-Notifications
2024.03.10-On-Being-Yourself
2024.03.03-On-Biking
2024.02.25-On-Descoping-Uncertainty
2024.02.18-On-Surfing
2024.02.11-On-Risk-Takers
2024.02.04-On-San-Francisco
2024.01.28-On-Big-Numbers
2024.01.21-On-Envy
2024.01.14-On-Value-vs-Price
2024.01.07-On-Running
2023.12.31-On-Thriving-&-Proactivity
2023.12.24-On-Surviving-&-Reactivity
2023.12.17-On-Sacrifices
2023.12.10-On-Suffering
2023.12.03-On-Constraints
2023.11.26-On-Fear-Hope-&-Patience
2023.11.19-On-Being-Light
2023.11.12-On-Hard-work-vs-Entitlement
2023.11.05-On-Cognitive-Dissonance
2023.10.29-On-Poetry
2023.10.22-On-Gut-Instinct
2023.10.15-On-Optionality
2023.10.08-On-Walking
2023.10.01-On-Exceeding-Expectations
2023.09.24-On-Iterative-Hypothesis-Testing
2023.09.17-On-Knowledge-&-Understanding
2023.09.10-On-Selfishness
2023.09.03-On-Friendship
2023.08.27-On-Craftsmanship
2023.08.20-On-Discipline-&-Deep-Work
2023.08.13-On-Community-Building
2023.08.05-On-Decentralized-Bottom-Up-Leadership
2023.07.29-On-Frame-Breaks
2023.07.22-On-Shared-Struggle
2023.07.16-On-Self-Similarity
2023.07.05-On-Experts
2023.07.02-The-Beginning

WRITING

"if you have to wait for it to roar out of you, then wait patiently."

- Charles Bukowski

Writing is one of my oldest skills; I started when I was very young, and have not stopped since. 

Age 13-16 - My first recorded journal entry was at 13 | Continued journaling, on and off.

Ages 17-18 - Started writing a bit more poetry, influenced heavily by Charles Bukwoski | Shockingly, some of my rather lewd poetry was featured at a county wide youth arts type event | Self published my first poetry book .

Age 19 - Self published another poetry book | Self published a short story collection with a narrative woven through it | Wrote a novel in one month; after considerable edits, it was long listed for the DCI Novel Prize, although that’s not that big of a deal, I think that contest was discontinued.

Age 20 - Published the GameStop book I mention on the investing page | Self published an original poetry collection that was dynamically generated based on reader preferences | Also created a collection of public domain poems with some friend’s and I’s mixed in, was also going to publish it with the dynamic generation, but never did.

Age 21 - Started writing letters to our hedge fund investors, see investing.

Age 22 - Started a weekly personal blog | Letters to company Investors, unpublished. 

Age 23 - Coming up on one year anniversary of consecutive weekly blog publications  | Letters to investors, unpublished.

You can use the table of contents to the left or click here to check out my blog posts.

Last Updated 2024.06.10

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On Risk Takers

XXXIII

2024.02.11

I’ve spent the last week at a Founders Retreat in Costa Rica. It’s given me a great opportunity to interrogate a bunch of entrepreneurs who are further along than I am. 

A set of questions I keep bringing up circles around risk; what is it, how do you think about it, and, of course, what’s the biggest risk you’ve taken? Do entrepreneurs really have a “higher risk tolerance” than most people?

DISCLAIMER: If you’re invested in Ultima and are reading this, “Retreat” still means I’m working Monday through Monday ;)

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Defining Risk

A pretty solid definition for risk is the spread of all possible outcomes and their likelihood of occurring when you go to take some action. 

If you go skydiving, there is a .044% chance you get injured and a .0011% chance that you die. While the latter is maybe the “ultimate risk,” the former can be highly variable in its extremity. Whether or not you jump out of the plane, though, is then a function of two things: 1) What’s it worth it to you if you do jump and everything goes fine weighted against the cost of the jump going poorly; 2) How much do you actually even “believe” those stats I just gave you. 

There’s that funny stat that 90% of startups fail. So, what you’d want to rationally assess when you start a business is what’s it worth if it goes right and what’s it cost if it goes wrong? How good is it if you land safely on the ground? How bad is it if the chute doesn’t open?

While both of those things can themselves be highly variable, I think one of the biggest commonalities between everyone I’ve spoken to is that they don’t believe that the statistic that 90% of startups fail is really relevant to them.

It’s not that the cost of failure isn’t real, it’s that the possibility of failure isn’t real. Interestingly enough, that doesn’t mean that everyone here doesn’t work tirelessly to mitigate the probability of failure, it’s more so than it doesn’t factor into whether or not they’ll embark on or continue the journey. The chute not opening isn’t a real possibility, but the bag will still be checked a number of times before the plane is left.

Failure

Nobody here is acting like they will fail. Many of them have already, by many standards, succeeded.

That being said, just because you act like you can’t fail, it doesn’t mean that you can’t fail; I’ve met plenty of people who have already failed who acted like they would never fail. But they did fail, in the sense that they didn’t do what they were saying they would do. 

So, confidence that you will succeed is certainly table stakes for the ethos of an entrepreneur, but that egregiously over simplifies it. So, much more must go into it than that; conviction that the chute will open is necessary but not sufficient.

Of the ones who I’ve seen leave the game earlier than I have, there seems to be a mismatch between the reality they were expecting or hoping for and what they were actually getting. Maybe they want n employees or $X a month reliably coming in by time t, but, when time t came around, they didn’t have it yet. So, they go get a real job.

For most of the people here, though, that is only a call to work harder… money and employees (leverage) can be cool, but they’re not the point of it.

I think the people who keep playing are on the same page with those people who do drop out of the game, on one important axis: both are avoiding risk. Someone with a real job is maybe avoiding the risk of emotional and financial instability. Someone without a “real job” is maybe avoiding the risk of being unable to create and move at a rapid and self guided pace.

The successful entrepreneurs are avoiding risk just as much as anyone who takes a real job is. It’s just a different kind of risk that is being avoided.



Caption: You can go on a crocodile viewing hike without swimming with crocodiles

The Risk of Nothing

In all of the entrepreneurs I’ve spoken with, myself included, there seems to be this underlying insecurity about not moving in a self guided direction, not being able to explore and build something significant, not being able to push themselves to the edge. 

One of my favorite notions from someone I spoke to this week was the following: 

“In life, there is constant unavoidable risk and it’s up to you to decide which risk to take.”

  -An Anonymous Entrepreneur

His point was that sitting on the couch and doing nothing is a risk. That’s not to say that anyone who has a job is sitting on the couch and doing nothing; I think it’s more so to say that having a real job enables the possibility of that, perhaps.

When you’re starting a business, there’s always something to do. Unless you’ve already succeeded at creating a business that runs itself, making a habit of sitting on the couch all the time won’t get you very far.

What Happens When You Fail

One of the women I spoke with talked about this notion of what actually does happen if she fails.

Her view on it is that if she fails, she missed out on two years of consulting and banking, which you guessed it, she doesn’t actually care at all about. Moreover, even if she failed tomorrow, she’ll have got to spend an amazing amount of time doing something she was proud of, knowing that she’s seriously helped other businesses along the way. 

She has a nonchalant confidence that even if she does fail, she was still living in alignment with herself.

This brings it full circle to the point about the people who I’ve seen leave the game; to them, failure was not having money or security or status. To her, and almost everyone else I’ve spoken with about the matter, failure is not living life on her terms. 

Money is cool, but I can tell you that it’s certainly not the main driver, at least not for the people I’ve spoken with.

The Biggest Risk

Of course, one of the questions I asked a few people was what is the biggest risk you’ve taken. 

One woman answered, “Attempting to raise an $X round.” I asked her what would happen if she didn’t, and she said that the company wouldn’t exist; for her, this was a much worse outcome than the company existing, even given all of the work and effort she would have to put in for the impending years to make it survive and thrive.

But, then she added on something; she said that the biggest risk she’s really taken was jumping out of a plane & generally putting her life in other people’s hands—she’s been in the military twice.  

This brings me to another point that makes it seem like we all have a high risk tolerance: jumping out of planes isn’t super uncommon for entrepreneurs, nor is just generally being attracted to adrenaline inducing things. Some examples:

  • The guy who organized the trip dropped out of college & moved from Europe to Chicago to start a business. 

  • One of the guys here loves to fire dance so much that he's making it his full time business–talk about playing with fire. 

  • The woman more afraid of consulting than running a business is embarking on a journey to visit every country in the world as a solo female traveler.

  • A particular Italian staying here really enjoys haggling with locals and riding motorcycles quite fast; he rolled an ATV while we were on a tour–none of us are convinced that it wasn’t on purpose, by the way. 

  • The most stable seeming guy here spent two weeks carrying a canoe through the Boundary Waters and just rented a surfboard for three weeks to teach himself how to surf… and damnit, I think I might join him!

But, believe it or not, all of this is pretty damn normal to us. We hear it, and think, “Wow, that’s cool, tell me more!” Not, “Are you sure that’s a good idea?”

That’s not to say that we don’t identify and accept the risk and proceed with caution; more so, it’s some sort of notion of these just being natural risks that one takes over the course of their life.

To us, they’re not “outsized” risks; not doing them is almost more risky.

Risk for An Entrepreneur

So, what is risk to an entrepreneur? How is it different from risk to someone else?

Really, I don’t think it is at all. I need to ask this question to more entrepreneurs, but it does feel like there’s more to what we all define as risky.

The entrepreneur does not really think that starting a business is incredibly “risky,” or that traveling the world is super risky. While we know that it is dangerous in a different way than staying in suburbia with a real job, there is a greater perceived cost to us to not doing these things than there is to doing them.

There’s a lot to unpack here, maybe we all just have a slightly different combination of mental disorders, who knows.

The rub of this post, though, is that the common perception of entrepreneurs having a “high risk tolerance” might be simplifying it a little and missing an important point; I think a lot of us just view the risk of not living a life on our terms as higher than the risks incurred for doing so.

If we don’t do what we’re doing, I think we have this perception that there is a 100% chance that we wouldn’t be fulfilled and living a life in alignment with ourselves. Maybe, that’s the greatest risk there is.

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More risk takers are arriving at the casa in Costa Rica; I’ll continue the poll going into next week and see if I get any new results. Let me know if you have any questions you’d like to ask this eclectic group of adrenaline junkies.

Live Deeply,