Author: alearningaday

One of the fascinating truths about life is that competition exists in everything we do.

If we’re running a business, we have to deal with competitors.

If we’re attempting to find a job, we have to compete with other applicants.

And, of course, dating is a competitive sport too.

So, competition is an ever present – in all the areas that tend to count anyway.

And, yet, the other side of this truth is that we are significantly better off when we ignore its existence.

The intent here isn’t to deny reality. Instead, it is to view it with a different frame – a frame which focuses on the fact that most games are not zero sum games.

And, choosing to focus on the abundance makes us happier people and, often (perhaps surprisingly), better competitors.

Clean Energy Investor Ramez Naam shared an excellent post on his blog recently titled “Solar’s Future is Insanely Cheap.” He made 4 points in this post –

1. Solar cost dropped 5x over the course of the last decade – that was a whopping 25% of what the International Energy Agency forecast in 2010. It was also 50% less than his own optimistic forecast from 2011

2. To understand this drop, we must understand Wright’s law – the cost of a technology drops exponentially as a function of cumulative scale of production. So, as we produce more of a certain technology, we learn how to better optimize its production.

In solar energy’s case, every doubling of cumulative production has resulted in a 30%-40% decline in prices.

3. Even with very conservative forecasts, it is likely that even medium cost solar plants will be cheaper than the cheapest fossil power plants within a decade.

This doesn’t mean the journey will be straightforward – but, we continue to make progress at a pace that exceeds any previous expectation.

4. Of course, the presence of cheap solar energy isn’t going to be a panacea until we make significant progress on cheap energy storage. We will need to combine solar with the likes of wind, hydro, and nuclear power to de-carbonize places that get little in the way of sunlight. And, we’ll need all the solar we can get as we transition toward Electric vehicles.

But, we’re making a lot of progress and there are plenty of reasons to remain optimistic.

We only gain agency over our happiness when we let go of any need for external validation of our journey or the decisions we make as part of it.

Every once a while I’m reminded of the quote – “There are over 7 billion people on the planet and you’re going to let one person ruin your day?” 

It doesn’t always fix my response to the situation at hand. But, it does considerably improve the situation each time.

Here’s to more of that.

“As I’ve gotten older—I would say starting in my mid-to-late 20s—I could not help but notice the effect on people of the stories they told about themselves. If you listen to people, if you just sit and listen, you’ll find that there are patterns in the way they talk about themselves.

There’s the kind of person who is always the victim in any story that they tell. Always on the receiving end of some injustice. There’s the person who’s always kind of the hero of every story they tell. There’s the smart person; they delivered the clever put down there.

There are lots of versions of this, and you’ve got to be very careful about how you tell these stories because it starts to become you. You are—in the way you craft your narrative—kind of crafting your character. And so I did at some point decide, “I am going to adopt self-consciously as my narrative, that I’m the happiest person anybody knows.” And it is amazing how happy-inducing it is.” | Michael Lewis

This note made me think about the narrative I’ve crafted about myself. My hunch is that the narrative I share revolves around the three words that I think of as my cultural tenets – integrity or doing what I say I’ll do, learning or attempting to find growth in every situation, and hunger or the constant push to move things forward and contribute positively.

I’ll be mulling this some more, however. Powerful idea.

(H/T: James Clear’s newsletter)

See something, say something, do something.

It is a simple idea.

Sometimes, it is all we need to effect progress.

How to make meetings with executives most useful:

i) For projects in early stages, use the time to align on the problem statement/goal and ask any related tough clarification questions

ii) For projects in execution, create simple docs/slides that share progress toward ETAs and bring forth all the hairiest disagreements and decisions the working team is facing (without throwing peers/partner teams under the bus).

How to mess things up: 

i) Not demonstrating urgency/speed

ii) Covering up misalignment within the working team

iii) Attempting to impress the room with beautiful presentations vs. prioritizing discussions on hard questions and outcomes (any celebration of progress happens best when it ensues vs. when it is being pursued)

I interviewed Morgan Housel a few years back as part of a side project where 2 friends and I interviewed folks we thought were inspiring and/or thought provoking.

Morgan had written a few wonderful articles about investing on The Motley Fool and I reached out after one resonated deeply. Many years later, he’s still writing as part of his fund – “The Collaborative Fund.” And, I’ve shared a few of his posts over the past year or so.

Today’s post – The Three Sides of Risk – is an example of why I’m a fan of his writing. He shares a poignant story from his time as a ski racer growing up on the slopes of Lake Tahoe. He joined two of his friends to ski in forbidden terrain at one of the largest resorts in Lake Tahoe. After one run where they experienced a mini-avalanche, he decided to call it a day.

His friends, however, decided to one more run.

Sadly, that run proved fatal. And, below are his notes at the end of the story.

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I’ve been risk-averse in other areas of life ever since, too. I drive the speed limit. I obey the seatbelt sign on airplanes. I invest in index funds.

I don’t know if Brendan and Bryan’s death actually affected how I invest. But it opened my eyes to the idea that there are three distinct sides of risk:

• The odds you will get hit.
• The average consequences of getting hit.
• The tail-end consequences of getting hit.

The first two are easy to grasp. It’s the third that’s hardest to learn, and can often only be learned through experience.

We knew we were taking risks when we skied. We knew that going out of bounds was wrong, and that we might get caught. But at 17 years old we figured the consequences of “risk” meant our coaches might yell at us. Maybe we’d get our season pass revoked for the year.

Never, not once, did we think we’d pay the ultimate price.

But once you go through something like that, you realize that the tail-end consequences – the low-probability, high-impact events – are all that matter.

In investing, the average consequences of risk make up most of the daily news headlines. But the tail-end consequences of risk – like pandemics, and depressions – are what make the pages of history books. They’re all that matter. They’re all you should focus on. We spent the last decade debating whether economic risk meant the Federal Reserve set interest rates at 0.25% or 0.5%. Then 36 million people lost their jobs in two months because of a virus. It’s absurd.

Tail-end events are all that matter.

Once you experience it, you’ll never think otherwise.

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It is a powerful post. If you have a few minutes, I’d suggest reading it in full.

Speed of execution is a powerful capability to have in our arsenal.

The underappreciated aspect of moving fast is that a significant part of our ability to do this plays out in our own minds. And, to that end, there are three super powers that help us make speed our ally –

1. A relentless focus on forward motion/progress (at the expense of any illusion of perfection) on things we control

2. Obsessing about the work without worrying about how the credit will be distributed

3. Being incredibly hard to offend

Sometimes, even small margins in speed of execution can have massive downstream impact on our products, businesses, and careers. And, each of these superpowers helps with those margins.

Of course, if we’re able to operate with a combination of these, the results tend to be formidable.