There’s a saying that it’s never been harder to become a millionaire, and never easier to become a billionaire. Since all activities associated to money seem to be viewed positively, regardless of the moral or even legal implications, stories about money get more recognition than ever before. Let’s take a look at billionaire Chamath Palihapitiya. Reportedly becoming a billionaire at the age of 40, he has a dream rag to riches story, coming from an immigrant family in Sri Lanka to Canada in dire poverty. His business and investing resume also include being a minority investor of the Golden State Warriors in 2010 for $25 million US before selling in pieces ~ a decade later, an early investor in bitcoin, founder of Social Capital, and early executive at Facebook helping grow its user base to the behemoth it is today. He’s also been involved in a number of SPACs, to varying degrees of success. He is also a regular member of the All-in podcast which hosts sessions once a week. Every person has something about them that we can learn from, so let’s see what advice he has on succeeding.
On investing
The world is becoming increasingly individualistic, target the individual. Back in the past, hunter gather tribe and agrarian societies, people relied on each other to survive. Now, not only are people surviving in an increasingly westernized/Americanized world, but people are now becoming more individualistic than ever, as the need to rely on others has reduced dramatically. Target companies with good marketing that puts an emphasis on the individual, to be able to stand out, to express their own true colors in the brand of the company. People want custom tailored products that speak to their deep desires and needs.
Subscription based relationships with customers in tech are the future industries and companies to succeed. Subscription revenue can be valued as much as 8x higher than a company with little recurring revenue. Subscriptions, particularly with high switching costs, offer consistent revenue even going forward, and that will likely lead to a company sustaining themselves. Customers now often even forget about subscriptions entirely, and can’t be bothered to cancel or switch unless the competition is superior in price or value, since it is usually charged on a debit or credit card. The average number of subscriptions the average person has was 12 in 2020 for $275 per month, according to Statista. And for millennials, this number rises to 17. It’s also forecasted that these numbers will only continue to grow. Having a sticky product and near guaranteed revenue is a really sweet business model. That could even help to get additional funding for companies in periods of low interest rates from traditional sources that might not have been had otherwise.
Now only two types of companies exist: the disruptor and the disruptive. Find the disruptive company and invest in them, because disruption is happening more than ever before. The average company in S&P 500 is down from 50 years in the 50s to 20 years, and projected only ten years starting in 2035. Companies that are nimble, fast, explosive, and trend setters will dominate like the cream that rises to the top.
Airbnb is one such company that could be the next big company as it has more of a monopoly and more pricing power. Charging money every time someone lives in someone else’s owned place while not owning the assets or having to pay those capital expenditure charges is a great way to achieve higher margins in the future.
On the individual
Be really good at one thing to succeed; the ideal scenario is extreme specialization and do one thing so well that it allows you to outsource and pay for everything else. The less skilled one is at one thing, the more they have to do multiple things in life. So, it pays to be the master of one. Many people are not in the extremes of the Gaussian bell curve and it may not be as practical advice for the majority. So, for everyone else outside the genius category, being good at a few skills, that are rare in combination and yet complimentary together, will end up yielding better results.
Practise is what you can control, the results not so much. We focus so much time and energy on the results, the output, and not nearly as much into the inputs, or efforts.
Success comes from what you do all the time, not the occasional hard work times. It does not come by luck or chance. Consistency beats intensity. Someone who is constantly working at it will end up better off than someone who occasionally puts in a lot of intensity.
In moments of failure, if you really internalize it, you can determine who you are and aren’t, what you are good at and what you are not good at. If you accept yourself, you can become very powerful internally. This gives a level of self-awareness that will allow you to make less repeated mistakes, both old and new, and be able to naturally gravitate towards strengths and by extension, small wins and successes.
Defining your sense of self worth from success is just not sustainable. If everything is taken away from you from no fault of your own due to some unlikely 3rd party black swan event, does your entire sense of worth, confidence, esteem vanquish as well? Net worth should not define success. The idea that someone who has more money than someone else is somehow a more worthwhile person is a delusional concept in a wealth obsessed world.
Failure is good; it is the key to success, building emotional and mental resiliency. One cannot achieve success before attaining a significant amount of failure. It’s been said that the master has failed more times than the beginner has even tried. Unless you are the next big thing, failure, and perhaps an extreme amount of it, is necessary to get any kind of meaningful success.
People often confuse luck and skill. Can the success you have be replicated over a long period of time on a sustainable basis? If not, more luck may be at play than we wish to admit.
People are telling you everyday passively or actively what’s in their heart and mind; sometimes it is not direct, sometimes it is. We just have to be willing to pay attention and see people for who they are, rather than who we wish them to be. We must always be aware not to try and fool people, and the easiest person to fool is in fact ourselves. Then again, no one is perfect, so there must be an understanding to accept a person for the entirety of their 3d person, not just the 2d surface level image that they are trying to promote.
Disclaimer
This is not Financial Advice. This article is meant only for educational and perhaps entertainment purposes.