I Lose At Everything I Do

As a child, I was accomplished in school. This gave me the false confidence that I’d be good at “real life” and doing “business” and “making money” as well. Excelling in school is different than excelling IRL.

Reason’s because our education is a laid out track with linear progression, and you’re told exactly what to do. Real life is hard, complicated, and has many surprises.

Having a great track record in the wrong thing gave me rose-colored goggles. It made me overconfident and vulnerable to surprises. Some examples:

  • Did e-commerce thinking it’d be “easy.” It wasn’t because everybody was doing the same thing.
  • Used to do “rent to rent” as I thought the process was straightforward; we’d rent out an apartment and sublet it on Airbnb. Turns out an infinite number of things can go wrong when it comes to tenants. Also: anyone can get you banned and bring your income stream down to 0 at anytime by installing a nonworking hidden camera in a smoke detector in the bedroom and saying you did it.
  • Wrote a bot to arbitrage NFTs. Somewhat lucrative for 3 months (made about $600 a day). Nowadays there’s tons of competition and I am lucky to make $30 a day.
  • Making another bot to arbitrage ERC20 tokens to diversify. Got my face ripped off before I launched my bot even, as someone exploited a security flaw in my non-public smart contract and stole 6.3 ETH from me.

When it comes to business and making money, you’ll run into stiff competition. Reason’s because everybody wants money. If you have some skill to make money–so does everyone else. And you’re probably not the best at it, so other people will beat you.

How To Win

You’re not the smartest. You don’t have the most resources. And you’re not the best. So how do you win?

Two things.

First, know that nothing comes easy. And know that if things do come easy, it means whatever alpha you’ve got will be very temporary. Ironically, expecting everything to be hard will make things easier: it’ll make you less overconfident and less vulnerable to surprises. You’ll anticipate more harder-to-see issues, saving time.

Second, do something so difficult that it’s not attractive to smarter competitors. All people want to make money fast, generally speaking. Smart people are no different. The way to win is to have a “difficulty moat”: solve a problem where so many things can go wrong that it’s no longer attractive to people who are smarter and more talented than you. As Warren Buffett says:

In any sort of a contest - financial, mental or physical - it’s an enormous advantage to have opponents who have been taught that it’s useless to even try.

Your weapon here is perceived difficulty and your patience in execution. Sure, a smarter competitor could finish the same thing a year quicker, but they’ll never do it. You win by default when there’s no competition.

And by the time you win and show the world what you do is “possible,” the smartest and brightest in search for a quick buck will try and compete with you. But too bad: they’ll never catch up with you.

The hare can’t catch up to the tortoise if the hare hasn’t even started and the tortoise is a millimeter from the finish line.

Other words: your compounded effort over years is your moat. Conversely, if you can flip a lot of money overnight, there wasn’t a lot of effort and thus your moat is weak.