(1) He has so much self belief

"He has so much self belief. At least that's how he came across to me at that time" - Michael Schumacher's agent

"One day I'll win races. One day I'll be world champion" - Michael Schumacher

I was watching the Netflix documentary called Schumacher '94 - the birth of a legend. I paused and wrote out the above quotes to highlight that belief comes before capability. The mindset matters. You have to believe in yourself before you can achieve. Everything after that is figureoutable.

(2) People follow leaders who are in the trenches

Kids follow parents who do what they say.

Teams follow managers who take the blame and share the credit.

Students follow teachers who never stop learning.

Customers follow brands that keep their promises.

Friends trust those who show up when it's inconvenient.

Influence isn't granted by title.
It's earned by example.

We don't follow words.
We follow proof.

(3) Nothing erodes self-esteem faster than breaking your word to yourself

Every promise you make to yourself is a small test. Wake up at 6. Skip the second drink. Finish the chapter tonight. When you follow through, you gather evidence that you’re someone who can be counted on. When you don’t, you gather evidence of the opposite.

Self-esteem isn’t a feeling you can talk yourself into. It’s a reputation you hold with yourself, and it’s built entirely on that evidence.

That’s why broken self-agreements cut deeper than broken promises to others. Other people might forget. They might forgive. But you were there every single time, and you know exactly how often you said you would and didn’t. Each lapse quietly teaches you that your intentions are negotiable.

Eventually you stop believing your own plans. You commit less, attempt less, and expect less of yourself. That slow loss of trust is what low self-esteem really is.

The good news is that it works in both directions. You can rebuild self-trust the same way you lost it, one kept promise at a time. Start smaller than feels impressive. “I’ll walk for ten minutes” beats “I’ll run every day,” because the goal isn’t the activity. The goal is proving that your word holds. Keep the small promises without exception, and the bigger ones become believable again.

Integrity with yourself isn’t about grand resolutions. It’s about becoming someone whose word means something, even when the only person keeping score is you.

(4) Instincts vs Ideas - which should you follow?

"I've found that for good entrepreneurs, our instincts are right 95% of the time, but our ideas are right at best 25% of the time" - founder of Zynga

I have often found myself getting a feel for what the market wants. What's selling? What are others doing? It is important and relevant because one must know the field they are playing on.

However when I've let others actions define mine, it hasn't worked. What has worked has always been adding my unique perspective to the solution, which has often been driven by my unique perspective, my instincts.

You must test your instincts and ideas without fear of whether they would be accepted by others or not. What matters is that you try. And when you get from point A to point B, you'll get feedback which will then take you to Point C and then D and on from there.

Be sure to keep moving forward. Take that left or right. Just don't stand still.

(5) What if everything goes right?

Challenge your limiting beliefs by asking yourself this question.

(6) Often all you need is a good night sleep

The ability to stop your mind and say "I gave it my all today, tomorrow we shall wake up and tackle another day", is also a super power.

Stop. Recharge. Continue... Everyday.

Harsh

I spent sixteen years helping build a business till it sold. Now I'm helping build something much bigger. I share what I learn on the way, on WhatsApp, LinkedIn, and this Sunday Email. Start your mornings with us on the Board of Optimists.

What follows are my thoughts, highlights and stories from this week.

(1) The success is ours. The failure is mine.

As a leader, my success depends on my team. If they do well, I do well. So when we win, it’s all about them. When we fail, it’s all about me. The buck stops with me.

(2) Everyone loses before they win

If you aren’t willing to suck, you’re never going to get good. Everyone loses before they win. To become great, you gotta be bad for a very long time.

Take the Board of Optimists community I just launched as an example. It’s about using behavioral psychology to follow certain habits to make you measurably more optimistic. It’s got 41 members. Participation is about 10%. Most do not participate. I have no clue whether people would want to follow along. But I am willing to test this in public and lose versus test it in my head and never try.

(3) We all need leaders who see potential in us

Without Steve Jobs, Jony Ive would never have got the opportunity to show what he was capable of.

“Steve unlocked Jony. Steve gave Jony the confidence to bring out his innate design talent and create amazing products.”

We all need leaders who see potential in us and give us the chance to prove it.

In my career, the CEO of EthosData saw potential in me. It unlocked me. I helped build the business till it sold. The current CEO of Ideals sees potential in me. It’s unlocked me. I will build the business till it becomes worth a billion.

What I’ve found is that if you believe in yourself, the right people will believe in you too.

(4) Work is an infinite game

When you play, you can test wild ideas quickly without worrying about failure. In a well designed game, it doesn’t take long to know whether you are winning or losing.

A way to test ideas quickly, spot the promising ones, and ruthlessly drop the rest is essential.

This doesn’t just apply to entrepreneurs. It applies to jobs too.

I am always trying to improve my team’s results by asking the right questions and prompting actions that get them closer to their dream outcomes. I ask better questions and get better results now than I did a year ago. I’ll be better a year from now than I am today, because I see it as an infinite game.

(5) The secret to a happy life is low expectations

Tony Robbins says, “Happiness is where your life meets or exceeds your expectations.”

Charlie Munger put the same idea another way: “The secret to a happy life is low expectations.”

Let me give you two examples.

• Imagine you have a million dollars in the bank, money you’ve saved up. But you expected to have 10 million. Chances are you’ll be miserable. Your expectations are GREATER than your reality. You feel scarcity, not abundance.

• Now imagine you only expected $500k, and you got to $1 million. Chances are you’re happy. Your expectations are LOWER than your reality. You got way more than you wanted.

The trick is to aim for the sky but still feel like you have it all. Ambition does not have to come at the cost of happiness.

(6) A conversation with myself across time

What would future me thank present me for doing?

I’ve scanned a number of my journals and put them all in one folder. I’m planning to get Claude to read through them. I’m eager to see how my intentions have changed, or stayed the same.

Reading what I wrote years ago, then writing what I think today, is the closest I can get to a conversation with myself across time.

Do you ever go back and read what you wrote?

Harsh

I spent sixteen years helping build a business till it sold. Now I'm helping build something much bigger. I share what I learn on the way, on WhatsApp, LinkedIn, and this Sunday Email. Start your mornings with us on the Board of Optimists.

“Why do you read these?”

Thirty-two of you wrote back.

I had always pictured you as founders. Some of you are. But one of you is a final-year engineering student. One is studying for the CFA. One is a mom. There is a shipping broker in Dubai, a chartered accountant in Chennai, a lawyer in Mumbai, and CXOs running banks and businesses.

Not one of you mentioned a book, a framework or a famous name. You all mentioned some version of being inspired by the stories, and getting to learn from what I learnt.

“The world already brings a lot of negative news to me everyday. This is one of the most positive pieces I come across every morning.”

“I follow your posts to get me a new thought and provoke some soul searching every morning.”

“Many of them are a reason why I want to get up and not give up in the rough patch of my life.”

And a lot of you mentioned that expecting a message from me has become a morning expectation.

Reading your replies, I kept thinking about my own mornings.

For twenty years, I have started the day with some version of the same ritual. Before I pick up the phone, I exercise or go for a walk. I send a message to the people I love. I clear my mind by journaling. And I write to learn.

Then I give my day a number. Only two answers - a 6 or an 8. A 6 feels like a blah day; my energy levels are low. An 8 is a day I want more of; I am feeling good.

It's a great frame to get a pulse of how I feel on any given day.

Yesterday I opened a room where we can share these morning habits to win the day together. It is called the Board of Optimists.

Four rituals: body, mind, family, community. Every morning, a post from me is waiting. You reply with your 6 or 8, one thought of the day and a photo of your morning.

We are the average of the people we spend the most time with. The idea of getting like minded optimists with a can-do attitude interests me. If it interests you too then see you inside.

Harsh

I build businesses with extraordinary people. I share what I learn on WhatsApp, LinkedIn, and this Sunday Email. Start your mornings with us on the Board of Optimists.

It was a forcing function. If I had to write to you every Sunday, then I had to keep learning.

So I read books and shared what I found. I shared personal lessons and stories. I wrote about what I learnt building businesses. If there was an insight that was worth sharing I wrote it down and shared it with you here.

Something has changed since then.

Content is more abundant and more free than it has ever been. I am part of that. I now use AI to find me stories, sources and insights, and when one of them moves me, I pass it on to you.

My life has changed too.

I have moved to Singapore to build Ideals across Asia, and I take that seriously. I am a father, and I take the hours I get with my family as sacred. I own a startup and have other business interests, and they take my weekends.

Between work and family, the only time left for myself goes into my health, physical and mental.

There is not much room left in that week.

This email is the one thing in it I do not want to give up. The habit is a large part of what has made me who I am over these three years.

But I would like to keep it for the right reason, and that means finally asking you something I never have.

Why do you read these?

Just hit reply and tell me in your own words. A line, a paragraph, whatever it is worth to you.

And tell me what you do, and where you are reading this from. Three years in, I still could not tell you who most of you are, which feels like the wrong way round.

If you have never replied to anything I have sent you in three years, make this the one you do respond to.

Harsh

I build businesses with extraordinary people. I share my learnings daily on my WhatsApp Community and LinkedIn, and weekly on this Sunday Email.

The order was worth more than his entire company. He turned it down.

In the late 1950s a purchasing agent at Bulova, the American watch company, saw Sony's pocket transistor radios and said he would take 100,000 of them.

It was the largest order the young Japanese company had ever been offered. Its value exceeded Sony's total capitalisation.

There was one condition. The radios had to carry the Bulova name, not Sony's.

Akio Morita was in New York. He cabled Tokyo.

His co-founder Masaru Ibuka and the Sony board cabled straight back, instructing him to accept.

He refused anyway.

The Bulova executive could not understand it. Nobody in America had heard of Sony. Bulova was a household name. He was offering free distribution to a brand worth nothing.

Morita's reply is the whole story:

He went home without the order.

Eventually he found a distributor willing to sell the radios as Sony, and Americans bought them.

What that refusal actually bought is bigger than one product line.

At the time, "Made in Japan" meant cheap. It was closer to a warning label. Japanese exports were understood as flimsy copies of Western goods.

Sony spent the following decades attaching its own name to things nobody had seen before, and the label changed meaning underneath it. By the 1980s, Japanese manufacturing stood for precision.

None of that happens if the first 100,000 units ship in somebody else's box.

Morita later called turning down Bulova the best business decision of his career.

Saying no cost him real money he badly needed, with no guarantee the alternative would ever appear. His own board thought he was wrong. He was not being brave with hindsight. He was being stubborn with a cash flow problem.

Every company gets offered this trade eventually. Revenue now, in exchange for being invisible.

Your name is the only asset that compounds while you sleep.

What are you shipping under somebody else's label because their cheque cleared faster?

Harsh

I build businesses with extraordinary people. I share my learnings daily on my WhatsApp Community and LinkedIn, and weekly on this Sunday Email.

Harsh

I build businesses with extraordinary people. I share my learnings daily on my WhatsApp Community and LinkedIn, and weekly on this Sunday Email.

What did you fail at?

If neither of them had an answer, he looked genuinely disappointed. A real, spectacular failure, the kind that came from actually attempting something hard, earned a high-five instead.

The rule flipped the usual incentive completely. In most households, failure gets hidden and success gets reported. At Blakely's table, having nothing to report was the actual failure, and a good story about a real attempt gone wrong was the win.

Blakely turned $5,000 in savings into Spanx.

At 41, that made her the youngest self-made woman on the Forbes Billionaires list, built with no outside investment, no debt, and without spending a dollar on advertising.

None of that came from a childhood free of real failure. It came from a home where failure was cheap to report and expensive to avoid.

Most people don't fail less than Sara Blakely did. They just learned earlier than she did to hide it, which means they stopped generating the kind of failures that only come from actually trying something.

What would change on your team if a real, honest failure earned a higher five than a safe non-attempt?

Harsh

I build businesses with extraordinary people. I share my learnings daily on my WhatsApp Community and LinkedIn, and weekly on this Sunday Email.

He tore the page in half, threw it down the table at her, and walked out. Brad Stone documents the scene in Amazon Unbound. The room sat in silence for a while after.

That is the brutal cousin of a gentler practice at the same company, one that eventually produced AWS, the Kindle, and Amazon Prime before a single line of code existed for any of them.

Before anyone builds a new product at Amazon, someone writes the press release for it first, as if it already shipped and already won. The process has a name inside the company: Working Backwards, documented in detail by former Amazon VP Colin Bryar, who ran it for years.

Five steps, in order, before any building starts.

1. Write the press release, as if the product already launched.
2. Write the FAQ, every hard question a skeptical customer would ask.
3. Write the user manual, exactly what the experience feels like.
4. Circulate it in a silent meeting. Everyone reads in the room. Nobody presents, nobody pitches.
5. Only greenlight it if the room is convinced by the document alone.

The mechanism underneath this is simple and easy to miss. A charismatic pitch can survive a weak idea. Tone, confidence, and delivery carry it across the room. A document read in silence has none of that. It either holds up on the page or it does not.

Bryar has been open about the failure rate. Most PR/FAQs, including several of his own, never became real products. The process is not designed to protect ideas. It is designed to kill the weak ones cheaply, before they cost anything more than an afternoon.

The next time you are about to defend an idea out loud, ask whether it would survive being read in silence instead.

The best ideas do not need a pitch to carry them.

Would yours survive a silent room?

Harsh

I build businesses with extraordinary people. I share my learnings daily on my WhatsApp Community and LinkedIn, and weekly on this Sunday Email.

Most people wait for evidence before they commit. Proof first, then belief. But the people who actually build something new almost always run it backwards: belief first, proof later. They act like the thing is already true, and reality eventually catches up to them.

Marc Andreessen put it this way: “The world is a very malleable place. If you know what you want, and you go for it with maximum energy and drive and passion, the world will often reconfigure itself around you much more quickly and easily than you would think.”

You can see it from the outside too. In 2008, Airbnb’s founders were broke, and every investor they’d pitched had passed. Nobody believed strangers would pay to sleep in someone else’s spare room. So they printed election-themed cereal boxes, “Obama O’s” and “Cap’n McCain’s,” and sold a few hundred on the street for $40 each. It made them close to $30,000, barely enough to survive a few more months. It also proved something to themselves before it proved anything to anyone else: that people would pay for something Airbnb-shaped if you packaged it right.

I’ve tested the same mechanism on my own numbers, just without the cereal. I believe I’m the best at what I do: no one attracts talent and manages people in a way that actually lets them thrive quite like I can. I believed that long before I had any proof it was true. Since then, every year has been a record year, each one bigger than the last. Every market I’ve entered has turned profitable. More of the best people want to join the team, not fewer. Now I have the proof, so I am doing more because of it. But the proof came second. The belief came first.

Different scale, same order of operations. Belief doesn’t wait for proof. It creates the conditions proof needs to show up in.

What are you waiting for proof on, that you should just start acting like is already true?

Harsh

I share my learnings as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on this Sunday Email.

That’s the real flex: not impressing anyone else, but having that little version of you be proud of who you are today.

Warren Buffett has a test for this. He asks: would you rather be the world’s greatest lover, but have everyone think you’re the worst? Or be the world’s worst, but have everyone think you’re the greatest? He calls it the difference between an Inner Scorecard and an Outer Scorecard, whether you’re keeping score by your own standard, or by what the world thinks of you.

Your eight-year-old self is your Inner Scorecard. It doesn’t care what your LinkedIn says about you.

You can control what you think. You can control how you think. And therefore, over enough days, you can control who you become.

You may spend a lot of time in your own head. That’s fine, as long as it’s not egotistical. It should be a scientist’s relationship with your own mind. Always modifying. Always asking: how do I approach my own mind the way I approach my craft, so I’m sharper tomorrow than I was today?

You may not be able to control what happens to you. But you can control how you respond. And that response, repeated enough times, is what decides who you become.

Your mind has more leverage over your life than you’re using.

What would that eight-year-old think of you, right now, today?

Harsh

I share my learnings as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on this Sunday Email.

You can become a millionaire even if you start from 0, if you have these 6 qualities.

There are 4 broad studies that have happened to identify what are the common traits of people who become super wealthy without any inheritance, all by themselves.

1. Good Grades wasn’t a factor - There is absolutely no correlation between good grades in school and college and being super wealthy. Getting into good college is just like downside protection that you can get a job that pays well. But would not necessarily make you wealthy. So there is no upside potential by getting good grades.

2. Sports was a major contributor - A majority of the self-made wealthy played sports at a higher level while growing up, which leads them to handling wins and losses equally well. And they can get up again to compete even if they have been losing matches consistently for a while. And they know that every winning streak does not mean you will continue to win. So it teaches them emotional stability.

3. Parents were self-employed - Over 60% of such people came from parents who were self-employed in some way, which means their families did not think getting a job is the only metric of success. Growing up in an environment where entrepreneurship or being self employed is promoted leads to one building psychological muscle to take risks with business.

4. Their biggest skill was in sales - which is not necessarily selling products or services, but the art of convincing others. This could be convincing prospects to date you, or making people wanting to hang out with you, or in a debate be able to convince people of your opinion positively.

5. Their decision making comes more on gut feel than pure analysis - which means they are comfortable taking decisions even when adequate data is not available. And can perform in uncertain situations and deal with ambiguity on what should you do next, without needing a superior to order you.

6. They have strong internal locus of control - which means if anything went wrong, they did not sit blaming others or build a victim mindset. But always took responsibility on themselves.

Source: CA Sarthak

When I heard the above, I went down the list to identify which of these qualities I had.

1. Grades - I had good grades in subjects I found interesting. For the rest, I did just enough to do as well as required.

2. Sports - has been a central pillar in my life. I played cricket at a professional level as a teenager in England. I continued to compete in my city into my 40s. I have learnt more about positive self-talk, emotional control, winning, losing and teamwork from cricket than anything else. Sports teaches you about yourself and working with others to achieve a common goal.

3. Self-employed parents - My parents were entrepreneurs. They worked together to earn a living through their ideas and initiatives. They never had a paycheck, so I experienced the ups and downs of not having consistent monthly income. But I also saw their chutzpah to create their own path, which they did successfully. I am also an entrepreneur, even when I work with a company that is not my own. It is the mindset of ownership, responsibility and initiative that makes me one.

4. I sell - but the way sales is defined here is not just about products and services. It is about selling a shared vision to achieve common goals. Because I believe in what I do, I create the conditions for win-win scenarios. I sell a winner’s mindset. I sell hard choices. I sell financial independence so that you can do more of what you are built to do. I sold my wife on marrying me. I sold the vision of a family. I sell health. I sell my team on achieving greatness. Everything you do is sales.

5. Gut feel - Intuition is data in the form of pattern recognition. I often feel what the right decision is after a good night’s sleep. I agree with Jeff Bezos, who believes that while data is essential for running an organization, the most important and high-impact decisions in business and life are made using intuition, gut feeling, and heart rather than spreadsheet analysis.

6. I take responsibility - the world does not owe me shit. My parents have done a great job in educating me; they don’t owe me shit either. I own every failure. And I share every success. What did I do wrong? What can I do better? What now? There is a lot of power in having an internal compass instead of using an external barometer.

I am self-made. So the above 6 qualities seem to have worked for me.

Do you have these 6 qualities too? And if you don’t, what can you do to acquire them?

See you next Sunday.

Harsh

I share my learnings as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on my Sunday Email.

Robert Brovdi is one of the most wanted men in Russia. I’m writing about him because of what he said about why they’re succeeding.

He said it comes down to his training in mathematics and his years as first violinist in a folk orchestra. Attaching survival and military operations to “collective intelligence” isn’t something you find in history books.

His first drone purchase was for his kids, back when he was still a businessman. Then he became a soldier, and the inability to see the men trying to kill him and his unit drove him to send up that same civilian drone. First it watched. Then it guided artillery. Then it guided intelligence. Then it guided weapons. A small group became a system. That system became a force. And the grain trader became commander of Ukraine’s unmanned systems forces.

Listen to how he ties his upbringing in maths and music to what he built:

This isn’t a war story. It’s a pattern.

Steve Jobs used to tell it about himself: dropping into a calligraphy class at Reed College with no career use for it, purely because it pulled at him. Years later, designing the first Macintosh, that one useless class became the reason personal computers got real typography. He didn’t plan it. He couldn’t have said why at the time.

Brovdi didn’t plan for a maths education and a seat in a folk orchestra to become the operating system for a drone force either.

The mental model underneath both: work at the intersection of what pulls your interest and what you’re actually talented at, even when no one, least of all you, can say why yet. You’re not building a résumé. You’re building a toolkit whose use you can’t see yet.

I have my own version of this.

In business school, I wanted a seat on the Barcelona exchange, not for any strategic reason, just pure interest in the city and the language. Everyone wanted it. The seats were limited, and I didn’t win one. So I went to the people who made the decision and asked what it would take to get it the following year. Then I spent that summer studying Spanish in Mexico.

The next year, I was one of three people chosen to go to ESADE, one of the most prestigious business schools in the world.

I didn’t know it then. But I believe that’s what shaped me: it’s where I learned that if I really want something, I can go get it.

Three different people. Three different decades. Same operating principle: follow the interest before you know what it’s for. The knowing comes later, if it comes at all.

So think about the success you've had, no matter how small. Can you trace it back to some interest you followed long before you understood why?

Harsh

I share my learnings as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on my Sunday Email.

Even if you don’t see yourself as an entrepreneur or creator, this essay is relevant to you. Because you will have to become one. You will have to figure out what you sell and how you sell it. You will have to create value to survive. To be given an opportunity to create value, you will have to be trusted by your partners, employers and employees. For example, trust is the one thing that can’t be copied, faked, or downloaded. It has to be earned. Trust is the reason why a company will pay you a million dollars even when knockoff solutions are ready to offer a solution for a tenth of the price. There are eight other things that you should keep in mind. Kevin puts it better than I can, a few paragraphs down.

This essay is one of the most useful things I have read this year. Everyone making anything should read and re-read it.

Enter Kevin…

In the analog world, it takes great effort to make a copy. That friction worked as a constraint to limit the propagation of copies. If you wrote a book or developed a photograph or carved a statue, it took trouble to reproduce it. We invented a legal system whereby we would reward the creator of the book or the photo or the art or the music or the device by preventing others from reproducing copies of it without the creator’s permission. Creators were granted a temporary monopoly to make the only copies available via a copyright—the right to make copies. Selling legal copies became the livelihood of most creators.

In the digital world, copies are so easy to make perfectly, they are free. The internet is basically a copy machine. The copies flow so fast and easily you could think of the internet as a superconductive fluid that transmits copies everywhere, all the time. Once a creation is brought into contact with the internet, it will be copied forever, and those copies never leave. With copies free and freely distributed, the traditional livelihood of creators selling copies is gone.

We now live in a digital age. If perfect reproductions of our best efforts as creators are free, how can we keep going? To put it simply, how does one make money selling free copies?

I have an answer. The simplest way I can put it is thus:

When copies are super abundant, they become worthless, and stuff which can’t be copied becomes scarce and valuable.

When copies are free, you need to sell things which cannot be copied.

Well, what can’t be copied?

There are a number of qualities that can’t be copied. Consider “trust.” You can’t purchase trust. You can’t duplicate it. Trust must be earned, over time. It cannot be downloaded. Or faked. Or counterfeited (at least for long). If everything else is equal, a stranger will always prefer to deal with someone they can trust. So trust is an intangible that has increasing value in a copy-saturated world.

There are a number of other qualities similar to trust that are difficult to copy, and thus become valuable in this network economy. I see roughly eight categories of intangible value that we purchase when we pay for something that could otherwise be free.

In a real sense, these are eight things that are better than free in the eyes of the creator. Eight uncopyable values. I call these values “generatives” because they must be generated, grown, cultivated, nurtured in context of the exchange with the buyer. A generative thing cannot be copied, cloned, stored, faked, replicated, counterfeited, banked, or reproduced. Instead the generative value must be generated uniquely, in place, in time. These generatives are what are sold, not the copies that carry them.

Eight Generatives Better Than Free

1. Immediacy — Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released — or even better, the second it is produced — by its creators is a generative asset. Many people go to movie theaters to see films on opening night, where they will pay a hefty price to see a film that later will be available for free, or almost free, via streaming or download. Hardcover books command a premium for their immediacy, disguised as a harder cover. First in line often commands an extra price for the same good. You might pay for a writer’s timely newsletter to get their insights that later appear for free on the web. As a sellable quality, immediacy has many levels, including access to beta versions. Fans are brought into the generative process itself. Beta versions are often devalued because they are incomplete, but they also possess generative qualities that can be sold. Immediacy is a relative term, which is why it is generative. It has to fit with the product and the audience. A blog has a different sense of time than a movie or a car. But immediacy can be found in any media.

2. Personalization — A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound acoustically perfect in your particular living room — as if it were performed in your room — you may be willing to pay a lot. The free copy of a book can be custom edited by the publishers to reflect your own previous reading background. A free movie you buy may be cut to reflect the rating you desire (no violence, no ads). Aspirin is practically free, but aspirin tailored to your DNA would be very expensive. As many have noted, personalization requires an ongoing conversation between the creator and consumer, artist and fan, producer and user. It is deeply generative because it is iterative and time-consuming. You can’t copy the personalization that a relationship represents. Marketers call that “stickiness” because it means both sides of the relationship are stuck (invested) in this generative asset and will be reluctant to switch and start over.

3. Interpretation — As the old joke goes: software, free; the software manual, $10,000. But it’s no joke. Consultants make their living doing exactly that. For instance, for 25 years the for-profit company Red Hat has been selling support, training, consultation for enterprises using Linux and other free open source software. The copy of the code, being mere bits, is free — and becomes valuable to a user only through the support and guidance. I suspect a lot of genetic information will go this route. Right now getting a copy of your DNA is not free, but soon it will be. In fact, I’d bet that pharmaceutical companies will eventually PAY you to get your genes sequenced because they can sell targeted drugs to you that don’t work for everyone. So the copy of your sequence will be free, but the interpretation of what it means, what you can do about it, and how to use it — the manual for your genes so to speak — will be expensive.

4. Authenticity — You might be able to grab an app for free, but you might like to be sure it is bug-free, reliable, and warranted. You’ll pay for authenticity. There are nearly an infinite number of variations of the Grateful Dead jams around; buying an authentic version from the band itself will ensure you get the one you wanted. Or that it was, indeed, actually performed by the Dead. Artists have dealt with this problem for a long time. Graphic reproductions such as photographs and lithographs often come with the artist’s stamp of authenticity — a signature — to raise the price of the copy. Digital watermarks and other signature technology will not work as copy-protection schemes (copies are super-conducting liquids, remember?) but they can serve up the generative quality of authenticity for those who care.

5. Accessibility — Free doesn’t mean it is easy to get. A clearinghouse that can offer otherwise free material in a format that we find easy to use will get our money (Spotify, Amazon Prime, etc.). We want our particular music (remember my tastes), at any time, anywhere in the world. Ditto for books and blogs and movies and apps. In fact, ownership is overrated. Even free stuff has to be stored, backed up, and tended to keep it accessible. An agency can do that for a fee. It works with us to keep everything in order, at our fingertips, with a uniform and dependable interface and therefore acts as a generative force for the copies.

6. Embodiment — At its core the digital copy is without a body. You can take a free copy of a work and throw it on a phone. But perhaps you’d like to see it in hi-res 16K on a huge screen? Maybe in 3D? PDFs are fine, but sometimes it is delicious to have the same words printed on bright white cottony paper, bound in leather. That hardcover book is embodiment. Feels so good. What about dwelling in your favorite (free) game with 35 others in the same physical room? Sure, the hi-res of today — which may draw ticket holders to a big theater — may migrate to your home theater tomorrow, but there will always be new, insanely great display technology that consumers won’t have and will have to move their bodies to. Laser projection, holographic display, the holodeck itself! And nothing gets embodied as much as music in a live performance, with real bodies. The music is free; the bodily performance expensive. The book is free; the bodily talk by the author is expensive. The movie is free, but the toy merch is expensive. This formula is a common one for many creators.

7. Patronage — It is my belief that audiences WANT to pay creators. Fans like to reward artists, musicians, authors and the like with the tokens of their appreciation because it allows them to connect. But they will only pay if (1) it is very easy to do, (2) it entails a reasonable amount, and (3) they feel certain the money will directly benefit the creators. Radiohead’s high-profile experiment in letting fans pay them whatever they wished for a free copy is an excellent illustration of the power of patronage. The elusive, intangible connection that flows between appreciative fans and the artist is worth something. In Radiohead’s case it was about $5 per download. There are many other examples of the audience paying simply because it feels good. The advent of Patreon, a reliable platform that enables fans to easily, dependably, and satisfyingly pay for free stuff is a great boon to creators. I run two different Substack newsletters that are free. But many readers pay for it (via the easy subscription mode) just because they want to establish a connection with me — by directly supporting me. I thank them personally.

8. Findability — A price of zero does not help direct attention to a work. In fact “free” may sometimes make it easy to ignore. But no matter what its price, a work has no value unless it is seen. Unfound masterpieces are worthless to the world. When there are millions of books, millions of songs, millions of movies, millions of apps, millions of agents, millions of everything all demanding our attention — and most of it free — being found is valuable. We pay the big aggregators like Netflix (and some users, like me, pay YouTube) in part to help us find good free stuff, which is why creators hook up with them. Right now the technologies of findability favor the economic interests of the big aggregators, rather than the creators, who only get a fraction of what the audience spends on their work. Alternatives like my 1,000 True Fans model can help, but are still constrained by the difficulty of findability. One of the promises of AI is that it could enable a more decentralized matchmaking function that would connect the creator who has a one-in-a-million interest with the thousand possible fans in the world with the same one-in-a-million interests.

***

In short, money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits. Careful readers will note one conspicuous absence so far. I have said nothing about advertising. Ads are widely regarded as the solution to the demise of the copy because they are attention magnets. Ads have almost been the ONLY solution to the conundrum of the free. Most of the suggested solutions I’ve seen for overcoming the free involve some measure of advertising. Ads do work, but I think they are only one of the paths that attention takes, and in the long run, they will only be part of the new ways money is made selling the free.

Maintaining generatives is a lot harder than duplicating copies. These eight qualities require a new skill set. Success in the free-copy world is not dependent upon the skills of distribution since the Great Copy Machine in the Sky takes care of that. Nor are legal skills surrounding copyright very useful anymore. Nor are the skills of hoarding and scarcity. Rather, these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can’t be replicated with a click of the mouse. These generatives are very human skills, by the way, which AIs are not very good at – yet.

Kevin Kelly is Senior Maverick at WIRED, which he co-founded in 1993, and the bestselling author of books including What Technology Wants, The Inevitable, and Excellent Advice for Living. Explore his work at KK.org, subscribe to his KK Substack, or follow him on X/Twitter and Instagram and on YouTube. Kevin’s most recent interview on The Tim Ferriss Show explored his life philosophy, optimism, advice for younger generations, and more.

***

Back to me, Tim:

To make this concrete and provide a dose of inspiration, here are a few friends and past guests who each embody at least one principle brilliantly.

1. Brandon Sanderson. His “Four Secret Novels” Kickstarter raised $41.75 million, making it the most-funded campaign in Kickstarter history. Fans paid extra for backer-first releases, lavishly illustrated premium leather-bound hardcovers, swag boxes, and a yearlong experience. For a deep dive on Brandon’s business, check this out.

2. Ben Thompson (Stratechery). The tech news is free everywhere; subscribers pay $15 per month for his interpretation. Stratechery was an explicit inspiration for Substack and an early proof that a one-person publication could scale through paid subscriptions.

3. Maria Popova (The Marginalian). Since 2006, The Marginalian has remained free and advertising-free, supported by reader patronage. Its value is Maria’s trusted curation, synthesis, and ability to draw unexpected connections across literature, science, philosophy, and art.

4. Derek Sivers. He says he replies to every personal email and sells his books directly from his own site, including every digital format with a purchase and pricing additional paper copies close to cost. The words are easy to share; the direct relationship with Derek is scarce.

5. Ryan Holiday (Daily Stoic). The free Daily Stoic email reaches roughly one million subscribers. Its paid offerings include physical coins and medallions, challenges, courses, memberships, signed and leather-bound books, and an actual bookstore, The Painted Porch.

6. Seth Godin. More than 10,000 free blog posts built the trust. Books, talks, courses, and the cohort-based workshops he pioneered turned those freely available ideas into deeper, participatory experiences.

7. Boyd Varty. His books and free podcast distribute his ideas inexpensively; the scarce offering is a five-day Track Your Life retreat at Londolozi, including wildlife-tracking expeditions, personal coaching with Boyd, and work with master trackers. You cannot download that.

8. Matt Mullenweg. WordPress is free and open-source. Automattic—the company behind the hosted WordPress.com service, WooCommerce, Jetpack, and other products—provides paid hosting, security, commerce, support, and other services around an open ecosystem. It is a modern version of “software, free; the software manual, $10,000.”

See you next Sunday.

Harsh

I share my learnings as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on my Sunday Email.

Both problems come from the same missing ingredient. A quest. One clear direction you have decided is worth everything else you could be doing. Without it, you either see no path forward, or you see too many and cannot choose between them.

A quest does not have to be building a company or breaking a record. It could be being the best father, the best musician, the best neighbor. What matters is that you have picked one thing and decided everything else bends around it.

But Hormozi’s rant raises a harder question. What do you do when you genuinely do not know what your quest is.

I think the answer is that you cannot think your way to it. You have to go find it. Try things you are curious about, notice what still holds your attention after the novelty wears off, and pay attention to what you are good at that other people seem to struggle with. None of that happens sitting still. It only happens by doing something badly first and seeing what the doing teaches you.

Ed Sheeran said something similar when asked how he became good enough to fill stadiums.

That is the part nobody wants to hear. The people who look like they found their quest early did not skip the rubbish phase. They just did not stop during it.

This is the part I would say to anyone who feels behind. Not knowing your quest yet is not the same as being lost. It just means you are still in the tinkering phase, and the tinkering phase does not resolve itself from a desk. It resolves out in the world, one attempt at a time.

So here is the question I am sitting with this week. If you already have a quest, are you actually moving toward it, or just thinking about it. And if you do not have one yet, what is the smallest thing you could try this week to find out what pulls at you.

See you next Sunday.

Harsh

I share my learnings as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on my Sunday Email.

Carse split every game into two kinds. A finite game has known players, fixed rules, and an end. Someone wins, someone loses, and it’s over. An infinite game has no such ending. Simon Sinek picked this up decades later and applied it to business: known and unknown players, rules that keep changing, and no finish line. The only real objective is to keep playing.

I realized I had been treating the bad month like a finite game, something that could be lost for good. But I haven’t made it this far because I had been chasing quick wins. My success has been the result of consistent, relentless progress. The compounding over decades has been possible because I love playing the game I am damn good at. That reminder shifted my mindset from “I am losing what I could have made this year” to “let’s see what you’re capable of, Harsh.” The money is a byproduct. It takes care of itself.

It wasn’t only true of one bad month. The same split runs under everything I do.

On business

“Finite games can be played within an infinite game, but an infinite game cannot be played within a finite game.”

A quarter is finite. A revenue target is finite. Beating a competitor this year is finite. The business itself is not. There is no year in which it gets declared won. Every finite result you chase sits inside a longer game, and the only real objective of that longer game is that the business still exists, still adapts, and still deserves its customers, long after this quarter is forgotten.

On craft

I feel this most directly in writing every week. There is no version of this newsletter that gets won. A strong Sunday proves nothing about the next one. The only real goal is to still be reading, still be thinking, and still be showing up to write down what I learned, years from now. Some weeks that looks like progress. Some weeks it just looks like showing up. Both count toward the same game.

On health

Training for one event is finite. It has a date and a result. Staying strong enough, mobile enough, and healthy enough to keep doing what you love as the years pass is not something you win once. You only keep playing it, or you stop.

On relationships

A wedding is finite. It has a date, a guest list, and an end. A marriage is not. There is no version of it where one person wins and the game is over. The only real measure of a good one is whether both people are still choosing, today, to keep playing.

Carse’s harder point is the one most people skip past. A finite player plays to end the game. An infinite player plays to keep it going.

So here is the question I am sitting with this week: the next time something goes against me, will I remember I’m playing an infinite game, or will I mistake it for a final score?

See you next Sunday.

Harsh

I share my learnings as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on my Sunday Email.

Model 1 - The Bedrock

Take a simple idea and take it seriously. Go all-in or it just doesn’t work.

Model 2 - Truth vs Trust

At the tight end of the graph you have extreme truth leading to extreme trust. This is where Jesus and Buddha hang out. Thats aspirational. Life is more convenient with the white lies. Get rid of them.

A personal example of what this means:

A business example of what this means:

Model 3 - Belief Comes Before Capability

This is a very important model to keep in mind when you are embarking on something new. If you really want something, it doesn’t matter what you know or what your expertise is, you got to first believe that it’s going to happen.

Model 4 - Heads I Win; Tails I Don’t Lose Much

Jeff Bezos defines asymmetric bets as high-upside, low-downside opportunities where potential gains exponentially outweighs risks, allowing for 1000-run returns compared to the 4-run maximum in baseball. Look for such opportunities where you either win big or you don’t lose much.

Model 5 - Be a Shameless Cloner

Cloning is a very powerful mental model. You do not need to come up with anything new. The world can accommodate multiples of the same thing. Just copy!

Model 6 - Use Hacks to Improve Yourself

Make a list of your friends and categorize them on who is better than you and who is worse than you. Then delete everyone on the worse category from your life.

Don’t care about loyalties. This model is difficult because you got to be a harsh grader. But when you delete someone, you have room for someone else who can make you better.

Model 7 - Hiring Hacks

Model 8 - Incentives are More Powerful Than You Think

Humans are very heavily driven by incentives.

Book recommendations:

• Copy This!: Lessons From A Hyperactive Dyslexic Who Turmed A Bright Idea Into One Of America’s Best Companies

• Les Schwab Pride in Performance: Keep It Going

Model 9 - You Can Start a Business with No Capital

You don’t need money to start, run or be successful in business. Out of 1 million businesses that start in the US every year, only 1% get funding. The economy runs on the remaining 99%.

Model 10 - Pursue Quality Intensely

Book recommendation: Zen and the Art of Motorcycle Maintenance

This book will show you the power of bringing extreme quality into everything you are doing, which will give you a big leg up in life.

Model 11 - Focus on Durable Moats

A great business is easier to build than a shoddy one.

Do what’s harder upfront by playing the long game, never thinking of an exit and making it your life’s work.

Model 12 - The Purpose of Business is Not to Make Money

The purpose of business is to deliver a great product or service to humanity. If you do that, then money is a natural side effect.

Model 13 - Outsource Everything that Can Be Done by Someone Else for Less than $100/hour

Put a value on your own time. Almost everything you want done can be done for $100 or less.

Only try to work on things that you are intensely excited about.

Try to have a team that can work on the rest.

Model 14 - Your Customers Will Tell You What To Focus On

Whatever you tell your customers you want to do, will not be correct. But if you listen, they will educate you on what their real pain is.

Model 15 - Two to Three Players Will Own 80-90% of the Market

It doesn’t matter whether the industry is paperclips or airplanes.

If it is a $10 billion market, if you say that you will take 2% of it, you will fail. It shows that you haven’t done the segmentation.

But if you say that your offer is so good that you can take 70% market share, then you have a chance.

Model 16 - Go All-In On No Brainers

For example - If a 1 hour podcast gives you better insights than a 20-hour book read, then go all-in and listen to as many podcasts as you can. It’s a highly efficient way to learn.

Model 17 - Introduce Randomness In Your Life

We sensor what we do. It narrows what data we take in. Introducing randomness broadens our perspective.

Other Models That Were Not Talked About

1. Fast is Slow

2. Take the Road Less Traveled

3. No Calibration in Reciprocation Tendency

4. Assume everyone is wearing an “I’m Important” sign

5. Influence from Association Tendency

6. Social Proof Tendency

7. Contrast Misreaction Tendency

8. Availability Misweighting Tendency

9. Focus on Being Kind vs. Being Right

10. To Be Interesting, Be Interested

11. Clone The Little Things

12. 99% of Success Is Just Showing Up

13. Attend As Many Funerals As You Can

14. Ask God Google The Day You Will Die And Plan Accordingly

15. To Encounter Misfortune and Overcome It Is Good Fortune

16. What you will do tomorrow, do today; What you will do today, do now

17. Your kids will learn from your actions, not what you tell them

18. Be an optimist

19. Take a nap every afternoon

20. Make no small plans

21. The sky is the limit if you do not care who gets the credit

22. Underpromise and Overdeliver

23. When you are young, have friends who are older. When you are old, have friends who are younger

24. Understand compounding

25. Spend less than you earn

26. Play infinite games

27. Read a lot

28. Only work for and with people you like, admire and trust

29. Be a generous tipper

30. Fish and Guests stink after Three Days

31. Do not die at 25 and get buried at 75

32. Get your music out

33. Learn from the Eminent Dead

These 3 books are better than any college degree:

1. Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger

2. Influence : The Psychology of Persuasion

3. Excellent Advice for Living: Wisdom I Wish I’d Known Earlier

Top 3 Posts from the week on LinkedIn and WhatsApp

• Your spouse is the single most important business decision of your life. Nothing else comes close.

• Hard choices, easy life. Easy choices, hard life. I have not heard a more honest career rule in a decade.

• Everything is sales. The sooner you accept it, the better your career becomes.

See you next Sunday.

Harsh

I share my learnings as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on my Sunday Email.

On work

• Don’t aspire to glory. Aspire to work. Be useful. A measure of success I’d say is how many useful things you can get done. A useful life is a good life. The target is not status, recognition, or wealth. The target is useful output.

• Are you contributing more than you consume? Try to have a positive net contribution to society.

• Business exists for service. Money comes naturally as the result of service. If someone is trying to make a company work, they should expect to grind super hard.

• Have a grow-the-pie mindset. People who do things that are morally questionable often have a zero-sum mindset. They think that to have more pie they need to eat someone else’s portion. The game is not zero-sum. The game is to grow-the-pie.

On finding your path

• Find the overlap of your talents and interests. Even if you are the best of the best, there is always a chance of failure. So it is very important that you really like what you are doing. If you like what you are doing, you think about it even when you are not working.

• Read broadly and meet broadly. Try to learn a little about a lot of things. How else would you know what you are really interested in if you do not explore? Also try to talk to people from all walks of life.

• Actively seek out negative feedback. When friends get a product I tell them: “don’t tell me what you like. Tell me what you don’t like.”

On thinking

• Break it down. First principles boils things down to the most fundamental truths. What are we sure as possible is true? And then reason up from there. Most people reason by analogy. They do what others have done before.

• Reduce the requirements. Start by reducing the number of requirements. The common mistake is to optimize the thing which should not exist. First principles forces a harder question: why does this exist at all?

• Add back. If you are not forced to add back 10% of what you deleted, you are not deleting enough.

On execution

• Scale the problem. Push assumptions to their limits to find where they break. What if our volume was 1 million units a year. Is it still expensive? If it is still expensive, then volume is not the problem.

• Run things in parallel. Any given thing can be sped up. Put as many elements in parallel as possible. Try not to serialise dependencies.

• Speed up what should exist. Never optimise what should not exist in the first place.

• Automate last.

On courage

• It is normal to feel fear. If you just accept the probabilities then that diminishes the fear. But fear does not go away. Accepting the odds shrinks it. “When I started SpaceX I thought the odds of success were less than 10%. I accepted that I would probably lose everything. But maybe we could make progress.”

• Let your troops see you in the fight. Show up, visibly, and the people around you follow. “I was sleeping on the factory floor under my desk for 3 years straight so that during shift change the entire team could see me. They knew I was there. And that made a huge difference.”

Which principle resonated with you the most?

For me it was the first - Don’t aspire to glory. Aspire to work. I love what I do. I love working with my teams. I love waking up everyday with problems to solve. I love playing the infinite game of life. It's not always fun. Sometimes I wake up anxious. Sometimes I cannot sleep. Sometimes I worry about my family and my future. There is always the money worry. But I always find a way to keep moving forward.

Follow the principles above to keep moving forward.

Best,
Harsh

I share extraordinary ideas I’m learning as a business builder, daily on my WhatsApp Community and LinkedIn, and weekly on my Sunday Email.

They’ve been good bets he didn’t make.

The costly mistakes were not the bad bets. They were the good bets that weren’t taken. The businesses that were understood, could be seen clearly, were known to be valuable, and not acted on.

He understood the business. He knew it was outstanding. He just didn’t want to pay the price. And he calls that the most expensive mistake of his career, repeated over and over again.

You know what to do. You can see it clearly. And you sit there, unable to act.

Here is Munger sharing a story that drives home how much omissions can cost.

$200 million!

Not because he made a bad investment. Because he didn’t make a big enough good one.

I think this goes beyond investing.

• The business you knew was exceptional, but moved on slowly just in case you were wrong.

• The person you could see was great, but you did not pay enough so he left.

• The decision you made correctly in your head, then executed at tenth the scale.

Same error every time.

The question I sit with now isn’t just: am I right? It’s: if I’m right, am I acting at the right scale?

A small bet on something you understand fully isn’t prudence. It’s a more comfortable version of sucking your thumb.

Best,
Harsh

I share what I’m learning as a business builder. Extraordinary ideas, daily on my WhatsApp Community and LinkedIn, and weekly on my Sunday Email.

“Another thing that’s interesting is how little turnover we have. The number of managers that we’ve had to replace in the last ten years are very few. We don’t have a retirement age… Without a retirement age, and with people working because they love their jobs, we get long tenure out of our managers. They like the money as well, but their primary motive is that they really like accomplishing what they do in their jobs… I would argue that’s a huge plus.”

“We have no human relations department, no legal department, no investor relations, no public relations, we don’t have any of that. We’ve got a bunch of all-stars out there running businesses.”

Buffett’s starting point is simple: get very good managers, let them stay a very long time, and don’t build a big headquarters to manage them.

“Some people bat left-handed, some people bat right-handed. Some people stand deep in the batter’s box, some crowd the plate. They all have different styles. And the styles of our managers have proven successful in their own businesses. So, we don’t try to superimpose any system from above… We like paying for performance. That is kind of a fundamental tenet.”

“We don’t have a headquarters culture that’s forced on the operating businesses. The operating businesses have their own cultures. And in every case I can think of it’s a wonderful culture. We just leave them alone.”

Different managers run their businesses in different ways. As long as the record is good, Berkshire does not try to standardise style. The one thing they are explicit about is paying for performance, and only for what is under the manager’s control.

“There are more problems with having the wrong manager than with having the wrong compensation system. It is enormously important who runs Procter & Gamble, Coca-Cola, or American Express; any compensation sins are generally of minor importance compared to the sin of having somebody that’s mediocre running a huge company.”

“You need a lot of good operating managers, and you need somebody at the top who allocates capital well and who makes sure you’ve got the right operating managers.”

The main risk is not the pay plan. It is having the wrong person in charge of a valuable business.

“The important thing we do with managers, generally, is to find the .400 hitters and then not tell them how to swing. The second thing we do is allocate capital.”

“Our managers know their businesses and they know how to run them. And if they didn’t, we’d do something about the manager, we wouldn’t try and build a bunch of systems.”

Once they have the right people, Berkshire’s job is to leave them alone to run their businesses and to allocate capital from the top, not to design more processes.

“I think culture has to come from the top. We work all the time at trying to behave with other people as if our positions were reversed.”

“Almost every business has problems, and we’d just assume the manager would tell us about them… We give very little advice to our managers, but one thing we always do say is to tell us the bad news immediately.”

Culture, for them, is how the top behaves and how problems are handled: treat people fairly, and surface bad news quickly.

On Monday

If you work with managers (or are one), pick one business you’re involved in and write down:

• Who is actually running it today?

• Is the main issue here the “system”, or is it the person in charge?

• Are they being measured and paid on what they truly control?

• Do they feel trusted to run it in their own style, and to bring bad news early?

Buffett and Munger’s view is clear: talent is scarce, styles can differ, and the biggest leverage is getting the right managers in place and then not telling the .400 hitters how to swing.

Best,
Harsh

I share what I’m learning as a business builder.

Newsletter: Sunday Email
More during the week: WhatsApp Community | LinkedIn

“One thing I would bet my life on is that over a fifty-year period, not only will Berkshire do considerably better than gold, but common stocks as a group will do better than gold, and probably farmland will do better than gold.”

Then he explained why:

“If you own an ounce of gold now and you caress it for the next hundred years, you’ll have an ounce of gold a hundred years from now. If you own a hundred acres of farmland, you’ll also have a hundred acres of farmland a hundred years from now and you’ll have taken the crops for a hundred years and sold them and presumably bought more farmland in the process. It’s very hard for an unproductive investment to beat productive investments over any long period of time.”

Gold just sits there.
Farmland produces for a century and lets you reinvest along the way.

He draws a clear difference between productive and unproductive assets:

“Anytime you buy an asset that can’t produce anything, you’re simply betting on whether somebody else will pay more for it in the future. That’s different from assets that you can value based on what they will produce, what they will deliver. You buy a farm because you expect a certain amount of corn, soybeans, cotton, whatever it may be, to come your way every year. And you decide how much you will pay based on how much you think the asset itself will deliver over time. Those are the assets that appeal to me and Charlie.”

That’s the core insight:

• Productive assets can be valued by what they deliver over time.

• Unproductive assets depend on someone else paying more later.

Then he talks about how people react:

“It’s interesting: But if you say anything negative about gold, it arouses passions with people, which is kind of fascinating, because usually if you thought through something intellectually, it shouldn’t really make much difference what people say. The question is whether your facts are right and your reasoning is right. But you run into people who are really excited about gold … My dad loved gold. But he was tolerant, he could take a discussion of it. I find many people have trouble with it.”

Two more insights sit here:

1. You should be able to discuss your position without feeling personally attacked.

2. The only questions that matter are:

   • Are my facts right?

   • Is my reasoning right?

That’s how I think about my own investing now:

• Prefer assets that produce cashflows I can roughly estimate.

• Be wary of assets that only move because someone else is more excited or afraid.

• Hold positions because the facts and reasoning still make sense, not because other people agree.

On Monday

Look at what you own and, for each asset, write down:

1. Does this thing produce anything (cash, output, rights to a stream of earnings)?

2. Or am I mainly hoping someone will pay more for it later?

The first bucket is your productive assets.
The second is your speculation.

Buffett’s point is simple: over long periods, it’s very hard for the second bucket to beat the first.

Best,
Harsh

I build businesses with extraordinary people.
I share what I’m learning with people who build and run companies.

Newsletter: Sunday Email
More during the week: WhatsApp Community | LinkedIn