Health, Wealth & Leadership [19 May 2024]

Carbs with Sleep, 50% Returns, Building Successful Teams, From $40 to $400, Milk Frailty & 13 Entrepreneurship Insights

Every Sunday I share lessons on how to be healthier, make more money and lead by example. Here is what I learnt last week:

1. Do the type of carbs you eat at night impact your sleep?

2. How would Warren Buffett invest his money to make 50% per year if he started today?

3. 9 things you should know if you want to build successful teams.

4. This company's market cap ($3.12 trillion) is almost 70% of India's stock market ($4.84 trillion). And their investors made 10x money in 10 years.

5. Do dairy products make you frail?

6. 13 insights on how to be a better entrepreneur

You can access previous editions of my weekly emails here. Let’s begin!

(1) Do the type of carbs you eat at night impact your sleep?

42 physically active men between the ages 18–48 were studied. They had an average VO2max (maximum oxygen consumption during exercise) of 45 to 51.

The protein, fat, and vegetable contents of the meals were similar between the groups. They all ate 1.5 grams of protein per kg, 5 grams of carbs per kg, and the remaining calories came from fat. 

They ate 3 hours before bedtime and exercised 4 hours before bed time. All of the participants followed the same exercise routine, 5 times per week, which was supervised by an exercise scientist. 

The result?

There were improvements in all the groups which suggests that doing resistance training and eating a high carb high protein diet can improve your sleep. But there was no significant difference between the groups which suggests that the amount and type of carbohydrate consumed did not impact sleep metrics.

Here is the study: https://pubmed.ncbi.nlm.nih.gov/38367595/

(2) How would Warren Buffett invest his money to make 50% per year if he started today?

Warren Buffett, the greatest investor of all time, recently got asked: "How would you make returns of 50% per year if you started investing today?"

The 93 year old said:

"In my case it would be going through 20,000 pages. For example, I went through thousands of pages to read about railroad companies. I knew details of companies that no one would know about. I would try to know everything about everything small. And I would find something. 

You could earn 50% per year, but you have to be in love with the subject. You can't just be in love with the money. But I also just want to play the game. You can't really do it if you don't find the game of interest, whether it's bridge, chess or in this case finding securities that are undervalued. 

I have had the luck of meeting a lot of people that are unbelievably smart in their own arena, and do some unbelievably dumb things in other areas. The human brain is complicated but it does its best when you find out what your brain is really suited for. And you just pound the hell out of it from that point."

(3) 9 things you should know if you want to build successful teams.

I spent 4 hours over 2 days putting these notes together. Here are 9 things I learnt about why every business is about doing one thing really well - getting the right team to work together for the right mission and paying them top dollar to make it happen:

1. At the top your job is to recruit, hire, train, manage. It's less about building businesses and way more about assembling the teams that builds the business. All businesses at the top are: marketing head, sales head, product head, finance head, legal head, tech head. That's the business! So irrespective of whether you're selling a product or service, at the very highest level, business is all the same. It's about managing the managers. 
   
   2. The best people cost more but make you way more than they cost. Big businesses understand that it's the talent that makes them a big business. You have to be worthy of the level of talent that you need and have a mission that's aligned with what they find meaningful. There is a reason that every one of Elon Musk's businesses are saving the world. He makes it about that. For example, Twitter was just a social media platform before Elon Musk came in and made it about civilization and the last beacon of free speech. By doing this he gets talented people to work night and day to save the world.
   
   3. If you hire better, the team and company will grow. Every new hire should raise the bar of the team you hire into. But keep in mind that people always hire people they aren't threatened by. 8 will hire 7s. 6 will hire 5s. 4 will hire 3s. They want security first. If they hire smarter, they feel threatened. Keep this in mind before you ask a manager to hire someone.
   
   4. When people do well, they get promoted to do something they've never done before. And then they do poorly. And then they get fired. Don't make that mistake.
   
   5. If you hire someone with 10 years of experience, the business grows from year 10, versus if you hire a fresher who will grow your business from Day-1. You want someone to have learnt all those lessons on someone else's dollar so that when they come to you, you get to benefit from his previous lessons. You don't need the scars.
   
   6. The business is only as strong as the weakest link. You and every other individual contributor should be specializing in your strengths but you as the business entrepreneur should be making sure that together the business is balanced.
   
   7. As the entrepreneur, either learn to do what you don't like. Or find someone to do it. Otherwise you will become the bottleneck.
   
   8. You should know who is going to be needed next, and what he looks like. How do you find the right people if you don't have the experience? 
   
   (A) Interview lots of people. For Skool, Sam interviewed 600 developers before he found his co-founder. He asked around. He got introduced to the best developers. He kept going up the ladder.
   
   (B) Look at the qualitative and quantitative aspects of the candidate. Ask them:
   (i) How do you measure success in your role? 
   (ii) How is what you do make the business money?
   
   If they cannot describe how they measure and contribute you can be sure they won't be able to contribute.
   
   9. You're one hire away from hiring someone who is 100x smarter than you, has done it way longer than you have and can help you grow the business.
   
   The other nuggets of wisdom from this 90 minute video from Alex Hormozi is shared below as the 6th story.

(4) This company's market cap ($3.12 trillion) is almost 70% of India's stock market ($4.84 trillion). And their investors made 10x money in 10 years.

They have grown 55x in the last 10 years, touching revenues of $212 billion and operating profits of $70 billion.

Most of us use their products.

Have you figured out who I'm writing about? It's Microsoft!

Microsoft has been around for over 50 years, reinventing itself every decade. They started with Windows in the 1980s. In the 1990s they got into work enterprise and server software (Windows NT and Windows Server). In the 2000s it was gaming (XBOX) and SME (Microsoft Dynamics). In the 2010s it was Azure and SAAS. What they started in the last decade now brings in almost 70% of their revenue. The fact that they have reinvented themselves every decade at this scale is unbelievable!

It's not all been rosy however. Remember Windows Mobile? Yes that also existed. There were many other failures along the way. But their attitude is that they want to take a shot at everything.

But you know what is the secret sauce that keeps them competitive and growing? 

Microsoft wants to add much more value to their customers then they want to extract. They could be charging way more for what they provide but instead they choose to bundle what they offer in order to give their customers much more than they are paying for. This is why they took on Slack and Zoom by building Teams and just giving it away with their bundle.

This is a company that thinks like a "forever business". They approach their customers knowing that in 20 years they may be selling them something totally different. This extremely long term thinking married with a sleek enterprise sales machine that runs at enormous scale, and their ability to control costs are a few reasons why someone who invested in Microsoft in 2014 has 10x their money by 2024. Their stock price has gone from $40 to $400. And chances are that it will keep on growing.

I learnt about Microsoft by listening to Saurabh and Jaibir speak.

(5) Do dairy products make you frail?

In this study 85,280 women, aged 60 or older were studied to determine the association between the consumption of milk, yogurt and cheese, and the risk of frailty.

Frailty defines the group of older people who are at highest risk of adverse outcomes such as falls, disability, admission to hospital, or the need for long-term care.

The study concluded that higher intake of cheese was associated with an increased risk of frailty. But a higher intake of yogurt or milk was not associated with the risk of frailty.

Here is the link to the study: https://pubmed.ncbi.nlm.nih.gov/38424524

(6) 13 insights on how to be a better entrepreneur.

I want to always learn from others experiences and mistakes so that I do what will push me forward and avoid the things which will push me back.

Here are 13 insights I am implementing in my day to day:

1. Make checklists. Document the process. That way you won't reinvent the wheel, can teach your team how to do it, and can set a standard that can keep on improving. This will make everything an order of magnitude better.
   

2. What is the Current state?
   What is the Desired state?
   What is the Obstacle?
   Most times it's not that you lack insight, it's that you're solving the wrong thing.
   

3. Better not bigger. If we get better, customers will demand we get bigger.
   

4. Quality will always win. It's so much better to spend 100 hours to do 1 exceptional thing than doing 100 mediocre things well. However, quantity matters because it teaches you how much work it takes to create quality. Over time all platforms will optimize for quality because there is no lack of information. Quality is in the details that you only realize with lots of exposure. The work is several coats of paint. Sanding it down and perfecting the edges. That comes with real work done over and over again by editing and redoing and relooking at what you're doing from different angles. Work that no one is willing to do.
   

5. If you're entering a market you want to be an order of magnitude better than what already exists.
   

6. If the reason you're in business is to make money, you will get distracted. That's why the mercenaries fail compared to the missionaries. Because if you just want to make a chicken sandwich, anything that is not a chicken sandwich, is not a priority.
   

7. I spend the first 4-6 hours of the day uninterrupted on the things which I think matter the most. This is the single habit that's got me furthest in my life. If you don't do this, you will work all day and get nothing done. I do my thinking in the morning 6-12 and do my meetings in the afternoon.
   

8. What's the 1 thing if it were true, would make all my other problems go away? Put all your effort into solving this. You can figure out where the constraints are by simply asking "why can't we 10x this"?
   

9. How to say no to meetings? "Hey I'm not taking meetings till I don't sell this company." That way you are giving people a reason which isn't about them.
   

10. A brand takes a long time to build but it's the most valuable thing you can own. It gives you the ability to get insane returns on advertising, price far above the market and keep people buying from you. It's very hard to imagine something that is better than that. Branding gets you far better returns on advertising than anything else. It just takes time.
    

11. You have to change your belief system. Why can't I spend $10,000 a day on ads? Why can't I hire 30 sales guys to do outbound in 90 days? For example - this fund manager did 200 interviews in 7 days to start his fund with his team. A startup guy may have taken 1 year to get the same result because of the constraints he put on himself. Figure out the outputs you need and the inputs they require to make it happen.
    

12. How good do you have to make it so that it is the first thing they bring up when they speak to the next person? That is a litmus test for "how good is the thing you sell?"
    

13. If the business can grow without me, how much more can it grow with me?

Harsh Batra (LinkedIn)

Whenever you are ready, there are 3 ways I can help you:

1. Happy Ratio - The foundation of health is your diet. You should focus on eating nutrient dense meals. But this is not always possible or easy. Happy Ratio is the only quick service restaurant chain that is on a mission to make healthy food the default choice for Indians. We are present in Delhi NCR and turned on Swiggy and Zomato last week for Gurgaon. Try us.

2. EthosData - If you are running M&A transactions, planning an IPO, or sharing anything confidential online, my team can run your Virtual Data Rooms. Companies like Tata, Reliance and Moody’s trust us.

3. Marcellus Investment Managers - I am a Marcellus client because their investment philosophy resonates with how I think about investing. My assumption is that Marcellus can generate returns of 18% per year over the next 10 years. That means 5x your money in a decade. Investing comes with inherent risks so please do your own due diligence before deciding where to put your money. I am also an Independent Financial Advisor with Marcellus.