frontiers

January 2023

I’ve been thinking a lot about frontiers recently. After putting pen to paper, I realised most of my perspective comes from listening to Naval over the last few years.

New opportunities are at the frontier. In Naval’s words, it’s where the risk-takers have arrived, but the masses and the bureaucrats haven’t. There’s a massive upside, and it’s not heavily competed over yet. If you’re doing what everyone else is doing, you’ve already lost.

Frontiers change over time. Rebels who disrupted the previous generation of incumbents sometimes entrench themselves and repeat their predecessors' mistakes.

Today’s frontier is the internet. As software eats the world, what was once physical is becoming digital. Things that were impossible in a world of atoms are unlocked by bits. The internet is a technological revolution that has its own frontiers within it. One of these is crypto. The crypto frontier will move faster and more intensely than others because anyone can push it forward through decentralised and permissionless networks.

Buffett and Munger have led a small group of value investors exploiting the arbitrage between price and intrinsic value for decades. Despite their smarts, they can’t grok crypto because it challenges their entire conception of the world. You can still respect them and their wisdom, while acknowledging this miss.

Avoid falling into the trap by keeping your identity small. Don’t attach it to things. We’re predisposed to act consistently with how we see ourselves. If your identity is built around something, when that thing is challenged by a new force, you’re going to resist it. Stay fluid and open to opportunities, even when they cannibalise things that have given you success.

This isn’t saying to jump on every new bandwagon, but keeping a default state of curiosity and optimism is a good way to go. You must be willing to keep reinventing yourself. To have repeat successes, you have to go from zero to one multiple times.

Kurt Vonnegut once wrote: “I want to stand as close to the edge as I can without going over. Out on the edge, you see all kinds of things you can’t see from the center.” 

Most people don’t like the edge because you look stupid for a while. And not looking stupid is more important to them than being right. To stay on the frontier, you need to embrace your weirdness and spend time in ways that people around you think are irrational. You won’t know if they’ll lead to anything, so you need to be obsessed enough to keep going deeper just for the love of it.

So goes the classic Chris Dixon line: what the smartest people are doing on nights and weekends now, everyone will be doing in ten years. The future is already here; it’s just on the fringe. People know this from history but fail to apply the lessons when it’s staring them in the face.

It’s much easier to follow your quirks when you see yourself as a loser. If you start from this assumption, you have nothing to lose and everything to win. It doesn’t matter when people try to outcast you for doing something strange because you’re already a pariah.

I have a working theory that the uncool kids at school turn out the most successful in life. They’ve acclimated to being on the outside and have to learn (out of necessity) not to care what other people think. That makes it much easier to move to the frontier and swing after opportunities everyone else thinks are dumb.