Specific knowledge can be found by pursuing your genuine curiosity
Arm yourself with specific knowledge
Nivi: Do you want to talk a little bit about the skills that you need, in particular specific knowledge, accountability, leverage and judgment. So, the first tweet in this area is âArm yourself with specific knowledge accountability and leverage.â And Iâll throw in judgment as well. I donât think you covered that in that particular tweet.
Naval: If you want to make money you have to get paid at scale. And why you, thatâs accountability, at scale, thatâs leverage, and just you getting paid as opposed to somebody else getting paid , thatâs specific knowledge.
So, specific knowledge is probably the hardest thing to get across in this whole tweetstorm, and itâs probably the thing that people get the most confused about.
The thing is that we have this idea that everything can be taught, everything can be taught in school. And itâs not true that everything can be taught. In fact, the most interesting things cannot be taught.
But everything can be learned. And very often that learning either comes from some innate characteristics in your DNA, or it could be through your childhood where you learn soft skills which are very, very hard to teach later on in life, or itâs something that is brand new so nobody else knows how to do it either, or itâs true on the job training because youâre pattern matching into highly complex environments, basically building judgment in a specific domain.
Classic example is investing, but it could be in anything. It could be in judgment in running a fleet of trucks, it could be judgment in weather forecasting.
So, specific knowledge is the knowledge that you care about. Especially if youâre later in life, letâs say your post 20, 21, 22, you almost donât get to choose which specific knowledge you have. Rather, you get to look at what you have already built by that point in time, and then you can build on top of it.
Specific knowledge canât be trained
The first thing to notice about specific knowledge is that you canât be trained for it. If you can be trained for it, if you can go to a class and learn specific knowledge, then somebody else can be trained for it too, and then we can mass-produce and mass-train people. Heck, we can even program computers to do it and eventually we can program robots to walk around doing it.
So, if thatâs the case, then youâre extremely replaceable and all we have to pay you is the minimum wage that we have to pay you to get you to do it when there are lots of other takers who can be trained to do it. So really, your returns just devolve into your cost of training plus the return on investment on that training.
So, you really want to pick up specific knowledge, you need your schooling, you need your training to be able to capitalize on the best specific knowledge, but the part of it that youâre going to get paid for is the specific knowledge.
Specific knowledge is found by pursuing your curiosity
For example, someone who goes and gets a degree in psychology and then becomes a salesperson. Well if they were already a formidable salesperson, a high grade salesmanship to begin with, then the psychology degree is leverage, it arms them and they do much better at sales.
But if they were always an introvert never very good at sales and theyâre trying to use psychology to learn sales, theyâre just not going to get that great at it.
So, specific knowledge is found much more by pursuing your innate talents, your genuine curiosity, and your passion. Itâs not by going to school for whatever is the hottest job, itâs not for going into whatever field investors say is the hottest.
Very often specific knowledge is at the edge of knowledge. Itâs also stuff thatâs just being figured out or is really hard to figure out.
So, if youâre not 100% into it somebody else who is 100% into it will outperform you. And they wonât just outperform you by a little bit, theyâll outperform you by a lot because now weâre operating the domain of ideas, compound interest really applies and leverage really applies.
So, if youâre operating with 1,000 times leverage and somebody is right 80% of the time, and somebody else is right 90% of time, the person whoâs right 90% of the time will literally get paid hundreds of times more by the market because of the leverage and because of the compounding factors and being correct. So, you really want to make sure youâre good at it so that genuine curiosity is very important.
Building specific knowledge will feel like play to you
So, very often, itâs not something you sit down and then you reason about, itâs more found by observation. You almost have to look back on your own life and see what youâre actually good at.
For example, I wanted to be a scientist and that is where a lot of my moral hierarchy comes from. I view scientists sort of at the top of the production chain for humanity. And the group of scientists who have made real breakthroughs and contributions that probably added more to human society, I think, than any single other class of human beings.
Not to take away anything from art or politics or engineering or business, but without the science weâd still be scrambling in the dirt fighting with sticks and trying to start fires.
My whole value system was built around scientists and I wanted to be a great scientist. But when I actually look back at what I was uniquely good at and what I ended up spending my time doing, it was more around making money, tinkering with technology, and selling people on things. Explaining things, talking to people.
So, I have some sales skills, which is a form specific knowledge that I have. I have some analytical skills around how to make money. And I have this ability to absorb data, obsess about it, and break it down and that is a specific skill that I have. I also just love tinkering with technology. And all of this stuff feels like play to me, but it looks like work to others.
So, there are other people to whom these things would be hard and they say like, âWell, how do I get good at being pithy and selling ideas?â Well, if youâre not already good at it or if youâre not really into it, maybe itâs not your thing, focus on the thing that you are really into.
This is ironic, but the first person to actually point out my real specific knowledge was my mother. She did it as an aside, talking from the kitchen and she said it when I was like 15 or 16 years old. I was telling a friend of mine that I want to be an astrophysicist and she said, âNo, youâre going to go into business.â
I was like, âWhat, my momâs telling me Iâm going to be in business. Iâm going to be an astrophysicist. Mom doesnât know sheâs talking about.â But mom knew exactly what she was talking about.
Sheâd already observed that every time we walk down the street, I would critique the local pizza parlor on why they were selling their slices a certain way with certain toppings and why their process of ordering was this way when it should have been that way.
So, she knew that I had more of a business curious mind, but then my obsession with science combined to create technology and technology businesses where I found myself.
So, very often, your specific knowledge is observed and often observed by other people who know you well and revealed in situations rather than something that you come up with.