Only need to get a few right!

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Source: the good coach

I recently stumbled upon this clip from the Daily Journal AGM 2017, where Charlie Munger said something really interesting:

You know, the ideas that I have had in my life are quite few. But the lesson I can give you is, a few is all you need, & don’t be disappointed.

When you find the few, of course, you have to act aggressively, that’s the Munger system.

Charlie Munger

As I was ruminating on blogging about my experience of this idea, Warren Buffet did a timely reminder in the recent Berkshire 2022 Shareholders Letter:

The lesson for investors: The weeds wither away in significance as the flowers bloom.

Over time, it takes just a few winners to work wonders. And, yes, it helps to start early and live into your 90s as well.

Warren Buffet

The idea that you only need to get it right a few times in order to lead a rich life is so powerful! Through it, Munger & Buffet also underline the importance of power laws in almost everything worthwhile. That a few decisions & outcomes will drive most of our respective lives.

About a decade back, this idea was an intriguing concept for me, but only at an academic level. Since then, I have experienced, & therefore internalized it, across multiple aspects of my life. Even though I would consider myself a perpetual hustler who has worked in 8 companies, tried multiple functions across diverse industries, lived in many cities across US & Asia, and invested in 20+ startups, I can boil down where I am in life today to a handful of decisions that acted as step-functions:

  • Where I ended up studying for undergrad, as that’s where I met my (future) wife.
  • Pursuing & marrying her several years later.
  • A cold email to a VC firm that eventually became my entry point into tech.
  • Deciding to move from India to Silicon Valley with no job in hand, no existing networks, with just faith that I will figure it out.
  • Casually meeting the husband of one of my wife’s friends back then, who eventually led me to join Alibaba.

That’s it! If I take any of these decisions out of the equation, my life would look very different.

At a more specific level, I see this dynamic play out in my angel portfolio too. I have been investing as an operator-angel since 2014, & now with enough data from my own experience, can confirm that 1-2 companies will end up driving a majority of my returns. The countless hours I have spent turning over stones, meeting hundreds of founders & working in the trenches with portcos, translate to just a couple of needle-moving outcomes over a decade. But yes, they are expected to move the needle by a lot (major step-functions, as I like to call them).

Same with content – sometimes I feel like I have written the most thoughtful post or a super-smart tweet, & no one reads it. And then, I write some crazy anecdote from my past lives & it goes viral.

Translating this “only need to get a few right” idea from purely academic to a lived & internalized one becomes important as it helps to frame risk-taking in the right way, particularly dealing with failure.

It has taught me many lessons:

  • Outcomes in creative & high-risk-high-reward pursuits are random.
  • Multiple failures don’t matter (& should be expected), as long as the few successes are outlandishly large.
  • Given success is sporadic, need enough shots at the goal to get odds in your favor. Take more chances with asymmetric upsides.
  • Given success is intermittent, plan for & evaluate things over a long-enough timeline. Patience is key!
  • When you get it right, let it compound. Milk every success to the fullest.
  • While specific outcomes are uncontrollable, a few decisions will always be make-or-break points in life – where you study, who you marry, which city you decide to settle down in, whether you have kids or how many, what house you buy & when etc. When faced with these questions, appreciate their importance, take your time & try to make the best possible decision in your capacity.
  • Finally, rather than getting fixated on episodic successes & failures, zoom out to look at the bigger picture & visualize your life as a curve. The goal is to have it trending up & to the right over a long timeline.

So, keep playing the game, be patient & wait until you get your “few” right!

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Author: Soumitra Sharma

Operator-Angel I Product Leader I US-India corridor I Believer in Power Laws I Love building & learning

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