#50 Josh Wolfe: Inventing the Future

1. Prioritize Human Psychology

Focus on understanding human nature and psychology, as it accounts for the majority of successes and problems in ventures, requiring an ‘armchair psychologist’ approach to diagnose team effectiveness and leadership issues.

2. Adopt a Stoic Mindset

Cultivate a Stoic mindset by focusing your energy and attention only on the things that truly matter and are within your control, rather than worrying about external factors.

3. Proactively Imagine Failure

Combat optimism bias by proactively imagining every possible way a venture could fail, then allocate time, talent, and money to prevent those anticipated negative outcomes.

4. Employ Irrefutable Logic

When making arguments or negotiating, strive to identify the objective truth and present logic that is so clear and irrefutable that others cannot disagree, leading to more effective outcomes.

5. Use “Hall of Heroes” Models

Cultivate a ‘Hall of Heroes’ – a pantheon of individuals whose decision-making you admire – and invoke their perspective by asking ‘What would X do?’ in challenging situations, also inverting for ‘bad actors.’

6. Challenge Certainties and Predictions

Actively question what everyone ‘knows for sure’ and linear predictions, looking for ‘informational surprise’ where widely accepted trends might suddenly reverse, leading to significant shocks.

7. Seek Overlooked Opportunities

First, understand what everyone else is focusing on, then actively seek out the ‘white space’ – areas or ideas that others are not looking at – to find unique opportunities.

8. Discern Universal Progress Trends

Identify ‘directional arrows of progress’ – undeniable, universal principles or trends that indicate a clear direction of technological or societal advancement, as these trends are likely to continue regardless of individual actors.

9. Acknowledge Luck and Randomness

Be humble about the amount of luck in your pursuits to open yourself to randomness and optionality, then maximize these opportunities as cheaply as possible.

10. Maximize Randomness and Optionality

Actively seek out and leverage chance meetings and unexpected circumstances, as many significant life and business opportunities arise from unpredictable events.

11. Systematically Learn New Domains

To master a new domain, combine voracious reading of scientific papers and journals with extensive networking, talking to 20-30 experts weekly, triangulating information, and iteratively refining your understanding and narrative to build credibility and recruit talent.

12. Ask “What Sucks?” for Innovation

Consistently ask ‘What sucks?’ about existing products, processes, or situations, as identifying pain points and inefficiencies is a powerful way to uncover opportunities for innovation and improvement.

13. Identify Contrarian Visionaries

Look for individuals who possess irreverence and a slight arrogance, holding a strong vision of how the world ought to look and disagreeing with consensus, then support them.

14. Prioritize Functionality Validation

When evaluating a technology or company, always ask the fundamental question: ‘Does it work?’ to ensure the core offering is functional and not based on unsupported claims.

15. Kill Risk to Create Value

View risk and value as interchangeable; actively identify and ‘kill’ risks in a project or venture, as each risk eliminated creates subsequent value and reduces the required return for future investors.

16. Cultivate Collaborative Culture

Build a culture that is internally collaborative, emphasizing information sharing among team members, while maintaining an externally competitive stance against rivals.

17. Be Direct in Feedback

Adopt a blunt and direct communication style for difficult conversations, ensuring feedback is focused on improving the situation or firm, not on personal attacks, and expect the same in return.

18. Solicit Bad News Proactively

Proactively ask for bad news from partners and team members, emphasizing that this is where you can truly help and collaborate, rather than just celebrating successes.

19. Be Wary of Unanimous Consensus

Be cautious when there is 100% consensus on a decision, as high confidence and complete agreement can be a signal that something important has been overlooked.

20. Designate a Devil’s Advocate

For critical decisions, intentionally designate a ‘red corner’ or devil’s advocate to proactively identify all potential reasons why a plan might fail and what could go wrong.

21. Record Decision Judgments

Systematically record individual judgments, perceptions, and observations for each decision to combat selective memory, refine future judgment, and encourage more nuanced rather than absolute viewpoints.

22. Identify Knowable Information

When evaluating dissenting opinions, focus on identifying what information is ‘knowable’ and verifiable through diligence, then actively seek out that information to reduce uncertainty or confirm biases.

23. Maintain Price Discipline

Prioritize long-term financial discipline over chasing every opportunity, being willing to forgo a deal if the price is too high, to protect capital and maintain a consistent investment philosophy.

24. Distill to the Core Issue

Practice distilling complex issues to their most critical 10%, absorbing all information, taking notes, and then identifying the single most important point or insight.

25. Embrace Intellectual Duality

Cultivate the ability to hold two opposing ideas in your head simultaneously without losing the capacity to function, as this is a mark of a first-rate intellect and helps navigate complex, uncertain situations.

26. Seek Unseen Opportunities

Strive to identify ‘unseen targets’ or technological secrets that nobody else has discovered, as this represents genius-level insight and is where the highest value opportunities lie.

27. Diversify Reading for Insights

Read a wide variety of news sources, including mainstream and less ‘sophisticated’ ones like USA Today, and look beyond front-page headlines to find ‘meta insights’ in less prominent sections, which may hold undervalued information.

28. Implement Diverse Information Routine

Start the day by checking emails, then Twitter, followed by skimming scientific papers and blogs for headlines, patterns, and trends, taking screenshots, and assembling collages of interesting phenomena to share with your team.

29. Focus on Undiscussed Topics

Seek out topics or areas that nobody else is talking about or thinking about, as these often represent overlooked opportunities where significant value can be found.

30. Locate Asymmetric Innovators

Identify individuals or groups who are inventing the future and possess unique, asymmetrically distributed knowledge, then build relationships and persuade them to partner with you before everybody else discovers them.

31. Identify Prodigious Scientists

Look for scientists who are highly prolific, publishing many cutting-edge papers, driven by both discovery and the desire for reputation, as these individuals often lead to significant innovation.

32. Cultivate Ambitious Postdoc Relationships

Seek out and develop relationships with aggressive, commercially-minded postdocs in the labs of famous, successful scientists, as these individuals often form a ‘fountain of opportunity and innovation.’

33. Develop Storytelling Skills

Cultivate strong storytelling ability to effectively recruit talent and attract investors, as it creates a powerful emotional connection and persuades people to join or invest in your vision.

34. Observe Delegation and Credit

During presentations, observe if a leader dominates the conversation or if they delegate and laud their team members, as the latter indicates a positive, trusting leadership style.

35. Vet Advisors for Credibility

Carefully vet the advisory board members of a company, as the presence of ‘BS scientists’ or promoters can be a ‘red flag’ signaling poor judgment from the CEO in discerning credible experts.

36. Build Credibility to Recruit

Continuously reduce ignorance and evolve your narrative through learning, as increased credibility makes it easier to recruit serious people and build an advisory board for new ventures.

37. Prioritize Active Venture Support

Actively prioritize how to help your portfolio companies by tracking their key metrics and immediate needs (e.g., specific hires), then leverage your network to provide targeted support.

38. Leverage Collective Intelligence

Systematically collect and share information across your team to create collective intelligence, allowing you to connect dots, identify competitive advantages (e.g., better lending terms), and apply insights across your portfolio.

39. Systematize Meeting Recaps

Ensure all team members consistently recap meetings, conversations, and board meeting tidbits, as this institutionalizes knowledge, creates an internal network effect, and prevents information silos.

40. Fund Milestones Incrementally

When investing, quantify how much capital is needed to achieve specific milestones within a defined timeframe, funding incrementally to de-risk the venture and adjust future investments based on progress.

41. Prepare Presenters with Questions

Before a presentation, provide the presenter with the key questions the team will ask, allowing them to prepare thoroughly and address critical concerns effectively.

42. Allow “One Per Fund” Bets

Implement a ‘one per fund’ rule where partners can push through a highly convicted investment despite team skepticism, to prevent errors of omission and foster long-term camaraderie.

43. Design Spaces for Interaction

To encourage interaction among people, design physical spaces with narrower halls and tighter structures, as constraining space can lead to more engagement than large, open atriums.

44. Foster Open Information Flow

Design office environments with open spaces and glass offices to encourage natural information flow, increase optionality for spontaneous interactions, and allow people to observe who is coming and going.

45. Utilize Peer Review

When evaluating scientific claims, rely on established filtering processes like peer review and publications to determine if a hypothesis is supported by observed, tested evidence and conclusions.

46. Balance Exploration and Exploitation

Continuously balance exploration (ingesting new information and ideas) with exploitation (applying existing knowledge), recognizing this is a constant trade-off that can lead to information anxiety but is crucial for growth.

47. Utilize Late Nights for Development

If your schedule allows, dedicate late-night hours (e.g., 11:30 PM - 1 AM) for personal reading, focused work, and consuming audiobooks at high speed to maximize learning and productivity.

48. Prioritize Attention in Parenting

Recognize that attention is the most valuable currency with children; reward positive behavior with fully engaged, eye-contact attention to provide the best positive feedback and encourage desired actions.

49. Instill Hedging and Preparedness

Teach children the principle ‘it’s better to have it and not need it than need it and not have it’ to encourage thinking about hedging, preparedness, and potential long-term consequences in various situations.

50. Foster Skeptical Thinking

Indoctrinate children with skepticism by encouraging them to question everything and reason through beliefs, rather than simply accepting dogma, by asking ‘What do you think?’ when they inquire about things like Santa Claus.

51. Learn from Others’ Mistakes

Actively review examples of people making poor decisions (e.g., from news stories) with your children, discussing the chain of events and motivations, to teach them to learn from others’ mistakes and avoid similar pitfalls.

52. Teach Balancing Conformity

Guide children to understand the balance between fitting in and standing out, recognizing when it’s appropriate to conform and when it’s crucial to assert their individuality, especially in situations like standing up for others.

53. Instill Persistence and Resilience

Consistently reinforce the value of persistence by asking ‘Does our family give up? Never,’ to instill a mindset of not giving up when facing frustration or challenges.

54. Watch for Control Freak Behavior

Be wary of leaders who are control freaks, as this can signal a lack of trust in their team, poor hiring decisions, or an attempt to hide information by controlling every decision.

55. Consider CEO Parenting Choices

When evaluating older CEOs, consider that those who chose not to have children may lack the humility gained from parenting, which can influence their management style and ability to handle irrational behavior.