Goals vs. Systems OR The right way to make New Year’s resolutions

[Note: I shared this mental model with my email subscribers on Dec 18, 2016. If you want to receive a new mental model every week, join the club.]

Goals vs. Systems

What it is:

It’s that time of the year. We’re all thinking about past resolutions we couldn’t keep, and resolving to be more faithful to our resolutions for the coming year.

Most of our resolutions are of the form: “Next year, I will do X”. Where X could be: “lose 10 pounds”, “run a marathon”, “get up at 5 am everyday”, “hit a million dollars in revenue”.

But point goals such as these have a number of disadvantages:

  • The focusing illusion: When you focus on your goal, it becomes more important in your head than your primary objective (e.g., “to be happy”). Till you realize one day – it’s not making you happy at all.
  • Dependence on outcomes extrinsic to you: Extrinsic goals tie your self-worth to factors that you don’t have complete control on. This (a) reduces intrinsic motivation, and (b) increases irrational risk-taking, as a Harvard study shows.
    Think running a marathon despite a niggle, only because you’d resolved to 9 months ago.
  • Goals can seem overwhelming and amorphous: Sure, you want to get to a million dollars in revenue, but where do you start?

And, as Scott Adams says:

OK, so what should we do instead?

Focus on process. On systems.


What does that mean? Break down your goal into its constituent parts – the specific actions you’d take to achieve that goal. Focus on those instead.

Such an approach gives more opportunities for daily victories (“I exercised today”), and sustains motivation.

But more importantly, it also prevents tunnel vision. If something else comes along that’s better than your previous goal, your mind is free to notice it.

Thus, a systems approach takes you from low odds of success to much higher odds.

From “I need to achieve this specific goal, else I fail” to “I’m building skills and creating options, and I’ll take advantage of whatever comes”.


Examples in business:

  • Career Planning: Don’t “plan” your career, as Marc Andreessen says in his career guide. Instead, make choices that maximize your future options / upside. Go where the action is.
  • Starting a company: Don’t over-invest in the solution you’re building. Instead, start with the customer. Identify the problem, and experiment with different solutions till one “catches fire”.
    Hypothesize > Test > Rinse and Repeat till you succeed. This is not novel – it’s the Lean Startup approach.
  • Marketing: Don’t try every single new marketing channel to get to 1 Mn users. Instead, use the Bullseye approach – prioritize 3 marketing channels, and experiment with them. Once you saturate them, unlock the next ones.
  • Any risky endeavour: Preserve and generate optionality. Understand how you can maximize potential upside and minimize downside risk.

Stack the cards so that you come out ahead even if you fail (e.g. learn unique / hard-to-replicate skills, build a strong network of influencers, etc.). Plus if Lady Luck smiles, you rake in a windfall.


Rules to follow:

  1. Focus on inputs (which you can control), not on outcomes (which you can’t). Create a process for success. Follow the process.
  2. Ask the question: How can you take key extrinsic risks out of the equation? How can you increase the odds of your actions having the desired result?
  3. In any decision, choose the path that creates the most options.

TL:DR: Success is a system (take several high reward / low risk bets), rather than a goal (I want to get rich).

Further Reading:


Linked to: Focusing illusion, Antifragility

Filed Under: Decision-making

Related Posts:

What I Learned from Reading 6,000+ Articles in the Last 52 Weeks

One year ago, I started the Sunday Reads newsletter. It’s a short email that goes out once every week (on Sunday, obviously), with “the best articles on business, strategy, entrepreneurship, and everything in between.”

Every week, I share the best articles I read that week. Sometimes they’re organized around a theme. Sometimes not. But there they are, without fail, in your inbox every Sunday.

I realized just last week that over the year, I had shared 600+ articles through that weekly email. And often, I read at least ten times as many articles during the week, to choose these best 10-12 articles.

What have I learned from these 6,000+ articles? Have they made me better at what I do?

No trees were harmed in the making of this post

No trees were harmed in the making of this post

A part of me answers almost immediately – yes, for sure! But how exactly have they helped? Can I tease out the key lessons I’ve learned from the articles? Or is it just a vague sense of achievement and hope – surely I haven’t wasted those hours?

So, over the last 7 days, I went back to those 52 emails. And pulled out the key learnings and principles that I’ve actually tried to use in my life.

Two caveats before we go on:

First, this is a long post. I’ve tried to summarize the key concepts I’ve learned, and it turns out 6,000 articles means a ton of learnings!

Second, I’ve included (several) links for further reading. Every paragraph is a rabbit hole. So, first read through the whole thing without clicking through on any link. Then, come back. Feel free to dive as deep as you want, on the subjects that interest you.


1. Goals don’t work. Use systems instead.

This was not a new lesson for me. But across article after article, book after book, this got reinforced. No matter the field, what seems to work is understanding the basic principles and following them. That’s it.

Success is not about choosing an ambitious goal and stretching to reach it. Whether in running your business or trying to win arguments with your spouse, hard work won’t cut it. Instead, you understand the basics, try a lot of different things, learn what works, and iterate or double down.

If you do it right, then no matter whether you succeed or fail in one specific endeavor, you’ll always come out ahead. You’ll always learn something that’ll be useful next time.

This sounds a little hackneyed at this high level, I know. But as you’ll see, it permeates all the other lessons below.

Further reading: Goals vs. Systems. I’ve read this a few times before, but I was still blown away by the simplicity when I read it just now. If you like this, you’ll love Scott Adams’ book.


2. Growth Mindset vs. Fixed Mindset

There are two types of people – those with a fixed mindset, and those with a growth mindset.

If you have a fixed mindset, you think you are at the peak of your skills. You’re the best artist, manager, husband, wife, etc. you can be.

If, on the other hand, you have a growth mindset, then you strongly believe you can grow and improve at whatever you do. Whether in your personal life (you can always become a better husband. OK, that hit too close to home), or in your professional career. There’s always room for improvement.

Your mindset determines how successful you are to a surprising extent. People with growth mindsets are more willing to try new things, learn new skills, and take risks. And those who take risks, get the rewards. Fortune favors the brave, etc.

Further Reading: You can read Carol Dweck’s book Mindset, which outlines the research on the subject. Or read Maria Popova’s review of the book.


3. Deliberate Practice

Let’s say you have a growth mindset. Is that enough to grow and improve your skills over time?

If the goals vs. systems argument tells us anything, it’s that just believing you can improve at something isn’t enough. So, what’s the system for this?

Practice. Not just doing something for 10,000 hours. Deliberate practice. Working at the edge of your abilities, getting immediate feedback (succeeding / failing), learning, and trying again. That’s what builds skills.

If you want to learn business, start a side-business. At every stage – idea generation, building your first product, selling it to your first customer – you’ll fail the first few times. And you’ll learn immensely.

If you want to improve your writing skills, start a blog. It takes 2 minutes on Medium. Write every day, and ask your friends and colleagues for feedback. Rinse, repeat.

Further Reading: Cal Newport’s book on the subject is excellent. This article from his blog is a good summary of the six traits of deliberate practice.


These were the three most important learnings for me from my last year of reading.

  1. Take a systems approach to all your endeavors
  2. There’s always room to become better at what you do
  3. The “system” to become better is deliberate practice

Everything else stems from these key principles. They form the foundation for the rest of the learnings. Get these right, and everything else falls into place. How’s that for a system?


As I continued plowing through the articles, I saw that a lot of them were organized around skills essential to succeed in the workplace today. Communication, structured thinking and problem solving, creativity, and focus (especially focus), to name a few.

How do we build these skills?

Learnings from Reading_02

4. How to learn anything

Communication, structured thinking, etc. are critical skills. But there’s one skill that’s a precursor to all this – the ability to pick up new skills quickly.

As Scott Adams says in his book, every new skill you learn doubles your chances of success. To take a simple example – an MBA who knows to code is far more valuable than just an MBA. And if this person also understands, say, cinematography, then the unique opportunities available are far more lucrative.

So, you need to continually build new skills throughout your career, to take advantage of new opportunities. And ideally, you’ll build skills that are themselves useful across a diverse set of sectors (system approach again).

OK, you’re sold. Learning how to learn is key (it’s also the secret moral of Kung Fu Panda, but that’s another story).

But how do you learn? You could join a course at your local university, or hire a teacher online, and do your 10,000 hours.

Or, you could use the Pareto principle to identify the 20% of concepts that have 80% of the importance, and quickly learn and practice those.

Further Reading: The Ultimate Guide to Learning Anything Faster


5. How to become smarter

Don’t you want to be that guy, who always sees through to the crux of an issue? Who understands the real problem, which no one else can see? Who always sees the way out of an unresolvable predicament?

I certainly want to be that guy.

Turns out, this is a learnable skill.

a. Don’t be stupid

Charlie Munger, Warren Buffett’s partner-in-crime, once said, “The best way to be smart is to not be stupid”.

We are not rational beings, as economists would have us believe. Not by a long shot. As I’ve written before, we’re not only not rational, we’re also irrational in consistent and repeatable ways.

We’re subject to several cognitive biases, which predictably warp our judgement.

Anchoring is one example of a pervasive bias. The first number thrown in a negotiation becomes an unconscious anchor to the rest of the bargaining. That’s why both parties fight to shout out the first bid.

Availability bias is another one. We overestimate the probability of an event if we can remember vivid instances of it. We pay more for earthquake insurance than for calamity insurance (even though the latter includes earthquakes!), we overestimate the possibility of winning the lottery if our neighbor just won it last week, and so on.

This site has an extensive list of such biases.

How do you avoid these biases? Here’s the thing – you can’t.

Since these operate at a subliminal level, just knowing them won’t prevent them. Next time someone makes the first offer in a negotiation, you’ll predictably bargain around that.

Instead, counteract these in your decision-making by using a two-track thinking process.

  • First, make a decision rationally (to the best of your abilities)
  • Then, try and recognize the biases you’re subject to, and adjust accordingly

Do this again and again, and you’ll soon become a natural. At not being stupid.

b. Develop a latticework of mental models

This idea also comes from Charlie Munger.

There are several different frameworks that help us understand the world. Understanding and building a repository of these frameworks in our heads can help us become much faster at comprehending the forces at play around us.

For example, knowing about the concept of virtuous cycles can help us understand the remarkable success of Uber. Understanding the power of incentives can help us predict that what gets measured will get managed. Or that what doesn’t get measured, won’t even exist.

Shane Parrish explains the concept of mental models well in this Introduction. He also shares some models from his toolkit.

c. Read actively.

Don’t just read – read actively. Make sure you’re internalizing what you read.

That’s the Buffett formula to get smarter, this time.


d. Keep a commonplace notebook

Whenever you read anything interesting or insightful, or see a surprising pattern, put it down in a notebook.

Over time, this will become a repository of the smartest things you’ve read. A surprisingly easy place to go back to whenever you need inspiration, or a way out of a thorny problem.

Here’s how to keep a commonplace notebook, and here’s why you should keep one. This is my commonplace notebook, and I love it!


6. How to become creative

Turns out creativity is a learnable skill too! Here’s how you become an Idea Machine.

[Aside: if you want to learn how to have great startup ideas, read this guide. But be warned, you’ll sometimes come up with ideas that seem to have a lot of potential, but are actually bad. Here’s how to recognize bad ideas that look good.]


7. How to communicate better

Learnings from Reading_03

a. How to write better

Just two rules: (1) Never use passive voice; and (2) Keep it simple. Don’t use two words where one will do. Don’t use a long sentence where two shorter ones will do. That’s it. Nothing more.

Further Reading: The day you became a better writer. And if you need help, check out the Hemingway app.


b. How to argue better

Before you even begin to argue:

(1) First, understand whether your opponent’s opinion is changeable at all. Ask: “What specific data points, if true, would convince you to change your mind?” If nothing will, you might as well not waste your time arguing. [Aside: yes, the similarity to the scientific method is not incidental].

(2) Then, as Daniel Dennett says here, first restate your opponent’s view so clearly and succinctly that they wish they could have put it that way themselves.

(3) Then, call out the specific areas on which you agree with your opponent, and what you’ve learnt from their view.

Then, and only then, should you say even one word of criticism.


How do you argue after that? Using the Ten Golden Rules of Argument.

And yes, remember Miller’s Law. “To understand what another person is saying, you must assume that it is true and try to imagine what it could be true of.”

Before you say some statement is wrong or silly, first challenge yourself to think of a scenario where that statement actually makes sense. [The same principle applies for criticizing political decisions, competitors’ moves, etc.]


Finally, be happy to be proven wrong, like Darwin. Remember, you only learn when you lose arguments.

c. How to give feedback better

There’s no playbook here.

Actually there is one – sandwich your feedback between two appreciative comments. It’s also known as The Shit Sandwich, and no, it doesn’t work. People see it coming a mile away. You start by saying “Your emails are always so well formatted”, and the opposite person immediately thinks, “God! How have I screwed up now?”

Instead, be authentic.

And come from the right place. Remember, you’re giving feedback so that the person succeeds going forward. And give constructive feedback frequently – don’t wait for review cycles, or the end of the week, etc.

That’s how you give feedback.

Further Reading: Making yourself a CEO, by Ben Horowitz. And Roger Fisher on How to Provide Feedback.


d. How to negotiate better

Nothing I say here will be as valuable as reading this excellent summary of Roger Fisher’s book, Getting to Yes.


In addition to all these, there’s one more important tenet to interpersonal communication. Always respond positively when someone says something to you. Negative / sarcastic reactions, or even no reaction at all, can be very damaging to relationships, as this article from Farnam Street recounts.


8. How to focus

Learnings from Sunday Reads_04

This is an important one. Between emailing all day, getting pings on Whatsapp, and checking what’s new on Twitter, it’s a wonder we get any work done.

Even as I type this, my hand continually reaches out to check my phone. Maybe there’s a new message since I last checked 2 minutes ago?

As this article from the NYT argues, focus is a critical skill. And it’s incredibly hard in this age of digital distraction. But as Cal Newport shows in his book Deep Work, it can be learned.

How do we learn it? By practicing it:

  1. First, use the Pareto principle. Take your to-do list, and remove the 80% of tasks that are unimportant.
  2. Then, use Parkinson’s Law (“work expands / contracts to fill the time available to it”). Give yourself slightly less time than needed for each of the 20% important tasks. This will force you to focus – if you get distracted, you won’t be able to finish in the given time.
  3. Of course, you’ll have to do the less important tasks at some point. For this, use a shallow work checklist that you tick things off when taking a break from the important tasks.


9. How to become a better manager

Read this FAQ from Henry Ward, CEO of eShares. Enough said.


10. How to get lucky

The last and final lesson I learned, and arguably the most important one. Building all those skills is great – it sets you up for success. But getting all the firewood together in one pile is not enough. Something has to light the fire. And luck is that matchstick.

Analogies apart (you can tell they’re my weak spot), you can acquire all the skills you want and work as hard as you can. But to win really big, you also need Lady Luck to favor you. And luck can be as capricious as they come.

But, like everything else above, you can engineer luck as well. You can expose yourself to positive luck, while limiting the downside from negative luck.

In the words of Nassim Taleb, you can be antifragile.

How do you do that?

a. Employ a barbell strategy – maintain a portfolio of low-risk / low-reward and high-risk / high-reward strategies.

Keep your day job, and try and build a side-business on the weekends. Quit your job only after the startup starts to scale. Even Craigslist was built in Craig’s spare time.

[Extra marks if you build your side business in a Power Law market. In such markets, if you do win, you’ll win huge.]


b. Build a strong network of ‘weak’ links – the best opportunities are at the edges of the status quo in every field. If you know people at the cutting edge in every industry, you’ll be better placed to spot and capitalize on big opportunities. Spend time with A+ people from other industries. [Note: This is also evidently the no. 1 predictor of career success].


c. Develop an “abundance mindset”. Look around and notice things. Be open to serendipity.

Nat Eliason has written a great primer on getting exposure to positive luck. You can also read this excellent book.


That’s it. Those were the lessons I learned from the 6,000+ articles I read in the last 52 weeks.

Oh, and I also learned that we’re living in a simulation. Probably. Quantum theory certainly seems to suggest so. Elon Musk thinks so. So do Scott Adams, Nick Bostrom, and a host of other tech leaders.

Oh well – hope someone’s writing a subroutine to guarantee success if we learn all these skills!

Related Posts:

The Barbell Strategy, or how you can have your cake and eat it too.

[A version of this article appeared on YourStory last week.]

One of the tenets that stock market investors live by is diversification. As their advice goes – if you invest in several (uncorrelated) stocks, you reduce the risk of a sharp fall in one stock damaging your income significantly. An extension of this argument is that traders should maintain a mix of low-risk and high-risk assets in their portfolio; even if the risk materializes and your high-risk assets blow up, you still have some income. This is called the ‘barbell strategy’.

This is a very useful concept in stock investing. But can we take advantage of this in other businesses?


Before we try and answer this question, let’s understand the ‘barbell’ concept a little better.

Barbell Final

The reason this investment strategy is called a ‘barbell’ is that all your investment goes to the two extremes of low risk-low return and high risk-high return, much like the weight of a barbell is concentrated at its ends.

Barbell SpectrumThus, you deliberately plant your feet at both ends – low risk and high risk; low payoff and high payoff; short-term and long-term.

Sounds like a great investing idea – limit your potential losses, even while pursuing high-risk investments. But, you may ask, how does this help those of us not in the financial sector? If you’re not a trader, how can you take advantage of diversification in general, much less a ‘barbell’?


There are several different avenues of business where a barbell approach can help cover downsides, and allow you to test new channels of growth.

1. Startup Marketing: There are several different channels through which you can market your product (Traction, an excellent book on the subject, lists 19!). But not all of them are equal – channels like TV advertising, SEO, and viral growth have a high ceiling on saturation (i.e., you can acquire millions of users through these channels), while others (PR, social media, community emailing, etc.) are far less scalable. But there’s a flipside – the former ‘moonshots’ are also more expensive, far more risky, and take longer to optimize.

When you’re selling a new product, you should definitely explore some of the moonshots – if any of them work, they can make your company’s destiny. But you should also invest in the more near-term, less-scalable channels, to ‘keep the wheels turning’ with a small flow of users. This also gives you time to perfect your product and plug the leaks in your user acquisition funnel, so that when one of your moonshot experiments suddenly delivers a deluge of users, you are able to effectively retain them.

Andrew Chen has written an excellent article on this. And Paul Graham refers to a similar concept when he says, “Do things that don’t scale.


2, Short vs. long-term value propositions: Sometimes, startups also need to bet on a combination of short and long term opportunities. Your product vision may be very ambitious, but you often can’t offer that proposition from day one. In fact, the more ambitious your vision, the longer it will take to start delivering it. So, if you want to survive long enough to achieve your dream, you need to sell something else till that happens.

A great example of this is Zomato – they started as a pure-play information source on restaurants around you. Gradually, as the user base grew, they began overlaying restaurant promotions. Now, they’ve just started an even more lucrative food delivery service. And I bet they’ll add other services soon – allowing you to book a table, pay for your meal through the app, etc. (I predicted this in an early March blog post, maybe 10-15 days before they started the food delivery service :P).


3. Multiple product lines: More mature businesses also employ the barbell strategy. They often have one-two cash cow product lines, which they can milk till the cows come home (I had to take the metaphor to its conclusion, didn’t I?). This gives them the freedom to invest in potential breakthrough products – many of these will fail, but a few will succeed and make up for all the losses and more.

Think of skincare brands – they all have some stable products like fairness creams and face washes, and periodically introduce more cutting edge products (e.g., anti-aging elixirs) to test the market.


4. Your own entrepreneurial career: The above examples are at a company level. But even individuals can employ a barbell strategy. For example, I have a startup, and have been working on a couple of products for 2 years now. At the same time, I also do some freelance consulting, and am about to run a taxi on Uber / Ola. Not only does this small but steady income give me the staying power to explore more opportunities at my startup, it also gives me a reserve to tap into, should any of my experiments work and I want to step on the gas. You may say I’m hedging. I don’t disagree, but I’ve found this safety net invaluable – I can apply myself to my venture in the best frame of mind, without worrying about a fast-falling bank balance.

This is similar to the entrepreneurial system that Scott Adams talks about in his book. And James Altucher has often spoken about how rich people have 7-10 different income sources.



Thus, you can employ the barbell strategy in several different situations, to reduce your risk even as you take on high-risk opportunities. And that, ladies and gentlemen, is how you can have your cake and eat it too!

I’d love to hear what you think of the barbell concept. Can you think of any other applications? Comment here, drop me a line at gt.jithamithra@gmail.com, or tweet at jithamithra.

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The reading list that transformed my professional life


6-9 months ago, when everyone was posting lists of the top 10 books they read, I was unfortunately busy with work. And then, when I wanted to post my own list, it was much too late to do so – people had moved on to sharing Upworthy articles instead.

Nevertheless, what’s far more useful is to talk about the top things I learnt from books – the ideas, insights, stories that changed how I think about life and work. After all, that’s why you read books – to improve yourself in some way – isn’t it? Well, at least all books apart from the Twilight series.

So, here are the 5 ideas that transformed how I think about life and work, and the books I read them in. Rather than describing these ideas in detail, I’ll also share links to articles that offer a short version. But I would definitely recommend you read the book themselves too!


1. System 1 vs. System 2 Thinking – Thinking Fast & Slow

An understanding of psychology is, in my view, an essential skill for anyone whose daily life involves interactions with other people to get stuff done. The human mind is not only not rational, it is also irrational in a few consistent and repeatable ways. Understanding these cognitive biases and fallacies that we suffer from can go a long way in helping you get what you want in interactions with people.

One of the key concepts I’ve come across in this area is that the human mind is really two distinct personalities – let’s call them System 1 and System 2. System 1 is the more automatic, quick-and-dirty, heuristic based, lazy thinker – get to an answer quickly by applying habits and patterns, often at a subliminal level. System 2, on the other hand, applies more careful, overt deliberation to any problem, coming to a solution in a more considered manner.

At any time, you’re thinking in one of these two modes. For example, when you’re doing math, you’re carefully thinking of the problem and solution – that’s System 2 in operation. When you’re tying your shoelaces, you’re usually not thinking about the loops and knots actively – you just do it. That’s an example of a System 1 task.

Now, at most times, the mind defaults to System 1 – which tries to recognize and apply patterns without thinking too much. And the result is that it can get tricked in fairly predictable ways – what we call cognitive biases. Two examples of these are anchoring (where an initial number suggested to you often influences your answers to a numerical question) and availability bias (you tend to overestimate the probability of an event if you can remember examples – this sometimes results in people paying more for earthquake insurance than insurance for natural calamities – even though the latter includes earthquakes!). Won’t go into detail on these biases here – you can read the articles I’ve linked to, and the book. But I’ll blog about them soon too!

Another interesting implication of the dominance of System 1 is that you can trick your brain into certain emotions. For example, you know that when you’re happy, you tend to smile. But did you know that this can work in reverse – that you can trick your brain into happiness, by simply smiling? This was a ridiculously amazing insight for me – to know that causality works both ways, and I can control my emotions. I’m a ‘moist robot’, in Scott Adams’ words.

Book: Thinking Fast & Slow – one of the best books I’ve read – and I actually prefer fiction.

Further reading: 15 Lessons from Behavioural Economics – Slideshare, Scott Adams on Programming the Moist Robot


2. Making Skewed Bets – Fooled by Randomness & Antifragile

When I was in business school, I read Fooled by Randomness, by Nassim Taleb. At that point, I thought it was the best book I had ever read – so many brilliant ideas, one after the other. I read it again recently, and while I’m a little less effusive, it’s definitely worth a read – it’s long-winded and unnecessarily complicated in parts, and the language is often self-absorbed – but if you can look beyond that, the insights will hit you at an unrelenting pace.

But the most important insight for me – in that it almost exclusively governs my world view since I read it – is that of making skewed bets. The world is innately random – your success depends far more on your luck than on your ability. At first glance, this seems to encourage laziness. Why work hard when your destiny doesn’t depend on it? But looking deeper, the implication is that you should try and expose yourself to ‘positive’ luck as far as possible, while limiting the impact of ‘negative’ luck. In simpler terms, expose yourself to very high upside, while limiting your downside as far as possible.

This is called making a skewed bet – where if you win, the gains are a windfall; but if you lose, you don’t lose that much. A lot like financial options or a startup – if you make it, you make it. And if you fail, then your losses are limited – the cost of the option, 1 year of salary, etc. Of course, the probability of a loss may be 90%. But if you make 10 skewed bets, then you’ll make a windfall gain on 1 of them – and that may be more than enough.

Another important way to keep yourself open to good luck is by simply staying on the field. Thomas Edison got the light bulb right on his 1000th attempt – and that happened only because he kept trying different things, and didn’t give up after 999. To surf a ‘killer wave’, you need to first be in the sea, navigating the 100 tepid waves before.

Book: Fooled by Randomness. Antifragile, a subsequent book by Taleb (even better), actually takes this one idea and distills it far more.

Further reading: The hard part about surfing


3. Goals vs. Systems / Success as a process- How to fail at almost everything & still win big

Taking the previous point further – success, then, seems to be a process rather than a brilliant idea, inch-perfect execution or just good luck. Try a lot of different things, observe, learn, and iterate. So that you slowly, over time, collect all the right materials for the magnifying glass of luck to ignite. You do all the right things and keep improving, so that when Lady Luck knocks, you’re ready.

Success is therefore a system (take several skewed, high-reward/low-cost risks), rather than a goal (I want to get rich). Now that’s at a macro-level, but this makes sense even at the micro-level – rather than adopting a goal of doubling your user base and throwing money at it, take a systematic approach of trying different things, observing, and then betting the farm on the 2-3 marketing techniques that work.

Scott Adams (of Dilbert fame) carefully charts out this approach in his book.

Book: How to fail at almost everything & still win big. I would venture that this is one of the best and most actionable books I’ve read. But read at your own peril – as they say, one should be careful when taking life and business advice from a cartoonist.

Further Reading: Goals vs. Systems – a short blog post applying this concept to life in general.


4. Power Laws, or why working hard is not enough – Zero to One

I’ve already blogged about this here, but it’s worth reiterating. Today’s business world is not a normal distribution, with most people distributed around average payoffs. Rather, it’s an exponential distribution – very few companies will make most of the money to be made. Therefore, success depends far, far more on what you do, than on how you do it.


In a power law distribution, very few sample points account for a majority of the population’s value.

The power law will permeate all your decisions (e.g., one marketing hack will drive 90% of your traction, one product feature will drive 90% of repeat users, etc.). Won’t go into more detail here – definitely read the post!

Book: Zero to One

Further reading: The Power Law, or why working hard is not enough (my blog post, again)


5. Attractor States Good Strategy Bad Strategy

The previous three concepts have all been around the idea of work and success. This one is different, and is a tool that I’ve found quite useful in jump-starting creative thinking about problems.

Let’s say you’re trying to think of a startup idea in a given space. You could look at what users do now, what they buy, how they consume, etc., and try to find areas where you can add value. Or, you can look at how the industry will inevitably evolve in the future and see how you can accelerate that.

The author calls this concept an ‘attractor state’ – given industry trends today, what do you see as the logical next frontier over the next 10-20 years? And how can you participate in that, rather than making incremental changes to the status quo? To paraphrase Wayne Gretzky, the ice hockey legend – don’t skate to where the puck is, but to where it will be.

This is a slightly nebulous concept, so let me provide an example. Let’s say I want to create an offering in the payments space. One option is to join the crowded current market, and provide a mobile wallet solution, a payment gateway, etc. Another way is to think of where the industry will be in 10-20 years – its attractor state. I’m not a payments expert, but seeing how it has evolved over time (barter -> gold -> paper money -> credit cards -> mobile wallets), there’s a clear trend towards individualization. The reasons mobile wallets are a great innovation is that everyone carries a mobile today, and they don’t share mobiles – it is a unique identifier of a person. Taking this individualization further, the next wave of advancement has to be biometrics – where unique characteristics of your person (iris, voice patterns, fingerprints, etc.) are your identifier, based on which transactions can be completed from your account. You don’t need to whip out your phone or credit card – just staring at a tiny lens is enough to connect to your payment account.

How does this help an entrepreneur? With this end-game in view, entrepreneurs can think about how they can add (and capture) disproportionate value in the long-term – the products and services they can start building today, to accelerate the attractor state. In the case of payments, it could be future biometric sensors, systems for collating massive customer data, POS terminals for accepting payments, etc. – each of these possibilities could be game-changing.

Won’t go into much more detail here – but I’ll write a blog post or two on this concept soon. I find it an incredibly powerful way to improve your creativity when thinking about problems and solutions.

Book: Good strategy Bad Strategy. Apart from a discussion of attractor states, this book also has a great discussion of chain linked strategy and focus as a source of competitive leverage. I’ve blogged about this here.

Further Reading: Will write a detailed post on this soon!

These are the five concepts from books that changed my world-view. It may be asking too much to hope that they fundamentally alter your thinking too, but I hope you find these perspectives and books interesting. Do comment!

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