Monday Musings (Maps, Insanity, Debate, Founders, Montreal)

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Hi friends,

Greetings from Austin!

Here's what I want to share this week:

Never-Ending Now: I posted this mini-essay on Saturday, and with more than 1 million impressions, it might be my most popular one yet. The Internet traps us in a perpetual present, which blinds us to history and makes life more chaotic than it needs to be.

One Big Idea: Many of the most successful people I’ve met have found their edge by putting their faith in one big idea. They’ve committed to the idea and studied it so much that its implications have become second nature.

Coolest Things I Learned This Week

Write When Your Emotions Are Raging

I was pretty upset about something this week, which surprisingly led to the best writing week I’ve had in months.

Anger isn’t necessarily a bad thing. The problem is the way people express themselves when they’re angry. But as a writer, anger is one of the few emotions that help you shatter the constraints of the pre-frontal cortex and spew raw emotion on the page.

When rage replaces reason, we can tap into our primal instincts. Thus, our spiciest writing comes alive in the heat of anger before the mind tempers itself with cold rationality. So when your spirit is in flames, write.

Just don’t share what you’ve written until you’re back in a sober state.

— —

The Virtue of Insanity

One of the best things you can do for your career is ask, “how am I insane?” and then find ways to make your insanity an asset instead of a liability.

— —

What Debate Teaches You

A freakishly large number of the smartest people I know studied debate.

I like how much they focus on how ideas are framed instead of jumping to conclusions. Instead of moving individual pieces, they create the rules of the game.

This, I think, is the problem with our obsession with fact-checking. It focuses too much on what’s being said while ignoring how the conversation is framed.

— —

Counterfactual Theory of Value

The Labor Theory of Value argues that the value of a product or a service is determined by the amount of labor required to produce it. If so, something that takes 100 hours to produce is worth 10x more than something that takes 10 hours.

One issue with the Labor Theory is it often causes people to work much harder than they need to, out of a belief that hard work is inherently good. But here, I’d like to answer a conundrum: In startups, why do the founders receive such a disproportionate percentage of equity? The CEO might own 40% of the company, while no employee owns more than 2%. It’s not that the CEO worked harder. And yes, many entrepreneurs argue that they’re being compensated for taking a risk.

But Johnathan Bi recently asked me: “What if they’re compensated by a Counterfactual Theory of Value?”

That is, what if pay is determined by asking: “Where would this company be without this individual?” The higher the number, the higher the pay should be — no matter how hard they work.

Baseball managers use the Counterfactual Theory of Value all the time, using a statistic called “Wins Above Replacement.” It predicts how many more wins a player gives their team, compared to whoever would replace them.

Elon Musk provides another example. Today, Tesla is worth more than $1 trillion. Without his will and personality, Tesla probably wouldn’t exist. It certainly wouldn’t have such cheap cost of capital and so many passionate brand advocates. If Elon resigned tomorrow, the company’s value would likely fall by hundreds of billions of dollars. Taken together, Musk is worth almost $300 billion because the counterfactual would be so different without him.

So when determining somebody’s economic value, ask yourself: “What’s the counterfactual?"

— —

Blindspots on the Map

Every industry has a map. Not a literal map, but a cognitive one filled with different skills needed to make money and produce products. Because of this, building a career starts with settling a part of the map.

The standard way to become successful is to build expertise in a well-understood area of the map. Say you want to work in Hollywood. If so, you might focus on a common part of the map, like scriptwriting or video editing. These parts of the map are so clear and well-trodden that there will always be a job for you. Other examples include being a doctor, lawyer, or accountant.

The greatest returns are given to people who settle unmapped territories. Most fail, but a small percentage find outsized success. Zooming out, the map of reality will forever be incomplete because the world is always changing. The faster it changes, the more blindspots are in the map and the more opportunities there are to settle unmapped territory.

Unmapped territories are why I’m so excited about Write of Passage. I’ve always felt like online writing was a heavily trafficked but poorly mapped area of society. I think of my career as taking this little section of the map and making it legible to others.

But whenever you seek to conquer unmapped territory, you have to ask: “Why hasn’t it been mapped before?”

In my case, it’s because when it comes to writing, the means of production and distribution have only recently been democratized. Thus, the writing section of the map hasn’t had a chance to catch up with reality. My career is built upon that arbitrage. No matter what I do with my life, I know I’ll be finding and building upon unmapped territory.

What kind of cartographer should you be?

Both strategies — becoming an expert in a well-known section of the map or settling unmapped territories — can lead to outlandish success.

Your relationship with the map will depend on your personality and risk calculus. Remember that both strategies have their flaws: follow the map too closely and you’ll never find a competitive edge, but if you wade too far off the map, it'll be hard for people to work with you.

Photo of the Week

I fell in love with these homes during my recent visit to Montreal. To reflect on my visit, I just published a collection of reflections on the city.

Have a creative week,

David Perell Logo 2x

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