1/ Everyone makes pros and con list to make decisions but they only take into account the first order effects or short term effects. The best decisions take advantage of embedded optionalities. It allows a hidden compounding that provides exposure to positive black swans.
2/ The major decisions in every person's life is location, career, love, friends, and families. For most people they are simply a re-mix of the habits, characters, and lifestyles of everyone close to them (geographically and relationship wise).
3/ The way people typically make decisions is through listing out all the attributes they care about and weighing the pros and cons and typically overweighing attributes that are relevant to you personally given your environment.
4/ For example, I have this job offer, I'm going to consider the salary, position, colleagues, culture, and geography in rank order and discuss this with my friends and families. Comparing various jobs on the context of career advancement.
5/ This short term aspects typically overweighs salary and title and underweighs area of focus (market), geography, skills developed. Meaning the attributes that people put as attributes typically #4-#7 with no immediate financial or status rewards are the most important.
6/ This is because people think of jobs as a bonds (money to live) rather than networks (geographies to access resources) or intellectual capital (learning skills or an exponential markets).
7/ These embedded optionalities usually touch more on access to networks or access to intellectual capital around an area. The important question is not what do I get out of this if I win. What do I get out of this even if I lose all immediate financial and status rewards? huh?
8/ What do I mean this? The most common question is why do a startup at all? If you look at immediate status and financial rewards, it doesn't make sense. You have a low probability chance of making a product, team, and market work toward your favor with a payout 5 years later.
9/ The bigger question is what happens if it fails? What do you get? If you build a startup in a technically interesting area like crypto, deep learning, reinforcement learning, you get auxiliary benefits of understanding the market and skills.
10/ The key thing concept to understand is the "dunning kruger effect." The general concept is that people cannot make decisions about their own skills if they don't have sufficient skills in that area.
11/ Put a different way, even if you "fail" from a conventional sense from joining or executing a startup in an exponential area, you'll be able to re-use the knowledge to make much better decisions than an outsider.
12/ In the first generation of the Bitcoin pump, there were many bitcoin companies that were created around 2012/2013, many of them failed. The interesting thing about them is that a good number of them become bitcoin and eth investors. Is this an accident? I would argue no.
13/ The intellectual compounding allows you to make better decisions of how to surround self. You can make better decisions about markets, projects, teams, cultures. The traditional narrative is about short term status or financial loss, but this almost always miss the point.
14/ So given a decision, how do you take advantage of tail distributions a la @nntaleb ? Lincoln used to say "I will prepare and some day my chance will come." The core of opportunity lies within preparation and strategic positioning in life.
15/ The first is to have a macro view of where the world is going at a geopolitics level. Why do people go to cities and suburbs and how do the geopolitics affect developed countries and developing countries?
16/ I would read @PeterZeihan 's books on Accidental Superpower to understand the overarching narrative for why the world the way it is. Why is this important? It helps you focus on where to live and which areas to focus on in terms of news.
17/ Understand the dynamics of geographical networks and why certain cities tend to have networks around academia (Boston), finance (NY), tech (bay area). Understand the underlying structural dynamics behind the cities. Read regional cultural newspapers and gossip rags.
18/ Understand the personas that are central to the given areas. For example, tech employee, entrepreneur, investor and the career dynamics of these given area and more importantly how do these career trees probabilistically lead to each other.
19/ The way to think about love is read the academia and divorce literature to see why relationships don't work. Be able to identify this and mitigate dynamics within your own relationships both in screening and also working toward a better positive relationship.
20/ So, if you notice, when I frame decisions, I don't say, "what if this works?" I say, "what if this completely fails in a conventional sense what would happen?" You get these interesting thought experiments.
21/ If your job that you chose to move cross country for fails or you get fired. The auxiliary benefits that you get which are the skills you accumulated and the intellectual knowledge within your domain become your ONLY asset as your "bond" "salary" goes to 0.
22/ I would argue that in order of priority for most people: 1. Dense geographical area around your industry 2. Dense virtual community around your industry 3. Dense social area for (friends and love). 4. Exponential or crucial changing areas affected by technology or regulation.
23/ Density and exposure to exponential rapidly growing areas provide a sea of optionalities. As waves happen from infrastructure to applications: You get to have an "option" for the next 20 years.
24/ It's no accident that the kings for virality in web 1.0 @DavidSacks @rabois and the paypal mafia provided the distribution techniques for the social network boom Tagged, Hi5, Linkedin, Yelp, and Facebook. These are simply the more obvious examples of intellectual compounding.
25/ In conclusion, most people look at the world in terms of a normal distribution. The think of life as a ladder and compare everyone up and down relative to themselves. It's more like fog of war or poker, where you can only see the next stage in context of your existing bet.
26/ The more you overweigh networks and position yourself to catch exponential growing areas allows you to have skills and be able to better judge and sequential improve your bayesian probability at making better and better decisions.
27/ In this sense, life is not like a ladder of status and finance, but rather more like the game Risk. Where you are positioned in life provide hidden advantages that other people cannot see from the outside based on traditional status measures.
28/ Or rather, once you now get all the hidden benefits of "failing" what are the unlimited rewards that you can get exposed to where you can scale zero probability outcomes to small probability outcomes with large effects being positioned well.
29/ Having a portfolio of these side bets will allow you to own a number of out of money options that have large effects toward everything you care about career, love, friends, and family. This is a thread toward effectiveness not productivity.
