Inside the mind: Naval Ravikant

This post is part of our 'Entrepreneurial toolkit' series. In this series, we put together a curated list of resources on a topic that is top of mind for entrepreneurs.

We'll share some key insights from the selected clips, but we highly encourage you to listen to the clips on broadn so that you can hear the experts themselves sharing ideas, opinions, and advice.

Who is Naval?

Naval Ravikant is best known for co-founding AngelList, a website for startups, angel investors, and job seekers interested in working at startups. However, his legacy extends beyond Silicon Valley to uncover the truths of life and the universe.

Naval on Wealth 

What is the difference between Wealth, Money, and Status?

Naval believes that people should seek wealth and not money or status. By his definition, wealth is investments in assets and resources that generate returns while you sleep. Wealth is the quest for freedom, which allows you to live life outside a cubicle. Even money is a lesser pursuit than wealth. He claims that the effect of these prized possessions wears off after a while, leaving you wanting more.

'Money is how we transfer wealth' - Naval

Money is essentially an acknowledgment from society for the services we provide as productive members. Although money cannot solve our problems, it can solve most of them— food, safety, security, and health.

As people move up the needs hierarchy, they engage in 'status games.' With increased wealth, it is only natural for humans to brag about their accomplishments and claim their place in the world. This eventually leads to a zero-sum situation and is not a sustainable way of living.

Why luck doesn't matter for wealth creation?

On the bright side, Naval distills his methods for generating wealth. Making money, according to Naval, isn't about being lucky; it's about being the type of person who makes money. As he puts it, it's about becoming someone who can rise from the ashes even if he loses everything and is left to his own devices. 

Moreover, dismissing the role of luck is analogous to rejecting the part of winds in sailing. One must channel luck in their favor or create their own luck. According to Naval, there are four types of luck:

1. The first type of luck described by Naval is blind luck, i.e., being in the right place at the right time, when events beyond one's control work in favor.

2. Then there's creating luck from your hard work when trying new things and experimenting with no set outcome to see what might work in your favor.

3. Become very good at spotting luck, so if you are very skilled in a field, you will notice when a lucky break occurs in that field, and other people who aren't responsive will miss it, so you become sensitive to luck, and that is the skill and knowledge.

4. A unique mindset where luck finds you. For example, if you are the only one who can do a particular job in your field, you become indispensable and highly valuable.

What is Specific Knowledge?

Naval, as you may have guessed, believes in creating your luck, and specific knowledge is the first step. Specific knowledge is leveraging your innate talents. Anyone could attend a class and become skilled at it if it were trainable. However, specific knowledge is unique to you - obtained through observation of the things you excel at compared to others.

Naval on Investing and Startups

Innovation, Invention, and the Myths of Silicon Valley

In his conversation with Matt Ridley, he discusses what differentiates innovation from invention. Invention is a creation of an idea, a prototype, or the first step. On the other hand, innovation is taking that prototype and scaling it into a business that benefits society.

The Founder Mentality and the value of free time

As a founder, your startup means the world to you, and you feel compelled to do everything yourself, also known as the Founder Mentality. Of course, there are drawbacks to this approach, and there are workarounds. If you find yourself in this situation, Naval recommends hiring a CEO to relieve you of the stress of back-to-back meetings or day-to-day operations. This approach gives founders the time to think, and Naval contends that companies exist because founders had a burst of creativity. Especially now, when finding the right PMF has become difficult, reinventing is critical.

The Consistent trait of companies that long for decades

This thinking also applies to the longevity of businesses. According to Naval's observations, companies that survive for decades or centuries are those whose founders are still engaged and not burned out. He uses Warren Buffet as an example, who has been running Berkshire Hathaway for over four decades. It is crucial to remain involved with your company by doing things you enjoy. Similarly, you can delegate tasks that you dislike, allowing you to be more productive and making your business as stable as possible.

What does Naval look for in a founder?

There is a fine line between genius and lunacy, and Naval believes these characteristics distinguish successful founders from unsuccessful ones.

1. Intelligence - The founders must have deep insights into the problem they are attempting to solve, i.e., they must have thoroughly calculated multiple viable future scenarios.

2. Energy - Being a founder requires a lot of energy on all levels - mentally, physically, and emotionally. Founders must persevere, refrain from seeking constant positive feedback, and be more focused on the problem they are trying to solve.

3. Integrity - If the founders have the energy and intelligence but lack integrity, they are 'hardworking, smart crooks,' in his words. And it is easy to screw people over in the fast-paced startup environment. Ethics and integrity transcend monetary value because everyone would do it if being ethical was profitable.

Naval on Happiness

Meditation as a remedy for anxiety

This 60-minute practice is Navals' most compelling form of meditation. The solution is simple: sit in one place for 60 minutes and let your mind roam free. You don't have to force or resist it; after a particular time, you will have decluttered your mind and become more self-contained. 

Foundations of Happiness

The first step toward happiness is to meet one's basic needs. You can't move up the ladder unless you've quenched the bottom hierarchy of needs. Assuming you've covered the essentials, the next step is to be in good physical health.

According to Naval, happiness is a choice and a skill that must be identified and developed. You do not lose motivation to achieve your goals because you are happy. Desires and goals are contracts you make with yourself to be unhappy until you reach them. If you are sad because you know too much, recognize that you, as an intellectual, can discover the truth.

The link between mind, peace and happiness

Our minds are hardwired to be pessimists, for which evolution is to blame. Humans, like all other species, have been bred paranoid to survive. On the other hand, modern societies create a much safer environment, and there is little need to perpetuate violence or be beside oneself in rage.

Although, modern life is flustered by chronic stress. As defined by Naval, stress occurs when a person desires two diametrically opposite things simultaneously, and there's this tug of war between what we can and cannot control that adds to it. Hence, we seek tools and resources to help us find peace, but you can't brute-force your mind to do anything; it only finds peace when it is truly at rest.

How does finding the truth lead to peace?

Seeking the truth is the path to peace. Naval uses the example of a smoker attempting to quit smoking. He can try certain techniques, but the process is painful and difficult. Then there is an understanding when he sees something in a new light. When he or someone he’s close to is diagnosed with lung cancer. That will shift his perspective, and the habit will dissolve more quickly than it would have otherwise.

The Beginning of an End - Seeking Truth

Naval then discusses seeking the truth with Kapil Gupta. According to Kapal, everything begins with knowing the truth. He claims that the truth is that everyone suffers and faces unique challenges. One approach is to expose oneself to the truth. The more someone is exposed to something, the more similar that person becomes. Similarly, the more you are exposed to the truth, the more likely you will internalize it.

Conclusion

Naval's success story is one that any entrepreneur or person can be inspired by and emulate. His all-encompassing advice is relevant to all facets of life. He is a brilliant thinker with a simple yet profound outlook on life and business. Naval's ideas can help entrepreneurs maximize leverage to find their moat in the saturated startup world. In general, his life principles can assist anyone in seeking the truth and eventually finding peace.