Understanding your Constraints

A competitive advantage is not the thing you are good at. It is the barrier that stops other people from being good at it. A competitive advantage is not the value. It is the container. It is a given that you need skills and knowledge, but you get paid for the box. 

You get paid because of the limits of supply. You do not get paid for things that are plentiful. The barrier is what makes it hard to do. It may be some intrinsic ability that only a few people have. They won the lottery of birth. Whether genetic, geographic, or familial. It does not matter if I want to run as fast as Wayde van Niekerk. It does not matter how hard I train in that attempt. It will not happen. 

It is not true that you can do anything you put your mind to (unless you just want to do it in your mind). We are born with constraints. You need to understand those limits, and how the world works. Then push them. Shift them. Break them. Or find your meaning within them. Not everyone can be Roger Federer, Simone Biles, or Caster Semenya. Not everyone can be you.

World Class Athlete

Being Ridiculous

Freedom is not the absence of rules. The biggest defenders of liberty will also be the strongest advocates for rule of law. Rules are just agreements. Not divine in nature, but between people. You can make agreements with yourself.

You can also ensure that you do not become too fixated on the rules that they are not serving the people who agreed to them. Anything without the capacity to change has increased capacity to break.

A university friend teased me because when we were in study-weeks I would arrange to meet him to watch a movie in a break. I would go to the Common Room to watch the movie, and he would be late, and there wouldn’t be time for the movie. I would be starting my next study session. He thought I was ridiculous. He was probably right. But that was the stage I was in. My rules likely made relationships and friendships more difficult because my structure had consequences for others.

It is difficult to create agreements that work for everyone in every situation. Still, we must create little bubbles for stuff that is important. Pockets of focus. Pockets of made-up limits. 

Containers for Exploration

Part of risk management is creating limits. Self-imposed limits. Investment managers will disclose their investment restrictions. The things they do, and the things they don’t do. Warren Buffett calls this the “Circle of Competence”. We have a nasty societal habit of thinking that a smart person can do anything. That when someone has proved themself in one area, we should take their opinion seriously in areas far removed from that because of the Halo effect. 

Creating limits helps you form little containers for your exploration. I am a creature of habit. I am at my most productive when I have made up some rules. Often very arbitrary rules.

When I was studying, I would take a very structured approach to learning. I would do 50-minute study sessions, then 10-minute breaks. I would have budgeted total time required, time available, and allocated by priority to the various subjects. I would record my actual learning, relative to the plan. Allowing for disruption, and breaks. 

These rules were self-imposed. I could, and did, break them. No one else was making me do it. The rules provided a structure that worked for me. I was also glad to eventually put that kind of structure behind me. It worked for a period, and then that period ended. “Everything in moderation, including moderation.”