Pulses Ripple

Reality is complex. We can’t simplify it as much as we would want to. We can create structures and simplifying stories to help us make decisions, but there needs to be an acknowledgment that we don’t all live the same lives. 

Our realities bump. Understanding requires work. No one has the capacity to understand in every way. We end up having to trust each other. Trust each other to go down different paths, while figuring out a way to stay in connection. 

We can be right on the edge of human knowledge. If there is no connection back, even if someone expands those boundaries, no one else will apply the learnings. 

There is a big tension between applied knowledge and theoretical knowledge. Opening questions up and closing down options to make tangible decisions. Sometimes by going down theoretical rabbit holes, you lose touch with other people. You live in a different place even if you are physically in the adjacent spot. 

Because of randomness, ambiguity, and complexity, we don’t and can’t understand how everything is connected. We don’t and can’t know all the consequences of our decisions. We need to build in feedback loops, and capacity to understand the impact we are having on the world. 

Actions matter. Actions have consequences. Consequences have consequences. We pulse, and our pulse ripples. The ripple is too complex for us to understand. We have to let go of that. 

We are here. We are part of the world. Making peace with that complexity is difficult and important.

Being Conspicuous

There is a wrestle with the way people dole out respect. It is trite to say “don’t care what people think about you”, but umuntu ngumuntu ngabantu (a person is a person through other people). 

Even the most hardcore libertarian has to make agreements to engage with the world. That involves a meeting of minds. That involves respect, trust, and trade-offs. 

Now if you are wrestling for respect using conspicuous “success” that doesn’t resonate with you, it can be hollow. I sometimes get resentful when I do get recognition. 

When the thing being recognised is actually a trade-off I am making, and not what really drives me. When I meet the productive targets of others, but they don’t see me. 

They don’t see the inconspicuous, hidden, hard to communicate ways I am creating meaning. It can then be frustrating when the only time I get seen is when I am doing the things I need to do. 

Joint decision making is hard. Really seeing each other is even harder. 

“Sometimes I do what I want to do. The rest of the time, I do what I have to.” (Marcus Tullius – Braveheart)

Feeling the Choices

Local markets should be more responsive to changes in preference, because they are able to respond to tacit knowledge. The stuff we can’t put into words. The stuff we don’t always understand ourselves. Our inconsistency. Our moods. 

Local markets mean relationship building and consequences. Huge markets become more abstract. If you sell someone something that isn’t a good deal for them (because you need/want the money) and it affects them badly, size matters. In a huge market, you disappear in search of the next sucker. In a local market, you still have to engage with the people. 

Local forces commitment, recognising that what we do matters. The boundaries between client, colleague, friends, and family blur. It gets complicated. Dealing with strangers is cleaner. It is transactional. Local and intimate means getting involved in the nitty gritty. Local means we experience the results of each other's decisions. Local means wrestling with issues. 

Standardization can give comfort. Where you do venture away from local to explore, some recognition is useful. When you (think you) recognise something, you don’t have to give it thought. Conscious choice is hard. 

Daniel Kahneman talks of “thinking fast and slow”. You want to embody a lot of decisions and make them fast. Jonathan Haidt talks of our rider (head) and elephant (body/habits). We think the rider is in control, but it is mostly the elephant. 

To embody and relax, we have to trust. It is hard to trust when you haven’t done the necessary wrestling to deep soak shared agreement.

International Standardization

Open Architecture

Adam Smith’s big insight was that win-win (the wealth of nations) beats win-lose (nations fighting). Open-Architecture, breaking down walls, and opening roads, can be frightening in a world where wealth is built in containers. You can’t tell someone who isn’t relaxed to relax. They need to start feeling it in their bones. They need to breathe.

In pure-play meritocracy, only the best would win. In reality, we all need to eat. So friction allows us to talk our own book. There are 7.9 Billion people on the planet. Very few are “the best”. Particularly in the early stages of setting yourself up, while you are living hand-to-mouth, relaxing is a challenge.

If you don’t have the capital and confidence to believe you can adapt and adjust as problems change. Walls are built because of fear. As fear subsides you get a trust premium. You release all the wasted resources we put into worrying, guarding, fighting, and defending. 

Berlin

Choosing Decision Makers

To outsource your decision-making, you need to develop trust. I like to believe in a world where we can have open conversations. The reality is that you can’t just decide to be honest, and vomit truth on someone. Truth needs unpacking. Trust is built. Both need time. It is dangerous to outsource decision-making, in part because we attach responsibility to the decision-maker. We attach identity to the decision-maker. We attach respect and blame. To outsource decisions, you need trust and confidence. Trust that the other decision-maker has your best interests at heart. Confidence that they have the competence to do what it is that they claim they will do. The decision about who to hand over responsibility to, is as important as the actual skill and knowledge required to make the relevant choice. Evaluating decision-makers is a skill in and of itself. Badly evaluating decision-makers allows you to pass on responsibility, and have a target to pin blame on should things go wrong. It does not solve the problem. 

"The Scapegoat"

William Holman Hunt (1854)

 

Taking Direction

What do you do if autonomy is really important to you, but you find something or someone else makes better decisions than you do? Imagine you had an app on your phone that was similar to GPS and Google Maps, but for life choices. In the beginning, I certainly didn’t trust GPS. When it first came out, it wasn’t great. I was working in a job where I had to visit various financial advisors in Joburg. I was a Durban boy, not a Joburger, so I had to use maps. GPS would tell me “you have reached your destination”, and I would be in the middle of the highway. I knew enough to know my destination, even if the path was cloudy. I had enough of a sense of my direction to know, “I am pretty sure this isn’t the right turnoff”. I would start by saying, “trust the GPS”, but I would end up in the wrong place. But gradually it got better, and gradually I started feeling comfortable letting it make decisions for me. Letting me focus on other things. 

Learning my way around Gauteng

 

Single Serving

We do not have full knowledge of other people’s stories. It helps to build an environment that supports repeated interaction. Connected stories. 

The hardest part of making money is building a relationship with decision-makers with money. Finding clients. 

A decision-maker will do the hard work of deciding they trust you enough to give you money. That is emotional work. They do not need to do that initial heavy lifting again if trust is maintained. Build deep relationships. Superficial relationships will leave you constantly searching for new clients. If you are serving them once, but then maybe they never want to see you again, because you have not acted with integrity, and they regret their initial decision.

Sharing Interests

People are interested in people who are interested in them. I have a deep reserve of inner confidence, partly because my Mother was always fascinated in, and supportive of, anything (and everything) I found interesting. My curiosity always had an army of motherly reserves. The South African bubble I grew up in has some resistance similar to British reserve to faking and overenthusiasm. I didn’t read the book “How to win friends and influence people” (Dale Carnegie) for years because the title sounded very “American” and fake. It is, I discovered, a brilliant text with some very practical observations on reality. One of those realities is we respond to people who show interest in us. Who are interested *because* we are interested. We recognise that indicates a deeper level of loyalty and willingness to put effort in, in order to share our worlds. If you want people to be genuinely interested in you, be genuinely interested in them. Yes, that takes effort. It shows.

Got my Back

Trusting the Container

The Holy Grail is a direct, sustainable, relationship with decision makers with money, where you have their trust and confidence. Trust that you intend to solve their problem. Confidence that you can. Relationship building is one of the strongest barriers to entry. Trust is built from multiple layers and signals to show that the words and ideas being exchanged mean the same thing to both people. A lot is lost in translation between worlds. This is why nepotism and prejudice are so powerful. In a world of complexity, friendship, community, and emotional connection are a way of cutting through the noise. A lot of business has nothing to do with business. The specific problem being solved is far less relevant, than the sustainability (and containability) of the connection. Building trust in the container of the relationship.

"The Damsel of the Sanct Grael"

Rossetti (1874)

Fighting over Scraps

The Corporate world is a game, best played as a game. I wasn’t good at it because I wasn’t willing to accept the veil of meritocracy. I took it too seriously and literally. I was too deep soaked in Righteous Indignation. It is more a club with increasing levels of loyalty when you prove yourself. Layer 1 is for cogs. Paid a salary and with a notice period. Your salary is the price it would cost to replace your skills and knowledge. Layer 2 is longer term incentives. Tying you in so breaking loyalty will cost you. Layer 3 is participation in profits (and losses). The club aims to reward you enough to stay, but not enough that you can afford to leave. Layer 4 is ownership. That private club isn’t open to everyone. Wealth creation gets institutionalised, so the first three layers are sufficient to create the value while closing the door to layer 4. Layer 4 is for immortality beyond individual contribution. Enough underconfident overachievers will do the work in the first three layers to make sure layer 4 is exclusive. Harsh reality? Layer 4 is available to those who start from scratch. The first three layers are attractive enough that people will fight over the scraps. Institutions change unwillingly. Pick your layer 4 and build new institutions.

Finding Balance

Key Performance Indicators (KPIs) and Balanced Scorecards are ways of managing performance. They are particularly challenging in areas that are hard to quantify and articulate. A lot of my work for money involved taking technical concepts, trying to wrap my head around them, then trying to make them easier for others to wrap their head around. Understanding is incredibly hard to quantify. Trust even more so. It takes years to build, and can be broken in an instant. Particularly if you are looking for reasons or data points to not trust someone. Everyone is holey. Everyone is flawed. A bigger flaw is looking for holes in other people. To look for reasons to distrust. The problem with KPIs is the list gets long fast. So if a task (maintain trust) is “worth 2%” of a year’s assessment, the quantifying or checklist becomes a spurious form of false confidence. Easier is to have a list of things you won’t do. Even better is to have an incredibly short list (three key things), and to trust people. Trusting doesn’t mean being a sucker. You can build buffers, checks and balances. But it does mean accepting that not everything can be controlled or quantified. It does mean building systems that aren’t designed to cut people off like gangrenous limbs.

Share of Wallet

The hardest part of making money is finding customers. It is the same thing as getting a job. It is preferable to get to come back tomorrow rather than looking for new employers every day. Ideally you are able to get a “share of wallet”. This is the amount of a customer’s regular spending they will direct to the problems you solve for them on a regular basis. Like a salary. That’s where relationship building and trust come in. We all specialise. We have to. So we are incompetent in an almost infinite number of ways. But we understand our problems. Especially our problems that are recurring. If we know someone can solve them, there is no reason to look for greener grass. Particularly if the problem is not the thing we are passionate about, but a distraction from our true purpose. If the relationship with the problem solver makes us better at the things we care about. A “Target Market” is a group of people (1) with money, (2) with the problem you have the skills and knowledge to solve, and (3) who you understand well enough to see the world from their perspective. It’s no coincidence that people with wallets get seen.  

Staying Rooted

If we were all farmers, delegation would be easier. The person giving the task, and the person accepting the task would understand each other clearly. Developed over the thousands of years since we learned to tame the land, our words would probably mean the same thing. The tasks would be well understood, even if seasons and the weather had the final say. We are not all farmers. Our words don’t mean the same thing. We often end up having to delegate tasks in areas we do not understand, so we can focus on our own slice (which we understand better than others, maybe). Due Diligence is the process of taking reasonable steps of oversight. Kicking the tires to check for defects or poor quality. Trust but verify. It’s worth collecting good questions. Knowing what to ask. What to look for. My preference is for as little abstraction as possible. I want to know what the Jam is. The product. How it is made. Who makes it. The process. Too many layers, and I’ll pass. We may not be farmers, but staying rooted still matters.

Not Farmers

At the Centre

My income comes primarily from my Engine. I spend very little time managing that Engine. My investment philosophy has become gradually more aligned with that of my Yoga teachers and Natural Bee Keeping Father-in-Law. When students love their yoga classes, they can get obsessed with the teacher. It’s not the teacher, it’s the yoga. In the same way my Father-in-Law sees his primary role as getting out of the way of the bees. It’s the bees doing the work. The key advantage I have with investing is I don’t manage other people’s money. This means I don’t have to do any of the fake work required by our activity obsession. I can let the management and staff at the companies do the work. I can get out of their way. It’s not about me. When a problem needs solving, our intuition is to do something more. I believe the real solution lies in the opposite direction. Accepting that problems will arise. That noise is learning. Building structures that can adapt, adjust, and accommodate. That can listen to change. That can rest, heal, rise, and shed in their own natural rhythms. Learning to hold space rather than fill it with our determination to be in control. Our determination to do something where we are the centre of the story.

Think Smaller

Diversification is a recognition that there is both a good chance you are wrong about any decision, and a good chance that there is so much noise that whether or not you were right will never truly be known. There are Economies of Scale and Diseconomies of Scale. There are costs and benefits of Globalisation, and of Localisation. Advantages to detachment and broad framing, and details that are missed without focus and true commitment. No decision comes without unintended consequences. Micro-ambition is the idea of having small, achievable goals, that add up. Wu-Wei is the idea of action through inaction. That the true starting point is acceptance, and understanding, of how things are rather than how we want them to be. Nudging from there. Rather than arguing with people about finding one solution, in a theoretical imagined world, maybe we should start by finding the 5% of what they care about that we can support. Finding 5% of a potential solution ourselves, while allowing for a 95% chance that other people’s reality is not the same as ours. Creativity within substantial buffers, and with a foundation in the way the world is now.

Unconditional Positive Regard

Unconditional Positive Regard (HT Daniel and Rolene Strauss) is the idea of giving people the benefit of the doubt at all times. When coming up with solutions, I feel like we often give excessive weight to the loud minority of skebengas. We become so keen not be taken advantage of that we intentionally limit our positive impact to avoid being a sucker. How would things be different if our default was to trust each other? Still with some limits. I call this a Bull Quota. Like suspending disbelief when watching a movie. My wife and I recently watched “Alien” again. The people were idiots. Proper idiots. But parking that, it was a good film. We can’t be so scared of free-riders and fear-mongers that they define our world. Let’s start by trusting each other.

In Space, No One Can Hear You Scream

Core Strength

Stay home doesn’t have a universal meaning. The self-evident truth of the current Global Crisis is that while we are all in the same storm, we don’t have the same life-boats. An excessive focus on the conspicuous, means our foundations and buffers have been found wanting. Our lives revolve around income. Income defines our local. Who we spend our time with. How we spend our time. Who can afford to spend time with us. So that in an emergency, when we retreat to our safe spaces, we aren’t connected to those who don’t have matching core security. We don’t have names, faces and trust to do something as simple as a Cash Transfer to those who don’t have the privilege of a world that continues when the work stops. Most of us don’t even have trusted individuals who have done the work to understand the parallel realities we are separated from in Global Apartheid. There is some existing trust. There are existing relationships.  We need to lean in, imperfectly. Then tear down walls and build bridges when we start again.

Cash Transfer

People need Cash. Without a living wage, or a buffer, or Capital, or friends or family to assist, or time, it becomes the only problem that matters. What each individual needs the cash for differs. The best way for them to spend it differs. We live in a hand-to-mouth, pass-the-parcel economy where we have to be active to survive, and there have to be enough jobs (available and permissible) in a functional chain for the music to keep playing. We can’t pause to check everyone is okay. We can’t pause to breathe. Except. We can. There are buffers. There is Capital. We do have enough. The challenge is a very simple technological problem. Cash Transfers. One Bank account to another. One person to another. It is not that we can’t do it. It is that we don’t trust each other. Stay home doesn’t mean the same thing and we don’t live together. In a world where we can’t look someone in the eye, hold their hand in a greeting, learn to pronounce their name, and see their world… the immediate necessity is Emergency Trust.

Hand it Over

Descaling our Lives

Money is a communication tool. Like words and numbers, it helps us organise ourselves and share our skills, knowledge, and resources. Slightly smarter than barter, but still mostly unaware. We don’t trust each other enough for full transparency. We all need to eat, so even if we know there is a better solution somewhere else, we still want to sell our skills. Secrecy and politics protect our interests. Competing interests. Money-making boils down to matching an ask to an offer. How many people want the same thing? How many people can offer it? A key ingredient is scale. If you can find something lots of people want, where only you have the solution. That is clearly difficult in a world where information flows freely, secrecy is harder, and the winner takes it all. The best competitive advantages don’t have to hide. They are “in the box thinking” which, like exercise and diet, everyone knows about but doesn’t necessarily do. A real competitive advantage is not having to scale. Breaking free from supply, demand, and secrecy. Changing the rules. That requires building Capital to do the money stuff, so we can do something else. Descaling our lives and leaning into the other communication tools.

Tough Sell

Just over five years ago I decided to step away from the world of money as much as possible. I had saved aggressively and put my money to work. The things that matter most to me are relationships, time, and space. I don’t like that the default way we spend our time is work, and that if we are honest, a lot of the work that gets done is simply killing time. Work for work’s sake. Work because it is a conspicuous demonstration of your place in the world. Work because money in the bank is the easiest way to communicate your value to people unwilling or unable to see you. Capital is better at working than people. My “Engine” is in three key buckets. Two funds, and then a portfolio of about 20 businesses I chose. I am significantly less emotionally attached to those businesses than the ones I worked for personally. Work becomes your community. It is who you spend your time with. Who you give your energy. I far prefer the idea of my community being built up without the filter of how to make money. In reality, that idea is a tough sell and needs a fundamental shift to what we value.

Peasants Harvesting Crops - Pieter Bruegel