How Entrepreneurs Think (Classic)

What's up, everyone? This is Alex Lieberman, co-founder and executive chairman of Morning Brew. Welcome back to Founders Journal, my personal audio diary, where I give you, the business builder, the tools you need to think better in order to build better, whether that's building a business, a team, or a new product. So I need to share an update, and that is for the next little while, we're going to be republishing classic episodes of Founders Journal. 2 reasons. One, because these are really good episodes that I spend a lot of time on, and with so many new listeners to the show, it's very likely you haven't heard some of these older episodes, and I think you'll benefit from them. Second, I'm spending a ton of time thinking about how to evolve this show so that we can make it as good as humanly possible for the next generation of builders and entrepreneurs. And with that, I would love your help as I dream up the future of this show. So once you've listened, shoot me an email to alex@morningbrew.com and don't hold back. Any feedback, recommendations, ideas? I want to hear it all and I want to have it help me inform where this show is going. That's the update. Now time for the episode. In today's classic episode, originally published on October 27th, 2021, I talk about the mental toolkit of all successful entrepreneurs. So there are 3 ways of thinking, 3 lenses, 3 mindsets. That I believe make the greatest entrepreneurs and professionals so great. These are things you can think about for yourself as a builder. They are also things you can look for in early employees or top senior leaders in a business. And so I'm going to take you through each of them, what they look like, how you can cultivate them, and some examples. The first tool is being an obsessive thinker. What does that mean? Very simply, you wake up thinking about your business. You go to sleep thinking about your business. Inevitably, entrepreneurs spend a ton of time working on their business. But even more than the actual physical act of working on it, I think that the time that an entrepreneur spends thinking about their business is both higher and more important because at the end of the day, every decision an entrepreneur or a builder or professional makes especially in the early days, is so important. And the way you can increase your probability of making quality decisions, I believe, is by improving your quality of thinking. And generally, I think you do that— improve your quality of thinking through quantity of thinking. By the way, just as a side note, I think this is the hardest part about an entrepreneur or a great professional not being able to turn off and do things outside of work. It's not just that they work long hours. It's also that even when they're not working on the business, they're working on the business just with their mind. And they may not be present to whatever else is going on, whether it's spending time with friends, family, etc. So that's what an obsessive mindset looks like. How do you cultivate it? How do you build an obsessive mindset? The short answer is it's really hard. It is something that I think people are born with. People are born more or less obsessive in terms of their personalities. But I do think you can train obsession. The first way you can do it is simply by creating momentum. Get the ball rolling on something you find interesting and force yourself to spend time thinking about it and not just be in the weeds doing, doing, doing. Easy example. I wasn't obsessed with working on Morning Brew in the early days. I didn't have a deep passion for writing a newsletter and making it more digestible for millennials. Simply what happened was I started working on this thing that I thought would be interesting, and then I got some wins and early validation, which made me feel even more invested as I spent more time on the product. I got more interested in The Brew the more that people responded back to our emails saying how much they enjoyed reading business in this format. I got more invested in the business the more that investors gave us money to expand the business. So the first is get the ball rolling on something. You don't have to be passionate day one, but with early wins and validation, you will inevitably get more passionate and obsessive. The second thing is what I call osmosis. Spend time with other obsessive people. Given we as human beings are mimetic to some extent, we mimic the behaviors of the people we spend the most time with. So if you spend time with other founders or people who honestly just love to nerd out and truly go down rabbit holes, that will rub off on you as well. And the third thing you can do is you can become more obsessive by getting more ownership. So very quickly, there was a story that I listened to the other day, and the story was of a submarine captain. The submarine captain had spent many years working on a single submarine. He was a great captain. He was asked to move to a new submarine. And the issue was, was he had to, within 6 months, become an expert on this new submarine that was configured completely different than the one he had spent his career on. And he knew that it was impossible for him to become an expert in that short of a period of time, but he had to do it. So how did he do that? Well, he decided that he was no longer going to be the captain in terms of having authority over decision-making. More so, he was going to make sure that he was surrounded by great people on the ship. He was going to give them all decision-making power and make sure they felt ownership over the boat, just as he did. So instead of putting the folks on the submarine in a place where they felt like they were following the orders of the captain, he put 135 service people in a position to think for themselves. And by giving up command, it It was no longer one person thinking on the ship. This ship went on to have the highest grade ever on a submarine safety inspection, and it is because 135 people became passionate, obsessive, creative, proactive instead of one person having to think for everyone. So how can you cultivate obsessive thinking? Take ownership or be given ownership by someone else. Now, the second tool after obsessive thinking in the mind of a successful builder, whether that's an entrepreneur or a professional, is someone who is a mature thinker. It's not enough to just think a lot. You also need to think in a sophisticated way. And to be a mature thinker, you need to be an independent thinker. You need to be a thinker that seeks truth, not being right. And you need to be a thinker that understands their own circles of competence. So let me break down each one very simply. An independent thinker is someone who thinks for themselves. Why is it important to be an independent thinker versus a dependent thinker in business? Because if you think what everyone is already thinking in business, then likely the business that you're trying to build has already been built or it's in the act of being built. You need to think differently from other people or other entrepreneurs, and you need to be right more than you're wrong to be an independent-minded, successful builder. And similar to obsessive thinking, I believe that independent thinking is largely nature. People are born independent thinkers. But I do think there are things you can do to better think for yourself. I've actually talked about this in a past Founders Journal, so I'm going to link to the episode in the show notes, but I'll just quickly list out some of the things you can do to cultivate independent thinking. First, be naive to conventional beliefs. It is impossible to be a dependent thinker if you don't know what conventional beliefs are. That's the story of Morning Brew. We thought of starting a newsletter and making it better and delivering it in the way we delivered it. Not because we were wildly unconventional thinkers, but we didn't realize convention would have said that newsletters are dead and we shouldn't start one. Second, similar to obsessive thinking, surround yourself with other independent thinkers. You will become more independent simply through osmosis. Where can you find these people? You can find them in startups, specifically founders and early employees. If you're in college, you can find them in majors that force critical thinking like philosophy. Or you can find them in extracurriculars in or out of college, specifically extracurriculars that are on the fringes or aren't mainstream. So a cliché example would be joining the crypto club in 2012 before it was mainstream, before Bitcoin was even a thing. But you would have spent a lot of time with a lot of really curious and smart people. And even if you didn't invest, you would have just learned being surrounded by those people. The third way that you can become a more independent thinker is by actively practicing independent thinking as an exercise. So you can do similar exercises to what I recommended in Monday's episode on thinking of startup ideas. You need to cultivate an attitude of healthy skepticism. When someone makes a statement to you that's based on an assumption that they're making, ask yourself, is their assumption true? And when you're going about life, everyday life, stop and ask yourself, why are you doing something in a certain way? So like right now, why am I typing this episode in the Notes app on my laptop? Or is there an easier or better way to do it? Would it have been better to actually talk out loud my thoughts and have them transcribed? Practicing skepticism and asking why is a great way to build up the muscle of thinking for yourself. Another way to be a mature thinker is to be one that seeks truth. You must be someone that is willing to be wrong in your views, and you need to be willing to change your views. Most people in life aim to be right because they want to demonstrate that they are better or more powerful than someone else. But I'd actually argue that the most powerful, or let's say right people, are those that aren't driven by their relative impressiveness to others, but instead those that are driven not by emotions, but by finding truth. And as I think about, you know, the types of thinkers we find in society, I would say the majority are what I would call either emotional crusaders or sloppy absolutists. Emotional crusaders are those that simply become blind to the facts, even if they know what the facts are, because emotions trump their objectivity. It blinds them. Then second, you have sloppy absolutists. Those are people who see things as white or black. If they think something is right, they believe it is 110% right. And if they think something is wrong, they believe it is 110% wrong. But things in life are way more nuanced than that. For the truth seeker, they always view decisions and views of the world as a simple T-chart. On one side are the pros. the right, or one possible future. On the other side are the cons, the wrong, or another possible future. And rarely is the T-chart only filled on one side, which means even when we have a view of what truth is, we always have a measured conviction of how likely our truth is actually the truth. Truth seekers realize that the world is constantly changing and that the things under the T-chart can constantly swap out or move to the other side and completely alter our view of what's true. Beyond independent thinking and beyond truth-seeking, mature thinking is also about being a thinker who understands your circles of competence. It's being a thinker who understands your boundaries of knowledge. So one of Warren Buffett's most famous mental models is circles of competence. And what he has said to Berkshire Hathaway investors in the past is what an investor needs is the ability to correctly evaluate selected businesses. Note that word selected. You don't have to be an expert on every company or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important. Knowing its boundaries, however, is vital. Your circle of competence is specific knowledge about the world that you've built up over the years through study or experience. Can you expand your circles of competence? Sure, but oftentimes it takes a lot of time. And when you try to push outside of your circle of competence, that's where you end up making mistakes because you have blind spots. For example, using me, I know that I have strong understanding of media, marketing, storytelling, and advertising. Beyond that, I don't have deep areas of knowledge right now. So what does that mean in practice? I'm probably not the most qualified person in the world to build a B2B SaaS company or a biotech company right now. And if I wanted to work on a business where I'm operating outside of my circles of competence, like the 2 I just mentioned, I need to understand that my odds are lower than other subject matter experts from the industry. And if I wanted to succeed, I'd likely need to bring on a co-founder who is operating well within their depth. So how do you spend most of your time within your circles of competence? 2 ways. First, you need to very honestly list out what is within your depth of knowledge And you need to realize it's going to only be 1 to 3 things. And second, you need to be disciplined about operating within your circles of competence and hire or work with people that complement those areas so that when you push your business or your teams outside of your competence, you know that you're lowering the odds of making mistakes because you have people that complement your knowledge base. Now, the final tool in the successful builder's mental toolkit We've talked about obsessive thinking, and we've talked about mature thinking. Now let's finish up with momentum thinking. If you listen to my recent episode about momentum, which I'll also link to in the show notes, you know exactly what I'm talking about. Momentum thinking is reserved for those builders that default to action and make things happen rather than wait for things to happen. When they launch a product, they do everything possible to get that product in front of consumers rather than waiting for consumers to somehow find the. Product. When they create a strategy, they ask themselves, what is the most aggressive and most ambitious roadmap that will push the business as hard as possible without breaking it? I always say that the early days of a startup is about willing things into existence, and that's how I describe the most successful entrepreneurs. They are forces of nature. They are boulders that are rolling down a hill that always feel like they have momentum and are constantly making things happen for themselves. Eric Weinstein, who is a managing director at Thiel Capital, said it great. He described the type of person I'm describing as someone with high agency. High agency is a sense that the story given to you by other people about what you can or cannot do is just a story and that you have control over the story. High agency people look to bend reality to their will. They either find a way or they make a way. So the example he would use is, how am I going to get past this bouncer who told me that I can't come into the nightclub? The high agency person would find a way. How am I going to start a business when my credit is terrible and I have no experience? The high agency person would find a way. So how do you default to action or create momentum thinking? Few ways. First, when you think of something that can be done immediately, just do it now. Practice constant action. Don't put things off. Second, when something seems difficult or improbable or you're told no, turn it into a game. Ask yourself, how can you be the one to figure it out, make it happen, or turn the no into a yes? Third, you value learning over failure, so you are never paralyzed to act based on a fear of failure. I talk about this in a past Founder's Journal, and so I'll include that as well. But you see everything as an opportunity to learn and you never are paralyzed by not making something happen. And fourth, a great question to ask yourself is one that Peter Thiel has asked entrepreneurs over the years. How can you achieve your 10-year goal in 6 months? It forces you to accelerate how you can be effective and think in a more ambitious or momentum-driven way than ever before. And those are the 3 tools in a successful entrepreneur or professional's mindset. With that, I'd love to hear from you. As I've said over the last few episodes, this show has been growing like crazy. This is becoming a massive community for builders, for people who want to think better in order to build better. And I'd love to meet you. Please reach out to me and tell me a little bit about yourself and why it is that you listen to Founders Journal. What is the specific value that you get from it that makes it worth your time? Shoot an email to alex@morningbrew.com or DM me on Twitter @BusinessBarista. Finally, if you enjoyed this episode, please pound the subscribe button on Apple Podcasts, on Spotify, or whatever the podcast player of your choice is. Hitting subscribe is the number one way to help Founders Journal move up the charts, so I'd love your help. Thanks again for listening, and I'll catch you next episode.