Fresh Nuggets - This is How all the New Fortunes are Made [Naval Ravikant, Mr Beast]
Have you ever wonder how is it that nowadays there are so many super young people that are so wealthy? (on their own merit). Well, I picked some insights from Naval Ravikant's Podcast and a few interviews of Jimmy (Mr Beast) Donaldson (biggest YouTuber in the world) to fundamentally understand this relatively recent phenomenon.
Below you will find all my notes, reflections and quotes that I took while studying all this content...
🧠 Quotes
"Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media). Apply specific knowledge with leverage and eventually, you will get what you deserve." - Naval Ravikant
"The most valuable thing you can build is an audience" - Alex Hormozi (founder Acquisition.com)
👨 Speakers
Naval Ravikant
Naval is an entrepreneur and angel investor, a co-author of Venture Hacks, and a co-maintainer of AngelList. I have learnt so much from his deep wisdom about many wide-ranging topics, from meditation and inner freedom to web 3.0 and crypto. I'm grateful for his willingness to share his insights, and inspire me to become a wiser / happier person.
Jimmy (Mr Beast) Donaldson
Jimmy (Mr Beast) Donaldson runs several YouTube Channels, a delivery fast food restaurant (Mr Beast Burger) and two philantropic projects: Beast Philantropy and Team Trees. His brand is valued in the Billions of dollars.
📝 Notes
Chapter 1: Naval Ravikant
"Fortunes require leverage. Business leverage comes from capital, people, and products with no marginal cost of replication (code and media). "
Leverage --> Is a force multiplier for your input work. It creates a non-linear relationship between the -time effort and quality of your work- AND - the outcomes of your work-.
Let's first look at the old forms of Leverage (where all the fortunes were made in the past):
1) Labor Leverage.
2) Capital Leverage
Core Idea: "Products that has no marginal cost of replication"
- The new form of Leverage.
Invented in the last few hundred years.
* History timeline:
1) The Printing Press
2) Broadcast Media (the Legacy Media)
Problems with this kind of Media:
It has Gatekeepers (with likely very different incentives from you -- if you wanna go into TV)
It is PermissionED Leverage ---> Means that someone has to give you the permission to use their Leverage!
3) Internet / Code
Internet / Code Leverage
You can use it to multiply your efforts without the need of:
Involving other humans (Labor Leverage) -- Permissioned Leverage
Money from other humans (Capital Leverage) -- Permissioned Leverage
Also, there are no Gatekeepers! You do not need permission of anyone to buy a cheap mic and start running a podcast (new media based on the internet) or you can learn how to code and build anything! This source of leverage is permissionless.
This Generation's Fortunes are built on this form of leverage.
2 kinds of Leverage that you can use from here:
1) New Media (enabled by Internet / Code)
Good examples: Joe Rogan Podcast, Pewdiepie...
2) Code (programming software)
Good examples: Jeff Bezos, Mark Zuckerberg, Bill Gates, Sergey Brin, Larry Page, Steve Jobs...
The magic combination happens when you combine all 4 types of leverage: Capital, Labor, Code and New Media (content creation).
Picking Nuggets Note:
In the next Chapter of my Notes, We will see how MrBeast brand illustrates very well this "magic combination" which Naval talks about.
Naval on Wealth...
Chapter 2: Jimmy (Mr Beast) Donaldson
The first leverage that Mr Beast started to compound was Media (internet-based) Leverage. As he became better by trial and error (acquiring bottom-up knowledge and thus improving his judgement) his videos reached more and more people thru the Media Leverage, until he built a pretty solid Audience which also started to give him a different form of Leverage ---> Capital.
He didn't saved anything and essentially reinvested ALL back into the business. So he used 100% of the Capital Leverage to make higher quality and more interesting videos, which coupled with Media Leverage allowed him to grow his audience way faster.
This made him more money (exponentially more), and he repeated this cycle continuously. He also used the capital to hire people (Labor Leverage). Currently he has over 100 people working in his empire, and they also contribute to making better videos (grow the audience more) and also start new business lines: Mr Beast Burger and Feastables (chocolate bars).
Also, his software developer employees set up the business websites and many apps with a really friendly User Interface (Code Media).
So, Mr Beast definitely got all the ingredients for the "magic combination" of leverage. But this took him some time, and he started with free permisionless leverage: Media, and from there he kept using it but also added other forms of Leverage. Mr Beast's empire is now valued in the billions of dollars.
If you liked the notes, you might also enjoy the YouTube Video version I created:
💬 Reflections
"The most valuable thing you can build is an audience" - Alex Hormozi (founder Acquisition.com)
The cool thing about Leverage is that it fundamentally distorts the relationship between your input and the output that you get. The relationship becomes non-linear in nature. And your input, once is done, is detached from the output, because it is detached from the marginal delivery of your product/service every time that a customer or viewer consumes it.
Using Leverage, you might work on some project for 1 day or 1 year, and that can potentially bring an output that people without leverage couldn't get in 10 years or a lifetime. This is why you can't get rich renting out your time. You must *own* something, run it on a form or forms of *leverage* and apply your *specific knowledge*.
Now I wanna share some quotes that always help me when doing any big personal project:
"The pessimist may sound intelligent, but is the optimist who makes money." - Peter Lynch.
“After a lifetime of making money and observing better men and women than I fall by the wayside, I am convinced that fear of failing in the eyes of the world is the single biggest impediment to amassing wealth. Trust me on this.” - Felix Dennis
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(Many times book authors will make hundreds of pages based on just a few new ideas just for the sake of producing a book, but in reality they could have given you these new-interesting ideas in just few pages. This is the cool thing about Shortform: you cut to the chase and get the book insights without having to go thru unnecessary extensions of them. Besides, in any book guide on Shortform you can find links to blogposts related to the same ideas! -- as Naval Ravikant argues: reading books to completion is more of a vanity metric. What actually matters is to look for ideas, and once you find good interesting ideas, you reflect and research on them. [Naval on the podcast with Joe Rogan]. And it is the foundational understanding of all these truthful and interdisciplinary ideas that will make you better in any life dimension [Charlie Munger, Warren Buffet, Naval Ravikant]).
So you will likely find many interesting book guides on Shortform! My plan is to read these book guides and if in a particular one I find a super interesting-new idea to me, I will also buy the book and read it entirely!
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The mark of a great (non-fiction) author...
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👨💻Other content I have found pretty cool and valuable lately...
Yen Liow - Discovering and exploring career paths 01-07-21 — www.youtube.com 10 min video prepared for teenagers and college students who are starting the exploration phase of career discovery. This talk was prepared for a discussion ...
Val Katayev on Twitter: "I've generated over $1 billion in sales using ONE strategy. Used it in every recession - 2000, 2009, and 2020. I've never shared it publicly before. This thread might make you a millionaire." / Twitter Your description for this link...
👆Reminds me of the famous Buffet's quote:
"Be fearful when others are greedy, and greedy when others are fearful.” - Warren Buffett
Vinod Khosla on Twitter: "Taking no risk may be the largest risk most enterprises take" / Twitter Your description for this link...
Until next time,
Julio xx
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