How to think critically:

(mental models and logical fallacies)

I've read all of Jeff Bezos's 23 years of Amazon shareholder letters twice now.

It's an MBA of its own.

Here's what I learned about startups, entrepreneurship, investing and more:

Your customers are loyal to you right up until the second that someone else offers them a better service.

Listen to customers, but don't just listen
to customers also invent on their behalf.

Here's Jeff Bezos on coming up with the Amazon Kindle:

We set ourselves the incredibly audacious goal of improving upon the physical book.

So don't be afraid to set big goals.

And remember that if you don't execute well, it will be done by someone else.

Many of the problems you'll face will have no textbook solutions, and so you should happily invent new approaches.

I read two-and-a-half decades worth of Jeff Bezos’s Amazon shareholder letters.

It’s like a mini MBA.

Here I’ve pulled out a free guide for startups, investing, marketing, and “web3”🧵

(It’s a thread, not an ebook)

First, why the focus on web3?

It’s the mid 90’s. A 30-year-old Jeff Bezos is trying to raise money for Amazon. And investors are wondering,

“What’s this internet thing?”

Fast forward, the year is 2022, and folks today are wondering,

“What’s web3?”

Now, a little background…

In 1994, Bezos quit a well paying job to start Amazon.

It wasn’t an easy decision. But Bezos used his famous “regret minimization framework.”

In other words, he didn’t want to be 80 and regret not doing what he really wanted to do.

But what did he want?

Bezos didn’t set out to disrupt retail from the outset.

He simply wanted to come up with a business idea based on the internet and then let the internet grow around it while he kept working on it.

Today, that idea is worth $1.7 trillion and counting.

Moving on to the lessons…

Each year since 1997, Bezos has written an annual letter to Amazon shareholders.

These letters reveal a great deal of lessons and secrets behind his massive success.

So what are they?

How to think about your career:

Phil Knight is the co-founder of Nike.

I found this advice in the last few pages of Phil's memoir about creating Nike.

It's some of the best I've ever received:

1/6

Hit pause.

Think long and hard about how you want to spend your time.

And with whom you want to spend it for the next forty years.

2/6

Don't settle for a job or a profession or even a career.

Seek a calling, even if you don’t know what that means.

If you’re following your calling, the fatigue will be easier to bear, the disappointments will be fuel, the highs will be like nothing you’ve ever felt.

3/6

Here's a warning:

The best of you, the iconoclasts, the innovators, the rebels, you will always have a bull’s-eye on your back.

The better you get, the bigger the bull’s-eye.

It’s a law of nature.

I just read all of Jeff Bezos's 23 letters to Amazon shareholders. And here's a thread with just one key-takeaway from each of these letters.

So if you're an artist or an entrepreneur looking to get some insight into the mind of this genius, read this right now.

1997: Focus relentlessly on your customers and long-term growth.

1998: Here are the 3 criteria Bezos wants managers to consider when hiring (to set the bar high):

1. Will you admire this person?

2. Will they raise the average level of effectiveness of the group?

3. Along what dimension might this person be a superstar?

1999: How to think long-term? Think: it's good enough today, but it will get so much better.

2000: "In the short run, the market is a voting machine but in the long run, it is a weighing machine.” - Benjamin Graham

We aren’t 10% smarter when the share goes 10% up, nor 10% dumber when it goes down. We want to be weighed, & we're always working to build a heavier company.

Five valuable mental models

1. Gates' Law
2. Parkinson’s Law
3. The Paradox of Choice
4. Hanlon's Razor
5. Leverage

On startups, business, finance, investing, career, life and whatnot.

Here's a quick guide/refresher:

Law.

We overestimate what we can do in a year and underestimate what we can do in ten years.

It's the classic instant gratification versus long term mindset.

A ten year timeline will set you free.

Parkinson’s Law.

Work expands to fill the time available for its completion.

"How can you achieve your 10 year plan in the next 6 months?" — Peter Thiel

Forgive me for putting it right after Gates' Law. But why not?

The Paradox of Choice.

More choices make decisions hard.

Your friends can't decide what to eat? Don't pass the parcel. Ask them to pick between two options. Same for Netflix. And so on. Saves time!

Eliminate indecision by reduction.

Hanlon's Razor.

"Never attribute to malice that which is adequately explained by stupidity."

Not everyone's out there to get you.

There can be honest mistakes.

Investing in stocks, startups, crypto, real estate, and whatever else can create a lot of wealth.

That's great.

But truly achieving happiness and success in life starts with one thing:

Investing in yourself 🧵

Our lives often get more hectic the more successful we become.

And it gets more difficult to justify taking the time and energy to invest in ourselves.

Instead we just focus on short term gains in our careers, often at the expense of ourselves.

This is a mistake.

I attribute a lot of my success to continuously making sure I am my best self.

But to do that well, you need to focus.

These are the categories I invest in:
1. Education
2. Physical Health
3. Mental Health
4. Relationships

If I get these things right, I know I am doing well.

1/ Education

For me, learning is about doing. That's why I prioritize having strong mentors.

Investing in your education means paying for experiences, trying new things or skills.

This investment should be in something that will have an impact, not just in knowing more stuff.

2/ Health

Health is finding a way to stay fit as your life style changes over time.

I don't do the same workouts I did in college or even the same ones I did before I had my boys.

If you don't invest in a health routine that matches your lifestyle, it's doomed to fail.

When your own reputation is solid, use subtler tactics, such as satire and ridicule to weaken your opponent while making you out as a charming rogue.

Learn to take advantage of other people’s work to further your own cause.

Time is precious and life is short.

If you try to do it all on your own, you run yourself ragged, waste energy, and burn yourself out.

The more you say, the more likely you are to say something foolish.

Simply dangle an object you seem to desire, a goal you seem to aim for, in front of people's eyes and they will take the appearance for reality.

Once their eyes focus on the decoy, they will fail to notice what you are really up to.