Skin in the game

Nassim Taleb might have written his best work to date with Skin in The Game. You should read this book.

I finished the book a few days back, and let my thoughts on it sit for 48 hours. That has been a productive exercise.

The world is soft when compared to previous generations.

Most Millennials suck, are weak, and lack resilience.

(I will write about the lack of masculinity in the world in another post.)

The "Avocado Toast" generation thinks that they should immediately earn: success, fame, uniqueness, and recognition. I like avocado toast, but it represents what is wrong with my generation.

Again, social media is an issue.

You win with hard work, resilience, help from mentors, and luck.

I have to tell you: it takes time. Overnight success does not exist.

One thing that you should do for yourself is to watch how interests are aligned in your life, how they are organized in business situations, and with interactions with people.

Everyone has an agenda. We are all subject to our biases, and it's fascinating to see how people make decisions.

The world respects those that take risk. People that put skin in the game and are willing to self-sacrifice to build something greater than themselves.

I always look for that in founders. The best way to understand the importance of a project is to see how leveraged they are with their net worth and time.

Capital and time are the two levers of reputation.

One extreme example of skin in the game, talked about in the book, was the case of ancient architects that projected houses on villages. Let’s assume the house was poorly planned, an accident happened, and it killed a family member of yours.

Would you have the right to kill a family member of the architect? That was acceptable behavior.

That way, the de-facto behavior was such that if I am building this house, I will make sure it is well done, otherwise I may suffer extreme consequences.

I like doing business that way.

At ONEVC I am very proud of our alignment of interest. Some with time, some with capital, and some (like myself and another partner) with both. As a group, we are investing 10% of our 20M fund together, which is a commitment 5x higher than the average in the market for funds of our size.

When you talk to an investor, ask him how much of his money he is putting to work on his firm.

I recommend you to partner with people that have skin in the game.

Life is too short not too.