The Psychology of Happiness, Liberating Our Children, Populist Presidents, What Makes Humans Special, The Mathematics of Success, AI Tools, Energy-Compute-Crypto, Defence Tech Briefing...
January 24, 2025
I am sharing this weekly email with you because I count you in the group of people I learn from and enjoy being around.
If you missed last week’s discussion: Tony Robbins on Building An Extraordinary Life, The Power of Curiosity, Intuition and Dreaming, How To Make it to the 1%, Tyler Cowen on AI Bottleneck, AI Without Datacentres, Defence Tech Briefing...
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Quotes I Am Thinking About:
“Most regrets, by the way, are acts of omission and not commission. If you do bad things, if you go murder somebody, that would be bad and that would be an act of commission that you would regret. But most everyday, ordinary non-murderers, when they’re 80 years old, their big regrets are omissions.”
- Jeff Bezos
“I don’t like people who have never fallen or stumbled. Their virtue is lifeless and it isn’t of much value. Life hasn’t revealed its beauty to them.”
- Boris Pasternak
“Those who do not remember the past are condemned to repeat it.”
- George Santayana
A. A Few Things Worth Checking Out:
1. My most important wish for you is that you are happy.
This is a beautiful and simple 8-page piece by James Montier titled: The Psychology of Happiness.
Thank you Mike Gallagher for flagging.
2. The Sovereign Child: Tim Ferriss recently spoke with Aaron Stupple and Naval Ravikant.
Aaron is a board-certified internal medicine physician. He focuses on reviving the non-coercive parenting movement derived from the philosophy of Popper and Deutsch called Taking Children Seriously.
His book, The Sovereign Child: How a Forgotten Philosophy Can Liberate Kids and Their Parents, gives practical examples of this freedom-maximizing approach to parenting, gleaned from his experience as a father of five.
Naval Ravikant is the co-founder of AngelList. He has invested in more than 100 companies, including many mega-successes, such as Twitter, Uber, Notion, Opendoor, Postmates, and Wish.
The 5 BIG IDEAS:
Freedom Through Guidance: Rather than enforcing rules, effective parenting focuses on maximizing children's freedom while providing active guidance. Parents serve as problem-solving partners, helping children navigate challenges while preserving their autonomy. This approach recognizes that mandatory compliance often creates resistance, while supported exploration builds genuine understanding.
Natural Learning: Children are innate learners who develop best when pursuing authentic interests. A child freely choosing to write birthday invitations learns more about literacy than one forced to complete worksheets. When allowed to follow their curiosity, children naturally progress from simple to complex understanding across all domains - from food preferences to mathematical concepts.
Digital Literacy: Screen time becomes valuable when viewed as a learning tool rather than a vice. Children typically progress from simple content to increasingly sophisticated material, developing discernment and deeper interests. This mirrors how adults evolve from basic to nuanced understanding in any field. The key is engaging with children's digital interests rather than restricting them.
Creative Solutions: When children resist common activities like brushing teeth or sleeping, the solution lies in understanding their perspective rather than enforcing compliance. By exploring creative alternatives - like making oral hygiene a game or adjusting sleep schedules to match natural rhythms - families find sustainable solutions that work for everyone.
Trust Foundation: The parent-child relationship thrives when built on trust rather than authority. By treating children as capable decision-makers, parents help them develop authentic self-regulation and judgment. This creates a foundation of mutual respect that serves both parties through all developmental stages, from toddlerhood through adolescence.
3. Trump’s Populism Isn’t a Sideshow. It’s as American as Apple Pie.
The folks at the Free Press have launched a new podcast titled Breaking History.
Their first episode is an educational journey about the life of Andrew Jackson, America’s first populist president. They discuss populism in America and what we can learn from Jackson that can help us understand America and Trump.
4. What makes Humans special?
Packy McCormick at Not Boring had an interesting strategic framework for human adaptation in an AI-driven economy.
His core argument is that as AI increasingly commoditises various forms of work and skills, humans should focus on "moving up the stack" - using commoditised capabilities as inputs to create novel experiences and value at higher levels of abstraction.
The memo argues that while AI will become more capable and cheaper (with costs dropping 600x since early 2023), this creates opportunities rather than threats for humans who position themselves as complements rather than substitutes to AI (remember 7 Powers framework).
The key strategy is differentiation through uniquely human qualities and novel experiences, summarized in the phrase "Most Human Wins."
5. Long-Term Thinking and 2nd Order Consequences.
Sam Ovens had a great discussion on how to make decisions that embrace the mathematics of success.
The 5 BIG IDEAS:
Embrace the counterintuitive: Transformative success comes from embracing the counterintuitive. The best business decisions often feel wrong in the moment - like Amazon reinvesting profits instead of showing early returns, or Apple spending heavily on R&D during downturns. The secret is reframing these moments of sacrifice: they're not costs, but investments in an exponential future that others can't see.
Decisions across time: Every business decision ripples through time like a stone thrown into a pond. But unlike ripples that fade, business consequences amplify. Netflix's early decision to cannibalize its DVD business for streaming looked risky, but they understood the chain reaction: streaming would enable data collection, which would enable better recommendations, which would drive engagement, which would fund original content. Each link amplified the last.
The Mathematics of Success: The mathematics of success follow compound interest, not linear progress. This explains why Buffett made 99% of his wealth after age 50. The key is identifying areas where small advantages compound: better decisions lead to better opportunities, which attract better talent, which enables better execution, creating an accelerating cycle. Success isn't about singular breakthroughs but building compounding systems.
Choosing The Right Paths: True strategic advantage comes from choosing paths with high barriers to entry - not just in markets, but in personal development. When faced with two options, ask: "Which path has fewer competitors because it requires delayed gratification?" That's usually the path where extraordinary returns hide. Most can't sustain the discomfort long enough to capture them.
The Distractions of Success: Lasting success requires protecting your core engine of value creation from the inevitable distractions of success. When Microsoft was rising, Gates was famous for taking "think weeks" where he'd disconnect entirely to focus on technology trends. The irony of success is that it creates exactly the distractions that can destroy its foundation. The art is learning to starve these distractions while feeding your core.
B. The Science and Technology Section:
1. Through out human history we have invented new tools, and throughout history, humans with better tools always out compete humans without the best tools.
This is our story.
A few years ago, I decided to budget time every month to experiment with new tools. It’s a good way to see the latest capabilities are and what I can or should add to regular use.
The hard part isn’t that the tools aren’t great but that our habits and current workflow means that it is hard to change them.
My hope is that by experimenting with the tools regularly, they become second nature and a part of my daily life.
Recently a lot of builders and developers have been building AI tools, so that feels like a reasonable thing to go check out.
In the last year I have managed to integrate Perplexity, Claude and ChatGPT heavily into how I search for, discover and process information. These tools have been priceless.
Last weekend I continued on the journey and tried some new tools with the kids. Wexperimented with udio, which the kids found fun. It allows you to create songs and music by just describing them.
Then we tried HeyGen and Synthesia which are both about AI enabled video generation. They are still a little complex.
Then we finished with Lumalab’s Dream Machine which is a beautiful & simple way to create images and videos.
I also love reading a lot, but sometimes an audio version of the text can be easier to consume, that’s what ElevenLabs is doing with their AI audio platform.
What are your “Top 3 recommended AI tools or resources?”
I’ll collect all the replies and share with those who contributed ideas.
2. There are 3 big themes colliding and converging - Energy, Compute and Crypto
Meltem Demirors at Crucible had a great X summary and slide deck outlining what she sees.
3. Models, Margins, and Moats: Ben Thompson at Stratechery spoke to two significant AI investors: Nat Friedman (last role was CEO of GitHub from 2018-2021) and Daniel Gross (currently CEO of Safe Superintelligence Inc).
It was a great tour of the cutting edge of AI Investing:
The 5 BIG IDEAS:
Frontier Models: The AI industry faces a fundamental economic challenge: frontier models requiring billions in investment can be quickly distilled into smaller, efficient versions by competitors. DeepSeek demonstrates this by matching GPT-4 capabilities at a fraction of the cost, suggesting the real competitive advantage may lie in inference cost structure rather than raw model capabilities.
Enterprise AI: adoption will likely follow a top-down transformation pattern similar to mainframe computing. Rather than gradual assistant-based adoption, companies will implement comprehensive department-wide replacements. This approach solves data integration challenges and sidesteps employee resistance, though it requires significant upfront investment in data organization and infrastructure.
Strengths determine positioning: Apple leverages hardware integration and distribution, Microsoft dominates enterprise relationships, Amazon excels in scalable infrastructure, while Meta capitalizes on consumer attention. Google's superior technical capabilities remain challenged by productization hurdles, reflecting their pre-AI dynamics.
Manufacturing Limitations: The US faces critical manufacturing limitations for AI hardware and robotics, with Asia dominating the component ecosystem. Despite initiatives like Texas's Starlink PCB factory, rebuilding domestic manufacturing capacity requires more than individual facilities - it needs the dense network of suppliers, expertise, and rapid iteration capabilities exemplified by Shenzhen.
What’s Next: The next frontier of AI development centers on personality and user experience customization. Tools are emerging to modify model behaviors at a granular level, beyond simple prompting. This raises crucial questions about cultural influence through base models, potentially making control over widely-used foundation models a key battleground for cultural and linguistic influence.
C. The Curious Mind Event Series:
Trump is an America First President and given the group of folks around him like Musk and Thiel, defence tech may continue to be an important theme.
To help us learn more about the market and contextualise the opportunity set I wanted to have my friend Ateet Ahluwalia give us a briefing.
Ateet started at Goldman Sachs as a credit trader, then traded Macro at BlueCrest, then crypto and venture investing at CoVenture and Bracket. Since 2023 he has been the Managing Partner at Island Green.
Island Green is an inflection focused venture capital firm that invests in generational companies across all sectors via primaries and secondaries at their turning points.
His prior investment experience includes SpaceX, Shield AI, Anduril, Palantir, Coinbase, Stripe and others.
He will discuss:
The US and Allied budget
The Chinese supply chain and Allied Defence
What tech is the pentagon focused on
Air land sea and now…space
New Defense start-ups vs primes
Why it’s crucial to have program of record
The briefing will be January 31st 12pm EST. Please let me know if you’d like to join.
Believe it or not, that “♡ Like” button is a big deal – it serves as a proxy to new visitors of this publication’s value. If you got value out of reading, please let others know!
Highest value thing in my inbox, thank you Ahmed.
Top 3 AI use cases for me:
1) Perplexity for general google replacement, especially when I want/need refences to data source.
2) ChatGPT, still the best python/trading etc. assistant.
3) Claude copilot embed in Cursor (using it to try to code an agent on Eliza).
Free dev school for here for item #3, for anyone who may be interested.
https://www.youtube.com/watch?v=ArptLpQiKfI&list=PLx5pnFXdPTRzWla0RaOxALTSTnVq53fKL&index=2&t=3908s