In the month of March, I was very lucky to attend the talk given by Mohnish Pabrai and Guy Spier at Stanford Business school. The core theme of the talk was centered around the concept of giving without expecting anything in return. Guy drew a chart on the board which I redraw below with my own annotations. He told us to be a giver without expecting anything in turn. In the first few years one won’t see much happening to our goodwill account. But as years progress, goodwill snowballs and starts to grow exponentially. Buffett’s goodwill account is at its peak and still growing at alarming rates.
In the month of May, I got lucky once again to read an interview given by Andrew Ng, Chairman and Co-founder of Coursera. You can find the interview here. There was a particular piece in that interview that caught my attention. The piece is given below. Read it couple of times and reflect on it.
Do you have any helpful habits or routines?
I wear blue shirts every day, I don’t know if you know that. [laughter] Yes. One of the biggest levers on your own life is your ability to form useful habits.
When I talk to researchers, when I talk to people wanting to engage in entrepreneurship, I tell them that if you read research papers consistently, if you seriously study half a dozen papers a week and you do that for two years, after those two years you will have learned a lot. This is a fantastic investment in your own long term development.
But that sort of investment, if you spend a whole Saturday studying rather than watching TV, there’s no one there to pat you on the back or tell you you did a good job. Chances are what you learned studying all Saturday won’t make you that much better at your job the following Monday. There are very few, almost no short-term rewards for these things. But it’s a fantastic long-term investment. This is really how you become a great researcher, you have to read a lot.
People that count on willpower to do these things, it almost never works because willpower peters out. Instead I think people that are into creating habits — you know, studying every week, working hard every week — those are the most important. Those are the people most likely to succeed.
Is there a connection between Guy Spier’s idea of giving-without-expecting-anything-in-return and Andrew Ng’s idea of creating-habits-like-studying-everyday? The connection between these two ideas is that in the short term you won’t see any noticeable changes. But when you work on something for a very long time then something interesting happens. In order to understand this concept deeply let’s jump into the field of chemistry and see how solid ice gets converted into a liquid water. Take a look at the image given below and focus between points A to B and B to C.
At point A the temperature is -25 degree celsius and ice remains in the solid form. The temperature is slowly increased from -25 to -1 degree celsius. Nothing happens and the ice still remains as solid. What happened to all the energy (heat is energy) and why solid ice is not getting converted to liquid water?
Intermolecular forces (IMFs) are weak attractive forces that occur between molecules. While bonds, which are much stronger, keep individual molecules together, IMFs are what drive two or more molecules to come together. IMFs decides the state of a matter; solid, liquid, or gas. From point A to B the energy from heat is used to increase the temperature from -25 to 0 degree celsius. From point B to C the added heat energy is used to overcome IMFs. At this point solid ice changes to liquid water. This concept is beautifully explained by V.S Ramachandran.
Imagine you have block of ice in front of you and you are gradually warming it up: 20 degrees Fahrenheit… 21 degrees… 22 degrees… Most of the time, heating the ice up by one more degree doesn’t have any interesting effect: all you have that you didn’t have a minute ago is a slightly warmer block of ice. But then you come to 32 degrees Fahrenheit. As soon as you reach this critical temperature, you see an abrupt, dramatic change. The crystalline structure of the ice decoheres, and suddenly the water molecules start slipping and flowing around each other freely. Your frozen water has turned into liquid water, thanks to that one critical degree of heat energy. At that key point, incremental changes stopped having incremental effects, and precipitated a sudden qualitative change called a phase transition.
Nature is full of phase transitions. Frozen water to liquid water is one. Liquid water to gaseous water (steam) is another. But they are not confined to chemistry examples. They can occur in social systems, for example, where millions of individual decisions or attitudes can interact to rapidly shift the entire system into a new balance. Phase transitions are afoot during speculative bubbles, stock market crashes, and spontaneous traffic jams. On a more positive note, they were on display in the breakup of the Soviet Bloc and the exponential rise of the Internet. – The Tell-Tale Brain
From chemistry let’s move on to the world of bicycles. Take a look at the video given below. In it the cyclist struggles to ride a reconfigured bike. After failing for several months he was able to ride the bike one fine day. This is akin to solid ice getting converted to liquid water. His effort for 6 months is equivalent to heating the water; nothing happened during that time. And his success is equivalent to breaking the intermolecular forces; he was able to ride the bike.
They key take away I got by connecting the ideas from Guy Spier, Andrew Ng, Ice, and Biker is to think long term. Few other insights which I got are (1) it takes a long time to create anything that’s valuable (2) one has to work hard every day without any improvements in the short term (3) keep doing it consistently for a very long time without giving up (4) enjoy the process and not worry about the outcome (5) not compare oneself to others and instead compare oneself to oneself two years ago. Anybody who is doing all of these will most likely succeed in his pursuit. This is what Buffett meant when he said: Games are won by players who focus on the field, not the ones looking at the scoreboard.