Why You Should Build From The Ground Up

If you are feeling stagnant and want to grow, try building something from the ground up.

It doesn’t matter what it is. It could be a business idea, a podcast, a website - whatever - just make sure you are building it from the ground up.

Here’s why:

Build from the Ground Up to Become a learning machine.

When you build something from the ground up, you own the results of what you build. You’re accountable.

This will make you a learning machine.

There’s a video of Steve Jobs talking to a group of students about the differences between learning as a founder vs. learning as a consultant.

Jobs was a founder. He was someone who built businesses from the ground up.

A consultant is someone who advises other people for a living. Someone who comes in after a business is built to make recommendations about what it should do next.

Here’s what Jobs says:

I think that without owning something, over an extended period of time, like a few years, where one has a chance to take responsibility for one's recommendations, where one has to see one's recommendations through all actions stages, and accumulate scar tissue for the mistakes, and pick oneself up off the ground and dust oneself off, one learns a fraction of what one can.

Coming in and making recommendations and not owning the results, not owning the implementation, I think is a fraction of the value and a fraction of the opportunity to learn and get better.

Founders are learning machines because if they make a mistake, they own the consequences. And the stakes are high. Margins are slim. One bad call and they are out on their ass. So, they are highly incentivized to keep learning and improving.

Consultants function differently. They don’t have to own the consequences of a mistake in the same way a business does. While a business could go bankrupt from a bad decision, a consultant may get a slap on the wrist. And so, consultants won’t learn from the mistake in the same way as the founders of the business.

Further, a consultant isn’t in a position to learn from the error in the first place because they weren’t around for the entire implementation and execution of their recommendation. They don’t see the full story and thus won’t learn the full lesson.

A founder goes an inch wide and mile deep.

A consultant goes a mile wide and an inch deep.

Here’s Jobs again:

[As a consultant] you do get a broad cut at companies, but it's very thin. You might get a very accurate picture, but it's only two-dimensional. And without the experience of actually doing it, you never get three-dimensional. So, you might have a lot of pictures on your walls, you can show it off to your friends. You can say, "Oh, look, I've worked in bananas, I've worked in peaches, I've worked in grapes." But you never really taste it.

Here’s the video clip of Jobs if you’re interested in watching it. Thanks to David Perell for sharing it.

 

Build from the Ground Up to learn Specific Knowledge.

Another reason why you should build something from the ground up is that you’ll learn the right things quickly.

You’ll learn specific knowledge.

Specific knowledge is a highly specialized form of knowledge that you can only learn by doing.

Naval Ravikant defines specific knowledge in his tweetstorm, How to get rich (without getting lucky):

The first thing to notice about specific knowledge is that you can’t be trained for it… Very often specific knowledge is at the edge of knowledge. It’s also stuff that’s just being figured out or is really hard to figure out... [It] tends to be technical and creative. It’s on the bleeding edge of technology, on the bleeding edge of art, on the bleeding edge of communication.

You learn specific knowledge through trial and error. By experimentation. By getting your ass kicked and trying again. There’s no road map. No career path. You have to build, test, and iterate to see what works.

Founders have a lot more specific knowledge than consultants because founders are immersed in trial and error experiments.

build from the ground up To have skin in the game.

Skin in the game means you are symmetrically exposed to both the upside gain and the downside loss of what you build - you have something at risk.

A founder has skin in the game because if the company fails, they are proportionally punished. They go bankrupt. They lose their house. Their family can’t eat.

If the company prospers, they are proportionately rewarded. They get rich. They buy themselves a yacht. They take their family to Disneyland.

A founder can’t take the upside without taking the proportional downside too.

A consultant, on the other hand, doesn’t have skin in the game. If they give bad advice to a business, they don’t suffer proportionately. They will still get paid (perhaps with a small slap on the wrist) while the founders go bankrupt. The consultants have transferred their downside risk to the company.

Nassim Nicholas Taleb made this idea of “skin in the game” popular in his book, Skin in the Game: Hidden Asymmetries in Daily Life.

Here’s how Taleb defines the term in another one of his books, AntiFragile: Things That Gain From Disorder:

Skin in the Game / Captain and Ship Rule: Every captain goes down with every ship.

The captain of a ship takes on the same risk as the crew he leads and the passengers he has vowed to protect. If the ship goes down, he goes down with it.

It’s the same for a founder and their company.

Taleb cites an ancient law in Paris, known as Hammurabi’s Law, which stated in part:

“If a builder builds a house and the house collapses and causes the death of the owner of the house—the builder shall be put to death.”

That’s skin in the game. The builder has something at risk - his life.

Find out who you are with skin in the game.

Having skin in the game is the only way to find out who you are. To find out what your guts are made of.

You will not find out by renting your time to someone else. You must build something of your own.

Build something you’re interested in.

It could be a website, business, Twitter account, graphic design firm, blog, novel, screenplay, etc. It doesn’t matter what it is as long as it’s something you’re interested in.

Naval Ravikant encourages us to build something that feels like play to us but looks like work to other people.

That’s as good of a place to start as any.

Start now.

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Taleb, Nassim Nicholas. Skin in the Game: Hidden Asymmetries in Daily Life. Random House Publishing Group. Kindle Edition.

Taleb, Nassim Nicholas. Antifragile: Things That Gain From Disorder: . Random House Publishing Group. Kindle Edition.

Naval Ravikant’s twitterstorm, “How to get rich (without getting lucky)” can be found here.

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