Vaguely right beats precisely wrong. "It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid instead of trying to be very intelligent." Charlie Munger
Panta Rei
"Everything flows, and human action (still) governs society."
Achieving anything meaningful requires adapting to constant change and always searching for new ways to learn, grow, and evolve. In business, we pay a high price for the truth. Often, it seems too costly or luxurious, and we can't afford it. We may think that lying, hiding, or omitting is easier. It might seem smart to avoid the truth, but ultimately, there’s no escape. To stay in business, it's essential to nurture principles, think independently, and test our assumptions to uncover what’s true and act accordingly.
Unlike the natural sciences, where objective truth is more easily discerned, business involves navigating uncharted waters where the truth is elusive. A startup is like braving the unpredictable tides of the ocean. Sometimes, the current is in our favor; other times, it works against us.
When founding a startup, we must uncover the most fundamental truths about our audience as quickly as possible. The challenge of understanding what customers want lies in first adopting a mindset of discovery, and then taking decisive action. Only by identifying the common denominator of customer needs can we build a successful company.
Next, we must ensure that our ideas are correct and innovative. "New" means offering something people can’t get elsewhere. It’s "correct" only if we build something people want—and are willing to pay for. It must address a genuine problem and provide a solution.
1. The Most Important Question: "Why?"
We have an idea. How do we explain it to the world? How do we show that we’re the right people to execute it? And how will it work? All these questions hinge on the "why." We should always start with it, both personally and in business.
"If we know why, we'll find the way."
By thinking from first principles, we can take action to achieve our objectives, making order out of chaos. These are the fundamental building blocks of any idea.
Consider this essay: it’s made up of paragraphs, sentences, words, and letters. Spell the letters correctly, and words appear. Connect the words, and sentences are formed. If the sentences make sense, paragraphs take shape. And if the paragraphs convey meaning, the essay is worth reading.
The same applies to business: we must first build the foundation. We start by gathering data to support our reasoning. Human understanding is rooted in mathematics and logic. If the data is consistent and the methodology sound, we can prove we’re on the right path. Then, we craft a compelling narrative to let the world know we’re onto the next big thing.
"Today you are You, that is truer than true. There is no one alive who is Youer than You." Dr. Seuss
The question "Why am I me?" has been a lifelong philosophical quest for many. The Oracle of Delphi’s command "know thyself" encourages self-reflection and self-awareness. In business, this self-discovery is akin to finding founder-market fit. We must convince a team, investors, and a market niche to follow our lead, but first, we need to know who we are.
Then, we must demonstrate that we can execute. To do so, we get out of the building. To explain why our idea will work, we develop a hypothesis, which we test through various means. The hypothesis is adjusted based on the results and retested until it aligns with observed phenomena.
This process should culminate in a Minimum Viable Product (MVP). From there, we iterate and test relentlessly. Hypotheses become tools for gathering data and making informed business decisions.
The pursuit of "why" should never end because it always leads us to write true sentences.
2. Start with One True Sentence
As Ernest Hemingway once said in A Moveable Feast, "The writer's job is to tell the truth," (...) "All you have to do is write one true sentence." From there, the rest will follow. In this sense, a writer is similar to an entrepreneur. Once we know why, we need only one true sentence to build upon.
"It’s in the game," "Think different," and "Just do it."
In business, it’s crucial to distinguish between truth and fiction. Success and longevity come from understanding the truth about our customers, market, niche, capabilities, competitors, economy, and the world.
But how do we do this? To succeed and consistently meet our goals, we must strive to understand reality as it is—not as we wish it to be. The most significant challenge is doing so when it contradicts what we love or our core beliefs. Often, we want to hear, see, and know only what we prefer to believe.
Our desire to be right can sometimes overshadow our need to discover what is true. We may hold onto our opinions without adequately testing them. Confronting our mistakes or character flaws can be uncomfortable, and we may feel offended if someone points them out.
Instead, we should accept that lying is a destructive process that ultimately harms us. Aim to be radically open-minded. By turning accurate feedback into actionable steps, we can make better decisions, learn more, and strive to realize our full potential.
Remember, there are many mysteries, but the first step is always one true sentence.
3. The Blindspot Trap
Regarding mysteries, everyone has blind spots. I realized this early in life due to my poor eyesight, which made me aware that others see things differently, often more clearly. While I may not fully grasp the extent of this, I recognize its reality.
This awareness led me to understand that I might also have mental blind spots. Everyone perceives the world differently because our brains are wired uniquely. Some excel at seeing the big picture, while others focus on details. Some are creative but unreliable, while others are dependable but unimaginative. There are linear thinkers, lateral thinkers, and so on.
"What you don’t see is what you get."
That’s why it’s crucial to acknowledge that blind spots emerge when we believe we can see everything. However, no one can see the full picture of reality alone. We need a complementary team to cover all the angles—a challenging yet essential task.
Naturally, people cannot appreciate what they cannot see. So, we need to develop mental models to enhance our vision.
4. Mental Models
A good starting point is considering the Lindy Effect—the longer an idea has been around, the longer it’s likely to remain valid. If a business can withstand the test of time, its odds of long-term success increase.
The late Charlie Munger possessed a remarkable mind. He cultivated it by observing the world and analyzing it through mental models. He taught us the importance of a meta-model, a model of models. Our minds should continually grow, adapt, and refine mental models, leading to what he called "worldly wisdom."
"I would say you are not restricted to living people when picking your mentors. Some of the very best people are dead," Charlie said. To build a high reference level, we must carefully choose our sources of information. He had around 100 models. Here’s one worth noting:
"Invert. Always invert."
How to be miserable? Addictions, envy, greed, and resentment. How to fail? Be unreliable, try to do everything yourself, give up early, and never invert.
"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid instead of trying to be very intelligent," Charlie used to say.
When it’s hard to know where to start with creating A, it’s often easier to understand non-A and avoid it. Vaguely right beats precisely wrong.
The lesson here is that it’s wise to be contrarian and develop a new perspective—not for the sake of it, but because the facts and time will eventually reveal the truth.
5. Game Theory Puts Everything in Perspective
Engaging in games offers us a fast-tracked way to understand how facts and time interact. These simulations unravel fundamental truths at a speed that real life often cannot match. By aiming for Nash Equilibrium in our daily lives—whether in business or personal matters—we can better contextualize our circumstances and focus on resolving our own "Prisoner's Dilemma" by interpreting information accurately.
Game theory guides us to optimal decisions in scenarios where independent and competing actors interact strategically. Through playing numerous games, we expose ourselves to edge cases and challenging situations, which sharpen our decision-making abilities. To consistently make the best choices, we must be radically open-minded, weigh others' perspectives believably, and seek out the underlying causes.
As you navigate these strategic situations, remember the Merovingian's words: "You see, there is only one constant. One universal. It is the only real truth: Causality. Action, reaction. Cause and effect.”
Wisdom lies in knowing the right path and taking it. However, "knowing what to do" is distinct from "doing something well." Wisdom demands discipline, while intelligence often comes from carefully chosen self-indulgence. Wisdom is broadly applicable, while intelligence tends to be more specific and personal.
Wisdom brings peace of mind and balance, whereas intelligence can often lead to dissatisfaction and hubris.
Many businesses operate on hubris, resulting in Catch-22 situations and colossal failures. Think of figures like Bernard Madoff, Jordan Belfort, or companies like Theranos, Enron, and FTX. These entities appeared to have an edge, but ultimately, it was all a façade. They gambled with game theory and lost.
Is an idea a result of choice or causality?
This question transcends our understanding and will continue to spark debate. Perhaps only the Matrix Architect himself, Jim Simons, who cracked the code, can answer it.
Simons achieved remarkable success, both for the NSA and Renaissance Technologies. He assembled a team of brilliant minds and created systems, models, and procedures that solved mathematical problems and eliminated anomalies, while others relied merely on narratives. Simons’ Medallion Fund applied a scientific approach, using massive computing power to discover, validate, and trade based on patterns, resulting in the most outstanding returns ever known. For him and his select customers, game theory worked.
While competing perceptions and ambiguity can lead to the Rashomon Effect, progress comes from our quest to find good explanations. And if we can't find the answer, sometimes even a valuable enemy can offer insight.
6. Foes' Quantum of Truth
Our minds, not our foes, lure us to evil ways.
When testing the validity of a claim, theory, or business move, it can be revealing to consider the perspectives of those who oppose it.
Take, for instance, the United States' bold move during the Cold War: the Moon landing. Despite the conspiracies that arose, the Soviet Union—the U.S.'s greatest adversary at the time—did not contest the claim. If America's biggest foe didn't challenge the Moon landing, the chances are that it was indeed a true story.
Another useful method is to triangulate an idea by examining how relevant opposing forces respond to it. Identify three key actors with differing interests and analyze their opinions. It's crucial to select individuals, companies, or states that do not share a common agenda. If they do, treat them as one entity and keep searching until you find truly independent voices. Those in the same boat often share the same perspective, so diligent inquiry is essential for accurate triangulation.
For example, consider the "birther movement" that questioned President Barack Obama’s citizenship. In this case, Hillary Clinton (Obama’s rival in the 2008 Democratic primaries), Republican Senator John McCain (his opponent in the 2008 general election), and even Donald Trump eventually acknowledged that Obama was born in the U.S. These three influential figures, despite being Obama’s adversaries and lacking a shared interest, supported his legitimacy. This suggests that the claims against his birth certificate were unfounded.
Thus, even our foes can help us uncover the truth. In some cases, they may be our last resort, but the final frontier always lies within us.
7. Everybody Lies. Use Reason to See the Light
Dr. Gregory House, the antisocial maverick doctor, excelled at diagnosing the most complex and rare medical cases. His success stemmed from a simple yet reliable principle: every patient has motives to hide information, even when their life is at risk.
Given that everybody lies—and it’s rarely Lupus—House had to dig deeper to find the root cause. He relied on Holmesian deduction to build his reasoning, supported by a team that challenged him through differential diagnosis.
The key lesson from Dr. House is that our most reliable tool is reason.
Reason is both the starting point and the final tool in our quest for becoming our best selves. We must use it to build a system of principles that shapes how we see and interact with the world.
Moreover, we should continually challenge, iterate, and improve that system. Wisdom is the result of action, not a prerequisite. Striving for wisdom makes us better people in the end.
We can only control our minds and how we respond to the world around us. Therefore, we should persistently seek the truth in both business and life. If we do so diligently and act accordingly, we are likely to end up better off. When everyone else is lying, reason is the light that guides us.
Conclusion
The pursuit of truth demands exploration, continuous learning, and independent thought. To foster positive outcomes, we must first discover our "why" and then distill it into a single, true guiding principle. Acknowledging our blind spots, crafting mental models, and rigorously testing our assumptions with data are essential practices. We must also apply game theory, scrutinize opposing viewpoints, and, most importantly, use reason to construct a solid framework of principles.
By embracing reality as it is—rather than as we wish it to be—and committing to the relentless search for truth, we unlock the potential to achieve our goals. This journey, though challenging, is deeply rewarding. The excitement of discovering something new is always present. To navigate it successfully, we must remain radically open-minded, continually refining the perspectives through which we view the world.
The pursuit of truth is not just a journey; it is a transformative process of becoming.
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Note: I acknowledge that my understanding of the truth is limited. My goal is to learn how to navigate life while still being behind the veil of ignorance. Therefore, this essay is meant to be exploratory rather than exhaustive. I have uncovered a few lenses through which I view the world, and I hope they may offer some value to you as well.