To become a truly great investor, you must first experience the chaos of being a business operator. Running different types of companies, including failures, builds the firsthand knowledge and intuition needed to accurately assess the quality and risks of a potential investment.
The primary threat of Large Language Models to the SaaS industry isn't that they will build better software, but that they will enable the creation of 50 to 100 competitors for every existing player. This massive increase in competition will inevitably compress profit margins for everyone.
While lucrative for top performers, being a content creator is fundamentally unscalable. The business is entirely dependent on the individual's daily effort and presence. If the creator stops producing content, the revenue stream disappears, creating a high-pressure 'prison' for the individual.
For many entrepreneurs, angel investing is a poor use of capital, akin to playing roulette. While it feels like 'paying it forward,' it often results in tying up millions of dollars in illiquid assets with a very low probability of a meaningful return, underperforming simpler investments.
Society instinctively criticizes people who defy their established labels, like a CEO who DJs or a celebrity passionate about prison reform. True freedom requires the 'courage to be disliked'—the willingness to pursue authentic interests even if they seem inconsistent or confusing to others.
The ultimate advantage in asset management, used by Warren Buffett and Bill Ackman, is 'permanent capital.' This structure, often a public company, prevents investors from withdrawing funds during market downturns. It eliminates the existential risk of forced selling that plagues traditional hedge funds.
While having a clear, formulaic professional identity (e.g., 'the B2B SaaS investor') helps with fundraising, being interesting and unlabelable attracts more serendipitous and potentially groundbreaking opportunities. People with diverse passions create a magnet for other interesting people and ideas.
The business model of owning Airbnb properties is highly vulnerable to regulatory changes. A single city council decision can effectively destroy a profitable operation overnight by imposing new restrictions, as seen in cities like Vancouver and San Francisco. This makes it a fundamentally fragile business.
Instead of being jealous of someone's success (the output), ask if you're jealous of their daily work process (the input). If you wouldn't want to live their day-to-day life, you have no reason to envy their results. This reframes jealousy into a compass for finding work you truly love.
An agency's stability is determined by how difficult it is for clients to leave. High-stakes services like accounting create sticky relationships and are great businesses. Volatile, project-based creative work suffers from a feast-or-famine cycle because clients can switch providers with little friction.
A powerful, non-obvious moat for software is deep integration with hardware. DJ software Serato partnered with hardware makers like Pioneer, becoming the industry standard. This makes switching extremely costly for users who have invested thousands in hardware, creating a durable competitive advantage.
Unlike scalable digital businesses, real estate has a hard ceiling on returns. You can't innovate on a property to dramatically increase revenue without massive capital expenditure. This lack of operational leverage limits its upside compared to businesses where profits can be reinvested into growth initiatives.