The Natural Selection of Time
I remember 2016 very clearly because it's the year I first became a Dad. My son was born in November 2016. Something else pretty big happened that month that made a lot of people very angry. Donald Trump won the 2016 election. I remembered thinking people would always have such a negative view of 2016 and that felt strange to think about for my son's birth year. John Oliver even did an entire segment to end his season of Last Week Tonight in 2016 called "F**k 2016." He burned the year in effigy.
I've always had that expectation of "negative vibes" for 2016 in the back of my mind. Fast forward, it's been over 5 years and I've started seeing 2016 nostalgia pop up on TikTok reminiscing on the days when Rihanna still made music, Stranger Things had just come out, and the mannequin challenge had gone viral. What a difference the passage of time can make.
Just this gradual adjustment for the vibes surrounding 2016 has made me reflect on how much impact time can have on how we think. Making decisions, especially in times of high emotional stress like right now, is not just a function of pros outweighing cons. Time will impact how we see the outcome of any decision we make. I came back to an idea I'd written about before (a long time ago), this idea that time will tell what opportunities were meant to survive and how we can do the most to take advantage of the time we have.
When I had previously written about the natural selection of time I focused mostly on how people often thought they were too busy to take advantage of great opportunities but that we should, instead, let opportunities survive for as long as possible and then take advantage of the best things that stick around.
Today the natural selection of time is, for me, more about the impact that time has on our choices, our perspectives, our investments, and our commitments. Time is the only thing that we can't actively experience, we mostly experience time in retrospect. And most of the time our own casual reflections of time are super wrong.
We're All Wrong in Retrospect
The changing perspective of how people view 2016 is an example of rosy retrospection where people often remember things to be better than they were. I've seen the same rosy bent in the investing world.
People often think the investments they passed on had overwhelming evidence to support their decision. They also think that the investment mistakes they did make were the most logical choices at the time. Very few people take any time for honest reflection on their past decisions.
One of the most effective ways to make sure you have an accurate depiction of your past decisions is to keep a journal. I've always liked the idea that time is like walking through a river. You'll never pass through the same water again, just like you'll never experience the same moment again. So you'd better keep a record of it.
Over the last few years people have made some pretty bad investment decisions based on an artificially inflated environment. Now everyone is licking their wounds. There has never been a better time than now to create the habit of writing down your reflections on this experience because you had better believe things are going to get crazy again. And when you're crafting your investment criteria in the bull market of 2031 you're going to appreciate the ability to read your own advice telling you to be more thoughtful.
Weighted Average Cost of Commitment
Time not only impacts the way we view our previous decisions. Time also tricks us into making decisions based on a very short time frame. People talk a lot about opportunity coming as the result of being in the right place at the right time. You'll dramatically improve the quality of your commitments if you make them with a long time horizon in mind.
Most people feel "adrift" right now, not because they have no options but because they have too many options, none of which are sure to work out. And people feel paralyzed by the possibilities. David Perell calls this a "commitment crisis." The idea that because people often have such a short time-frame in mind they fear long-term commitments that limit their optionality. Where the Y-Axis is value and he X-Axis is time people are "hugging the X-Axis."
The problem with hugging the X-Axis is that time moves on with or without you. If you make no commitments then you only lose out on time. So you have to make commitments. You have to make decisions. The question is whether you're making the right commitments that will drive the most long-term value. The advice I've given to several folks is to create a "weighted average equation" for making a decision. The first step in that equation is determining what you’re solving for.
One of the best things to solve for is minimized regret. Jeff Bezos talks about his regret minimization framework:
"I knew that when I was 80 I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the Internet that I thought was going to be a really big deal. I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried."
Once you've identified the thing you want (e.g. "participating in this thing called the internet") then you create a list of risks that you'll want to minimize. The best example of this came recently in a conversation I had with someone who was choosing between two different jobs with the long-term intention of becoming a founder. He could either work at a seed-stage startup or a later-stage company.
If he lets short-term time frames determine his definition of success then he would solve for things like comfort and compensation. But the natural selection of time is always long-term. In the long-term how will time impact the outcome of your decisions?
When you prioritize the long-term outcome of success as a startup founder you start to identify key risks that you can allow your short-term decisions to help de-risk your experience in the future. The most common risks to a new startup founder? Product-market fit. Co-founder risk. Hiring risk. The ability to sell. The ability to fundraise.
So what can you do with your decision today to de-risk your outcome tomorrow?
The Natural Selection of Time
We should be better at reflecting on our decisions over time. We should create frameworks that allow long-term implications to more closely impact our short-term decisions. But at the end of the day Matt Damon's words ring true: "Fortune favors the brave."
The biggest idea behind the natural selection of time is that, while we can do everything to prepare and adjust for time, time will pass on with or without you. And it's up to you to take advantage of opportunities when their time has come.
"Opportunities that present themselves to you are the consequence—at least partially—of being in the right place at the right time. They tend to present themselves when you're not expecting it—and often when you are engaged in other activities that would seem to preclude you from pursuing them. And they come and go quickly—if you don't jump all over an opportunity, someone else generally will and it will vanish." (Marc Andreessen)
Writing in a journal helps you crystalize your own thinking. Post-mortems are the act of reflecting on that crystallization to more accurately judge the quality of the decision making. And creating a weighted average cost of commitment will more effectively align short-term decisions with long-term outcomes.
But at the end of the day we have to act. We have to commit. Right now the investing world is filled with indecision. No one wants to be the bold or the brave in 2022 for the same reasons no one wanted to be the party pooper in 2021. We fear the judgement of the people around us when in reality the only judgement that matters is time.