Earlier this year, my dad gave me some amazing advice. Specifically, he challenged me to get from the “how” to the “what”. As an engineer, my daily job is to figure out how-to-do, but rarely do I spend time thinking about what-to-do. I was mind blown.
Now, of course, I can’t complain if I remain an engineer my entire life. It’s not a bad livelihood at all. But if I ever want to lead a team or lead a company, I need to start developing my intuition on what-to-do. Everyone should start at the how-to-do level to know the details of implementation. But there will always be more people who know how-to-do than what-to-do.
I started to realize that I needed context, and how to make judgments based on that context. I knew I had a long way to go. Here’s my strategy for becoming more of a what-oriented thinker, which involves understanding what exists today, the rule-setters, and the disruptors of tomorrow.
1. Learn about the market. (What Exists Today)
The market is a place to exchange goods and services. Businesses are the engine of the economy because they work as a collective unit to provide these goods and services. Customers then choose what to buy, and this is key because this tells us what customers want. Once we know what customers are lacking or what they wish for, we can start thinking about where there are other gaps to fill.
This first step is aimed at understanding the context. Of course, it’s impossible to understand every market sector. In my case, I would choose just two or three to have a deeper-than-usual understanding:
- IT/Software Services (because we are currently in the information age; also, it’s what I work in)
- Energy (because this powers everything)
- Real Estate (because we all need land)
2. Understand how the government regulates the economy. (The Rule-Setters)
I completely underestimated the government’s role in balancing out the economy, until recently. I remember that the US government bailed out several industries in 2008 with $700B, and they spent even more money in 2020 ($2T). Now in 2021, they seek to spend another $2T. They are literally printing money, which will drive up inflation because each dollar we have in our pockets is going to be worth less than before since there’s more currency in circulation.
But wow, I didn’t think that hard about it before, and now understand that it’s quite important to know.
Some other (non-exhaustive) levers that the government uses to regulate the economy are:
- Setting interest rates on borrowing money (lower interest rates to stimulate growth and higher interest rates to slow growth to prevent growing too fast and crashing)
- Freddie Mac and Fannie Mae guidelines on purchasing mortgage loans (that mortgage loan you got from a bank actually gets sold to these government agencies)
- Controlling the amount of currency in circulation (how much currency bills exist in the hands of all collective people)
I’m still a new learner to this, so I still have a long way to go. I’ll be spending more time reading on the US Treasury’s website to get more authoritative information rather than reading secondary commentary articles that shield the raw numbers. No more shying away from the primary sources.
3. Keep an eye on emerging startups. (The Disruptors of Tomorrow)
Finally, once I’ve grasped the above two, I can start looking at new things in the making and identify interesting opportunities. These startups are unsatisfied with the way things are, and they believe strongly that no other company in existence already will solve the problem they want to solve. You need pretty strong conviction to start your own company because there’s a ton of friction in doing so.
There are different stages in which we can monitor startups. In backward order of maturity, I believe these are the ways:
- Watching for new IPOs
- Watching for newly filed IPOs
- Watching for which startups get funded by which funder and what rounds (seed, series-letter)
- Watching for Kickstarter ideas in their infancy
New learner to this as well, but I’m hoping these steps that I’ve laid out here can get me going from the “how” to the “what”. I don’t know how long it will take me to get there, but I plan on making the journey, and I hope you join along with me.
Have a great blessed upcoming week!