AUDIENCE MEMBER 00:00
Hi, so my name is Elizabeth and I’m an undergraduate here in Paul Merage. And I – my question simply was what is the most valuable piece of advice you have received over the course of your career?
MOHNISH PABRAI 00:13
You know to answer your question, I don’t know whether it's advice, but I would say that there are – what I would say the important thing for me is certain mental models and some of them came about from, you know, people, some of them I read about different things and these mental models have been very important.
So for example, one of the mental models that I think might be useful to this group is that there are 168 hours in a week and when you start working full-time, your employer is expecting you to show up for around 40 hours, 40 or 50 hours or something like that. And if you live close to where you work and you won’t have much time with commutes and such.
And even if you take out time for everything else, you know, eating, sleeping and etc., there’s probably at least another 40 hours available to you for other activities. You can spend a number of different ways and one way that the second 40 hours can be spent is it can be spent on your passions, if you will. It could be spent on getting a start-up off the ground, it could be spent on – in Sanjay's case investing that $5000, so in ten years it becomes $25000, right.
So there’s a chunk of time all of us have and in my case, you know I only had one employer but when I knew I wanted to do a start-up and leave, I didn’t just leave because I didn’t have any money, I use this mental model.
So what I did is I basically reduced my intensity of work for the employer to be just about firing level, you know, I was no longer interested in being employee of the month or employee of the year anything like that, I wanted to take it down where I was just above that he’s not so bad they’re gonna fire him but that’s about all we're going to get out of him.
And I spent all the time, you know, early morning before I went to work, in the evening that I came back and weekends on getting my start-up off the ground, and I put all my energy there and it took about 9 months of running this kind of dual life by which time the start-up had some revenue, I have 2-3 months of visibility and I resigned.
And when I resigned, my boss said: “You know, we couldn’t figure out what happened to you in the last 6 or 8 months." I said yeah exactly, I said: “You know, my point was to just, you know, focal.” He said: “Yeah, it wasn’t so bad they want to fire you but you were just gone, there was like something, there is –" I said: “That was exactly the point, I want to be just above firing level.” (Laughter)
So the mental model of that you can do two things at one time within the same week is an important one.
The mental model of understanding that compounding is the eighth wonder of the world is an important one. There are a few of these models which basically become important.
Another mental model I probably got late in life, probably I was in my mid-30s is that humans want the truth, they don’t particularly care what it is. So for example, let’s say I did something untoward or negative or I had some results that were not that great.
If I am absolutely candid about owning up to those, generally speaking as humans we know that we are subject to screw-ups. And so the – something that I didn’t understand was that people don’t particularly care that you screw up, what they care about is that you're candid about the screw up.
And so what I found is that when you have candour around screw ups, you strengthen relationships and you actually deepen trust and all those things have huge positive impact long-term.
So these are, you know, I think that Munger is kind of – what I learn from Charlie is to be a collector of mental models. And one of the reasons why these mental models become important because our brains are kind of very screwy in terms of how we process things. There’s a lot of kind of glitches in it. And so these mental models help us get around a lot of these glitches and such.
So that’s kind of what I would say is some of the things to think about.