what i really learned this summer

“Startups and VC funds won’t care that you interned for a trading shop. Skills aren’t transferable really.”

A VC partner, and somebody I really respect, told me this right before I decided to take my offer at a top trading firm for the summer. I took it because I thought it would give me options and possibly broaden my horizons, neither of which, in retrospect, was a super reason for ignoring the above advice. Luckily, sometimes we make the right decisions for the wrong reasons.

Whenever somebody asks me what I learned this summer, I usually say, “Probably more than I have the rest of my life combined,” which is true. It turns out that what I really got out of my summer was a whole new way of thinking about the world, something that’s applicable to everything from trading to business to product to politics. The premise of this framework is:

Assuming that everybody else is stupid is usually wrong, and always arrogant.

In trading, it’s really important to be wary of adverse selection. If you’re buying something that you think is worth 10 for 9, and you keep buying and buying, and another firm keeps selling and selling to you, it’s pretty likely that they think it’s worth 8, and they probably didn’t pull that number out of their collective ass. Based on this, you should probably start worrying that they might actually be right, and you might actually be wrong, or you are likely to lose a lot of money.

This is applicable to just about everything, actually. If you make a statement, and somebody (or a lot of somebodies) don’t agree with you, it’s probably worthwhile to reconsider that they are not pulling their opinions (or facts) out of nowhere, and you should accordingly update your beliefs. If there is an idea that nobody else is trying, you should probably consider that it’s possible that nobody else is trying it. If there is an empty subway car during rush hour, you should probably consider why nobody is on it.

In a way, I guess this also means that I now strongly object to Peter Thiel’s argument that “you should believe something that nobody else does.” If you do this, you are, with overwhelming probability, in the wrong, unless, again, you can come up with an explanation for why everybody else is actually wrong and you are right; a pretty easy way to test this is to have to convince a lot of people of your “unique belief.”

It’s important to be bold if you want to succeed in the Valley, and it’s important to be unafraid to try things. But if your argument is that “I believe that puppies actually can use Snapchat, and because nobody else believes it, I’ll be successful” and you haven’t figured out why nobody else has tried it yet, you might want to reconsider.

It’s not always a bad thing to be a salmon swimming upstream. Just remember that the fish swimming downstream have a reason that they’re doing so, and most of the time, it’s because there’s a bear at the top.