Bezos, Musk, & Buffett See The World Differently, Because They See Time Differently
“The greatest CEOs that we ever studied manage for the quarter… century.” ― Jim Collins
Over the last 5 years, I’ve spent hundreds of hours studying and writing about self-made billionaire entrepreneurs like Jeff Bezos, Bill Gates, Warren Buffett, Ray Dalio, and Elon Musk. These innovators have built multi-decade track records like few others in history. Cumulatively, they have donated tens of billions of dollars and helped create world-changing products. In other words, the planet would be very different right now if they had never been born.
One of the most surprising patterns they all share is that they see in 4D while most people see in 1D:
- Dimension 1: Focus on one field (specialization)
- Dimension 2: Learn across disciplines, apply to a specialty (polymath)
- Dimension 3: Think vertically from hacks to principles (mental models)
- Dimension 4: Think hundreds of years into the past and future (time)
In previous articles, I’ve written about the first three dimensions. This is the first time I’m writing about the fourth one...time. This is probably the least understood of the four dimensions…
The Power Of The Long Game
Where almost all public company CEOs, not to mention people in general, plan days, weeks, and months ahead, these visionaries think decades or even centuries into the future. And they don’t just plan: They put their money where their mouths are. They make bold bets that won’t pay off anytime soon — and that have a high probability of failure.
In fact, I would say that these long-term thinkers redefine what it means to think long-term.
When I first came across this surprising observation, I wrote it off as a quirk. But as I’ve studied more of the world’s top entrepreneurs — taking an especially close look at Jeff Bezos — my opinion slowly shifted.
I started to wonder whether playing the long game is actually a universally powerful and foundational life and business strategy that we should all adopt.
After reading this article, you’ll wonder the same…
Jeff Bezos’ Unique Approach To Long-Term Thinking
Take this Jeff Bezos interview where he makes a very surprising proclamation:
I believe on the longest time frame — and really here I’m thinking of a timeframe of a couple of hundred years — I get increasing conviction with every passing year, that Blue Origin, the space company, is the most important work I’m doing.
This statement is particularly fascinating on two accounts:
- Most people haven’t even heard of Blue Origin.
- Amazon is one of the largest companies in the world.
What is Bezos seeing that we’re not?
Explaining why his space company will be more important than Amazon in the future, he says…
I’m pursuing this work [with Blue Origin] because if we don’t, we will eventually end up with a civilization of stasis, which I find very demoralizing. I don’t want my great grandchildren’s great grandchildren to live in a civilization of stasis.
According to Bezos, the cause of the stasis is an upcoming energy crisis…
If you take baseline energy usage globally across the whole world and compound it at just a few percent a year for just a few hundred years, you have to cover the entire surface of the Earth with solar cells. So that’s the real energy crisis. And it’s happening soon, and by soon, I mean just a few hundred years. And so we don’t actually have that much time.
What jumps out to me here is the word ‘soon’ denoting a few hundred years. For most people, soon means a few days. Bezos is thinking on a time scale where hundreds of years is a blip in a Universe. Finally, Bezos explains the role that his space company, Blue Origin, will play in the solution:
Now, take the alternative scenario where you move out into the solar system. The solar system can easily support a trillion humans. If we had a trillion humans, we would have a thousand Einsteins and a thousand Mozarts. And, unlimited, for all practical purposes, resources from solar power and so on.
As soon as you read these words, you start to realize that Bezos is coming from an entirely different paradigm.
And these words only scratch the surface…
- Bezos believes Amazon is just getting started even though it’s nearly 30 years old. He refers to this mindset as the “Day One Philosophy”, and it’s baked into Amazon’s culture.
- Bezos is willing to repeatedly lose billions of dollars on bold experiments that are likely to fail and will take seven years for the experiment to pay off.
- Bezos’ daily focus is three years into the future. Most CEOs focus on putting out fires, dealing with quarterly shareholders, and driving to hit their quarterly earnings. Bezos explains how he does things differently in a fascinating interview with Forbes, “Friends congratulate me after a quarterly-earnings announcement and say, ‘Good job, great quarter.’ And I’ll say, ‘Thank you, but that quarter was baked three years ago.’ I’m working on a quarter that’ll happen in 2021 right now… I get to work two or three years into the future, and most of my leadership team has the same setup.”
- Bezos invested tens of millions of dollars into a 10,000-Year Clock. Describing his philanthropic investment, Bezos explains why he thinks it’s important to build a symbol for a long-term time horizon: “If [humans] think long term, we can accomplish things that we wouldn’t otherwise accomplish…We humans are getting awfully sophisticated in technological ways and have a lot of potential to be very dangerous to ourselves. It seems to me that we, as a species, have to start thinking longer term.”
Why would Jeff Bezos do all of these quirky things:
- Say it’s Day 1 at 26-year-old company.
- Purposely lose money for 10 years in order to invest in the long-term.
- Spend almost all of his time on activities that won’t pay off for years.
- Think 200 years into the future of energy.
- Invest tens of millions of dollars into a clock.
Playing the long game isn’t just one of many mental models for Bezos. In many respects, it is THE mental model. In other words, a long-term time horizon is the “decoder” that makes Amazon’s iconoclastic strategy over the years make sense.
Without long-term thinking, Amazon would never have:
- Expanded from the world’s largest bookstore to the world’s largest everything store.
- Focused on deferring profits for most of its first 20 years.
- Focused on making bold bets on customer experience (ie — free two-day shipping) that would result in significant losses in the short-term.
- Kept experimenting with a third-party sellers program after the first two experiments (auctions and Zshops) flopped.
- Structured employee compensation plans to heavily focus on long-term incentives.
And Bezos isn’t alone.
Sam Altman, the former president of Y Combinator, the largest startup accelerator in the world, refers to long-term thinking as “one of the few arbitrage opportunities left in the market.” He adds, “When you’re thinking about a startup, it’s really worthwhile to think about something you’re willing to make a very long-term commitment to because that is where the current void in the market is.”
Self-made billionaire Ray Dalio is famous for studying cycles going back hundreds of years in order to understand the economy…
Warren Buffett is famous for only investing in companies and individuals he could see himself investing in for decades into the future. He has built his whole career on the power of compound interest and compound learning. He has purposely kept his lifestyle expenses low so that his money could compound. In addition, he has spent 80% of his time reading and thinking for his entire career.
In a TED interview, Elon Musk shows that he also thinks about time differently than almost everybody...
I look at the future from a standpoint of probabilities. It’s like a branching stream of probabilities. And there are actions that we can take that effect those probabilities or that accelerate one thing or slow down another thing, introduce something new to the probability stream.
Let’s unpack what he’s saying:
- There are an infinite number of potential futures (of ourselves of individuals and of humanity).
- These futures have different probabilities of happening.
- It is possible to shape that future by altering the probability streams.
Here’s what people like Altman, Musk, Buffett, Dalio, and Bezos see that almost no one else does…
The Long Game Is the Archimedes Leverage of Success And Impact
I believe a long time horizon comes closer than any other factor to being a “magic bullet.”
Over the last several years, I’ve read hundreds of academic studies and books on scientifically validated approaches to being more successful and impactful, and found that many factors correlate with success:
- Delaying gratification
- Deep passion and curiosity
- Deliberate practice
- Productivity output
- Diverse relationships
While each of these play an important role, a long time horizon is essential all of them.
If you’re thinking long-term, then:
- The benefits of delayed gratification become obvious. You aren’t sacrificing the short term for an amorphous future. You’re sacrificing a much worse investment for a much better one. Over the period of a day, taking “time out” to reflect, exercise, learn, rest, build relationships, and experiment are distractions. Over the period of a life-time, they are the best investments we can make.
- Doing something that is extremely meaningful to you is absolutely critical. You can sustain a job, marriage, project, or company that bores or doesn’t inspire you for a short while, but not for a long time. A long time horizon goes hand in hand with purpose and passion. This purpose helps you work harder, learn harder (deliberate practice), create more (productive output), have more soul and be willing to overcome challenges (resilience).
- Not only yourself and your business are affected, but your relationships. Think of your most “successful” relationships. Chances are they evolved over a long time and involve constantly giving without expecting anything in return. A long time horizon is almost a prerequisite to defining a healthy, productive relationship in any realm.
What follows is the most comprehensive summary on the transformative effect of long-term thinking that I’m aware of…
The Top 3 Reasons The Long Game Works Wonders
#1: Thinking long-term gives you an “arbitrage” advantage because almost no one else thinks long-term
“If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue.”
― Jeff Bezos
The biggest innovation opportunities take many years to pay off and have low odds of success. Therefore, many traditional CEOs don’t pursue them. This means that Bezos, Musk, and others have less competition for super high-quality investments. This approach has given Amazon, Tesla, and SpaceX several-year huge head starts against other companies.
Let’s break it down a level deeper…
- In the market of business opportunities, there are short-term actors and there are long-term actors.
- Short-term actors only pursue opportunities that pay off in a short-period of time. Long-term actors pursue the best opportunities, whether they are short-term or long-term.
- Therefore, long-term actors have a larger basket of opportunities to choose from.
- Longer-term opportunities are almost always the largest opportunities.
- There is little competition for long-term opportunities.
#2: Having a long-term time horizon helps you make better decisions
Long-term thinking supports the failure and iteration required for invention, and it frees us to pioneer in unexplored spaces. Seek instant gratification — or the elusive promise of it — and chances are you’ll find a crowd there ahead of you.
— Jeff Bezos
In Time Paradox, one of the most recognized psychologists of all time, Stanford professor Philip Zimbardo, concluded that our attitudes toward time have a profound impact on our lives that we seldom recognize. Our time horizons are as invisible to us as water is to fish, but they have everything to do with how we make decisions and how successful we are.
After surveying more than 10,000 people with the Zimbardo Time Perspective Inventory, Zimbardo found that attitudes toward time fall into five categories:
- Past positive people focus on the “good old days”.
- Past negative people focus on all the things that went wrong in the past.
- Present hedonistic people live in the moment, seeking pleasure and avoiding pain.
- Present fatalistic people feel that decisions are moot because, “What will be, will be.”
- Future-oriented people plan for the future and trust that their decisions will work out.
Each of these mindsets is like living in a different world. And you can probably guess which mindset yields the best results:
Future-oriented people tend to be more successful professionally and academically, to eat well, to exercise regularly, and to schedule preventative doctor’s exams. The mantra of a Future is “meet tomorrow’s deadline, complete all the necessary work before tonight’s play.” Futures consider work a source of special pleasure. Tomorrow’s anticipated gains and losses fuel today’s decisions and actions.
When challenged to solve maze puzzles as quickly as they could, present-oriented people responded very differently from future-oriented ones.
The Presents started immediately from the start, moving their pencils through the maze. The Futures did not move at all at first, looking for the goal, then working backwards to the starting point, checking out dead ends along the route. The Futures always won.
Bottom line: Our “time horizons” determine our decisions. Decisions determine our destiny.
#3: Long-term thinking leverages the power of compounding
Einstein famously called compound interest the eighth wonder of the world. Warren Buffett said that compound interest was one of the top three factors that led to his success.
If we do the right things consistently over a long period of time, the future we want becomes more and more inevitable because our actions compound upon one another over time.
Just as a small snowball being rolled down the hill slowly picks up snow with each rotation and becomes a huge one:
Or how a tiny domino can eventually knock over a huge one if you give the momentum time to compound upon itself:
With both the snowball and the dominoes, the ending is inevitable.
In the beginning of earning compound interest, you don’t see the benefits of compounding. Your results in the beginning are tightly correlated with your effort, but by the end, the interest is doing almost all of the work for you.
Most of us learn the power of compounding when we learn about the incredible power of financial compound interest, but it applies across any domain where positive feedback loops occur for a long period of time such as:
- Business Strategies
One of the best examples of compounding is this chart showing Amazon’s market value since it went public in 1997:
In the past few years, Amazon’s market value has more than doubled. Put in other words, in the last few years, Amazon has grown in value just as much as it did in the previous 20 years!!
To summarize, the long game gives you three core benefits…
- Gives you an “arbitrage” advantage
- Helps you make better decisions
- Leverages the power of compounding
Taken together, these three benefits show how long-term thinking may be the fundamental Archimedes lever for creating a successful, healthy, fulfilling, and impactful life. Without it, the odds of having any of these go way down.
But to fully understand the power of long-term thinking, it’s critical to understand the hazards of short-term thinking...
We’re Wired To Think Short-Term. This Helps Us In The Short-Term And Destroys Us In The Long-Term.
In a TED talk, the late and renowned Harvard Professor Clayton Christensen shares a story that perfectly captures the situation:
As Christensen tells it, when he graduated from Harvard Business School, all of his classmates had ambitious plans to make an impact and be successful. At their early class reunions, everything seemed like it was on track. People were sharing all of their successes.
However, as time passed by, he noticed something surprising. People’s lives got worse and worse on many levels:
- They got divorced
- They became estranged from their kids
- Some even got in trouble for fraud
- They suffered poor health
Christensen explains why:
Everyone here is driven to achieve. And when you have an extra ounce of energy or an extra 30 minutes of time, instinctively and unconsciously you’ll allocate it to whatever activities in your life give you the most immediate evidence of achievement.
In other words, his classmates got stuck in short-term thinking.
A second quote builds off Christensen’s world-renowned work on why the world’s most successful companies, which have billions of dollars in the bank and employ the world’s smartest people, are often disrupted by startups — something that theoretically should never happen:
The reason why successful companies fail is that they invest in things that provide the most immediate and tangible evidence of achievement. And the reason why they have such a short time horizon is that they are run by people like you and I [people focused on achievement].
In An Ambitious Person’s Brutally Honest Take On Work-Life Balance, I share my own experience hitting rock bottom because of short-term thinking.
I had been putting all of my energy into being successful by a certain age. As a result, I sacrificed my health, my vitality, and nearly my marriage. At the end of the ordeal, I embraced a life philosophy that focuses much more on small gains compounding over the long-term rather than sprinting and burning out.
When we have a short time horizon, the activities we do have the following reward profile:
As an example, here’s what happens when you have a short-term time horizon when it comes to diet…
When we have a long-term time horizon, it looks like this:
There is a little pain in the beginning, but then the rewards compound to a much larger amount.
Another way of visualizing the impact of short-term thinking is what’s known as the “greedy algorithm” in mathematics. Greedy algorithms optimize by always taking the best short-term opportunities in front of them. The algorithm is good at achieving what are called “local maximums,” but not good at achieving global maximums. It helps you get small wins, but not big wins.
In the following animation from Brilliant, the greedy algorithm seeks to find the path with the largest sum. It does this by selecting the largest available number at each step. So, when it is first presented with choosing between 3 and 12, it goes to 12.
However, the greedy algorithm fails to find the largest sum, because it makes decisions based only on the information it has at any one step, without regard to the overall big picture. In this case, the optimal approach is to take the 3 first, because it leads to a 99 on the next step. While the 12 only leads to a 5 or 6 on the next step.
How does this apply to life?
To have the largest impact in the long-term, we necessarily must go slower in the short-term. Counterintuitively, sometimes the best step forward feels like a step backward. For example…
- It feels better to avoid an argument than confront it.
- It feels better to jump right into a skill rather than focusing on the fundamentals and slowly progressing forward with deliberate practice.
- It feels better to focus on the deadline rather than slow down and maximize learning.
- It feels unnecessary to nip a problem in the bud, before you experience real consequences.
- It feels more productive to load up on coffee and reduce sleep in the immediate term.
In each of these situations, if you follow what feels right, you eventually get stuck. We must find a way to consistently go against our instincts.
Use The 5-Hour Rule In Order To Play The Long Game
Realizing the power of long-term thinking is half the game. The other half is turning it into a habit.
In this regard, I recommend following the famous 5-Hour Rule. Spend at least an hour a day on weekdays learning with no exceptions. Having a ‘no excuses’ rule is crucial, because you’ll ALWAYS be faced with compelling reasons why you’re too busy to continue. Don’t listen to them.
Use your time to invest in learning activities like…
- Reading great books and learning about mental models
- Reflecting on your lessons learned
- Experimenting with new companies, habits, and ideas
Over time, the value of this habit will compound exponentially and transform you life…
What separates people like Warren Buffett, Jeff Bezos, Elon Musk and Bill Gates is not that they became successful and then started learning. It’s that they started learning on their own with no promise of payoff for years before they became internationally known.
Ultimately, the saying, “It takes 10 years to become an overnight success,” is true after all. We must be willing to work in the dark now so we can shine in the light later.
Looking for more support on your learning journey?
I created a few active Facebook groups to help you:
- Learn From Elon Musk, Jeff Bezos, Warren Buffett, & Bill Gates: Get daily inspiration and insight via quotes, interview clips, and links to longform articles featuring super innovators.
- Daily Learning Journal: Share your biggest lesson learned everyday with a community of fellow learners.
- Learning How To Learn: Join 200,000 people who want to remember what they learn, conquer information overwhelm, find time in their schedule for learning, and learn faster.
This article was written with love and care using the blockbuster mental model.