Harnessing Sam Altman's Force of Will
Becoming King on an Island of Cannibals
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A Force of Will
Paul Graham considers Sam Altman one of the five most interesting startup founders of the last 30 years. Not that surprising a statement. Except he said it in 2009, years before Altman was President of Y Combinator and CEO at OpenAI.
“What I learned from meeting Sama is that the doctrine of the elect applies to startups. It applies way less than most people think: startup investing does not consist of trying to pick winners the way you might in a horse race. But there are a few people with such force of will that they're going to get whatever they want.”
Graham went even further praising Altman in an essay six months before the list of five most interesting founders:
“You could parachute [Altman] into an island full of cannibals and come back in 5 years and he'd be the king.”
Altman’s triumphant return to CEO of OpenAI, where almost the entire tech world united with him against the inept OpenAI board, is his entering the island of cannibals and coming out king. But this is not an opening to talk about the OpenAI/Sam Altman drama. That story is tired, boring, and thankfully over.
I’m curious how one becomes a force of nature like Altman. Is it learned or innate? How do we turn our force of nature on? Should we want to be forces of nature ourselves?
The Dormant Force
We all have a force of will built in our DNA, but so few of us have switched it on.
I believe we all have the force of will in us because it’s the only sensible belief in a Pascalian sense. Pascal reasoned that if you don’t believe in heaven, and it does exist, you end up in eternal hell. If you do believe in heaven, and it doesn’t exist, you live a virtuous life with no eternal salvation at the end.
The severity of the punishment for not believing in heaven if it does exist vs the minor sacrifice to believing in heaven if it does exist makes the optimal strategy clear. You believe in heaven.
Similarly, if you don’t believe we have force of will and you haven’t turned it on, you never will. You live in eternal mediocrity, never seeking to exert your force of will. If you do believe we all have a force of will inside of us, and we don’t, you just work hard to perhaps some disappointment that you would have ended up with anyway.
So, Pascalian logic says you should believe we all have a force of will inside of us.
The force of will gene is stronger in some people than others. Sam Altman seems to have a naturally high capacity to exert his force of will. He’s Luke Skywalker. Perhaps the rest of us are just unnamed Jedi extras, but the force exists in all of us who turn it on.
Altman has another advantage in tapping his force of will: He’s doing his life’s work.
Altman is a billionaire who got fired from one of the most important CEO jobs in tech, was rumored to start a new company in the exact same field as a free agent, signed with one of the biggest companies in the world to lead an AI research lab, and then ultimately ended up back as CEO of OpenAI. When someone fights that hard to do a thing, it can only be because it’s their life’s work.
A person who exerts force of will and is doing their life’s work is an alien. They’re the rare person that moves the earth. I described aliens in my Investing Extremes Dictionary as:
Alien: A person with uncomfortable levels of insight, perseverance, and conviction that can create world-changing outcomes.
You can think of the intersection of using the force of will and doing one’s life’s work in a sort of Venn diagram:
As a venture investor, the job is almost entirely about finding aliens, giving them money, and getting out of their way. Sam Altman is an alien. If you can give him money, you should. And then don’t put a convoluted board structure in his way.
Someone doing their life’s work with the force of will switched on plays an unfair game. You’re unabashed in promoting the future you believe in. You’re unashamed of pushing and challenging others to make that future a reality. You’re unafraid of hearing no. The world is full of vulnerable people who neither have force of will nor are doing their life’s work. They are fodder for the alien, and that’s why aliens change the world.
Activating the Force
How do we activate our dormant force of will?
Just flip the switch, and turn it on.
Personal changes only stick when they are dramatic and instant.
People who use programs to quit drugs or drinking are addicts in recovery. They still cede power to drugs and alcohol, living a lifestyle of avoidance. People who decide they’re done smoking and drinking have changed. They aren’t addicts. They’ve reclaimed permanent power over the substances that previously had power over them.
Assuming power over undesirable behavior isn’t a mere change. It’s a new identity. You change who you are in an instant. The identity can only survive by being fed everyday with the desired behavior.
The same is true for being a force of nature. A 12 step program of changing habits might temporarily help you ask for more and push harder, but until you adopt the identity of one who uses their force of will, you’re just playing a character.
Flipping the switch to change who you are is so hard to do that almost no one ever finds it in themselves to do it. Catalysts mostly commonly spark change, not a simple desire to change. Some people find health after a health scare. Others stop smoking after having a kid like my granddad. Daily smoker for decades, decided he was done, never smoked again in his life.
The common catalyst to flipping the force of nature switch is finding your life’s work.
So if you know you aren’t using your force of will, you can try to force the force, or you can find the catalyst of important work to spark the change in identity. Then you become an alien.
Don’t Want to Be Me
Aliens often end up with responsibility, fame, and stress. That’s a necessary byproduct of being an alien.
Elon Musk is an alien exerting force of will on his life’s work, and he recently explained that people may think they want to be him, but they really don’t.
No, most people don’t want all that comes with being Elon or Sam Altman. When you switch on your force of will, it’s not something you can shut off. It makes your mind “a storm” as Elon describes on the podcast.
We should invite the force of will to fight for something we believe in. Of course, that demands a controversial idea you want to fight for to bring to life. The only things worth fighting for are controversial. A conventional idea doesn’t need the force of will because everyone already accepts it.
Most people never get that far.
So much of my recent writing has centered on curiosity. A couple of months ago, I said:
The goal of curiosity is to discover a secret about the world to build conviction that leads to persistent action.
That’s another way of saying curiosity is about finding your life’s work. It’s about finding something that switches on the force of will that’s in all of us. Sam Altman isn’t lucky because he has force of will, he’s lucky because he found his life’s work at a young age. We can all do that if we stay curious enough for long enough.
Disclaimer: My views here do not constitute investment advice. They are for educational purposes only. My firm, Deepwater Asset Management, may hold positions in securities I write about. See our full disclaimer.
Intelligent Alpha: The Things that Won’t Change
It's the things that won't change that you want to build on and invest in.
The thing I’m most certain won’t change in investing is that owning companies that persistently grow free cash flow will result in superior returns over time, AI won't change that. AI should embrace it. That's the philosophy I build into Intelligent Alpha's AI-powered strategies that are still performing great against markets.
I’m not sure if Intelligent Alpha is my life’s work yet, but it’s been just plain fun using generative AI to beat markets applying this simple philosophy.
Of the ~30 strategies I track, ~65% of them are beating relevant benchmarks. The outperformance is across the board:
Intelligent Alpha strategies are also beating the existing AI-powered ETFs in the market:
We’ve also moved beyond just tracking AI-powered strategies to investing in two of them at Deepwater. One strategy is a 12 stock concentrated tech portfolio which is ahead of the QQQ by 130 bps with two months of data. The other strategy is a long/short portfolio inspired by Julian Robertson’s buy the best companies and short the worst ones running 50% net long. The long/short strategy is up 2.5% inception to date, which I’ll comp against hedge fund index data when I next get it.
Using AI to build investment strategies convinces me of three things:
Humans won't be doing fundamental stock picking in 20 years.
There will be a shift toward AI-powered investment strategies similar to what we’ve seen in fund flows from active to passive.
Current AI-powered strategies aren't going to be the winners. Many of them trade too much and few incorporate the philosophy of a long-term investor, which I believe is the key to long-term outperformance.
Ultimately, the proof is in the results, but I’m pretty sure the future of investing will be powered by AI even if results always come from long-term free cash flow generation. Some things never change.