How to find businesses with (almost) zero competition

Speaker 1: You know, one thing this this podcast has done a lot of for me is it rewired my brain to understand that when I look around the room, nothing is here by accident. Nothing just appeared. You know, like the the little like the lead that goes in this this mechanical pencils. There's a company that makes that. There's a guy who you'll meet on a boat somewhere whose business is just to provide these lead... the world is full of these projects and everywhere... It's always bigger than you think... I sell you know, in a factory where there's like a conveyor belt... the tread of that conveyor conveyor belt. We make the tread... I met a guy who makes the dye that makes the color blue because blue is not really a naturally occurring you know, chem substance you find.

Host: I find you had referenced this, but I didn't quite know what you were talking about and I didn't want to ask cuz I didn't want to look stupid, but it's the soybean oil shortage and basically the idea here is that one of Warren Buffett's best trades ever was American Express because at the time there was this whole scheme where basically there was a a scam artist and he realized that he could get loans against his soybean oil inventory... And because American Express was the guarantor, they were the company that promised that the amount of soybean oil promised to the lenders was there, they were the ones who had to pay this massive fine.

Speaker 2: It's the art of noticing... It is actually why comedians, when they get rich and famous, they fall off. Because it's the struggles of the everyday person that led them to an insight... you have to really like create a system where you were going to be exposed to interesting things and a habit of noticing them... pay attention to what you did in your free time... as a kid, you don't really think about what you should do. You just simply think about what you want to do... what happens is we find these things that we're interested in, but we blow we blow them off. We just brush them off as if they're sort of trivial, or meaningless, they are irrelevant, or they're childish.

Speaker 2: Paul Graham wrote this essay called How to Do Great Work... he basically says, 'Look, like here's the formula. You want to first just follow the path of most excitement, so of most interest to you'... let your excitement or your interest be the motor of the boat as well as the rudder... go all the way to the frontier... when you're at the frontier... you notice, oh [__] you got to kind of step over these gaps that exist. People don't know this. They don't do They don't know how to do this... and it's only when you're in the frontier there that you will find the gaps and then you the entrepreneurial step is to just decide to fill one of those.

Host: Paul Graham wrote this essay called How to Do Great Work. And what he describes is like a few steps system... In it, he basically says, 'Look, like here's the formula. You want to first just follow the path of most excitement, so of most interest to you.' ... Let your excitement or your interest be the motor of the boat as well as the rudder. ... Go all the way to the frontier. ... if you get all the way out there, you notice, oh [ __ ] you got to kind of step over these gaps that exist. People don't know this. ... And it's only when you're in the frontier there that you will find the gaps and then you the entrepreneurial step is to just decide to fill one of those.

Speaker 2: Enthusiasm is such an underrated trait. Everybody knows that it's better to work with somebody who's enthusiastic. Everybody knows that enthusiasm is a positive attribute to have, but it's something that smart people feel stupid when they do it. Like it's a low status thing for a smart person to do is be enthusiastic. And you seem sort of like dumb, like a golden retriever. Well, guess what? Everybody wants that person around. We love golden retrievers. And it's actually a very useful trait for going and doing something hard is to have enthusiasm every day versus just being beaten down by the reality of your situation. So there's these like handful of traits that smart people refuse to work on, which makes it like an uncompetitive playing field. You could just go dominate with very little effort.

Host: I do think it's everyone is capable of it, but very few people ever do it. I think there's two two interesting things I can say about this. The first is look into your childhood... So, you know, I got obsessed with one video game. But then I would grow out of that, but then I got obsessed with online poker. ... And I got obsessed with business, and now I'm sort of obsessed with investing. And they're all the same through line, right? ... Dan Brown... when he was a kid, his dad did something really wonderful for him, and sparked this like passion in him. Every Christmas, instead of presents under the tree, his dad would put a treasure map... He paid attention to the things he was interested in loved as a kid.

Host: So just one is one is pay attention to your childhood, notice what you loved then. The second is don't uh sort of brush it off. Don't don't uh you got to be a bit shameless about it... Elan Lee was one of the creators of the Exploding Kittens board game. And he built an enormous ... business in the business of board games and card games... he's just still doing the [ __ ] he loved as a kid... if you do the [ __ ] that's the most to you, you will only attract you'll repel people who want to be at the strip club, and you will attract people who are like you.