This week I had lunch with a group of entrepreneurs. One of them, a CEO, had a pressing issue he wanted input on. He had a few million in revenue and was having trouble finding a firm to handle his company’s marketing. They all pitch the same strategy, which doesn’t resonate with him. He’s frustrated and wanted to know what other founders have done to get their marketing efforts off the ground.

When clarifying questions were answered, we learned that the CEO’s focus has been solely on outsourcing the marketing function to an agency. He wants to achieve a specific output or goal and wants an agency to figure out how to do that.

The feedback from founders centered on two points:

• You can’t outsource marketing entirely. It’s hard for an external company to develop a strategy when they don’t have a great understanding of your customer or the problem(s) you solve for your customers. Some founders have had success hiring a full-time marketing leader, who developed the marketing strategy and outsourced some tactical work to agencies. The function and strategy were owned internally by a full-time company employee.
• Deep understanding of the customer, their problem, and their journey lives with the CEO. It’s the CEO’s job to get others in the company to understand those things too and, in the case of marketing, to create appropriate strategies. The CEO can hand his or her understanding off to marketing, but it’s not realistic to expect marketers to develop that understanding and the messaging around it.

I’m no marketing savant, but I’m actively learning to understand it better. Based on my past mistakes and what I’ve read from marketing thought leaders, I agree with these points.

The feedback was useful to the founder with the problem, who walked away thinking differently about marketing. Instead of outsourcing, he’s now considering finding someone to lead his marketing strategy. He’s also thinking about how to convey his deep understanding of the customer’s journey on day one to his new marketing lead so he can set them up for success.  

I shared earlier this week that I’m reading The Success Equation by Michael J. Mauboussin. It outlines a framework for assessing the influence of skill and luck on your decisions (many life outcomes are a combination of both) so you can increase the chances of getting a successful outcome. It’s a good book about improving your decision-making by understanding the impact of luck and skill on successful (and unsuccessful) outcomes.

As I’ve said many times, books are a great way to find other books. One of the key concepts Mauboussin discusses is that to improve your skill in activities where luck has a greater influence than skill, you must focus on the process used to make decisions. The idea is that good decisions can result in outcomes we don’t want because of the influence of luck. And vice versa: a bad decision can lead to a good outcome because you got lucky. Therefore, a decision can’t be judged by its outcome; it must be judged by the quality of the process and analysis used to make it. He goes into more detail, but that’s the gist. I agree with this.

One of the things he suggested using, because they’re effective tools to improve decision-making processes, is checklists. Charlie Munger said the same thing in Poor Charlie’s Almanack (see here). Mauboussin told the story of a doctor who used checklists to significantly reduce hospital infections and realized how powerful they are. He wrote a book about checklists and how to use them effectively called The Checklist Manifesto.

Munger and Mauboussin can’t both be wrong about checklists. I use them some already, and I want to embrace them for material decisions, especially those that involve luck. I’m going to get a copy of The Checklist Manifesto and give it a read so I can lean into what Munger and Mauboussin have both said.

A book I’ve heard mentioned several times by people I respect is The Wealth of Nations by Adam Smith. It was written in 1776, so almost 250 years ago. I struggle to understand the language in old books. It takes me a lot longer to read them, and I don’t always grasp the main points. So I shy away from really old books. But I’m curious about The Wealth of Nations, especially after learning that Warren Buffett recommended it highly.

I came across a work-around: a book called Warren Buffett’s 3 Favorite Books. It was highly rated and claimed to summarize the main points of Buffett’s three most recommended books, including The Wealth of Nations, The Intelligent Investor, and Security Analysis (the last two both by Benjamin Graham).

The book does more than that. It distills the core ideas from the three books and explains them using simple examples. It then explains how and why those core ideas became the principles that drive Buffett’s value-investing strategy. And all in a way that anyone can easily understand.

One thing I especially enjoyed was how he explained the importance of taking initiative and teaching yourself. I really like his explanation of Thayer’s method of learning, a self-teaching approach he learned while attending the U.S. Military Academy. The gist is that if you embrace this method, you can teach yourself almost anything in life, which makes the method an invaluable asset. I totally agree with this method but didn’t know there was a name for the method.

The other concepts I enjoyed were in the chapters on bond valuation and stock valuation. He demonstrated how and why the two are connected and why comparing their yields (mainly, for bonds, the risk-free treasury yield) is a key concept that underpins much of the investing world.

Overall, this is a good book that’s a quick read. Anyone looking to understand or brush up on the core concepts of investing should consider this book.

I’m reading a book this week about understanding the impact of luck and skill on successful (and unsuccessful) outcomes. It’s called The Success Equation, and it’s by Michael J. Mauboussin. It outlines a framework for assessing the influence of skill and luck on your decisions (many life outcomes are a combination of both) so you can increase the chances of getting a successful outcome. Very interesting book so far.

One section is called “Why Smart People Do Dumb Things.” I’ve been thinking about it a lot today. The key premise of this section is that intelligence tests measure some cognitive abilities but fail to measure others. One area these tests miss is decision-making ability. Smart people sometimes make stupid decisions.

The book goes on to distinguish between intelligence and rationality. Most would think they’re related, but this isn’t necessarily true, the book argues. There are two ways to evaluate someone’s cognitive ability:

• Intelligence quotient (IQ) – This is what traditional intelligence tests measure. It’s a rating of someone’s ability adjusted for their age and compared to the rest of the population. Think mental processing speed, memory, vocabulary, etc.
• Rationality quotient (RQ) – This is the ability to think and behave rationally. RQ attributes include “adaptive behavioral acts, judicious decision making, efficient behavioral regulation, sensible goal prioritization, reflectivity, and the proper calibration of evidence.” This is what interests me most.

The book highlights that many people with high IQs cannot act or think rationally and gives examples.

This section resonated with me for a few reasons. First, if decision-making is what matters most in life, then RQ is most important. IQ can’t be changed (as far as I know), but anyone can learn to act and think rationally through hard work and focus. So, if you didn’t win the ovarian lottery and don’t have a rocket-scientist IQ (I fall into this category), you can still have outsize success if you’re intentional about thinking and acting rationally. It’s not easy and takes work—e.g., I read this book—but I feel it’s definitely something that be learned and improved materially.

Second, this section mirrored something Warren Buffett said (I read it in The Warren Buffett Way last year). I wrote a post on the quote; see here. The gist is that rational behavior is what enabled Warren Buffett to achieve outsize success, not his IQ (which is very high, too). It’s not how smart you are, but how effectively you use the intelligence you have. Buffett says some smart people have a 400-horsepower brain but only get 100-horsepower output from it because of the decisions they make. He argues that by being rational, you can have a 200-horsepower brain and get 200-horsepower of output, which puts you ahead of the 400-horsepower “genius” who can’t act rationally.

When two wise people say the same thing, it catches my attention because they reached the same conclusion independently. The probability that both are wrong is low.

I’m excited to finish reading this book. Understanding IQ and RQ, and recognizing when luck heavily influences what I’m doing, has already changed some of my thinking and decision-making.

Current Project: Reading books about entrepreneurs and sharing what I learned from them

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

Cumulative metrics (since 4/1/24):

• Total books read: 87
• Total blog posts published: 574

This week’s metrics:

• Books read: 1
• Blog posts published: 7

What I completed in the week ending 11/2/25 (link to the previous week’s commitments):

• Read Warren Buffett’s Three Favorite Books, which distills the value-investing principles that shaped Buffett’s investing style; these principles are from three books that Buffett highly recommends

What I’ll do next week:

• Read a biography, autobiography, or framework book
• Pick my next weekend project and start working on it

Asks:

• No ask this week

Week two hundred ninety-two was another week of learning. Looking forward to next week!

I’ve been writing this week about riding shotgun with a founder as he sells his VC-backed start-up. A new topic that came up today, the closing day, was transferring the money. How this is handled depends on the size of the deal. If it’s big enough, lawyers handle the transfer of funds to owners and investors. But if it’s a smaller deal, how the funds are transferred can impact the ability to close.

If the transfer is made via ACH, the funds aren’t available immediately. ACH transfers are processed in batches, and it can take from one to three days for the money to be posted in the buyer’s account. This can create issues if the closing is on a specific date. Also, ACH transfers can easily be canceled, which could cause an issue if the buyer is given possession of the assets before the seller receives the funds. ACH transfers are often free or relatively cheap.

Wire transfers are different because funds are transferred immediately. Each wire transfer is processed individually. Once the buyer initiates the wire, the funds are often received within minutes. Wires are often used to close transactions that involve closing dates and the transfer of ownership via paperwork, such as real estate deals. And not only are wire transfers faster, they can’t be easily canceled. Once a wire has been submitted for processing, you can’t easily recall the funds. Wires usually cost more than ACHs.

If you’re selling a company, ideally, you want to receive funds via wire transfer. It eliminates the waiting period, which can seem like an eternity when you’re selling a company. It costs a few more dollars, but it’s often worth it.