Alpha is Beyond the Wall

Hey everyone, and welcome back. Some exciting news: we finally have a name for the blog — The Long Run.

For those of you runners out there, you know that one of the most important runs of the week is the long run — the single run that might cover 20-30% of your weekly mileage. The long run has always been my favorite type of workout — one of peace, patience, and persistence. Like life, it’s long, but all you can do is focus on one mile at a time, being fully present in the moment you’re in.

For you econ nerds out there, the long run is the hypothetical steady state, a period in the future when fluctuations in variables normalize. It’s an idealistic future, but one we (and the economy, naturally) are constantly striving for.

Here in this blog, we believe in playing the long game. We hope to inspire curiosity, self-discovery, and personal growth through ideas & frameworks that enable us to play our own game. Journeys over destinations. Infinite games over finite games. Experiences over purely dollars. The Long Run is more than a single action, but a way of living.

A massive thank you to each of you for taking a few minutes out of your week to read this stuff — you’re the real ones. Shoutout to my sister for the logo design (@kaystodesign).

You can also check out my previous posts here and follow me on Twitter!

Let’s hop into it.

Let’s start with a story. Imagine you’re born into a city in ancient Mesopotamia a few thousand years ago. Your city is surrounded by walls on all sides, in order to safeguard from intruders.

Growing up, you’re taught to never go outside the walls, as it’s incredibly dangerous on the other side. After all, life on the inside is safe and comfortable — what more could you possibly want?

Nevertheless, you have this burning desire to see what’s out there, this itch to leave the city and do something bigger. All your life you’ve been suppressing this appetite to explore, to seek a larger purpose.

Why? Because you’ve been taught that it’s “risky” to do so.

There’s an interesting contradiction between how humans evolved and our relationship with risk.

On one hand, avoiding risk and behaviors with high-variance outcomes was a naturally selective trait — don’t leave the tribe, or nature will kill you within a matter of days; don’t eat that mushroom, because you have no idea whether it’ll taste great, you’ll see god, or it’ll kill you instantly.

For the most part, this risk aversion was a good thing. We prioritized survival over sur-”thrive”-al (okay, I’ll admit that was a stretch, but it sounded good when I first thought of it).

However, at some point, after we were able to account for our most basic needs, we got curious. We started inventing things. And as we invented things, we innovated on those things to create new things. And as those things covered more and more of our most basic needs and created more free time in our lives, innovation really went crazy. It took us thousands of years to get from stone tools to the printing press, yet less than 200 years to get from the telegraph to artificial intelligence on the level of ChatGPT.

Why? Because we started experimenting and taking risks.

The Curse of Optionality

If you ask most young people today what they want to do, most of them will tell you they have no idea, but that they want to “maximize optionality” — enjoy the possibilities of what could be, without actually being on the hook to do any one thing. I won’t belabor this point (we talked about the concept of “hedging” in a previous post), but this emphasis on pursuing optionality often backfires when gathering “more options” becomes a habit and creeps its way into broader life decisions.

Large institutions (consulting firms, investment banks, and agencies, among others) tend to attract the most talented young people under the promise that “you can do anything you want after you put in a few years here,” deferring dreams to the future.

I often hear many people I know who work for these large institutions say they want to work for a startup. They have this itch do something bigger than “maximize shareholder value” through sitting in PowerPoint and Excel all day (and night). What’s stopping most of us from taking the leap?

Fear of the unknown.

Leaving the Proverbial Walled City

When we take the safer route, we are living inside the walled city, with no view of what it looks like on the outside. That city is all we know, and although we might lack purpose on the inside, there’s comfort in sticking to what we know.

Pursuing a dream — whether that be leaving our stable career, taking some extended time to travel, or making ourselves vulnerable in front of others — is scary. It requires us to venture outside the proverbial walls of the city, without any idea of what’s on the other side.

But in reality, the other side of the wall is almost never as bad as we imagine.

Career risk is a myth (and especially if you’re young).

The job market is constantly changing, and in a world where the rate of change is faster than ever before, being adaptable and willing to take risks is actually, counterintuitively, less risky.

A shocking 70% of people have career regret. And yet, there’s been no better time in history than today to create your own path. We live in a golden age of entrepreneurship & the creator economy, a world where opportunities abound.

Let’s use startups as an example, as it’s the one I’m most familiar with.

For most people who want to work at a startup but don’t, they have a “fear of failure,” that if the startup flops, they’ll be out of a job and a source of income.

This couldn’t be further from the truth, especially if they’re of the traditional business school type. First, if you have a college degree from a good school, you already have a desirable set of skills that will be valuable to someone else — if shit hits the fan, you’ll find another job.

Second, the “worst case” scenario is never as bad as it seems. If the startup you work for goes under, you’ll only really be out the lost value of your equity. What you’ll have lost in the financial value that could have been, you’ll have gained in everything you learned and the people you worked with — the value of your experiences.

I can’t speak for every startup, but if you’re at a fast-growing company with a team of great people, you’ll learn at 10x the rate you would if you had worked for a large, slow-moving corporation, you’ll have more ownership over your work, and, in most cases, the work will be significantly more interesting.

What you give up when you pursue the startup path is the safety net — the sure thing and predictability of what your career will look like. And startups are just one example here, among any choice in life that we want to try, but we don’t out of fear of the downside.

Linear and Nonlinear Career Paths

The traditional career path looks something like this: predictable starting salary, predictable promotions after you check the boxes and put in your time, and you can quite honestly, almost to the month, map out exactly what your life will look like 5 years from now. These careers are linear.

As the kids say, that sounds pretty “mid.”

On the flip side, let’s say you decide to go the startup route. The startup path is nonlinear. The results are far less predictable, and in most cases, you’ll make less money in the short term relative to your peers.

However, here in this blog, we like to play the long game.

If you stick with it — and this may mean working at multiple different startups, falling down, brushing yourself off, and getting back up — one might eventually be successful and pay for all of the ones that didn’t work out by multiples.

You find the one that takes off through consistency and learning. It’s an exponential growth curve. As we’ve said before, the experiences that matter compound over time, just like money.

When thinking about work, I like to make sure that whatever I’m doing, I’m answering “yes” to three questions:

1. Am I learning and challenged?

2. Do I enjoy what I’m doing?

3. Do I work with great people who share my values?

In a nonlinear career path, if your work (regardless of whether or not it’s a startup) checks those boxes, it’s only a matter of time before you succeed. And the important thing is that, even if it takes decades (and many times it will), you’ll enjoy the process and grow more along the way, rather than purely trading your time for money doing something you don’t enjoy.

Nonlinear careers are asymmetric bets — where the downside is limited (zero), while the upside is disproportionately large. When we’re young, and we have very few obligations, we’re almost doing ourselves a disservice to not take asymmetric bets and forget our reliance on safety nets.

But the interesting thing about leaving the safety net of the city behind the walls is that, to use a finance analogy, that’s where the alpha exists. And an admirable, fulfilling life is one with alpha.

Alpha in Life

Alpha is the finance term for excess return relative to a benchmark index. When you earn alpha in finance, you “beat the market” on a risk-adjusted basis.

In life, staying inside the proverbial walls of the city is “the market” — we shouldn’t expect exceptional results if we do what everyone else does.

Sustaining alpha over long periods of time is difficult. It requires hard work, discipline, and an incessant passion for whatever it is we’re doing.

The only way to find alpha is to pursue it ceaselessly.

If you live in a first world country and you’re alive today, you’re already in a better spot than 99.9% of the people who are either currently on this earth or have walked before us. To put it in the terms of one of my favorite writers, Jack Raines, “if you’re reading this, you’ve already won.”

Today, you can literally do just about anything.

Do things you would be proud to tell your grandchildren about.

Do things that fire you up.

Do things that are scary but push you to grow.

Do things your 80 year old self would be proud of.

What “risks” are holding us back? What are we not enjoying because we are afraid they’re too risky? This isn’t a call to do something stupid or dangerous, but rather to better understand ourselves and take more calculated risks.

Winston Churchill put it beautifully:

We each get one shot at this thing called life. To spend it sitting in an office formatting logos in PowerPoint, at home on the couch doom-scrolling social media, or “waiting for the right time” is a disservice to those who didn’t have the opportunities we now have.

Alpha is on the other side of the wall. And it’s not as scary as we think out there.

The biggest risk might just be taking no risks at all.

-Owen

Fresh Finds

A Cook’s Tour (Anthony Bourdain)

Book | ~300 pages minutes

In complete transparency, I actually didn’t know anything about Anthony Bourdain before reading this book, but I absolutely loved it. This is his story about his quest around the world to find the perfect meal — a story of travel, food & culture across the globe, and an incredibly interesting character just living in the moment. Bourdain’s writing style is eloquent & engaging, yet oftentimes blunt and to-the-point. Worth a read for anyone.

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