In the swirling tides of advice and guidance that inundate us from all quarters—social media, boardrooms, or the evening news—one would do well to remember a piece of Charlie Munger's wisdom: be wary of whose counsel you take. As a product builder who’s spun a yarn or two about the intersection of technology, investing, and sheer human folly, I can tell you that Munger’s wariness isn’t just prudence; it’s a necessary armor in the battle for rational decision-making.
Let's unpack this: Imagine you’re at the helm of a new venture. You’ve got skin in the game, equity on the line, and perhaps even your reputation teetering on the precipice of public opinion. Then along come the “experts,” the “consultants,” each armed with advice and prognostications. This is where the first Munger minefield lies: incentives. If the person giving you advice benefits more from the giving than you do from the taking, red flags should be hoisted high. It's basic incentive-caused bias, a term Munger uses to describe the tendency of a person to skew advice based on the incentive structure they operate under. I’ve seen it time and again—advice that’s more about the advisor's commission or prestige than about your success.
Next, we have incompetence. The world is brimming with confident incompetents—those who believe they know far more than they do, a cognitive bias Munger often highlights. These individuals can be dangerous, as their advice often comes with the persuasive power of certainty. They are the blind leading the blissfully unaware toward the cliff's edge. In the technology and investing worlds, where I've spent most of my time, these types are particularly prevalent, often masquerading as gurus after one lucky gamble pays off. They throw around buzzwords—synergy, blockchain, AI—as if they were magical incantations rather than complex concepts.
Then we have the matter of credentials. In our credential-obsessed culture, it’s easy to equate a diploma or a title with expertise. But as Munger would likely agree, a certificate is no substitute for skin in the game. I've seen Ph.D.s who can't think their way out of a paper bag and high school dropouts who can code circles around the ivory tower elite. Credentials, while potentially indicative of a person's dedication or specialization, are by no means a guarantee of real-world acumen.
What's the solution? It's twofold: First, seek out those with aligned incentives. Find advisors who win when you win and lose when you lose. This alignment tends to filter out the noise and ensures that the advice you get is aimed at mutual success. Second, bet on track records, not titles. The world is full of 'experts' who have never felt the sting of their own bad advice. Instead, look to those whose success—and failure—you can verify and learn from.
In essence, navigating the advisory waters of entrepreneurship and investment requires a keen eye on the compass of incentives, an ear to the ground for the footfalls of competence, and a healthy skepticism of the laurels of credentials. As Munger himself has professed, the best decisions are often reached by considering what not to do before what to do. In the context of advice, this means filtering out the cacophony of misaligned, incompetent, or falsely credentialed “help” that might steer you off course.
In the market of advice, let's not forget that buyer—yes, you, the entrepreneur, the investor, the creator—beware is the cardinal rule. As I've noted in my writings, it’s your ship, your venture into the turbulent seas of business. Make sure your crew is rowing not just with strength but in the right direction. And remember, sometimes the best advice comes from within, from your own careful analysis and hard-won experience. Munger’s wisdom, like a lighthouse beam cutting through a fog of confusion, reminds us that the safest harbor often lies in trusting one’s own reasoned judgment.