Discover more from Infinite Loops
6 Life Lessons From Jim O’Shaughnessy
Demystifying Venture Capital #04: obsessions, failures, and what it means to be The Man in the Arena
Author’s Note: This is the final essay in a series titled Demystifying Venture Capital. You can read part 1 here: The Origin Story of Venture Capital, part 2 here: Inside the Creator Economy, and part 3 here: Calling Out 5 Elephants in the Room.
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
— “The Man in the Arena” by Teddy Roosevelt
So far in this series of Demystifying Venture Capital, we have time-traveled to venture capital’s origins of whaling syndicates; we have analyzed its relationship to the creator economy; and we have analyzed the good, the bad, and the ugly around investing, innovation, and Allbird shoes.
Now, we’re going to hear from a (voraciously curious) venture capitalist himself.
O'Shaughnessy Ventures is the brainchild of Jim O’Shaughnessy – our founder and CEO, host of the Infinite Loops podcast, and self-proclaimed variance amplifier and loquacious provocateur on Twitter.
After beginning his career in quantitative analysis, Jim published multiple books about investing, founded multiple companies, became a successful venture capitalist, and most recently, built OSV – the passion project that has been percolating in his mind for the last decade.
Not only is Jim a modern-day Renaissance man – captivated by the convergence of money, art, philosophy, and memes – but his favorite question is “why?”
Why can’t we create this tool? Why can't we create a network for creatives? Why can't creatives earn more from their work?
His favorite man, however, is Teddy Roosevelt’s “Man in the Arena.” The one who strives valiantly, who errs, who comes up short again and again, but who does so with great enthusiasm and great devotion.
What if we could empower creatives to become their own Man in the Arena?
All of this led to the birth of OSV.
Not to mention, it just so happened to be the perfect excuse for a modern-day Renaissance man to indulge in all of his passions, loves, and interests – and encourage others to do the same.
When Jim and I first hopped on a Zoom to chat about this essay, he led with this sentiment:
“We're at a really interesting period in history, almost an inflection point. I call it the Great Reshuffle: where all of the old models are collapsing, where we have to unlearn and then relearn new models. I think future humans are going to look back and say this was the start of a golden era. I just feel so incredibly blessed and lucky to be alive during it.”
Some symptoms of the Great Reshuffle: humans are ditching corporate to become full-time creators; they’re leaning heavily into self-improvement; they’re optimizing the pursuit of curiosity and exploration more than ever before, etc.
That’s what we’re here to talk about today – the six invaluable life lessons Jim has learned in the face of the Great Reshuffle.
These are the kind of lessons that, yes, apply to venture capital, creators, and startups; but also the kind of lessons that transcend our carefully constructed boundary of “work” versus “life.” These lessons are something far more substantial and evergreen.
The birth of OSV was founded on these principles. This is what sets us apart.
Whoever you are – an entrepreneur, a VC, a Youtuber, a line cook, a janitor – this smorgasbord of life advice is for you.
Here are six lessons to carry with you into the rising sun of the Great Reshuffle.
Thanks for reading Infinite Loops! Subscribe for free to receive new posts and support our work.
1. Find your unlock
Not everyone is lucky enough to be gripped by obsession. Jim, however, considers himself one of the lucky ones.
The year is 1979, and Jim is 18.
Born into a prominent family of oil entrepreneurs, he is sitting in on a dinner where the board (his relatives) are gathered around the table talking business. They’re an Irish family, so there are double the amount of opinions than people at the table. There are debates, arguments, lively discussions about the inner workings of the company. And in the middle of it all, his favorite Uncle John nudging him, trying to plant the seed: So, when are you coming to work for the company?
But something struck Jim during this dinner discussion — the board only ever seemed interested in what the CEO of a company was doing.
If they’re going to analyze a company, shouldn’t they be looking at what kind of money they make and how they’re going to pay for it? Shouldn’t they be looking at…more?
Young Jim was already infatuated with the stock market, but this sent him down a rabbit hole of quantitative analysis – the process of using financial and statistical methods to manage risk within a company.
Despite Uncle John’s request, Jim knew he could not join the oil business. He was going to college to study economics and become a “quant.”
Around this same time, 18-year-old Jim started taking notes.
He journaled about his life, his ideas, projects he wanted to work on. He became obsessed with markets as the expression of human desires and hopes and dreams.
Later in his life, when flipping through old notebooks, Jim realized that things he spent his entire life building and exploring had been brewing in his teenage years. For instance, he was journaling about AI before AI was even AI.
Point is, he was obsessed. And obsession is a gift.
Obsession leads to endurance and persistence. It is the ultimate motivator (no wonder it’s the #1 thing Jim looks for in founders today).
While quantitative analysis was the unlock for Jim’s obsession — and the portal to many different worlds — the process of obsession is different for everyone.
Find your obsession. Find your unlock. Take notes. See what patterns continually emerge. Develop a process that works for you. And follow it as far as it will take you.
2. Be aggressively open-minded
Another theme that emerged from Jim’s practice of journaling was that he realized he was wrong – a lot.
He saw the unreliable nature of his memory, of gut feelings he had misread, of loopholes and gaps in his being that he forgot existed in the first place. All in his own handwriting.
He began documenting gut feelings to create a “batting average.” How often was his gut right? When was it wrong? What could he learn from that?
A small example of this is when he attended a dinner party with friends and the conversation turned towards the first Gulf War. Jim announced he had always supported that first Gulf War. No doubt. He was sure of it. One week later, flipping through an old journal, Jim discovered that not only had he not been in support of that war, he had been vehemently against it.
It was like a shoulder-tap from the universe. A reminder that he was not who he had once been. And it opened him up (even more so than he already was) to being okay with being wrong.
Sometimes, we hold certain patterns of thinking too tightly, like stubborn little kids clutching a favorite toy close to their chest. Closed-off pathways of thinking create misalignment with ourselves and with reality. To be stuck in our ways of thinking is stasis. Stasis is death. This is why Jim encourages people to wholeheartedly embrace being wrong. It means growth, fluidity, movement, life.
In a piece Jim wrote titled “Mistakes Were Made (And Yes By Me)” he said this:
“...mistakes provide a lesson-rich environment. But you’ve got to own your mistakes. You’d be compounding them if you tried to point your finger at anything or anyone other than yourself. The most successful people I’ve met have usually also been the ones who not only made the most mistakes but also always owned them. If you have the ability to say “I was wrong” and truly believe and learn from it, you’re close to gaining a new superpower in life.”
Truth is, we are all the unreliable narrator of our own hero’s journey.
We think we know best when we don’t. We swear by gut feelings that lead us down the wrong path. We change our minds. We change our beliefs and opinions. We become different people.
Don’t fall into habitual beliefs. Stretch your patterns of thinking. Be aggressively open-minded. Be okay with being wrong. Self-experiment. Take notes – on your dreams, projects, ideas, gut feelings – and let them guide you through your life (writing is, after all, just a more nuanced way of thinking). Get into a healthy practice of aligning yourself with yourself while allowing space for your brain to make updates.
3. Failure is freedom
Have you ever failed in public and realized it wasn’t nearly as horrible as you imagined?
Sure, it was a gut punch, but when it was over, you were still standing. You still woke up in the morning and brewed a cup of coffee and scratched your dog behind the ear and watched the sun slant broken orange rays into your kitchen. Life prevailed.
The year is 1999, and Jim is 38.
He has survived the market crash of ‘87, he has published multiple books on investing, and he is the CEO and Chairman of O’Shaughnessy Capital Management.
As a CEO, he learns a valuable lesson: shut up and listen. It’s not often that people question a person in a position of power, so he learns to let people speak before him. He is eager to learn from others, determined to stretch the patterns of his own thinking.
It is the height of the dot-com era, and Jim has launched a company called Netfolio in hopes of bringing investing to the end user. He gets huge offers from multiple companies – but his venture partners convince him to turn them down. Netfolio is going to be the biggest thing in the world. Jim ignores a tiny gut feeling urging him to take the offer.
And alas, they were all wrong.
Things didn’t work out. The market crashed. Netfolio was a public failure. The media wrote lots of things about Jim (none of them good), and while it felt like a crushing blow for a while, this public failure only cemented in Jim an eagerness to fail again.
His worst case scenario had happened, but look – he was still standing. He had failed daring greatly, striving valiantly, and in the end, it freed him from the paralyzing fear of failure.
Ironically enough, failure dulls the sharpness of its own edge. Once you fail, you aren’t as scared of failure as you were before. Your body and mind realize, Okay, we’ve been here before. The sun still rises and we still get to drink our French Press. We’ve got this.
Allow failure to open your mind’s aperture. Allow it to instill an enthusiasm to take risks, to adventure, to fully suck the marrow from life. Failure begets courage; so fail daringly.
4. Innovate, adapt, and iterate
We love to ask the question: where will the world be in 10 years?
Recently, someone asked Jim this very question on Twitter. How will AI affect the entrepreneur 10 years from now?
On our Zoom call, Jim chuckled at the question.
“There’s a bug in human nature that makes us believe we can predict the future,” he said. “I’m lucky enough to know that I have no idea.”
But admitting “I have no idea” is far from a copout. It is simply acknowledging that our reality is in a constant and rapid state of flux.
When we look at the history of technical innovations, they wipe out a lot of jobs – but in almost every instance, they create vastly better jobs than the ones they wiped out.
Take the Industrial Revolution for example. People were convinced the world was ending, when it was actually only getting better (enter: the Great Reshuffle).
Assuming we have perfect foresight is a closed pattern of thinking. Closed patterns of thinking encourage people to freeze circumstances as they are; to remain stagnant and rigid and afraid. They stir up the fear that humans may have innovated before, but surely they will never innovate like that again. And that is repeatedly and demonstrably false.
Imagine when humans first discovered fire.
Undoubtedly, there were tribe members who were afraid. What if it burns down the village? What if it spreads to the forest? What if it kills us and our animals?
But rather than operating on a scarcity mindset, what did we do?
We innovated. We learned how to safely contain fire with fire pits and fireplaces. We adapted. We created fire alarms, fire extinguishers, fire departments. We iterated. We learned from our mistakes and we pushed our knowledge forward into the future.
In an alternative universe, humans decided fire was too dangerous to implement into society. And in that alternative universe, humans are still tiger food.
The ability to unlock our abundance mindset can literally change the world.
But don’t misread this as a call to arms for a glass half-full, I’m-just-a-really-optimistic-person! mindset. Understand that we will make bad choices. Things will go wrong. We can count on that. But that’s exactly how we learn. Remember: failure is freedom.
Honestly, 10 years from now, AI probably will take our jobs. And we’ll produce even better ones.
A skinny, measly scarcity mindset is a zero sum game. The triumph and power of an abundance mindset will forever outweigh it. We must innovate, adapt, and iterate like we always have – and like we always will.
5. We don’t have ideas – ideas have us
People often come to VC’s to announce that they have a grand idea.
They announce it like it is the first and only of its kind. Like no one else on the planet has ever had this idea. They white-knuckle it, keep it close, wanting to own it, like those stubborn little kids we mentioned earlier.
But the beauty of humanity (and venture capital) is the beauty of the collective. The triumph of the network.
Our minds are fascinating things. One human mind on its own is alright – but when we combine a network of human minds, there is no predicting what we can accomplish. Everything we have today was created through a cooperative sharing of ideas and problems.
A historical example of this is Isaac Newton – the mathematician who claimed to have invented calculus. But while Newton was obsessing over calculus in England, a man named Gottfried Wilhelm Leibniz was doing the exact same thing in Germany.
Ideas are not “owned” by any one person. They are spread out across the world, like an invisible fishing net cast wide, or perhaps an invisible spider’s web connecting us all together.
“I have a theory that there is this human cloud,” Jim joked over Zoom. “Jim doesn’t have ideas. Ideas have Jim.”
This is, of course, a reference to Carl Jung, who said, “People don’t have ideas. Ideas have people.”
Indulge in your ideas, but don’t pretend you own them. Tap into the human cloud. Follow the rabbit holes. Be obsessed. The Great Reshuffle is at hand. This is not the time to have ideas. Let ideas have you.
6. Don’t be a noun – be a verb
If there is one life lesson woven throughout Jim’s life like a golden thread, it is this:
Life is about becoming.
To live as a verb and not as a noun, you must be okay with mutating; with shedding old skin and recreating yourself. You must grow, change, evolve. You must grow into yourself and out of yourself all at once. Life is movement. Stasis is death. Be movement. Be water.
Stepping into the arena
And as Jim reminded us, there is no predicting the future.
That’s why OSV is founded on the ethos of Roosevelt’s “Man in the Arena”: to shift the narrative of venture capital into the powerful, transformative process we know it can be, to lead the frontier of VC in the Great Reshuffle by empowering creatives and entrepreneurs to pick up their sword, to dare greatly, to strive, err, and spend themselves.
Whether you’re a creator, founder, or you’ve randomly stumbled upon this Substack while drinking your morning coffee, we hope this series resonated. We hope you feel equipped and ready to step into the arena.
Life is not a dress rehearsal, friends.
Find your unlock. Be aggressively open-minded. Fail daringly. Innovate, adapt, and iterate. Let ideas have you. And don’t be a noun. Be a verb.