Riding the Wave
“When technology moves as fast as it does in a civilization like ours, you get a phenomenon which I call competitive destruction. You know, you have the finest buggy whip factory and all of a sudden in comes this little horseless carriage. And before too many years go by, your buggy whip business is dead. You either get into a different business or you’re dead—you’re destroyed. It happens again and again and again.
And when these new businesses come in, there are huge advantages for the early birds. And when you’re an early bird, there’s a model that I call “surfing” – when a surfer gets up and catches the wave and just stays there, he can go a long, long time. But if he gets off the wave, he becomes mired in shallows….
But people get long runs when they’re right on the edge of the wave – whether it’s Microsoft or Intel or all kinds of people.”
-Charlie Munger
Surfing a wave is the perfect mixture of chance and skill. You have to be there when the wave starts, and know how to ride the wave without letting it crush you.
When people think of surfing, they usually picture relaxing beaches and chilled out people gently coasting on the water. What a lot of people don’t know is the intense skill it takes to stay on top of the wave and how dangerous it can be when you fall.
Surfing the Wave is a mental model about being prepared for the right moments, as well as seeking out those opportunities.
Where will the wave hit?
No one could say for sure, but I can tell you where it won’t hit. It’s not going to hit when you are sitting at home, paying no attention to the things going on around you.
Catching a wave is about being at the right place at the right time. You could spend days on the water (or years of your life) just waiting for one to hit, but you’d better be there when it does. Put yourself in situations where you can find opportunities.
Pretend for a moment that your dream job is to be an artist. You know your chances of success aren’t good and that a lot of things have to line up for you to do well. The right person has to see your work, it has to be the right time, and you need to come up with the right material.
Your chances of success are 0 when you are sitting at your desk dreaming about it. Even if your chances were one in a thousand, the chances are more in your favor the more you try. Finally, you meet the right person at the right time after displaying your art at the 500th venue, and the wave starts to pick up.
Looking for the Wave
You might catch a wave, but if you aren’t prepared for it, then you might as well be under it. This is where vigilance is key.
You always need to be on the lookout for opportunities. Surfers spend hours just waiting for a wave to hit. But the whole time they’re in the water, they are looking for it.
Bill Gates, Jeff Bezos, and Steve Jobs all saw the internet wave coming. They didn’t just get lucky— although luck played a part— they knew it was coming.
They saw what everyone else saw, but the difference is they saw a way to ride the wave and stay on top of it.
This not only requires a watchful eye; it also requires vision. You need to see an opportunity where no one else sees it and you have to be brave enough to get on top of it.
Trying to catch a wave is risky. It’s nearly impossible to say where it’s going to go and how big it’s going to get. Not everyone is ready to take the chance and dive into a sea of uncertainty.
Is now the right time?
Any emerging business has to answer this question, why now? Even if you see the wave coming, it’s not a good idea to get on top of your board until it reaches you.
If people aren’t ready for it, it doesn’t matter how ready you are. Don’t make the mistake of thinking that riding waves is about being first.
Ask yourself these questions..
- Why is now the right time?
- Why was yesterday too soon?
- Why is tomorrow too late?
- Do I have a plan?
With any new and emerging ideas, the chances are against you. You need to be prepared to fail, but have a plan for success. Before you catch a wave, you’re going to need to learn how to swim because you’re going to wipe out— a lot.
Why now is not the same thing as to why not. Your answer to this question shouldn’t be passive, it should have the urgency of now or never.
Surfing
You’ve waited for the opportunity, you saw it coming a long way off, and you think now is the right time. Now, it’s time to follow through.
You don’t want to be one of those people who say they saw it coming as if it’s just as good as having done something about it.
But that isn’t you. You don’t want easy because anything easy isn’t worth doing anyway. You’re a problem solver and this mental model is the solution.
See Best of Charlie Munger: 1994-2011 speeches here
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