My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
Back to Mental Models
Asymmetric Risk/Reward
Seek opportunities where you can lose small amounts but win large amounts, or where you have information others lack
Decision Rule
Only invest when downside is limited but upside is potentially massive, or when you have knowledge edge
How It Works
Mathematical expectation works in your favor when risk/reward ratios are skewed positively
Failure Modes
Overestimating your information advantage
Ignoring probability of success in favor of large upside
Taking asymmetric bets you can't afford to lose
Example Decision
“Investing $100 in a startup where maximum loss is $100 but potential return is 100x, especially when you have industry knowledge others lack”