Last Lecture Series: “How to Live an Asymmetric Life,” Graham Weaver

CH organiz Chaniz change the [Music] world thank you 20 years ago I'm in this meeting I'm in this huge there's this huge conference table that seats 20 people and I'm the only one there I'm in the 29th floor in the financial district there's this window I can see the entire Bay and alcatra and everything and again I'm about your age at this time it's a conference room of my largest investor this guy I'll call him Joe and Joe is this bigger than life person hedge fund magnet household name and I'm sitting there and I am

petrified I am shaking and my my throat is dry and I can hear Joe walking toward me and then I hear the the knob turn and he walks in as he always did just huge personality Graham you know he's all excited and I'm sitting there and he sits down and he can see something's like really wrong I tell Joe that his investment in my firm is down 50% he's lost half his money and it wasn't his firm's money it was his personal money and I can just see the energy drain out of him and the

worst part is he's trying so hard to be positive because he knows if he says the wrong thing like he's just going to crush me because I I was I was so fragile and he was my you know he's my largest investor I had been told no by over a hundred people raising my first fund and there were about five or six people like Joe who said yes because not because I had any track record because I didn't but because he believed in me you know just me he was investing in Graham Weaver and uh

that's what I had to show for him I get I lost half his money and it was the worst day of my career at that point and even to this day the thing that I thought I knew about investing back then it was all wrong what I thought I knew at the time was rule one don't lose money and Rule two never forget rule one so I spent all that time I spent all that time just playing for like playing small like just trying to protect my downside trying not to lose really hard so we

bought businesses like at a discount to their net asset value and even when things went right it didn't go that right but there were three times I wrote literally an investment memo that it is mathematically impossible to lose money on this investment and we lost money all three times so what I what I learned is that it's kind of like imagine your imagine you're you start dating and your only purpose of dating is not get your heartbroken and you're going to have one foot in and one foot out and even if you have a even

if you have a good datea it's not going to be that great because you're not really in it but the more likely outcome is you're going to guarantee the very outcome you're trying to avoid which is you're going to get your heartbroken and so I started deciding over the over the next 30 Years I started realizing that that was 180 degrees from what I should be doing in investing that no matter what you do in this life like if you're going to invest there's going to be downside you you're there you're never going to get

that to zero you can reduce it maybe a little bit but the more valuable part and the magic is what can you do on the upside you know what what can go when it goes right you know in class I right assume success what happens if things go well in 30 years of being a professional investor I can summarize great investing in a single word which is asymmetry and you are looking for the biggest possible outcome relative to your risk and your risk typically is just losing one times your money that's all you're going to

lose so you want to be stacking criteria on top of each other where it becomes asymmetric so for example if you have the criteria of an amazing management team that is going to work super hard and hire well and they're going to be in this industry that's got infinite capacity they re redeploy Capital at high rates of return and and and and you can hold it for 10 years and they want to keep going and you stack those on top of each other they don't stack linearly they stock they stack log rhythmically and and you

can have an almost infinite outcome you're not playing for one and a half or two times your money as we were in the early days you can be playing for 10 20 50 100 times your money with that with that criteria and you don't have to do many of those investments in your lifetime so as I started realizing that this was how I was living my life invest invest thing it also was how I was living my personal life and I was just playing small I was playing not to lose I was just trying to

just trying not to lose and so what I'm going to share with you today is how to live an asymmetric life and there are four principles and if you get one of these principles right you will you will dramatically dramatically improve your life if you get two or three right you'll have this magical incredible life but if you can run the table on all four you can have literally an INF life you can have almost anything that you want and you can live with joy and you can sustain and you can have energy and you

can sustain that for decades and I can tell you this from experience principle one is do hard things so we have this view we have this thought that life is supposed to be easy and that there's and that and that Comfort is where we're going to gain uh happiness so you can order Harmony Bowl from sweet Greens on your on your app you can you can you can Bing binge watch succession and Ted lasso and you can have you can have you can have a life of ease and and and that will give you a

quick hit of dopamine but make no mistake that is not the path it is exactly the opposite I rode crew in college and the way you measure progress in rowing and the way you kind of determine what boat you're going to as Logan was saying is you you have an urg test you sit on a rowing machine you Rod 2,000 meters as hard as you can and the saying is if you get done with that urg test and you can pull one more stroke you didn't pull hard enough so it's going to hurt no matter

what you do it's going to hurt well throughout the course of the the season like the day that I'd show up which would be like September 1st from that date all the way through March I would improve my urg time by 20 seconds roughly from the first day with all conditioning everything we do but so a big part of that would be rowing stadium stairs uh L lifting weights and on and on it was grueling and it was it was a lot but all that stuff I just said would take about six months and only

10 seconds of that 20 would come from that the other 10 seconds would come in the first 2 weeks you're like what so what happened in the first two weeks to give you 10 seconds I'll tell you what didn't happen you didn't change your cardiovascular fitness you didn't change your strength you didn't change your v2x or your Technique all you changed is your comfort to be uncomfortable you realize that you could push yourself a lot harder than you thought you could that's all that changed that was half of the gains I would get all year

would just be me reminding in myself that I had a lot more than I thought I did and that at 750 m with when my heart rate's 175 beats a minute I'm not you know I can keep going this chart right here shows our lives and this is what happens we get kind of complacent you know or we or we get we get comfortable and if we want to move forward and get to the next Peak the magic of of is to understand that your life is almost always going to get worse for first any

change that you want to make is almost always going to get worse first so you're in a relationship and you have to have a hard conversation that particular night your life is going to get a little worse and then you're going to come out the other and it's going to get better or if you need to leave a relationship that you shouldn't be in in the first place your life is going to get worse first if you want to change careers and you want to learn something new you're going to go down the learning curve

your salary is probably going to go down you're going to not be good at your job when you first start your life's going to get worse first you want to start a new habit you want to take a cold shower you want to meditate you want to start exercising it's going to get worse first and you're going to and you're going to follow this pattern but you need to realize that the thing that's keeping you there is the first move is always going to be worse and eventually you're going to eventually what's going to happen

is these these uh downward curves are going to get a lot shallower because you know what the biggest part of that curve is it's just fear the biggest part of that curve is just fear so the more you put yourself in situations where you do hard things the shallower and shallower those divots are going to get because because you're going to remove that fear just like I mentioned in the rowing example I had no fear at 2,000 MERS than I or 1500 meters everything that you want in this life is on the other side of

worse first if you want to have an asymmetric life do hard things second principle if you want to have an asymmetric life do your thing do your thing when I graduated from school probably like many of you I had a choice to make there were two basically two options there was uh there was a firm that came to recruit on campus and I knew I could do it is what I did before business school it was a big private Equity Firm there was a a number of my classmates went with me there was a salary

and a bonus and free lunches and it was it was really clear and then there was there was another path which is i' done these as L Logan I started doing this crazy stuff in business school with buying companies on my credit cards and like but I was like I don't even know how that's going to work like I don't I don't know what that looks like I don't know how to get started I don't know how to raise money whatever so so I chose I chose uh the path of of going to the big

firm let me tell you what happened during that time my boss is like here's what you need to do to be vice president you know here's your gold post so I'm gonna like Sprint like hell to those gold post as fast as I can as all of you are right because you're competitive and you want to go there so I got on early flights you know would start bidding on businesses and they'd tell me which companies to go to and I would do those and I would I would throw I threw myself in with everything

that I had and if I had kids at the time I would have been home late and I would have you know missed Little League games and the thing is Buddha figured out something 2,800 years ago first principle of Buddhism which is called Dua which is that there's going to be suffering either way there's no easy path path there's no safe path there's no path of ease there's no path that's that's going to be that's going to make everything right you're going to suffer either way I'm sorry to be the one to tell you that

but I'm 20 years out of school and it's it's the truth truest thing I'm probably going to say today life is suffering and so choose something worth suffering for the other thing you're missing in this equation of your is is you're going to do an expected value calculation right but there's one thing you're not factoring into that equation which is you're not factoring in you when you're turned on I went to this dinner in New York and it was a bunch of other private it it it was ridiculous this dinner there's a whole bunch of

private Equity people there and uh we go to this restaurant in New York it's one of those restaurants that has like the ice and the fish's heads are like in the ice and you can like go up and you point to the fish that you want and for the privilege of doing that you pay like four times more for the same fish but but they're in the ice and then like we had a reservation at like 8:00 at night and then even with a reservation we still didn't get seated till like 9:15 which is like

my bedtime typically and and then we're at the dinner and this one woman comes in from with a with a um a driver and everything and she's from the Hampton she's if I had a counter she said the words Hampton probably 13 times at dinner I was like just out of curiosity do you happen to have a place in the Hampton CU I'm kind of confused and uh but but there's this one guy there Dave okay and Dave is in the same business he's in the same role as me we're in the same he's at

a competing firm and Dave starts going off Dave is like I just won this deal you won't believe this here's what happened there was this debt this is what we did on the debt covenants we didn't step them down we had the debt to IID that didn't step down for two quarters we're going to save 50 basis points on our interest and we use proforma adjusted TR 12 months yesterday EAD times 365 and we therefore we're getting extra quarter of a turn of debt and that's going to help our and he's going on and on

and on and I'm thinking Dave thinks he's colonizing Mars you know he's so excited about this like he's in his head you know he's colonizing Mars and I'm thinking to myself two things I'm thinking first Dave is going to kick my ass because I don't care at all about any of this stuff and and the other thing I realized is that this is what Dave had written his business school essay about he was living it he was doing the thing that he wanted to be doing and what what you're you're not you're not going to

win doing someone else's dream you can survive for a little while but you're not going to win if you want to live an asymmetric life do hard things and do your thing the uh third principle is do it for decades and and this is a this is one that probably a lot of people don't want to hear so like I have conversations with a lot of you and the conversation will go something like this my roommate's sister's friend Megan is trading Dogecoin and made $2 million and that could have been me you know because I

just wasn't in the right place at the right time and her friend Kristen is day trading board ape nfts and like makes $30,000 a passive income and all this stuff right and and that's that could have been you if you were just in the right place but you're all behind you know you're not there yet you're just you're like way behind where you should be and I thought that same thing when I was here when I was here it was internet 1.0 B Toc like pet food.com my classmates all went into that and if Dave

at that dinner had asked me although he Dave was not a good conversational so he never asked me but had had had Dave asked me about what I was excited about I would have talked about building this bu this little label business I would have talked about the culture we were trying to build at this company I would have talked about how we punched way above our weight and we hired this person for their ATT his attributes and no one thought of this and we pulled him from this public company and then we were putting

Lee manufacturing the plant we were building a culture where people wanted to stay and spend their lives and we were training people from high school to be press operators and and Dave would have been like Graham thinks he's freaking changing the world you know with this little label business um but what so what we didn't factor in at the time was I was willing to just keep going because I loved it if you think of the equation for returns it's 1 plus r to the n n is quadratic n is the number of years you

you you compound that's the most powerful part of the equation is n and and so if you think of me my rate of growth it almost doesn't matter I'm growing every year year three I'm a better CEO than I was in year two and in year five I'm better than I was in year four but you're 23 I'm in you're 23 and if you if you take that R which is how how fast you're improving and you can work on that r a little bit Executive coaching and writing out your goals and meditating and trying

to work and be good at your job and now you put a 23 on it you can be the best in the world it's just about the it's just about how long you're willing to do it that's the most powerful factor and there is no obstacle that will not yield to you excited about something for a decade or longer if you want to have an asymmetric life do hard things do your thing and do it for decades the fourth and final point is the most important of all in 2008 we had just started we finally

got going at Alpine things are start you know we're starting to get going and Bam we just got flattened by the recession I mean flattened we were not well positioned it turned out we wouldn't raise a fund for 5 years drain my savings account to make payroll we had seven companies in default including our largest business was in default at the time uh so for some reason during that time I had I had lunch with this this guy named JP flum and he was an executive coach I was like what the hell is an executive

coach that sounds I had no idea what that even was but he was super he was super persuasive and he's like hey let me level with you it ain't going so great in the Executive coaching business right now either so I'm GNA give you this you know incredible thing that I just pitched you for half price which was still a ton of money for me which I just drained my savings account and I just was and and I don't know why to this day that I said yes I don't know why but I did I

said yes so I hired my first ever executive coach I would not know it until much later that I I actually hired probably one of the best coaches in the world we start talking about the largest business that we have and and how it's not going well and he's like well what you know what what's going on you know what are you doing how how's this going and I said you know JP have you not seen the news in like the last you know year the Market's down 50% Leman Brothers blew up Mary Lynch just

got bought Banks aren lending like that you know like we're we're toast you know he's like he like well it sounds like you're you're just kind of helpless then Graham and then he's like you sorry like you know you know so I was like all right well what do we do he's like all right here's what we're going to do we're going to write a story okay and there's three rules to writing this story the first one is it's going to take place five years from now we're going to get out of the fog of

warri you're right you can't you can't look past where you are six Ines in front of your face let's go out five years the second rule is let's start with Nirvana I don't want to hear something that's mediocre I want to hear what would happen what would you do if you would knew would not fail what would be your genie goal as as Logan said and third he said the how is the killer of all great dreams forget the how I don't care about the how right now I just want to hear about the dream

turns out with those three rules it's pretty fun exercise I get to say ex I get to go out five years I don't have to worry about how I'm going to do it and I get to pick anything I want like that who doesn't want to do that so we put in place this this plan for this this one company we just started with one company and what we basically said is all right we're going to hire this best CEO you could imagine in the world this CEO is going to build this incredible team our

technolog is going to be better than anyone else and therefore we're going to have better uptime we're going to hire the sales team we're going to start winning contracts we never you know we've been losing all of them we're gonna you know and then we're going to start buying competitors because they're down too and we can do add- on you know and and and and and and we had this incredible thing and I was like and that was really fun and then I started saying well that that was great you know you know but that

that there's no way we're going to do that like it it was just so aspirational aspirational by the way is a euphemism for how the hell we going to do no way that's going to happen it was it was aspirational so he's like well what's the first step first step is hire a CEO it turns out in 2008 a recession that's a pretty good time to hire a CEO we spent six months and we brought on the best CEO his name is Mark Stout he's been and he he's a great friend of mine now he's

a partner at Alpine now and so we brought him on we started doing exactly what we talked about we started building the team we started building the technology we had better up time and then when Mark and his team got going after 18 months we won every single contract that came up in that business for the next two years except one and we just started stomping on our competitors and by the way what didn't the industry didn't change the market didn't change our competitors didn't change we changed we just changed our story that's all we

did we changed our story you know don't write a story about what happens write your story and then make it happen and there's so much magic in this you you put out the thing in the universe that you want to happen and the universe responds and it does and that sounds like woo woo you're like oh God here we go Universe responds but what what what's really happening what's really happening is you're putting on blinders to where you want to go you're making goals you're aligning your day to where you want to go you're attracting

people that want to go to the same place that you want to go so it's it is the universe but it's actually there's some mechanics behind it too that make it happen after that experience this I was like on to something I was like this is Magic pure magic we started writing stories Alpine about everything we wrote stories about how we could have NBAs become CEOs right when they graduate we wrote stories about building cultures where people would want to spend their whole careers where where people could feel like they mattered and feel like they're

their their life you know had meaning and that they were contributing we wrote stories about companies we wrote stories about sourcing and just pretty much every single thing we ever wrote came true from that point on I had the privilege of meeting with Joe very recently from the very first story I told you and this Joe Joe this is 20 20 year 20 years after the first story ande Jo stayed I didn't tell you what Joe Joe was incredibly gracious I could tell how hard it was for him to do that but he was gracious

because he too had had some struggles in her in her his early days and he understood that things take time and that they're hard so he stayed with us and he was a supporter of us for for the last 20 years so Joe left the hedge fund and and he devoted his life to climate change so we sit down we and we had an hour meeting we spend the first 55 minutes hearing all about climate change and all the stuff he's working on he's just bouncing off the walls he's so excited he was doing his

thing and then as we do every single time that we meet you know I give him our Our Deck and our performance sheet and Joe's been a big investor of ours and you know his foundation that does climate change is is our investor and he looks at this sheet and he uh and he just he just looked at me and he just said you know go Grand you did it you did it you know 20 23 years later like this is amazing he said thank you and you know just like back then when I had

to have that meeting over and over I had the privilege of having this meeting over and over and I meet with college endowments and boards that are like that that will say literally like you've helped us fund 10 years of financial aid for our school or another another University like shows us that this is going to go a huge part of the budget toward the buildings that they're building or you know we have investors that are running cancer foundations and are doing uh climate change work and it's it's been it's been a long ride but

a really glorious one and uh I go back to that meeting with Dave who said you know Graham's buying these stupid label printing companies and thinks he's changing the world and I'm may be having a little hopefully a little bit of an impact so where does this leave all of you all of you right now are about to graduate and a lot of you have pic have chosen jobs and careers and each of you has an opportunity no matter where you are in your life whether you're you know a parent who's even watching here tonight

like you have an opportunity to write the story you want to have you can write any story that you want you just have to start writing it and if you want to have an asymmetric leg do hard things do your thing do it for decades and write your story I thought I'd end with a catalyst that I had in my life probably the biggest turning point so I rode crew in college and uh as I mentioned before and uh I I had a nickname in in rowing which was Dream Weaver and my last name is

Weaver and so my friends call me Dream Weaver and like what a great name right cuz I mean like who doesn't want to be Dream Weaver so the person who gave me this name was a guy named Monty Razer and my sophomore year he was a senior and like you know I was not I didn't make this make the boat as as Logan said and I wasn't very good he was he was in the first he was amazing so but anyway I could still picture like I would walk into the rowing room and Monty would

just say dream like this and like I would just get this surge of energy and like the name just stuck everyone started calling me dream it was awesome and it signified who I was back then well a few years after I graduate um I'm sitting down and my friend calls me on the phone and says you know hey sit you need to sit down which nothing ever good comes of of that first intro and a phone call and he says hey your friend you know Mon's gone um he he was killed in a plane crash

he was 23 and uh I I was just like I couldn't even process this information I was just like it it just couldn't register I I I was just devastated but also I was kind of like just not dealing with it and uh so long I go with my life year after year and as I said I worked at this firm and a little bit of me was you know I was that that Dreamweaver character that that Monty had found in me was was nowhere to be seen and so around that time right at right

at right as I was in this large private firm I flew out to New York and I ended up having dinner with a bunch of uh our colleagues who who had rode crew with Monty and we ended up talking all night and I think all of us kind of needed a process uh what you know what had happened and none of us had really done that and uh so we start talking all night and and we were drinking and we're telling stories about Monty and this went on pretty much all through the night and it

was awesome we needed it you know we needed to we needed basically to kind of clear this out and and and and and deal with the this LW that we had so the next day I get on a plane to go home and uh I just lose it you know I'm in one of these huge planes going from San Francisco to New York and it has two seats and then five seats and then two seats and I'm not right in the middle I'm like one over but in the middle and I'm just balling hysterically and

like people on both sides of me are like trying to help me and tell me if I'm okay and the flight attendant keeps bringing me water and I'm like I'm good you know and like 3 hours I'm just I could not con I just like I was exhausted to that never helps I'd stayed up all night so anyway finally I kind of get my act together and I'm go to the you know splash some water in the bathroom it's like 3 hours now into the flight and I sit back down at this point and I

just remember thinking to myself so I sit back down and and like I close my eyes and I can kind of still see that visual where Monty says dream when I walk into the you know the the uh locker room and I just remember thinking Monty would be so disappointed in me right now like I'm so far from this person that he thought I was this Dreamweaver like I'm I haven't seen that person in years I was just like and then I started thinking like what what am I doing you know what am I doing

like I I'm playing for this downside I'm trying to protect the downside well guess what I had just seen the ultimate downside with my friend and like there's really ultimately there's no way to totally protect against loss or downside and so I said from this point on I'm going to play for the upside I'm just going to go big and from that point on I did I made a decision right then that I was never again in my life going to say not me or not now I was never going to say those words again

so I landed I ended my relationship uh that night the next day I walked in and handed in my resignation at my firm that I'd been working at left my crude equity and bonus and everything didn't have any come coming in and then few days later I packed up my car and drove out to Steamboat Springs Colorado where my ex high school girlfriend Cindy was living who's now who's here and my wife of 21 [Music] years and in 20 in 203 years years since that plane flight I've never I've never once again I've never said

again not me not now never and it's been amazing and it hasn't been easy as I've as we talked about so bringing it back to you all the biggest thing that you're going to face um as you graduate for most of you and through your lives like the biggest obstacle you really have is going to be fear if you really boil it down and fear is very very manipulative and it shows up in all these kinds of different ways and it tries to disguise itself okay it disguises itself as being practical I'm being practical right

now it disguises itself as I'm helping you it disguises itself as I'm saving you and most of all it disguises itself as not me not now what I have given you today is the antidote to fear that's been my goal the four things that we talked about are ways that you can tangibly and tactically throughout your lives look fear in the eye and say to fear not today today I'm going to play Big today I'm going to play for this asymmetric life now is the time to do hard things there's something that you fear right

now that's exactly where you should go you should be doing that thing there's something you're putting off right now you should be doing that thing everything that you want is on the other side of worse first now is the time to do your thing there is suffering you will suffer so pick something worth suffering for and realize that you are underestimating yourself at your full power when you're excited about something that's not going into your equation do it for decades because you excited for a decade knows no bounds there is no obstacle that will not

yield to you excited for a decade and finally write your own story no matter where you're starting and no matter what your role you have after school or where where you are right now it doesn't matter you can start today writing your story inside of you you have you have a you have magic you have your own life you have something that's special for you and there's really only one question you need to answer which is are you going to give yourself permission to lead that life to live that life and to let that out

that's a question you're going to answer over and over and over in your life from now on are you going to give yourself permission it's permission you need so class of 2023 here we are in class of 2023 you're about to graduate from Stanford freaking business school Stanford freaking business school you did not come this far to play small you came this far to move the world now is the time now is your time thank you so much thank you