We hear stories of phenomenal entrepreneurs — Jeff Bezos of Amazon.com, Mark Zuckerberg of Facebook, Evan Spiegel of Snapchat, Travis Kalanick of Uber — these young men have successfully built up *empires* within their lifetimes and literally impact the lives of hundreds of millions of people every single day. Unlike other fields such as sports or science, entrepreneurship is a relatively fair playing field. One does not necessarily need to be 6’5″ with long arms and huge hands or have the mental capacity to engineer spacecraft propulsion systems to excel. We hear inspiring rags-to-riches stories of men like Larry Ellison or stories of high-school dropouts like Richard Branson. These stories speak to us — people without innate talents or gifts — and gives us a sliver of hope that we can too achieve those levels of greatness.
At least for me, that’s what drew me to the world of Start-ups in the first place. I was more than convinced that if I worked hard and hustled enough, I would be able to build something great, regardless of my skills or background. I spent thousands of hours reading countless startup books, blogs, articles, and video material — little did I know that I would be quickly disillioned by the entire idea. It started with a single row of Oil Palm trees in a tiny district called Setiawan in Malaysia.
It had been years since I had last seen the countryside, and during the previous trip my eyes were glued to the screen of my smartphone. We were driving out of town to Setiawan for a cousin’s wedding when my almost-annoying curiousity started to take form and exert itself on my father.
“Dad, why are there so many palm trees?”
“…what do you mean why? We are the second largest producers of palm oil in the world. Of course there are so many trees!”
“No but why? What is palm oil even used for?”
“Ju, palm oil is in almost all the food that you eat. See, this is why you shouldn’t be playing with your phone all the time!”
I was shocked, partly at the facts that my father had just laid out, but mostly at my lack of general knowledge.
“Wait, how do we even get oil from those trees? Do they produce it in their bark or something?”
My dad laughed out loud, but I could feel that he was slightly concerned for his son.
“Can you see those red things on the trees? That’s the palm oil fruit. When they crush it up they get the palm oil. Isn’t it obvious?”
“Wait wha-. So people literally pick the palm oil fruits and crush them up to get oil? Some of those trees are crazy tall, how do they even do that?”
“That’s a surprisingly good question. Lucky for you, I read about this recently. Apparently people use long sticks and poke them when they are ripe and they drop to the ground. Then they carry them to a nearby truck for it to get transported to the factory. You know, one of the biggest problems is that there is a lot of waste during this process.”
“WHAT? So there are random people just running around the forests with long sticks poking the fruits down and carrying them to the trucks?”
“Um well if you want to put it that way then yes. It’s one of the things these companies are investing money into. Some of them try to reduce waste by converting the residue after processing the palm oil into chicken feed.”
“Wait wait, back up to the harvesting. So people POKE THE FRUITS manually with STICKS?”
“Yes, why is that so hard to understand?”
My brain went into overdrive into thinking of a better solution. Could this be my lucky break? Could I disrupt this palm oil harvesting industry? Multiple ideas popped into my head — a robot to automatically harvest the trees; an app to tell farmers which trees were harvest-able; a drone to take aerial images and identify which trees needed to be harvested soon or else the fruits will become overripe. I was so sure that there was an opportunity here. As Elon Musk once said, “I could either watch it happen or be part of it”
For the remaining duration of the journey, I continued to brainstorm. I thought of all kinds of solutions to improve the harvesting process. “I’m like 90% sure companies would pay me millions to solve this problem”, I told myself. Fueled with the energy of creativity and conviction, I interrogated my father for more answers.
“Dad have you ever bought palm oil? Not like the actually palm oil but like the commodity.”
“I wanted to buy it many years ago, and I should have. The prices shot up by a few times in the 90s and hedge funds and other financial institutions made a whole load of cash”
“Like millions of dollars?”
“More like tens of billions.”
This felt like a punch to my gut. Here I was sitting in the car, brainstorming about how to improve the palm oil harvesting process using bleeding-edge technology like machine vision, and the amount of value I estimated I could create was in the millions. It would take a team of extraordinarily smart people to live cheaply and work a disproportionate amount of time to build out this technology, while on the other side of the world, well dressed hedge-fund managers on Wall Street were making orders of magnitude more with a single trade.
It suddenly felt like the entire start-up ideal of infinite optimism and altruistic value creation turned around and kicked me in the face. The amount of effort I would have to pour into this company to make it successful clearly had a lesser payoff than a single correct bet on the markets. I’m not saying that it is easy to make a correct bet on the prices of palm oil, but it is infinitely easier than building a company.
What was the point of fighting for something so hard, if the payoff was better in a different field?
This is where I get called a ruthless capitalist who only cares about money, but really I do feel that this is part and parcel of becoming a more mature individual. I’m not going to inherit a billion dollars which I can spend however I want. I, like most of us reading this humble blog, will probably need to work for the rest of their lives to pay the bills.
Would I rather spend 10x the time for 1x the payoff, or would I rather have the opposite?
This single experience, despite insignificant, evoked a 180 pivot in the direction of my goals. I wanted to prioritize learning how to make money and sustain myself versus learning how to build a tech startup. I wanted to learn how to invest and grow my money instead of putting everything on the line to create value in the world (cue Elon Musk with SpaceX and Tesla). Thus began my startup disillusionment and my journey to understanding finance.
Deep down, I still do feel a tugging sense of conviction to create value and build great things. I just believe that maturity means understanding that I need to build up enough personal capital to be able to take action on my convictions without ruining my quality of life. I do want to do something outside of finance at some point in my life, but my personal comfort will always come first.
I believe that the wealthiest people are the ones who are able to have the largest impact. I also believe that startups are not the smartest way to amassing the amount of capital I need to living the way I want to.
Call me a selfish capitalist, call me a sellout, tell me that I’ve given up on my dreams — but at this junction of my life, I am convinced that this is the best thing to do.