Judgment is the skill that gets paid.
What Naval Ravikant says about it, where those words come from, and what research says. Plus what a founder can do about it.
Naval says what matters most is not working hard. It is judgment.
In The Almanack of Naval Ravikant, he says hard work counts for less in today's economy. What is underrated, he says, is judgment.
Three plain questions follow. What is judgment? Is he right? Can you build it?
Source: Almanack, p. 94, free text
Judgment is knowing what your choice will cause later.
Naval starts with wisdom: knowing the long-term results of what you do. Judgment is that skill pointed at problems outside yourself, like a hire, a product or a deal.
So it is not about being clever. It is about seeing far enough ahead.
A tool that makes your work bigger also makes your choices bigger.
Code, media, money and other people are all levers. A small push moves a big weight. Aim well and you win big. Aim badly and you lose big.
That is why Naval says one right decision can win everything.
Source: Almanack, p. 94
With huge leverage, being right 9 times in 10 instead of 8 could pay hundreds of times more.
Naval gave this for 1,000 times leverage. It is his arithmetic, not a measured result.
Source: nav.al, "How to Get Rich"
He did not say hard work is useless.
- You still have to put in the time.
- Judgment matters more than the hours.
- Skip the work and you build neither judgment nor leverage.
Source: Almanack, p. 94. First card is a one-line quote often seen online.
The page is an edit, not a transcript.
Source: Almanack endnotes 1 and 78; Jorgenson, raw-material counts. The editor says to check wording against the original.
Yes, if you get feedback on your calls.
Philip Tetlock tracked people who predict the future. The average expert did barely better than chance. But some did far better, and the skill grew with practice and feedback.
His best forecasters even beat intelligence analysts who had secret data.
Source: Wharton interview; Superforecasting, publisher summary
Give three experts the same case and they often give three answers.
Daniel Kahneman and his co-authors found professionals disagree far more than anyone expects. They call the gap noise. Doctors, judges and investors all show it.
The fix is simple. Ask several people on their own, then average.
Source: McKinsey, Kahneman and Sibony
Hours of practice explain less than you would think.
A review of 88 studies found structured practice explained about a fifth of the gap in music and sport. Among elite athletes alone, under 1%. One expert disputes how practice was counted.
Source: Macnamara, Hambrick, Oswald 2014; BPS on elite sport
Small gaps in skill can become huge gaps in pay.
Economist Sherwin Rosen showed that when one act can reach a huge market, the best one takes most of the money. In 1982, the top 1% of pop acts took 26% of concert ticket revenue.
But one basketball study found no such effect once other factors were counted. Luck and fame play a part too.
Source: Minneapolis Fed on Rosen; 1982 figure, citing NYT; PBA study
"Predictable" is too strong a word.
Naval's goal is to be rich in 999 of 1,000 possible worlds. That is a goal, not a result. He admits he lost his first fortune and was cheated out of his second.
Critics add that his examples are winners, and that luck and timing matter. No source I found measured how much.
Source: nav.al; 36Kr essay
Pick the direction first, then count your attempts.
Naval says direction matters far more than force. I found no study that tests that, so treat it as advice.
He also says you learn from new attempts. Stacking the same shelf for 1,000 hours teaches little. Trying something new each week teaches fast.
Source: Almanack, p. 94; nav.al
Write down your calls, then check them later.
- Write what you decided and why, before you know the result.
- Ask a few people on their own, then average. Do not let them hear each other first.
- Watch your feelings. Naval says emotions block you from seeing clearly.
The first two habits come from Tetlock and Kahneman, not Naval. Source: nav.al
Do the work, aim it well, and keep score.
Judgment is learned by acting, being checked, and trying again. It pays because tools multiply the choices you make. Naval is right about the shape of it, and too bold about the promise.
Where this comes from.
- The Almanack, Building Judgment and its sources list
- nav.al, How to Get Rich and Judgment Is the Decisive Skill
- Tetlock, Kahneman, Macnamara, Rosen, 1982 ticket data
- Jorgenson on the book's raw material, swyx, 36Kr essay
Method: Almanack wording matched to its free text and endnotes. I did not open the 2018 Periscope stream. Research is read from abstracts and reviews, so check exact figures in the papers before quoting. All illustrations are original, drawn by vizmaya desk. No photographs are used.