Find your niche

I randomly remembered a line from a Tamil song, and I kept thinking about it for a few minutes. I wanted to make a drawing out of that line. I opened Google Gemini, entered an elaborate prompt, and got a pretty good image as the result.

The line from the song says, “Travelling on a cart, why are you carrying your things on your head? Put them on the cart, and the cart will carry them for you.”

I have had zero training in drawing. When I was a school student, drawing basic flowcharts using rulers and pencils would take me hours. I do not consider myself inclined or experienced in any way when it comes to drawing as an art.

Despite my lack of exposure and training, I was able to make this image fairly easily.

That’s the kind of enablement, or lowering the bar, generative AI has been doing. It has not made an artist overnight out of me. But it has enabled me to express myself in ways that were impossible before.

Technology increases quality of life

Back in the days, when electricity was not available everywhere, if someone had to listen to a song, there was no way other than to ask someone nearby to sing for them. Once electricity, cassette players, recorded songs (such as from movies) became prevalent, no one asked their friends or family to sing for them. Most people were able to listen to recorded performances of singers like TM Soundararajan or Lata Mangeshkar.

We can imagine that mediocre singers whose songs were accepted as “good enough” suddenly had to compete with Lata Mangeshkar and became “not” good enough. The advent of technology changed the world so that the quality of acceptable singing went way up.

Technology lowers the bar to entry

Technology benefited the experts by making them more accessible. But technology also lowered the bar to entry. (Not the same technology, but technology nonetheless.)

I am a good example for that. Without the internet and free publishing platforms, I may not have written as much as I have written in the past 20 years. As a writer I am not exactly good, but I have the platform I need to communicate, to share my ideas with others.

Generative AI agents are now lowering the entry bar even further: I was able to make an image just by describing it in words.

The importance of niches in the modern life

On the one side, the entry bar keeps getting lower—anyone can participate. On the other side, good stuff (such as content) keeps getting more accessible. The vast majority of content—blog posts, videos, podcasts, etc—will likely not find any audience at all. If you were an emerging creator, this can make you feel powerless. You can create, but most people may not find your work compelling.They would rather enjoy the works of the experts in your field.

There is a way to opt out of these impossible conditions: deliberately stop trying to compete with global (or even regional) superstars on their turf. Instead, find a niche where they are not even present.

Niches are, by definition, less crowded. It becomes relatively easier to find someone who likes what you create. Niches also tend to have less competition. A crude example: Richard Lindsay probably didn’t have to snatch Dido’s or Taylor Swift’s listeners for his Recorder in the Corner song. Dido listeners are not very likely to be present in Richard Lindsay’s niche.

If you are wondering what to do in life, maybe start by finding your niche. Unfortunately, finding your niche will also feel like an impossible task. Keep doing what you love and study the kinds of engagement you get. Your niche will likely be visible from the patterns you see in the engagement you get. You’ll often discover your niche only in hindsight, so keep creating and sharing what you create. Once you find your niche it can become easier.

Are niches only for artists?

Though I only mentioned singing and writing, finding a niche can help people in other professions too. Everyone, including the likes of plumbers, engineers, and tour operators, can—and should—focus on finding a niche where they can excel.

Random thought: Learning is thinking

Learning is thinking.

Many consider reading, writing, listening to lectures, participating in discussions, etc. as learning. However, they remain only as tools that enable the actual learning, which is thinking.

Surrender: responding to life without a bias

My life coach recommended The Surrender Experiment to me. I have been reading the book ever so slowly.

My primary takeaway from the book so far is to accept life as it happens without the influence of my own personal preferences. The following quote captures the core of the advice:

From now on if life was unfolding in a certain way, and the only reason I was resisting it was because of personal preference, I would let go of my preference and let life be in charge.

For a couple of days, it seemed obvious what I had to do. But slowly it started to be confusing. If on a Sunday I feel like eating at a fancy restaurant, is that my own personal preference, or is that life offering me a fancy meal (in the form of a spontaneous thought)? I didn’t have an answer.

Then it occurred to me. Accepting life means living spontaneously; pausing to question every single choice is anything but.

If always acting by one’s personal preferences is the south pole of the earth, purposely acting against one’s preferences is the north pole. The direction may be different, but they are qualitatively the same; you are still on the same plane; you are still anchored to the earth. What we really need is to rise above the earth. Rather than basing your actions on your preferences, you should ignore the preferences.

Respond to the situation that life presents. If the response aligns with your preferences, so be it. If the response is against your preferences, so be it.

Dream big to realise your potential

I am a credit card enthusiast. I often browse through credit card offerings to see if there are better cards than what I currently have.

Earlier in 2024, I got the Infinia credit card from HDFC Bank. This is sort of like “winning” the credit card game. There is no clearly better card an Infinia holder can upgrade to. (While there may be more beneficial cards for some people based on their spend patterns, it’s hard to do better than Infinia for most people.)

My “credit card optimisation” game pretty much ended when I got the Infinia, with me winning the game. However, I still habitually explore other credit cards every now and then. As expected, such explorations end with a reaffirmation of what I already know: there aren’t many cards I can upgrade to. The time spent looking at credit cards is wasted time, more or less.

But why do I still look at credit card options even when I know it’s not a productive use of my time? I think it’s because I don’t have anything more productive to do.

This is where the advice to “dream big” shines through. Dreaming big and working towards achieving those dreams is an effective way to realise your potential. Had I dreamt of doing something more meaningful than simply collecting credit card rewards, I wouldn’t be wasting time now browsing credit card brochures.

Great work is a great energizer

We often see people who act with an incredible amount of energy while we struggle to even wake up in the morning.

Many of us would also have noticed that we are filled with energy at times, but we can’t muster any energy at other times.

I have wondered why, and I think I have an answer now. Maybe not the answer, but an answer.

When we do great work, it’s easy to find the energy needed to do it. If the work that awaits us—and the things that we can accomplish—are of great importance and interest to us, it’s easy to wake up early and start the day with a smile. When we expect the day to be dull, it becomes mysteriously hard to get up and move.

Great work is a great energizer.

To invest is to go out on a limb

Investing is an act carried out mostly in faith. We can look at hundreds of different data points or read dozens of books and research papers. But none of that—literally none of that—can guarantee anything about the future.

Any asset we pick, any strategy we pick—there will be a dozen arguments supporting them and a dozen opposing them. Which arguments should we accept and which ones should we ignore?

We have to go out on a limb and make our bets. We may get the returns we wanted, or we may not. The risks we took great care to avoid may play out, or they may not. If the risks play out, we get to feel smart; if they don’t, we get to look like fools for not getting on the bandwagon.

Investing is a humbling exercise. It shows us how powerless we are. It’s also an empowering exercise. It forces us to march on even when the path is dark and our legs trembling.

Picture by Caio Triana from Negative Space

Being aware of emotions

The good news is that awareness is a significant half of the solution. Knowing how and when we allow emotions to hijack us is the first step towards a solution.

The bad news is that awareness is only half the solution. When I become aware that I am acting in anger, I am usually left puzzled about what to do next. I need to pause and reconsider the situation to decide on a response. Sometimes there is just nothing for me to do, i.e., the situation is simply beyond my control.

As someone who used to get hijacked by emotions on a regular basis, this awareness is making me uncomfortable. I am still figuring out how to deal with it. I suppose I should be proud, but I don’t feel that way yet… I am still confused. 😅

Emotions hijack us

This happens often. I am in the process of doing something, but a seemingly stupid thing prevents me from doing it. I become angry. That “stupid thing” may be a broken tool or someone’s inexplicable policy or someone not living up to my expectations. Essentially, something that is not in my control blocks me.

Often, this enrages me. I go on the offensive and my focus turns into hurting or humiliating this entity or person whom I am upset with. Naturally, I forget about my original goal. Hurting/humiliating becomes the priority now.

Photo by Andrea Piacquadio

But angry responses seldom help. People are more likely to cooperate when I am nice than when I am yelling at them. I cannot persuade an inanimate tool by being nice, but being angry is no better. If I shifted my focus to what I want to accomplish rather than cursing the broken tool, I’ll likely come up with an alternate solution.

Emotions hijack us. We should avoid getting hijacked. When we unconsciously allow ourselves to be hijacked, we should be flexible/humble/honest enough to drop the emotion and course correct.

When an abundance of information doesn’t help

Conflict of interest is a weird thing. It’s hard to detect and assess. Even when we can see a conflict of interest, it’s difficult to know what the conflict actually means.

When I used to be in the “anti-gold camp” (meaning, when I believed that gold should not be part of investment portfolios), I noticed that everyone that praised gold was also selling investment gold. That’s a clear conflict of interest. But just because someone sells gold, it doesn’t mean they have ulterior motives, right? On the contrary, someone who genuinely likes gold will of course sell it on their platform. (“Shocker! Milk seller thinks that milk is a good food!”)

On the other side of the marketplace we have asset managers boasting their “skin in the game.” Imagine you are asked to fly into enemy territory as a passenger on a fighter plane. The fighter pilot assures you, “I am flying right with you. I would genuinely try to keep us both alive.” The pilot isn’t lying. But taking that flight is a foolish move for most civilians. That the pilot takes the same risk as the passenger is irrelevant.

That means, making sound investment decisions boils down to knowing what you are doing. Investors need to understand the assets they invest in and decide for themselves whether they want to invest in an asset or not, how much they want to invest, etc. Fiduciary advisors can (and do) help, but the investor is the ultimate decision maker.

Academic research can potentially help, but acting based on academic research is also mired in complexity. Who funded the study? What are the researchers’ preconceived biases? Was this a “research” fabricated to prove a point, or was this done with genuine intellectual curiosity? How sound are the data and the methodologies used by the researchers? Most people cannot evaluate these. Even the conclusions of such research studies are beyond many ordinary people’s comprehension. As a result, ordinary people rely on someone else to simplify the study’s conclusion, and we are back to the same problem that we started with.

Thinking about all these reminds me of the phrase, “Water, water everywhere, but not a drop to drink.” An abundance of information is available to us, and yet, it is so hard to make sound investment decisions.

Photo by Pok Rie

How can banks retain customers?

I used to be an HDFC Bank customer. Some 5 years ago, the staff at my HDFC Bank branch were so lousy that I severed all my ties with HDFC Bank and went to Kotak Mahindra Bank. Back in 2019, Kotak was a much better experience than HDFC, especially with their much improved net and mobile banking interfaces.

I was a happy Kotak Mahindra Bank customer. But other than a bank account, there was little else that Kotak Mahindra Bank had for me. I didn’t know this back then, but now I see that this is a vulnerable position for the bank.

Each customer wants a different set of functionalities from their banks. My banking needs today include:

1. Basic banking operations, such as receiving and sending money, supported by good net and mobile banking apps.
2. A good set of credit cards that pay meaningful rewards.
3. A way to optimally manage my safety buffer cash (aka emergency fund).
4. Ability to hold small savings accounts, such as PPF and SSY accounts.
5. Not strictly necessary, but nice to have: automatic bill payments.

Of these, Kotak Mahindra offers #1 and #3. I was a happy Kotak Mahindra customer until I learnt that HDFC Bank offered an unbeatable forex conversion rate to Google employees. I have to regularly convert USD into INR. To reduce my forex conversion cost, I decided to open an HDFC Bank account. I didn’t intend to make HDFC my primary bank, though. I thought I’d transfer all the cash to my Kotak Mahindra account and transact from there.

But within a few months, I got pulled deep into the HDFC Bank ecosystem. I got their top-of-the-line credit card that pays incredible rewards. HDFC’s SmartBuy became my primary shopping destination. HDFC SmartPay started tracking all my bills and paying them automatically.

I opened an HDFC Bank account with the intention of not using it for any transaction. Within a few months, I am in a situation where most of my transactions happen through that account!

Partner discounts and automatic bill payments are not unique to HDFC Bank—almost every bank offers it. But HDFC Bank does them so much better that I actually want to use those features. Credit cards are not unique to HDFC Bank. I am a Kotak Privy League customer, and they have given me their Zen credit card for free. But I barely ever use the Zen card because the rewards aren’t attractive. HDFC Bank’s offerings are simply more practical.

Within a year since opening the HDFC Bank account, I am considering closing off my Kotak Mahindra Bank account. This is shocking even to myself since I like Kotak Mahindra and this had been my primary bank account since 2019!

How can a bank like Kotak Mahindra not lose customers to a bank like HDFC? I think they should think more holistically and build products that work together to deliver value. HDFC’s bank accounts, credit cards, SmartBuy, SmartPay, etc work so well together that customers would often want to use those products. Competing banks need to have a vision, a viable strategy for building a good ecosystem of products, and execute well towards that vision. Such a task is so difficult that most banks would never accomplish it.

PS: I sound like an HDFC Bank fanboy, don’t I? 😅 But I am not affiliated with any bank. I am just writing down my observations and thoughts.

Small cogs in a big engine

Balaji is a taxi driver. He drives a taxi at night. Most of his customers after 11pm go to the airport. He stays awake till well into the morning taking people to wherever they need to go.

Does Balaji contribute to making the world a better place?

On the surface, no. He is not inventing medicines to cure diseases. He is not inventing technology to ease people’s lives. He is not counselling families to stop their quarrels. All Balaji does is taking people to where they want to go.

If we use the same lens, most people’s work doesn’t contribute to making the world a better or an easier place to live in. Yet, the world has constantly been becoming a better and easier place.

What was the world like in 2014? Are our lives easier now? Of course! What was the world like in 2004? Are our lives easier now? Definitely!

One way to explain this would be to give the entire credits to specific inventions that have made our lives better. We’ll maybe find hundreds or thousands of people to cite as the reason for the improvements. Did those thousands of people accomplish all this all by themselves? No, they did not.

Taxi drivers like Balaji help scientists (and businesspersons and social workers and …) go where they need to go. Progress is faster because we have easy transportation thanks to taxi drivers. Let me repeat this in different words. In a society where there are no taxi drivers and everyone needs to manage transportation on their own, progress would be slower.

This is not just about taxi drivers, though. Everyone out there today, doing all kinds of work, is helping the society move forward. Maybe they are small cogs in a big engine, but everyone is a small cog in the humongous machine that is our society. All these small cogs come together to make the engine do wonderful things.

When you take a taxi ride next time, or when you have a plumber repair your water lines, or when you have a delivery person bring you things, or when you have a restaurant cook a meal for you—remember that they are also a reason you’re able to excel in your day job.

My takeaway from this year’s budget

Quite a few people are losing their heads due to the taxation change. I’ll admit that I am also in some kind of a despair due to my old debt funds losing indexation all of a sudden.

I suppose this is proof that you need to be emotionally stable to succeed in investing. (Or anything in life, for that matter.)

Keep a clear head; learn the new rules; change your strategy if necessary. Keep marching towards your goals. Maybe that’s the lesson I need to learn from the taxation changes introduced by this year’s budget.

Suffering from success

I am sure “suffering from success” sounds bizarre, if not stupid. But I think it is a real thing. Here are a few examples that I have come across.

1. Money management

For the past few years, I have been optimising money management. Different ways of managing different expenses, different spreadsheets to track expenses, income, taxes, investments, etc. Whenever I encountered some unsolved problem, I tweaked my processes and tooling.

Earlier, a significant chunk of my energy went into thinking about money and worrying if I had enough money. Then I started devoting a similar amount of energy in tweaking my processes and creating tools and spreadsheets.

Now I am at a phase where I don’t have to worry about money too much. My regular data recording and review processes don’t take more than a few minutes. I actually have free time… except I don’t know how to use that time. It’s a good problem to have for sure, but I am not prepared for this. If I don’t figure out how to use the extra time, I’ll likely become a sad person just scrolling through social media aimlessly.

2. Financial independence

There is a craze in some circles about financial independence. People even talk about how much they hate their current jobs and how amazing their lives will become once they have amassed enough wealth to be able to stop working.

But surprisingly, not everyone who retires early enjoys a peaceful life. Some live in a constant fear of running out of money. Some find it hard to keep themselves occupied and even go back to their old job (or a similar one).

What comes after success?

What’s common between these two examples? We look only at our immediate problems and solve them. Once they are solved, we are little prepared for what comes next.

I don’t think anyone can foresee these “second phase problems” and start to solve them ahead of time. That’s likely not possible, and likely not necessary. Maybe what we need is an open mind. Not getting too stuck in our routines that they leave us feeling empty when those routines are not necessary anymore. When we feel empty, we get addicted to something. I, for example, am likely on the verge of getting addicted to social media. Spending some energy in figuring out how to use my time better is in order now.

It’s funny. We see some problems and solve them. What do we get? More problems. Reminds me of this line from the movie Zorba the Greek: “Boss, life is trouble. Only death is not. To be alive is to undo your belt and look for trouble.” Maybe life is just an endeavor to keep looking for better and better problems.

Unbiased

Every human is biased. When we come across someone that has biases similar to our own, we call them unbiased.

Random thoughts after our Bali visit

Some scattered thoughts from our recent visit to Bali, Indonesia:

Pura Tirta Empul in Bali

• While I don’t hate my job, it probably is very stressful. I am not consciously aware of the stress, but my constant ailments pretty much disappeared during the trip, even when I had stopped taking the regular medicines.
• One of the best things that happened during this trip was bonding with my (8 years old) son. I never thought I’d be able to connect with him at a different level, but this trip made that possible. This is itself reason enough to keep travelling with my children.
• A day is 8 to 10 hours long. Be it work or leisure, it should be just that length. Adults in the party (my wife and I) were okay to stretch the days to 12 hours, but the children needed their “me” time. They had to put their feet up and watch their YouTube videos or run around playing in the hotel room before they’d go to bed. I need to remember this next time and limit the number of activities we pack into each day.
• I have always found flight travel awful. Dragging 3 sleep deprived and dehydrated children through airport gates and immigration reaffirmed my dislike for flying.

A cluttered portfolio is not a problem—it’s a symptom

Let’s say you have bought a ticket for a 4pm movie show. When you arrive at the movie theatre, you notice that there is a 7:30pm show of a more interesting movie. If you had known about this screening earlier, you wouldn’t even have bought tickets to the 4pm movie—the 7:30pm movie is just better.

What do you do after your 4pm movie is over? Do you stay at the theatre and watch the 7:30pm show too? While some may do that, most people don’t. Despite the 7:30pm movie being good, most people don’t have an uncontrollable urge to watch it. Why? Because people know that it’s just another movie. Yes, every movie is unique, but that doesn’t mean you have to watch every movie out there to be entertained. You can afford to miss even really good movies.

Now replace movies with mutual funds. You have been investing in a flexi-cap fund for a few months. You see a media report that praises a certain mid-cap fund for its stellar performance. You fear you’re missing out, so you invest some money in that mid-cap fund. A few months later, maybe you invest in a thematic fund because the theme sounds so wonderful. Later you invest in a contra fund. If this goes on, you’ll soon be holding a dozen or more mutual funds in your portfolio.

Why does this happen? Why is it so easy to say No to a movie, but so very difficult to say No to a mutual fund? Not just mutual funds—accumulating clutter is true with pretty much any investment asset. People who invest in equity want to add gold to their portfolio. Then some REITs. Then some global equity. Then some InvITs. Then something fancy, say invoice discounting. When it comes to investment assets, many of us have a hard time saying No. Why?

I think I have an explanation.

We know that we don’t miss much by not watching a movie. We are able to control or ignore our desires and urges. Most of the time, it’s not even an issue because we know beyond doubt that it’s just a movie.

But we are not able to say No to investment assets because we lack that confidence. We have no confidence in our ability to make the right decisions. This lack of confidence makes us nervous every time we come across something new. Diversifying into different assets gives us a sense of safety. We hope that at least some assets will bring in profits. This lack of confidence inevitably leads to a messy and cluttered portfolio.

A cluttered portfolio is not a problem in itself, but it’s a symptom that tells us that the investor lacks confidence. The investor has no confidence in their ability to pick the right investment asstes. Nor do they have confidence in the assets they currently hold. They readily make room for new assets because they don’t know if their current assets are sufficient or whether they need the new asset. They err on the side of caution.

Conversely, a confident investor will have a simple, uncluttered portfolio. They are comfortable not having every interesting asset in their portfolio because they are confident about the prospects of the few assets they already hold. They don’t get FOMO (fear of missing out) because they know that it’s just another asset.

Uncharted territory

Every territory is an uncharted territory.

Maybe a thousand people have already done what you are about to do. But that doesn’t make a difference to you if this is the first time you are doing it. When you do it, you should do it your way. That means you learn, improvise, and improve as you go.

So what are the takeaways?

• Remember that you don’t have to copy others. Do it in your own way.
• You have learnt and done so many things in life. The challenge of this new thing is not going to define you. (You do not define yourself based on how you fare in this one challenge.)

Be thoughtful about your “default thoughts”

Many of us know about growth mindset. The basic idea is that you don’t restrict yourself, or some other person, to what you or that person is capable of doing today. You consciously accept that one can acquire new skills and do new things tomorrow. I had a revelation yesterday about how growth mindset may look in reality.

Recently, I received feedback from my managers that I needed to do a better job at «responsibility». My director said, “If everyone on my team is doing the bare minimum necessary, I can’t take this team to new heights. I want you [and everyone] to go above and beyond the baseline expectation.”

I immediately knew what I had to change. I have to stop thinking “I don’t know how to do this” and replace it with “I can figure this out.” That should be the default thought.

Default thoughts should be empowering, and be of growth mindset, rather than of restricting growth.

“Hard earned” money

Am I the only one irked by the expression “hard earned” money? As if money that one got easily is any less respectable. Money is money irrespective of how one gets it.

Career growth and inefficiency

When you start doing something new, you are usually pretty bad at it. Once you figure out how to do it right, you stop being bad. With practice, you’ll become good, and the work will become effortless. If you are rapidly growing to new heights, you won’t be spending a lot of time on such effortless tasks. You’ll keep on moving to newer problems and you will likely find yourself struggling again and again.

Image source: pxfuel.com

It’s counterintuitive, but the faster you grow, the more time you spend being inefficient. If you’re too hard on yourself for being inefficient, your growth won’t be fast. Newer challenges will make you feel bad, and you’ll involuntarily resist growth.

If you want rapid growth, you need to change the way you assess yourself. Avoid thinking “It took me 2 full days to write a short business proposal.” Such a thought causes negativity. Instead, you may think “I have finished writing my first ever business proposal. Until today I was only an engineer, but now I am growing into also becoming a businessperson.” Feed on the positives rather than focusing on the negatives.

You need to consciously derive happiness and pride from the challenges that enable your growth. If you expect yourself to be flawless every time no matter what, your growth will be slow and painful.

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PS: Implicit assumption here is that you can tell good results from bad: either you are capable of assessing it yourself or you have people who will give you reliable feedback. This post is not for people who declare victory too quickly even when the quality of their work is poor.