Lessons from the World’s Most Successful People with Polina Pompliano (EP.106)

0:28We all need to make smart decisions with our money. secret ways of thinking that power the world's most successful people. She's also the founder of The Profile, a media organization that studies successful people and companies. Previously, Polina spent five years at Fortune, where she wrote more than 1 ,300 articles and earned the trust of prominent investors and entrepreneurs. As the author and editor of Termsheet, Fortune's industry-leading dealmaking newsletter, where she interviewed some of the industry's most influential dealmakers. In our conversation, Polina and I discuss a wide variety of mental models and thought patterns that can be implemented throughout your personal and professional life.

1:07As always, you can find links to all the resources mentioned during the conversation by visiting thelongterminvestor.com. And with that, here is my conversation with Polina Pompliano. Polina, welcome to The Long Term Investor. Thank you for having me. I'm very excited to be here. Well, I've actually been following your work at The Profile for a while now. And for listeners and viewers that aren't familiar with your work, I was hoping we could just start the conversation there, give a little sense of what it is that you do on a regular basis. Absolutely. So in a very small nutshell, The Profile is the place where I just study people that I want to learn from.

1:49And I say that I study successful people, but I find that people have an aversion to the word success, because I think most of us define success in the traditional way, which is status, wealth, material possessions. That's not how I define success. And all the people that I study are people that fit my personal definition of success, which is that they've done something remarkable. They failed. They've learned lessons. They've taken those lessons and applied it to their next endeavor and then shared everything that they've learned with other people. And so that's why I look for stories that are very complex and winding and not the obvious linear path that most people think about when they think about success.

2:32And yeah, the profile is just this newsletter that I started in 2017 that I've sent every single Sunday since February of 2017. And it curates seven to eight profiles of successful people. And then, you know, I share my takeaways and my learnings in an individual deep dive with my subscribers. Well, for anyone who has not seen it before, I highly recommend it. And everything that we mentioned here on the show is always can be found links resources at the longterminvestor.com, including a link to your new book, Hidden Genius, The Secret Ways of Thinking That Power the World's Most Successful People.

3:14So first of all, congratulations. I had the opportunity to read it while I was beachside in Florida. It was an excellent, excellent read. And the teaser for the book, it kind of mentions what you just said, but you say high performers don't use tricks or hacks. They use mental frameworks. Can you expand on that idea a little bit? Yeah. So anybody who's been on the internet for any amount of time, we've seen those thought leaders and influencers who say, wake up and take a cold plunge at 4am and like do this, this and this, that does not guarantee that you will be successful. That is not a way of thinking.

3:53Maybe it is a way of life for some, but it's very hard to be consistent and for it to be sustainable. What I'm talking about here is not these like tiny hacks that you can do to optimize your day. It's more of like, what are long-term thought patterns you can implement in your life and in yourself that will sustain you through the rest of your career and life and hopefully improve your professional and personal relationships. I love that. Something certainly that I believe in as well. I'm just kind of curious. Is there a favorite of yours of the mental frameworks that you do explore throughout the book.

4:32What would be your favorite and why? Yeah. So entrepreneur and investor, Reid Hoffman, I heard him on a podcast once say, consistency plus time equals trust. And that has been like a guiding philosophy in my life ever since. Because not only can you apply it to investing or founding a company or doing a business, having business relationships, but also to your personal relationships. Any time that you meet a person and you're like, ooh, do I trust them? Can I not trust them? And like, you're trying to figure that out. It's through the longevity of that relationship that you can find the answer.

5:12And it's not just the other person, it's you too. So it's like, I asked the question of name a relationship in your life, whether it's business, personal or professional of any sort, where you trust a person who consistently breaks their promises to you. And it's like that person doesn't exist. We do not trust people who say they're going to do something and then consistently over a long period of time break their promises. Maybe they do it two or three times and then you're like, you are not a reliable person I can count on. So I've thought about that in my personal relationships, like with my husband.

5:46Like if I say I'm going to do something, I will do it. but also with my readers. So as the writer of the profile, I have not missed a single Sunday since February of 2017, not because I'm a workaholic, but because I understand that anytime you start doing something, everybody has like these lofty goals, right? Like, oh, I'm going to send this every single week without exception, except for when life happens. You have to go to a funeral. You have to travel across the world to another country, different time zone. You have a baby. Like life will happen. And it's planning for those unexpected events.

6:26How can I be consistent and keep my promise even when the, you know, unpredictable happens? So I know that those moments will happen. So I have measures in place where I will still send you something. Maybe it won't be like the full length of the newsletter you're used to, but I will still send you something so that I keep that consistency going and I earn your trust. and I did the profile for free for three years before I ever asked for a single dollar from my readers and I think it's because I built that trust over that three-year period that allowed people to be like, oh, okay, I could trust her with my money.

7:03I'm not gonna subscribe to this newsletter and pay and then she's gonna run off and take my money and never send it again. So I think like if you think about that framework as just like an overarching theme in your life, you can apply it to every single area. I really appreciate you sharing that. And as a content creator myself, I know what the struggle is to hit publish every week and what goes into that and what it looks like, but also how rewarding it can be. And so you've been doing this for a while, you said since 2017, and your book has a very similar theme. You know, it's looking at the successes of others, looking at their profiles, knowing that that's your favorite mental framework, perhaps I'm already going to have answered this question, but was there a place you were most excited to write about within the book or a chapter in particular?

7:49I mean, was that the one? Or was there anything else that sort of stuck out to you that you were particularly excited about just because of the way that it influences your own life? So when I was writing the book, I never actually like thought about like, oh, I wonder what people will like or which chapter they'll gravitate towards the most. From the people that have read an early version, I've gathered that they really like chapter two, which is the mental toughness chapter. I really enjoyed writing that one too. But I think one that probably won't get as much hype that I really loved writing was on storytelling.

8:24And the reason I liked writing it is because if you read the book, you'll notice that there's a theme throughout, which is perspective and identity. And I wanted to play with perspective and identity. And throughout the book, I ask a lot of questions that will make the reader look inward and be like, wait, who am I? What do I value? How do I define success? And the storytelling chapter begins with kind of how we're all the unreliable narrator of our own life, because nobody looks at themselves super objectively. And in investing, you know this, it's really, really hard to devoid yourself of emotion when making investments.

9:05So I start with that. And then I go into some of the best storytellers in the world, one of them being Aaron Sorkin, who wrote many, many, many films, but one of them being The Social Network. And The Social Network was about the inception of Facebook. And in it, he's just an expert at weaving in different layers of perspective to the point where the viewer is like, oh my God, like, what is the truth? So he was like, I wasn't particularly interested in technology or startups or whatever. But I liked this particular story because there were multiple lawsuits at the time. And he was like, I saw that there were multiple versions of the truth.

9:50And there is not one ultimate source of truth. So the way that he did it was like he did it from three different perspectives. Like, sure, there's Mark Zuckerberg's perspective, but then there's Eduardo, his friend. And then there's also the Winklevoss twins. And then there's also like Harvard, the institution of Harvard. So it's like you have all these conflicting versions of the truth. And how do you make sense of it? And that's what makes his films great. But it's also something that we can look in our own lives where it's like, oh, man, I think this is the truth. But what if there's multiple other perspectives and layers here that I can untangle to get as close as possible?

10:29I think in the book, I include a quote by Robert Evans, who says, there are three sides to every story, yours, mine, and the truth. I love that quote. And I did love the story that you shared within the book of Aaron Sorkin, talking about that movie, as well as just how he thinks about what really drives a story as a whole. And that's one thing that really struck me as I was reading this book is that you grabbed from so many resources that I myself have read over the years, strictly with an investment mindset as I'm going through it. And yet you've weaved these all into, I don't know if personal improvement is the right word, but you've found a narrative to sort of tie so many different disciplines and experts into one place.

11:14And I'm hoping I can just touch on a few things in the book that stuck out to me that I think was very influential to the way that I think on my own, I think might be helpful for our listeners, starting with the systems-based mindset. Can you talk a little bit about the difference between an outcome-based mindset and a systems-based mindset? Yeah. So Toby Lutke, who's the CEO of Shopify, the founder and CEO of Shopify, he's obsessed with systemizing everything within the company and also within his life. And he says that any time that a big decision has to be made, he sits his team down and they go through every single part of the process and how they got to that decision.

11:57Because he's like, if the fundamental mentals are shaky. It doesn't matter what the outcome is. The outcome's not going to be able to stand. So chess players use this a lot, outcome-based mindset versus systems-based mindset. Basically, if you make a mistake during any sort of game, chess game, football game, investing game, if you make a mistake, it's easy to deconstruct that one mistake and be like, I made this mistake because it led to this outcome. Oh, I'm not going to make that mistake again. So in an outcome-based mindset, it prevents you from making that one particular mistake again. But in a systems-based mindset, you're looking at the process that led to that outcome.

12:38And so you're preventing yourself from making hundreds of future mistakes like that one again. And so I think James Clear also talks about this, how if you're focused on the outcome, you can win one time. But if you're focused on the process, you can win many times. And also by focusing on the process, which are those tiny, tiny habits and tiny, tiny minute decisions that go into what becomes the outcome, you are becoming a certain type of person at the end. You're not just changing the outcome this one time. You're not just running a marathon one time. You're becoming a runner. I absolutely loved that part, which is why I asked.

13:20And you had some quotes in there from I'm Nick Saban. I'm a big sports fan. So someone who is obsessed with process over outcome. And when a player makes a bad play, they say, just stick to the process. Don't worry about what happened. But more so in my everyday life, both coaching people through investing and financial issues, as well as just talking to people in everyday conversation. They think so much about the outcome. Even a good decision can lead to a bad outcome. And forgetting what goes into a good decision-making process and judgment. And even though I don't know what we have time, I know you go into Bay's theorem later in the book, which is just the most heavenly thing for an investment decision-maker.

14:00But I think this idea that outcomes are pretty random. And if you judge whether something was a good choice or not, strictly on the outcome will start to lead you down maybe a less than productive path. So I really enjoyed that. And I'm going to kind of make a hard transition to another story that Chris Hadfield, I actually drew something slightly different from his story. So I would love for you to sort of tell it yourself. Explain the point that you made in the book. I might share sort of when I first heard that story, how I applied it to my life, if you don't mind. Perfect. Yeah. So Chris Hadfield, he's an astronaut and he was doing a spacewalk.

14:37So that means he was outside of the International Space Station when all of a sudden, he felt that his left eye like slammed shut in pain. He was like, what on earth just happened? And it was some sort of like soap and oil solution that astronauts use to clean their visors, got inside the helmet into his eye. And so he couldn't see. So he became temporarily blind outside of the ISS holding on with one arm, which is crazy. Most people would just immediately panic. I would be calling Houston, like, help me out. Like, we really have a problem, Houston. But he, instead of panic, he realized like, okay, I have options and I'm striving.

15:18Basically, what they teach you in any sort of astronaut training or any sort of like high stress situation training is give yourself optionality and give yourself room to think. So he started like listing all the options that he had in his head. He was like, I could call Houston. I could have my fellow like astronaut Scott Parazinski conduct an incapacitated crew rescue out here or I could cry a little bit and just like let the stuff dilute. He ended up doing a fourth option which was to open a vent on the side of his helmet to let some oxygen out and help clear it out and then he continued working.

15:55So it was just like this crazy moment of fear, fear, fear, a panic, but then stop, think and give yourself options. I love the way you describe that. And as I mentioned, I read this once upon a time and started a blog post, which is pretty common. I write a lot of stuff that never sees the light of day because I just don't quite get to the point. The big thing for me was that don't panic because the moment panic seeps in, you lose all rationality. And so I like that you highlighted how he had this action of making a list of things he can do. And the one thing that I did end up publishing eventually was more about NASA's training through what is effectively exposure therapy, where you get used to a bad situation long enough and you don't panic.

16:39And a lot of what we do with clients and market losses is basically every time we're in front of them, we say, hey, the market's going to fall a lot and we don't know when or why and we're not going to panic. Here's some of the things. But what I am going to change now, I will tell you, Polina, is that I am going to say, you're going to make a list of all the things you can do. And usually at the top of that list, I'll tell people, you might as well look at your financial plan before your portfolio when you're going through that list. But really, you know, a great example of how people, you know, you can learn from the way that they've handled risks and different moments in their life.

17:12And you and I, even before the show, we're talking about Morgan Housel, who everything he writes is great. And so you had a lot of material to draw from, but you picked one in particular that I had sitting on my bulletin board by my office desk for a long, long time. And I am going to pull this so I read it correctly, that on risk, the things that you're trying to think of are the odds that you will get hit, the average consequences of getting hit, and the tail end consequences of getting hit. So Paulina, let me ask you, how do you think people should apply this lesson? And where do you see it popping up in our daily lives?

17:45This is a perfect link to what you said earlier, where you said you can make all the right decisions and have an amazing process, and then the outcome can still be bad. And that doesn't mean that, you know, your process was faulty. Sometimes life is just random and chaotic, and you cannot account for all the risks. So like Chris Hadfield in astronaut training, he calls it a dress rehearsal for catastrophe. They list all the risks. They do exposure therapy. They're like, if you're in this situation, here are your options. But sometimes something totally the tail end of consequences happen. So I give this example because it's the tail end consequences of risk that are of the highest magnitude and you're the least able to predict.

18:37So it's like that's really, really hard. It's like the black swan events, right? So Morgan talks about this, and I immediately thought of the story of Conrad Anker, who is this legendary mountaineer, and he's a legend. He knows how to climb mountains. His process is immaculate. But he one time was climbing Mount Shishapingma with two of his buddies, and they were going up, and everything was fine until there was an avalanche that nobody had foreseen. and as it was coming down, Conrad went to the left and his buddies went to the right and then he suffered, you know, broken ribs and broken collarbone and head lacerations and stuff like that, but he survived, whereas his friends' bodies weren't found until years later.

19:29So it's like that one stupid, dumb luck decision of going left instead of going right is what saved his life, Right. Like that's not something you can account for or train for or prepare for. So I think it's like, yes, you can become a master of chaos in some way, but you have to know that there will be those random risks and things that happen to you that you're not prepared for. And it's after years of training that like, yes, maybe you can go through your options and you can go through everything and you can make an informed decision. Or sometimes you just go left instead of going right. Yeah, I think there are sometimes that people who only focus on the tail end consequences, particularly when it comes to the finances, the investing and that sort of thing.

20:16There are others that don't really think about the average consequences of their general risk. Kind of going back to Chris Hadfield, and I don't know if he said this or if it's just a general NASA saying that like there's no problem that you can't make worse. and understanding really where the risks lie and thinking of those different, when you come to big life decisions and whether it's starting a business, quitting your job, moving, starting a family, there's all sorts of everyday life, things that will keep any given person up at night. But I really do like those three kind of levels of thinking about risk.

20:50So I was thrilled to see you include it. I love the mountain climbing story to show that really, on those tail ends, your process can be perfect and a good outcome or bad outcome can be more random. Although in that case, that guy really just had to randomly choose. Look, you've obviously spent countless hours studying the lessons of dozens of people. I'm kind of curious what you think. If someone were to study your life, what do you think we would learn? That's really interesting. So I think the reason I got so good at meeting people and being able to extract lessons from them so quickly is because two things.

21:31One, I always feel like an outsider because I always have been in some way. Like we moved from Bulgaria to Atlanta, Georgia when I was eight. Then when I was an adult, I moved to New York City. And I got to see like three totally different perspectives of the way people live and the way they think. So my beliefs are very grayscale. I never think that one particular group is right. or the only way to think, or anything like that. Like, that's not how my mind works. So I'm able to get lessons from people that you may not ever think you can learn something from. And the other part is that I think when we first moved to the U.S., I didn't speak English, obviously.

22:13So when I was in class and school, I spent a lot of time reading body language and just looking at how people interacted and trying to read like cultural and social norms, like trying to learn that with also being in a new country. And I think that really, really helped me understand that there's a subtext of like social interactions. There's what people say, yes, that's very important and whatever, but how they want the world to perceive them or who they choose to hang out with or where they sit in the cafeteria tells you a lot more than just what they're telling you. So I think that that's really, really helped me.

22:53When you've made it clear in the book, as well as in your newsletter, that you aren't setting out to learn about these people or showcasing them or writing them as a form of idolization. But I mean, I do know that you do quite a bit of reading on biographies. So even though none of your work is trying to idolize people. Is there anybody in particular that you find yourself idolizing and be kind of curious as the why behind that? A funny thing happens when you study so many people. It's like you realize that you don't idolize anybody because idolizing requires you to worship like perfect versions of imperfect people.

23:37And I think we all remember like Bill and Melinda Gates were the shining example of a power couple. And then when all was revealed, you're like, oh, wow. Like, okay. So I was trying to learn from something that wasn't real. So I think like there's perception and there's reality. So to me, even the closest people, even like family members that when you're a child, you idolize your parents. But then like, for example, like when my parents were going through their divorce, I was like, this is the first time that I'm kind of realizing, like, maybe they're not absolutely perfect, unblemished people that I had idolized in my mind.

24:15So there's not one single person. I really truly do think that each one of us has really great qualities, but we also have blind spots. And with the profile, I'm trying to learn like, this is what I really like and I admire, but this is definitely not what I want to replicate. For example, I used to think that Danielle Steele was an amazing author and she's so prolific and how does she work so much and create these amazing novels. And then I learned that she had a really dark time in her early life where her son passed away. And since that day, she just went all into work and she used writing as an escape from reality.

24:56So it's like, oh, that's interesting. And she talks about like, I work all day long. I have no life for anything else. And I have no time for anything else to the point where her personal relationships suffer. So it's like, okay, I don't want to replicate that, you know? So it's very much like learning and understanding where you could go wrong. I love that. Really, really interesting. So you'd brushed up against this topic a little bit earlier in the conversation. And I'd like to dedicate some space before we close out here directly to ask you, Polina, how do you define success? Oh, that's how I define success.

25:38I define success as personal fulfillment, if I had to put it succinctly. You strive for something that truly fulfills you, not what society tells you should fulfill you. You strive for that. You work really hard to get it, to attain it. And then once you have it, I feel like it's almost like your responsibility as a successful person to share your learnings with those who can come after you. Well, Polina, this has been wonderful that you're sharing all of your learnings with my audience here. If you're watching us on YouTube, please leave some comments below. Subscribe, like if you're on the podcast, rate the podcast wherever you listen to it.

26:18But Polina, where can people find you if they want to follow you some more. You can find me at readtheprofile.com to sign up for my newsletter, The Profile, or with the book, hiddengeniusbook.com. Well, it's truly a pleasure. Again, congratulations on the book. It's really wonderful. I suspect you'll have 3 million and one sales as we discussed earlier. But truly, this has been wonderful. Thank you so much for sharing your time. For all of you listening and watching us, thanks again and to Long-Term Investing. Thank you so much. Thanks for listening to the Long-Term Investor Podcast. To access free financial resources and submit questions to be answered on the show, visit thelongterminvestor.com.

27:06Peter Lazaroff is an employee of PlanCorp and Brightplan. All opinions expressed by Peter and any podcast guests are solely their own opinions and do not reflect the opinions of PlanCorp or BrightPlan. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of PlanCorp and BrightPlan may maintain positions in the securities discussed in this podcast.