Here is the full transcript of Graham Weaver’s talk titled “How to Live an Asymmetric Life” which was delivered at GSB 2023 Last Lecture Series.
In this Last Lecture Series, Graham Weaver, Founder of Alpine Investors, shares his insights on living an asymmetric life, emphasizing the importance of taking calculated risks and pursuing one’s passions. He discusses the principles of doing hard things, doing your own thing, and choosing something worth suffering for. Weaver also highlights the power of compounding growth and the impact of setting ambitious goals.
Listen to the audio version here:
TRANSCRIPT:
Twenty years ago, I’m in this meeting. I’m in this huge conference room with a massive table seating 20 people, and I’m the only one there. I’m on the 29th floor in the financial district, gazing out of a window that overlooks the entire bay, Alcatraz, 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. Joe is this bigger-than-life person, a hedge fund magnet, a household name. I’m sitting there, petrified, shaking, with a dry throat. I can hear Joe walking toward me, and then I hear the knob turn as he walks in, his huge personality filling the room. “Graham, you know,” he’s all excited.
I’m sitting there, and he sits down, sensing something’s 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. I can see the energy drain out of him, and the worst part is he’s trying hard to be positive because he knows that if he says the wrong thing, he’ll crush me, as I was so fragile. He was my largest investor, and I had been told “no” by over 100 people while raising my first fund.
There were about five or six people like Joe who said yes, not because I had any track record — because I didn’t — but because he believed in me, just me. He was investing in Graham Weaver, and that’s what I had to show for him — I lost half his money. It was the worst day of my career at that point and even to this day.
The thing I thought I knew about investing back then was all wrong. What I thought I knew was rule one: don’t lose money. And rule two: never forget rule one. So, I spent all that time playing small, trying to protect my downside, buying businesses at a discount to their net asset value. Even when things went right, it didn’t go that right. Three times, I wrote an investment memo claiming it’s mathematically impossible to lose money, and we lost money all three times.
What I learned is like starting to date with the sole purpose of not getting your heart broken. You have one foot in and one foot out, and even if you have a good date, it’s not great because you’re not really in it. The more likely outcome is you guarantee the very outcome you’re trying to avoid — you get your heart broken.
Over the next 30 years, I started realizing that this approach was 180 degrees from what I should be doing in investing. No matter what you do in life, if you’re going to invest, there’s going to be downside; you can’t get it to zero. You can reduce it maybe a little bit, but the magic is what can you do on the upside? What happens if things go well?
In 30 years of being a professional investor, I can summarize great investing in a single word — asymmetry. You’re looking for the biggest possible outcome relative to your risk. Your risk typically is just losing one times your money. So, you want to be stacking criteria on top of each other where it becomes asymmetric.
For example, if you have the criteria of an amazing management team working super hard, hiring well, in an industry with infinite capacity to redeploy capital at high rates of return — and you can hold it for 10 years, they want to keep going — you stack those on top of each other. They don’t stack linearly; they stack logarithmically. You can have an almost infinite outcome, playing for 10, 20, 50, 100 times your money with that criteria.
As I started realizing that this was how I was living my life investing, it also was how I was living my personal life — playing small, playing not to lose. So, what I’m going to share with you today is how to live an asymmetric life. There are four principles, and if you get one of these principles right, you will 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 infinite 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 it for decades. And I can tell you this from experience.
Do Hard Things
Principle one is do hard things. So we have this view, we have this thought that life is supposed to be easy and that comfort is where we’re going to gain happiness. So you can order Harmony Bowl from Sweet Greens on your app. You can binge-watch Succession and Ted Lasso. And you can have a life of ease, 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 rowed 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 have an ERG test.
You sit on a rowing machine, you row 2,000 meters as hard as you can.
And the saying is if you get done with that ERG 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 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 ERG 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, lifting weights, and on and on. It was grueling, and 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 two 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 VO2 max or your technique. All you changed is your comfort to be uncomfortable. You realized 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 myself that I had a lot more than I thought I did and that at 750 meters, when my heart rate’s 175 beats a minute, I can keep going.
This chart right here shows our lives, and this is what happens. We get complacent, or we get comfortable. And if we want to move forward and get to the next peak, the magic is to understand that your life is almost always going to get worse 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’s 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. 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.
Eventually what’s going to happen is these 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 you’re going to remove that fear, just like I mentioned in the rowing example. I had no fear at 2,000 meters or 1,500 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.
Do Your Thing
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 basically two options. There was a firm that came to recruit on campus, and I knew I could do it. It was what I did before business school. It was a big private equity firm. A number of my classmates went with me. There was a salary and a bonus and free lunches, and it was really clear.
Then there was another path, which is I’d done these, as Logan said, I started doing this crazy stuff in business school with buying companies on my credit cards. I was like, I don’t even know how that’s going to work. 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. I chose the path 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. Here’s your goalposts. I’m going to sprint like hell to those goalposts as fast as I can as all of you are because you’re competitive and you want to go there.
I got on early flights and would start bidding on businesses, and they’d tell me which companies to go to, and I would do those. I threw myself in with everything that I had. If I had kids at the time, I would have been home late, and I would have missed Little League games. The thing is, Buddha figured out something 2,800 years ago, the first principle of Buddhism, which is called dukkha, which is that there’s going to be suffering either way.
There’s no easy path. There’s no safe path. There’s no path of ease. There’s no path 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 the 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 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 was ridiculous, this dinner. There’s a whole bunch of private equity people there.
We go to this restaurant in New York. It’s one of those restaurants that has the ice, and the fish’s heads are in the ice. You can go up and you point to the fish that you want. For the privilege of doing that, you pay four times more for the same fish, but they’re in the ice.
We had a reservation at eight o’clock at night. Even with a reservation, we still didn’t get seated until 9.15, which is my bedtime typically. Then we’re at the dinner, and this one woman comes in with a driver and everything, and she’s from the Hamptons. If I had a counter, she said the words Hamptons probably 13 times at dinner.
I was like, just out of curiosity, do you happen to have a place in the Hamptons? Because I’m kind of confused. There’s this one guy there, Dave. Dave is in the same business. He’s in the same role as me. He’s at a competing firm. 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 EBITDA that didn’t step down for two quarters. We’re going to save 50 basis points on our interest. We use pro forma adjusted trailing 12 months. Yesterday EBITDA times 365. Therefore, we’re getting an extra quarter of a turn of debt, and that’s going to help.
He’s going on and on and on. I’m thinking, Dave thinks he’s colonizing Mars. He’s so excited about this. In his head, he’s colonizing Mars. 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.
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. 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.
Do It For Decades
If you want to live an asymmetric life, do hard things and do your thing. The third principle is do it for decades. This is one that probably a lot of people don’t want to hear. 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. That could have been me because I just wasn’t in the right place at the right time. Her friend, Kristen, is day trading BordApe NFTs and makes $30,000 of passive income. That could have been you if you were just in the right place, but you’re all behind. You’re not there yet. You’re way behind where you should be.
I thought that same thing when I was here. When I was here, it was internet 1.0, B2C, petfood.com. My classmates all went into that. Dave, at that dinner, had asked me, although Dave was not a good conversationalist, so he never asked me. Had Dave asked me about what I was excited about, I would have talked about building 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. We hired this person for his attributes. No one thought of this. We pulled him from this public company. Then we were putting lean manufacturing in the plant. We were building a culture where people wanted to stay and spend their lives. We were training people from high school to be press operators.
Dave would have been like, Graham thinks he’s freaking changing the world with this little label business. 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 compound. That’s the most powerful part of the equation is N.
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. In year five, I’m better than I was in year four. But year 23, I’m in year 23. If you take that R, which is how fast you’re improving, and you can work on that R a little bit, the 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 how long you’re willing to do it. That’s the most powerful factor.
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.
Write Your Story And Then Make It Happen
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 starting, 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 five years, train my savings account to make payroll. We had seven companies in default, including our largest business was in default at the time. So for some reason, during that time, I had lunch with this guy named JP Flaum, and he was an executive coach.
I was like, what the hell is an executive coach? I had no idea what that even was, but 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 going to give you this 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 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 actually hired probably one of the best coaches in the world. We start talking about the largest business that we have and how it’s not going well, and he’s like, well, what’s going on? What are you doing? How’s this going?
I said, JP, have you not seen the news in the last year? The market’s down 50%. Lehman Brothers blew up. Merrill Lynch just got bought. Banks aren’t lending. We’re toast. He’s like, well, it sounds like you’re just kind of helpless then, Graham, and then it’s like, 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 war. You’re right. You can’t look past where you are six inches 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 knew you would not fail?
What would be your genie goal, 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 actually to write the dream.
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. Who doesn’t want to do that? So we put in place this plan for this one company. We just started with one company, and what we basically said is, all right, we’re going to hire the best CEO you can imagine in the world.
The CEO is going to build this incredible team. Our technology 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’ve been losing all of them, and then we’re going to start buying competitors because they’re down too, and we can add on, and, and, and, and, and, and we had this incredible thing.
And that was really fun, and then I started saying, well, that was great, but there’s no way we’re going to do that. It was just so aspirational. Aspirational, by the way, is a euphemism for how the hell are we going to do it? No way that’s going to happen. It was aspirational.
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 Strauch, and 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 uptime, 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.
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 put out the thing in the universe that you want to happen, and the universe responds.
And that sounds like woo-woo. You’re like, oh, God, here we go. Universe responds. But 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 is the universe, but it’s actually, there’s some mechanics behind it, too, that make it happen.
After that experience, I was on to something. I was like, this is magic, pure magic. We started writing stories at Alpine about everything. We wrote stories about how we could have MBAs become CEOs right when they graduate. We wrote stories about building cultures where people would want to spend their whole careers, where people could feel like they mattered and feel like their life 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. This is 20 years after the first story.
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 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 the last 20 years.
So Joe left the hedge fund, and he devoted his life to climate change. So we sit down, and then 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, I give him our DAC and our performance sheet. And Joe’s been a big investor of ours, and his foundation that does climate change is our investor. And he looks at this sheet, and he just looked at me, and he just said, you know what, Grant? You did it. You did it.
Twenty-three years later, this is amazing. He said, thank you. And 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. I meet with college endowments and boards that will say literally, you’ve helped us fund 10 years of financial aid for our school, or another university shows us that this is going to go a huge part of the budget toward the buildings that they’re building.
We have investors that are running cancer foundations and are doing climate change work. And it’s been a long ride, but a really glorious one. And 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 maybe 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 chosen jobs and careers. And each of you has an opportunity, no matter where you are in your life, whether you’re a parent who’s even watching here tonight, 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 life, do hard things, do your thing, do it for decades, and write your story. I thought I’d end with cattles that I had in my life, probably the biggest turning point. So I rode crew in college.
And as I mentioned before, and I had a nickname in rowing, which was Dream Weaver. And my last name is Weaver. And so my friends called me Dream Weaver. And like, what a great name, right? Because I mean, like, who doesn’t want to be Dream Weaver? So the person who gave me this name was a guy named Monty Razor. And my sophomore year, he was a senior.
And like, you know, I was not, I didn’t make this, make the boat, as Logan said, and I wasn’t very good. And 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, 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 that first intro on a phone call.
And he says, hey, your friend, you know, Monty’s gone. He was killed in a plane crash. He was 23. And I was just like, I couldn’t even process this information. I was just like, it just couldn’t register. I was just devastated. But also, I was kind of like just not dealing with it. And 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 nowhere to be seen. And so around that time, right at right out right as I was in this large private equity firm, I flew out to New York.
And I ended up having dinner with a bunch of our colleagues who had rode crew with Monty. And we ended up talking all night. And I think all of us kind of needed to process what you know what had happened. And none of us had really done that. And so we start talking all night.
And we’re 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 deal with this loss that we had.
So the next day, I get on a plane to go home. And 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 bawling 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. And like three hours, I’m just I could not continue. I was exhausted too, that never helps. I stayed up all night. So anyway, finally, I kind of get my act together.
And I’m going to splash water in the bathroom. It’s like three 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 like I close my eyes, and I can kind of still see that visual where Monty says, dream when I walk into the locker room.
And I just remember thinking, Monty would be so disappointed in me right now. Like, I’m so far from the person that he thought I was this dream weaver. Like, I haven’t seen that person in years. I was just like, and then I started thinking like, what am I doing?
You know, what am I doing? Like, 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 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 income coming in. And then a 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 years. And in 23 years since that plane flight, 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 we talked about. So bringing it back to you all, the biggest thing that you’re going to face as you graduate, for most of you and through your lives, the biggest obstacle you really have is going to be fear, if you really boil it down. And fear is very manipulative. And it shows up in all these kinds of different ways.
And it tries to disguise itself. 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 role you have after school or where you are right now, it doesn’t matter. You can start today writing your story.
Inside of you, 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.