U PSTREAM E FFECTS #8: C URRENCIES

LIGHTS WAX AND WANE 

We’d met in the afternoon on the rooftop cafe, surrounded by elegant plants and decor, and watched the lights of one of Taipei's night markets slowly come on as the sun slinked down below the horizon.
 
Now those lights were dimming and blotting out, giving the night back its darkness.
 
But we had filled, between the two of us, a whole one-third of a large notebook with sketches, concepts, diagrams.
 
***
 
The conversation had started the previous year at my office in Beijing. Most of our friends were the type of people who tried to decipher the secrets of the universe — what works? What doesn’t? Why?
 
Kai had brought a novel theory he’d been musing over, as he passed through Beijing after seeing his relatives.
 
“Four Currencies”
 
There’s an old management dictum that “what gets measured, gets managed” — the corollary being that unmeasured stuff often fails to get managed.
 
Kai had been searching out how to measure the development of various tangible and intangible resources.
 
Tangible resources are easy enough — how much cash is in your checking account? Easy.
 
Intangible resources are harder — what’s the value of having another case study in your portfolio? If you get offered the opportunity to work on a high-prestige project at a low rate of pay, or a high-pay low-prestige project, which one serves you better in the short-term and long-term?
 
These questions aren’t academic. It was clear the ground underneath the collective feet of the Western world had started to shift: unlike our grandparents, we were not going to work at one job at one company all our lives. In fact, the very concept of “job” seemed to be shifting and blurring; people like Kai and I usually weren’t working for salaried wages, but were often piecing together project portfolios and looking at tradeoffs between higher cash for doing routine work we’d proven our skills at, venturing off into unexplored areas with unknown payoffs, doing more speculative engagements that could lead to — what, exactly?
 
It was all very hard to get one’s mind around.
 
***
 
Kai’s always insightful to be around, and I turned over his Four Currencies model in my mind from the short meeting in Beijing. He went on to the highest-paid engagement of his life, did exceptional work there, but — mystifying just about everyone he knew — he walked away from his $15k/month contracting gig after delivering a nice set of deliverables, and struck off into the unknown again. They wanted him to do more for them, so everyone was surprised when he didn't stay.
 
Everyone expected him to keep milking the cash cow for a while, but no. If Kai hadn’t repeatedly surprised people — and been proven right repeatedly — we’d have all thought he was mad.
 
There’s not a very long list of people I admire very greatly, so I didn’t hesitate to tell Kai to please stop by Taipei en route to Shanghai next time he went to see his family when I heard of his departure from this high-paying work. 
 
So there we sat, the hours melting away faster than if we’d been at an engrossing blockbuster movie, diagramming and deciphering and trying to make sense of the tradeoffs between the various resources available.
 
***
 
Well-pleased with our pile of notes, we determined that day to write a book about it, and budgeted ourselves a two-week intense sprint in the Shanghai French Concession to do it; I flew out there after he’d seen his relatives, we holed up and began to write.
 
We were, of course, a bit naive — the book finished many months later, barely sort of on-time, after extensive writing and editing sessions on a ship across the Atlantic with no internet, and after blocking out long sessions in Marrakech (it was cheap, we thought) and Istanbul (much more suitable to productivity, despite being more expensive). 
 
***
 
FOUR + ONE CURRENCIES
 
Gateless , I’m pleased to say, was highly reviewed and extremely well-received. Here is what the model of 4+1 Currencies became —
 
Capacity : Your generalized ability to get results and make things happen.
 
Network : The sum of your friendships, collaborations, and mutual regard with others.
 
Signal : How you appear to the outside world.
 
Assets : Your tangible resources; the mix of financial assets and tools you employ.
 
Those were the evolved versions of the Four Currencies model that Kai pioneered. We added one final one, Meaning , that all the resource-gathering supports and resolves to.
 
***
 
A FRAMEWORK FOR MANAGING ONE’S INTANGIBLE DEVELOPMENT
 
The 4+1 Currencies model was hugely helpful for Kai and I in measuring and ensuring we’re developing well on all those areas that are more loose and hazy.
 
Thankfully, has been reported as hugely helpful for colleagues and readers of ours.
 
If you find this concept useful and intriguing, I’d highly recommend you go get a copy of  Gateless  — I’m biased, since I co-authored it, but we’ve got literally perfect five-star reviews throughout for it. Being able to put one’s intangible development into a framework and getting it on rails is incredibly valuable.
 
Now, I’ll walk you through the basics of it.
 
And of course, with a focus on Upstream Effects — it’s always a little humbling when I realize that the options and power I have available to me today are directly descended from what I did in past months and years.
 
A good decision, made two years ago, to really cultivate a connection with someone admirable and hard-working, will often pay surprising dividends in opportunities, friendship, and great action years later.
 
Sometimes I get a little shiver up my spine when I think about how some seemingly small action I took affected the future — the future, of course, now being the present moment. And I realize, what I do now will affect how I’m living and what my options are in the coming weeks, months, years, decades — it’s both marvelous and terrifying, isn’t it?
 
Here’s that framework —
 
***
 
CAPACITY: YOUR GENERALIZED ABILITY TO CREATE EFFECTS
 
You’re always creating effects. As you walk into a room, the social texture of that room changes. Every business you patronize, you create for them revenue that affects their profitability and numbers. The work you do makes ripples, sometimes larger or smaller, through the entire world around you.
 
Your ability to consciously shape the effects you’re creating around you — that’s what Kai and I call “Capacity.”
 
Be sure — you’re creating effects, intentionally or not. But to understand Capacity, imagine a large problem happening and different people you know saying, “I’ve got this under control.”
 
There are people who, right away, you’d think: “Oh, phew, they’re on it. It’ll get fixed.”
 
Those people have high Capacity; they can fix things. These people that can always do what they set out to do are incredibly valuable. If you know someone like this, you know how appreciated they are, and how much everyone counts on them.
 
There are other people who, once they’ve pledged to get it done, you’d think, “They said they’ve got it under control... hmm... there’s a 50/50 chance it’ll get done. I’ll have to pay attention.”
 
Those people have a lower Capacity, but a decent one; they are unreliable in their results, but can sometimes produce. This is most of us.
 
And of course, there’s people who, after promising to get it done, you’d feel no reassurance at all. You’d still be looking to get it fixed, because you know they’re not going to get it done. Low Capacity.
 
A lot of the things that go towards “Capacity” are things that wouldn’t normally get lumped together.
 
A greater ability to function when stressed, fatigued, or in distress means higher Capacity.
 
An ability to spot opportunities as they emerge — higher Capacity, again.
 
Putting together novel connections to produce better results? That does it.
 
So does being able to concentrate more.
 
Being able to speak clearly helps; so does being able to understood the point another person is making.
 
Being able to understand numbers well is often useful.
 
Some of these are active processes. Some of them operate in the background. And some of them, people think are aspects of who they are, immutable and unchangeable.
 
In a world with less defined careers and less clear paths, the simple ability to get a job done is incredibly prized and valuable.
 
A case could be made that this generalized effectiveness has become the most valuable trade. Specialist’s knowledge still reigns in medicine, law, and architecture, but even these very-established fields are seeing a greatly increased need for people who can learn quickly, adapt flexibly, and produce results .
 
That is, people who can consciously make effects happen  — people of high Capacity.
 
***
 
CONSCIOUSLY TRAINING CAPACITY
 
In  Gateless , Kai and I focused on Four Levers Of Capacity  — Biochemistry, Cognition, Action, and Environment — as ways to broadly alter and improve your ability to consciously create effects.
 
A lot goes into this, under many names and categories — health, productivity, meaning, thinking, creating, consistency, training, thought processes, attitudes and affinities, beliefs, prejudices, skills, physical characteristics, mental characteristics, habits, knowledge, and so on — all of this goes into Capacity.
 
There are many universals, and searching for them and installing them into your life makes you universally more effective.
 
Much of these chapters on Upstream Effects has focused on Capacity — entrainment, biochemistry, firebreaks and rapid repairs, doing those micro-upstream actions to make tomorrow and the coming couple weeks better, planning, basic mathematics, working on trajectory.
 
I do think it’s worthwhile to see Capacity as a unified whole — in short, learning better planning skills and spending time getting your athletic training in order both help this same generalized ability. 
 
***
 
NETWORK: A NON-TRITE DEFINITION…
 
“Network” and “networking” have awful reputations as words, and probably for good reason.
 
Frankly, neither both Kai and I don’t love the word “network” or “networking”... there just isn’t anything better that’s not too wordy or too contrived.
 
One speculates whether “networking” has such a bad reputation because of the impersonal-seeming nature of it.
 
Sitting with a friend in a comfortable cafe with a strong coffee in hand... Recounting adventures, swapping stories about your lives, and planning how to keep moving up in the world. Is this “networking”? Is this person “a node in your network”?
 
It seems absurd. It doesn’t capture it. It’s so... impersonal. Clinical.
 
The word “network” could imply some abstract graph of interconnecting dots and lines. But in reality, it’s so much more than that — it’s about the living, breathing people you choose to share your life with.
 
Friendship, camaraderie, working together, helping each other — these are some of the most beautiful and noble things we do. And the sum of your friendships, collaborations, and mutual regard for others becomes your... well, network.
 
***
 
… AND A WAY TO MEASURE IT 
 
In the book, Kai and I started by outlining the importance of Network, the magnifying effect of it on everything you do, the importance of taking a character-first approach to fixing and improving yourself before trying blindly to make connections.
 
But then, ok, you’ve got all that down — now what? You do you know if you’ve actually improved your Network? How do you stay on top of it?
 
And that’s where a measurement that we devised comes very much in handy.
 
To figure out how well your network fits with what you want to do in the world, evaluate along three lines
 
1. how relevant each person in your network is to your goals and life,
2. how intimate you are with each person,
3. and the character of each person.
 
***
 
RELEVANCY, INTIMACY, AND CHARACTER: AN EXERCISE
 
A “higher quality network” is one where you’re more intimate with people of excellent character who are relevant to what you want to do in the world.
 
How do you measure that?
 
Here’s an exercise.
 
To start, write down on a piece of paper the 50 to 150 people you know most well.
 
Then, write down next to their name how “Relevant” each person is to what your current core goals and purposes are on a scale of 1 to 5. Be sparing putting someone down as “Relevancy 5” — that might be only a few people who are real trailblazers and key people in the field you’re in.
 
Relevancy is pretty straightforward, and people tend to naturally come up with good numbers for it. Intimacy is a little trickier, because it’s so subjective. But is it? There’s actually a way to make it objective. Try this —
 
1. The person only vaguely knows who you are, and might or might not remember you.
2. The person knows who you are, but won’t always take your phone call.
3. The person will take your call every single time you call, and call you back if you miss each other.
4. The person will actively help you if you ask, even if there’s nothing explicitly in it for them.
5. They’ll “tell you where the bodies are buried.”
 
As you can see, this maps from almost strangers at 1 to acquaintances at 2, then starting to become friends at 3 (they respect you enough to consistently take your calls), to friends at 4, and really close confidants and intimate friends at 5.
 
It’s a pretty objective scale.
 
***
 
TYPICAL SURPRISES FROM THAT EXERCISE
 
Almost everyone who does this exercise for the first time is surprised when they mark these numbers down.
 
If you’re like most people, the first thing that’ll stand out to you is that it’s likely the people that are most relevant to your life are also the ones you’re least intimate with and followup with the least.
 
People tend to get intimidated when they meet someone who is “powerful” or “accomplished” — and there’s something to that, but people are people. Almost everyone who does this exercise realizes they don’t reach out enough to people they’ve met who could really help make a big boost in their lives.
 
You’ll want to fix that.
 
Gradually, intentionally increasing the amount of outreach you do with people who are highly relevant to your life is critical to going where you want to go.
 
***
 
(CHARACTER CAVEAT)
 
One caveat! 
 
Character is more important than anything else.
 
The attitudes, habits, world views, politics, personality — even the way you speak and language you choose — this is hugely affected by the people you have in your life.
 
“Character” is harder to nail down. There’s no numerical scale for it. But you should be constantly looking to become closer only with people of excellent character.
 
You’ll almost certainly have opportunities in your life to advance yourself by mixing in with someone of slightly bad character. Maybe they’re a little sloppy, or a little dishonest, or whatever else.
 
Avoid it.
 
When you’re around people who are honest, diligent, friendly, hard working, who like to evolve, who are conscientious, and so on — this makes life easier and more enjoyable. And more importantly, it makes you more like that. Doing the opposite, no matter how promising the opportunity, is a recipe for long-term disaster.
 
That’s not to say that everyone in your network must be a saint. Actually, navigating relationships with people who are highly relevant to your life or are gatekeepers or stakeholders — but who have poor character — is an important skill. But be very careful not to nurture and develop those relationships with people with poor character. You become like the people you’re around.
 
***
 
SIGNAL: EVERYTHING YOU CONSCIOUSLY AND UNCONSCIOUSLY BROADCAST ABOUT YOURSELF
 
The most appreciated and commented-on part of  Gateless  were the sections on Signal.
 
We put it down as: "Your own “Signal” is always on; it’s what you’re intentionally and unintentionally broadcasting about yourself, and how others perceive your Signal has a huge impact on how you get treated and what you’re able to do in the world.”
 
***
 
SIGNAL IS REALLY IMPORTANT
 
Everything you do with other people becomes easier or harder, depending on your Signal. Again, that’s the sum total of what you’re intentionally and unintentionally broadcasting about yourself to others.
 
Obviously, this has a huge multiplier on just about everything in life involving others.
 
To improve your Signal, there’s six areas to go to work on gradually —
 
1. Artifacts  of what you’ve built and done: One of the highest credibility aspects of Signal. Use liberally. If you have claims to make, put them into action and get artifacts out of it.
 
2. Claims  of what you can do: One of the lower credibility aspects of Signal. Better done with another method when possible. If needing to use claims, look to make them accurate and process-oriented rather than state-oriented.
 
3. Opinions  of third parties on you: The most surprisingly credible and impactful aspect of Signal. Often underestimated by smart people, references and testimonials go incredibly far to build your Signal. Learn how to get these; it’s not that hard to learn and very useful.
 
4. Observations  people make when seeing you: Hard to control, but given an extremely high weighting by most people. This can be obsessed over to your detriment — once it’s “Above the bar,” switch to building Character, Capacity, etc. Revisit and tweak occasionally, but this has the least bearing on your actual ability and is the least useful in isolation (and it’s the most over-invested in societally).
 
5. Context  in which you first come across each other: Surprisingly confusingly important. Not entirely controllable, but look to get into contexts that the people who you want on your side are receptive, trusting, and open to connecting with people. Introductions rule here; so do organizations and events that just being there means being valuable.
 
6. Biases  the other person brings to the table: Study which ones might apply to you. It’s hard to get people to be honest about these, because no one wants to admit they’re prejudiced. Get feedback, listen to stories from people with a similar background who found a way to thrive, and experiment to learn what works. Figure out how you can deal with what you’re up against in a way that harmonizes with your values. It can be uncomfortable, but try not to bury your head in the sand on this stuff. You should win at life, and there’s many ways to get there — you can find one that works for you.
 
***
 
SIGNAL CYCLES
 
One of the coolest concepts to see emerge after writing Gateless was seeing people we know, now that these concepts were identified, do “Signal Cycles” — meaning, search through everything about their signal, think through how each can be tuned and improved to make life more effective, and improve them all.
 
The key part of a better Signal is “Better Reality” — actually doing better, consistently. Do more, serve more, be better. But after that, you can start capturing and Artifact-izing the gains of what you’ve done. Writing a single great case study, taking photos or videos to document good work you’ve done, writing debriefs and reports that are useful — all of these show proof of what you’ve done in the past, and make life easier.
 
Instead of thinking about “credentials” abstractly, you think about Signal. An official mainstream credential might be more powerful or less powerful than a simple testimonial or endorsement from someone well-respected. If you can do outstanding work for a single person well-respected in your field, have them attest to it, and have some proofs/samples of the good work you’ve done, you’ve dramatically improved your Signal.
 
***
 
ASSETS AND MEANING
 
We talked about Assets quite a bit last chapter — it’s the easy example to use in terms of Trajectory, given that it’s the one that’s gotten the most mainstream ink and has the most common straightforward guides on how to measure and interact with. (I will just say, very briefly, that it’s worth occasionally overviewing everything you own, what its function is, and analyzing if there’s better quality or more effective versions of the tools and items you use regularly.)
 
Then, we’ll talk about Meaning in the later sections and chapters, given how precious it is — it’s what everything else can and should add up to.
 
When talking about virtue and goodness in life, Aristotle wrote that,
 
“To entrust to chance what is greatest and most noble would be a very defective arrangement."
 
Sage advice. Hopefully this chapter has given you some new frameworks and tools to measure these intangibles. If you didn’t do that Relevancy/Intimacy/Character exercise from the middle of it, consider going back and doing it now.