I think it was Warren Buffett’s business partner Charlie Munger who said that:
If all you have is a hammer, then all the problems seem like nails.
What I think he meant was that if you only know one thing, then you will make a mistake of trying to fix every problem with the same solution.
But that is a wrong way to look at thing. It’s the glass half empty way. Find out what to do if you only have a hammer.
Well, Munger’s quote is particularly interesting because that’s what Warren and Charlie have been doing their entire careers of becoming some of the wealthiest people in the world.
In the beginning it was cigar buts. They found a specific way to get the last puff of smoke out of companies were in a certain financial situation. The basic idea that they had was the hammer they used on specific nails or cigar buts that were the companies they bought.
The cigar but idea has stopped working since then, but Warren Buffett and Charlie Munger still work the same way. They have specific business models that they understand well, and they use them on the companies that are well suited for that particular hammer.
One model they use is the economic moat model, where they invest in businesses that have some advantage that is almost impossible for their competition to overcome.
The key here is specialization.
Focus on what you do best
To get extraordinary results you have to have a laser focus on something and become the best you can be in that thing.
So, that thing is your hammer.
Now you go out and start finding nails.
I understand what Charlie meant by saying that if you only have a hammer, everything looks like a nail. I’m sure this happens when you don’t understand your situation and try to apply your solution to a problem it’s not meant for.
Learn to understand what a is a nail and what’s not.
In business, you get exceptional results when you go deep in one niche. Don’t try to be everything for everybody. Be the best at using a hammer on all kinds of nails. You can focus even more. Select a specific range of nails you want to work with.
Improve your skills in the hammer and nails area every day. Your name should become a synonym of the field you are in the same way we google for information.
Become the best at identifying your special type of nails
You can find all the nails there are and dominate the market of your kind of nails. You will be the Windows or Android in your area. Or you can rise your prices and only work with the select few, becoming a Ferrari or Rolex in your niche.
Select the nails that are best suited for your type of hammer. When you continuously improve your hammer and nail skills, then you have the choice of working with the projects you want. You can send away clients you don’t like. At the same time, you can take on pro bono work, because you generate enough value to give something back to the community.
As you continue to improve your hammering skills and move beyond 10 thousand hours of deliberate practice, the hammer will become a part of you. You will intuitively know what problems you can solve with your hammer.
Now you can focus on art. When the routine things you do in your craft become part of your muscle memory, you are free to focus on the smallest details. Like the native people of the north have 22 words for snow, so do you, about your craft.
Competition and Innovation
Sometimes industries are disrupted. There are few people offering taxi services with horses these days. You have to be vigilant so you are not out competed by a new better way to hammer nails.
There are dozens of examples where the incumbent market leader was dethroned by agile startup or a whole new technology. Kodak was the largest provider of supplies for photographers. They even invented the digital camera. But they didn’t understand what people wanted and lost everything.
Like Jeff Bezos said, “Don’t think what’s going to change, think about what’s going to stay the same in ten years.”
Make sure that your hammer and nails are not out competed, and you still get the results you want. Understand why your customers want what you offer now and which parts of that will most likely never change.
This helps you to future-proof yourself.
In the shed where I write this, I have several hammers. If I would need to hammer a nail into the wall any one of them will do. For most people hammer is a hammer is a hammer. But with your skill, you will show people that there is a difference.
This difference lets you choose your customers and dictate your prices. Because you are the one.
Persistence is the key
The first time we pick up our hammers, we suck at hammering. Then we learn a little about the craft and suddenly we know everything. Until the bubble bursts and we understand that we have barely scratched the surface in our field.
Then we have to put in the hours.
There is no other way.
Continue at hammering those nails year after year. Improving your skills at the same time.
If you put everything you’ve got into developing your hammering skills, then it takes at least five years to become very, very good. It may take 10 or even 15.
There’s no shortcut.
As your skill improves you start to feel good about yourself. Most people get to a certain level and then stagnate. Complacency kicks in and you stop learning new things. This is a trap. You may coast doing the same thing for 30 years. You are incredibly good at what you do, but you are doing the same things you did decades ago. You haven’t expanded your field.
It is said that the best doctor to have is five years out of medical school. This is the time when they still learn new things and haven’t set in their ways yet.
When your brain turns to stone, better hammer technology or better people could replace you.
But if you avoid the complacency trap and go further, passion kicks in.
You look forward to each day hoping to discover something new about your hammer.
And you become the Warren Buffett of your field.
And this, my dear reader, is the easy way to make money and secure your future.
When to start?
In your teens and twenties, experiment with everything. Get a sense of what you like and what might become the hammer in your life. The more experiences you can collect during the formative years, the wider are your horizons when it time to focus.
In late twenties, early thirties, you should already be working on your hammering skills. This timeline will let you become unstoppable hammering machine in your forties. And then you are set for life.
Sometimes people change the key skill they have honed for years. This is hard. But it’s doable.
The question is not so much about if you could do it, but the risk involved changing course in mid-life when you may have many responsibilities. The more of your old skills you can use in your new field, the faster you get up and running.
Or you may synthesize one skill into another and revolutionize the fields you work in.
Whether you are young or changing course half-way. You can do it. The steps are simple. The persistency is the key.
When all you have is a hammer, find all the nails. ~ Priit Kallas