A Twitter thread by Erik Torenberg.

1/ In the literature of growth & marketing, there is this concept called “loops”

I’m curious to explore “loops” in the context of how people make career decisions and think about how to build career capital over time.

2/ “Loops”:

The basic idea is that the best companies not only understand their “funnels”: where their users are coming from and convert down the stack — but also their loops: the process by which one cohort of users not only retains but leads to an additional cohort of users.

3/ Loops, in other words, are what leads to sustainable, compounding, growth.

Funnels without loops means you have to keep pushing in order to get output, and, at some point, that becomes unsustainable, especially if your funnel is disrupted.

h/t https://www.reforge.com/blog/growth-loops …

4/ Applying loops in the context of career:

The Q to ask when evaluating career decisions:

“What are the things that if you do, today, make it easier for you to have the career opportunities and resources you desire, tomorrow, in a way that compounds and is defensible?”

5/ Understanding how to build a moat is hard (and takes a long time), so people affiliate w/ brands as short hand: Harvard, Goldman Sachs, etc.

6/ As information symmetry increases, however, the value of brand decreases. In a world w perfect information symmetry, your Harvard degree is only worth the intrinsic value of the skills/networks/etc. developed there.

H/t @taylorpearson for this thought.

7/ I posit there are four different types of career loops (or assets):

Specialized Knowledge / Skills (“Get So Good They Can’t Ignore You”)
Financial Capital ($)
Brand / Legibility (ability for your skills/assets to be widely recognizable)
Unique Network Access/Strength

8/ These loops are reinforcing. Having one of each affords you more of the other.

But not all loops are equal

You can be rich, for example, but not respected. People will use you for your money, but your influence will be limited to your access to capital.

9/ You can have a big brand (have distribution), but not respected. People will use you for your distribution, but your role will be limited to the eyeballs you can summon. Once you’ve served your purpose, you are no longer needed.

10/ You can have good network access — you can be well-liked by a lot of people — but not respected. People will use you for your network, but your influence will only be limited to who else you’ll rout them to.

11/ Once you’ve served your purpose as a router, you’re time is done. And, worse over, unlike with financial capital (e.g investing), you don’t capture any value. If you look at your network as a marketplace, your marketplace has 100% “leakage”.

12/ Let me explain.

It’s one thing to be widely networked. Another thing to be strategically networked. And yet another to have created networks that compound over time (e.g Thiel Fellowship, Paul Graham and YC).

13a/ It is yet (yet!) another thing to be well *respected* among these strategic networks — as in, they not only like you, they deeply respect you and would let you invest in their company at better terms, pay you for your expertise, or some metaphorical equivalent.

13b/ this is some really wonky stuff. don't take any of this too seriously. make friends and have fun.]

14/ Respect -- this is a loop that most enables other loops. I didn’t put it as one of the four because you can’t go after it directly - it is a byproduct of something else.

Indeed: I’d posit that respect is best earned from gaining (& deploying) Specialized Knowledge / Skills.

15/ Knowledge / Skills is also the best loop to attract the other loops.

Financial Capital?  Knowledge / Skills gives you opportunities to build companies that no one is building, or invest in companies that others aren’t.

16/ Unique Network Access & Strength? knowledge / skills allows you to build a unique network access & strength. Networks are heat-seeking missiles searching for specialized skills / knowledge.

17/ Others can spend their whole lives building relationship with someone only to, when it matters, not have as much influence as you after meeting with that same person for 5 minutes, if you’ve gotten “so good they can’t ignore you.”

18/ Brand? Specialized knowledge / skills makes legibility much easier. Just give a talk, write a post, or go on a podcast and boom — your expertise is widely known, cemented on the internet.

19/ It's not that the other assets aren’t really important. They are. They’re just easier to get once you have specialized knowledge.

To be sure, however, you don’t want a lack of these other career assets to be constraints:

20/ You’ll need the “minimum viable $” to keep going + not have to take a job that doesn’t remotely increase your specialized knowledge / skills.

You’ll want the “minimum viable network”, to know the right people to help, + the “minimum viable legibility” to get them to care.

21/ However, most people make a directionally different mistake. When it comes to network, most people make the mistake of focusing on brand awareness, instead of expertise. They focus too much on the “legible” side of things, rather than knowledge / skills.

22/ In 99% of cases, you don’t need to grow your network as much as you need to elevate how highly your existing network thinks about you -- by developing rare & valuable knowledge / skills.

23/ In other words, your bottleneck usually isn’t that this person won’t get coffee with you. It’s that when you do, it’s not worth their time (otherwise they would likely have done it!).

24/ You want to refine the knowledge / skills loop so that when you do get coffee w/ them, they’ll get value out of it, and they’ll want to do it again—and refer you to others — or they’ll even reach out to you for coffee.

25/ In other words, focusing on knowledge / skills enables you to most quickly gain the other loops — capital, network, and legibility. but it doesn’t work the other way around.

That’s because with knowledge/ skills, there are no shortcuts. You have to put the time in.

26/ Not necessarily w/ the others.

Indeed: Found yourself with some money, valuable contacts, or fame? Parlay that into acquiring knowledge / skills.

Knowledge / skills will advance all the other loops and it will bring you more optionality, autonomy, and durability.