Founder in Focus: Jake Taylor of Farnam Street Investments

This week’s Remarkable person is Jake Taylor of Farnam Street Investments. Jake started Farnam after studying the investment process and decision-making for more than fifteen years. It gave him a sense of where the holes in his processes were. Our brains take shortcuts whenever they can to conserve glucose; we’ve evolved from an environment that’s often at odds with the modern world. Jake recognized the necessity of building safeguards to overcome our biology. He saw the power of software when it came to improving his process and had a hunch others could benefit too.

Jake says augmented intelligence is the future; defined as those tools that aid, but not replace humans, and it will drive humanity forward. At its core, his Journalytic app is an aid to human decision-making. It provides all the benefits of journaling (which research shows are immense) and provides specific feedback that’s only available because we know your context is investing. At some point the feedback provided will border on sci-fi, but Jake says he needs to build something insanely great first. 

All founders and creators often point to great advice, received early. For Jake, the best advice he ever received was to “Did your well before you’re thirsty,” which is based on the book of the same name by Harvey Mackay. Essentially, you need to invest years into being a productive node in your network – the key point is to be useful with no expectations, well before you ask for favors. Be thoughtful, be authentic, and help others in a way that leverages your unique strengths. And when the time is right, people will fall over themselves to help you.

The ROI of a strong network continues to amaze Jake. He says having other people root for you is an Archimedean lever in making your own dent in the universe, noting it’s impossible to accomplish anything important by yourself.

But the real trick is to be a good teammate to others first. Jake’s friend offered the advice, “Go positive, go first.” Reciprocity is a fundamental law of the universe. 

When it comes to developing his entrepreneurial spirit, Jake points to basketball as a kid. But there was one problem. Jake was an unathletic, late-bloomer. He was barely five feet tall and weighed 100 pounds soaking wet at age 16. And was playing against men.

So how did he make the team? Jake outworked everyone. He was first on the floor for a loose ball. He was unafraid to take a charge from a freight train power forward. Jake used smart positioning to hide slow-footedness, and was always first off the bench to cheer for a teammate.

“I didn’t play much, but I think the coaches liked me because I worked as hard as I could and drove the other players to up their intensity.” says Jake.

And those lessons have come in handy as Jake builds out Journalytic. He says there’s a lot of great note-taking and knowledge management apps out there. Some are super powerful. But they’re Swiss Army knives – great for a lot of use cases.

Jake says Journalytic is objectively worse than something like Notion or Roam for most use cases, save one: investment decision-making. In this instance, his app is WAY better. Because the context is investing, the app provides novel tools, features, and feedback you don’t get with the all-purpose tools.

“If you’re having surgery, you want a surgeon using a scalpel, not a Swiss Army knife.” according to Jake.

Entrepreneurship

Long walks in nature, reading widely, and having conversations with people smarter than him are key when it comes to generating new ideas. As for motivation, Jake asks, “What example are you setting for the boys right now?” (He has 14 and 10-year old boys) It’s quite a forcing function. 

Time never stands still, and Jake admits most of his early entrepreneurial ambitions were ego driven. He wanted to feel important, like a ‘Master of the Universe’ running his own hedge fund. Early on, it’s hard not to be inward focused while you’re still finding yourself.

Now Jake cares more about seeing the people around him successful. He’s got less to prove when it comes to his ego. He likes creating jobs for people who are passionate about changing the world. He enjoys building the tools that help investors improve, and he likes fostering more rationality in the world.

There’s a common theme among founders and creators; don’t underestimate the impact of health. Jake shares this view. He says when you feel great it changes how you show up in the world. It’s hard to fill others cups if your own isn’t overflowing. It’s all about the basics; eat real food, move your body, get plenty of sleep, get sun – avoid deleterious substances, destress with nature and social connection.

A lot of entrepreneurial clichés make the rounds, some of them stick, and not all of them are good. One common trope is that entrepreneurs are risk-takers. Jake doesn’t think this is necessarily true. Some risks are unavoidable; the base rates of startup successes are daunting. But real entrepreneurs seek to limit the possible downsides. They identify and mitigate points of failure, alleviate chokepoints, and empower those around them to improve every part of their business. They test out small bets and don’t bet the farm. They iterate, they keep grinding.