Adapting to Thrive 🧠

So, what do the human mind, you know, the way it works and the tech market actually have in common?

Hmm sounds like a riddle.

It kind of does, but the answer is pretty fascinating. It's this uh this surprising ability they both share to adapt and really thrive.

Okay, I'm listening. Adapt how?

Well, not by constantly trying to reinvent the wheel, but by cleverly using what's already there.

Ah, leveraging existing structures.

Exactly. And today, our mission is to take a deep dive into some sources that really unpack this. We We want to show you how success whether it's like our bodies healing or company succeeding often comes from building on what exists.

So it's a shortcut to understanding this powerful idea.

Precisely. We're looking mainly at adapting to thrive saw it by relic mind and connecting it to Ethan Dean's ideas on something called levered beta. Some really neat parallels,

right? And I think the core insight here really is about efficiency. It's about understanding that real power, whether you're talking neural networks or economic ones, often comes from amplifying what you've got, not always starting from zero.

Couldn't have said it better. And where better to start than the human brain. It's just a masterclass in adaptation. Let's talk about the sensory map.

Oh yeah, the seat sensory cortex.

Oh, that's the one. You can kind of picture it as this dynamic always changing blueprint in your mind guiding movement, sensation.

It's constantly updating based on everything we do. A live map of yourself essentially.

And this system, it's not just amazing. It's uh incredibly efficient evolutionarily speaking. You often see it visualized as the homunculus,

right? The homunculus, that distorted little map of the body on the brain surface. It looks pretty weird, actually.

Totally. And what's key is how some parts are just huge on that map.

Exactly. Your hands, your lips, your face, they take up massive amounts of what we call neural real estate.

Why is that?

Well, it's because they're packed with your endings. Super sensitive, involved in all sorts of complex stuff. The map reflects function, not physical size.

It's the brain's efficient, if slightly oddlooking, self-portrait.

Okay, makes sense. So, what happens if that map gets, you know, messed up? Like, say you sprain your ankle pretty badly. What does the source say happens then?

Ah, good question. The source explains that an injury like that can actually blur the map's clarity for that area.

Blur it like it gets fuzzy.

Yeah, kind of. The injured part gets less distinct, less representation on that neural blueprint. It's like the brain's paying less attention to it. which can make it feel less functional, less…there.

Yeah.

Huh. So, how does it fix itself? Does it have to like erase and redraw that whole section?

See, that's the brilliant part. No, it doesn't need a full redraw. That'd be way too slow and energy intensive.

Okay. So, then what?

Instead, what happens during recovery is that gentle stimulation of the areas around the injury sends signals, subtle inputs…

Just around it, not directly on it.

Often, yeah, especially initially.

These signals prompt the brain to just update and refine the existing map. It gradually brings clarity and function back to the injured bit. Yeah. There's research, for instance, with stroke patients, targeted touch, specific movements. These things spark neuroplasticity. The brain basically rewires and rebuilds using the connections it already has. It doesn't start from scratch. It's incredibly efficient.

So, the big lesson from the brain here is adapt by refining, not overhauling. Leverage those existing pathways.

Precisely. It's about working with what's built.

It's amazing how these subtle nudges can lead to such big recovery. Really shows the brain's uh innate wisdom, doesn't it?

It absolutely does.

Okay, now hold that thought because there's a surprisingly similar thing happening in a totally different world. AI startups and investing.

Ah, the parallel. This is where levered beta comes in right from Ethan Ding.

Exactly. So maybe first can you break down beta in finance just quickly?

Sure. So beta in simple terms just measures how much an investment like a stock or a whole portfolio tends to move when the overall market moves, like the S&P 500.

Yeah, exactly. So, if the S&P goes up 10%, a portfolio with a beta of 1.0 should in theory also go up about 10%. A beta of 2.0 would mean it moves twice as much roughly.

Got it. So, what makes it levered? Does that just mean borrowing money?

Not necessarily literally borrowing, though it can. In this context, levered beta is more about amplifying that market movement strategically. It's about making a magnified bet on an existing trend.

How?

By say leveraging powerful technology someone else built or riding a huge wave of market enthusiasm like we're seeing with AI. So a 10% rise in general AI adoption could maybe mean a 20% gain for a company that's perfectly positioned to leverage that wave maybe using an existing LLM. Their growth gets amplified by outside factors.

Right. Okay. And the AI world right now is just full of examples. Take the startup 11x.

Oh yeah. The source highlights them.

Crazy growth.

Totally. $10 million in annual recurring revenue super fast. And get this, the source says they did it with a clunky product. How does that even work?

Well, clunky probably just means it wasn't the slickest, most perfect solution right away. But their success boils down to two things.

Timing and leveraging.

Yeah. They didn't invent the core AI, the big models. They just smartly tapped into that absolute frenzy around AI sales tools.

The FOMO effect.

Exactly. Executives were green-lighting pilots. like crazy out of fear of missing out. They saw competitors jumping on AI and didn't want to be left behind. So, they'd sign off on almost anything promising AI, even if it wasn't fully baked.

So, 11X was just there at the right time with something that used existing AI.

Pretty much first to market with an application that leveraged existing large language models, the LLMs. It's capital efficient too, right? Avoids the massive cost of building those models yourself.

And their future gains are tied to the LLM getting better, disproportionately.

So…yeah,

they benefit hugely when the underlying tech improves without having to do that core R&D.

They're riding someone else's innovation wave.

That is smart positioning.

Okay, another example. Harvey valued in the billions. Apparently, right? And what is it fundamentally?

The source says it's basically chat GPT but with a legal interface.

Perfect example of levered beta.

Harvey leverages open AI's tech, slaps on lawyer friendly branding, targets a specific niche, and rides the massive AI option wave hitting law firms.

So again, not inventing the core AI model.

Nope. It's a clear bet on AI's inevitable rise in that sector. They're amplifying their own success by applying existing powerful tech to a market that's ready for it.

Okay, one more lovable. They pair Claude's AI with a simple editor, and they're competing with giants like Replit.

Yeah, which sounds tough if you think purely about engineering resources,

right? How do they compete?

That's their clever levered beta play. They aren't trying to outenineer Replet on the or platform. They know that when Claude, the AI model underneath their product gets say 50% better, which it probably will,

which it inevitably will, the users of lovable will credit lovable for the improvement, they feel like the platform got better.

Ah, so it effectively neutralizes the engineering edge of competitors who build more from scratch.

Exactly. It's fascinating.

They benefit directly from innovation happening elsewhere, turning that external progress into their own advantage without the huge R&D spend on the AI itself.

Okay, so wrapping up the market side, levered beta in AI right now means betting on the whole sector's growth, riding that big AI wave instead of trying to be the one company that invents the next big thing from scratch.

You got it.

It's about riding the tide, not necessarily creating the ocean itself.

So, let's pull these threads together. The brain, the market, they seem so different. What's the deep connection the sources are pointing to?

Well, the core principle that jumps out is pretty clear, isn't it? Adaptation beats reinvention.

Okay. on that.

The brain when it heals doesn't just scrap the old map. It makes subtle tweaks, refines existing pathways using those gentle inputs we talked about,

right?

And that's almost exactly what these successful AI companies and investors are doing. They're leveraging existing tech like the big AI models and writing the market momentum that's already there. They're not trying to build every single piece from the ground up.

So, it's about efficiency, smart growth.

Absolutely. Efficient growth, optimizing what's already working, what's already proven

and the sources. Let's distill this into some practical takeaways, right? Lessons we can maybe apply.

They do. For the body, the message is basically stimulate wisely to guide recovery. Use those gentle nudges on existing pathways.

And for startups,

it's about position over prototype. Focus more on your strategic place in the market, leveraging what's out there rather than just trying to over engineer everything yourself.

Makes sense. And for investors,

the advice is essentially ride the wave, don't create it. Amplify the big market. market trends with smart strategic bets using that levered beta concept.

So whether it's healing your body or navigating the AI boom,

yeah, the big lesson seems to be that success often comes from skillfully working with what you already have, riding that existing wave instead of always trying to generate a whole new one from scratch, which does make you wonder where else could this apply.

That's a great point. So the central idea really is that adapting using existing resources rather than constantly reinventing is a super powerful strate strategy for thriving, especially when things are complex and changing fast. It's not doing less, it's just doing smarter.

I think so. And it's fascinating that the brain figured this out ages ago. This principle of leveraging existing pathways and now the market, especially in tech and AI, seems to be learning that same lesson and learning it fast.

So maybe something for you, the listener, to think about.

Yeah, definitely. As you go about your day, maybe consider how could you apply this mindset of leveraging what's already there. could be challenges, opportunities, yeah, in your work, your life, anything.

Instead of always thinking you need to start completely from scratch, what existing pathways or trends or resources could you maybe tap into to get where you want to go more effectively?

It's a powerful thought to chew on, for sure.