IMPROVE Your BEHAVIOR, IMPROVE Your LIFE | Sendhil Mullainathan

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The Knowledge Project

Sendhil Mullainathan is the Professor of Computation and Behavioral Science at the University of Chicago Booth School of Business and the author of Scarcity: Why Having Too Little Means So Much. Sendhil reflects on lessons he learned from his father, how creativity is the marrying of ideation and filtration, direct versus associative memory, what we can do to get better, rules versus decisions, positioning over predicting, outcome over ego and so much more. Listen now for some ideas that you can put into practice that will help you become a better version of yourself. 00:00:45 Introduction 4 00:00:51 Lessons Learned From Your Parents 00:05:32 Creativity Is The Marrying Of Ideation And Filtration 00:08:47 Giving Feedback and Criticism 00:00:00 Balancing Boldness And Pragmatism 00:15:51 Starting A PhD At 19 00:20:07 Early Influences 00:23:17 Stages Of Learning 00:28:37 Direct Versus Associative Memory 00:30:30 Applying Opportunity Costs 00:37:40 The Value of Time 00:44:42 Time Travel By Using Relativity 00:51:21 Rules You Live By 00:54:42 Rules Versus Decisions 01:00:49 Creating Obsolescence of Self When Founding 01:08:25 Outcome Over Ego 01:10:26 Positioning Over Predicting 01:19:08 The Future Of Insight 01:21:52 A Revolution In Behavioral Science 01:25:48 Blindspot Reduction Through Technology 01:30:05 The Role Of Academics In Society And Business 01:32:33 What Do You Want People To Say About You at 90 Full show notes here: Follow us on Instagram HERE: Subscribe to The Knowledge Project Podcast Apple Podcasts: Spotify: Google Podcasts: -------- #TheKnowledgeProject #ShaneParrish #SendhilMullainathan -------- FOLLOW US: Instagram: Twitter: Shane Parrish:

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There's a person in my life i just do not trust like even though i spend a lot of time with this person i just do not trust them like it's embarrassing to say but i don't trust their motives i don't trust them to follow through on anything and that person is me like you should not trust yourself like every and so Decisions it's like handing over a bubble wrap to like a five-year-old it's like you know what's gonna happen so it's like well thought out rules have the property that they are ones that many parts of ourselves subscribe to poorly thought out rules i think don't have that property and are are doomed if not to failure to misery at some level sandhill i'm so happy to Get to talk to you yeah it's my pleasure i'm really looking forward to to chatting so much i mean you grew up in india until age seven right and then you moved to la where your parents owned a video rental store i'm so curious as to sort of like what lessons you've learned from your parents oh my god i you know for a while i contemplated uh writing a book about my dad okay and It was gonna actually be a genuine book about my dad meaning i thought it would be a great way to convey lessons from psychology and social science through my interactions with him because he has just an insane font of good ideas but also mixed with bad ideas so there it just shows raw creativity at work so my favorite of his ideas which is going to be the title of the book Was this idea he he called me up one day this is when i you know i graduated i had my phd i was a professor and he calls me up and his opening line his opening gambit is uh so you're an economist right i'm like well at this point this fact should be known to you i but i didn't like where this is going because i don't even know what my dad thinks an economist is so he says so you're the kind of friend like yes he Said okay i need your help opening a bank like first of all i that's so far from anything i know anything but i want to know where the story was headed so i said okay but why do you want to start a bank accident i've got a great idea so there are a lot of people who believe in reincarnation right i said yes you know so why should they go to the next life With nothing so we'll start a bank they give us a pin code they deposit their money when they're reincarnated if they're reincarnated they come back they give us the pin code and they get their cash now he says we win either way either we have definitive proof of reincarnation that's a win in and of itself or we have a lot of money from people Who falsely believe in reincarnation and the best part was he said i already have a name for it i was like what is it he said the eternal bang oh i love it and i isn't that amazing and i thought that would be a great title for a book about my dad the eternal bank because it's sort of he has these right he has all these stories and so on yeah so that was one of the the i think what i learned from my dad many Amongst many things is just you know i think a lot of people aspire to think outside the box but my dad doesn't even know where the box is like he is just and he really instilled that in me in such an intuitive way that i never even kind of i'm clearly not as creative as he is but that somehow it it's like to this day i chafe At the box like i'm so not used to that we can't leave it at that one story we gotta go into another one but you could also you could also pay like 20 interest per annum on these bank accounts right yeah yeah exactly right we could really i mean this is a financial idea that's just gonna be awesome i can only withdraw posthumously at least in this life yeah you need a proof of a death certificate To withdraw that's that's all we need uh so yeah so i if we can get that past the regulators i think that's a good money-making idea the other story is a little more poignant it's a story um it's a story about like actually i had a lot i had like written out like 20 of these i thought because each of them i thought illustrated something about science like it's not just oh my dad is interesting Like this story i thought illustrated something about creativity which is i think a lot of people forget that creativity is the marrying of ideation and filtration that you need the capacity to generate ideas but you also need the capacity to filter ideas and these processes are in such fundamental opposition if you have a good filter you can't Generate ideas because the world is as it seems like if you're like oh that idea won't work that idea won't work you just you don't have that other capacity if you have a good ideation you don't have a good filter so one of the things i've struggled with and i know i i i love the way you think about sort of i call them tools of thought you call them mental models but When i think of tools of thought for me one of the tools of thought i've been spending a lot of time working on my whole career is how do you how do you create ideation skills while also creating filtration skills because they're they just don't sit well together in your head they just they don't like each other like one of them wants to see the world as it is and realize well you can't do this you Can't do that the other wants to see the world without any constraints and and so i i spend a lot of time on that internal tension and so that was gonna be the point of that that eternal bank chapter most people don't think of economists and innovation going hand in hand can we dive into some of the work you've done on that in terms of how you're better at um i guess lack of filtering on Information like how do you think about that like go deeper one of the things that for me i think helped with lack of filtration i'll give you a couple of things one very mundane just it's just it's mundane but it's fundamental which is um you know we're social animals actually my favorite quote on this is nick eppley a colleague of mine has this awesome book Mind wise in which uh he quotes these two primatologists and their husband and wife pair i think and they they have been studied they have studied baboons i think for their whole lives and so they wrote a book with an awesome title baboon metaphysics and in that book he has a quote which is just awesome their quote is that no matter How you look at it the problems of baboons can be summarized in two words other baboons and i think of that quote all the time other baboons and so i think one of the filtration processes that's very like basic and obvious is the other baboon problem like if you are doing something creative you can't expect the other baboons to be like that's Great on the other hand you gotta somehow take feedback you don't want to be the insane person on an island who's like this is it i've got a perpetual motion machine so part of what i i think creating a filtration mechanism is actually creating the right social filtration mechanism how do you decide which other baboons to listen to how do you decide what About what they're telling you do you want to listen to so for example if you have an idea and there are a lot of people for whom i would trust the content of their criticism meaning if they say oh this idea has this flaw well you're like oh okay let me think about that flaw is it truly a flaw what it makes it so there are a lot of people who you would Have that but most people don't do that they give you the summary judgment oh i think this is not a good idea oh i think this you know there are very few people for whom you can trust their summary judgment so i think for me the first issue is trying to be very open to feedback and criticism but trying to get the feedback and criticism down to something Granular rather than this sort of oh i don't like it whereas every part of my personality really wants to say you know give me approval tell me you like it like that's what i want to hear and so i think one filtration mechanism i think is architecting the social structure around you and having the discipline which i'm not saying i have but aspire to have that Discipline to try to kind of not seek approval nor to have the reflexive mechanism to just say well it doesn't matter what they say no no it does matter what they say and how do you get that feedback is that because you're specifically asking for a granular level like you're like go deeper on this like i really want to understand Your criticism or is it more effective to pick those people in the first place that are naturally prone to do that i i think i definitely i think it's both and i think i've also kind of tried to be the reverse how do i become the kind of person who's giving granular criticism like how do i or feedback positive or negative and it's It's it's shockingly hard so you're definitely right picking people is a big part of it but but you'd be amazed with like a little bit of guidance like part of it is leaning into the wind which is really hard when someone says oh i just don't think this will work you kind of and they're not giving anything granular it's like you have to say okay i don't like hearing that that's really painful But i have to just like swallow and just say okay tell me why you think it won't work and their first response most notably is some high level thing so you're like okay i have to i have to sit here and let that wave pass me that's going to be high level whatever and then you have to say okay is there something in their high level thing that i could latch onto and say oh you mentioned x tell me more about X not everybody but even people who start high level a big fraction of them with a little bit of patience you can get them down to the specific kind of thing that they're that is bothering them and it it's it's really hard because it's your instinct like every every fighter instinct in you is to push back it's like no no no that's not now here i've already thought Of that or i haven't answered that and you probably do but that's not the point you kind of just need to lean into it it's very hard like i i find it i think i'm getting better but i i find it very hard but rewarding when you do it well are there specific sort of pieces of feedback that you're giving to people that seem consistent like is there a pattern to some of the feedback that You're seeing that you you offer oh that's a really good question i think one piece of feedback that i've noticed applies to many many like you know sometimes their business ideas sometimes their ideas for research papers it doesn't matter what the discipline is one piece that i've noticed and it goes back to our sort of creativity and filtration thing is that Many people when they're exploring something new gets stuck in the middle they don't let the novel part of the thing fully express itself because they're afraid that like that's too wild but then they don't let the filtration part fully express itself so one thing i often say to people is like okay let's call this offense and defense you're stuck in this middle ground right Now with your idea where you're certifying some offense you're sort of playing some defense let's actually just let one side develop a lot before bringing in the other side and it's kind of this weird thing it leads to ideas without when you're stuck in this weird middle it leads to this ideas that are neither bold nor are they particularly pragmatic like because you're not you don't have The discipline to be brutal on the pragmatic side nor do the the courage to be brutally bold and it's and it's like i think people imagine that if you look at the timeline of their thinking like if i could just plot it i could attach something to your head i think they imagine the way things should look is a nice balance of boldness and pragmatism at every minute or hour but really I think it works much more effectively to be bold for days and then switch on a dime and just be pragmatic for days because it's easier to get into the pragmatic groove and be really brutal and then easier to get into the boldness groove and be really brutal and that's when you know it's like this tree has just enough time to grow because you've been bold then things can attack it And so that that i guess i call it the biorhythm of these two things and developing a sense of that biorhythm is often what i i notice in ideas i'm like well this was good but why did you why did you not like get even more bold on this bit and why not like just keep developing that and then usually there's an answer like oh i don't know if that would sell or if that's realistic he said let's not Worry about that let's first develop it then you can come back later and say how do we make it something sellable maybe it's not like what do you lose it's just an idea you developed it you saw it didn't work okay ideas were disposable it's a great question because i hadn't really thought about it but i think that's one of the general feedbacks that arise i i love that response i think like if You're stuck in that middle area even if you're successful you're only going to be incrementally successful and if you're a failure you're not going to be too far from success so you're sort of like keeping yourself in this boundary where you can always convince yourself that you're sort of right or not very wrong instead of going for it and and Moving that like gaussian distribution out to these fat tails like you're trying to stick within one standard deviation instead of i love it pushing it out i love it it's like a it's like a mist i love that way of framing it it's like a misguided form of hedging yeah you're like oh i'm gonna protect my downside risk and you're like kind of just staying in That middle because you know you know it's misguided because it's comfortable and it's misguided because i like your gaussian analogy look you could you're just thinking you're not doing yet so don't worry if you think and the idea turns out to be awful like a negative tale hey you'll find out it's okay you'll find out in your head or while talking to people like if you Don't take risks now in your head are you going to take the risks and it comes back to the baboon thing right when we're we're explaining these ideas to other people we're seeking unconsciously their approval because we are social creatures and so we don't want to be too far out in left field because then we're afraid our social group might shun us and then it's not about the outcome And in a way it's about protecting our ego protecting our view of ourselves and protecting our relationships that's that's a good point i i do find that that's one thing i i i was just starting to work on but i still find hard which is i it's protecting the ego it's like i want to be much more comfortable having people tell me that idea is really dumb and here's why Like it's yeah it still hurts like i mean i've been at this for how many years like at this point and and it's astonishing it could be an incoming phd student who's it's it's not even like it's not just praise from people who i think it's anybody and somehow it could be the person a random person on a train and they're like really i don't know and I'm like oh no like i feel that it's it's shocking how much it affects you and it sticks right like you can hear a thousand positive comments and then one negative and it's that one negative one that you know it's 11 pm at night and you're like oh it just can't shake it speaking of phds you were super young in college you started your phd at like 19. what was that like uh yeah yeah i was i was 20 i i i think I was um i couldn't drink uh in the us it's 21. i i was always ahead of my grade um weirdly i was actually ahead by one less when i came here to the us when i was in fourth grade in india then i come here and the us has age restrictions actually and so they said you're too young to be in fourth grade so at this period where they put me back And it was like all stuff i knew and so i was still ahead of my grade and it was painful but the reason i actually ended up being so far ahead has nothing to do with like oh like he must have shown young promise it had nothing to do with that it was that you weren't doogie howser no exactly i don't know about that there was um when i was about i don't know 18 months i guess let's call it one year Old 18 i don't remember something in that age we lived in bangalore and my dad uh would bring home mangoes now i don't know if he ever had an indian mango but like mangoes in india especially during the right season oh they are divine so you bring home these mangoes and i was this little kid and i loved mangoes so like wherever he put them i'd go and i Grabbed them when no one was looking and i just like rip it open and start eating it like a baboon i guess and then they developed a system where they would put them somewhere and they'd say oh the mango is here but i didn't speak you know i didn't know the word for mango but apparently i pieced together where it was so if they said the mango is there i'd like go and Get it and take it so then they developed another word for mango just a totally new word and this time they had put it up on a mantle and one fact you should know for this story is that in india the floors are concrete this will be important in a second so apparently while they were all gone i had already i pieced together that this was the word for mango Which they didn't know so i like i i still picture myself i must have been tiny i went and like took a chair pushed it and then like i climbed up on that chair and like i guess i couldn't reach the mangoes i must have climbed up on the edge of the chair like the the back to reach the mango and i don't know whether i got it or not but gravity being what it is i just i started falling and i hit And my mom said she heard the worst thud in the world and she comes out and imagine what it must feel like when you're a mother there's your kid blood everywhere on this concrete floor having hit like a concrete floor so then they took me to the hospital the doctors basically didn't know if i'd survive and then i did survive i guess you know as we now know uh you know a spoiler but The other thing that happened was they said yeah there's probably going to be damage as a result of this and we don't know what it is and so i didn't talk like literally like almost no talking for a long time and so they thought that was the damage like they were like oh this is this is bad this is the problem until like what i mean i must have said a few words before this but one of the first Substantive things i said was i apparently went up to my parents and i said isis when i was three all my friends are now going to school because they were like two years older i want to go to school and they're like wow this kid doesn't say anything he says this whatever he says will do no he comes out with complete sentences and requests so they put me in school so i was like In school two years earlier as a result of this mango fiasco and so i think i think it led to a lot of problems uh because when you're physically younger than everybody you know it's just not you're not socially developing very well so i was not a well socially well-developed kid i think is the best way of saying it and Grad school was was probably the first time where you know that it's like the it's like one of those perception things like percentages like the age difference of two years when you're like 12 is a lot but by the time you hit 20 you know 20 to 22 but they don't really make such a difference through undergrad i didn't feel it as much but in grad school i really didn't feel it's just felt like People say oh you're young but we had all been equally developed or underdeveloped depending on your view on on things and that um yeah so that that part was nice uh big influence for you early on was richard thaler at cornell um he's the guy who got you to switch into econ isn't he yeah yeah i was a math and uh computer science major and i actually Applied to the phd but i i deferred the phd in computer science um uh to say let me try this phd in economics so taylor is amazing the other person who really it was both taylor and and um this guy bob frank have you read any of bob frank's work no i don't think so very amazing writer and he taught these classes so one class he taught was called applied microeconomics and it was a phd Class i took it as an undergrad and but what made the class exceptional was until then i'd taken these phd classes in economics which were basically just math like and i was like oh this field is kind of like math they just use math and they apply and that's it but in this class even though it was a phd class he did these cool exercises where he said okay every week you're going to have to go And find a thing in the world that this phenomena applies to that no one else has written about and i want you to write about it and how it fits or how it doesn't fit and there was something terrifically interesting about navigating the world but equipped with an idea like a scavenger hunt of sorts like how will i find this idea instantiated in the world around me That way of thinking of like you receive a new idea don't judge it as rightness or correctness internally just use that as a way to spend the day looking for that thing in the world a that way of thinking was awesome so that's a tool of thought i've kind of maintained for a long time like it's like i kind of think it as what am i mulling right now like have a Top of mind mulling thing and take that thing that you're mulling and as you wander the world like kind of keep keep it activated like is this an example of blank that i just learned about now we tend to do this naturally but because we tend to do it naturally we think we don't need to work on it but it's actually it is a thing to work it's just one of the many faculties of The mind that yeah it happens naturally doesn't mean it happens often enough so that that that thing he did but the other thing he did was he had this great phrase i'm going to butcher it but he talked about how you know as an economist you like think of a botanist think of how a botanist walking in the woods is walking in a very different woods than you or i like It's just different for them like same physical space different mental space and he said you know as an economist the exact same thing is true for the social world like you should be able to walk a walk in the woods for you as a walk into a starbucks and you should be able to see things there that are different now i ended up doing a lot of psychology but I think whether it's psychology or economics i think the same idea is it's what's so exciting about social science it's like it arms you with ideas that you can see refracted in just everyday life around you so he was he was a big influence and and taylor of course was a huge influence how do you check yourself on that like how do you how do you not over fit what you're Seeing when you're trying to fit it into sort of like this mental toolkit i think i think the first stage of learning is overfitting i think you go with when you have a new idea and you're trying to like upload it so to speak to use some crass uh a computer science uh metaphor when you're trying to upload it i actually kind of lean into overfitting because think of it as there are ideas That have been so rehearsed they are over activated to find any it's like think of this way like when you're in a bad relationship a romantic relationship or a friendship you're like on edge about some things oh this is just another example of blank like there are ideas that are just top of mind that are looking to be instantiated but in your regular life you also have That like right now people in the u.s have just whether you're on the left or the right they're on high alert for certain things either as evidence of racism or evidence and and that's not to say they're not right i mean it's just it's just a fact of the mind um there is a lot of racism but that's that's a separate issue it's just your mind is on high alert and so what happens is when a new idea Is trying to enter this ecosystem it's competing against these highly active ideas they're they're kind of blocking out the sun so part of what you need to do is to just let them live for a bit it's okay if they overfit because the goal of this mulling is not to get to accurate truth about the world it's to practice this new idea and to Let it be getting its own activation once it's big enough it's like think of it as a a greenhouse once the plant is grown in the greenhouse then you put it into the wild and there you have to trust all the other instincts you have the other ideas that are active that are going to be competing and say you think it's that you think it's that or your usual capacity to say yeah i did Notice and i think this is it but is it that partly because we encounter these people who are almost uh you know just zealots about an idea we think the big danger is being too into an idea but as an uploader of an idea uh we're not yet zealots uh and and you know we have to trust in ourselves that once it's uploaded we have a good ecosystem In our mind but the overfitting is i think actually a a feature i don't think of it as a bug it's part of the fun too it's like who knows if it's right but this is another example of blank and you know it doesn't matter if it's right it's you you're practicing your seeing skills that's a really interesting way to think about it you said that's the first stage of learning i'm curious as to What are the other stages of learning so i think once it's uploaded and has the capacity to sort of notice i think the next stage i often think of is and this is where a lot of ideas fall short a lot of ideas have recognition capacity meaning you can see them in the world but they don't have generation capacity what i mean is once i've noticed this thing so you know Opportunity cost once i've noticed this is an example of an opportunity cost that i'm neglecting if you practice opportunity costs you'll start noticing opportunity cost but for an idea to be generative it then has to have a what's next okay i've now noticed it with opportunity cost it has a straightforward next which is okay now that you've noticed the Opportunity cost pay attention to it so that's that's helpful but to me ideas are graded by how much depth the depth they have in what's next let me give an example of an idea let me see if i can think one off on the fly which has both noticing but also an endless capacity for uh generation i'm spending a lot of time thinking now about metacognition sort of and i can tell you why we can come back to what got me on this path it was Actually not what got me on this path was actually um a study we did with people in the south side of chicago kids in the south side of chicago so it's actually a study on crime and totally different but it's all about metacognition so metacognition is the capacity or skill to become aware of one's own mental process so on the one hand it seems kind of obvious But if you say today i'm going to try to notice and simply just notice a part of my mental process i had not yet been aware of now that's interesting because what that is is it's not just an observational thing you'll notice it opens doors to things you've never thought of so as an example how many questions do you ask in a day Are you median in that level should you be asking more this is a form of noticing that generates other questions and other ideas and other thoughts so i think of the next stage as is this a you learn about an idea this way you learn okay this is an idea that's useful i can i can upload it it has a practical decision implication this is an idea that's generative If i start doing this other things open up in front of me so almost like the next stage is the evaluation of this thing and trying to understand and yeah i think that's a really interesting way to look at it i like that as you were saying sort of the first part is you know recognition and sort of overfitting or the second part was recognition but the first part Was like overfitting i was almost coming back to sort of like your computer science phd that you defer you can still do it by the way you can i'm sure they'll let you back in but i was thinking about memory and how we have this direct memory versus associative memory right and so the direct memory is you learn a concept and you sort of have this Uh the sense of it and you see it in the original capacity in which you learned it so if you have a direct match which is how a computer sort of matches right versus associative which is like i have this general concept and i'm going to try to over i'm going to apply it here and here and now i can start to see it in the world and even though it's not a perfect alignment It's that associative match that we really want to hone in on and not the direct match because direct match means you need to identify the problem in the exact specific way that you've seen it before and a lot of textbook learning is sort of like direct batch right you're taking a concept from one discipline you're applying it in that discipline with the same set of variables the Question might be worded differently but you're really just fitting them into sort of like that's perfect in fact it's it's that's such a crisp way of putting it because that's the reason i think overfitting is not a problem because it's the type 1 type 2 error yes you can stay in this very narrow area and you know the thing you were learned it fits it's fine it's not overfitting You can go out over here okay you get a bunch of fits that are false whatever but you find one which is outside the original domain and you're like oh it it is you're right it's also what's super gratifying about a metaphor and now you see the world differently than other people because you're you're willing to sort of be wrong and risk the overfitting um come back to opportunity costs for a Second here you brought that up i would love to hear your definition of opportunity cost and how you apply that in your life oh that is a good question this take me back some time so let me try and i want to hear your definition i think i think i have a different definition today than i would five years ago or ten years ago for me the opportunity cost is dictated by the hidden mental frame You have on the problem so any decision you make you are quite a bit narrowing the world down to some very tiny little world opportunity cost is the thing that is left out of that frame because what you've decided is you said should i go to dinner with my friends how much will dinner cost the opportunity cost is the fact that You've left undefined the other things you can do with your time for example or how much will that dinner cost is the stake worth twenty dollars i don't know i'm using steak i'm a vegetarian but whatever is the steak or twenty dollars the opportunity cost is the other things i could have spent the money on but you'll notice in the frame and this is why opportunity costs are so insidious In the frame is the stake or twenty dollars the other uses are not in that frame it's not steak or whatever movie then there's no opportunity cost at stake or movie it's all these choices where there is no or else and the frame doesn't provide anywhere else now that's not a it is a bug but it's also a feature because you couldn't possibly go about making your decisions in life Working through every other or else like you're going to pay 20 bucks you either want this thing or not and and so i think opportunity costs are the hidden consequences that are left outside of your frame whether it's for money or time it's those things that then are neglected because they're exactly not part of how you frame this problem so i think part of for me more valuable than opportunity cost Is to almost ask yourself what are the hidden alternatives that are or consequences that are being left out of this frame and sometimes the answer is look i don't you know i know the 20 might have some other value fine just imagine another use of 20 that's at least one thing now you've brought from outside the frame into the frame And and i think there's a deeper lesson there than just um opportunity costs it's it's construal i think is a psychologist sometimes use that phrase which i like it's how you've chosen to construe this decision leaves a lot of things out of there i think that's a really good way to look at it i mean one of the things that i struggle with is as an entrepreneur like the Opportunity cost is always to be working on the business right so you're always you have this high hurdle for everything to begin with and then you're sort of like constantly within reason you're harmonizing your life between work and family but you're you're also within reason trying to constantly raise the opportunity cost of what you're doing over time and i find it a really interesting way To think and people don't tend to think in terms of opportunity cost i'll give you an example which is like um i remember having a conversation with a friend who lived in the suburbs and they were like it's so much cheaper to live here and i was like well that depends on how you think about your time right because you're spending you're spending 70 minutes each way commuting from door to door You know i'm spending ten so you're spending an extra two hours a day in a car and like now like what's your opportunity cost for that now maybe you're listening to to an audiobook and that's what you would do anyway and maybe your your that's your transition from home to work and work to home and you would do that anyway and so maybe it's negligent and maybe it's not but it also like if you start slapping Well you know if you make 20 bucks an hour and you slap 20 bucks an hour on well that's 40 a day that you're it's a hidden cost that you don't really see and it's just a way to conceptualize sort of like give people tools to think about it i love that example one thing that i might kind of add as a way to think about that example is that Oftentimes people think they're they're making money and space decisions like oh i got a bigger house it'll cost a little bit more if i lived in the city it'll cost blah blah blah they vaguely in the back of their mind know they're also making a time decision but in the choice in front of you what's in front of you it's like three bedrooms x you know a thousand dollars two bedrooms they're like oh I can get more space for you know the same amount of money but but the hidden object here is i love that i actually had this decision um when i moved to chicago all the interesting things are downtown my work is here uh in hyde park it's like 30 minutes but chicago is a terrible town to drive in like anywhere it's just traffic is bad i was like oh everyone said oh You like to go out and do things you should live downtown and this is like an example here it's it's it's really digging into the opportunity cost so i was like oh okay but then i'd be commuting every day to work and how often will i commute to work how often will i commute for fun so that the algebra starts to like load up but the other thing is if you think of the psychology of time I think that's the one place where i'd say sometimes people make time into money which is a good heuristic but time doesn't operate like money time is a unit of object whose value can range from the negative to the positive like huge values like what is boredom boredom is when there's like negative value for time you're waiting in line you're like i just want this to be over With give me a pill so there your value of time is negative what is peak joy oh i wish this moment could go on forever so time it's not constrained by the normal laws at some level because we don't have every every opportunity for consumption isn't available to us so time actually is an object whose value we have the capacity to make more valuable or less valuable so why am I saying in this context what does a commute to work feel like i mean you know work is fun but you're commuting to work what is a commute to like go out to eat at a nice restaurant feel like yeah the commute's shitty but you got something to look forward to you're going with some friends you get to chat so it's not just the even if i was commuting every day that And the same amount of time was being spent but time isn't spent like ultimately time is is is not really a spending thing it's only being spent as proportion to what the utility looks like during the use of it and so you i wouldn't say i spent time at this amazing play no i actually consumed the time at this amazing but i mean it was it's like i consumed that i wish i could Have more hours like that i don't have the capacity that's another layered i think your story which i i certainly experience i think the the i really appreciate you sort of adding that point to it which is like even on the way home from that restaurant you're talking about the stories from dinner so there's there's some sort of value to it i've always thought and maybe missed correctly i've sort of approached As i've gotten older i approach time as something like it's finite i don't get more of it and what i value is optionality so i will always try to spend money to create time versus spending time to create money in that sense and you know it's super fortunate to be able to do that and run a business but the the flip side of that is like it also drives you To sort of think about time differently right which is you're not going to get more of it you i mean with very few exceptions more money is not necessarily going to buy you more time it might buy you a couple years at the end of life or a bit better medical care in the united states but generally speaking it's not so you want to use wealth or money to create time and i Think that that's a really interesting way to think about it and how you value that time the utility on it is also an important consideration i think the the the utility of it is what interests me mo one of the things i've been working on with um the psychologist mike norton and is and and beck weeks she's the she's one of the co-founders is this app to help people Re-conceptualize how they see the world and in there we have this thing it's called peak in there we have this set of moments around time so one moment around time which i like we call the moments because our little experiences to try to teach you things but one moment that i have in there that i like which is we're trying let's not try it now to bore the viewers listeners is just To sit there close your eyes turn on your stopwatch and when you think a minute has passed open your eyes now it's the most trivial thing in the world like when you think a minute has passed now there's a couple of things we get out of this exercise when we get people to do that in the app one thing to get out of the exercise is do this with your partner The differences in how time feels is amazing between people that so that's what the second thing we get out of this is do this over the course of a week like five times it's shocking how the flow like if i told you oh shane i've invaded a little time machine it lets you move forward faster or slower on the on the ocean of time you'd be Like that's just sounds stupid but i have it's called the mind like you yourself are floating through this thing faster or slower and you don't really have any and people people think and it's true some of it is like this conversation is flowing so it's time goes really fast so some of it is that it's external stimuli but some of it is just internal like once you start so we try to get People to do this moment a few times you start becoming aware there are just days where or hours whatever where you are kind of marching slowly through time and this i just want to say this because it's related to your point the irony of it is that when that's happening you don't think to yourself i've gotten more time you're like oh this day is dragging so there's something peculiar about our Hedonic experience we all wish we had more time on you know our mortal coil would last longer yet when we have these moments where time is sort of stretched it doesn't feel good and so it's interesting to think about we almost want more time but we also want it to go faster because those periods of flow are the most enjoyable that's a really good way to think about it um i also wanted to ask you just Before we move on this concept of time as you were talking about the utility value of time how do you compare like how do you factor in i guess feelings love family on one side which is um largely unquantifiable and then on the other side you have money you have um other things that we seek as humans like status power wealth and those are are more quantifiable And and you're often trading these things off against one another can you just riff on that for a second that's a good question let me let me do something lateral and then we'll come back to the exact question at one of the other moments we have in peak is to help people see that they don't we're all hoarders here's what i mean you invest a lot of time acquiring a partner or spouse who cares about you And loves you like you put a lot of energy into that activity you spend time i'd say dollars but that sounds creepy but it is it's also dollars it's like a lot of okay so now you've acquired in very crude terms this quote asset how much do you actually enjoy that asset you'd say no i value it you know my spouse and i do things together okay great But say you're on a train ride somewhere on your board here's a simple way you can cherish that asset you just sit there and go oh let me think about one thing i really like about my spouse i mean that's the consumption of an asset you've hoarded but like hoarders what we actually do is acquire this put it away somewhere and never actually consume it So like you have love that you've invested in you've had experience so one of the things we have people do is something very trivial it's just an exercise take out your camera zoom to a random period in your in that thing look at one of the photos you know you can do that anytime that's how you keep taking these photos but how many photos have you taken how many photos have you looked at And and that's like it's you're not consuming the you're acquiring like it's perverse and it it seems almost wrong to just sit there looking at but it's not you're actually that is the consumption you bought yourself and it's what the value of all this hardware is an example from the professional sphere it doesn't have to be love it's like you've worked really hard you've become Successful like you have this awesome brand and you have like you know this is great how often do you spend time enjoying aspects of that brand where you just sit back and say let me think what i was striving for five years ago or ten years ago let me think what that person would have said if i could you know you had danny on for a podcast i think If you if somebody had said to you yeah i'm gonna have like danny on for a podcast like that just even knowing that's a thing that you're i mean and just cherishing it it sounds so trivial but we just don't do it we don't actually engage in mental consumption it's bizarre we're in acquisition mode not in consumption mode as you were saying that i was sort of thinking like is this like A galilean relativity problem where we're like we're on this train we're holding a ball you know we're going 60 miles an hour so the ball doesn't look like it's moving but to the observer on the outside you know we're moving 60 miles an hour and you know the you five years ago and the you five years in the future is going to have this whole different reference point Around you and it's almost it's really difficult to mentally shift that perspective and go back five years and be like man if if i told you five years ago you were going to be in this position doing this you would be ecstatic right but you sort of miss this sort of happiness like and i'm riffing here a little bit and thinking out loud but you miss the Happiness because you're you're sort of like living in the moment you're inching ahead but what you really want to do is sort of like be able to time travel right so you want to be able to make your your hindsight of your future self your foresight of your present self and you want to be able to like take these lessons which is like what is life when i'm 90 what is that Going to look like and what is it going to mean and then how do i take whatever i'm time traveling there and bring it back to me today so that i can use that to live a more meaningful life and sort of be a better partner and person and and leader and absolutely i like the relativity thing part of what you can do for yourself so we tried this in one of these moments And it started when i was like a while ago there's a site i forgot what it's called we can look it up afterwards but it lets you send i guess now you don't need the site google has ascend later it lets you send emails to yourself in the future like future me this is awesome you should write a few emails to yourself five years from now like or even one year from now the shock value even at three months Will blow you away here's what i'm thinking about today yeah yeah yeah write anything you want to your three months from sell future like i have opened a wormhole to you three months from now i mean it's like it's like a sci-fi movie you get to like talk to this it's unfortunately one way but you know you can't expect everything and so anything you write it'll feel a little stupid you're like okay You know you get people to write this about whatever it feels a little stupid but in three months you're like holy cow that's what i was thinking and so i think the relativity thing is i think part of it i think the other part of it is that we have this like naive realism i think in your book do you call this like the map is not the the territory the the territory the map is not the territory This is like a form of naive realism i think so let me explain what i mean which is naive realism is like you know our thoughts are real but there's a form of it my mom's like been trying to figure out what else to call this which is that the brain operates as it operates so when we say how do we get pleasure well it's a function of the brain in Economics like that's your utility function that's not it like it's it's just some dumb thing so i think we we imagine something feels unnatural to us about sitting there and saying now i'm going to engage in nostalgia whereas if we just had this nostalgic moment that filled us with endorphins we'd be like oh that's really nice it's like What the hell like it's just a stupid little i mean it's just a piece of wet wear it's not that and so i think what no one's really thinks about the fact that we are responsible for the creation of the mental habits that then in turn create nostalgic moments at the right time etc and i think that that i think that's the other reason we don't kind of it's like we just assume well if i was going to Enjoy thinking about five years ago it just would have happened or something i i wonder if facebook has data on that because they're doing this thing now and i only have three facebook friends so uh i'm not up on it's my mom my dad and sort of like my my great grandmother are my facebook friends and i use it to share photos of the kids but one of the things i've noticed when i log in just to upload photos i Don't do anything else on there but when i upload photos is it's like four years ago here's where you were and what you were doing and it has these like little nostalgic moments for you and i wonder what their data would sort of say about how that affects your mood because i'm sure that they have enough of it to figure that out that's a great point you're right facebook tries to create these kind of nostalgias that's right What i find amazing when we've had people do these moments in peak is you can have a week ago nostalgia like pull out your calendar and look at what you're doing a week ago you're like oh that was a fun dinner like it's crazy since most of our since many of our memories sit external nowadays this is such an easier exercise to do i think that's the deeper lesson it's kind of i think the deeper lesson for How we should think about psychology or mental models or anything in the next 20 years versus the last 20 years which is that in the previous 20 years we were forced to do everything in our heads in the next 20 years i think we'll be able to improve what's happening in our heads using digital tools because so much of what happened in our heads is now Digitized so we can look at that digital footprints and use that to improve how we're thinking and feeling etc i think that's probably the biggest change i wonder if that'll affect our feelings differently like is it different that if you have this nostalgic moment and you remember traveling with your kids versus facebook prompting you with the exact same thing so You're actually getting the same memory but the way in which you get it is different and how that would would change um you're right i think that's that's very that's a very astute observation i think one of the reasons we have this feeling about the brain is that we we attribute too much meaning to it so when you remember this nice nostalgic trip with your wife somewhere you not only enjoy the Nostalgia but you attribute to it as oh that's something that's important to me because i remembered it spontaneously and if it were forced upon me or been not forced but you know for triggered externally i wouldn't have that same attribution of like i must think that's important i think this is this crazy view we have in the brain is that like we know that we belch and fart and we don't attribute deep meaning to Belches or farts but the same belches and farts produced by the firing of our neurons are like oh i thought about that i wonder what i mean what the hell you're just like interpreting these you know the tritus that's produced by the mind like it's just it's just it turns out that's its job yeah yeah so anyway um i'm switching subjects after celebrating your farts and your belches I'm curious as to how you run your day i mean you seem pretty spartan and disciplined what are the personal rules that you you live by well oh no i'm not smart they're disciplined at all i have i have one thing i'm disciplined about in my life like literally one wait you used to hold hold on before you say that you say you're not disciplined didn't you used to drive to the same sweet green Every day and order the same meal we've got friends in common here i did my research so i don't view that as discipline i view that as an entirely undisciplined man who likes weekly i my one discipline is i go to the gym every day like every it's how the day starts like every day first thing in the morning first thing And i think i learned a lot from establishing that habit so for example one thing i learned was every day is much easier than four days a week you might think four days a week is easier because it's less often but every day removes the most difficult thing about life is choosing and every day removes choice when i wake up i don't ask myself should i brush my teeth I don't ask myself should i go to the gym i don't i mean i don't ask myself should i have coffee i don't they're not there's nothing to be done i'm on a conveyor belt i'm sitting on this conveyor belt you know i'm on the plane it's going here it's going where it's going and so the every that's one lesson the every day really made a difference the other thing that made a huge difference is in installing that Everyday habit is to say the goal as i said is i go to the gym every day i didn't say i have a good workout every day or i even have an okay workout so literally the only thing i need to do is to get to the gym get on the treadmill or whatever lift some weights and i can leave two minutes later and you have to be honest with yourself i have literally gone like this happened Two days ago i showed up at the gym and you're always a little sheepish because people because i'm like i hope the front desk person who i know doesn't think i'm an idiot but like i i went i was like super tired i got on the treadmill i'm like i'm not doing anything i tried to lift some weights i'm like great i showed up done check and i go home and the thing you have to remind yourself is That's the victory that is i'm so proud of that day as opposed to the day where you had a great workout whatever i had a great workout because it was whatever some physic but i showed up that day that's the victory so that i think that that element of low bar but consistent has worked so well in other aspects of life like i i like to write but i struggle with writing and again Low bar like when i when i've been in a good writing group it's like it's gonna sit down the only thing i have to do is show up today the only thing i have to do is to write 50 words or 100 words which if for people who don't write is like a quarter of a page it doesn't seem like a lot and that's the only thing i have to do and if i don't want to do any more i can Leave it it's hard to keep that rhythm it's hard to keep that discipline but once you get yourself with the low expectation of the low bar it works because then some days many days after the hundred words you're like oh i can keep going and it really makes such a big difference i want to come back to sort of the establishing habits i sort of think of that as like what are The like the ones that we consciously choose we want to establish the correct automatic behaviors that are putting us on the greatest path towards success but before we do that i sort of wanted to dive into a little bit about your your gym habit and how you made it every day i sort of think of that as rules versus decisions right and so you don't have to make a decision every day you know the rule is and you design these rules either to put You on the path to success because you know that you don't want to have to decide about this in the moment like i have a lot of friends experiment with dieting and it never seems to work and i i went up to one of my friends and i was like your rule is you never eat dessert and he's like what do you mean i was like well this way you're not deciding you don't have to decide that decision is pre-made so you've pre-made these Decisions that put you on the path to success because you've identified in advance like this is the path and the trajectory i want to be on what are the rules and automatic behaviors that i can create for myself and then how do i how do i do that so that i don't actually have to decide and you can also do that identity based right like i'm the type of person that Goes to the gym every day i'm the type of person that writes every day i am a writer and then therefore i do it and that's my rule i write every day and now you're not thinking about it you're establishing that that habit i love it the social part of what you're saying is great too because once you tell people your rule then when your friend is dinner with somebody saying wait didn't you tell me You're a person who doesn't eat dessert like uh you know so they also have become kind of an enforcer because there's no yeah i like the the rule versus decision has another element which i really like which is there's a person in my life i just do not trust like even though i spend a lot of time with this person i just do not trust them like It's embarrassing to say but i don't trust their motives i don't trust them to follow through on anything and that person is me like you should not trust yourself like every and so decisions it's like handing over a bubble wrap to like a five-year-old it's like you know what's gonna happen so it's like so rules versus decisions are in part i think also the recognition that we can't you know You have an uneasy relationship with yourself you like yourself you trust yourself sometimes you don't trust yourself a lot and so rules are this like i think of as this weighty you know in this democracy of self this constitutional process that you say okay guys we've all agreed like this rule seems good you have to be careful when picking them i think a lot of people i see they pick And i've done this myself they pick rules willy-nilly that's just handing over power to the person in that moment who thought that was a good idea so it's like you want a protracted process for picking a rule like your friend i would say fine write down no dessert that's not the rule that you've decided that's the rule that's been proposed now we're going to have a vote over the next week let's see how every self that Shows up over the next week feels about the rule of no dessert if at the end we've got you know a super majority then we know who's imposing that rule the confederacy of selves that have appeared at different times wanting different things have all agreed this is a good rule and so now we're implementing it and so i think that that that gives rules i think well thought out rules have the Property that they are ones that many parts of ourselves subscribe to poorly thought out rules i think don't have that property and are are doomed if not to failure to misery at some level yeah i was over generalizing a little bit i mean you do have to establish your own rules that's the only way you're going to stick with them But the idea is like your best self and your worst self and you're sort of like all of yourselves are creating these rules to be like this is the type of person i want to be this is the path i want to go these are the dreams i want to accomplish and then you can just ask yourself what what would people who who have done this or are doing this what would the rules be that are going to nudge me in that direction so it could be like I'm not drinking you know every night of the week i only drink fridays and saturdays and then my rule is i cut off at nine and now and i mentioned this to sort of danny when we were talking and he added an aspect to it that i i i think he surfaced an aspect i had never really consciously recognized which is like people don't argue with rules And talking to you and i'm like we wouldn't even argue with our own rules so it's not that other people won't even argue with our rules because you can push back and you can get away with things and the example danny gave on the podcast was sort of i have a rule that i never agree to anything on the phone which prevents him from agreeing in the moment for sort of like social approval but your rule with yourself you would Never really disagree with it because it would be the rule and the rule would be part of the identity and the identity is part of what you created i love it i think that's such a nice way of putting it and i think i think the mistakes i've made hey not having enough rules but also i think it's why you need this legislative process that allows this period of time where you have Many parts of yourselves to register their dislike like if they're like no look i don't agree with and it the multiplicity of cells necessarily means i think some people are like this i i don't know how they like this where they'll just like wake up when they say is what i'm doing and then they do it that's not me there's a lot of chaos inside me i think there's a lot of chaos inside most People so i think the legislative process is also what gives rules the weight to say you can't agree with this we've all talked about it like that's it because it's just you know if you agree you're in the vast minority until you're right and then you don't disagree it's like it's like in a constitutional democracy one reason we don't fight the laws is because the laws are Made through a process we all agree with now when the law stopped being made through that process as we're starting to see in a certain country then people do suddenly disagree so i think it's the it's the process is what lends credence to the moral weight of a rule i like that i'm going to switch gears a little bit here you founded a company ideas42 and then you sort of grew it beyond you i'm Curious as to how you did that and that was a conscious decision like how was that and psychologically like how was that too right where you create something and then it no longer needs you i can tell you the philosophy and then the personal part the philosophy part is if you've ever seen trees it's almost obvious but not much grows underneath the tree A little bit of grass because grass can grow anywhere and trees cast shadows that inhibit growth and i think the toughest thing in founding things whether it's an organization like ideas 42 or whether it's in doing new research the toughest thing is that you don't want to cast a shadow but yet you have ego And so i noticed early on in a lot of things i was doing i was building more to make myself central inadvertently than i was asking my question asking myself the question how do i make myself obsolete and if you think about this phrase programmed cell death if you just ask yourself what can i do with this idea this research or with This organization that would let it do what it wants to do but that makes me obsolete that's actually a much better heuristic because it forces you to ask wait what parts of you are essential wait okay if that's essential why can't you distill that communicate that so that now others can do like what is so magical about you Like what is it what you have good taste okay distill that understand why you think your taste is good and it actually is an amazing personal growth because what it does is by preventing yourself from hiding behind your ego and your sense that no no there's something magical inside of me it it actually lets you grow because it lets you get work on the hard problem of Articulating and communicating and teaching the things that you think you're great at in that process articulated knowledge is always better than unarticulated second sure you think you have good taste but once you try to articulate those rules and communicate it guess what other people can improve on that and they can be like yeah that Maybe is a good starting point and so it's this it actually turns out to be a very it's painful because no one wants to not be wanted but but it's uh i found it incredibly valuable like i think you can do this in any endeavor i think you can you know any productive endeavor not social endeavor but any productive endeavor you can ask yourself okay what is the thing i can do like you could do this And you're an entrepreneur you could say what is the thing that i am so central at in this activity great how do i articulate that and make that how do i create obsolescence of self i'm curious a little bit as to how you felt about that but maybe before you because that's a hard thing to go through right you're going through like when you start something you own the idea you own the vision you and the Execution and then you slowly sort of like wean yourself off of that and let other people take over um but one of the things that i find really interesting about that is so often we want to be that focal point right and that's the limiting focal point it's like the the ceiling of what we can achieve because everything has to go through us instead of Enabling other people and unleashing their potential even if their vision is slightly different than what your vision is i guess there are two parts that i put around it that might be helpful there's control it's like and that was in your vision comment like they want to go in that direction you want to go in this room so there's control which is just very basic but then there's the the Feeling of specialness do you know what i mean like if if people come to you and you're the one who knows how to do something that's that's that feels great it feels like you have value i think the control one is just a sort of a come to jesus you know i'm not christian i know i used to i like that phrase it's the control one is to come to jesus moment where you have to ask yourself What am i trying to accomplish and you say look i seed control but it gets to what i'm truly trying to accomplish or on this issue i'm not willing to seek control because this is what i'm truly trying to accomplish it's like that's a very good pivot moment i think the harder one is the feeling of specialness i think that's the one where you you need to just Because it because it erodes at your deeper sense of like wait if others can do this like what does that mean about me yeah exactly i'm not so special i'm not exactly yeah that's really i mean i was thinking of the story i was traveling with this former colleague about i don't know five six years ago now and we were sitting in this restaurant and his phone kept going off And we were trying to have a conversation but his phone kept going off and he's like they can't do anything without me and i just looked at them and i was like they're not the problem you are right the problem is that you you want to be this focal point like as much as you're you're sort of complaining about it to me in the moment this has been you for years and so it's Not a them problem it's like they're scared to act without you or you haven't enabled them to make those decisions and given them the knowledge they need but given that you have the same people around you that you've had for years it's really like you just want to feel good about you and there's no sort of like i'm not putting you down i'm not sort of like i'm just giving you a different Observation on to it which you can do with what you want because it's okay to want those things i mean that's fundamentally very human right because that and especially in organizations and this is where i see it the most i find that entrepreneurs are actually generally speaking they're probably one or two standard deviations a little bit better about this because they care more about the outcomes And less about who gets the credit but inside organizations how you get promoted tends to be a story right that story is like how you save the day and how everybody needs you and and the more compelling that story is the better your trajectory in the organization instead of well this person enabled this team to make decisions without them they're redundant well that's a really good story but that's a hard story to Sell because it doesn't carry the same narrative weight that that is great yeah i think that's well first of all kudos to you for telling your friend that there's a couple of parts of that story i want to unpack one is um if you look at something you said i want to just really pick up on you know your friend could have said oh yeah And then it's okay for your friend as you said to choose and say i like being the center of it i mean that's that's what i like then it removes all this tension and i like i think of it a little bit like sports like on a sports team like i watch basketball you can be the person who's like i want to make the big shots i want to take the big shots but then you can't complain when the Ball is past you all the time you can't be like why does everyone expect me to tell yeah you said you wanted to be the first one to take the big i don't know what do you want like and so i think there's neither right nor wrong here as you say it's just the realization that it's one or the other and you're picking it and you should just pick the one you like i think that that like now the second One i want to say is how did your friend respond when you when you told him this uh i mean startled at first but it prompted a really good conversation right and then the conversation sort of dove into one of the aspects that we talked about in that moment was our need for excuses and so by keeping the power we also have the excuse that somebody didn't execute properly you know like you know so we we have not only do we Have the story and the narrative of how important we are on one hand we also have the story in the narrative where when things go wrong it's always somebody else's fault and that sort of reinforces that even though you're the decision maker you know you're reinforcing oh they didn't execute properly they didn't and so you always have this mental scapegoat and i thought it was just really interesting Way to think about it it's not right or wrong i don't know i think it's just something that we all need to dive into in ourselves but it's really hard for us to see when we're doing that and i mean one of the biggest lessons i've sort of learned since becoming an entrepreneur is outcome over ego right like before it used to be about me and i was a knowledge worker and if i Wasn't knowledgeable then what was i right if i didn't have the answer to this problem then my whole question of the self-worth came into play because i can't tell a story to get promoted and if i can't solve this problem what does that mean about me and my employment and my my brain and my ability and people think of me as a knowledge worker but then unconsciously you try to make your idea Right and so you go out seeking all of this information that is sort of like reinforces your view and then unconsciously you sort of undermine and sometimes consciously i don't think i ever consciously did it but you unconsciously undermine other people's ideas just to show that your idea is better yeah that's right You were saying this is so good i like outcome over ego do you have for yourself a articulated like outcome mantra that you go back to like okay this is the bigger outcome i'm aiming for does that make sense like like a true north outcome have you do you have that or no i don't think so i mean i i look at this as like positioning over predicting like i don't I can't predict the future i just want to be positioned for multiple possible futures and then inside the company like inside the people that i work with i'm trying to and consciously trying to empower them more and more and more and make myself redundant to the point where i can start working on things that are two or three years in the future and less day-to-day and trust um even Though people make mistakes they don't need to check with me they can just run with that and that'll give us the the velocity that we need to sort of uh allow us to do all because we have a very small team and i want to keep it small like i don't want to i have no ambitions on having like hundreds of people or big staff or any of this stuff because none of that matters our impact matters And what's gonna cause the most impact i think is by empowering people to to do their thing and unleashing their potential and it's going to be a different type of potential than sort of like i would unleash in myself but it's nice you've talked you've described two things though that already feel like you do have an implicit outcome mantra which is like one is this Positioning that like one outcome you want and you said this earlier too and you're talking about opportunity cost that you want to you want your opportunity cost to keep increasing but that's like an interesting i never thought about this it's a good outcome to say the outcome i'm aiming for is greater and greater optionality like that's it's a very reasonable outcome and It seems like it's giving you at least implicitly a north to sort of like follow a little i i think we're we're too focused often on just predicting the future and then and then our whole world view reinforces that our prediction about the future is right and in the stock market that's sort of like one angle to it but we're doing it all the time at work right We're picking a particular line and we're investing in it and i think that if you're right that is always the most optimal solution in the moment right so there's always somebody you can compare yourself to who's doing the exact optimal thing in the moment but since the environment and the context in which we operate is always changing Eventually um positioning wins but it never wins in the moment but it wins over time right so over over a hundred years positioning is almost guaranteed to win it can't do anything but win but in the next one month or one week or even one year it's always going to be the sub-optimal solution and you're always going to have a comparison base of people around you be it at work Financial returns and in a quantitative way who are always generating more than you that's great that's great and the funny part of that is that person may even have just been someone who positioned themselves well earlier but you don't see the positioning you only see the outcome of the positioning so you don't see the work actually happen earlier they kind of put themselves That's really nice how do you i like that positioning versus predicting how do you at some point does there come a time when you have to make your go all in big bet in other words like does does how do you you know you position yourself to get i don't know if you go all in but you definitely sort of like maybe um go way way into it like a kelly criterion Sort of like you're never going to go back to zero but you're definitely gonna over invest in the when you know when you can see the future with greater clarity i think that that and there's different domains for all of us like i remember one example of how i applied this in like real life because people always ask like well what does that mean i was like well in february Like i was at grocery stores like getting rice and beans and putting it on the table right and i was doing this with my kids who were 10 and 11 and they're like dad you're crazy like what are you doing because our dining room table was like full of food and i was like well i don't know what's gonna happen in the future there's this thing coming and i was like how do we position ourselves for if the grocery stores Closed down that we have provisions and we can sort of survive a couple weeks and i said if we're wrong like what do we lose and i was like about 100 bucks and if we're right what do we gain and so you have this asymmetry where you know for a very small amount of money which we can you know we'll consume inevitably at some point in the future anyway so we're just fast forwarding an expense we would already have And then we're positioning for if this thing happens then we're better prepared for that and so you have this thing where i'm not trying to predict what happens i honestly have no idea and i hope nothing happens because that would be the best case for the world but the flip side of that is like if something bad does happen we're now in a better position than we would have been but if you look at that like there's Somebody else who's not doing that and then that's optimal right they're not spending the money they're not fast forwarding the expense that they would normally have and they're not bringing it forward so they always look like they're in a better position i love that i love that i think for me as i was reflecting on you because i love your positioning thing as i'm reflecting on the positioning it Seems to me like make that work for me i'd i'd wanna also understand how am i making the mostly in decision so we called it mostly not all in i like that it's mostly in it's almost like what allows you to have the patience to position is to have the confidence that no when the time comes in to put a lot more on my chips i trust myself to do that too so it's almost like it's the Pairing of the posit you know positioning requires some form of patience and trust and so it's almost like if i if i had thought about my mostly in process i think it also have more patience in the position part i i like that pairing right where you and i think that you know what we're describing in a really roundabout way is like how buffett has Been the most successful investor in in sort of like the last probably the history of the world but definitely the last sort of like 50 years where he's constantly just saving up cash and then deploying it when there's something that he feels is predictable and then he tends to invest in more predictable businesses to begin with and i think that that's a really Interesting way to think about things and when you have going back to the baboon problem if you have a have a company that's controlled by no one shareholder you end up with a sub-optimal strategy where you're always you're almost forced to pursue the best strategy in the moment instead of the best strategy overall whereas when you have a controlling Shareholder either be it through multiple voting shares or financially like we have with berkshire hathaway you can just sit on caching you don't have to worry about activist investors you don't have to worry about all this other stuff and then you can take this short-term sub-optimal strategy and sort of um exceed or outperform in the long run one thing i like about this is great and The buffett analogy is great one thing i bet that it would help to apply this in personal life is that i think the the other challenge of optionality or positioning is that the assets you're building the options you're building are hidden like in finance if i were to go and acquire a set of options they'd be on my books i could see the options that acquired Like if this were a sports team and the optionality we acquired were draft picks the draft picks would be on the balance sheet i think what's so tough about doing this in our own professional lives is that we don't record the optionality that we've created so i wonder if to a degree this would all become much easier just through tracking like literally say here are some options I bought myself and here's how i bought it for myself and then you're like oh you know how do i compare to that other baboon yeah they're earning returns right now but look at the options i'm sitting on and so i i think there's a sports team i followed like this where in the short run they look really bad but they were acquiring picks and so the balance sheet looked not bad at all so i wondered what extent this is A hidden balance sheet problem i wonder if we just started writing down optionality you would also then be better at doing that thing you shouldn't do which is realizing if i say yes to this i am actually extinguishing these options like it's coming at a cost that you don't realize and so i wonder if we can track these that would make life much easier for me if i could somehow even start to Articulate what these optionalities are that i'm creating i love that and i love the idea of sort of like hidden options that you you might not even be able to see but also hidden options that you can't predict will be there but just the very nature of having options allows you to take advantage of those things in the short term i'm curious as to how you choose where you sort of like go next like Um you're you're always trying to predict where the puck is going to use the wingrecksky sort of analogy like how do you think about that by the way i've taken a lot out of this conversation the the positioning thing is something that right now i'm in an in-between period right now where i am struggling so this personally this has helped me a lot because i am Struggling with the patience needed to be positioning because i i i think you know there's a few clearly big things that i'm just very confident about like what so the this work i mentioned with with beck weeks and mike norton i think whether it's that you know the app i'm excited about but the the idea embodies the metacognition yeah yeah The app the app the peak app but here's what i think i'm deeply sure about the puck is going there's something happening at the nexus of technology so let's call it specifically the fact that i now have the capacity to wrap a layer around your mind that's attention which is one of the core cognitive capacities and memory the fact that i can wrap a digital layer around your mind For attention and memory and we're getting better at that that's like a no that's so obvious the second thing that's so obvious is that we have this literature that's bubbling up in psychology that is unearthing insights about ourselves and people are i mean your career is a testament to this people are eager to learn those insights so i think when you combine these two Things it naturally implies okay how do i create the thing that lets people get greater actionable insight about themselves like themselves not just in the general but their life as it's instantiated like your story about your friend it's awesome because your friend has an asset and you who managed to say to him hey look you know this is not about them this is About you that is highly personalized highly contextualized now i don't think we're at that level it's like oh you know we're gonna do that tomorrow but the combination of these things and it's not a digital solution alone it's digital solutions that work with you so for example one of the things your story made me think is that like how do we get people to realize there's a simple question they Can ask their friends and create the right moment to ask them that would be life-changing you know which is hey what do you know about me that i don't know about myself right exactly which is a perspective it goes back to sort of like this being on the train right like what do you see what's your lens into this that i can't see because i'm me that's right that's right so i think that that angle I think is very clear i think we're going to see a revolution both in behavioral science as a research discipline so for example here's a telltale sign psychologists don't work on self-help that doesn't make any sense there's a whole ocean of people who in good faith want to improve themselves how does the research discipline of psychology largely ignore this and if you look at most people by Behavioral economic behavioral science books they're sort of very high brow self-help you wouldn't call it self-help lest you be chastised but it's it's the deepest of human desires to improve oneself understand oneself so i think you see it at every level that that angle that that area is about the bubble and we have the technology to implement it i think is really is one happening like clear area um But your question was more meta how does one try to make such calls i guess it comes down to thinking about not just your own thinking but other people's thinking so if i look at self-help there's a big desire so now you have to ask yourself wait there's a research discipline called psychology over here there's why is the market not being made why is supply not meeting demand so then It's partly about saying what is it in a research psychologist that makes them allergic to doing this and then if you can understand the inner logic then you can ask the question but will any pieces of that logic are they amenable to change or will they naturally change over the next 10 years then i think you start to fray in this and i think that that that type of Understanding it's almost like having metacognition about other market participants that is i always say this i was like if you can describe someone else's perspective on a problem so well that they themselves say oh yeah that is what i'm thinking then you know you have an arbitrage opportunity because you've said it as well as they have And yet you see something they don't see so it's like a really useful challenge to set to oneself not to articulate what you believe but to articulate what other market participants believe with such high fidelity that they would agree with you that's when you know that you found an arbitrage opportunity does that make any sense Oh i love that it's sort of like we've written about this on the website called the right to have an opinion and that's effectively you know you shouldn't be entitled to an opinion until you can argue the other side better than they can argue themselves and then at that point you're entitled you've done the work necessary to have an opinion and i think that that's a really Interesting philosophy for life and sort of like how you conduct yourself online in this age of uh you know sort of instant disagreeing with everybody and surface skimming and you know we we can't all have as many opinions as we have and once you really ask yourself like can i articulate the other side of this better than they can articulate it or do i really know what i think i know And often you you discover that no you can't and a lot of your opinions come from skimming headlines and you're like oh that headline i agree with so it gets reinforced slightly in your mind and then over time as we have this filtration bubble around the information we consume we get reinforced in our beliefs and more we get more conviction i guess more confidence in them Even though we should in a way be getting less confidence as we learn more about a subject it's like the illusion of explanatory depth with respect to other people's opinions it's like you say right it's like you say hey what does a think you say okay tell me more like oh i got nothing else like wait why do i have nothing else whereas we have tons of depth on our own opinions Tell me more about what you think oh i can go on for hours i wonder how we'll feel about a couple things that we sort of like just loosely hit on there which is one computer's telling you about something you can't see about yourself um so it's like your your aura ring or your apple watch or whatever that future technology is going you know we notice that you use negative words When you speak to these people or something right like how will we feel about that being a computer versus a person will we feel better about it because now it's depersonalized or we feel worse about it because it's like why now you're making you're surfacing the fact to my conscious level that you're monitoring you're sort of like collecting data on me and you're wrong and we sort of like Justify why those technologies would be wrong what's your take on that i think my take on that with all these technologies i always go back to the elevator so when the elevator was first built no one wanted to get it because if you think about it it is frightening this thing this piece of metal is barreling through the sky it's it's insane to get an elevator if You objectively think about it and if we were talking about elevators and how will people feel about elevators in the future and you were otis you know otis just has to have to have this core belief look whatever you guys think today you're not going to think it in 20 years and he was right they wouldn't think in 20 years and i think part of what we forget is that like a lot of our Our our resistance to things is just like that local one to two to three years of like what you know even before remember when people are like uh how could anybody just talk via text you know i missed attempted you get used to everything you know you adapt to everything so i actually think that the advantage of the algorithm over the person is what you said which Is that once you get used to it you know even your friend when you told him this fact partly he must have however nicely you said it felt a sting of judgment a little bit like oh like now i whereas a computer doesn't have this thing of judgment it's like when i look at my fitbit it says whatever i don't have a fitbit it says like 7 000 steps it's not judging me it's just saying Seven thousand likes is what it is but that's an objective fact versus like something about our mood our feelings the way we talk what we're missing like once we have technology pointing out our blind spots like blind spot reduction is like the number one way to make better decisions it's the number because we all have blind spots but when we have technology pointing at those blind spots That is it's not as factual as like the number of steps you've taken or the the decibels that you're hearing in your ear or i think what we're going to head with this is already seen in sports is that an athlete has a coach who sits with them and looks at the tape right the tape is the objective right and i'm going to help you interpret it and so you can fight the interpretation And that's an all too human process but just the fact that we have so much objective data that we're going to share and look at to then interpret that's going to be huge and i think you're right there's no algorithm that's it's just not feasible to think of that interpretational process for most things but i think the the human interpretation just i think i think is how i think about it is like We're all going to be quarterbacks or you know whatever tennis players but now we're going to have in our professional lives all of this tape and we've already seen some early versions of this there's a cool study with teachers where they improved their teaching by quite a bit and the way they experiment was they videotaped their actual classes and they had Someone sit with them and it was even less than coaching it was just watching together and just asking them simple questions like did that go well did you notice something so even just the person's nascent own capacities to notice when the data is surfaced and someone forces you to look they saw big improvements in teaching scores after quite impressive just you know coaching on something like That now that teachers can be on tape but as you say more and more decisions are on tape you know we have memos we say hey should we invest in this thing great let's write a pro con everybody writes their own pro con like now we have this database of decisions and i think that's a very exciting area i think that's a really really good segue into sort of the next topic which Is you're somebody who straddles academics and sort of practical application how do you see academics sort of contributing to society and business and how do you see that role like what should that role be academics produce the raw ingredients not in every place but in many places produce the raw ingredients Off of which are converted to creativity and intelligence into product and i think that that pipeline happens in the very banal like you see it in pharma in pharma bio labs produce molecules that might be useful for certain things or technologies that then pharmacists you see in a very tight pipeline but you see it in like the conversation we're having like all this great behavioral science Work that was done as pure research was raw material by itself it's just a set of studies people have to then take that and so i think this conversion process is is really one way i think about it but the other way i think about it is that i think academia needs to also realize that it flows back in the other direction you know so if you think in physics and you say what are the great fields of Physics you know uh classical mechanics fine that went in one direction that's clear but electricity and magnetism that did not go in this direction that went in the other way people playing with electricity find these cool things blah blah that created one of the core physical laws was going this way thermodynamics did not go this way it went this way so i think academia has this illusion That it can it's going this way as the only force but there's a strong feedback loop and so part of my career has been trying to in my own life enable that feedback loop so that i understand what happens over there and and i found that super valuable like super enjoyable because especially in areas like this like in behavioral science it's just and a practicing researcher would be Foolish to think that they're at the frontier no no like this area is so interesting lots of people are touching it from lots of different places and you have a chance to contribute in both directions i like that a lot i think it's really interesting to think about how the intersection of those exists today but also how it changes over time and how technology will enable and sort Of data will enable and also hinder progress in some ways i i sort of want to end on the i've been exploring different ending questions to the podcast i want to end with uh a new one which is what do you want people to say about you when you're 90 oh that is a great question what do i want people to say about me when i'm 90 i think i'm with the optionality to revise it i think what i would want People to say when i'm 90 is um oh he changed how i think and if that's five people say it i'd be happy at 50 but i think changing how people think is the most durable asset that you can create because when people change how they think they then produce in so many areas and so many it's the ultimate force multiplier so if i could contribute in some small way to Changing how some people think that would really mean a lot to me well i think this conversation went a long way to doing that yeah me too and converse i'm gonna remember the positioning thing uh this is awesome thank you shane this is so fun i really appreciate it you

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