My First Million - Business Tricks We've Learned From Gamblers, Pickup Artists, & Feynman

Episode Date: June 28, 2024

Episode 602: Sam Parr ( https://twitter.com/theSamParr ) and Shaan Puri ( https://twitter.com/ShaanVP ) talk about how to 10x your odds of success.  — Show Notes: (0:00) Ed Thorp and the mathematics of gambling (7:51) World's first hedge fund (12:12) Sam and Shaan revisit “The Game” (16:06) The Feynman technique for learning (21:14) Shaan's one criteria for action (24:58) Why you don't need privilege to start (29:06) Playing "the game" of business (33:37) Switching to better games (36:15) How the Roger Bannister Effect crushes limiting beliefs (40:13) Step 0: Believe it can be done — Links: • [Steal This] Get our proven writing frameworks that have made us millions https://clickhubspot.com/copy • Ed Thorp biography - https://tinyurl.com/yjcp4645 • Beat The Dealer - https://tinyurl.com/yc426fc5 • Ed Thorp website - https://www.edwardothorp.com/ • The Game - https://tinyurl.com/3kh3xfhn • Jack Smith’s episode - https://tinyurl.com/yc4zdnem • Kaggle - https://www.kaggle.com/ • Bringing Down The House - https://tinyurl.com/4txm492n • Grab HubSpot's free AI-Powered Customer Platform and watch your business grow https://clickhubspot.com/fmf — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth • Sam’s List - http://samslist.co/ — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano

All right, we're live. Sean, I've got a story for you. And this story, I'm going to take a weird take on this. I have a weird take on this. And I'm going to appeal to all the young single men out there. All right. This is your specialty, young single men. Let's go. I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel. All right. Listen, the story is about Ed Thorpe. Have you ever heard that name, Ed Thorpe? Sounds like a swimmer. No. It does sound like a swimmer, but he's not. So Ed Thorpe, I'm reading his biography called Man for All Markets. So Ed Thorpe, today he's 91. So what does that mean? He's born in the 1940s, 1930s.

Ed Thorpe, he grew up as a math whiz kid. He was like a prodigy at a young age. Grew up in a very poor household, didn't have a lot of money. But as a young kid, when he was like 12 and 13 years old, he got moved up a bunch of grades. And he took a bunch of standardized tests. And at the time, when he lived in California, he got something. like the highest scores in California for high schoolers when he was like 13 years old. And at the time, they didn't have calculators, but they had like little counting devices.

And he would take these tests without these counting devices because he couldn't afford them. And he still crushed it. He killed it. So eventually, Ed Thorpe, he gets a scholarship to Berkeley. And then he goes to UCLA where he gets his PhD in mathematics. And he becomes a professor. And he starts going down this track where he's in his 30s and he's this brilliant professor and whatever. but then he does something interesting. He gets interested in applying his theories to real-life situations

because he's like reading these academic papers and he's like, this is cool and all, but we got to apply this stuff. And his specialty was probability and statistics. And he got super interested in how he could use his theories to beat Blackjack. Oh, this is the gambling guy. I saw this guy on Tim Ferriss. This guy's interesting. It's because he's done so much more than just these few little stories I'm going to

tell. But basically, you could actually verify this. Blackjack is what? 51% chance the house is going to win. Is that right? Is it like 51, 49? 51, 52, something like that. Yeah. So it's a small margin. But back in the 60s, when he was kind of getting going, he had this theory where he thought that if he saw the cards on the table, he could have a higher probability of getting 21 because he basically could count cards changing the ratio of 51% in the user's, uh, perspective. So he was 51% chance of winning. The house was 49% chance. So he creates this paper where he explains all of this. And inevitably, people are like, man, this is just some academic theory. There's no way that you're going to be able to do this. And so Thorpe is a fun guy.

And he's like, we got to prove it. So he builds out this blackjack table at his house. And he gets his wife to smoke cigarettes and blow cigarettes smoke into his face while she's talking to him and like annoying him. And then he has friends come over who like are drinking alcohol and like, yelling in his face as if he's at a casino to distract him. And he spends a handful of months doing this and it starts working. He's like, I think this actually can work. I think I can do this. And he publishes this paper and all these people reach out.

He gets hundreds of letters. But eventually he gets this one letter from this guy named Manny. And Manny, he doesn't really know it at the time. But after a while, Ed kind of realizes that Manny is basically in the mob. He helped make bootlegging a thing in the 20s when alcohol was illegal. And Manny goes, hey, Ed. Let's see if you can actually pull this off. I'm going to front you 10 grand, and we're going to split the winnings.

10 grand at the time, the 60s, something like 80 grand. So it was a lot of money, particularly for a professor who's making the equivalent of $150,000 back then. And so they go and they spend this weekend at a casino in Las Vegas, and they make $11,000 in profit. And Ed's like, holy moly, this thing works. But he doesn't really want to become totally a professional gambler, but he's really interested in proving his theories. And eventually he writes a book on this.

And if you Google Ed Thorpe Blackjack book, he wrote this book at the 60s that was a massive hit. And to Ed, this was all just a big, like, fun game, a way to prove that his research wasn't just academic, but it could actually be used. And this book was a massive hit. And it was one of the first times that academic research was like used in real life. And it went straight to the masses as opposed to him publishing more papers.

But this meant now that he was known in the casino world. In the casino world back then, Vegas was just getting going. And so it was small enough that all the casinos could know what had looked like. And all the dealers would know what he looks like and what his name is. And so he eventually goes back at every handful of weekends and he has to wear a disguise. But he still ends up cleaning them all out. And next he goes, well, Blackjack was cool. Let's see if I can do this with Roulette.

And so he goes, you know, roulette is a little bit unlike Blackjack where I don't even know if there is necessarily, at least it doesn't appear so there's a lot of skill because it's all like where the ball lands on this spinning wheel. But he has this weird theory that if he can see, if he can like quickly count how fast the wheel is going and where the ball starts and where it hits the wheel,

somehow he's able to calculate 51% in his odds where the ball is going to land. And this sounds like a crazy idea, right? I mean, that just sounds impossible to me. As somebody who has spent a lot of time at a roulette wheel,

being able to figure out while the wheel is turning where the ball is going to land and when the ball hits, it bounces like in a random direction based on the spin and the speed and everything. For somebody to do that in their head would be, I'd have to see that to believe that. It sounds impossible, right?

And that's what interested him is he was a math nerd and he was really fascinated with the game of proving his theories correctly. And so what he did was he took a small computer and he basically assembled a small computer. And the way it worked is, He would have a two-person team. And so he would be at the table placing the bet.

And he had two people on the side. And they had these little small computers, and they had little buttons in their shoes. And they would calculate where they thought the ball was going to roll to. And they would tap their feet in order to keep the cadence of the wheel. And it would help him predict where the ball was going to go. And that music, the taps, it kind of sounded like music, would go into his earpiece that he was wearing. And he would make a bet. And this was actually the world's first wearing.

You know, like an iPhone or like an eyewatch is a wearable. This was the world's first wearable and it worked and he killed it. He made a lot of money and he wrote a book on this. He did it again. But now we're going to fast forward to him 10 years doing these experiments. He's got some money, something like $100,000 at the time, which was a lot of money for a professor. And he needs to invest his money because he just doesn't want it sitting there. And so he spends a few months learning everything he can about investing, basically just reading books.

He just read lots of books. And as he said, he wanted to understand the math behind all of this. And so he starts investing in publicly traded companies. And he loses a lot of money at first. He said, I had to pay my tuition to Mr. Money Market because it gets a lot of it wrong. But then he discovers options. And this part is a bit out of my expertise to explain how he does this. But it involves both shorting a company and buying the company's actual stock.

So predicting the company's stock is going to go down while buying the stock. but in doing that, he studied the option that he was going to purchase as well as the current stock price. And in doing that, he was able to hedge it so he would only lose a little bit amount of money, but make a whole bunch of money. And for him, he actually didn't look at any of the stock information as in what the company was selling. So, you know, you have guys who like do value investing and they're like, well, I think that this brand is undervalue. That wasn't him. It was all just a math game to him. But after a year or two, it starts working and he starts making a little bit of money. And so now we're in the 70s.

And there's another professor at his university who starts hearing that Ed is now investing in stocks and he's doing quite well. He tells some of his coworkers, he's like, I might make more than my salary this year investing. It's going quite well. And so one of his professors has invested his money, the professor's money, in this small little fund called Buffett Associates. And of course, it was run by this guy, Warren Buffett, out of Omaha. And this professor was like, hey, this guy who I invested, and warm, he's going to wind down his fun. He's crushed it for me, but he just wrote this letter saying he can't find any more good deals, which in the 70s, Buffett actually paused investing for

like five years. He didn't want to invest because he's like, I can't find any good deals right now. I'm just going to sit and do nothing. I'm going to wind down my fun. And the professor goes, hey, look, this guy's running down is fun. Why don't you, you know, he's got some free time. I'm friendly with him. I'm going to invite him over to my house. I'll invite you over and we'll just shoot the shit. And maybe you'll have a new friend in the investing industry because you don't really know, anyone else doing this, I'll help make the introduction. Buffet comes over for dinner, and Ed Thorpe and him get along beautifully. Hand in hand, like pots and pans.

They're really close. They become great friends, and they love hanging out that day. And a few weeks after the dinner, the professor goes, hey, look, Ed, I was kind of testing you. I kind of wanted Warren to, like, kind of see what's up with you. He gave a thumbs up. He said you're really smart and that your ideas are good. Can I take this money that I got?

back from Warren Buffett and give it to you to invest. And Ed's like, taking other people's money. That's not really what I've been doing. I've just been doing this for my own. If you guess I'll try it. And so he teams up with another guy and they raise something like $5 million over the course of six months. And they have Buffett stamp of approval. And so they start basically one of the very first hedge funds ever. And particularly he's a quaint, which is common nowadays, but Ed Thorpe was the first quaint where he didn't really look at the companies. He just looked at the numbers and he killed it. So over the course of 30 years,

he made something like 20 to 25% per year, which is massive. I don't know what is Buffett made. You know, probably something like that, but over the course of... Buffett's is like 20, yeah. Yeah, it's like 20, but over the course of like 60 years.

Yeah, for a lot longer. And so Ed Thorpe basically invented counting cards with Blackjack and then made a book on it. He invented this roulette game and the world's first wearable, which all these things, by the way, eventually became illegal. They weren't illegal, or I don't know if it's illegal or against the rules, but they basically are banned in casinos because of him.

And he parlays all of this learning and all this experience into creating the world's first hedge fund and becoming one of the first quants. And he knocks it out the park. The guy kills that. I think he made something like $800 million. And then eventually, fast forward to today, or more like 2005, he shuts down his fun because he's like, I have enough. I don't need anymore.

This has been fun while it lasted. I'm out. He's one of the few guys to just be winning, and he just says, that's enough, I'm done. So he completely shuts it down. So now he's 92 years old. He still does push-ups and pull-ups. He's really into fitness.

He does not look 90. I saw him on the Tim Ferriss podcast. I can't have been that long ago. He was 89 then on that Tim Ferriss podcast. He looks honestly like somebody who's early 60s. He looks great. Yeah. And here's the part where I promise I'm going to try to weave this into advice to the young

man. Ed Thorpe is so fascinating to me and the reason he's fascinating to me is because I don't know if you'll admit to this you probably will if you did it. Did you ever read that book The Game? Did you ever read books on like how to meet women? Not only did I read the game.

Not only did my girlfriend in high school buy the game for me before I went to college as a goodbye gift. Was that her breakup gift? It's over between us, but I wish you well. We're not to stay together, but let me help you out here. Not only do those two things happen. Two nights ago, I reread the game.

And I'm a married man. I reread the game because I was like, that book was amazing back then. I wanted to learn the style of it. I was like, what was great about that book? I read it two nights ago. So it's crazy you brought it up. So that's a great book.

So anyone, most men in their 30s nowadays probably read that when they're 14. It was like the Bible because all of us nerds, but like, I desperately want to be loved. How do I be loved? Whatever? And there was a lot of bullshit in that book.

Brother, the number of times I used the cube test. Like, there's not a woman on Duke campus that didn't get the cube test for me. Which one was the cube test? It's like a cold read where you're like, I want you to close your eyes. Imagine a cube. It's floating in the desert. How big is the cube? If they say it's big, they're self-confident.

If they say it's small, they have no ego. Is the cube see-through? Is it colored? Oh, it's kind of see-through? Well, you don't let people in easily. But when you do, you really do connect with people at a deep level. That's so me. And then you just go on, so on and so forth about their relationships and about their way they view the world.

And by the end of it, they're like, this guy, this guy is going to be in the friend zone is really what happened to me. But I think for better looking people, it probably worked better than that. They were like a cat and you were just holding a string, just like trying to entertain them and they're like, yeah, I'm done with you. That's another thing in the book, cat string theory. That's actually another principle they have.

Well, and this is where it gets really nerdy. But one of the parts of that book and that whole movement, there was a lot of bullshit in that book and in that movement. But one of the parts that I always took the heart was the best way to attract others, both men and women, is to be an interesting person. And what that means,

is basically people like ambitious people. And being passionate about hobbies is under that umbrella of being ambitious. And I remember as a kid, I love that because I'm like, wait, you're telling me I could just work on myself and I'll attract others? That sounds like the greatest thing ever. And I believe it to be true.

As I've gotten older, I've noticed I've gotten less interesting. And the reason I've gotten less interesting, there's a few reasons there. The first is that I've developed higher expectations towards most things that I do. or rather, I've just developed expectations, as opposed to just doing something just for fun. Like, you do think as a kid just because you're intrigued,

you know, like, I don't know where this is going to go, but I'm just going to follow it. Whereas now, there's expectations for everything that I do, and I want to have, I'm a little bit more interested in the outcome. The other thing that I've noticed lately about me and why I've become less interesting is because I've been distracted. With social media, just like how you're typing right now as I'm talking to you, it's so much easier to be distracted nowadays with Twitter and Slack and email and text.

I find myself getting so distracted and so I don't have a significant amount of like deep thought or like going deep on something. It's more so like I'm being on the defense where people throw information at me and I react to it as opposed to like spending time pursuing something that interests me just because it interests me. And so the reason why Ed Thorpe, the reason why I like reading about him and particularly for young men listening is he's kind of inspired me to just pursue more hobbies just for the sake of learning. And here's an example. When he was developing his roulette game, he basically went and bought an old roulette table at an auction for like $500. And he just sat at home in the evening with his wife. And they're like,

hey, let's just see if we can count this game. It was almost like, what's that one board game called Settlers of Katan? Yeah. You know how like people just like get into that random stuff? And they're like, let's just see if we can master this game. It sounds fun. And that's exactly how it started with him. A lot of these things that became massive outcomes for him. They were just like interesting little hobbies for him and they started very rudimentary. Have you read about Dr. Richard Feyman? Of course. So, Feynman was one of the guys who was important for a variety of reasons, including helping make the atomic bomb and all these things. And he had little like weird things about him where it's like, why can dog smell so good? He's like, well, I asked myself that. And then I just put my head close to

the floor and I noticed I can smell things on the floor. And it's like really simple ways to like prove or disprove a theory where you start at like very basic principles and you're like, let's just see if this works. You know, Justin Kahn used to call himself, he had some tagline for himself when he was making content. He used to say, hey, it's me, it's Justin, your favorite founder's favorite founder. And that was like how you always talked about himself. Your favorite founders, favorite founder.

And I feel like Feynman is kind of that. It's like your favorite guru's favorite guru or your favorite thinkers, favorite thinker. It's like everybody who you love their thoughts, they love Feynman and the Feynman technique, and they love all the Feynman's books and his writings. Everybody you respect respects Feynman. Yeah, I think Tim Ferriss's holding company is called Feynman Inc or something like that. Dude, that's actually genius to just be like, yeah, it's Feynman and Ferris Associates. Just put yourself with them, just like, oh, yes, this is the Puri and Musk consultancy. Well, how can I help you?

Yeah, just like borrow from their credibility. But there's guys like Feynman, and Ed Thorpe is now in that, sphere where they just get interested in some things that seem so silly, and they do it at a very rudimentary level, and it goes from level to level to level, but it starts at level one. You know, who's exactly like this? Jack Smith. Jack Smith is like that, yeah. Jack Smith is one of these guys. Jack is a buddy of ours. You're really good friends with them. I think you've known him for a lot longer than I have, but he is such an interesting guy. He built companies, and he said he built a company called Vungal, sold it. His whole origin story was one of the very first podcasts on this feed. So if you go back,

was in there and he talked about, you know, when he was a high school or what he was doing, flipping things on eBay, and then how he hacked his way into an accelerator. Then once he was in the accelerator, how he figured out this ad tech company, how the experts told him there's no way, son, you don't understand how the ad business works. He's like, yeah, that's my strength. I don't understand how this works. So when I approach it, it's, I'm going to approach it differently. And what he did was the whole way the whole ad industry works was all based on CPM,

impressions. So it's a billboard. How many people are going to see this billboard? That's how I charge you. And he's like, well, that's kind of stupid. If I was advertising, I don't want people to see. see it. I want people to buy for me or I want people to download my app. I want the action. So what if we just paid for the action? And it became CPA instead of CPM. And so he reinvented

in a way that's a little bit generous, I would say. There's other people doing this. But Jack and his co-founder created Vungal, sold it for $700 million. And it was really based around this mobile gaming ad network that was going to do things a little differently the way other people were doing them. He sold it for 750 million when he was 29 years old, like crazy stuff. And for example, again, thinking from first principles. So like, what should the ad be? Everybody else did video ads. And so you would be playing a game.

It would stop. A video would take over the screen and it would be a video commercial. And then you'd be like, when can I click the X? So I can get back to playing a game. And what Jack realized was he's like, well, the best way to advertise a game is actually just play the game for a second. Oh, it's about shooting the ball into this hoop. Well, like, let them try to shoot a couple times.

They miss and they want to make it. And then now they got a sample. So they created an ad unit that was just a mini version of the game. that worked way better than the video ad. And it was, again, many times over of just thinking from first mentors, how could I do this? But now, since selling the company, he had his Thorpe enough moment where he did not need to go create another company and instead got really into other things. He's like, you know, I need to buy an office chair.

He goes and he looks kind of uninspired. He's like, well, certainly there's been some studies on the best way to sit. So what is the best way to sit? And he'll go and he'll read research papers about the rest way to sit. And he'll test chairs. And he ultimately ends up building this crazy ergonomic chair himself in his garage over the period about six or eight months. Did you see the chair? It looks like a dentist chair. He's laying down in this crazy position and it's like a work chair. But anytime if you ask him like, hey, Jack,

what do you have to nowadays? He felt zero pressure or at least caved to zero of the pressure of having some important sounding answer because he just did what was important to him rather than what sounded important to others. So he'd be like, I'm just, you know, just messing around. You're like, no, what does that mean? Like, what do you do every day, Jack? He's like, well, I'm really working on trying to build a chair. You know, I got really interested in chairs and, you know, sitting. I sit for six hours a day, and I just thought, well, why don't I sit in a better chair? And so I can start researching chairs. So I've bought 52 chairs, and I've been testing them.

And then I've decided to build my own, the best of each of these. That's what he'll do for one year. And then next year he'll do something completely different just off of his curiosity. And the cake, one year for his birthday, the cake that his wife made for him at his party was shaped like an Amazon box, because he'd orders so many chairs or so many whatever things that he's interested in that he had a room in his home just dedicated to all the boxes. Yeah, he had a small like FBA fulfilled by Amazon facility in his in his pantry just to test out every single product. And at one point, they banned him on Amazon. They ban them on Amazon for returning too much stuff because he would buy all of this stuff to test it out.

But yeah, Jack is perfectly like that. But does this resonate with you where you're like, I need to just pursue more things without having a big outcome in mind? We haven't been talking a ton, but that's become the theme of my, I don't know, the last 12, 15 months or so. I heard this quote, Naveau said this thing on some podcast, and he goes, too many of us live where we're doing things today for some future reward, some future payoff. I'm not doing what I want to be doing now, but I'm putting in the time. I'm putting in the work, I'm putting in there for some future payoff. He goes, that's understandable.

We all start there. He's like, but the day you start doing things where the thing you're doing in and of itself is the reward, that's the day you've retired. People think retirement is when you stop working, you go sit down, you chill, you do nothing. it's not that you do nothing. It's that you do the things you want to do because the act of doing them itself is the payoff. And you're not sure, there might be some upside in the future,

but that's not why you did it. And when I heard that, I was like, okay, that's what I need to be doing. I don't know how I'm going to get there. And I've many times had little detours off of that where I start to do something opportunistic because, oh, it's going to pay off in the future. But I've just continued to bring myself back to that moment, which was, I want this next chapter of my life to be all about,

I'm doing things where the only criteria is, the act of doing it has to be rewarding enough for it to have been worth it. And that one criteria eliminates like 98% of the possible things I want to do. Because if I'm honest with myself and I say, well, why do I want to do this? It's because it might make a bunch of money or it might pay off in this thing later. It doesn't, it might be business related. It could be relationships related.

Why do I want to meet this person or go to this event? Oh, because it might lead to something. No, no, no. I'm only going to this event if the event itself is the payoff. I'm only hanging out with this person if the hangout is the payoff, not because it's going to lead to something else. It can be a fit. Did you determine what that is?

Do you determine, have you, that's actually really hard is figuring out what the play is? What I realize is it's less of a thing. So I thought, like you're just asking me this question. I thought it's a thing. I got to find my thing.

My new thing, that's the thing I just love to do and I'm doing it for the sake of doing it. What I realize is it's fundamentally different. It's not a thing. It's a approach and it's a filter. And so actually, it's a question that I asked at the beginning,

of anything I'm going to do that day, which is, am I doing this for some deferred payoff, some deferred benefits? Or am I doing this because I actually enjoy doing this? And so it changed the way I did everything. So, for example, with my workouts, there was a version of workouts that I did because whatever, just bite the bullet, just do this and you're going to, it'll pay off later when you get fit versus, well, why don't I just do workouts that the workout itself is so satisfying? Of course, if I do that, I'm going to do it more often.

I'm going to do it with my full effort and I'm going to still get the reward in the end. So I started working with this like boxing coach or playing basketball, different things that I wasn't doing before because I was willing to settle for doing something that today kind of sucks. But in the future, maybe it's going to turn out great.

And I realized I had lived basically like 35 years of my life with the this kind of sucks now. But oh, it's all going to pay off in the end. I realize it's a false choice. You don't have to do that. You can just filter every activity on. Is the act of doing this going to be worth it? Even if it's challenging.

It doesn't mean everything is so happy. But is the act of doing this the reward or am I doing this only for some future payoff? So it became a filtering criteria, not a one thing. So, for example, I told you, I was reading the book the game the other day. Why did I do that? I was reading a book in the middle of the day, especially an old book that I'd already read before that had no relevance to me because I'm not trying to be a pickup artist or hit on women anymore, right? That's not what I was doing.

But it was the thing I was most interested in that moment. And so I did it because the act of doing it was the reward because I was most interested in it. And I've done that with other hobbies, like picked up playing the piano. I started doing other things that are all falling into this bucket. And I've never been so, you can hear it in my voice. I've never been so switched on after making this sort of shift in the way I chose what to work on. And that's a very, I'm going to say the P word. That's a very privileged way to go about it, which is if you hit the lottery, like maybe we have,

or I mean, we've worked hard, but we've got lucky as well, where that's a very privileged way to go about it. And so I do think you have to eat shit for a certain period of time and also get some luck. but yeah, I'm very drawn to this way of living. I'm not sure that that's true. It's 100% true. The reason I say that is, first, whenever somebody calls me privilege,

I'm like, that's a compliment. I think they mean it as an insult. People use it as an egg, not you in this case, but I'm saying most people, if you call someone a privilege, you're trying to tear them down. I want my life to be described as one of privilege. That's the point.

You're giving me a compliment. That's like saying, wow, you're really good at this. This comes effortlessly to you or whatever. I want my life to be described that way. That is a goal of mine. And I just mean that because most people will treat that as a negative and that they try to make themselves smaller, right?

So a little bit of like the tall poppy syndrome where if you have the freedom to do something and you are not doing it because you're worried about how it looks or how it sounds or how it others don't have that privilege, you're wasting your privilege. I think that's a bad thing. Let me answer the other part, which is I would say that the most successful project I've ever done more than any of the company's ever built or any job I ever had has been this This podcast. This podcast from a usage, like people listen to this.

They like it. So customers are happiest. Financially, it's a very lucrative product. That affords a very good lifestyle. But also just the my enjoyment of it, the act of doing it. I don't do this episode for some future payoff. I do this episode because it's going to be fun to do. I enjoy this conversation, this conversation up.

By the time we click stop, I've got my payoff. And when I started the podcast, I literally wrote down that I'm going to lose money doing this. that I expect that nobody will listen to this and I'm going to do it anyways because it'll be so fun to record these episodes talking to interesting people and learning that it will make it worth it.

And I wrote down, I have this Google Doc, I'll share it. It says, my forecast is I will lose $10,000 a year doing this. My forecast is that really nobody but my mom is going to listen to this thing. And it's still worth doing.

What were the other predictions? So I got into this position because I made a choice like that four years ago. Right? Like that, that. And so I don't think, I also thought, well, you got to eat shit for a while before you get to go do the fun things. I don't believe that that's actually true.

That's 100% true. Think about it. Let's say you're a 40-year-old landscaper with three kids. It is one way to do things. I know a bunch of engineers who work on projects that they are personally interested in. They build personal projects. And one goes kind of nowhere. Two goes kind of nowhere.

But it doesn't matter. They're building up their skills. They're having fun doing it. And sure enough, by the third, the fourth, the fifth, either they built up skills where they're a highly valuable person that gets brought into a project that's already working. and they get paid handsomely for it, or one of their projects takes off. But the whole time,

they were just doing the thing that they really like to do. I think that there is one way to win, which is grind and eat shit, and pay your dues, work up the ladder, pick whichever cliche you want, and that that is a way to win.

I know several people that, from the beginning, they were driven by working on the things that were interesting to them, like an Ian Thorpe type of guy, right? And when they're working on the things that were interesting, it led to good outcomes.

Because when you work on things that are interesting, You work on it longer, harder than a person who's just doing it for a reward. You get better at it. And when you get really good at something, that's when the payoffs tend to come. Well, I believe that can be true. And also it can be true that it's more challenging logistically for certain people. For example, you're a blue-collar labor with three kids at 40 years old.

You work from 6 a.m. to 7 p.m. And you're like, there's just no time. And I just got to pay the bills. I do think that it's just more challenging. Many of the people listening right now, I believe you are totally right, which is we probably have a lot of college educated, particularly college age kids who don't have too much responsibility. And they should lean into this thing. And I completely believe that to be true. And I believe it also to be true that as you grow, this type of mindset gets stamped out of you. The world wants you to be vanilla.

Yeah, absolutely. Let me ask a different question. Of the people we know that are successful, just give me a rough number. what percentage do you think got there through the grind, do shit they didn't like that paid off in an unsexy way? And then now they work on things that are more interesting, pleasurable, that they're driven by curiosity, they're driven by passion, they're driven by whatever, versus people that made it by following things they were curious about. Maybe it was a bit of a lonely road for a bit. Maybe other people, maybe it wasn't a hot market, but it became hot, but they were there already, right? That happens a lot. What percentage would you say in each? I'm just curious roughly how you would think.

about it? Is it like only 5% got successful through following their own interest fundamentally? Or do you think that it's 50-50 that got successful following their interest versus following what was more proven? If I had to guess, 60 to 70% of the people who we know who we would consider wealthy enough that money doesn't really matter probably made money in a way that looking back, they were like, that was really hard and miserable. And I don't think I can do that again. and then a large percentage of them now, I would say only 50% of them then go and pursue something that truly interests them

and the other 50% just do the playbook again and are miserable while earning a great living. Yeah, so roughly, let's say 20, 25%, you think maybe we're in the bucket that I'm talking about, which is they were just doing what's interesting to them and that happened to become something that was very successful versus people who chose things that were not as interesting or not as fun for them,

but they thought we're going to have a payoff and it did. And here's why. Y Combinator is like the stereotypical Silicon Valley like story. You go to Y Combinator. How long is White Combinator? Eight or 12 weeks? Three months, yeah. Okay.

So you go with one idea and you only have 12 weeks to decide if this is going to work or not. And by week six, they say, dude, this sucks. You should pivot this amazing idea you had to do credit card processing or to do something else that people want to give you money for. And so they just go, oh, fuck it, whatever. I got to go down that path. But that path that they're signing up for is a 10-year journey or more. And so there wasn't too much thought with it. And so they're just like, man, I just got to get a win however way I can. And I only have another six weeks until I've got to go do demo day. So I've got to just settle on something and move forward and do it. And I think that that mentality is often what a lot of

internet-based businesses are built on. So I think that's a little unfair to YC because, for example, if I think that does happen, but one of the things that happens in those pivots, because I've invested in a lot of YC companies that pivot. And also if you read Paul Graham's essay, one of the things Paul Graham advises heavily against is the,

what he calls playing startup. It's like playing house where you sort of just try to manufacture a startup idea that you think might work or think might be good. He's like, the best way to figure out a startup idea is to scratch your own edge. And to look at your own life and figure out in what place am I, already living in some future that other people aren't, but I could build a product that would help them get there? Or what's a pain point we've discovered along the way of doing this

that we could solve? So yes, they pivot quickly and they pivot in the middle of YC, but usually the advice is that you should pivot to something, the problem, like the itch that you want scratched, the problem that you are currently having, or the thing you uniquely understand because of the way you live your life versus what other people do. And the biggest successes out of YC have typically been that, right? I agree that the Airbnb guys renting out their own apartment to make way or Brian Armstrong doing Coinbase because he lived in Argentina and dealt with the currency issues and was interested in Bitcoin. These were not ideas that fun and at least sounded good. The biggest successes, I think, are done that way. Yeah. But not the average success.

I think that's exactly right. I think the most successful people will work that way, but the average or the majority are not that way. And I think that's probably the true statement. I would have to go look through a white commenter companies, but there's not that many 23-year-olds that know anything about payroll processing software. But there's a lot of 25-year-olds or whatever who have created something really cool like that. Our friend Jack, why did he do Vungal? I think he was curious of solving problems,

but he didn't have a problem. He wanted success more than he wanted to say. He was like, this just seems like intriguing, I guess. Like, yeah, let's just. He's somebody who made a shift. I would also say there's a confounding factor, which is that for a lot of the people who are our friends, the thing that they are interested in is the game.

So it's not the industry. that was the passionate thing. The passionate thing was playing the game of business. Can I give you two related things that came up for me? I don't know if you remember this, but when the Open AI drama was going on, when they fired Sam Altman, one of the things that came out was

maybe they have AGI internally. And everyone's like, no, they probably don't have AGI intern. But maybe there was some breakthrough because he had gone at some conference and said, there are these moments with Open AI where you're sitting in a room and you get to see a demo and your mind gets blown.

You've seen the future. The world is not the same because of what you just saw. He goes, that just happened about three weeks ago. And people didn't know what it was, but he was kind of just like teasing a little bit. And he wasn't even trying to make a hype thing. He was just trying to say what it's like to work there. He was trying to use it for some other reason.

But people took that and they're like, man, they must have something. Sam Alman said that or an employee said that. Sam Albin had said that. And so people started speculating, what is it? And then these leaks happened. They started talking about this thing called QSTAR. Do you remember this QSTAR thing? Yeah, I don't know what it is, though.

So QSTAR, I mean, I'm not a AI. PhD researcher, so I don't know exactly, but the idea is like there are different algorithms or different methods you can use to do something. And QSTAR is a certain technique. And so people were like, oh, QSTAR, does that mean they're using the Q technique or the STAR technique or whatever? That's not what people are using today, but maybe there's something there. And so this thing leaks, it's not been confirmed yet whether that's was or wasn't a thing. But what ended up happening was there was a whole bunch of smart people that suddenly started sniffing around that technique. and just recently a bunch of research papers got published saying that they're seeing amazing performance using this technique.

And so this guy came on and he talked about that this is actually a phenomenon that happens frequently. So I'll just tie this together. This guy, Robert Kwansey, was tweeted this. I don't know this guy. He tweeted this little story that I liked. And he said, Claude Shannon once told me that as a kid, he remember being stuck on a jigsaw puzzle. And his brother was passing by and said, you know, I could tell you something that would help you with this puzzle. but now I'm not going to do it.

That's all the brother said. But that was enough of a hint for Claude to solve the puzzle. The great thing about the hint is that you can always give this to yourself. So basically there's this phenomenon that happens in human behavior, which is that if you knew that there might be a win, you don't even need to know what the thing is. That alone will increase your probability of success. Do you know what else Claude Shannon did?

Do you remember how I told you Ed Thorpe went to the roulette table and it required two people to be in the crowd? He was his buddy. That was the other guy. So, in fact, if you look it up, there's like, it's called, I think it's like the Thorpe Shannon principle. And it's like the theory of, so Claude Shannon, who this guy is referencing, he was the guy who was tapping his foot to tell Ed Thorps, which is pretty funny.

So the second story, that's the same principle is about Kaggle. So Kaggle's this online competitive place for solving, you know, problems, riddles, puzzles, puzzles, whatever it is. I don't know if it's all coding or if it's just math puzzles. So this guy replied in the thing, he goes, one of my. My favorite Caggle Facts is that anytime that the leaderboard gets stagnant for a while in any competition, if one team suddenly makes a jump that will automatically cause multiple independent teams to quickly reproduce the same breakthrough with no knowledge of how the first team made the breakthrough. And isn't that kind of amazing how it's like it's the four minute mile, right?

What's the guy's name of ran the four minute mile? So when prior to Roger Bannister running four minute miles, people were only like three seconds like 403, 404, which is quite a long distance away from four. minutes, but basically when Roger Bannister did it, roughly four other runners also broke four minute miles within like three months of Roger Bannister doing it. Right. So the same thing just happened to me in one of my businesses. So in one of my businesses, there was a marketing tactic or channel that we had looked at. We'd even kind of dabbled with, but we didn't exactly know how to do it. It kind of seemed like a puzzle we didn't know how to solve. So we put it on a shelf for a while. And then I heard a whisper that somebody else was

just crushing it using that channel. Now, I don't know what they're doing. I don't know the technique that they're doing. I don't know how much they're crushing it. I just heard enough to know that they are crushing it. And immediately, we mobilized. And that same channel that looked kind of like a dead thing before to us, we didn't really know how to make any progress.

We still didn't have any technique. Nobody gave us a tool of how to make progress. Just the knowledge that somebody else was making progress in that same channel fired us up, got us going, and we immediately found a breakthrough. And over the weekend, we did like 30 grand in revenue on this one channel.

And it reminded me of the same principle of just the knowledge that there is a solution actually increases your probability of getting to a solution. Just the knowledge that somebody else has found a solution without telling you how at all will increase your probability.

And I think that's one of the things about this podcast that should help people. That's one of the ways to use this podcast is that you're not going to do exactly what any of the stories we tell on this podcast do. But just hearing other people's success, just hearing other people ran a four minute mile will make you run a four minute mile.

We've had this with our friends too, people who are saying, within, you know, I'm going to make X amount of money in Y months. Right? We had a friend that was like, I'm going to try to make a million dollars in three months.

And just hearing that question, I didn't have that question before. Just hearing that question got me to start thinking about ways you could do it. Then hearing that somebody did it immediately made me want to figure out how. And even though I was not going to do any of the things that they did, it allowed me to figure out a solution that would be able to do that. I think that's one of the most underrated learning techniques you can have or success techniques you could have.

What's that called? The MFM paradox, that you can become more successful following somebody else, even though you don't know what they did. Just the fact that they did it. And this is like way less cool than artificial intelligence. But similarly, when Morning Brew and the hustle were first getting going with the newsletter business,

we had the exact same thing happen, multiple times where eventually I became, one time Austin came over after we had both sold and I was like, hey, you want to see something cool? And I go, pull up your computer, I'll pull up mine. I know you got a document that shows everything that you guys were doing per month. Let me show you mine and you show me yours. And it was the exact same thing, by the way. We were seeing little inklings of what the other person was doing as it was happening. And we kind of replicated each other's success and it absolutely happened the same way. Before we started this podcast, you said, What topics do you have?

I'm feeling a little uninspired. And I have to say, you win a blue ribbon today because you have completely put a beautiful bow tie on this thing that I brought you. You brought so many good, interesting tidbits to add to the story of Ed Thorpe. That was pretty good. Well, can I leave you with one framework?

I have one story. So the framework is, you know, when Ed Thorpe was beating Blackjack or beating roulette, what's the first step that he had to do before he beats the house? What is step absolute step zero before he even figured out how to beat the house? I don't know just how to do it at home. Believing that it could be done.

Yeah. Believing that it could be done. And this is cheesy, but it is very true. And by the way, things that are cheesy but true are underrated because smart people write off cheesy things because they're cheesy because they've heard them before, but they haven't actually acted on it. So their underpriced assets are things that are cheesy and true because they're ignored by other smart, ambitious people. I remember when I went to this Tony Robbins event. On the second day, there's another guy who hosts it. So the other guy, he starts off with a game of Simon Says to kind of warm up the audience.

And you just think there's a warm up because they want you to be engaged as an audience. They want you to be active, do something interactive, a little crowd work to start. So he starts with Simon Says. We're going to play Simon Says. Now, this is a room of about 6,000 people. So there's 6,000 people we're going to play Simon Says. And he's like, the winner gets to come on stage. Or like, yeah, the winner gets to come on stage and you're going to get this thing.

I forgot what it was, some good prize. but again there's 6,000 people, so whatever, good luck. So he starts and he says Simon says, blah blah, blah, and then he immediately gets like half the people in the first one. So for example, he goes, all right, are you guys ready to play? Stand up.

And everybody stands up. He says, he didn't say Simon says stand up. So you only do the thing what he says Simon says, but if he just says an instruction and you do it without saying Simon says, you're out. This guy clearly read the book the game. Exactly. So he's got us on the catstring theory. We were just obeying his commands. So the game starts, half people get out on the first round

it whittles it down within five minutes he's down to the winner winner gets up on stage blah blah blah and he had the final 10 people he said stay standing you don't get to come on save but stay standing and then he called on somebody he's like the guy who's standing you got to the final 10

the guy next to you when did you get out he's like I got out in like the second round he goes let me ask you something did you believe you were going to win and the guy was like no I mean so many people it's a silly game I don't know I didn't even think about it He goes, that's interesting.

Ask next person. Did you believe you were going to win? No. He goes, so raise your hand. When we started the game, you believed that you could win. Only like 5% of the audience raise their hand. He goes, so all of you thought you were competing with 6,000 people. The only competition was amongst these 50 people who actually believe that there was a way to win.

And he's like, I'm going to leave you with two ideas. Number one, if you're going to play the game, decide to win. That's so funny. He's like, you don't have to win every game. But if you decide to play, you should decide to win. And he goes, the second thing is that in life, you believe you're competing with a much bigger pool of people than you actually are. Because the majority of people aren't even playing the game and of the people who are playing the game,

most of them don't even believe that they can win. You're only competing with the people who actually believe that there is a way to win. And so similarly, with this guy cracking blackjack, cracking roulette, that's a game I thought was impossible to crack until I read the book. I think it's called Bringing Down the House or something like that. That's the other blackjack card counting book. And immediately, my mind. shifted into, oh, Blackjack is a beatable game. We can beat this game. And suddenly I started

to learn things. Suddenly I started to understand how do you actually beat the game of Blackjack. And it compelled me into action. All right, let's pause real quick. I got to do the thrill of the shill where I'm going to give you a thrill here. I'm going to teach you something that I think is a very important principle that any founder should know. And I'm going to tell you about a company that's doing it well. All right. So the thrill of the shill is, have you ever heard of the law of category? Are you familiar with this? I've not. I think it's from the book, the 22 immutable laws of marketing. And in that book, it's talking about marketing, how do you actually stand out? How do you do the hard thing in business, which is stand out, get your brand out there,

get customers, and get them coming to you versus you just chasing them down and hunting them one by one? How do you get market pull? And the law of category is a very simple principle, which is that you'd rather own a category than participate in one. If you can't be the first in a category, you'd rather create a new category altogether. And that is something that many people have done. So, for example, I'll give you one in the podcast.

space. So we're a podcast, and this podcast started off very undifferentiated. We started off just as interviews with successful people. Guess what? That's what every business podcast is. Interviews with successful people. How did you do it? It's all past facing. How did you do it? We started to stand out when me and you got on here. We started going a little future facing, which is, hey, what trends, what opportunities do you see? What's going on right now in the market that you think somebody could be capitalizing on? So suddenly we were in a new category. So how many podcasts were there that we're talking about, stuff that, you know, opportunities and trends that you could be capitalizing on for the next 12 months versus what did you do 15 years ago, successful person.

And even when we invited guests on, we said, you got to bring some ideas. What opportunities do you see today? Now we're not just going to ask about the thing you did in the past. Even further than that is, you ever seen hot ones that show where the guy interviews celebrities, but instead of just interviewing them, they're eating hot wings while they're doing it, escalating in hotness? It's the law of category. That show became super popular.

It gets millions of views on you. YouTube and he gets the best guess because he's the only podcast that does that. He's the only show doing that. He created his own category. And now if you came in and you try to do a show like that, guess what they would say? Oh, it's kind of like hot ones. They own that category. They own that niche.

And so the law of category is a very small principle, which is that without taking more effort, if you simply just define a new category, you now have a reason to buy, an RTP, a reason for a customer to come use your product, come use your service. Well, the company that sponsors today's podcast, Wander, is a great example of exactly that. These guys basically said, well, you have luxury hotels. You got the four seasons. What's that fancy one? Amon that everybody's going to nowadays.

You got the luxury fancy hotels. And then you have stay in a house like Airbnb where you get to stay in a home, multiple rooms in a kitchen and all that. But it's not as luxury and turnkey and just a beautiful, everything's taking care of your experience. So they created a new category. which is hotelified homes. So luxury homes that are on par with the nicest luxury hotels, but it's a house instead of being in a building in a skyscraper. You get a, you get a backyard, a pool, a sauna, you get a kitchen,

you get everything you want in a home, but you get the guarantee that it's going to be luxury, unlike an Airbnb. So I think that they've done a great job. That's why they've grown so fast. They did, I think, like 12 million in bookings in the last 12 months, because they created their own category. There isn't anybody else who's really in the,

that category where they actually manage the property and therefore can guarantee a certain quality of service. Great thrill. Pretty good shill. I love the shill. Improft my show, please. No, I think your show was great. So if you want to use them, Wander. Wander.com slash MFM, what do they get? I think they get $300 off their first day. If you go to Wander.com slash MFM, so that's our personal code. That's just for listeners of this pod. You download the app. If you do that, you get 300 bucks off a stay. So you get 300 bucks off. And you're entered into a giveaway that's going to be they're giving away a free wander stay. So if you're one of the people who are doing this and remember the principle that's in this podcast, if you enter, you got to believe that you can win,

go ahead and enter and you might win the free wander travel thing. So check it out, wander.com slash M-F-M. I think you said last time I go, you know, I'm not sure how many people are going to do this. So if you're one of the people that actually does it, you've got a pretty good chance of actually winning. Exactly. So that's W-A-N-D-E-R-com slash M-F-M. All right, back to the episode. So I have a funny story I'll tie it up with this, which is that people have heard of a vicious cycle.

That's a vicious cycle. And they'll say it's, you know, poverty is a vicious cycle. You don't have money. So therefore, you can't buy the best food or education.

And therefore you end up staying, you know, you don't get the best opportunities. And therefore you stay poor. Vicious cycle, right? We've all heard of vicious cycle. Well, a good thought experiment is what is the opposite

of a vicious cycle? A virtuous cycle. What's a virtual cycle? And a virtual cycle, virtual cycle is like a Tony Robbins thing, is basically if you believe, so if you have high conviction that something can happen, we've all had moments in our life where we are like, I am convinced that I can do this or that it can happen. Then you'll take a different level of action. So belief drives action. The amount of belief drives the amount of action. So little belief will drive little action, which drives a little result.

A lot of belief takes you to take a lot of action, which drives a bigger result. And guess what? Once you see that result, it reinforces the belief. So if you start with a little belief, you take a little action, get a little result, you'll be like, I knew it. I knew the shit wasn't going to work. It lowers your belief even more, takes even lower action, lower result. And the opposite happens where if you're heavy believer, you take a shit ton of action, shit ton of action will start to yield a result. And your belief will say, I knew it. I knew we could do this. I knew we'd get progress. You'd take even more action. And it just becomes a virtual cycle. And so that is one of the things that I think is most important, if you are stuck or if you're at a plateau or you're not exactly where you want to be, Step zero is you have to somehow trick yourself into raising your level of belief that it is possible. One way is to read books about other people who have already done it or talk to other people who have done it. Imagine yourself doing it. Whatever.

Ask yourself questions until you are worked up into a fever that this is going to work because that's the only chance you have of taking enough action to actually get a result. I want to hear from the listener, the people who have made it this far. if they feel like I feel right now which is like I want to run through a fucking wall you're just like you're like a guy you're like a pastor right now you know you're like one of these like black churches where you're like dancing and screaming and shit and I'm just like

in the crowd like dancing as well I feel good yeah so now let me tell you a quick blackjack story of this so I read this book and I become convinced that we can do this I tell my buddy Trevor I said Trevor we can do this we can bring down the house we can count cards we can get rich a blackjack He says, say no more. Trevor's a believer. He's down.

What age are you? Perfect, perfect trait in a partner being down. We're, I don't know, 21 years old. And we're a senior in college. Did you read the whole book? Read the whole book. All right. But again, because we have a ton of belief, we find a way to take action. I'm living in North Carolina. There's no casino in North Carolina. What am I going to do? Fly to Vegas? No, no, no. The belief drives action. The belief causes me to find a way. I realize, hey, in South Carolina, there's a river book. And that boat will, like, boat out into international waters and then you can gamble because it's international waters. That's the beauty of the world. It's got international waters. Anything goes. So we drive down to South Carolina. We get on

this riverboat and we drive out. But before we do that, we spend three weeks practicing. And it's the same system. You have a counter who's going to be, we'll keep in count. You have the signaller who's going to signal in the whale. So Trevor's the counter. Trevor's got the focus. I'm the communicator. I'm the signal guy. And our buddy Dan is going to be the whale. What was your signal? The whale's job is to come over. He's a gregarious character because the trick when you count cards is you need to wait until the deck is stacked in your favor

where there's more, let's say, aces and the low cards are out, so the count is high. And then you need to vary your bet size. So that's actually how you win is you bet more when the deck is hot. You bet less when it's not. But if the casino sees you varying your bet like that, they kick you out. So that's why you need two players. You know one guy who's counting and the guy who comes in to make the bet,

he needs to start with a big bet. So he only comes in when the deck is hot. And so he comes in and we're like, Dan, you've got to act like a drunken idiot. And you're just plopping down your whole stack on this one hand. And then you're going to double, oh, screw it. We went, play it again. As long as the deck is hot.

And when the deck is not hot, we're going to signal you to leave. What's your signals to them? So we have two signals. You have the signal where you're supposed to come over, which is basically it was me with my arm, like, you know, kind of like this is where I'm holding my arm like this, but I'm behind.

It's like standing behind me. It's hard to do. I'm sitting down. But just a standing posture. So I'm standing behind Trevor. Trevor's counting. Trevor has a verbal signal to me. So you create a word for every number. So let's say, you know, the deck is if the count is one, which is a very bad count,

he would just say, all right, all right. Uno mas. Like one more hand, but that just signals to me, the count is one. One. If there was two, he'd be like, oh, shit, balls. Bowls. We got two balls. That's why there's two.

And then he'd be like three. And he'd be like, you know, he'd have a thing for three. And we use, like, basketball player. names or whatever. And you want to get the guy in on the counts like 10, 11, 12, something like that. And he'd be like, dude, I've had a dozen chances now. And so we practice for weeks on this. And we're in our dorm room. We're skipping class. And we're just practicing, practicing, practicing signals. Boom, boom, boom, boom. Betts. And we're running simulation. So we have our friend, this girl, like, who was our friend, she was the dealer. And she would deal it out.

We were like, every time we're cleaning up, this shit works. And so we drive down to South Carolina, we get on the riverboat. We go, Dan's got his drunken, drunk and, drunk and tour. costume on. Trevor's the guy who's just bored. He's just sitting there. He's betting the minimum, but he's counting. And I'm the signaller. I'm Trevor's buddy. And so what ends up happening is, count gets hot. We get to 10. And I signal. But in the real world, conditions are a little different. Dan's not as quick to get up. Because he's so busy being in his drunk of character that he's actually acting like an idiot. He's not paying attention to anything that we're doing. So he's actually getting a drink. So he misses 10.

Count starts to drop, but it's at eight. And I'm like, okay, whatever. Eight's still good enough. Let's signal it might go back to 10. So I signal him. Dan sees the signal. He starts coming over. Now, our dorm room was kind of small.

He's at the, he's farther away, so it takes him a little bit of time. By the time Dan gets the table and he tries to cash in his, he tries to put down the bet when the counts like, you know, six or something like that. And he puts his money down. They're like, well, we have to color it up first.

We're to exchange your cash for chips. No bet on this one. So the hand gets dealt out. It nukes the count back down to two. Dan's hand is visibly shaking. I'm like, oh, God, this is not good. He cashes in like $1,000 or the chips. This is like big money for us.

He takes $1,000 with the chips. He's ready to bet big, but the count is now too. And Trevor's like, balls, man. Balls, dude. And Dan, he's supposed to take balls and he's supposed to leave. Dan is in, he's blacked out at this point. He's not drunk and blacked up, but he's just got tunnel vision. Like, he's so locked into his character and these stupid things that he's saying to the dealer,

he's completely ignoring the signal. And so he just puts the $1,000 on. And we're both like, balls, balls, balls, balls. What's happening? Why are you betting? This is the worst time to bet. And we just get wiped out into it. And you lost all your money.

Lost all of our money. And we were like, the book made it seem a lot easier than this. Because in the book, it immediately works. And it starts a series of events that just escalates into them being ballers. And yeah, it's sort of like the game. It's kind of the same thing with the game. with the game. Okay, so we go back home. We're licking our wounds. We're like, damn, what the hell, man? And he's like, I'm sorry. It was harder in real life. We're like,

all right, whatever. It's all good, man. We got to get, the belief was still high that, hey, there's a way to use blackjack to make a lot of money. So we said, you know what? Screw it. What if we're the house? And so we decide to create an underground blackjack club at school where we'll just be the house. These movies go one or two ways. Now you're on, you're on option B for a great movie. Exactly. So we try to become the house. Now we're playing Molly's game, basically. So we, again, start running these simulations. We're like, this is great.

Like, the house has an edge. We're winning. This is like, it's a no-brainer. So we, and our friend the whole time was just like, you guys are idiots. Like, you've already wasted, you know, one month of time on the stupid plan number one. Now you're on stupid plan number two. He's like, this is an even dumber plan. We're like, dude, what are you talking about?

We're the house. You ever heard about the house's edge? Like, we can't lose. We're the house. And he's like, okay. So we're like, again, two weeks into our, like, every night we're simulating this. We're trying to run like, we're, we're, Or like type in Excel, like how much money we're winning or losing?

You're not going to cheat. You're just going to open up a casino. That's it. And so he's like, okay, watch this. So our friend comes in, it just like owns us. He walks in and he's like, all right, yeah, I want to bet. He bets. He loses.

I bet more loses. And we're like, see? Told you. Told you this can work. He's like, cool. And he's like, hey, give me all my fucking money back. And we're like, no, dude. he's just like, you're going to give me all my money back right now,

or, and we're like, what are you going to beat us up? He's like, no, I'm just going to call the cops, tell me you're running a blackjack ring in your room right now. That's actually like a, you know, that's like a serious crime. And you're going to get kicked out of school or you're going to give me my $800 back. And we were like, oh. You win. Yeah, we got out of the $800 back and we're like, damn it.

Yeah. You didn't see the part of the scene in Molly's game where she gets beat up for doing this. And this guy just instantly pointed out. the fatal flaw, which is basically, you know, this is a crime. They could at any time just bust us. We would have to move the game every week and somehow know that this guy's not going to screw us over. But every player who loses money

would always have the ultimate leverage. So that's when I learned about leverage. And I learned that leverage is more important than an edge. You should have went back to the casino. It sounded like this stupid idea actually could have maybe worked if your buddy Dan got a shit together. The reality is that

casinos, I don't know why people don't, I mean, I guess people do talk about this, but Casinos use six decks and they use auto shufflers now. And so the ability for the deck to get really hot has been cut down dramatically. And so they basically use six decks, which will smoothen out the variance. And then they auto shuffle and they shuffle before you get through the whole shoe. So the whole point was like, you need to get where a lot of the cards have been used. There's only a small number of cards left and that that small number of cards is going to have a higher proportion of face cards for you.

But that just doesn't really happen anymore. So I don't really know where the edge is. I don't think there's an edge. This has been a roller coaster. I feel like I've got my money's worth after listening to this episode. And I should have just been learning out of code that whole time in college. I should have just been learning how to code and I would have made a lot more money than all of my hairbrain schemes to make money. Or playing League of Legends.

One of the two. This was very good. This was a good episode. Is that the pod? That's it. All right, that's the pod. I feel like I can rule the world. I know I could be what I want to.

I put my all in it like no days off On the road, let's travel, never looking back