SOLVED with Mark Manson - How to Get Lucky, Solved

Starting point is 00:00:00 So a lot of people don't know this, but I co-authored Will Smith's memoir with him. And I spent roughly two or three years with Will, got to know him really well, got to know his family, learned all about his career, everything. And there was one story from his entire life that is my favorite story that I love. In fact, I loved it so much. It was actually the first thing I wrote for the book. It took place back when Independence Day came out. So you probably remember Independence Day? It was a huge part of our childhood.

Starting point is 00:00:29 Oh, yeah. Oh, yeah. So people who don't know, Independence Day came out, I believe, in 1996. At the time, it broke all sorts of box office records. It was by far the biggest action movie that had ever come out. And it was Will's second starring feature that he had ever done. So he was relatively new. So back then, movies used to come out on a Friday.

Starting point is 00:00:51 They would make a bunch of money over the weekend. And then you would get the box office numbers in the newspaper on Monday morning. So there was like a three-day delay. And so the weekend after Independence Day came out, it was Sunday night and Will got a phone call at about three o'clock in the morning. And he picked it up and it was his dad. And the first thing his dad said was, you look at them numbers? And Will's like, what? And it turned out that, you know, the box office numbers had come out on the East Coast.

Starting point is 00:01:22 His dad was up at 6 a.m. He had just seen the newspaper. And so he was calling Will waking him up in the middle of 90s. He says, you see them damn numbers? You remember what I told you about luck? You remember when I told you there's no such thing as luck that luck is when opportunity meets preparation? You remember that?

Starting point is 00:01:40 Will's like, yeah, dad, yeah, I remember. Can I go back to bed? He's like, well, that was some fucking bullshit. You the luckiest motherfucker I ever met in my life. And he hung up on him. Napoleon famously asked his generals whether they believe they were lucky or not. and he would promote them based on how they answered.

Starting point is 00:02:05 So here is an honest question for you. How much of where you are in your life right now, your career, your relationships, everything that you've built, did you actually earn or how much of it was due to luck? Because whatever you answer, I'm willing to bet that you're wrong. And in this episode, you're going to understand why. Because people waste an absurd amount of energy arguing over whether someone's success came down to luck or skill.

Starting point is 00:02:28 It's the wrong argument, because luck comes in three different flavors and they each work differently. And two of them, you can actually learn how to create more of it. And that's what this episode is all about. Accepting the luck that you can't control and then maximizing the luck that you can control, tilting the odds in your favor. In this episode of Solve, we're going to talk about how to tell which parts of your life you actually earned and which parts you just got lucky.

Starting point is 00:02:53 And why getting this wrong can keep you stuck. We're going to talk about the two types of luck that you can deliberately create more of and the specific habits that produce them. And one of these you can actually start doing today. We're going to talk about why luck both matters and also doesn't matter and why it's better to just assume that you're lucky no matter the situation. We'll talk about why your brain quietly deletes the luck out of your own life story and what that costs you every time you make a decision.

Starting point is 00:03:18 We'll talk about the decades of research of what actually separates lucky people from unlucky people. We'll talk about how to stop wasting guilt and self-loathing on the stuff that was never in your control in the first place and how to be. how to put that energy into where it actually moves the needle. We'll talk about why some people's success explodes while equally talented and hardworking people plateau and how to position yourself in the right side of that gap. And we'll get into the ancient framework that splits luck into three forces. So you can finally know which lever to pull instead of guessing all the time.

Starting point is 00:03:50 This and much, much more. So the question isn't whether you got lucky or not, because let's be honest. We've all gotten lucky and unlucky in all sorts of different ways. The question is what type of luck we have and what type we don't have and how we should respond in each situation. Because once you can actually see the forces that are shaping your life, it stops feeling like a guilt trip, and it starts feeling like something you can actually work with and improve. Because it turns out you can control your own luck, and you can make yourself luckier, even if you've been dealt a bad hand or gone through a stretch of incredibly bad luck. Luck in many ways is the most under-discussed topic and personal growth,

Starting point is 00:04:30 and I believe people don't understand what it really is and how it actually benefits them. So if you were assuming today's episode does not have any useful information for you, well, today's your lucky day, because you're going to discover how incredibly wrong you are. I'm New York Times best-selling author Mark Nansen, and this is Drew Bernie, my intrepid co-host, producer, lead researcher, and a man who claims that he lost 37 straight rock paper, or matches. That's pretty unlucky, Drew. And this is solved, the most comprehensive podcast in the world where every episode we aim to solve one problem in your life once and for all.

Starting point is 00:05:03 Today, we're tackling luck, and who knows, maybe this is your lucky podcast episode. Drew, how lucky are you? Hmm. I'm currently recruiting generals from my conquest of Europe, and I'm... Napoleon? I'm wondering if you're qualified. I mean, I generally do think of myself as an incredibly lucky person, yes. Really? If I'm applying for the job, yeah. Interesting.

Starting point is 00:05:30 Why is that? I mean, I'm sitting here, aren't I? How much of that was due to my skill versus luck? If that's the question you're asking me, I don't really know, but I feel... Are you sure sitting here is a good thing? That's another question, too. That's true. That's true, that old parable.

Starting point is 00:05:47 It's an interesting question. I do think about this a lot. I do a lot. because there's just so many ways my life could have turned out different, you know, run it a thousand times over. I don't think I'd take another chance on it, honestly. Interesting. So, yeah, I think I'm lucky.

Starting point is 00:06:01 Hmm. Do you think you're lucky? I do think I'm lucky. Yeah. But I don't think about it very often. Interesting. Okay. Napoleon believed that it was very indicative of certain character traits or personality traits

Starting point is 00:06:14 about a person that if they believe they were lucky or not. And it turns out that some modern research does. support that, that it turns out that people who believe that they are lucky tend to spot more opportunities. They tend to have more agency, take more initiative, try new things, take more chances. And generally, all those things lead to better outcomes, which is kind of fascinating. So you're saying it's a way you see it. If you think about it, luck really is largely perception, right? Like, so there's always good and bad things happening in our lives around the world, but a lot of it is how we choose to see it.

Starting point is 00:06:52 There are ways to adopt perspectives to see the same thing in both a lucky or unlucky light. And what's interesting is that the ability to see things in a way that gives you the perception that you're lucky tends to enhance your outcomes. Okay. So, for example, there was a couple really interesting studies that happened over in the UK.

Starting point is 00:07:13 Researcher Richard Wiseman gave a bunch of people newspapers and told them to count how many photos were in the newspapers. And before, Andy, he asked people to rate how lucky they believed that they were. And in the newspaper, as people are flipping through the pages, counting the photos, there was text that said, stop counting. There are 43 photos. And then there was another piece of text, like buried in an article somewhere that said,

Starting point is 00:07:39 if you are reading this, tell the researchers, they will give you 100 pounds. And what's fascinating is that people who rated themselves as luckier found of those pieces of text far more often than the people who rated themselves as unlucky. There was another study that he did where he told people to go to a coffee shop. He put money on the ground and then he put a really successful business person basically at the bar next to the place where you order your coffee. And sure enough, people who were rated themselves as luckier found the money more often and struck up conversations with the successful businessman more often and came away, seeing the whole experience is like a very positive thing, whereas the unlucky people

Starting point is 00:08:19 just kind of walked in, missed the money, sat by themselves, ignored everybody and everything, and then nothing happened. Yeah. What's really interesting, too, is that these researchers who study all this stuff found that you actually could improve people's perception of their own luck, that you could actually train people to see themselves as being luckier and to behave in ways that generate more, quote unquote, lucky outcomes, which is really interesting. Like, it's kind of a almost obscure piece of psychology that, like, luck could be a skill that you could learn, and then that by developing that skill, you could actually generate better outcomes in your life. I love this topic for a few reasons. One is I'm just a degenerate and I play a lot of poker.

Starting point is 00:08:59 But part of it is because I do think it gets at the intersection of two very, very important things that I think people struggle to think about or struggle to talk about. One is, how are they making decisions? how are they taking risk and assessing risk in their life? And then the second component is how are they choosing to see the outcomes in their life? You know, you can easily describe yourself as sitting at this table as very fortunate or very unfortunate based on which perspective you decide to take. It's a very underrated topic and something that people don't think enough about. And to Napoleon's point, maybe it does matter if you see yourself lucky or not.

Starting point is 00:09:39 Because if you do see yourself lucky, you're likely to create more luckier outcomes. You're likely to spot more opportunities, and you're likely to act on them when you do spot them. Well, that's not to say, though, that there aren't random chance events that we can't control, too, and that are outside of our perception, right? And that are terrible, yes. And that are terrible or awesome or whatever. The point is that they are outside of our control and perception, our ability to change our perception around, too. Yeah. So, yeah.

Starting point is 00:10:05 It's complicated. It's a little bit complicated. It is complicated. But I think it is worth diving into. By the end of this episode, I think people will see. that they have been underwriting this topic and maybe some of the perspectives that they've adopted in their lives

Starting point is 00:10:18 have not been helpful and have been holding themselves back in many ways. First, a quick word from our sponsors. This episode is brought to you by Simple. Luck is a funny thing. We love handing it credit for the stuff that actually took years of quiet work. Think of the person who stays in shape

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Starting point is 00:11:42 So go take the quiz at simple.life slash solved. That's simple. Dot life slash solved. And use the code solved at checkout for 85% off your plan. And we're back. Welcome back to solved. So first, before we dive into it, I do want to talk a little bit about the resistance that people have to thinking about luck.

Starting point is 00:12:02 Like, you know, I asked you, do you consider yourself lucky? You pretty much immediately said yes. What's funny to me about that is that it's easy for you to look at your own life and say, I got lucky. But imagine if some random person or somebody you know looked you in the face and said, yeah, you just got lucky. All this. No, I don't like that. Like all this. Yeah, you don't like hearing that. Yeah. But when I reflect it back to myself, I'm like, well, they're right. But. Yeah. Yeah. So there's a component of this that is, that bleeds into like our feelings of justice, fairness, status. I think the first piece of resistance is around that. Like we have a, there's,

Starting point is 00:12:40 it's very instinctual that we like to think that our effort should be proportional to our output. If we see an in equal outcome, we assume that whoever has more should have put in more effort than the person who has less. And if that's not true or if we don't perceive that to be true, we get really fucking upset.

Starting point is 00:12:56 Yeah. The whole system crumbles really. Yeah. And so you end up in a situation where people are like, well, that guy just got lucky and that's not fair. And so he should, he or she should give back to the others who are not as lucky as this person is. You get into a lot of kind of social justice topics around this as well because you can very easily look at people who are born in different circumstances, born in different parts of the world, different ethnicities, genders.

Starting point is 00:13:22 And statistically say this person is unluckier for being born in this country at this time, you know, as a woman or a non-heterosexual person. And yeah, factually, that is less lucky than, say, being born as a white straight. male in a first world country. And I think that bothers a lot of people. And they don't, so there's, there's a little bit of a resistance of like, well, I'm already privileged. So like, why should I try to maximize my luck even further? I've already gotten so lucky. So who am I to like try to maximize my luck even? Is guilt the right response there even? That's, that's a good question. We'll get into. It is, it is a good question. I do think there's also a self-worth piece here. Let's say you and I are both working towards some goal and I believe I'm putting in twice the amount of effort that you're

Starting point is 00:14:11 putting in yet you're achieving better outcomes. There's kind of two explanations for that. One is you're you're getting lucky and I'm getting unlucky or shit, what's wrong with me? Because clearly something's like, why do bad things keep happening to me? Why do I seem uniquely unlucky in all these situations? That can start to bleed into how you actually like your actual relationship with yourself. And so again, luck is ultimately a perspective. We all have lots of opportunities throughout our lives. We also have lots of challenges that are handed to us throughout our lives. What shifts and changes and what we define as luck is often just the frame and the perspective which we choose to adopt around those opportunities and challenges. And there are

Starting point is 00:14:55 better perspectives and frames to adopt than others. The research shows us. I think another problem, too, is what they call the just world hypothesis. is related to what you just said. But we just have this really, really deep need to believe that the world is just, or that there's some order or some sort of sense that can be made out of it rather than just random chance. We just have this deep need to think that the world is a somewhat at least tilts in favor of fairness or at least makes sense.

Starting point is 00:15:26 And when it's just random and chance, then that doesn't make any sense to us. And so if somebody is suffering disproportionately, either they deserve it because they fucked up or somebody else is screwing them over. And you could almost map those two assumptions onto the political right and the political left, right? Like the political right will look at an unlucky situation and be like, well, that person probably deserves it for some reason or another that we're not seen. Whereas the political left will look at it and say, well, that person's probably getting screwed over by the person who's not suffering as much. when in fact it could just be random. Just be completely random. Yeah.

Starting point is 00:16:03 That's unsettling. Yes. You know, we like to start all of our solved episodes by going back in history and kind of looking at what the ancients thought about certain topics and what's the history of thought around a certain idea. And I think luck is interesting because it's probably the first topic that we're covering that the West has really struggled with. I can't help but think that maybe, maybe, and I don't know, this is just my hairbrain theory, but like, so much of Western culture really is, like there is a strong sense of fairness and desire towards equality is very much inherent in Western culture. And so I think that would maybe explain why the ancient Greeks and Romans didn't really have a good answer for this. Whereas I think other cultures have been a little bit more realistic of like, yeah, sometimes life's unfair. Sometimes some people get screwed over.

Starting point is 00:16:57 Sometimes some people are just better than you or take advantage of an opportunity you didn't. There's a little bit more realism, I think, in some of the Eastern cultures, which we'll get to in a second. But I just want to touch on the West's inadequate assessment of fortune and luck. So the Greeks personified luck as a goddess named Tyke. And she was fickle, impulsive. There was no rhyme or reason. She would just kind of screw people over randomly. And the Greeks used this as an explanation of why bad things.

Starting point is 00:17:25 things happen the good people. The Romans carried this on with their version of the same goddess, which is where the word fortune comes from. Perhaps like this kind of ancient view of how chance operated in life was best exemplified by both he is who. He was a bureaucrat and a philosopher towards the end of the Roman Empire and he was actually sentenced to death by his political opponents. And he wrote while he was imprisoned, essentially life is just, it's a wheel of fortune that you spin and whatever the wheel lands on, that's what you're stuck with. There's nothing you can do about it. So you might as well not complain. You might as well just accept it, move on. And it was very fatalist and didn't really have much sense of agency or an ability to kind of change your

Starting point is 00:18:11 fortune in life. Now, this kind of fatalistic approach continued throughout the Middle Ages. You know, medieval christened them and the Catholic Church, they saw, instead of Lady Fortune, they saw everything as just God's will. And so anything bad happened, they said, well, that's part of God's plan. Anything good happened and said, well, God is blessing you. And it was actually looked on as a bad thing. If you had any sort of agency or tried to kind of steer the outcome of your life in any meaningful way, it was seen as you revolting against God's will. And so it really isn't until you get to the Renaissance where Machiavelli compared fortune to a raging river.

Starting point is 00:18:46 And he said that when the tide is high and the water is raging, there's nothing you can do. You just got to hope that you can write it to someplace good. Whereas when the tide comes down and it calms, then you can build levees and canals and irrigation systems and kind of leverage the water and steer it where you want it to go. But then when the tide rises again, it's going to wash everything away. And there's nothing you can really do about it. This is probably the closest thing that we get to like an accurate portrayal

Starting point is 00:19:14 of how luck operates in our day-to-day lives and how we can leverage it. Still not very satisfying though. And then you get into the Enlightenment. everybody kind of turns into a math nerd and figures out probability theory and starts analyzing and calculating all the percentage outcomes of different choices and assumptions. And there's a lot of value in this. It's still not totally satisfying. Like, it is useful and important to understand the different probabilities of different outcomes in your life. It's important for risk assessment.

Starting point is 00:19:46 And we're going to talk about making good decisions around Bayesian thinking in chapter 4. we're going to have Annie Duke on as a guest to kind of talk us through how to think in bets and think in probabilities. But in terms of like assessing the fortune and luck in our own lives, like it's still not very satisfied. It doesn't solve the fairness issue. It doesn't solve the justice issue or the guilt issue. It doesn't help us assess what we can do broadly in our lives to increase our luck to find more opportunities and to act on those opportunities when we do find them. So in Western thinking, you kind of have this. ever-present tension between two forces. One is that luck is just something that happens to you. It's

Starting point is 00:20:27 something that is inherently outside of your control. There's nothing you can do about it. It's pure fortune. You might as well just accept it and get used to it. But there's also this feeling of like, you can improve your life. You can put yourself in better situations. You can give yourself more opportunities. Luck is something that you can work on and improve and adopt into your life. but both of these things are simultaneously true. I think it's common sense that they both exist, and I think we have trouble resolving the tension between the two. So out of all the frameworks that I came across,

Starting point is 00:21:01 I think the best one actually comes from ancient China. And it's this framework called Sansai. What's interesting is that in Chinese, there's more than one word for luck. The Chinese actually have different conceptions of luck and fortune in their lives, and I think as a result, they end up with a much more accurate assessment of what luck is, what is chance, what is opportunity. And we're going to use it as a framework for this episode. But I also think it's just something that is useful for people to think about in their day-to-day lives.

Starting point is 00:21:32 So the three different types of luck are literally translated as heaven luck, earth luck, and human luck. Now, heaven luck is basically the birth lottery. where were you born? What are the traits that you were born with? Were you born into a good family? Were you born into a family with money? Were you born into a country that's functional and has good infrastructure? Or were you born into somewhere that has war?

Starting point is 00:21:59 It's basically all this stuff that's outside of your control that just happens. There's zero agency going on. And as we'll discover, the best way to approach heaven luck is through shifting and adopting your perspective to the different things that happen in your life. The second luck is Earthluck, and Earthluck is kind of the environment that you move through. I think it's probably the hardest one to understand of the three lucks, but it's also arguably the most important one. Once you do kind of figure it out, it can have the largest benefits and effects on your life. But basically, Earthluck is like the systems that you exist within.

Starting point is 00:22:37 It is the environment that you live in. It's the people that you surround yourself with. A simple example is like living in New York City versus living in a tiny town in like South Dakota, right? If you live in New York City, you're going to be surrounded by so many people doing so many interesting things. There's going to be tons of jobs, tons of different careers and professions, tons of opportunities, tons of people you could meet and date. Whereas if you live in this tiny town in South Dakota, there's probably not a whole lot going on. It's probably very homogenous. There's probably very few opportunities or all.

Starting point is 00:23:12 those opportunities are probably in like the same line of work, the same career. Everybody you meet is probably going to be very similar. And so in this sense, putting yourself in a much more dynamic environment full of more opportunities, you could say, quote unquote, makes you luckier, right? Like, it gives you more surface area to stumble into opportunities and chance situations that benefit you. And so this is earth luck. It's like major macro decisions that alter an effect. hundreds and hundreds of micro decisions. And then there's human luck, which is simply, what are your decisions? How are you choosing the act based on the probabilities in front of you?

Starting point is 00:23:56 Based on the situations that you find yourself in, how well are you able to adapt to the circumstances? Now, the way I like to think about this is that if life is a poker game, heaven luck is the cards you're dealt. you can't control whether you're dealt good hands or bad hands. If the cards are dead in that poker game for you, that just happens and it sucks, right? Earth luck is the table you choose to sit down at.

Starting point is 00:24:22 Human luck is your ability to play those cards as well as you possibly can. So even if you get shitty cards, you can still play those cards well and you can still win a lot of hands and make a lot of money if you're a very good poker player. Now, one of the things that's really interesting about poker is that if you ever talk to a poker professional, they will tell you that the single biggest decision you make is which table do you sit down at and where do you sit down at that table? Because there are certain players that you have to know you have an advantage or disadvantage against. And there's also certain placement at the table that can put you at an advantage or disadvantage

Starting point is 00:24:59 relative to those players. And so if you sit at a table where you're at a disadvantage, then you're creating bad luck for yourself. Whereas if you wait and find a table, where you have a lot of advantage, then you're creating a lot of luck for yourself. So you said earlier that you were lucky. I'm curious which of these three lucks do you believe you have benefited from?

Starting point is 00:25:21 I think the biggest one for me has probably been Earth look. I've had a lot of really good Earth look. Heaven luck was, I don't know, I can see it either way. My human luck, I've made some good decisions. I made some pretty bad decisions. And I think it's all been mitigated by my Earth look.

Starting point is 00:25:35 Okay. Yeah. How so? I grew up in where those tiny towns you were talking about right in the Midwest where there wasn't a lot going on and it seems like that's not a real good draw of the heaven luck but when I look back on it I actually see that that environment was if I was going to be a pretty poor kid growing up in America in the 90s and 2000s that was the place to be the school system I was in it was a public school system so you're thinking small town

Starting point is 00:26:00 public school system no big deal but it was actually really good like the arts community there was insane for what we had like half the kids were in choir and band in the whole whole whole school, you know, that's not, and that's not how it is today. Some of the teachers I had were just amazing. I had a lot of, like, even from an early age, I had a lot of, like, male teachers who were role models for me that I just don't think happens anymore, too. In high school, I had a teacher who was the, he was the English teacher. He was, uh, he'd be teaching us about T.S. Eliot and Sylvia Plath during the day. And then he was a football coach, too. So it would be screaming at you. I think, is what I'm saying. I had a lot of people around me who, even

Starting point is 00:26:36 though I wasn't born into like real fortunate circumstances, it seemed like there really was a village behind me. The weird thing, though, is, too, is I talk to people, other people around me, they didn't have the same experience, right? Like, I feel like I was lucky and I talked to them about that, and they're like, I did not have that experience. For whatever reason, like, my, my set of heaven luck and human luck matched that environment very, very well, and I benefited greatly from it, not everybody did. So I just think I had, yeah, I think the terrain that I've traversed through has been very, very fortunate for me. Interesting. Yeah. Yeah. Which kind of luck do you think you've benefited from most so far? This is going to be a very obnoxious answer. Okay. I think I've been

Starting point is 00:27:20 so lucky in all three. My family's relatively wealthy, born in the U.S., born in literally a fastest growing city in America just had, I mean, every opportunity was kind of laid out in front of me. I've had great health. I've never had like any sort of catastrophic, you know, accident or a thing happen. I think I've made excellent earth luck decisions. I think that's something that I've just kind of intuitively, yeah, I've just intuitively been very good at, you know, like that macro decision that negates thousands of micro decisions. I seem to have a sense. of like knowing where to put myself at the right time, different places to live, different groups of people to meet. Like you could look at my career and say I got, I've become very lucky.

Starting point is 00:28:09 I think some of the best earth luck decisions often look lucky on the outside, even though inside they just, they're very smart. Because generally speaking, the largest opportunities, the reason their opportunities is because most people underestimate them, right? So it's like when I started blogging in like 2008, 2009. Very quickly I was convinced I'm like, this is the future of media. If I throw myself into this and get really good at it before anybody else, I'm just going to have like such a ridiculous amount of upside and advantage. And I was right about that, right? And it's funny because for probably six, seven years, my bunch of friends and family back home were like, dude, when are you going to get a job? Like, what's this internet thing you're doing? Like,

Starting point is 00:28:57 you're wasting your life. You need to start a real career, all this stuff. And then you fast forward 10 or 15 years and they're like, wow, Mark was very fortunate. And then I think on the human luck side is just, that's just good micro decision making, right? Like understanding in the moment, what is a high ROI bet to take,

Starting point is 00:29:18 whether it's with a person you're dating, a place that you're living, a work project that you're taking on? If you look at like the, the range of outcomes my decisions could have produced, I think I'm definitely towards the high, like very much towards the higher band of like what, what potential outcomes could have happened.

Starting point is 00:29:40 I think I've experienced luck across the board and all three. Yeah, sure. There was some heaven luck on a lot of that. Like you just, and I know you've acknowledged that, but like, you know, the blogging and the internet thing, like we're at the right age for that, right? we're born at the right time and right place for that. In the right country.

Starting point is 00:29:57 Now you see those levels, though, all working together. Yeah. And so on one level, it's like, yeah, I did get lucky. On the other level, it's like, I also made really good decisions. But on another level, it's like those decisions also worked out almost as well as they could have. Because there is a world where a lot of those same decisions didn't work out nearly as well. Coming back to the fairness piece, the justice piece, like this is what we struggle with so much is that it is always both of these. forces and tension. Like it is both a large amount of variables outside of our control and a

Starting point is 00:30:31 large amount of variables inside of our control happening at all times. And so anytime you want to convince yourself that all of the outcome is due to stuff outside of your control, it's not hard to find a narrative or explanation that that will justify that. And similarly, if you want to find a narrative that justifies your outcomes as only your decision, decisions, it's not very hard to find that narrative or justification as well. So like, I think people need to be very careful and how they explain their outcomes in life and explain the outcomes of other people in life as well, because it is always some mixture of fortune and skill operating at all times. Yeah, so McAvilly was kind of right in that way, right? Like is a raging river, yes. And you can

Starting point is 00:31:20 divert parts of it and make little dams and stuff like that. A lot of it you can control a lot but you can't. And the rest of this episode is how to do that, I think. Yes. And so the goal here is, I think, all of the things that are outside of our control, there are better and worse perspectives to take on those things. Right, right.

Starting point is 00:31:38 And we'll get into that in the next chapter. And then everything that's inside of our control, there's a lot of skills and mindsets that help us make those decisions as well as possible. So in this episode of Solve, we're going to dive into all of these forms of luck and how we can best leverage, each one to our advantage.

Starting point is 00:31:55 And the next chapter, we're going to talk about heaven luck and talk about how in many ways life is like a lottery. And whether you win or lose, most of it comes down to how you see that lottery. We're going to talk about Earth luck and how your environment and psychology are either expanding your luck surface area or shrinking your luck surface area every day of your life. We're going to talk about human luck, which is the probability game that we are always playing and affects all the decisions that we're making. And then in chapter 5, we're going to turn everything on its head.

Starting point is 00:32:28 Because even if you master all three forms of luck, the distribution of outcomes still is not fair. There is almost like a certain amount of luck in how much luck benefits you and how much it doesn't. There's like a meta luck that goes on. And finally, we will close with all the takeaways, all the appropriate mindsets, all the exercises you can do to make sure that you are as lucky as possible

Starting point is 00:32:53 in this life, even if you don't believe it yet. So what I'm really driving out with all this is that this question that we hear in different forms all the time of like, is this just luck or is it skill? Is it luck that Elon Musk is a trillionaire or is it skill? It's always both. It's always both and it's always operating on different levels. There is heaven luck. There are things outside of our control and then there is earth and human luck. The decisions we make, the environments we put ourselves and the circumstances that we subject ourselves to. Just to close the loop on the Napoleon piece, the reason Napoleon asked his generals this,

Starting point is 00:33:30 it was more of a proxy for creative and opportune thinking because Napoleon understood extremely well that there are always going to be unexpected things that are happening and there's always going to be forces and variables that are outside of your control. And so he needed generals who understood an opportunity when they saw it. Right? when the plan goes to shit and a bunch of unexpected stuff starts happening and a situation presents itself where you could really take advantage of a situation, he wanted generals who he was confident we're going to take advantage of that situation and change the plan and change their mind and move on it.

Starting point is 00:34:08 People who saw themselves as unlucky would just see that circumstance and be like, oh, the plan, that's not part of the plan. I'm so screwed. This isn't going to work. So in the next chapter, we're actually going to start with probably the hardest form of luck to address, which is heaven luck, the things that happen outside of our control. The approach to this is almost entirely about our perspective and how we choose to frame the situations in our lives. And what's most interesting is that probably the healthiest and most beneficial way to look at this comes from two people who kind of had the same idea at the same time. One happens to be a billionaire who eats a lot of Big Macs. And then the other one is a famous philosopher who probably invented the most important theory about justice in modern history. But first, a word from our sponsor.

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Starting point is 00:36:01 That's code solve 2026-50 off at factor meals.com. Solve 2026-50 off, all one word, at factor meals.com. See website for details. All right, welcome back. This is solved. There's a temptation to believe that the circumstances were born with are our destiny. And it just turns out that that's not true at all. And I think the perfect example of this is an interview I saw of Warren Buffett maybe like 10 years ago.

Starting point is 00:36:33 And Buffett was asked, what is the number one factor to your success that has made you so successful over such a long period of time? And Buffett immediately answered luck. And the journalist was kind of like shocked. He was like, what are you talking about? You're the greatest investor of all time. You're worth like $100 billion. What do you mean luck? And Buffett had a really fascinating answer to this, which is he said that he won the ovarian lottery and that he was born in the richest country in the world at literally the best possible time to begin a career in financial investments.

Starting point is 00:37:10 he came of age and started investing at the very bottom of the Great Depression. So immediately starting out, he had the largest financial tailwind in human history behind him. He points out that, you know, he was born in the 1920s in the United States. He was born a white male. If he was born a female or some other ethnicity, he wouldn't have had the same opportunities. He has two sisters who he argued were smarter than he was and just as ambitious, but they were not afforded the same opportunities that he had. And I would even argue as well that he's had another kind of luck factor on his side, which

Starting point is 00:37:45 doesn't get talked about a whole bunch, which is simply longevity. I believe he made his first investment when he was 11 years old and he just retired. In a profession where everything compounds very slowly over a long period of time, longevity may actually be the greatest factor to his success. There was an interesting statistic in Morgan Halsall's book where he pointed out that 99% of Warren Buffett's wealth he made after he turned 65. years old, which is... Yeah, he wasn't even a billionaire until his 60s, right?

Starting point is 00:38:14 So, yeah. Mind-blowing. This concept that Warren is talking about, this is the heaven luck in the San Sai Chinese system. This is the luck that you're born with. This is the circumstances that you arrive with. And in many ways, it is like a lottery. There are objectively better and worse situations that you can be born into,

Starting point is 00:38:35 objectively better and worse families that you can be born into, better and worse time periods that you can be born into. It's like the old saying some people are born on third base. And it's not fair. It's not just, but it is just life. Heaven luck encompasses pretty much everything that is outside of our control, everything that we had no say in and simply happened to us. I think Warren Buffett points out that there's different kinds of heaven luck that can intersect and compound with each other as well, too, right? Like he talks about the different lotteries he won, not just those lotteries that you said, you know, he was born in the United States at the right time and all that.

Starting point is 00:39:13 What he calls the talent match lottery, like he's a very analytical person, very numerical-minded, probably pretty emotionally steady. Yeah, so he doesn't make investments with emotions. At the time and place where he was born, that was a very advantageous set of skills to have. He makes the joke, though, that Bill Gates has always told him,

Starting point is 00:39:31 you know, if you were born 100,000 years ago, you would have been some animals lunch. Like, those skills don't matter at all in that environment, right? So there's all these different kinds of layers. that can go into this and all these different kinds of heaven luck that can come together or not and produce these wild outcomes or or terrible outcomes too, right? We don't have any control over any of those. You're right.

Starting point is 00:39:50 There's kind of a tension of like, it's important to understand the factors of heaven luck. And I think there is a temptation because heaven luck is the most measurable form of luck out of the three. There's a temptation, I think, to over index on it and kind of assume that it accounts for most, if not all. all of our outcomes. But as we'll find as we go through this episode, like, that's not the case. And actually, we would argue that heaven luck is not as simple as it initially appears. Like, it seems simple to simply say, like, okay, well, I was born in a better place than this person was. Therefore, I'm luckier and my life's going to turn out better. It's not, it's not that clear. You're right. It is very measurable. Let me, let me paint a modern picture of how that might look.

Starting point is 00:40:38 and then we can talk a little bit more about that. Okay, so let's take two different children, two different babies born in the same day today. Okay, in two different places, though. One born in Norway, one born in Sierra Leone. Okay, let me just give you some hard facts, like you said, it's measurable. Let me give you some hard facts of like what that looks like at their starting points. The first one, let's say they're born in Oslo in Norway, okay? She will, statistically, she has a very high chance of living to about 83 years old.

Starting point is 00:41:04 Okay, that's her life expectancy at birth. She'll have access to free health care, free, free. university education, one of the strongest social safety nets that's ever been built by humanity. She has access to that from day one, right? Her country's GDP per capita is about $82,000 per person. Childhood mortality risk, which is like the likelihood that she'll die before the age of five, is only two and one thousand. The infrastructure she has access to, like the roads there and, you know, hospitals and education, all of that is like top rate. Some of the best you can find in the world, right? Obviously she didn't choose any of that. Yeah.

Starting point is 00:41:38 Right. Compare that to a child born the same day in Freetown, Sierra Leone. Okay. Life expectancy there at birth is 62, so full 21 years shorter than Norway. Country's GDP is about $800 per person per year. So about 100 times, more than 100 times less than in Norway. Childhood mortality risk is 94 in 1,000 compared to 2 in 1,000. Okay, so 47 times worse.

Starting point is 00:42:05 The infrastructure, there's really education. is lacking access to health care roads, recent civil war, lots of violence, no guarantees of safety, all of that is very, very present. Okay. When we say, oh, this heaven luck, like, obviously, if you're going to choose, you'd want to be born in Norway, right, over Sierra Leone. Yes, those are stark differences. But what do we do with that information, Mark? Like, what, like, how do we, how are we supposed to think about that? You can look at that and you say, well, we're shit out of luck, right? There's a fatalism to it that that's very easy to go to. But is that the right reaction? Yeah, and like we talked about in chapter one, our natural inclination is the just world hypothesis, which is that whenever we see a large disparity between people, we assume that something unfair is happening or that it is inherently unfair. Maybe it is, but to your question of like, what do we do with that? I think it's ultimately, as with anything outside of our control, the best we can do is find a way to accept it and leverage it. I want to come back to the

Starting point is 00:43:07 this comparison because this idea of luck and who is lucky. So there's a philosopher named John Rawls and he has this amazing concept that he called the veil of ignorance. And basically what Rawls argued was that the only way to tell how just a society was was by doing a thought experiment. And that thought experiment was assume that you're not born yet. And you get to choose which society you're going to be born into not knowing what individuals you're going to be born as. So you don't know your gender, race, ethnicity, what your family situation is going to be like, what your talent is going to be like, what your IQ is going to be. The simple question is, is when presented with a society, would you choose to be born into that society or not? Now, from a veil of ignorance perspective, obviously, if offered the chance to be born into Norway or be born into Sierra Leone, I think pretty much everybody would choose to be born into Norway. But that doesn't mean that every single person in Norway is luckier than every single person in Norway is luckier than every year. single person in Sierra Leone, right? So you could be born into Norway and, I don't know, be born with some chronic disease or get cancer at the age of five or something and die when

Starting point is 00:44:16 you're seven. Whereas in Sierra Leone, you know, there's plenty of stories of people who have overcome incredible hardship and actually become very fortunate. There was a story that I found about a local pastor who was digging through a local riverbed looking for essentially gold dust. and happened to stumble across the second largest diamond ever found. It was worth close to $10 million. And then this pastor ended up netting about $2.5 million for his trouble. Keep in mind, this isn't a country that they make less than $1,000 a year. And he just landed $2.5 million, right?

Starting point is 00:44:55 And he did all sorts of amazing things. He built schools, community centers, built roads, infrastructure for the community, gave a bunch of money away to friends and family and local children. would you say he's lucky, right? He's actually luckier than most other people on the planet, even though he was born into an extremely unlucky circumstance. And the reason I bring this up is that luck is ultimately simply a comparison between reality and potential alternatives.

Starting point is 00:45:26 And so by definition, luck is always relative. Like if you're saying that he's unlucky or he's lucky, It's lucky compared to what? Unlucky compared to what? Yes, it's unlucky to be born in Sierra Leone today versus being born into Norway today. But it's also lucky to be born in Sierra Leone today versus born there when there was a civil war raging. Or 100 years ago when there was zero infrastructure and rampant colonialism. Or a thousand years ago where you had absolutely no basic services and the life expectancy was probably like 25 years old.

Starting point is 00:46:03 right? So it's like lucky compared to what? The most important takeaway of heaven luck is that luck is ultimately a perspective. It's a frame of reference that you choose to adopt. It's a yardstick that you use to measure your life versus whatever else. You know, there's this old Chinese fable about the farmer and the horse, which I think illustrates this perfectly. So basically there was a poor farmer in ancient China. And all he had was a single horse. And one day that horse runs away. And his son comes running in, says,

Starting point is 00:46:41 Dad, Dad, our horse is gone. This is terrible. We're so unlucky. And the farmer looks at his son and he says, good luck, bad luck. Who knows? And so the son goes looking for the horse. And he like wanders out into the wilderness.

Starting point is 00:46:54 And he comes back the next day with five horses. Turns out that the horse that ran away went and found a bunch of horsey friends. And they hung out. had a little party and then they came back together. So his son comes back and he's got five. He's like, Dad, oh my God, I can't believe it. We have five horses now.

Starting point is 00:47:09 We're rich. We're so lucky. And the farmer looks at him and says, good luck, bad luck. Who knows? So then the sun starts spending the next couple of weeks trying to train these wild horses, trying to tame them and get them to do farm work.

Starting point is 00:47:22 And one day, one of the horses rears up and kicks them off the back. And the sun falls and breaks his leg. And the farmer's poor. So he has no other work. It's just him and a son. And so the son is like, oh my God, dad, this is terrible. This is, we're so unlucky. I can't believe this happened to us.

Starting point is 00:47:38 The farmer says, good luck, bad luck. Who knows? And then a week later, the local militia comes through. There's a war has started and the local lord or king of the local fiefdom is like recruiting, drafting young men into his army. They see the farmer's son sitting there with a broken leg and they're like, oh, well, we can't draft him into the war. so, you know, we'll leave him here. And the son looks up at his dad and he's like, oh my God, we're so lucky, dad.

Starting point is 00:48:06 This is, thank God this happened. And his dad says, good luck, bad luck, who knows? And the story goes on and on and on and it just keeps shifting back and forth, right? And it's like the same exact occurrence is both lucky and unlucky depending on the frame of reference, depending on the potential alternative reality that you can imagine that has not happened. And so in this sense, both feeling lucky and feeling unlucky is available to us in every moment, depending on simply what alternative realities we choose to imagine for ourselves. And as we'll see, this has very significant consequences.

Starting point is 00:48:47 This is definitely something I've seen in my own life. Like, when I was younger, I thought I was so unlucky to be born in the middle of nowhere. You know, the small town, your parents didn't have a lot of money. They were young and they, you know, not a lot of vacancy. access to resources, no outside connections, anything like that. And the older I got, the more I realized, like, oh, if I was, if you were going to grow up like that, the time and place where I grew up actually turned out to be a very good time and place to grow up like that. The 90s and early 2000s in the Midwest and in the middle of America and I was a free range kid. We had that advantage, you know,

Starting point is 00:49:20 it was a small enough place where you can just let your kids go, had dial up internet, you know, as a teenager. Also to this, like, there was this community aspect that I realized later on that all those big city kids didn't have that I had growing up. The community actually looked after children, like it was really a village raising the kids around there. And that frame of reference of mind kind of changed over time. And now I talked to people who I grew up with who don't see it that way still too. So you're right. It absolutely is like compared to what, right? And they keep comparing it to all these other things. But when I see it, I see like the good fortune that I had to have the people around me where I was who helped me really grow as, you know, as a young

Starting point is 00:49:58 person. But it was a general shift. I mean, good luck, bad luck, who knows, you know? Totally. I had that. Yeah. The frame of reference piece here is, is so important, right? Because it used to be, you know, if you grew up in a small podong town, you had no frame of reference. You didn't know what you were missing out on. You didn't know how other people were potentially growing up. Same thing if you were born in Sierra Leone 100 years ago, like you had no conception that like anywhere else in the world was any different than where you were, right? And so a side effect of, quote, connecting the world through the internet

Starting point is 00:50:32 is that we all become suddenly aware of hundreds or thousands of reference points that make our current situation seem less fortunate. We are hyper aware of all of the things that we lack and that we don't have

Starting point is 00:50:48 access to and that we advantages we didn't get situations we haven't experienced. And I think that puts a downward pressure on our perception of our own fortune. The effect of that is that you actually get people who have grown up in extremely fortunate circumstances or had very fortunate lives, feeling unbelievably oppressed and disadvantaged for like the tiniest things. My grandmother talks about this a lot. She was a child

Starting point is 00:51:16 of the depression. You know, she was young when the depression was going on. And she said, we were poor, but we didn't know it because everybody was poor around us. They made dresses out of flower sacks. And they, you know, they had, they would just organize dances among the kids on the weekends because they didn't have any money to do anything else. And he's like, we had a great time and we didn't know we were poor. The takeaway from all that for me anyway is that, yeah, you can't control heaven luck, but you also really can't interpret it correctly either. Like, you know, you can say that, oh, this is a terrible way. Like we just said with the Sierra Leone versus Norway or my situation or whatever, it's really hard to interpret it correctly. Good luck,

Starting point is 00:51:52 bad luck, who knows. One of the reasons for that, though, is some of the biases that are constantly working in the background for us. Just a couple of those I want to point out one of the big ones is the actor-observer bias. In that, when we observe other people's behavior, we usually attribute that to their character. And then when we observe our own behavior, we usually attribute a lot of it to circumstances. So, like, classic example is getting cut off in traffic versus being cut off in traffic. Like, if you cut someone else off, I was like, well, I'm in a hurry and, you know, my grandma's sick or, you know, this is like, I've had a bad day, whatever. When they cut you off, though, they're just an asshole. They're a horrible person. Yeah. And so and so instead of just like seeing that like a lot of

Starting point is 00:52:31 things are just random and there's chance and there's luck involved to it, we just have this real like deep desire to attribute actions to some sort of meaning. Right. And usually that meaning is someone's character or the, they're who they are. Right. Rather than just this just happened. Right. So it's like if I'm struggling, it's because all these horrible things have happened to me. But if you're struggling, it's because you are, there's some fail. of character, you're irresponsible, you make terrible decisions, you don't know what you're doing, etc., etc. Someone's rude to you and they're an asshole or something like that.

Starting point is 00:53:05 Maybe they've been up since 4 a.m. and they've been taking care of a sick parent or child or, you know, you don't see all of those things, right? It's almost impossible for us to interpret any kind of luck, but especially heaven luck, too, right? Like, there's so many complicated factors that go into it. The other one is hindsight bias. The farmer in the horse story, you know, there's hindsight bias all the time. Like the sun keeps coming up, oh, this is good luck. this was bad luck after the fact, right?

Starting point is 00:53:28 We can look back and say, this was good luck because of how it turned out. But you really don't know whether that is good luck or bad luck. So the point is that we're just very, very biased not to see luck and fortune in a very accurate way. Like all of our perspectives. Yes. Ultimately, they are self-serving to our own interests and all biases pretty much end up there. That's true. Here's the thing about these biases is that you're not necessarily stuck with them too.

Starting point is 00:53:52 You can kind of train yourself to see luck, maybe not in an accurate way, at a more beneficial way, at least. One of those ways is through gratitude, okay? What gratitude is, is like an expansion of your frame of reference. For example, like, you could sit here and say, well, the sun rising in the morning, that's not lucky. That's just, that's what happens. It's what happens on Earth, right?

Starting point is 00:54:13 There's nothing lucky about that. But if you broaden your frame of reference a little bit and you think about, well, you're floating on a rock and infinite nothingness, hurtling through space, why we're here, we don't know. Yeah. I mean, there's millions of other planets that billions, trillions, maybe a billion, and as far as we know, none of them have a sun that can support life that is, has a regular rotation and all these things. Yeah. That seems incredibly lucky, right? You and I and everybody else listening to this, you are the product of literally billions of years of literally perfect evolution. Not a single thing went wrong in that

Starting point is 00:54:54 cosmically impossible chain of events. Not one single thing went wrong. That's like the widest frame that I usually get to. I mean, that is incredible, right? And we'd like go all the way back to the beginning of time. Not a single thing went wrong to produce this moment right now. That's insane. It's an expansion of your reference point, though, too. And this is what happens, I think, with people when they, you don't see the luck around you is that you get so narrowly focused on something. Like, oh, this bad thing happened and it's bad for me right now. But if you step back and widen that frame of reference a little bit, and if you can do that through gratitude, you know, I've kind of poohed on gratitude before like, ah, it's kind of a hokey practice or whatever. But I am a pretty

Starting point is 00:55:37 grateful person in general. And so I don't feel like I have to practice it. But if you aren't a grateful person, you can practice it and you can widen your references way. I've always been kind of lukewarm on the gratitude thing, but I think prepping this episode and stumbling, thinking of it in this way, like really explained it to me. Gratitude really is the mental exercise of just imagining all of the potential worse realities that you could exist in. And by doing that mental exercise, it generates a sense of a positive feeling and optimism and hope for the future that that really came from nothing. Like you really, it allows you to kind of conjure those feelings out of nothing to help you move forward. And I think,

Starting point is 00:56:21 think that's an incredibly powerful thing and it's an incredible mental tool that you can use to to propel yourself forward. Yeah, I think that's why I feel like I haven't had a lot of bad luck or I think I've seen all the alternatives because of the way I grew up and where I grew up. There were a lot of examples around me that didn't turn out as well. And I was like, I easily could have been one of them and I'm not. And that's an expansion of your frame of reference too, right? Like, just like you're saying, all the things that could have gone wrong that didn't go wrong. There's kind of a geographic lottery, a demographic lottery, there's a talent matching lottery, there's a time horizon lottery.

Starting point is 00:56:56 You can expand your frame of reference in all those different ways to generate a sense of gratitude as well, right? So if you feel bad about where you live, well, you can easily imagine a worse place to live. If you feel bad about the time you live in, well, it's not very hard to reach back and find a much worse time to live. If you feel bad about your particular talent or aptitudes for certain things, it's not hard to think of things that you'd be even worse at than whatever you're doing. It's funny, I had a viral tweet a couple years ago that I love, name-checking myself on my own podcast here,

Starting point is 00:57:26 but this was a banger. So I'm proud of it. So I said, your ancestors survived centuries of floods, wars, famine, slavery, and plagues for you to sit on the toilet and compare your life to people on the internet. That's a vivid image. Yeah. The point isn't necessarily to make you feel guilty about it, though, right? The point is just that, like, you can widen your frame of reference. You can, there's a different way to look at this, right? We talk a lot about, you know, cognitive reframing and all that in a lot of different ways. And this is just another form of that. Expanding your frame of reference, though, is the way to do this. And there's real tangible benefits to this, too. Right. So the research they've done, like positive emotions in general, gratitude especially, though, they literally do

Starting point is 00:58:08 broaden your attentional scope. When you broaden your scope, those positive emotions kind of have a positive feedback loop where you broaden your attentional scope and you start to see things, more things, more opportunities in your environment. So it's like luck begets luck. There's like an upward spiral that kind of happens from this. Because you expand your frame of reference, you say, okay, well, this didn't happen. That didn't happen. I'm here. Now you see all these other possibilities. You're going to see more chance opportunities in your environment just by broadening your frame of reference. Yeah, it makes sense if you broaden that aperture of how you see yourself, you open yourself up to way more connections and possibilities than you would have

Starting point is 00:58:48 had otherwise. And I think this kind of explains that research that I talked about at the top of the episode, right? Where it's like the lucky people were the ones who spotted the money sitting on the ground. They're the ones who spotted the really interesting person sitting in the coffee shop and started a conversation with them, which then just makes them feel luckier, which then just makes it easier to imagine a world where they didn't see those things or take that action, which is, so yeah, yeah, it kind of becomes like a flywheel of, good fortune. This is also going to be really important as we get into the next chapters because as we get into earth luck and human luck, so much of maximizing earth luck and human luck,

Starting point is 00:59:25 like those are the two forms of luck that you actually can actively increase in your life. And so much of that we're going to find is simply either a, seeing a wider range of possibilities than you see now and then seeing the situation clearly, like being able to be realistic, and rational about like a decision in front of you. And so if you are very kind of narrow-minded and closed off in how you see yourself and you just see yourself living a very unfortunate existence, you see yourself as very uniquely victimized or screwed over in some way. A, you're not going to have that wider horizon to see future possibilities. And then B, you're also probably not going to be objective about the decisions immediately in front of you

Starting point is 01:00:10 because you're going to be so invested in that one frame of reference of yourself that you're not going to be willing to challenge it or question it in any way. Also, I think there are interestingly two ways to really screw this up with your own heaven luck. I think one is to properly assess all of the unfortunate things that you've had to deal with in your life without seeing the fortunate things that you've had in your life. So like just really narrowly focusing on all the bad shit that's happened to you and not widening your perspective to include some of the better stuff.

Starting point is 01:00:47 Conversely, you can also screw this up by taking credit for all of the good things that have happened to you and not acknowledging that a significant amount of it was due to luck, right? So it's like one version of this is say the unfortunate person who just feels zero agency

Starting point is 01:01:05 and that the world has just screwed them over time and time again. But the other version of this is somebody who was born on third base and thinks they hit a triple. Adcknowledging your own fortune requires you to expand in both directions, if that makes sense. There's research on this gratitude stuff too that says this has to be grounded in some sort of reality, right? And you're right, there's two ways that that can go get out of reality. You can, you can assess it outside the bounds of reality. If you're going to be grateful about something, it does have to be grounded in some sort of fact. of your life.

Starting point is 01:01:41 Accurately, yes, but also, too, like, yeah, you have to have a bias of, like, expanding that reference like we're talking about, that frame of reference. One thing that Buffett said, too,

Starting point is 01:01:49 that I really like, and I've definitely felt this in my own life, is that he was giving a talk to MBA students about this topic, about the ovarian lottery. And he was explaining that, like, because he feels so fortunate to be who he is,

Starting point is 01:02:04 he feels that gives him a sense of moral duty to give back, can help others. It's not like, oh, I'm so fortunate. Let me just like party like a rock star and think I'm better and everybody. It's actually quite the opposite. It's when you are aware of all the ways things could be worse, I think it makes you more compassionate and you feel more of a sense of duty to help those around you. And like I realize I'm in such an insanely privileged position. Some of it I've earned. Some of it is just like. pure chance and happenstance.

Starting point is 01:02:41 But because I'm here, I do feel some sort of obligation to do something with it. If I just sat around spending all my money, like watching football games and going to the pool, like, I would feel fucking terrible about myself. It would feel like squandering such a blessed and incredible opportunity that I've been given. And so in a sense, I do think this. widening of your aperture, expanding your frame of reference, considering all the possible alternatives that are worse than your current situation. Not only does it make you more grateful for what you have, it makes you a more compassionate and giving person in general to the, to the other

Starting point is 01:03:25 people around you. There's another side to it too that some people will go to, which is extreme guilt around this. And that can also lead to like an action where it's like, well, I have all this, I'm not going to do anything with it because I have all this. I'm not going to, you know, go out and make more money that you could give away. or, you know, something like that. So I think that's the right balance to strike is finding, you know, not partying your ass offices, you know, being extremely guilty

Starting point is 01:03:47 and not doing anything either. I start from a sense of guilt a lot of times, too, like, oh, God, I got, like, I got lucky here. Well, a lot of people don't want to act on opportunities because they feel guilt. Well, it's not fair I have this opportunity. So I'm not going to take it. Right.

Starting point is 01:04:00 Whereas I'm like, it's, no, it's not fair for you to not take it. So to kind of bring this home, you know, people who perceive themselves as luck, as we've already discussed. They tend to report higher life satisfaction. They tend to be happier people. They tend to be more successful, see more opportunities. They just report better outcomes kind of across the board. There does seem to be a little bit of a self-fulfilling prophecy aspect of this, which is that the more fortunate you feel, the more aware you are of alternative realities or alternative versions of your life, which then opens you up to seeing future opportunities. It makes you kind of more open-minded,

Starting point is 01:04:39 more flexible in your thinking, which then allows you to take advantage of those future opportunities and excel even more and live an even better life. So heaven luck, even though we can't control it, even though it is all of the stuff that happens to us, what we can control is our perspective on it, how we view our circumstances, and what are the alternative circumstances that we can imagine for ourselves that we don't have. So while we can't change our heaven luck, we can change how we feel about our heaven luck, and it turns out that that actually matters as much, if not more, than what heaven luck we have in the first place. But the next two lucks we're going to talk about are actually the forms of luck that we can alter in our lives, that we can improve, that we can

Starting point is 01:05:22 get better at through different skills and practice. So in the next chapter, we're going to talk about earth luck, which is the luck that is generated by our environment. And to explain that, we're going to go back to Napoleon, except we're going to visit him as a teenager when he was a lonely foreign, bullied student at an academy in France and seemed to have nothing going for him. Yet, he still managed to turn into the most powerful man in the world. But first, a word from our sponsor. This episode is brought to you by Quo. This whole episode keeps landing on the same idea.

Starting point is 01:05:59 The lucky people are the ones who notice the opportunity that everyone else walks past. The money is on the ground for all of us, but it's the lucky ones who look down and actually pick it up. So if you run a business, that gets very literal. Your opportunity rarely announces itself. Usually it's a phone ringing while you're buried in doing something else. And it doesn't just wait around. If you miss that call, whoever you're competing with is going to be the one that answers it. That's why today's episode is brought to you by Quo, spelled QUO.

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Starting point is 01:07:02 for free, plus get 20% off your first six months when you go to Quo.com slash solved. That's QUO.com slash solved. All right, welcome back. This is solved. Everybody talks about hard work. Everybody talks about discipline. Everybody talks about productivity. Nobody talks about luck.

Starting point is 01:07:25 And definitely nobody talks about how you can improve your own luck to achieve incredible things. So I want to start with a story. It's 1778. It's a small military academy in France. It's full of young boys from French nobility, a bunch of rich, spoiled brats. And there is this one nine-year-old there. He's the youngest.

Starting point is 01:07:49 He's the smallest. He's definitely the poorest. He's from an obscure island in the Mediterranean called Corsica. He's only technically French by pure happenstance. The French happened to invade Corsica and conquer it, I believe the year before he was born. Otherwise, he would have been born Italian. He spoke with a thick Italian accent. actually his entire life, he was ruthlessly bullied, ostracized, kind of seen as a joke in the academy.

Starting point is 01:08:20 But his name was Napoleon. And ironically, he would go on to become the emperor of France, one of the most powerful men in world history. And also, one of the most incredible historical figures. There's a kind of a definitive biography on him by a historian named Andrew Robert. I read that at the beginning of this year. And at this point, I've read quite a few biographies of major historical figures. If you told me to pick one historical figure that you could have put him in any context, any country, any time period, and he would have become extraordinary, I think I would pick Napoleon. By the time he's 14, it is so clear that this person is exceptional at almost everything he does.

Starting point is 01:09:10 Yes, he was hardworking. He was very disciplined. He was very intelligent. But one of the things that was notable about Napoleon was his situational awareness. He had a very strong understanding of his position in the world and where the opportunities were in the world. And so in this military academy, he was a bit of an academic prodigy. And he understood relatively early that, you know, at the time, our children, was kind of the new thing. They had just invented various types of cannons and whatnot. But to operate the artillery at the time, you had to be extremely good at math,

Starting point is 01:09:50 and you needed to be able to calculate very quickly in your head. And he was very good at that. And so he understood that artillery was the highest leverage point within the military, and so he studied and went into the artillery with kind of an intuitive understanding of, like, this is going to be extremely important. So if I can get really good at this before most other people, this is going to give me more opportunities. He was a lonely kid. He was on his own.

Starting point is 01:10:17 He was bullied. He was picked on. But he also seemed to have this intuitive sense that if he could just accumulate as much knowledge as possible, as early as possible, this would give him a compounded advantage throughout the rest of life. And so you see very early on that there's just this like voracious appetite for knowledge. He was always in the library. He was always, he always had a massive stack of books on his bedside. He was reading constantly, 10 hours a day, trying to understand everything, reading. And he was, wasn't just reading about anything.

Starting point is 01:10:54 He was reading about his history, politics, warfare, economics, trying to understand all of the broad systems of society. because again, I think he understood the context in which he lived, that he was in a very turbulent period in maybe the most powerful country in the world at the time, France, right before the revolution. And so with this expertise in this incredible understanding, when the revolution eventually did happen, Napoleon found himself in a very unique position because most of his peers, that he had come up through the academy with, they were children of the aristocrats.

Starting point is 01:11:40 They were terrified of the revolution. They were incredibly risk-averse. They were not forward-thinking. They were not innovatives in the way they saw politics or government or society in general. Whereas Napoleon, not only had he spent all of his teenage years studying historical situations like this, but he himself had come from a revolutionary family

Starting point is 01:12:05 in Corsica from a country that had been conquered by an empire and was rebelling against that empire. And so he had a very intuitive understanding of both sides of the coin, kind of the old aristocratic and royalty on the one side, but also the people of France who were rising up and demanding their own rights and their own political freedoms. What's really notable when you read Napoleon's story is that he was extremely good at spotting high leverage opportunities and then he would act ferociously on those opportunities.

Starting point is 01:12:41 Like he would see an opening that was maybe a little bit risky but he could see that the upside was massive and he would go all in on it very, very quickly. And so in this sense, from the outside, he looks very lucky. It's like his entire life is kind of this endless series of things working out for him

Starting point is 01:13:01 one after another after another. But when you really get in and analyze very, deeply, his thought process. It's clear that these were calculated decisions where he had a very strong understanding of the upside. I'll give you a really simple example. So early on when he was in power, all the other European powers were trying to get rid of him. Everybody was like terrified of him and terrified of what had happened in France. And so the other European powers were declaring war on him constantly and attacking him and fighting him. He received some intelligence that the Austrian army was moving across northern Italy

Starting point is 01:13:37 and was getting in position to invade the south of France. And for the French army to move to the south of France, they're going to be behind the eight ball. They were going to be behind schedule. It was going to be very difficult for them to get there in time. They were going to be very disadvantaged once the Austrian invasion started. At the time, it was assumed that crossing the Alps was impossible, especially in winter.

Starting point is 01:14:03 And so no army had even attempted it in centuries. Napoleon looked at it and he was like, well, we've got some pretty good engineers. I bet they could figure it out. And if they could figure it out, we can actually attack the Austrian army from behind without them even knowing that we're there. And so he said, fuck it, let's do it. Right? This thing that nobody had ever done before that all the military strategists of the time thought was literally impossible.

Starting point is 01:14:31 within a day he was like, no, I think we can figure it out. Let's go for it. Because he understood that like the upside was that he would basically win the war before it even began. All he had to do was just, you know, figure out a little bit of the logistics

Starting point is 01:14:49 of getting over the mountain. And sure enough, his army figured it out. They like devised all these new methods of, you know, they like built sleds for their cannons and shit and like dragged it up. the mountaintops and they somehow managed it in an insanely short period of time. And then he ended up just wiping out the Austrian army like days. His whole story is just filled with moments like this of just like him noticing the thing

Starting point is 01:15:19 that nobody else was noticing and him having the courage and wisdom to act aggressively on that opportunity that nobody else was witnessing. And I love Napoleon's story because he is somebody who was born with a relatively low amount of heaven luck in one sense. But his earth luck, the environment and the context that he was placed in, there were always very large openings with large upside. And his genius, he was brilliant at a lot of things, but his genius was really maximizing his earth luck, understanding the situation he was in, and understanding sometimes intuitively, sometimes very intellectually, that there was extremely high upside to some decisions over others, and that if he could just continually place himself in the right context over and over again,

Starting point is 01:16:15 good things were going to happen. Another example of Napoleon kind of inventing his own luck, so to speak, is that he very famously would go eat and sleep with his soldiers, right? So at the time, generals of most European armies, they were like quasi-royalties. Some of them were princes. Some of them were, they were all aristocrats. And it was a very stratified military, right? It's like the generals, you wouldn't catch them dead near their soldiers. Napoleon very regularly would leave his own tent, go down into the ranks, sit around campfires, share stories, talk to his men, joke around with them. His men had nicknames for him. They used to tease him. He would very honestly go up to random foot soldiers and

Starting point is 01:17:06 ask for feedback on how things were being run. Did they need anything? How were they feeling? And so he generated this immense amount of respect and loyalty among his men. And as a result, what you noticed is that his armies, most of the battles that he fought, his army was outnumbered, yet they would still win. There were often situations that most generals or military leaders would look at the map and say, that's impossible. But Napoleon would know that it was possible just because of the morale and the intensity that his men were willing to fight for him. And so from the outside, you could look at it and say like, wow, he got lucky over and over again. But actually, there was an element that was happening behind the scenes that other military

Starting point is 01:17:58 leaders just weren't aware of, that there was like kind of this intangible emotional side that Napoleon had mastered and understood that gave him the appearance of being lucky to others. It's funny, there was a thing that I saw when I was reading the Napoleon book, I was Googling around and finding a bunch of stuff on them. And there was a historical researcher who went and found all the most famous and prominent military commanders throughout history. So he took all of their major battles. He took the size of the armies. He took the terrain and resources and circumstances into account and developed like a statistical model that predicted how likely it was that each general would win or lose each battle.

Starting point is 01:18:42 he compared that statistical prediction of how many battles each general should win versus how many battles they actually won. And then he ranked them. So the best generals were the ones who won the most over their expected victories based on troop counts and resources and technology. And obviously the worst generals were the ones who actually lost more battles than they were statistically expected to win. the chart is like almost hilarious because it's like a pretty clean curve right you've got all the bad generals here at the bottom and then it like slowly rises up and you've got some generals who are like modestly outperform expectation and then you've got this like very small handful of outliers like i think julius caesar was one um i think uh there was like a an english general who was one or english admiral who was one um um A couple others. And then there's Napoleon, and he's, like, so far off the chart that it looks like it's just broken. Like somebody put in the wrong number on an Excel spreadsheet because he's, like, such an absurd outlier that it's, like, statistically impossible.

Starting point is 01:19:56 Like, it shouldn't even happen. Okay, I'm done nerdy now. To bring this back to luck and bring it back to Napoleon's question to his generals, are you lucky? I think what is encapsulated in that question for Napoleon, probably why he asked it. You know, we talked in last chapter about that broadening the aperture of your frame of reference. I think what he was asking other generals is how wide is your aperture, how wide is your frame of reference? How broadly do you see yourself, your situation and history, your relationship with your men? that is ultimately upstream of all sorts of decisions that you're going to make,

Starting point is 01:20:37 especially in the heat of battle. Are you able to spot opportunities that other people are not going to be able to spot? Are you going to be able to act on those opportunities when most people are not going to be able to act? Are you going to pay attention to the small details that most people ignore? Are you going to go talk to your men? Are you going to, you know, spend extra time scouting terrain? Are you going to find new innovative ways to like use your resources that other people wouldn't consider, wouldn't think about? All of these things are ultimately variations of Earth luck, right?

Starting point is 01:21:12 It's finding high leverage decisions that make dozens and dozens, if not hundreds of other decisions, skew in your favor. When we get the human luck, we're going to talk about actually playing the probabilities of certain situations. Earthluck is like finding ways to skew those probabilities to your advantage. When Napoleon had dinner with his soldiers and hung and slept around the same campfire as them, on the surface, that's a very low leverage behavior. It feels like he's wasting time. But he knows those men are going to talk to other men. He's going to develop a reputation.

Starting point is 01:21:53 People are going to really admire him. That's going to have an outsized effect on the next battle. By spending that time with his men, it's going to skew dozens of them slightly in his favor. And then all of those variables that skew in his favor, they compound when added together. Now, I want to bring this back to Richard Wiseman, who was the researcher who did the newspaper study and the cafe study that we talked about at the top of this podcast episode. Weisman spent a decade stunning luck and chance and people who perceive themselves as lucky. and he was the one to find that people who perceive themselves as lucky tend to score higher on various measures of well-being,

Starting point is 01:22:34 they tend to have better outcomes. And really what he was measuring was Earth luck. He wasn't measuring heaven luck. He wasn't looking at, you know, how wealthy were people's families that they were born into or what country did they grow up in or whatever. He also wasn't looking at human luck, which is taking calculated risk and decision-making.

Starting point is 01:22:54 he looked at Earthluck, which was, what are these people's mindsets? How do they see the world? How do they spot opportunities? How often do they see opportunities? How often do they see opportunities that other people don't see? And how willing are they to act on those opportunities? And he broke down Earthluck into four principles. And these four principles are principles that we can all adopt to make us, quote unquote, luckier. But really to maximize that ability to spot connection. and opportunities in our environment. So the first principle is people with a lot of earth luck, they maximize the opportunities when presented to them. This is the piece of advice that Will Smith's dad gave him, right? Luck is just when opportunity meets preparation. It's like an opportunity presents itself, you go all in, you put in all your effort to make that opportunity work for you.

Starting point is 01:23:51 That's quote unquote luck. There's no such thing as luck. It's just opportunity in preparation. What's interesting is that Wiseman found that people who tended to be luckier, they were better at acting on the opportunities in their environment, even like opportunities that maybe appeared small or insignificant at first. So he found that lucky people tended to have lots and lots of loose social ties. They had much wider social networks.

Starting point is 01:24:20 They were good at when they met somebody new, they were good at following up. They were good at checking in. They were good at introducing people to each other. Similarly, he found that lucky people were open-minded about things that they could do or things that they could try. Like if an opportunity to go to a new sort of event or try a new activity came along, the lucky people were more likely to say, fuck it, let me give it a shot. Let's see what happens, right? You have nothing to lose.

Starting point is 01:24:52 The second principle he found was that lucky people he found was that lucky people. people tended to listen to their intuition more often. This one is interesting because, as we're going to find in the next chapter, so much of human luck is kind of rational decision making and understanding the risk or the probability of what's in front of you. Earth luck seems to be much more because it is much broader in terms of what you're assessing and what opportunities you're considering. It seems that people who rely on their gut instinct, tend to do better. We don't need to go down the rabbit hole too much

Starting point is 01:25:30 of like what gut instinct is or like Daniel Conneman's work or type one thinking versus type two thinking, but basically what your gut instinct is is it is all of the connections that your unconscious is drawing between your experiences and your knowledge without your full conscious awareness. And generally what you see among the research

Starting point is 01:25:51 is that making decisions based on gut instinct is better if it is if you are well informed or have a broad set of experience around a decision and it performs poorly if you are in a completely new environment. You have no fucking idea what you're doing. You have no knowledge whatsoever. I think when you look at Napoleon's case, all of that reading that he did when he was young, it built this like foundational layer of context and understanding of the world that when he was in those heated situations later on and he had to make really critical decisions

Starting point is 01:26:32 in the spur of the moment, he was able to. And they were able, generally, he was able to make good decision. Yeah, and I think generally people who are quote unquote lucky are, there's probably a little bit of a self-fulfilling prophecy here because they are, they have a wider aperture, they're just better at that lateral thinking to begin with. And so their intuition probably is a little more informed, you know what I mean? Just like you're saying.

Starting point is 01:26:54 So yeah, this little bit I would throw in there too. Principle number three is lucky people expect good things to happen to them. There's just an optimism to it. This is nothing groundbreaking, but generally optimists are happier. Better things happen to them. They're healthier. There is a self-fulfilling prophecy to this as well. And that when you expect good things to happen, you are more open to finding the good

Starting point is 01:27:20 silver linings of whatever does come and then focusing on those and then acting on those. And then principle number four is that lucky people tend to transform bad luck into good luck, which is this is the turning lemons and the lemonade. So if something does go against them, they're good at using it as a learning experience or taking a lesson from it or adjusting their behavior going forward. So you and I, we've both described ourselves as lucky people. I'm curious, which of the four principles do you think you embody the most that, like, drives a lot of your luck? I mean, a couple of them. Lately, I've went back and forth through this one throughout my life, though, but the chance opportunities one, I've seen it more and more.

Starting point is 01:28:10 Sometimes I pull back and I kind of withdraw and I get real into ruts and routines and stuff like that. And then I kind of do feel myself being like, oh, nothing good ever happens. But lately I've been like kind of trying to get out a little bit more. I used to work in coffee shops a lot, you know, to work remotely and working coffee shops a lot. And I stopped doing that for a while. Now I'm going back to doing that. And I bump into just random people all the time now, which is kind of cool. And I saw this, you know, in our line of work too.

Starting point is 01:28:34 So Steph, who works with us now, right? This was a chance opportunity that you kind of forced me into. I remember you got invited to this podcast networking thing and you were being all grumpy pants about it. Like networking and, nah. And I was like, Drew, just shut up and go. Yeah. Yeah. And I was like, you go, Mark.

Starting point is 01:28:51 You go. I'd be glad you did. It turns out, yeah, we ended up, we got a great team. A great team member out of this. And not only that, she kind of made her own luck there, too, though. She was one of the organizers of that dinner. She, you know, was kind of putting herself out there. And she organized this dinner and a whole bunch of podcasts just so turned out.

Starting point is 01:29:12 I was like, Mark, we need to hire somebody to know us what the hell they're doing here. And she was a perfect fit for it. So, like, that happened. And so ever since then, I was like, oh, I used to do this a lot. I used to just throw myself into these situations that were, you know, high variance and a lot of contact, a lot of surface area with luck. And I think that, that I think is the best one out of all of them anyways, just putting yourself in those in high variance situations where there's more opportunity. Several of the last few people I've dated. I've just met through something I wasn't going to go to, but ended up going.

Starting point is 01:29:44 Yeah. And some social event or something like that. I was like, oh, I'm tired, but I'm going to go anyway. I end up meeting somebody that, you know, I develop a relationship or those sorts of things happen to me all the time, I think, too. Yeah. A little bit the intuition side, too. I've noticed that a little bit as I get older. If I'm listening to that part of myself where it's like, you know, you probably really should do this.

Starting point is 01:30:06 And instead of ignoring it, I go go do it. And I think there is, again, it's those connections I've made from all my experience in the past. Yeah. That one you've got to be careful with, I think. But yeah, yeah. What about you? What do you think? I think I'm pretty good at maximizing opportunities.

Starting point is 01:30:20 Yeah, yeah, you are. You put yourself into a lot of situations, too. You are. You're very open to experience. You're more open to experience than I am. So you just naturally put yourself into a lot more situations than I do. I would say I'm extremely good at principle four, too, transforming bad luck and the good luck. Like, I almost have, it's almost actually a problem.

Starting point is 01:30:39 Yeah, yeah. How well I can polish a turd in my life. I know. Yeah. It takes me a little while to get there. I notice you just go. straight there. Yeah, I'm like, this is great. It takes me, like, I learned something, but it's after the fact and it takes me a little while. You go straight there. I feel very blessed. So I feel like

Starting point is 01:30:57 I have a lot of human luck in that I think I am naturally very good at the Earth luck side of this. I think I'm good at understanding contexts and situations that are likely to have a lot of upside. I think I generally spot it earlier than most, and I'm very tolerant of setbacks, challenges, failures. So my whole career started because my roommates had blogs on BlogSpot in 2007, and they were like, hey, Mark, you've got some fun stories. You should start a blog. And I was like, what's the point? Nobody's going to read it.

Starting point is 01:31:36 Ha ha. I started writing, and I remember, you know, I got like a few months in. And people started showing up on my blog that I'd never met before. You know, initially it was like my roommates and a couple friends and then like a couple friends of friends. And then six months in, there's like random people from like California, Germany, the UK showing up and leaving comments and stuff. And I remember at that point, I had a moment where I was like, oh, there's something here.

Starting point is 01:32:07 Like if if I just go all in on this, like, something good is going to happen. I remember I quit my day job. I quit my day job spring of 2008. And I was burning through savings. Ironically, I had made a bunch of money playing poker the year before. And I was burning through all my poker winnings. And I remember talking to my friend. And I remember saying, like, I don't know if it's going to be this year or next year or the year after. I just know that if I keep doing this, big things are going to happen. Like I just, I could tell,

Starting point is 01:32:42 like, this is, this is the future of media. It's the future of creativity. Cutting out all the middlemen and gatekeepers between content creator and content consumer. Like, it just seemed inevitable. And I,

Starting point is 01:32:56 and I had an implicit understanding that, like, I'm here very early and I have a knack for this. So if I just keep going, it's going to work out. Yeah. And that was some intuition then, you think?

Starting point is 01:33:07 I think there was. I mean, coupled with, you know, some data too, but yeah. Absolutely. Yeah. But to come back to like the surface area piece, I think that that might be the one, you know, throwing yourself into situations. Like I do think that's, that's been the hardest one to learn. I've always been a bit of a loner and just wanted to do things myself and also had like a delusional level of optimism of my own capacity to do things. I would say for me the big aha moment around maximizing opportunities,

Starting point is 01:33:43 expanding surface area. I lived as a nomad, digital nomad from 2009 to 2014. And my career was doing really well. But I remember right around the time I got my first book deal, which eventually became subtle art. There was kind of this, I started to have this aware. that like by not being in the U.S., there was just something about not being in the room when a lot of things were happening, not being able to meet people face to face who were doing the same thing I was doing. And in 2015, after getting my book deal, I decided to move to New York initially as an experiment. But that six months, I met more people who were impactful on my career in that six months than I had like the five years prior combined. And so many opportunities opened up, so many people doing like interesting business stuff that, you know, like I was learning so much so fast that it was moving to New York is in hindsight like one of the best decisions I ever made just because it like exposed me to so many chance encounters that I wouldn't have been exposed to otherwise.

Starting point is 01:34:56 It's funny because I notice as we're going through this episode or or this chapter, I still feel awkward just calling it luck. Like I keep finding these other words to replace it, like chance encounters, maximizing opportunity, expanding surface area. This kind of comes back to the Western culture point. Like I think it's so ingrained in us in Western culture that like luck is something that happens to you. It's not it's not something you can control. It's not something you can leverage or build. Yeah, it's funny.

Starting point is 01:35:28 Even though we've been studying this for the past month and I'm like, I still feel awkward. saying I've gotten luckier or I've gotten I've had more luck as my life has gone. Yeah. Yeah. What should think that's about? I don't know, man. Yeah. It's just like it is very deep.

Starting point is 01:35:47 It just feels like as soon as I call it luck, I'm like removing my own agency. But it's like I don't know what else to call it, right? Like you call it boldness. You can call it foresight. You can call it. They're inextricable. What the skills and the effort and everything you put in is. You can't extricate that from chance encounters the surface area.

Starting point is 01:36:07 You're talking about the luck around you. You just can't separate that. I don't know what to make a bit necessarily either. I mean, you can talk about people have different beliefs about luck. Right. There's actually, it's kind of interesting. There's these two main beliefs that psychologists have identified. And they sound kind of the same on the surface.

Starting point is 01:36:26 But when you dig into them, they're very different, that very different outcomes around it. Okay. So the first is like this belief in luck. Like do you believe in luck? Right? People ask, do you believe in luck? You believe in fate.

Starting point is 01:36:37 You believe in chance, whatever. Do you believe in luck? That's a different question than are you lucky? Like the Napoleon question. Yeah. Which is what they call personal belief in personal luck. So people usually have these two different, either have one of these two different frame of minds around this, okay?

Starting point is 01:36:54 These two different beliefs. If you believe in luck, just luck is just this force and it's almost like fatalism. Like luck is just a force acting on us and there is nothing we can do about it. Right. If that's what you believe, you usually, there's usually worse outcomes, less well-being, you're less happy. You don't have as much luck in your life, too. You just think luck is like kind of a cool force that's out of your control.

Starting point is 01:37:16 It's linked to neuroticism to some degree, even to. Again, essentially it's just fatalism. And we saw that throughout the Western mind, the history of the Western mind. There's a strong kind of strain of fatalism that runs through. that. The other belief, though, the belief in personal luck, like, are you personally lucky? People who believe that, like you and I do, actually tend to be happier people. They have more luck in their life. It's more hype, and it's more life satisfaction. And it's independent of any other personality traits as well. Okay. It's Wiseman's that positive expectation. It's that principle

Starting point is 01:37:53 number three, he says, right? It operates more as a stable self-concept rather than just this situational thing that happens to you again. And so I think if you can adopt that, where, you know, use that gratitude to widen your frame of reference and start seeing yourself as someone who is lucky, personally lucky, you can actually reap the benefits of this. It transfers, transforms into more of that, what you're talking about, where, you know, we just have this idea that luck is just something that happens to you versus something that luck is actually something that's a little bit within your control, something you can influence, at least. I mean, I don't have a whole lot of control on the outcome of it, but you can at least

Starting point is 01:38:32 influence the odds, like you're saying. So, yeah. I guess one way to think about it, this is kind of a variation of Rawls' bail of ignorance, is that if you think you were to live your life a thousand times, where on the continuum of outcomes do you think your current timeline is on? Right. Mine is like 998, I'm going to say. You really think so? think it's up there. I mean, just given given the starting point that I had and again, the people I saw around me who have very similar starting points who didn't wind up. Yeah. It went the other way. I'm up there. I like 90th percentile for sure of where I could have ended up, I think. I really do think that. Me too. So that's why I wouldn't draw that ball again. I wouldn't, I would not pull that

Starting point is 01:39:18 level again. No, no, no, no. Yeah. If I had the chance. But it's interesting because instead of like trading it for somebody else's life, a random person's life, this is like having a real, do on your own life. Right, right. Given the exact same circumstances that, you know, like that, right? Yeah. I don't think I would. No, I'm definitely up in the 99th percent.

Starting point is 01:39:37 Yeah. It's like there's some like stupidly outsized returns on some of my decisions. But then it's like, is that just because we can't imagine things better? Like it's easier to imagine things worse. Yeah, yeah. Sure. I can think about how I could do a lot of things better on the margins, but there's like, when I think about like, okay, what's the.

Starting point is 01:39:58 version of my life that's like 10x this life. It's extremely hard for me to think about that. Yeah. Yeah, I don't know. I guess I go there too. If there was a decision somewhere along the line that could have 10xed my current result, where would it have been? I can't think of anything. That's a hard one to come up with. Yeah. I mean, I don't know. I just see all the things that had to like, you know, like this job, for instance, Mark, like I applied twice to work with you actually. the first time I got an interview with you, but I wasn't a right fit for the job. Yeah, you got unlucky.

Starting point is 01:40:30 Thought that was unlucky at the time, right? I like how we both made this same joke. Good luck, bad luck. Who knows? Turned out to be great luck, actually, because then two years later, like this job came up, a version of this job came up. I was way better suited for it.

Starting point is 01:40:45 I was in way better position for it. I was in the middle of a PhD program and you're like, I need a researcher who knows psychology and neuroscience, all this kind of stuff. That turned out to be lucky. and then when you made the decision, could have been on a day, you just, you had a good lunch and you're like, I like this guy.

Starting point is 01:41:01 Like, there's so many things that go into this that I'm just like, no, I wouldn't roll that dice again. Yeah, yeah. I just wouldn't. Yeah. So I don't know. Yeah. I see myself as a personally lucky person, I guess, is what I'm saying.

Starting point is 01:41:12 And I, yeah, luck is a force in the grand scheme of things, but it comes down to it. I wonder what the proportion of people who see themselves as lucky to unlucky is. Yeah, I didn't see that, I guess. Yeah, I didn't see that in the research there. Yeah. If you're listening to this and you, in you,

Starting point is 01:41:25 And you genuinely believe yourself to be unlucky. Explain in the comments why. Yeah. Yeah. Because I don't mean a whole lot of people like that, I guess. Yeah. And is it heaven luck? Is it earth luck or is it human luck?

Starting point is 01:41:38 Because it's one thing that just make like some rational decisions and they kind of go against you. You know, it's like you go to school to be a software engineer and then the next year chat chitp t comes out. Like it's like that was a rational decision and just went against you. That is unlucky in a lot of ways. Okay. Actually, I think there probably are a fair amount of,

Starting point is 01:41:55 the people who do see themselves as unlucky because something I dug up as well is this connection between luck and anxiety. We talked about that like widening the aperture, widening your frame of reference. Anxiety does the opposite. And a lot of people have those are pretty anxious, right? What anxiety does is really narrows your focus on something. Obviously, like you're more vigilant when you're anxious. You're more focused on the bad things when you're anxious, right? And And this has the effect of you ending up, like you end up missing a lot of those opportunities that you would otherwise see if you had that wider frame of reference. And so I think there's a fair amount of people who probably do walk around thinking they're

Starting point is 01:42:37 quite unlucky because of that. If you're anxious about your life in general or something, and I notice this when I go through periods of anxiety too, I miss all sorts of things around me. I miss all sorts of opportunities. I don't engage with the world as much. It's interesting because if you think about anxiety, it is quite literally an expectation of misfortune. Yeah. Right?

Starting point is 01:43:00 So it's like when you're anxious, let's say you have to go on stage and publicly speak in front of hundreds of people and you're absolutely mortified beforehand. The thing you're mortified about is the absolute worst case scenario that is a one in a 10,000 chance of happening is that you go out there and you just bomb so hard. you have a panic attack or you puke in front of everybody. Like it just, it is so unlikely yet in your mind that is probably what you're expecting that to happen. Yeah. Yeah. This is explained actually in intentional control theory.

Starting point is 01:43:33 This was a theory back from the 2000s, but there's these two systems kind of operating in your mind. You have a goal directed system and then you have a stimulus driven system. Okay. When you're less anxious, you have a goal directed orientation, right? You're like, what am I trying to accomplish here? You're, again, wider aperture. You can see the goal.

Starting point is 01:43:53 You can see the forest for the trees. When you're anxious, though, it's that stimulus-driven system. You're thinking about the individual stimuli that you're talking about, puking and being, you know, embarrassed in front of everyone. So there's kind of like, yeah, neurological level of that. And there's two executive functions that we kind of, that go along with that too, like inhibition, the ability to filter out, like, irrelevant information in your environment. that's decreased under anxiety. And during anxiety, then you're vigilant

Starting point is 01:44:23 and you're looking for all those stimuli in your environment. I just made another connection here, which is that, you know, there's kind of a conventional wisdom of like, don't make choices out of fear. Right?

Starting point is 01:44:35 It's like, especially major life decisions, right? You shouldn't make a major decision because you're avoiding something you're afraid of. You should be making a major decision because you're excited about what you're stepping into.

Starting point is 01:44:46 I think the reason that's really good advice is that when you're afraid of something, you're very myopic and you're only focused on that one single variable. Yet when you are excited about something, your view of the future and what's possible is probably very expansive. And you've probably drawn a lot of different connections or seeing a lot of different opportunities. And you probably make a luckier decision. Yes. Yes. Because when you're avoiding the single thing out of fear, you're only accounting for that single variable. You're not accounting for the dozens and hundreds and millions of other variables. Right. Right. Yeah. So, yeah, there's that inhibition side. There's a shifting side to this where it's your ability to direct attention, flexibility between stimuli and tasks. So again, that's like if you have that wider aperture, you can do that.

Starting point is 01:45:34 You know, anxious, anxious people do measurably have a reduced ability to notice things in their environment. Again, they get that myopic. So it's so crazy, isn't it? Dude, my wife is like, it's a, it happens. Think about it when you're anxious. You get fixated. Yeah, yeah. And you do, you just get this tunnel vision and you can't see anything else around. Dude, my wife, so my wife is.

Starting point is 01:45:56 Yeah, very anxious person. Yeah. We were walking down the street, I think just a week ago. And we were on the other side of the street, there was like this. It was like a man in like a ballerina tutu with like a bright red wig. But like. full hairy chest going on carrying like a handbag a really expensive handbag and on roller skates and I'm like gawking at this person being like holy shit look at that and my wife is just like

Starting point is 01:46:28 do to do completely walks by it and I like leaned over I'm like did you see that and she's like what literally this happens with your with your vision yeah right when you are when you are anxious or you're stressed in any way, your vision literally narrows. Like your peripheral vision kind of gets quieted down in your brain. It literally narrows like this. So there's a, there's a physiological side to this too. That explains a lot about my marriage.

Starting point is 01:46:55 Yeah, right, right? She fixates on a few things about you too, huh? Yeah. Yeah. So another thing I found in the research, and it's not super great research, I'll say that, but there's some things that are kind of point.

Starting point is 01:47:11 towards this is just how much the environment actually matters. Yeah. Versus things like personality, okay? In kind of some of these preliminary studies, what they found is your personality, like traits, like we talked about in the change episode, all of those traits, they don't matter nearly as much as the environment that you put yourself in when it comes to opportunities in your life and luck in your life, right? So like one study, this was the digital environments, but you talked about this a little bit

Starting point is 01:47:40 with your blogging and stuff like that, there was this digital environment that you got into, and it was novel, and there was a lot of variation, a lot of serendipity involved with it, right? They did this where, and it's self-report stuff. So again, this is preliminary.

Starting point is 01:47:55 Yeah. But people who engaged in more high variance digital environments met more people online. They found more interesting content online. They learned more online. Then people kind of just went to the same ones that were lower variance environments. Yep.

Starting point is 01:48:13 I think this could easily translate into the real world, too. I mean, there's obviously an application for this in digital environments and online, even social media. But the point was, like, what they did is they measured all these people's personality traits, you know, gave them a personality test, measured all of them. Almost none of that predicted whether or not they found, like got lucky, had a serendipitous encounter, met new people. found interesting content, any of that. It was strictly almost the environment that they put themselves into. It's interesting because I do think this is important because I know one of the criticisms Richard Wiseman's work has gotten is people have said like, oh, you're just describing extroversion and openness to new experiences. Like that's not luck. That's just

Starting point is 01:48:58 personality, you know? So like, I do think this finding is very relevant to that because it's not it's behavior based. It's not necessarily personality. Sure. And extrovert is probably going to be better at having a large social network than a introverted person, but ultimately it's the behavior that drives opportunities. Right, right. And that behavior is choosing high variance environments. Yes. So again, go back to like my coffee shop example.

Starting point is 01:49:23 Instead of me sitting at home all day, every day and working from my laptop, I'll go out and, you know, bump into people. And sometimes it works and sometimes it doesn't. Or I'll go to that party that I decided not to go to. Or there's a bigger thing you can think about though here too. Like you talked about moving to New York. Yeah. That's a high variance environment versus if you're living out in rural Idaho or whatever, right? I think there's a lot of people, too, you could be the hardest working, most creative, talented person, and maybe you want to go be an actor.

Starting point is 01:49:55 But if you're not going to move out here to L.A. and you insist on living in rural Montana or whatever it is, I'm sorry, but that's just not going to happen. Dude, I just had this conversation with a guy I know who's a YouTube consultant. Yeah, yeah. He was a big YouTuber a number of years ago, kind of pivoted into consultancy, seemed to be doing great for a couple of years. But he lives on the other side of the world. Yeah. And he was here for VidCon a couple weeks ago. And I had a whole conversation with him.

Starting point is 01:50:23 I was like, dude, if you want to take the – because he's – it seems like he's kind of been a rough patch business-wise. And I was like, how often do you come out to L.A.? And he's like, wow, it's the first time I've been here in three years. And I'm like, pro. Like, you got to fish where the fish are. Like, you can't, you can't just expect everybody to come to you. Even though, like, that's a digital environment that he's operating in. So it seems like you can do everything remote.

Starting point is 01:50:48 Nope. Nope. No, you can't. Because it's, it's, and it was funny because we were at a local event here in Venice. And just in the hour that he and I were there together, we bumped into like three different people who knew us online and like had really interesting conversations with them. It's a very real thing. And I think especially for young people, this is such an important piece of advice. Like if you, whatever industry you want to go into, you should strongly consider physically moving yourself to the epicenter of that industry. Right. So if you want to be in finance, like you should go to London, New York. If you want to be in tech, like go to the Bay Area, especially if you're young, especially if you don't have other obligations or responsibilities to balance, putting, yourself in that high variance, high relevance environment to your goals, it's just going to open up so many random opportunities. It's funny, I invested in a company here, and I was talking to the

Starting point is 01:51:49 co-founders, and I asked them how they met each other, and they were like, oh, we were roommates in Palo Alto when we both moved there. And it was funny because they both moved there to work at other companies, and then they were roommates. And then after like a year, they're like, oh, we should just start our own company together. And it's like, that never happens unless you move to Palo Alto. That's a high variance environment there too. Yeah. Yeah. Your business partner, Raj.

Starting point is 01:52:11 Yes. Can you talk about how you met him? Meadow, meta, poker game. Which is meta, right there. Very super meta. Very, very meta. It's funny, he and I joke because that night, that night, I want a bunch of money and he lost a bunch of money. And, but we joke, we joke that it was actually the highest ROI poker game.

Starting point is 01:52:30 Right. He never played in his life. Yeah. Yeah. But yeah, just sat down next to him. I was, you know, looking to, you know, to get into AI for personal growth and development and had been already been talking to a number of startups about partnering with them or doing something with them. Sat down next to Raj, start chatting very casually. And one of the first things he says to me, he's like, oh, I've been building AI products for 10 years.

Starting point is 01:52:58 I've sold my first two companies. I'm thinking about getting into mental health. What are you working on? And I was like, oh, my God. okay. I don't, I'm not like a fate person. I don't really believe in that sort of thing, but wow. Yeah. Yeah, but it's like, sometimes it just slaps you in the face. And it's like, hey, moron, here it is. Here's your opportunity. Take it. Yeah. Okay. And there's, I think you can bring it down to earth too. If you're not one of those people who is going to move to New York or London or L.A. or whatever it is. Just like I was saying, go to the, go to the coffee shop or whatever. Just like last week I went, was watching one of the World Cup games with some friends. And some of my friends were like, oh, we're going to go grab a drink. And I was like, can I tag along, you know, until it went. And we ran into this guy I met 10 years ago. I haven't talked to him since or whatever and got caught up with him.

Starting point is 01:53:46 He's running and like a, he's importing teak wood now, like as a business, which he wasn't doing at the time. And he's like, now I got a source of teak wood. I have, right? Which is great. I'm a woodworker. It's actually an fortunate thing for me. I wouldn't have done that if I wouldn't have just decided, yeah, I'll go grab a drink with you guys, you know. So stuff like that. Just like increasing your surface area. If you're like, oh, my life is boring and, you know, all of this. Just stuff like that. Just simple stuff like that.

Starting point is 01:54:11 What's interesting is that this is something that companies have understood for a long time. So if you look at like corporate floor plans where they put different, like, there's all sorts of stories about like Pixar and Apple and how they like lay out their floor plans and how they put the engineers next to the artists and make sure that they all they have to talk to each other. And it just like they they measure this and they see real out like increased outputs in terms of creativity and innovative ideas. Google did something super cool in their early days which is they,

Starting point is 01:54:44 I'm trying to remember what they called it. But in their early days, their entire engineering team had one day a week to work on whatever they had. Yeah, yeah. It was you had to come in. You had to work on something. but it could be any project you wanted

Starting point is 01:55:03 and some of Google's most valuable assets came out of like Google Maps came out of that and Gmail did you. Gmail came out of that like a bunch of kind of the early infrastructure of the internet came out of just Google engineers screwing around on a Friday afternoon because Google understood these are brilliant creative people if we give them opportunity to explore their interests they're going to find so many things that we would never think of and they did. Okay, yeah. So, I mean, I think the point, you know, like I said, I've kind of had a lot of, like, really good earth luck, just in general, like the people around me and everything. I felt like I didn't do a whole lot to influence that. Later on in my life I did, but early on I had just good earth luck. But the whole point of this is that, like, you can't design the city that you live in or whatever, but you can choose the city that you live in, right? There is some influence to this. Whereas heaven luck, we don't have any control over it.

Starting point is 01:55:57 Correct. Earth luck, we can influence it to some degree. The way I think about it is Earth luck is, you know, heaven luck is the super macro stuff that we have zero control over. Human luck is like the micro stuff, the day-to-day decisions, the calculations, you know, it's like should I buy a house or not? Should I get a new car or not? Like all of these things that you can kind of sit down and calculate the expected value of.

Starting point is 01:56:26 Earth luck to me is like the periodic high leverage decisions that alter thousands of other decisions. So it's where you decide to live, what city you decide to live, what industry you decide to go into, what partner you choose to marry. Like this is something that you don't think of as luck, right? But it's like if you choose to marry a partner who is very emotionally unstable, is like constantly in crises, makes lots of bad decisions. Terrible with their money. Terrible with their money. You know, it's like unpredictable, volatile. Guess what? Look at the odds. You're probably going to create a lot of bad luck for yourself because you're choosing to share a life with a person who creates all sorts of downside opportunities. Whereas

Starting point is 01:57:17 if you marry somebody who's like extremely reliable, makes really good decisions, is a great communicator has a great social network is very good at making new friends and finding new opportunities you are increasing your earth luck by being with that person and sharing your life with that person so it's like these mega decisions that create all sorts of downstream effects in other areas of your life and it it can be easy to look at a situation and be like well that guy just got lucky because his wife's super smart and it's like no he's not lucky he fucking chose her, right? Like, there's a certain understanding that, like, a good partner is going to make all the other areas of your life better. Out of the three lucks, I think Earth's luck is the hardest

Starting point is 01:58:02 to kind of conceptualize, but I also think it's the most important. I think it is what creates the greatest outcomes for us in our lives. Heaven luck, you're really just trying to make peace with it, find a way to feel good about it. Human luck, you're just trying to make rational decisions and kind of be objective about the situation you're in. But Earth's luck is, like, it feels like Earth Luck is where the biggest gains come from, the biggest wins come from. And that kind of come back to the poker analogy, you know, if heaven luck is the cards you're dealt, and human luck is the way you choose to play those cards,

Starting point is 01:58:41 Earth Luck is the table that you choose to play at, or it's the game you choose to enter. And some games have far more players and far more cards being dealt than others. Some games have more opportunities and more variants than others. And, you know, there's that old saying it's like play stupid games, win stupid prizes, right? Like, play good games, win good prizes. Like, game selection is such a huge part of life. And finding the right game to situate yourself in that matches your talents, that fits your goals, that gives you more surface.

Starting point is 01:59:16 area for good things to happen is just so key. Yeah, I think what you're what you're kind of getting at is about power laws, what we call power laws. Yes. Okay. And power laws kind of, they determine basically the ceiling of your outcome. Right. So yeah, you pick the right table. You pick the right game. Some tables have bigger pots. Yes. Whether you win that or not is kind of how you play the game and the human luck, right? But which tables you sit down at really do matter. Yeah. Right. And we've kind of alluded to this already, the career you pick and all of that, right? there are the what I would call power law environments, right? So let's just take an example.

Starting point is 01:59:54 Let's say you want to be a dentist, okay? And let's say you want to be the best dentist in the world. How much more are you earning as the best dentist in the world compared to the 20th best dentist in the world? Or the second best dentist. Or even the average dentist, right? Maybe twice as much. I don't know, three times as much. Maybe.

Starting point is 02:00:12 Maybe. Right. So my point, though, like dentistry, accounting. manual labor, construction jobs, whatever, those have a ceiling. Those are the tables where you sit down and like the pot is only so big, right? And it's not going to get any bigger than that. Yeah, the success curve is pretty flat. Pretty flat there, right? So these are the industries where like effort and skill actually do compound pretty reliably. It just limits out pretty early, right? There's no real single in any one of these industries or tables that you sit at that could wildly

Starting point is 02:00:45 give you wild success in any one of these, right? Compare that to something like entrepreneurship or the publishing world or technology, one of these where it's like there are wild, wild gains to be had from very, very minor differences in really long. Quality or, yeah, results. Yeah, in result. You can be one percent better at like product design and probably make 100 times more money. Right. If you're a software company. Right. Let's just, I don't know, randomly pick the

Starting point is 02:01:19 publishing industry. Why would you pick that one, Drew? So I'm sitting across from someone who's sold millions of millions of books, right? How would you characterize that in terms of your earth luck that you've had? See, it's funny because the success, the outcome has been so disproportionate, it's actually fucked with my head. Yeah, right? Like, subtle, the subtle art not giving a fuck, I think if you look at kind of like the median self-help book, the subtle art not giving me a fuck has probably produced 20,000 times the result. Yeah. Right? Like a two, what is that? Two million percent increased result. It's not 20,000 times better than the median. So it's probably, it's maybe twice as good as the median self-help book. So that curve, that success curve, is just insanely steep.

Starting point is 02:02:13 And you see this in the publishing industry. You see this in media in general and entertainment in general. That it's like the 0.001% generates like 90% of the money. And coming back to the game analogy, again, it's like being aware of the game that you're signing up to play. Right? like I originally wanted to be a musician. One of the things that you have to be very sober about if you want to pursue music is that you are signing up for a game that out of a thousand people, 999 of them are not really going to make

Starting point is 02:02:49 much money at all. And then that one person out of a thousand is going to be incredibly successful and have a hell of a career. Right. So that's the game you're signing up for. And it's important to know and understand that curve because any sort of luck that you stumble into in a game like that, you're going to have like a massively outsized upside. Then again, say like if you go into a county or dentistry or whatever, like a lucky

Starting point is 02:03:14 dentist is probably not that much better off than an unlucky dentist, whereas a lucky musician is much better off than an unlucky musician. Right. Right. And we look at people in those industries in those like asymmetric industries where it's not a bell curve. It's like a lot of, a few people make all of the returns in it or get on the success. in whatever way that's measured, right? Yeah. We look, a lot of us from the outside look in and say, oh, they got lucky. And yes, they did.

Starting point is 02:03:40 They got lucky. But they also were playing a game in which the luck had outsized effects. That had outsized returns on it. And so that's the earth luck aspect of this, right? Choosing that game and choosing that realm to play in. I guess it's like that can make all the difference. Yeah. Yeah, it's interesting not to keep coming back to Napoleon.

Starting point is 02:04:01 I can't agree to pull you back. Okay. All right. I'm keeping you on a short leash on this one, right? Napoleon, he's my man. I'm a little obsessed with the guy right now. The interesting thing about Napoleon that's very related to this, he didn't become emperor with some elaborate coup attempt.

Starting point is 02:04:18 Like, he didn't have, like, thousands of armed forces lined up, and he didn't, like, mastermind and plan this massive thing. It was relatively spontaneous. What he did is he put himself, continually put himself in a political position where he was always there as an appealing alternative to whatever kind of political upheaval the French Revolution was going through. And sure enough, eventually an opportunity arose, like a window opened and he was there ready to take it. But he wasn't sitting there trying to pry a window open with like storming Paris with thousands of troops. Power law situation. Yeah. Upside is emperor

Starting point is 02:05:01 of France. All right, I'm done. Okay. I'll leave it to rest now. So there are these power laws and environments, but there's also like power law moments throughout history too, right? And this kind of, this is where heaven luck and earth luck kind of meet each other a little bit. So, you know, for example, like everybody says, you know, if you wanted to be Bill Gates or Steve Jobs or whatever, then be born when Bill Gates and Steve Jobs were born. Mid-50s was like the time. If you wanted to hit the computing revolution, that was the perfect time to be born. Malcolm Gladwell talks about this in his books, right?

Starting point is 02:05:35 There's like a heaven luck aspect to that. But then they were, they played the game. They caught that revolution at the right time and they were in that arena. So you can take that, you know, from like 75 to 1875 to 1885, that was about like if you were in the peak of your career, prime beginning of your career, that was a great time to be. And that's exactly where they were. Yeah. Right. Another one would have been like social networking, roughly 2004 to 2010-ish. something like that. That's when you and I were coming up. You like built your whole career really on social media. Right? So like you hit the perfect time for that. And really it was Facebook. Try to build anything on Facebook now and good luck, right? Like, yeah. What's fascinating too is, is, so if you look at Mark Zuckerberg. Yeah. It's the stuff he was building right before he built Facebook, it's actually pretty crazy. So like the project he built in high school with one of his friends, it was essentially Spotify.

Starting point is 02:06:32 Oh, yeah. It was just too early. Like the computing power hadn't caught up yet, and it wasn't really scalable across the internet. And then he built something else even before that that was like, that was also like has gone on to become like a multi-billion dollar company. And he was like building the stuff for fun as a teenager. And it just so happened that like he was too early on a lot of these concepts and ideas.

Starting point is 02:06:56 And then Facebook was the one that he like hit perfectly, hit the right moment perfectly. So on the one hand, you could look at somebody like Zuckerberg and be like, that dude got really lucky, built the right thing at the right time. And yeah, sure, he did. But he was also putting himself in those positions repeatedly knowing and understanding that like, okay, if I keep building these amazing software products, eventually one's going to catch at the right moment.

Starting point is 02:07:21 And it'll take off from there. I think of it as like, and maybe this is because I like surfing, but like I think of it is like waves. Waves come. And even if you miss one, there's going to be another one. And so in one sense, it is heaven luck in that like, sure, there's only one computing revolution or there's only one social media revolution. But there's always another wave coming, you know, on the horizon. And if you just wait and put yourself, try to put yourself in the right position, you can catch it and write it. Right. Such as like right now with AI, right? Yeah. Totally. Here's the next. wave. Totally. And, and I mean, you've, you jumped on that too pretty early on and I think that'll be,

Starting point is 02:08:04 we'll see how that plays out. But I mean, I don't think there's anybody right now who denies that that's, this is the wave now. For sure. And the thing about trying to catch waves like this is that there's very little downside to try it. Yes. Yeah. Right. Oh yeah. Worst case scenario, you try to build Facebook before the world's ready for Facebook. And so you just, you know, you wasted a year of your life or something working on something. Um, that's like not compared to the upside of building Facebook. That's a very small downside. So you lose very little, but you stand the gain just an absurd amount.

Starting point is 02:08:41 And again, this is, it's, it's game selection, you know, it's like knowing which game to insert yourself into. Yeah. I want to point out just a little bit of the heaven luck involved in this though too. So Zuckerberg, born in 1984, same as us. He's like a month older than I am, I think, like that. let's see, Sam Altman, CEO of Open AI. I think he was born in 85 or 86. Dario Amadee, head of Anthropic. He was born in 1983.

Starting point is 02:09:08 Okay. So we're in one of those windows again, I think. We're going to see that again. Yeah? Yeah, which is pretty interesting. And there'll be another one after us. Yep. 10 years from now, there will be another one.

Starting point is 02:09:16 There absolutely will be. Yeah. So I'm not trying to say, like, oh, if you weren't born in one of these years, and you're screwed. No, not at all. The next wave will come. If only they were as lucky as us, true. I know, right.

Starting point is 02:09:26 There was, I mean, you would think about it, though, too. Yeah. Born in the mid-80s, like, we grew up without the internet. Yeah. It came at the right time where it kind of like adolescence. I was in, like, it was even later for me because I was in upode-up, nowhere town that didn't get the internet for a while, you know? So I got delayed by a couple of years even more, which was probably a good thing. I just think our generation was incredibly lucky.

Starting point is 02:09:47 Oh, man. Oh, you think so? 90s, man. Oh, the 90s, okay. The 90s. I don't know if you're going to say like screamo punk or something. I don't know. It was, absolutely was.

Starting point is 02:09:58 There was. There's a lot of other ways we're lucky, though, too. Just not growing up with devices glued to our face. Being free-range kids and all that. Every generation has their good luck. I think that was ours. And, yeah, we'll see how that plays out. Okay.

Starting point is 02:10:17 Yeah. Heaven luck sets the context in the container, I guess, in which we live our life make our decisions. Earth luck is the way we position ourselves in our life. And there are certain advantageous places to position yourself versus others. Heaven luck, we don't control. Earth luck, we have some control, but it's like periodic, large-scale decision-making. In the next chapter, we're going to get into human luck, which is the day-to-day probabilistic

Starting point is 02:10:53 understanding of like, is this going to work? Is this a good decision? How do I set myself up to make sure I'm making a good decision and not screwing myself over? This is when we get into actually understanding how much failure is to be expected, how much is normal, and how to best proceed in situations that are largely ambiguous and unclear. And so we'll be coming back with special guest Annie Duke, who's a former professional poker player and a PhD in cognitive science and decision-making, and she's going to help us understand

Starting point is 02:11:29 all of the amazing ways that we can help maximize our luck and our day-to-day decision-making. First, a quick word from our sponsors. This episode is brought to you by Shopify. You know the friend who's been about to launch something for like three years? Yeah, don't be that guy. The whole lesson of human luck

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Starting point is 02:12:33 With Shopify, nothing stands between your idea and a real business. So go make it once. Start your free trial at Shopify.com slash solved. Start your free trial at Shopify.com slash solved. And we're back. Welcome back to solved. For this next chapter, I am joined by a special guest, Annie Duke. is here. Annie Duke is a former professional poker player, an author, a business consultants,

Starting point is 02:13:00 an educator, and a mother of four. Annie Duke has won multiple World Series of poker bracelets and over $4 million worth of winnings throughout her career. More importantly, Annie Duke is an academic and an educator. She has a PhD in cognitive psychology from UPenn, where she specializes in decision science. She is a three-time author of Thinking in Betts, How to Decide and Quit, when to know when to walk away. And today she is here with me to help break down how to think about luck in our day-to-day lives and make better decisions in the face of it.

Starting point is 02:13:32 So Annie, welcome to the show. It's great to have you here. And my first question for you is what Napoleon asked all of his generals, which is, how lucky are you? Oh, how lucky am I? Yes. I'm going to give you a slightly unexpected answer. Okay.

Starting point is 02:13:48 I assume when you're asking me how lucky I am, you're asking me if on average I've had good luck or bad luck. But I actually think of luck as a relatively neutral term. Luck is just a force that happens upon you, basically. Do I have a better than average outcome than expectation given what my possible outcomes were when I was born? I would guess yes. Okay. Right?

Starting point is 02:14:15 Yeah. I would say, I would say yeah. I do. You're in your general of the army. aboard. Thank you. Let me set some context here. So this episode, we're talking about luck, and we're actually talking about it through, there's an ancient Chinese framework called San Sai. And the Chinese believe that there are three types of luck. They called it heaven luck, earth luck, and human luck. So heaven luck is the luck that you're born at two, right? It's the country

Starting point is 02:14:43 you're born in. It's the year you're born. It's who your parents are, all those things. It's the luck that's completely outside of your control. The earth luck is the environment. The that you place yourself in. So some environments are luckier than others, right? Like you can, the poker analogy is, is table selection, right? Like, they're better and worse tables to play at in terms of, like, increasing your chances of winning.

Starting point is 02:15:06 Okay. Right? So, like, the city you live in is a way to increase your earth luck. You can put yourself in an environment where good things are more likely to happen. And then human luck, which is what we're going to talk about today, is about navigating the probabilities of decision making, right? It's like there's always uncertainty around anything you choose to do.

Starting point is 02:15:24 So how do you develop an awareness and a consciousness of that uncertainty? And then how do you make good decisions in spite of it? Okay. So can I just take a second to like unpack those three things? Yes. I would love that. Okay. So I love that.

Starting point is 02:15:38 That's a great sort of three buckets to put things in. So heaven luck, no quibble with, agree. And actually I was going to say, there's sort of two ways that. I would think about in the sort of colloquial sense, am I lucky? It's not just am I sort of at the right tail of my possible outcomes, right, that were available to me. But it's also, I was lucky with all sorts of circumstances of my birth. Right. So I always think about like, what if I had been born in 1600? Yes. Right. I would have been property. Yes. So that would have been bad.

Starting point is 02:16:18 And your talents would have been wasted. Right, exactly. Okay, so that's the heaven luck. So agree completely. I think that we really need to focus on that in terms of how we understand how people's lives turns out, right? What environment you put yourself in means that you're changing the distribution of outcomes. That actually doesn't have to do with luck, right? So any environment that you choose has a different distribution of outcomes that are associated with it. That's true of like what city you choose to live in or what career you choose, what mate you. you choose or partner, that's going to all have like a different distribution of outcomes that are associated with it. That's actually under the skill category, right? So when we think about it, there's only two things that are going to determine how your life turns out. One is luck. We can't control that. But that's like the heaven luck. But we can think about heaven luck in the same way. Heaven is like you're put on earth, which is like this environment and you're born into a certain environment, right? But that's true of any environment that you end up with it. That's

Starting point is 02:17:23 really like Kevin Luck. The environments you end up with, though, that's the quality of the decisions you make. And the quality of the decisions you make is the other thing that determines how your life turns out, because those decisions change the distribution of possible outcomes that are available to you. If you make bad decisions, they're going to make it more likely that you end up with bad outcomes. If you make good decisions, it's going to be more likely that you end up with good outcomes, but none of that is a guarantee because, you know, we can go through a green light and get in an accident. And I've run some red lights accidentally, of course, but I've run, I've run some red lights and gotten through just fine. The way I think about it is there's kind of

Starting point is 02:18:04 these macro decisions that once made, they kind of determine the context of hundreds or thousands of other micro decisions, right? So it's like who you marry, right? Like that is kind of a macro level decision that is going to set up the context for hundreds, thousands of other decisions that happened throughout your life? Yeah. So now we can take that concept of heaven luck and say, well, that's really what Earth luck is, right? It's just that we're aware that we hopefully are aware that we're making the choice about what environment that we want to be in. And depending on the environment we're in, there's going to be a different, different probability that sort of good things happen to us and bad things happen to us. And what we're trying to do with our decision,

Starting point is 02:18:46 is improve that distribution in our favor. Right. So speaking of which, let's get into thinking in bets. Okay. So why should people think about their choices in terms of bets? Because they are. Explain that. Okay.

Starting point is 02:19:02 So whether you know it or not, every decision that you've ever made has been a bet. So we can take this like into a simple like poker example, right? Here I'm going to use money or chips because that's what you bet in poker. if I have a hand, I could choose to play that hand or not, right? If I fold, I'm making a bet that that would have not been a good choice for me, that I would have moved away from my goals. But maybe that's not true. Maybe it's not, right?

Starting point is 02:19:29 But I have to make my best guess of that. It's called the forecast. And if I play the hand, I'm making a bet that this is going to be what we call positive expected value. In other words, it's just going to have a positive return on the money that I'm going to put into the pot. And I'm saying, I think this is a better way for me to invest my money than other choices that I could make, which includes choices that I might make in the future. So if I invest in this hand, that may take money away from my ability to invest in hands in the future, right? Which kind of gets at the point you were making before of like when you choose to marry someone, then there's all sorts of things that happen after that, right? So there's some path dependency to how that's going to affect your future as well. So when I make a, a choice like I choose to raise, what I'm saying is that my forecast is that this is going to

Starting point is 02:20:19 increase the chances that I make money on this hand, that I have good things happen to me. Now we can take that into who do I marry, right? This is a bet as well. I have a set of values and people have different things that they want to get out of marriage. So whatever your values are, you've sampled the world, right? So you have some sort of model of what you think is going to be a good partner for you. You know what your values are. And at some point, you're going to have to make a choice. And that's going to be a bet. I'm going to bet that this person is going to help me to achieve the things that I want out of this marriage more than other options that I might have available to me now or in the future. Because if I marry this person, that stops me from marrying

Starting point is 02:21:04 somebody else later. And so it's always this sort of comparison between options and which thing is the best thing for me to invest in. But there's a hitch. And this is the hitch that's the big problem, is that when we're making those bats, it's under the influence of uncertainty. Like, it's highly uncertain for two reasons. One is we're not omniscient. Yeah. Bummer. And then the second thing is just luck. So I could be all-knowing. Yes. Right. So imagine I'm omniscient now. I'm an all-knowing being. And I do know that this is the best option in terms of the chances that I'm going to have a good outcome. I still have the word chance in there because that all that means is that that outcome is associated with a set of options. Those options are going to occur at some probability.

Starting point is 02:21:52 And when I sort of calculate the payoff across that set of possibilities, that has the highest return than other options I might choose. But it doesn't guarantee I'm not going to get a bad outcome. That's the influence of luck. And that's why these decisions are really bad. Yeah. Kind of in sum, it's no decision in life has ever 100%. It's also never 0%. It's always some probability in the middle.

Starting point is 02:22:17 And that probability is often opaque to us due to lack of information and also just chance. Right. And so our decision making is very much determined by, accumulating as much information as possible and also, I guess, rationally interpreting that information when making a decision, but also understanding that, like, nothing is a sure thing. There's always a chance something could go wrong. I think there's kind of two ways that sort of that last bit can go wrong.

Starting point is 02:22:53 There's two directions that can go. If you acknowledge that the world is probabilistic, right, that whatever you choose, there's going to be some. some distribution of outcomes. They're going to occur it, you know, with some probability. And you sort of, you know, you understand that you can't know. Like, first of all, that that distribution is there and you can't control which outcome you actually observe.

Starting point is 02:23:16 Like, if I'm 95% to win a hand of poker, that means 5% of time I'm going to lose. Like, by definition. And the problem is, I don't know which that 5% is. Could it be this time that I'm playing? Or is it going to be the next time or the time after that? I just know that if I play that hand 100 times, 95% of the time I'll win and five times, you know, five times I'm going to lose. And I just don't know.

Starting point is 02:23:41 So that's like a very unsettling fact, I think, for people in general, like cognitively for us to sort of wrap our heads around this idea that like we can't know what's going to occur on the next time. On top of that, what we sort of realize is because we don't have a lot of information, we don't even know what the probability distribution looks like. We're making some sort of forecast of that. We're making a guess at that. I sort of see that there's two reactions that happened to that.

Starting point is 02:24:11 Reaction number one is actually being way overconfident. Like thinking that you know a lot more about what could happen in the future than you actually do. Right. And you see this all the time with people where they're just so sure that if they make a certain decision that it's going to work out well, that they're constantly surprised by these bad outcomes, right? So something bad happens and they're just like so surprised by it. And then they say, oh, so unlucky. Yeah.

Starting point is 02:24:40 It's like not really. Like five percent is going to happen five percent of the time. Like the problem is that they just way overestimated. Right. Like they had way too much certainty about the way that the world was going to work. So that's one reaction to it is basically to turn away from the uncertainty and say, I know. And I think that's a very common thing that you see in people.

Starting point is 02:25:04 Right. So the other thing that happens is people are like, well, I can't know so I'm just going to go with my gut. Yeah, yeah. Right. Like there's no way to know. So whatever. I'm just going to wing it. And that one is an equally bad mistake.

Starting point is 02:25:18 Like overselling and then just going, well, whatever, I'm just going to go with my gut, those are both going to get you into a very bad place because you want to land somewhere in the middle, which is acknowledging the uncertainty, but being very very. careful to at least try to make your best guess about what the outcomes are that might be associated with a choice that you might make and what the probability of those things occurring is because here's the thing and this kind of goes back to like decisions are just bets you're doing it anyway yeah somewhere in your mind you have to be making these types of calculations whether it's explicit or not whether you realize it's happening or not because when you choose

Starting point is 02:25:56 to get married to somebody somewhere in there you're saying I think this is the best match for me compared to other people that I might be seeing. And I can imagine the different outcomes that might come from this. And I think I'm more likely to be happy with them. Or like in the simplest sense, right? When you're trying to decide when you're supposed to leave the house to get somewhere, you have to be making an estimate of how long it's going to take you to get there. Number one. Number two, how bad it is if you're late. So it's funny because I was actually going to use this example because this morning I came here late. And, and, okay, let's talk about it. And I was, it's funny because I was thinking about it this morning in terms of bets, right?

Starting point is 02:26:33 So it's, I, I had a lot of work to catch up on this morning. Yeah. And I kind of sat there and I was like, okay, I could leave 10, 15 minutes late. Probably nothing bad is going to happen. Maybe I raise my chance of getting a ticket or getting an accident by like 1%. Yeah. But I also get that extra 15 minutes to prep and to get some work done and everything. And so there's like this, this cost benefit analysis that kind of goes on your head.

Starting point is 02:26:58 But it's, our mind. don't seem like very defaulted to think in this manner. No. Right? Because it's in my head, it's immediately like, well, I leave late all the time and I drive fast all the time. So I'll be fine. I was fine every other time.

Starting point is 02:27:13 So I'll be fine this time too, right? Which is probabilistically not true. Like it's if I'm going to, if I'm going to drive recklessly every time I leave the house statistically at some point, I'm going to get in an accident. Yes, the risk of crew. Yeah. That is true. Yes.

Starting point is 02:27:29 The traffic example is such a good example. So this is what I would ask you. This is what I'm saying, like, how much risk can you afford? Like, imagine that you were making that same decision this morning. And what you were talking about, by the way, is an opportunity cost problem. Yes. Right? So if you choose to leave where you're going to get here on time, you lose the opportunity

Starting point is 02:27:47 and the gains that might come from the work that you wanted to catch up on. Right? So this is like, these are the types of tradeoffs that we have to make all the time. Imagine you were in a situation, though, where the thing you were going to, Like, if you were late, it was the end of the world. Yeah. When would you have left? Like hours earlier.

Starting point is 02:28:06 Right. So this is kind of what I'm saying about, like, we don't realize that this is the way that all decisions work. But I think this traffic example is a good way to get people to think that under the hood, this is what's happening. Is you're saying, look, in my experience, this is how long it takes me to get there. And there's some sort of average in a distance. around that average, right? So there's like your fastest day and your slowest day when there's an accident on the 10. Right. Right. It's super annoying, but whatever. So to tie this back to luck, I think what a lot of people experience is bad luck is say they overestimate their ability to get

Starting point is 02:28:48 to LAX and get through TSA. It's all backed up. There's something going on. That flight that is actually super important, they do miss, and they say, ah, this was such bad luck without realizing that there actually was a probability distribution of like all of their behaviors that they chose up until that point that they just weren't consciously thinking through. This is where like we just need to sort of separate out like sort of colloquially how we think about luck versus the way that say in an academic sense, you might think about this. idea of luck. So two things could be true. One is you would treat something to bad luck that was actually bad decision making. That's what you just described. Yeah. Right. So if you really can't miss

Starting point is 02:29:35 and you leave at the average time, right, for travel, hey, if you miss your flight, that's not really bad luck in that sense. Like you made a decision that where, you know, some percentage of the time that was actually a percentage that you couldn't tolerate, you were actually going to miss that flight, right? So I would call that bad decision making that you're actually attributing to luck, right? But you could lead lots and lots of time. And some crazy thing could happen. Like, I think I remember one time, like I left a ton of time to get somewhere because I was getting my son to a football game. This was in L.A. And the presidential motorcade, I mean, it would have even faster to walk.

Starting point is 02:30:22 Yeah. Right. And so obviously, like, we didn't, we were late and whatever, right? So I made a reasonable decision in this thing that was like completely unknowable to me, right? Like, at that time, there was no way for me to know that, that this was going to occur and it was going to be like right in my way. And then it didn't matter what date I had in terms of how long it took me to get there. Like, I just wasn't going to get there, right?

Starting point is 02:30:46 Colloquially speaking, we would call that bad luck, right? Because I made a good decision. Right. I left enough time. I thought about the distribution and I was at a good end of the scale for what my values were that day and how much risk I could tolerate. And then the president decided to, I think this was like in 2009 or something like that, right? Like the president just decided to screw me up. Okay. Thanks, Obama. Thanks, Obama. Right. So let's call that in the colloquial sense bad luck. But if we step away from like, well, what really is luck? Remember, it's just a force that acts upon you. I would just call that. luck. Like there's volatility around anything that you do. And sometimes you might be at the very, very far left tail of bad outcomes. Right. That's just like way, way, way, way out at the tail. And it's just in the mix. And here's the thing is that I think, I really truly believe this, that you live a happier life if you stop putting the word bad and good on the word luck.

Starting point is 02:31:48 It's just variance. It's just variance. And not. not only do I think you're happier because you're not sitting there thinking like, whoa is me, like look at this bad luck, like da-da-da-da. You know, I think that when you sort of get caught up in this sort of bad luck thing, you know, you're sort of, you know, you're like droopy drawers. You're like, why me? Why me? What did I do to deserve this?

Starting point is 02:32:10 And I don't think that's a particularly happy way to live. And if you start thinking that the good luck is going to continue to come, that's going to cause you to make. some pretty bad decisions going forward. So there's kind of two reasons that I think that it's really way better for your life to get out of this sort of good and bad thing when it comes to luck. Reason number one is that I actually don't think it's possible, even if you accepted the idea of good and bad luck, to know in the moment whether that was good or bad luck. Because I think that you need that to develop over time because there's this path issue, right, as to whether that was

Starting point is 02:32:46 good or bad luck. I'll give you an example actually from my own life of this problem. So I At the end of my first time in graduate school, because my first time in graduate school, I did not actually get my PhD. I had done five years. So when people leave graduate school, it's usually around their qualifying exams. Otherwise, they're called like major area exams, right? So this is when you're showing enough expertise that they say to you, okay, we're going to allow you to now go and pursue your doctorate.

Starting point is 02:33:12 It usually occurs like two and a half, three years in. It's a really big hurdle. And a lot of people leave at that point. I did not. I stayed. And I actually did the full five years and I had my dissertation research done and I was on the job market. I already had job talks lined up. Right. So like I'm really far down the road. But I've been suffering for about the last year of graduate school with a chronic illness that then became really, really acute. And I landed in the hospital actually for a couple of weeks. So I had to

Starting point is 02:33:49 cancel all my job talks and pull myself off the job market. Now you can imagine at the time, I was like, felt like this was really bad luck. I was very like, woe is me. This is so terrible. Why does this happen to me? Why is this happening to me? Right. Like, you know, honestly, like in retrospect, I don't think was particularly helpful, but also I don't think it was bad luck in retrospect. So I then leave graduate school. I take time off. So I'm going to now take a year off and go back out on the job market the next year. And I had been there on a fellowship. And as I told you before, my dad was a school teacher and my mom didn't work. So as you can imagine, nobody was like, here's a bunch of money while you recuperate. And when you leave graduate school, NSF says, oh, by the way,

Starting point is 02:34:34 your stipends gone. Yeah. Okay. So now I have no money. So that's actually why I started playing poker because I wanted to do something that was like, okay, it's not restarting a new career, at least I didn't think so at the time. It's very flexible hours because they didn't feel very well. So committing to a nine to five would have been really hard. Right. Right. And so it kind of like tick the boxes and then like, okay, I'll just do this for a while and then I can leave and I'll go back to graduate school and I'll go back out on the job market next year. And obviously I started playing poker and I kept playing poker. And I didn't go back to graduate school for quite a while, actually, for a couple decades to go finish my PhD.

Starting point is 02:35:16 But like, in retrospect, if we're going to use the word good or bad, wasn't that good luck. Because look what happened, right? Like, I became a professional poker player before it was ever on television. You know, by 1999, I was the winningest woman in the game. I won World Series of poker bracelets and the tournament of champions. and like then all of a sudden in 2002 I was on TV. And then we could even take it further, which is ending up on TV is what got businesses to pay attention to me.

Starting point is 02:35:44 And then they asked me to get in touch with them and like come speak to them. And they didn't know necessarily I had the background in cognitive psychology. So I started merging that together. And then I started building this business of going giving talks at the intersection of poker and cognitive psychology. And then that allowed me to develop a consulting business where now I consult mainly in finance, but also for startups in those two worlds because the finance people I work with are inventors.

Starting point is 02:36:09 So that obviously is a reasonable crossover. I got back to teaching, which I absolutely love. I would have never had the audience for the books that I wrote had I not been on television. I would just been another academic writing a book, right? But now I'm like a poker player writing a book. So look what that did. And so on so forth, right? So the thing is this thing that I was wallowing in, wallowing at the time,

Starting point is 02:36:34 about my bad luck and why does this happen to me and so and so forth. You know, with the passage of time, I would completely re-judge that. Yeah. So why not just not judge it at all? Wouldn't that be happier? Yeah. So you have this concept of resulting, right? Yeah.

Starting point is 02:36:51 It makes sense that if everything is kind of a probabilistic distribution, then you can't really judge the quality of a decision based on the quality of the result. Right. But the point that you raise with that. story is that like what is the result right like you can go and redraw the goalposts 20 different times over 20 years and define a different result as the result of that decision and you know one of the things I've written before is that um is the concept of deserve is like itself often just counter counterproductive yeah for almost any kind of conversation um and I think it's for a similar reason

Starting point is 02:37:34 Like it's just you don't know, do you deserve good things to happen to you? Like, do I deserve good or bad things to happen? I don't know. I don't know. You know what? So that's interesting. So two things there is that now I have to go off and think more deeply about what is the result. Yeah. Not something I have written about and now you have my mind turning. So now I'm going to be distracted because that's such a good point. So I'm going to, I'm going to go mold that over now. But I think you're so. like right in the zone there with that idea of deserve because when you're judging something is bad luck, what are you saying? I didn't deserve that. Exactly. Right. Yes. So I think that's like

Starting point is 02:38:14 such a deep point is that when we get into that idea of like what what do we deserve to have happen to us, right? Like it's, I just think it's like a very, a very unhappy way to live. It is and it's and it's it's unhappy regardless of which direction you go. So if you are a person who believes everything good should happen to you, you deserve everything good in the world, that's not going to lead you to a good place. No, you're going to be sad, a lot. You should be very disappointed. But also, if you're a person who believes you don't deserve any good things to happen to you,

Starting point is 02:38:46 that's also going to take you to a very dark place. So it's almost like the only safe place to be is to just be like, I don't know what I deserve. I think that's exactly right. And obviously, if you feel like only bad things are going to happen to, it will be a self-fulfilling prophecy anyway. That gets you into the, why should I try? Yeah. Here's one of the problems is that if you sort of automatically say, oh, that was such bad luck,

Starting point is 02:39:07 you're not going to go back and look at what the quality of your decision was. If you say that was good luck, you're also not going to go back and look at what the quality of your decision was. Both of those are true. So once we start to sort of make this judgment, right? And instead we should be asking, well, what was the influence of luck neutral? What was the influence of luck? And what was the quality of the decision that I made?

Starting point is 02:39:29 and look at sort of look at that as a question. Yeah. Right? Because here's the problem. Just saying I got bad luck isn't going to make your life better in the future, right? Because if you just say bad luck, then there's no examination. There's no looking back and saying. You're removing agency from yourself.

Starting point is 02:39:48 Yeah. And you're going to lose an opportunity to learn what was the decision that I made? What were, did I choose something that had? you know, a probability distribution that actually wasn't very good for me. Yeah. Right? Compared to other options I could have chosen, because if I can figure that out, then the next time I make the same decision, my forecast will be better.

Starting point is 02:40:15 Again, going back to that idea of like there's only two things that determine how your life terms out. Luck and the quality of your decisions, what we really want to focus on is decision quality. Yeah. And say, look, luck is there in the background. It's going to happen anyway. Once we start getting caught up in this like, well, I just got so unlucky, we lose sight of, well, what was the quality of the decision in the first place? And I think part of the reason is because in the moment, cognitively, it feels better to say

Starting point is 02:40:47 it was bad luck than to say it was a bad decision, right? Of course. It's, yeah, it's a natural human bias, right? Yeah, it's actually called self-serving bias. There's a name for it. Yes. Yes. If something great happens, it's because I'm a genius.

Starting point is 02:41:04 And if something bad happens, it's because the world's awful and I'm so unlucky. So this is what we can think about, right? It's like, you know, you can go search Wikipedia for a list of cognitive biases, right? And you're going to see like this enormous list, right? Because there's a lot of dissertations that people have to write. Yes. So there's a lot of individual biases resulting among them, right? And self-serving bias.

Starting point is 02:41:27 But the thing is that I, I think. think that for like the most parsimonious way to look at it actually comes from uh daniel connemon which is that what we're really all sort of cognitively trying to accomplish is to advance our self narrative in a positive way yes right like we want to feel good about ourselves and every time we're interpreting things that are happening in the world um we want to feel a little better about ourselves at all times which is fine and i wouldn't ask anybody not to do that right like because otherwise you get sad and depressed and I don't want anybody to depress. I want people to be happy. Right. So, of course, we want to feel good about ourselves. But the question is, like, which self, which I know sounds weird,

Starting point is 02:42:11 right? Like, what do you mean, which self? Me, myself, right? Oh, but there's different versions of yourself. There's the version of you now. And then there's all the versions of you in the future. And this is the real cognitive problem is that we have this. constant street fight happening between us and the now, present us and future us. And that is like the jets and the sharks, man. This is like a battle. Yeah. And what's happening when you say, oh, that was bad luck is that you're protecting present you, right? Because if present you has to say, well, maybe it wasn't bad luck, like maybe I made a bad decision. Now you have to actually be open to going and checking. And you know what you might find out? You might find out that you made a bad

Starting point is 02:43:02 decision. Does that advance your self-narrative? Not right then. Right? So now you, now your self-narrative is going to take a hit. You have to take a step backwards and we don't like that very much, right? But if you can spot that error in your decision making, guess what happens to all the future versions of you? They do better. Because going back to that idea of earth luck, right? Like, I now get to make decisions that are going to put me in better neighborhood. You just triggered a kind of an epiphany in me, which is, which is, there's all these platitudes that you hear all the time. It's like, everything happens for a reason or like the universe has a plan for me. No, it doesn't.

Starting point is 02:43:44 Right. It's just all this like kind of gobbly gobble-y-gook. But like it, it's designed to make people feel better in the moment, right? Yeah. When there's either a bad outcome or they made a bad decision. Yeah. That differentiation between present self and the future self, right? And it's like, the epiphany I had is that a lot of, a lot of these kind of colloquial platitudes, I think they kind of evolved as mental tools to allow people who don't understand any of this stuff to be more adaptive when something doesn't go their way.

Starting point is 02:44:13 Right? Because it's like if something bad happens and or you screw up or you make a poor decision or whatever and you're not a probabilistic thinker, you're not a Bayesian thinker. You don't reason in these ways. It makes sense, though, of like telling yourself something like, you know, God has a plan. Yeah, yeah, yeah. And it's this happened for a good reason. Everything happens for a reason. Yeah. That, like, mentally primes you to look for those lessons and be aware of maybe the positive result that has not yet occurred.

Starting point is 02:44:47 And whereas if you did not believe in that, you would just be kind of wallow away and be like, why me, poor me? I would say, so I'm going to agree with you partially. Yeah, so I can understand what you're saying about. It gets you to maybe think maybe some positive things will happen in the future. Yeah. But what it doesn't do is get you to look at your decision. No, it doesn't. Right?

Starting point is 02:45:08 So that's the thing I want you to do. Yes. So going back to this idea, of course I want you to feel good about yourself. I want to feel good about myself. I want to feel awesome at all times, right? Like I'm like everybody else. If you can shift your mindset to say like, okay, I'm really going to take care of future me.

Starting point is 02:45:26 Yeah. I want future me to create better earth luck. And the only way I can do that is by choosing better environments to be in. And I can only do that if I examine the decisions that I'm making and try to figure out when I've made an error or when I've made a really good one. Because if I've made a really good one, I want to repeat that. If I made a really bad one, I don't want to repeat it. I want to get the lessons from that. So I always have to be going back to that.

Starting point is 02:45:50 Right. And instead of just saying, oh, this is bad luck, which makes me feel better now. I can say, I'm one of those people who's willing to go look and find mistakes because I'm taking care of future me. And then you get to still feel good about yourself. Right. So you get the benefits of all those versions of yourself that are going to benefit from the examination that you're doing. And you don't have to feel bad about yourself because you know you're taking care of future me. So you can kind of think about it as like, you know, do I want to like hang out and like scroll and whatever?

Starting point is 02:46:22 or do I want to go to the gym? And I really don't want to go to the gym today. But why do you go to the gym? Because you're taking care of future you. And then you feel pretty good about that choice, right? So do that with your decisions too. If you can get yourself to feel good about your choice to go to the gym when you don't want to. Because you know you're taking care of all the future versions of you, particularly 80 old you who wants to be able to like go up the stairs and carry groceries, right?

Starting point is 02:46:47 Then think about that with your decision me also, right? Like shift that. and then we don't get in that quandary of, wait, do I have to be depressed in order to become a better decision? No, you get to still feel good about yourself. There's actually for people a great book that I would recommend from Hal Herschfeld is called Future You. He's just done a whole bunch of work in this space. And, you know, it's really leveraging this concept of mental time travel. And here's the thing. Like, we don't have an actual time machine, which is a bummer, but we can imagine the future. And that is actually a big distinguishing thing.

Starting point is 02:47:21 between us and like a pigeon. Yeah. So we are, as far as we know, the only species that can imagine beyond our own death, as a matter of fact, right? So like we have this really powerful tool available to us. And so just constantly ask yourself which self, right? And start saying all those selves that are going to be in the future are the things that I want to take care of.

Starting point is 02:47:45 And I'm going to get in my mental time machine and I'm going to travel over there. I'm going to look at how do I think their life is going to turn in? now, given the choice that I'm thinking about making this minute. It's interesting because this kind of, this brings a lot of themes of this episode full circle in that I think of what we experience as luck is very perceptually based. Yes. Right? So it's, if you think about heaven luck, it is imagining all of the alternative context and

Starting point is 02:48:11 situations you could have been born into and then the one you were born into. And then depending on your ability to imagine better or worse situations, you are going to define yourself as having good or bad luck. Yeah. I think it's similar in our decision making as well. In some ways, it's kind of having a lack of an imagination of just not being able to imagine the alternative futures or the alternative pass. Yeah. Right. To orient yourself towards, you know, what actually happened. And so if your imagination is kind of biased in one direction or the other, right, you're only thinking about the worst futures that you could potentially have or you're only thinking about the worst pass that you could potentially have, you're not going to have,

Starting point is 02:48:51 you're not going to have clarity around, you know, making these decisions, making these choices moving forward. So there's actually, uh, so that actually gets into like if you're, if you're only imagining like sort of these worst, you know, versions of the future, um, that, that now you're getting like really deeply into the work of Daniel Kahneman and Amos Tversky. So Daniel Kahneman won a Nobel Prize actually for work on just that problem. Um, not for. from like a clinical psychology perspective, but from a behavioral economics perspective. So for those people who've heard of prospect theory, which is what he won the Nobel Prize for, Tversky would have won it as well, but he had passed by then. When we think about prospect theory, what it shows is that

Starting point is 02:49:32 we experience losses much more keenly than we experience identical gains, right? So you can think about it this way. You know, there's arguments about whether it's like two to one or one point five to one, but we can think about it this way, that if you lose $50 at Blackjack, it's going to feel about as bad to you as winning $100 at Blackjack feels good. But then why is Blackjack so fun? Why do I like it so much? Well, is it though when you lose, though? That's the question.

Starting point is 02:50:02 Why do I like it so much? Is it when you lose? So that gets into that like, why are we thinking, oh, it's bad luck, it's bad luck, right? So now we can sort of take that into the future. Yeah. And we can talk about what's called loss aversion. And this kind of follows from this central insight of prospect theory that when we're making choices, right, we know that there's a distribution of outcomes that could occur at some probability, right? And what we're really supposed to be doing is what we would call taking a weighted average of those things.

Starting point is 02:50:36 So any of the outcomes have some payoff associated with them and some probability. And we can multiply those things together and we can come up what we would call an expected value, right? So you could think about that as a return on investment. But what we know is that for any prospective return on investment, we could end up getting a lot more or a lot less. We're going to end up in there. That's just what's going to happen on average in the same way that if you flip a coin, yeah, you could get three heads in a row on a fair coin. But like after 10,000 flips, you're going to end up with 50-50. So this is kind of like an abstract concept, but this idea of expected value is really important.

Starting point is 02:51:14 And it's particularly important sort of to the resulting concept because on one flip of the coin, I can't get 50% heads, right? So we misinterpret this outcomes a lot. But what this insight about loss aversion is is that when we're sort of on the go forward and we're thinking about do I want to choose option A or option B is, is that sort of independent of what the expected value is, independent of how much that on average is going to get. us to either move toward our goals or away from our goals, we'll tend to choose the option that has the lowest sort of absolute loss associated with us. So in other words, we're living in kind of the possibility of those bad universes and we'll pick options that have maybe a less bad universe associated with them, even if the gains must might be a lot greater. Someone who's really loss of us, for example, would never start a company. Right. Right. They're less likely to quit

Starting point is 02:52:14 the job that they hate, even though they hate their job because they're so focused on this, what if I take the new job and I hate that too, right? Even though the chances of a better future version of themselves are greater if they were to take that risk and quit, right? So it's not just like, oh, no, like it's really, you know, it's sort of bad, psychologically speaking, like in a clinical sense, like for your mental health. to be living in those bad, you know, universes that might occur in the future. But it also makes you make bad choices, right?

Starting point is 02:52:52 Like, it makes you choose things that are going to make your life worse on average because you're not quitting the job you hate because you're so afraid that the new job might turn out poorly also. So how do we counteract that? Mm. You said before something about, you know, if you don't think probabilistically or, like, a basian. Right. So let me just add some nuance to that. Sure. Everybody thinks probabilistically and like a basian because it's happening under the hood. So the question is if you don't think explicitly.

Starting point is 02:53:26 Right. So I want to just sort of think about what's implicit and what's explicit because part of the way that you solve a lot of these problems is to make that explicit. Explicit. Yeah. Right. And this is something really important. It's something I teach in my classes that you have to not allow these things to just run under the hood. And the reason is that those forecasts that you're coming up with, the way that you're sort of like forecasting what you think the probability is of things occurring in the future, what you think the outcomes might be associated with those and so on and so forth, sometimes it's right. Yeah. But sometimes it's wrong.

Starting point is 02:53:58 And if you leave it implicit, you can never figure out which, right? So making it explicit actually is going to help you to spot errors, you yourself spot errors. It's also going to help other people to see what you're thinking is and they may have really good input, right? So you can get other minds in there. So when we think about that kind of hidden information problem, right? Like we're not omniscient. Well, if we make it explicit, we get other people to sort of look at our thinking, we get closer to omniscience. It also kind of solves the self-serving bias a little bit. So my wife loves to make predictions. And whenever she's right, she always remembers. And she's like, I knew it. I told you this was going to happen. And I always tell her, I'm like, it's funny. You never

Starting point is 02:54:38 remember the predictions you made that never happened? And she's like, oh, I didn't make those predictions, you know? So it's the making it explicit is important because it documents your predictions and a way that you can actually objectively go back and be like, okay, why did I think this was going to happen? And why was I wrong? Yeah. So that's actually an incredibly important point because making explicit improves your, improves you in a variety of ways. One is the act of making it explicit has been shown to make your, uh, decision. it's more accurate. It reduces error. Just the act of doing that, right? Interesting. Number two is it allows other people to examine what you're looking at. So they're

Starting point is 02:55:16 more likely to help you and sort of fill in the gaps and give you different ways to think about it, spot errors in your thinking. And so that's all kind of in the moment. So we've got you're more likely to be more accurate, but then also other people, you can bring other people into the equation and you can, you know, inch closer to omniscience, like inch closer to omniscience, unfortunately, because they're not omniscient either, but it helps you to get different perspectives on the thing. But then the accountability thing is really important. Yeah. Right?

Starting point is 02:55:43 Because now it actually gives us a way to go and say, here's what I was thinking. Here's how these things turned out. Let me go back and look, right? Let me think, like, was I anticipating this? How was I thinking about this? Did I actually foresee what happened? The things that I learned after the fact, could I have known them? If I could have known them, why didn't I include it in the first place?

Starting point is 02:56:07 So maybe I should include that going forward, right? It's such an important point, this sort of accountability piece. Because not only does knowing you're going to be accountable improve the quality of the, of the decision that you make, because just the knowledge that someone might look at it in the future makes you less biased. It's a really good debiasing tool. But then you also get to close the feedback loops, which actually does make you more accurate as well. Do you recommend keeping like a decision journal? Like is this something, is this some sort of regular?

Starting point is 02:56:37 practice that normal people can do on a day-to-week-week basis? So I love that question. I don't think you need a decision journal because I think if you make a good decision, you'll create a record of it anyway. So journaling sort of feels like I make a decision and then I journal about it. Yeah. So I just like have an aversion to that term for that reason. Because I think any good decision process is going to produce a record.

Starting point is 02:57:00 Yeah. How much, how deep, how big the record is is going to depend on, how much time the decision deserves. And different decisions deserve different amounts of thought that are put into them. And the way that we think about how much time and effort and attention, am I supposed to put into this thought, we want to think about, again, going back to tradeoffs, the more effort or time that I put into a decision, I should be increasing the accuracy of the decision, right? So what this brings us to is like, well, how tolerant am I of error?

Starting point is 02:57:37 obviously every decision that I ever make, I can't put like full process into. I don't, I shouldn't make every single thing explicit. I shouldn't be making probabilistic distributions about whether to brush my teeth in the morning. I hope you're not doing that. Okay. Like, okay. So because if we did that, we'd never get down the stairs. Right, right. Right. Like, you'd have to be like creating these distributions for like what shirt you want to wear. Like that would be nuts. All right. So how do we actually figure this out? Well, again, through this frame of how much error can I tolerate. And that gets you, to two really big ideas, long-term impact, not short-term impact, long-term impact of the decision and how easy it is to reverse the decision. Because being able to reverse the decision

Starting point is 02:58:18 or quit what you're doing reduces impact. So they're actually sort of the same thing. We're just sort of putting it into two buckets. So I just think about this as like the intern versus CEO problem or the dating versus marrying problem. Right. Right. So if you're hiring an intern and they don't work out, it's probably not going to have a really big impact on your, on your business in the long run. It might feel bad in the short run, but we don't care about short-term us, right? We care about long-term us, because that creates a lot better short-term us in the future. You know, it's not going to be a big deal if it doesn't work out.

Starting point is 02:58:48 So how much effort should you put into that? Probably not very much, right? You should have a couple of boxes that you tick, you know, reasonable references, you know, whatever, and go ahead and hire them. You might end up with like 20 people that are perfectly good. But CEO, better put a lot of time into that. Dating, if you have a bad date, whatever. Right.

Starting point is 02:59:11 Marrying. All right. So we can sort of think about those things in those categories, right? So basically what you want to ask yourself is two questions, right? The first one is just, if I, you know, if I sort of imagine this not turning out well in the future, how big of a deal is that? And if it's a small deal, don't spend a lot of time. If it's a big deal, you should be creating a pretty strong record of why you're deciding what you're doing, right? You should be doing these forecasts.

Starting point is 02:59:40 You should be thinking about the outcomes. You should be comparing options. You should be getting other people's input, like all of these things. Like with my clients, we'd create decision rubrics, right? And then we're creating a record and we're quantifying their qualitative opinions. We're doing a whole bunch of stuff. But these are for really big decisions where they're slinging millions of dollars into companies. For little decisions, I would tell them not to do that.

Starting point is 03:00:00 like please don't do that for small decisions. And then the other one is, you know, sort of how quittable is it? So I'm going to urge people to sort of lose that one-way door, two-way door analogy. The reason why I don't like it is it suggests that it's binary. You can either quit or you can't. It's not true. You can quit anything. Just some things are a higher cost to quit than others. So it's a very low cost to let go of an intern because letting go if someone is quitting. right so a very low cost to let go of an intern it's very low cost to not go on another date with a person or even walk out in the middle of it um not a big deal but it's very high cost to lose a CEO it's a very high cost to end a marriage right we can sort of think about it along that range okay so now that kind of brings us back to this problem of like so how do we get someone to actually quit their job right like instead of being loss ofverse um and it goes into this zone right? So what we want to start doing is notice that what I'm asking you to do in that situation is to say, what does the future look like for this decision? Is it going to be a big deal? Is it

Starting point is 03:01:10 going to be a big cost to reverse the decision? You want to step back and start being explicitly probabilistic in your thinking when you're thinking about should I stay in this job or go to a new one as well. Like it's sort of a very similar idea of how do we actually make these things probabilistic and how do we get into the future? So you want to combine those two things and basically all sort of good decision hygiene. I actually did this with someone who really hated their job. And they had a new job and they were talking to me for advice about whether they should go to the new job. They were an ER doctor and there was a whole bunch of things that were going on where they just had been unhappy for many years. And they now had an opportunity to go work for an insurance

Starting point is 03:01:50 company helped them evaluate claims. So they described to me what was going on and the job that they were in and honestly, I was super confused. Because I was like, you've hated it for years. Like, why aren't you? I don't, I don't get it. So I said to them, what's the issue? Like, why don't you want to go take this new job? And they said that sentence. What if I hate that one too? I wanted to take this person who obviously, under the hood, the probability is occurring. Under the hood, they're a Bayesian, right? So let's make it explicit. And I said, okay, well, let's imagine it's a year from now. And you're in the job you're in. What are the chances that you're happy? Right. So I'm just moving them into that kind of think about future you and let's think about that

Starting point is 03:02:29 probabilistically. And they said, uh, zero. They had like years worth of evidence, right? I said, all right. So, uh, imagine you take the new job. And I understand that you're worried it might not work out. Okay. But imagine you take the new job and it's a year from now and what are the chances that you're happy. And they said, that's hard for me to guess because I haven't taken it before. I go, just give me your best guess. They said 50-50, you know, which is an answer you often get, right? And I said, oh, is 50% greater than zero? And she said, yes.

Starting point is 03:03:06 And she actually literally quit the next day. Wow. She had been like agonizing over this decision for really years. I mean, this was a new job offer, but she had been thinking about leaving for a very long time. And when I just put it in those terms, it was like, it just. It really is funny how the loss aversion and the emotions that are wrapped up in it. And of course, you get stuff like identity, you know, fear of change and all this stuff.

Starting point is 03:03:30 It all gets wrapped up in it and it, it muddies that under the hood kind of unconscious Bayesian thinking. It's funny. I remember back when I was thinking about trying to start my first business. Yeah. And it was middle of the 2008 crisis. Job market was in the total gutter. Yeah, it was like total dog shit job market.

Starting point is 03:03:50 Fun times. And I was struggling. And I was getting by with like some odd jobs here. there. I just finally landed like the first real job of my life and I hated it. And, and I remember sitting there and I struggled with it for weeks. I remember, you know, sitting down and kind of writing out best case scenario, worst case scenario, you know, if I do it, if I don't, all that, all those sorts of things. And I remember coming to the realization that the worst case scenario, if I quit, if I quit this, try to start my own business, it doesn't work and I go broke.

Starting point is 03:04:20 And then I got to go get go back and get another job in two years. I realized that. I realized that, that in terms of the job market, an unemployed 23-year-old and an unemployed 24-year-old are both with zero job experience. There's like no difference between the two. Like I'm literally losing nothing by taking another year and trying to do this thing. And not only that, but the job market will likely be better when I come back in a year. And I remember as soon as I realized that I felt so stupid because I was like, I'm actually in a better position if I try this.

Starting point is 03:04:54 it fails, you know, for a year because then it's, I'm probably going to come back to a better situation and I will have learned all sorts of things in the process. So here's the interesting thing about loss aversion. And this is what you were sort of feeling in there is that it's asymmetric. When we're thinking about starting something, we're very loss averse. We're thinking about the bad things that could happen. We sort of, we want, we kind of want like a guarantee that it's going to work out well. Otherwise, we don't want to do it, right? But we're not loss averse to the option that we're already exercising. Right. So like you weren't really thinking about like, well, what if the thing I'm doing right now turns out really badly, right? You're worried about what if the thing that I'm doing in the future works out badly. Okay. So what that means is that we're not we're not thinking about the status quo as an option. Right. So when I'm saying like think about the option that you're considering and like what are the possible outcomes? What are the probabilities of those occurring? And then to your point, what would I do if I saw them?

Starting point is 03:05:54 Like what would I do in reaction to that? What would the world look like? What would, if I did that thing, what do I think would occur after that, right? So we're thinking about, you know, I'm asking you to think about this, but you have to do that for the status quo too because you have to have a comparison. Right. Right? Because what you're trying to decide is should I stay in the job I'm in? Yeah.

Starting point is 03:06:13 Or should I switch? And what happened with my doctor friend is that she was only thinking about the switch. and she was only worried about the bad outcomes that were associated with it. And she wasn't even thinking about the option that she was currently exercising, the job that she was already in as something where she should apply the exact same thinking in the same process. So that's kind of number one is that we have to realize that we always have to be comparing to something.

Starting point is 03:06:42 And when you're thinking about doing something new, you have to remember to include the status quo in that process because the question is, is the thing I'm doing good for me and helping to advance me to my goals? comparison to the new thing that I'm thinking about. Then to get out of the loss ofversion problem, you have to think about the whole probability distribution and the whole outcome distribution together. And then you have to think, well, okay, but like what's the cost to quit? Meaning, if I do this thing and it doesn't work out, like, what's the cost for me to stop doing it? And then how bad is that anyway? Like, what are the other things that I could do in response? So the decision,

Starting point is 03:07:23 no longer becomes like last and final, which is the way that we sort of think about things, which is really funny because like if you look backwards, you know that decisions aren't last and final, but we think about forward decisions as last and final. You aren't as worried about a bad outcome because you've already planned for it. And if you get an outcome that you don't like, you're less likely to think about it as a failure because it was already included in the mix and you already had a plan for it. So this kind of goes back to this core idea of luck, right? when you're thinking about an option and should I do this thing, should I go start my own company, what you're thinking about is there's some distribution of things that could occur.

Starting point is 03:08:02 I could end up on sort of like luck could influence me toward outcomes that are undesirable. It could give me outcomes that are desirable. If I get those undesirable outcomes, which is what makes us afraid to start things, let me kind of live in that and imagine what that looks like. And then I can do two things. I can think, well, okay, if I end up there, can I come back, right? can I come back to where I am now or is there something better that I could go to or whatever, like sort of plan for that?

Starting point is 03:08:30 And then you can go beyond that and say, well, let's imagine that I sort of ended up in that world. Looking back, what would be the signals that that was how things were unfolding. What would I do if I see those signals, right? And now you've sort of metabolized those, the possibility of those things occurring in advance. And you sort of get out of this resulting problem because it's just in there. It's funny because hearing you describe that, there's a concept in stoicism called negative visualization. It comes from Seneca. And the way he wrote about it, it was very much just kind of, I think, undercut people's loss aversion, right?

Starting point is 03:09:10 It's like to help people realize that, hey, worst case scenario is actually not as bad as it feels like it's going to be. Having this conversation about it, I realize now that it actually like ties in very well to decision. because it kind of corrects that loss aversion and those negative sentiments that we have, those irrational negative sentiments that we have about potential bad outcomes. So actually, interestingly enough, with my clients, we include this, it's called a premortem, right? So we want to think about the bad thing happening before it happens instead of after. It's a lot better.

Starting point is 03:09:43 You're going to think about it more clearly. I want to throw another kind of strategy or tactic at you. Okay, right. I'm ready. And it actually, it ties into something that. is common in the poker world, right? Which is that you combat volatility with volume. I've started seeing this show up in the productivity world.

Starting point is 03:09:59 Alex Hormozzi has this concept that he started saying that he says volume negates luck, which is basically that like if you take a thousand shots on goal, at some point, you know, at some point it's not luck anymore. Like you're... Yeah, yeah, yeah. Then you get into the all-scale part. Yeah. So I'm curious, like, what's your reaction to that?

Starting point is 03:10:16 I realize that this isn't some things, some decisions in life are not volume. based decision? Like you can't marry a thousand times and you can't fire a thousand CEOs, but you can go on a thousand dates and you and you can, you know, send a thousand job resumes to job positions. There is something here that I think is useful and it's, and I'm wondering how you would orient that in your decision making. Okay. So let me just, can I just rephrase? Sure. Volume reduces the influence of luck on the outcome. I agree. It doesn't negate. Nothing negates luck, sadly.

Starting point is 03:10:55 It just is. There's skill and luck. So there's a couple of ways that you can reduce the influence of luck on the outcome, right? So volume is one. That's true whether it's a high volatility world or a low volatility world, right? This is a fun one. So if you're like the Boston Red Sox and you're playing a little league team, there's going to be zero influence of luck on the outcome, right?

Starting point is 03:11:18 Like that's going to only be determined by skill. But as you match the skill of two great teams, like the Red Sox versus the Yankees, although, to be fair, I don't know if they're equally matched this year, but let's pretend they are. We'll pretend they are. Then the influence of luck becomes much greater. So when we have very big skill gaps, we can also reduce the influence of luck on the outcome just because the skill is going to dominate there. So like in poker, if we're equally matched, it's going to be like the deal of the cards in the short run. Right. Like just what happens. Like in the long run, we'll end up with equal amounts of money. But in the short run, who wins in that given game if we're equally matched in skill, right, is going to be determined by like, do you win the races, right? Like when we're 50-50, do you come out on top? And there's a lot of like short-term ball there. So it's a question of like how much is luck influencing the outcome? You can't, you can neither negate it or not. Like it just is. It's just there. So I would just like to say that. Okay. So now on the volume issue.

Starting point is 03:12:16 there are definitely a lot of types of decisions where you can get volume, right? So this is just portfolio theory, right? Like if you're in venture, it's a lot better to have invested in 70 companies that it is to have in five. In five, you're going to have a much greater influence of luck on the outcome in terms of what we would call realizing your edge. Right. So let's assume that you're investing at an edge where in poker, you might, let's say you have a 5% edge, which would be a really nice edge to have in poker, by the way.

Starting point is 03:12:51 So you're making five cents on every dollar that you invest. You might lose a lot of money or win a lot of money as opposed to specifically five cents on your dollar. But if you play 1,500 hours of poker, you'll end up with 5% more than you churned through the game, right? So that's generally portfolio theory. If I can pay for 1,500 hours, which is like thousands and thousands and thousands of hands,

Starting point is 03:13:12 I'm better off than if I play one. in terms of reducing that sort of appearance of luck in what's going on. Okay, so that's one thing that's true. And that's true, like, of a lot of different stuff. But your instinct of, like, it's not true of everything, is right, unless you think about your life, how your life turns out as a portfolio of all the decisions that you've made. So are each of those decisions isomorce to each other? Are they identical to each other? not in the way that investing in a startup is.

Starting point is 03:13:45 But generally, they're going to be relatively similar to each other, right? So we can really understand kind of like this idea of creative portfolio of decisions when the decisions are looking similar to each other. Our minds have trouble when they look very different, except for, I'm going to go back to this idea of Earth luck, like I'm going to pull that term in again. It's just Earth luck. I like that Earth luck is winning you over over the course of this conversation. I like it as a category, right?

Starting point is 03:14:12 But like I'm using it as, but going back to what I said about yes. I'm just going to say yes. I'm going to stop and I'm just going to say, yes, I like it as a term because I think that it creates a great distinction. Yeah. Well, it's funny because when we were prepping this episode, we really struggled with Earth luck. Like, we probably spend as much time on the Earth Luck section as all the other sections. And I had the same issue. I was like, how is this any different than the other types of luck?

Starting point is 03:14:38 But as we worked through it, we're like, okay, yeah, there is kind of a cat. category of decisions that are much more impactful than yeah. I agree. So now let's think about all the decisions that you make, whether it's who do you invest in, if you're investing in a company or a stock or whatever, right? Like what house you buy, who you marry. But then like, what am I eating for lunch? Yeah. Okay. Right. Like, you know, at the, end, how your life turns out is going to be kind of the total of luck plus the quality of all the decisions that you ever made. So I don't really think of decisions as one-offs because it's in the portfolio of decisions that you've made in your life. And when we get down to decision quality,

Starting point is 03:15:35 the principles that we're talking about apply to any type of decision that you make. So if you can improve your decision quality, if you can improve your process, it's going to improve the outcome of decisions that are like, feel like they're one-offs, as well as decisions that are obviously repeating. And so that's why I sort of say, like, okay, yeah, like, it feels like the marriage decision is a one-off, but it's not really. It's in the portfolio of decisions that you make in your life. And at the end of your life, as you look back and you say, was it a good life? it's going to be the result of luck plus the quality of your decisions. And so it's just a portfolio. I like that. I like that a lot. Last question for you. Okay. What is an example of either a terrible

Starting point is 03:16:21 decision you've made that turned out great or a great decision that went really poorly? How much does you? When poker exploded all over television, I happened to have just had my fourth child. So I missed out on the first six months of this whole situation. And the thing is that the way people played, you know, and I had been playing professionally for about eight years at that point. The way that people played before that, you know,

Starting point is 03:16:57 it's kind of like that. Boston Red Sox versus Little League versus Boston Red Sox versus Boston Red Sox, if you could put the identical teams together. It was a little more like that second thing in the sense that if you were actually playing in high stakes poker, high stakes tournaments, mostly you knew what you were doing. Okay, so now I come in and Chris Moneymaker, best name ever, right, has now won the world series of poker in my absence. And in fact, when he won that, I came in 10th that year and I was two weeks from, I mean, I was so pregnant during that. It was like crazy. I come back for my first tournament. First of all, it's like there's like 10 times as many people.

Starting point is 03:17:42 It's rid of a tournament like that. And the players are really different, right? Like they don't play like the players that I'm used to. So anyway, it's a situation where I raise it with a hand. I have King Queen, what's called on the button. I'm last to act. and everybody is folded before me. And this player, who I've never laid eyes on,

Starting point is 03:18:00 calls in the big blank. And the board comes Ace 10 blank. So for those who don't know poker, that means I have Ace King, Queen, Blank 10. So if I can get a jack, then obviously I would have the very best hand possible. The problem is that there's only four jacks in the deck. And so, like, the chances that I get a jack on the very,

Starting point is 03:18:25 next card are 8% just so we're clear. I am not playing this hand to try to get a jack. I just want to make that really clear. If I were, that would be a really bad decision. It wasn't as bad a decision as that. But this guy bets. And that usually signals that the person doesn't, that the person's hand is like somewhat weak. So I call because I'm like, ha ha, ha, ha, I know that he doesn't have a good hand.

Starting point is 03:18:57 I'm just going to call him. I could hit a jack, but I'm doing this to set up a bluff on the next card. So the next card comes, it's nothing. I still have nothing. I have King High. He bets again and now I raise him. And oh, he called really fast. So then the final card was a jack.

Starting point is 03:19:14 Of course. Right. Of course. Suck out. Exactly. And he checked and I moved all in and he called. Right. So anyway, I turned my hand over.

Starting point is 03:19:23 and then he very angrily turned over an ace and a nine. So like here was the problem. This is why this was a bad decision. I kind of had him in the right zone. Like I kind of knew he had a bad ace. But what I got wrong was that like he wasn't the Red Sox. Yes. Do you know what I mean?

Starting point is 03:19:38 Yes. He wasn't calling me because he thought he was catching me in a bluff. He was calling me because he thought his hand was pretty good. Right. So that was a pretty bad play that turned out really, really, really well because I hit that 8%. Like I kind of liked my logic. here's why I think it was a really bad decision. Because there were 10 times as many people in the tournament. Like, it's not like it was unknowable to me that the people were probably not experts.

Starting point is 03:20:02 Yes, I kind of had him in the right zone. I don't fault myself for that. I fought myself for just being on autopilot, right? And like not thinking about like, well, wait, is he going to play like the people that I'm used to playing against? And when I went and told, like, I think I told Eric Seidel the hand and he started laughing at me. He was just like, what is wrong with you? It's one of those you didn't deserve that jack, right? No, I definitely. I did not deserve to what we're called suck out there. Like, it was just like, but it was like, it was so obvious.

Starting point is 03:20:35 It was such an obvious error to make. Like, how could there be 10 times as many people in this tournament and they all play like the experts that I'm used to playing against? Like, I mean, that was idiotic, idiotic. And obviously I changed my model after that. But so that, that's like a really bad decision that worked out really well because that was really early in the tournament. I ended up making the final table.

Starting point is 03:20:56 I made a lot of money in that tournament because I got really lucky in that one's spot because I would have like no chips after that. So that was pretty bad. You know what the interesting thing is? Like I don't really think about those hands too much because I don't think there's a lot to be learned from them. It's like, all right, I put all my money in with ACEs

Starting point is 03:21:13 and you called me with five. It's really bad and you got a five. Like, what am I supposed to learn about it? That happens all the time. And here's the thing. And I think this is actually really important for people to recognize in life. The better you are at poker, the more likely you're going to make a good decision that doesn't turn out well.

Starting point is 03:21:28 Because the majority of our decisions are going to be better than average, and you're going to be getting these situations where the person against you has a very low probability of winning, or at minimum, they're losing to the amount of money that they put in the pot. And honestly, what are you hoping for? Right? Like, you're hoping that somebody's going to hit a five on you because it means they're putting their money in with fives against you. Like, if you linger on that and you start thinking about how unlucky you are, are and so on and so forth, it's going to make you play bad going forward instead of just saying,

Starting point is 03:21:59 well, what am I hoping for? Right. Like this is just going to happen to me because I'm on average making better decisions than most, right? So the worst of decisions you make, the less likely you're getting bad luck. The better decisions you make, the more likely you're getting bad luck. So like, why are you like, why are you lingering on them except just to go back and check the decision? So I just don't think there's like a lot of use in that because that was kind of the point of playing, right, is to get people make bad decisions about you. And that's where you're going to get what looks like bad luck. I think in poker, it's very explicit that there's not a whole lot of value in thinking through like counterfactuals. Like, like, oh, what if that five didn't come?

Starting point is 03:22:35 Like, it doesn't matter what came on the flop if you have bases versus fives. Like, it's a good decision no matter what comes on the flop. Whereas, you know, I think in life people get tripped up a lot more of thinking like, you know, what if that, what if that red light had not had changed a little bit quicker or like, what if, you know? Yeah, so what? And we kind of convinced ourselves that that matters. It doesn't. Yeah.

Starting point is 03:22:56 I went to graduate school because that's what I was supposed to do. Parents were both educators. They had both gone to graduate school. Education was a really big thing in my family. And I'm not saying, like, if I had thought it through, I might not have ended up at graduate school. And this is an important thing to understand is that you can end up with the right outcome, but sort of, you know, or even the best option for you and still have not made a great

Starting point is 03:23:20 decision. It was more just like I was at college and then I was taking the GRE and then I was applying to graduate school. I don't really think I thought very much about like, well, what do I really want to do? Is this the best choice for me? Is this going to get me the outcomes that I want in my life? It was just like, no, this is what my maiden name is letterer. This is what a letterer is supposed to do. So I went and did that.

Starting point is 03:23:40 I don't think that's a good choice. My decision to leave and not come back and get my PhD, I also think was pretty bad for a very similar reason. I was sick. I went off and played poker, but I don't remember ever explicitly sitting down and saying, should I have gone back, right? Like, I didn't compare, like, what does it look like if I stay playing poker versus what does it look like if I go back and I complete my PhD? Even if I don't go out on the job market.

Starting point is 03:24:04 Like, I didn't think through any of that stuff. It was a little bit like, I'm doing this, I'm making money. I guess I'll just keep doing it. Right. Right. Worked out fabulously. But I don't really consider either of those things particularly good decisions. because I don't think that I was super thoughtful about them.

Starting point is 03:24:23 And I think that I actually took a really big lesson from that later on. Because when I was thinking, as I started getting asked to give these talks, I actually did think more deliberately about it. Like how much time do I want to be spending on this? What do I want to talk about? What am I getting out of it? Is this bringing me joy? And then I started comparing that to poker in a really deliberate way.

Starting point is 03:24:46 You know, how do I feel when I'm doing this versus how do I feel when I'm doing poker? I was balancing out how I wanted to allocate my time. You know, I feel like it's like you're sort of caught in a tide type of decisions. Like this is just sort of how things are going. So I will just keep going that way. And those can work out really well. They did for me. But I don't think that it was because I made a good decision.

Starting point is 03:25:06 I think it was because it just turned out well. Yeah. I never thought of Chris Moneymaker as Earth luck, but maybe he was your Earth luck. Chris Moneymaker was definitely my Earth's luck. Yes. Right? For sure. For sure.

Starting point is 03:25:18 That put me in a very different world because without that, I am very sure that I would not have ended up finishing my PhD, which I did with Phil Tetlock and Barb Miller's, which was amazing. Everybody should go get the book super forecasting, by the way. Like it will change the way you think about decision making. It's an incredible book. Getting asked to come talk to people did was it brought me back to the cognitive science because I started thinking about. the way that those two disciplines could inform each other. That was just so exciting to me to think about the intersection of the two things that I had, the only two things, really, that I had done in my life professionally. That wouldn't have happened without that event occurring. I had no control over that.

Starting point is 03:26:05 Yeah, I'm very grateful for that moment of luck having happened because then that opens this whole other thing that I end up doing. And I end up starting off giving these talks, that suite of talks and it actually ended up as thinking about it. I then am writing two books after that. I'm now finishing up my next one. I end up consulting. I love my clients so much. I go very deep with a very small group of clients, so I get to know them very well over very, very long periods of time. It's really exciting for me. It's fulfilling. I really, really enjoy the work that I do. And that all can be traced back to that moment because without that sort of developing that brand, which I can't do unless that moment happens, you know, none of those opportunities would

Starting point is 03:26:50 have been available to me. So I'm just like, I'm so grateful for that. And then I, I co-founded a nonprofit, which is the Alliance for Decision Education. And we're saying, hey, let's bring all of this decision stuff that we're doing for adults and bring it into K through 12. Because if we go back to the beginning, you know, the total of your life is luck in the quality of your decisions. Why aren't we teaching kindergartners how to make better decisions? Why aren't we starting earlier? We do it like maybe in college if you take an elective. Like you can teach a lot of things to a kindergartner about decision and education. Obviously, you can get really deep on probability and things like that as kids get older. But how about just teaching a kid that they're an agent of their own decisions?

Starting point is 03:27:31 Like just things like that. Like, right? So I don't get to do that and have the impact that that nonprofit has on the world without 2002 happening. Annie Duke, thank you very much. First, a quick word from our sponsors. This episode is brought to you by Purpose, the app that I actually co-founded and built. Purpose is a coach in your pocket. It's an AI that you can actually talk to about your life and all the issues that you're struggling with. But here's what makes it different. Every other app on your phone is engineered to keep you hooked, to make you feel good.

Starting point is 03:28:05 They have feeds that pull you in, notifications that drag you back, and the hours disappear without your life getting any better for it. for it. Purpose actually does the opposite. You tell it what's going on. It gives you honest, no bullshit answers, and then it hands your time back to you. And in fact, if you try to use it too much, it will just tell you to go touch grass. We recently rebuilt it. There's a fresh design, new tools, and some new quests made specifically to help you break your worst habits, and a voice mode that is now available to everybody on iOS and Android. So you can just talk it out instead of typing. So if you want an AI mentor that gives it to you straight and then lets you get on with your life instead of an app built to keep you scrolling, get started for free at

Starting point is 03:28:43 solved. Solved.deals slash purpose. That's solved. Dot deals slash purpose. And we're back. Welcome back to Solved. It's funny doing these solved episodes because there is a consistent pattern that has begun to emerge, which is that whichever episode we're doing, the experience of doing it

Starting point is 03:29:06 seems to take on the character of that episode's theme. So, for example, when we did an episode on procrastination, it took us like an extra three months of preparation to actually shoot that episode. When we did the episode on shame, Drew and I screwed that episode up so much that we actually felt very ashamed of how much we screwed it up beforehand and how much stuff we had to reshoot. When we did the happiness episode, we felt very light and easy and fulfilled because it was a very easy episode to shoot and a ton of fun.

Starting point is 03:29:37 When we did confidence, I felt very confident about it. When we did change, we completely changed the set and the format. In this episode is about luck. And since we began taping this episode, everything unlucky seems to have been happening. Drew was having health issues, sleep issues, we had production issues, we had a hard drive failure. And now I have an empty chair across from me because Drew's flight got delayed and he was not able to get here for the last day of recording. So I carry on to the end of the luck episode. I stumble through the finish line of this luck episode all alone.

Starting point is 03:30:16 But let's go back to the top. Why is luck so underrated as a factor? Why don't we think about it more? And why do we tend to think about it the wrong ways? Because as Annie Duke said, everything in life either is skill or luck. It's either a decision you made or it is chance. And we spend so much time thinking about our decisions. We rarely think about the chance.

Starting point is 03:30:37 element. And when we do, it's usually to preserve our good feelings about ourselves. It's a self-serving bias. We tell ourselves like, oh, there's nothing I could do that was just bad luck, even though it likely was a bad decision. We tell ourselves that we're brilliant and we're so smart, even though maybe we benefited from good luck. Why do we seem to have such a hard time thinking about luck and fortune? And why do we avoid doing so? Well, I think there's a few reasons. For one, there's a legibility issue. It's unclear how much of what happens in our lives is ultimately within our control and how much is just a factor of circumstance. Like, that's a blurry line that we often don't have a clear sense of what is what. And to get clarity around that line, we have to ask honest questions of ourselves, which are quite uncomfortable, which is how much control do we have over our own lives? How much can we affect in our own lives? And that doesn't feel very good. We don't like to admit a lot of those things. On top of that, our brain's natural tendency is to ascribe meaning and value to good fortune or bad. We operate based on the just world hypothesis that if something good happens to us,

Starting point is 03:31:50 it must be because there's something great about us. Or if something bad happens to us, it must be because we did something wrong. And ultimately, this can lead us into one of two traps. There's the fatalism trap, which is everything is luck, I have control over nothing, so why even bother and try? or you have the self-serving delusion, which is, I earned everything, there is no luck in my life,

Starting point is 03:32:11 I'm pretty awesome. Don't even bother me with this bullshit. The fatalism trap removes our responsibility to improve our own lives, and the delusion trap protects our ego and prevents us from learning from our failures. We briefly covered some of the Western thought around luck, and we landed on the ancient Chinese framework of San Sai,

Starting point is 03:32:31 which is heaven luck. It's the genetic lottery, the ovarian lottery, what you're born into, the Earth luck, which is the broader environmental context that you put yourself in, which is generally determined by a handful of very high-leverage decisions you make throughout your life. And then there's the human luck, which is your ability to navigate each choice, each decision on a day-to-day basis to maximize your probability of achieving your goals. If life is a game of poker, then heaven luck is the cards that we get dealt. Earth luck is, is the table we choose to sit down and play at. And human luck is the choices that we make as we play.

Starting point is 03:33:12 All three have a very profound effect on our outcomes. Heaven luck, we have zero control over. Earth luck, we have some control over, but on a very macro broad level. And in human luck, we have full control over our decisions. When it comes to heaven luck, there's generally a temptation to ascribe some sort of inherent value based on where we were born. the circumstances we were born into how we grew up. And the funny thing is, is that it works against us in both cases, whether we were born into really good circumstances or we were born into really bad circumstances. So if we're born in the really great circumstances, there's a tendency to experience some sense of guilt of like, what did I do to deserve this? Why was I blessed with all

Starting point is 03:33:57 of these privileges and benefits when I didn't earn anything that the other people around me had to work really hard for. Now, while it's useful to see the discrepancies and the benefits that maybe we were born into, kind of just an ever-present sense of guilt is not very useful or productive. Ultimately, we should take all of the things that we've been blessed with and try to leverage them to help others. If you were born with a particularly large amount of heaven luck, then I would say you have a moral duty or responsibility to leverage that heaven luck to distribute some of the benefits that you've received to as many people as possible. Now on the flip side, if you were born into a situation with very little heaven luck, then that doesn't really change the fact that you are

Starting point is 03:34:44 responsible for the outcomes in your life. It may not be fair that you were born into West Africa instead of Norway, but even if you were born there, it is still your responsibility to make the most of that situation that you possibly can. So heaven luck tells us a lot about the circumstances from which we came, but they don't really tell us about what we should do. And because, ultimately, the longer we're alive, the more our individual decisions play into our long-term results, it is hard to say that heaven luck should necessarily matter a whole lot to us at all. Our takeaway in this episode is that the goal with heaven luck is simply to become aware of it and to develop some sense of gratitude around it. And the way we develop that sense of gratitude is to remind ourselves and

Starting point is 03:35:29 take perspectives of all of the potential realities that we could have been born into, but we were not. So while there may be things about our lives that we feel bad about today, surely you can imagine an infinite amount of worse possible lives that you could have lived, but you're not living. And because of that, gratitude is accessible in any moment at any time to any person. Now, this brings us to Earth luck, which is a set of broad, environmentally based decisions that we each have to make throughout our lives, and the result of those decisions is that it either increases or decreases the surface area for good things to happen to us. For example, if I aspire to be a famous television actor and I'm trying to start my acting career in Boise, Idaho,

Starting point is 03:36:18 I'm probably going to run into a lot of bad luck, or at least I'm going to have very little good luck. But if I move to Los Angeles and I surround myself with Hollywood and hundreds of other aspiring actors and producers and screenwriters, I am increasing my surface area for something serendipitous to happen to me that I can leverage and take advantage of and benefit from. So there is a class of decisions throughout our lives that greatly influenced the probabilistic outcomes of hundreds, if not thousands of other decisions that happened down the road. The job or career you decide to pursue, the city that you decide to live in, the partner that you decide to marry and spend a life with.

Starting point is 03:36:58 these things are one-time decisions that not only will greatly influence thousands of other decisions, but in many cases, they will set the context and basis of all of those thousands of decisions. And so maximizing Earthluck is really just about understanding yourself, your goals, and what is the best environment to place yourself into that is going to maximize the opportunity of achieving those goals. This happens with the relationships you choose to build, the networks you choose to enmesh yourself into, the environment that you choose to live in, all of these things have outsized impacts on all of the other decisions that you make, but also the decisions that are foisted upon you in the first place. Now, what's interesting is that Earth luck is kind of the first

Starting point is 03:37:46 luck that there is some research on how you can develop skills to expand it. So, for example, developing good social skills can expand your Earth luck. If you are better able to meet and talk to and connect with new people, it's going to open doors for you wherever you go in situations that doors might have otherwise been closed. Another skill that we talked about is simply having an open mind. Being open to more consequences or more experiences seems to allow people to draw connections and find opportunities and environments that people who are a little bit more closed-minded literally don't even see in front of them. In fact, some researchers have even gone as far as measuring luck in people based on how much they're aware of in their

Starting point is 03:38:32 environment, how much they pay attention to, and how quickly they act on opportunities once they spot them. And then once you spot those opportunities, this is when human luck comes into play. Because even the best opportunities in life, there's always going to be a chance of failure. Nothing is ever 100% and nothing is ever 0%. there is always some probabilistic distribution of outcomes that you are setting up bets when you decide to pursue them. And because every decision you make has a probabilistic outcome, it means that you can't necessarily judge the quality of your decisions based on the quality of your results. You can move to L.A. to try to make something happen, but even if nothing happens, it doesn't mean that moving to L.A. was a bad decision. You can marry the partner you're in love with and be extremely happy with them for many years.

Starting point is 03:39:22 But that doesn't necessarily mean it's a good decision depending on their traits and qualities and personality and the situations that they place you into over the coming years. Now, we have to be careful around this because we have all sorts of cognitive biases that prevent us from judging our decisions objectively and accurately. We have a self-serving bias, so we like to take credit for all the good things that happen and blame bad luck for all the bad things that happen. We have loss aversion, which causes us to overestimate the negative impact of failure and therefore not take a chance even when the odds are in our favor. Andy Duke and I talked about all sorts of different methods and ways that you can kind of counteract these biases and try to make better decisions consistently. And she raised a great point that we're always doing kind of this probabilistic thinking underneath the hood. It's just what we experience as intuition is our subconscious doing some of the statistical analysis and placing bets accordingly. But the problem is, is that our intuitions under the hood are not super accurate.

Starting point is 03:40:28 So the best way to make these decisions accurate is to take the implicit, intuitive decision making and make it explicit, to actually write it out, try to forecast the results of a major life decision, try to see all of the contingencies and pass. half dependencies and what the actual cost of failure looks like. Because once you do that, not only do you get more objectivity and more clarity around the decision itself, but it creates a form of accountability. You can go back and look at old decisions that you made and spot blind spots, spot biases, spot things that you didn't consider that you didn't look for. Find patterns of mistakes that you consistently make when you try to make decisions. The other thing that she talked about is developing a practice of doing a pre-mortem.

Starting point is 03:41:18 This is very similar to the stoic practice of negative visualization where you intentionally imagine the worst-case scenario and ask yourself, what factors led to this worst-case scenario? What are the warning signs that this thing is not going to go well? How are we going to define and measure success and define and measure failure in the context of this decision? Developing a sense of what all these things are going to look like before you make the decision is going to help you make a much better decision and then ironically, make failure much less likely

Starting point is 03:41:47 because you're going to know what to look out for and you're going to know what to prevent before it happens. And then finally, there's a volume approach to a lot of these decisions because the fact of the matter is that any time you are doing something with a probabilistic outcome many, many times in sequence,

Starting point is 03:42:05 there's going to be a lot of volatility. You're going to go through periods where you do have a lot of negative outcomes, even though you make good decisions. You're going to go through periods where you have a lot of positive outcomes, even though maybe you made bad decisions. There's always going to be a little bit of variance. And the best way to negate the impact of that variance is to increase volume.

Starting point is 03:42:25 Because the more you increase volume, the more you weight everything towards skill and the less you weight things towards luck. On top of that, as you increase volume, you give yourself more opportunities and reps to learn from your failures. And because you're moving quicker, you will find out if something is. not the right path quicker as well. So how should we really approach luck and consider luck in our lives? I think there's a general rule of thumb that is probably useful to follow, which is that anything

Starting point is 03:42:54 from the present moment forward, you should act as though you have full control over everything, even though you don't. You should make decisions as if everything is up to you, even though there's going to be things that you can't predict that are going to happen. Then, you're looking in hindsight, that's when you should try to be honest about what was you and what was the environment. What was heaven luck, what was earth luck, and what was human luck. So while that's how we should approach our decisions, there's still a few other levers that we can pull to help us gain more perspective, more clarity, and a little bit more luck in our lives. So one is kind of like a gratitude journal, but with a twist. Sit down every night or every week or whatever it is,

Starting point is 03:43:39 write down some good things that happen to you, some things that you're grateful for, but also be very explicit on why you're grateful for them. What are the worst possible outcomes that could have happened but didn't happen? But next, I want you to go a step further, which is to write out what are some potential things that you could be lucky about in the near future that could break your way, that could go well, it could happen. This is a simple exercise in drawing connections in your environment so that you are more well-equipped to spot them when they do emerge, right? When you tell yourself like,

Starting point is 03:44:14 hey, I could actually meet somebody really cool at this event I'm going to this weekend, instead of dreading it, you help prime your mind to see the opportunities in it. The second easy thing you can do to increase your luck today is just show up. Just do more things. Be in more rooms. Accept more invitations. Introduce yourself to more people. Again, the more surface area you create for yourself for serendipity, the more likely that serendipity is to happen. Now, a lot of people don't do this because they feel like it's a waste of time or, you know, it's if nine out of ten people they meet, nothing's going to come of it. It's like, well, why waste all that effort? But if you think of it the other way that one out of ten people you meet

Starting point is 03:44:54 could have a pretty significant impact on your life, then it makes sense to work through those other nine people as quickly as you possibly can. There's also something to be said about, about making asymmetric bets. Annie talked a lot about how emotionally our approach to betting is asymmetric to the downside, which is that we tend to overestimate the cost of failing and underestimate the benefits of success. You can look for situations where there is an outsized benefit with very little cost. Again, walking into a room and introducing yourself to someone is a perfect example of that. I mean, when I met my wife, I was in a loud nightclub and she was just like the first girl that walked in the door that I saw that I was attracted to. I lost nothing by going over and talking to her, but what I gained was a partner for the rest of my life.

Starting point is 03:45:49 And then finally, the last lever is how you choose to respond when things go wrong. There's a lot of research showing that people who experience more luck in their lives, they tend to bounce back faster. They don't dwell on the failures as long as others. They don't get mired in like the, why me, what did I do to deserve this? This isn't fair. The world's unfair. They just try to learn something and move on as quickly as possible. And so ultimately, we imagine luck as being kind of this cosmic force that is thrust upon each of us in different ways.

Starting point is 03:46:22 Some of us are just seemed to be born extremely lucky and others seem to be born extremely unlucky. But like Annie said, luck is actually just kind of this ever. present roulette wheel to everything we do. And over a long enough period of time, all of us are going to experience good luck and bad luck in different proportions. And we're actually going to be very poor at identifying what the good luck is and what the bad luck is and where it begins and ends. Instead, it's simply more useful to acknowledge that everything we do in our lives has some element of chance to it. But we can manipulate our circumstances and our situations and our decisions to leverage our chances more optimally. We can put ourselves in situations that increase the odds of

Starting point is 03:47:08 positive outcomes based on our goals. We can develop habits and skills that allow us to have more opportunities and to gain that volume that minimizes volatility. And then we can implement some basic decision-making practices and some basic mental practices that help us notice opportunities and make high-conviction decisions on them sooner than what we otherwise would. In some, this is what luck actually is. It's developing a series of perspectives towards chance and probability that benefit ourselves and developing habits and behaviors that leverage the randomness in the world better than others. And so at the end of the day, Will's father was correct. Maybe there isn't such a thing as luck. There's just when opportunity meets preparation. Thank you all. I will see you

Starting point is 03:47:59 next month with another great episode. And just a reminder, we do have a free PDF guide for this full episode. If you go to solvepodcast.com slash luck, you can download it for free, get all of our resources, citations, references. Big thank you to Annie Duke for coming out and helping us out with this one. And as always, please follow, subscribe, support the show any way you can. We really appreciate it. My name is Mark Manson. I have no co-host. I'm terribly unlucky. am I lucky? Stay tuned. We'll find out next month.

SOLVED with Mark Manson - How to Get Lucky, Solved

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