The Knowledge Project with Shane Parrish - #102 Sendhil Mullainathan: The Chaos Inside Us

Episode Date: February 2, 2021

Sendhil Mullainathan is the Professor of Computation and Behavioral Science at the University of Chicago Booth School of Business and the author of Scarcity: Why Having Too Little Means So Much. Sendhil reflects on lessons he learned from his father, how creativity is the marrying of ideation and filtration, direct versus associative memory, what we can do to get better, rules versus decisions, positioning over predicting, outcome over ego and so much more. Listen now for some ideas that you can put into practice that will help you become a better version of yourself. -- Want even more? Members get early access, hand-edited transcripts, member-only episodes, and so much more. Learn more here: https://fs.blog/membership/   Every Sunday our Brain Food newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/   Follow Shane on Twitter at: https://twitter.com/ShaneAParrish Learn more about your ad choices. Visit megaphone.fm/adchoices

there's a person in my life, I just do not trust. Like, even though I spend a lot of time with this person, I just do not trust them. Like, it's embarrassing to say, but I don't trust their motives. I don't trust them to follow through on anything. And that person is me. Like, you should not trust yourself. Like, every, and so decisions, it's like handing over a bubble wrap to like a five-year-old. It's like, you know what's going to happen.

So it's like, well-thought-out rules have the property that they are ones that many parts of ourselves subscribe to. Poorly thought-out rules, I think, don't have that property and are doomed, if not to failure, to misery at some level. Hello and welcome. I'm Shane Parrish and you're listening to The Knowledge Project. This podcast in our website, FS.Blog, help you sharpen your mind by mastering the best of what other people have already figured out. If you enjoy this podcast, we've created a premium version that brings you even more. You'll get ad-free versions of the show, access before anybody else, transcripts, and so much more. If you want to learn more now, head on over to fs.blog slash podcast or check out the show notes for a link. My guest today is Scent Hill Molinawan, Professor of Computation and Behavioral Science at the University of Chicago Booth School of Business and the author of Scarcity, Why Having Too Little Means So Much. I have to say this is one of my favorite conversations today. We talk about the lessons he's learned from his father, how creativity is the marrying of ideation and filtration, direct versus associated memory, what we can do to get better, rules versus decisions, positioning over predicting, outcome over ego, and so much more.

walk away with several new ideas that you can put into practice right now that will help you become a better version of yourself. It's time to listen and learn. Sandhill, I'm so happy to get to talk to you. Yeah, it's my pleasure. I'm really looking forward to chatting. So am I. I mean, you grew up in India until age seven, right? And then you moved to L.A. where your parents owned a video rental store. I'm so curious as to sort of Like, what lessons you've learned from your parents? Oh, my God. You know, for a while, I contemplated writing a book about my dad, okay?

And it was going to actually be a genuine book about my dad, meaning I thought it would be a great way to convey lessons from psychology and social science through my interactions with him because he has just an insane font of good ideas, but also mixed with bad ideas. So it just shows raw creativity. work. So my favorite of his ideas, which is going to be the title of the book, was this idea. He called me up one day. This is when I'd, you know, I'd graduate at my PhD. I was a professor, and he calls me up in his opening line, his opening gambit is, so you're an economist, right?

I'm like, well, at this point, this fact should be known to you. But I didn't like where this is because I don't even know what my dad thinks an economist is. So he says, so you're an economist, right? I'm like, yes. He said, okay, I need your help opening a bank. Like, first of all, I, that So far from anything I know anything, but I want to know where the story was headed. So I said, okay, but why do you want to start a bank? He said, no, no, I've got a great idea. So there are a lot of people who believe in reincarnation, right? I said, yes.

You know, so why should they go to the next life with nothing? So we'll start a bank. They give us a pin code. They deposit their money when they're reincarnated. If they're reincarnated, they come back, they give us the pin code, and they get their cash. Now, he says we win either way. Either we have definitive proof of reincarnation. That's a win in and of itself.

Or we have a lot of money from people who falsely believe in reincarnation. And the best part was he said, I already have a name for it. I was like, what is it? He said, The Eternal Bank. Oh, I love it. And I, isn't that amazing? And I thought that would be a great title for a book about my dad, The Eternal Bank. Because it sort of has these, right, he has all these stories and so on.

So that was one of the, I think what I learned from my dad, amongst many things, is just, you know, I think a lot of people aspire to think outside the box, but my dad doesn't even know where the box is. Like, he is just out. And he really instilled that in me in such an intuitive way that I never even kind of, I'm clearly not as creative as he is, but that somehow it, it's like to this day, I chafe at the box. Like, I'm so not used to that. We can't leave it at that one story. We've got to go into another one. But you could also pay like 20% interest per annum on these bank accounts, right? Yeah, yeah, exactly right.

We could really, I mean, this is a financial idea that's just going to be awesome. You can only withdraw post-humanously, at least in this life. Yeah, you need a proof of a debt certificate to withdraw. That's all we need. So, yeah, so if we can get that past the regulators, I think that's a good money-making idea. The other story is a little more poignant. It's a story about like, actually, I had a lot. I had like written out like 20 of these.

Because each of them I thought illustrated something about science. Like it's not just, oh, my dad is interesting. Like this story I thought illustrated something about creativity, which is I think a lot of people forget the creativity is the marrying of ideation and filtration. That you need the capacity to generate ideas. but you also need the capacity to filter ideas. And these processes are in such fundamental opposition. If you have a good filter, you can't generate ideas because the world is as it seems.

Like if you're like, oh, that idea won't work, that idea won't work. You just, you don't have that other capacity. If you have a good ideation, you don't have a good filter. So one of the things I've struggled with, and I know I love the way you think about sort of, I call them tools of thought, you call them mental models, But when I think of tools of thought, for me, one of the tools of thought I've been spending a lot of time working on my whole career is how do you create ideation skills while also creating filtration skills? Because they just don't sit well together in your head. They don't like each other.

Like one of them wants to see the world as it is and realize, well, you can't do this, you can't do that. the other wants to see the world without any constraints. And so I spend a lot of time on that internal tension. And so that was going to be the point of that eternal bank chapter. Most people don't think of economists and innovation going hand in hand. Can we dive into some of the work you've done on that in terms of how you're better at, I guess, lack of filtering on information? Like, how do you think about that?

Like, go deeper. One of the things that for me, I think, helped with lack of filtration. I'll give you a couple of things. One very mundane. It's mundane, but it's fundamental, which is, you know, we're social animals. Actually, my favorite quote on this is Nick Epley, a colleague of mine, has this awesome book, Mind-wise, in which he quotes these two primatologists, and they're a husband-wife pair, I think. And they have been studied, they have studied baboons, I think, for their whole lives.

And so they wrote a book with an awesome title, Baboon Metaphysics. And in that book, he has a quote, which is just awesome. Their quote is that no matter how you look at it, the problems of baboons can be summarized in two words, other baboons. And I think of that quote all the time, other baboons. And so I think one of the filtration processes that's very basic and obvious is, the other baboon problem. Like, if you are doing something creative,

you can't expect the other baboons to be like, that's great. On the other hand, you got to somehow take feedback. You don't want to be the insane person on an island who's like, this is it, I've got a perpetual motion machine. So part of what I think creating a filtration mechanism is actually creating the right social filtration mechanism. How do you decide which other baboons to listen to? How do you decide what about what they're telling you do you want to listen to?

So, for example, if you have an idea and there are a lot of people for whom I would trust the content of their criticism, meaning if they say, oh, this idea has this flaw, well, you're like, oh, okay, let me think about that flaw. Is it truly a flaw? So there are a lot of people who you would have that. But most people don't do that. They give you the summary judgment. Oh, I think this is not a good idea. Oh, I think this, you know, there are very few people for whom you can trust their summary judgment. So I think for me, the first issue is trying to be very open to feedback and criticism,

but trying to get the feedback and criticism down to something granular rather than this sort of, oh, I don't like it. Whereas every part of my personality really wants to say, you know, give me approval. Tell me you like it. Like, that's what I want to hear. And so I think one filtration mechanism, I think, is architecting the social structure around you and having the discipline, which I'm not saying I have, but aspire to have that discipline to try to kind of not seek approval nor to have the reflexive mechanism to just say,

well, it doesn't matter what they say. No, no, it does matter what they say. And how do you get that feedback? Is that because you're specifically asking for a granular level? Like, you're like, go deeper on this. Like, I really want to understand your criticism. Or is it more effective to pick those people in the first place that are naturally prone to do that? The conjuring left rights on September 5th.

I come down here with you in your house. Hooray! Hooray! Array! I think it's both. And I think I've also kind of tried to be the reverse. How do I become the kind of person who's giving granular criticism? Like how do I, or feedback, positive or negative?

and it's it's it's shockingly hard so you're definitely right picking people is a big part of it but but you'd be amazed with like a little bit of guidance like part of it is leaning into the wind which is really hard when someone says oh i just don't think this will work you kind of and they're not giving anything granular it's like you have to say okay i don't like hearing that that's really painful but i have to just like swallow and just say okay tell me why you think it won't work and their first response most notably is some highly level thing. So you're like, okay, I have to sit here and let that wave pass me. That's going to be high level, whatever. And then you have to say, okay, is there something in their high level thing that I can latch on to and say, oh, you mentioned X. Tell me more about X. Not everybody, but even people who start high level, a big fraction of them with a little bit of patience, you can get them down to the specific kind of thing that is bothering them. And it's, it's, it's, it's, it's really hard because it's your instinct. Like every, every fighter instinct in you is to push back. It's like, no, no, no. Now, here, I've already thought of that or I haven't answered that.

And you probably do. But that's not the point. You kind of just need to lean into it. It's very hard. Like I find it, I think I'm getting better, but I find it very hard, but rewarding when you do it well. Are there specific sort of pieces of feedback that you're giving to people that seem consistent? Like, is there a pattern to some of the feedback that you're seeing that you offer? That's a really good question. I think one piece of feedback that I've noticed applies to many, many, like, you know, sometimes they're business ideas, sometimes there's ideas for research papers. It doesn't matter what the discipline is. One piece that I've noticed, and it goes back to our sort of creativity and filtration thing, is that many people, when they're exploring something new,

get stuck in the middle. They don't let the novel part of the thing fully express itself because they're afraid that, like, that's too wild. But then they don't let the filtration part fully express itself. So one thing I often say to people is like, okay, let's call this offense and defense. You're stuck in this middle ground right now with your idea where you're sort of playing some offense, you're sort of playing some defense. Let's actually just let one side develop a lot.

lot before bringing in the other side. And it's kind of this weird thing. It leads to ideas when you're stuck in this weird middle, it leads to these ideas that are neither bold, nor are they particularly pragmatic. Because you're not, you don't have the discipline to be brutal on the pragmatic side, nor do the courage to be brutally bold. And it's like, I think people imagine that if you look at the timeline of their thinking, like if I could just plot it, I can attach something to your head. I think they imagine the way things should look is a nice balance of boldness and pragmatism at every minute or hour.

But really, I think it works much more effectively to be bold for days and then switch on a dime and just be pragmatic for days because it's easier to get into the pragmatic groove and be really brutal and then easier to get into the boldness groove and be really brutal. And that's when, you know, it's like this. Tree has just enough time to grow because you've been bold, then things can attack it. And so that, I guess I call it the bio rhythm of these two things, developing a sense of that biowrhythm is often what I notice in ideas. I'm like, well, this was good, but why did you not like get even more bold on this bit?

And why not? Like just keep developing that. And then usually there's an answer like, oh, I don't know if that would sell or if that's realistic. I say, well, let's not worry about that. Let's first develop it. Then you can come back later. and say, how do we make it something sellable? Maybe it's not. Like, what do you lose? It's just an idea.

You developed it. You saw it didn't work. Okay. Ideas were disposable. It's a great question because I hadn't really thought about it. But I think that's one of the general feedbacks that arise. I love that response. I think like if you're stuck in that middle area, even if you're successful, you're only going to be incrementally successful. And if you're a failure, you're not going to be too far from success. So you're sort of like keeping yourself in this boundary where you can always convince yourself that you're sort of right or not very wrong instead of going for it and moving that like Gaussian distribution out to these fat tails. Like you're trying to stick within one standard deviation instead of pushing it out.

I love it. It's like a, it's like a, I love that way of framing it. It's like a misguided form of hedging. Yeah. You're like, oh, I'm going to protect my downside risk. And you're like kind of just staying in that middle because you know, you know, whereas it's misguided. because it's comfortable and it's misguided because I like your Gaussian analogy.

Look, you're just thinking, you're not doing yet. So don't worry, if you think and the idea turns out to be awful, like a negative tail, you'll find out, it's okay. You'll find out in your head or while talking to people. Like, if you don't take risks now in your head, when are you going to take the risks? And it comes back to the baboon thing, right? When we're explaining these ideas to other people, we're seeking unconsciously there approval because we are social creatures. And so we don't want to be too far out in left field

because then we're afraid our social group might shun us. And then it's not about the outcome. And in a way, it's about protecting our ego, protecting our view of ourselves and protecting our relationships. That's a good point. I do find that that's one thing. I was just starting to work on, but I still find hard, which is, it's protecting the ego. It's like I want to be much more comfortable having people tell me that idea is really dumb and here's why like it's yeah yeah it still hurts like i mean i've been at this for how many years like at this point and and it's astonishing it could be an incoming phd student who's it's it's not even like it's not just praise from people who i think it's anybody and somehow it could be the person a random person on a train

And they're like, really? I don't know. And I'm like, oh, no. Like, I feel that. It's shocking how much it affects you. And it sticks, right? Like, you can hear a thousand positive comments and then one negative. And it's that one negative one that, you know, it's 11 p.m. at night.

And you're like, oh, it just can't shake it. Speaking of PhDs, you were super young in college. You started your PhD at like 19. What was that like? Yeah, yeah. I was 20. I think I was, I couldn't really. drink in the U.S. It's 21. I was always ahead of my grade. Weirdly, I was actually ahead by

one less, when I came here to the U.S. when I was in fourth grade in India. Then I come here. And the U.S. has age restrictions, actually. And so they said, you're too young to be in fourth grade. So I had this period where they put me back. And it was like all stuff I knew. And so I was still ahead of my grade. And it was painful. But the reason I actually ended up being so far ahead has nothing to do with like oh like he must have shown young promise had nothing to do with that it was that you weren't dougie hazard no yeah exactly yes i don't know about that there was um when i was about i don't know 18 months i guess let's call it one year old 18 i don't remember something in that age we lived in banglor and my dad uh would bring home mangoes now i don't know

if you ever had an indian mango but like mangoes in india especially during the right season oh they are So he'd bring home these mangoes. And I was this little kid, and I loved mangoes. So, like, wherever he put them, I'd go, and I'd grab them when no one was looking, and I'd just, like, rip it open and start eating it like a baboon, I guess. And then they developed a system where they would put them somewhere, and they'd say, oh, the mango is here, but I didn't speak, you know, I didn't know the word for mango, but apparently I pieced together where it was.

So if they said the mango is there, I'd, like, go and get it and take it. So then they developed another word for mango. It's a totally new word. And this time, they had put it up on a mantle. And one fact you should know for this story is that in India, the floors are concrete. This will be important in a second. So apparently while they were all gone, I had already, I pieced together that this was the word for mango, which they didn't know. So, like, I still picture myself.

I must have been tiny. I went and, like, took a chair, pushed it. And then, like, I climbed up on that chair. And, like, I guess I couldn't reach the mango. So I must still climbed up on the edge of the chair, like the back, to reach. the mango and I don't know whether I got it or not but gravity being what it is I just I started falling and I hit and my mom says she heard the worst that in the world and she comes out and imagine what it must feel like when you're her mother there's your kid blood everywhere

on this concrete floor having hit like a concrete floor so then they took me to the hospital the doctors basically didn't know if I'd survive and then I did survive I guess you know as we now know, you know, spoiler. But the other thing that happened was they said, yeah, there's probably going to be damage as a result of this, and we don't know what it is. And so I didn't talk, like literally, like almost no talking for a long time. And so they thought that was the damage. Like, they were like, oh, this is, this is bad. This is the problem. Until, like, what, I mean, I must have said a few words before this, but one of the first substantive things I said was I apparently went up to my parents, and I said, this was when I was three, all my friends

are now going to school because they were like two years older. I want to go to school. And they're like, wow, this kid doesn't say anything. He says this. Whatever he says, we'll do. Now he comes out with complete sentences and requests. So they put me in school. So I was like in school two years earlier as a result of this mango fiasco.

And so I think it led to a lot of problems because when you're physically younger than everybody, you know, it's just not, you're not socially developing very well. So I was not a well, socially well-developed kid, I think is the best way of saying it. And grad school was probably the first time where, you know, it's like one of those perception things, like percentages, like the age difference of two years when you're like 12 is a lot. But by the time you hit 20, you know, 20 to 22, but they don't really make such a difference. Through undergrad, I didn't feel it as much, but in grad school, I really didn't feel it. It just felt like people say, oh, you're young, but we had all been equally developed or underdeveloped, depending on

your view on things. And that, yeah, so that part was nice. A big influence for you early on was Richard Thaler at Cornell. He's the guy who got you to switch into econ, isn't he? Yeah, yeah. I was a math and computer science major, and I actually applied to the PhD, but I deferred a PhD, in computer science to say, let me try this PhD in economics. So Thaler is amazing. The other person who really, it was both Thaler and this guy, Bob Frank. Have you read any of Bob Frank's work? No, I don't think so.

They're amazing writer, and he taught these classes. So one class he taught was called Applied Microeconomics. And it was a PhD class. I took it as an undergrad, but what made the class exceptional was until then I had taken these PhD classes in economics, which are basically just math. And I was like, oh, this field is kind of like math. They just use math and they apply it. And that's it. But in this class, even it was a PhD class, he did these cool exercises where he said, okay, every week you're going to have to go and find a thing in the world that this phenomena applies to that no one else

has written about. And I want you to write about it and how it fits or how it doesn't fit. And there was something terrifically interesting about navigating the world but equipped with an idea, like a scavenger hunt of sorts. How will I find this idea instantiated in the world around me? That way of thinking of like you receive a new idea, don't judge it as rightness or correctness internally, just use that as a way to spend a day looking for that thing in the world. A, that way of thinking was awesome. So that's a tool of thought I've kind of maintained for a long time. It's like, I kind of think it as what am I mulling right now? Like have a top of mind mulling thing and take that thing that you're mulling.

And as you wander the world, like kind of keep activated. Like, is this an example of blank that I just learned about? Now, we tend to do this naturally, but because we tend to do it naturally, we think we don't need to work on it. But it's actually, it is a thing to work. It's just one of the many faculties of the mind that, yeah, it happens naturally. It doesn't mean it happens often enough. So that thing he did. But the other thing he did was he had this great phrase, I'm going to butcher it.

But he talked about how, you know, as an economist, like think of a botanist. Think of how a botanist walking in the woods is walking in a very different woods than you or I. Like, it's just different for them. Like same physical space, different mental space. And he said, you know, as an economist, the exact same thing is true for the social world. Like, you should be able to walk. A walk in the woods for you is a walk into a Starbucks. And you should be able to see things there that are different.

Now, I ended up doing a lot of psychology, but I think whether it's psychology or economics, I think the same idea is it's what's so exciting about social science. It's like it arms you with ideas that you can see refracted in just everyday life around you. So he was a big influence, and Thaler, of course, was a huge influence. How do you check yourself on that? Like, how do you not overfit what you're seeing when you're trying to fit it into sort of like this mental toolkit? I think the first stage of learning is overfitting. I think you go with, when you have a new idea and you're trying to like upload it, so to speak,

to use some crass computer science metaphor, when you're trying to upload it, I actually kind of lean into overfitting because think of it as there are ideas that have been so rehearsed, they are overactivated to find any, it's like being, think of this way, like when you're in a bad relationship, a romantic relationship or friendship, you're like on edge about some things. Oh, this is just another example of blank. Like there are ideas that are just top of mind that are looking to be instantiated. But in your regular life, you also have that.

Right now, people in the U.S. have just, whether you're on the left and the right, they're on high alert for certain things, either as evidence of racism or evidence of evidence. And that's not to say they're not right. I mean, it's just the fact of the mind. There is a lot of racism, but that's a separate issue. It's just your mind is on high alert. And so what happens is when a new idea is trying to enter this ecosystem, it's competing against these highly active ideas.

they're kind of blocking out the sun. So part of what you need to do is to just let them live for a bit. It's okay if they overfit because the goal of this mulling is not to get to accurate truth about the world. It's to practice this new idea and to let it be getting its own activation. Once it's big enough, it's like think of it as a greenhouse. Once the plan is grown in the greenhouse, then you put it into the wild. And there you have to trust all the other instincts you have, the other ideas that are active that are going to be competing and say, you think it's that, you think it's that, or your usual capacity to say, yeah, I did notice and I think this is it, but is it that? Partly because we encounter these people who are almost, you know, just zealots about an idea, we think the big danger is being too into an idea.

But as an uploader of an idea, we're not yet zealots. and, you know, we have to trust in ourselves that once it's uploaded, we have a good ecosystem in our mind. But the overfitting is, I think, actually a feature. I don't think if it's a bug. It's part of the fun, too. It's like, ooh, who knows if it's right? But this is another example of blank. And it doesn't matter if it's right. You're practicing your seeing skills. It's a really interesting way to think about it. You said that's the first stage of learning. I'm curious as to what are the other stages of learning. So I think once it's uploaded and it has the capacity to sort of notice, I think the next stage I often think of is, and this is where a lot of ideas fall short, a lot of ideas have recognition capacity, meaning you can see them in the world.

But they don't have generation capacity. What I mean is once I've noticed this thing, so, you know, opportunity costs, once I've noticed, this is an example of an opportunity cost that I've noticed. this is an example of an opportunity cost that I'm neglecting. If you practice opportunity costs, you'll start noticing opportunity costs. But for an idea to be generative, it then has to have a what's next. Okay, I've now noticed it. With opportunity cost, it has a straightforward next, which is, okay, now that you've noticed the opportunity cost, pay attention to it.

So that's helpful. But to me, ideas are graded by how much that, depth they have in what's next. Let me give an example of an idea. Let me see if I can think one of it on the fly, which has both noticing but also an endless capacity for generation. I'm spending a lot of time thinking now about metacognition, sort of, and I can tell you why.

We can come back to what got me on this path. It was actually not, what got me on this path was actually a study we did with people in the south side of Chicago, kids in the south side of Chicago. So it was actually a study on crime. I'm totally different, but it's all about metacognition. So metacognition is the capacity or skill to become aware of one's own mental process.

So on the one hand, it seems kind of obvious. But if you say, today I'm going to try to notice and simply just notice a part of my mental process I had not yet been aware of. Now, that's interesting because what that is is it's not just an observational thing. You'll notice it opens doors to things you've never thought of. So as an example, how many questions do you ask it a day? Are you median in that level? Should you be asking more?

This is a form of noticing that generates other questions and other ideas and other thoughts. So I think of the next stage as, is this a, you learn about an idea. this way. You learn, okay, this is an idea that's useful. I can upload it. It has a practical decision implication. This is an idea that's generative. If I start doing this, other things open up in front of me. So almost like the next stage is the evaluation of this thing in trying to understand. And yeah. I think that's a really interesting way to look at it. I like that. As you were saying, sort of the first part is, you know, recognition and sort of overfitting, or the second part was recognition, but the first part was like overfitting. I was always

almost coming back to sort of like your computer science, PhD that you defer, you can still do it. By the way, you can, I'm sure they'll let you back in. But I was thinking about memory and how we have this direct memory versus associative memory, right? And so the direct memory is you learn a concept and you sort of have this sense of it and you see it in the original capacity in which you learned it. So if you have a direct match, which is how a computer sort of matches, right? versus associative, which is like, I have this general concept, and I'm going to try to apply it here and here, and now I can start to see it in the world. And even though it's not a perfect alignment, it's that associative match that we really want to hone in on and not

the direct match, because direct match means you need to identify the problem in the exact specific way that you've seen it before. And a lot of textbook learning is sort of like direct match, right? You're taking a concept from one discipline. You're applying it in that discipline with the same set of variables, the question might be worded differently, but you're really just fitting them into sort of like... That's perfect. In fact, that's such a crisp way of putting it

because that's the reason I think overfitting is not a problem because it's the type 1, type 2 error. Yes, you can stay in this very narrow area and the thing you were learned, it fits, it's fine, it's not overfitting. You can go out over here, okay, you get a bunch of fits that are false, whatever, but you find one, which is out. outside the original domain, and you're like, oh, it is, you're right. It's also what's super gratifying about a metaphor. And now you see the world differently than other people because

you're willing to sort of be wrong and risk the overfitting. Come back to opportunity costs for a second here. You brought that up. I would love to hear your definition of opportunity cost and how you apply that in your life. Oh, that is a good question. This is taking me back some time. So let me try and then I want to hear your definition. I think I have a different definition today than I would five years ago or ten years ago. For me, the opportunity cost is dictated by the hidden mental frame you have on the problem. So any decision you make, you are quite a bit narrowing the world down to some very tiny little world. Opportunity cost is the thing that is left out of that frame. Because what you've decided is you said, should I go to dinner

with my friends? How much will dinner cost? The opportunity cost is the fact that you've left undefined the other things you can do with your time, for example. Or how much will that dinner cost? Is the steak worth $20? I don't know. I'm using steak. I'm a vegetarian, but whatever. Is this steak or $20, the opportunity cost is the other things I could have spent the money on. But you'll notice in the frame, and this is why opportunity costs are so insidious, in the frame is the stake or $20. The other uses are not in that frame. It's not stake or whatever movie. Then there's no opportunity cost. It's stake or movie. It's all these choices where there is no or else. And the frame doesn't provide an or else.

Now, that's not a, it is a bug, but it's also a feature because you couldn't possibly go about making your decisions in life working through every other or else. Like you're going to pay 20 bucks. You either want this thing or not. And so I think opportunity costs are the hidden consequences that are left outside of your frame, whether it's for money or time. It's those things that then are neglected because they're exactly not part of how you frame this problem. So I think part of for me more valuable than opportunity cost is to almost. Ask yourself, what are the hidden alternatives that are, or consequences that are being left out of this frame? And sometimes the answer is, look, I don't, you know, I know the $20 might have some other value. Fine. Just imagine another use of $20. That's at least one thing now you've brought from outside the frame into the frame. And I think there's a deeper lesson there than just opportunity costs.

It's construe, I think, is a psychologist sometimes used that phrase, which I like. it's how you've chosen to construe this decision leaves a lot of things out of there. I think that's a really good way to look at it. I mean, one of the things that I struggle with is as an entrepreneur, like the opportunity cost is always to be working on the business, right? So you're always, you have this high hurdle for everything to begin with. And then you're sort of like constantly within reason, you're harmonizing your life between work and family, but you're also within reason trying to constantly raise the opportunity

cost of what you're doing over time. And I find it a really interesting way to think. And people don't tend to think in terms of opportunity cost. I'll give you an example, which is like, I remember having a conversation with a friend who lived in the suburbs, and they were like, it's so much cheaper to live here. And I was like, well, that depends on how you think about your time, right? Because you're spending, you're spending 70 minutes each way commuting from door to door. You know, I'm spending 10.

So you're spending an extra two hours a day in a car. And now, like, what's your opportunity cost for that? Now, maybe you're listening to an audiobook, and that's what you would do anyway. And maybe that's your transition from home to work and work to home. And you would do that anyway. And so maybe it's negligent and maybe it's not. But it also, like, if you start slapping, well, you know, if you make 20 bucks an hour and you slap 20 bucks an hour on, well, that's $40 a day that it's a hidden cost

that you don't really see. And it's just a way to conceptualize sort of like give people tools to think about it. I love that example. One thing that I might kind of add as a way to think about that example is that oftentimes people think they're making money and space decisions.

Like, oh, I got a bigger house. It'll cost a little bit more. If I lived in the city, it'll cost them, blah, blah. They vaguely in the back of their mind, know they're also making a time decision. but in the choice in front of you, what's in front of you, it's like three bedrooms, you know, $1,000, two bedrooms. They're like, oh, I can get more space for, you know, same amount of money.

But the hidden object here is, so I love that. I actually had this decision when I moved to Chicago. All the interesting things were downtown. My work is here in Hyde Park. It's like 30 minutes. And Chicago is a terrible town to drive in, like anywhere. It's just traffic is bad. I was like, oh, everyone said, oh, you like to go out and do things.

You should live downtown. And this is like an example of here. It's really digging into the opportunity cost. I was like, oh, okay. But then I'd be commuting every day to work. And how often will I commute to work? How often will I commute for fun? So the algebra starts to like load up.

But the other thing is if you think of the psychology of time, I think that's the one place where I'd say, sometimes people make time into money, which is a good juristic. But time doesn't operate like money. Time is a unit of object whose value can range from the negative to the positive, like huge values. Like, what is boredom? Boredom is when there's like negative value for time.

You're waiting in line. You're like, I just want this to be over with. Give me a pill. So there, your value of time is negative. What is peak joy? Oh, I wish this moment could go on forever. So time, it's not constrained by the normal laws at some level because we don't have every opportunity for consumption isn't available to us.

So time actually is an object whose value we have the capacity to make more valuable or less valuable. So why am I saying it in this context? What does a commute to work feel like? I mean, you know, work is fun, but you're commuting the work. What does a commute to like go out to eat at a nice restaurant feel like? Yeah, the commute's shitty, but you guys like. something to look forward to, you're going with some friends, you get the chat. So it's not just

even if I was commuting every day and the same amount of time was being spent. But time isn't spent. Like ultimately, time is not really a spending thing. It's only being spent as proportion to what the utility looks like during the use of it. And so I wouldn't say I spent time at this amazing play. No, I actually consumed the time at this amazing play. I mean, it was, it's a I consumed it. I wish I could have more hours like that. I don't have the capacity of that. That's another layered, I think, your story, which I certainly experience. I think the, I really appreciate you sort of adding that point to it, which is like even on the way home from that restaurant, you're talking about the stories from dinner. So there's,

there's some sort of value to it. I've always thought, and maybe miscorrectly, I've sort of approached, as I've gotten older, I approach time as something like, it's finite. I don't get more of it. And what I value is optionality. So I will always. try to spend money to create time versus spending time to create money in that sense. And you know, it's super fortunate to be able to do that and run a business. But the flip side of that is like it also drives you to sort of think about time differently, right? Which is you're not going to get more of it. You, I mean, with very few exceptions, more money is not necessarily going to buy you more time. It might buy you a couple years at the end of life or a bit better

medical care in the United States, but generally speaking, it's not. So you want to use wealth or money to create time. And I think that that's a really interesting way to think about it. And how you value that time, the utility on it is also an important consideration. I think the utility of it is what interests me most. One of the things I've been working on with the psychologist Mike Norton and Beck Weeks, he's the co-founders, is this app. to help people reconceptualize how they see the world

and in there we have this thing it's called peak in there we have this set of moments around time so one moment around time which I like

we call the moments because our little experiences that try to teach you things but one moment that I have in there that I like which is we're trying

let's not try it now to board the viewers listeners is just to sit there close your eyes turn on your stopwatch and when you think a minute has passed, open your eyes. Now, it's the most trivial thing in the world.

Like, when you think a minute has passed. Now, there's a couple of things we get out of this exercise, when we get people to do that in the app. One thing we get out of the exercise is do this with your partner. The differences in how time feels is amazing between people. So that's what, the second thing we get out of this, is do this over the course of a week, like five times. It's shocking how the flow, like, if I told you, oh, Shane, I've invaded a little time machine,

it lets you move forward faster or slower on the ocean of time. You'd be like, that's just sound stupid. But I have. It's called the mind. Like you yourself are floating through this thing faster or slower, and you don't really have any, and people think, and it's true, Some of it is, like this conversation is flowing, so time goes really fast. So some of it is that. It's external stimuli.

But some of it is just internal. Like once you start, so we try to get people to do this moment a few times. You start becoming aware. There are just days where, or hours, whatever, where you are kind of marching slowly through time. And this, I just want to say this because it's related to your point. The irony of it is that when that's happening, you don't think to yourself, Woo-hoo, I've gotten more time. You're like, oh, this day is dragging.

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So there's something peculiar about our hedonic experience. We all wish we had more time on, you know, our mortal coil would last longer. Yet when we have these moments where time is sort of stretched, it doesn't feel good. And so it's interesting to think about. We almost want more time, but we also want it to go faster because those periods of flow are the most enjoyable. That's a really good way to think about it. I also wanted to ask you, just before we move on, this concept of time, as you were talking about the utility value of time, how do you compare, like, how do you factor in, I guess, feelings, love, family, on one side, which is largely unquantifiable, and then on the other side, you have money, you have other things that we seek as humans, like status, power, wealth, and those are more quantifiable. And you're often trading these things off against one or another.

Can you just riff on that for a second? It's a good question. Let me do something lateral, and it will come back to the exact question. One of the other moments we have in Peek is to help people see that they don't. We're all hoarders. Here's what I mean. You invest a lot of time acquiring a partner or a spouse who cares about you and loves you. Like, you put a lot of energy into that activity.

You spent time. I'd say dollars, but that sounds creepy, but it is. It's also dollars. It's like a lot of, okay, so now you've acquired, in very crude terms, this quote asset. How much do you actually enjoy that asset? You'd say, no, I value it, you know, my spouse and I do things together. Okay, great. But say you're on a train ride somewhere in your board, here's a simple way you can cherish that asset.

We just sit there and go, oh, let me think about one thing I really like about my spouse. I mean, that's the consumption of an asset you've hoarded. But like hoarders, what we actually do is acquire this shit, put it away somewhere, and never actually consume it. So, like, you have love that you've invested in. You've had experience. So one of the things we have people do is something very trivial. It's just an exercise. Take out your camera, zoom to a random period in that thing. Look at one of the photos. You know you can do that anytime. That's so you keep taking these photos. But how many photos have you taken? How many photos have you looked at? And that's like you're not consuming this shit. You're acquiring. It's perverse. And it seems

almost wrong to just sit there looking at, but it's not. You're actually, that is the consumption you bought yourself. And it's what the value of all this hard war is an example from the professional sphere. It doesn't have to be loved. It's like, you've worked really hard, you've become successful. like you have this awesome brand and you have like, you know, this is great. How often do you spend time enjoying aspects of that brand where you just sit back and say, let me think what I was striving for five years ago or ten years ago. Let me think what that person would have said if I could, you know, you had Danny on for a podcast, I think. If somebody had said to you, yeah, I'm going to have like Danny on for a podcast.

Like that, just even knowing that's a thing that you're, I mean, and just cherishing it. It sounds so trivial, but we just don't do it. We don't actually engage in mental consumption. It's bizarre. We're in acquisition mode, not in consumption mode. As you were saying that, I was sort of thinking, like, is this like a Galilean relativity problem where we're like, we're on this train, we're holding a ball, you know, we're going 60 miles an hour, so the ball doesn't look like it's moving.

But to the observer on the outside, you know, we're. moving 60 miles an hour and you know the you five years ago and the you five years in the future is going to have this whole different reference point around you and it's almost it's really difficult to mentally shift that perspective and go back five years and be like man if if i told you five years ago you were going to be in this position doing this you would be ecstatic right but you sort of miss this sort of happiness like and i'm riffing here a little bit and thinking out loud but you miss the happiness because you're you're sort of like living in the moment you're inching ahead but what you really want to do is sort of like be able to time travel right so you want to be

able to make your your hindsight of your future self your foresight of your present self and you want to be able to like take these lessons which is like what is life when I'm 90 what is that going to look like and what is it going to mean and then how do I take whatever I'm time traveling there and bring it back to me today so that I can use that to live a more meaningful life and sort of be a better partner in person and and leader. Absolutely. I like the relativity thing. Part of what you can do for yourself, so we tried this in one of these moments and it started when I was like a while ago, there's a site. I forgot what it's called. We can look it up afterwards, but it lets you send, I guess now you don't need this site. Google has a send later.

it lets you send emails to yourself in the future, like future me. This is awesome. You should write a few emails to yourself five years from now, or even one year from now. The shock value, even at three months, will blow you away. Here's what I'm thinking about today. Yeah, yeah. Write anything you want to your three months from self-future. I have opened a wormhole to you three months from now.

I mean, it's like a sci-fi movie. You get to like talk to this. It's unfortunately one way, but you know, you can't expect everything. And so anything you write, it'll feel a little stupid. You're like, okay, you know, you get people to write this about whatever. It feels a little stupid. But in three months, you've like, holy cow, that's what I was thinking. And so I think the relativity thing is, I think, part of it.

I think the other part of it is that we have this, like, naive realism. I think in your book, do you call this like the map is not the territory? The territory, the map is not the territory. So this is like a form of naive realism, I think. So let me explain what I mean, which is naive realism is like, you know, our thoughts are real. But there's a form of it. I'm almost like been trying to figure out what else to call this, which is that the brain operates as it operates. So when we say, how do we get pleasure?

Well, it's a function of the brain. In economics, like that's your utility function. That's not it. Like, it's just some dumb thing. So I think we imagine something feels unnatural to us about sitting there. and saying, now I'm going to engage in nostalgia. Whereas if we had just had this nostalgic moment that filled us with endorphins, we'd be like, oh, that's really nice.

It's like, what the hell? Like, it's just a stupid little, I mean, it's just a piece of wetware. It's not that. And so I think no one really thinks about the fact that we are responsible for the creation of the mental habits that then in turn create nostalgic moments at the right time, et cetera. And I think that that, I think that's the other reason we don't kind of, we just assume, well, if I was going to enjoy thinking about five years ago, it just would have

happened or something. I wonder if Facebook has data on that because they're doing this thing now, and I only have three Facebook friends. So I'm not up on the, it's my mom, my dad, and sort of like my great grandmother are my Facebook friends. And I use it to share photos of the kids. But one of the things I've noticed when I log in just to upload photos, I don't do anything else on there.

But when I upload photos, it's like four years ago, here's where you were and what you were doing. And it has these like little nostalgic moments for you. And I wonder what their data would sort of say about how that affects your mood, because I'm sure that they have enough of it to figure that out. That's a great point. You're right. Facebook tries to create these kind of nostalgia. That's right. What I find amazing when we've had people do these moments in peak is you can have a week ago nostalgia. Like pull out your calendar and look at what you were doing a week ago. You're like, oh, that was a fun dinner. Like it's crazy. Since many of our memories sit external nowadays, this is such an easier exercise to do.

I think that's the deeper lesson, I think the deeper lesson for how we should think about psychology or mental models or anything in the next 20 years versus the last 20 years, which is that in the previous 20 years, we were forced to do everything in our heads. In the next 20 years, I think we'll be able to improve what's happening in our heads using digital tools because so much of what happened in our heads is now digitized. So we can look at that digital footprints and use that to improve how we're thinking

and feeling, et cetera. I think that's probably the biggest change. I wonder if that'll affect our feelings differently. Like, is it different that if you have this nostalgic moment and you remember traveling with your kids versus Facebook prompting you with the exact same thing? So you're actually getting the same memory, but the way in which you get it is different

and how that would change. You're right. I think that's a very astute observation. I think one of the reasons we have this feeling about the brain is that we attribute too much meaning to it. So when you remember this nice nostalgic trip with your wife somewhere, you not only enjoy the nostalgia, but you attribute to it as, oh, that's something that's important to me because I remembered it spontaneously. And if it were forced upon me, or not forced, but if it were triggered externally, I wouldn't have that same. attribution of like I must think that's important. I think this is this crazy view we have of the brain is that like we know that we belch and fart and we don't attribute deep meaning

to belches or farts. But the same belches and farts produced by the firing of our neurons are like, oh, I thought about that. I wonder what the hell? You're just like interpreting these, you know, detritus that's produced by the mind. Like it's just, it turns out shit. That's its job. I'm switching subjects after celebrating your farts and your belches. I'm curious as to how you run your day. I mean, you seem pretty Spartan and discipline. What are the personal rules that you live by? Oh, no.

I'm not smart. They're disciplined at all. I have one thing I'm disciplined about in my life, like literally one. Wait, you used to hold on. Before you say that, you say you're not disciplined. Didn't you used to drive to the same sweet green every day and order the same meal? We've got friends in common here. I did my research.

So I don't view that as discipline. I view that as an entirely undisciplined man who likes sweet green. My one discipline is I go to the gym every day. Like every, it's how the day starts. Like every day. So you're all first thing in the morning. First thing. And I think I learned a lot.

from establishing that habit. So, for example, one thing I learned was every day is much easier than four days a week. You might think four days a week is easier because it's less often. But every day removes the most difficult thing about life is choosing, and every day removes choice. When I wake up, I don't ask myself, should I brush my teeth? I don't ask myself, should I go to the gym? I don't, I mean, I don't ask myself, should I have coffee? There's nothing to be done.

I'm on a conveyor belt. I'm sitting on the conveyor belt. I'm on the plane. It's going here. It's going where it's going. And so that's one lesson. The everyday really made a difference. The other thing that made a huge difference is in installing that everyday habit is to say the goal, as I said, is I go to the gym every day.

I didn't say I have a good workout every day or I even have an okay workout. So literally the only thing I need to do is to get to the gym, get on the treadmill, or whatever, lift some weights, and I can leave two minutes later. And you have to be honest with yourself. I have literally gone, like this happened two days ago. I showed up at the gym, and you're always a little sheepish because I'm like, I hope the front desk person who I know doesn't think I'm an idiot. But like, I went, I was like super tired.

I got on the treadmill. I'm like, I'm not doing anything. I tried to lift some weights. I'm like, great. I showed up, done, check. And I go home. And the thing you have to remind yourself is that's the victory. I'm so proud of that day

as opposed to the day where you had a great workout whatever I had a great workout because it was whatever but I showed up that day that's the victory so that I think that that element of low bar

but consistent has worked so well in other aspects of life like I like to write but I struggle with writing and again low bar like when I

when I've been in a good writing groove. It's like, it's going to sit down. The only thing I have to do is show up today. The only thing I have to do is to write 50 words or 100 words, which for people who don't write is like a quarter of a page. It doesn't seem like a lot. And that's the only thing I have to do. And if I don't want to do anymore, I can leave. It's hard to keep that rhythm. It's hard to keep that discipline. But once you get yourself with the low expectation of the low bar, it works. Because in some days, many days, after the 100 words, you're like, ooh, I can keep going. And it, it, It really makes such a big difference.

I want to come back to sort of the establishing habits. I sort of think of that as like, what are the, like the ones that we consciously choose, we want to establish the correct automatic behaviors that are putting us on the greatest path towards success. But before we do that, I sort of wanted to dive into a little bit about your gym habit and how you made it every day. I sort of think of that as rules versus decisions, right? And so you don't have to make a decision every day.

You know the rule is, and you design these rules. either to put you on the path to success because you know that you don't want to have to decide about this in the moment. Like, I have a lot of friends experiment with dieting. And it never seems to work. And I went up to one of my friends and I was like, your rule is you never eat dessert. And he's like, what do you mean? I was like, well, this way you're not deciding.

You don't have to decide. That decision is pre-made. So you've pre-made these decisions that put you on the path to success because you've identified in advance. It's like, this is the path and the trajectory I want to be on. What are the rules and automatic behaviors that I can create for myself? And then how do I do that so that I don't actually have to decide? And you can also do that identity-based, right?

Like, I'm the type of person that goes to the gym every day. I'm the type of person that writes every day. I am a writer. And then therefore, I do it. And that's my rule. I write every day. And now you're not thinking about it. You're establishing that habit.

I love it. The social part of what you're saying is great, too, because once you tell people your rule, then when your friend is dinner with somebody, say, well, didn't you tell me you're a person who doesn't eat dessert? So they also have become kind of an enforcer because there's no – yeah, I like the rule versus decision has another element which I really like, which is there's a person in my life. I just do not trust. Like, even though I spend a lot of time with this person, I just do not trust them. Like, it's embarrassing to say, but I don't trust their motives. I don't trust them to follow through on anything.

And that person is me. Like, you should not trust yourself. Like, every, and so decisions, it's like handing over a bubble wrap to like a five-year-old. It's like, you know what's going to happen. So it's like, so rules versus decisions are in part, I think also the recognition that we can't, you know, you have an uneasy relationship with yourself. you like yourself, you trust yourself sometimes, you don't trust yourself a lot. And so rules are this like, I think of it as this weighty, you know, in this democracy of self, this constitutional process that you say, okay, guys, we've all agreed.

Like this rule seems good. So you have to be careful in picking them. I think a lot of people I see they pick, and I've done this myself, they pick rules willy-nilly. That's just handing over power to the person in that moment who thought that was a good idea. So it's like you want a protracted process for picking a rule. Like to your friend, I would say, fine, write down no dessert. That's not the rule that you've decided. That's the rule that's been proposed.

Now we're going to have a vote over the next week. Let's see how every self that shows up over the next week feels about the rule of no dessert. If at the end we've got a supermajority, then we know who's imposing that rule. The Confederacy of selves that have appeared at different times wanting different things have all agreed this is a good rule. And so now we're implementing it. And so I think that that gives rules, I think well thought out rules have the property that they are ones that many parts of ourselves subscribe to. Poorly thought out rules, I think, don't have that property and are doomed, if not to failure, to misery at some level. Yeah, I was overgeneralizing a little bit. I mean,

you do have to establish your own rules. That's the only way you're going to stick with them. But the idea is like your best self and your worst self and you're sort of like all of yourselves are creating these rules to be like, this is the type of person I want to be. This is the path I want to go. These are the dreams I want to accomplish. And then you can just ask yourself, what would people who have done this or are doing this? What would the rules be that are going to nudge me in that direction? So it could be like, I'm not drinking, you know, every night of the week.

I only drink Fridays and Saturdays. And then my rule is I cut off at nine. And now I mentioned this to sort of Danny when we were talking, and he added an aspect to it that I think he surfaced an aspect I had never really consciously recognized, which is like, people don't argue with rules. And talking to you, and I'm like, we wouldn't even argue with our own rules. So it's not that other people won't even argue with our rules, because you can push back and you can get away with things. And the example Danny gave on the podcast was sort of, I have a rule that I never agree to anything on the phone. which prevents him from agreeing in the moment for sort of like social approval. But your rule with yourself, you would never really disagree with it because it would be the rule and the rule would be part of the identity and the identity is part of what you created. I love it.

I think that's such a nice way of putting it. And I think the mistakes I've made, A, not having enough rules, but also I think it's why you need this legislative process that allows this period of time where you have many parts of yourselves to register their dislike. Like if they're like, no, look, I don't agree with it. And the multiplicity of selves necessarily means, I think some people are like this.

I don't know how they'd like this, where they just like wake up one day and say, is what I'm doing, and then they do it. That's not me. There's a lot of chaos inside me. I think there's a lot of chaos inside most people. So I think the legislative process is also what gives rules the weight to say, you can't agree with this.

We've all talked about it. Like, that's it. If you agree, you're in the vast minority, and so you're right, and then you don't disagree. It's like, it's like in a constitutional democracy. One reason we don't fight the laws is because the laws were made through a process we all agree with. Now, when the law stopped being made through that process, as we're starting to see in a certain country, then people do suddenly disagree. So I think it's the process is what lends credence to the moral weight of a rule. I like that.

I'm going to switch gears a little bit here. You found out a company, Ideas 42, and then. you sort of grew it beyond you. I'm curious as to how you did that. And that was a conscious decision. Like, how was that? And psychologically, like, how was that too, right? Where you create something and then it no longer needs you. I can tell you the philosophy and then the personal part. The philosophy part is, if you've ever seen trees, it's almost obvious, but not much grows underneath the tree, a little bit of grass, because grass can grow anywhere. And trees cast shadows that inhibit growth. And I think the toughest thing in founding things,

whether it's an organization like ideas 42, or whether it's in doing new research, the toughest thing is that you don't want to cast a shadow, but yet you have ego. And so I noticed early on in a lot of things I was doing, I was building more to make myself central inadvertently then I was asking my question, asking myself the question, how do I make myself obsolete? And if you think about this phrase program cell death, if you just ask yourself, what can I do with this idea, this research, or with this organization that would let it do what it wants to do, but that makes me obsolete, that's actually a much better heuristic, because it forces you to ask, wait, what parts of you are essential?

Wait, okay, if that's essential, why can't you distill that, communicate that, so that now others can do? Like, what is so magical about you? Like, what? Is it what? You have good taste? Okay, distill that, understand why you think your taste is good.

And it actually is an amazing personal growth because what it does is by preventing yourself from hiding behind your ego and your sense that, no, no, there's something magical inside of me, it actually lets you grow because it lets you get, work on the hard problem of articulating and communicating and teaching the things that you think you're great at in that process, articulated knowledge is always better than unarticulated. Second, sure, you think you have good taste. But once you try to articulate those rules and

communicate it, guess what other people can improve on that? And they can be like, yeah, that maybe is a good starting point. And so it's this. it actually turns out to be a very, it's painful because no one wants to not be wanted, but it's, I've found it incredibly valuable. Like, I think you can do this in any endeavor. I think you can, you know, any productive endeavor, not social endeavor, but any productive endeavor, you can ask yourself, okay, what is the thing I can do? Like, you could do this in your entrepreneur.

You could say, what is the thing that I am so central at in this activity? Great. how do I articulate that and make that, how do I create obsolescence of self? I'm curious a little bit as to how you felt about that, but maybe before you, because that's a hard thing to go through, right? You're going through like when you start something, you own the idea, you own the vision, you own the execution, and then you slowly sort of like wean yourself off of that and let other people take over. But one of the things that I find really interesting about that is so often we want to be that focal point.

point, right? And that's the limiting focal point. It's like the ceiling of what we can achieve because everything has to go through us instead of enabling other people and unleashing their potential, even if their vision is slightly different than what your vision is. I guess there are two parts that I put around it that might be helpful. There's control. It's like, and that was in your vision comment, like they want to go in that direction. You want to go in this direction. So there's control, which is just very basic. But then there's the feeling of specialness. Do you know what I mean? Like if if people come to you and you're the one who knows how to do something, that's that feels great. It feels like you have value. I think the

control one is just a sort of a come to Jesus, you know, I'm not Christian, I don't know he's come. I like that phrase. The control one is a come to Jesus moment where you have to ask yourself, what am I trying to accomplish? And you say, look, I seed control, but it gets to what I'm truly trying to accomplish. Or on this issue, I'm not willing to seed control. because this is what I'm truly trying to accomplish. That's a very good pivot moment. I think the harder one is the feeling of specialness. I think that's the one where you need to just,

because it erodes at your deeper sense of like, wait, if others can do this, like. What does that mean about me? Yeah, exactly. I'm not so special. I'm not. Exactly. Yeah.

I mean, I was thinking of this story. I was traveling with this former colleague about, I don't know, five, six years ago now. And we were sitting in this restaurant and his phone kept going off. And we were trying to have a conversation, but his phone kept going off. And he's like, they can't do anything without me. And I just looked at him and I was like, they're not the problem. You are.

Right? The problem is that you want to be this focal point. Like as much as you're sort of complaining about it to me in the moment, this has been you for years. And so it's not a them problem. It's like they're scared to act without you. Or you haven't enabled them. to make those decisions and given them the knowledge they need,

but given that you have the same people around you that you've had for years, it's really like you just want to feel good about your... And there's no sort of like, I'm not putting you down. I'm not sort of like, I'm just giving you a different observation onto it, which you can do with what you want because it's okay to want those things. I mean, that's fundamentally very human, right? Because that and especially in organizations, and this is where I see it the most. I find it entrepreneurs are actually generally speaking,

they're probably one or two standard deviations a little bit better about this because they care more about the outcomes and less about who gets the credit. But inside organizations, how you get promoted tends to be a story, right? That story is like how you save the day and how everybody needs you. And the more compelling that story is the better your trajectory in the organization. Instead of, well, this person enabled this team to make decisions without them. They're redundant. Well, that's a really good story, but that's a hard story to sell because it doesn't carry the same narrative weight that that is great. Yeah, I think that's, well, first of all, kudos to you for telling your friend that. There's a couple of parts of that story I want to unpack. One is if you look at

something you said, I want to just really pick up on, you know, your friend could have said, oh, yeah. And then it's okay for your friend, as you said, to choose and say, I like being the center. I mean, that's what I like. Then it removes all this tension. And I, like, I think of it a little bit like sports. Like, on a sports team, like I watch basketball. You can be the person who's like, I want to make the big shots. I want to take the big shots. But then you can't complain when the ball is past you all the time. You can't be like, why does everyone expect me to tell? Yeah, you said you wanted to be the person. I don't know. What do you want? And so I think there's neither right nor wrong here. As you say, it's just the realization that it's one or the other and you're picking

it and you should just pick the one you like. I think that I really like now. The second one I want to say is how did your friend respond when you told him this? I mean, startled at first, but it prompted a really good conversation, right? And the conversation sort of dove into one of the aspects that we talked about in that moment was our need for excuses. And so by keeping the power, we also have the excuse that somebody didn't execute properly, you know, like, you know, so we have, not only do we have this story and the narrative of how important we are on one hand, we also have the story in the narrative that when things go wrong, it's always somebody else's fault. And that sort of reinforces that, even though you're the decision maker, you know, you're reinforced, oh, they didn't

execute properly. They didn't. And so you always have this mental scapego. And I thought it was just really interesting way to think about it. It's not right or wrong. I, I, I don't know. I think it's just something that we all need to dive into and ourselves, but it's really hard for us to see when we're doing that. And I mean, one of the biggest lessons I've sort of learned since becoming an entrepreneur is outcome over ego, right? Like before it used to be about me and I was a knowledge worker.

And if I wasn't knowledgeable, then what was I? Right? If I didn't have the answer to this problem, then my whole question of this self-worth came into play because I can't. tell a story to get promoted. And if I can't solve this problem, what does that mean about me in my employment and my brain and my ability? And people think of me as a knowledge worker. But then unconsciously, you try to make your idea right. And so you go out seeking all of this information that is sort of like reinforces your view. And then unconsciously, you sort of undermine

and sometimes consciously, I don't think I ever consciously did it, but you unconsciously undermine other people's ideas just to show that your idea is better. Yeah, that's right. You were saying, this is so good. I like outcome of ego. Do you have for yourself a articulated like outcome mantra that you go back to? Like, okay, this is the bigger outcome I'm aiming for. Does that make sense? Like a true North outcome. Have you, do you have that or? No, I don't think so. I mean, I look at this as like positioning over predicting. Like, I don't, I can't predict. I can't predict the future. I just want to be positioned for multiple possible futures. And then inside the company, like inside the people that I work with, I'm trying to, and consciously trying to empower them

more and more and more and make myself redundant to the point where I can start working on things that are two or three years in the future and less day to day and trust, even though people will make mistakes. They don't need to check with me. They can just run with that. And that'll give us the velocity that we need to sort of allow us to do all, because we have a very small team and I want to keep it small. I don't want to, I have no ambitions on having like hundreds of people or big stuff or any of this stuff because none of that matters or impact matters. And what's going to cause the most impact, I think, is by empowering people to to do their thing and unleashing their potential. And it's going to be a different type of potential than sort of like

I would unleash in myself. But it's nice. You've described two things, though, that I already feel like you do have an implicit outcome mantra, which is, like, one is this positioning that, like, one outcome you want, and you said this earlier, too, when you were talking about opportunity costs, that you want to, you want your opportunity costs to keep increasing. But that's like an interesting, I never thought about this. It's a good outcome to say the outcome I'm aiming for is greater and greater optionality. Like, that's, it's a very reasonable outcome. And it seems like it's giving you at least implicitly a north to sort of like follow a loop. I think we're too focused often on just predicting

the future. And then our whole worldview reinforces that our prediction about the future is right. And in the stock market, that's sort of like one angle to it, but we're doing it all the time at work, right? We're picking a particular line and we're investing in it. And I think that if you're right, that is always the most optimal solution in the moment. So there's always somebody you can compare yourself to who's doing the exact optimal thing in the moment. But since the environment and the context in which we operate is always changing, eventually positioning wins. But it never wins in the moment. But it wins over time. So over 100 years, positioning is almost guaranteed to win. It can't do anything but win. But in the next one month or one week or even one year, it's always going

to be the suboptimal solution, and you're always going to have a comparison base of people around you, be it at work, financial returns in a quantitative way, who are always generating more than you. That's great. That's great. And the funny part of that is that person may even have just been someone who positioned themselves well earlier, but you don't see the positioning. You only see the outcome of the positioning, so you don't see the work actually happen

earlier. They kind of put themselves. So that's really nice. How do you, I like that, positioning versus predicting, how do you, at some point, does there come a time when you have to make your go all in big bet? In other words, like, does, how do you, you know, you position yourself to get? I don't know if you go all in, but you definitely sort of like maybe go way, way into it, like a Kelly criterion sort of like, you're never going to go back to zero, but you're

definitely going to overinvest in the, when you know, when you can see the future with greater clarity. I think that that, and there's different domains for all of us. Like, I remember one example of how I applied this in like real life, because people always ask like, what does that mean? I was like, well, in February, like I was at grocery stores like getting rice and beans and putting it on the table, right? And I was doing this with my kids who were 10 and 11 and they're like, dad, you're crazy. Like, what are you doing? Because our dining room table was like full of food. And I was like, well, I don't know what's going to happen in the future. There's this thing coming. And I was like, how do we position ourselves for if the grocery stores close down that we have provisions and we can sort of survive a couple of weeks?

And I said, if we're wrong, like, what do we lose? And I was like, about 100 bucks. And if we're right, what do we gain? And so you have this asymmetry where, you know, for a very small amount of money, which we can, you know, will consume inevitably at some point in the future anyway. So we're just fast forwarding an expense we would already have. And then we're positioning for if this thing happens, then we're better prepared for that. And so you have this thing where I'm not trying to predict what happens. I honestly have no idea.

And I hope nothing happens because that would be the best case for the world. But the flip side of that is like if something bad does happen, we're now in a better position than we would have been. But if you look at that, like there's somebody else who's not doing that. And then that's optimal, right? they're not spending the money, they're not fast forwarding the expense that they would normally have, and they're not bringing it forward. So they always look like they're in a better position. I love that. I love that. I think for me, as I was reflecting on your, because I love your positioning thing. As I'm reflecting on the positioning, it seems to me that make that work for me. I'd want

to also understand how am I making the mostly-in decision? So have you called it mostly and not all in? I like that. It's mostly in. It's almost like what allows you to have the patience to position is to have the confidence that, no, when the time comes in to put a lot more of my chips, I trust myself to do that too. So it's almost like it's the pairing of the, you know, positioning requires some form of patience and trust. And so it's almost like if I, if I had thought about my mostly in process, I think it'll also have more patience in the position part. I like that pairing, right, where you, and I think that, you know, what we're describing in a really roundabout way is like how Buffett has been the most successful investor in sort of like the last probably the history of the world, but definitely the last sort of like 50 years, where he's constantly just saving up cash and then deploying it when there's something that he feels is predictable. And then he tends to invest in more predictable businesses to begin with. And I think that. That's a really interesting way to think about things.

And when you have going back to the baboon problem, if you have a company that's controlled by no one shareholder, you end up with this suboptimal strategy where you're almost forced to pursue the best strategy in the moment instead of the best strategy overall, whereas when you have a controlling shareholder, either be it through multiple voting shares or financially like we have with Berkshire Hathaway, you can just sit on. on cashing. You don't have to worry about activist investors. You don't have to worry about all this other stuff. And then you can take this short-term suboptimal strategy and sort of exceed or outperform in the long run. One thing I like about, this is great, and the Buffett analogy is great. One thing I bet that it would help to apply this in personal life is that I think the other challenge of optionality or positioning is that the assets you're building, the options you're building are hidden. I can find If I were to go and acquire a set of options, they'd be on my books. I could see the options I'd acquired.

Like if this were a sports team and the optionality we'd acquired were draft picks, the draft picks would be on the balance sheet. I think what's so tough about doing this in our own professional lives is that we don't record the optionality that we've created. So I wonder if to a degree this would all become much easier just through tracking. Like literally say, here's some options I bought myself. and here's how I bought it for myself. And then you're like, ooh, you know, how do I compare to that other bedroom?

Yeah, they're earning returns right now, but look at the options I'm sitting on. And so I think there's a sports team I followed like this where in the short run, they look really bad, but they were acquiring picks. And so the balance sheet looked not bad at all. So I wonder to what extent this is a hidden balance sheet problem. I wonder if we just started writing down optionality. You would also then be better at doing that thing you shouldn't do. do, which is realizing shit, if I say yes to this, I am actually extinguishing these options. Like, it's coming at a cost that you don't realize.

And so I wonder if we can track these. That would make much easier for me if I could somehow even start to articulate what these optionalities are that I'm creating. I love that. And I love the idea of sort of like hidden options that you might not even be able to see, but also hidden options that you can't predict will be there. But just the very nature of having options allows you to take advantage of those things in the short term. I'm curious as to how you choose where you sort of go next. You're always

trying to predict where the puck is going to use the Wayne Grexky sort of analogy. How do you think about that? By the way, I've taken a lot out of this conversation. The positioning thing is something that right now I'm in an in-between period right now where I am struggling. So personally, this has helped me a lot because I am struggling with the patients needed. be positioning because I think you know there's a few clearly big things that I'm just very confident about like what so the this work I mentioned with with Beck Weeks and Mike Norton I think whether it's that you know the app I'm excited about but the the idea embodies a metacognition yeah yeah the app the app the app the app the peak app but here's what

I think I'm deeply sure about the puck is going there's something happening at the nexus of technology, so let's call it specifically, the fact that I now have the capacity to wrap a layer around your mind that's attention, which is one of the core cognitive capacities, and memory. The fact that I can wrap a digital layer around your mind for attention and memory, and we're getting better at that. That's like so obvious. The second thing that's so obvious is that we have this literature that's bubbling up in psychology that is unearthing insights about ourselves and people are, I mean, your career is a testament to this. People are eager to learn those insights. So I think when you combine these two things, it naturally implies,

okay, how do I create the thing that lets people get greater actionable. insight about themselves, like themselves, not just in the general, but they're live as it's insantiated. Like, your story about your friend, it's awesome because your friend has an asset in you who managed to say to him, hey, look, you know, this is not about them, this is about you. That is highly personalized, highly contextualized. Now, I don't think we're at that level. It's like, oh, you know, we're going to do that tomorrow. But the combination of these things, and it's not a digital solution alone. It's digital, solutions that work with you. So, for example, one of the things your story made me think

is that, like, how do we get people to realize there's a simple question they can ask their friends and create the right moment to ask them that would be life-changing, you know, which is, hey, what do you know about me that I don't know about myself? Right, exactly, which is a perspective. It goes back to sort of like being on the train, right? Like, what do you see? What's your lens into this that I can't see? Because I'm. That's right. That's right. So I think that that angle, I think is very clear. I think we're going to see a revolution both in behavioral science as a research discipline. So for example, here's a telltale sign. Psychologists don't work on self-help. That doesn't make any sense. There's a whole ocean of people who in good faith want to improve themselves. How does the research discipline of psychology largely ignore this? And if you look at it, most people buy behavioral economics, behavioral science books, they're sort of very very very high-brow self-help. You wouldn't call it self-help lest you be chastised, but it's the deepest of human desires to improve oneself, understand oneself. So I think you see

it at every level. That angle that that area is about the bubble and we have the technology to implement it, I think is really is one happening, like clear area. But your question was more meta. How does one try to make such calls? I guess it comes down to thinking about not just your own thinking, but other people's thinking. So if I look at self-help, there's a big desire. So now you have to ask yourself, wait, there's a research discipline called psychology over here. Why is the market not being made? Why is supply not meeting demand? So then it's partly about saying, what is it in a research psychologist that makes them allergic to doing this? And then if you can understand the inner logic, then you can ask the question, but will any

pieces of that logic, are they amenable to change or will they naturally change over the next 10 years? Then I think you start to fray in this. And I think that that that type of understanding, it's almost like having metacognition about other market participants. That is, I always say this, if you can describe someone else's perspective on a problem so well that they themselves say, oh yeah, that is what I'm thinking, then you know you have an arbitrage opportunity. Because you've said it as well as they have, and yet you see something they don't see. So it's like a really useful challenge to set to oneself, not to articulate what you believe, but to articulate what other market participants believe with such high fidelity that they would agree with you,

that's when you know that you found an arbitrage opportunity. Does that make any sense? I love that. It's sort of like we've written about this on the website called The Right to Have an Opinion, and that's effectively, you know, you shouldn't be entitled to an opinion until you can argue the other side. better than they can argue themselves. And then at that point, you're entitled. You've done the work necessary to have an opinion. And I think that that's a really interesting philosophy for life and sort of like how you conduct yourself online in this age of, you know, sort of instant

disagreeing with everybody and surface skimming. And, you know, we can't all have as many opinions as we have. And once you really ask yourself, like, can I articulate the other side of this better than they can articulate it. Do I really know what I think I know? And often you discover that no, you can't. And a lot of your opinions come from skimming headlines. And you're like, oh, that headline I agree with. So it gets reinforced slightly in your mind. And then over time, as we have this filtration bubble around the information we consume, we get reinforced in our beliefs and we get more conviction, I guess, more confidence in them, even though we should in a way be getting less confidence as we learn more about a subject.

It's like the illusion of explanatory depth with respect to other people's opinions. It's like you say, right? It's like you say, hey, what does A think? You say, tell me more. Like, oh, I got nothing else. Like, wait, why do I have nothing else? Whereas we have tons of depth on our own opinions. Tell me more about what you think.

Oh, I can go on for hours. I wonder how we'll feel about a couple things that we sort of like just loosely hit on there, which is one, computers telling you about something you can't see about yourself. So it's like your aura ring or your Apple Watch or whatever that future technology is going, you know, we notice that you use negative words when you speak to these people or something, right? Like how will we feel about that being a computer versus a person? Will we feel better about it because now it's depersonalized? Or we feel worse about it because it's like why now you're surfacing the fact to my conscious level that you're monitoring,

you're sort of like collecting data on me and you're wrong and we sort of like justify why those technologies would be wrong once your take on that? I think my take on that with all these technologies I always go back to the elevator

so when the elevator was first built no one want to get in it because if you think about it it is frightening this thing, this piece of metal is barreling through the sky I mean it's insane to get in an elevator if you objectively think about it

And if we were talking about elevators and how will people feel about elevators in the future, and you were Otis, you know, Otis just has to have this core belief. Look, whatever you guys think today, you're not going to think it in 20 years. And he was right. They wouldn't think in 20 years. And I think part of what we forget is that like a lot of our resistance to things is just like that local one to two to three years of like what, you know, even before, remember when people were like, how could anybody just talk via text. You know, I missed attempt it. You get used to every, like, you know, you adapt to everything. So I actually think that the advantage of the algorithm over the person is what you said, which is that once you get used to it, you know, even your friend when you told him this fact, partly he must have, however nicely you said, it felt a sting of judgments a little bit, like, oh shit, like now I, whereas a computer doesn't have this thing of judgment.

It's like when I look at my Fitbit, it says, whatever, I don't have a Fitbit, but remember it says, like 7,000 steps. Is that judging me? It's just saying 7,000. That is what it is. But that's an objective fact versus like something about our mood or feelings, the way we talk, what we're missing. What, like once we have technology pointing out our blind spots,

like blind spot reduction is like the number one way to make better decisions. It's the number, because we all have blind spots. But when we have technology pointing out those blind spots, that is, it's not as factual as like the number of. steps you've taken or the the decibels that you're hearing in your ear or i think where we're going to head with this is already seen in sports is that an athlete has a coach who sits with them and looks at the tape right the tape is the objective right and i'm going to help you interpret it and so you can fight the interpretation and that's an all too human process but just the fact that we have so much

objective data that we're going to share and look at to then interpret that's going to be huge And I think you're right. There's no algorithm that's just not feasible to think of that interpretational process for most things. But I think the human interpretation just, I think is how I think about it. It's like we're all going to be quarterbacks or, you know, whatever tennis players, but now we're going to have in our professional lives all of this tape. And we've already seen some early versions of this. There's a cool study with teachers where they improve their teaching by quite a bit. And the way they did the experiment was they videotape their actual classes and they had someone sit with them and it was even less than coaching. It was just watching together and just

asking them simple questions like, did that go well? Do you notice something? So even just a person's nascent own capacities to notice when the data surfaced and someone forced you to look, they saw big improvements in teaching scores after. It's quite impressive. Just, you know, coaching on something like that. Now, teachers can be on tape. As you say, more and more decisions are on tape. We have memos. We say, hey, should we invest in this thing? Great. Let's write a pro con. Everybody writes their own pro con. Like, now we have this database of decisions. And I think that's a very exciting area. I think there's a really good segue into sort of the next topic, which is you're somebody who straddles academics and sort of practical application. How do you see academics sort of

contributing to society and business and how do you see that role? What, like, what should that role be? Academics produce the raw ingredients, not in every place, but in many places, produce the raw ingredients off of which are converted to creativity and intelligence into product. And I think that that pipeline happens in the very banal, like you see it in pharma. In pharma, biolableness, produce molecules that might be useful for certain things or technologies that then pharmacants. So you see it in a very tight pipeline. But you see it in like the conversation we're having, like all this great behavioral science work that was done as pure research, it was raw material. By itself, it's just a set of studies. People have to then take that. So I think

this conversion process is really one way I think about it. But the other way I think about it is that I think academia needs to also realize that it flows back in the other direction. You know, So if you think in physics, and you say, what are the great fields of physics, you know, classical mechanics, fine, that went in one direction, that's clear. But electricity and magnetism, that did not go in this direction. That went in the other way. People playing with electricity, find these cool things, blah, blah, that created one of the core physical laws was going this way.

Thermodynamics did not go this way. It went this way. So I think academia has this illusion that it's going. this way as the only force, but there's a strong feedback loop. And so part of my career has been trying to, in my own life, enable that feedback loop so that I understand what happens over there. And I found that super valuable, like super enjoyable because especially in areas like this, like in behavioral science, it's just a practicing researcher would be foolish to think

that they're at the frontier. No, like this area is so interesting. Lots of people are touching it from lots of different places. and you have a chance to contribute in both directions. I like that a lot. I think it's really interesting to think about how the intersection of those exist today, but also how it changes over time and how technology will enable and sort of data will enable and also hinder progress in some ways.

I sort of want to end on the, I've been exploring different ending questions to the podcast. I want to end with a new one, which is what do you want people to say about you when you're 90. Oh, that is a great question. What do I want people to say about me when I'm 90? I think with the optionality to revise it, I think what I would want people to say when I'm 90 is, oh, he changed how I think. And if that's five people say it, I'd be happy at 50 people. But I think changing how people think is the most durable asset that you can create. Because when people change how they think, they then produce in so many areas and so many, it's the ultimate force multiplier.

So if I could contribute in some small way to changing how some people think, that would really mean a lot to me. Well, I think this conversation went a long way to doing that. Yeah, me too. And conversant, I'm going to remember the positioning thing. This is awesome. Thank you. This is so fun.

I really appreciate it. Hey, one more thing before we say goodbye. The Knowledge Project is produced by the team at Furnham Street. I want to make this the best podcast you listen to, and I'd love to get your feedback. If you have comments, ideas for future shows, or topics, or just feedback in general, you can email me at Shanefs.blog, or follow me on Twitter at Shane A. Parish. You can learn more about the show and find past episodes at fs.blog slash podcast. If you want a transcript of this episode, go to fs.blog slash tribe and join our learning community.

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