Strategy Chain

Alex, also known as “The Science of Hitting Investing” on Gurufocus and TSOH_Investing on Twitter, is an investor at an RIA and a prolific investing writer. I’ve really enjoyed his articles, so I was really excited to talk to him. And the conversation didn’t disappoint. During the interview, we talk about structuring a process to maximize your chance of finding good investment candidates, trying to reconstruct management dashboards as a way to understand investments, and the different parts of the value investing spectrum. Time Stamps0:01:00 – Introduction to Alex (@TSOH_Investing on Twitter https://twitter.com/TSOH_Investing; https://www.gurufocus.com/news.php?author=The+Science+of+Hitting&u=110170 on GuruFocus) 0:05:05 – The 3 Modalities of long-only value investing: (1) buy companies that are better than everyone thinks they are, (2) buy companies that are less bad than everyone thinks they are, and (3) greater fool theory. 0:06:45 – Alex on the path to value investing as a philosophy (passive-active split) 0:10:35 – Howard Marks on “Winning the Loser’s Game” (not making mistakes) 0:11:30 – Pros and cons of quality vs cheapness in investing (spillover research, ulcers, frictional costs, etc.) 0:15:30 – Alex’s thoughts on quality companies / compounders vs cheap names 0:17:00 – “When to Average Down” by John Hempton 0:21:20 – Risks of screening 0:23:00 – David Kilcullen “rich information” and sunk costs 0:25:30 – My experience with finding Tailored Brands through screening 0:27:00 – Thoughts on fixing my screening process (setting myself up for failure) 0:28:31 – How Alex runs his portfolio (low turnover, high quality, relatively concentrated) 0:37:54 – How to conduct a search to maximize the chances of finding a compounder 0:42:15 – Cumulative knowledge: an advantage of studying high-quality businesses 0:46:31 – Thinking about how to allocate research time with Costco as a case study 0:49:50 – Red flags (compensation, management ownership, shareholder letters, etc.) 1:00:00 – Trying to construct a management key performance indicator (KPI) dashboard 1:02:05 – An issue with financial modeling—everything is based on sales, and sales are hard to predict 1:03:45 – Pat Dorsey: don’t model using percentages (Visa example) 1:05:10 – TSOH investment style in a nutshell: “the return to a historic margin rate is in doubt, and I’m stepping in and saying it’s a short-term problem.” 1:07:00 – Disney analysis: CPI vs Magic Kingdom pricing vs airline pricing 1:09:17 – My observation on “the game:” cigar butts have secure sales but insecure cash flows; compounders have secure margins but insecure sales 1:11:00 – Bruce Greenwald said that long term, things become commodities (everything is a toaster in the long term), but some have disagreed ( https://sloanreview.mit.edu/article/the-myth-of-commoditization/ ) 1:24:00 – Thoughts on software 1:28:24 – Thoughts on optimizing industry study time: listen to smart people, observe what you know 1:33:27 – Thoughts on micro-caps and special situations 1:35:20 – Observations on short-form podcasting 1:40:31 – The importance of exploring the investing the world alongside great people 1:41:55 – Closing thoughts Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

This episode is an amazing case study on founder-market fit. As Mr. T says, “I pity the fool” who competes with Max and Patrick at relationship building—they clearly live and breathe the opportunity to form genuine connections with people. Beyond founder-market fit, Max and Patrick also make a connection to the 8th wonder of the world, which value investing disciples know is compounding. They don’t do any paid marketing, but they can almost predict the amount of inbound referrals they’ll get on any given month, and it’s all because of their focus on white-glove customer service for everyone they meet. Max and Patrick's Links On the web: https://www.maxandpatrick.com/ https://americaonerealestate.com/ Instagram: https://www.instagram.com/max_americaone/?hl=en  https://www.instagram.com/patrick_americaone/?hl=en Youtube: https://www.youtube.com/channel/UC9m_VZEMttpIiXjE6RZEpRA/featured Time Stamps0:03:15 – A frustrating experience exposed a market opportunity 0:15:15 – Thoughts on the luxury customer experience 0:19:50 – Surprising lessons from operating the business: it’s not reinventing the wheel, it’s getting the job done 0:24:20 – A critical outside observation: where does business come from (organic referral, marketing, salesmen, etc.) 0:27:08 – Most important first step: screening for genuine, long-term relationships by emphasizing the personal relationship before entering into a business relationship 0:31:30 – White glove service: using technology and one-on-one attention to help buyers understand the product (3d photorealistic renderings, one-on-one tours through other projects at various levels of completion, everything catered toward fostering a relationship) 0:34:55 – Referral sources (referrals from people they’ve never even met) 0:39:08 – Highlight reel moments: representing the transaction rather than the buyer or seller 0:41:00 – Training and growing a team, consistently reflecting on process and habits 0:46:45 – Helpful resources in the course of running their business: it’s the simplest things that help you be effective (their phones are their CRM). 0:50:15 – The right kind of lazy: the pursuit of having to work less 0:51:52 – Get out and talk to people (even in the tech industry) 0:54:10 – Compounding relationships (the most predictable business is the “unpredictable” business) 1:01:15 – It’s not what they do, it’s who they are: genuine desire to serve 1:08:45 Where to find them: On the Web: https://www.maxandpatrick.com/ https://americaonerealestate.com/ Instagram: https://www.instagram.com/max_americaone/?hl=en  https://www.instagram.com/patrick_americaone/?hl=en Youtube: https://www.youtube.com/channel/UC9m_VZEMttpIiXjE6RZEpRA/featured Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Errors snowball, and compounding is like the Marine Corps—no better friend, and no worse enemy. In this episode, we’ll talk about how Jocko Willink, Mike Krzyzewski, and Bill Ackman use a tactical “reset” to get back on track. Let’s start with the opposite. Time’s running out, everything is on the line, mistakes are being made, and it looks like the window of opportunity is closing. The position is going from bad to worse, and a vicious cycle is forming: bad position, bad decision, worse position, worse decision. And on, and on. Balls are getting dropped, emotions are running hot, and stress is widespread. Chaos reigns. Corners are being cut since time is in short supply. Confusion, haste, sloppiness, complexity, errors, anxiety, weariness. It’s a nightmare situation. This description could apply to a crunch period at work, the fourth quarter of a basketball game, or just about any part of life where results matter. We all know the phrase: “when the going gets tough, the tough get going.” But sometimes even the toughest know it’s time to take a beat. In this episode, we’ll talk about how Jocko Willink, Mike Krzyzewski, and Bill Ackman use a tactical “reset” to get back on track. Jocko Willink: “Detachment” First, let’s talk about resetting through the frame of “detachment.” Let’s start with the toughest of the tough. If you know Jocko Willink, you know he’s no wimp. Jocko is a huge proponent of what he calls “detaching.” In the show notes, there’s a link to a podcast episode where Jocko dives into this idea and the experience that drove it home for him.  https://fhww.files.wordpress.com/2018/08/107-jocko-willink.pdf  In a nutshell, during a complicated, stressful training mission on an offshore oil rig, Jocko realized that by taking a few steps away from his team’s position, he could re-assess the situation with fresh eyes. When you “detach,” priorities become clear. You can stop spinning your wheels and get back to ticking off your priorities. If you listen to his podcast—and I highly recommend it—you’ll hear from tons of people who had to reset mid-battle, right in the thick of the fog of war. Coach K: “We Will Win” It’s February 12, 2019, and 22,000 Louisville fans have packed the KFC Yum! Center to see their Cardinals beat the Duke Blue Devils. At 9 minutes, 54 seconds remaining in the game, a Louisville player hits a 3-point shot that puts Lousiville ahead 59-36. At that point, Coach K had never seen a Duke team recover from such a dramatic deficit. Before we discuss what Krzyzewski said during his own timeout, let’s take a timeout of our own. I’ve included a bunch of links in the show notes. The first is the full video highlight reel for the comeback. The second is an incredible article by the NCAA (written in conjunction with ESPN’s data) laying out the highlights of how the game progressed along with a chart showing the statistical probability of victory in a time series graph. At its trough, the win probability was 0.1%, meaning that Duke had a 1 in 1,000 chance of victory. It’s times like these that coaches like Coach K and programs like Duke don’t show up in the numbers. https://youtu.be/OydPe7ZtdRY https://www.ncaa.com/news/basketball-men/article/2019-02-13/improbable-duke-comeback-vs-louisville-explained-coach-k-and So what happens? Coach K calls a timeout and makes a tactical shift (more on that in a moment), but more importantly, he communicates the message that he believes Duke will earn the win. In the article, he mentions that he wasn’t necessarily being 100% truthful. Tactically, Coach K shifts to an aggressive, attacking form of defense that doesn’t concede any ground to the opposing team as they try to maneuver the ball from under their own basket into their opponents’ half. The results are unbelievable. Louisville implodes under the pressure, giving up 9 turnovers in the final minutes of the game, and Duke wins by 2. I didn’t see the stats to prove it, but I’m relatively sure that most of the points Duke scored in the comeback were transition opportunities directly resulting from opponents’ turnovers. If you can visualize a steal where two defenders strip the ball from a lone ballhandler steps from his own basket, you know that this is asymmetry at its finest. Oh—and regarding frustration, the tables have completely turned. Two points to Duke, and the Louisville transition starts right back over again. Right back into the jaws of the full-court press. This is coaching at its purest. (A) don’t panic; we can win (B) let’s re-take the aggressive, proactive stance in this game by rapidly forcing a situation that favors us drastically—a suffocating, flustering, frustrating, exhausting, and in-your-face defense that plays to all of our strengths. Coach K knows how to reset. Bill Ackman: “Back to Basics” We can also frame the tactical “reset” as “back to basics.” Bill Ackman lays out his basic investment criteria in an interview (and I’ve linked it in the show notes). Before we move on—because I know I’d be wondering if I were listening—this is what he says he wants. Businesses that are: Simple Predictable Free Cash Flow Generative Dominant And that have: High Barriers to Entry Limited Exposure to Extrinsic Risk Strong Balance Sheets (and as a result no need to access capital markets) Excellent Management & Good Governance https://www.youtube.com/watch?v=sU83fZF6HcU&feature=youtu.be&t=669  Now, if you follow the financial media, you might be wondering why he needs to go “back to basics” at all! What am I talking about? Bill Ackman has been in the media recently after a windfall profit from what’s been called the “best trade of all time” since he spent $27 million to make $2.6 billion dollars with extremely limited exposure (but I should mention that the total exposure was probably about $700 million on a worst-case basis). So still a 5-bagger. And he did it by buying credit default swaps or CDS on three credit default swap indices (both high yield and investment grade) as a hedge on the credit markets. Again—for those interested, I’ve linked to the letter where he both describes the position and gives a brief primer on the mechanics behind how CDS works. It’s really awesome reading if you’re into this stuff. https://assets.pershingsquareholdings.com/2020/03/26222617/Pershing-Square-Capital-Management-L.P.-Releases-Letter-to-Investors-March-26-2020.pdf And I’ve also linked to an excellent interview he did with Shane Parrish of Farnam Street (although his podcast—which is excellent—is called The Knowledge Project). He talks with Shane about the rationale behind the hedge as well as his thoughts on bouncing back from failure. It’s an excellent listen. https://fs.blog/knowledge-project/bill-ackman/ Now if you’re not familiar with Ackman, I know you must be asking yourself: “What on Earth does all this have to do with resetting? Seems like Ackman is doing just fine.” And I hear you—in his interview with Shane, he also acknowledges that much of what I’m about to describe is firmly under the umbrella of “first world problems.” But if we re-wind the tape, Bill Ackman had been having an incredibly difficult run from 2015 until about 2019. Let’s go back in time. During its 2015 peak, Pershing Square was running $20 billion in AUM.  Ackman was in the middle of a battle over Herbalife, which he believed was a pyramid scheme. Between 2012 and 2018, Ackman held short positions (first outright short positions in Herbalife stock, and later put options). Ackman ran a very public campaign to out what he considered to be unethical practices (and make money if the share price dropped). Carl Icahn, another billionaire, had built an enormous position on the other side of the trade, aiming to catalyze what he called “the mother of all short squeezes.” This squeeze would basically make the short side submit and unwind the position, causing a big run-up in the share price. With this long and ultimately unfruitful campaign in the background, he began to have serious problems with an investment in Valeant, a pharmaceutical company. Over the life of Pershing’s investment, Valeant dropped from $190/share to $11/share during a very public activist stake (and I have a really interesting article from the New York Times linked that includes a timeline, for those interested). And for a Murphy’s Law moment, Pershing was sued by Allergan shareholders, who claimed that Pershing bought Allergan shares with insider knowledge of a looming takeover bid from Valeant. All told—per the Wall Street Journal—Valeant cost Pershing $4 billion (there’s a link in the show notes to that too). https://www.nytimes.com/2017/03/19/business/valeant-ackman-timeline.html https://www.wsj.com/articles/william-ackmans-pershing-square-sold-stake-in-valeant-1489439314?mod=article_inline What a nightmare. Now let’s skip ahead So the mid-teens were a rough few years for Ackman and Pershing. But now let’s skip ahead to 2019. Let’s start with a headline from Yahoo! Finance on January 5, 2020. Hedge fund manager Bill Ackman delivers 58.1% for investors in 2019. The article, linked below, was written by Julia La Roche, and I certainly couldn’t sum things up any better: “Like Buffett, the mission at Pershing Square is to have a permanent capital structure. Ackman said the firm took a step in that direction, launching a publicly-traded fund in 2014 with the long-term plan to have a majority of capital in that vehicle. After posting a return of 40.4% in 2014, the hedge fund experienced negative performance for each consecutive year—until 2019. At the April conference, Ackman attributed the string of poor performance to a couple of bad investments. Those mistakes led to significant investor redemptions, or what Ackman characterized as a “rough patch.” Pershing Square Holdings, the public vehicle, is now 80% of the firm’s capital, Ackman said at the time.” The link to the article is in the show notes. https://finance.yahoo.com/news/bill-ackman-pershing-square-2019-performance-130053673.html So what happened? In the interview with Shane, Bill mentions that recover is a “slow, plodding, one-step-at-a-time process.” I think there are lots of reasons for the comeback. I’m sure I’ll leave some out, but I think these ones are critical: He revamped the investor base I believe it’s impossible to be a good long-term investor without committed, locked-in, and relatively under-updated capital He swore off public contests, especially on the short side These drain his time, energy, and attention—his most valuable resources In the interview with Shane, Bill mentions that he’s focused on avoiding catastrophically low “return on invested brain damage” He swore off bets with 100% downside (even if they have the potential to be a 4-bagger) This one speaks to me I just made a mistake with just such a company It was an enormous waste of time, energy and resources And it was pretty embarrassing to do it in public! And last but not least, he returned to his basic criteria, which he literally has engraved into tombstones (also known as deal toys) that sit on every employee’s desk For good measure, I’m including one additional fun article on Ackman that the Wall Street Journal ran. The byline: With performance bad and investors fleeing, Mr. Ackman ‘went activist’ on Pershing Square. https://www.wsj.com/articles/after-suffering-bruising-losses-ackman-pursues-quiet-recovery-11553176760?adobe_mc=MCMID%3D69363972300789071000526555740666532794%7CMCORGID%3DCB68E4BA55144CAA0A4C98A5%2540AdobeOrg%7CTS%3D1597609842 Bottom Line Compounding is the 8th wonder of the world, and we need to do everything in our power to make sure we aren’t on the wrong side of it. Well-oiled machines shouldn’t constantly require downtime, but in critical moments, it can be an extremely high-yield decision to pause and reset. Errors snowball, and compounding is like the Marine Corps—no better friend, and no worse enemy. So that does it for this episode. I hope it shows some threads to pull. If you’re interested in show notes or supporting the podcast, check out strategychainpodcast.com. If you want to get in touch with me, you can find me on social media @strategychain. So until next time—thank you. Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

In this episode I had the good fortune to talk to Dr. Ivan Pastine. I really enjoyed his refreshingly positive outlook. In our conversation, we talk about common real-life game theory scenarios, avoiding man with a hammer syndrome, the concept of “imperfect but useful,” incentives, trust, marketing, networking, and the importance of showing up. I think his book, Game Theory: A Graphic Guide, is the best introduction to game theory out there. I really enjoyed this conversation, and I think you will too. 0:01:52 – The time Ivan punched a Thai officer while in the Navy 0:04:55 – How he moved from the Navy into economics 0:07:21 – Game theory “games” that happen all the time 0:07:47 – Competition Demystified by Bruce Greenwald 0:08:47 – One of Ivan’s books—Introducing Game Theory: A Graphic Guide 0:12:50 – The economic starting point: how the individual acts in service of his goals 0:16:06 – Avoiding man with a hammer syndrome: what’s the important bit / imperfect, but useful. 0:27:45 – Behavioral economics & the ultimatum game (spite) 0:43:50 – Trust, the marshmallow game, and how games change when players expect to play each other again 0:49:35 –James Heckman, Kindergarten lessons about conflict, and a connection to “Touchy Feely” with Nicky Hinrichsen and Chris Coleman (Episode 029) 0:54:39 – Hawk and Dove Game—attitudes toward conflict 1:04:02 – The pinnacle of game theory: understanding the incentives (a la Charlie Munger) 1:11:55 – Shaping incentives for better outcomes (social norms) 1:21:32 – Trust as it relates to dealing with a person vs an institution 1:26:38 – Communication—lessons from teaching and writing 1:32:18 – The importance of having a good editor & the qualities of a good editor 1:35:07 – Thoughts on marketing, celebrity, and the media 1:47:40 – Connection to Mike Malinconico (Episode 021) 1:49:20 – Networking strategies and tactics 1:54:45 – People are surprisingly generous 1:57:30 – Important beliefs: showing up is really important Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

This series is all about making things easier for ourselves. I’m going to make the non-controversial case that collaborating with others is a great way to do this. Then I’ll talk about some tactics that can help us perform better. First, let’s take a page out of Charlie Munger’s book and approach the problem backwards. Let’s look at the opposite of working together—isolation. This is particularly relevant during COVID-19. A quick google search for solitary confinement will show the effects of being alone. Yes—this is a very specific population, and some of the more vivid examples might not be relevant for most of us. But there are some important takeaways. https://www.psychologytoday.com/us/blog/brain-chemistry/201902/the-effects-solitary-confinement-the-brain In Psychology Today, Elena Blanco Suarez, a biochemistry PhD, reported that “solitary confinement as a punishment is closer to a form of torture, with serious consequences for neurological health.” The brain literally changes, with the zones that contribute to learning, memory, and spatial awareness shrinking and those that contribute to fear and anxiety growing. I’ve even seen a TED talk by Johann Hari (link https://www.ted.com/talks/johann_hari_everything_you_think_you_know_about_addiction_is_wrong/transcript?language=en  in the show notes) about how the famous rats on heroin model doesn’t result in overdose when the rats have other rat friends, food, and fun things to do. As the saying goes, no man is an island! From an economic viewpoint, isolation also hurts us. If Dan can sew and cook better than Tim, Dan can still benefit from trading with Tim because Dan is likely to be “better-er,” so to speak, at one of the two activities. So the opportunity cost drives a collaboration benefit. This isn’t groundbreaking—the overwhelming majority of people benefit from trade. Virtually no one produces even her own food and shelter. Doing this would require massive downgrades in both. We’re a society of middle-men, and I don’t say that pejoratively—we’re benefitting from comparative advantage, and it’s completely natural and logical. Everyone has a boss, even if it’s ultimately the consumer of our products, even if we live off investment earnings, we’re ultimately beholden to the people who buy our investments’ products and services. We’re all in this together. So now let’s talk about how we can be together better. Co-Founders Paul Graham of Y Combinator notes that startups that work tend to have multiple co-founders. There are tons of reasons why. As Calvin Hawkes mentioned in our interview, a big role of the co-founding team is to be emotionally strong when the other co-founder is struggling. As you increase the number of engines on an airplane, you reduce the likelihood that they all fail. On top of that, there’s a wide spectrum of skills required to nail product development and marketing of products and services, and any one person is unlikely to have an expertise in all the skills. And there’s virtually no chance that there wouldn’t be comparative advantage stemming from opportunity cost (remember—there’s a cost associated with doing what you’re not “better-er” at). Corporate Boards Another feature of the startup ecosystem is the board of directors. Mature companies also feature corporate boards, but I’d argue that their impact is relatively muted when compared to the green-ness you’d see in startups and the siloed nature of the co-founders’ experience. The C-Suite exists to manage the day-to-day operations of the company, and the board of directors exists to manage and counsel the company’s managers on behalf of the company’s owners (shareholders). The best corporate board members provide incisive, experienced, and nuanced takes on complex, critical issues. For up-and-coming companies, board members offer a fresh perspective from a different background that is grounded in years of experience. To me, this sounds a lot like mentorship, and I think many startup co-founders would agree. Why Should You Care? There’s a possibility that I’m living in a bubble, but I think most people are lucky to have even one lifelong mentor. This is a far cry from accepted best practices in the startup ecosystem, and I think it’s a screaming opportunity for us to improve our internal processes by leaps and bounds. Each of us is the CEO of our own life. Those in the know recommend building a co-founding team and a strong board of directors. We should follow suit—here’s how: Think about the advisors you need (based on weaknesses and blind spots) Populate your advisory board Real contacts (consider teachers, coaches, parents, bosses, friends, and family members) Your favorite in-thinkers (dead or alive) Your favorite cross-functional thinkers (dead or alive) Invite them (in real life or virtually) Build your process Choose a reporting period (weekly, monthly, quarterly) Choose a reporting template (more frequent = shorter report, aim for 1 page) Divide the page into Past Performance KPIs, MD&A, Future Objectives, and Open Questions Iterate Periodically write the report Distribute it to real-life contacts & record the feedback Imagine what your non-contacts would say to you & record the feedback The questions of the week: Who do you want on your team? What processes can you build to improve your results? So that does it for this episode. I hope it shows some threads to pull. If you’re interested in show notes or supporting the podcast, check out strategychainpodcast.com. If you want to get in touch with me, you can find me on social media @strategychain. So until next time—thank you. Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Einstein famously described compounding as the 8th wonder of the world. It’s the secret superpower that drives network effects, population growth, and the spread of viruses—clearly it’s a force to be reckoned with. In a recent conversation, Max De Melo and Patrick Niederdrenk of America One Luxury Real Estate illustrated another hidden example of compounding: reputation. They mentioned that they could essentially predict inbound referral business despite having absolutely no idea where it would come from on a one-off basis. For any Ozark fans out there, it instantly reminded me of the scene where Marty Byrde talks about casinos. On any individual pull on the slot machine, he couldn’t predict the outcome. But on the aggregate, casino results become probability math—super predictable. With a nod to “German Efficiency,” Max and Patrick mentioned that they basically don’t conduct outbound marketing. Their business is completely referral driven. And they’ve been growing. Fast. This means that Max and Patrick have found viral growth, another way to describe compounding. One good experience leads the customer to recommend America One. Rinse, lather, repeat. For a strange coincidence, I’ve also recently received a ton of inbound opportunities from people I’ve known for years and years. There’s a reason Warren Buffett and Charlie Munger put such a special emphasis on reputation—it’s a natural compounding engine. And for a final callback to Charlie Munger’s beloved idea of inversion, I think it’s important to examine what happens when you give a customer or a boss—or anyone for that matter—a terrible experience. You create an agent for negative compounding. In the episode with Dylan Lipari, he mentioned a terrible experience with a store owner. Dylan’s a nice guy, and he didn’t talk about it explicitly in the episode, but I bet he’d love to tell you where *not* to get your shoes repaired in LA if you talked to him in confidence. When you give someone a terrible experience, you create a motivated saboteur. Someone who will write bad reviews, give bad referrals, and basically become an unpaid intern for your competition. I like to call to mind the episode of How I Met Your Mother where Barney’s love life goes to shambles as a former romantic partner spread the news about his misdeeds. The bottom line: reputation is everything. Do all in your power to guard, enhance, and leverage your own reputation. Don’t do anything that would endanger it—it’s your most powerful asset. The questions of the week: What scripted response would you like someone to give if they had to talk about you? How can you turn those words from a hypothetical wish fantasy into a real-life review? What can you do to enhance your reputation? What low-cost actions could turn someone you know into an evangelist for you? How can you share what you know or who you know with someone else? So that does it for this episode. I hope it shows  some threads to pull. If you’re interested in show notes or supporting the podcast, check out strategychainpodcast.com. If you want to get in touch with me, you can find me on social media @strategychain. So until next time—thank you. Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

I’m working hard on developing an important skill: the ability to deconstruct a failure before it happens. I’m trying to move from postmortem to premortem. A postmortem is an after-action review where mistakes and successes are deconstructed. A premortem is the same analysis shifted forward in time and focused on the variables that cause mistakes. Charlie Munger says that the best type of learning is “vicarious,” meaning that you learn from the example of others. You see your friend burn his hand on the stove, and you decide not to touch it for yourself to see if it’s hot. This type of learning is great, and I think it can prevent a lot of unnecessary suffering. But I think a lot of learning comes from experience. Howard Marks likes to say that “experience is what you get when you don’t get what you want.” Another phrase I like is “he who suffers remembers.” In that light—postmortem learning definitely isn’t preferable, but once mistakes become available for you to deconstruct, they can be a great resource. On Twitter, Ian Cassel recently mentioned that a well-constructed active investment strategy needs to be molded and shaped to you as an individual. It’s similar to what people say about Jiu Jitsu having a certain sense of justice—you’ll often find yourself in the positions you need to work on most. Rubbing your face in real-life mistakes through postmortem analysis is a fantastic way to address key flaws and drive inflection points in your learning. I’m just finished a postmortem of a miserable experience I had investing in Tailored Brands (which, as of July 8th, looks to be on the verge of bankruptcy after a missed bond interest payment). You’ll be able to see that analysis online at www.strategychainpodcast.com/postmortems. The analysis centers on analytical fundamentals, execution methodology, and psychology & behavior. I summarize the experience, look at what went right, and discuss in detail what I did wrong. The question of the week is short: how can I shift the distribution away from postmortem and toward premortem? So that does it for this episode. I hope it unearths some threads to pull. If you’re interested in show notes or supporting the podcast, check out strategychainpodcast.com. If you want to get in touch with me, you can find me on Twitter @strategychain. So until next time—thank you. Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

I’m a huge fan of Howard Marks. He often references the concept of “winning the loser’s game” by avoiding errors rather than looking for huge wins. In tennis, professionals win with unreturnable shots and amateurs win by keeping the ball in play. Charlie Munger uses a similar framework: inversion. He focuses on not going where he will die. In physical training, Christian Thibaudeau promotes a similar idea for “natural” lifters (as opposed to those using performance-enhancing drugs). Cortisol—the stress/readiness hormone is the enemy of the natural lifter because it can promote a variety of counterproductive sequences in the body. So the goal is to structure a program that sidesteps the problems from high stress levels in order to perform at peak levels. I believe that the body and the mind are one. Physical realities can change our mental state, and our thinking can change our physiology. To perform at our best, we need to use all our tools. Similar to what Thibaudeau says about sidestepping cortisol for physical performance, I think we can use a similar strategy to make life easy so that we can perform our best. We can do that by embracing simple joys and avoiding suffering. But I want to take a quick moment to explain what I’m NOT saying. There’s a reason Navy SEALs essentially torture their incoming pipeline of prospects. The ability to endure hardship is critical. I’m not saying that we should all sit on the couch chasing fleeting pleasure at the expense of critical day-to-day tasks and long-term strategic pursuits. I’m saying that there are cheap, untapped resources all around us that can help us recover so that we can operate at the highest levels. I’m talking about simple joys, the natural ways that we can soothe and rejuvenate ourselves—recharging for our next push forward. The problem is that many physical pleasures can be traps—pathways to pile on physical debt by trading misery tomorrow for euphoria today. This includes everything addictive—drugs, alcohol, sugar, technology, and the list goes on. Things that are expensive, things that downgrade your decision-making, and things that otherwise erode your future goals. These aren’t what I’m talking about. We should mostly avoid things in this category. If you can handle moderation, I think the phrase “everything in moderation—including moderation” makes sense. But there’s also a huge list of simple, cheap, sustainable physical pleasures that don’t hurt us in the future. Sunlight, exposure to the blue sky, the mild post-workout euphoria, a cold or warm shower (depending on the season), a nap, a full night’s sleep, a moment of mental rest from meditation, a simple stretch, a short walk, a moment of laughter from stand-up comedy. These are all examples of nearly costless ways to fight stress and its depleting, destructive, gradual erosion. So the question of the week is simple: what can I do for 5 minutes to enjoy a simple, natural pleasure and unplug from the world of worry and stress? So that does it for this episode. I hope it unearths some threads to pull. If you’re interested in show notes or supporting the podcast, check out strategychainpodcast.com. If you want to get in touch with me, you can find me on social media @strategychain. So until next time—thank you. Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Today, I had the pleasure of talking to Nicky Hinrichsen and Chris Coleman, who went to Stanford Business School and started a venture-backed company called Carlypso in 2013. Working on building the “Amazon for used cars,” the two founders went through Y Combinator in 2014, raised $10 million in venture capital by 2015, and successfully sold the business to Carvana in 2017. Like true entrepreneurs, Chris and Nicky are now working on their next venture called WithClutch. The co-founders discovered that auto loan rates are all over the map, and they built a refinance calculator that allows car owners to reduce their monthly payments and save thousands in just minutes. Time Stamps 0:06:28 – Nicky & Chris’ meeting 0:11:57 – Two stages of a startup: (1) finding value (2) scaling 0:15:37 – Nicky & Chris’ experience at Y Combinator 0:22:42 – What it was like to build the technology as semi-technical co-founders 0:27:17 – Evaluating technical talent outside of your comfort zone 0:39:56 – Things that don’t scale: chasing a stolen car down the highway 0:45:47 – Developing the hustler mentality and structuring processes that worked for them psychologically 0:50:11 – Lessons on hiring, firing, and job inertia 0:57:30 – The Co-Founder relationship: what Nicky and Chris got right 1:03:48 – Nicky’s confrontation with a copycat 1:06:28 – Creating a culture of candor 1:08:26 – “Touchy Feely” at Stanford GSB 1:11:06 – Things they’d whisper in their own ears: some lessons are best hard-learned, it’s important to take time off, it’s good to form an informal advisory board, be easier on yourself when you miss high bars 1:13:30 – Books: ( www.strategychainpodcast.com/support ) Never Split the Difference by Chris Voss (and an example), High Output Management by Andy Grove 1:18:00 – Where to connect with Nicky and Chris: LinkedIn https://www.linkedin.com/in/nicholas-hinrichsen-7b33874a/ ; https://www.linkedin.com/in/christopher-coleman-a316696/ Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Today’s episode explores how we can take the “easy” road by broadening our view. Let’s start with the problem We see the world through a flawed lens. There are a million terms for this idea: “target fixation,” “missing the forest for the trees,” “anchoring,” “framing.” The list goes on. The point is—we get so used to “the rules of the game” that we miss it when the game changes. David Kilcullen explores this idea in fascinating detail in The Dragons and the Snakes. If you’re into geopolitics, check out Episode 023 with David. The TL;DR version of the book is that success can breed failure. Since the West dominated the traditional battlefield, its enemies found new ways to fight. China embraced a much wider view of war, including economic, legal, and technological avenues to fight the West. David called this tactic conceptual envelopment. Similarly, the Russians have sidestepped traditional battlefield confrontations by “surfing the edge,” as David would say, of confrontation. The Russians blur the lines and exploit the slow reaction times of Western powers. The takeaway: don’t get mired in the old way of fighting. In my recent episode with Brian DeChesare, a similar concept comes up at the very end. He mentions that very driven people tend to confine themselves to options (a, b, c) when there are many more that exist. We get sucked into optimizing for the wrong thing, and we grind away for trivial gains while leaving the critical variables unexamined. Hollywood gives an awesome false frame example in the Dark Knight. Batman’s butler, Alfred, tells the story of his search for a jewel thief in Burma. Alfred and his team search the villages and black markets for the stolen jewels—all to no avail. Until they find a child playing with a huge ruby. They realized that the “thief” wasn’t a thief at all. He was throwing the stones away because he just wanted to cause chaos. Once they realized that the problem was different, they could pivot and make real progress. Their false assumption caused a lot of wasted effort. For a more real-life example, there’s a funny Harvard Business Review article by Peter Bregman where a “sibling fighting problem” is reframed as a “morning crankiness problem.” The link is in the show notes https://hbr.org/2015/12/are-you-solving-the-wrong-problem. It turned out that the solution was orange juice rather than a lecture on the golden rule. If we find ourselves grinding away without making progress, it can be a good time to try to rethink our assumptions. But this is way easier said than done. So what’s the solution? If it’s possible that our assumptions are wrong, we need to take a moment to consider what we might think is goofy. If convention isn’t working, it’s time to start breaking the rules—if only as a thought experiment. So here are some questions to ask and threads to pull: First, reconsider the obvious What is obvious? What clear facts are present? List them out and toggle them on and off to see if breakthrough ideas present themselves. Ask yourself how you know these obvious facts are true. Second, role play—how would a completely different person approach the issue There’s a link in the show notes to a site called 16 Personalities https://www.16personalities.com/personality-types It uses the Meyers Briggs classifications to construct some character archetypes Put yourself in the shoes of a different type, and imagine how that person might approach the problem You could also imagine an advisory council of people (and this could be past or present) who you admire Third, use arbitrary restriction What tools are available? Imagine throwing them out and starting from scratch What else is possible? How could you solve the problem if you had no resources whatsoever. Fourth, consider your untapped resources What allies haven’t you called on? What hidden assets haven’t you considered? What inventory or skills or contacts or tests are going underutilized? Think of the way AirBnb has unlocked the ability to rent out vacant real estate. Fifth, use physical cues What’s your physical status right now? How can you change your environment to stimulate different, novel thoughts? Take a freezing shower Go for a walk To change your perspective—literally change your vantage point Toggle the stimulus from your five senses to break free of the thinking ruts you’re in Finally, imagine the problem didn’t exist Is it possible that you don’t need to solve the problem? Is it possible that the problem can be sidestepped instead of tackled head-on? Is the problem taking its power from another controllable factor? How can that factor be addressed? Hopefully these questions help explore new avenues and wider perspectives on the challenges at hand. Until next week—thanks for listening. Support Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Brian DeChesare is the founder of Breaking Into Wall Street and Mergers and Inquisitions. Mergers & Inquisitions is a website dedicated to careers in the finance industry, with over 600 expertly crafted articles, over 500,000 monthly visitors, and over 100,000 email subscribers. The site features interviews with industry insiders in investment banking, private equity, venture capital, hedge funds, sales & trading, and other fields, as well as career tips, news commentary, case studies, and modeling tutorials. Breaking Into Wall Street is M&I’s sister site. It offers online training products like PDF guides and video courses as well as coaching services designed to help people break into investment banking, private equity, and hedge funds. Early in my career, I was both an avid reader and a customer of Brian’s. Although Brian has been a successful entrepreneur—earning a case study mention in the 4-Hour Workweek, as an example—I’m more impressed by Brian’s ability to “step off the line,” as Jocko Willink would say, to strategically re-orient himself. During our conversation, we discuss two points where Brian strategically pivots in order to achieve his true long-term objectives. We also cover Brian’s experience with angel investing, his biggest business inflection points, and how he structures his life to accentuate his strong suits. Links from the Show Mergers and Inquisitions www.mergersandinquisitions.com Breaking Into Wall Street www.breakingintowallstreet.com Brian’s Reading List www.strategychainpodcast.com/support Time Stamps 0:03:40 – Brian’s “slap in the face” moment 0:07:35 – Connection to Episode 003 with Michael Pollack 0:09:41 – Catch-up since Brian’s latest life story post 0:12:19 – Eliminating policy-borne headaches (refunds, support, payment plans) 0:22:31 – The difficulty of transitioning from a one-man show to a team 0:28:02 – Misinterpretations of the 4-Hour Workweek 0:31:52 – How to leverage obsessive-compulsive traits (spurts, Toggl time tracking, and adapting over time) 0:44:26 – High-yield activities and attribution difficulties (Wicked Reports) 0:50:31 – Issues with partnerships within a niche industry 0:55:46 – Business inflection points (pitching content, product development, marketing) 1:11:30 – The psychological lift from making the first sale 1:17:13 – Developing products by offering services 1:22:03 – The magic decision that improved profitability AND unit sales: pricing 1:30:32 – Brian’s angel investing experience 1:48:19 – What Brian would say to a younger version of himself: think of other options 1:50:40 – Brian’s future plans 1:55:15 – Book recommendations (Dan Kennedy’s work, Jason Fried & David Heinemeier Hansson: It Doesn't Have to be Crazy at Work, Rework, Remote, Henry IV Parts 1&2, Henry V, A Song of Ice and Fire, The Witcher Series, Brandon Sanderson’s The Wheel of Time, Robert Jackson Bennett [City of Miracles, City of Blades, City of Stairs]) 2:06:08 – Closing thoughts: you can only connect the dots in retrospect, find the unconsidered options. Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

What if we didn’t have to worry anymore? In this episode for anxiety-ridden overthinkers, I’m going to distinguish between worry (non-productive, anxious, hand-wringing) and work (productive, effective steps toward good decision-making). Then I’ll offer up some tactics to reallocate your resources into the work bucket. Let’s take a step back No matter what our goals are, we have a few things in common. We want to create a high chance of winning and a low chance of losing. And we want a big reward for winning and a small penalty for losing. Here’s the rub We get into trouble because we often mistake activity for production. The future is foggy and uncertain. I like Howard Marks’ description: the future is a spectrum of possible future outcomes. Humans hate uncertainty. It’s painful because it’s scary. And it’s scary because we don’t know what’s going to happen. It’s the grown-up version of being scared of the dark. We’ll do almost anything to get rid of the nagging doubt and anxiety about the future. We are driven to confirm there isn’t a monster under the bed. After we lay our baseline of fear, we stack on another dangerous brick: unfounded hope, otherwise known as simple psychological denial. In other words, as the saying goes “as we wish, so we shall believe.” We want to find a light switch. We want to find a flashlight. We want to know for sure that monsters aren’t there. We’re scared and we want to deal with it. Maybe I can relax once I check “x,” once I look at “y,” once I confirm “z.” So we cake hope on top of fear, and we end up with what Charlie Munger calls a Lollapalooza effect—a nasty combination of powerful psychological factors. If you’re like me, you might begin to create a feedback loop. Fear, unfounded hope, checking behavior, lack of material results. Rinse, lather repeat. Two absurd extremes Let’s illustrate the spectrum with a ridiculous example. On one end, there’s driving down the road with a blindfold on. That’s zero analysis. Action without forethought. On the other end, there’s learning Japanese to consider the historical context of other cultures and their attitudes toward motor vehicles. That’s over-analysis. Forethought without action. Let’s get back to reality Recently, I’ve been looking through Distressed Debt Analysis by Stephen Moyer. For many of you, that might not sound like a super-thrilling read. But there’s an EXTREMELY helpful concept in the book. Moyer addresses the critical challenge of investment analysis: when do you know enough to make an educated decision in the face of an uncertain future? On page 258, Moyer says: Realistically, however, the investor cannot “know” with metaphysical certitude that the firm will be able to access the capital markets in the future, and, mathematically, it is difficult to meaningfully or rigorously “quantify” the risk of refinancing. The investor can make an investment judgment based on an experienced assessment of the environment. However, that investment judgment will be erroneously derived, if the investor fails to uncover that another bond indenture of the firm prohibits the refinancing of the subordinated debt with other than junior securities, for which there may be no market, or that the working capital facility has a lien on all assets, not just the typical accounts receivable and inventory. Those factors were not in the “terms” of the bet. It would be like making a bet on a horse in a given race and then finding out that at the last moment the jockey was being changed or that three very strong horses had been added to the field. To properly calculate the odds, you need all the facts. That is the role of “due diligence.” So that’s the key idea. If there are material, discoverable unknowns affecting your decision-making, it makes sense to invest your time to find out the facts. On the other hand, if there aren’t material, discoverable unknowns affecting your decision-making, it’s time to calculate your best move. Importantly, this guideline applies throughout the decision-making process. At any given moment, your best course of action is determined by the facts. If you’ve already “decided,” and you are presented with information material to your decision-making—you should change course. It’s no use staring at a broken window and crying about what a wonderful window it used to be. Move on. The art is to construct a process that drives efficient discovery of the material facts, balancing a fact’s impact with its cost of discovery. This idea was one of Calvin Hawkes’ closing thoughts during Episode 013. If you haven’t heard it, I highly recommend that series of episodes. Calvin is super interesting and super smart. Now let’s bring this full circle Above, I’ve described the strategy for structuring a decision-making process. It’s all about material, discoverable facts. Finding those facts is what I call “work.” On the other hand, there are immaterial, impossible-to-find facts. The facts are there, but the cost to acquire the fact is too high or the impact of the fact is too low. And that’s where worry lives. Worry is the nightmare union of wasted time and energy. It’s a wheel-spinning, cortisol-dumping, mental sludge factory. Returning again to Charlie Munger, this is a great time to invert. Worry is where we can’t afford to live, and it warrants some deep thought. Everyone is different, and everyone has different circumstances. So—as always—there isn’t a one-size-fits-all solution. Here are some questions to help expose wasteful allocations of mental your energy. What are your fears? Which of your fears are uncertainty-driven? Which of the many possible futures scare you? What facts would help you narrow the distribution of probable futures? Objectively, are you likely to find those facts? Objectively, what is the cost—in time, in cash, in opportunity, in anxiety—required to find those facts? Imagine the worst-case scenario. Is that an acceptable outcome to you given your current levels of uncertainty? If you make a decision, are you likely to spin your wheels in search of answers you won’t find? What could make you comfortable with the uncertainty? Are you prone to checking behaviors that don’t deliver material new information? How can you change your decision-making structure or daily habits to side-step these checking behaviors? Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Jacob Wolinsky worked in investing and financial journalism before founding ValueWalk, a site that curates information about investing, hedge funds, asset management, and the broader world of finance. We explore Jacob’s journey as an investor and an entrepreneur. This episode was a real treat for me because our guest was (and continues to be) instrumental to my growth as a value investor. Jacob gave us a ton of awesome reading material, and I can’t wait to dive into it. Links from the Show ValueWalk www.valuewalk.com ValueWalk Premium www.valuewalkpremium.com Hidden Value Stocks www.hiddenvaluestocks.com Jacob’s Reading List www.strategychainpodcast.com/support Time Stamps 0:06:34 – Jacob’s first experience as an investor: right for the wrong reason! 0:08:38 – A revelation: Benjamin Graham’s book The Intelligent Investor 0:14:49 – Greater Fool Theory: Beanie Babies and Trading Tulips 0:18:12 – Cigar Butts: Classic value investing 0:21:40 – The role of psychology in investing 0:24:15 – Jacob’s professional path into investing 0:32:01 – How Jacob got started writing for GuruFocus 0:40:40 – Circle of competence & the danger of overstepping like Long-Term Capital Management 0:44:22 – Patience: David Einhorn’s Fooling Some of the People All of the Time and Christine Richard’s Confidence Game (About Bill Ackman) 0:46:36 – Joel Greenblatt: positions took 2-3 years before they worked (on average) 0:47:43 – The advantages of being a small investor 0:50:04 – Taking the jump: focusing on ValueWalk full time 1:17:49 – HiddenValueStocks.com background 1:22:11 – Thoughts on conducting valuation after having run a real business 1:31:35 – Investing is extremely dependent on the individual’s personality 1:35:03 – Jacob’s favorite investing books: John Neff’s books (particularly John Neff on Investing), David Dreman’s books (particularly Contrarian Investing Strategies), Christopher Browne’s The Little Book of Value Investing, James Montier’s The Little Book of Behavioral Investing, The Millionaire Next Door by Thomas Stanley and William Danko, John Bogle’s books, Bruce Greenwald’s Value Investing from Graham to Buffett and Beyond, John Train’s Money Masters of Our Time, Joel Greenblatt’s You Can Be a Stock Market Genius, Ben Graham and David Dodd’s The Intelligent Investor, Andrew Tobias’ The Only Investment Guide You’ll Ever Need, William J. Bernstein’s The Four Pillars of Investing. Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Mohnish Pabrai - Paul Tudor Jones - Ian Spalter - Elad Gil - Eric Ries - Gabriel Weinberg - Sun Tzu - David Kilcullen - Charlie Munger - Mike Malinconico They all say to be brief. We should listen. Brevity is “easy” because time is expensive. Brevity isn’t easy for you, but it’s easy for your counterparts: customers, investors, students, athletes, colleagues, bosses, partners. Everyone. We need to get to the point if we want people to listen. Here are some examples: In Investing Mohnish Pabrai suggests limiting investment theses to one paragraph. Paul Tudor Jones suggests studying journalism to learn clarity, brevity, and the art of positioning the critical matters first such that readers can stop at any point and take away the most important ideas. See the show notes for a link to his thoughts. https://www.youtube.com/watch?v=_e0U-MKV90w In Business Brevity is the core of user experience design. Designers obsess over every line and punctuation mark so users get what they want—fast. When was the last time Amazon made you suffer through a tedious experience? Twitter is what’s happening in 140 characters. Instagram is 1,000 words in an instant. For a great example, see the show notes for a link to Ian Spalter’s episode on Abstract: The Art of Design. https://www.netflix.com/title/80057883 In Entrepreneurship When pitching Venture Capitalists—or anyone really—it’s crucial to get to the point. Explain the market opportunity, the product, the distribution strategy, and the team. Then be ready for a game of 20 questions. Elad Gil mentioned that his favorite pitch meeting was scheduled for 45 minutes but lasted for 10. The founder explained himself, fielded key questions, thanked Elad for the meeting, left, and responded with the answer a few days later. Brief, rapid-iteration testing is a hallmark of both The Lean Startup and Traction. In Combat Brevity is critical in combat. Time is the critical resource. Manage it well. Sun Tzu says that no effective campaign can be drawn out. Long, draining campaigns are the enemy of good strategy. In his latest book, The Dragons and the Snakes and in Episode 023, David Kilcullen discusses how Russia uses ultra-quick, ultra-targeted campaigns masterfully. The US did the same thing during the Gulf War. Interestingly, Charlie Munger also praises extreme decisiveness in the face of fleeting opportunity. In Grappling Mike Malinconico boils years of training into 90 seconds of dense technique in his Behind the Dirt series and in FloWrestling’s technique library. High-level jiu jitsu players talk about following the tightest path between two points. In the striking arts, the jab and the teep are essential building blocks—and they highlight the connection between small time investments and limited risk. In Athletics Master coaches work on jarringly brief cues to instantly communicate technical corrections. My Resolution It’s not the New Year, but I resolve to chase brevity. So for the question of the week: where can we trim the fat in our communication? Support Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

David Kilcullen is a soldier, strategist, diplomat, and author. He’s a scholar of guerrilla warfare, terrorism, urbanization, and the future of conflict. His newest book explores how the Western world's adversaries are adapting. This was a fascinating conversation covering topics like second-order effects, evolution and adaptation in competitive environments, and yield. We discuss world politics and the strategies and tactics of Russia, China, and North Korea. Links from the Show David’s talk at the Australian Centre for Society and Armed Conflict https://www.youtube.com/watch?v=JDummafZbXs David’s talks at Google https://www.youtube.com/watch?v=tVUI9U4WQ6E https://www.youtube.com/watch?v=DoS9_Mr_K2E David on Hidden Forces (podcast) https://hiddenforces.io/podcasts/david-kilcullen-national-emergency/ David on the Federalist Radio Hour (podcast) https://thefederalist.com/2020/04/06/federalist-radio-hour-how-bad-actors-plague-the-international-stage-and-attack-the-west/ David on Departures with Robert Amsterdam (podcast) https://robertamsterdam.com/new-episode-of-departures-podcast-featuring-david-kilcullen/  Time Stamps 0:02:00 – Introduction 0:04:32 – Other talks by David you might enjoy (Google, Australian Centre for Society and Armed Conflict, Hidden Forces, The Federalist Radio Hour, and Departures with Robert Amsterdam) 0:07:35 – Nadia Schadlow & her book War and the Art of Governance (link above) 0:10:17 – Basis for the book’s name: CIA Director James Woolsey’s 1993 confirmation hearing testimony 0:14:16 – What exactly are “the dragons and the snakes?” 0:15:58 – The Gulf War: the blueprint for how not to fight the US 0:16:56 – Bookend #1: H.R. McMaster and the Battle of 73 Easting (precision, system-of-systems battlefield dominance) 0:19:12 – Second-order effects: the Gulf War forces an evolutionary response (Iran, China, and even US allies!) 0:22:13 – Bookend #2 “Dora Farms” (tactical excellence in the service of a blinkered strategy) 0:28:36 – Multi-disciplinary approach: using evolutionary biology as a basis for exploring strategy 0:32:10 – By becoming so dominant in 1991, we forced our adversaries to adapt or evolve 0:32:40 – Russia case study: Liminal Warfare & surfing the ambiguity threshold 0:40:55 – Adaptations to the modern media environment: impossible to keep things secret, but possible to sow confusion and exploit the intelligence OODA Loop 0:43:49 – Russian goal wasn’t to elect Trump but to create debate and disruption 0:48:15 – Russian strategy is like a Hollywood heist movie 0:49:50 – Connection to investing: super-high yield 0:51:44 – China case study: broadening the definition of war 1:07:17 – Reference Prisoners of Geography 1:08:32 – A huge theme in the book: the potential for misunderstanding 1:16:24 – North Korea case study 1:20:33 – Attempt to contain nuclear ambitions fall apart as we focus on Iraq and Afghanistan and in the aftermath of the “axis of evil” speech 1:34:50 – The three approaches the US can take going forward Strategy Chain Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Today we’re going to focus on the concept of yield—both high-yielding activities and their opposite, wheel spinning. The world’s top performers always focus on getting the most bang for their buck. From business to combat and everything in-between, this is a pretty steady rule. Investing Topics and Links The Superinvestors of Graham-and-Doddsville https://www8.gsb.columbia.edu/articles/columbia-business/superinvestors Joel Greenblatt's The Little Book That Beats the Market and You Can Be a Stock Market Genius, Tobias Carlisle's The Acquirer's Multiple, Ben Graham's Security Analysis Business Topics and Links Jocko Willink's phrase "prioritize and execute," Richard Koch's The 80/20 Principle, Peter Drucker's The Effective Executive, Gabriel Weinberg's Traction, Eric Ries' The Lean Startup, Kim and Mauborgne's Blue Ocean Strategy, Ries and Trout's The 22 Immutable Laws of Marketing, Peter Thiel's Zero to One Entrepreneurship Topics and Links Elaine Pofeldt's The Million-Dollar One-Person Business, Chris Guillebeau's Side Hustle and The $100 Startup Joshua Kennon's essay on synthetic equity https://web.archive.org/web/20150109034520/https://www.joshuakennon.com/creating-and-using-synthetic-equity-to-make-money/  Calvin Hawkes' Soul Ceramics Combat David Kilcullen's The Snakes and the Dragons: How the Rest Learned to Fight the West Grappling Helio Gracie Athletics Pine City's basketball team https://www.wsj.com/articles/the-basketball-team-that-never-takes-a-bad-shot-1485788165 Pulaski Academy's football team https://www.washingtonpost.com/news/sports/wp/2015/08/13/the-highly-successful-high-school-coach-who-never-punts-has-another-radical-idea/ Money Ball FiveThirtyEight's 3-Pointer study https://fivethirtyeight.com/features/nearly-every-team-is-playing-like-the-rockets-and-thats-hurting-the-rockets/ LeBron James https://www.espn.com/nba/story/_/id/23384071/lebron-james-plays-rests-keep-cleveland-cavaliers-hopes-alive Support Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)  

Today’s guest is Mike Malinconico, FloWrestling’s technique wizard. We had a really broad conversation covering topics like: the challenges of the learning process, the role of money in wrestling, how to grow the sport, and how to break wrestling into branches from a home base. Time Stamps 0:05:43 – The beginnings of “Behind the Dirt” technique series 0:08:51 – What Mike had to do to find technique “back in the day” 0:10:21 – Wrestling’s education problem—it’s hard to be a casual fan 0:14:42 – How struggling in school led to becoming a great student and teacher of technique 0:17:35 – Lessons translated from sales: brevity and engagement 0:27:33 – Thoughts on Tim Ferriss’ learning framework (deconstruction, selection, sequencing, stakes) 0:32:39 – J’Den Cox as an example of hyper focus on his best positions 0:34:12 – The difference between a technique and a system 0:36:21 – Staples vs. Esoterica 0:38:51 – The drill Mike starts every practice with: “chasing tail” 0:47:47 – What makes a good college program 0:51:20 – The impact of funding on wrestling programs: it’s all about who’s in the room 0:55:27 – How the RTC system works (non-profits outside of the universities) 1:02:15 – The opportunity for growth in metropolitan hubs 1:06:34 – Can the US re-create the culture of wrestling in Russia and Iran? 1:07:58 – An Madison Square Garden mystery event which may or may not be happening Nov. 1, 2020 1:09:12 – Beat the Streets and what wrestling can be 1:12:06 – WWE, UFC, and how we can leverage their hype tactics to grow wrestling 1:19:11 – Me on my soapbox: what needs to change for us to grow wrestling 1:26:02 – Another huge opportunity: growing women’s wrestling 1:36:47 – How to select a technical system or style to develop 1:54:36 – Surprising lessons from being around elite athletes and coaches 1:58:51 – Recommended books: Zen and the Art of Motorcycle Maintenance 2:02:08 – Skills to develop: storytelling and video editing 2:14:56 – How Mike became comfortable with promoting himself 2:20:52 – Important beliefs: everyone should wrestle Support Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Preview Jocko Willink, Marcelo Garcia, Kurt Osiander, Joel Greenblatt, Seth Godin, Tim Ferriss, and Sun Tzu are all using the same strategic approach to drive their tactical decision-making. It’s a mental model called “catalysts and derivative decisions.” Let’s get into it. Introduction to the concept Warren Buffett says compounding is the 8th wonder of the world. He’s usually talking about the power of reinvestment. That’s either operating cash flow funding reinvestment in a business and creating more future cash flow—or interest from reinvested interest. But compounding exists outside of business and investing. Its mechanics define and drive viral growth, causing positives like agriculture and negatives like COVID-19. It’s something worth understanding. Either way, when we hear people talking about compounding or virality, they’re usually talking about “growth.” But compounding has another critical application: cascading effects—actions that influence later actions. High performers use compounding to create advantages by focusing on catalysts and ignoring “derivative decisions.” In turned-based, position-based, and time-sensitive strategic applications, it’s critical to get ahead and stay ahead. It’s like the saying “an ounce of prevention is worth a pound of cure.” Business, sports, combat—and much of life—falls into this bucket. Let’s explore how titans from different verticals leverage this concept. Jocko Willink Jocko Willink is a retired Navy SEAL Commander with 20 years of service experience. Since retiring, he’s focused on building an expansive business empire. Before leaving the Navy, he had already owned real estate properties and an MMA gym. Since then, he has created a blockbuster podcast on leadership, 10 books, a strategy consulting firm, and an All-American manufacturing company whose products run the gamut: jeans, boots, nutrition products, jiu-jitsu gis, and standard apparel. And he’s only been at it for a decade. If you’ve listened to the podcast, you’ll recognize a few omnipresent themes: “default aggressive” and “be first.” Both of these obey the law of “catalysts.” In true combat and in combat sports, this concept is critical. Being first creates a cascade of better opportunities. Two examples jump to mind: ambush situations and the first minutes of an MMA fight. First—let’s talk about an example of being on the wrong end of the rule. If you’re being ambushed, you’re on what Sun Tzu calls “death ground.” Think of a sinking ship or a burning building. The situation is bad, and it gets worse every second. Without even knowing it, you’ve found yourself several unfavorable steps into a decision tree. But things can and will deteriorate if you delay. Combat veterans call the position where the ambush is triggered the “X.” The idea: get off the X! Things have developed against you, but you can still stop your position from becoming even worse. On the other hand, we have the beginning of the fight. “Be first” means take the fight where you want it to go. If you’re a stronger striker, begin to dismantle the opponent with movement and traps. If you’re a stronger grappler, initiate with takedown pressure. Relentlessly force the opponent into worse positions. Even if you’re globally outmatched by the opponent, you can at the very least maneuver to a position you’re familiar with rather than a place of total confusion. Marcelo Garcia Marcelo Garcia uses the same approach when teaching. His lessons often begin with resetting—breaking the opponent’s initial controlling grips and funneling the fight to a place where you can dominate. Watch his matches—this is something he does relentlessly. A Marcelo Garcia highlight reel is like a technique DVD focused on a single technical pathway to submission. Why? Because he doesn’t accept what Tom DeBlass calls “the mutual agreement,” that the guard passer will (a) allow a guard to be established and then (b) try to dismantle it. Marcelo Garcia aggressively seeks advantage and aggressively breaks any tie that doesn’t favor him. Kurt Osiander As a counterexample, check out this video [ https://www.youtube.com/watch?v=4l9tP2gRuOo ]of Kurt Osiander explaining how to get out of bottom side control. For the non-BJJ crowd, bottom side control is extremely hard to escape—there are many variations that require different responses. As the bottom player, you’re constantly defending a diverse combination of attacks. For an extremely technical positional breakdown: “bro, you fucked up a long time ago!” Don’t let them get you there. But this theme extends well beyond combat and sports applications. Joel Greenblatt Joel Greenblatt is a legendary investor. Howard Marks—a legend in his own right—describes investment returns in the high teens as being very special. Anything above that level should be viewed as the territory of the very best of the experienced professional investing world. Joel Greenblatt returned 50% per annum for a decade, well over 50x returns. He’s written a deeply technical book about investing opportunity and deeply simple book about beating the market using a simple rule. The first book is called You Can Be a Stock Market Genius. Don’t let the goofy title fool you. It’s one of the best books on public markets investing, period. Joel attributes his success to his methodology—a hyper focus on “special situations” like spinoffs, rights offerings, restructurings, stub stocks, and much more. What’s so “special” about these situations? They are corners of the market where sophisticated players act like idiots for structural reasons. Reasons related to their investing mandates. I love the metaphor he uses for this choice on page 55: So, there I was, at perhaps the finest restaurant in the world, certainly in New York, looking over the menu. Over walks a gentleman in full chef’s garb to help with our order. Somehow, his outfit didn’t tip me off that this was actually Andre Soltner, proprietor and head chef. Pointing to one of the appetizers on the menu, I asked innocently, “Is this one any good?” “No, it stinks!” came Soltner’s reply. Even thought he was just kidding around, I did get the point. Pretty much everything on the menu was going to be good. Selecting Lutece was the important culinary decision, my particular menu choices were just fine tuning. … It’s great to look for investments in places other are not, but it’s not enough. You also have to look in the right places. If you preselect investment areas that put you ahead of the game even before you start (the “Luteces” of the investment world), the most important work is already done. You’ll still have plenty of decisions to make, but if you’re picking and choosing your spots from an already outstanding menu, your choices are less likely to result in indigestion. Seth Godin Continuing along with the “culinary metaphors” to explain the catalysts versus derivative decisions theme, we have some thoughts from Seth Godin in his post “Tires, Coffee, and People.” [ https://seths.blog/2015/09/tires-coffee-and-people/ ] The most important part of a cup of coffee is the beans. The grinder, the machine, the barista pale in comparison to the quality of what you start with. Tim Ferriss And finally, Tim Ferriss is a huge proponent of the concept. Tim calls these high-leverage actions “lead dominos” and describes them as things that “make everything else easier or irrelevant.” Threads to Pull So where does this leave us? I really enjoy the concept of “threads to pull.” Why? Circumstances vary widely, so the execution of certain strategies can become a no go. Specific application is crucial. So while it’s impossible to make blanket statements that will work for any situation, we can always ask ourselves good questions. ·         How can I “be first?” ·         When am I reactive? How can I transition to proactive? ·         What’s at the very beginning of my critical decision tree? ·         Where can I find structural causes of market dislocations? ·         How can I improve the quality of my fundamental building blocks? ·         What rules can I use so that my decision-making doesn’t matter? Support Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

I’m excited to announce a mini-series double header. They will be called “The Easy Series” and “The Hard Series.” These will be punchy episodes focused on giving you themes to ponder, threads to pull, and stories to remember.     Arthur Schopenhauer said:   Talent hits a target no one else can hit; genius hits a target no one else can see. This quote gets at the core of strategy. There are two paths: the easy way and the hard way. And there’s a time and place for both! Each is based on avoiding prisoner’s dilemma and exploiting non-crowded (and therefore high-yield) channels. The Easy Way: Use Perception The Easy Way is only “easy” because it’s the hidden target. It’s represented by the target no one can see. To paraphrase Howard Marks, all it takes to be a great investor is superior insight. Sure—but how do we get that superior insight? We need to be able to perceive the truth—to find what’s retrospectively obvious. We’ll call it “easy” because it uses the brain instead of using pain. The difficulty is understanding the principles and seeing where to apply them. Luckily, we can largely steal these principles from the smartest people ever to walk the Earth. Then it’s generally a process of turning over rocks to see what we find underneath. When you think of “The Easy Way,” think “we copy them,” as in—the greatest to play the game. (“Easy” might be a bit of a misnomer, but let’s go with it.) The Hard Way: Use Pain On the other hand, “The Hard Way” is the target no one else can hit. It’s totally obvious what we have to do. These are the things that everyone knows yet no one does. It’s generally as simple as “this is so painful that no one else will be able to do it.” We’ll call it “hard” because it uses pain—not the brain. These things are generally slogs. Uncomfortable processes with long time horizons. Frustrating, painful, and tedious. What’s the upside? Most people can’t stand to do them. So yes—competitors could copy us—but they probably can’t stand actually doing it. The hard way is where the rubber meets the road. When you think of “The Hard Way,” think “they can’t copy us.” Why? Because it’s too painful. Support Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Entrepreneurs, investors, and designers alike will enjoy this conversation. It focuses on the missing link between the vague idea for a company and the ultimate cash flows it produces—namely, the execution of a design that makes customers want to pay. You might be surprised at some of their ideas about branding tactics. Have you ever considered the impact of typeface design in a company’s messaging? Today’s guests make a compelling case for re-thinking the media we use to reach our customers and prospects. Ryan Bugden is an old friend, and together with Michelle Ando, we had a fantastic discussion on their design education, their work, their approach to branding, and the way that design bridges the commercial and the artistic. Ryan and Michelle are both RISD-educated graphic designers based in Brooklyn. Both at one point made their way to Red Antler—a legendary branding design studio known for its work with clients like Casper, Allbirds, FourSquare, Square, Betterment, Zillow, Google, American Express, HBO, TripAdvisor, and General Electric, just to name a few. Michelle is still with Red Antler, and Ryan has moved on, working at Pentagram under Paula Scher before leaving to focus on his own work. Keep listening for their thoughts on design, branding, the creative process, learning, and much more. Guest Links Ryan Bugden: Instagram @ryanbugden https://www.instagram.com/ryanbugden/ | Website https://www.ryanbugden.com Michelle Ando: Website https://michelle-ando.com Time Stamps 0:05:05 – What it was like developing as artists 0:07:53 – Design bridges the artistic and commercial worlds 0:09:41 – Why Ryan and Michelle dislike being called “creatives” 0:10:59 – Viewing different verticals as learnable disciplines: Mastery by Robert Greene 0:14:47 – How they became interested in typeface design 0:20:39 – What typefaces can do for a brand 0:27:36 – Ryan and Michelle’s work with Getaway ( https://www.getaway.bar/ ) 0:34:16 – Design as the connection between the “numbers” and the “reality” of business 0:38:30 – Branding and the “spectrum of consistency”  0:40:28 – Nike: “consistently inconsistent in a beautiful way” 0:41:58 – Shick Toikka’s “Nike Unlaced” typeface ( https://www.schick-toikka.com/custom-fonts/nike-unlaced ) 0:43:52 – Discussion of building a heritage brand and brand equity 0:48:55 – Watching the development of Allbirds’s branding at Red Antler 0:50:17 – Emily Heyward’s top 3 questions about brand identity 0:51:45 – Ryan and Michelle’s process & design approach 1:13:47 – Growth & recovery: connection to Katina Mountanos, Dupi Singh, and Daydreamers 1:16:07 – The connection between play and recovery 1:19:55 – Managing emotions in the creative process 1:25:32 – Their approach to marketing and cold outreach 1:33:33 – Truthfully, much in design (as in investing) is a leap of faith 1:39:29 – Observations on what clients and end customers really want 1:42:21 – Genuineness—the brand needs to be congruent with the company 1:44:25 – The spectrum of “brand importance” (from B2B to Fashion) 1:47:48 – Influential books: Roland Barthes, Walter Benjamin, Susan Sontag, Alan Watts 1:54:16 – Documentaries: Adam Curtis (HyperNormalisation) https://www.youtube.com/watch?v=AUiqaFIONPQ 1:57:36 – Skills: coding in Python, animation 2:04:31 – Beliefs: “brand systems can be chaotic” and “work smart; not hard” 2:08:33 – Learning strategies: make learning purpose-driven 2:17:11 – Whisper to themselves: (paraphrasing) “a career in the arts is possible,” “don’t overtrust others or undertrust yourself,” and “make the process your own.” Support Links Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

We’re well into the quarantine. It’s a dynamic, anxiety-provoking environment. Business is decidedly not as usual. I’ve been reflecting on opportunity and timing. I want to share my thoughts in case they are helpful to even a small degree. The essential question of strategy is “what should we do?” Uncertain times fraught with danger (perceived or real) are good times to revisit our most basic assumptions and explore our personal strategies. To that end, I want to do three things: (1) talk about the cyclical, dynamic nature of opportunity, (2) suggest a good framework for strategic analysis, and (3) make some observations about times similar to the present. Links: Tim Ferriss’ 17 questions: https://tim.blog/2016/12/07/testing-the-impossible-17-questions-that-changed-my-life/ Review Strategy Chain at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me (Michael Roberson) questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Dylan Lipari toured the nation as his band's drummer from age 13 to 23. His band ended things on a high note: opening for Bon Jovi at MetLife Stadium. Dylan transitioned into a successful career in corporate retail before joining his brother at the Superare Fight Shop, helping lead the expansion from Long Island to Manhattan and (most recently) LA. Dylan is a master salesman. You can't help but like the guy--he can connect with anyone. His story highlights the tenacity, hustle, and optimism required to be successful in any pursuit. And his story is incredible. 0:04:00 – Intro to Dylan and his background 0:10:03 – How Dylan first got involved with Superare 0:21:00 – The top of the funnel: getting people into combat sports 0:40:55 – How Dylan’s band started 0:46:12 – Selling out venues across the country 0:51:02 – #1 unsigned band on Myspace for 6 years 0:53:25 – Sneaking onto Warped Tour 1:04:38 – First musical instrument to play at MetLife Stadium (opening for Bon Jovi) 1:10:12 – Lessons on selling, marketing, and employee retention 1:43:05 – Granular dive into Superare 2:11:25 – Customer service best experience 2:31:35 – "Say 'yes' and figure it out" ... making heavy bags for Jay Glazer 2:41:09 – Expanding to the LA Superare location 2:55:14 – Guerrilla Marketing 3:02:00 – Experiences with licensing (Muhammad Ali and Bruce Lee) 3:04:47 – Collaborations 3:17:38 – A connection to Mohnish Pabrai's P/E of 1 3:26:35 – Closing questions (and some crazy theft stories) 4:08:03 – When Dana White’s Looking for a Fight came to Superare 4:17:58 – Favorite books Review Strategy Chain at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me (Michael Roberson) questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

This episode explores the difference between step-wise and incremental progress. We’ll discuss thoughts from startups, venture capital, established tech companies, politics, combat, grappling, investing, marketing, and the movie Zoolander. We’ll discuss thoughts from Gabriel Weinberg’s Traction, Bill Gates, Tim Ferriss, Newt Gingrich, Sun Tzu’s The Art of War, Peter Thiel’s Zero to One, wrestling, Jiu Jitsu, strength training, Jocko Willink, the Navy SEALs, the Green Berets, the CIA, the US Government, Mohnish Pabrai’s Dhandho Investor, W. Chan Kim and Renee Mauborgne’s Blue Ocean Strategy, Richard Branson, Al Ries and Jack Trout’s The 22 Immutable Laws of Marketing, Charlie Munger, and Derek Zoolander. Here’s the point: anyone who is great focuses on moving the needle. Review Strategy Chain at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me (Michael Roberson) questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Today we discuss the laborious, painful processes that make and break competitive advantages. To illustrate this concept, this episode is going to feature: Paul Graham (of Y Combinator), Mike Posner (a prolific singer, songwriter, rapper, poet, and record producer who received a Grammy nomination for song of the year), Gary Gulman (a stand-up comedian), Charlie Munger (a legendary investor), the Green Berets, and the New England Patriots. And as a bonus, we’ll explore how Marcelo Garcia provides an example of when to break the principle—and why.

Calvin successfully exited two businesses without raising dilutive equity funding before turning 28. While building them, he and his co-founders lived in China, South Africa, Mexico, and Chile for fun and geo-arbitrage. Calvin also tells an UNBELIEVABLE story about how he and his team ended up in jail in Beijing. Here, Calvin gives us a sense of what he’s learned, what works well for him currently at Trivago, and what he’d say to a younger version of himself. I found it really insightful. Very simple, but very powerful. I suggest listening to what he has to say. 0:01:34 – What happened between joining Start-Up Chile and selling the company to Trivago 0:03:58 – Getting contacted by Marriott 0:04:21 – Marketing their B2B concept by promoting their consumer-facing site 0:05:23 – Joining Trivago 0:06:16 – What it means to be a product owner at Trivago 0:11:32 – Small changes that have big impacts 0:12:30 – Calvin’s first experience launching a “losing” set of tests and shifting revenue down 3% 0:12:59 – Asymmetric risk & reward 0:17:25 – Game theory, OODA loops, Howard Marks, & connections to wrestling 0:23:10 – Important books: The 4-Hour Workweek, Traction, and biographies 0:26:15 – Valuable lessons from failure & doubt; importance of co-founder team 0:27:46 – Important skills: brutally honesty about your skill set, choosing what NOT to do, & transparency 0:31:20 – Important beliefs: forgiving yourself, focusing on what you did right, and making quick decisions 0:35:18 – What he would whisper to himself: you’ll make a lot of mistakes Review Strategy Chain at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me (Michael Roberson) questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Calvin successfully exited two businesses without raising dilutive equity funding before turning 28. While building them, he and his co-founders lived in China, South Africa, Mexico, and Chile for fun and geo-arbitrage. Calvin also tells an UNBELIEVABLE story about how he and his team ended up in jail in Beijing. Listen in for details on Soul Ceramics (the Tim Ferriss style automated cash flow business they sold to an individual investor) & TripHappy (the tech company they sold to Trivago). 0:02:00 – Transitioning their focus from Soul Ceramics to TripHappy in 2015 0:04:22 – The infamous Chinese jail story 0:17:50 – What is TripHappy? First iterations and pivots of the company. 0:21:26 – We have a useful product: now what? 0:22:14 – First attempt at content marketing: using travel bloggers 0:23:04 – Second attempt at content marketing: writing automated travel guides 0:24:30 – Third attempt at content marketing: hitting the front page of Reddit 0:28:31 – Finding the real “problem” that TripHappy solves 0:30:28 – Focusing on viral content & hitting Reddit’s front page … again! 0:32:18 – Seeking funding through Start-Up Chile 0:34:28 – Traction by Gabriel Weinberg and Justin Mares 0:43:00 – Start-Up Chile experience 0:46:22 – Learning from other entrepreneurs: what did you try, what worked, and what didn’t? Review Strategy Chain at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me (Michael Roberson) questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Calvin Hawkes successfully exited two businesses without raising dilutive equity funding--before turning 28. While building them, he and his co-founders lived in China, South Africa, Mexico, and Chile for fun and geo-arbitrage. Calvin also tells an UNBELIEVABLE story about how he and his team ended up in jail in Beijing (in the next episode). Listen in for details on Soul Ceramics (the Tim Ferriss style automated cash flow business they sold to an individual investor) & TripHappy (the tech company they sold to Trivago). 0:04:23 – His first online business, Maple Cheats 0:06:23 – Starting his career at Deloitte 0:10:05 – Making a pact with his future co-founders to quit their jobs in a year 0:10:57 – Enter The 4-Hour Workweek 0:13:23 – Their first attempted automated cash flow business: SnackShackSupplies.com 0:19:41 – Lessons learned from failure & their next attempt: Soul Ceramics 0:27:38 – Things that didn’t carry over & getting a cease and desist letter 0:30:17 – Marketing dynamics and economics using Google Shopping 0:35:37 – The importance of emotions and motivation in entrepreneurship 0:39:31 – The importance of selecting the right co-founders: trust  0:47:37 – Transitioning from Soul Ceramics to TripHappy 0:49:45 – A step back: Soul Ceramics’ economics and mechanics 0:55:35 – Moving from a working business model to an automated cash flow business 0:59:30 – Content marketing to hedge against an ad inventory auction “race to the bottom” 1:04:00 – Selling Soul Ceramics through EmpireFlippers.com Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Walmart’s founder and an NCAA wrestling champion born with one leg used the same strategy to dominate their competition: local advantages. Sam Walton founded Walmart and grew it from a single discount retail store to well past 4,000 locations. Anthony Robles, born with one leg, developed a strategy that culminated in an undefeated senior season and achieving his dream: an NCAA title. 0:00:00 – Local advantages and asymmetry 0:03:00 – Competition Demystified and Sam Walton introduction 0:06:15 – Anthony Robles introduction and discussion 0:15:59 – Robles vs Gardner: overtime during the 2008 NCAA Division I Wrestling Tournament 0:27:21 – Robles vs McDonough: the detail that completed an undefeated season 0:29:15 – Strategic and tactical changes 0:32:13 – Summary of the Robles example 0:34:57 – Zooming out: context 0:35:16 – Sam Walton and the Walmart story 0:35:41 – Connection to Risk strategy: entry / pre-emption games 0:37:24 – Sam Walton’s 3 density advantages 0:41:42 – Conclusions and takeaways 0:43:30 – Gratitude and support Rate and review the podcast at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Find Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

Today Colin Keeley ( www.twitter.com/colinkeeley, www.colinkeeley.com, and www.techinchicago.co) joins us to talk about venture capital, continued education, networking, and how to optimize learning. Colin has a super interesting story that ultimately culminates in the venture-capital field. He also runs an amazing podcast called Tech in Chicago. I think Colin’s superpowers include: masterful genuine networking, appetite for taking calculated risks, and taking perpetual, non-stop steps toward his lofty goals. Listen for these themes as you make your way through podcast, and I think you’ll see them all over the place. Time Stamps0:00:00 – Introduction to the episode 0:03:00 – Introduction to Colin Keeley 0:03:13 – My favorite episodes of Tech in Chicago: Jeff Carter ( https://www.builtinchicago.org/blog/tech-chicago-episode-8-jeff-carter-vc-hyde-park-angels-west-loop-ventures ), Ezra Galston ( https://www.builtinchicago.org/blog/tech-chicago-episode-6-ezra-galston-vc-chicago-ventures ), and Troy Henikoff ( http://www.techinchicago.co/episodes/2017/1/13/troy-henikoff-techstars-md-vc-math-vp ) 0:04:18 – Macalester College to Inveni 0:04:55 – Seth Levine of the Foundry Group gave a talk 0:05:38 – Cold email into a job 0:07:05 – First start up hire: “athletes” 0:08:30 – Experience with Geneva Denim 0:09:40 – University of Chicago MBA & starting in venture capital 0:15:07 – Bevy Post-Mortem ( https://colinkeeley.com/blog/bevy-post-mortemmy-sharing-economy-startupnbspfailure ) 0:16:57 – How Colin met Paul Lee https://www.builders.vc/people.html#cbpi=paullee.html from Builders VC 0:18:25 – Starting Tech in Chicago 0:20:00 – The vision for Avocado Audio 0:22:44 – Venture Capital 0:34:14 – Continued education 0:36:23 – How to learn without doing in a start-up context: “Why now?” 0:37:38 – Answers to the “why now” question 0:41:57 – Importance of persuasion, sales, and storytelling 0:44:42 – Networking 0:54:00 – Reading text and retention   0:56:56 – Audio and retention 1:00:30 – Podcast analytics lagging behind video platforms 1:02:34 – Books (American Kingpin, eBoys, The Design of Everyday Things) 1:05:41 – Skills (communication, writing, selling, public speaking, producing content) 1:07:56 – Beliefs (improved at letting trivial matters go) 1:09:25 – Strategies for learning (reading, listening to podcasts, writing, meeting with people) 1:09:50 – What he wishes younger Colin knew (make yourself uncomfortable, ask for what you want, start at a larger start-up so that you have a network if things don’t work out) 1:12:10 – Support & Closing Gratitude Give Strategy Chain a 5-star rating and leave a review at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium)

In this episode, we’re going to explore some themes and connections surfaced by a book called The Four Agreements. This book was recommended by Olivia Roberson from episode 002, and Katina Mountanos from episode 005. This book is about managing fear and suffering by identifying and destroying bad beliefs that hold us back. It offers a very simple message, yet one that is very difficult, and very-very important, to implement: we can live without suffering and fear. Time Stamps 0:00:00 – Intro 0:02:00 – Connections 0:02:25 – What are you struggling with? 0:02:50 – Themes 0:04:30 – Framework: common perceptions 0:06:15 – The judge and the victim 0:07:50 – The Joker and how people respond to “the plan” https://www.youtube.com/watch?v=G0AXgaFqEas 0:09:30 – The First Agreement 0:15:00 – The Second Agreement 0:16:05 – The brain is like the South Park manatees https://southpark.cc.com/clips/103666/idea-balls 0:17:03 – The Third Agreement 0:18:19 – The wisdom of Michael Scott 0:19:06 – The Fourth Agreement 0:19:32 – Parable of the man seeking transcendence 0:22:02 – Implementing these strategies 0:25:49 – Connection to Game of Thrones https://www.youtube.com/watch?v=i82rrVzQ4sM&feature=youtu.be&t=235 0:27:20 – Other quotes on fear 0:28:46 – Principles by Ray Dalio 0:27:20 – Seeking Wisdom from Darwin to Munger by Peter Bevelin 0:29:08 – Striking Thoughts by Bruce Lee 0:30:10 – The 50th Law by 50 Cent and Robert Greene (quotes from 50 Cent, Friedrich Nietzsche, and Frederick Douglass) 0:32:50 – Support & Closing Gratitude Give Strategy Chain a 5-star rating and leave a review at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium, Linktree)

Dave Roberts teaches a master class on personal and professional development. He’s an astoundingly productive human being, and yet he’s still one of the most genuinely kind and personable people on the planet. Dave is currently a professor at Virginia Tech, having recently completed a 20-year career with Marriott in a senior management position overseeing multiple departments. He began his professional career as a rocket scientist, and before that, he was a D1 wrestler at Cornell. Time Stamps 0:00:00 – Intro to the intro with specific timestamps 0:02:00 – Introduction to Dave Roberts through the eyes of a 6-year-old 0:08:00 – The human, the dog, and the computer 0:09:56 – How not to compete against the computer 0:11:00 – Dangers of taking jobs that look good on a resume 0:11:14 – “Pursue the path that you find interesting. That’s really all you have to bring to the table—because no matter what you’re going to do, you’re going to be in competition with other people. And there are a lot of smart people out there, there are a lot of very motivated, dedicated, hard-working people out there. The only way to bring your A-game is if you’re bringing it to something that you find inherently interesting. And that takes some work and some conscious effort—especially early on in your career—to figure out what it is that I like and don’t like. And a lot of times, it’s not necessarily about an industry. It’s about a type of work that you like to do.” 0:12:38 – Framework for when to make a change 0:14:10 – Connection to Episode 005 with Katina Mountanos and Dupi Singh 0:15:54 – Breadth of experience (road to senior management and exposure to different roles) 0:20:58 – Public speaking 0:21:45 – “To get better at something, you just have to keep doing it. So I also made a point of inviting myself to do presentations and talks to anybody who would listen. Forcing myself out there. I’ve been to a ton of college campuses: teaching classes, guest speaking on whatever topic they want to talk about. And I was fortunate at Marriott—there were a lot of opportunities to talk at different departments, different town halls. And I made myself a pledge—almost 20 years ago now—to do a group presentation at least once a month from now until my career is over. And I’ve stuck to that for almost 20 years. Even now, I’ve been to several different colleges around the area. I was down at University of Arkansas giving a career talk just last month because basically … I invited myself. And I do this a lot. I’m arranging a couple more this spring, so I still do it. And now I’m pretty comfortable presenting in front of groups. I was an emcee at a conference last summer with 800 attendees. And I was on stage all day. I was a little anxious, but I loved it so much that I’m going back this coming summer. It’s a huge event, and it’s me. I’m the emcee, and I love it. I look back to when I finished graduate school, and if would tell my future self that I would be standing in front of 800 people all day … and I’d like it so much that I’d ask to do it again, I would have said absolutely no way.” 0:24:40 – The shift from developing the skill to enjoying the skill 0:26:00 – When the thought of becoming a professor occurred to him 10 years ago 0:26:44 – “I’ve done a thousand of these, but every time, you learn something either about the material itself or about a better way to frame the message. And then you tweak that and get better next time.” 0:27:25 – “If you’re standing up in front of a group, it’s not about you. It’s about the message. If the message is a good message (well-presented and well-delivered) and you conveyed information in a good way, that’s a great presentation. When you start to think it becomes about you—and I was guilty of this—the reason is because you’re nervous. It’s self-reinforcing because you’re standing up there and you’re nervous. And your biggest fear is that you look nervous. It reinforces itself. And when I was in that phase, for me, the once a month presentation was like “I will get through this.” I’m a grinder, I’m going to keep doing this until it gets better. I feel like I’m a pretty disciplined guy. And I set a goal to do this. Like I said, I’ve been doing at least one presentation per month for my adult life. And then at some point, it kind of clicked. This is actually fun. I love going to college campuses. I’ve probably gone to 15 universities over the years. Either teaching a class or giving a career talk or whatever. And it’s just fun. I look for opportunities to do that. In fact, I probably send a couple emails every week to different colleges and professors. 0:29:23 – Selecting a speaking topic 0:30:49 – Remember your circle of competence 0:32:08 – Top areas for development 0:33:22 – Dave’s approach to personal development 0:34:49 – The 2-week window concept 0:37:54 – “When you’re in the corporate world and you’re insanely busy, the most common mistake in terms of personal development is to delay it. By far the most common. It happens all the time. … If you wait until you’re not busy to do these things, you’ll never start.” 0:38:47 – Great personal development story 0:41:02 – What other companies should learn from Marriott 0:42:00 – Korn Ferry: “Managers are worse at developing their employees than they are at anything else they do.” “Do it yourself career development.” Harvard Business Review 0:43:24 – Connection to Seth Godin on “projects” vs “jobs” 0:44:18 – The alternative to personal development: commoditization and a “race to the bottom” 0:46:36 – Dr. Kristin Neff’s insight on self-compassion 0:50:42 – How to distinguish between beating yourself up and trying to be disciplined 0:52:05 – How self-compassion influenced his management practices 0:57:50 – The concept of practicing “practice” 0:58:56 – Taking courses on your own 0:60:22 – Learning makes you a better teacher and vice versa 1:01:23 – Upcoming book on hotel revenue management 1:02:00 – Writing the book highlighted what he needed to study further 1:02:48 – Richard Bach “We teach best what we most need to learn.” 1:03:39 – How to choose what not to do 1:04:18 – On meetings: “You have to have a reason to go, and the reason to go needs to be something other than ‘I was invited.’” 1:05:57 – “You have to be aggressive on your calendar, and aggressively own your own time and what you’re going to commit time to.” 1:07:00 – How Dave approaches his calendar 1:11:25 – How Dave uses Evernote 1:15:24 – How Dave takes notes while reading 1:16:08 – “I read every book like it’s a textbook—like I’m studying. Because I believe I am."  1:17:50 – Connection to Shane Parrish’s “How to Read a Book” https://fs.blog/how-to-read-a-book/ 1:27:00 – Book recommendations 1:27:15 – Process: always reading 1; usually have 2-3 “on deck” 1:27:25 – Always has the current and “on deck” books available (e.g. when traveling) 1:28:00 – Pick topics genuinely of interest; make it something you look forward to reading 1:29:38 – The Effortless Experience & Amazon 1:31:45 – 7 Powers by Hamilton Helmer 1:32:28 – Sapiens and Homo Deus by Yuval Harari 1:38:27 – Everybody Lies by Seth Stephens-Davidowitz 1:44:25 – Stumbling on Happiness by Daniel Gilbert  1:45:35 – The Future of Humanity by Michio Kaku 1:45:50 –  Valuable questions 1:45:50 – “There’s an expression in business: ‘budgets reflect priorities.’ And how an organization spends its money is a direct insight into what they think is important. I think the same thing applies to your own personal life. Budgets reflect priorities, but what you’re budgeting is your time.” 1:48:08 – Meditation and reflection 1:48:08 – “Reading some of these books is my meditation.” 1:50:00 – Reading physical books, pen in hand, either in the office or in bed 1:51:12 – Practice variables from Resilience by Eric Greitens 1:54:31 – Work-life balance and being “busy” 1:55:51 – The trigger for happiness: “margin” 1:57:06 – Warren Buffett’s calendar 1:58:00 – Scheduling “margin” and things that you like to do 2:02:45 – Getting two cell phones to make working a choice 2:04:01 – “Define a work-life balance that works for you, or else that balance is going to be defined for you by default.” 2:06:56 – “Do not live by default. That is a key to unhappiness, in my opinion.” 2:09:42 – What Dave would whisper in his ear earlier in life: self-compassion and wisdom all around you 2:12:38 – “A common mindset is that I am constantly being judged, and I constantly need to prove myself; I think some of that is healthy. But instead of that, try this perspective: I want to improve and develop myself. And I’m surrounded by talented people who have this ability and inclination to help me do exactly that. And all I have to do is ask them. Wow. It’s a totally different mindset.” 2:15:00 – Support & Closing Gratitude Give Strategy Chain a 5-star rating and leave a review at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium, Linktree)

In this episode, we cover The Most Important Thing by Howard Marks, focusing on investing applications (which we left out of Episode 004). This book lays out the philosophical underpinnings of value investing (the school of thought that Warren Buffett uses). Time Stamps [0:00:00 == Introduction and key themes]………… [0:03:35 ==  2nd-level thinking]………… [0:04:10 == Caveat on algorithms]………… [0:04:30 == The Little Book That Beats the Market by Joel Greenblatt]………… [0:05:15 == www.MagicFormulaInvesting.com]………… [0:06:30 == The Acquirer’s Multiple by Tobias Carlisle]………… [0:06:35 == www.acquirersmultiple.com]………… [0:08:00 == These algorithms force 2nd-level thinking]………… [0:08:25 == The efficient market hypothesis (EMH)]………… [0:09:15 == Testing the EMH on FAANG stocks]………… [0:09:20 == Facebook]………… [0:10:20 == Apple]………… [0:11:00 == Amazon]………… [0:11:30 == Netflix ]………… [0:12:40 == Big Lots]………… [0:13:45 == Ollie’s]………… [0:15:00 == Difference between price and value]………… [0:15:50 == Market efficiency ebbs and flows]………… [0:16:00 == Contrarianism]………… [0:16:25 == Waiting]………… [0:17:10 == Circle of Competence]………… [0:18:05 == The Right to Have an Opinion]………… [0:18:30 == Reasonable expectations]………… [0:21:00 == The whole point of the book]………… [0:21:45 == Howard Marks and Michael Burry on index bubbles]………… [0:23:00 == Basic starting spot: “buy low, sell high”]………… [0:23:15 == Avoid leverage, options, and short positions]………… [0:27:40 == More nuanced than “buy low, sell high”]………… [0:29:15 == I still like the book even though it doesn’t talk valuation]………… [0:31:30 == Key assumptions of the book]………… [0:32:00 == Agency problems]………… [0:33:40 == Second-level thinking]………… [0:35:10 == Market Efficiency Fluctuates]………… [0:36:00 == You Can Be A Stock Market Genius by Joel Greenblatt]………… [0:37:45 == The Random Walk Hypothesis]………… [0:38:45 == Value vs. Growth]………… [0:39:50 == Value Equals Growth]…………  [0:40:10 == “Omaha Zoo” of Growth or VC]………… [0:41:40 == Being right isn’t enough]………… [0:43:15 == Good assets =/= good investments]………… [0:44:10 == It’s important not to conflate asset quality with investment quality]………… [0:44:40 == Contrarianism]………… [0:46:30 == Connection to Mike Pollack episode]………… [0:47:00 == Finding bargains]………… [0:47:10 == Necessary resources]………… [0:47:55 == Ray Dalio on correlation]………… [0:48:50 ==Patient Opportunism]………… [0:49:15 == Joel Greenblatt: 6 investable for every 50-70 looks]………… [0:50:10 == Knowing What You Don’t Know]………… [0:50:30 == “I know” investors]………… [0:50:59 == Reasonable expectations]………… [0:53:00 == Support & Closing Gratitude]………… Links Give Strategy Chain a 5-star rating and leave a review at https://podcasts.apple.com/us/podcast/strategy-chain/id1492935567 Amazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Social Media @strategychain (Facebook, Twitter, Instagram, Medium, Linktree)

We are joined the co-founders of a start-up called daydreamers—a gym for creativity. Links and timestamps appear at the bottom. These two are a real power couple. Both began in the finance world in New York. Katina did data analytics at Goldman Sachs before moving on to a philanthropic venture fund. Dupi worked in investment banking before moving on to private equity. But that’s where the conventional path ended for these two. Katina started On Adulting, blog and online community focused on lifestyle and wellness for millennial women. Katina’s work has been featured in outlets like Fast Company, Teen Vogue, Mindbodygreen, HuffPost, Elite Daily, and Thrive Global, and her message quickly caught fire. On Adulting has gone viral with a large, highly-engaged audience, and Katina has a thriving consulting practice. Now Katina and Dupi are working together—backed by VICE Media Worldwide’s Chief Creative Officer, Eddy Moretti—to launch daydreamers in Summer 2020. Topics-Genuine connections -The importance of time as a nonrenewable resource -Risk -The epidemic of loneliness -The impact of play and recovery on performance -Fundraising and finding the right equity partners as a startup Guest Links https://www.onadulting.com/ https://www.daydreamerspace.com/ https://www.instagram.com/onadulting/?hl=en https://linktr.ee/onadulting Strategy Chain LinksAmazon affiliate links at http://strategychainpodcast.com/support Send me questions at http://strategychainpodcast.com/contact Sign up for the email list at http://strategychainpodcast.com/ Strategy Chain on Social Media https://www.facebook.com/strategychain/ https://twitter.com/StrategyChain https://www.instagram.com/strategychain/ https://medium.com/@strategychain https://linktr.ee/admin Timestamps0:03:00|Backgrounds 0:04:10|Dupi (NYU to investment banking to private equity) 0:05:14|Katina (NYU to Goldman Sachs to philanthropic venture fund to On Adulting) 0:09:50|Connection to The Education of a Value Investor by Guy Spier https://amzn.to/2QGPMWT 0:14:10|Moving from “networking” to “connecting” 0:17:53|True connections and the first time one of Katina’s posts went viral 0:20:10|Genuine connections with people 0:27:30|Dupi’s thought process behind leaving private equity for Daydreamers 0:28:45|How they came up with Daydreamers 0:30:15|Risk 0:33:30|Time is the ultimate currency of life 0:34:30|How Dupi and Katina approach risk 0:37:10|What is Daydreamers? How did they de-risk it? 0:40:05|Product Development and Market Research 0:45:55|Lack of and importance of community 0:47:15|Daydreamers’ vision for strong community 0:48:45|Loneliness is an epidemic 0:53:45|Olivia Roberson on how progress isn’t linear 0:54:55|Relaxation can be a productivity tool 0:54:45|Beginner’s mind lets you learn from everyone 0:55:55|Play is connected to performance (Google, Patagonia) 0:56:50|Connection to Penn State wrestling 0:59:00|Play to preserve beginner’s mind 0:60:30|High performers focusing on recovery 0:60:55|Risk mitigation and the need to prevent burnout 1:01:30|Craving a place to be a stress-free beginner 1:05:00|Brands often forget about older consumers 1:08:00|Older Americans being isolated 1:08:40|High-tech concepts (marketplaces, networks, subscriptions, etc.) don’t need to be digital 1:10:12|“Physical first, digital second” approach for fundraising 1:10:50|The fundraising process and finding the ideal equity partner 1:12:30|Eddy Moretti, Chief Creative Officer of VICE Media, Co-Founder of VICELAND, Co-Founder of Epiphany 1:15:45|What they wanted in an equity partner 1:17:55|Finding genuine relationships and connections during the fundraising process 1:20:00|People with checklists and people who really like you 1:20:15|How their romantic relationship has affected their business 1:25:45|“Year of Adventure” 1:28:45|Elle Luna’s perspective on “Should versus Must” 1:29:55|Their podcast: (un)Productive 1:31:45|Short questions 1:32:00|Book recommendations 1:32:05|Let My People Go Surfing by Yvon Chouinard https://amzn.to/37WhfJM 1:33:00|The Four Agreements by Don Miguel Ruiz https://amzn.to/2QHoM9D 1:34:10|Zen and the Art of Motorcycle Maintenance by Robert M. Pirsig https://amzn.to/39XpjMw 1:35:00|What they would whisper in their ears 1:35:05|Katina: Listen to your “fire” and disregard the practical 1:36:00|Dupi: Don’t take advice as a book of rules 1:36:20|Dupi: Seek happiness rather than success 1:38:15|Best questions they’ve asked or heard 1:38:50|Katina: “But how did you really feel about that?” 1:40:30|Dupi: “Why did you think that?” 1:43:00|Where we can find Katina and Dupi 1:44:30|Shout out to Marcelo Garcia Jiu Jitsu in New York 1:45:10|Support & Closing Gratitude

Book's Amazon Affiliate Link: https://amzn.to/2N0Scxj Oaktree Investor Letters: https://www.oaktreecapital.com/insights/howard-marks-memos 0:00:00 – Introduction to The Most Important Thing Illuminated by Howard Marks 0:05:25 – Risk 0:08:55 – Alternate Histories and the Seahawks-Patriots game 0:17:00 – Risk and Reward Aren’t Tied 0:11:40 – Being Wrong for the Wrong Reason 0:21:20 – Perception causing risk: the “Perversity of Risk” 0:25:30 – Circle of Competence 0:28:50 – But we can’t insist on zero risk because that would mean inaction 0:29:45 – Fooled by Randomness 0:32:38 – Knowing yourself 0:33:20 – Cycles 0:34:00 – Psychology is cyclical 0:35:20 – Biggest risks and biggest opportunities come from psychological cycles 0:37:50 – When there is nothing good to do, do nothing 0:38:40 – Psychological Factors 0:42:15 – To know and not to do is not to know 0:43:20 – OODA Loop 0:46:00 – How Tim Kennedy turned my OODA Loop into and OOD Loop 0:48:30 – Joel Greenblatt: even the best investors keep making the same mistakes 0:50:00 – Connection to Michael Pollack interview: psychology focus 0:57:00 – Avoiding Mistakes 0:57:50 – Charlie Munger’s story about the man visiting the oracle 0:59:45 – Believing something is 100% safe can cause it to become risky 1:03:00 – Correlation 1:04:00 – 2 kinds of mistakes (commission and omission) 1:05:42 – Nuances when extrapolating from investing to other arenas 1:09:00 – Game theory: matrix and tree forms (Competition Demystified) 1:14:40 – Connection to Jocko Willink 1:25:20 – Support

Show Notes Episode 003 – Michael Pollack Links NYU Stern Bio Interview on Charlie Rose SCA Charitable Foundation Forbes - Heroes at the Taj NY Post Article Time Stamps 0:03:10 – Jason Karp on probabilistic decision-making 0:09:30 – Important teachers in Mike’s life 0:10:55 – “Own reality. Get out of your own head. Get out of the projections and wish fantasies that are there, and understand what this real world is. Relate to it, touch it, experience it, and embrace it for what it is—not what you want it to be.” 0:11:55—Applying this lesson to investing 0:13:13—Great investors focusing on psychology more than valuation or other fundamentals 0:13:50—Conversion of the East & West: “Know Thyself” as the beginning of knowledge 0:15:00—Sun Tzu’s The Art of War: how to “not be imperiled in 1,000 battles” 0:16:00—“The Key to tactics is information asymmetry, but the first step to information asymmetry is understanding what it is that you are projecting into the world.” 0:16:50—Preparation: how do I prepare, and how do I deceive my opponents about my preparation 0:17:10—Meditation 0:18:05—Connection to Freud & how we place stories onto objects 0:18:40—Starting points for meditation: Why Buddhism is True by Robert Wright 0:19:15—“Follow your breath and turn off language” 0:19:45—Default mode network 0:20:10—Meditation is like dreaming; no ego involvement 0:20:25—Using classical music to turn off language but remain awake 0:21:20—Simple but difficult 0:21:50—Self-assessment 0:22:45—Reframing self-assessment as “agency” 0:23:10—The “me and I” dichotomy 0:25:25—Experiences as teachers 0:25:45—Charlie Munger’s recommendations for misery 0:26:18—Epictetus’ epitaph: “Here lies Epictetus, a slave, maimed in body, the ultimate in poverty, and favored by the gods.” 0:26:45—A turning point in Mike’s life 0:27:30—Terrorist attack, Forbes article, Heroes at the Taj 0:28:50—Educate Girls’ growth, Audacious Award, 35k villages, provide learning outcomes for 1 million 0:31:45—Trauma can’t be repressed; only channeled 0:32:30—Sebastian Junger’s point on the thrill and adrenaline of terrifying situations 0:34:15—What really drives his philanthropic efforts: survivor’s guild & making sure that the people who saved him know that their sacrifice wasn’t in vain 0:35:40—Short-sighted world 0:36:45—Background on the terrorist attack 0:38:05—"When the front is prepared, the rear is lacking; when the rear is prepared, the front is lacking. Preparedness everywhere means lack everywhere.” 0:38:20—“The few are those on the defensive against others; the many are those who cause others to be on the defensive against themselves” 0:39:15—Metaphor of fish & water for insurgency 0:40:40—Sun Tzu and the “death ground” (a place of desperation) 0:41:05—Optionless people as targets for manipulation 0:42:00—Mike’s reactions to my thoughts on counterinsurgency & education 0:42:50—Where I’m missing the point (overemphasizing cause and effect) 0:43:10—Terrorism is an appeal to the non-rational 0:44:00—Terrorism as a rational tactic (not that he’s condoning it) 0:44:50—How terrorism fits into Maslow's hierarchy of needs: “you will be the most loved if you do this” 0:46:30—The terrorists that attacked them were just kids 0:47:00—Qualities of a person or group to steward a charitable investment 0:47:45—Balance passion and pragmatism; looking for cost-efficiency and scalable nature 0:48:50—You aren’t running the show; don’t let the story you’re telling someone get in the way 0:49:35—Meeting Safeena Husain (link Wikipedia | Educate Girls) 0:50:10—Meeting Deval Sanghavi of Dasra, who introduced Mike to Safeena 0:49:00—How Mike knew that Safeena was worth backing 0:52:00—Don’t look for KPIs; hold management accountable to delivering their own metrics 0:53:18—Aristotle: “precision can only be found relative to the industry you’re pursuing” 0:53:50—Humility as an important puzzle piece 0:54:20—Seeking technical mastery in investing “own every loss” 0:55:15—“Everything is about process optimization” 0:55:40—How emotional people get over money 0:55:45—Nietzsche and the “will to power” 0:56:20—TED Talk with Laurie Santos about fear causing non-rationality in monkeys 0:57:25—Need to know when to pause when fear or greed are present 0:57:50—Need to recognize Sun Tzu’s idea of “the general’s temperament” 0:59:50—How to determine if you’re being rational when a position goes against you 0:60:25—Seeing fear in everyone’s eyes during the financial crisis in 2008 1:01:00—Being contrary to the prevailing emotional sentiment 1:02:05—Making more money in 2009 outside of a hedge fund than he ever did inside a hedge fund because of the opportunity set and a heavy bet 1:03:00—Am I acting impulsively, or am I acting rationally? 1:03:30—What place am I acting from? 1:03:50—Greeks, Buddhism, Socrates, Aristotle all coming together to understand where you’re coming from 1:04:00—Investing being very emotional rather than spreadsheet-oriented 1:05:15—Can quants and fundamental investors coexist and both be profitable? 1:06:30—Quants are short-term holders 1:06:45—Valuation and fundamental investing as storytelling 1:08:00—The one constant is disruption, and people will always be able to raise money based on their storytelling about seeing the future better 1:08:25—What Mike would whisper in his ear: You can accomplish the same things without being fearful. We can act from a place that is non fear based and have a better experience of it all and accomplish the same action.

Show Notes & Links Olivia Roberson (Instagram | Lighthouse Yoga Website) is a budding yoga therapist and trained yoga teacher. Interested in starting Yoga or a mindfulness practice? I think you’ll enjoy this episode. We discuss Olivia’s journey, how she conducts self-assessment, practicing mindfulness, false dichotomies, digital yoga therapy, implementing new habits, monitoring your internal dialogue, strategies for approaching yoga, and strategies that we should steal from yoga. Olivia’s Offers (1) Subscribe to her newsletter at the bottom of this link to access her Nidra. (2) Contact her for a free hour-long digital, remote yoga therapy session. Take her up on the offer while it’s still on the table! Affiliate Links for Olivia’s Recommendations The Life-Changing Magic of Tidying Up by Marie Kondo Happiness by Thich Nhat Hanh The Four Agreements by Don Miguel Ruiz Ayurvedic Yoga Therapy by Mukunda Stiles Time Stamps [0:00:00 == Introduction to Olivia]………… [0:02:30 == Leaving Psychology for Yoga]………… [0:08:00 == Cortney Ostrosky (Instagram) https://www.instagram.com/cortney108/ (Website http://www.cortneyostrosky.com/), The Life-Changing Magic of Tidying Up by Marie Kondo https://amzn.to/35RJLf2, and realizing that she needed to move on because of her visceral reaction to her textbooks. ]………… [0:10:59 == "This is your life, and you can’t live it for someone else, so if you’re going down a path for any reason other than that you want to go down it, it’s really not a good idea.” ]………… [0:12:25 == How Olivia conducts self-assessment]………… [0:15:45 == Realizing that “gentleness” was her superpower]………… [0:17:28 == Learning to listen to your body and stop living from the neck up]………… [0:19:45 == Crossover between yoga and jiu-jitsu (mindfulness in practice) ]………… [0:21:00 == Many routes to practicing mindfulness]………… [0:21:30 == Bruce Lee on reaching technical mastery to the degree of “no mind” ]………… [0:23:22 == When did yoga enter your life? ]………… [0:26:55 == Developing a sense of "mise en place” / equilibrium]………… [0:28:00 == “You might not even be aware of how anxious or bad you’re feeling day-to-day if you haven’t come to that state of balance.” ]………… [0:29:20 == How Yoga changed from “workout” to “therapy” ]………… [0:29:35 == "It’s not about the Asana” ]………… [0:29:55 == Yoga is an 8-limbed practice (more about philosophy and inner inquiry) ]………… [0:34:22 == What are the 8 limbs of yoga (not just about posture) ]………… [0:40:00 == When did you know Yoga was your calling rather than something you enjoy]………… [0:46:00 == False dichotomy between good and bad / really more between boredom and excitement]………… [0:47:35 == Gordon Ryan (BJJ) and mirroring Olivia’s experience with “no days off” ]………… [0:50:45 == 10 themes I observe in top performers]………… [0:54:20 == What is Yoga Therapy]………… [0:59:30 == Meeting the client where they are]………… [1:00:00 == Good candidates for Yoga Therapy]………… [1:03:00 == Remote/digital options for Yoga Therapy]………… [1:05:15 == Keys to implementing a new habit (consistency, surrender, and self-inquiry) ]………… [1:07:10 == Keeping your promises to yourself]………… [1:08:40 == Drink from the well every day “if you’re trying to do it that way, you’re missing the point.” ]………… [1:10:20 == Lower the bar and make continuous progress]………… [1:10:37 == Navy SEALs “Say goodnight to the sun” break your goals into tiny steps]………… [1:12:21 == Dan John and Pavel Tsatsouline: dial down intensity and amp up frequency]………… [1:13:40 == How to lay the groundwork for your Yoga practice]………… [1:15:00 == Embrace where you are when you start your journey]………… [1:16:20 == Don’t create a right/wrong duality; try not to judge]………… [1:17:38 == Monitoring your internal dialogue]………… [1:19:40 == The most important thing is to start; you’ll notice as you go along]………… [1:20:27 == KPIs for Yoga]………… [1:21:00 == Healing is not linear]………… [1:24:30 == When to ignore advice (unhealthy power dynamics) ]………… [1:26:00 == You are your own best teacher; listen to what the body needs; individualize your practice]………… [1:27:00 == Some signs of a good Yoga teacher]………… [1:28:30 == Resisting idolization and hero worship]………… [1:32:45 == How to understand our body’s proportions and their impact]………… [1:37:35 == How to combat misunderstandings]………… [1:40:50 == How to approach your Yoga study; where to spend your time]………… [1:43:50 == Important fundamental starting positions (Joint Freeing, Sun Salutation) ]………… [1:49:00 == How to adapt Yoga for weightlifting, back injuries, and general inflexibility]………… [1:55:09 == How to proactively manage your Yoga teacher’s expectations]………… [1:59:30 == How to ask questions without disrupting the class]………… [2:03:00 == Common stumbling blocks, discouraging times, etc. ]………… [2:07:00 == Reframe the good/bad narrative]………… [2:08:00 == How to downgrade your practice during times of stress to maintain consistency]………… [2:09:50 == A good option for a shortened practice: Sun Salutation & Restorative Yoga]………… [2:13:40 == Best investments]………… [2:13:50 == Book recommendations]………… [2:22:00 == Where to find Olivia]………… [2:23:00 == Closing thoughts]…………

www.strategychainpodcast.com https://www.instagram.com/strategychain/ https://www.facebook.com/strategychain https://twitter.com/StrategyChain https://medium.com/@strategychain  Hi Guys—my name is Michael Roberson, and this is the first episode of Strategy Chain. Strategy Chain is a podcast about learning to leverage great strategy. Together, we focus on studying strategy through six main lenses: investing, business, entrepreneurship, grappling, combat, and athletics. There will be a mix of conceptual, principle-based discussions and brass-tacks, tactical, execution-oriented discussions. I want to emphasize that I’m not an expert. I have some experience in some of these fields, but I’m trying to use a philosophy that my high school wrestling coach taught me: the smart take from the strong. We’ll be studying the world’s most successful investors, entrepreneurs, business leaders, grapplers, combat veterans, and athletes. We’ll also mix things up from time to time, but we will always remain focused on uncovering the strategies that unite these wide-ranging fields. You might be surprised at the connections we find! The podcast will be an ongoing experiment. The format will fluctuate, but several thins will remain constant. It will be a long form podcast targeting one episode weekly. At the outset, I’m aiming for a 50-50 split between interviews and book discussions. I will aggressively seek feedback so that I can iterate and improve.