Podcasts about mediocristan

Learn from history's Greatest Minds — and find Timeless ideas you can apply to business and life. Every episode we explore a Lindy book: We strive to become polymaths like our investing and business icons, pulling the Big Ideas from a wide range of disciplines. For the curious-minded seeking Worldly Wisdom. Join 3,000+ others by subscribing @ rationalvc.com to get free access to essays and exclusive content. For the video version of this episode click here. A rare episode where we invited guests to join us, in this case due to the book being a unique format and also wrapping up our entire 5-episode Incerto Series. We discussed the application of the Incerto teachings in the real world, with two of the biggest Incerto practitioners we know. Timestamps: (00:00) Intro (08:57) Our Favourite Aphorisms (16:04) Special Guests Join & Their Intros (17:59) Dangers of Monthly Salary (24:25) Golden Handcuffs, Legacy vs. Lifestyle (28:00) Our DNA as Hunter-Gatherers (31:50) Learn Sales Before Technical Skills (36:00) Practice Before Theory (37:04) Conventional Education (43:00) Convexity, Agency, & Mediocristan (57:21) More Aphorisms (1:00:19) Ergodicity, Rationality & Survival (1:08:32) Venture Capital & Startups (1:23:53) Asymmetry of Information, & Honour (1:29:20) Bureaucracy (1:34:05) Fat Tony (1:43:11) Small Bets (2:09:51) Via Negativa & Making Money Online (2:18:19) Gathering Vs. Elicitation Mindset (2:21:52) Incerto Practice in the Real World (2:31:06) Closing Thoughts — Our website (all essays and podcasts): rationalvc.com Our investment fund: rational.fund Cyrus' Twitter: x.com/CyrusYari Iman's Twitter: x.com/iman_olya — Guests: Daniel Vassallo's Twitter: x.com/dvassallo  Seb Lees' Twitter: x.com/sebs_tweets  Daniel's company: smallbets.com Seb's Podcast & Community: fattonys.net — Disclaimer: The materials provided are solely for informational or entertainment purposes and do not constitute investment or legal advice. All opinions expressed by hosts and guests are solely their own opinions and do not reflect the opinion of their employer(s). #Timeless #wisdom #knowledge #books #polymaths

Every podcast episode we explore a Lindy book, and find ideas you can use in business and life. Join 3,000+ curious minds and avid readers by subscribing @ rationalvc.com to get free access to essays and exclusive content. For the video version of episode click here.   Timestamps: (00:00) Intro / chit-chat (09:26) Structure of the show (10:36) What is a Black Swan? (19:34) Human blindness to Black Swans (01:02:45) Mediocristan vs Extremistan (01:30:45) Bell Curve / Gaussian fraud (01:37:18) Why the Midwit meme is wrong (01:47:27) Leveraging Black Swans (01:58:34) Chapter overviews (02:19:16) Chapter 19 deep dive (02:27:58) Favourite quotes / our lives (02:37:09) Fat Tony (02:43:33) 10 Principles for Black Swan robustness (02:48:54) Amor Fati - Our website (all essays and podcasts): rationalvc.com  Our investment fund: rational.fund  Cyrus' Twitter: x.com/CyrusYari  Iman's Twitter: x.com/iman_olya - Links mentioned in the episode below: Iman Tweet on daily routines of creatives: https://twitter.com/iman_olya/status/1764721995743121415  Table 1 - Extremistan vs Mediocristan:  https://capitalideasonline.com/wordpress/mediocristan-vs-extremistan/  Vizi Andrei: https://twitter.com/viziandrei  Cyrus being interviewed on the Brick by Brick podcast: https://open.spotify.com/episode/54RvagfMSIWNtVwAe2193a?si=1cb28db259814326  Cyrus essay on Angel Investing (incl. Barbell Investing): https://www.rationalvc.com/articles/angel  Cyrus essay on Tech Markets are Irrational:  https://www.rationalvc.com/articles/irrational  Jack Raines FU Money ZeroHedge essay: https://www.youngmoney.co/p/fck-money WhosAria Bars of Wisdom newsletter: https://www.barsofwisdom.com  Fat Tony's Community:  https://fattonys.net/  -   Disclaimer: The materials provided are solely for informational or entertainment purposes and do not constitute investment or legal advice. All opinions expressed by hosts and guests are solely their own opinions and do not reflect the opinion of their employer(s). #Lindy #knowledge #books

After nearly eight years of the Love Your Work podcast, I'm quitting. Here's why, and What's Next. Podcasting is a bad business This is not the immediate reason I'm quitting, but it is at the root: Podcasting is a bad business. When the indirect benefits of an activity run out, it's hard to keep doing it if it's not making money. I realized long ago podcasting is a bad business, but I kept going for other reasons. I'll explain why in a bit. Though I didn't start my podcast with dollar signs in my eyes, I did at least hope I would grow to earn money doing it. I've earned about $32,000 in the eight-year history of Love Your Work. More than half of that has been from Patreon supporters, many of whom support for reasons other than the podcast. During that time, I've spent: $1,008 on hosting $11,749 on assistance with editing and publishing $241 on equipment And some other expenses, for a total of about $13,000 In raw numbers, I've made a “profit” on the podcast. But, as I broke down in my latest income report, my “wage” was about $6 an hour. My podcast comprised about 5% of my income over these eight years, and took much more than that portion of my time and energy. Of course, I don't think about whether the podcast was worth it in terms of an hourly rate. Creative work happens in Extremistan, not Mediocristan, and I've made massive life choices to be free to explore creatively without worrying so much what I'm earning in the short-term. Ways to make money podcasting But there are many different ways to make a podcast a solid business, and none of them worked for me, for various reasons. Here are some of these business models, as they apply to the “thought-leader” space (I'll ignore the more entertainment/infotainment space that podcasts like Gimlet's inhabit). Be so massively famous, you can pick-and-choose advertisers, while demanding a lot of money. This is where Tim Ferriss and Joe Rogan are. They both started with large platforms, and applied whatever talents that helped them earn those platforms to make their podcasts huge. After more than fifteen years as a creator, I have a modest platform, but orders of magnitude smaller. Build a “content machine” that manufactures ad slots. I won't name names, but you've heard these podcasts. They're formulaic and don't seem to discern much who they have as a guest, nor what sponsors they accept. This business model is why my inbox is still full of pitches – they think I actually want more guests, because more guests would mean more ad slots. It takes a very rare set of circumstances for me to be excited to interview someone. Share information that directly helps people make money. If you have tactical and actionable information that's useful to professionals in a specific industry, you can charge for premium podcast content. I'm not as interested in the tactical and actionable as I am in the abstract and exploratory. Cover a niche topic. If you have a leading podcast about a very specific topic, advertisers within that niche will be willing to pay high rates to reach that audience. I didn't want to build my podcast according to a specific topic – more on that later. Have a “back-end” business. If you have a thriving consulting business, or training programs to sell, you can attract more clients and customers through your podcast. As I wrote in my ten-year reflections, “I want to make a living creating. I don't want creating to be merely a marketing strategy for other things. Is that completely insane?” I flirted with success in a few of these business models. Early on, I hoped my podcast would be famous enough to pick and choose advertisers at high rates. For a while, it looked like I had a chance. I was approached by a podcast network, and I had some reputable advertisers such as LinkedIn, Skillshare, Casper, Audible, Pittney Bowes, and University of California. Various times, I thought I was on the cusp of my “big break” – such as when Love Your Work was featured on the Apple Podcasts home screen. But the more I tried to go the “get famous” route, the louder the siren-song of the “content machine” route got. There were plenty of opportunities to do “interview swaps” with hosts I wasn't interested in interviewing. There were a few advertisers that had money, but whose products felt sleazy. Joining a podcast network would have pressured me to crank out content even if I didn't feel like it. There was (and still is) the never-ending stream of pitch emails for guests. I had too much wax in my ears to go the “content machine” route. Not included in my lifetime revenue-estimates for Love Your Work is money I made through the “back-end business” route. I was somewhat comfortable with this model, but I haven't made a course in years, as I've been focused on writing books. And as bad a business as people say writing books is, it's better than making a podcast. The podcast has helped me sell books in more ways than one. One way is that people who listened to the podcast bought my books. The other way is, making my podcast helped me write my books. This brings me to the reason I kept making my podcast, even after I realized it wasn't a good business. Make for what making makes you In my sixteen years experimenting with different business models as an independent creator, I've settled on one thing that works: Make for what making makes you. If making a podcast, writing a book, sending a weekly newsletter – you name it – merely makes you money, and doesn't make you who you want to be, what's the point? Sure, sometimes you don't feel like creating, and you do it anyway. Yes, sometimes you pick one project over another because you think it will be more lucrative. But you can only redirect the river that is your creativity so much before it overflows and returns to its natural path. I learned from my guests When I started Love Your Work, and was struggling to make it big enough to work with an ad model, even if I wasn't bringing in lots of ad revenue, I was still connecting with and learning from my guests. It was an incredible privilege to have in-depth conversations with people like Seth Godin, Elise Bauer, and David Allen. It was like having my own personal advisory board of heroes. Talking to them helped me learn how to go off the beaten path and find my calling. I was able to find patterns in their stories that I could apply to my own life and career. I would be a completely different person today if I hadn't had those conversations. It was time to explore But there came a point when doing interviews was no longer serving me the way it once had. It was when I had gained the confidence – thanks to my previous guests – to explore further my own ideas. That's when I stopped interviewing guests, so I'd have more time to explore. Love Your Work shifted from my personal advisory board to my personal sounding board – a sort of “open mic,” where I fleshed out ideas. I got to see how it felt to effortfully explore each idea. I got to hear how they sounded when I read them aloud. I got to feel how they resonated (or didn't) with others. It helped me write my books A couple years after I started Love Your Work, I started writing a book called Getting Art Done. Getting Art Done turned out to be three books, two of which I've published. Love Your Work has been there to help me explore the ideas in these books. The Heart to Start was full of conversations from my early guests, and came from my very real struggles in gaining the confidence to take my ideas seriously enough to pursue them. Mind Management, Not Time Management came from my very real struggles to harness my creative energy and push my ideas forward. As I work on the final book in the Getting Art Done trilogy, Finish What Matters, I'm asking myself, What struggle does this book come from? Clearly, I've finished a lot of creative work: three books, over two-hundred consecutive weekly newsletters, and over three-hundred episodes of this podcast. But as I've dwelt on that final word in the title, matters, I'm asking myself if I'm really working on what matters? Love Your Work and Getting Art Done have been an exploration in creative productivity. But at some point, writing about Resistance becomes a form of Resistance. I don't feel I've reached that point yet, but I don't want to. If I'm going to learn enough to write Finish What Matters, I have to really test my ideas of what matters. I've probably explored enough ideas, through Love Your Work, that I want to develop further in Finish What Matters. But for the time being, I need space to explore what matters. That's the biggest reason I'm quitting Love Your Work. I had considered doing so in the past, but I kept hoping I'd know What's Next before I quit. I've come to realize that I can't know What's Next until I have the space to explore. What's Next is finding What's Next It's a little scary to have that void. But it's also exciting. Furthermore, I've faced The Void many times before: when I started on my own, after finishing each book, and a little bit after each podcast episode or newsletter. What's scarier now than facing the void is that I'll stick with what's safe, and distract myself into dying with my best creations inside me. I could just say I'm taking a break, or not say anything at all and stop until I felt inspired to make a new episode. I've talked before about how I struggle to burn my boats and close doors. So, I'm calling it quits, knowing I could always drop another episode in the feed down the line if I wanted to. But I hope I find something that matters more, before that ever happens. Thank you for listening! Thank you for listening to Love Your Work. Thank you especially to my Patreon supporters, who can of course feel free to stop supporting, or keep supporting for the bonus content, and to support What's Next. To learn What's Next once I find it, be sure to subscribe to my newsletter at kdv.co. One last time, thank you. Thank you, thank you, thank you. Image: Pierrot Lunaire by Paul Klee About Your Host, David Kadavy David Kadavy is author of Mind Management, Not Time Management, The Heart to Start and Design for Hackers. Through the Love Your Work podcast, his Love Mondays newsletter, and self-publishing coaching David helps you make it as a creative. Follow David on: Twitter Instagram Facebook YouTube Subscribe to Love Your Work Apple Podcasts Overcast Spotify Stitcher YouTube RSS Email New bonus content on Patreon! I've been adding lots of new content to Patreon. Join the Patreon »       Show notes: https://kadavy.net/blog/posts/quit-podcasting/

One thing I hear from a lot from readers of The Heart to Start, is that many people have no problem starting new projects. They instead struggle with finishing them. I can relate. Like many creative people, I once struggled to finish projects. I always had new ideas, I left books half-read, projects half-finished. I had done lots of creative work, and had little to show for it. Now I still always have new ideas, and I still leave books half-read and projects half-finished. But now, I have lots of finished projects to show for all the work I've done. What's changed? I've learned to finish what matters, and forget the rest. Embrace your inner Perceiver A turning point in my own creative journey came when I learned to embrace my inner Perceiver. As much flak as the Myers-Briggs Personality Type Indicator gets for being pseudoscience, it's still a useful lens for understanding your own tendencies. The concepts of Introversion and Extroversion have wide scientific support, but also useful I think are the concepts of “Perceiving” and “Judging.” If you watch in awe as one friend after another executes on ideas and achieves success, while you flounder, working on one idea after another, but never truly following through, your friends are probably “Js”, and you might be a “P.” This is the position I was in, until a friend at a party explained this dichotomy to me. Why was this other friend of ours so great at follow-through, while we both struggled to find our paths? This friend was a J. We were Ps. Another way of thinking about being a Perceiver is you're someone who sees Possibilities. You can't move forward with one idea, because you keep having other, better ideas. Meanwhile, your “Judging” friends find an idea, make the judgement to stick with it, and see it through. Shiny objects aren't shameful Perceiving Possibilities is a necessary part of being creative. For DNA to be discovered, the researchers had to entertain the Possibility that they should pursue something other than the original intent of their grant application – which was to study cancer treatments. For Alexander Fleming to discover antibiotics, he had to see Possibilities in experimental petri dishes that were contaminated. If you want a treasure trove of Perceivers, look no further than nearly every person Walter Isaacson has written a biography on. For Leonardo Da Vinci to paint the Mona Lisa, he applied his knowledge of optics to his sfumato technique, which allowed him to model the painting with no hard lines. He applied his knowledge of anatomy to crafting the Mona Lisa's mysterious smirk. He had dissected humans and animals, studying exactly which muscles were recruited to express various emotions. In episode 272, I talked about how Steve Jobs and the engineers and executives at Apple had to consider the Possibility that while a trackwheel served as a useful interface for an iPod, it might not be such for the iPhone. Isaacson himself has said, “People who love all fields of knowledge are the ones who can best spot the patterns across nature.” So if you're someone who beats themself up over Shiny Object Syndrome, consider the Possibility that it's a necessary component of creative thinking. Creative success happens in Extremistan On the rare occasion that someone with shiny object syndrome does finish a project, it might not be successful, and that can make matters worse. Why bother following through with anything, you might think, when you aren't assured of success? But, creative work calls for a different approach to success. As I talked about in episode 253, creative work happens in Extremistan. Nobody knows anything It's impossible to predict which creative projects will be successful. If record companies knew hits, that's all they'd release. If movie studios knew blockbusters, that's all they'd produce. If publishers knew bestsellers, that's all they'd launch. If Venture Capitalists knew unicorns, that's all they'd fund. And they wouldn't be called “Venture” Capitalists – they'd just be Capitalists. As two-time Academy-Award-winning screenwriter William Goldman said, “Nobody knows anything.” The sky is the limit Even when a creative project is released into Extremistan, there is a huge range of potential outcomes. When Art De Vany analyzed the box-office proceeds of various movies, he found that the top 1% of movies accounted for 20% of sales. My latest book, Mind Management, Not Time Management is a success. Book-marketing expert Tucker Max calls a self-published book that sells 2,500 copies in its first year a “home run”. Mind Management, Not Time Management sold 10,000. But, Mark Manson's Subtle Art has sold more than ten million. This podcast episode will get more downloads than about 97% of other podcasts, but it's not unusual for an episode of Joe Rogan's podcast to get 1,000 times the downloads of this one. It's a long night to overnight success When you follow through and put a creative project into the world, you may have mild success, or you may have wild success. But there's no telling how long wild success can take. The Queen's Gambit took thirty-seven years to become a New York Times bestseller. Jane Austen's books went out of print after her death. There's no telling when a box-office bust will become a cult classic, or just a straight-up classic. People forget that The Shawshank Redemption was a box-office bomb, now considered by many to be the best movie of all time. Like I talked about on episode 251, you can't call out Suvivorship Bias so easily in creative work, because you often don't know if a project is truly dead. We're raised in Mediocristan Creative success happens in Extremistan, not Mediocristan, and this is at the heart of why many people feel ashamed of their shiny object syndrome. We're raised in Mediocristan, so we evaluate success and our ability to follow through based upon how things get done in Mediocristan. The whole point of civilization – with its steady paychecks, fixed-rate mortgages, and insurance policies – is to smooth out the shocks of the natural world. Mediocristan is built upon predictability, and to succeed by Mediocristan's standards, you need to yourself be predictable. If you can follow the curriculum, do the reading, and fill out the bubbles on a standardized test with your standardized #2 pencil, you can get a good grade, that adds up to a good GPA, which lets you graduate and get your degree to put the right keywords in your resume so a computer can read it and find you. You can get a job, a steady paycheck, a fixed-rate mortgage, and an insurance policy. But for any of these niceties of Mediocristan to exist, someone has to invent something. Before Henry Ford could double the going rate for a factory worker, introduce the five-dollar day, and have 10,000 people banging on his gates, he had to create those jobs. You are a Maker/Capitalist Even if you wanted to work in a factory in Mediocristan – besides the fact that few humans could handle the monotony of working on Ford's assembly-line – these kinds of jobs are becoming more scarce. More of our drudgery is being handled by automation. This is reducing the barriers to entry for putting ideas into the world. You can build a no-code app with Adalo or Webflow, you can print and ship artwork and memorabilia with Printful, you can – like me – sell thousands of print-on-demand books in dozens of countries around the world, and not touch a single one. It used to require capital and labor to produce a good or service. Now, less labor is needed, and almost no capital. It used to require management to organize all that labor. Now management is the arrangement of automation – but “management” isn't the right word for it, and neither is labor. The word “creator” embodies the trifecta of coming up with ideas, doing the work, and distributing the goods. More and more of us can be creator/capitalists. We require little capital to fund our making, but we have to be adept at using what little capital we have wisely. Balaji Srinivasan would call us “capital allocators.” Finish what matters, and forget the rest If creative success is random, and happens upon a long timeline, how do you stay the course to embrace your shiny object syndrome and still ship projects? Start by building your shipping skills, like I talked about on episode 265. Treat even the smallest projects in your life as opportunities to have a vision, form a plan, and carry out that plan. You can do this by cooking a recipe, planning a party or trip, and build into shipping small creative projects. Learn to navigate uncertainty. Get used to making percentage-confidence predictions about the future, then evaluating those predictions down the road. You can learn with the Avocado Challenge I talked about on episode 245. Remember that for Henry Ford to build the Model T, he had to iterate on Models A through S. Like a construction project that seems to make no progress, until suddenly a twenty-story building appears, you need to let the Foundation Effect happen, like I talked about on episode 266. Remember the Iceberg Principle, like I talked about on episode 263. The same way ninety-percent of an iceberg is underwater, what you present to the world in your masterpiece will be just a small fraction of the knowledge and experimentation you put in. You have to embrace creative waste, like I talked about on episode 264. As a creator/capitalist, you need to use your resources wisely. Use the Barbell Strategy that I talked about on episode 244. Put most of your resources toward “sure bets” that keep you in the game. But set aside time and energy to play wildcards – crazy ideas with little downside, but unlimited potential upside. Creative work is the business of breeding Black Swans. Through this process, you won't finish every project, and you won't always be able to tell which projects matter. But with enough practice, over enough time, you'll become adept at finishing what matters, and forgetting the rest. Image: Characters In Yellow, Paul Klee Mind Management is a Kindle Deal! Amazon has hand-selected Mind Management, Not Time Management for a promotional discount. It's only $2.49 on Amazon.com and Amazon.ca. Offer ends March 31st, so grab it now! About Your Host, David Kadavy David Kadavy is author of Mind Management, Not Time Management, The Heart to Start and Design for Hackers. Through the Love Your Work podcast, his Love Mondays newsletter, and self-publishing coaching David helps you make it as a creative. Follow David on: Twitter Instagram Facebook YouTube Subscribe to Love Your Work Apple Podcasts Overcast Spotify Stitcher YouTube RSS Email Support the show on Patreon Put your money where your mind is. Patreon lets you support independent creators like me. Support now on Patreon »     Show notes: http://kadavy.net/blog/posts/finish-what-matters/

There are at least two kinds of randomness in the world: normal, as in a normal distribution or a bell curve, and extreme. As humans we're used to the normal distribution. That's the kind of thing we dealt with a lot over the thousands of years of our existence. It's only recently that the extreme distribution has come to predominate. Nassim Taleb has labeled the first mediocristan and the second extremistan. In this podcast we explore the difference between the two and how the tools of mediocristan are inadequate to the disasters of extremistan.

When Vincent van Gogh began his career as an artist, he had already failed at everything else. He even got fired from his own family's business in the process. Not seeing any alternative, he completely immersed himself in art. In one two-week period, he created 120 drawings. But exactly none of those drawings are famous today. [This is Love Your Work, and I'm David Kadavy] What feels like waste is not waste Last week, I talked about the Iceberg Principle – the idea that any masterpiece you see is just the tip of the iceberg. There's far more knowledge and experience beneath the surface, giving that masterpiece confidence and grace. But as you're adding layer after layer to your iceberg, it doesn't feel like that's what you're doing. It feels like you're wasting your energy. But you're not. After Van Gogh's frenzied first couple weeks seriously pursuing art, he settled in to a more conservative pace. Instead of 120 drawings in two weeks, he was instead shooting to make just twenty a week. He figured that's how many he'd have to make to end up with one good piece each week. “Waste” takes many forms What feels like “waste” can take many forms: Failed projects: You made something, and nobody likes it. Off on timing: Nobody like it yet, but some day someone will. Unfinished projects: You started, got a little ways, and maybe Shiny Object Syndrome took over. For whatever reason, you didn't finish. Research and Preparation: You don't always know what you're trying to learn, but all sorts of tinkering may seem like a waste. Creative waste is part of the creative game Sometimes what feels like “waste,” makes it directly into a current or future project, thus making it clearly not waste. But even the stuff that never becomes a part of your body of work is part of the creative game. I talked in episode 256 about the Barbell Strategy. To succeed in creative work, put most of your efforts toward “sure bets” that protect your downside and keep you in the game. With the rest of your time and energy, play “wildcards,” that have a chance of big upside. Creative work happens in Extremistan, not Mediocristan. Success won't be a steady climb up-and-to-the-right. Instead, it will look more like a poorly-shaved porcupine. Long periods of time where it doesn't seem like much is happening, punctuated by big spikes that level up your career one at a time. Yes, you're showing up every day and putting in the work, but all that is a series of small bets. You hope for one or two or a few to turn into positive Black Swans. Projects that take off, and take on a life of their own. In the course of playing this strategy, you can't tell what will be wasted, and what will not. You have to trust that “waste” is part of the process. Projects will fail, projects will go unfinished, and iterations will burn in the fire. That doesn't make you a procrastinator or a dilettante – that makes you a creator. Waste in Van Gogh's first masterpiece Vincent van Gogh's first masterpiece was full of waste. He did not just a sketch, but a small study, a medium study, and a print he could give out to test his idea. This was all before working on the final canvas. And that had many iterations, and four coats of varnish. He left it in his friend's studio to prevent himself from “spoiling it.” Then he still came back and worked on it some more. All that waste was on top of the years of work he did leading up to the project. The painting was about peasants, and he wandered around living like a peasant himself, begging people to model for him. And, there was the twenty drawings a week he had done. And those 120 drawings he did in a two-week period? We don't even know what they look like, because he destroyed them. Once this first masterpiece, The Potato Eaters, was done, it must have felt like a waste to Vincent. Everyone hated it. He got in a fight with his brother about it, and he completely cut off a friend who attacked it, viciously. Vincent van Gogh's first masterpiece was the result of a lot of waste. Each of those drawings was a failed project, surely many were left unfinished. He did a massive amount of research and preparation, and he was certainly off on timing. The Potato Eaters is regarded as a masterpiece today. Creative waste adds to the iceberg You already heard last week about how any masterpiece is just the tip of the iceberg. There's far more below the surface. So what new do you learn from creative waste? Sometimes, you can't see the tip of the iceberg. Sometimes it all just feels like waste. Your projects are failing, and your preparation and planning isn't getting you anywhere, causing you to leave projects unfinished. Just remember that other creators have embraced creative waste. I told you last week about how Margaret Mitchell re-wrote nearly every chapter of Gone With the Wind at least twenty times, Jerry Seinfeld says joke-writing is “ninety-five percent re-write,” Meredith Monk's charts and graphs go to waste and don't end up in the final performance, and Stephen King reminds you to “kill your darlings.” Those are all fine when you're deep in a project and you can see where it's going, but what do you do when entire projects get scrapped? Great creators embrace waste That's when you need to remind yourself of the approach Picasso took to his paintings. He did one after another. He saw them as like “pages in [his] journal.” He understood that not all his works would be successful. Even once he had a finished piece, he didn't know its true fate. “The future will chose the pages it prefers,” he said. “It's not up to me to make the choice.” Embrace creative waste. No waste, no wins. Image: Tale of Hoffmann by Paul Klee About Your Host, David Kadavy David Kadavy is author of Mind Management, Not Time Management, The Heart to Start and Design for Hackers. Through the Love Your Work podcast, his Love Mondays newsletter, and self-publishing coaching David helps you make it as a creative. Follow David on: Twitter Instagram Facebook YouTube Subscribe to Love Your Work Apple Podcasts Overcast Spotify Stitcher YouTube RSS Email Support the show on Patreon Put your money where your mind is. Patreon lets you support independent creators like me. Support now on Patreon »     Show notes: http://kadavy.net/blog/posts/creative-waste/

The business of creative work is the business of riding randomness. If you want to write a bestselling book or launch a revolutionary company, you’re going to need luck. You’re navigating Extremistan, not Mediocristan, as I talked about in episode 253. How do you increase your chances of having a hit without risking everything? You do it with “The Barbell Strategy.” You can use the Barbell Strategy in many areas of life and work. The Barbell Strategy defined The Barbell Strategy is introduced in Nassim Taleb’s The Black Swan, which I summarized on episode 244. The Barbell Strategy protects you from catastrophic losses that can take you out of the game. Meanwhile, it gives you chances to make big gains. Why “barbell”? Think of a barbell – a very lopsided barbell. On one side of the barbell is a big weight. On the other side of the barbell is a small weight. In the middle is the thin bar that connects the two. The Barbell Strategy is an investment strategy Taleb introduces The Barbell Strategy in an investing context. This is the strategy Taleb has used as a financial trader. As we’ll see, you can apply it to other areas as well. Taleb says: If you know that you are vulnerable to prediction errors, and if you accept that most “risk measures” are flawed, because of the Black Swan, then your strategy is to be as hyperconservative and hyperaggressive as you can be instead of being mildly aggressive or conservative. (emphasis mine) In other words, you have to accept that the world is full of Black Swans. As a review, Black Swans are outlier events with extreme impact. We think we can explain Black Swans after the fact, but we really have no idea. They can be positive, or negative. Things like financial market crashes or mega-best-selling books. By being hyperconservative, you avoid the negative Black Swans. By being hyperagressive, you expose yourself to positive Black Swans. 85% hyperconservative investments, 15% hyperaggressive investments Most people go with the “safe” investment. I’m not a financial advisor, and nothing I’m saying is investment advice, but for most people, that’s the index fund: Keep putting money in an S&P 500 ETF. Expect to get a 7% return over your lifetime. The strategy Taleb espouses is to avoid so-called “medium risk” investments. Instead, put 85% of your portfolio in hyperconservative investments – places where you won’t lose money. Invest the other 15% of your portfolio in hyperaggressive investments – places where you might lose your money, but where there’s also no limit to how much money you could make. When you’re invested in the index fund, your entire portfolio is exposed to Black Swans. The stock market dropped nearly 90% during the Great Depression, and swift drops of 30 or 40% are not uncommon. If 85% of your portfolio is spread across hyperconservative investments, you’re unlikely to need to weather such storms. With 15% of your portfolio in hyperaggressive investments, you can only lose 15% of your money. Meanwhile, there’s no limit to how high those hyperaggressive investments can go. Imagine you put 1% of your net worth in Bitcoin five years ago. Multiply that by 100, and that’s your current return. Even if you lost all the other 14% of your net worth in hyperaggressive investments, you would have nearly doubled your money, with little downside risk. The Barbell Strategy in creative work As you learned in episode 253 about Mediocristan vs. Extremistan, creative success is unpredictable. As award-winning screenwriter William Goldman said, “Nobody knows anything.” Most creatives expect their success to go “up and to the right.” When someone suggests they take some chances, to justify not taking those chances they abuse survivorship bias – as I talked about on episode 251. So they stick to “the middle.” They do the thing they feel will get them a little success. For authors, this is the strategy of cranking out a formulaic novel every month that’s sure to sell some copies – but for which nobody is ever going to camp in line outside a bookstore to be the first to get. Maybe they make the graph go “up and to the right,” but they’ll never have a breakout success. Find some “sure bets” – protect your downside To play the Barbell Strategy in creative work, first, you need to find some sure bets. Protect your downside, so you can stay in the game. Remember on episode 251 when I told you about my poker-player friend who needs a certain “bankroll” to make $100 an hour? That’s what you need. You need some room to explore long enough to let ergodicity take over. That could be a literal bankroll. I personally invested a lot when I had a secure job, knowing that some day I’d use the bankroll as runway to start something on my own. Some creatives like to have a secure day job, and spend a little time creating before or after work. Anthony Trollope and Charles Bukowski worked at the post office. Octavia Butler’s many jobs included potato chip inspector. Comedian Mark Normand was a janitor, which allowed him to think about his bits while he worked. When I first started on my own, after I had gone through savings I had bookmarked for exploration, I spent ten hours a week freelancing – the rest of the time I spent building passive income streams. I told you on episode 214 how one passive income stream made me $150,000. I now live in Colombia, where my three-bedroom apartment costs less than $700 a month – which takes off a lot of financial pressure. To play the Barbell Strategy, you need to protect your downside. There are no guarantees in life, including life itself – so this means something different for everyone. Figure out what it is for you. Play some “wildcards” Now, play some “wildcards” (Note that “sure bets” and “wildcards” are my own terms. Taleb hates gambling analogies because in gambling the actual odds are known – but you get the idea.) Wildcards are things that – as Seth Godin would say – “might not work.” In fact, they probably won’t work – but they have unlimited upside potential. They’re the “asymmetric opportunities” Tynan talked about on episode 145. “Asymmetric” refers to the risk profile: The potential downsides are small, but the potential upside are huge. The profile is not symmetric, it’s asymmetric. For example, it costs little to write a blog post. You have little to lose, but you may gain a lot. I’ve written many hundreds of blog posts in seventeen years. Two of those have led to positive Black Swans: One got me my first book deal, and catapulted my status online from nobody to somebody. Another got me an advisory position with a company that sold to Google, and became the subject of my latest book. Numerous others brought smaller benefits, but I can’t think of any I regret. Your wildcards have a chance to become positive Black Swans. You can’t predict what will work, so make lots of small bets with unlimited upside. Avoid “the middle” Finally, avoid “the middle.” There’s a few reasons for this. One, the middle is crowded. As restauranteur Nick Kokonas said on episode 213, most people aren’t as afraid of failure as they are of success. They want to do okay, but they don’t want to do great. At the same time, we have a loss-aversion bias. We hate losing an investment twice as much as we enjoy gaining from an investment. So, everyone goes for the middle. And there’s more competition in the middle. Two, the middle is where the negative Black Swans happen. You’re only investing a little in the wildcards, so you can afford to lose it all. We tend to go all-in on the middle, so when an unexpected catastrophe happens, we lose a lot. Three, the middle has little chance of bringing positive Black Swans. Your index fund is supposed to return 7% a year. It could lose 40% of its value in a day or two. Meanwhile, does it have any chance of gaining 1,000% just as fast? Very unlikely. What’s hot is usually “the middle” Look at what is hot in your field, and you’ll probably find “the middle.” In writing, it’s churning out formulaic fiction series for Kindle Unlimited. In blogging, it’s making sure you’re sharing every blog post to every social media channel. In SEO, it’s manufacturing mediocre articles on high-volume keywords you have little chance of ranking for. In SaaS entrepreneurship, it’s A/B testing to make minuscule gains in conversion rate. Some of these things might bring a little progress, which is why people do them, but they have no chance of big upside. Avoiding the middle protects your downside, and gives you a chance for more upside. With less invested in the middle, you can invest more in the wildcards. The Barbell Strategy in other areas The Barbell Strategy is useful in investing, and it’s useful in creative work. If you look around, you can also apply the Barbell Strategy to other areas. The Barbell Strategy for exercise “The middle” for exercise is steady-state, medium-intensity, training. Taleb himself is an advocate of doing power lifts, as heavy as you can. This certainly exposes you to upside, but I think it also exposes you to the downside of injury. I think the true Barbell Strategy for exercise is Body by Science, which I summarized on episode 160. It’s a very intense and short protocol, with little chance of injury. Other than that, go for long walks or do physical activities you enjoy. The Barbell Strategy for technology use You can apply the Barbell Strategy to your technology use. Some technology exposes you to potential serendipity. Surfing around on Reddit or social media is fun, and you never know when you’ll happen across a breakthrough idea. But like a risky investment, it’s risky to spend all your attention in these areas. The “sure bets” in technology are to use specific tools for the job you’re trying to get done. I talked about “grippy” and “slippy” tools on episode 230. If you’re a writer, get an AlphaSmart, or a typewriter for the initial brainstorming phases of your work. High-powered technology such as smartphones and laptops can be sure bets, too. But just use them for short bursts for specific tasks. What you want to avoid is the always-on use of the highest-power technology available. If you’re always glued to your smartphone or laptop, you’re connected to the internet, but you’re disconnected from your own mind. You can’t use technology without technology using some part of you. Marshall McLuhan, whose book, Understanding Media, I talked about on episode 248, would say that as technology extends, it also “amputates.” Another “wildcard” for technology is to not use technology at all. When I took Naval Ravikant’s meditation challenge, which I talked about on episode 246, I found that during meditation I thought more about asymmetric ideas, which I later implemented when I was using technology. The Barbell Strategy for time management You can apply the Barbell Strategy to time management. “The middle” is trying to get the most done in the shortest time. It’s being on clock time instead of event time, like I talked about on episode 235. The “sure bets” for time management are to have clear priorities, build habits, document processes, and automate what you can. These tactics help you use time and energy more effectively, without stressing you out and disrupting your creativity. The “wildcards” for time management are mostly the opposite of the sure bets. Meditate, daydream, go for walks, take naps, tinker, play, and discuss. As Taleb says, “Go to parties!” Instead of having clear priorities, spend time on “anti-priorities”: Things that don’t seem important, but that you want to do anyway. What you want to avoid is the stuff most people try to do to “save time”: full schedules, tight deadlines, last-minute crises, mindless outsourcing, and complexity creep. These tactics lead to negative time Black Swans: When one thing goes wrong, everything collapses, you lose time, and stress yourself out. Live the barbell life Let’s close with a quote from Nassim Taleb: I will never get to know the unknown since, by definition, it is unknown. However, I can always guess how it might affect me, and I should base my decisions around that. To apply the Barbell Strategy to any area of your life and work, avoid the middle, find sure bets, and play some wildcards. It’s the best way to stay in the game long enough to get lucky. Last chance to join the True Fan Patreon tier I'm offering the special "True Fan" Patreon tier through May. Join today and get lots of benefits at a discounted price. Learn more here » About Your Host, David Kadavy David Kadavy is author of Mind Management, Not Time Management, The Heart to Start and Design for Hackers. Through the Love Your Work podcast, his Love Mondays newsletter, and self-publishing coaching David helps you make it as a creative. Follow David on: Twitter Instagram Facebook YouTube Subscribe to Love Your Work Apple Podcasts Overcast Spotify Stitcher YouTube RSS Email Support the show on Patreon Put your money where your mind is. Patreon lets you support independent creators like me. Support now on Patreon »     Show notes: http://kadavy.net/blog/posts/barbell-strategy/

If you want to succeed in anything creative – whether that’s writing, art, or entrepreneurship – you’re navigating unfamiliar territory. Everyone else is living in Mediocristan, but you’re living in Extremistan. You need a different approach for deciding how you define success. “Extremistan” is a term introduced by Nicholas Nassim Taleb in his book, The Black Swan, which I summarized on episode 244. We tend to think we’re living in the opposite of Extremistan: Mediocristan. When we as creatives measure success and make our decisions as if we are in Mediocristan, we ruin any chance we have of succeeding in the world we’re actually in: Extremistan. Extremistan defined Extremistan is an imaginary place where events are random and unpredictable, and the impact of those events are extreme. It’s a world full of “Black Swans.” Extremistan vs. Mediocristan Mediocristan is a place that’s the opposite of Extremistan. Extremistan is unstable. Mediocristan is stable. Extremistan is the world of the unpredictable and unexpected. Mediocristan is the world of the predictable and expected. Extremistan is full of singular events (“Black Swans”). In Mediocristan, the same things happen over and over. Extremistan is full of variables that scale infinitely. In Mediocristan, all variables fall within a range. We’re used to Mediocristan Our modern world is built to be Mediocristan. We think we can predict what will happen. Some of this may be that our mental hard-wiring makes it difficult for us to think in terms of the unpredictable and unstable. Some of it is definitely because we’ve spread, across the collective, risks that face the individual. An hourly-wage job is in Mediocristan Imagine you have an hourly-wage job serving coffee at Starbucks. You’re working in Mediocristan. There are plenty of unpredictable things Starbucks has to deal with serving millions of customers across tens of thousands of locations. Employees will call in sick or stop showing up. There can be a coffee bean shortage, causing prices to suddenly spike. Someone might slip and fall in the bathroom and sue for millions of dollars. All these things affect Starbucks’ profits. One month, they may make a big profit. The next month, they may lose money and need to take out a loan to stay in business. But all the while, you know exactly how much you’re getting paid each hour you work. Starbucks can handle these shocks and pay you a steady wage because they spread risk across the entire organization. You don’t even notice if a water main breaks, flooding another location, or if the Director of Operations gets in a car wreck and ends up in the hospital for seven weeks. Your hourly-wage job at Starbucks is mind-numbing, it’s boring, you’re living on rice and beans from Aldi. But, it’s impressively predictable. It beats the heck out of foraging in the jungle and hoping you don’t get pounced on by a puma. Creative work happens in Extremistan A Mediocristan job is a pretty sweet deal if the wage is livable. Though, stable, well-paying Mediocristan jobs are more and more scarce. That’s not the thing I want to talk about. What I want to talk about is how important it is to understand that when you’re doing creative work, you’re not in Mediocristan, rather you’re in Extremistan. An author works in Extremistan Imagine if when you get off your shift at Starbucks, you sit down and write each day. After you build a writing habit and keep it for several years, you finish your first novel. You upload your novel to Amazon, and: nothing. You get a few sales a month. Then one day, you log into your Amazon dashboard, and see a huge spike. You’ve sold 3,000 books, and it’s not even 10 a.m. Turns out an influencer shared your book on TikTok. 3,000 books is just the beginning. Your book becomes a massive best-seller. You sell millions. A big publisher picks it up and distributes it around the world. You’re getting six-figure checks for foreign rights deals, then you get a seven-figure check for the movie rights. You quit the Starbucks job. Your life is forever changed. Extremistan is a world of extremes Your job at Starbucks is in Mediocristan. Your work as an author is in Extremistan. Remember, Extremistan is unstable, unpredictable, with singular events and variables that scale infinitely. You wrote every day after work, with no financial returns – suddenly you had more money than you knew what to do with. That’s unstable. It looked as if your book was a failure, until it wasn’t. That’s unpredictable. By some fluke, the influencer shared your book. That was a singular event (a “Black Swan”). There’s virtually no limit to the number of books you could sell. Your book sales are a variable that could scale infinitely. As the name would imply, Extremistan is a world of extremes. In Mediocristan, variables fall within a range In Mediocristan, variables fall within a range. The height of humans is a good example. The height of humans is distributed on a bell curve. There are a lot of people who are about average height. There are far fewer people on the tails of the bell curve whether extremely tall, or extremely short. There are no adults nine inches tall, nor ninety feet tall. No one has even been nine feet tall. In Extremistan, variables scale infinitely In Extremistan, variables scale infinitely. The “average” net worth of a U.S. family is about $700,000. But while there are a lot of people who are average height, there aren’t so many with average wealth. To be richer than half of all Americans, you need “only” $100,000. Why are so many Americans below “average” wealth? Because if Bill Gates walks into a bar, on average, everyone there is a billionaire. The people on the high edge of wealth distribution are so wealthy, they skew the average. Jeff Bezos has 1 million times the wealth of the average American – over $100 billion. Human height has a predictable and limited range – it’s in Mediocristan. Wealth has an unpredictable and unlimited range – it’s in Extremistan. Be careful what you learn in Extremistan Because Extremistan is so unpredictable, with unlimited variables, you have to be careful not to draw conclusions too soon from what you see in Extremistan. A quote from Taleb: In Extremistan, one unit can easily affect the total in a disproportionate way. In this world, you should always be suspicious of the knowledge you derive from data. In other words, the individual can skew the collective – Bill Gates walks into a bar and on average everyone there is a billionaire. So be careful what conclusions you draw from the data, when you’re working in Extremistan. It wouldn’t matter how long you worked at that hourly-wage job at Starbucks – you wouldn’t get rich. If the wage were livable, and you enjoyed the work, that could be fine. Don’t measure Extremistan success on Mediocristan terms But you’re in trouble if, while writing your novel, you measure success on the same terms as you measure success at your hourly-wage job at Starbucks. You’d be measuring Extremistan work on Mediocristan terms. You could do something well at work, and get a dollar-an-hour raise. You’re seeing progress. You could write an incredible chapter in your book, and not see no immediate benefit. Yet the impact of that dollar-an-hour raise, stretched out over your entire Starbucks career, may be tiny when compared to the lifetime benefit of the incredible, climactic, chapter in your novel. If you only looked at the data you immediately received, you’d quickly conclude there was no point in working on your novel. You might as well stick to serving coffee. Another quote from Taleb: What you can know from data in Mediocristan augments very rapidly with the supply of information. But knowledge in Extremistan grows slowly and erratically... In other words, in Mediocristan, the more data you collect, the more you know. In Extremistan, the more data you collect, the more you think you know – if you’re not careful. In reality, new data in Extremistan tells you very little. Success in Extremistan is explosive Like wealth, success in creative work scales infinitely. Art De Vany studied the box-office performance of 350 movies that came out during the course of nine months. The top four of those 350 movies made 20% of the total revenue. The bottom four: 0.0036%. The top movie made almost $50 million. The bottom movie, about $5,000. Success in Extremistan is random Nobody spends millions making a movie to only make $5,000. If the movie industry knew how to make $50 million instead, they would only make the movies that made $50 million. William Goldman wrote a lot of screenplays, including the cult classic, The Princess Bride. He won two Academy Awards for other screenplays. Still, he said, Nobody knows anything.... Not one person in the entire motion picture field knows for a certainty what’s going to work. Every time out it’s a guess and, if you’re lucky, an educated one. —William Goldman This applies to movies, books, scientific discoveries, and entrepreneurship. You can learn and apply skill, but ultimately success in Extremistan is random. Success in Extremistan is delayed Success in Extremistan can also be delayed. Vincent van Gogh, after only two years of painting, wrote his brother Theo saying that maybe he had made a mistake investing so much in painting. It wasn’t until after ten years of painting that Van Gogh’s work was recognized – just before his early death at 37. It took Leonardo three years to paint The Last Supper. It took Marie Curie four years to isolate radium. It took James Cameron fifteen years to produce Avatar. Don’t use Mediocristan terms to measure Extremistan success When you’re measuring success in Mediocristan, you expect to see the graph go “up and to the right.” But success in Extremistan looks more like a poorly-shaved porcupine. The more you measure success in Extremistan on Mediocristan terms, the less you’ll invest in doing the kinds of things that will bring you success in Extremistan. If you focus all your energy on A/B testing, you’ll only ever see incremental gains. Misleading A/B test data aside, you’ll never take chances that lead to explosive growth. If you dismiss advice or don’t try something based upon a flawed interpretation of survivorship bias – as I talked about on episode 251, you won’t have the perseverance to stick around long enough for randomness to give you a boost (remember, The Queen’s Gambit took 37 years to become a bestseller). Creative work is about riding randomness in Extremistan If you want to make it in creative work, you need to recognize that you’re riding randomness. That’s a tough thing to get comfortable with – we like to have sure bets. A good strategy is “The Barbell Strategy,” which I talked about in The Black Swan book summary on episode 244: Go ahead and take the sure bets, but leave some room for the wildcards. Work the Starbucks job, but spend your evenings writing the boldest novel you can. We think of our world as predictable. We want to see steady growth. But the predicable and steady is from Mediocristan. Finding your way to success in creative work is a journey through Extremistan. Mind Management, Not Time Management now available! After nearly a decade of work, Mind Management, Not Time Management is now available! This book will show you how to manage your mental energy to be productive when creativity matters. Buy it now! My Weekly Newsletter: Love Mondays Start off each week with a dose of inspiration to help you make it as a creative. Sign up at: kadavy.net/mondays. About Your Host, David Kadavy David Kadavy is author of Mind Management, Not Time Management, The Heart to Start and Design for Hackers. Through the Love Your Work podcast, his Love Mondays newsletter, and self-publishing coaching David helps you make it as a creative. Follow David on: Twitter Instagram Facebook YouTube Subscribe to Love Your Work Apple Podcasts Overcast Spotify Stitcher YouTube RSS Email Support the show on Patreon Put your money where your mind is. Patreon lets you support independent creators like me. Support now on Patreon »     Show notes: http://kadavy.net/blog/posts/mediocristan-vs-extremistan/

There’s an important bias to avoid: Survivorship bias. Unfortunately, people who might otherwise do something with their lives hide behind survivorship bias. Just as important as knowing when survivorship bias matters is knowing when survivorship bias does not matter. Survivorship bias has a fatal flaw. Example: Abraham Wald avoided survivorship bias to bring back more survivors In WWII the US military was trying to improve their planes. Each time a plane came back from a mission, they made a record of the bullet holes. Since most bullet holes were on the wings and tails of the planes, the military concluded they needed to add more armor in the wings and tails. But statistician Abraham Wald said, No – that’s not where you want to add more armor. You want more armor around the engine. That seemed weird. Their map of bullet holes showed very little damage to the engine compartment.   What Wald noticed that the military hadn’t noticed is they were only seeing bullet holes on planes that returned from missions. The bullet holes they weren’t seeing were the bullet holes on planes that did not return. And the bullet holes on planes that did not return were the ones bringing the planes down. Abraham Wald was cleverly taking into account what would become known as survivorship bias. Example: How survivorship bias can be used by an investing con artist In his book, Fooled by Randomness, Nassim Taleb tells a story of a con artist. He’d send out 10,000 letters. Half the letters predicted the stock market would go up in the next month. Half the letters, down. The next month, the con artist would send not 10,000 letters, but only 5,000. The following month, 2,500. Then 1,250, and on and on. Why did he keep sending fewer and fewer letters? Because he only sent follow-up letters to those who had received correct predictions. After enough letters, he had 150 or so victims hanging on his every word, eager to have this mystery genius invest money for them. Of course once the con artist received their money, they never heard from him again. They had been “fooled by randomness.” They had been fooled by survivorship bias. Survivorship bias doesn’t account for ergodicity Both these stories are useful examples of survivorship bias. In the first case, Abraham Wald used an awareness of survivorship bias to avoid getting a false signal from the data. In the second example, the recipients of the letters didn’t realize they could be getting a false signal from the letters. Survivorship bias is an important phenomenon to understand, but survivorship bias has a fatal flaw: Survivorship bias doesn’t account for ergodicity. What is ergodicity? What is ergodicity? Imagine you enter a dimly-lit bar just as it opens. A table of patrons across the room light up cigarettes. You can see the cascading trails of smoke rising. When they’re done with their cigarettes, they don’t smoke anymore the rest of the night. When you get home, you realize your clothes smell like smoke. How could this be? You were nowhere near the trails of smoke. Well, after the trails of smoke rose from the cigarettes, they dissipated around the room, until a faint haze of smoke filled the entire room. Randomness eventually touches everything That’s ergodicity. The smoke was rising from the cigarettes in a random pattern. But when a random pattern continues for long enough, that random pattern eventually fills the entire space it could have filled. The smoke spread randomly, until it filled the whole room. Ergodicity is why it’s not only 1% of Americans who are in the top 1% of income. As time passes, people enter and leave the top 1% of income. In a lifetime, 10% of Americans spend a year in the top 1%. More than half will spend a year in the top 10%. Ergodicity is why – even though life expectancy is about 76 – a 76-year-old only has a 4% chance of dying. The small risks of dying each year of life accumulate over time. Not every game is do-or-die Next time some entrepreneur or creative gives advice, or is profiled in an article, look at the comments or responses. You’ll probably see something like this: Don’t forget about survivorship bias! You didn’t hear from the thousands of others who followed that same advice, but didn’t succeed! Sometimes this is useful. More often than not, this is as damaging as survivorship bias itself. Example: Survivorship bias in Russian Roulette Imagine Russian Roulette was a spectator sport (thank God it’s not, but imagine). Chances are, there would be some “Michael Jordan” of Russian Roulette. Through mere chance, this person has survived hundreds of Russian Roulette matches. It just so happens that of the thousands of times this “champion” has spun the cylinder on the revolver, pointed the gun at their temple, and pulled the trigger, the chamber hasn’t had a bullet in it once. If there were millions of Russian Roulette players in the world – playing college Russian Roulette and little league Russian Roulette, hoping to make it to the Russian Roulette big leagues – a person like this would probably exist. Just like there is today in entrepreneurship and creativity, there would be an entire cottage industry of journalists and courses and Russian Roulette podcasts, all touting the advice from this Russian Roulette champion. How to spin the chamber, what thoughts to think while pulling the trigger, how much pressure to use, what gear like like gloves and jerseys to wear, and exercise programs for strength and conditioning. That would be survivorship bias at its finest – or worst. It’s all random. This “champion” has no skill. All their advice is useless. The Queen’s Gambit was not a “survivor” – then it was In 1983, Walter Tevis published a novel. He soon after optioned the screenplay rights to Jesse Kornbluth. Then Tevis died, and the project was cancelled. Nine years later, in 1992, Kornbluth could no longer afford to keep the option. Allan Scott bought the screen rights. Fifteen years later, in 2007, plans were underway to make a feature film out of this novel. Then the director died. (That director, Heath Ledger.) Finally, in 2020, the story from this novel was released as a Netflix series. At least 60 million people watched it. It’s Netflix’s most popular limited series ever. That series: The Queen’s Gambit. For the first time, the novel, The Queen’s Gambit, became a New York Times bestseller. This overnight success was almost 40 years in the making. For 37 years, The Queen’s Gambit was one of the “thousands of others who never made it.” In 2011, Kornbluth – who had the screenplay option before Scott had rights – said the rights had been bought by “people who will never get the film made.” The Queen’s Gambit was not a “survivor.” In fact, it went out of print. Not to mention at least two people literally did not survive to see it on the screen. Creative work is not Russian Roulette When you play Russian Roulette and lose, you are out of the game forever. Fortunately, as creatives, we are not playing Russian Roulette. If you build a company that fails, you can try again. If you write a blog post that falls flat, you can try hundreds or thousands more times. Creative work happens in Extremistan When someone says “Don’t forget survivorship bias,” what they’re really saying is, “Show me the exact steps to follow that guarantee success.” In creative work, there are no exact steps that guarantee success. Those only exist in Mediocristan. Even The Queen’s Gambit, which was wildly successful, wasn’t guaranteed success. It could have just as easily stayed out of print. Creative work happens not in Mediocristan, but Extremistan. No failure will come from pure lack of skill. No success will come from pure good luck. Creatives are like poker champions I have a friend who is a professional poker player. He knows if he plays poker online eight hours a day, he’ll average 100 dollars an hour. But he also knows for long stretches of time he’ll be losing money. It will look as if his career is over. On the contrary, he’ll also sometimes be flush with cash. It will look like he’s making way more than 100 dollars an hour. His career only works if he has one critical thing: “bankroll.” He needs a certain amount of money – a certain amount of padding – to help him weather losing streaks. If he goes bust, he’s out of the game entirely – he’s lost Russian Roulette. He has tremendous skill. That’s how he can survive as a professional poker player. But there’s no fighting randomness. His bankroll allows him to let randomness run its course long enough for ergodicity to even things out. The creative career is riding randomness Your results in creative work are not a direct reflection of your skill. Even if you’re “So good they can’t ignore you,” you could be toiling in obscurity for a while as you wait for your big break. If you aren’t cut out for that, fine. But admit it to yourself and don’t use survivorship bias as your scapegoat. Stay in the game long enough to survive But if you’re willing to try something that, as Seth Godin says, “might not work,” go ahead and try that advice. Maybe it will improve your odds a little. What’s important is you stay in the game long enough to let ergodicity give you more shots at a win. That could be literally having the bankroll to stay in the game. That could be making sure you make small enough bets – with high enough potential upside – that you don’t go bust, but have a chance to hit the jackpot. You have to watch your eggs long enough for a Black Swan to hatch. My Weekly Newsletter: Love Mondays Start off each week with a dose of inspiration to help you make it as a creative. Sign up at: kadavy.net/mondays. About Your Host, David Kadavy David Kadavy is author of Mind Management, Not Time Management, The Heart to Start and Design for Hackers. Through the Love Your Work podcast, his Love Mondays newsletter, and self-publishing coaching David helps you make it as a creative. Follow David on: Twitter Instagram Facebook YouTube Subscribe to Love Your Work Apple Podcasts Overcast Spotify Stitcher YouTube RSS Email Support the show on Patreon Put your money where your mind is. Patreon lets you support independent creators like me. Support now on Patreon »     Show notes: http://kadavy.net/blog/posts/survivorship-bias/

Extremistan V. Mediocristan One of the best takeaways from the Incerto & a fantastic way to think about the markets (outsized returns) and a fantastic way to measure broken beauracracy who think their processes are the cause of their success. These are two imaginative lands Nassim introduces us too in the Black Swan.My Writing Online: https://atlasgeographica.com/the-black-swan-nassim-taleb/Also my interview podcasts -

Nassim Taleb los llama Mediocristán y Extremistán y toda persona que analiza lo social necesita comprender cuáles son sus diferencias. Espero que esta introducción te sea util y te parezca interesante. P.d. Entra a jmgr.com.mx para leer el transcript del episodio, habrá links para profundizar y gráficas para comprender los ejemplos. JM

If you want to write a book, don’t ask, “How much money does the average book make?” In this context, “average” is meaningless. You’re in the world of Black Swans. The Black Swan is a book by Nicholas Nassim Taleb, and I have found the ideas in it critical to navigating my career as an author. Here – in my own words – is my summary of The Black Swan: The Impact of the Highly Improbable. These are the ideas I think about when I’m considering writing a new book.   Where does the term “Black Swan” come from? Imagine a world where you’ve only ever seen white swans. If someone asked you whether or not black swans existed, you might say no. You’ve seen thousands of swans, and they’ve all been white. Therefore, black swans don’t exist. You’ve mistaken an absence of evidence for evidence of absence. Just because you haven’t seen evidence of black swans, does not prove they don’t exist. What is a Black Swan? A positive Black Swan: In 2010, I wrote a blog post. That blog post prompted a publisher to reach out to me. I got a book deal. A negative Black Swan: A Las Vegas casino had an insurance policy. They protected against every cheating scenario they could imagine. They had the most popular show in Vegas, where magicians worked with giant live tigers. So they protected against the scenario of a tiger jumping into the audience. But they never imagined the tiger would maim one of the performers – Roy of Siegfried and Roy. Siegfried and Roy lost their careers. The casino lost $100 million. Both of these incidents are Black Swans: Black Swans are outliers: They’re not what we expect. Nothing in the past predicts a Black Swan. Black Swans have extreme impact: The impact could be positive, such as my book deal, or negative, such as the tiger attack, or the terrorist attacks of 9/11. We backwards-rationalize Black Swans: After a Black Swan happens, it seems obvious. We look back and come up with explanations for how it happened. This gives us the illusion that Black Swans are explainable and predictable. Note: COVID-19 is not a Black Swan. As Taleb has explained, global pandemics happen regularly. They’re uncommon, but they’re inevitable, and we know that. The Black Swan Turkey Imagine you’re a Turkey. Every day, humans come and feed you. You think humans are pretty good and nice. Each day you get new information to confirm this belief. A graph of your opinion of humans might look like this:     Notice the sharp drop-off at the end. That’s the day before Thanksgiving. Things seemed good, until they weren’t. History does not always predict the future. Events come along that shatter all assumptions we’ve made based upon past information. Mediocristan vs. Extremistan Black Swans happen in a place Taleb calls “Extremistan.” Extremistan is the opposite of “Mediocristan.” There’s a joke I like, “Bill Gates walks into a bar. On average, everyone there is a millionaire.” We’re attracted to the “average” and the predictable. But oftentimes the concept of “average” is misleading. Some things happen in Mediocristan and are predictable. The “average” is meaningful in Mediocristan. Other things happen in Extremistan and are unpredictable and extreme. The “average” is meaningless in Extremistan. Mediocristan is about “the collective, the routine, the obvious, and the predicted.” Mediocristan is about risk spread out amongst many, to avoid surprises. An hourly-wage job at Starbucks is possible only in Mediocristan. Extremistan is about “the singular, the accidental, the unseen and the unpredicted.” It’s where the Black Swans happen: random events you never expected, caused by forces you’ll never understand. Such as I experienced suddenly getting a book deal or working with a company that sold to Google. Mediocristan is about variables that fall within a predictable range. In the history of humanity, there’s never been a man 100 feet tall, or a woman 2,000 years old. Nobody has even come close to these extremes. Height and life expectancy follow a bell curve.   A bell curve. (Source: D Wells, Wikimedia Commons)   Distribution of height. (Source: Our World in Data)[/caption]     Extremistan is about variables that scale indefinitely. There’s no known limit to how rich a person can be. The “average” net worth of a U.S. family is about $700,000. But to be richer than half of all Americans you need only $100,000. Still, Jeff Bezos has more than $100,000,000,000.   Wealth distribution, by percentile, in the U.S. Jeff Bezos is 10x as wealthy as the highest point in this chart. (Wikipedia)[/caption] Why are Black Swans important? Understanding Black Swans can prepare you for the unexpected. If you learn about the impact that unexpected and extreme events can have, you can avoid foolish choices that expose you to negative Black Swans. Exposing yourself to Black Swans can make you successful. As we’ll talk about later, when you behave as if you’re in Mediocristan, you miss out on the positive Black Swans you’d find Extremistan. Businesses that thrive on Black Swans include venture capital, scientific research, and publishing. (Note: Another reason Black Swans are important is – as I talked about in Mind Management, Not Time Management – if it’s predictable, it can be automated. Your edge as a human is not in Mediocristan where the robots are taking over. It’s in Extremistan – in doing something nobody could expect.) Black Swan barrier: Platonicity One way we blind ourselves from Black Swans is through what Taleb calls “Platonicity.” Named after the philosopher, Plato, “Platonicity” is our desire to define things, and to pay more attention to things that have been defined. We create names for objects, we create terms (yes, such as “Platonicity”), and we invent nationalities. Because we’re so focused on things we define, we miss all the messier stuff that also matters. Taleb describes it as “[mistaking] the map for the territory.” (I once wrote about a similar concept, and called it Stuff and Things.) It’s helpful to categorize things, but it becomes a problem when we see a category as definitive, and don’t see the fuzzy boundaries between categories or revise them when we see new information that doesn’t fit how we categorize things. We’ve seen this in the gendered bathroom debate. We broke gender down into two categories. Based on that we made two bathrooms. But we’re realizing it’s not so simple. To be Platonic is to be top-down, formulaic, and close-minded. To be a-Platonic is to be bottom-up, open-minded, skeptical, and empirical. The Platonification of breast milk Doctors in the 1960s replicated breast milk in a laboratory, by replicating the components they could see in the milk (the things they had “Platonified”). It seemed to make no practical sense for women to go through the inconvenience of breast feeding when you could just use bottles and lab-made formula. There was an absence of evidence of what the benefits of breast milk were, and that was taken as evidence of absence of benefits. We didn’t know the full benefits of breast milk, but we assumed the components we could see were the only important parts. It turned out children who were not breast fed were later at an increased risk of some cancers. If the mothers themselves had breast fed, they would have had a reduced risk of breast cancer. Black Swan barrier: The Triplet of Opacity Another way we blind ourselves from Black Swans is through what Taleb calls “The Triplet of Opacity.” Those are: The Illusion of understanding. We think we understand what’s going on, but the world is more complicated and random than we know. The retrospective distortion. We assess things after the fact, so we backwards rationalize and come up with reasons why things happened. The overvaluation of information. We place too much emphasis on facts – the things we can “Platonify” – which blinds us from stuff that isn’t so easy to Platonify. How to make Black Swans happen? Since Platonification blinds us to Black Swans, and we suffer from the illusion of understanding and the retrospective distortion, it may seem silly to try to make Black Swans happen. You can’t engineer a Black Swan, but you can create the conditions for positive Black Swans to happen, as I talked about on episode 146. Tinker Top-down planning gives us the illusion of control, and keeps us in Mediocristan. Instead, tinker as much as possible, and learn to recognize opportunities when they present themselves. Taleb says the reason free markets work is not because they give rewards or drive incentives. Rather, free markets work because they let people get lucky through trial and error. (Then we explain away the brilliant things we did to arrive at this wonderful discovery.) Many discoveries come from searching for what you know, and finding what you didn’t expect. Europeans first learned of the American continent while searching for a route to India. I got my first book deal when I was trying to get votes for my speech proposal for a conference. Be patient Negative Black Swans happen suddenly, but positive Black Swans happen slowly. “It is much easier and much faster to destroy than to build.” Black Swan discoveries take time to have an impact. The computer, the internet, and the laser all had a huge impacts, but were underappreciated after initial discovery. Charles H. Townes was teased by his colleagues for inventing the laser, because they thought it was useless. It turned out to be important to eyesight correction, surgery, and data storage and retrieval. Denarrate The triplet of opacity feeds into the “narrative fallacy.” We’re wired to come up with stories of why things happen, but Black Swans happen for unknown reasons. Taleb realized that as a stock trader, there was no way for him to get an informational edge. He realized any piece of news that came out would quickly be worked into the market price of any security. So, he stopped reading the news. He recognized that reading the news as a stock trader would just support the narrative fallacy. Taleb describes a study where sports bookmakers were given ten variables to predict horse races. When they were later given double the information, these bookmakers were no more accurate in their predictions – yet they were much more confident. So Taleb decided that by reading the news he wouldn’t get an edge and he would become overconfident. The Barbell Strategy The main method Taleb recommends for protecting against negative Black Swans while exposing oneself to positive Black Swans is what he calls the Barbell Strategy.   Think of a barbell, with weights on either side. On one side of the barbell is your sure bets – things where you have little chance of losing. On the other side of the barbell is your wildcards – things with unlimited upside. The Barbell Strategy in investing (Note: I’m not a finance expert and nothing I’m about to say is investment advice.) In investing, the sure bets would be treasury bills, cash, and gold. Obviously Black Swans could come along and make these bets not so sure bets, but they’re as sure as you can get. The wildcards would be highly-leveraged option trading, angel investments, or cryptocurrency. You have a decent chance of losing your money, but there’s almost no limit to how much you can gain. In an investing context, Taleb recommends putting 85–90% of your assets into the safe investments, and the remaining 10–15% in the speculative investments. What you’re avoiding is the stuff in the middle. People think index funds are safe because they historically gain about 7% a year, but the entire stock market has lost up to 30% of its value very quickly. Since we’re living in an increasingly complex world, there’s no telling what kind of Black Swan could come in the future and cause an even bigger drop. The Barbell Strategy in creative work I hadn’t realized before reading The Black Swan that I had used the Barbell Strategy to build my creative career. When I was first starting out, I made sure to get just enough freelance work to pay my bills. I also spent a portion of my time building passive income streams. The rest of the time, I spent tinkering and exploring my own ideas. After three years, I randomly landed a book deal to write Design for Hackers. Dan Ariely mentioned a Barbell Strategy in my latest podcast conversation with him. He says he “gambles with his time.” He spends some portion of his time on things that don’t make sense, such as collaborating with a mentalist on-stage in one of his speeches, or working with a cartoonist. My own Barbell Strategy has benefitted from Dan’s Barbell Strategy. A blog post I wrote as a “wildcard” – during one of my Weeks of Want – prompted Dan to reach out to me. I collaborated with him on a productivity app. We sold it to Google. That blog post also led to my third book, Mind Management, Not Time Management. There’s your The Black Swan summary! I hope you’ve found this The Black Swan summary useful and clear. Taleb’s writing can be confusing and even off-putting at first, but if you take the time to understand his ideas, they can help you navigate an uncertain world and find breakthrough opportunities. I highly recommend The Black Swan. It’s one of my favorite books.   Mind Management, Not Time Management now available! After nearly a decade of work, Mind Management, Not Time Management is now available! This book will show you how to manage your mental energy to be productive when creativity matters. Buy it now! My Weekly Newsletter: Love Mondays Start off each week with a dose of inspiration to help you make it as a creative. Sign up at: kadavy.net/mondays. Listener Showcase Abby Stoddard makes the Dunnit app – the "have-done lilst." It’s a minimalist tool designed to motivate action and build healthy habits. About Your Host, David Kadavy David Kadavy is author of Mind Management, Not Time Management, The Heart to Start and Design for Hackers. Through the Love Your Work podcast, his Love Mondays newsletter, and self-publishing coaching David helps you make it as a creative. Follow David on: Twitter Instagram Facebook YouTube Subscribe to Love Your Work Apple Podcasts Overcast Spotify Stitcher YouTube RSS Email Support the show on Patreon Put your money where your mind is. Patreon lets you support independent creators like me. Support now on Patreon »     Show notes: http://kadavy.net/blog/posts/black-swan-summary 

Subject: “IMMEDIATE Action Reqeusted [sic]” They misspelled “requested,” which had the unintended effect of highlighting that this email was urgent. There were some documents attached to the email. They wanted me to review the documents and sign them. Then, I would get a wire of money to my bank account – from Google, Inc. I had no idea this email was coming. It was a nice surprise, since it was my birthday. It was all thanks to a decision I made three years prior. Three years prior, I cleared my schedule and declared what I call a “Week of Want.” I gave myself an entire week to work on whatever I wanted. I had no plan at the time – that was the point of my Week of Want. Three years later, here I was getting a surprise paycheck, thanks to that Week of Want. Creative work happens in “Extremistan” What was happening was a [Black Swan]. A rare and unpredictable event – in this case, a positive one. If you made several copies of the universe, and repeated my decision from three years prior, in most of those parallel universes, I probably wouldn’t end up getting money wired to my bank account from Google. That’s because creative work happens in Extremistan. Nassim Taleb introduced Extremistan in his book, [The Black Swan]. Extremistan is a world of Black Swans – rare and unpredictable events. Creative work does not happen in “Mediocristan” Other kinds of work happens in the opposite of Extremistan – what Taleb calls Mediocristan. Mediocristan is a world that’s stable and predictable. Serving coffee is a good example of work that happens Mediocristan. There’s a steady supply of coffee, and a steady demand for coffee. If you get a job at Starbucks, they can more or less predict that supply and demand, as well as their overhead costs. So, they can pay you by the hour. When your line of work is thinking of ideas and bringing those ideas into the world, you can’t get paid by the hour. Beyoncé does not get paid by the hour to make her music, even though she’s Beyoncé, and her next record is guaranteed to sell. Much less is the world’s next Beyoncé getting paid by the hour. Nobody knows she’s the next Beyoncé. If you made copies of the universe, in many of those parallel universes, she wouldn’t even become the next Beyoncé. You need clear priorities in Extremistan When you’re working in a pure Mediocristan, you don’t even need priorities. You know exactly what needs to be done, and you do it. When you’re working in Extremistan, you do need clear priorities. There are a million things you could do – a million things that might work – so you have to be ruthless with your priorities. You have to be ruthless in what you say yes to and what you say no to, and in trying to find some way to objectively see what the results are so you can make better decisions in the future. Clear priorities have a dark side But clear priorities have a dark side. It’s that when you have clear priorities, you only put your money on the sure bets. And when all of your money is on sure bets, you aren’t even gambling anymore. You’ve moved yourself from Extremistan to Mediocristan. You can keep steady paychecks coming, but you’ll never hit the jackpot. So employ the Barbell Strategy So how do you give yourself the opportunity to hit it big, without going bust? You need to spend some time in Extremistan. Taleb calls it “The Barbell Strategy”: Imagine a barbell, with fat weights on the ends, and a thin bar in the middle. On one end of the barbell is your sure bets. If you’re investing, that’s treasury bills. On the other end of the barbell is your risky bets. If you’re investing, that might be options, or cryptocurrencies. What you’re avoiding is the stuff in the middle. Don’t make big bets where you can lose your shirt, and avoid the seemingly-conservative investments in which you can actually lose a lot. Give yourself a “Week of Want” One way I spend time in Extremistan is by giving myself a “Week of Want.” In a week of want, I clear as much as I can from my schedule for a whole week, and I let myself explore whatever is interesting to me. In 2012, after publishing my first book, I gave myself a Week of Want. I spent most of my week reflecting on the experience of writing that first book. Why did it seem nothing I had learned about productivity had prepared me to write that book? I reflected on the grab-bag of rituals and routines I eventually developed to keep my writing process moving forward. I shared my thoughts in a blog post, called [Mind Management (Not Time Management)]. Nothing happened right away. That’s the nature of creative work. There’s often a delay before your bets pay off. But another year and a half later, I got an email. The renowned behavioral scientist, Dan Ariely, had read my blog post, and wondered if I’d like to help him with a productivity app he was building. Another year and a half after that, I got a surprise payday from Google. Google bought that productivity app. The Week of Want is a way of “gambling with your time.” [Dan Ariely] himself talked about gambling with his own time back on episode 203. He’ll spend some amount of his time on things that don’t make sense, such as working with a cartoonist, or inviting a mentalist to perform at one of his speeches. The Week of Want exposes you to “asymmetric opportunities,” like [Tynan] talked about on episode 145. Oftentimes we hold ourselves back from pursuing a silly idea. There’s very little downside to pursuing the idea, but the potential upside is unlimited. Why “want?” The Week of Want is a great way to make sure you spend a little time in Extremistan. But it has another valuable purpose, and that purpose lies in the idea of “want.” When we’re spending all of our energy on what we feel we should do, we soon forget what we want to do. But remember that creative work is unpredictable. Even when we think really hard about what we should do, a lot of the time we’re going to be wrong. Additionally, the things we want to be doing are powerful. The things we want to be doing are the things we’re curious about. And curiosity is powerful in two ways. One: Curiosity is motivational fuel. You can work harder on something you’re curious about. Two: Curiosity is a path to originality. Your curiosity will lead you down multiple paths. When those paths converge, you’ll be where no one else has been. Why a week? You may recognize elements of the Week of Want in Google’s famous “twenty-percent time” strategy. When Google was first starting out, they allowed their engineers to spend twenty percent of their time on whatever project they wanted. The strategy worked great. Some of Google’s best products were created during twenty-percent time – including Gmail and AdSense. I’ve heard some people say that they spend one day a week on a side-project. Hey, that’s a good use of the barbell strategy, and it will expose you to positive Black Swans more than not working on a side project at all. But there’s something special about spending an entire week doing whatever you want. Working on what you want to work on, and doing so for an entire week, takes you further and further from the norm. It brings you deeper and deeper into the territory where you’ll discover truly original ideas. When I asked neuroscientist John Kounios – way back on [episode 8] – about the benefits of taking an entire week to do what I want, he said there were two potential ways that could improve creative thinking. One: Doing what you want improves your mood, which leads to better ideas. He explained, “It gives you pleasure, puts you in a positive mood, and it’s something you can sustain over the week – and then it can lead to creative insights.” Two: Taking a whole week puts you in a deeper state of creativity. Dr. Kounios said that the “insightful state of mind is very fragile.... It’s easier to get into an analytical state of mind than it is to get into a creative, insightful, state of mind. So if you can create this whole block of time for a week, it allows you to really sink into that state.” Week of Want rules To do your own week of want, clear away as much as you can for a week. Act like you’re going on vacation. Set up the out-of-office autoresponder on your email. Approach the Week of Want with no expectations as to what you’ll discover during that week. The goal of the Week of Want is much less about actually finding great ideas. It’s more about reconnecting with the feeling of wanting in the first place. We so regularly do the things we feel we should do, we soon forget what it feels like to want to do something at all. Image: [Insula Dulcamara, by Paul Klee] Mind Management, Not Time Management available for pre-order! After nearly a decade of work, Mind Management, Not Time Management debuts October 27th! This book will show you how to manage your mental energy to be productive when creativity matters. Pre-order it today! My Weekly Newsletter: Love Mondays Start off each week with a dose of inspiration to help you make it as a creative. Sign up at: kadavy.net/mondays About Your Host, David Kadavy David Kadavy is author of Mind Management, Not Time Management, The Heart to Start and Design for Hackers. Through the Love Your Work podcast, his Love Mondays newsletter, and self-publishing coaching David helps you make it as a creative. Follow David on: Twitter Instagram Facebook YouTube Subscribe to Love Your Work Apple Podcasts Overcast Spotify Stitcher YouTube RSS Email Support the show on Patreon Put your money where your mind is. Patreon lets you support independent creators like me. Support now on Patreon »     Show notes: http://kadavy.net/blog/posts/week-want/ 

This week Horace joins Oliver to talk about the work of Nassim Taleb - namely, antifragility and asymmetric risk - and what connections there are to disruptive innovation theory and Micromobility. Oliver has wanted to record this episode for a while and it doesn’t disappoint.Specifically we dig into:- Taleb’s work and background, explaining concepts such as Black Swans, antifragility, Fat Tony, Skin in the Game, Extremistan vs Mediocristan and intellectual-yet-idiots- The attraction and danger of polemical thinking- The importance of understanding if you’re dealing with bounded or unbounded risk probabilities- How traditional MBA education has increased fragility in enterprises, right at the same time that they’re increasingly trapped by the innovators dilemma, how these two concepts are tied and why Apple’s paranoia from it’s near death experience parallel the investment strategy outlined by Taleb.- The role of job-to-be-done and the anti-fragility of the restaurant space.- The connections between antifragility and disruptive innovation theory- How micromobility’s characteristics of having a clear and easy job-to-be-done, relative simplicity, light weight, low cost and flexible production make it suited to taking ‘hits’ to its business model and thus, more likely to be resilient as a phenomenon.

I. Writing a review of The Black Swan is a nerve-wracking experience. First, because it forces me to reveal I am about ten years behind the times in my reading habits. But second, because its author Nassim Nicholas Taleb is infamous for angry Twitter rants against people who misunderstand his work. Much better men than I have read and reviewed Black Swan, messed it up, and ended up the victim of Taleb’s acerbic tongue. One might ask: what’s the worst that could happen? A famous intellectual yells at me on Twitter for a few minutes? Isn’t that normal these days? Sure, occasionally Taleb will go further and write an entire enraged Medium article about some particularly egregious flub, but only occasionally. And even that isn’t so bad, is it? But such an argument betrays the following underlying view:  It assumes that events can always be mapped onto a bell curve, with a peak at the average and dropping off quickly as one moves towards extremes. Most reviews of Black Swan will get an angry Twitter rant. A few will get only a snarky Facebook post or an entire enraged Medium article. By the time we get to real extremes in either directions – a mere passive-aggressive Reddit comment, or a dramatic violent assault – the probabilities are so low that they can safely be ignored. Some distributions really do follow a bell curve. The classic example is height. The average person is about 5’7. The likelihood of anyone being a different height drops off dramatically with distance from the mean. Only about one in a million people should be taller than 7 feet; only one in a billion should be as tall as 7’5. Nobody is order-of-magnitude differences in height from anyone else. Taleb calls the world of bell curves and minor differences Mediocristan. If Taleb’s reaction to bad reviews dwells alongside height in Mediocristan, I am safe; nothing an order-of-magnitude difference from an angry Twitter rant is likely to happen in entire lifetimes of misinterpreting his work. But other distributions are nothing like a bell curve. Taleb cites power-law distributions as an example, and calls their world Extremistan. Wealth inequality lives in Extremistan. If wealth followed a bell curve around the median household income of $57,000, and a standard deviation scaled the same way as height, then a rich person earning $70,000 would be as remarkable as a tall person hitting 7 feet. Someone who earned $76,000 would be the same kind of prodigy of nature as the 7’6 Yao Ming. Instead, people earning $70,000 are dirt-common, some people earn millions, and the occasional tycoon can make hundreds of millions of dollars per year. In Mediocristan, the extremes don’t matter; in Extremistan, sometimes only the extremes matter. If you have a room full of 99 average-height people plus Yao Ming, Yao only has 1.3% of the total height in the room. If you have a room full of 99 average-income people plus Jeff Bezos, Bezos has 99.99% of the total wealth.

Nassim Taleb saw that the financial system was way too complex for any one to understand. He succeeded as a trader by learning how to deal with uncertainty. His work (check out all of Nassim's books on Amazon - https://www.amazon.com/Nassim-Nicholas-Taleb/e/B000APVZ7W/ref=dbs_p_pbk_rwt_abau)is quite popular within the bitcoin community. Joey and I thought it would be worthwhile to look at some of his ideas through lens of Bitcoin: - the Turkey problem - Risk taking and iterative action - Mediocristan vs extremistan - Fat Tails and asymmetries - IYIs - Dr. John and Fat Tony - Lindy effect - Antifragility - Learn by doing and iterating

"The normal American did not graduate from college and doesn't have an associate's degree. He or she perhaps attended college for one year or graduated from high school. She or he has a net worth of approximately $36,000, about $6,000 excluding home and vehicle equity and lives paycheck to paycheck. She or he has less than $500 in flexible savings and minimal assets invested in the stock market. These are median statistics with 50% of Americans below these levels” In this episode of Made You Think, Neil and Nat discuss The War On Normal People By Andrew Yang. This book is a balanced and optimistic view on Universal Basic Income, the economic impact of the automation of jobs and our options for the future. "half of American households already rely on the government for direct income in some form." We cover a wide range of topics, including: Universal Basic Income and Government benefits Statistics on unemployment, labor and the changing workforce Technology, automation and robot dog walkers Centralization of certain jobs in certain cities Remote work, freelancers, the gig economy Taxes, Cryptocurrencies & Video Games Tangents on Fortnite, Rolex and ad revenue in sports And much more. Please enjoy, and be sure to grab a copy of The War On Normal People By Andrew Yang. You can also listen on Google Play Music, SoundCloud, YouTube, or in any other podcasting app by searching “Made You Think.” If you enjoyed this episode, be sure to check out our episode on Sovereign Individual for opposing views. Along with our episode on The Elephant In The Brain for more on human nature and the desire for success. Be sure to join our mailing list to find out about what books are coming up, giveaways we're running, special events, and more. Links from the Episode Mentioned in the show Waking Up Podcast [01:08] Universal Basic Income [02:48] Mass Shooters [04:43] Social Revolution [04:46] Median Statistics [05:33] Labor Participation Rate [06:22] Manufacturing States [12:33] Detroit Riots [13:11] W-2 [13:43] Retraining Programs [15:12] Technology Industrial Wave [15:43] Amazon Warehouses [17:17] Walmart [17:25] Paralegals [19:33] The Sims [23:02] Hive Mind [23:27] UpWork [32:56] Slack [36:40] Esports [37:00] Twitch [37:09] Extremistan [37:12] Mediocristan [37:14] Gig Economy [40:44] Rover [40:52] Wag [40:52] Twilight Zone [42:10] Flywheel effect [45:35] Lincoln University [47:24] Biggest question Nat had have from reading @AndrewYangVFA's UBI book (on Twitter) [55:00] Unlimited Brewing [55:55] The world’s top economy: the US vs China in five charts [57:50] Cryptocurrencies [01:05:50] (Crypto episode) TransferWise [01:09:05] Blockchain [01:09:26] Winner-takes-all effect [01:09:54] Patreon Bonus Material [01:12:19] Fortnite [01:17:46] Call of Duty [01:18:03] Mad Max [01:21:11] ISIS [01:21:17] Social Credits [01:22:48] Million Dollar Bill [01:22:48] Vietnamese Dong [01:23:51] Trump’s Tax Plan [01:27:20] Totalitarianism Article [1:31:45] Yang2020.com [01:31:58] The New Deal [1:32:38] The Great Depression [01:33:40] Obamacare [01:35:22] Selection Bias [01:39:03] Books mentioned The War On Normal People by Andrew Yang Sovereign Individual by James Dale Davidson [03:17] (Nat’s notes) (book episode) Dreams From My Father by Barack Obama [01:12:47] Sapiens by Yuval Harari [01:18:47] (Nat’s Notes) (part 1) (part 2) Homo Deus by Yuval Harari [01:18:48] (Nat’s Notes) (book episode) Skin in the Game by Nassim Taleb [01:31:47] (Nat’s Notes) (Neil’s Notes) (book episode) Elephant in the Brain by Kevin Simler and Robin Hanson [01:38:43] (book episode) People mentioned Andrew Yang Sam Harris [01:00] Winston Churchill [04:25] Nassim Nicholas Taleb [37:06] (Antifragile episode) (Skin in the Game episode) Donald Trump [01:03:10] Barack Obama [01:12:12] Youval Harari [01:19:04] Robin Hanson [01:38:05] Show Topics 01:42 – The book feels optimistic and fairly balanced and offers Universal Basic Income as a good solution to our current situation. Andrew sets the stage well with the magnitude of the problem. 03:04 – We have both come from a place of not thinking UBI was a good solution and our views have been changed several times on this, since reading Sovereign Individual and now this. 04:19 – It feels like this could the best of the option that we currently have if we want to maintain this current system and avoid social revolution. 05:10 – Yang starts the book off by emphasizing the scale of the problem using median statistics or labor participation rate, unemployment rate and number of disability claimants. 06:30 – There is a massive number of people who are working age but are no longer looking for work. This is not evident when viewing the unemployment rate as they are discounted. However the labor participation rate is 63% which is lower that all other industrialized economies. 06:58 – One in three people have left the job market entirely. They have self-selected to no longer participate in the search for work and are not counted as unemployed. 08:09 – "half of American households already rely on the government for direct income in some form.". The majority of these are on disability for muscular tissue issues, mood disorders, anxiety or depression. 09:09 – There is a whole industry of lawyers who help people get onto disability who then take a cut of the back dated payments. 10:26 – Similarities between the level of disability payments and the proposition of UBI. However with disability payments, you are dis-incentivized from trying to find work as payments would stop. This causes a large number of people to stay on disability for longer and find untraceable ways of earning additional income. 11:10 – Yang says that 94% of all jobs created within the last 10 years were temporary contractor jobs with no benefits. People are not going to risk their $12,000 disability payment for a job at $7 per hour. 11:35 – Disability has less than 1% churn rate, very few people get off it. It’s like the anti-SaaS startup. 11:59 – Increases in disability payments correlate to the areas with the biggest job losses. Highest in the old manufacturing states. Does the government recognize that these payments are just another type of welfare for those that have lost their jobs? 12:31 – In Michigan of the 310,000 who left the workforce between 2003 and 2013 half went on to take disability payments. They don’t have any other options available. 13:29 – The Government doesn’t seem to actively fight benefit fraud with more people joining but few leaving. Missing of checks to see who is health is improving enough to move back into work. 14:29 – Inefficiencies of job retraining programs and the lack of transferable skills between old industries losing jobs and new (mostly technical) industries with jobs available. "The test is not 'Will there be new jobs we haven't predicted yet that appear?' Of course there will be. The real test is 'Will there be millions of new jobs for middle-aged people with low skills and levels of education near the places they currently reside'. And the answer to that seems almost certainly no." 15:44 – In previous industrial waves people have been able to adapt due to similarities of skill. Automation is now removing low skilled jobs entirely. Automation in car factories, Amazon warehouses. 18:30 – Automation isn’t solely for low skilled, Blue Collar jobs. Anything repetitive and routine can be automated. This will impact White Collar workers too. “Routine jobs of all stripes are those most under threat from AI and Automation and in time more categories of jobs will be affected.” 19:21 – Automation in law, research and reduction in personnel. Repetition as a tool for learning. Loss of high-level expertise as no-one has the foundational knowledge that comes from early repetition. 20:42 – Tangent. A Science Fiction story to make you think! In a distant future, expertise on computers has been lost and no one knows how to resolve a computer bug. A future where humans are reliant on computers to retain the knowledge for them. 22:42 – Computers no longer needing humans. The Sims, the hive mind of the Internet. Memes, Russian hackers, and Wikipedia created by AI destroying humanity. 25:19 – Assumptions of UBI imply an increase of entrepreneurship. What happens when you pay people to not work? Current level of cash wealth for the average American is $500. The expense of Healthcare means that one ER visit can put people into long term financial difficulty. Defaulted medical bills are then just another form of welfare. 27:50 – Median salary in the US is $31,000. Cost of living in New York and San Francisco. Impact cost of living has on average job wages. Manhattan vs Brooklyn. 32:14 – The author criticizes the idea that those that lose their job can just start working remotely. Those in the US can’t compete due to cost of living with locations like the Philippines and Sri Lanka. Tech skills required are also a barrier to entry. 36:10 – Professional eSports players and the popularity of Twitch and the platform reinforcing the popular streamers causes them to be more popular. Extremistan vs Mediocristan. 39:11 – Lack of service jobs, the rise of the gig economy, dog walking apps. Robot dogs and cyborg owners. 42:39 – Hyper-concentration of money and talent in 6 cities: Boston, Chicago, Los Angeles, New York and Washington DC. Reinforcing loop effect. Venture Capital money and secondary cities that are on the rise. The effects of anchor companies in smaller cities. 50:01 – Potential to see an exodus of people moving away from high cost of living areas due to remote work. The increase of remote working technologies which helps team collaboration. 52:32 – Geography is destiny. Jobs disappear where society falls apart and the smartest leave first. Reduction in families relocating across state lines. 54:14 – The ‘useless’ class being subsidized by the 1%. Will this cause talent to leave on a international level? Yang says inertia, lower taxes, standard of Education keep people in the U.S. 55:40 – VAT, international transactions, selling to the UK from the US. Micro economies and city-states. China GDP. Impact of taxes in lower cost of living regions. 01:01:50 – Moving abroad, spending in different economies. Moving to Canada because of Trump. Tipping point for people leaving their state or country because of high tax levels. 01:05:41 – Tangent. Cryptocurrencies as an alternative to being taxed. Adoption of Bitcoin and untraceable payment systems. Exchange rates and paying freelancers. TransferWise, PayPal. UBI as being a better option than the status quo. 01:10:20 – Yang doesn’t present UBI as a perfect solution but it’s an option to divert us from the direction we are already headed in. 1:12:00 – If you want to hear Neil’s comments about Obama’s book, support us on Patreon and listen to the bonus material for this episode. 01:13:14 – The explosion in popularity of video games for unemployed men. The average playing time went from 3 hours per week to 8 hours per week in just a few years. 01:14:32 – E-sports, ad revenue, disposable income of an unemployed audience. Comparisons with NBA, NFL, tennis, golf and other sports. Sponsorships vs engagement of an audience. 01:16:35 – Power of in-app purchases, revenue making game mechanics. Popularity of Fortnite, going to $318MM in monthly revenue in just eight months. Comparisons with Call of Duty, game play and enjoyment. 01:18:55 – Harari's comments on the ‘useless’ class moving to VR as a stimulus. Swapping religion for video games. Lack of creative outlets and sense of reward in modern life. People turning to games for the feeling of progress and adventure. 01:20:31 – Implications of having unemployed young men roam the streets are a recipe for disaster. Preventing social unrest of large group of unemployed people by videogames. 01:21:35 – Lack of stimulation causes unwanted behaviors. People don’t always direct their energy in productive ways. Social credit apps, psychology of spending millions in other currencies. 01:24:07 – UBI as an economic stimulus, makes new businesses more viable. Additional disposable income. Decreasing customers causes decreasing investment. Spending on subscriptions like Netflix causes income to flow back to those already rich cities. 01:26:55 – Trump’s tax plan, government waste. UBI puts money in the hands of the individual and reduces government control. Appealing to both political sides - as a safety net and as a way for individuals to have more control. 01:29:52 – Welfare increasing risk of totalitarianism. Government and citizens in harmony - taxes in exchange for infrastructure and protection. Does reducing taxes reduce how much the government listens to the people? 01:31:36 – Andrew Yang is a presidential candidate for 2020 against Trump. Danger of using UBI as a re-election tactic. An issue so powerful could lead to a potential dictatorship. The Great Depression, introduction of Social Security. Congress, altruistic presidents and Obamacare. 01:35:47 – If you want to hear more about some of our thoughts related to the book get the bonus material for this episode at Patreon. We got to say it a lot of times to make sure everyone remembers what it is. Patreon.com/madeyouthink 01:38:03 – You can also leave a review for this show on iTunes. That is probably one of the best ways to support the show, that helps us show up as a recommended podcast. It makes us feel good. It'll make our mother's proud of us. Keep tweeting about it. We love hearing from you guys and getting your questions and your thoughts. 01:40:23 – You can check out some deals from our wonderful sponsors at MadeYouThinkPodcast.com/Support. That's where you can find the mushroom coffee, the Perfect Keto ketones the Kettle and Fire bone broth, the Cup and Leaf tea and also you can click through to Amazon. Buy anything there and that helps support the show as well. This is a topic we're definitely interested in so if there are articles, other books, videos definitely send them our way on Twitter. I’m @TheRealNeilS and I’m @NatEliason. See you guys next week. If you enjoyed this episode, don’t forget to subscribe at https://madeyouthinkpodcast.com

When lightening hit, we do not change the laws of nature Welcome to extremistan or the Non linear/or the complex Domain Since the world has become increasingly more unpredictable, due to globalization and internet-we are witnessing the following problems- which pervade across board.  The difference between anecdote and evidence The difference between knowledge and BS The difference between an observation that is fake check and something you can generalise   How do you know something is safe, a turkey is fed for 1000 days by a butcher and everyday confirms to the turkey statistic department, the turkey accounting department, the turkey membership site, marketing department, Federal reserve Department– that the butcher loves the turkey with increasing statistical evidence until November, two days before thanks giving, It is never a good idea to be a turkey. The turkey will get a big surprise (the unexpected, the random) by becoming dead meat. This is by the way is in nutshell – the illustration of the consequence of inferring from the observable- or generalizing from the known to the unknown.    My point here is that, we can probably solve the problem, by figuring out in which domain these errors are consequential and in which domain these errors are not consequential. So we are going to make a separation between two domains with this classical experiment: The Mediocristan and extremistan The Mediocristan is caracterise by the collection of regular,yes it is the average that dominates.In technical terms is,if you take randomnly select 1000 people and you place on the scale in term of weigh.We can figure out quickly the average weigh of the total-right.Now add to that sample -that the heaviest person you can think of in the world.Key question how much of the total the exception meaning represent to the total? Answer: well 0.3% in another words the means which here is the average weigh is closed to the to the exception.so from here we derive the properties.This is by the way call the law of large number which define as when your sample becomes large,no single observatio can impact the total-further we draw out the properties.   Without this law statistics and social science won’t exist.If you are earn money per,or dentist,or massage therapist etc... you are in mediocristan?Why because you can not store your work and scale it.You have to there to perform and it is the average of your work that dominates But?     --Now Extremistan Take the randomnly same selected  sample of 1000 people and instead of weigh,let us take wealth- and add to the sample the richest person alife today.Bill Gates- How much of the total would he represents? Answer: 99.9999999% of the total,therefore the total is completely irrelevant and what count here is the exception- namely the outlier,the rare that dominates the most. You can from here see why with globalisation and internet the world is schifting rapidliy to exteremistan where the winner take all effect. Some example,take google,youtube control more than 80% of traffic online – facebook twiter are the behemoth in term of traffic in social media. If you are author or expert who creates an online courses and it becomes a best seller like harry potter,just one day represent your entire earning and change your financial for better or worst.by the way you don’t have to be there to perform – and even dead your stuffs continue to sell. Now here is where lies the major problem: The procrustean bed of pseudo experts,entrepreneurs,aspiring entrepreurs and investors- in this era is- they are most likely of  conflating absence of evidence for evidence of absence.Just a turkey who is fed for 1000 days by the butcher and two days before thanks giving is surprised to become a dead meat.    --- In Business life,take most recent world membership successful and renown sites compete.com -which by the way was an Online Competitive Intelligence specialised in a web traffic analysis service – guess what compete.com went bust by december 2016- main reason,there became turkey by falling victim observing continuos of profits and benefits from when variation were compressed and before they realised that – they were sitting on tons of dynamite. This is by the way the consequence of infering from the observable.    What about most online busineeses outhere who are victim of self deception and hide it to themselves?   How many membership site do you have outhere?         By the way trades and industries are at their best when they are not yet generally understood to be profitable. When seen by all so, they fall off; because many from resorting to them, the competition prevents them from being any longer lucrative. In all things, it profits to be up bedtimes We should look to substance, not to appearance and surface of things. Yet it is incredible how much favour smooth words will bring you among men. The reason I believe to be that is everyone seems to deserve more than is really his due, and in consequence is vexed – if he sees you do not value him as he things he merits.    Here are the three big away of my thoughts 1 – We are wired to favour the visble,the tangible,the well narrated,storiesand anecdotes and we scorn the abstract,the opaque,the unknown and this the reason why optionalityprofits have been created to  2 – Most pseudo experts outhere are most likely to mistake absence of evidence for evidence of absence in another mistaking the extremistan for mediocristan. 3- What matter in is not how long successeful or unsuccessful you have been – but the magnitude or the cumulative of the rare. 4- Under complexity,the legal and the ethic don’t macth anymore and a lot of aspiring achievers are victmed for pseudo experts and con artsist are they to take advantage of you.Beware.This is the reason optionatlty profit is in cration to          

In this episode, Marc interviews Taylor Pearson, entrepreneur, and author of The End of Jobs: Money, Meaning and Freedom Without the 9-to-5. Inc. Magazine just rated The End of Jobs as one of the Top Three ‘Start Your Own Business’ books of 2015, and a ‘Top 25 Business Book’ of 2015. It has sold tens of thousands of copies, and it has been translated into Chinese (simple and complex), Japanese, Korean, and Thai. A Wall Street Journal bestselling author and entrepreneur James Altucher, said of it, “Entrepreneurship is not a choice you can make at your leisure. You have to jump on the train, or lose your chance. Now is the time, and Taylor’s book describes exactly how to do it.” His work has been featured in media outlets, including Business Insider, Inc., and Entrepreneur. A former Brazilian Super Bowl Champion (It’s not what you think!), Taylor has lived in Tennessee, Alabama, Argentina, Brazil, Viet Nam, Thailand, San Diego, Texas, and currently, in New York. Marc and Taylor discuss how Taylor wrote an important book on online entrepreneurism, what he means by the end of jobs, and how your job will change. They discuss the vital importance of learning new skills — not by paying for them, but by earning them through experience. New skills bring new earning opportunities, and new markets to grow for your future.   Key Takeaways: [2:40] Taylor is from Memphis, Tenn. He attended a small college in Birmingham Ala., studying History and Spanish. He worked as a medical interpreter, and taught English in Brazil. He started listening to podcasts on entrepreneurship, and online businesses. He returned to Memphis, and started working at an online marketing agency. [4:00] At the agency, he did SEO and project management, managing fulfillment and clients. He moved to manage an e-commerce organization in San Diego, working with a web marketing team based in Southeast Asia. He moved there, to run the team. The owner also ran a community for online entrepreneurs. This was a new exposure for him. [5:40] Taylor published The End of Jobs about the new life script the Internet enabled. He borrowed the title from, "The End of History?" a 1989 essay by Francis Fukuyama, who proposed there were no remaining viable competitors to liberal democracy. Taylor proposes the institution of traditional jobs will end, much as communism will end. [7:48] Taylor had attended a conference of the community of entrepreneurs, held in Bangkok, Thailand. At a breakfast, the discussion was how to explain the new career path of online international entrepreneurism. Taylor moved the conversation into a book intended for Millennials. He is pleased to learn that Baby Boomers take to it as well. [9:34] Marc is working with a client now, looking for a problem for him to solve. The goal is to start a business. Some Boomers are, of necessity, entrepreneurs, with too little saved to retire, and no job offers. Two thirds of all small businesses are owned by Baby Boomers, and they’re ready to sell but not to retire. So, they start a new business. [11:16] Taylor’s book cites three reasons he believes we are at peak jobs: communications technology, the rise of machines, and the abundance of credentialization. As an example of tech, this podcast is held over free Skype, recorded inexpensively, and will be uploaded for anyone in the world to hear. Compare to radio. [12:34] There have been huge decreases in cost to talking with people around the world, creating global access to the labor market. Companies no longer need to hire locally. All that’s required is an Internet connection. Vietnamese programmers fluent in English are excited to work for $1K a month. Their grandparents worked in rice paddies. [15:11] We underestimate how quickly jobs are being outsourced or automated. Not only manufacturing jobs, but now knowledge work is being performed by AI. An AT&T study in the early 80’s proposed 100 thousand cell phone users in 2000, not the 100 million that really used cell phones in 2000. [17:58] We’ve stopped thinking of higher education as an investment, and started thinking of it as a must-have. But, for two decades, the salary value of the degree has been going down across every industry, while the cost of it has been going up. The lines have crossed for a lot of professions, such as JDs and MBAs. [20:33] Taylor discusses the concepts of Mediocristan, and Extremistan. Most people heightwise, financially, etc., live in Mediocristan. Outliers — the very short, the very tall, the very poor, the very wealthy — live in Extremistan. Most people work in Mediocristan, they don’t improve skills, don’t work on side projects, and get laid off — and it’s too late. [24:43] Costs and risks to entrepreneurism are much, much lower than they were five years ago. Playing it safe is the new risky. Taylor talks about stair-stepping to entrepreneurship. Chinese companies will take purchase orders for $5K, if you want to sell physical products. Start to experiment, and learn inexpensively. [27:13] Taylor talks about Rob Walling, who was in a C-level position at a construction company, and started side projects, like an ebook with plans for a duck boat. That taught him about SEO, Wordpress, and managing customer support. The more he learned, the bigger his ideas, and using cash flow, he bought a software firm and more.   Mentioned in This Episode: Careerpivot.com Contact Marc, and ask questions at: Careerpivot.com/contact-me Email: Taylor@TaylorPearson.me Website: TaylorPearson.me Twitter: @TaylorPearsonMe The End of Jobs: Money, Meaning and Freedom Without the 9-to-5, by Taylor Pearson The 100-Year Life: Living and Working in an Age of Longevity, by Lynda Gratton and Andrew Scott Will It Fly? How to Test Your Next Business Idea So You Don't Waste Your Time and Money, by Pat Flynn For other episodes in the Experts Series, listen to Episode 2, Episode 6, and Episode 10.   Please take a moment — go to iTunes, Stitcher, or Google Play. Give this podcast a review and subscribe! If you’re not sure how to leave a review, please go to CareerPivot.com/review, and read the detailed instructions there.

    Hi and welcome dear friends Jerome here    How to become multimillionaire in seven steps   Scandal of Prediction Take a look at this finding from of Dunn and Bradstreet: “Of the small Businesses that fail 90% do so because of lack of skill and knowledge on the part of the owner". ---Well it raises the sound question; is Business building, investing all about what we know or what we don't know?     Further to really understand successes and analyse what caused them. We need to study the traits in failures     Consider the following experiment borrowed from the world renowned professional statistician Nassim Taleb:” Numerous studies of millionaires aimed at figuring out the skills required for hotshotness follow the following methodology. They take a population of hotshots, those with big titles and big jobs, and study their attributes. They look at what those big guns have in common: courage, risk taking, optimism, and so on, and infer that these traits, most notably risk taking, help you to become successful. You would also probably get the same impression if you read CEOs' ghost-written autobiographies or attended their presentations to fawning MBA students. Now take a look at the cemetery. It is quite difficult to do so because people who fail do not seem to write memoirs, and, if they did, those business publishers I know would not even consider giving them the courtesy of a returned phone call (as to returned e-mail, fuhgedit). Readers would not pay $26.95 for a story of failure, even if you convinced them that it had more useful tricks than a story of success.* The entire notion of biography is grounded in the arbitrary ascription of a causal relation between specified traits and subsequent events. Now consider the cemetery. The graveyard of bankrupt failed persons will be full of people who shared the following traits: courage, risk taking, optimism, et cetera. Just like the population of millionaires. There may be some differences in skills, but what truly separates the two is for the most part a single factor: luck. Plain luck.          Why luck? Well because the large share of the successful winner is tie to matters that lie outside the winner himself- namely extrinsic attributes such as (social contagion, cumulative advantage, information cascade, collaboration), by the way I am not saying it’s all about Luck- skill are necessary and a lot people have a lot skills and few succeed wildly. So to succeed wildly, you need necessary skills and a lot of luck.           Why is luck invisible to us? Well because we humans have a propensity to analyse and explain success by focusing on the piece itself or the person himself and we forget the cemetery of silent evidence of losers or bankrupt people who have the same intrinsic attributes.   You do not need a lot of thought of experiment to figure this out. A simple thought experiment suffices to debunk the fallacy of scandal of prediction that pervade out there.      Let say we collect randomly or an assorted population (in term of less skill and highly skill ex ante ) of 1000 publishers then universal (writers, thinkers, Business owners, Investors etc.…) – and every year you fire the half of them who are losers, leaving the winners and thus end up with long-term steady winners. Since you do not observe the cemetery. Keep in the mind that it is a random thought experiment, after and year 5 you have roughly 31 spurious Multimillionaire winners – just by luck. Of course an explanation will be readily provided for the success of the lucky survivors “He works between 80 to 100 hours a week”, “He has passion for what he does” or “He takes a lot of risks” and so forth .Yes with By the mechanism of retrospective determinism we will find the “cause"—actually, we need to see the cause and the most surprising part is that we completely forget that it was random.      Well after the facts we always fit back explanation to random data. Be careful I am assuming this in a random world In the world that is not random, it doesn’t change to much the number of Multimillionaire. All this to say we are more likely to look back at the traits of those who have survive or the Rosier part. We are not looking at the cemetery of flops who have the same attributes that did lead not to success.          Yes we human have an inability to prospectively predict before the facts-and a strong propensity the ability to retrospectively predict after the facts. Which gives us the illusion of understanding success and therefore to be able to predict the next one, hence Steve Jobs quote “again you cannot connect the dots looking forward, you can only connect them looking backward; so you have to trust that the dots will connect somehow in the future- stay hungry, stay foolish” What I am talking about here is hindsight bias derive from the confirmation bias and use as foresight. Yes we tend to focus on what we know and we scorn what we don’t know- namely the unknown (except our enemy focus on what we don’t know), whereas the really value of a Library lies in the books you haven’t read than the ones you have read. The former is fragile, the later robust. And vastly important: above and beyond all the ability to Know, how you want to know what you don't know and are in the hurry to find out are the most crucial ingredient. By the way we think we understand is heavenly mark with psychological narrative and the confirmation bias        Seemingly most entrepreneurs, start up starters, discoverers - venture Capitalists, decision makers and those who advise them: executives, senior management, public administrators, management consultants, organizational development professionals and business educators. still act today upon a straight jacket plan- hence devoid to optionality. Most of them miss the point that the essence of research or investment lies in the Unknown unknowns.          By the way as I suspect the most successful businesses are precisely those that know how work around inherent unpredictability and ultimately even exploit it          As Dave McClure defined a start up as a company that is confused about 1) what its product is, 2) who its customers are, and 3) how to make money. As soon as it figures out all 3 things, it ceases to be a startup and then becomes a real business. Hence we have the aspect of randomness (uncertainty) link to any business to begin with.         This is what the legendary successful screen writer William Goldman shouted "Nobody knows anything" in relation to prediction. You may scratch your head and ask yourself how come could he be so successful? Well He knew that he could not predict individual events, but he was well aware that the unpredictable, namely a movie turning into a blockbuster, would benefit him immensely.          Moreover we human inhabit simultaneously two worlds, namely the Mediocristan and the Extremistan - The Mediocristan is characterised by the collection of the regular that count, Example: Frequent daily sales; The Extremistan is characterised by the Outlier or Exception(s) that dominate Example: Infrequent Huge sales.           Now the procrustean bed of modernity is squeezing the Extremistan (nonlinear) into Mediocristan world. This where comes the tragedy of most consultants- Business owners, investors, entrepreneurs and decisions makers. Yes we are fooled by randomness- because we tend to mistake the random with the non-random than the other way round - meaning we tend to see pattern where there is none, than to miss on the pattern. Prediction not narration is the real test of understanding the world. In this time of change, one day among the learner is than longer than the longest life of an ignorant. Who still lives after his life has been completed. By the way reason is not satisfied with obvious facts, its higher and nobler functions is to deal with hidden facts – hidden facts need prove. Three big ideas to take away To switch from predictive methods to non-predictive methods To stop trying to understand the world and focus on Robustness by avoiding some fragility To Shift from trying to understand the future to focus the present which is measurable if you have proper rule to assure absence of fragility and the only thing you have to worry about is random event. Here in optionality Profits, we help decisions makers, entrepreneurs, consultants, investors- how to make decision under incomplete information, incomplete understanding and how build a system that is robust to the unexpected and even benefits from it and more important how to create organizations that use volatility, variability, stress and disorder as information for making better decisions. You are a Dent maker (The creative spirits. The underdogs. The resolute. The determined. The indefatigable. The defiant. The outsiders. The independent thinkers. The sophisticated. The Convexed.The fighters. The true believers. Above all Risk loving).    I love friends to read your posted comments so we get to know better. PLEASE SUBSCRIBE at https://www.optionalityprofits.com/p/tres-bien for this daily episode and tour dates.                 

Nassim Taleb talks about the challenges of coping with uncertainty, predicting events, and understanding history. This wide-ranging conversation looks at investment, health, history and other areas where data play a key role. Taleb, the author of Fooled By Randomness and The Black Swan, imagines two countries, Mediocristan and Extremistan where the ability to understand the past and predict the future is radically different. Taleb's contention is that we often bring our intuition from Mediocristan for the events of Extremistan, leading us to error. The result is a tendency to be blind-sided by the unexpected.

Nassim Taleb talks about the challenges of coping with uncertainty, predicting events, and understanding history. This wide-ranging conversation looks at investment, health, history and other areas where data play a key role. Taleb, the author of Fooled By Randomness and The Black Swan, imagines two countries, Mediocristan and Extremistan where the ability to understand the past and predict the future is radically different. Taleb's contention is that we often bring our intuition from Mediocristan for the events of Extremistan, leading us to error. The result is a tendency to be blind-sided by the unexpected.