Category Archives: Theories

some totally random Rules for Life (2019)

ABC: Always Be Charging
Whenever you have a chance to charge your devices (phone, laptop, etc), always do it. You never know when you will lack access to reliable power.

Always Be Reading Long-form
Read at least 7 hours a week of long-form. Read books. But also read well-written articles longer than 3 pages. Save time to go down reading rabbit holes. Feel free to cut out short-form reading (like clickbait articles) to make time for long-form. The airplane is a fantastic place to read.

Always Go to the Bathroom
Whenever you have a chance to go to the bathroom, take it. Never “hold it in.” Just makes you very uncomfortable and unproductive.

Always Be Listening Long-Form
We are in a podcast revolution — take advantage of it. You also can get many books (but unfortunately only 20% of good books) on audio.

Always Love Email
Email is the best form of communication ever invented. All new communications methods in the last 20 years are inferior to email. Email is the greatest asynchronous communication tool. For synchronous communication: meet in-person, by live video, or talk on the phone. Slack and Facebook Messenger can be productivity killers.

Always be Writing
Try to write something over 500 words a few times per week … even if the only person who reads it is yourself. This will help you collect your thoughts.

Sometimes Change your Mind
At least once a year, challenge yourself to change your mind about a deeply held belief (business, family, political, societal, etc.).

self-driving cars will cause the Rich to Get Even RICHER

When self-driving cars come (and I’m skeptical they will come in mass in the next 20 years … but that is for another post), everyone’s commute will be much faster. That is because cars will be able to coordinate with each other and rarely need to go below 80 miles/hour on highways (even during the busiest of times).

But once self-driving cars happen, the next thing is to allow cars to pay up to go EVEN faster. There is no reason a car can’t go 160 miles per hour and get you there in half the time.

Cars that don’t pay up for the privilege will be forced to yield to cars that do. Essentially expect to see surge pricing to get to places faster.

Would you pay an extra $100 to get from San Francisco to Los Angeles in 100 minutes by car? An extra $300?

Note: I’ve been thinking a LOT about transportation recently because of all the transportation-related companies that use SafeGraph Places.

Summation: while self-driving cars will be good for everyone, they will be GREAT for people with lots of money (especially in capitalist societies like the U.S. and China).

Waymo self-driving car

What-You-Know now beats Who-You-Know

What-You-Knows ascends past Who-You-Knows

The old adage that “it’s not what-you-know but who-you-know” is so entrenched that we don’t question the premise. Undoubtedly, who-you-know has been important throughout history, whether in the trade networks of ancient Greece, or in the dense web of high tech companies in Silicon Valley. A good network is especially important when capital is scarce, information hoarded, and when finding the appropriate contacts is difficult. For much of history, knowing the right people was crucial if you wanted cash and cache.

By definition: a “What-You-Know” knows a lot about a certain thing. They possess a lot of knowledge, insight, and research. They usually spend a lot of time reading broadly and interacting with a few dozen select people (strong ties).

A “Who-You-Know” generally has a very large network of weak ties. The ultimate who-you-knows make money by being in a profession that introduce two what-you-knows together and taking a vig. In the 1980s, the professions with the highest prestige were the what-you-know professions (like investment banker, corporate lawyer, real estate agent, wealth manager, etc.).

Because the who-you-knows were constantly talking to smart what-you-knows, the who-you-knows ACTUALLY BECOME what-you-knows because they had access to a ton of proprietary knowledge.

Think back to the 1980s … there were no blogs and there were a very small number of news sources. Information was really hoarded and having a deep network was one of the best ways to get access to interesting and unique knowledge.

But something happened in the last 10 years … it is easier to find people, connect with them, learn new things, and get access to capital. So the what-you-know has been ascendant.

Finding people is easier.  So is connecting with them.

Tools such as LinkedIn and Google, democratize the ability to network. If before it was difficult to ferret out the perfect contact, today finding a right marine biologist in New Zealand or the genetic researcher in Norway is as easy as a Google search. And social media has made it even easier to connect with that person.  

Access to capital is much easier.

Today, capital is relatively plentiful and accessible. In fact, it is the easiest time in history to get capital. That does not mean getting capital is “easy” — it certainly is still really hard. But it is significantly easier than in the 1980s (and the 1980s were easier than the 1880s). It is also much easier than ever to get access to people who have money (accessing capital can be as easy as sending an email). 

Access to information is easier.

Information, too, has been democratized. It used to be that if you wanted to get access to cutting-edge ideas in technology, you needed an invitation to an exclusive conference like TED … or to attend a university like MIT. Today, TED lectures and MIT courses are offered free online. The only barrier to most of the world’s best information is knowing English (and even that is changing).  Some of the best information is available on blogs.

As an aside, I count myself extremely lucky to be friends with Tyler Cowen (who is truly a wondrous person). But if I knew someone like that in the 1980s, I might have 95% advantage (in getting interesting information) than people that did not know him. Today, anyone can read Tyler’s blog (which I highly recommend you do). It is chock-full of information. My information advantage in knowing Tyler may only be 15% more than those that do not. That is a huge change in a short time.

Given our hyper-connected world, could it be that “who you know,” while still important, matters a little less than in the past? Could it be that “what you know” carries more weight? The answer to both questions is undeniably “yes.”

My intuition is that “what you know” has now crossed the line to be more important … and possibly even MUCH MORE important … than “who you know.” Like Kurt Vonnegut said in Breakfast for Champions; “new knowledge is the most valuable commodity on earth. The more truth we have to work with, the richer we become.” 

In today’s world, if you know something really compelling, you will be sought out … and sought out directly. In the past, the people with connections were gatekeepers who controlled access to the elite circle and got paid handsomely for that. Today, people that invent interesting things (the true What-You-Know people) will reap many more rewards than the brokers who make introductions.  

Even the traditional who-you-know professions such as banking and law are becoming more specialized.  The lawyer that understands the intricate tax implications of U.S.-Brazil joint ventures is now much more valuable than the generalist lawyer that introduces you to that person.   

Today the professions most prized are the what-you-knows. The inventors, hedge fund managers, etc. One hundred years ago, most inventors would capture only a small portion of their intellectual property. Most of it would be taken by the who-you-knows.

All this does not mean that your network isn’t important. Of course it is. Who-you-know is still incredibly useful. But it will just be less important than it has been in the past.  Even the Wizard of Oz was looking to network: just before he leaves the Emerald City he tells Dorothy that he is off “to confer, converse and otherwise hobnob with my brother wizards.”

Summation: In the new world of abundant capital, easy access to information and people with knowledge, the what-you-know skills are more important than those of the who-you-know.

This is drawn from my original 2012 post in Summation and my  2014 post on Quora.

If you like this, follow Auren on Twitter.

People are Highly Susceptible to Suggestion

Your decisions are easily primed by random factors

People are influenced by the strangest things and sometimes we make decisions because of random bias. We should be aware of our bias and how our opinions and actions can be shaped by priming.

Jonah Berger, Assistant Professor of Marketing at the Wharton School of Business, conducted a terrific study where he demonstrates that where people vote affects how they vote. Essentially, people whose voting booth is located in a church are more likely to put more weight into social issues, people voting in fire houses care more about safety, and people voting in a school tend to put more weight on things like education.

Can you believe that where you vote affects how you vote?

People are easily primed by the simplest thing, like their name. University of Buffalo’s Associate Professor and Psychologist Brett Pelham conducted a groundbreaking study that some of the biggest decisions of our life – where we live, what we do, and who we marry – are influenced by our first name. The book The Happiness Hypothesis by Jonathan Haidt explains further:

Men named Lawrence and women named Laurie are more likely to become lawyers. Louis and Louise are more likely to move to Louisiana or St. Louis, and George and Georgina are more likely to move to Georgia.

My guess is that people with the last name of Clinton, Kennedy, and Bush (all relatively common last names) tend to have a more favorable opinion of the Presidents sharing the same last name than the rest of the population.

People can also start acting a certain way because other people expect them too. Berger has other studies which suggest people are more likely to conform to a stereotype of them because that stereotype exists.

In psychology, these actions are known as priming. And we humans are primed often. As advanced decision makers, we need to make sure we are making important decisions for the right reasons and not just because of being primed. Deciding to see a Dustin Hoffman movie just because we have the same last name is no big deal. But if I wanted to switch professions and become an actor because of my name, it might be a good idea to really understand why.

This is another reason why your “gut” isn’t always right. A gut reaction is generally a collection of biases and can be easily primed. While it can be right (the brain can often analyze information implicitly faster than it can explicitly), it can also be dangerously wrong. It would be a really bad idea to hire someone to watch over your child just because you got a “good feeling” about the person.

Your gut might be much better at telling you what not to do than giving you good direction on what to do. If your gut tells you something is wrong with someone, than you probably do not want to entrust your kid with her. But a positive gut-check often does little good (at least for me). When thinking about how this affects hiring, our goal at Rapleaf is to attempt to remove primed biases from hiring decisions. While you’ll never be able to remove all bias, removing just a few of them can give you a dramatically large advantage over a competitor. Malcolm Gladwell has a great anecdote about this in Blink where a metropolitan symphony decides to change its hiring by listening to someone play (person was behind a screen) rather than seeing them play. It turned out that the symphony in question massively increased the number of women they hired when they stopped watching people play and instead just listened to them. And, of course, the quality of the music got much better too.

So the next time you are voting in an elementary school, think twice to yourself if we really need this new school bond.

economic lesons of premium airline status

If you have premium status, you get better seats with more legroom.  But those seats are the most coveted so you’ll almost certainly be sitting next to an occupied middle seat.   But if you don’t have status you get worse seats (usuall near the back of the plane), but you have a better chance of not having to sit next to someone.  

Bad coach seats with an empty middle seat is BETTER THAN a good seat with a full middle seat.   So depending on when you are flying, you have to make a decision about how full the plane will be as you choose where you’d like to sit.

How to Disagree and always shooting the messenger

I love reading Paul Graham … I’ve read pretty much
everything he has written and while I don’t always agree, I always come away
from his articles with a new thought. In fact, I think he has most insightful blog/column out there.

 
Graham writes a new one entitled How to Disagree:

http://www.paulgraham.com/disagree.html


this is well worth reading. Many people have trouble disagreeing and the most common way to
discredit an argument is to go after the messenger. Graham points out this is a really a poor
argument as to why the messenger’s point is bad.

but most humans give too much weight to the messenger and not
enough weight to the message. That
makes sense from a purely evolutionary point of view. If Stephen Hawking says something about
physics, you might want to listen. But
if Britney Spears starts discussing string theory, you might think she’s talking
about bikinis and not theoretical physics. This reasoning works most of the time as usually Hawking has interesting
things to say about science and Spears is known for other talents.


But in politics and business, not listening to the messenger
can lead to very bad decisions. Giving
a little more weight to a new opinion of someone you like over those that you
dislike makes sense. But a good
decision maker should only weigh the messenger a little and focus much more on
dissecting the message. The boy who
cries wolf might be right sometime … you shouldn’t just reject the message out
of hand.