I’m a big fan of Disney just on the fact that they’ve been able to sell something intangible; the perfect family experience. What will parents pay for a safe and fun weekend with their children? It’s priceless.
Disney deeply understands this and has built a product/service that completely nails it. My friend Ken, who has 3 kids, once told me – “It might be more expensive, but you can’t go wrong.”
One way they are able to achieve this is by focusing on components that nearly everyone overlooks. These are details that the majority of people think “wouldn’t matter.” Steve Jobs is also famous for this when it comes to his design techniques. Based on his biography, he learned at a young age the importance of making every part to a product perfect, even the parts nobody ever sees.
So what minor detail did Walt Disney want to focus on for his theme park? Trash Cans. Boring old waste.
He focused on three questions:
How many cans are needed?
Can they be designed better?
Do they have to be ugly?
1. Walt did research on how far apart trash cans needed to be. In other words, how far will the average person walk to throw out waste? To test this he decided to remove every trash can and wait to observe where litter would accumulate. He found that 30 feet was the magic number and by letting people throw trash on the ground, he was able to better decide where to place bins. Brilliant.
2. Trash cans in the 1950’s were boringly standard. They looked a lot like the cans on Sesame Street; silver with a removable lid. Walt wanted to make them easier to use for guests. In a stroke of genius, he redesigned them to have swinging doors which solved two problems. Not only would these save time to use, but the new design would better contain the smell.
3. Why do trash cans need to be so ugly and do they need to look the same? Those were questions the Disney team arrived at once they finally figured out where and how to place the bins. Instead of keeping them silver (which would definitely stick out), they decided to turn them into art. Cans were decorated to perfectly match each respective theme of the park. What used to be viewed as gross was now added to the fun.
By focusing on garbage and employing extra workers to change trash more regularly, Walt was able to accomplish a key feat; guaranteed cleanliness. While other parks might be able to provide fun, families going to Disney would never need to worry about stepping in gum or walking around empty soda bottles.
Which brings to the ultimate point and business proposition of the park; Disney packages an unparalleled experience considering every detail.
Or as Ken puts it, “you can’t go wrong.”
What are your trash cans?
In business, what are features that competitors don’t care about? How can you use that to your advantage?
In life, what are habits that most people overlook? What’s something small that you can easily achieve that will help you improve the most?
Figuring this out is the hardest part, but once you decide, it becomes much easier. The more rare and unique the attribute, the better the return will be compared to the average.
The lesson on garbage is actually a principle; small details transform outcomes. Be thoughtful and design for what can make a difference.
Warren Buffet has an interesting principal he follows.
At the end of each year, a company gets to decide what to do with their earnings. Some companies issue a portion of the money to their shareholders; this is called a dividend. Most investors love it, in fact some design their portfolios to exclusively invest in companies that provide annual dividends. Warren on the other hand? He HATES investing in these companies.
Why? When you receive a dividend, you realize gains, which means you have to pay taxes each year.
Warren would rather the money was reinvested into the business to help it grow.
First off, this allows him to avoid taxes for as long as he can. But if we remember the rules of compounding, it allows his money to stay in the system and work even harder. Warren wants to be taxed only once, at the very end when the journey is over, not throughout.
But once your money is in, we want to optimize towards growth – this means paying as little as possible.
“The objective is to buy a non-dividend-paying stock that compounds for 30 years at 15% a year and pay only a single tax at the end of the period. After taxes this works out to a 13.4% annual rate of return.
Charlie Munger, 1998
If you invested $10,000 with Warren Buffett, at his annual rate of return of 23%, the following chart shows you the amount you’d have in 30 years, based off if you paid taxes each year versus allowed the money to keep compounding.
Assumes 23% compounding annual rate, blue line allows money to compound, red line removes taxes at 35% rate each year It’s worth noting that these are extremely high rates of return, and the average investor can expect to get closer to 8% ARR
Breaks vs BRAKES
Breaks are healthy – they allow us to recover and admire our results.
Trouble comes when we allow a short break to turn into hitting the brakes (that is, stopping completely).
Here’s what what I mean:
Health – When we feel physically in shape, we decide to stop exercising – a few days becomes a few weeks
Learning – When we believe we’ve mastered enough, we decide to stop learning – binge reading becomes binge television
Relationships – When we sense our connections are strong, we decide to stop building them – personal texting becomes singular social media posting
Warren’s principal reminds us of the power of pausing too often or for too long.
Once you stop showing up, you stop gaining.
Keep It Going
You’ve decided to start (that’s great!), but don’t underestimate the importance of continued hustle. The laws of compounding don’t care if you’ve had a bad day, or it’s a busy week.
When we decide to follow through, we continue to gain, period.
So wherever you are, keep it up, and just like Warren you too will enjoy the aggregation, not of a single year, but an exponential 30 years.
Getting up when others won’t is what makes all the difference.
And who knows, that determination might be worth an extra $2.8M dollars, in whichever domain you’re compounding.
There’s a divide on the horizon, and it’s unlike ones we’ve seen in the past.
When we use the word “divide” to describe a phenomenon, it usually refers to access; one group of people has access to a resource, while a second group does not. We’ve seen this around the world with clean water, education, and nutritious foods. If you happen to be born in a country that doesn’t have one of these resources (or a limited supply of one), you’re at a disadvantage and there’s not much you can do about it – tough luck.
But today we’re looking at a different divide, one which I believe will be synonymous with the 21st century. It has to do with access, but in a completely new way.
I call it, “The Next Divide” and it’s a digital one.
Chapter 1:Active vs Passive
Are you using your phone, or is your phone using you?
We live in an amazing time. Your phone can retrieve endless quantities of entertainment, social connection and knowledge.
Consider for a moment that you’re able to travel back in time to 1980. You encounter your 1980’s doppelgänger self and you do your best to explain smartphones in 2019.
Let’s face it, we tend to spend a large portion of our time surfing our phones without meaningful intent. This isn’t completely our fault, it more has to do with the implicit relationship between you and your phone.
While your phone offers you endless possibilities, it comes at a cost. Instead of money, most apps demand something else: your time and attention.
New-age business models
Internet companies (and many smartphone apps) make money by keeping you on their products longer. They do this by monetizing their products through online advertising, which directly correlates with engagement and time spent on their website. The more they know about you, the better they can convert your data into cash.
Question: What happens when our most valuable businesses operate in this way?
Answer: Our most brilliant data scientists and software engineers are being taken from every other industry to work on the same objective: keep you online longer.
According to Tristan Harris, a “design ethicist,” the problem isn’t that people lack willpower; it’s that “there are a thousand people on the other side of the screen whose job it is to break down the self-regulation you have.”
While you’re scrolling through Instagram, there are thousands of MIT, Harvard, and Berkley engineers running multivariate tests, all to determine the best way to break down your self-control and keep you on their app longer.
Personally, I find myself being used, all the time.
Last week, I decided to open Instagram to see what my friends were up to. My intention was to scroll for 5 or 10 minutes, but 30 minutes later I caught myself mindlessly watching puppy video clips. The power dynamic shifted because I was no longer making the choices.
For the first five minutes, I was in control of the content, but soon after Instagram took over by deciding what to put in front of me. Facebook had been battling for control over my attention, and it had won.
Digital and online for that matter, isn’t a story of all negatives, there are positives too:
When I was 18 I received a guitar as a gift. Before then my involvement in playing instruments was limited, however learning guitar was a cool aspiration I’d always had. Unlike generations before me, I shrugged off formal training, and instead took to YouTube for lessons.
Between the hundreds of videos and endless practicing, I learned how to play guitar and still do today. Sure, that took discipline; I played for at least an hour everyday after school, but there were far less distractions back then.
This is just one small example; there are millions of people who have elevated their musical ability through the type of lessons the internet can provide. If you take a step back and consider this idea, you’ll recognize that people are applying it to all areas of expertise (ie: coding, art, history, the list goes on).
So ask yourself, who really has the power in your tech relationship? And further, are are you trading your asset (time and attention) at a positive return? Or perhaps the technology has the upper-hand?
Summary: The 21st Century has created a new tier of human potential, but the question is…
Chapter 2:Which Group Are You In?
While technology is accelerating our ability to achieve amazing intellectual, creative and productive feats, it’s ability to distract us is accelerating at an equal clip. You can’t go a day without being inspired, yet so distracted at the same time. It’s these conditions that make the digital divide possible.
Sometimes success is 3% brains and 97% not getting distracted by the internet.
Shane Parrish
The digital divide will create two groups:
Group 1 is able to control their focus and leverage technology to improve themselves, and moreover, reach greater potential.
[Technology] is a great way to automate a habit. You can save for retirement with an automatic deduction from your paycheck. You can curtail social media browsing with a website blocker.
Technology can transform actions that were once hard, annoying, and complicated into behaviors that are easy, painless, and simple.
It is the most reliable and effective way to guarantee the right behavior.
James Clear
Meanwhile, Group 2 is trading their time for mindless surfing. Their behavior is not only distracting themselves from the world around them, but it’s also causing them to achieve less.
And technology can rewire our brains.
The Sleeping Scientist
We each have a little scientist named Hank, who manages a lab within our brain. It’s Hank’s job to control your focus, and he does this by balancing your distraction liquid 24 hours a day, 7 days a week.
There’s a constant replenishment of distraction at all times; your thoughts wander as new stimuli enter and exit your external environment.
Some people are born with more liquid than normal, others develop habits which increase their exposure over time. Ultimately, you train your Hank to manage his beakers in the best way possible. My personal favorite strategy is meditation.
But the crux of the problem is that digital applications are training your Hank to be irresponsible. Have you ever sat down to work on something, only to find yourself distracted 10 minutes later? What about open your phone to do something, and then completely forget?
That’s your Hank falling asleep in the lab, and when Hank doesn’t pay attention, he causes leaks and spills.
Here’s what distraction looks like:
Small naps lead to extreme compounding. . One laboratory spill leads to a broken beaker, which leads to less liquid control in the future. Lab explosions move from a rarity to a constant affair in your head.
So over a short period (1-2weeks), the difference is marginal. However as the time series extends further, the differences become insurmountable.
I’ve written about the power of compounding many times; Albert Einstein dubbed it as one of the greatest wonders of the universe. Talk about a bold statement, especially from a man who revolutionized modern day physics (and astronomy).
Summary: Whether you’re in Group 1 or Group 2, will become a life-changing characteristic.
Over the next ten years, this macro trend will lead to enormously disparate outcomes. Great or terrible, it all depends on which group you fall into.
Chapter 3: The AI Revolution
We’ve now established that access (per the traditional sense) isn’t the problem; each group can connect to the internet at relatively similar speeds. Instead this divide focuses on the way in which people leverage the internet (use the resource).
Enter Artificial Intelligence, aka: the great accelerator.
AI is a comprehensive subject, so I’m going to over-simplify a bit here. If afterwards readers have greater interest in the mechanics, I can write up a separate blog post. But for now, let’s just say there have been some major advancements in the field.
Once of the largest breakthroughs is around this idea called deep learning.
Previously you could only train a computer to follow a set of rules (or simple algorithms). You would tell a machine that if it hears the phrase, “Knock, Knock” it needs to answer, “Who’s there?” Any variations from “Knock, Knock” and the computer not be able to respond.
Now, with deep learning, we can give the computer a massive set of data (in this case jokes) and train it to learn humor. Scientists watch it learn in real time and correct it whenever it makes a mistake. After lots of data and repetition, it eventually “learns” the idea.
Mechanically the computer forms connections just like how our brains do. These are called neural networks, and to get a better visualization of how these systems work, you can check out the Tensorflow Playground.
What does this mean for the Digital Divide?
AI is (already) learning your behaviors, tailoring content, and therefore be able to break you down significantly further.
Remember those thousands of MIT graduates running multi-variate tests? Now imagine if they programmed a super-computer with more power and genius level pattern recognition. They will now discover things about you that were unfathomable with humans experimenting alone.
Summary: AI is forming a massive crater in the ground, and it is going to push the two groups further apart.
It will be on us to make sure there are enough formidable bridges to provide opportunity for those stuck on one side, however more likely than not, AI Valley will destroy your hopes of crossing… if you wait too long.
Conclusion: Big Distractions or Big Dreams?
I believe these gaps will be filled over time, but it’s going to take time and large innovations in technology.
Right now companies are making money off of your time and attention, so there’s no incentive to turn a passive person into a more active person. Yet, if we want to grow to our total potential, we need to flip the script and change the way we use our attention ourselves.
Which side of the digital divide will you be on?
The earlier you decide, the more you’ll gain.
“Don’t be on your deathbed someday, having squandered your one chance at life, full of regret because you pursued little distractions instead of big dreams.”
Last week Jack Bogle passed away. A true financial great, Jack made some of the most pivotal contributions to finance and investing throughout his career. Don’t just take my word for it, even other legends agree:
“If a statue is ever erected to honor the person who has done the most for American investors, the hands down choice should be Jack Bogle.
In his early years, Jack was frequently mocked by the investment-management industry.
Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.”
In this writeup, I outline my favorite Jack Bogle lessons, all of them have applications outside of money management and may be applied in wider ways across your life. The quotes within are taken from, “The Bogleheads’ Guide to Investing“
Compounding Interest
The best gains in life grow in a compounding fashion; returns continue to grow on top of prior returns. The amounts your money can earn in Year 1 will be far smaller than year 2, year 3 or year 5.
A comparison of two investment accounts. The first starts with $10 and grows by $1 everyday. The second starts with 1 penny and doubles everyday. The penny will be worth more by day 13, and by day 16 (shown above) the compounding account will be worth 13x that of the linear one.
“It may not seem like a big deal, until you realize that every time the money doubles, it becomes 4, then 8, then 16 times your original investment.
Start with one penny and double it every day, on the thirtieth day it compounds to $5,338,709.12.”
LESSON: Most people search for linear gains. Instead, set your pursuits on investments that can yield compounding results.
If your young, your greatest advantage is starting earlier than your competition. “The best time to plant a tree is twenty years ago. The second best time is now.” The old proverb goes. At face-value, a few years doesn’t sound like much, until you account for compounding interest.
If you contribute $1,000 each year into an investment account, which compounds at 7% each year, above is the final balance you’d have by age 67, based off what age you start.
“Let’s assume a child is born today. For the next 65 years, she or her parents will deposit a certain amount into a stock mutual fund that pays an average annual return of 10 percent.
How much do you think they need to deposit each day in order for her to have $1 million at age 65? Five dollars? Ten Dollars?
In fact, a daily deposit of only 54 cents compounds to more than $1 million in 65 years.
It really helps to start early.“
LESSON: The most important thing you can do is start today. Forget about the marginal progress you’ll make on Day 1, it’s the fact that you got off the couch and began that matters most.
The common-person thinks the only path to wealth is to generate more income. While making more money can help, there’s a second part to the equation, one which is often times ignored: minimizing costs.
“Reducing your spending [costs] is financially more efficient than earning more money.
For every additional dollar of earnings you plan to save, you will likely have to earn $1.40 because you have to pay income taxes.
However, every dollar unspent can be invested [immediately for compounding gains].”
LESSON: While most people focus on gains, you should also consider the power of subtractions. You don’t need to add another book to your reading list, you need to remove one not servicing your needs.
Index Fund vs. Fund Managers
Choosing a single winner is far harder than it may appear. While markets are meant to show the “real value” of an asset, it’s nearly impossible to predict their future value. You’ll fare much better by holding the entire market; when the economy wins, you win too.
The fastest way to get rich in the stock market is to own the next Microsoft. The fastest way to lose all your money is to own the next Enron. Identifying them in advance is impossible.
However, you don’t have to identify them in advance to make a healthy return on your investment. If you buy an S&P 500 index fund, your investment is highly diversified and its performance will match that of 500 leading U.S. corporations’ stocks.
Over 10 years, the average expert-picked stocks were up an annualized 8% compared to the market index return of 9.5%.
A 1.5% difference may not seem like much, but compounded over a lifetime it makes a tremendous difference.
LESSON: Don’t waste your time trying to find a needle in a haystack. Sure you may get lucky sometimes, but odds are you’ll fare better by holding a small piece of everything. Worry about getting the market (macro) right, not the stock (micro).
The most common mistake that people make when setting their goals is either (1) they try to change too much at once or (2) they emphasize results instead of consistency. If you want to nail your resolution, hone in on one goal and focus on showing up everyday. Learn more on forming better habits here.
As we enter 2019, I’ve done some reflecting. I present to you, Critical-Chance’s year in review:
In February ’18, I launched the website.
By the numbers (2018):
Total Pageviews: 3,563
Video Views: 290
Newsletter Subscribers: 144
Ever wonder, “what do my friendships actually look like?”
We use math, and witty cartoons to describe the nuances of our relationships
Last year I read 20 books (+60% YOY). I attribute the increase to my growing travel schedule and the Amazon Kindle. Whenever I find myself mindlessly surfing social media, I whip out this bad boy and read information I’ve self-selected. It’s great, and I strongly recommend trying it if you haven’t. Sorry memes, you no longer receive all of my attention.
Parents have begun to over-shield their kids from harm. This has taught the most recent generation (Gen Z) to fear setbacks and ideology that goes against their personal beliefs. This is contrary to previous generations, “what doesn’t kill you makes you stronger,” tradition. Greg and Jon discuss how this mentality has flipped the way our academic institutions operate, and how it’s (likely) causing changes in the way we treat each other online and the rate of teen depression.
We are addicted to our technology; half of us would rather suffer a broken bone than a broken phone. Adam investigates the rise of our addiction, and explains why so many of today’s products are irresistible. Armed with the right knowledge and online tools, we can begin to leverage our phones to provide us more benefit than harm.
David Goggins went from an overweight, depressed kid to one of the toughest (physically and mentally) people in the world. Navy Seal Hell Week (3x), 100 mile marathon (18x) and Heart Surgery (2x), there isn’t an obstacle Goggins can’t overcome. Through his journey he learns that the most important voice is the one inside your own head. He’s evidence that when you embrace discomfort, you can achieve anything.
As Aristotle once said, “It is the mark of an educated mind to be able to entertain a thought without accepting it.” Part of my mission with Critical-Chance is to learn and evolve. I love finding unique ideas and viewpoints I haven’t heard of before. This is a deliberate focus of mine, because without entertaining new or opposing ideas, you’ll eventually plateau as a thinker.
three ideas I learned and entertained in 2018:
Success comes down to compounding
Everyone has heard of compounding interest in the context of money, but few consider how it reigns true across other domains in your life such as knowledge
Success is played at the margins (incremental improvement), are you getting 1% better everyday or 1% worse?
Time and attention will always be your most valuable resources, and unfortunately, 21st century business models rely on stealing these from you
Sometimes success is simply not getting distracted, and as society keeps relying on technology, this will become more and more true
New article coming soon =)
And finally, thank you. Thanks for the kind encouragement and detailed feedback. If you’ve subscribed to the newsletter, attended a lecture or even just read a single sentence, I appreciate your gift of attention and time. I’m excited to keep learning this year. As the curiosity train keeps trekking forward, thanks for reserving a seat on board.
Each buddy is unique but have you ever considered the context of your relationships? Or their wider connection to the universe?
This month, we uncover friendship diagrams (FDs for short); A way to translate your connections onto paper using math and social science.
Let’s begin!
Meet Brent and Ace.
Each would independently call the other a “best friend.”
Translated into a Friendship Diagram…
This visual has four components.
(1) Arrows show consensus
For Brent and Ace, it’s a two way street; they each agree a friendship exists between them.
While subtle, it’s an important distinction because not all friendships go both ways. In fact, many do not.
Meet Dirk.
Dirk is kind of a jerk, so nobody really likes him. Sure, you’ll be respectful when he’s around, but you don’t actually want to hang out with the guy.
…
Dirk thinks everyone is his friend, but everyone else thinks differently. When we view his FD, Dirkhas arrows going out, but sadly, none returning.
This is a crappy realization, but everyone knows a Dirk. In fact, at one point or another, we’ve likely found ourselves in our own Dirk-like scenario. While this is unavoidable, it could be worse.
A noble mission: include the Steven Glansbergs and the Dirks.
(2) Proximity shows depth
Since Brent and Ace are best friends, it only makes sense that their proximity is close, but distance explains much more. How much do they know about each other? How often do they interact? Do they have similar social circles?
Bear with me, but the distance can be captured by an equation.
D = Distance on the Friendship Diagram
Qt = Quality Time spent together (life experiences and adventure)
t = Raw Time spent together (idle time and proximity)
r = Recency (how often you speak / last time you interacted)
The higher the score (D), the stronger your connection is, and the closer you sit on the diagram.
The purple bit of the statement describes our time.
Quality Time (Qt): When friends define how close they feel, it doesn’t have to do with their physical proximity. Instead, it’s described by how well two people know each other and the experiences they’ve shared together. For example, you may have a childhood friend whom you rarely speak with, yet you’ve grown up together. While your interactions are sparse, you’ve built a serious bond through the events that have shaped you, That’s Quality Time (Qt).
Time (t): In the same vein, there are those we spend time being around, but we’re not actively deepening relationships with. Think of the co-worker everyone dislikes, your child’s school teacher, even that crazy guy on the Subway. Time still counts towards something, but, when it’s idle or non-bond building, it pushes us away. That’s why Idle Time (t) sits in the denominator of the the equation. If raw time increases without any bond building, we’re slowly drifting apart.
We want to strive for the highest proportion of quality time together, because idle time eventually erodes our relationships. Consider your friendships; has your time together been quality or idle? When’s the last time you deeply interacted with your friends?
Recency (r): Just because you’ve built a strong connection, doesn’t mean you don’t need to maintain it. Keeping tabs on your buddies is not just additive but multiplicative. When we plan a fun night with friends, we tend to think of those we’ve interacted with most recently. And, if you’re out of the picture for a while, you can drop out of a friend’s immediate social channel quickly. This is why recency feels as if it’s on an exponential curve, but it’s not (see above). The truth is that you just need to take initiative. When we proactively reach out, we resume our closer proximity… justdon’t waittoo long.
Have you been missing in action lately? Check out this post on how to deepen relationships in the 21st century. (Hint: While it may feel hard, it’s easier than ever to stand out).
If you break down the math you’ll find that Quality Time (Qt) and Recency (r) are the biggest drivers of Distance. Meaning that the fast lane to building a friendship is to spend time purposely with one another on a more frequent basis. There could be an entire post written on this subject, but to keep it simple: discover shared interests, make plans, and show up.
Cool, we’ve learned distance! Now grab your astronomy boots, because we’re going planetary next.
(3) Mass shows power
Mass is your weight after you strip away gravity (aka: the force holding us down on Earth).
But the coolest part about Mass is that it shows us how different bodies interact [1]. The greater a planet’s mass, the more it pulls in other objects around it. Take the Sun and the Earth. It’s estimated that you could fit 1.3 million Earths inside the Sun.
The Sun is 333,000 times more massive than the Earth. Because it’s so large, there’s an invisible force pulling all the planets in our solar system towards the Sun at all times. This is why the Earth rotates around the Sun and not vice-versa (sorry Aristotle!).
I posit that our friendships experience the same phenomenons; Friendship Diagrams are like mini-maps of our own universe.
First off, we can denote each person’s Mass; illustrating the ability of an individual to pull others inward, and keep us together. Just like the periodic table of elements, there is a wide range of Mass out there, or, in this case, “pulling in strength.”
But there’s a second quality of Mass; the more massive an object, the harder it is change its state of motion [2]. In the case of FD’s, motion isn’t physical, but is a person’s opinions, attitudes, feelings, and decisions to be friends.
Take Grace, as an example.
…
…
…
Hangout with Grace once, no big deal. But make it a weekly occurrence, and she’ll suck you right in. Before you know it, you can’t escape Grace; she’s everywhere you go, socializing more than breathing, hanging out with your friends.
Want to go bowling? Oh, hey Grace…
Trying to see Avengers alone?
Soon, you can’t make plans, because Grace has already made them for you.
Grace is the blackhole of friends.
And there are two things we know about Black Holes.
#1. The speed of sucking you in accelerates as objects get closer towards the center.
#2. Once you pass “the point of no return” (Schwarzschild radius), you can never escape [3].
Together, this forms a massive Grace.
There are positive versions of this phenomenon, but the main point is to be careful. Our social circles exhibit an abundance of forces, and you can drift far without realizing it.
Have you wandered off course?
(4) Color shows uniqueness
Lastly, while Brent and Ace have similar interests, they are unique people. To illustrate their differences, they are distinct colors.
When we talk about color in the friendship diagram we mean informational differences, like their education, experiences, values, and goals.
Brenton grew up in the South, he’s from a rural town, and studied Writing in college.
Ace grew up in the North, he’s from an urban town, and studied Business in college.
Small differences, large shifts in viewpoint.
This attribute is powerful, and we want to aim for a colorful Friendship Diagram of our own.
Adam Grant has a good explanation of why diverse backgrounds and viewpoints matter:
“You want teams that are cognitively diverse and psychologically safe. A varietyofthinkingstyles—coupled with the freedom to take risks without being punished—enables groups to generate, test, and implement creative ideas. It’s important that our diagrams grow diversely, and we give them the freedom to fail.”
Think about the internet, would you agree that (when used properly) it can elevate performance? There are a variety of reasons why that may be so, but the internet provides an unfathomable number of data points (many of them being different). While these articles, opinions, and interests may not be relevant or even true, they create new pathways of thought that challenge our decisions. Ultimately, we may only use a small percentage of the data, but having access to unique opinions gives way to the best outcomes – it fights against the echo-chambers of our own selves. Here’s a study from Stanford further explaining this concept.
Of course, it’s easier to relate to colors that are similar ie: those who have similar backgrounds or experiences. However, we must push ourselves to create relationships with those less like us as too. Performance outcomes are elevated when we increase diversity [2]. And of course, digging deeper we actually find that we are more alike than different.
“Human beings by nature want happiness… everyone tries to achieve [it]. In this way, [we] are the same, whether rich or poor, education or uneducated, Easterner or Westerner, believer or non-believer, and within believers whether Buddhist, Christian, Jewish, Muslim and so on. Basically from the viewpoint of real human value we are all the same.”
-Dalai Lama
We’re all some sort of dot on the friendship diagram, whether our dots are big, small, blue, or green.
Written by David Tillem on May 17th, 201810 minute read
Relationships: A Simple Way to Stand Out
We are in a period of time where people all over the world PERCEIVE that they are the most connected they have ever been.
This is only partially true.
Facebook lets you see that your old roommate from college just had a baby, but did you write them a letter to congratulate them? Did you even send a text? Social media gives us the feeling that we are connected but, when it’s not backed by actions, it’s really just smoke and mirrors. Dating apps are another great example, they can give us the same feeling. Maybe you are going out on lots of dates, but are you really making connections?
Social Media gives us an excuse to not reach out. You saw it on Instagram and double tapped it for the heart. So while we may be staying up to date on important moments, we’re not deepening our relationships.
Relationships ebb and flow. I get it. But if you’re like me, you have friends, acquaintances, colleagues, sports team mates, relatives, etc. in your life that you have at one point been close with but eventually drifted apart.
Why is that?
You moved to different cities, you graduated, you changed teams, you got in a fight… whatever the reason, they moved on and you moved on. Were those people important to you? Valuable to your network? Did they make you laugh? Give you confidence? Push you to be better? How did you let these relationships slip away you ask yourself?
They may be gone for now, but not gone for good. In modern terms, these relationships are just a few clicks away from being rekindled.
Yes, the answer is that simple.
What are we waiting for?
Making a phone call isn’t hard. Clearly, it’s something else that is stopping us from reaching out to that old friend. This is where the perception pivot comes into play (to read more about perception pivots click here).
Our mind immediately goes to the worst case scenario. Essentially, the same reason you don’t walk up to the pretty girl at the bar is a different version of the same reason you don’t just call a friend you haven’t spoken to in 5 years out of the blue. Rejection.
But, the truth is, people are ALWAYS happy to hear from you. Always. What’s more flattering than getting a call from someone you haven’t heard from in a while? Who doesn’t love to be called and asked for career advice? Or catch up about old college memories?
Imagine the scenario where your old co worker from your last firm calls you and you chat for 30 minutes and catch up. You go home, tell your significant other about it. Do you say, “ugh, you’ll never believe it, some guy that I worked with years ago called and talked my ear off, couldn’t get him off the phone. What a waste of time.”
OR do you think it goes more like, “Honey, I had a guy that I used to work with reach out. Really great to catch up with him. Turns out he’s working at a competitor of one of my clients. So awesome to hear from him – might even get some business out of it!”
Likely the conversation would be somewhere in between those two scenarios, but you get the point.
Beyond the benefits of networking and generally being “in the know”, why should you put yourself intentionally in seemingly tough and awkward positions?
Robert Waldinger, a professor of psychiatry at Harvard Medical School recently concluded one of the world’s longest studies of adult life. A key conclusion gleans why relationships are so critical.
Those who kept warm relationships lived longer and happier, and the loners often died earlier. Loneliness kills and on long time horizons, it’s as powerful as smoking or alcoholism.”**
We can’t all live in the same place, stay at the same job, have the same interests forever but, if you care about a relationship, don’t let too much time go between interactions. Friendships don’t take a long time to start fizzling out.
I know I am over simplifying it. If it was that easy, everyone would do it, right? Take some baby steps.
Make note of birthdays on your list of people you want to catch up with and, on that day, shoot them a text or give them a call. Talk about an easy in.
Keep up with someone’s LinkedIn updates. A congratulatory call when an old friend gets a promotion is a normal and positive reason to call someone… but NO ONE EVER DOES IT. You will stand out amongst your peers, if you do these things.
A Simple Framework
1. Make a list
People you haven’t spoken to in a while that you that you care about
2. Tackle the list one by one
Go down the list and just start calling people (texting counts, but use it as a tool to set something up)
ie: Text someone to organize a time to talk or meet for a coffee
So you might ask yourself, why don’t people do it? I think there are a couple of reasons.
Number one, inertia/laziness/selfishness.
Get over it. Just reach out. Once you do it the first time, and you realize how fulfilling it is, you will want to do it over and over again. Not only will it feel good, but it helps ensure the network you worked so hard at creating remain healthy and strong.
You can feed your selfish side by remembering that staying in touch with smart and successful people will likely help you down the road. Not only that, people will start to look to you as the person that knows what everyone is up to.
It starts out hard with that first awkward conversation but quickly becomes easier and more natural.
It’s an upward spiral effect, and it’s all driven by you taking action.
Why else do people not do it?
Fear.
What would I say? We haven’t spoke in so long… again, this is a bogus excuse. You will likely be the only person calling them out of the blue to catch up and they will be excited that you called.
The usual, “How’s work?”, “How are things?”, “Girlfriend?”, “Boyfriend?”, “Where are you living?” Those types of questions are OK. Remember, you haven’t spoken in a while. Even if the conversation never gets past those surface level topics, it was still worth having. If this is someone you care to maintain a relationship with, it IS worth doing. The next call will be easier.
When I ask people why they don’t keep in touch with their high school friends, their college friends, their old co workers, the answer is almost always, “I don’t know… but I really should“.
Let’s change that.
I challenge you to go out and make one phone call a week to a friend, old colleague, aunt or uncle that you haven’t kept up with and see how he or she is doing. Make a physical list of people, and keep it wherever you may be most inclined to make these calls.
For me, when I lived in NYC, I wouldn’t take the bus or train to and from work. I walked the thirty minutes, and every day on my way home, I called SOMEBODY. My mom, old college friends, friends from my hometown etc. Sure, I find value in listening to podcasts and music when walking or driving around, but I have never gotten more out of listening to music than I have strengthening a relationship.
This is the 21st century. We no longer need to write a letter and wait weeks for a response. There is really no good excuse for good relationships to shrivel up and disappear.
Connections matter. A lot. Let’s treat them with the amount of importance they deserve. Make the call.
*Special thanks to David Tillem for this guest post!
Everyone has trouble delaying gratification, but some people have it worse than others.
Let’s explore why it’s so hard, and how it connects to your success.
Part 1: It’s not (totally) your fault
Our brains are wired to favor immediate reward.
Two Million years ago, our only priority was to stay alive. Cavemen didn’t have time to sit around and contemplate life (sorry Aristotle!), instead they needed to hunt and gather. Our human brains encouraged this behavior through a short-term feedback loop, which worked really well. This simple system was at the root of our survival; don’t be eaten, successfully procreate, and improve living conditions.
While humans have evolved and developed the ability to rationalize, our brains continue to use the same decision-making system.
It’s as if we have the newest iPhone, but it’s running on the original Mac software.
Using fMRI machines, scientists can observe what is going on in our brains while we make decisions. Ultimately, it’s a fight between two parts of your brain; emotional vs. rational.
When we choose immediate gratification, our emotional parts are in control; when we choose future rewards, our rational parts are running the show. (Brain Battles, 2004).
This explains why, when we’re under stress, we tend to break goals and indulge in bad habits. Stress basically numbs our prefrontal cortex and gives complete control to the amygdala.
It’s like emotional morphs into Muhammed Ali, while rational downgrades into a nostalgic childhood geek.
Place your bets.
But there’s a greater issue.
Today’s world is significantly different than that of our ancestors; our goals are at odds with our brains.
Want to get in better shape?
Work-out daily, become lean months later
Want to start a business?
Operate on annual losses, see profit years later
Want to be more financially independent?
Save and invest for decades, have enough to retire comfortably later in life
We’re in a constant fight against immediate reward, and our ability to overcome it is extremely predictive of future success.
This is especially true in the 21st century, but, before we apply it to our lives today, let’s take a quick look back on history.
Part 2: Human time dilation and relativity
Time dilation is a scientific concept discovered in 1897 by Joseph Larmor (source). Time dilation occurs when two people are looking at the same event but observe a different amount of elapsed time.
When this gets discussed in the scientific community, it’s focused around velocity and gravitational fields. For example, when we are on Earth we look out into the universe and view things in “Earth-time,” which is based on our gravitational field. If we were on Mars, we would see the exact same events, but happening slightly slower. This is because the gravitational field on Mars is different, and, therefore, time moves at a different speed.
Have you seen the movie Interstellar?
The scene below is touted by some astrophysicists as one of the best visual representations of time dilation ever. In this scene, part of the team spends less than 15 minutes on a high-gravitational planet. When they return back to their ship, 23 years has passed for the crew members who remained on board.
I posit this is happening everyday, all around us.
…
Instead of velocity and gravity, it’s based on our experiences and use of technology.
Here’s what I mean:
The technology we use has subtly established new baselines for our expectations and our patience.
This change began a few centuries ago, but it is progressing. Quickly.
Months: In the 1600s, when settlers first arrived in America, they set up a monthly horseback post between New York and Boston [1]. Back in that time, that was the speed of communication and exploration; it was their reality. Think about it, not only did they wait months to receive messages by post, but it took them months to sail across the ocean and arrive in America. Their reference point for time was in months, basically the currency or units of exchange.
Days: Once the United States Postal Service was established in 1775, improvements in infrastructure allowed mail to be delivered on a more regular basis. By the 1800s, Americans were becoming used to receiving new mail each day, a vast improvement from the century before. With this improvement, the new baseline shifted from monthly to daily.
Hours: In the late 1800s, Alexander Graham Bell figured out a way to transmit sounds over wires, creating the landline telephone [2]. While the invention occurred in the 1800s, consumer adoption didn’t start taking hold until the 1960s [3]. With a telephone in every home and office, it was expected that you’d be able to answer or return a call within a few hours of receiving one. What was also widely popular around this time? The color television and the evening news. These technologies helped create a new world, one understood by the hour.
Minutes: Ray Tomlinson is credited with inventing email in 1972 [4], but it wasn’t until the 1990’s when email became more adopted by everyday people. Likewise, microwaves become common in every home, which meant one great leap; foods that were meant to take an hour to cook, would now be ready in minutes. Children born in the 90’s are also referred to as the “Microwave generation” for this reason. Kids growing up at this time naturally saw the world through minutes, and would now be able to have another basic need even faster than their parents.
Seconds: Steve Jobs. Just by saying his name, you likely pictured two things; iPhones and black turtlenecks. We can credit him with the proliferation of smartphones, and along with those, improvements in mobile apps, sites and tools. A few seconds, can feel like an eternity. And if you need proof of this point, 53% of mobile users abandon sites that take longer than 3 seconds to load [5]. Today, for better or worse, the baseline is seconds.
The baseline leaps between generations continues to accelerate.
The boxes are getting smaller and the clocks are halvening. Improvements are taking less time to develop and, when they go into production, their addition is exponential.
Consider how often you may check social media after you’ve added a post, or how often you refresh your inbox after an important email has been sent. Do you think of it in months, days, hours, minutes, or seconds? The sheer speed we now have has changed our definition of delayed gratification; time has recalibrated.
Which takes us back to our kid and grandparent graphic; same reality, different baselines.
Your baseline is highly predicated on the way you choose to use the technology available. If you allow it to control your expectations and understanding of speed, you will continue to have difficulty delaying gratification.
And, gratification, is where this all comes together.
Part 3: Where everything comes together
Our greatest pursuits are set on long time horizons.
The more ambitious the goal, the longer you must persist without immediate results.
Perhaps this is one reason why we look at wildly successful individuals as if they are cut from a different cloth. It’s as if they possess some sort of magical power to accomplish remarkable things, meanwhile, we are merely “average.” Yet, fundamentally, they are more masterful at delaying gratification. A small part may be in their genes, but I’d posit it’s mostly hard-work, focus and comfort when waiting to reap reward.
The Reward Delayed Timeline
They are achieving goals that have longer reward delays. As their ambition and impact increase so do the stakes and risk. Are they immune to reality and natural stress? Certainly not. They stay grounded and honest to the necessary waiting period needed to get the job done. By surrounding themselves with others who are similar, it makes goals feel more possible and recalibrates their natural baseline to a new timeframe.
More delayed gratification = more ambitious goals
“The first order thought of instant gratification is a crowded path, ensuring mediocre results at best. Delayed gratification, which requires second order thinking, is less crowded and more likely to get results.”
A simple example would be writing this article. Believe it or not, this article took two months to complete. That meant opening a Google Doc hundreds of times, only to see incomplete or partial work. The writing too underdeveloped so I couldn’t share my work for feedback. I was forced to wait.
Here’s the thing, if I had to plot it on the Reward Delayed Timeline, it’s not that high; it falls somewhere around “Skilled.” It’s measly compared to a founder starting a business (Industry Leader) or a personal favorite of mine, Elon Musk (World Changer). Getting humanity to Mars is at least a 30 year project, which has minimal feedback loops along the way. That’s some serious second order thinking.
How to elevate your second order thinking
Step 1: Determine your most ambitious goal
Print a copy of Reward Delayed Timeline (download here)
Plot your top 2 or 3 aspirations on the chart
Step 2: Ask the questions
Are your reward expectations sitting on the right time horizon?
If not, either adjust your goal or reset time expectations
Work backwards, set micro-goals that prove you’re progressing
Step 3: Commit to to the delay
Whenever you feel down on yourself, pull out your timeline
Remind yourself how ambitious your goal is, and at what delay level you committed to.
You can do it.
Repeat, repeat, repeat.
Anyone can change the world, but it takes patience
As our baseline shifts, it becomes harder to stay on task, delay results, and produce deep meaningful impact.
I believe that if you can put your phone down and detach more often, you’ll be better at setting time-delayed goals and sticking to them. By focusing your efforts on a reward-delayed timeline strategy, you can correctly plot the ambition, skills and patience needed to get the job done.
Because once you become a master of yourself, you can master anything.
If you’re reading this article, I need to thank you.
Thank you for becoming a fan, sharing with friends, and for all of the encouragement along the way.
Building a subscriber base is a lot like weight lifting.
Let me explain…
The first time you hit the gym, your muscles aren’t very strong. Something as light as 25 pounds, really feels like 100.
Well, that’s the same thing that happens when you start anything new. I’ll use this blog as an example, but odds are, you’re also working on something you’re excited about too. Take this framework and fit it into whatever constitutes as your blog.
If you plot difficulty over your most ambitious goals, they get more achievable over time. It takes a while to establish a base, but once you do, the next goalpost becomes easier. Much like when you hit the gym, the first set of weights feel way heavier, but if you stick with it, your muscles build and those once heavier weights become your warm-up exercise.
It has this funny compounding effect; where your progress keeps doubling, yet, it continues to get easier. Your ability to impact keeps growing too. Suddenly lifting 100 pounds feels less than your original 50 pound rep on day one.
This blog is still in its earliest infancy. We’re deciding which exercises make sense and when to fit the gym into the busyness of life. We have to zoom in really close to see the location.
This past month, you’ve seen me lace up my sneakers and hit the gym. After a month of checking out the equipment, I’ve decided to put a new workout plan in place. That’s right, channeling my inner Kanye =)
Monday Tidbits are staying, but I’m switching around the article content.
I want to go deeper on these topics and add more visuals (similar to this week). Who knows, maybe there will be video content too or a podcast for the train ride or drive. But basically, the articles won’t come everyThursday.
If you’ve enjoyed anything so far, or thought this week was cool, I think you’ll love what’s coming next.
The destination may change but who cares?
Changing the workout routine keeps life interesting.
Ninety-Percent of life is about showing up… on time
Compounding interest is perhaps one of the most important and powerful discoveries of our time.
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
– Albert Einstein
Einstein wasn’t just referencing money when he said those wise words; in nearly every domain of life, compounding can either make or break you. If for example, you only get 1% better everyday for a year, versus 1% worse, you’ll be over 1000% better by end of year.
When you break it down, success is actually played at the margins; it’s about getting slightly better each day over a long period time, instead of dramatically better in one fell swoop. [James Clear on Marginal Gains]
The classic example is saving for retirement. When you start early and stay consistent, accumulating a large nest egg becomes much easier. With an Employer Match, a 20 year old could invest as little as $5 each day to retire a millionaire by 67 (The Impact of a Starbucks Latte).
If you imagine compounding as a Dr. Seuss-like machine, there are two ingredients going in to create varying levels of “Success” that come out the other side: TIME (when you start) and INVESTMENT (deliberate practice).
Here’s the best part about it, you control both inputs. Given the first example (1% better), you can see that, if time is on your side, you actually don’t need to invest nearly as much. However, the longer you wait, the more you’ll need to catch up. If you contribute $1,000 each year into an investment account, which compounds at 7% each year, below is the final balance you’d have by age 67, based off what age you START:
If you start at age 5, you’ll be a millionaire. Say you wait until half way through this chart (31 years old) to begin, you’d end up with a mere 17% of the total opportunity.
Perhaps the more powerful input you control is how early you start, not how much you invest.
Intellectual Compounding told by greats
“An investment in knowledge pays the best interest.”
-Benjamin Franklin
Most people know about financial compounding, but few recognize intellectual compounding. That is, the same exponential curve can apply to your growth as a thinker, an entrepreneur, or any related skill. If we were to plot how much you push yourself to learn, we see the same 1% better trend lines. By learning everyday, you become better at learning new things and adapting to your environment; it’s not a linear relationship, but instead an exponential lift.
“Read 500 pages every day. That’s how knowledge works. It builds up like compound interest.”
-Warren Buffett
The prolific speaker, Tony Robbins, has also acknowledged this phenomenon. When Tony started his career, he wasn’t nearly the presenter he is today. In fact, Tony says one of his co-workers was much better than him, which made Tony wonder why. What was difference between them? Did his co-worker have a gift that Tony was incapable of? Not even close. Tony realized he was only giving 1 presentation a week, whereas his co-worker was giving about 3 a week. So to be better, Tony quit his job and started giving 3 presentations a day. In about 2 months time, Tony gave the equivalent number of presentations that the other guy would give for the rest of the year.
Tony massively elevated his deliberate practice, but he also started early. While his fame emerged after his first book release at age 28, his first job as a motivational speaker was at age 17 – a full 11 years earlier.*
“The most important thing to do is start investing now so you can unlock the power of compounding.”
-Tony Robbins
We typically over-praise the individual versus their positive habits, environment, or commitment to growth. Whether you’re starting a business, a new job, or working towards an ambitious goal, compounding is the secret sauce that gets less attention. When we think of becoming great in any domain, we usually think about working harder and longer than the proverbial other guy. Instead, we should be thinking about starting one day earlier than ‘the other guy’.
Timing needs a higher priority
Working hard is the easier part; it’s not difficult to wake up an extra hour earlier or stay at the office after hours if it’s something that you find deep purpose and potential in. Figuring out when to start though, that’s hard.
“Bookstores have an entire ‘how to’ section but not a ‘when to’ section… [Yet] timing… can be everything.”
Perhaps we can simplify this though; start now. There are probably millions of great ideas waiting to be unlocked, but we’re too afraid or too slow to start. When you understand compounding, you give timing the attention that it deserves. Successful people understand this and it’s why, when they get asked about their biggest regret, many of them answer that they wish they had started sooner.
One of my favorite high school teachers used to say, “Ninety-Percent of life is showing up on time.” He would go on long tangents about the value of time, whenever someone arrived late to class. Ironically, we’d end up spending anywhere from 5 to 15 minutes of class time listening to him dissect the topic. To him, it was imperative to show up, but the more important point was to be on time.
Reflecting more than a decade later, I believe he understood something much deeper about timing. If you want to be the next Mozart, you can’t wait 30 years to begin learning piano, you need to show up when the opportunity first strikes. When you’re late to start, you miss much more than just the opening credits of a movie; you miss the character development, the plot, in fact, you never reach the conclusion. Using compounding interest, a late entry could reduce your returns by 100x; that’s the chance to learn, grow, or become your best self.
To take advantage of our total potential, we need to be on time.
