Business Tricks We’ve Learned From Gamblers, Pickup Artists, & Feynman

0:00:03 All right, we’re live Sean. I’ve got a story for you and this story
0:00:05 I’m gonna take a weird take on this
0:00:12 I have a weird take on this and I’m gonna appeal to all the young single men out there. All right. This is your specialty
0:00:29 All right, listen the story is about Ed Thorpe. Have you ever heard that name Ed Thorpe? Sounds like a swimmer now
0:00:33 It does sound like a swimmer, but he’s not so Ed Thorpe
0:00:38 I’m reading his biography called man for all markets. So Ed Thorpe today. He’s 91
0:00:41 So what does that mean? He’s born in the 1940s 1930s
0:00:45 Ed Thorpe he grew up as a math whiz kid
0:00:50 He was like a prodigy at a young age grew up in a very poor household didn’t have a lot of money
0:00:53 But as a young kid when he was like 12 and 13 years old
0:00:59 he got moved up a bunch of grades and he took a bunch of standardized tests and at the time when he lived in California
0:01:05 He got something like the highest scores in California for high schoolers when he was like 13 years old and at the time
0:01:06 They didn’t have calculators
0:01:11 But they had like little counting devices and he would take these tests without these counting devices because he couldn’t afford them
0:01:14 And he still crushed it. He killed it
0:01:21 so eventually Ed Thorpe he gets a scholarship to Berkeley and then he goes to UCLA where he gets his PhD in mathematics and
0:01:28 He becomes a professor and he starts going down this track where he’s in his 30s and he’s this brilliant professor and whatever
0:01:31 But then he does something interesting
0:01:38 He gets interested in applying his theories to real life situations because he’s like reading these academic papers
0:01:44 And he’s like this is cool and all but we got to apply this stuff and his specialty was probability and statistics
0:01:51 And he got super interested in how he could use his theories to beat blackjack. Oh, this is the gambling guy
0:01:53 I saw this guy on Tim Ferriss
0:01:58 This guy’s interesting is because he’s done so much more than just these few little stories. I’m gonna tell
0:02:05 But basically you could actually verify this blackjack is what 51% chance the house is gonna win
0:02:10 Is that right? Is it like 51/49? 51/52 something like that. Yeah, so it’s a small margin
0:02:13 But back in the 60s when he was kind of getting going
0:02:18 He had this theory where he thought that if he saw the the cards on the table
0:02:23 He could have a higher probability of getting 21 because he basically could count cards
0:02:26 changing the ratio of 51% in the
0:02:28 users
0:02:33 Perspective so he was 51% chance of winning the house was 49% chance
0:02:39 So he creates this paper where he explains all of this and inevitably people are like, man, this is just some academic theory
0:02:41 there’s no way that you’re gonna be able to do this and
0:02:46 So Thorpe is is a fun guy and he’s like we got to prove it
0:02:53 So he builds out this blackjack table at his house and he gets his wife to smoke cigarettes and blows cigarette smoke into his face
0:02:58 while she’s talking to him and like annoying him and then he has friends come over who like are drinking alcohol and like yelling in
0:03:04 His face as if he’s at a casino to distract him and he spends a handful of months doing this and it starts working
0:03:11 He’s like, I think this actually can work. I think I can do this and he publishes this paper and all these people reach out
0:03:12 He gets hundreds of letters
0:03:16 But eventually he gets those one letter from this guy named Manny and Manny
0:03:18 He doesn’t really know it at the time
0:03:22 But after a while Ed kind of realizes that Manny is basically in the mob
0:03:27 He helped make bootlegging a thing in the 20s when alcohol was illegal and Manny goes. Hey Ed
0:03:32 Let’s see if you can actually pull this off. I’m gonna front you 10 grand and we’re gonna split the winnings
0:03:36 10 grand at the time the 60s is something like 80 grand
0:03:42 So it was a lot of money particularly for a professor who’s making the equivalent of a hundred hundred fifty thousand dollars back then
0:03:47 And so they go and they spend this week this weekend at a casino in Las Vegas
0:03:52 And they make a eleven thousand dollars in profit and Ed’s like holy moly this thing works
0:03:55 But he doesn’t really want to become like totally a professional gambler
0:04:01 But he’s really interested in proving his theories and he eventually he writes a book on this
0:04:05 And if you Google Ed Thorpe blackjack book, he wrote this book at the 60s. That was a massive hit and
0:04:13 To head to Ed this was all just a big like fun game a way to like prove that his research wasn’t just academic
0:04:16 But it could actually be used and this book was a massive hit
0:04:20 And it was one of the first times that academic research was like used in real life
0:04:23 And it went straight to the masses as opposed to him publishing more papers
0:04:29 But this meant now that he was known in the casino world in the casino world back then
0:04:35 Vegas was just getting going and so it was small enough that they all the casinos could know what Ed looked like and all the
0:04:40 Dealers would know what he looks like and what his name is and so he eventually goes back at every handful of weekends
0:04:45 And he has to wear disguise and he’s but he still sends up ends up cleaning them all out and
0:04:50 Next he goes well blackjack was cool. Let’s see if I can do this with roulette
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0:05:31 So he goes, you know roulette is a little bit unlike blackjack where I don’t even know if there is necessarily at least it doesn’t appear
0:05:35 So there’s a lot of skill because it’s all like where the ball lands on this spinning wheel
0:05:42 But he asked this weird theory that if he can see if he can like quickly count how fast the wheel is going and where the ball
0:05:47 Starts and where it hits the wheel somehow. He’s able to calculate
0:05:54 51% in his odds where the ball is going to land and this sounds like a crazy idea, right? I mean that just sounds
0:05:59 Impossible to me as somebody who has spent a lot of time at roulette wheel
0:06:07 Being able to figure out well while the wheel is turning where the ball is going to land and it I mean when the ball hits
0:06:13 It bounces like in a random direction based on the spin and the speed and everything like somebody do that in their head would be
0:06:16 I’d have to see that to believe that it sounds impossible, right?
0:06:22 And that’s what interested him is is he was a math nerd and he was really fascinated with the game of proving his theories correctly
0:06:25 And so what he did was he took a small
0:06:30 Computer and he basically assembled a small computer and the way it worked is he would have a two-person team
0:06:35 And so he would be at the table placing the bet and he had up two people on the side
0:06:39 And they had these little small computers and they had little buttons in their shoes
0:06:44 And they would calculate where they thought the ball was going to roll to and they would tap their feet in
0:06:50 order to keep the cadence of the wheel and it would help him predict where the ball was going to go and that music the
0:06:56 Taps it kind of sounded like music would go into his his earpiece that he was wearing and he would make a bet
0:07:02 And this was actually the world’s first wearable, you know like an iPhone or like an eye watch is a wearable
0:07:06 This was the world’s first wearable and it worked and he killed it
0:07:09 He made a lot of money and he wrote a book on this he did it again
0:07:15 But now we’re gonna fast forward to him ten years doing these experiments. He’s got some money
0:07:20 Something like a hundred thousand dollars at the time, which was a lot of money for a professor
0:07:24 And he needs to invest his money because he just doesn’t want it sitting there
0:07:28 And so he spends a few months learning everything he can about investing basically just reading books
0:07:33 he just read lots of books and as he said he wanted to understand the math behind all of this and
0:07:38 So he starts investing in publicly traded companies and he loses a lot of money at first
0:07:42 He said I had to pay my tuition to mr. Money market because it gets a lot of it wrong
0:07:49 But then he discovered discovers options and this part is a bit out of my expertise to explain how he does this
0:07:53 But it involves both shorting a company and buying the company’s actual stock
0:07:57 So predicting the company’s stock is going to go down while buying the stock
0:08:04 But in doing that he studied the the option that he was going to purchase as well as the current stock price
0:08:08 And in doing that he was able to hedge it so he would only lose a little bit amount of money
0:08:10 But make a whole bunch of money and for him
0:08:15 He actually didn’t look at any of the stock information as in what the company was selling
0:08:18 So you know you have guys who like you value investing and they’re like well
0:08:20 I think that this brand is undervalued that wasn’t him
0:08:22 It was all just a math game to him
0:08:26 But after a year or two it starts working and he starts making a little bit of money
0:08:32 And so now we’re in the 70s and there’s another professor at his university who starts hearing that Ed is now investing in stocks
0:08:35 And he’s doing quite well. He tells some of his coworkers. He’s like I
0:08:40 Might make more of my more than my salary this year investing. It’s going quite well
0:08:48 And so one of his professors has invested his money the professors money in the small little fund called Buffett
0:08:54 Associates and of course it was run by this guy Warren Buffett out of Omaha and this professor was like hey
0:08:58 This guy who I invested in Warren, he’s gonna wind down his fund
0:09:00 He’s crushed it for me
0:09:03 But he just wrote this letter saying he can’t find any more good deals
0:09:07 Which in the 70s Buffett actually paused investing for like five years
0:09:10 He didn’t want to invest because he’s like I can’t find any good deals right now. I’m just gonna sit and do nothing
0:09:13 I’m gonna wind down my fund and the professor goes. Hey look
0:09:16 This guy’s running down his fund
0:09:19 Why don’t you you know, he’s got some free time. I’m friendly with him
0:09:20 I’m gonna invite him over to my house
0:09:25 I’ll invite you over and we’ll just shoot the shit and maybe you’ll have a new friend in the investing industry cuz you don’t really know
0:09:29 Anyone else doing this. I’ll help make the introduction
0:09:35 Buffett comes over for dinner and Ed Thorpe and him get along beautifully hand-in-hand like pots and pans
0:09:43 They’re they’re really close. They become great friends and they love hanging out that day and a few weeks after the dinner
0:09:46 The professor goes. Hey look Ed. I was kind of testing you
0:09:49 I kind of wanted Warren to like sit like kind of see what’s up with you
0:09:51 He gave he gave a thumbs up
0:09:54 He said you’re really smart and that your ideas are good
0:09:59 Can I take this money that I got back from Warren Buffett and give it to you to invest and it’s like
0:10:04 Taking other people’s money. That’s not really what I’ve been doing. I’ve just been doing this for my own
0:10:11 You guess I’ll try it and so he teams up with another guy and they raise something like five million dollars over the course of six months
0:10:19 And they have Buffett’s stamp of approval and so they start basically one of the very first hedge funds ever and particularly a he’s a
0:10:24 Quant which is common nowadays, but Ed Thorpe was the first quant where he didn’t really look at the companies
0:10:27 He just looked at the numbers and he killed it
0:10:33 So over the course of 30 years, he made something like 20 to 25 percent per year, which is massive
0:10:38 I don’t know what his Buffett made. You know probably something like that, but over the course of if it’s just like 20
0:10:42 Yeah, it’s like 20, but over the course of like 60 years. Yeah for a lot longer
0:10:49 And so Ed Thorpe basically invented counting cards with Blackjack and then made a book on it
0:10:56 He invented this roulette game and the world’s first wearable, which all these things by the way eventually became illegal
0:10:59 They weren’t illegal or I don’t know if it’s illegal or against the rules
0:11:05 But they basically are banned in casinos because of him and he parlays all this
0:11:11 Learning and all this experience into creating the world’s first hedge fund and becoming one of the first quants and he knocks it out
0:11:16 The park the guy kills that I think he made something like 800 million dollars and then eventually fast forward to today
0:11:24 More like 2005 he shuts down his fun because he’s like I have enough. I don’t need anymore. This has been fun
0:11:29 While it lasted I’m out. He’s one of the few guys to just be winning and he just says that’s enough. I’m done
0:11:35 So he completely shuts it down. So now he’s 92 years old. He still does push-ups and pull-ups
0:11:39 He’s really into fitness. He does not look 90. I saw him on the Tim Ferriss podcast
0:11:46 I kind of been that long ago. He was 89 then on that Tim Ferriss podcast like a he looks honestly like somebody’s early 60s
0:11:50 He looks great. Yeah, and here’s the part where I promise
0:11:54 I’m gonna try and weave this into advice to the young man
0:12:01 Ed Thorpe is so fascinating to me and the reason he’s fascinating to me is because I don’t know if you’ll admit to this
0:12:04 You probably will if you did it. Did you ever read that book the game?
0:12:08 Did you ever read like books on like how to meet women? Not only did I read the game?
0:12:14 Not only did my girlfriend in high school buy the game for me before I went to college as a goodbye gift
0:12:17 Was that her breakup gift?
0:12:20 We’re not a stay together, but let me help you out here
0:12:23 Not only do those two things happen
0:12:27 Two nights ago. I reread the game and I’m a married man
0:12:31 I reread the game cuz I was like that book was amazing back then. I wanted to learn the style of it
0:12:35 I was like, what was great about that books? I went back and I reread it two nights ago. So it’s crazy. You brought it up
0:12:41 So that’s a great book. So anyone most men in their in their 30s. Nowadays probably read that when they’re 14
0:12:46 It was like the Bible because all of us nerds are like I just really want to be loved
0:12:49 How do I be loved whatever and there was a lot of bullshit in that book brother number of times?
0:12:53 I use the Cube test like there’s not a woman on Duke campus that didn’t get the Cube test for me
0:12:55 Which one was the Cube test?
0:12:59 It’s like a cold read where you’re like, I want you to close your eyes. Imagine the Cube
0:13:04 It’s it’s floating in the desert. How big is the Cube if they say it’s big they’re self-confident if they say it’s small
0:13:09 They have no ego is the Cube see-through is a colored. Oh, it’s it’s kind of see-through
0:13:15 Well, you’d you don’t let people in easily, but when you do you really do connect with people at a deep level
0:13:19 That’s so me and then you just go on so on and so forth about their relationships and about their their way
0:13:22 They view the world and by the end of it. They’re like this guy
0:13:25 This guy’s gonna be in the friend zone is really what happened to me
0:13:28 But I think for better looking people who probably work better than that
0:13:34 They are like a cat and you’re just holding a string just like trying to entertain them and they’re like, yeah, I’m done with you
0:13:38 That’s another thing cat string theory. That’s actually another principle. They have well
0:13:39 And this is where it gets really nerdy
0:13:44 But one of the parts of that book and that whole movement there was a lot of bullshit in that book and in that movement
0:13:50 But one of the parts that I always took the heart was the best way to attract others both men and women
0:13:52 It’s to be an interesting person
0:13:54 and what that means is basically
0:14:01 people like ambitious people and being passionate about hobbies is under that umbrella of being ambitious and
0:14:05 I remember as a kid. I love that because I’m like wait
0:14:07 You’re telling me I could just like work on myself and I’ll attract others
0:14:11 That sounds like the greatest thing ever and and and I believe it to be true as
0:14:17 I’ve gotten older. I’ve noticed I’ve gotten less interesting and the reason I’ve gotten less interesting
0:14:23 There’s a few reasons there. The first is that I’ve developed higher expectations towards most things that I do
0:14:27 Or rather I’ve just developed expectations as opposed to just doing something just for fun
0:14:32 Like you do think as a kid just because you’re intrigued, you know, like, I don’t know where this is gonna go
0:14:34 But I’m just gonna I’m just gonna follow it
0:14:41 Whereas now there’s expectations for everything that I do and I want to have I’m a little bit more interested in the outcome
0:14:49 The other thing that I’ve noticed lately about me and why I’ve become less interesting is because I’ve been distracted with social media
0:14:51 Just like how you’re typing right now as I’m talking to you
0:14:57 It’s so much easier to be distracted nowadays with Twitter and Slack and email and text
0:15:03 I find myself getting so distracted and so I don’t have a significant amount of like deep thought or like going deep on something
0:15:07 It’s more so like I’m being on the defense where people throw information at me
0:15:13 And I react to it as opposed to like spending time pursuing something that interests me just because it interests me and so
0:15:20 The reason why I thought the reason why I like reading about him and particularly for young men listening is
0:15:26 He’s kind of inspired me to just pursue more hobbies just for the sake of learning and here’s an example
0:15:29 When he was developing his roulette game
0:15:34 He basically went and bought old roulette table at an auction for like $500
0:15:38 And he just sat at home in the evening with his wife and they’re like hey
0:15:43 Let’s just see if we can like count this game. It was almost like what’s that one game board game called settlers of Catan?
0:15:46 Yeah, you know how like people just like get into that random stuff and they’re like
0:15:47 Let’s just see if we can master this game
0:15:52 It sounds fun and that’s exactly how it started with him a lot of these things that became massive outcomes for him
0:15:56 They were just like interesting little hobbies for him and they started very rudimentary
0:16:00 Have you ever read about dr. Richard Feynman? Of course
0:16:05 So Feynman was one of the guys who was important for a variety of reasons including
0:16:09 Helping make the atomic bomb and all these things and he had little like weird things about him where it’s like
0:16:14 Why can dogs smell so good? He’s like well, I asked myself that and then I just
0:16:19 Put my head close to the floor and I noticed I can smell things on the floor and like that’s like I like it’s like
0:16:24 Really simple ways to like prove or disprove a theory where you start out like very basic principles
0:16:28 And you’re like let’s just see if this works, you know Justin Kahn used to call himself
0:16:30 He had some tagline for himself when he was making content
0:16:33 He used to say hey, it’s me Justin your favorite founders favorite founder
0:16:39 And I was like how you always talked about your favorite founders favorite founder, and I feel like Feynman is kind of that
0:16:43 It’s like your favorite gurus favorite guru or your favorite thinkers favorite thinker
0:16:48 It’s like everybody who you love their thoughts. They love Feynman and the Feynman technique
0:16:53 They love all the Feynman’s books and his writings. Oh everybody you respect respects Feynman. Yeah
0:16:57 I think Tim Ferriss’s holding company is called Feynman Inc or something like that
0:17:02 Dude, that’s actually genius to just be like that’s Feynman and Ferriss associates. Yeah with them
0:17:06 Just like ah, yes, this is the Puri and Musk consultancy. Well, how can I help you?
0:17:09 Yeah, just like borrow from their credibility
0:17:13 But there’s guys like Feynman and Ed Thorpe is now in that a sphere
0:17:21 Where they just get interested in some things that seem so silly and they do it at a very rudimentary level and it goes
0:17:26 From level to level to level to level, but it starts at level one, you know, it’s exactly like this Jack Smith
0:17:29 Jack Smith is like that. Yeah, Jack Smith is what he’s one of these guys
0:17:32 Jack is a buddy of ours. You’re really good friends with them
0:17:35 I think you’ve known him for a lot longer than than I have but he is such an interesting guy
0:17:42 He built companies he said built a company called Vungal sold it his whole origin story was one of the very first podcasts on this
0:17:47 Fit feed so if you go back Jack was in there and he talked about you know when he was a high school or what he was doing flipping things
0:17:52 On eBay and then how he hacked his way into an accelerator then once he was in the accelerator how he figured out this ad tech company
0:17:58 How the experts told him there’s no way son. You don’t understand how the ad business works. He’s like, yeah, that’s my strength
0:17:59 I don’t understand how this works
0:18:04 So when I approach it it’s I’m gonna approach it differently and what he did was the whole the way the whole ad industry work
0:18:09 It was all based on CPM impressions. So it’s a billboard. How many people are gonna see this billboard?
0:18:12 That’s how I charge you and he’s like, well, that’s kind of stupid if I was advertising
0:18:16 I don’t want people to see it. I want people to buy from me or I want people to download my app
0:18:21 I want the action. So what if we just paid for the action and it became CPA instead of CPM?
0:18:26 And so he reinvented in a way. That’s a little bit generous. I would say there’s other people doing this
0:18:29 But Jack and his co-founder created Vongol sold it for 700 million dollars
0:18:32 And it was really based around this mobile gaming ad network
0:18:35 That was gonna do things a little differently the way other people were doing them
0:18:39 He sold it for 750 million when he was 29 years old
0:18:43 Crazy stuff and for example, like in thinking from first principle
0:18:47 So like what should the ad be everybody else did video ads and so you would be playing a game
0:18:51 It would stop a video would take over the screen and it would be a video commercial
0:18:54 And then you’d be like when when can I click the X so I can get back to playing a game
0:19:00 And what Jack realized was he’s like well the best way to advertise a game is actually just play the game for a second
0:19:02 Oh, it’s it’s about shooting the ball into this hoop
0:19:04 Well, like let him try to shoot a couple times
0:19:07 They miss and they want to make it and they make it and then now they got a sample
0:19:12 So they created an ad unit that was just a mini version of the game that worked way better than the video ad
0:19:15 And it was again many times over of just thinking from first principles
0:19:19 How could I do this but now since selling the company he had his Thorpe enough?
0:19:24 Moment where he did not need to go create another company and instead got really into other things
0:19:28 He’s like, you know, I need to buy an office chair. He goes and he looks kind of uninspired. He’s like well, certainly
0:19:30 There’s been some studies on the best way to sit
0:19:34 So what is the best way to sit and he’ll go and he’ll read research papers about the rest way to sit
0:19:41 He’ll test chairs and he ultimately ends up building this crazy ergonomic chair himself in his garage over the period about six or eight months
0:19:43 Did you see the chair? It looks like a dentist chair
0:19:46 He’s laying down in this crazy position and it’s like a work chair
0:19:49 But anytime if you ask him like hey, Jack, what do you have two nowadays?
0:19:51 he felt zero pressure or at least
0:19:58 Caved to zero of the pressure of having some important sounding answer because he just did what was important to him
0:20:03 Rather than what sounded important to others. So he’d be like, uh, just you know, just messing around
0:20:05 You’re like, no, what does that mean? Like what do you do every day? Jack?
0:20:07 He’s like, well, I’m really working on trying to build a chair
0:20:11 You know, I got really interesting chairs and you know sitting I sit for six hours a day
0:20:15 And I just thought well, why don’t I sit in a better chair and so I can start researching chairs
0:20:19 So I’ve bought 52 chairs and I’ve been testing them and then I’ve decided to you to build my own
0:20:20 That’s the best of each of these
0:20:25 That’s what he’ll do for one year and then actually he’ll do something completely different just off of his curiosity
0:20:30 And the cake one year for his birthday the cake that his wife made for him at his party
0:20:36 Was shaped like an amazon box because he’d orders so many chairs or so many whatever things that he’s interested in
0:20:40 That that he had a room in his home just dedicated to all the boxes
0:20:44 Yeah, he had a small like fba fulfilled by amazon facility in his in his pantry
0:20:47 Just to test out every single product and at one point they banned him on amazon
0:20:52 They banned him on amazon for returning too much stuff because he would buy all this stuff to test it out
0:20:54 But yeah, jack is perfectly like that
0:21:01 But does this resonate with you where you’re like, I need to just pursue more things without having a big outcome
0:21:03 in mind
0:21:06 We haven’t been talking at all, but that’s become the theme of my
0:21:08 I don’t know the last
0:21:09 12 15 months or so
0:21:11 I heard this quote
0:21:13 I’ve all said this thing on some podcast and he goes
0:21:17 Too many of us live where we’re doing things today for some future
0:21:21 Reward some future payoff. I’m not doing what I want to be doing now
0:21:26 But I’m putting in the time I’m putting in the work I’m putting in there for some future payoff
0:21:28 He goes that’s understandable. We all start there
0:21:33 He’s like but the day you start doing things where the the thing you’re doing in and of itself is the reward
0:21:39 That’s the day you’ve retired people think retirement is when you stop working you go sit down you chill you do nothing
0:21:40 It’s not that you do nothing
0:21:44 It’s that you do the things you want to do because the act of doing them
0:21:50 Itself is the payoff and you’re not sure there might be some upside in the future, but that’s not why you did it
0:21:51 and
0:21:52 when I heard that
0:21:54 I was like
0:21:55 Okay, that’s what I need to be doing
0:21:57 I don’t know how I’m going to get there
0:22:02 And I’ve many times had little detours off of that where I start to do something opportunistic because oh, it’s going to pay off in the
0:22:03 future
0:22:06 But I’ve just continued to bring myself back to that that moment which was
0:22:11 I want this next chapter of my life to be all about I’m doing things where the only criteria is
0:22:15 The act of doing it has to be rewarding enough for it to have been worth it
0:22:20 And that one criteria eliminates like 98 percent of the possible things I want to do
0:22:25 Because if I’m honest with myself and I say well, why do I want to do this? It’s because it might
0:22:28 Make a bunch of money or it might pay off in this thing later
0:22:31 It doesn’t it might could be business related it could be relationships related
0:22:35 It could be a why do I want to meet this person or go to this event? Oh because it might lead to something
0:22:38 No, no, no, I’m only going to this event if the event itself is the payoff
0:22:43 I’m only hanging out with this person if the hangout is the payoff not because it’s going to lead to something else
0:22:46 It can be but did you determine what that is do you determine?
0:22:52 Have you that’s actually really hard is figuring out what the play is what I realize is it’s less of a thing
0:22:56 So I thought like you’re just asking me this question. I thought it’s a thing
0:23:01 I got to find my thing my new thing that’s the thing. I just love to do and I’m doing it for the sake of doing it
0:23:05 What I realized is it’s fundamentally different. It’s not a thing. It’s a approach and it’s a filter
0:23:09 And so actually it’s a question that I ask at the beginning of any
0:23:16 Anything I’m going to do that day, which is am I doing this for some deferred payoff some deferred benefits
0:23:22 Or am I doing this because I actually enjoy doing this and so it changed the way I did everything
0:23:25 So for example with my workouts, there was a version of workouts that I did because
0:23:31 Whatever just just bite bite the bullet just do this and you’re gonna it’ll pay off later when you get fit versus
0:23:35 Well, why don’t I just do workouts that the workout itself is so satisfying?
0:23:38 Of course, if I do that I’m going to do it more often
0:23:41 I’m going to do it with my full effort and I’m going to still get the reward in the end
0:23:45 So I started working with this like boxing coach or playing basketball different things that I wasn’t doing before
0:23:48 because I was willing to settle for
0:23:52 Doing something that today kind of sucks, but in the future
0:23:54 Maybe it’s going to turn out great
0:23:58 And I realized I had lived basically like 35 years of my life with the this kind of sucks now
0:24:02 But oh, it’s going to it’s all going to pay off in the end. I realize it’s a false choice. You don’t have to do that
0:24:06 You can just filter every activity on is the act of doing this going to be worth it
0:24:09 Even if it’s challenging, it doesn’t mean everything is so happy
0:24:12 But is the act of doing this the reward or am I doing this only for some future pay off?
0:24:18 So it became a a filtering criteria and not a one thing. So for example, I told you I was reading the book the game the other day
0:24:21 Why did I do that? I was reading a book in the middle of the day
0:24:24 Especially an old book that I’d already read before that had no relevance to me
0:24:27 Because I’m not trying to be a pick-up artist or hit on women anymore, right?
0:24:28 That’s not what I was doing
0:24:30 But it was the thing I was most interested in that moment
0:24:33 And so I did it because the act of doing it was the reward because I was most interested in it
0:24:37 And I’ve done that with other hobbies like picked up playing the piano and I started doing other things
0:24:42 That are all falling into this bucket and I’ve never been so you can hear it in my voice
0:24:46 I’ve never been so switched on after making this sort of shift in the way I
0:24:51 Chose what to work on and that’s a very I’m going to say the p word
0:24:53 That’s a very privileged way to go about it
0:24:57 Which is if you hit the lottery like maybe we have or I mean we’ve worked hard
0:25:01 But we’ve got lucky as well where that’s a very privileged way to go about it
0:25:06 And so I do think you have to eat shit for a certain period of time and also get some luck, but
0:25:13 Yeah, I’m very drawn to this way of living. I’m not sure that that’s true. It’s 100% true. The reason I say that is
0:25:17 First whenever somebody calls me privileged, I’m like that’s a compliment
0:25:21 I think they they mean it as an insult they people use it as an egg not you in this case
0:25:24 But I’m saying most people if you call someone privileged you’re trying to tear them down
0:25:29 I want my life to be described as one of privilege. That’s the point. You’re giving me a compliment
0:25:32 That’s like saying wow, you’re really good at this or this comes effortlessly to you or whatever
0:25:35 I want my life to be described that way that is a goal of mine
0:25:41 And I just mean that because most people will treat that as a negative and that they try to make themselves smaller
0:25:43 Right. So a little bit of like the tall poppy syndrome where
0:25:45 If you have the freedom to do something
0:25:51 And you are not doing it because you’re worried about how it looks or how it sounds or how it others don’t have that privilege
0:25:55 You’re wasting your privilege. I think that’s a it’s a bad thing. Let me answer the other part which is
0:25:58 I would say that the most successful project I’ve ever done
0:26:05 More than any of the companies ever built or any job I ever had has been this this podcast this podcast from a
0:26:11 Usage like people listen to this they like it. So customers are happiest financially
0:26:13 It’s a very lucrative product out for it’s a very good lifestyle
0:26:18 But also just the my enjoyment of it the act of doing it. I don’t do this episode
0:26:21 For some future payoff. I do this episode because it’s going to be fun to do
0:26:24 I enjoy this conversation this conversation up by the time we click stop
0:26:27 I’ve got my payoff
0:26:29 And when I started the podcast
0:26:32 I literally wrote down that I’m going to lose money doing this
0:26:39 That I expect that nobody will listen to this and I’m going to do it anyways because it’ll be so fun to record these episodes talking to
0:26:43 Interesting people and learning that it will make it worth it and I wrote down I have this google doc
0:26:47 I’ll share it it says my forecast as I will lose $10,000 a year doing this
0:26:51 My forecast is that really nobody but my mom is going to listen to this thing and it’s still worth doing
0:26:57 What were the other predictions? So I got into this position because I made a choice like that four years ago
0:26:59 right like
0:27:04 That that and so I don’t think I also thought well you got to eat shit for a while before you get to go do the fun things
0:27:08 I don’t believe that that’s actually true. I know a lot. That’s 100 true. Think about it
0:27:11 Let’s say you’re a 40 year old landscaper with three kids
0:27:13 It is one way to do things
0:27:17 I know a bunch of engineers who work on projects that they are personally interested in they build
0:27:21 Personal projects and one goes kind of nowhere two goes kind of nowhere, but it doesn’t matter
0:27:23 they’re building up their skills they’re having fun doing it and
0:27:30 Sure enough by the third the fourth the fifth either they’ve built up skills where they’re a highly valuable person that gets brought into a project
0:27:35 That’s already working and they get paid handsomely for it or they’re one of their projects takes off
0:27:38 But the whole time they were just doing the thing that they really like to do
0:27:41 I think that there is one way to win which is grind and eat shit
0:27:47 And pay your dues work up the ladder pick whichever cliche you want and that that is a way to win
0:27:52 I know several people that from the beginning they were driven by working on the things that were interesting to them
0:27:55 Like any adult type of guy, right?
0:28:01 And when they when they’re working on things that were interesting it led to good outcomes because when you work on things that are interesting
0:28:05 You work on it longer harder than than a person who’s just doing it for a reward
0:28:08 You get better at it and when you get really good at something that’s when the payoffs tend to come
0:28:16 Well, I believe that can be true and also it can be true that it’s more challenging logistically for certain people for example
0:28:21 You’re a blue collar laborer with three kids at 40 years old
0:28:28 You work from 6 a.m. To 7 p.m. And you’re like there’s just no time and I just got to pay the bills
0:28:29 I do think that
0:28:33 It’s just more challenging for many of the people listening right now. I believe you are
0:28:40 Totally right, which is we probably have a lot of college educated particularly college age kids who don’t have
0:28:42 too much responsibility
0:28:47 And they should lean into this this thing and I completely believe that to be true
0:28:50 And I believe it also to be true that as you grow
0:28:55 This type of mindset gets stamped out of you the world wants you to be vanilla
0:29:00 Yeah, absolutely. Let me ask a different question of the people we know that are successful. Just give me a rough number
0:29:03 What percentage do you think got there?
0:29:05 through the
0:29:07 grind do shit they didn’t like
0:29:13 That paid off in an unsexy way and then now they work on things that are more interesting pleasurable that they’re driven by curiosity
0:29:16 They’re driven by fashion. They’re driven by whatever versus people that
0:29:22 Made it by following things. They were curious about maybe it was a bit of a lonely road for a bit
0:29:25 Maybe other people maybe it wasn’t a hot market, but it became hot
0:29:28 But they were there already right that happens a lot. What percentage would you say in each?
0:29:33 I’m just curious roughly how you would think about it. Is it like only five percent
0:29:38 Got successful through following their own their own interests fundamentally
0:29:44 Or do you think that it’s 50 50 they got it got successful following their interest versus following what was more proven
0:29:45 If I had to guess
0:29:49 60 to 70 percent of the people who we know who we would consider
0:29:55 Wealthy enough that money doesn’t really matter probably made money in a way that looking back
0:29:59 They were like that was really hard and miserable and I don’t think I can do that again
0:30:02 And then a large percentage of them now
0:30:09 I would say only 50 percent of them then go and pursue something that truly interests them and the other 50 percent
0:30:14 Just do the playbook again and are miserable while earning a great living
0:30:18 Yeah, so roughly let’s say 20 25 percent. You think maybe we’re in the
0:30:22 The bucket that I’m talking about which is they were just doing what’s interesting to them
0:30:26 And that happened to become something that was very successful versus people who chose things that were
0:30:32 Not as interesting or not as fun for them, but they thought we’re gonna have a payoff and it did and here’s why
0:30:38 Why combinator is like the stereotypical silicon valley like story
0:30:43 You go to white combinator. How long is white combinator eight or 12 weeks three months? Three months. Yeah
0:30:49 Okay, so you go with one idea and you only have 12 weeks to decide if this is going to work or not
0:30:53 And by week six they say dude, this sucks
0:30:55 You should pivot this amazing idea you had to do
0:31:01 Credit card processing or to do something else that people want to give you money for and so they just go
0:31:04 Ah, fuck it. Whatever. I gotta go down that path
0:31:07 But that path that they’re signing up for is a 10-year journey or more
0:31:11 And so there wasn’t too much thought with it and so they’re just like man
0:31:17 I just got to get a win however way I can and I only have another six weeks until I’ve got to go do demo day
0:31:20 So I’ve got to just settle on something and move forward and do it
0:31:26 And I think that that mentality is often what a lot of internet based businesses are built on
0:31:31 So I think that’s a little unfair to yc because for example if I think that does happen
0:31:33 but
0:31:37 one of the things that happens in those pivots because I’ve invested a lot of yc companies that pivot
0:31:43 And also if you read a programs essay one of these program advises heavily against is the what he calls playing startup
0:31:49 It’s like playing house where you sort of just try to manufacture a startup idea that you think might work or think might be good
0:31:52 He’s like the best way to figure out a startup idea is to scratch your own edge
0:31:58 And to look at your own life and figure out in what place am I already living in some future that other people aren’t
0:32:01 But I could build a product that would help them get there or what’s a pain point?
0:32:03 We’ve discovered along the way of doing this that we could solve
0:32:06 So yes, they pivot quickly and they pivot in the middle of yc
0:32:11 But usually the advice is that you should pivot to something the product the it’s that you want scratched
0:32:16 The problem that you are currently having or the thing you you uniquely understand because of the way you live your life
0:32:22 Versus uh, what other people do and the biggest success is out of yc have typically been that right?
0:32:25 I agree that that the air bnb guys renting out their own apartment to make
0:32:32 Hey or brian armstrong doing coinbase because he lived in argentina and dealt with the currency issues and was interested in bitcoin
0:32:38 These are not ideas that fundamentally sounded good. The biggest successes. I think are done that way
0:32:41 Yeah, but not the average success. I think that’s exactly right
0:32:43 I think the most successful people will work that way
0:32:48 But the average or the majority are not that way and I think that’s probably the true statement
0:32:54 I I’d have to go look through a white commenter companies, but there’s not that many 23 year olds that know anything about payroll
0:32:57 processing software, but there’s a lot of
0:33:02 25 year olds or whatever who have created something really cool like that our friend jack
0:33:08 Why did he do vongole? I think he was curious of solving problems, but he didn’t have a problem wanted success more than he wanted
0:33:13 He was like this just seems like intriguing. I guess like yeah, let’s just he’s somebody made a shift
0:33:17 I would also say something there’s a confounding factor, which is that for a lot of the people who are our friends
0:33:20 The thing that they are interested in is the game
0:33:27 So it’s not the industry that they that was the passionate thing the passionate thing was playing the game of business
0:33:30 Can I give you two related things that came up for me?
0:33:34 I don’t know if you remember this but when the open ai drama was going on when they fired sam altman
0:33:37 One of the things that came out was
0:33:41 Maybe they have agi internally and everyone’s like no they probably don’t have agi internal
0:33:44 But maybe there was some breakthrough because he had gone at some conference and said
0:33:47 There are these moments with open ai where you’re sitting in a room and you get to see a demo
0:33:52 And your mind gets blown you’ve seen the future the world is not the same because of what you just saw
0:33:56 He goes that just happened about three weeks ago and people didn’t know what it was
0:34:00 But he was kind of just like teasing a little bit and just he wasn’t even trying to make a hype thing
0:34:01 He was just
0:34:03 Trying to say like what it’s like to work there
0:34:06 He was trying to use it for some other reason but people took that and they’re like man
0:34:09 They must have something sam altman said that or an employee said that sam altman had said that
0:34:12 And so people started speculating. What is it?
0:34:17 And then these leaks happened they start talking about this thing called q-star. Do you remember this?
0:34:18 Do you remember this q-star thing?
0:34:20 Yeah, I don’t know what it is though. So q-stars
0:34:27 I I’m not a ai phd researcher. So I don’t know exactly but the idea is like there are different algorithms or different methods
0:34:31 You can use to do something and q-star is a certain technique
0:34:36 And so people were like oh q-star does that mean they’re using the either the q technique or the star technique or whatever?
0:34:37 That’s not what people are using today
0:34:40 But maybe there’s something there and so this thing leaks
0:34:44 It’s not been confirmed yet whether that’s was or wasn’t a thing
0:34:50 But what ended up happening was there was a whole bunch of smart people that suddenly started sniffing around that technique
0:34:54 and just recently a bunch of research papers got published
0:34:59 Saying that they’re seeing amazing performance using this technique
0:35:04 And so this guy came on and he talked about that this is actually a phenomenon that happens frequently
0:35:08 So, uh, I’ll just tie this together. This guy Robert Kwanzey was tweeted this
0:35:10 I don’t know this guy but he tweeted this little story that I liked
0:35:13 And he said claud shannon once told me that as a kid
0:35:15 He remember being stuck on a jigsaw puzzle
0:35:18 And his brother was passing by and said, you know
0:35:20 I could tell you something that would help you with this puzzle
0:35:23 But now I’m not going to do it
0:35:24 That’s all the brother said
0:35:27 But that was enough of a hint for claud to solve the puzzle
0:35:29 The great thing about the hint is that you can always give this to yourself
0:35:33 So basically there’s this this phenomenon that happens in human behavior, which is that
0:35:36 If you knew that there might be a win
0:35:42 You don’t even need to know what the thing is that alone will increase your probability of success
0:35:45 Do you know one I don’t know what else claud shannon did?
0:35:50 Do you remember how I told you ed Thorpe went to the roulette table and it required two people to be in the crowd?
0:35:51 He was his buddy
0:35:52 That was the other guy
0:35:57 So in fact, if you look it up the there’s like it’s called I think it’s like the Thorpe shannon principle
0:36:00 And it’s like the theory of so claud shannon who this guy was referencing
0:36:05 He was the guy who was tapping his foot to tell ed Thorpe’s which is pretty funny
0:36:09 So the second story that’s the same principle is about Kaggle
0:36:14 So Kaggle’s this online competitive place for solving, you know problems riddles puddles puzzles whatever it is
0:36:16 I think I don’t know if it’s all coding or if it’s just math puzzles
0:36:19 So this guy replied in the thing he goes
0:36:25 One of my favorite Kaggle facts is that anytime that the leaderboard gets stagnant for a while in any competition
0:36:27 If one team suddenly makes a jump
0:36:35 That will automatically cause multiple independent teams to quickly reproduce the same breakthrough with no knowledge of how the first team made the breakthrough
0:36:39 And isn’t that kind of amazing how it’s like it’s the four minute mile, right?
0:36:44 What’s the guy’s name around Roger so when prior Roger banister running four minute miles
0:36:50 People were only like three seconds like 403 404 which is quite a long distance away from four minutes
0:36:53 But basically when Roger banister did it roughly
0:36:59 Four other runners also broke four minute miles within like three months of Roger banister doing it
0:37:00 Right
0:37:03 So the same thing just happened to me in one of my businesses
0:37:06 So in one of my businesses we had there was a marketing tactic or channel
0:37:12 That we had looked at we had even kind of dabbled with but we didn’t didn’t exactly know how to do it
0:37:15 It kind of seemed like a puzzle. We didn’t know how to solve so we put it on a shelf for a while
0:37:16 and
0:37:18 Then I heard a whisper that somebody else
0:37:21 Was just crushing it using that channel
0:37:27 Now I don’t know what they’re doing. I don’t know the technique that they’re doing. I don’t know how much they’re crushing it
0:37:30 I just heard enough to know that they are crushing it
0:37:33 and immediately
0:37:37 We mobilized and that same channel that looked kind of like a dead thing before to us
0:37:39 We didn’t really know how to make any progress
0:37:40 We still didn’t have any technique
0:37:46 Nobody gave us a tool of how to make progress just the knowledge that somebody else was making progress in that same channel
0:37:50 Fired us up got us going and we immediately found a breakthrough and over the weekend
0:37:52 We did like 30 grand in revenue on this one channel
0:37:56 and it reminded me of the same principle of
0:37:58 Just the knowledge that there is a solution
0:38:02 Actually increases your probability of getting to a solution
0:38:07 Just the knowledge that somebody else has found a solution without telling you how at all will increase your probability
0:38:11 And I think that’s one of the things about this podcast that should help people
0:38:13 That’s one of the ways to use this podcast
0:38:17 Is that you’re not going to do exactly what any of the stories we tell in this podcast do but
0:38:19 Just hearing
0:38:24 Other people’s success just hearing other people ran a four minute mile will make you run a four minute mile
0:38:26 We’ve had this with our friends too people who are saying
0:38:30 Within um, you know, I’m going to make x amount of money in y months
0:38:33 All right, we had a friend that was like I’m going to try to make a million dollars in three months
0:38:36 And just hearing that question
0:38:40 I didn’t have that question before just hearing that question got me to start thinking about ways you could do it
0:38:43 Then hearing that somebody did it
0:38:47 Immediately made me want to figure out how and even though I was not going to do any of the things that they did
0:38:50 It allowed me to figure out a solution that would be able to do that
0:38:55 I think that’s one of the most underrated learning techniques you can have or like success techniques you could have
0:39:01 What’s that called the mfm paradox that you can become more successful following somebody else
0:39:03 Even though you don’t know what they did just the fact that they did it
0:39:07 This and this is like way less cool than
0:39:14 Artificial intelligence, but similarly when morning brew and the hustle were first getting going with the newsletter business
0:39:19 We had the exact same thing happen multiple times where eventually I became one time
0:39:23 Austin came over after we had both sold and I was like, hey, you want to see something cool?
0:39:29 And I go pull up your computer. I’ll pull up mine. I know you got a document that shows everything that you guys were doing per month
0:39:31 Let me show you mine and you show me yours
0:39:33 And it was the exact same thing by the way
0:39:38 It was we were we were seeing little inklings of what the other person was doing as it was happening
0:39:42 And we kind of replicated each other’s success and it absolutely happened the same way
0:39:46 All right, if you’re listening to this pod, I already know something about you
0:39:49 You my friend are nosy
0:39:55 You want to know the numbers behind all of these things that we’re talking about how much money people make how much money people spend
0:39:59 How much money businesses make you want to know all of this people’s net worth all of it?
0:40:04 Well, I’ve got good news for you. So my company Hampton. We’re a private community for CEOs
0:40:08 We do this thing where we survey our members and we ask them all types of information
0:40:10 Like how much money they’re paying themselves
0:40:16 How much money they’re paying a lot of their employees what their team my bonuses are what their net worth is what their portfolio looks like
0:40:22 We ask all these questions, but we do it anonymously and so people are willing to reveal all types of amazing information
0:40:26 So if you really cannot google you can’t find anywhere else and you could check it out at joinhampton.com
0:40:31 Click the report section on the menu. Click the salary and compensation report
0:40:36 It’s going to blow your mind. You’re going to love this stuff. Check it out now back to the pod
0:40:42 Before we started this podcast you said what topics do you have it? I’m feeling a little uninspired and I have to say
0:40:47 You win a blue ribbon today because you have completely
0:40:52 Put a beautiful bow tie on this thing that I brought you you brought so many good
0:40:57 Interesting tidbits to add to the story of edthorp. That was pretty good
0:41:00 Well, can I can I leave you with one framework? I have one story
0:41:04 So the framework is you know when edthorp was beating blackjack or beating roulette
0:41:08 What’s the first step that he had to do before he beats the house?
0:41:13 What is step absolute step zero before he even figured out how to beat the house?
0:41:15 I don’t know just how to do it at home
0:41:17 Believing that it could be done. Yeah, right
0:41:21 Believing that it could be done and this is cheesy, but it is very true
0:41:27 And by the way things that are cheesy but true are underrated because smart people
0:41:32 Write off cheesy things because they’re cheesy because they’ve heard them before but they haven’t actually acted on it
0:41:38 So they’re underpriced assets are things that are cheesy and true because they’re ignored by other smart ambitious people
0:41:41 I remember when I went to this tony robbins event on the second day
0:41:43 There’s another guy who who hosts it
0:41:47 So the other guy he starts off with a game of simon says to kind of warm up the audience
0:41:50 And you just think this is a warm up because they want you to be engaged as an audience
0:41:53 They want you to be active do something interactive a little crowd work to start
0:41:57 So he starts with simon says we’re gonna play simon says now. This is a room of about 6,000 people
0:42:02 So there’s 6,000 people we’re gonna play simon says and he’s like the winner gets to come on stage
0:42:06 Or like that the yeah the winner gets to come on stage and you’re gonna get this thing
0:42:11 I forgot what it was some some good prize, but again, there’s 6,000 people. So, you know, whatever good luck
0:42:18 So he starts and he says simon says blah blah blah and then like he immediately gets like half the people in the first one
0:42:21 So for example, he goes all right. You guys ready to play stand up
0:42:24 And everybody stands up. He says he didn’t say simon says stand up
0:42:26 So you only do the thing what he says simon says
0:42:30 But if he just says an instruction and you do it without saying simon says you’re out
0:42:32 This guy clearly read the book the game
0:42:36 Exactly. So he’s got us on the cat string theory. We are just obeying his commands
0:42:41 So the game starts half people get out on the first round. It whittles it down within five minutes
0:42:45 He’s down to the winner winner gets up on stage blah blah blah and he had the final 10 people
0:42:49 he said stay standing you don’t get to come on stage just stay standing and
0:42:53 Um, then he called on somebody. He’s like the guy who’s standing you got to the final 10
0:42:57 The guy next to you. When did you get out? He’s like, I got out on like the second round
0:43:00 He goes, let me ask you something
0:43:02 Did you believe you were gonna win?
0:43:07 And the guy was like, no, I mean so many people. It’s a silly game. I don’t know. I didn’t even think about it
0:43:11 He goes, that’s interesting. That’s nice. Did you believe you were gonna win?
0:43:13 No, he goes
0:43:17 So raise your hand if you when we started the game you believed that you could win
0:43:23 Only like five percent of the audience raised their hand. He goes, so all of you thought you were competing with 6 000 people
0:43:26 The only competition was amongst these 50 people
0:43:31 Who actually believed that there was a way to win and he’s like, I’m gonna leave you with two two ideas
0:43:34 Number one, if you’re gonna play the game decide to win. That’s so funny
0:43:36 He’s like, you don’t have to win every game
0:43:40 But if you decide to play you should decide to win and he goes the second thing is that
0:43:44 In life, you believe you’re competing with a much bigger pool of people than you actually are
0:43:48 Because the majority of people aren’t even playing the game and other people who play in the game
0:43:50 Most of them don’t even believe that they can win
0:43:53 You’re only competing with the people who actually believe that there is a way to win
0:43:58 And so similarly with this guy cracking blackjack cracking roulette. That’s a game. I thought was impossible to crack
0:44:02 Until I read the book. I think it’s called bringing down the house or something like that
0:44:08 That’s the other blackjack card counting book and immediately my mind shifted into a blackjack is a beatable game
0:44:13 If we could beat this game and suddenly I started to learn things suddenly I started to understand
0:44:15 How do you actually beat the game of blackjack and it compelled me into action?
0:44:17 All right, let’s pause real quick
0:44:19 I got to do the thrill of the shill where I’m going to give you a thrill here
0:44:23 I’m going to teach you something that I think is a very important principle that any founder should know
0:44:27 And I’m going to tell you about a company that’s doing it well. All right, so the thrill of the shill is
0:44:35 Have you ever heard of the law of category? You familiar with this? I’ve not I think it’s from the book the 22 immutable laws of marketing
0:44:38 And in that book it’s talking about marketing. How do you actually stand out?
0:44:39 How do you
0:44:43 Do the hard thing in business which is stand out get your brand out there get customers
0:44:47 And get them coming to you versus you just chasing them down and hunting them one by one
0:44:51 How do you get market pull and the law of category is a very simple principle
0:44:56 Which is that you’d rather own a category than participate in one if you can’t be the first in a category
0:44:58 you’d rather create a new category altogether
0:45:05 And that is something that many people have done. So for example, I’ll give you I’ll give you one in the podcasting space
0:45:08 So we’re we’re a podcast and this podcast started off very
0:45:15 Undifferentiated we started off just as interviews with successful people. Just what that’s what every business podcast is interviews with successful people
0:45:19 How did you do it? It’s all past past facing. How did you do it?
0:45:22 We started to stand out when me and you got on here
0:45:24 We started going a little future facing which is
0:45:30 Hey, what trends what opportunities do you see what’s going on right now in the market that you think somebody could be capitalizing on
0:45:35 So suddenly we were in a new category. So how many podcasts were there that we’re talking about?
0:45:40 Stuff that you know opportunities and trends that you could be capitalizing on for the next 12 months versus
0:45:45 What did you do 15 years ago successful person and even when we invited guests on we said you got to bring some ideas
0:45:49 What opportunities do you see today now? We’re not just going to ask about the thing you did in the past
0:45:55 Even further than that is you ever seen hot ones that show where the guy interviews celebrities
0:45:59 But instead of just interviewing them they’re eating hot wings while they’re doing it escalating and in hotness
0:46:04 It’s the law of category that show became super popular gets millions of views on youtube
0:46:09 And he gets the best guess because he’s the only podcast that does that he’s the only show doing that
0:46:14 He created his own category and now if you came in and you try to do a show like that guess what they would say
0:46:17 Oh, it’s kind of like hot ones. They own that category
0:46:21 They own that that niche and so the law of category is a very small principle
0:46:26 Which is that without taking more effort if you simply just define a new category
0:46:32 You now have a reason to buy an rtb a reason for a customer to come use your product come use your service
0:46:37 Well the company that sponsors today’s podcast wander is a great example of exactly that
0:46:41 These guys basically said well, you have luxury hotels. You got the four seasons
0:46:44 You got what’s that fancy one a man that everybody’s going to nowadays
0:46:46 You got the luxury fancy hotels
0:46:50 And then you have stay in a house like arabian b where you get the home
0:46:53 You know you get to stay in a home multiple rooms in a kitchen and all that
0:46:59 But it’s not as luxury and turnkey and just a beautiful everything’s taking care of your experience
0:47:02 So they created a new category which is
0:47:08 Hotelified homes so luxury homes that are on par with the nicest luxury hotels
0:47:11 But it’s a house instead of being in a building in the skyscraper
0:47:16 You get a you get a backyard a pool a sauna you get a kitchen
0:47:20 You get everything you want in a home, but you get the guarantee that it’s going to be luxury
0:47:23 Unlike an airbnb. So I think that they’ve done a great job
0:47:25 As why they’ve grown so fast
0:47:30 They did I think like 12 million and bookings in the last 12 months because they created their own category
0:47:36 There isn’t anybody else who’s really in that category where they actually manage the property and therefore can guarantee a certain quality of service
0:47:40 Great thrill pretty good show. I love the show
0:47:46 Improve my show, please. No, I think your show was great. So if you want to use them wonder it got wonder dot com
0:47:52 Slash mfm. What do they get? I think they get $300 off the first day if you go to wander dot com slash mfm
0:47:54 So that’s our personal code. That’s just for listeners of this pod
0:47:58 You download the app if you do that you get 300 bucks off a stay
0:48:04 So you get 300 bucks off and you’re entered into a giveaway that’s going to be they’re giving away a free wander stay
0:48:08 So if you’re one of the people who are doing this and remember the principle that’s in this podcast
0:48:10 If you enter you got to believe that you can win
0:48:15 Go ahead and enter and you might win the free wander travel thing. So check it out wander dot com slash mfm
0:48:19 I think you said last time I go, you know, I’m not sure how many people are going to do this
0:48:23 So if you’re one of the people that actually does it you’ve got a pretty good chance of actually winning exactly
0:48:29 So that’s w a n d e r dot com slash mfm. All right back to the episode
0:48:32 So I have a funny story that I’ll tie it up with this which is that
0:48:38 People have heard of a vicious cycle. Oh, that’s a vicious cycle and they’ll say it’s you know
0:48:44 Poverty is a vicious cycle. You don’t have money. So therefore you don’t um, you can’t buy the best food or or
0:48:51 Education and therefore you end up staying, you know, you don’t get the best opportunities and therefore you stay poor vicious cycle, right?
0:48:53 We’ve all heard a vicious cycle
0:48:56 Well a good thought experiment is what is the opposite of a vicious cycle?
0:49:03 A virtuous cycle what’s a virtuous cycle and a virtuous cycle a virtuous cycle is again a tony robinson is basically
0:49:07 If you believe so if you have high conviction that something can happen
0:49:11 We’ve all had moments in our life where we are like I am convinced that I can do this or that it can happen
0:49:14 Then you’ll take a different level of action
0:49:17 So belief drives action the amount of belief drives the amount of action
0:49:21 So little belief will drive little action which drives a little result
0:49:27 A lot of belief takes you to drive take a lot of action which drives a bigger result and guess what once you see that result
0:49:29 It reinforces the belief
0:49:32 So if you start with a little belief you take a little action get a little result
0:49:35 You’ll be like I knew it. I knew the shit wasn’t going to work
0:49:38 It lowers your belief even more takes even lower action lower result
0:49:42 And the opposite happens where if you’re a heavy believer you take a shit ton of action
0:49:46 Shit ton of action will start to yield a result and your belief will say I knew it. I knew we could do this
0:49:51 I knew we’d get progress you take even more action and it just becomes a virtual cycle
0:49:53 and so that is one of the things that I think is
0:49:58 Most important if you are stuck or if you’re at a plateau or you’re not exactly where you want to be
0:50:00 step zero is you have to somehow
0:50:04 Trick yourself into raising your level belief that it is possible
0:50:08 One way is to read books about other people who have already done it or talk to other people who’ve done it
0:50:13 Imagine yourself doing it whatever ask yourself questions until you are worked up into a fever
0:50:18 That this this is going to work because that’s the only chance you have of taking enough action to actually get a result
0:50:22 I want to hear from the listener
0:50:25 The people who have made it this far
0:50:29 If they feel like I feel right now, which is like I want to run through a fucking wall
0:50:33 You’ve just like you’re like a guy you’re like a pastor right now
0:50:37 You know, you’re like one of these like black churches where you’re like dancing and screaming and shit
0:50:41 And I’m just like in the crowd like dancing as well. I feel good
0:50:45 Yeah, so now let me tell you a quick blackjack story of this
0:50:49 So I read this book and I become convinced that we could do this. I tell my buddy trevor. I said trevor
0:50:54 We could do this. We could bring down the house. We can count cards. We can get rich a blackjack
0:50:59 He says say no more trevor’s trevor’s a believer. He’s down. What hate are you perfect part? Perfect trait in the partner being down
0:51:04 We’re I don’t 21 years old and we’re seeing in college. Did you read the whole book?
0:51:06 Read the whole book
0:51:11 All right, but again because we have a ton of belief we find a way to take action. I’m living in north carolina
0:51:13 There’s no casino in north carolina. What am I going to do fly to vegas?
0:51:18 No, no, no the belief drives action. The belief causes me to find a way
0:51:22 I’ve realized hey in south carolina, there’s a river boat and that boat will
0:51:27 Like boat out into international waters and then you can gamble because it’s international waters
0:51:30 That’s the beauty of the world. It’s got international waters anything goes
0:51:33 So we drive down the south carolina. We get on this river boat
0:51:36 And we drive out but before we do that we spend three weeks practicing
0:51:39 And the same it’s the same system. You have a counter
0:51:42 Who’s going to be keeping count?
0:51:47 You have the signaler who’s going to signal in the whale. So trevor’s the counter
0:51:50 trevor’s got the focus on the communicator on the signal guy
0:51:56 And our buddy dan is going to be the whale and what was your signal the whale’s job is to
0:52:01 Come over he’s ag. He’s a gregarious character because the trick when you count cards is
0:52:05 You need to wait till the deck is stacked in your favor where there’s more let’s say aces and bad
0:52:09 The low cards are out so the count is high and then you need to vary your bet size
0:52:13 So that’s actually how you win is you bet more when the deck is hot you bet less when it’s not but if the
0:52:16 Casino sees you varying your bet like that they kick you out
0:52:20 So that’s why you need two players you know one guy who’s counting and the guy who comes in to make the bet
0:52:23 He needs to start with a big bet so he only comes in when the deck is hot
0:52:27 And so he comes in and we’re like dan you’ve got to act like a drunken idiot
0:52:29 And you’re just plopping down your whole
0:52:31 stack on this one hand
0:52:34 And then you’re just going to and then you’re going to double oh screw it
0:52:38 We went play it again as long as the deck is hot and when the deck is not hot we’re going to signal you to leave
0:52:40 What’s your signals to them?
0:52:44 So we have two signals you have the signal where you’re supposed to come over
0:52:48 Which is basically it was me with my arm like you know kind of like like this is where I’ve won
0:52:51 I’m holding my arm like this, but I’m behind it’s like standing behind me
0:52:56 It’s hard to do I’m sitting down but just a standing posture. So I’m standing behind trevor trevor’s counting trevor has a verbal signal to me
0:52:59 So you create a word for every number?
0:53:03 So let’s say, you know the deck is if the count is one, which is a very bad count
0:53:08 He would just say um, he’s just like all right. All right. Uno mas uno mas like one more hand
0:53:11 But that just signals me the count is one one if there was two he’d be like
0:53:17 I’d be like ah shit balls balls. We got two balls. That’s why there’s two and then he’d be like three
0:53:22 And he uh, he’d be like, you know, he’d have to think for three and we use like basketball player names or whatever and like
0:53:26 We had and you want to get the guy in on the counts like 10 11 12
0:53:29 Something like that and he’d be like dude. I’ve had a dozen chances now
0:53:33 And so we practice for weeks on this and we’re in our dorm room
0:53:38 We’re skipping class and we’re just practicing practicing practices signals boom boom boom bets and we’re running simulation
0:53:42 So we have our friend this girl like who was our friend. She was the dealer and she would deal it out
0:53:47 We were like every time we’re cleaning up this shit works. And so we drive down to South Carolina
0:53:49 We get on the riverboat we go
0:53:55 Dan’s got his drunken drunken tourist costume on trevers the the the guy who’s just bored. He’s just sitting there
0:53:59 He’s betting the minimum, but he’s counting and I’m the signaler. I’m trevers, buddy
0:54:02 And so and so what ends up happening is
0:54:07 Count gets hot we get to 10 and um, I signal
0:54:12 But in the real world conditions are a little different Dan’s not as they’re a lot different
0:54:15 Because he’s so busy being in his drunkid character that he’s actually
0:54:18 Acting like an idiot. He’s not paying attention to anything that we’re doing
0:54:20 So he’s actually getting a drink so he misses 10
0:54:25 Count starts to drop but but it’s at eight. I’m like, okay, whatever still eight still good enough
0:54:27 Let’s signal. I might go back to 10
0:54:29 So I say you know, Dan sees the signal. He starts coming over
0:54:33 Now our dorm room was kind of small. He’s at the he’s farther away
0:54:36 So it takes a little bit of time by the time Dan gets the table and he tries to cash in his
0:54:40 He tries to put down the bet when the count’s like, you know, six or something like that
0:54:44 And he puts his money down. They’re like, well, we have to color it up first
0:54:46 We have to exchange your cash for chips. No bet on this one
0:54:51 So the hand gets dealt out it nukes the count back down to two
0:54:54 Dan’s hand is visibly shaking
0:54:59 He cashes in like a thousand dollars or the chips. This is like big money for us
0:55:02 He takes a thousand dollars with the chips. He’s ready to bet big
0:55:07 But the count is now two and Trevor’s like balls, man, there’s balls, dude
0:55:11 And and Dan he’s supposed to take balls and he’s supposed to leave
0:55:16 Dan is in he’s blacked out at this point. He’s not drunk and blacked out
0:55:21 But he’s just got tunnel vision like he’s so locked into his character and the stupid things that he’s saying to the dealer
0:55:23 He’s completely ignoring the signal
0:55:27 And so he just puts the thousand dollars on and we’re both like balls balls balls balls
0:55:30 What’s happening? Why are you betting? This is the worst time to bet
0:55:33 And we just get wiped out
0:55:38 And you lost all your money lost all of our money and we were like
0:55:43 The book made it seem a lot easier than this because in the book it immediately works
0:55:47 and it starts a series of events that just escalates into them being ballers and um
0:55:51 Yeah, that was it’s sort of like the game. It’s kind of the same thing with the game
0:55:56 Okay, so we go back home. We’re licking our wounds. We’re like, damn. What the hell man?
0:55:59 And he’s like, I’m sorry. It was harder in real life. We’re like, all right, whatever. It’s all good, man
0:56:03 We got to the belief was still high that hey, there’s a way to use blackjack to make a lot of money
0:56:05 So we said, you know what?
0:56:11 Screw it. What if we’re the house and so we decide to create an underground blackjack club at school where we’ll just be the house
0:56:17 These movies go one or two ways now you’re on you’re on option b for a great movie
0:56:20 Exactly. So we we try to become the house now. We’re playing molly’s game basically so we
0:56:26 Again start running these simulations. We’re like, this is great. Like the house has an edge. We’re winning. This is like it’s a no-brainer
0:56:29 so we
0:56:32 And our friend the whole time was just like you guys are idiots
0:56:36 Like you’ve already wasted, you know one month of time on the stupid plan number one
0:56:39 Now you’re on stupid plan number two. He’s like, this is an even dumber plan
0:56:41 We’re like, dude, what are you talking about? We’re the house. You ever heard about the house’s edge?
0:56:44 Like we can’t lose or the house and he’s like
0:56:50 Okay, uh, so we’re like again two weeks into our like every night. We’re simulating this. We’re trying to run like
0:56:54 We’re like typing excel like how much money we’re waiting so you’re losing
0:57:00 You’re not gonna cheat. You’re just gonna. No, we’re gonna be the house. That’s it. And um, so he’s like, okay
0:57:07 Watch this so our friend comes in and just like owns us. He walks in and he’s like, all right. Yeah, I want to bet
0:57:09 He bets he loses
0:57:11 I bet more
0:57:15 Loses and we’re like see told you told you this can work. He’s like cool
0:57:18 And he’s like, hey, give me all my fucking money back
0:57:20 We’re like, no, dude
0:57:23 he’s just like you’re gonna give me all my money back right now or
0:57:27 And we’re like, what are you gonna beat us up? He’s like, no, I’m just gonna call the cops
0:57:30 Tell me you’re running a blackjack ring in your room right now. That’s actually like a like a you know
0:57:32 That’s like a serious crime
0:57:35 And you’re gonna get kicked out of school or you’re gonna give him my $800 back
0:57:39 And we were like, oh, uh, yeah
0:57:41 Kind of the $800 back and we’re like dammit
0:57:47 Yeah, you didn’t see the part of the scene in Molly’s game where she gets beat up for doing this
0:57:53 And this guy just instantly pointed out the fatal flaw, which is basically, you know, this is a crime
0:57:56 They could at any time just bust us. Uh, we would have to move the game every week
0:57:58 And like somehow know that this guy’s not gonna screw us over
0:58:01 But any player who loses money would always have the ultimate leverage
0:58:05 So that’s what I learned about leverage and I learned that leverage is more important than an edge
0:58:08 You should have went back to the casino
0:58:13 It sounds like this stupid idea actually could have maybe worked if your buddy Dan got a shit together
0:58:15 the reality is that
0:58:19 Casinos and I don’t know why people don’t I mean, I guess people do talk about this
0:58:23 But casinos use six decks and they use auto shufflers now
0:58:25 And so the ability for the deck to get really hot
0:58:28 It’s been cut down dramatically
0:58:32 And so, you know, they basically use six decks which will smoothen out the variants
0:58:35 And then they auto shuffle and they shuffle before you get through the whole shoe
0:58:39 So the whole point was like you need to get where a lot of the cards have been used
0:58:43 There’s only a small number of cards left and that that small number of cards is going to have a higher proportion
0:58:48 Of a face cards for you, but that just doesn’t really happen anymore. So I don’t really know where the edge is
0:58:50 I don’t think there’s an edge
0:58:52 This has been a roller coaster
0:58:57 I feel like I I’ve got my money’s worth after listening to this episode
0:58:59 And I should have just been learning how to code the whole time in college
0:59:03 I should have just been learning how to code and I would have made a lot more money than all of my
0:59:06 Hairbrained schemes to to make money or playing league of legends
0:59:08 One of the two
0:59:12 This was very good. This was a good episode. Um, is that the pod?
0:59:15 All right, that’s the pod
0:59:19 I can rule the world. I know I could be what I want to
0:59:24 I put my all in it like no days off on the road. Let’s travel never looking back
0:59:25 – Bye.
0:59:33 [BLANK_AUDIO]