17 Questions: 10-13
Do I need to make it back the way I lost it?
Ha, this is a particular cognitive bias of humans. I lost a bunch of money in real estate in 2008, as a lot of people did, and I refused to sell the house. I thought it would be better to try to rent it out, do anything I could to make money back in real estate. I'm a real estate idiot, I shouldn't do that. I'm not qualified, I have no informational advantage. And this applies to many different things. It's called, often referred to, one aspect of it, sunk cost fallacy. So I'd encourage everybody here to look up cognitive biases on Wikipedia, there's a good overview, and there are books like Think Twice that talk about how you can succumb less often to cognitive biases. You do not need to make money back the same way you lost it, all right? If your goal is to make the money back, think of alternate ways to focus on your strengths and not your weaknesses. All right, what if I can only subtract to solve problems? All right, this was on my no...
tebook. All right, for a New Year resolutions and so on, we might often ask, "What should I do? What should I do?" And there are two modifications I would say to that. So, one comes from Adam Robinson, who was on my podcast not too long ago. I don't know if anybody heard that episode. A relatively unknown character, super brilliant, basically an advisor to mega, mega billionaires. And he has an amazing backstory. He was personally trained in chess by Bobby Fischer and started, co-founded the Princeton Review and is a fascinating guy. And he recently came to visit me here in San Francisco. And every time I started a sentence with, "Well, what I should do," or "What I could do," he goes, "No, no, no." And he would stop me every time and he'd go, "You need to be asking, "what can I get other people to do? "What can I have other people do? "You need to stop thinking about you being "the active director in all of this "and reframe all of it." And even if you don't have a lot of financial resources, this is an interesting thought exercise. But, what I said was, "What if I can only subtract to solve problems?" What should I do, implies that you're going to get the most gain, in terms of quality of life and otherwise, if you add. Right, and then this is often something that results in feature creep in software design because engineers aren't generally paid to remove things, they're paid to add things. And this can be very, very problematic. Humans think this way. All right, so what if you could subtract to solve your problems? Create a not-to-do list, okay? And that is where I try to start before I'm adding. And there are some spectacular examples I could give to you of, say, startups that I've worked with where they're doing all sorts of sophisticated testing, doing a million and one things. And I say, "Okay, I realize I don't want "to add a huge man hour burden to what you're "up to, but let's try one thing. "Go to the page where you have your most "valuable click, you need people to sign up, "okay, great. It's hidden in the top hand corner, "and you've got all of your social buttons. "You're basically bringing people in to a Lamborghini showroom and then selling them, like a Yugo." (laughter) "So let's take away all those social buttons "and then let's take the number of "clickable elements above the fold "and just remove 90% of them "so that you can really hone people "in on that most valuable click." And some sites like Dropbox do a good job of this. And their conversions improved 21.1%. Overnight, just like that. Okay, that is the difference between getting funding and not getting funding, succeeding or not succeeding. That was a huge difference and it was just from removing things. All right, what might I put in place to allow me to go off the grid for four to eight weeks with no phone or email? All right, how many people here are entrepreneurs or have their own business of some type? All right, this might be, along with the fear setting, one of the more valuable for entrepreneurs, Who, at any given point, or at some point, will feel overwhelmed. How could you take eight weeks off the grid with no email? And that doesn't mean you can cheat with Slack, either. Okay, so (laughter), so I'm going off the grid, incommunicado, how could you do it? The value of this exercise, and it's not just an exercise, it's not just a hypothetical. The intention is to get on the calendar an eight week period, let's say six months from now, and go off the grid. For at least four weeks, I would recommend more if possible. What this forces you to do, because if you go away for a week you can allow fires to erupt because you don't have great processes and you're not delegating well. The fires erupt, you come back, you play firefighter. Four to eight weeks, you can't do it. Your business will implode. What that forces you to do, and The E Myth Revisited is a decent book about this, or focuses on some aspects of it, if forces you to put in policies and processes--outsourcing, rules for decision making, maybe Google Docs with processes, whatever it might be. Dropbox with particular resources, templates, et cetera, so that you are no longer the bottleneck in your business. And when you do this, you leave, you have this fantastic vacation, which you otherwise would not be able to take. You come back and then those systems outlive the vacation. So, in aiming for this time off the grid, you are not hurting your business. In fact, you're removing the constraints that allow you to five, 10x revenue. And I've seen this over and over and over again. So I would highly encourage you, it's the beginning of the year, if you haven't taken a vacation in a while chances are a few of you fall in that camp, four to eight weeks. And put it on the calendar, and get really excited about it. Put your dream trip on the calendar and then get to work putting systems in place. All right, and if you want to see an example of that that I did myself, you can look up The Four Hour Reality Check, which was an Inc. magazine piece (laughs) that was a funny description of a trip I took to Bali where I had no calendar, no email, no phone (laughs) for the entire time that I was there. So you can check that out if you want to see a real world example of it. All right, just a few left here, and they don't require as much explanation. Am I hunting antelope or field mice? All right, this is 80/20 at work, once again, and being effective instead of being efficient, doing the right things not just doing things well. Because you can get great, you can get so good at inbox zero and have it mean exactly zero, right. Are you hunting antelope or field mice? This is actually from Newt Gingrich, and if we're talking strategy, like him or not, very, very impressive Republican strategist, extremely smart in how he's accomplished certain things. And he tells this story of the lion. So the lion can very easily catch and kill field mice, and in the short term, that's very rewarding. But over time it actually requires more calories than the lion's ingesting. So, field mice, field mice, field mice, all day long, after a while, the lion will die. On the other hand, you have antelope. Antelope, much stronger, much faster, much more difficult, require more planning, more energy expenditure. But, can feed you for days, weeks, potentially, right. I'm not a zoologist, maybe it's not that long. But, I'll use Newt Gingrich's example-- lions seem pretty damn big, so maybe not, but you get the idea. So at the end of the day, and I've set reminders to this effect, today did you hunt antelope or did you hunt field mice. Were you playing Whack-a-Mole, were you being busy instead of productive? And this is just a prompt, this is a question that I ask myself all the time. You do not have to do many things correctly to have a hugely disproportionate output compared to most people. And a boring book title, but I would highly recommend everyone here read The Effective Executive by Peter Drucker. In effect, the entire book focuses on this question. And it's a fantastic read, I've read it probably a dozen times.