Morgan Housel once wrote that “being good at something doesn’t promise rewards.” He continues, “it doesn’t even promise a compliment”. Because what’s rewarded in the world is scarcity, he says, all that matters is what you can do that other people are bad at.
It makes sense. In fact, it’s nothing more than Econ 101, where every high school student learns that price is determined by supply and demand.
But when I read what Housel wrote, my first thought wasn’t to nod quickly in agreement. Indeed, I found this unexpected; a little harsh even. …
One of the most surprising things I’ve learnt from writing on the Internet is that your biggest fan is likely to be someone you don’t know.
A fan is someone who’s excited by your work; a true fan is someone who will buy anything you produce. This is quite different from a supporter, who stays around for you. Both of them may provide the resources and encouragement you need to keep going, but the distinction between the two is crucial. In fact, it’s why a complete stranger can be your biggest fan.
Think about when something you’ve said has resonated…
Pillsbury started making instant cake mix in the 1940s, but it didn’t sell well.
It didn’t make sense to them because the mix made things easier. All you had to do was add water and you had something you could eat. Other companies sold instant cake mix as well, but the executives at Pillsbury thought that they had the better product because no one had a formula as complete as theirs.
Then Ernest Dichter came along. His realisation was that making a cake is not mere drudgery. Cakes held meaning. They showed love. …
Bonini’s Paradox states that the more complete a model of a complex system, the less understandable it becomes. This is a useful concept to remember because the world is a complex place, filled with complex institutions and complex people.
Aphorisms aim to cut through such complexity. They are meant to be simple. Take “honesty is the best policy” for example. It’s concise and easy to remember. But it’s also clearly lacking in nuance, and everyone can point to situations where one shouldn’t be honest. …
George Akerloff was the first to detail this. In his Nobel-winning paper, The Market for Lemons, he observed that markets with asymmetric information would eventually collapse.
Because only sellers would know the condition of the goods they sold, they could always mask defective products — lemons — as quality products and charge buyers the higher price for them. To protect themselves, buyers had to price in the above possibility they would end up with a lemon. This meant assuming that they were likely being offered an average product, and should pay no more than what it could command.
When Michael Jordan came out of the University of North Carolina, he was selected by the Chicago Bulls as the 3rd overall pick in the 1984 NBA Draft. Top draft picks typically go on to have respectable careers, but no one could have imagined what this junior out of college would do.
Six NBA championships, 5 MVPs, and 2 Olympic gold medals later, Michael Jordan has definitely made his case. ESPN named him the greatest North American athlete of all time. The Jordan line of shoes recorded over $1 billion in sales in the last quarter of 2019. …
Show me a disagreement, and I’ll show you a negotiation.
Negotiation happens every day. You see this in corporate boardrooms where you have lawyers trying to settle a complex claim. But negotiation also takes place whenever you decide with your friends where you should go for dinner. Or which movie you should catch.
As Roger Fisher and William Ury tell us in Getting to Yes:
“Like it or not, you are a negotiator. Negotiation is a fact of life.”
We typically see negotiations as a formal process where people on different sides fight to get what they want. In our…
If there’s one type of person we admire, it’s the person who’s able to get things done without even trying.
You know that person. He’s the student who aces the final exam “without even studying”. She’s the Instagram model who woke up with perfect hair. And both of them are in great shape by “just eating right”.
Statements like these may annoy us. But at the same time, we can’t help admiring or envying people who have things come to them easy.
It’s difficult to explain why we feel this way. The philosopher Nietzsche observed that our vanity and self-love…
Everybody knows that they don’t know enough about the world.
Where people disagree though, is how much exactly they know. “Maybe I don’t know about rocket science or self-driving cars”, you might say, “but I know enough about the world”. That’s enough for me.
It sounds reasonable, but even then, there’s a good chance you may be taking too much credit. Complexity exists all around us.
Take a minute and try to explain what happens when you flush a toilet. If you’re like me, you’ll be stumped when asked to explain the principles that govern the toilet’s operation.
Imagine you’ve just walked into a room.
You’re wearing a t-shirt printed with a terrible joke. It’s printed in block letters, so there’s no way people can miss. The colours don’t even go well together. It’s downright embarrassing.
A couple of reactions are to be expected.
You can’t help but notice that a couple of your peers are glancing in your direction. Someone in the corner was snickering. A few people you passed were talking under their breath. It seems everyone has noticed this social gaffe you’ve made.
A couple of minutes later, you’re certain you’re never going to recover…