Truth-Default, Podcast-Default

How do you believe someone?

It seems like context is really important. Used-care-salesmen face an uphill battle on the field of ‘reputation’. Businessmen in suits have some kind of unconscious advantage. Then there’re podcasters.

Why are podcast people so persuasive?

I wondered this after looking up another ETF by another ETF operator and podcast interviewee. They always seem to have good ideas and my rationalizing brain runs faster than my legs on my podcast runs. Negative splits are a joke compared to the legitimization I can do. Well, you do need to zig when everyone else zags.

Part-of-the-reason may be due to something Dr. Tim Levine (YT) calls “Truth-Default Theory.” The thinking goes that Truth-Default allows coordination.

The part of Levin’s talk that related to my podcast persuadability was when he addressed couples. In one study they collected college couples and told some couples that one might be lying about some things (it was a large collection of statements to hide the true nature of the study) and they told other couples nothing of the sort.

For couples who received hints of deception, the lie-spot-rate was slightly above average (60%). However in couples with NO hints the rate terrible. It was so bad, Levine said, “During debriefing we had several subjects deny the nature of the experiment and tell us their partner did not lie to them and we were surely mistaken.”

In a study of political agreeableness, there was a humanizing element to hearing someone’s voice rather than reading their words. This is may be what happens in podcasts. Listeners subscribe to things they want to hear (confirmation tendency) with people they enjoy listening to (liking tendency) in a medium (McLuhan) that is more persuasive.

Pile on Levine’s theory that we default to believe. He said, “My theory is that absent some kind of prompting, thoughts of deception don’t even come to mind.” The payoff to believing must be worth it.

Image result for if you want to go far go together

On a Christmas walk with my father-in-law, we covered a lot of ground in both sidewalk and ideas, and one that we touched on was fasting. I explained that I believed in fasting without considering the science. In fasting, there’s nothing to sell.

Constant vigilance is impossible and unwanted. Truth trust leads to cooperation–which got us here. However, an awareness might help at least avoid the situations that aren’t win-win.

Thanks for reading. More around this idea on Twitter.

Design it

I don’t remember resolutions as a kid other than be nice to my brother or study more. Ambiguous, token offerings.

As an adult, I get it. Finances, health, and friendships all take on different meanings as time passes. It’s that wonder of the world called: compounding.

Part-of-the-reason things compound is the system. As kids, our systems is buffered, like bowling alley gutter guards, by caring adults and lack of resources. It’s harder to go to extremes. As an adult these buffers fall away and we rely on the skill called ‘personal responsibility’.

If t-shirts are any indication, there are fewer adults ‘adulting’ each day. Luckily for them, very little ‘adulting’ is required except for small moments of design. Their obstacles are really opportunities.

Rich Barton said “Every friction point in our lives is a chance for an entrepreneur to solve a problem.” Jeff Jordan said that eBay bought PayPal because of transaction cost frictions. Ted Sarandos noted this too, “What it takes to get you out of your house if you’re on episode four of Stranger Things is pretty high.”

Frictions are the source of the negative effects that lead to the resolutions.

For our resolute resolvers then, we can ask if we want to do more of something we should make it easier to do and if we want to do less of something we should make it difficult to do. They should design it.

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However, most people don’t consider themselves designers. They confuse design with art. Art is the “shabbiest” kind of design writes Victor Papanek. Design is not white walls and pine desks and smart drawings. Design is ugly prototypes and rough consensus and running code and living problems.

Design just changes the system. Anything that changes behavior is a design. So if we want to change something, we can design it—business or personal.

15 or 30-year mortgage?

Right around thirty-two, most people ask this question: should I get a 15 or 30-year mortgage?

When my wife and I wondered this we had some of the personal-finance challenges licked (hedonic adaptation, envying the Joneses, etc.). A fifteen-year mortgage felt like the responsible choice because delayed gratification is almost always worth it.

However, there was opportunity cost to consider. If we chose the lower monthly payments that go along with the longer payment period we could invest the difference. Using a selection of actual returns of the S&P500 over the last thirty years here’s what the number said: it doesn’t matter.

These lines cross around thirty-five years.

Subtract total house payments (extra interest) from total investment gains and the total difference is twenty-thousand dollars.

Fifteen or thirty? Doesn’t matter.

Another question that pops up for parents is paying for college. It just so happens—and I double-checked the math—that a fifteen-year mortgage started when a child is three, finishes when that child turns eighteen and may head off to college. Mortgage payments become tuition payments. Clean and easy.

This doesn’t matter either.

All that matters is choosing from good options. With hindsight one option will be better than the others, but that prediction is impossible.

A lot of time we want THE BEST. Early in life, I compared televisions, computers, and cars on all the listed attributes (I hadn’t read Sutherland). Now I try to think about what the good options are and pick one.

Much of life is too complex to optimize but not so complex to neglect.

Forward and Backward Thinking

“Jeopardy! James” Holzhauer won a total of 2.7M dollars during his appearances on Jeopardy!. It was a financial and cultural success as bar flies asked each other, have you seen this guy?

During the week his run ended, Holzhauer appeared on the Wharton Moneyball podcast to talk about his approach on the show as well as what it is like to be a sports bettor. While his interview was good, this part stood out the most:

A stunner of a Daily Double OR “someone suggested they could make the questions really easy and any advantage I had is negated and I’d purely have to win on the buzzer.”

Most of the time people find themselves thinking about the first suggestion; harder questions. However, difficulty is a dial that can go both ways. Rather than ask how can James get fewer questions correct someone on the show could wonder, how can not-James get more questions correct?

Daryl Morey said of the early analytics movements that coaches quickly picked up the advantage of corner-threes—offensively. However, “If you knew threes were good on offense you had to know they were bad on defense but that whole marriage hadn’t happened yet.”

There are two obstacles to seeing things forward and backward.

First is that people love to see cause and effect as well as assign responsibility. Put another way, we rarely consider the conditions of the system, and their effects.

Second is that people settle for one-right-answer. I blame school. ORA works for complicated questions in stable fields: solve this chemical formula. ORA also works for simple questions in complicated fields: what motivated this purchase? ORA does not work for complicated questions in complicated fields. We call this “most of life”.

Thinking forward and backward then provides one tool for approaching problems. For practical use, whenever you hear an adjective like good, low, recent think of the opposite like bad, high, or ancient and think about how turning the dial in that direction might have beneficial effects too.

Tools for 2020

Recently I had to take our family golf cart in for service.

That seems odd, but we live adjacent to the largest retirement community in the United States. There are over 100 miles of ‘multi-use paths’ for walkers, runners, bikers, and golf-cart-drivers. Have you ever gone to dinner, the library, or home from elementary school on a golf cart? It’s awesome.

The service station was three miles from our house and so I ended up walking home. As I strolled, cars and carts zoomed past and I marveled at the efficiency of an internal combustion engine.

Later that same day I read this from The History of the Future:

“With web forums, chat rooms and a motto of “Learn, Build, Mod,” ModRetro sought to attract the world’s best, brightest and most curious portabilizers. And for the most part, Luckey’s community achieved that objective.”

Toward the end of 2019 on Twitter there was a thankfulness on the platform. I’ve met some of the most thoughtful, kind, insightful people. It’s really amazing.

Both the engine and the internet increased productivity.  Throw in some other major changes and we get a picture of the growth.

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That low hanging fruit has been picked, sorted, canned, jammed, and consumed. But here are some ideas for tools for 2020 and beyond.

  1. Your health. It’s amazing how much more someone can do when they optimize their physical and mental health. Some new tools will be easier than others because they’re adjacent to the things we already do but this is one area where anyone can develop and deploy better tools.
  2. Your writing. There’s something to writing that forces someone to think about an idea. Even superficial writing — I have an idea! — can be valuable because it creates a dot on an idea graph.
  3. Your technology. Those engines that zipped past me required some level of skill, so too does the technology in our lives. From no-code to real code, tweeting to a/b tests, technology is a tool to worth improving.

These three tools are guaranteed to help because there’s nothing here to sell. It doesn’t matter which health program, plan, or path. There’s no software for writing or specific code for technology.

I’m a sucker for the shiny new app, service, or technique for X. But the best results may come from the compounding of all the things we already do.

Words mean Competition

Supported by Greenhaven Road Capital, finding value off the beaten path.

The easiest competition is a competition with no one. Peter Thiel wants entrepreneurs to go from Zero to One. Bob Moesta wants business owners to think about nonconsumption. Investors want to fish by themselves.

A good sign for a lack of competition is a lack of words, metrics, numbers, figures, or ways to describe the thing. Sabermetrics provides a clear example, creating new words like WAR (wins-above-replacement). Early on it was only natives that spoke that language. With time it became legible and numerical.

Recently I was researching Shopify for a client and the Reddit message boards are full of good questions, helpful advice, and sad stories. The most helpful comment was this, “drop shipping worked before there was a name for it.” 

Like comets passing past planets; ideas are unknown, known and captured, or lost again. Once an idea has been collectively captured it takes a form, it becomes easy, and it’s hard to create value from it. Ben Savage explains this idea in his comment about blockchain.

There’s little doubt that in 2020 we will generate, collect, clean, and analyze more data than we did in 2019. That’s a lot of potential legibility. However, more data doesn’t mean good data.

Ask any parent what the best restaurant meal is like and they’ll tell you, 100% of the time, it’s when a waiter takes special care of the children. Early food, extra apps, special cups, jokes, magic tricks, whatever. This is low hanging fruit, easy to see, guaranteed to please.

“A larger sample size doesn’t give you a better answer to a bad question.” — Bob Moesta

I don’t get more excited for new years than I do new months but they do provide an artificial break — like a paragraph — to pause and prepare.

We can take a breath and business owners can ask, am I going to sell the same things to new people or new things to the same people? To avoid the competition and make a difficult task slightly easier it will help if there aren’t quite words for what you’re doing.

Thanks for reading.

Malcolm Gladwell

Supported by Greenhaven Road Capital, finding value off the beaten path.

Malcolm Gladwell was on the Joe Rogan podcast to talk about his book and wander and wonder around as Joe Rogan does. This post will be about finding the truth.

The truth in a joke.

When asked why so many comics come from Boston, Rogan said, “It’s a hard place, mean women, drunk guys.” Audiences pay with their time (opportunity costs), their money (tickets), and social currency (getting a babysitter). Rogan said that comics must “quit fucking around and get to work.”

Gladwell asked whose fault it is when a joke bombs. “If it doesn’t go over most likely the joke sucks and you have these ideas and you need to rework them,” Rogan answered.

Listening to Rogan talk about good jokes reminded me a lot about The Mom Test. Created by Rob Fitzpatrick, it’s an approach to innovation that starts with the customer needs rather than the producer’s ideas. Comedians, like Rogan, have ideas but they need to test them. Only the real world provides the acid test for jokes, investments, or war.

The truth in a phonecall.

Rogan tells Gladwell about being lied to in person and on the phone and Malcolm wonders, “would you have done a better job if all I gave you was the transcript of this guy’s speech. There’s a lot of interest in this question in the community of people who have studied deception.”

On average, people are no better than chance at spotting liars. But that’s the average. When something is familiar, people believe it more. When liars are highly motivated, they get away with more, to a point. When judging something in different mediums, the medium matters. Gladwell explained, “It seems to be the case that we do better when we remove sight and sound and all we have are the plain words on the page.” For our understanding, mediums matter.

The truth in a book.

When asked how he writes, Gladwell said this:

“I type and then print it out because there are structural things you can only see, I think, when it’s on the page. Then I will annotate that draft with a pen. I think that our thinking is quite sensitive to the mode that we use it in. You think differently when typing on a keyboard than when you have a pen in your hand. One is not better than another, they’re both good, just different.”

This echoes something Neil Gaiman told Tim Ferriss, writing by hand produces something different. Rogan agreed, noting that he types his jokes because it’s fast but then he writes them longhand because it sticks.

The truth.

The idea Rogan and Gladwell circle is about conveying truths. One person wants another person to understand them, to see their truth as our truth. For this to happen we must consider the medium.

In his book, Presto, Penn Jillette writes that reality television competitions have multiple stakes. The first is what we see on the screen. Contestants, sell, build, run, and verb. A winner emerges and appears next week to do it again. Scenes are supercut for spectacle.

Second is what happens off-screen. Jillette calls this the “real competition,” and in his case it’s to “put asses in the Peen and Teller Theater seats.”

The truth that Jillette wants to convey is not that he’s good at selling, baking, or building on television but that he’s interesting and therefore his show is interesting too. The on-screen and off-screen nature of television is perfect for this truth.

As a comedian, Rogan wants to unearth and share jokes. He’s a cultural anthropologist and his fossil is funny. Gladwell and Gaiman are authors who want their voice in your head.

What’s ‘true’ is for people smarter than me. But how truths are shared is something we all can understand. Thanks for reading.


Supported by Greenhaven Road Capital, finding value off the beaten path.

The most influential idea of the year, partly because it was new and I was starting from scratch, was the idea of jobs-to-be-done.

For a long time, I’d circled this idea. It was like being in a crowd of people, thinking you saw someone you knew, but unsure of the name. Maybe you knew it once. It was familiar. That was me.

I’d met JTBD in a Clayton Christensen book. But not until diving into the work of Bob Moesta, Ryan Singer, and Alan Klemet did I see the name, learn the etymology, and become fluent. Here’s a podcast on what I learned. Here’s a Kindle ebook. Here’s a pdf (JTBD). Here’s a tweet:

A warning. Once you see ‘jobs’ you can’t unsee them.

Matthew Marolda

Supported by Greenhaven Road Capital, finding value off the beaten path.

Thomas Tull thought that Legendary Films could be better after he saw newspapers advertising The Hangover. Is this really how we should market this? Tull thought.

As a sports fan who saw sabermetric’s ascent, he looked for an analytics group he could hire (buy) and found one started by Matthew Marolda who recalled meeting Tull on his jet and getting this pitch:

“‘Legendary is a benevolent dictatorship’ and that helps, having the guy at the top be like, ‘this is what we’re doing, get on board.'”

Listen to analysts in the game and you’ll hear how often this isn’t the case. With support, Marolda built up an analytics staff quite a bit larger than their Hollywood peers, at least at first. Marolda used to joke that his group was about sixty people, which was fifty-nine more than their nearest competitor.

Another thing that contributed to Legendary’s success was separating analytics from creative. This distance “ensures objectivity,” Marolda said in 2016.


Distance had its drawbacks. They reinvented the wheel, Marolda said, but they also came across new ideas and weren’t unnecessarily influenced by others. Malcolm Gladwell has wondered for years why basketball teams don’t do something like this.

Bill Simmons noted that they kind of do.

Maroldo wanted to figure out how conditions matter. What was the Hollywood equivalent to when baseball hitters were shown heat maps or coaches told about 3-point offense and defense? In what ways did talent fit well and how could data help market movies?

The talent advantage has been nebulous, at least as far as public information goes. The Great Wall likely barely broken even despite starring Matt Damon, an A-List actor who indexes especially well in China.

Legendary has had much more success in marketing movies. They remind people who are in the tent that movies are coming out and they ignore people like Marolda’s mom who’s never seen a Legendary movie. Which kind of makes sense when you see their list of movies.

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Movie marketing is similar to sports sabermetrics. The traditional way was fine until new metrics, tools, and technology led to better outcomes. Traditional movie marketing looks like this:

  • 70% on television
  • 10% on digital
  • 10% on outdoor and print
  • 10% on fees.

However, for Krampus, Legendary flipped the marketing model and spent six times the normal amount on digital and one-third on television. Speaking generally Marolda said:

“It wasn’t to say that TV advertising was bad, in fact, it’s quite effective in the right context. Rather, can you bolster it, flip the order, have targeted digital lead the charge? That’s what I think where the immediate revolution has been.”

Digital’s advantage is being able to not target Marolda’s mom. She shouldn’t know about Godzilla vs. King Kong in 2020.

Marlo Vinasco of Uber spoke about how they’re using data for targeted marketing too. “That’s the key insight for marketing. Instead of randomly targeting hundreds to catch ten (potential churning customers or drivers), I’m going to target twenty to catch five or six. It’s a much more efficient vehicle for marketing investment than before.”

That said, digital still has obstacles. When asked in 2016 if Legendary might go totally digital Marolda balked.

“We’re not opposed to going 100% digital, we’re close to doing it. But the theory is that if you do that and then it fails, then that’s an easy way to point a finger. So we’re cognizant of that.”

Career risk exists, even with data backup.

Part of the reason for career risk is the narrative around a movie. For example, Warcraft was panned by critics, enjoyed by US fanatics, and loved by Chinese viewers, outearning Star Wars for the month. Marolda said, “Our industry is very domestically centric so people were watching the US box office but they didn’t really have their eye on what we were really thinking about, which was China.”

Without the inside story, commentators criticize baseball teams, tennis players, or Michigan brewers. Mike Reiss put it this way:

“At the end of season 4 (of The Simpsons), I left to take my Christmas break. I picked up a year-end magazine that declared ‘the writing on The Simpsons has gone downhill.’ That critique ruined my holiday. I obsessed about what I could have been doing wrong. Twenty years later, that same magazine declared season 4, ‘the greatest season of the greatest show in history.’ Thanks.”

Without the insider’s reasons, we get outsider’s guesses. Warcraft worked for a number of reasons, one of which was the data. Marolda said, “because of our relationship with companies like Tencent and Baidu who actually sell tickets, we’re able to close loops in ways we can’t anywhere else.”

They targeted marketing and it worked.

Movies are an interesting business. Some things have changed, but others haven’t. For marketers who better target customers, it’s a fuller theater. We’ll give the last word to Robert McKee, “For writers who can tell a quality story, it’s a seller’s market—always has been, always will be.”

Thomas Tull

Supported by Greenhaven Road Capital, finding value off the beaten path.

Former Chairman of Legendary Films, Thomas Tull spoke with Shane Parrish.

A key insight to Rory Sutherland’s book Alchemy that we keep coming back to is doing more with less through psychological suggestion rather than physical improvement. One form of that is a see-it-to-believe-it moment. Tull experienced one at Hamilton College, which: “Had a profound impact on how to think, how to communicate, and that you could have efficacy in the world. If I had to distill the education down, it was looking at other people and the fact that you could have an impact on the world. It wasn’t just get up, do my job, and be slotted into my life.”

Hamilton taught him agency.

After college, Tull owned and operated an auto repair shop as well as some laundromats where he installed washing machines with dynamic pricing. Through those experiences Tull learned:

“If there’s any thematic to my business career, it’s that I’m not good with coming up with a new thing…what I’ve done okay at is looking at an industry or business model and saying, ‘Okay, where are points where you could improve this?’.”

Invent or optimize? Lay track or make the trains run on time? These questions depend on the phases of business and personal fit. Tull optimizes.

After a stint in venture capital, Tull started Legendary Entertainment in the early 2000s. We’ve noted here that some businesses like movies, wine, and restaurants tend to be terrible options because they pay in profit and prestige. Easier, though not easy, businesses are being Taleb’s Dentist or Charlie’s Plumber.

To succeed in making movies, wine, or food takes timing (luck).

When Thomas started Legendary, “a lot of big-box retailers were using (DVDs) as a loss-leader and the discs had great margins.” Combine that with “premium, grade-A, global, intellectual property.” Movies lacked capital and Tull saw an opportunity.

“I really had conviction because I looked at the economics and thought, if you can build it in a different way (partnering for distribution) and if you could have the right structure and draft off global infrastructure you could build a nice business.”

Tull’s first director was Christopher Nolan (more luck) and Legendary went on to make We Are Marshall, The Hangover, and Straight Outta Compton. The secret to these successes was to “Stand as close as you can to absolute talent.”

Tull also talks about the movie economics and how Legendary is closer to Disney than Blumhouse. If Jason Blum is the Warren Buffett of movie-making (don’t lose money) then Tull is like Disney. The scope of resources makes “each film is like a startup company.”

During this time Tull noticed how movie marketing changed. “It used to be that if you made a good movie, got good test scores, and got a good trailer, you’d be fine.”

But it was after seeing that The Hangover spent seven million dollars on newspaper advertising that Tull though, “that’s probably not an efficient use of capital.” Working with Eric Schmidt, chairman at Google, Tull bought a boutique analytics company founded by Matt Marolda.

“I wanted to insert ourselves into the decision point. If it’s clear to me that you’re not psychographically into this movie, I don’t want to bother you.”

This change was a “pretty material impact on our business.” This change is spreading from films to rides to films.

In 2016, Legendary Entertainment was acquired by the Wanda Group and Tull started Tulco Holdings. Tull looks to invest in companies with enough ‘there there’. That means aligning the stakeholders. For private equity like Brent Beshore it means one thing. For venture capitalists, it means another. Here’s how Andy Weissman put it:

“If you take money from a venture capitalist, the way the economics of the VC world work, are an investor like me needs to make 10 or 100 x on our money, which means we need these companies to be really large businesses for us to return money to our investors. If they’re not, those returns make less sense to us. When the time to take venture money is when you think your incentives are completely aligned with that. You have to believe it’s a big business. You are comfortable taking big risks, including existential risks around managing that business.”

Thanks for reading.