Second Order Parenting

“Perhaps the most important thing is supporting a kid’s sense of autonomy.” – William Stixrud

Peter Attia wants to be an Olympian. When he’s 100. When Attia first explained the idea, he worked backward. What should someone do now if they want to do something else later? If you want to be able to go to Disney World with your grandkids you better be able to walk eight miles now. Or some such thing.

Working backwards is a nice tool for solving problems. I want to get to n so first I need to get to n-1.

A similar approach is advocated in the book, The Self Driven Child. In that book William Stixrud and Neil Johnson ask parents to consider their future eighteen-year-old. Then, like Attia, work backwards and consider what a child needs to do at twelve so they are successful later.

Stixrud’s and Johnson’s ideas come down to four pieces of advice for parents:

  1. Offer help, not force 
  2. Offer advice, it’s their choice  
  3. Encourage children to make their own decisions
  4. Have kids solve their own problems, as much as possible 

It’s not so much about ice-cream for dinner, but it’s about setting some (wide, but safe) boundaries for children to operate within.

This has been hard because parenting is a bit of a wicked problem. There’s a lot of showy things a parent can do but might not necessarily be that helpful. Once a child is mentally and physically safe, what’s the next clear thing?

In the ERE book, Jacob Fisker shares a reverse fishbone diagram to show ‘net’ effects. The aim is to end up above the horizontal line. Eating a candy is a positive first order effect, it tastes good. But a negative second order effect (low nutrients, high sugar), and maybe even more (bad habits).

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Easy decisions, hard life. Hard decisions, easy life.

There are many things with negative first order effects (difficult conversations, certain exercises, working late/early) but which have positive n+1 effects and so they are worth doing. Personal finance follows this diagram for example. Parenting according to Stixrud and Johnson follows it too. It might not feel easy and it might violate the actions=progress maxim, but it’s difficult non-actions that help kids the most.

One personal instance is schoolwork. We’ve been distance learning and I’ve played a large role from checking work to answering questions. And, sometimes just telling my daughters the answers. Like junk food it’s easy at first but it violates both the fishbone approach and the self-driven child advice.

How much to change, I don’t know. But this isn’t baking. Like over-price or over-rated or over-indexed, the direction for gains is clear: my kids have to learn to live their own lives and it’s my job to support them.

The TiVo Problem

Via Alex Rampell (2015):

“The battle between every startup and incumbent comes down to whether the startup gets distribution before the incumbent gets innovation.”

White Claw succeeded, gaining distribution before Budweiser could imitate/innovate. Hallmark is entangled with this problem as Disney/Hulu carry Lifetime. Barefoot Wine succeeded finding the overlap between price-point, JTBD, and non-wine-snob. Snapchat introduces stories, Facebook copies. Innovation vs. Distribution.

There are a few options given this condition.

1/ Rampell suggests to “be boring”. Or, to be first in the chronology. Customers wanted Comcast before the wanted Tivo.

2/ Innovate where the competition can’t. This is (was?) the SoFi plan: filter better borrowers who default less lowering costs and pass on the some savings.

3/ The system might change, as in the case of medicine where the large firms (Glaxo) mostly license innovation.

This post will be the first thread in a larger exploration of this idea. For instance, Etsy seems to have held off Amazon Homemade and Candy Crush is still crushing it.

Market Mechanism 2

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This is in addition to the previous post on the market mechanism. Briefly, it’s the idea that competition erodes the value captured by the producer.

Barry Ritholtz asked Morgan Housel about what he wished he knew when he started. Housel responded, “One thing that sticks out is that good investing is not about being good at something but you have to find something that other people are bad at. The fact that you are good at modeling does not necessarily make a difference because a lot of people are good at that.”

This, said Fredrik DeBoer, is part of the myth of college. One way to avoid the squeeze of the market mechanism is to have a rare skill. In Housel’s words, to be good at something other people are bad at. People are compensated by what they know, proxied by a degree, then a graduate degree. More degrees more (proxied) competition.

Success is found, said Hamilton Helmer, in the durable. “If you do something better, the question is, ‘How can this be durable?’ There has to be something that prevents others from taking all of that away from you.” How can you avoid the market mechanism creating a commodity?

It probably will happen too. Rufus Peabody said about gambling: “I used to bet second halves in college and professional football. That used to drive my yearly earnings, it was an ATM machine basically. But the last three years I’ve basically broke even there and may not continue running the models because the inefficiencies that were there are no longer there.”

Profits attract competition, competition drives profits and prices down. The market mechanism is Santa for the consumer and saboteur to the producer.

There’s one way to avoid the market mechanism; attract less competition.

Movies, wine, investing, and sports all offer financial and psychic income. That’s a double dose of the market mechanism once someone sniffs out the potential rewards. A cooler choice might be digging pools.

Numeracy + Psychology

One of the consistent behavioral psychology findings is the framing effect. People judge what is pointed out and consider the number attached to it. Two out of every three dentists approve chewing no-sugar gum. Sure, but do they caveat that with increased flossing? Heck, no one cares. The thinking goes that if it was flossing that was important someone would have mentioned it.

This effect is most often seen in medical communication and Matt Yglesias captures it perfectly here:

But that headline is good. It’s salient – 4 people. It’s got friction. The real surprise is that they didn’t say ‘warn’ rather than ‘said’.

This kind of psycho-logic-magic needs countered with another kind of psycho-logic-magic.

We can assume two things work: (1) that people pay attention to and value what someone points out to them. This is normal, helpful, and completely understandable. It works. Most things that most people say are relevant to our lives. (2) that new news works. Different is interesting. This is also, normally helpful and understandable.

Here’s the pitch. This is the angle, the message. Here’s the psycho-logic-magic for vaccine interventions: opportunity cost.

If you’re pro-vaccine point out all the things that will be back to normal once people get it. Grandparents will visit grandchildren. Sports will resume. Christmas won’t be cancelled. Freedom and fellowship. Dining out and date nights. Cruise ships and college trips. Find whatever people value and point it out. People do not consider the opportunity cost unless it is explicit.

Closing note: if SkininTheGame is the ultimate signal, my wife had her second dose last weekend.

Design Ease

James Clear joined Ted Seides to talk about habits:

“Or you see a plate of cookies on the table and that’s a visual cue for the cookies. The practical strategy is to make the cues for your good habits as obvious as possible. Rather than having cookies on the counter have fruit or nuts or something you want to eat.”

James Clear

Clear has a good framework which boils down to ease. Make the things you want to do easier (access, reward, feedback, etc.) and make the things you don’t want to do more difficult. We faced this one Christmas, relegating the cookies and promoting the fruit.

When the cookies (bottom left) were on the island we gorged on them. When they were moved five feet away to the corner, and replaced by fruit the gluttony stopped.

Recently we noted influential words and a potential addition is the word ‘design’. That’s a heavy word. It carries too much.

‘Design’ gives the impression that something was cultivated and refined. It gives the air of investment and taste. Design can be that, but there’s a quick and simple design rule that works almost all the time—and worked for our cookie and fruit switch at Christmas.

Go from zero to one.

Not in the Peter Thiel sense, but in the behavioral economics sense. If something is understood as free, we do more of it. Make us pay even a tiny bit though, and we do much much less.

Clear gives an example in the podcast. He told Ted that he’ll keep his phone in the other room, a mere 30 seconds away. That’s a big old nothing-burger of cost, yet it is when it comes to actually doing the thing. Try this. Put your phone one place and sit down with a book/computer/project in another.

Well done. You’re a designer.

What the mean age means.

The Math of Life and Death is a good addition to the when are we ever going to use this collection of popular science books. With numeracy being so important in life, a regular diet of these ideas keeps someone mentally fit. Consider the story of student loans as one example.

Often the mathematical manuscripts show mean and median differing in network systems like in the case of income or the social graph. Or, how much Bill Gates skews average wealth but not legs.

Kip Yates reminds us of other instances.

“However, ecological fallacies can be more subtle than this. Perhaps it would surprise you to know that despite having a mean life expectancy of just 78.8 years, the majority of British males will live longer than the overall population life expectancy of eighty-one years. At first this statement seems contradictory, but it is due to a discrepancy in the statistics we use to summarize the data. The small, but significant, number of people who die young brings down the mean age of death (the typically quoted life expectancy in which everyone’s age at death is added together and then divided by the total number of people). Surprisingly, these early deaths take the mean well below the median (the age that falls exactly in the middle: as many people die before this age as after). The median age of death for UK males is eighty-two, meaning that half of them will be at least this age when they die.”

Kip Yates

Numeracy is becoming more important because we are generating more data. Luckily, we don’t have to become mathematicians but we do have to see if ideas pass the sniff test. We have to think about how survivor explains sampling, and consider gambling parlays. We have to be mathematically minded.

Poker’s Appeal?

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“I’ve grown accustomed to this type of (probabilistic) thinking because my background consists of experience in two disciplines; sports and poker, in which you’ll see pretty much everything at least once. Play enough poker hands and you’ll make your share of royal flushes. Play a few more and you’ll see your opponent has made a royal flush when you have a full house.”

Nate Silver, The Signal and the Noise, 2020 update, audiobook.

Maybe the reason poker is popular isn’t so much the gambling as the way of thinking. We’ve looked at lot of poker players here, at least relative to their overall occurrence.

From James Holzhauer we get the idea of forward and backward thinking. How might his Jeopardy run been thwarted? What if the questions were harder? Or, much easier?

From Jeopardy James we also get to think about what Mauboussin calls the success equation. If outcomes are a product of skill and luck, what are the skill components to Jeopardy? There’s knowledge, yes, but there’s also buzzer ability. Here noobs are severely disadvantaged, and Jeopardy has evolved the training time challengers now get.

From Annie Duke we see the market mechanism at play. Why does Duke no longer play poker? It’s harder! Make something glamorous and financially rewarding and people flock to it, which raises the skill and increases the role of luck. It’s the reason behind why pool companies manage differently from Netflix.

From Maria Konnikova we think about small bets, or +EV. It’s not that all every decision must be correct but that decisions on the whole are.

Maybe the reason we like poker so much isn’t the glamorousness or the risk taking but the approach. Maybe the reason we like poker is because it articulates an innate sensation.

Probabilistic can be a worldview. It’s not the default, but it is helpful. Maybe poker is like sushi or pickleball, something about the approach appeals to us.

Gaming Work or Working Games?

“We have every reason to believe,” said Jane McGonigal, “the future of work will be more like Fortnite than the kinds of office jobs that we have today.”

2020 results

I would wager that future response balances will have a COVID-19 influence to them. School for example, seems to be tilting more digital as both administration wants to appear technological, tools become cheaper to implement students, and external forces require it.

Translating JTBD

“At Twitter we had all the sales people in a different building and so we organized a margarita and taco event in the sales building. Of course all the engineers wanted margaritas and tacos so they had to go and spend time with the sales people and ask them around their roles.”

Kris Cordle

Cordle goes on to tell Shane Parrish that once a sense of community forms it’s easier for the sales people to go to the engineers, “rather than filling out a form that goes to the engineer who goes, ‘what is this person talking about?’.”

Jobs-to-be-done is like an elegant meal—but in the kitchen the cooks are hot and the chef is scratching her head wondering what will make it into tomorrow’s soup.

JTBD-ing is messy because we don’t have the language for it. The axiom to don’t ask the customer what he wants exists not because the customer doesn’t know but because the customer doesn’t know how to express it.

Here’s a question transcription of a sample interview Moesta conducted:

Look at the ground Moesta covers! For a mattress! Look at the language. “You moved?” “Who suggested sand bags?”

JTBD is elegant because of the hard work behind it and the hard work is the translation. Often this comes down to: what does the person need to feel.

Now we can circle back to Cordle and see how, like a game of telephone, the message ‘needs to feel this’ gets garbled going from one person to another. What makes the message clearer is good communication which exists in a good culture.

Margaritas and tacos seems unnecessary to the bottom-line but becomes axiomatic once we trace the process back. Like looking at the flurry of activity in a kitchen can give a sense how such a polished meal emerges.

For more, check out Moesta’s (2020) Demand Side Sales 101.

Japanese, in L.A., with a Brit

“I went to a Japanese restaurant in Los Angeles, like the number seven restaurant in Los Angeles, and I couldn’t believe that this was the place. It was in a strip mall somewhere, but it was utterly fantastic. The presentation on the exterior was atrocious, and sometimes I think that is done deliberately. In a sense, there is a category of restaurants where it’s all about food. Like, with a name like Smuckers it has to be good. We couldn’t be this crowded with such terrible frontage.”

That’s Rory Sutherland on episode 201 of Risky Conversations. Tyler Cowen, more here, uses the same idea and beyond, “When I heard that name I thought, this place must be great. When Americans want to eat Ethiopian food, what kind of name are they looking for? The Red Sea? Queen of Sheba? Fine. But when it’s EYO Sports bar you know it’s really for Ethiopians.”

The biggest returns in life come from new information or new analysis. Though it’s helpful to keep in mind that not everyone wants the same returns or if they do, on the same timeline. Dining isn’t only about the food, there are many jobs to be done with a meal out. However, if one of your jobs is different (in scope or time), you can often hire for a great price.

For food, follow the lead of Rory and Tyler, and find good food at places with bad names.