Never Split the Difference (book review)

You never step in the same river twice, the saying goes and this second read (the first) of Chris Voss’s Never Split the Difference revealed an unknown spectrum.

Life is a series of “I want you to…”. These requests span our discomfort. For me, job-to-be-done interviews are easier than Voss’s negotiations which are easier than direct copy which is easier than face-to-face negotiations.

I dismissed direct copy and negotiations as less good and confused the metric of difficult as correct.

But they’re all the same.

Each “I want you to…” begins in another person’s world. “The goal is to identify what your counter-party needs,” writes Voss and get them to talk and talk and talk some more. For direct copy said Bob Bly, “enter the conversation they are having in their mind.” For JTBD interviews said Bob Moesta, act like a documentary filmmaker gathering information. Understanding always happens first.

But not a perfect understanding.

Voss wrote his book because Getting to Yes felt too formal. Perfect understanding is a logic puzzle. Negotiations are psychological puzzles. Like understanding Status Games, Voss wants his readers to understand people’s biases and tendencies too. Those include:

  • Framing: setting an anchor price or using loss aversion, each of which changes the comparison to a new price or a missed deal.
  • Removing the sting: I’m about to ask you for a big favor or this is going to take a while but we will go as fast as possible. These warnings are the balm for the stoic observation that we suffer more in imagination than reality.
  • Avoid split the difference compromises: which optimize easy and neglect the chance to be creative.

Negotiations are like the Who’s Line is it Anyway Helping Hands skit (YouTube). Each party is a set of hands and “the deal” is making something that works. Understanding the other person’s style and needs is how to make it work.

My discomfortable dismissal was mood affiliation.

The Morgan Housel side effects

Software companies have a great business model: spend a lot making something once, but each sale costs almost nothing. Google took a bunch of effort to create but takes much less now. Movies are like this too. Businesses with low marginal costs and high sales are very profitable.

That structure applies to decisions too. 

Rather than make a decision each time, we can design decisions. Atomic Habits, James Clear’s best-selling book explains this (and embodies it, books are low marginal cost too!).  Decisions with low marginal costs and accumulated effects are very beneficial. 

Google’s advertising is golden because many people use the service many times. But payoffs also come from one person facing the same design many times or from many people facing the same design once. Framing tradeoffs is one design decision: 

Tradeoffs work because they shift the important information. This ad is great because it forces us to think about what we don’t get and is important relative to the first. Part of the reason we want a new phone is to take and share awesome pictures. 

Imagine we go back to March of 2020, Morgan Housel told Derek Thompson. The Federal Reserve Chairman, the White House, and the Treasury Head go on television with this warning: We are about to enter the second Great Depression, it is that bad, if not worse. We can prevent that. However, in 2022 there is going to be 10% inflation as a consequence of avoiding thirty percent unemployment.

That would have worked. 

We know there are tradeoffs, we just don’t try to think of them. But highlighting the exchange shifts how we think, and maybe how we act. 

Framing costs

Three stories about framing costs.

In college, our ultimate frisbee marketing wasn’t table tents like everyone else, but t-shirts. It seemed superior to subsidize the extra shirts, Mike C. bought four, than pay for paper adverts. It was an accidental Influence via social proof. Robert Cialdini writes, “there are three main optimizing conditions (for social proof): when we are unsure of what is best to do; when the evidence of what is best to do comes from numerous others; and when that evidence comes from people like us.”

So maybe the shirts were the better advertising route. But that’s hindsight. At the time the thinking was: why not use the money to get something that advertises the club but also which we can wear. It allowed our marketing budget to stretch into our uniform budget too.

Though cleaning Airbnb rentals, residential homes, and apartment turnovers seem the same, the unit economics are not. The rentals required extra work like stacking pillows and sorting silverware and the homes required return visits to address distress and missteps. Plus, the rentals and residences were “times are good” businesses. George wanted something that would cover when times were not good too. That left apartment turnovers.

Then George did two other things. First, George brought all the rental turnover services in house, “one throat to choke.” When a tenant leaves, property managers need to make one call. George’s crew cleans the carpet, patches the walls, and fixes what is broken. Bundling these services is a better solution to the JTBD.

The second thing George did was to hire a quality control manager. This person follows the main crew, addresses small misses, and coaches the crew on the larger items. This, Acquiring Minds host Will Smith, sounds expensive. Yes, George replies, if you look at it only as a cost. But it’s not just a cost in the sense of apartment preparation.

You see, George explains, this is my marketing. It’s through word-of-moth referrals that people find George. The quality control is part marketing. And if that wasn’t enough, the quality control changes George’s LTV-CAC calculation.

Framing title insurance

You’d think price matters but when buying a home it doesn’t.

At least the title insurance does not.

On Acquisitions Anonymous, the crew looked at a title insurance company with one million in sales which serves residential real estate clients. One aspect host Bill D’Alessandro wondered about was deal flow. Does the business get clients through advertising or does the owner have specific relationships? If the latter the acquirer must inquire.

But advertising doesn’t really exist for title insurance, “the customer does not shop for these services, you can’t really advertise to the consumer,” Bill observed. And there’s no advertising for two reasons.

First, it’s hard to compete on price because of framing. Framing matters a lot. We see framing in ‘always buy two new cars‘, in making better predictions, and the impact of Covid. Title insurance cost is framed against the price of the house. Saving a few hundred dollars while spending a few hundred thousand isn’t part of our mental accounting.

Second, the fear of being wrong. People switch to avoid loss, the loss of a title snafu is much greater than the loss of the cost of insurance. The JTBD of title insurance is protection. Switching from the default company to another introduces psychological discomfort if something goes wrong. I can only imagine telling my wife, “no, no, I saw an advertisement on Facebook for this cheaper company.”

How much a buyer can unleash a business’s potential is TBD, and dependent on the answer to this deal flow question.

Flat earth beliefs

It is surprising there are not more anti-science beliefs.
1. Science isn’t static, there’s not much canon.
2. Science is mostly not a putting-a-man-on-the-moon problem.
3. Science communication persuasion is difficult, especially relative to cultures, norms, and habits.
4. Science belief doesn’t follow formal logic, it is contextual. There are plenty of people who don’t trust a medical engineering but trust engineered medicine, or vice versa.

One way to think about all the non-science beliefs is as three states of the world: -1, 0, and 1. Put another way: anti-science, ignorant, pro-science.

Sometimes science denial is an information problem. If people only knew…. But that’s not quite it. Yes, sometimes scientific knowledge is zero, ‘they just don’t know the facts’.

“The other thing I think is wrong about how the media portrays it (science denial) is as misinformation. Science denial is about disinformation. Someone has intentionally created the theory that rebreathing into a mask will give you CO2 poisoning. Someone has made that up and filtered it out through the internet where it hits someone’s cognitive bias and they start to believe it.” – Lee McIntyre, Behavioral Grooves, November 2021

Most of life is not a ‘they just know the facts’ situation. C’mon, how many things do you dear reader not hold an opinion on. More often, it’s not non-consumption, but belief in something else. Weight Watchers and financial education are also examples of this state. Plus, our views on science and medicine, finances, and diet-health-lifestyle all have a strong identity component. If someone said, “Look, I hear what you are saying but I don’t trust the experts and this online community are my people,” you would have no idea if they were a Boglehead, a CrossFit participant, or anit-vax father of two.

The case at hand is like an errant Sudoku puzzle, there’s something else in that spot and it’s attached to a person’s identity.

Around here we try to skip the ‘they just don’t know the facts’ stage and go right to designing change. Personal finance is about shifting what we buy, often time rather than stuff. Heath is about shifting what we eat and what we do, replacing one thing with a healthier option. Anti-science persuasion then must replace the anti-science beliefs with something else. The trick here, says McIntyre is to plant a seed. Rather than ‘the facts’, be empathetic and offer suggestions. Reframe your aim from conversion to combustion, be the spark but let them do the work.


It is wild how many things we do become part of our identity.

Update February 15, 2022. Even ‘hard’ sciences are hard. Only forty percent of cancer biology studies replicated and eighty percent of pharmaceutical studies in academic labs cannot be replicated in industrial ones. Also, plastic recycling has (always?) been a sham: NPR Planet Money.

$1 Toronto real estate

Average is like my reciprocating saw: never as useful as I expect. Part of the reason average sticks around is economics, It’s cheap to produce.. Average is a crude tool, like with student loan debt, and often hides the heterogeneity of a situation.

We’re entering an era of precision. One covid lesson has been the effect size of heterogeneity. At the macro level, the impact of covid depends on time and place. At the micro level, the impact depends on age, immunity, and social network. Covid was (is?) difficult to judge because there are a lot of factors that need fitted together.

If we need precision we should probably think about distributions at least as often as we think about averages. An example is the periodic one dollar real estate listing. Yes, this generates attention, spins up the market mechanism, and might be the marketing magic an owner needs. But it also changes the distribution of offers without changing the average offer.

“When you give people a listing price they ask if it’s worth more or less and by how much, so they anchor at the listing. If you don’t have an anchor people build a valuation from first principles. The average (offer) doesn’t change but the distribution does. For a one dollar listing you get some really high rates and some really low ones. In the listing price you get distributions around what the asking price was. This is a world where the seller doesn’t care about the average, they only care about the top end of the distribution.” – Dilip Soman, The Decision Corner, October 2021

Maybe this is being too hard. Average, like the saw, has its uses. The aim here is to combine numeracy with psychology to get by in the world. That means presenting the ‘best’ wait times or predicting rain more often. Being numerate is understanding that the average age is 78, but if you make it to 65 you’ll probably live well past eighty.


“The average looks like 10-12 years lost due to Covid – but that’s an average of a distribution with a very odd shape, a highly skewed distribution, some people have lost forty years of life. The peak of the distribution is people who lost less than a year of life.” – David Spiegelhalter, Risky Talk October 2021

Always buy two new cars

I’ve been driving my wife’s car a lot lately. Her car is nice. It’s smooth, it’s got more room, and it has bells and whistles. It’s always had these things but I’d never noticed.

It’s refreshing to notice instances of relative rather than absolute value. Her car is nice relative to mine but not so nice relative to the newest thing for sale. After driving her car I kinda wanted a new car.

Like made up start ups, the advice to ‘always buy two new cars’ is half a joke. Much of the personal finance advice around here is to choose from pretty good options. Emergency funds should be generally right, both 15 and 30 year mortgages are good choices, and personal finance expertise is from experience not eduction.

To buy two new cars then means that the relative value of the next new car will be largely hidden from me. Sure there will be neighbors and Ubers and advertisements but I make – we make – easy decisions. If it’s not easy to compare then it’s a comparison that won’t occur.


Ironically I noticed this idea with iPhones a couple of years ago. It only mattered that the phone was newer, not that it was newest. All value is perceived value.

The ball bet

What are the odds of more than twelve named Atlantic hurricanes in 2021? That Bitcoin will top 75K in 2021? More than 2M travelers through TSA in a single day?

These, and more, were part of the 2021 predictions. That post built on the ideas of Superforecasting, which offers ideas towards better predictions. Julia Galef adds another.

Here’s one of the prompts: Will I lose power at my home in Central Florida for more than three days? I figure these odds were about 10%, and would wager that, no, we will not lose power for more than three days.

Imagine another prompt. In this bag of twenty balls there is one red and nineteen black, pick the red one and win. Okay, simple enough. There’s a five percent chance to win the red. And here’s Galef’s guise, you can only play one game.

Do I feel more confident about the hurricanes making landfall or the finding of the red ball? The hypothetical ball bag bet can slide up or down: 5%, 10%, 30%, etc.

“You just ask yourself, do I feel more optimistic about taking that bet or [the other]…You can play with the ratio of balls to kind of narrow down the number you put on your confidence in the original question.” – Julia Galef, BBC’s More or Less, August 2021

With my kids we use coin flipping. One day I had an appointment and told them there was a 5% chance they would have to go to after care at the school. “That’s like flipping a coin and landing on heads four times in a row” I told them.

Probabilistic thinking is difficult but it can be helping in making good decisions. Poker’s appeal highlights this idea too.


The TSA’s nadir was 87,000 travelers the week of April 13 2020, down 95% from the same week in 2019. In 2021 that number was more than one million. The week of June 11, 2021 there were more than two million travelers. I guessed there was a seventy-five percent chance that would happen.

Just the first day of camp

Stand up comedy is the fruit fly of the comedy world. Comedians can think of an idea in the morning, expand it in the afternoon, and perform it that night. Nothing is above the laugh and the feedback is fast and firm. Jokes work or they don’t.

Covid, no laughing matter, has been similar. Though not as fast or firm, the cycle between idea, test, and results has been pretty good. Though clear-ish now, vaccines, hand washing, masks, social distancing, lockdowns, etc. etc. etc. have been a figure-it-out-as-we-go kind of thing. There’s a lot we didn’t know, and still don’t know.

Another area where we know more is our sense of costs and benefits. For instance:

“Send your kid to camp the first day. When they come home they won’t have Covid, because they didn’t get Covid on the first day of camp and they will be like, ‘Wow, camp was amazing.’ The normalcy makes the other pieces vivid.” – Emily Oster, September 2021

What Oster does nicely here is frame the Covid camp trade off for people who overweight the risk from Covid for kids and underweight the reward from camp. During ’20 & ’21 Covid has been all we think about, and we need a reminder about this other stuff. A small step – the first day – is a good approach for highlighting this balance.

We haven’t always known that kids are mostly okay. We haven’t always known that camp is mostly ok (maybe up to 20,000 people?). We’ve learned that being younger is better. We’ve learned that local conditions matter – a lot! We’ve learned a lot.


Framing information one way rather than another is one of my favorite themes.

It’s all solutions

A Chesterton Fence is the idea that we should understand a thing before we change it. Marc Andreessen tells the Chesterton Fence story of Airbnb. Prior to online marketplace for homes and rooms were hotels and prior to hotels were bed and breakfasts. These bnbs varied and so hotels created brands and brands gave consumers information. It’s this kind of hotel. Brian Chesky et al. figured out that rather than brands, the same information could be in reviews and ratings.

“I want to change the way people see the modern world. I want people to look out at the world around them: at the steel, at the concrete, the glass, the computers, the washing machine, the automobile and jet plane and I want them to see everything made by human beings and understand it as a solution to a problem. There was some problem that we had in the past and we solved it. I think when you start to see the modern world as, ‘I am surrounded by solutions to problems’ you start to appreciate it a lot more.” – Jason Crawford, June 2020

That’s awesome. Everything around me is a solution frames the world as such a cool place.

Everything framed as a solution also nudges people towards a bit more curiosity. If a 401k or a mask policy or an expressway interchange is a solution then why was it that rather than something else? If we use hotels or stores or cars why was that the solution?

Solutions, all the way down.


Crawford’s episode came up on a curated podcast playlist I source from Tyler Cowen’s posts. Cowen is one of the most influential thinkers. Here’s a pay-what-you-want thirty-minute read about a few things I’ve learned from Cowen. Or, if you’re really into the coolness of ‘stuff’, try the book Stuff Matters on Amazon.