Transcript
Speaker: Everybody wants to know how to be successful.
Speaker: Everybody wants to know the secret to success.
Speaker: But in today's episode, we're going to take a bit more of a calm approach to it and look at it through a mathematical lens, dissecting what are the core variables that influence success and how we can actually look one level of abstraction further.
Speaker: not just thinking about how can we maximize the variables that increase our likelihood of success, but also how can we make it so that the variables that we cannot even control would still be maximally beneficial to us.
Speaker: If we look at success as a continuum, let's say that you can be successful zero or you can be successful 100, 100 being every single thing you can imagine.
Speaker: then what are the factors that influence how high your success in life is?
Speaker: Looking at it very simply, there are two things, effort and luck.
Speaker: So that leaves us with three variables, effort, luck, and success.
Speaker: Effort and luck being the input variables and success being the output variable.
Speaker: To simplify the image, we're going to first talk about why we are not going to actually look at effort as a variable in the first place, but rather as a constant, a constant that is always maxed out.
Speaker: Because, well, if you're not putting in the maximum effort to try and be successful, then what are you even doing?
Speaker: And we're going to expand on why putting in that effort is so crucial in this episode today.
Speaker: But even if you put in the maximum effort, that is still not enough.
Speaker: There is still that variable of luck.
Speaker: But wait a minute, you say, luck cannot be controlled.
Speaker: How am I supposed to maximize my luck?
Speaker: What does that even mean?
Speaker: And you would be absolutely correct there.
Speaker: But this is where the real cleverness comes in of not playing the game to maximize your luck, but playing the game such that any luck that you get maximally benefits you.
Speaker: And I'm going to dive into much more detail on this soon enough.
Speaker: But first, Sebi, why don't you just tell us about why we need to maximize effort at all times as like a given?
Speaker: And what are the benefits of putting in that maximum effort in no matter what pursuit we're going after?
Speaker: Well, to answer the second question, I think you almost owe yourself a duty to put as much effort as you can into everything that you do, right?
Speaker: Because you only have one life, or at least it is not guaranteed that you'll get a second go at life, right?
Speaker: So you might as well, it makes the most sense to...
Speaker: when you're pursuing a goal, when you're pursuing anything, to pursue it with all your time, all your energy.
Speaker: Yeah, to basically put your all into it, right?
Speaker: So that answers your second question of like why effort is so important and why we should all put everything into it.
Speaker: Because you only really have one life.
Speaker: But I think that also means it's...
Speaker: important to make, to treat this effort as a concept, right?
Speaker: Because if you're comparing yourself to other successful people, or maybe if you're not comparing yourself, but you're just looking at, um, okay, what are the factors that define successful people?
Speaker: All of these people are likely to be thinking in the same, in similar terms, right?
Speaker: They like to think, okay, right.
Speaker: I only have one life.
Speaker: I want to achieve this goal.
Speaker: So I'm going to put as much effort as I can into it.
Speaker: Right.
Speaker: And so the benefits of making this constant is that it enables you to shift your focus onto choosing optimal strategies that enable you to maximize your success.
Speaker: And you touch upon this Rico, because you talk about increasing your exposure to luck, to positioning yourself such that you, when luck comes, you
Speaker: right?
Speaker: You benefit from it because luck just to, just to define it a bit more concretely, it's just any sort of random occurrence that happens to you that has some sort of impact on your life.
Speaker: Obviously you can have bad luck because the impact could be negative.
Speaker: There could, the luck could be neutral.
Speaker: Nothing could really happen.
Speaker: Um, or it could be good, right?
Speaker: You could be given some sort of job opportunity.
Speaker: You could be an entrepreneur getting your first client.
Speaker: So
Speaker: Focusing on, yeah, so kind of forgetting as much, focusing less on the amount of effort you're putting in enables you to focus on choosing optimal strategies.
Speaker: And by optimal strategies, what I really mean is choosing on a more macro level what you want to devote your time to.
Speaker: Do you want to become an entrepreneur?
Speaker: Do you want to become a lawyer?
Speaker: What kind of career path do you want to pursue?
Speaker: And within that, say you want to become an entrepreneur, what type of entrepreneur, what field do you want to devote yourself into?
Speaker: So that's the first thing.
Speaker: The second type of strategies that we're talking about is within that specific field in which you've identified, how you can choose the best entrepreneur.
Speaker: way, the best path to achieving your goals.
Speaker: Because say you're an entrepreneur and you're developing your own, you know, you're starting your own business and you have some sort of software product.
Speaker: That's the goal.
Speaker: But obviously there are hundreds of different ways in which you do it.
Speaker: So if you're only focused, if you're obsessed by the factor of effort, then you almost be blinded.
Speaker: You'll, you know, kind of be chained to the fallacy that, oh, if I put, if I work 15 hours every day, constantly, I'm going to achieve success.
Speaker: You might achieve some success, but there are people who are thinking a bit more strategically, who are achieving more success towards you because they're thinking, okay, um, this is the optimal strategy.
Speaker: This is how I best achieve my goals.
Speaker: And actually this leads us into, this, you know, segues us into, um, another concept that of leverage or that of leverage, which I'm sure Rico you'd love to talk about.
Speaker: Yeah, well, because what you said holds a very important truth.
Speaker: The fact is that there are a lot of people putting in a lot of effort in this world, but what is the thing that fundamentally separates someone who spends 10, 12 hours working a hard manual job and someone who puts in the same amount of effort towards running a billion dollar business?
Speaker: Why does one person get so much more out of their efforts than the other?
Speaker: That
Speaker: The core concept here is leverage.
Speaker: And to define leverage, for those that don't know, leverage is simply how much output you get per unit input.
Speaker: So to simplify, if you do one hour of work, what do you get for it?
Speaker: And in this game of material success, we're mostly talking about material returns.
Speaker: How much do you earn?
Speaker: How much money do you make in that one hour of work?
Speaker: Now, what is the difference between someone who does 12 hours of hard manual labor a day versus someone who spends 12 hours running a billion dollar business a day?
Speaker: The difference is how much output they get per unit of effort put in.
Speaker: That is, the difference is their leverage.
Speaker: Now, how can we maximize our leverage is a different question that we've talked about in previous podcast episodes as well.
Speaker: But in this episode, we'd more so like to focus on
Speaker: Thinking, okay, so if we are putting in that maximum effort and if we assume that we're always doing that, how can we look at this uncontrollable dimension of luck and make sure that what we're doing is exposing us in the most favorable way to any luck that may occur in our lives?
Speaker: Because the reality is that all of us have some good luck.
Speaker: And all of us have some bad luck.
Speaker: All of us succeed in what we're doing sometimes and all of us fail sometimes.
Speaker: This is basically an uncontrollable fact of life.
Speaker: No matter what we do, there are some things that will succeed, like go better and some things that will go worse.
Speaker: But the fact is that for the person who is running a billion dollar, uh, billion dollar company,
Speaker: if they have structured the thing right, and we're not here talking, of course, about things that they may do where they fail that blows up the entire thing.
Speaker: But the fact is that that person, probably when they...
Speaker: When they make a small mistake, if they have structured their lives right, that doesn't cost them much.
Speaker: And it doesn't cost much to that person doing hard manual labor either.
Speaker: So we can think of both of these people as having a similar exposure to unluckiness.
Speaker: If something goes disproportionately for them or, you know, something just doesn't go as expected,
Speaker: Maybe we could even say that the billionaire CEO is already in such a position that their exposure to that unluckiness is much less because they have, I don't know, savings, et cetera.
Speaker: But that aside, for both of those people, unluckiness, if they're doing things well enough, something goes bad, they fail, they take the pain, they move on.
Speaker: Where the core difference, if we're talking about success, where it comes in is their exposure to being lucky.
Speaker: Because that manual worker, that person who is selling their time to succeed, to help someone else succeed at their goals, if they get lucky, let's say that they're really feeling good that day and everything goes right.
Speaker: If they get anything, maybe they get a small extra bonus or a pat on their back or a warm handshake.
Speaker: Whereas that billionaire CEO, should they have a lucky day, they can make money.
Speaker: They can make outstanding returns, returns that are even hard to speak about their imagination.
Speaker: So why is that one person so much more exposed to luck and the other person so much less
Speaker: One good way to visualize this is if we look at the two variables, we imagine luck and success as being the x and y axis on a graph.
Speaker: Luck on the x axis and success on the y axis, because luck is the thing that determines success.
Speaker: And here we are, again, we're assuming that effort is always a constant maximum, because that's just a necessity in order to become successful in this life.
Speaker: If we imagine this graph with luck on the X axis and success on the Y axis, we can think of the entrepreneur, the person pursuing high leverage activities and building something of their own.
Speaker: Very, very crucially, building something of their own.
Speaker: The graph is sort of exponential.
Speaker: The more luck they have, of course, if luck is very small, if they have completely unlucky, they will have very little success, even with a lot of effort.
Speaker: That's just the reality of life.
Speaker: And we cannot control that.
Speaker: So it is not the topic of discussion because it's not under control.
Speaker: We cannot improve it.
Speaker: But if they are lucky and the more lucky they are, the better it gets for them.
Speaker: And if they are really lucky and they put in the maximum effort,
Speaker: Well, they achieve everything they wanted to.
Speaker: They become completely materially successful.
Speaker: Now, if we compare that to the person going down a traditional career path, simply selling their time to someone else, you can imagine a more logarithmic graph.
Speaker: A graph that starts rising, yes, because once again, if you have very little luck, it's at zero.
Speaker: You don't achieve any success.
Speaker: The more luck you have, okay, you get more success.
Speaker: But the graph dies down.
Speaker: It doesn't keep rising because there's a capital.
Speaker: Even if the person is very lucky and they do maximize the opportunities they have, if they're playing that sort of game, then the best that they have is not anywhere comparable to the best that the person in that entrepreneurial game can have.
Speaker: Because if you think of a very lucky and successful entrepreneur and you think of a lucky and successful regular worker, obviously there's a difference, right?
Speaker: Now, think about this fact.
Speaker: And to me, this is honestly the core fundamental philosophical reason why I have chosen to pursue this path of entrepreneurship.
Speaker: Because why wouldn't I choose to spend my life playing the game in which I have the maximum chance of winning rather than play an unwinnable game?
Speaker: And Seve...
Speaker: If this is one interpretation of like maximizing, maximizing our antifragility really, maximizing the fact that randomness actually helps us, making it so that the luck that we cannot control is our friend, because if we have none of it, it doesn't matter, we're in the same position anyways, but we want to make it so that the more of this random force of the universe that we cannot control,
Speaker: We have, we benefit from it as much as possible.
Speaker: But Seve, I think that there's another way of looking at it and framing this sort of dichotomy of control.
Speaker: Yeah, so...
Speaker: The ancient Stoics, in fact, the concept of the dichotomy of control comes from this school of ancient Greek philosophy called Stoicism.
Speaker: And what they define the dichotomy of control as is an idea and they would say, and I would say truth that the
Speaker: In the world, there exists outcomes and events, and there exists two types of events and outcomes.
Speaker: Those which are in your control, which you can directly influence.
Speaker: So for example, I can open this door, you know, that's just a very simplest example, but you get the point.
Speaker: Or secondly, things which are outside of your control.
Speaker: To illustrate, just think of the natural disasters, which I could do, I could pray, I could throw something into the sky, but there is no way that I will be able to influence the weather, I will be able to stop that volcano from erupting.
Speaker: So the dichotomy of control defines two types of events, those within our control that we can influence and those without our control.
Speaker: And so this principle lies at the heart of this, uh, lies at the heart of the strategy, which you've been talking about, because the strategy of exposing yourself to, uh, to luck, putting yourself in a position in which you're more able to benefit from luck is all about expanding that little area of events that
Speaker: which are in your control, right?
Speaker: Because it's about taking all the possible things that can happen to you and orienting yourself such that what's perhaps in the past may have been something outside of your control and kind of bringing it into that realm so that you can experience the tangible benefits that it offers.
Speaker: And I think this is a general mental model which can help you in so many ways.
Speaker: So you can apply it to this strategy, which refers, which you can use in the context of, you know, choosing your career, entrepreneurship, you know, achieving success, financial success, stuff like that.
Speaker: But also on more, and you know, other more personal levels, such as, you
Speaker: decreasing, becoming a much more calm, much less anxious person.
Speaker: Because just to follow this example further, because if you think about it,
Speaker: A lot of things which we worry about are things which are outside of our control.
Speaker: So we worry about, oh, what happens if the weather is bad tomorrow?
Speaker: I won't be able to do all these things which I really wanted to do, right?
Speaker: That's outside of your control.
Speaker: You can't influence it.
Speaker: There's no point you worrying about it.
Speaker: Or perhaps in a more specific example, say you're applying, you're going for a job interview, right?
Speaker: there will be elements which are in your control, which would be how you, you know, your appearance, like the way in which you present yourself, both regards to like the clothes you wear, whether you're, you know, well-dressed, well-kept.
Speaker: Yeah, how prepared you are.
Speaker: Have you done your research on the people, the company?
Speaker: Do you speak clearly, et cetera, et cetera.
Speaker: All of that is within your control.
Speaker: But the final decision of the person, right, to take all that, what they've seen of you
Speaker: And use that and finally offer you the job is not your decision because you're not the person that says, oh yeah, I'm going to hire me.
Speaker: No, it's someone else.
Speaker: So the ultimate decision there is outside their control.
Speaker: So the way in which you can use this mental model to decrease your stress in that specific example is...
Speaker: not worrying about whether the person will like you or not.
Speaker: And instead using all that energy, which you otherwise would have wasted, you know, worrying, stressing, you know, not sleeping, thinking, oh, will they like me?
Speaker: Will I get the job, this, that, the other?
Speaker: You devote that to preparing yourself to doing all that, which exists within the scope of your control.
Speaker: To putting in that maximum effort.
Speaker: And obviously as Rico, yeah, yeah.
Speaker: and putting in that maximum effort.
Speaker: Yeah, and I think actually,
Speaker: Yeah, actually, it's good that you referred back to effort because while we have talked about the importance of treating effort as a constant, right?
Speaker: Because you obviously want to focus on increasing your exposure to luck because that's what differentiates the really successful people from the people who just put a lot of effort in.
Speaker: I think it's important just to reiterate, to just say that effort is about...
Speaker: Max doing all that, which is in your control, because how much effort, how much time you put into achieving a goal that is very much within your control.
Speaker: And that's why it is very much something that you always have a duty to do, because if you commit yourself to saying, okay, I want to achieve this goal, I want to create my own business.
Speaker: The logical conclusion is if I really do want this, I'm going to do all that which is in this realm of control to help get me to that goal.
Speaker: And the beauty of the system that Rico was talking about is that it expands this area to maximize your exposure to luck and ultimately success.
Speaker: Because...
Speaker: But the beauty of this is that this ancient concept created by the original Stoics applies to our career choices today.
Speaker: Because if you think about it, they had this idea that in order to maximize your chance of success, you need to, yeah, as you said, make bigger this area that is under your control.
Speaker: What is the career path where you have the most variables under control?
Speaker: That is being a business owner.
Speaker: That is being an entrepreneurship.
Speaker: Of course, everything we do in life has unknowns.
Speaker: It's always going to be, do the customers want to buy from us?
Speaker: Is my product even good?
Speaker: In that sense, yes, there are a lot of unknowns in entrepreneurship, but you have the most things under your control as well.
Speaker: The unknowns and the things that you can control should not be confused.
Speaker: Because even though in business, there are a lot more unknowns than just going and working for someone else and doing one thing.
Speaker: you have more things under your control.
Speaker: So you have more chances to use that effort to actually make a change because you can apply that first to this thing, then to this thing, then to this thing.
Speaker: And with like pouring in the effort into the bowl of things under your control, the bowl is bigger.
Speaker: So the more effort you keep putting in, you don't hit that cap and you just keep on filling it up.
Speaker: So we've talked about today of two different concepts that
Speaker: to maximize your chance of success.
Speaker: And both of them point towards a single conclusion.
Speaker: The two concepts we talked about are one, maximizing our exposure to luck, choosing a game that makes the graph of luck versus success look for us a constantly growing one rather than one that gets capped off at a certain point.
Speaker: And the other concept we talked about was maximizing the amount of things that we have under our control so that if we put in that constant maximum effort,
Speaker: that we do not hit another sort of cap, the cap where, yes, I can turn up to do my job over hours, but all I get is a small bonus and a pat on my back.
Speaker: So ultimately, what these two things point towards is that for a person who is willing to go that extra mile and put in that effort, it simply makes no sense to choose a game in which the possible reward that they get for it is capped.
Speaker: Yes, it may seem like a slightly more safe option and it may give you more of an instant gratification reward.
Speaker: But ultimately, for people willing to do the work and for people willing to go the extra mile, it makes much more sense to live our lives our way.
