Tag: stephen dubner

Think Like A Freak by Steven Levitt & Stephen Dubner – The Authors of Freakonomics Offer to Retrain Your Brain

I quit my job to help you quit yours, but, to do that, it’s going to require a different way of thinking. And, while this may not be a business book that we’re looking at today, it certainly shows us another way of thinking, and I think anyone who wants to challenge the “normal” way of doing things can benefit from it.

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In case you don’t know, these guys initially became famous from their book called Freakonomics. Steven and Stephen are economists, and they use copious amounts of research and data to argue correlation and causation of certain events that go directly against intuition, common knowledge, and media hype.

In the opening of this book, they basically say that, once they wrote Freakonomics, the fans sent in a flood of questions that they could probably never answer in their lifetimes. So, instead of trying, they thought it would be more useful to write a book that would help each of us see into their thought process and maybe be able to answer some of the craziest questions for ourselves.

With that little introduction, let’s take a look at an awesome quote from Levitt that will help you start to see how he thinks…

“Morality, it could be argued, represents the way that people would like the world to work, whereas economics represents how it actually does work.”

This quote reminds me of something I heard about Amazon’s Jeff Bezos. He’s famous for being a seeker of truth. He doesn’t like rules, he doesn’t like assumptions, he doesn’t even care about being right, he cares about the truth. These guys use economics to find the truth, not the convenient answer, and I’m a big fan of that. I love challenging conventional ways of thinking and finding better ways of doing things.

Let’s jump into the golden nuggets we’ll be looking at form this book.

  1. We’ll talk about what it means to think like a freak
  2. We’ll talk about  why our society has made “I don’t know” the 3 hardest words in the English language to say (and what we can do about it).
  3. Finally, we’ll talk about  why we should, and how we can think more like a child.

First, what does it mean to think like a freak? Although we can all learn a ton from reading—and that’s why I make these videos, I want to encourage you all to read and learn more—there are so many questions out there that we can’t rely on books or anyone else to answer them for us. We need to learn how to think for ourselves. If only school had taught us how to think instead of how to follow rules… but don’t get me going on that.

If you want to think like a freak, one of the most important things that you need to understand is incentives, and the book gives a fantastic example of how powerful incentives are. The example is that of a penalty kick in soccer, or football if you live anywhere other than the U.S.

A PK is when the ball is placed 11 meters from the goal, and a kicker faces off with the keeper. The overall odds of success for the kicker is 75%. Because more people are right-handed (or footed as it may be), the left corner is considered the stronger side, so  keepers go left 57% of the time, and they go right 41% of the time. If the keeper guesses wrong, then the odds go up to 90%.

It turns out that kicking the ball right down the middle is 7% more likely to succeed than either direction, but kickers only do this 17% of the time overall. So, why is this? You could argue that, if players did this all the time, keepers would just stand still and stop the kick easily, so kickers need to have some variety. Also, it’s possible that a keeper jumping one way or the other could still stop the ball down the center with his foot.

But the real reason that kickers do this so infrequently comes down to incentives, and the fear of shame. If the kicker has a 75% chance of being a hero and winning the game for his team, those are pretty good odds. If the keeper makes a fantastic save, then that’s the 25%–too bad for the kicker, but he did his best. If he wanted to increase his odds by 7%, he could kick it down the middle. But, if the keeper, for some bizarre reason, stood still and just caught the ball fired right at him, the kicker would look like a complete moron, and everyone would hate him.

In this example, the interests of the kicker are aligned with the interests of the team and the fans, but not completely. The kicker would still prefer a loss if it meant that he wouldn’t be ridiculed and shamed for making a bozo move.

Here’s what I take away from this example . If I ever can’t understand why someone is doing something or behaving a certain way, I know that the reason is always incentive. I may not understand the incentive, in fact, he may not understand it either, but for some reason, he thinks it is in his best interest to do that.

So, the biggest takeaway from this is to actively align your interests with those around you, so everyone is incentivized to accomplish the same goal or mission. This is why I’m such a fan of business partnerships, commissions, and employee ownership. If you want people to behave in the best interest of your company, make the company’s best interests the same as them.

Now, let’s look at why “I don’t know” is are the three hardest words in the English language, not “I love you,” like many people think. To illustrate this, I’m going to read a simple story from the book, and then I’ll ask you a few questions about it: A little girl named Mary goes to the beach with her mother and brother. They drive there in a red car. At the beach they swim, eat some ice cream, play in the sand, and have sandwiches for lunch.

Ok, so the questions are: What color was the car? Did they have fish and chips for lunch? Did they listen to music in the car? And did they drink lemonade with lunch? Did you get them all?

  1. It was a red car
  2. No, they had sandwiches for lunch.
  3. ?
  4. ?

What about #3 and #4? There wasn’t enough information  to accurately answer these.

The fact is, though, that you probably answered yes or no… I know I did, and that’s because we like to think we know all the answers. We’ve been trained to know all the answers, to extrapolate, to guestimate, to… bullshit. I remember in school thinking how smart I was, because I could B.S. my way through stuff. Unfortunately, this is why our culture is full of it.

If you also answered yes or no, don’t be hard on yourself, but take a mental note to be okay with saying “I don’t know” next time.

The book talks about how useful it can be to think like a child when it comes to solving some very difficult, adult problems. It all starts with how curious kids are. Even as simple—and annoying—as a kid who says “why? Why? Why? Why?” over and over again. This may seem, well, childish, but just because you’re unwilling to finally say “I don’t know” doesn’t mean it’s the kids fault.

The next reason it can be good to think like a child is pure idea generation. As long as you can separate good ideas from bad ones, the more ideas, the merrier. The Stephen’s say, to separate the bad ideas, use a cooling off period—just don’t act on any ideas right away. They all seem brilliant when you think of them… but sleep on it, and you may decide otherwise.

Finally, to think like a freak, they say to think small. People love thinking big, but they argue that that’s largely because it’s an exercise in imprecision and speculation. People love speculating. They say to think small, because often small problems are ignored by others, so you can learn a lot. They say big problems are a mess of small problems, so you can make more progress by tackling one of those small ones. And, because change is hard for people, it’s easier to have a real impact on a small problem than a big one.

Let’s wrap up with an exercise, and I want you all to answer these questions in the comments! Interact, so these points really stick with you:

  1. How would you take the PK?
  2. How did you do on the “I don’t know” quiz?
  3. Should we think big or small?

I hope you take a ton away from this lesson. I look forward to hearing from you. Go read this book, and I will see you next time!

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