A Billionaire Taught Me How To Think Like A Billionaire Ep 554

Summary Notes


In this episode, the host of "The Game" podcast reflects on his journey of building acquisition.com and shares valuable thinking frameworks for entrepreneurs. He discusses the importance of distinguishing between dichotomies to be managed, such as the balance between delegation and micromanagement, and actual problems to be solved. The host emphasizes the necessity of asking the right questions to accurately identify issues, using examples like the inherent conflict between fairness and equality in tax codes, and the mistake of binary thinking in situations that are actually continuums, such as diet adherence. By adopting these mental models, he aims to help entrepreneurs avoid "mental hamster wheels" and make more precise decisions to effectively grow their businesses.

Summary Notes

Fairness and Equality

  • Fairness and equality are presented as ideals that are inherently right yet distinct and potentially conflicting.
  • The speaker implies that striving for both fairness and equality is a complex endeavor due to their nuanced differences.

"That's fair. This is equal. Both are ideals, and yet somehow they're not the same thing, and yet both are right."

The quote suggests that fairness and equality, while both positive goals, are not synonymous and can lead to conflicts when trying to achieve both simultaneously.

Justice and Mercy

  • Justice and mercy are highlighted as another pair of ideals that are correct in their own right but can be in conflict.
  • The speaker points out the difficulty in balancing these ideals, similar to the balance between fairness and equality.

"It's the same thing between justice and mercy. Both of them are ideals, both of them are right, and yet somehow they're conflicting."

This quote draws a parallel between the concepts of justice and mercy, emphasizing their individual righteousness but inherent conflict when applied together.

Business as a Game

  • The speaker views business through the metaphor of a game and shares their journey of building a successful portfolio.
  • The intent is to document and share lessons learned to help others grow their businesses and possibly collaborate in the future.

"The wealthiest people in the world see business as a game. This podcast, the game, is my attempt at documenting the lessons I've learn on my way to building acquisition.com into a billion dollar portfolio."

The quote conveys the speaker's perspective on business as a strategic endeavor and introduces the podcast as a medium to share valuable experiences and insights.

Delegation in Business

  • The speaker discusses their early experiences with delegation in business, highlighting the initial over-reliance on it.
  • The consequences of excessive delegation are described, leading to a lack of desired outcomes and a realization of its limitations.

"When I was in the beginning of my entrepreneurial career, I would read a book on delegation, right? And as soon as I read the book, I was like, okay, this is how you delegate."

This quote introduces the speaker's initial approach to delegation, influenced by their reading and the subsequent actions they took with their team.

The Pitfalls of Micromanagement

  • After experiencing issues with delegation, the speaker shifted to an extreme of micromanagement, which also led to problems.
  • Micromanagement stifled initiative and made the speaker a bottleneck, demonstrating the need for a balanced approach.

"And then I read a bunch of books on management, et cetera, and then I dive super far in and start micromanaging everyone, trying to control everything."

The quote illustrates the speaker's overcorrection from delegation to micromanagement, revealing the negative impact it had on their team's autonomy and efficiency.

Thinking Frameworks for Business

  • The speaker introduces the concept of thinking frameworks as tools for decision-making and problem-solving in business.
  • Four different frameworks are mentioned, with the intent to provide examples and explain their applications.

"And so I say that to illustrate one of the thinking frameworks that has served me well. And I'm actually really excited to talk about this because when I talk to people, I think a lot of people think that. I'm told that sometimes I communicate some ideas well."

This quote sets the stage for discussing thinking frameworks that have been beneficial to the speaker and indicates their enthusiasm about sharing these methods with others.

Dichotomy Management

  • The speaker presents the idea of managing dichotomies rather than viewing them as problems to be solved.
  • The balance between micromanagement and delegation is used as an example of a dichotomy that must be managed, not solved.

"And so what's interesting about this is that there are a lot of different things that come up in the business world where I will see people conflate or mistake what thing they are solving, right? And most times when I'm talking to a newer entrepreneur or someone who's trying to solve a problem, they're actually not trying to solve a problem, they're trying to manage a dichotomy."

The quote emphasizes the importance of recognizing when a situation requires managing a balance between two extremes rather than seeking a definitive solution, using the example of management versus delegation.

Problem Identification and Management

  • Importance of clearly defining the problem at hand.
  • Advising to ask subordinates or direct reports to pause and consider what problem they are actually trying to solve.
  • Differentiating between solvable problems and ongoing dichotomies that need to be managed rather than solved.
  • The need to prioritize problems correctly and not perceive all problems as existential threats.
  • Understanding that some issues can be improved over time through systems and processes.
  • Recognizing that not all problems require immediate cessation of operations to fix.
  • Introducing the concept of dichotomies in problem-solving, such as fairness vs. equality and justice vs. mercy.
  • Emphasizing the importance of pattern recognition in identifying unsolvable problems and managing dichotomies.

"what problem are we solving? It usually gets them to stop, right?"

This quote emphasizes the importance of pausing to clearly define the problem that needs to be addressed, which can help focus the conversation and lead to better problem-solving.

"Is this something that we believe that we can reasonably eliminate? Is this something that is catastrophic to the business, or is this something that we can kind of try and improve over time through systems and process, right?"

This quote highlights the need to assess the severity and solvability of a problem, and to determine whether it's an existential threat or something that can be incrementally improved.

"most people think in terms of like, I have a problem to solve, rather than a dichotomy to be managed"

The speaker suggests that many people approach problems with a one-dimensional mindset of solving them, without recognizing that some issues are ongoing dichotomies that require continuous management.

"The reason we will probably never have people who are all happy about a tax code is because you cannot have both fairness and equality."

Using the tax code as an example, the speaker illustrates a dichotomy where two equally valid ideals cannot be fully achieved simultaneously, demonstrating that some problems are inherently unsolvable and must be managed.

"It's like, oh, you guys are spending all this effort trying to solve a problem that is unsolvable. This is a dichotomy that must be managed and will never be eliminated."

This quote reinforces the concept that some problems are perpetual dichotomies that cannot be eliminated but must be managed, and the futility of trying to solve what is inherently unsolvable.

"if I can help you get out of these little mental hamster wheels"

The speaker's goal is to help listeners break free from the unproductive cycle of trying to solve unsolvable problems and instead focus on recognizing and managing dichotomies effectively.

Understanding Dichotomies

  • Dichotomies are often mistaken for problems that need to be solved.
  • People misinterpret dichotomies as issues requiring a solution when they may just represent two opposing forces or concepts.

"That's the dichotomy. That's, like, one of the things that people will mistake. They'll mistake a dichotomy for a problem that needs to be solved."

This quote emphasizes the common misunderstanding surrounding dichotomies, where they are wrongly perceived as problems rather than just contrasting elements.

Importance of Networking on LinkedIn

  • The host encourages listeners to connect on LinkedIn and engage with the content.
  • Listeners are invited to send connection requests and notes mentioning the show for acceptance.
  • The host suggests tagging relevant individuals in posts for increased networking and support.

"Hey, mozanation, quick break. Just to let you know that we've been starting to post on LinkedIn and want to connect with you. [...] There's anyone you think that we should be connected with, tag them in one of my or Layla's posts, and I will give you all the love in the world."

The quote is a call to action for listeners to connect with the host on LinkedIn, fostering a community and expanding their professional network.

Continuum vs. Binary Thinking

  • The concept of a continuum is presented as more accurate compared to binary thinking.
  • Binary thinking is a psychological shortcut that simplifies decision-making but can lead to inaccuracies.
  • Reality and biology are better represented on a continuum, such as the extent to which someone may deviate from a diet.
  • Thinking in continuums rather than binaries can lead to more precise decision-making.

"Another framework that I find immensely valuable is the concept of a continuum versus a binary. [...] And so that is one of the biggest mistakes that I see all the time in thinking in entrepreneurs and really in anything in general, because we like to have that shorthand."

The quote introduces the concept of continuum versus binary thinking and highlights the common mistake of oversimplifying complex situations into binary choices.

Examples of Continuum Thinking in Practice

  • The host uses weight loss and diabetes as examples to illustrate continuum thinking.
  • The extent of one's deviation from a diet or the degree of diabetes are examples of where continuum thinking applies.
  • Dr. Cashy, a biochemist and the host's close friend, is credited with influencing this perspective.

"It's easier to say I fell off my diet or I am diabetic, when the reality is it's not whether you are diabetic, it's how diabetic are you?"

This quote explains that conditions like diabetes exist on a spectrum, and it's more accurate to consider the degree of the condition rather than a binary state.

Applying Continuum Thinking to Business

  • Entrepreneurs often make the mistake of binary thinking in business contexts, such as marketing effectiveness.
  • Recognizing the nuances and degrees of success or failure in strategies like Facebook marketing is crucial.
  • Understanding the extent to which a strategy has not worked allows for more targeted improvements.

"So if we have a binary where people are saying yes or no, which is, let's say Facebook doesn't work, marketing doesn't work. [...] It is not that it doesn't work. It is just, we only got it to work this percent right now."

The quote challenges the binary perspective of marketing strategies either working or not, advocating for a nuanced understanding of the degree to which a strategy may be effective.

Mistaking Dichotomies for Problems

  • Dichotomies in life are often mistaken for problems that need solving.
  • The speaker observes this error in various aspects of life, including marriages.
  • A dichotomy should be managed rather than solved.
  • The example given involves the need for both variety and consistency in a relationship.
  • Recognizing and managing dichotomies can lead to better decision-making.

The first mental lapse I'll say that I see all the time, is mistaking a dichotomy that needs to be managed for a problem that needs to be solved.

The quote highlights the common mistake of treating a dichotomy as a simple problem to be solved, when it should be managed over time.

Psychological Binaries vs. Continuums

  • People often use psychological binaries to make judgments.
  • The speaker suggests that many situations are not binary but exist on a continuum.
  • The example given involves adherence to a diet, where the degree of deviation is more important than a binary success/fail.
  • Avoiding binary thinking can prevent harsh self-judgment and promote a more realistic approach to goals and problems.
  • This concept is applied to business, where issues may not be "problems" but points on a continuum that require adjustment.

The second framework between two things that I see as a problem that most people make is that they use a psychological binary to make a judgment and say, yes, this works. No, this doesn't work, or, yes, this is this way, or, no, this, not this way, so that I can apply this arbitrary label that was made up when instead it is to what extent, right, it is a continuum.

The quote explains the flaw in black-and-white thinking and emphasizes the importance of recognizing the extent or degree of an issue rather than labeling it as simply good or bad.

The Importance of Precise Language and Thinking

  • Precision in language leads to precision in thinking.
  • Asking the right questions is crucial to obtaining useful answers.
  • The speaker encourages avoiding "stupid questions" to avoid "stupid answers."
  • The goal is to achieve clarity and success in one's endeavors and to be able to tackle more significant life questions.

If we can be precise with our language, we can be precise with our thinking. If we can ask the right questions, we will get the right answers.

This quote emphasizes the connection between the precision of language and the clarity of thought, suggesting that better questions will lead to better outcomes.

Mental Models and Decision-Making

  • The speaker references Charlie Munger's concept of a "Lattice work of mental models."
  • Mental models are used to check decisions.
  • Sharing and understanding various mental models can improve decision-making.
  • The speaker's aim is to help the audience avoid poor decisions and achieve their desires.

These are the things that Charlie Munger talks about having a Latice work of mental models, and he checks through decisions with mental models.

The quote introduces the idea of using a system of mental models as a tool for better decision-making, as advocated by Charlie Munger.

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