E238: Acting Fast and Slow

0:00I've been reflecting about the podcast that just came out with Dave Fontenot, the founder of HFZero. And after interviewing Dave, it's dramatically changed the way that me and my business partner, Curtis, conduct our business. So much so that we have constructed our day in a way to allow for long periods of uninterrupted work, which means both from a scheduling standpoint, also physically. there's days that me and Curtis work from different locations so as not to be tempted to interrupt each other over short-term needs and things that might interrupt with long-term flow. And I decided to dust up what I learned in my master's in psychology about fast versus slow dopamine.

0:54The technical word for fast dopamine or immediate reward loop is phasic dopamine release. So this is what happens when you get a like or somebody messages you or you get a burst of dopamine. This oftentimes leads to addictive behaviors, most famously at casinos. People get these kind of fast dopamine releases. The second type is called slow dopamine, which is the long-term reward circle, which is the tonic dopamine release. If you look at a two-by-two matrix, the things that are important and non-urgent, this is what that is. The two-by-two part of the matrix that is important and non-urgent is the slow dopamine release.

1:43And just so critical because those are the 10x boosters and the real unlocks in your business. Dave Fontenot talks about this in terms of the pace of realizations. Just to give you some context, Dave and HFZero have had 11 batches of 10 companies, 110 companies. They have a hit rate that exceeds Sequoia in terms of being able to pick winners. And what's even crazier about it is oftentimes these companies will come in with half a million or a million dollars in ARR in week zero and by week 12, get to 10 million ARR. And to get a breakdown of how that works and how that's even humanly possible, watch the full episode with Dave Fontenot.

2:28But what's necessary part of this is two aspects. One is we talk about in the interview about the ability to go into monk mode, to be locked in the basement and just focused on, in his case coding but in working on a long-term project again something that is super important and non-urgent upstream of even that even working on the most important thing is understanding the temptations and the difference between this phasic burst a fast dopamine and the tonic baseline which is the slow dopamine when you look at human behavior it's dictated by the subconscious processes until we take the time to learn about these subconscious processes so that they become conscious and on the conscious level is where we could actually effect them.

3:18So I think it's really important to understand that we as human beings, as homo sapiens, are wired to select for these fast dopamine immediate reward cycles. Taken to the extremes, you have a junkie on the street that only knows how to have fast rewards and ends up being a drug addict. And then on the opposite extreme, you have the surgeon that goes through undergrad, then goes through four years of medical school, then goes through three years of residency, then does a year of specialty. The ability to really defer the reward, the long-term reward loop, is what differentiates these two opposite ends of the spectrum.

4:00That could be taken both on a career, aspect, but also within projects, within what you're doing. And it's so important to be aware of this temptation to take that small win, to respond back to that email, to check off that next checkbox. We get that super fast dopamine release. We're literally neurobiologically wired where that actually does not align with the business goals. The business is actually driven by the slow dopamine, the long-term reward cycles. Step one is understanding that we have such a buys for that. Step two is starting the day with a question, which is if I could do one thing today, one long-term project that would make everything else pale in comparison or significantly less important, what would that one thing be?

4:46And oftentimes it's these long-term projects. When I interviewed Ryan Hoover, who started Product Hunt, he looks at a lot of his problems, not as processes to run, but as products to build. He has these products that automate a lot of his life. And although that seems obvious, and why doesn't everybody do it? The reason is these products oftentimes take weeks to build. So something might take two weeks to build that would technically solve a 45 minute process. The reason it's so effective and so scalable for Ryan is because that 45 minute process might be something that he wants to run two, three times a day.

5:23So the break even on two weeks to build, even if it's he himself building that project, which is the least efficient way to do it. If you do that twice a day and an hour and a half, that break even in 60 days. So after two months, everything's gravy. So you have a process running for three, four years. You have two months, you pay for upfront, and then you have five years and 10 months of scalability and of efficiency. And that's assuming that he himself does the product, which is the least efficient way to do that, of course. Acting in this way, which I call acting slow versus fast, which is a play on thinking fast and slow by a book by Daniel Kahneman, which I recommend, is something that sounds easy, but is, again, extremely difficult to do because we are neurobiologically wired from an evolutionary standpoint not to do this.

6:21but as i mentioned unlike other primates and like apes and like other animals the thing that differentiates humans is our ability to make the subconscious conscious and to effect that change at the conscious level so although we are not wired to do that we're also potentially not wired to wear clothes but we wear clothes so it is something that can be changed and once focused on this. This is where Dave Fontenot and HF0 sees these 20x returns on revenue in 12 weeks. That's the dramatic upside that you could achieve when you think in this manner. Thanks for listening to my conversation. If you enjoyed this episode, please share with a friend.

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