Money Talks: What to Love About Limitations

0:00Slate Money is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Listen to Washington Wise, an original podcast for investors from Charles Schwab, to hear the stories making news in Washington right now. Host Mike Townsend, Charles Schwab's Managing Director for Legislative and Regulatory Affairs, takes a nonpartisan look at the stories that matter most to investors, including policy initiatives for retirement savings, taxes, and trade, inflation concerns, the Federal Reserve, and how regulatory developments can affect companies, sectors, and even the entire market.

0:41Mike and his guests offer their perspective on how policy changes could affect what you do with your portfolio. Download the latest episode and follow at schwab.com slash Washington Wise or wherever you listen. Slate Money is sponsored this week by Bill, which is the intelligence finance platform that helps business and accounting firms scale with proven results. Bill is a leading provider of software that simplifies, digitizes, and automates back-office financial processes for accounting firms and small to medium-sized businesses. What does that mean? It means they help businesses pay and get paid by ACH, JET, credit card, wire transfers, you name it.

1:24It's secure. It has AI-powered accounts payable automation that erases the busy work from capturing invoices and processing payments. It syncs seamlessly with accounting software. It does your 1099 tax filings, you name it. It's an end-to-end workflow. It's customers come from all industries, ranging from startups to established brands and nonprofits to accounting firms themselves. When business owners choose Bill, they aren't guessing. They're choosing infrastructure that is already proven by millions of users and over a trillion dollars in secure payments. Bill doesn't just move money. It enables the business's entire accounts payables workflow, and it creates the ability for them to control their financial operations securely and at scale.

2:08So talk with a payments expert at bill.com slash proven and get a$150 gift card as a thank you. That's bill.com slash proven.

2:26Hello and welcome to Money Talks. I'm your host, Elizabeth Spires. And today I'm happy to have David Epstein, who is the author of the New York Times bestsellers Range and the Sports Gene. We're here to talk about his new book, Inside the Box, How Constraints Make Us Better. Welcome, David. Thanks so much for having me. So introduce yourself and tell us a little bit about what the book is about. I'm a science writer and investigative reporter. I was previously investigative reporter at ProPublica. Before that, I was the science writer at Sports Illustrated. And this book is about how limitations can be our most useful tools for creativity, collaboration, and even personal contentment.

3:05So I read a lot of books like this for work and for my own edification. And I really loved it, partly because a lot of the books that I read, I read them and I think this probably started as a magazine article. It should have stayed a magazine article. And they're just kind of low levels of ideas and information density. And I felt the opposite about your book. I kept making notes. I have a Google Doc. My 10-year-old and I contribute to where it's just interesting facts and stories about things. That's cool. And I used a lot of stuff from your book. So what originally got you interested in the thesis?

3:38Kind of two things. One was that my previous book, Range, was about the benefits of broad experiences and skills in an increasingly specialized world. And the nature of a lot of the questions that I would get after that from readers was, okay, I've got this diverse background, but now what? I'm sort of having trouble figuring out what to do. And so partly it was responsive to that and saying, okay, well, once you have that broad toolbox, you have to focus that into achievement. And I guess the second impetus, which is related, was a hefty dose of me-search. I mean, I had that same question, having a zigzaggy career myself.

4:13And I would have been terrible at putting boundaries around my own work in the past. So like with my first two books, I wrote over length by about 50 % and then had to cut back because I didn't really define well what I was doing ahead of time. Once I became a parent, I really wanted to use my time a lot more efficiently. And so it was partly me wanting to learn to be better at these things in my own life. And so I completely overhauled my own writing system, ultimately where I forced myself to outline the book, make a structural architecture before I started. I didn't start writing for a year, only researching and interviewing, and then did a one-page structural outline.

4:50And if it's not on that page, it's not in the book. And it made it so much more coherent so I could work much more efficiently. So it was partly responsive to readers and partly just me wanting to be better at things that I was terrible at. Yeah, on a selfish basis, I also appreciated the book because I felt like I needed to hear some of what you're writing. If you just picked up the book and said, okay, this is a book about how to constraints make us better, you come into it with an idea, like you know what the book's going to be about. But you go in so many different directions that all do come back to that theme, but they're interesting kind of concepts and stories by themselves.

5:20But the first thing you go through is the corporate case for trying to do too much and where companies fail. And General Magic, which is a great example of this legendary Silicon Valley company that predated a lot of the big tech giants now, attracted all this talent and they had many directions that they could go in. What were their mistakes? Yeah, this was a company that starting basically in the late 80s was looking to make essentially the iPhone before the internet. it. And they were the first concept IPO in Silicon Valley history. Goldman Sachs took them public just with an idea because their vision was so amazing.

5:55Back before their respects. Exactly. And their talent was incredible. Two of the founders were designers of the original Mac. Another was this visionary, incredibly visionary guy. And they did see, by the way, when I was doing this reporting, that third founder who became the CEO was a guy named Mark Peratt. And I read his 1976 Stanford PhD dissertation and reporting. On the first page, he coins the term information economy, and then reading it is absolutely eerie. I mean, he saw the next half century of technological change, not just the promise, but also issues with misinformation and rising inequality and all these kinds of things.

6:29And so he had the vision of what was coming. And so money poured in, talent poured in. And as he said, he was trying to create heaven for engineers where they were just totally free to invent. And he said, what more could anyone ask for? And I think the answer was a little less freedom because it's every idea that someone had, they started doing it and the project just grew and grew until it became incoherent and eventually collapsed under its own weight and the company became worthless. And I interviewed dozens of former employees and I would say three quarters of them would say some version of, I just couldn't figure out what not to do.

7:00So they just did not have a good box to work within. There was one interview that I thought was really emblematic of what was going on. And it had to do with an engineer named Steve Perlman, who is charged with creating a calendar function. And he writes it to go from 1904 to 2096. And he checks it in, thinks he's done. And someone else comes to him, one of the company leaders and says, hey, Steve, somebody might write historical apps. You have to make this thing go back farther. So he writes it to go from year one into the future, thinks he's done again. And then another team comes to him and says, why are you tying this into this arbitrary religious context?

7:35Why don't you begin at the beginning of astronomical time? So he opens it up again and writes it to go, a calendar function to go from the Big Bang. And so it ends up taking months where it would have been four lines of code if he left it at 1904 to 2096. But because they had the money, they had the talent, they could do anything. And so they did, and it just spiraled out of control. Well, you know, my biggest complaint about G-Cal is that I can't go back to BC3 and put in some hypothetical dates. They were thinking about you. So how would you contrast what happened to General Magic with two other places that have been kind of considered heaven for engineers and innovators?

8:09Bell Labs and Xerox PARC. What went right with them and General Magic just couldn't do? Yeah, I think they were a lot more diligent about defining problems. So one thing with General Magic was they defined their customers Joe Sixpack. And after a few years of missed deadlines, they realized nobody knew, nobody met the guy. Nobody knew who he was, what his problems were. So they ended up just building for each other because they weren't defining, they weren't solving a clear problem for anyone. Whereas Bell Labs and Xerox Park, and Bell Labs, I think, is an especially interesting example because it's thought of as the epitome of unfettered exploration, right?

8:47It's a corporate research lab, but their basic research leads to 10 Nobel Prizes. And it's true that they had incredible freedom, but they had a staff at Bell Labs that was often, well, sometimes at least bigger than the basic research staff itself, whose whole job was to go to different engineers in different parts of the business, who's AT &T, and find problems, define them really clearly, and then bring them to the basic researchers. So as one scholar described the way Bell Labs worked, he said, long leash, narrow fence. They had a ton of leeway to work on problem solving, but there were specific well-defined problems brought to them.

9:25There was a whole staff that was just there for defining problems. Yeah, you have a point later in the book about how important this idea of framing the question correctly is, or asking the right question. What was your term for that? Problem setter or something? Problem setters, right, that's what I referred to as sort of like the setter in a volleyball team, where you think of the person who puts the ball up into the air for the subsequent spike. So these people that really well define important problems, which turns out to be often the best way to get them solved. So what are some examples of that?

9:53Or who are people that do that well, but maybe wouldn't be thought of as innovators by themselves because they don't fit this archetype of the crazy lone genius? Yeah, I mean, one of the really important problem setters was a mathematician named David Hilbert. And Hilbert is viewed as one of the most important mathematicians of the 20th century. But the reason isn't because of any individual breakthrough. It's actually that he decided to survey all of the math in the very early, basically beginning of the 20th century. And pick about two dozen problems that he thought were really interesting and important that affected a lot of different areas of math.

10:31define them really explicitly and pass them out in a pamphlet to all of his colleagues at an event. And it set an agenda for 20th century math, and many of them were then solved. And so because he did this, like this problem definition looking for really interesting problems, he's remembered as one of the most important mathematicians of the 20th century, even though he wasn't the one solving those problems. So that's a good example. I mean, another very famous one that's kind of unusual is Thomas Malthus, who in the 19th century was writing about, he was essentially writing about charity. But what his argument was, was that if we do charity in such a way that it allows hungry people to have more kids, we'll always just produce more hungry mouths to feed because the way population works is it explodes at a rate faster than the food supply grows.

11:20And so we'll always just be in this situation where population grows and then crashes back because we outstrip the food supply. And that had been true in some cases in history, but he was absolutely wrong about what was then going on in human history where we've avoided what's called Malthusian catastrophe, where we outgrow the food supply over and over. But it doesn't matter. He didn't have to be right because his writing, his essay on population, was read both by Charles Darwin and Alfred Russell Wallace independently. And it spurred both of them to start thinking about competition for resources and the effect that would have.

11:54And it led both of them to the theory of evolution by natural selection in almost identical terms. You can see in both of their diaries, they're saying, I just read Malthus on population and got this idea. Of course, they had all this other background. But so Malthus was wrong about humanity going forward, but he set up this problem really well. You also talk about the idea of multiple discovery, where people come to independently the same conclusions. And it's interesting to hear that story about Darwin, and you offer several other examples that really predate the kind of media environment we have now.

12:28How do you think about the fact that it seems like we're in an environment where it's much more conducive to that happening just because of information ubiquity? You know, I think about sometimes I'll write a column and somebody will accuse me of having plagiarized the idea from some other place where it appeared two days later. And I always have to explain, you know, sometimes you're just going to reach the same conclusion as somebody else somewhere else. But how does that typically happen? Because you describe it in a very systemic way. Yeah, I mean, and you're right. I think things have changed, right?

12:58So in a lot of the cases I was writing about were these independent discoveries where it turns out what science historians call multiple discovery, multiple people totally independently lighting on the same breakthrough in very similar timing. And it turns out to be the rule, not the exception for world changing breakthroughs. And I think it is somewhat different now. So if we think about generative AI, for example, as soon as OpenAI released ChatGPT to the public, in very quick succession, all these other companies did essentially the same thing because they were at essentially the same spot.

13:29And they just had not chosen to release yet for various reasons. And it sort of became, I mean, these ideas have been around for a half century that generative AI is based on, but we didn't have enough computing power and enough huge data sets to train the models, basically. But also these companies, like people were moving between these companies and there was more information public. So it wasn't totally independent in that way. I would say it's still like convergent evolution where it's like all these different people were converging on the same thing, but it wasn't independent in the same way that Darwin and Malthus was.

14:03And so I think it's much harder now to tell what's truly independent because there's just so much information widely available that I still think there are convergent breakthroughs, But it's harder to document if it's fully independent. Yeah, it's funny because I feel like the tech industry, brand-wise, has kind of developed a sort of thinking that they have a monopoly on innovation and the creative aspects of that. But then you see the kind of narratives that really they hold up and glorify are narratives where you have a lone wolf kind of innovator who comes up with something that's sui generis and then they go out and make it.

14:39And that's how we end up with open AI. Is this just American culture thing, or is it endemic to the industry? Why is that the dominant narrative when everything that you're saying says, this is not how any of this works? Yeah, it's not how innovation works at all. There are a few reasons. I think it feels particularly American now, but I think it actually has roots more in Europe and in England specifically. I mean, until the late 18th century, this idea of innovations that totally break with the past and that are created by lone geniuses who are struck by inspiration lightning, that wasn't even a thing.

15:12It sort of grew up in the late 18th century as a response to enlightenment thinking. And it birthed this thing called the cult of the hero, where there were all these people trying to manufacture lone genius heroes. And I think that we're still living with some of that. But a lot of it is because of what science historians call priority disputes, is that people are fighting for their reputation as being the one, as being the genius. And that occurred even historically. So I write about a famous dream in chemistry that led to a breakthrough and turns out not to be true. As I was doing that research, it turns out there's a whole bunch of famous dreams in chemistry.

15:48And usually it's because someone is, multiple people arrive at the same breakthrough at the same time. And so they'll start saying like, I saw this in a dream. I could not have been familiar with your work. And usually someone does win the priority dispute. I mean, Elisha Gray and Alexander Graham Bell filed their patents for the telephone literally on the same day in the patent office, but one of them is much more well-known. One hero sort of usually wins because it's just an easier way to tell it in history books, not at all because it's true. So does that mean that because chat GPT is sort of what mainstreamed AI for most people that Sam Altman won the priority dispute?

16:22I think so, although there was people catching up in such quick succession that maybe there's some realization that this was really a whole bunch of people converging at the same time. I mean, I've been in like a private meeting where some heads of other important AI groups were talking about how they all had this stuff and were agreeing, like, maybe it's not time to unleash it on the public yet. And then OpenAI did, and then everyone was like, well, now we have to, basically. So it was not that OpenAI was, like, ahead of everyone. It was that they decided to release it. Well, I wonder if some of that is because of something else you talk about, where they had that inflection point because they were showing people a consumer product that had enough similarity to things that they'd seen before that they were able to adopt it.

17:04Yeah, optimal newness is a term I took from a researcher about when you want things to be useful for people, you actually don't want them to be too new in a certain sense. I mean, you do, but if people are going to adopt it, whether this is an idea or a product, it has to be grounded in things that are familiar and that give a sense of what its function is. You know, this is why we have folder icons on our computer and why the first electric vehicles have a plug where the non-existent gas tank is, where you plug in a thing that looks like a gas hose. or Thomas Edison famously, when he electrified New York, kept certain wattage on the bulbs and kept lampshades, even though you didn't need them anymore without gas lamps, to give people this feeling of familiarity so they would adopt it and also to suggest what it is these new things do.

17:48And so I think when innovation occurs, we say that things are ahead of their time, but in fact, looking at the history of innovation, if something is really ahead of its time, like General Magic was trying to make the iPhone a generation early, it actually doesn't work at all because people don't know what they're supposed to do with it. This idea is very prevalent in, for example, web and app design. The idea that you want the look and feel of something and the experience of using it to be close enough to what people are already accustomed to that you don't have to educate them about how something works.

18:18And very occasionally you'll have a design pattern that breaks through in spite of its non-intuitiveness. And a good example of this is the little hamburger menu that you see on mobile apps, the little three lines. And everybody knows now that you click on that, that's where the menu is. but that's after many prominent websites using it and having to explain to the reader that's what that is. But all it took is one site that's already in usage a lot where people kind of have to adapt to it. And that's sort of the opposite of what you're talking about. And you talk a little bit about that idea too, that the individual should fit into this larger system that they should just be forced to use.

18:53Where do you see that happening right now with companies and products that are not really fit for the users. They want users to adapt to the system and not the other way around. Yeah, I mean, to be honest, I think AI has a lot of promise in a lot of ways and also a lot of dangers. But so far, I think one of the things that it's actually done is outsource a bunch of work to the customers, in many cases. Whether this is a self-checkout thing, whether this is the way you're having to deal with service when you're on the phone, entering forms with chatbots, instead of taking the process that existed and finding some of the pain points and automating those, they're actually just automating it in a way that forces the customer to be doing their labor, essentially.

19:39And it's incredibly frustrating, I find. And so I'm like now choosing a lot of the businesses I want to deal with based on if they have legitimate customer service or not, which was never a differentiating factor for me in the past, based on if I feel like I'm doing labor when I'm dealing with them. And so I think this is an implementation of AI where companies saw, oh, this is this great thing. We can automate some work, but it's really just pushing the work onto the user. And so I think that's some really terrible design choices. Speaking of that, you also talk a lot about servicing the constrained user, the person who has the most hurdles to overcome whenever they need to use a product.

20:16In your example there, when you design for people who, for example, have more physical constraints, you end up with a better product for everyone. I think this is intuitive to a lot of design people, but not necessarily to policy people, to executives, especially in an age where there is a kind of one size fits all for a lot of the things that we consume. The best antidote, though, that you have, I thought, was about the military having to design newer body armor because women were going into combat and ending up with body armor that was just better for everybody. How do you think about that in the context of, for example, the average corporate environment, where people are sort of incentivized to look at products based on marginal profitability and not very incentivized to come up with new solutions for users who are already kind of excluded?

21:05Where does that innovative point come from? What would generate it internally in those situations? If they want to grow, right? Right. So for any kind of technology or product, if it's getting used at all, then there are early adopters who might get over all sorts of hurdles of usage because they're interested or whatever it is. But then there's a whole universe of people who might be excluded for one reason or another. Maybe that's because they have a physical disability. Maybe it's just because they don't have the patience for what this thing is or they're just not very good at using it. And I think when organizations take a look, whether these are governments or companies, take a look at what some of our interested but not super adept or active users doing, what are the problems?

21:47What are their pain points? And if you can focus on that, I mean, and this again gets to this concept that I was writing about called universal design, where if you look for the most constrained users, sometimes these are kids or older people. Sometimes these are people with disabilities. Sometimes they're just people who are unfamiliar. And you can cater to some of their needs, like what's holding them back. you'll basically end up with something that's better for everyone, even the power users in many cases. And there are all kinds of examples like this. When I was talking to the chief technology officer at the VA, and he was talking about how many websites initially built for screen readers, for people with vision impairment, it crawls the screen and reads it out to them very rapidly.

22:26And that required pages that were structured really logically with menus with hierarchical information and all this stuff. And that turns out also to be amazing for mobile because of the way mobile works. So it's like when you're looking at some of the problems and challenges that constrained users have, you should go out and find them because they can be the best spotlight showing you where there are high leverage spots to innovate. Because their problems tend to just be extreme versions of problems that a lot more people have. Yeah, I think about stuff like this. Anytime I hear a Democrat talk about the median voter, which in my experience, they do tend to think of as a nebulous, single type of person.

23:07And there is a kind of dismissal of people at the margins because there's an idea that there aren't enough of them to pay that much attention to. And I was sort of thinking about how your theory might apply to politics in that case. You know, if you really design policies and party platform around the most constrained voters, in addition to thinking about this hypothetical kind of generic type, how that would sort of change policy and platform. But I think it's even more obvious whenever you're looking at corporate situations because people don't necessarily have the impetus to do the kind of research that you're talking about to sort of understand those users.

23:46In fact, a lot of companies just don't have that sort of research budget at all. So if you were in a company and you thought, maybe we're not really catering to the user, what would you do in that situation? I don't think this has to be high-cost stuff. Looking at some of the companies that have been totally born that way, like OXO, the kitchen appliance company. I mean, this came out of a husband and wife where the wife had arthritic hands and she was having trouble gripping normal potato peelers. And so they decided to make this chunky rubber contoured handle and that led to this incredible company.

24:18And so I think sometimes even just seeing a small number of users like going out and trying to find who's really having trouble with this and what is their trouble can actually be incredibly effective because this isn't a case where you need a huge sample size. like you're talking about the median, it's kind of nebulous, right? You're doing this sort of aggregate data. Go farther than that and find the more extreme problem. And I'm not saying you have to solve it perfectly, but again, it's usually going to be just a larger version of a problem that more people have. So I don't think I would do a giant budget for this.

24:48I mean, you could have one person who's going out and finding in one way or another the people who are interested but really struggling. Or if this is just a virtual interface, and it's like there it's easier to see where are you losing people at what step in the process and then finding some of those people. It's much more qualitative than like a real scientific research. We just need to identify what are some of these pain points for people who are being basically excluded. And we'll get more into the strategies David's talking about when we get back from the break.

25:26This episode is powered by AT &T Business. I was thinking the other day about what I'd tell myself on day one of starting this journey. I'd probably say, hey, maybe spend a little less time obsessing over the font on your business cards and a little more time on your infrastructure. When you're starting out, you try to save money everywhere. You use your personal data plan, you hop on whatever Wi-Fi is around, but eventually you hit a turning point. You realize that your business is only as strong as your connection to your customers. I wish I'd prioritized a provider like AT &T Business from the start.

25:53AT &T Business is a reliable provider for small business owners. For Small Business Month, we celebrate small businesses by helping them run better. This means reliable uptime, easy switching, smart communications. Powered by AT &T Business, built to work. Get AT &T Business at business.att.com.

26:13This episode is powered by AT &T Business. For every small business owner, there's a moment they remember when they realize they wanted to start their own business. It can be a life-changing moment, but those first steps are never easy. Figuring out the right building blocks, your goals, your schedule, your mindset. You have to think about an entire ecosystem. Not just the big stuff, but the little bits too. In this day and age, a major point for any successful business is strong connectivity. Spotty internet has led to some terrible work calls in my life, but when you're running a business, connectivity can make or break you.

26:42AT &T Business has the tools, team, and expertise you need for a reliable network you can depend on. They make connecting easy, and that's the main thing you want in a provider. Less time stressing, so you can focus on the million other things on your plate. AT &T Business is a reliable provider for small business owners. For Small Business Month, we celebrate small businesses by helping them run better. This means reliable uptime, easy switching, smart communications. AT &T Business built to work. Get AT &T Business at business.att.com.

27:14Slate Money is sponsored this week by Quince. quince and let me tell you now that spring has sprung i am very much enjoying i am wearing right now a shirt that i absolutely adore made of some of the most beautiful cotton i have ever come across in my life if you lean into pieces that just feel effortless and comfortable and still put together it can improve your mood it can improve your day and it makes getting dressed simpler. Quince has fabrics that feel elevated, have flattering fits. They can put together a wardrobe for you where everything just works without overthinking it. My proposition to you is that you should refresh your everyday this spring with pieces that feel as good as they look.

27:59Quince uses premium materials like 100 % European linen, organic cotton, ultra soft denim. They have lightweight linen pants, dresses and tops starting at just$30, which are effortless, breathable and easy to wear on repeat. Everything at Quince is priced 50 to 80 percent less than similar brands. They work directly with ethical factories. They cut out the middlemen, so you're paying for quality and craftsmanship, not brand markup. We are out of the Quince cashmere season, I would guess. Like, it is getting a little bit warm for that. Quince cashmere is just incredibly high quality. You can find cashmere sweaters for the same price, but they are just not as good.

28:37And if you find something as good, it is more expensive. So here's the idea. You should refresh your everyday with luxury you will actually use. Head to quince.com slash money for free shipping on your order and 365 day returns now available in Canada too. That's q-u-i-n-c-e dot com slash money for free shipping and 365 day returns. Quince.com slash money. You know, another thing that you talk about is really the importance of identifying bottlenecks in a system and how one single thing can constrain an entire system. And to go back to your Malthusian population theory of global starvation that turns out not to be true, you also had some really interesting stories about a company called Appeal, where what the company does is they make a, it's not really a preservative.

29:31It's like a lipid that allows food to last longer and how that would help with food issues, especially in food deserts. But initially, their sort of idea was to sell the product into farms, which have no incentive whatsoever to use a preservative that will allow produce to last longer. But this seems like such an obvious, I mean, anybody who buys fresh produce on a regular basis understands the problem here. What are some other companies that you've looked at where the success of them was really the identifying the single bottleneck that just created an entirely new opportunity? Yeah. And so a peel, just to clarify what they are, they make this coating that's made from basically dissolved peels and seeds.

30:14And then the molecules are rearranged and then they're put onto fruits and vegetables and they prevent them from spoiling for a much longer time. So I think some that are really, really famous, Uber, for example. So their opportunity was that it's annoying to get a cab or a car, basically. I live in DC. I remember pre-Uber, you really could not ever rely on a car that you could reserve ahead of time, basically. Unless it was like a really expensive one, right, for normal people. So all that they're really selling is looking at what is the bottleneck that is stopping people from having more usage of reserved cars.

30:47And it's transaction costs. What economists call transaction costs. It's the difficulty of arranging a meeting place between two strangers, having some accountability that the driver is competent and that the rider will pay, and then transferring the money when that time comes. And so they're not really a ride company in that sense, which is why they've been able to also move over to all these other areas. They were really targeting what are the things that hold people back from doing this very obvious thing more. And that's similar with Airbnb. It's like, what is the thing that's holding more people back from using their house as a rental asset?

31:19And obviously that's spiraled into its own other thing. But all of these kinds of companies are really selling lowered transaction costs. What was the thing holding back greater usage of these assets that already exist? And that was their business opportunity. You also apply these ideas, the personal development. And I know you're a former sports reporter, so you've studied the way athletes train and performance and things like that. How does this apply to the individual? Yeah, this idea of looking for a bottleneck that you can widen, or the theory of constraints. this idea that all systems are limited by a single slowest step.

31:53So even if everything else is humming and working great, it doesn't matter because it's limited by the least efficient spot in the chain. It actually really resonates with what happened to me in my own athletic career. So I was a division one, 800 meter runner in college. And I was a walk-on, meaning I wasn't good enough to get recruited. And I wasn't very good. And fortunately, I had a period of experimentation where I could try different things with my training. And it turned out that my bottleneck or my limiting factor was my ability to recover between workouts. So we had three hard workouts a week and I just could not recover.

32:21So we had one on Monday. By the time the next one came on Wednesday, I was not recovered. By the time it was Friday, I was a wreck. And so one of the strategies that an assistant coach helped me hatch was to schedule class over one workout per day. So I have an excuse not to show up. So now I was recovered from Monday to Friday and it worked like crazy. You know, I went from being a walk-on to university record holder. I got to run at the U.S. National Championships indoors. And so it's this idea of instead of continuing to train the things that are not the limiting factor, which is what I was doing, is looking for what really is the thing limiting the system because that shows you the highest leverage place to apply your effort.

32:55Yeah, to go back to the idea of, for example, putting limitations on how you define the problem and also the way in which you attack it, I taught a class on innovation and media at the NYU J School for a long time. And my students were grad students. And they would do a studio project where initially my assignment to them was think of a new media product and we're going to prototype it and go through the user testing and we're going to come up with a business model. And they would flail for three or four weeks because that was just way too broad. And the number of things that they could do under the constraints of that were unlimited.

33:30And in my naivete, I thought this will be inspiring for them because they have the option to do whatever they want. And then after two years of teaching it, I kind of realized what the problem was. So I gave them a much narrower focus. I said, this needs to be done in six weeks. If this is something that would bore you for reading about, you know, extensively for four weeks, don't pick it because you're going to want to slate your rest by the end of it. I gave them a sort of budget. This has to be feasibly prototyped up to a certain point and you need to be prepared to pitch it to an actual industry professional in three months.

34:03And that really narrowed down what people wanted to do. They would pick stuff that was ambitious, but not completely infeasible for them to do on top of the rest of their class load. And the quality of the projects just got so much better because they weren't flailing. And I've seen that in writing classes too, where people have no problem being creative if you give them a very narrow prompt. But if you say, sit down and write something, it's too intimidating. Have you seen that in your own practice, your own writing life? Absolutely. And by the way, you're echoing a huge mountain of research that shows that the more you can kind of box people in in some ways, the more creative they become.

34:38The advertising agency has this saying, give me the freedom of a tight brief. Because when you define what people are supposed to do well, it actually liberates their creativity instead of squelching it. And actually often makes people who are seemingly uncreative suddenly become more creative. I for sure see that in my own writing life. I mean, first of all, you mentioned deadlines. Like I would go on forever. I was reading about the filmmaker Hayao Miyazaki. I love his films, Spirited Away and Princess Mononoke and all those films. And his sort of business partner for life, his kind of life partner in his work, referred to him as the never-ending man.

35:10Because if he wasn't told, it's going to be in a theater on this day, he would just go tweaking and tweaking forever and never stop. So he needed that. I also need that. When I signed this book contract, I immediately freak out about all the things I have to do to get it done. And my agent says, well, you know, like the deadline can always be pushed back. I'm like, don't say that ever again. I need to, this needs to be treated really seriously. But the interesting thing with this book was I started writing so much later. So book process, about the formal part of it is about two years for me. And this time I burned 50 % of the time not writing a word, but just trying to define the thing I was writing about and then making this one page structural outline.

35:49So I started writing way later than my previous two books. But then once I did it, not only did it proceed way faster, and I sat on the book for a couple of weeks because I was ahead of my deadline. I didn't even know what to do. I'm like, can you even turn in a book early? I've never even heard of that. But also I felt so much more liberated once I had created the boundaries to focus on the writing, on the execution. And it allowed me to experiment in ways. So I have one story that's threaded throughout the book and I'd never done that before. But once I had the box, essentially, I just felt so much more liberated to focus on the creative part that was remaining anyway and then to execute.

36:24So yeah, I mean, I totally understand what you're saying. And I would never again leave it as amorphous as I did for my first two books. I'm impressed when people can do it in the amorphous fashion because I really can't. They'd probably be better if they didn't. I mean, I think I was better this time because I didn't. It's certainly the project is more coherent. It's also 20 % shorter. And I think that's just because I wasn't forced to prioritize as ruthlessly in the past. Well, also I think that's what I said in the beginning is I thought your book is very information dense. There's a lot there.

36:54Some of the books that I don't enjoy reading are the ones that have a lot of throat clearing and they become much longer because you feel like they're trying to write it as they go along and they're trying to hit a word count. And part of that is that they don't do as much thinking before they start writing a book. But also people don't want to be hamstrung by research where if you don't put a deadline on that, there is a temptation to research something indefinitely. Or particularly if you're a very curious person, you start going down different rabbit holes and don't know when to stop. That has been, yes.

37:25I don't know anyone who has that problem. No, that has been my, I've like for weeks sometimes gone up and then come back up. I'm like, how do I, did I think this was ever going to be useful in the book? But that, that throat clearing thing resonates too, because if we're, if we're thinking about the same thing, I often notice that at beginnings of chapters, maybe not at the introduction of a book, but many chapters, especially once you're getting well into the book, it's like someone's just has to get started and they're not really sure why they're starting where they are. So for this book, I adopted this, since I was reporting on Pixar for a while, I stole from them or repurposed this thing they had called the three pitches rule, where they would force directors to pitch three ideas because they would find that they would fall in love with their first idea if they were only pitching one, and it usually wasn't their best idea.

38:07And so for the opening paragraph or two, basically the lead of every chapter in this book, I wrote one, the one that came to mind, and then forced myself to write two that were different, that started in a different place. And I would say for two-thirds of the chapters, I ended up picking option two or three, and only for one-third did I stick with the first one that came to mind. Because the first thing that comes to mind is just the first things that come to mind. It's not the best thing, but it's very hard to unanchor yourself from it once you've put it down, unless you're really forcing yourself.

38:36I also did an exercise in this innovation class where I made my students come up with 20 revenue lines for their project once they decided what it was. And it was mostly to get them through whatever the four or five obvious ideas were. And then by the time they get to 20, they're really far out there. Or they've come up with something that is truly genius and was not something that they would have come up with in the first pass. And you have to force it. This is called, in psychology, the creative cliff illusion. People think that they have their most creative ideas first because they think it's a spark of inspiration.

39:07But in fact, they come much later after you've gotten the really obvious stuff out of the way and are no longer allowed to use it. So it's, psychologist Patricia Stokes calls this a preclude constraint where you take the obvious solutions. you say, this is the thing that is now blocked. I can't do it. Next client meeting, we're not allowed to recommend the usual thing. What do we recommend instead? Or we can't solve this problem in the usual way. What do we do instead? And it's like the greatest creative prompt possible. So that's partly what you're doing. You're saying you have to come up with 20, so once you've come up with the obvious ones, you're not allowed to use those again.

39:39And so it's forcing them to do something unusual, which is where innovation happens. Are there any other areas of your personal or professional life where you've taken things that you learned researching this book and found them useful? Oh yeah, a bunch. So let me see. Okay, I'll give you a few things. So one, I read about a genomics lab in the book that they were a leading genomics lab in the world, but they were slipping because they were having so much work in progress that their work was getting fragmented, they were starting to lose samples and things. And they decided to make all of their current commitments visible, all of the current projects, post-it notes on a wall, literally, and immediately realized that they had way more in process than they could ever get done.

40:17And so it led them to build this funnel, again, on the wall, where they, first of all, they see all the things, so now they realize there's lots of medium priorities competing with high priorities, so they move the medium priorities into a holding area, and then use the rule of stop starting, start finishing, which basically means you can't put something in the top of the funnel until something comes out the bottom of the funnel. So I did that with all my current commitments and had the same experience, that there were too many things, some of them were lower priority, and made myself a funnel where nothing goes in the top unless something else comes out the bottom.

40:45Because otherwise, you only add ever. It just gets bigger and bigger. Yeah, I'm terrible about adding. I like the novelty of new projects and then I start when. Everybody's terrible about adding. It's literally a human bias called subtraction neglect bias, where we overlook solutions that involve taking things away and its cousin, additive bias. We love to add things to solve problems. And the theory among some psychologists is that in our evolutionary history, having too much wasn't a problem, but having too little was and so we're just hardwired to add instead of taking away. There's this great study I write about that, I mean, there's a whole batch of these studies but one that I think is really fun done by Leidy Klotz at Virginia and his colleagues where they had this Lego structure they gave people and you had to bolster it to balance a masonry brick over the head of a Star Wars stormtrooper figure so it wouldn't crush the figure.

41:33And you could add as many pieces as you want but you had to pay for every piece you add. And almost everybody added multiple pieces and paid for it instead of just taking away the one piece that would have solved the problem immediately. So once people are cued to be like, you can subtract to solve the problem, then they see it, but until then they don't. So I do regular subtraction audits now. Another thing, I've done a lot of changes to try to retrain my ability to focus because I think I would say the most alarming research that went into the book was by this psychologist named Gloria Mark, who spent about a quarter century tracking what people actually do at work.

42:08And when she started tracking in the early 2000s, She found that people were switching tasks about every three minutes. And then by 2012, it was every 75 seconds. And then by 2022, it was every 45 seconds. I think it's kind of plateaued there. And averaging checking emails 77 times a day, 77 different times a day. That doesn't mean answering 77 emails, it means 77 different checks a day. And it's really bad because what she found is that oftentimes people will say, all right, I'm multitasking all the time. But she describes your brain being like a whiteboard where you have something written on it, you have to erase that to move to the next task, but it leaves a residue that builds up over the course of the day that makes you less capable in everything else you do.

42:48And she found that people will often say, okay, well, today or this week, I really have to focus. So I'm putting the phone aside, I'm turning the notifications off, whatever. But that you can't, because once you become accustomed to a certain cadence of interruption, you will self-interrupt with intrusive thoughts at the rate to which you've adapted. So it's like we have some internal distraction barometer that will keep a pace, even if we try to say, today I'm focusing. So you have to retrain your focus. Unfortunately, it doesn't take that long. So I've done things like, I don't start my day in my inbox because that's a huge group of unfinished tasks that will stick in my mind.

43:24So I put that off. And when I do email, I batch it into one or two or three different times a day where that's the only thing I'm doing. And then I'm not doing it at all when I'm not doing it. And I'll put my phone outside of the room or off because it's now shown that even if it's visible, you're thinking about it and it lowers people's scores on cognitive tests. So batching my work, not starting the day with stuff that's, I think I often used to start the day with email just because it was low friction and easy to feel like I'm getting something done, not because it was important. Batching my work, not starting in my inbox and getting my phone out of the room so that my distraction cadence is much, much lower.

43:56Yeah, that all makes sense. It's funny, I read somewhere about a study where they found that something like 50 % of worker ants were just pretending to work. And now this makes me think that maybe they were just trying to multitask and got discombobulated. That's really funny. I never heard that. They're pretending to work. But this was great. Thank you so much. I really enjoyed it. I have to look that up. And that's it for Money Talks. Thanks to our guest, David Epstein, for joining. And thanks to Jessamyn Molle of Seaplane Armada for producing. We'll be back on Saturday with our regular edition of Slate Money.

44:39This episode of Slate Money is brought to you by Aerolo, the world's leading eSIM brand. In this wonderful world of modern technology, you travel the world with a supercomputer, you can order a car, you can book a hotel, you can translate the menu, you can text your friends. But are you going to have any service? when you're traveling internationally, you have to think about it in advance. It's complicated. It's often very expensive. That is where Aerolo comes in. It's the world's largest travel eSIM platform. It's trusted by more than 30 million travelers worldwide, and it lets you connect to mobile networks instantly in more than 200 destinations.

45:20So you don't need to worry about finding a SIM at the airport. You don't need to worry about roaming charges. You can just use your phone like a normal person. I spend a lot of time traveling around Europe and I can tell you having a second sim and having a second number in Europe is just relaxing. And because Aerolo offers prepaid plans, there are no hidden fees, no surprise charges, no worries about what's going to happen to your phone door when you get back home. In fact, travelers using Aerolo can save on average more than$70 on a one week trip compared with traditional carrier roaming fees.

45:54So if you want to learn more or get unlimited data this summer, go to Airolo.com. That's A-I-R-A-L-O dot com.

46:24Host Mike Townsend, Charles Schwab's Managing Director for Legislative and Regulatory Affairs, takes a nonpartisan look at the stories that matter most to investors, including policy initiatives for retirement savings, taxes and trade, inflation concerns, the Federal Reserve, and how regulatory developments can affect companies, sectors, and even the entire market. Mike and his guests offer their perspective on how policy changes could affect what you do with your portfolio. Download the latest episode and follow at schwab.com slash WashingtonWise or wherever you listen.