The Ultimate Guide to Making Good Decisions

28:05And again, you have to be in good physical health, good emotional health, good creative health, good spiritual health to be able to do this. But you detach yourself from these bad stories. You just surrender. So you don't assume that any story that you're going to, or you could start looking at stories of success like you could surrender and you could say i'm going to do my best and that's going to be enough to to make me successful and i'll trust that because i'm everything else is rolling smoothly like my physical health creative health whatever i'll trust that good things will happen and so you start attaching yourself and noticing good stories and i'm going to talk a little bit more about the decision making of creativity in a bit but go Go ahead.

28:47Yeah. So what about the phrase like FF? Is that considered surrendering yourself? A little bit. It depends. It depends a little bit. Like let's say you're like, oh, I can't pay my mortgage this month. So I'm going to take all of my savings and I'm going to put it on. I'm going to go to Las Vegas and I'm going to put it on black at the roulette table. You know, screw it. Like screw it. Just do it. As Richard Branson would say, like you have to be able to model risks also. and you have to be able to understand the consequences of risks. Would you rather not make your mortgage and still have$3 ,000 in the bank or would you take the risk that you're going to have$0 in the bank and not make your mortgage?

29:28So what are the consequences of that and are there other choices you could have? Could you just stop paying your mortgage, for instance, what would happen? Well, maybe it would take 90 days to evict you and during that time, you could have time to either find another place to live or you could have time to make enough money to make a new deal with the banks so they don't evict you, or you could have time to raise or borrow or make the money to pay your mortgage. So you have to understand all the risks of every decision you do. Let's say, again, I was going to put all my money in one investment.

30:02Okay, I know that that investment decision might be good. Let's say I have a good investment decision-making process, which I'll talk about my personal decision-making process in a little bit. But let's say I have a good investment decision-making process, a stock still could go up or down in the short term. We don't know. So we know this. We also know the stock market could crash and then the stock I invested in could go down. We know this. I also know that there are things I don't know. I don't know if there's fraud, for instance, in the business. So there are things I don't know. And there are also just some weird thing.

30:36I don't know if a 9-11 is going to happen. The day before 9-11 is a good example. I was a day trader then, the market had just fallen something like four or five days in a row. And I had basically one of the first AI-based trading systems, software that I wrote to trade the markets. And it signaled, this is a huge, enormous buy. So I was like 150 % invested in the market on the morning of 9-11. Of course, nobody would have guessed a terrorist attack was going to occur three blocks away from my house at the time. And so that was, as Donald Rumsfeld once put it, that's an unknown unknown. Like I didn't, I had no clue that was going to happen.

31:18And my system, of course, didn't know that was going to happen. And so that's a risk I should have, you know, contemplated, which I didn't back then. And, and this was when I was first learning trading and, and it was a very excruciating process to say the least. But I just want to emphasize again, these short-term decisions, like very, very important on a daily basis. Like I even asked myself at the end of each day and I tell my kids to do this, you know, did you make decisions that improved yourself 1 % physically, emotionally, creatively, spiritually, and that will compound. And, you know, other, you know, short-term models for decision-making, there's something called choice overload.

32:01So let's say, like, and Steve Jobs is very famous for this. Like he wore, I think he wore jeans and like a black turtleneck every day, something like that. So he didn't want going to have to decide. I mean, he's a very smart guy. He could have decided every day, oh, I'm going to wear a different outfit. He's certainly smart enough to figure out what outfit to wear and to vary it up a little bit. But he decided, I'm not going to use a single spare thought on things I don't have to. Every thought, you could think of every thought as requiring some energy. And you start off the day with a lot of energy.

32:33And by the end of the day, you don't have any energy left. You've done your 60 ,000 thoughts. People estimate you think 60 ,000 thoughts a day. I don't know if that's how they come up with that number, but he didn't want to waste any of those thoughts. Mark Zuckerberg does something similar about his clothes. Or you could just decide, you don't have to be so obsessive about it. You could just decide that if I have two choices that are roughly similar, it doesn't really matter what choice. So if I'm in the store, I'm trying to decide whether to buy Kellogg's Corn Flakes or Quaker Oats Corn Flakes.

33:07Well, they're basically the same. So don't try to make a decision. Just pick one or make a rule. I'm always going to pick Kellogg's Corn Flakes. What reason? No reason, because it just doesn't matter. So Steve Jobs made a rule. I'm always going to wear this. So it simplified how he bought outfits, what outfits to wear, what outfits to clean, and so on. It simplified that whole process in his life. Or if someone eats the same meal, again, simplifies the whole process. I'm not saying you should do this, but I'm saying what things in your life do you put too much time thinking about? And for someone like Steve Jobs, the clothes he wore, we don't know what other short-term decisions he simplified, but try to simplify.

33:48If you're driving to work, oh, do you decide between taking the highway or taking these other roads, even though they both take the same amount of time most of the time? Or are you trying to decide what lane to get into on the highway? It doesn't really matter. Don't decide. Just pick a lane and stick with it. And you might not be always happiest with Kellogg's Corn Flakes as opposed to Captain Crunch cereal, but in the long run, you would have saved so much time and energy having a process for making a simple decision that you'll benefit in other ways. So you won't always make the optimal decision, but you'll make, on average, pretty good decisions using a very simple rule-based technique to avoid what's called choice overload.

34:30Yeah, that's what I did for my meals. Like every day my breakfast is the same. Same with breakfast, lunch, and dinner. And if I go out, I tell myself, if I go out just by myself, I only go to Chick-fil-A. Yeah, that's a good… Or like if you… For me, if it's not easy for me to, you know, cook a meal, which is never easy for me, unless there's a meal already lying around the house, I'll use Uber Eats and I always order from the same place on Uber Eats. Or if I'm trying to sign on an Uber, you already have a rule in place, whether you're going to do Uber, are you going to choose Uber XL all the time?

35:05Are you going to choose the cheapest one all the time? Are you going to choose the fastest one? These are simple rules that you don't have to think or decide because that adds up. Imagine if everything, of your 60 ,000 thoughts, let's say 20 ,000 of those thoughts took an extra three seconds to decide. Well, that's 60 ,000 extra seconds you used. I'm making these numbers up because that seems too high. But even if every thought costs you an extra half a second, all right, it's just too much time. So as much as possible, if you could simplify, or for instance, you can use the choose yourself model of the physical, emotional, creative, spiritual.

35:45If you're deciding what to do next during the day, does it fall under one of those four categories? If not, then forget it. If you're to decide making to watch tick tock for an hour that might not conform to the choose yourself model even though it might be fun so you wouldn't do it but now like i say let's say i'm going to watch a youtube video and i say okay i'm going to watch a youtube video but it's going to be educational or it's going to help me in some way then that might fit into the mental or if it's going to make me feel better it might fit into the emotional or spiritual i don't know so you could use some model of how you want to live your life like let's say i'm going to make a phone call to a friend.

36:25Well, is this one of the five people I want to surround myself with? You know, you're, again, you're the average of the five people you surround yourself with, or you're the average of the 25 people you're five people surround themselves with. And so you could call one of those people and improve your relationship with that person. Or you could call someone you want to have an argument with and you could call them and have an argument that might not improve you emotionally and it might be a source of misery for you in life. So these are all, again, we're going to talk about long-term and I think there's three types of decision-making.

36:58There's short-term slash short-term energetic ones, like where you have this physical, emotional, mental, spiritual framework of making most decisions during your day. And for other things, you can use a bunch of simple rules like, okay, I'm not going to wallow in regrets. I'm not going to wallow in worries? Am I living in the here and now? Am I avoiding choice overload? One thing I want to say also, if I'm saying, you know, a lot of times people call me and say, hey, do you want to do X, Y, or Z? Do you want to speak at this conference? Do you want to go on this podcast? Do you want to blah, blah, blah.

37:32I like the Derek Sivers model. If it's not a hell yeah, then say no. And so sometimes even after I say yes, if I realize later, oh, that wasn't a hell yeah, I'll say no. and it's very important. If I find myself wondering later, like why did I agree to that? Just because I said yes earlier, I'm not going to necessarily just do it. Just because I said yes earlier, I'll still say no and you have to nurture yourself and take care of yourself. And you do that long enough and you discipline yourself long enough to be aware when it's not a hell yeah, eventually you stop saying yes. I say yes now to maybe, I mean I say no now to maybe 99 % of the things I used to say yes to.

38:11So when I say yes to something now, I pretty much, it's a hell yeah. But that takes practice. Like you can't just do that overnight. That's like a muscle that you have to practice. So I would say that's the entirety of my short-term decision-making. Oh, one more thing, which is when I'm having conversation with someone, let's say I'm at a meeting or a party or whatever. Before I say something, I usually try to think, is this more of a question or more of a me stating my opinion? And I would rather make decisions about saying questions than opinions. So again, that's a very short-term type of decision-making technique.

38:45What do you mean by questions or? Let's say I'm at a party and everyone's arguing about, I don't know, gun control. And I don't want to enter the conversation. And I feel like I want to say, well, you know, oh, we need guns to protect ourselves. Or if I feel like I'm saying, oh, you know, guns kill people, so the fewer guns, fewer people kill. rather than stating an opinion, I'd rather say, hey, what's a country that eliminated guns? And then what were the statistics afterwards? So better to ask a question than to give an opinion. You know what? Because no one really gives a shit about my opinions anyway.

39:21Sorry for the language. But I want to, better for me to learn more anyway.

39:42And then there's long-term. Like, what sort of long-term decisions do we have to make? Do you make, Jay? Financial. Long-term financial. And then, like, buying cars or not buying cars. Where to live or going back to Malaysia or stay here or, you know… What? Are you thinking of going back to Malaysia? No, no. Like, or like, you know, should I start a studio or should I not build a studio? or should I not, where do I want to live and stuff like that? Those are the long-term decisions. But let me ask you this though. Is voting for presidential elections or any elections considered long-term or short-term?

40:21That's a good question. I would say it's not short-term because it's not short-term in the sense this is what I have to deal with every day. I don't have to vote for president every day. So it's sort of long-term. And you could argue it's long-term because it's like, oh, what kind of political system do I want to live in for the next four years? And voting is an interesting one because I, on purpose, have never voted in a presidential election in my entire life. And there's a lot of reasons. And before the 2020 election, I had written why I wasn't going to vote. And somebody invited me to participate in a debate.

40:55I wrote about this. Maybe we could put the URL in the show links because I wrote about this debate and how the person I was debating or the people I were debating did not – they didn't really debate properly, meaning they just instead decided to use anecdotes or insult me personally or whatever. And, you know, again, I'd rather get facts than opinions, and I'd rather understand what all the facts are. But just to say, like, I have a rule, which is that if something prevents me from being neutral politically for the purposes of this podcast, then I won't do it. So going into the 2020 election, I had liberals, conservatives, libertarians, people of all political stripes on this podcast.

41:47Like Tim Ryan was running for president in the Democrat primaries, very liberal. but you know on the flip side we've had on conservative campaign managers we had on barack obama's speech writer we had on rfk jr although we didn't release that till recently um we had on andrew yang i've had on ron paul like all angles of the political spectrum because it helps me which i hope helps the listeners make a more informed decision and so i feel like if i vote that'll cognitively bias me towards one side or the other it's like if you make a bet it's hard to be neutral after you've placed a bet. But Mehdi argued otherwise, right?

42:24Who argued otherwise? Mehdi Hassan. What's his name? Oh, right, yeah. Mehdi Hassan. He has the MSNBC show. He's been on the podcast. Yeah, and he's going to come on again. I'm really looking forward to it. And yeah, he said it's impossible for someone to be neutral. And he wrote a great book, Win Every Argument, The Art of Debating, Persuading, and Public Speaking. Great book. Highly recommend it. Listen to my podcast with him. Mehdi Hassan, really nice guy. And yeah, he argues that I can't possibly be neutral. I don't know if that's true because I do think creativity plays more of a role in our lives than who the president of the United States is.

43:07Like, you know, and this is something I'll ask Mehdi because I want to know. Like, what has changed politically? you know for instance all the immigration rules from what i understand have stayed the same between biden and trump i don't know i don't want to get into a political thing because i'm not just not that interested in it right now but if many came back on me well you could discuss this and i have a bunch of questions for him to understand to try and understand what has changed that's affected our lives you know now you could argue roe versus wade has made things change a lot but that was already, you know, the court was already in place before Biden, but that's something that does affect people's lives is who's on the Supreme court, you know, so there was a recent rulings on affirmative action on reversing Roe versus Wade.

43:54And that's definitely probably going to affect people's lives, but it's something that, you know, I'm happy to talk about in another podcast, but so, yeah, so maybe voting is an important decision, but I think I can make better decisions with my political time for me personally by using the podcast as a platform for all sorts of opinions and views that I, so I could ask questions and help myself and other people learn. Most people vote without knowing anything. So better to vote with some knowledge. And I think this podcast is a platform for knowledge and better for me to be unbiased, for me personally.

44:30So I'm not saying everyone shouldn't vote. I'm just saying for me personally. um but like i would say for long-term decisions there's jobs there's relationships there's education there's things like should you start a business and if so what kind of business should you start there's should you have a baby or not there's you know all sorts of things like that and i do want to say you know people have all sorts of models like oh write down the pros write down the cons which list is bigger but i would say there are situations where you can't really make a good or bad decision. For instance, whether or not you should have a baby, it's hard to know in advance whether you're making a good or bad decision.

45:12Maybe you say to yourself, if it's not a hell yeah, then no, that would probably be a good framework for having a baby. But other than that, I don't think, you know, you could say, well, if I don't have enough money, I can't have a baby. Or if I don't live in a certain area, or if I'm not a certain age, or haven't achieved a certain area and goal in my life. I can't have a baby. I think all of those are BS. You can't use any of those to... In other words, in some cases, it's okay to just make any decision and not worry about it too much if you actually want to have a baby. Don't have a baby if you don't want to have a baby.

45:47That's the one thing. Yeah, because a lot of people, once they have a baby, all of their view about baby have changed. Yeah. Right. But something like education, let's look at education for a second. So there's education in the traditional route, like what college should I go to and should I even go to college or not? Or there's an education about how can I best, I want to learn something, how can I best learn? So that's two different types of education. One's about actually learning, the other is kind of a lifestyle choice. And I would say with decisions like that, and I talked to Annie Duke about this in our podcast like several years ago, you sort of look at what's important to you.

46:27Like it could be how much money you're going to make, how much you're going to learn and quality of life. And you say, well, you kind of just add it up. Well, what's the expected value? If I decide to go to Harvard as opposed to community college, as opposed to no college, what's the odds that I'm going to make more money? What's the odds that I'm going to have higher quality of life? What's the odds that, you know, I'm going to be a happier person? And we don't really know the answer. So you just have to figure it out. But I would research it like, oh, it turns out people from Harvard make on average$70 ,000 a year.

47:00And people who go to community college make on average$60 ,000 a year but have zero debt, whereas someone from Harvard might have$400 ,000 in debt. And so you could do research on the things that are important to you and make decisions that way. And then people could have arguments with you. Oh, no, you're wrong about this or you're wrong about that. But if you do enough research, it's not going to help you make a decision. but at least you'll be equipped with more facts to maybe make a decision. But again, it's one of those areas like having a baby where it's going to end up how it's going to end up and better to learn how to be happy than to regret any past decision.

47:37Whether you went to Harvard or vocational school or don't even have a high school degree. And I know many smart people, people who have been on this podcast who don't even have a high school degree and have become very successful. And of course, we've had many Harvard grads or whatever who have come on the podcast as well. So, but I would say like, if you're trying to learn something new, I wrote about a framework where I, if I wanted to learn how to play the guitar, for instance, I asked myself, okay, what are the micro skills I need to learn? Well, I need to learn about music and music theory.

48:09Maybe I need to know how to read music. I need to learn how to actually make a sound from a guitar. and so these are micro skills I would need to learn. Maybe I could look up some of that on YouTube or whatever. And then very important for me is who's my plus, who's my minus, who's my equals? So plus is who's going to be your teacher or coach minus who are you going to teach? Because if you can't explain something simply, then you don't truly understand it. And who are going to be my equals? Like who's learning how to play the guitar at the same time as me that we could trade notes and study together and learn together and so on.

48:44And then with the coach, you sort of study what you need to know. The coach, you do something, like you play a song, and the coach tells you what you did you were wrong, and then you go back to the drawing board. You study, you practice, you do, and then you get some feedback and then repeat. And this is the way I learned. So micro skills and then plus minus equals, and then study, do, feedback, repeat. And it's very important to do these things. You know, I will say for some things though, you want to have a process like investing. If I am going to invest in something and it might be a stock or it might be a private investment or it might be a house or it might be a car or whatever.

49:31Here's my rule-based model that I built up over many, many years of making bad decisions, particularly with investments. I basically asked myself, is someone smarter than me in this investment at the same, basically in the same way that I'm in it. So did Warren Buffett buy this stock at roughly the same price I want to buy this stock? And then I don't need to, then I don't need to wonder anymore. Like, oh, Warren Buffett put 1 % of his portfolio in, let's say, you know, IBM stock. So I'll put 1 % of my portfolio in IBM stock, knowing of course that Warren Buffett is in a different financial situation than me.

50:12So I take that into account, but I always say to myself, I'm never going to argue with Warren Buffett. Like Warren, why did you buy IBM? Are you an idiot or something? Like he's smarter than me as an investor. So I like people smarter than me to do something. So another thing is if I am buying a house, I'll look at, well, okay, what town should I pick? Well, I can't really, I don't really know enough to, to predict that, you know, suburban Denver is the right place to buy a home because the real estate market's going to explode there in the next 10 years or the middle of Kansas city or Cincinnati or Atlanta or Miami or whatever.

50:55But I'll look, okay, where are smart investors buying houses? And, you know, I'll try to figure out what does it mean to be a smart investor in a house and then I'll look like, oh, is BlackRock buying a bunch of houses in suburban Atlanta? Oh yeah, they are. So that might be an interesting place to buy a house. That would be the beginnings of my research. This works better with stocks or private investments, but it could be used for other things as well. Is that how you buy your current house? Yeah. So with my current place, by the way, I've always been against owning a home. I still might not have changed my opinion on that, but I do own a home.

51:33And what I did was I looked at all the change of address data coming out of New York City. So New York City, there is a net outflow of people the past three or four years. And I looked at what cities they were moving to. And I also talked to, we even had on the podcast, a guy from a home moving business, a house moving business. And where was everybody moving to? And that gave me an idea of what cities to look at. And then I found, you know, I looked at houses that seemed to be undervalued given the size of the house or the location or the size of the property. And I had to ask, why is it undervalued?

52:13And then I made a decision based on that. So I looked at several cities. I narrowed in on Atlanta and outside of Atlanta and found a place I thought was sufficiently undervalued. And so why is something undervalued? Like, isn't that a bad sign? Well, no, maybe somebody needs to move because they just got a divorce or maybe they owe money to the IRS or they're paying a debt. Or maybe, you know, they had a business that just went out of business or maybe they have a parent that's sick and so they need to move to where the parent is. So there's reasons why someplace might be undervalued and the person might be eager to sell other than that the house might be bad.

52:53So I think there's something called the five Ds. Disease, debt, divorce, death, maybe something else. But these are all models. Like for big decisions like this, people have done a lot of work into coming up with models that are easy to remember, like the five Ds. Or like if I'm writing, we've had a podcast about like copywriting, that there's the five or six U's, urgency, uniqueness, ultra specific, user-friendly, blah, blah, blah, that are models for writing good copy. Or, you know, what's a model for writing a good novel? Oh, the arc of the hero. And we've talked about that in podcasts before.

53:29So lots of types of decisions. There's really good models for already investing. There are many models, whether you're a value investor or growth investor, an arbitrage investor, but I use a very, very simple one. Is someone smarter than me making this investment? And then I know at least that whatever amount of work I could do to determine this is good or bad. Someone's done more work than me and smarter work than me. And so that's a good way, at least a starting point for me, it's often an end point for what kind of stocks or private businesses I should invest in. Another thing like relationships, I think that's like the baby decision.

54:09Like, oh, should I stay with this person or break up with this person? And I think there's no easy, there's no decision model that really works other than looking at extremes. So I think of two things. I think of, is there some line that this person has crossed over? And what is that line? So I decide in advance what those lines are. Has someone physically beaten me up? What just happened in the past? What? I ended up, ended that relationship. Or is someone verbally abusive to me? Or is someone being very secretive or lying to me? Wait, someone beat you up? Well, let's just say someone physically abused me.

54:44And I had ultimately, and you stick with those relationships because you don't know how to decide. Now with experience, I know that this is a really bad thing and nothing would tolerate staying with that person. But it's hard when you're in the moment to end it. So you have a line and that's a good reason to break up. And then the other extreme, I always imagine I'm writing the acknowledgements of a book. And if I'm not willing to put someone, if someone's my spouse and I'm not willing to, or, or, or partner in some way, and I'm not willing, willing to put them in the acknowledgements of my book, then that's usually a bad sign.

55:21And if I put them in the acknowledgements of the book, what would I say? So I've, I studied people's acknowledgements, like everybody who's ever been on this podcast, I've read all of the acknowledgements they've written in their books. So I'm, I know how people thank their spouses and thank their partners and thank their friends. And, and I think, Hmm, would I say this about my friends and my partners and so on? And that helps me make decisions is like, I picture, what would I say about this person? I might not even have an acknowledgement, but I picture if I did have an acknowledgement, what would I say about this person in my acknowledgement?

55:53And if it's generally a lot of positive stuff, then, oh, okay, this is a good person to have in my life. Two very important models I want to talk about are kind of life goals. What are good goals versus bad goals? if you could say such a thing, and also jobs. So let's talk about jobs first. And this is very much related to the choose yourself mentality that I've tried to develop for myself, sometimes successfully, sometimes not. Let's say you're trying to decide whether you should stay at a job or not. Here's an important model that I use, which is have to versus want to. So here's what you should do every day for the next two weeks, three weeks, maybe four weeks.

56:34At the end of the day, write down what percentage of activities that I do at the job that I had to do versus wanted to do. And if it's both, obviously, then you want it, wanted to do takes precedent. So if you wanted to do it and you had to do it, that's a good thing. So you put it in that under the wanted to do. And so let's say 60 % of the things on Monday you had to do and 40 % you actually wanted to do. And write that down every day for three or four weeks. At the end, ask yourself, am I okay with this breakdown? Like if 90 % of the things I had to do, only 10 % of the things I wanted to do, that doesn't sound very good.

57:16Well, then you ask, did it change over the three weeks? Let's say the first day was 90 % versus 10 % had to, want to. And by the end, it was 80-20. 80 % had to, 20 % wanted to. Well, that's a good trend. So maybe you stay at the job because it's trending over time towards things you want to do, you know, that you're doing as part of the job. And that's an important thing to look at. So I, very early on, I was working at HBO and I got another job offer. And I kind of, without thinking about it, did this process. Like the other job offer was almost double what I was making at HBO. So financially, everybody, like my parents, my friends, everybody was encouraging me to take the new job.

58:04But at HBO, I really wanted to do a TV show. And was I more likely to do a TV show or something creative at HBO or at the new job? And my ultimate answer was at HBO, I'd be more likely to do what I wanted to do. So I chose to stay at HBO. And then that helped me negotiate a better salary and so on, because I really wanted to stay there, but I still had room to negotiate. So that's a good model for whether you should pursue a job, stay at a job, continue at a job. Let's say the trend is bad. You're moving towards more things you had to do versus wanting to do. You might not leave the job, but you could negotiate, hey, I'd like to do this, this and this and jay's going to call me later and say james i really don't want to do audio engineering anymore blow but but in general you can figure out this helps you figure out what you want to negotiate it's not just about money and by the way here's a good negotiating model this was taught to me by dr larry brilliant his real name who uh eradicated we should get him on the podcast but i don't know i haven't spoken to him he was head of google charities for a while he He helped eradicate smallpox in India in the 70s.

59:17But anyway, he told me, always have a bigger list than the person you're negotiating with. So it shouldn't be just about money. It should be about quality of life. It should be about had to versus want to. It should be about, you know, you could have healthcare benefits, vacation time. Just make sure you have more things than the other person on your list of things to negotiate so you could give up the nickels for the dimes. And I've always thought that was a very good negotiating model. So that's, you know, again, for everything, whether it's jobs, relationship, education, starting a business.

59:48Okay, let's talk about starting a business for a second. Is an idea a good idea or a bad idea? Should I start this business or not? So given the fact that you might have a full-time job, and so it's hard to start a business because of your lifestyle, that's a different sort of thing. But I like the Jim McKelvey model of starting a business. which is, so I wrote about this and skipped the line, three different models that you could use to start a business. The Jim McKelvey model, which he wrote about, he's the founder of Square, and he wrote about in his book, The Innovation Stack. There's the access economy model, and there's the humans versus data model, but I won't talk about that as much.

1:00:29Matt Ridley wrote about that in The Evolution of Everything. Matt Ridley is a great friend of the podcast and has been on several times. So the Jim McKelvey model for starting a business is, can I do something? Is there an industry that doesn't service the needs of the bottom one third of society? So he determined, oh, mom and pop stores, like he ran a mom and pop business, they can't accept credit cards. They couldn't accept credit cards. So he started Square to service all the small businesses that weren't big enough to accept credit cards. And he made it possible for them to accept credit cards.

1:01:01So boom, great business, made billions of dollars. The access economy is the model of, there's three categories. There's people who have a lot of something. There's people who want a lot of what other people have. And there's the intermediary, the software platform in the middle. So Uber is an example of this. Oh, there's a lot of people who have empty car seats during the day. There's other people who want to use empty car seats to get from one place to another. And Uber is the software in the middle that helps the two sides find each other, pay each other securely, deal with customer service, deal with reviews and all sorts of things.

1:01:45So Airbnb is in that model. Even newsletters are in that model. Oh, somebody might have a lot of knowledge about stocks. Another person might want some knowledge about stocks. And the newsletter is kind of the access, helps people access, one side access the other people. So that's the access economy. And then the humans to data, oh, if something's done by humans, is there a way to automate this? And we're seeing this a lot with AI right now. Like AI has unleashed this model, a new generation of this model, just like the internet did before that. So just like crypto sometimes does and so on. So I guess what I'm trying to say with all of these long-term models is there's no one set of rules, but with each thing you do, there's a model for doing it better.

1:02:33And I hope I described, I described how I, the model I use for different things and some of that might make sense to people. Others might say, oh, I have, there's other things, but that's my long-term sets of decision-making models. And then the final thing I want to talk about is creativity models. But Jay, did you have a question or anything? I'm going to use all those models. Because starting business is hard, right? I always want to start a studio. But you're right. If I start a studio, is my studio going to serve another one-third of the populations? Or what's the purpose of my studio? Is it just my need?

1:03:16Or is it just I want a studio? It could be that you want to do a higher percentage of what you want to do versus have to do. So you're fine starting a me-too business. Like, oh, there's other studios all over the place, but there's such high demand that I know I'll at least make a living and I get to do what I want to do all day long. So whether or not you should start a business, it depends what your goals are. And, oh, I did want to talk about goals. So it's great to have goals. And there's a saying, it's the journey, not the destination that you should value, which I don't know if that's true or not.

1:03:54But I do want to say that if you have a goal, make sure your goal is consistent with your happiness. So here's a mathematical formula to think about happiness. Happiness is expectations divided by reality. So let's say you have a weight loss goal. Let's say you're 500 pounds. I'm just making this up. Let's say you're 500 pounds and your goal is to weigh 150 pounds. So happiness is expectations over reality. So expectations is, oh, I'm not gonna be happy till I have 150 pounds. That's my goal. and reality is you're 500 pounds and you're not doing anything to lose weight. Well, your happiness is going to be very small.

1:04:49It's like it's 150 divided by 500 is almost like between one third and one fourth. So it's not very high. Whereas let's say you have a financial goal and let's say your financial goal is to make a million dollars and you actually have,

1:05:09or let's say, I don't know how to describe this. So essentially, make sure that your expectations are not out of whack with reality. And you could still say your goal is to be 150 pounds, but today my goal might be, this is where the process is important. It's not that the process or the journey is more important than the goal. They're equal. It's just that the goal and the journey are the same thing. So if your goal is to be 150 pounds, then your happiness is determined not by whether or not you're 150 pounds versus the reality of 500, but just today I did intermittent fasting. So I only ate a plate of vegetables for lunch and then a plate of vegetables a few hours later and boom.

1:06:01That was my, you know, chunk down your expectations so that they could be favorable compared to your reality so that you're as happy as possible while you're achieving your goal. So this is very important. Like, if I want to be a better chess player, I can't say, oh, my goal is to be the world champion because there's no process that will make me the world champion chess player. That's not an achievable goal for me. and you know so this way i could be happy and just enjoy the game even if i'm not the world champion because you know i know that i will work hard and seek to improve today and i i have a set of things i do to improve i could judge myself against that versus a final goal i could say well did i study my games that i played today did i study some classical games did i uh uh you know work on some puzzles that improve my calculation.

1:06:58Oh, I did all those things? Good. Now my expectations and reality are in line with each other. But isn't there a saying that always aim higher than where you want it to be? Sure. So I can aim higher, by the way. Instead of aiming for a certain rank, I can aim to play higher than that. But the process will stay the same. If I focus on the process, I'll be happy with the goal. So if my goal is to, you know, again, I can't be world champion. That's ridiculous. But I can maybe aim for slightly higher than my goal. You know, my real goal for myself right now is to achieve a higher rank than I achieved when I was 25 years old.

1:07:41It's a long time ago. It was 30 years ago. And, you know, that's achievable. But really, what does it take to achieve that? And did I do that today? Am I respecting the goal? And as long as you're respecting the goal and you do the right things, you don't, you don't, you know, you, you treat your goal with respect. You don't just, I don't play just one minute chess all day long and then say, oh, I'm trying to get better because that wouldn't be respecting the goal. So my, my, my expectations won't be in line with my reality, but if I do the right kind of studying, I could expect, you know, high achievements.

1:08:18And then that's in line with reality is that, oh, the reality is if I do these things, I will achieve my goal. I don't know. That one didn't make as much sense, but let's go with it anyway. And then the final thing I want to talk about is creativity. So everything we've talked about involves creativity. Like Jay, let's take your example. Let's say you want to start your own audio studio. Okay. Well, other people have started an audio studio. What are you going to do differently well so like the one that i envisioned ideally it's the combinations of a music studio podcast studio and the post-production studio so it's like a it's like a multi multi sort of like a multimedia studio um and then what i would do i would link all the room up and then i will have one room that large enough to have a live event so people want to shoot something or we want to do like a live podcast or live show they can do that and i can link all the room together and create like a multi-room experience of recording and mixing so i think that's a great idea and what you did uses the creativity technique that i call idea sex right which is that you take two ideas and you combine them like okay you don't want to just do a music studio but since you have all the equipment there you could it could be a music studio and a podcast studio and if you want to throw in a third thing you can you also have everything set up to do live events.

1:09:40Like, so you get a big enough space that you could do live events. And the purpose of the live events is to not only make money through ticketing, but also so people are exposed to your studio. And so this combination is very powerful creativity technique. Uh, let me talk about like some ways. And I wrote, I read about this also in skip the line. I call it the secrets of idea calculus, uh, which I talk about idea subtraction, idea multiplication, idea division, and I talk about idea sex. So idea sex is what you did there was merging two ideas into one. Or let's take Harry Potter as an example.

1:10:23Let's say I want to write something. Let's say I really enjoyed Harry Potter and I really enjoyed the TV show Friends and I want to make a new TV show. Well, I can have a bunch of wizards after they graduate from some sort of wizarding school. I'm not J.K. Rowling, so I can't use Hogwarts. But I have a bunch of wizards who graduated from wizarding school. And I put them in an expensive apartment in New York City. And while they're dealing with their daily lives of being wizards in New York City, they're also having relationship issues with their friends who live in the apartment or live in the apartment across the hall or whatever.

1:10:59So that's, you know, combining, you know, using Ideasix to make a new TV show out of the components of two things that I love, Harry Potter and the TV show Friends. I actually hate the TV show Friends. How did SNL haven't done this already? I know, that would be a great idea. But I bet you that's how comedians do come up with ideas. I know this because I've been a stand-up comedian. Like, oh, let's take Amazon reviews and combine it with satire. And there's all sorts of things you could find in Amazon reviews that are just insane. Or look, music does this all the time with sampling. Like, remember when the Fugees, we've had Wyclef Jean on the podcast from the Fugees.

1:11:39Remember when the Fugees did a rap version of the song, the disco song by the Bee Gees, Stayin' Alive. Right. That was such a, that was automatically going to be a bestseller. Like Stayin' Alive was the top disco song of all time. A rap, the Fugees was the top band at that time, 1996, 1997. Of course, a combination between the two was going to be a number one hit. So, and I would encourage people to listen to the song, We Tryin' to Stay Alive. It was a great song. Or think about Stan Weston. He wanted to make a doll for boys, but the only dolls out there were like Barbie dolls. So he made G.I.

1:12:17Joe. It's combined military, like all the boys like military stuff with Barbies and you had G.I. Joe. So that's combination is a very powerful technique. Another one is what I call idea subtraction. Idea subtraction might be take something, a good idea. Like, let's say you want to write a book and publish it and now subtract something from the, but then you say to yourself, well, I can't do it. Like it's five years before I write a book and get an agent and find an editor and get a publishing house and they have to publish it and so on. Well, let's subtract part of that process. Maybe you don't have to use a traditional publisher.

1:12:54Turns out self-publishing paperback, hardcover, audio book, Kindle on Amazon, on average makes people more money anyway than going through a traditional publisher. So Fifty Shades of Grey, which was a horribly written book, was originally a self-published book and sold 100 million copies or whatever it was. So I say horribly written book, but who am I to judge? Sold 100 million copies, more copies than I'll ever sell probably in my lifetime. So subtraction is often an effective way to get creative things done. Another thing is not subtraction, but substitution. So let's say I loved Harry Potter, but I want to write my own version but I can't write about a little boy with glasses who is sort of abused by his family who then discovers he's a wizard.

1:13:45Or can I? Because I don't know if we've ever talked about this before. You ever read The Books of Magic by Neil Gaiman? No, but I think I saw your post on Twitter. Yeah, so if you look at the cover of this comic book written in the early 90s by Neil Gaiman who's a famous comic book writer and movie writer now, it looks exactly like Harry Potter. And the plot is exactly like Harry Potter. I don't know if J.K. Rowling read the books of magic or maybe she read it and forgot it or heard about it, but it's the exact same concept as Harry Potter. So, but okay, for that aside, because you can do similar ideas over and over and over again, but that aside, let's just come up with some substitutions.

1:14:24What if Harry Potter's a girl instead of a boy? What if Harry Potter, or what if your wizard is an old man versus a young person? What are other substitutions? What if Harry Potter in space? Yeah, what if it's Harry Potter on Mars? Or what if Harry Potter is evil and Voldemort is good? So I think there was something like that. Snickety, lemony snicket was sort of like that. I don't know if that's a… What about like the Harry Potter where he has to decide, you know, he's a good wizard, but because he had cancer or whatever, he has to find some way to support the family. So he has to become sort of like a wizard drug dealer or something.

1:15:05Oh, yeah. What if there's a wizard who has to become a drug dealer because he's trying to raise money to get his mom cured from cancer or something like that? Yeah. Great. And that's like a little bit of combination, a little bit of substitution. Or you could substitute or let's say adapt with the time. So what if Harry Potter is not a wizard, but is the same story, someone who's being verbally or physically abused by their family, sort of a geeky looking kid, but someone comes to him and says, hey, you're a mutant. Like Professor X comes and says, you're a mutant. Or someone comes to him from some top secret organization and says, look, we genetically bred you to be a super scientist.

1:15:49Like if you go to our special school, Science Warts, you'll be a super scientist, the best physicist beyond Albert Einstein and everything. Whatever it is. Like, oh, we're going to take you out of this bad situation that you're in because we realize you're the best, secretly the best investor in the world. and you're going to study at our hedge fund and turn into the best investor in the world. So you kind of modify other things. Or I don't know if you remember when I did the Subway talk show. So I took the format of a talk show, which is a late night comedian, does some standup, and then sits behind a desk, has a musical act, and interviews celebrities.

1:16:32So I took the format of a late night show and I substituted, hey, stage with subway. So I did stand up on a subway. I interviewed AJ Jacobs inside the subway. We had a musical act, which was this guy banging on trash cans and it was actually really good music. And I actually videotaped the whole thing and pitched it as a TV show, which was rejected. But that's when you substitute just one element of a very common format, it's a very potentially creative thing to do. So basically, even though creativity feels like it should be without rules, there are very common ways, and these are just a few of them, combine, substitute, subtract, or another thing is adapt.

1:17:15Like let's say I want to do friends, but I don't have a$70 million budget. Okay, maybe I could do it on YouTube with my friends. So adapt to what you have, like set restrictions and boundaries on what you have. Robert Rodriguez, the movie director. He originally made movies in the early 90s. Now he's a huge movie director, but he did his first movie, El Mariachi, for less than$20 ,000 because that was his budget. And he couldn't spend more than that budget. So he made, though, a huge movie. It made millions of dollars for him and it launched his career by putting boundaries and restrictions around what he could do.

1:17:53So he eliminated things. Oh, we don't need to have 70 different camera angles. We don't need to have a million different settings where we film a little bit in the desert, a little bit in an apartment building, a little bit in the Super Bowl. We're just going to have one setting and on and on. So he eliminated things that normally happen in movies to fit a movie within his restrictions, but he kept the arc of the hero. So these are some rules of decision making around creativity. And if people have questions, I'm happy to talk more about that. But Jay, this has been a long enough episode. I think we could probably divide this into two, don't you think?

1:18:34I think it would be great if people can just listen once through, so they can take notes and stuff like that. And then if they want to stop and come back to it. Good decision. And since it doesn't matter so much to me, whether it's one episode or two, and you're the expert, you're the producer of this podcast, I will bow to your decision and we'll do it as one episode. So I don't have to think about it anymore. Great decisions. Thank you, James, for asking me to ignore my advice from my ex-ex-ex-ex-ex-girlfriend. All the time. I will always be happy to recommend people ignore advice. All right.

1:19:12Thank you.

1:19:26Thank you.