Author Archives: Blas

About Blas

Hi, I'm Blas Moros. I'm a half-Swedish, half-Venezuelan mutt who has been fortunate enough to live and travel the world. I spent the first 20 years of my life dedicated to tennis and this culminated in an amazing experience playing for the University of Notre Dame. I am now living in Chicago, working in the finance industry. I have a younger brother at the University of Chicago and a younger sister who is a senior in high school. My parents are unfailingly supportive and I won't ever be able to thank them enough for everything they have made possible for me.

Essays of Warren Buffett: Lessons for Corporate America by Lawrence Cunningham

Summary
  1. An organized compilation of Warren Buffett’s annual letters, broken down by concept. “By arranging these writings as thematic essays, this collection presents a synthesis of the overall business and investment philosophy intended for dissemination to a wide general audience.”
Key Takeaways
  1. Focus on the business with outstanding economic characteristics (favorable and durable moats) and management
  2. People are everything – partner with CEOs who will act well even if they could cheat, who act as if they’re the sole owner, as if it’s the only asset they hold, as if they can’t sell or merge for 100 years
  3. Performance should be the basis for executive pay decisions, as measured by profitability, after profits are reduced by a charge for the capital employed in the relevant business or earnings retained by. If stock options are used, it should be related to individual rather than corporate performance, and priced based on business value
  4. True risk is not volatility but permanent loss of capital
  5. Rather be approximately right than precisely wrong
  6. Put eggs in one basket and watch that basket
  7. Price is what you pay, value is what you get
  8. The 3 legs of the investing stool – Mr. Market, margin of safety, circle of competence
  9. Value investing is a redundancy – aim for focused or intelligent investing
  10. Deploying cash requires evaluating 4 commonsense questions based on information rather than rumor
    1. the probability of the event occurring
    2. The time the funds will be tied up
    3. The opportunity cost
    4. The downside if the event does not occur
  11. Guard against the institutional imperative – CEOs herd-like behavior, producing resistance to change, inertia, and blindness
  12. If you aren’t happy owning business when exchange is closed, you aren’t happy owning it when open
  13. Create the business and environment that attracts the people, management, shareholders that you want
  14. Useful financial statements must enable a user to answer 3 basic questions about a business
    1. Approximately how much a company is worth
    2. Its likely ability to meet its future obligations
    3. How good a job its managers are doing in operating the business
  15. Owner earnings –> cash flow = operating earnings + depreciation expense and other non-cash charges – required reinvestment in the business (average amount of capitalized expenditures for PPE that the business requires to fully maintain its long-term competitive position and its unit volume)
  16. Intrinsic value = the discounted value of the cash that can be taken out of a business during its remaining life
  17. Don’t risk what you have and need for what you don’t have and don’t need
  18. Beware weak accounting (EBITDA), unintelligible foot notes, those who trumpet projections
  19. Directors must be independent, business savvy, shareholder oriented, have a genuine interest in the business
  20. Really only 2 jobs – capital allocation, attract and keep outside management
  21. Choose a cold sink (weaker competition) than best management
  22. Conventionality often overpowers rationality
  23. Risk – we continually search for large business with understandable, enduring and mouth-watering economics that are run by able and shareholder-oriented managements
    1. The certainty with which the long-term economic characteristics of the business can be evaluated
    2. The certainty with which management can be evaluated, both as to its ability to realize the full potential of the business and to wisely employ its cash flows
    3. The certainty with which management can be counted on to channel the reward from the business to the shareholders rather than to itself
    4. The purchase price of the business
    5. The levels of taxation and inflation that will be experienced and that will determine the degree by which an investor’s purchasing-power return is reduced from his gross return
  24. When dumb money acknowledges its limitations, it ceases to be dumb
  25. Need to do very few things right if you avoid big mistakes
  26. Changing styles often is a recipe for disaster
  27. Worry most about management losing focus
  28. If you won’t own a business for 10 years, don’t own it for 10 minutes – materially higher earnings in 5-10 years is what you’re looking for
  29. Time is the friend of the wonderful business, the enemy of the mediocre
  30. Have not learned how to solve difficult business problems, but have learned to avoid them
  31. Never in a hurry – enjoy the process more than the proceeds
  32. “Expert error” – falling in love and acting on theory, not reality
  33. You don’t have to make it back the way you lost it
  34. In commodity-type businesses, it’s almost impossible to be a lot smarter than your dumbest competitor
  35. 4th Law of Motion – for investors as a whole, returns decrease as motion increases. a hyperactive market is the pickpocket of enterprise
  36. Attract proper inventors through clear, consistent communications of business philosophy
  37. It pays to be active, interested, and open-minded, never in a hurry
  38. Avoid small commitments – if something is not worth doing at all, it’s not worth doing well
  39. Deals often fail in practice but never in projections
  40. In a trade, what you give is as important as what you get
  41. The goal of each investor should be to create a portfolio (in effect, a “company”) that will deliver him other the highest possible look-through earnings a decade or so from now. An approach of this kind will force the investor to think about long-term business prospects rather than short-term market prospects, a perspective likely to improve results. It’s true, of course, that, in the long run, the scoreboard for investment decisions is market price. But prices will be determined by future earnings. In investing, just as in baseball, to put runs on the scoreboard one must watch the playing field, not the scoreboard
  42. The primary test of managerial economic performance is the achievement of a high ROE employed and not the achievement of consistent gains in earnings per share
  43. The difficulty lies not in the new ideas but in escaping the old ones.
  44. Ultimately, business experience, direct and vicarious, produced my present strong preference of businesses that possess large amounts of enduring Goodwill and that utilize a minimum of tangible assets.
  45. Nothing sedates rationality like large doses of effortless money
  46. Speculation most dangerous when it looks easiest
  47. Fear is the foe of the faddist but the friend of the fundamentalist
  48. Take into account exposure, not experience
  49. Noah Rule – predicting rain doesn’t count, building arks does
  50. Tolerance for huge losses is a major competitive advantage
  51. Berkshire’s next CEO – temperament is important, independent thinking, emotional stability, and a keen understanding of both human and institutional behavior is vital to long-term investing success.
What I got out of it
  1. An amazing collection of investing, finance, accounting, and management ideas

The Master Algorithm: How the Quest for the Ultimate Learning Machine Will Remake Our World by Pedro Domingos

Summary
  1. Opening the black box and truly understanding machine learning is deeply important as it impacts every aspect of our lives. This book provides a conceptual model for machine learning, the basic ideas which make up this field. The central thesis of this book is that all knowledge, past, present, and future, can be derived from data by a single universal algorithm – the master algorithm
Key Takeaways
  1. An algorithm is a series of instructions telling a computer what to do. No matter how complex, there are 3 options – and, or, not. Claude Shannon’s breakthrough thesis was that resistors use logic based on these options
  2. Machine learning algorithms can learn by making inferences from data and the more they have of it the better. It is a technology that builds itself and can build other artifacts, turning data into algorithms
  3. Algorithms are absolutely everywhere and are changing how we do business, make decisions, and even fall in love. It is all about accurate predictions and greatly expand this scope
  4. The master algorithm is the key to machine learning, unifying various different thoughts into one ultimate algorithm – a general learner. It may be the best start or path towards a theory of everything that we have
  5. Complexity is a huge battle each computer scientist must face as each algorithm is typically built on top of other algorithms. However, the learner algorithm can overcome this as it is fed the data and the desired result and spits out the algorithm that fits the situation. This type of technology is more like nature. Learning algorithms are the seed, data is the soil and the programs are the crops
  6. Machine learning can be thought of as the inverse of programming as you can feed the desired output and data and out comes the algorithm
  7. ML requires statistical rather than probabilistic thinking. 99% accuracy may be the best you can get. ML automates automation itself, otherwise programmers become the bottleneck
  8. Data is the name of the game and is why network effects are so powerful and why google and other platform type companies have tailwinds at the back.
  9. You need data commensurate with the complexity of the task at hand. The algorithm can only be as good as the data that goes into it so huge amounts of relevant data is the name of the game
  10. Data can be thought of as the new oil and there is huge money in refining it
  11. If something exists but the brain can’t learn it, it is the equivalent of not existing for us
  12. Overfitting is a big problem and occurs when data is stuffed in and patterns are thought to be there that really aren’t. One way to limit this is by rewarding simpler theories and algorithms
  13. Generalizing data for situations that haven’t been seen before is difficult. Accuracy on held out data is the gold standard for testing an algorithms accuracy
  14. The S-curve is the most important curve in the world
  15. The exploration vs exploitation trade off must be considered in life and in algorithms
  16. Nature and nurture work together seamlessly to help us survive – the program and the data
  17. Dimensionality is the second worst issue in machine learning
  18. Clustering – assignment of a set of subsets (clusters) so that observations within the same cluster are similar according to some predesignated criterion or criteria, while observations drawn from different clusters are dissimilar
  19. Law of affect – people move towards pleasure and away from pain
  20. Reinforcement learning – long term algorithms which are programmed to choose the move with the greatest value
  21. Power law of practice – chunking in action, best way to learn
  22. Causality – Being aware of your environment, how your actions impact it and adapting to best get what you want
  23. Relational learning – Best way to understand an entity is to see how it relates, fits in and acts with the entities around it. This way it is not an individualistic exercise, but a holistic, network-type view. Predator and have deeply intertwined characteristics. This may be one of the best ways to understand how the world works 
  24. A man is wealthy if he is richer than his wife’s sisters husband – HL Mencken
    1. Lateral networks
  25. They found that advertising to one of the most trusted reviewers of a product is as effective as advertising to a third of all possible customers 
  26. Some of the most important inventions or discoveries in history have been unifiers – things which took many separate processes can now be done in one. The internet and electricity are two examples of unifiers. The master algorithm is the unifier of ML. It let’s any application use any learner by abstracting the learner into a common form that is all the applications need to know. Out of many models, one
  27. All learners have representation, evaluation, and optimization processes 
  28. Like the brain, genetic search followed by gradient descent may be one of the best tactics. Evolution creates the structure and individual experience molds it to specific uses 
  29. As you interact with algorithms, understand what model of you you want it to have and what data you can give it in order to bring that model to fruition. In the future, everyone will have bots which take your preferences, wishes, desires, etc into account and will navigate the world around you and deal with other people’s and company’s bots to get you the best outcome. Therefore, having the most accurate digital representation of you is important and the company which can safely and securely develop this virtual data storage of people and know what to share, when, and with whom is bound to get incredibly wealthy 
  30. Technology is a phenotype of humans and will help us continue to expand our scope and capabilities
  31. Domingos paints a pretty rosy future where these algorithms help us achieve what we want and automate a lot of what we do today. There will be high unemployment but it won’t matter because the machines can produce what we need so cheaply that basic income is universal and only those who want to work will have to – necessarily in certain niches where computers aren’t as effective as humans
What I got out of it
  1. The master algorithm is a general learner algorithm and the more relevant data you have, the better. Great primer into ML, algorithms, and how they are and will continue to impact our lives

The Scientist in the Crib: What Early Learning Tells Us About the Mind by Alison Gopnik

Summary
  1. In this book we tell the story of the new science of children’s minds. Why? Understanding children has led us to understand ourselves in a new way. The new research shows that babies and young children know and learn more about the world than we could ever have imagined. They think, draw conclusions, make predictions, look for explanations, and even do experiments. Scientists and children belong together because they are the best learners in the universe. And that means that ordinary adults also have more powerful learning abilities than we might have thought. Grown-ups, after all, are all ex-children and potential scientists.
Key Takeaways
  1. The new developmental research tells us that Baby 0.0 must have some pretty special features. First, it must already have a great deal of knowledge about the world built into its original program. The experiments we will describe show that even newborns already know a great deal about people and objects and language. But more significant, babies and children have powerful learning mechanisms that allow them to spontaneously revise, reshape, and restructure their knowledge. This is, notoriously, the great weakness of existing computers. They are terrific at solving well-defined problems, they are not so hot at learning, and they are really awful at spontaneously changing how they learn. Finally, the babies have the universe’s best system of tech support: mothers. Grown-ups are themselves designed to behave in ways that will allow babies to learn. This support plays such a powerful role in the babies’ development, in fact, that it may make sense to think of it as part of the system itself. The human baby’s computational system is really a network, held together by language and love, instead of by optic fiber.
  2. Just as everything about our minds is caused by our brains, everything about our brains is ultimately caused by our evolutionary history. That means, though, that evolution can select learning strategies and cultural abilities just as it selects reflexes and instincts. For human beings, nurture is our nature. The capacity for culture is part of our biology, and the drive to learn is our most important and central instinct. The new developmental research suggests that our unique evolutionary trick, our central adaptation, our greatest weapon in the struggle for survival, is precisely our dazzling ability to learn when we are babies and to teach when we are grown-ups.
  3. We survive by being able to learn how to behave in almost any ecological niche, and by being able to construct our own niches.
  4. The advantage of learning is that it allows you to find out about your particular environment. The disadvantage is that until you do find out, you don’t know what to do; you’re helpless. We may have two evolutionary gifts: great abilities to learn about the world around us and a long protected period in which to deploy those abilities.
  5. For Piaget, learning was as natural as eating. This idea is the second element in the new developmental science. For Vygotsky, adults, quite unconsciously, adjusted their behavior to give children just the information they needed to solve the problems that were most important to them. Children used adults to discover the particularities of their culture and society. Just as Piaget saw that learning was innate, Vygotsky saw that culture was natural.
  6. Success in science is often a matter of finding the right analogies, and the computer gave us a new one. The Big Idea, the conceptual breakthrough of the last thirty years of psychology, is that the brain is a kind of computer. That’s the basis of the new field of cognitive science. Of course, we don’t know just what kind of computer the brain is. Certainly it’s very different from any of the actual computers we have now.
  7. The ancient problems of knowledge are all fascinating, but only the problem of Other Minds is gut-wrenching. We dedicate most of our waking life to deciphering the minds of others.
  8. There are three elements in nature’s solution to the problem of knowledge: innate knowledge, powerful learning abilities, and unconscious tuition from adults.
  9. It’s a myth that newborn babies can’t see, but babies are very nearsighted by adult standards, and unlike adults, they have difficulty changing their focus to suit both near and far objects. What this means is that objects about a foot away are in sharp focus and objects nearer or farther are blurred. Of course, that’s just the distance from a newborn’s face to the face of the person who is holding him or her. Babies seem designed to see the people who love them more clearly than anything else.
  10. Babies spontaneously coordinate their own expressions, gestures, and voices with the expressions, gestures, and voices of other people. Flirting is largely a matter of timing.
  11. One-year-old babies know that they will see something by looking where other people point; they know what they should do to something by watching what other people do; they know how they should feel about something by seeing how other people feel. The babies can use other people to figure out the world. In a very simple way, these one-year-olds are already participating in a culture. They already can take advantage of the discoveries of previous generations.
  12. The terrible twos seem to involve a systematic exploration of that idea, almost a kind of experimental research program. Toddlers are systematically testing the dimensions on which their desires and the desires of others may be in conflict. The grave look is directed at you because you and your reaction, rather than the lamp cord itself, are the really interesting thing. If the child is a budding psychologist, we parents are the laboratory rats. It may be some comfort to know that these toddlers don’t really want to drive us crazy, they just want to understand how we work.
  13. Just as it’s important to infer the nature of other people’s minds in order to survive, it’s also important to infer the nature of the physical world.
  14. We look for the underlying, hidden causes of events. We try to figure out the nature of things. It’s not just that we human beings can do this; we need to do it. We seem to have a kind of explanatory drive, like our drive for food or sex. When we’re presented with a puzzle, a mystery, a hint of a pattern, something that doesn’t quite make sense, we work until we find a solution.
  15. Babies are similarly fascinated by causal relations between objects. Babies in the ribbon-and-mobile experiments actually get bored after a while with the spectacle of the mobile moving, but they don’t get bored with the sensation of their own power.
  16. We used to think that babies learned words first and that words helped them sort out which sounds were critical to their language. But this research turned the argument around. Babies master the sounds of their language first, and that makes the words easier to learn.
  17. Why do we do it? Do we produce motherese simply to get the babies’ attention? (It certainly does that.) Do we do it just to convey affection and comfort? Or does motherese have a more focused purpose? It turns out that motherese is more than just a sweet siren song we use to draw our babies to us. Motherese seems to actually help babies solve the Language problem. Motherese sentences are shorter and simpler than sentences directed at adults. Moreover, grown-ups speaking to babies often repeat the same thing over and over with slight variations. (“You are a pretty girl, aren’t you? Aren’t you a pretty girl? Pretty, pretty girl.”) These characteristics of motherese may help children to figure out the words and grammar of their language.
  18. One odd and interesting thing we know about these machines is that all the big ones start out small. The little machines actually turn into the big ones. If we want to understand the basic mechanisms that make these devices tick, perhaps we should start out small, too.
  19. We’ll summarize this big picture by elaborating on the three ideas we’ve presented in previous chapters.
    1. Foundations. Babies begin by translating information from the world into rich, complex, abstract, coherent representations. Those representations allow babies to interpret their experience in particular ways and to make predictions about new events. Babies are born with powerful programs already booted up and ready to run.
    2. Learning. Their experiences lead babies and young children to enrich, modify, revise, reshape, reorganize, and sometimes replace their initial representations, and so to end up with other, quite different rich, complex, abstract, coherent representations. As children take in more input from the world, their rules for translating, manipulating, and rearranging that input also change. Rather than having a single program, they have a succession of progressively more powerful and accurate programs. Children themselves play an active role in this process by exploring and experimenting. Children reprogram themselves.
    3. Other people. Other people, especially the people who take care of children, naturally act in ways that promote and influence the changes in the children’s representations and rules. Mostly they do this quite unconsciously. Other people are programmed to help children reprogram themselves.
  20. The philosopher Otto Neurath compared knowledge to a boat we rebuild as we sail in it. To keep afloat during his thirty years of wandering, Ulysses had to constantly repair and rebuild the boat he lived in. Each new storm or calm meant an alteration in the design. By the end of the journey hardly anything remained of the original vessel. That is an apt metaphor for our view of cognitive development. We begin with many beliefs about the world, and those beliefs allow us to understand what’s going on around us and to act—they let us navigate our way around. But as we do, we get new information that makes us change our beliefs and therefore understand and act in new ways.
  21. It may seem to us that we make up theories of the world because we want explanations, just as it seems to us that we have sex because we want orgasms. From the evolutionary point of view, though, the relationship is the reverse. Orgasms guarantee that we will keep trying to have sex, and our joy in explanation guarantees that we will keep trying to construct better, truer theories of the world. Getting the world right, like having sex, gives us a long-term evolutionary advantage. Drives and emotions turn those long-term advantages into short-term motivations. Studying babies makes us realize that the biological computers on this planet differ from the man-made computers in this regard, as well. They don’t just compute, learn, reason, and know. They are driven to do all these things and are designed to take intense pleasure in doing so.
  22. Imitation is the motor for culture. By imitating what the particular adults around them do, young children learn how to behave in the particular social world—the particular family or community or culture—they find themselves in. They can draw a bow or dress a doll or even learn such bizarre cultural rituals as pulling a piece of toothed plastic through their hair every morning and rubbing a stiff brush against their teeth every night.
  23. The second important thing about the influence of other people is that the most significant behavior seems almost entirely unintentional. Parents don’t deliberately set out to imitate their babies or to speak motherese; it’s just what comes naturally. Our instinctive behaviors toward babies and babies’ instinctive behaviors toward us combine to enable the babies to learn as much as they do. The third important thing about the influence of other people is that it seems to work in concert with children’s own learning abilities. Newborns will imitate facial expressions, but only much older babies will imitate actions on objects, like touching their forehead to the box. Babies won’t imitate complex actions they don’t understand themselves.
  24. Two things emerge from all these studies. The adult brain is a highly specialized device that responds specifically to specific kinds of stimulation. Particular parts of the brain, even individual cells, are designed to respond to information from the outside world in particular ways, sending that information off to other parts of the brain. In that sense the brain is like a classical computer. The brain is also, however, a dynamic and active system. Its parts are constantly interacting with one another, and often many parts of the brain and certainly many, many cells are simultaneously involved in processing even a simple piece of information. Unlike most computers, the brain has no single place where all the decisions are made or where all the information is stored.
  25. Everything a baby sees, hears, tastes, touches, and smells influences the way the brain gets hooked up.
  26. This early research with animals established an important point—a brain can physically expand and contract and change depending on experience.
  27. One of the other surprises of recent studies on the brain’s plasticity is that social factors can dramatically alter how animals learn. As we saw, white-crowned sparrows can typically learn their species’ song from a tape recording between days twenty and fifty. However, this critical period seems less rigid in the right social context. The sparrows can learn after they are fifty days old if they are exposed to a live tutor, a real bird singing the song in front of them. Interacting with another bird helps the baby bird learn.
  28. Moreover, the representations that result from learning influence how the brain processes new experiences. Experience changes the brain, but then those very changes alter the way new experience affects the brain. The sequence of development seems very important: choosing one path early on may heavily influence which paths will be available later.
  29. One benefit of knowing the science is a kind of protective skepticism. It should make us deeply suspicious of any enterprise that offers a formula for making babies smarter or teaching them more, from flash cards to Mozart tapes to Better Baby Institutes. Everything we know about babies suggests that these artificial interventions are at best useless and at worst distractions from the normal interaction between grown-ups and babies. Babies are already as smart as they can be, they know what they need to know, and they are very effective and selective in getting the kinds of information they need. They are designed to learn about the real world that surrounds them, and they learn by playing with the things in that world, most of all by playing with the people who love them. Not the least advantage of knowing about science is that it immunizes us from pseudoscience.
  30. Children, in particular, have suffered a grievous decline in just the goods that are most important to them: adult time, energy, and company. The child-rearing work that men and women and an extended family did a hundred years ago, and that women did thirty years ago, has to be done somehow by someone. The scientific moral is not that we need experts to tell us what to do with our children. What we need are the time and space and opportunity to do what we would do anyway, and that’s just what we are losing. Grandparents and uncles and aunts have also disappeared from children’s lives just when they are most needed, and grandchildren and nieces and nephews have sadly disappeared from our lives. Perhaps we will construct institutions that allow people whose own children have grown up, or who don’t have children, to be involved with other people’s children.
  31. When we look attentively, carefully, and thoughtfully at the things around us, they invariably turn out to be more interesting, more orderly, more complex, more strange, and more wonderful than we would ever have imagined. That’s what happened when Kepler looked carefully at the stars, when Darwin looked at finches, when Marie Curie looked at pitchblende ore. And it’s also what happened when Jane Austen looked at a provincial village and Proust looked at a madeleine cookie, when Vermeer looked at a girl making lace and Juan Gris looked at a café table.
What I got out of it
  1. Babies are born knowing a great deal and nature has designed adults to teach babies, as much as it has designed babies to learn. Don’t be seduced by new technologies, adult time, energy, and company are probably the most effective approaches to teaching children

Junk to Gold: From Salvage to the World’s Largest Online Auto Auction by Willis Johnson

Summary
  1. This is a story of a man who believes in hard work and treating people right. Willis always says things like, “If you take care of the company, the company will take care of you,” and “Watch your pennies and your dollars will take care of themselves,” and “Don’t forget a lot of people are counting on us.” These values led to his desire to have no debt on his balance sheet, to go public on the NASDAQ Exchange, and to build a great company from the ground up.. “Barry, here’s the thing. I’m not just buying a can of soup for twenty-nine cents and selling it for forty-nine cents,” I explained. “I have ten different services that are growing all the time. Think of us like the local sewer system.” Well, that got his attention. “We’re a utility. Nothing can get rid of us—nothing. Two of the biggest businesses in the world are car manufacturers and insurance companies,” I went on. “If insurance companies don’t write insurance policies on cars, then they’re out of business. If manufacturers don’t make cars, then they’re out of business. They’re always gonna make cars, and they’re always gonna insure them. We’re the guy in between.” I looked him right in the eye and said, “As long as we’ve got the land in the right place to put the cars on, we can’t fail. We are like the septic tanks of the sewer system. You can’t have the system without us.” Barry told me later that after our meeting, he called his wife and told her he had just met the smartest man he’d ever met in business. I don’t know about that; I’d probably give my dad that title. But I do know that despite the fact Barry and I were so different and came from such different worlds, we still understood each other completely. Barry was slick, and I was unrefined. Barry was uptown; I was downtown. But he liked the way I approached business, and I liked his tenacity. We were gonna do business. And we were gonna make some money.”
Key Takeaways
  1. Embrace Adventure and Learn from Second Chances
  2. Don’t Feel Sorry for Yourself
  3. Know What You’re Paying For
  4. Be as Relentless as the Cows
  5. Everyone Is Created Equal, but They Aren’t Always Treated Equally
    1. While my dad taught me how to crunch numbers, build a business, and take chances, Mom played an important role in making me a leader. The most important lesson I learned from her was that no one was better than anyone else.
  6. Take Care of the Business, and the Business Will Take Care of You
    1. Both my dad and I also built reputations in the business world of always standing by our word and never doing business if a deal felt wrong. We both walked away from opportunities that may have helped our businesses but would have crossed a moral or ethical line. To us, the business world was black and white, and a deal you aren’t sure about isn’t really a deal at all. It never ceases to surprise me, though, when others cross that line without even a blink of an eye. I was raised to believe that cheating is the same whether you are taking ten cents or $10,000. And if you could do it once, there was a good chance you would do it again.
  7. Don’t Forget Where You Came From
    1. One of my favorite phrases is, “Sittin’ in high cotton.” It means everything is going well. The cotton’s high, which means the profits are too. But I’ve found you appreciate sittin’ in high cotton a lot more when you’ve had times you couldn’t even find the cotton. It’s those times that keep
  8. Find Something in Common to Unite Around
    1. It took me a long time to figure out what was really going on. That sergeant wasn’t all that concerned about the bed. He was just giving us something to unite around. That bed making brought us together. We all became buddies no matter where we had come from. It didn’t matter if we were jocks or hippies. It was us against that sergeant.
  9. Push through the Fear
    1. So the war taught me how to make the best decisions for the people around me, not just for myself. And the military taught me other lessons too. Having good leaders and a clear chain of command is important. And it taught me cleanliness and order. Keeping things lined up makes for efficiency.
  10. When Times Get Tough, Get Creative
    1. I also learned another important lesson that day. The reason we were able to make such a good deal was because we were the only guys who got dirty. We did our homework and knew exactly what we were buying. As a result, Dad was able to outbid the others, who didn’t know the true value of the yard or had underestimated what others knew about its value. It was also another example of why it’s important to take action and not procrastinate.
    2. All of us would take our lunch breaks in a room above the store. This was before stores commonly installed security cameras, so the room was also a great way to observe customers and catch them stealing. Boy, was that an eye opener. I found out just how dishonest people could really be sitting above that store. That little old lady that you never thought would steal was putting stuff in her purse when no one was looking, or the fat guy was putting pork ribs down his pants and walking out of the store. It made me really think of how theft can affect a business and how you can’t ignore it. Safeway also reinforced the need for order that was established earlier when I was in the army. The aisles had to be organized and clean for people to want to shop and so they could find what they were looking for. That meant paying attention to stock empty shelves, checking expiration dates, and holding specials for items that were overstocked.
  11. When You Make a Promise to Someone, Keep It
    1. Back home and back at the business I loved, I took all I had learned in the military and at Safeway and applied it to dismantling. I tripled the income at the yard by taking good care of customers and calling body shops and mechanics to tell them what inventory we had in stock.
    2. After Dad backed out of the promise he made me, I told myself I would never do that, even if it meant I would lose money. I never promised something to someone that I didn’t do, and I never made promises I couldn’t keep. My word is gold. You don’t have to get me to sign something for me to take my commitment seriously. That was a really good lesson to learn, even if there were better ways to learn it.
  12. You Need to Sacrifice to Build a Dream
  13. Ideas Can Come from Anywhere—Even John Wayne
    1. For those of you not in the business, a dismantling yard primarily deals in used auto parts and recycling scrap iron. I would buy cars—mostly the ones that weren’t drivable and had come to the end of their life—and pay thirty-five dollars to fifty dollars and then tow them to the yard. There, I’d pull all the parts off that I thought I could resell, drain the fluids out of the car (which is called “depolluting”), and then haul the shell to the smelter, where I’d get paid for the iron by the ton. If I had a motor that was cast iron, or any copper or aluminum, I got paid different rates for that as well. At first, when I didn’t have a lot of money, I relied on the scrap iron to make ends meet. As the business grew, I hoped to be able to buy better cars and build up the parts side of the business.
    2. Tammi says she and the other kids all learned how to work and about the value of work during that time. She also says I set a good example for them about how to work hard. But really, I was just doing what I had to do—working late nights and weekends to make the business work. I did make a point, however, of reserving Sundays for family.
    3. While I was building the company, that was our time because building a successful business means nothing if you don’t have your family or your faith.
    4. I did try to use the business to teach my kids some important lessons. Reba tells me I never expected anything from anyone that I wouldn’t do myself, and she’s right.
  14. The Sum of Parts Is Greater Than the Whole—at Least in Dismantling
    1. My dream to build up the parts side of the business was starting to come true. As I was able to buy better cars, Mather was able to stock more and better parts, including motors, transmissions, and rear ends. As this happened, the business relied less on scrap iron, which gradually went from the main revenue stream to a byproduct of the parts business. The better the cars I could buy, the better the parts, and the better the profits. We were also able to pay off all the money friends and family gave us to start the business.
      1. Virtuous cycles, leaping-emergent effects
    2. One other big boost was that I was the first in the industry to dismantle parts, not just cars. Typically, if someone came into a dismantling shop and asked for a 4.6 liter motor, the shop would pull the whole motor out of a wrecked car and sell the motor and everything hanging on it—including the alternator, starter, regulator, smog pumps, air breather, carburetor, and distributor. A fully dressed 318 Dodge engine with twenty-two thousand miles on it might have cost a customer about $400 back in the early ’70s and would have come with a warranty. But if the motor had been sitting for a while, the carburetor might be dried out—the water pump shot or other parts didn’t fit the car just right—meaning there was a good chance the dismantler would have to buy it back to honor the warranty. The customer might also already have a good alternator and not need another one. But they were forced to buy the whole package. That didn’t make sense to me. That’s why if the same customer went into Mather, he or she would find just the motor—steam cleaned and painted and looking brand-new. The additional parts would have been taken out as soon as the motor had arrived to the yard, restored, and sold separately so customers could buy only what they needed. I would sell them just the motor, undressed, for $275—a deal if that’s all they needed. Then I’d sell the other parts separately—the distributor for $50, the alternator for $25, the carburetor for $100. By the time I was done, I could get $700 for the same parts sold separately that were sold together by my competitor for $400. And the customer was happier. I also had fewer buy-backs because I didn’t have to guarantee all the parts on the motor. This caused my profit margins to far exceed that of my competitors.
      1. Making it easier for the customer, adding transparency/ease/velocity can have incredible returns
    3. Whatever made it look nice, we did. That way, when people walked in, it was like they were walking into a real retail store. It made it more personal. They could shop. I know that sounds crazy—shopping at a wrecking yard. But no matter what you are buying, you want it to be a good experience, and you want to find what you want easily. Up until then, people just thought of a wrecking yard as a bunch of wrecked cars in a field that you had to wander through to find what you wanted.
      1. Can use poor competition, low standards to stand out
    4. As I saw the effects Ray’s death had on his surviving wife and kids, it also made me think even harder about the real reason I wanted to be successful—so I could take care of my family.
    5. Even with the larger building to display parts, I knew that to really compete with other auto dismantlers in the Sacramento region, I would need to do something different. I just couldn’t realistically keep every make and model part stocked like the larger dismantlers with more money and space. But I knew of some dismantlers like Al Parker in Citrus Heights who was doing well specializing in only Rambler parts at a small two-acre yard. All the larger dismantlers sold their Rambler parts to him and sent Rambler customers his way because they preferred stocking only hot-selling items that had a high demand. Because Al was the only specialized Rambler dealer in the area, he could draw customers from a large geographical area.
      1. Don’t expect to get different results by doing the same things, you have to act differently
    6. I came back and told Curtis that if we were going to compete, we needed to specialize in a car the other dismantlers in town didn’t want to carry. At the time Chrysler, Dodge, and Plymouth were not cars dismantlers wanted to have because they weren’t hot-selling items. So we made a decision to specialize in Chrysler, Dodge, and Plymouth. All the other dismantlers thought I was crazy. But they were more than willing to sell us their Chrysler parts that weren’t moving and send business our way so they could continue to stock more-popular items. My friend and brother-in-law Mike James says I’m not afraid to break the mold and go where no one else has gone before. I guess I just don’t like people telling me I can’t do something. When people tell me, “Willis, you can’t do that,” it just pushes me to show them I can. It wasn’t that I thought I was better than anybody; I just always thought if you wanted something bad enough and worked hard enough for it, it would happen. And it did. Soon I was drawing on a large area of customers who needed Chrysler parts because other dismantlers didn’t have them. In any one area, there wasn’t a big demand for Chrysler parts, which is why most dismantlers didn’t want to carry them. But in the entire area including Sacramento, Stockton, Marysville, and Yuba City, there was a big demand. There were pockets of General Motors and Ford specialty yards but not Chrysler, so we were filling a need for a big area. It was also cheaper to stock Chrysler parts. At the time we were still partly in the scrap business, so we could buy all the junk Chrysler cars for thirty-five to forty dollars whereas we were paying seventy-five to one hundred dollars for General Motors junk cars. I could go to an auction and buy a wrecked Dodge Polara for twenty-five cents on a dollar compared to a Chevrolet. So I could buy parts cheaper, but the parts were just as valuable, especially since no one else carried them. Before we specialized, Curtis and I were running between $3,500 and $5,000 worth of parts a month at Mather. After specializing, we were running around $3,500 worth of parts a day.
      1. Specializing in a certain niche, even if seemingly unattractive on a standalone basis, can be very attractive when pooled and efficiencies are found – Willis found a 30x in a niche nobody wanted!
    7. Curtis remembers that other people thought I was crazy (or stupid—or maybe both) to spend so much money on a computer for a wrecking yard. But I was never afraid to spend money on technology if it could help us be more efficient. And it turned out that the whole industry would end up computerizing once they saw the benefits it gave people like me and Marv. As large and foreign as this machine seemed back then, it paid off because it gave me a complete picture of the business and the inventory, which in turn gave me more knowledge and control over the yard, which helped me make more money. For example, the computerized system could tell me in a few keystrokes not just how many of each type of make and model doors were in the yard but could also tell me how many right doors we had, how many left doors we had, and what color they all were. If we had a lot of side doors that were the same color, I would discount them to move the inventory. But if we had only one right green Volare door, for example, I could charge customers more because it was harder to find and I could justify the price, which they usually paid because it saved them time and money from having to paint it. This allowed us to move parts faster and maximize our profits. The computer also kept track of the hot-selling items. For example, after we computerized we learned that we sold a lot of right front fenders and left front doors—although I don’t know why. So I made sure we had those in stock. I also started dismantling the right front doors—which didn’t sell as frequently. That way, if a customer needed door glass or a door motor, which didn’t have to come from a specific side, I could sell them out of the doors that weren’t selling very often. This allowed us to still move these parts but not take away from other sales. The customers were happy because they didn’t have to pay for a whole door, and we were getting money for inventory that might have otherwise just sat there.
    8. I did other things that other dismantlers looked at me funny for too, although not for long. For example, all the wrecking yards around Sacramento had agreed to use the same size ad—a little tiny ad—in the yellow pages because it was really inexpensive. Well that didn’t make any sense to me, so I went and bought a half-page, color ad. Curtis jokes that all the other dismantlers were mad at me for a while because they had to do the same thing to compete. I went big—they went big. I wanted to take it to the next level, and the rest of the guys had to try to keep up.
    9. I’d also use the trip to mine other wrecking yards for ideas I could take home and implement at Mather. We’d suck in all their ideas, and they didn’t care if they told us because we weren’t direct competitors. So I would learn a lot about what they did that worked and what didn’t work, like how they were handling antifreeze and tires as environmental regulations weren’t yet developed. Their experiences helped make our company better.
    10. He taught me that you have to do your research and that if you don’t stay on top of reading about other people’s ideas, you never come up with ideas yourself. It’s good to learn from others.
    11. My sister Bonnie said she will never forget how excited Peter and I were. We were excited to buy a salvage auction and to be branching out from the wrecking business. It was a big step, one that would change my life forever. What made the U-Pull-It model unique was the high volume of cars it could turn around. I liken it to the Wal-Mart of dismantling. But it was also a little like the old days of Mather because there was a lot of scrap iron. To keep everything cheap and to be able to retain a high volume, U-Pull-It dealt mostly in end-of-life cars. It got its cars by running ads in the paper announcing, “We’ll buy your junk car.” How much we paid for that car depended on how far we had to tow it and how popular the parts on that make and model were. Popular makes and models would sit out for about thirty days while people pulled what they wanted from it. Less-popular cars would sit for sixty days. At the end of the allotted time, what was left was crushed, and fresh cars brought in with fresh parts. At $70 a ton you can get about $140 for a two-ton car. But if you can sell another $100 or $200 worth of parts out of it, you are doubling your money. Then you multiply that by one hundred cars a day, and that’s where the money comes in because it’s not about how good the parts are on it. If you have three hundred car doors that you would normally crush and you can sell some of them for $5 or $6 each, you’re that much further ahead. We could do this because the customers at a self-service yard like U-Pull-It were also different than customers at my other businesses. These were people who didn’t have a lot of money and were barely getting by. They needed to get their cars running as cheaply as possible to get to work the next day and oftentimes were fixing it themselves. By contrast, Mather dealt mostly with body shops and mechanics, people wanting late-model parts that were guaranteed and as perfect as possible. Most of the customers at U-Pull-It were driving cars just like the ones inside the gates. In some cases, customers would even sell their cars in exchange for one that was slightly better inside. They could buy a car there for $300, drive it until it barely worked, and bring it back a few months later and sell it for $50. Then they could buy another $300 one again. It was a cheap way to maintain transportation. U-Pull-It was also a popular stop for buyers from Mexico, who came with semitrucks and filled them with fenders, radiators, and other parts they would then take over the border and resell. We would give them a discount for buying more than $5,000 worth of parts. The model for U-Pull-It was simple. It didn’t matter what the condition of a part was; all parts of the same kind cost the same amount of money. That put the liability on the person buying it, not the person selling. It benefitted the customers to hunt for the best part they could because they were paying the same amount. In the end, U-Pull-It also had three revenue streams—the gate fee, the parts sales, and scrap iron. That was just three more reasons to like the business, as far as I was concerned. It also had another by-product of business. Because many of the cars were abandoned or forgotten, much of what was left inside had also been forgotten. We created a thrift store out of htese items – baby strollers, CD cases, clothing, and more. Our customers, always looking for a deal, loved the bargains,a nd it provided yet one more revenue stream to the mix.
    12. I was sittin’ in high cotton, running on all cylinders with the Mather Chrysler yard, the mini-truck yard, Today Radiator, Mather Auto Parts, and U-Pull-It. I had also decided to specialize yet again, opening up a foreign auto parts yard next to U-Pull-It under the now well-known Mather name. Foreign cars had become more popular, and I could ship in foreign parts from Taiwan for pennies on the dollar for Datsuns, Toyotas, and Fords. I also sold aftermarket sheet metal from the foreign parts yard. But I still wanted to increase business, especially at the specialized yards. I started a dismantling magazine so I could advertise and allowed all specialized yards in the Sacramento area to purchase full-page ads in it, which I then direct mailed to body shops, mechanics, and insurance companies. I didn’t start the magazine to make money but to be a tool that I, along with other specialized dismantlers, could use to get more business. At first, we just called the magazine Specialized Magazine, a boring name I didn’t care for. We needed to think of something better. Then I remembered from my days growing up on a farm how farmers would store their grain together in a co-op and how other businesses would form similar alliances for a mutual benefit. Since the magazine was a co-op of parts dealers using it for the mutual benefit of advertising, I decided to call it Copart instead.
    13. Instead of waiting for the DMV to find a better way, I went to them and proposed a solution. I would develop a way to create electronic forms and print them from a computer, thereby eliminating the need for the DMV to send out the books at all, saving them money and my business valuable time. I spent about $40,000 building the computerized system for the state of California. Now we could go to the computer and fill out all the paperwork needed and didn’t have to wait for books. It sped up the whole process and was an example of how it pays to fix something yourself instead of waiting for someone else to solve the problem for you.
    14. I got the inspiration to create new services within my companies from Disneyland. When I was younger and I went to Disneyland for the first time, Disneyland wasn’t just a theme park to me or a place to have fun. Disneyland to me was a model of how to build businesses within a business. I paid a fee just to get in the gate. And then when I went to a restaurant, I paid to eat and drink. Then I paid money at the gift shops. I paid for tickets to the rides. Everything I did was another business. I thought, Okay, I’ve got to find a business that has multiple revenue streams within it. Disneyland taught me about building other revenue streams. Every time you can add a revenue stream to the same pipeline, the profit margins change drastically. You are putting more through that pipe. That’s what I always tried to do in my businesses, and it is how we were successful.
    15. U-Pull-It grew up as my children also grew up. As each of them turned sixteen, I would find them a wrecked vehicle from one of the wrecking yards for them to fix up themselves and drive. The kids had to put up half the money—which Joyce and I would match.
    16. My work didn’t drain me; it energized me and drove me. Jay wanted to be like that.
    17. I’d tell him how much I liked a certain motor because it broke a lot. Jay didn’t understand that at first; why would a motor that broke all the time be so great? But I told him, “You’re never going to sell it if it doesn’t break. What are you going to do with a bunch of motors that never break?” It was a big learning curve.
  15. Be Your Customer’s Most Valuable Partner
    1. What if we could clean up those cars—take out the debris, vacuum them out, and make them look clean and new again (outside of the damage)? They would be more attractive to buyers and get more bids, driving the price higher, I thought. I knew I could get the insurance company more money if I cleaned these cars up, but I also knew I would have to charge the insurance companies for that service. That was a problem because insurance companies didn’t want to pay you to clean up a wrecked car. To them it was junk. I had to find another way. I proposed a deal to the Fireman’s Fund. Instead of charging fees, I would keep a percentage of the sale price for each car—20 percent on older, highly damaged cars; 10 percent on newer cars. That meant that the burned-out car I could only sell for twenty-five dollars would only get me five dollars. But I could more than make up for the losses on the badly damaged cars with the 10 percent I got off of the newer cars that could be more easily repaired—especially if we cleaned them up and drew top dollar. The Fireman’s Fund was thrilled because they no longer had upside-down cars and they were seeing their returns go up because the newer cars were getting more bids. And I was watching Copart’s profits go up with the returns. But maybe most importantly, PIP represented a significant shift in the industry. Now the salvage auction was a partner with the insurance company, with the goal of getting the best possible price for each car, eliminating any arguments over fees.
      1. Win/Win
    2. When you buy a business, you can inherit some great talent from that business. To let that talent go is bad business. I learned to really respect the people who came with the facilities we purchased, and many of them turned out to be great, long-term employees who really helped us grow and do well.
    3. Efficiency is what excites Jay. Looking at something and finding a better way to do it is his forte. And that’s something I not only valued but embraced. I’m not the kind of guy who says, “Look, kid, I’ve been doing this for twenty years, and I’m not interested in changing.” I never have a problem if someone tells me something is broken. I have always wanted to do things better and improve on the model.
  16. On Going Public
    1. I had never cared about the stock market. The stock page in the newspaper was as foreign to me as the sports page and about as useful. I hadn’t a clue about Wall Street. But when I heard that IAA was making big moves that could affect my business, I decided I should start to care. Marv sent me IAA’s prospectus, and I read it. Then I read it again. And again. I didn’t understand most of it at the time, but I did understand this: IAA had not been making the money I thought it should be to go public. They were in debt. Going public allowed them to raise a ton of money, and they didn’t even have to pay it back. On the other hand, we were making money, and we weren’t in debt. Even though I knew nothing about going public, I figured if they could do it, so could I. We had a better company.
    2. I know what I don’t know. I also think it’s a good idea to learn as much as you can.
    3. I went down to the library and tried to find a book to explain it all. When you don’t know what you’re looking for, it’s not easy to find it.
    4. Steve told me later that he admired my principles and the fact that failure wasn’t an option for me. But while I was driven, I was also willing to wait to do it the way I wanted, without cutting deals I shouldn’t or selling myself or the business short. John and Steve respected that, which I appreciated
    5. Sometimes people underestimated me because of the way I talked and because I looked more like an Okie farm boy than a polished city slicker. Those people usually lost out. It was a good way to weed out the jerks, though—the Wall Street types who would talk down to me, thinking I was less than them somehow. They didn’t know it, but as they were judging me, I was summing them up too—seeing if they were going to play honest or try to take advantage of me.
    6. I’ve been in business a long time, and if I don’t trust people from a conversation across a dinner table, I’m pretty sure I’m not going to trust them with my reputation or my money. And if I don’t trust them with my money, I’m sure not going to go making money for them. I told Barry, “They’re not good partners. I don’t want to deal with them.”
    7. We all met at a restaurant—which had become my favorite place for these things because deals just go better on a full stomach.
    8. I also knew Copart was mine again. At the time, I had three million shares, making me the biggest shareholder, with 40 percent ownership of the company. I could do one of two things—use my stock as currency to buy other companies or go back to Wall Street to raise more money. Now that Copart was public, raising more money would be easy.
    9. In the meantime, IAA was gobbling up facilities across the country as fast as they could. I knew from my dealings with Bob Spence that their plan was to acquire as many locations as they could and let the yards still run like they had been before they purchased them, even if that meant they ran on separate computer systems and used different business models. IAA figured they’d worry about converting them into one system later, when they had finished growing. My philosophy was much different. I felt Copart should grow slowly, acquiring strategic locations and then converting each one over to the Copart system and business model immediately. Jay had already become an expert at converting yards—taking the lead in changing things over in all the facilities I had acquired while getting ready to go public. I just didn’t want to grow to grow. I wanted to build a brand. I wanted anything with a Copart logo on it to run the same way—same computer system, same pricing, same way of treating our employees—so people started relating our name to a certain way of doing business. We spent time converting things over and converting employees over and teaching them our way of doing things because in many cases, the old way they were doing things hadn’t been working. That’s why they had to sell. That’s also why I think IAA’s approach to keeping newly acquired yards running the same way was wrong. They weren’t fixing what was broken in the first place.
    10. IAA was especially focused on big cities, so we looked at more rural areas. The good news about that is it is a lot cheaper and easier to run a yard in a rural area. There is also less competition. Copart’s board of directors didn’t agree with my approach. They wanted me to grow like IAA was growing—finding locations in big cities like Chicago. I decided what they didn’t know wouldn’t hurt them. I told the board I would look in Chicago, but then did what I wanted to do anyway.
      1. Doing things differently, courage to stand up for what you believe is right
  17. Look Beyond Balance Sheets
    1. IAA would show up wearing suits and riding in limos. I showed up wearing cowboy boots and driving a rental car. Some owners were wooed by the flash of IAA. Some were put off by it. For other owners, it came down to the bottom line—who would pay more? I had the advantage there. IAA bought companies the Wall Street way—based on pretax or after-tax earnings. I had my own method based on how many cars the auction sold and the value of the land. I knew what didn’t show up on the balance sheet of a private, family-owned company—that many of these business owners used a lot of their profits to buy personal cars or pay salaries and benefits to their family members. Many of the businesses were undervalued as a result. I paid a little more for these businesses, but I was also able to see their potential. With my operating systems and business model, I also knew we could increase profits almost instantly. The other philosophical difference between Copart and IAA was that IAA purchased the cars from the insurance companies while Copart charged fees to store, clean up, and sell the cars. The advantage of this was Copart could limit its liability and get a greater percent of earnings per investment, since they were putting out less cash. The downside was IAA could show more revenue on its books, which people on Wall Street saw as having more potential. I didn’t care though because I knew in the long run, it was about earnings. The bottom line is: what percentage are you making on your business? If we are pulling 30 to 40 percent to their 10 percent, we are a stronger company.
  18. Consistency Is the Key
  19. Look for Leaders Everywhere
    1. Loyalty was a trait I valued. Whenever I shake the hand or meet somebody, I really size them up. After that first meeting with Vinnie, I thought, If he’ll stay with the company, he’s going to be a big leader here. Vinnie told me that his impression of me on that first meeting was that of a simple, easygoing guy with a clear vision and who was quick to react. I was a guy who had a lot to get done in a hurry, and Vinnie knew that. In that, we found a common bond.
  20. Admit Your Mistakes
    1. It was just a bad idea, so we went back to the original model. But the good thing about Copart is even though sometimes we have bad ideas, we learn from them and correct them. That’s the advice I also passed on to Jay and Vinnie: Any time you make a mistake or bad news comes and you’re really upset about it, remember there’s a lesson in it. Just chalk it up as a lesson, and don’t let it happen again. When you lose a customer because you bid wrong, don’t get mad at the customer. Ask yourself, “What did we do wrong to not get that contract?” Just like with buying cars—it didn’t work, so we learned that lesson and moved forward.
    2. Even great entrepreneurs make mistakes, but they only make them once because they learn from them. Willis was never afraid to take a risk, but when it didn’t work, it was time to course correct. Making sure you learn from past mistakes was one of the best lessons I learned from Willis over the years.
  21. Keep Your Growth Sustainable
    1. Jim Grosfeld, who was on Copart’s board, gave me some sage advice: “Willis, Wall Street doesn’t care about ups and downs. They hate that. What they like is consistency. If you just make that earnings line just move up a little bit every quarter, every year, you’ll get paid a really good high multiple because then they can figure your company out.” From then on, I concentrated on steady growth, and when I thought about buying another location, I didn’t try to buy it just because I wanted to grow the company. I bought it because it was a good fit and was in a strategic area that helped fill in our network. I learned an important lesson, and that was not to grow too fast. You have to grow slow and steady, or Wall Street will make you pay for it. They always compare you to what you did last time. If you exceed what you did last time, you’re successful; if you come in under what you did last year, they don’t like you.
    2. At one point, I asked David when it would be done. We needed it now, and I wasn’t good at waiting. When David told me it would probably take another eight to ten months, I wasn’t happy. “Well, put more programmers on it—then we’ll get it done faster,” I told him. “Willis, I’m going to give you a lesson in life right now,” David replied. “One woman can have a baby in nine months. But nine women can’t have a baby in one month. The time doesn’t change. That’s the way it is.” CAS (Copart Auction Systems) ended up taking a year to build at a cost of $3 million—huge money at the time. Now he could see how many cars we picked up that day, how many cars we sold that day. It helped us manage our business better and bring it all together.
      1. Irreducible minimums are important to identify and understand
  22. Embrace New Ideas
    1. Jay talked to buyers himself about online bidding, trying to educate them about the new web-based technology. At this time, online bidding had descriptions of cars for sale but no pictures. All the buyers told Jay it was a dumb idea; no one would bid on a car they didn’t look at first, they said. Jay told them, “I’m not asking you to not see the car. I’m asking you to come look at the car the day before the sale, and for thirty-five dollars you can submit a bid on our website and not have to stand in the auction all day or pay a contract buyer one hundred and fifty dollars to stand there for you.”
      1. Removing frictions, making it easier for the customer to do business
    2. Something else amazing with online bidding was happening too. One day, Jay saw a car in San Diego sell to a buyer in Connecticut. We had never imagined cross-state bidding, let alone cross-country bidding. Jay had David call up the buyer and find out how he was bidding on vehicles he was too far away from to come look at prior to the sale. The buyer told him he knew what he was doing, but it would be helpful if Copart put pictures of the cars online too.
  23. Fill in the Gaps
    1. Copart was still physically growing too. Now that the systems were in place, I had a goal of adding six to ten yards per year in strategic locations between existing yards to not only grow the network but also to shorten tow times and cycle times, which is the time between getting a car into a yard and having it be sold and picked up. Every time we added a dot on the map, we saved towing. This was especially important because at the time, about 70 percent of our customers were using the PIP program and we were eating the cost of long tows. Any time we saw our towing costs were too high, we’d try to put a yard between locations to improve our bottom line. If we can tow a car 50 miles instead of 150 miles, that’s money in the bank. The new yards would also free up space in nearby existing facilities, which in turn could take in more cars.
    2. It was all about making the company stronger, without any debt, and having more cash in the bank. We wanted to take care of our employees, the insurance companies, and our buyers.
      1. Stakeholder win/win mindset
  24. Make Doing Business Easy
    1. As the temperatures continued to drop, so did the number of buyers who braved the cold. With fewer buyers, returns also dropped. So I had an idea: Why not bring the buyers inside, into a nice, warm building, and show them the cars on television monitors? People would no longer have to follow around auction trucks in the cold. That’s when EVA (electronic viewing auction) was born. We brought the auctioneers inside and displayed pictures of the cars on one screen and the make, model, and other information about the car on another screen so no one had to go outside anymore. Buyers loved the idea, but to make it work, it required a lot of building. We had to build an auction booth inside the building, get chairs and coat racks, and buy donuts. We had to do more interior things than we ever had before, including wiring these televisions up on stands. It took a big capital investment to get people inside, but they loved it. While about 40 percent of people were bidding online, there were still a lot of people coming to the sale at this time.
  25. Never Stop Improving on an Idea
    1. Internet buyers still wanted more. They wanted a way to increase their bids on the day of the sale too. Jay figured if there was a way people could bid online during the sale, we would get even higher returns.
    2. I learned that from the military. You don’t leave anyone behind.
      1. As a leader, you also have to be on the frontline, facing danger head on; officers have to eat last; group size should be small and manageable (Dunbar’s number)
    3. We had also seen on the news that commercial planes all over were being grounded—not because the government was grounding them but because no one wanted to fly. On the other hand, car rental companies were booming. You could hardly find a car that wasn’t already rented. I told Jay people weren’t going to fly as much after this. Instead, they were going to drive. If that was the case, they were going to wreck more cars. That meant our business was due to grow again.
      1. Willis understood the whole system, and secondary effects
    4. I talked to one of the guys at Salomon Smith Barney and asked if he thought us doing an offering would be OK even though it had only been three weeks since 9/11. I also told him why I thought this was a good time to grow. He told me no one was doing offerings at this time. Wall Street had pretty much shut down since 9/11, and although there were people who wanted to invest and there was money out there, everything had pretty much come to a screeching halt. This made me think, Well, if there’s a lot of money out there and we have a good story to tell, this may be the perfect time to do an offering.
      1. Greedy when others are fearful
    5. We went out on the road show, which we were used to from our first two offerings. Usually you go from one investment company to another, and you only have thirty minutes at each one because their calendar is full. You have twenty-five minutes to tell them about the company and another five minutes to talk numbers, and maybe, if you are lucky, five minutes of questions. Usually there are also only two bankers in the room to make orders because they are so busy. That wasn’t the case this time. In fact, it was totally the opposite. We’d go into a conference room with fifteen investors, and they wanted us to stay because they had no one else coming in—nothing else to do.
      1. Find opportunities for contrast
  26. Ask Yourself, “What’s My Job?”
    1. Because it was easier for buyers to participate and they could do it from anywhere, more buyers bid on each car. The Internet auction also retained the same excitement as live bidding, which kept the competitive atmosphere alive. With more competition, returns went up. In fact, the sale had the highest returns of the entire year. It went over like gangbusters.
    2. It was time to make a major business decision. That decision wasn’t whether we were going to roll out VB2 to all the yards—that decision was obvious, even to the auctioneers who would lose their jobs. So we had to figure out what our job was. We literally sat in a room and wrote the words, “What is our job?” on a board. We decided our job was to help buyers purchase cars easier so we could get the most money for the sellers. That was our job—to get the insurance company more money. That superseded anything else.
    3. I didn’t see it from a seller’s perspective, though. I didn’t expect returns to go up. I wasn’t thinking that by making it easier, more buyers would use it—and that buyers from all over the world would be able to use it. With all those buyers competing over the cars, it was a natural result that the returns would go up. That was the kicker for me.
      1. “Good” decisions are those which have unintended, positive knock-on effects
    4. It goes to show you that any company today has to pay attention to technology and how the world is changing and incorporate that if it wants to survive. You can’t do things the same way and expect to be around in ten years. The world moves too quickly. The moment you snooze, you lose.
    5. Our philosophy is always to be on the bleeding edge and to never let those young kids come up behind us and do what they’ve done to so many industries. We need to hire those kids instead so we can stay ahead of the curve on all the new technology.
  27. Don’t Lose What Makes You Special
    1. It was 2002 when Jay realized something bad had happened to Copart: no one knew anyone anymore. We had gotten so big we didn’t have that mom-and-pop feel anymore. This was especially evident when Jay called up a yard to talk to a general manager one day, and was surprised to find out no one knew who he was. “Jay Adair? I don’t think I know you. Do you work at Copart?” asked the employee who had answered the phone. Copart had become a much different kind of company than when Jay first started working there in 1989. It was big. It was financially secure. It had revolutionary technology. But the vision and spirit we had built the company on was no longer reaching its employees. The employees, as a result, did not act as a team or feel like they were working together. That in turn negatively impacted the company’s progress and its relationship with its customers. So Jay decided Copart needed a revolution. It needed to get back to its roots.
    2. Another catalyst for Jay’s decision to have a revolution was when Copart disbanded its fleet of tow trucks and began to contract with drivers instead. This improved efficiency and cut transportation and insurance costs. But the decision—which meant laying off hundreds of drivers—also hurt morale.
    3. About 75 percent of our workers’ comp costs were for truck drivers. Seventy-five percent of our liability claims were because trucks were driving over mailboxes or knocking down gates. When we added it all up, it was ridiculous. It’s crazy we never thought of it before. After testing it out further, the company decided to get out of trucks altogether. But they needed to find a way to do it that would be fair to the hundreds of drivers who would no longer be on the payroll. Gerry Waters took the lead in an effort to sell all of Copart’s carriers to each driver at a discount. He put together a packet of information for all the drivers that outlined how to start their own businesses, including everything from getting a business license and insurance to lists of lenders that had already been identified as willing to finance their new venture. Copart also promised to favor the new entrepreneurs when choosing subhaulers in the future. Whatever the other local guy towed for, Copart offered to pay more if the driver used to be an employee. Only about 20 percent of the drivers took the deal, with the 80 percent choosing not to take the risk of running their own businesses. Copart found that owner-operated tow trucks worked harder. Each tow represented more money for their business, while regular employees got paid the same no matter how many tows they did in a day. All of a sudden we had people doing more loads in the same amount of time for us—because they were hustling more. They were doing three loads a day instead of two. And they were working earlier and later instead of just punching a clock because it meant more money for them. They were in control of their paycheck. As Copart progressed, the subhaul program progressed with it. Copart began offering incentives for tow companies, like discounts on cell phones and insurance, to sweeten the pot and attract the best companies. It again goes back to the lesson that when something bad happens, like the union problem in Michigan, you don’t need to panic or get mad; you just need to step back and find a new way. And more times than not, that bad thing that happened will turn into a good thing if you listen to the lessons it is teaching you.
    4. There were more lessons. Copart didn’t just learn that it could operate better without its own fleet of trucks; it also learned it needed to change the way it interacted with employees. We learned it wasn’t just enough to treat your employees nice, give them good benefits, and hope they got it. That wasn’t enough to keep the unions out. We treated the employee nice, gave them as many benefits as we could, and treated them like we didn’t want them to leave—because we didn’t. But we didn’t tell them we loved them; we didn’t show them how much they meant to the company. That’s where we had fallen short. This was another reason Jay wanted a cultural revolution at Copart. We had been a nuts-and-bolts company where as long as you got the work done, it didn’t matter if you had fun doing your job or liked the people you worked with or even knew why you were doing what you did. That made us into a place that on some levels really wasn’t a great place to work because it didn’t matter if people would rather work around you than with you. That needed to change. Jay told managers at a conference in 2002 that from then on Copart was going to be a company that didn’t just hire on skill sets or IQ (intelligent quotient); it was going to hire based on attitude—EQ (emotional quotient). We were going to be a company in which people liked their coworkers and had fun at what they did. If that happened, we knew they would probably be more efficient and productive and capable of delivering legendary service. If employees are happy, that translates directly to how we treat our customers and how we can move forward as a company.
    5. Becoming a big, public company, we decided, didn’t mean we had to sacrifice having a culture where people worked hard, had fun, and were rewarded for it. Jay remembered how in the early days he was given the freedom to disagree with me and share his ideas, which helped him grow. He wanted all employees at Copart to have that same opportunity. You should be respectful of your boss but not fear your boss or be afraid to disagree with him or her. If you have the ability to speak your mind, the company benefits too because that’s when great ideas are born. We also wanted to communicate to employees that the most important thing at Copart was keeping a clear moral direction. So many people separate different aspects of life by saying “this is life” and “this is business” and give them different sets of rules. But we look at business and life and family as all intermixing. If you are happy at home, you’re happier at work and vice versa. If you do well at work, you can provide more for your family. Jay also wanted everyone at Copart to treat each other like friends and family. Take care of the company, and we’ll take care of you. Take care of customers like you want to be taken care of
  28. Have a Clear Mission, Vision, and values
    1. To communicate some of these lost ideals and vision, Copart developed a mission, vision, and values statement to guide its business principles and employees. Its mission was to streamline and simplify the auction process; its vision was to continually offer compelling, innovative, and unique products and services to propel the marketplace forward. And the first letter of each of its values spelled out the Copart name itself—committed, ownership, profitability, adaptable, relationships, and trust. But it wasn’t enough to just hang these on the wall. The mission, vision, and values also became a key element in Copart’s training and culture. The CIC—Copart identity campaign—was also launched and introduced initiatives designed to build morale, teamwork, and customer service standards. The campaign included company-wide initiatives, such as the twenty-four-hour rule in which employees must follow up with customers within one day. A weekly cheer was also introduced to bring employees together and build company pride, and employees were also encouraged to wear the company color – blue – one day a week.
    2. I also formed the Copart Private Foundation—a scholarship fund created directly from private contributions made by me and other executives. The foundation was set up to help Copart employees’ children with the costs of college and books. No one who has applied for the scholarship has been turned down. My military background and strong love for my country also prompted me to start a program at Copart that paid 50 percent salary to any employee deployed to an active US military campaign. Positions are also held for six months for those who are deployed. This policy earned Copart national recognition from the Employer Support of the Guard and Reserve (ESGR)
    3. Despite these improvements, Jay was still concerned that the senior management of Copart was still too far removed from the people working in the yards, as was demonstrated when the woman who answered the phone didn’t know who he was. As he was talking to a business associate one day, he thought out loud about how great it would be if he could meet every employee personally and travel to all of Copart’s yards, which numbered more than 110 at that time. His associate laughed at him and commented he would never be able to do it. Was he crazy? That was all the challenge Jay needed to prove him wrong. Jay promised all the employees he would come meet them personally at their yard over the next year. The world tour was born. Jay didn’t know what he was getting into, though. The world tour took on a life of its own, and the spirit and excitement that had been lost over the years returned as employees tried to outdo one another by staging stunts, games, and skits for Jay and other executives when they visited. During the 2005 tour, Jay found himself riding a donkey, being arrested, getting dunked in a dunk tank, and dressing up as Elvis. It was an opportunity for employees to turn the tables on executives and put them on the spot—and as a result, the executives became more like ordinary people in their eyes. More importantly, the world tour also had a powerful message. Jay talked to each yard about where the company had been and where it was going. He told them how Copart’s change-centric culture had made Copart a leader in the industry and how the company would keep embracing change and finding better ways to do things. He explained Copart needed to provide not just good service but legendary service—service that left customers saying, “Wow, how did they do that?” and telling others about the experience. He shared the strength of the company’s future with employees and talked about how the salvage industry was recession proof because people would always be wrecking cars. The world tour really brought the company together. We got to know our employees better, and they got to know us. We got back that mom-and-pop feel we had lost.
    4. Helping out in the Katrina disaster – Through the ordeal, Copart did not pass any of its added costs on to its customers. Copart chose to absorb the costs for a couple of reasons—first, because it was the right thing to do. Copart emerged as an important ally in the clean-up and recovery efforts, with many government agencies asking for and receiving Copart’s help. One of Copart’s first priorities after the storm was picking up vehicles at Kessler Air Force Base in Biloxi, Mississippi, so rescue operations could be made to New Orleans. Copart also absorbed the costs because it wanted to prove to its customers it was not just a vendor but a business partner they could rely on even at the worst possible time.
    5. Finally, I decided to get a second opinion. I called Richard Reese, the CEO of Iron Mountain, who already had operations in the UK. I had met Richard at a CEO group I attended and had asked him for his advice before. “Richard, what’s the most important thing I need to do in England?” I asked. Richard’s advice was quick and direct. “You need to introduce your company’s culture there.” Richard went on to explain that in the UK, business was very hierarchical, meaning managers didn’t like to talk to people many levels below them. “That’s not the way your company or my company works, Willis,” Richard told him. “We need to have that communication between management and the employees—that idea flow—for things to work well.”
  29. Other
    1. Her gut [his wife’s] was always right. She really helped me make good decisions. Joyce always told me she liked to hear about my ideas and see me excited about the next big thing I had planned. There was nothing she felt I couldn’t do, she told me. That’s a pretty amazing thing—when you have someone on your side who feels that way. She knew how much I loved Copart and loved taking it to different places and trying new things. Neither of us really knew if I could ever give that up.
    2. I have only one regret—that I now spend more time with my grandchildren than I was able to spend with my children while they were growing up. I was too busy growing the business to enjoy them as much as I would have liked.
    3. One thing I’ve taught all the executives in the company is that while you may be good in our business, that doesn’t mean you are good in any other business. Don’t get a big head and think you know it all, because that’s when you’ll lose. You’re really good in the car business. You’re really good in the recycling business. You’re not necessarily good in everything else, and you need to understand that. Stay with what you are good at, venture out if you see an opportunity, but pull your horns in if you make a mistake.
    4. Willis didn’t come home at seven at night with his shoulders down like he had just put in another day at the salt mine. His work didn’t drain him; it drove him. I wanted to be like that.
    5. Willis used to say if you get big enough, you can make an industry behave in a particular way.
What I got out of it
  1. Humility, common sense, work ethic, admitting mistakes, being in the thick of it on a daily basis, surrounding yourself with great people and doing the right thing are all key attributes of leaders, as Willis amazingly demonstrates

The Three Questions: How to Discover and Master the Power Within You by Don Miguel Ruiz

Summary
  1. “At each stage in our lives, we must ask these simple yet deeply profound questions. Finding the answers will open the door to the next stage in our development, and eventually lead us to our complete, truest selves”
Key Takeaways
  1. Who am I? You will know who you are by what you are not
  2. What is real? You will know what is real by what is not real
  3. What is love? You will know love when you know what love is not
  4. Everyone feels good around someone who has genuine love for themselves. We can never give what we do not have so it makes sense that it would be hard to truly love others if we don’t move ourselves. Be aware of your self talk and be affectionate and compassionate to yourself. Unconditional love of yourself is paradise.
  5. You can love without worrying about getting anything in return. You’ll find that you come to love naturally. When you don’t have to defend your opinions, you’re free to be authentic and open, surrendering to life
  6. Love has no conditions
  7. When there is nothing left to defend, truth is all that’s left
  8. The solution to all conflict is respect
  9. One of the biggest barriers to love is fear. We must be extremely aware of irrational fears, things which aren’t real, things which we’ve made up. We must face the fear and increase clarity, bringing calm and self awareness.
  10. Fear, left unchallenged, controls our actions. We are often most afraid of our reactions and enjoy being the victim. Awareness is our gift and salvation
  11. Searching for answers brings unexpected revelations. Curiosity opens unseen doors. We allow ourselves to receive the information of life. When we can’t master our own attention, we miss a lot. Too much focus on one thing means we miss so much around us
  12. Humanity’s greatest art is to dream consciously
  13. When you give up having to know or be right, you become so much lighter
  14. People trust authenticity more than almost anything
What I got out of it
  1. Be authentic, self-aware, and give as much of yourself to others as you can

The Laws of Human Nature by Robert Greene

Summary
  1. Robert Greene draws on a multitude of different resources to highlight the laws of human nature. The examples are timeless, universal, and profound. By acknowledging these human universals, to what extent they impact you, and how they are prevalent in others, you will become more aware and better able to mitigate and control them in yourself and others. “Human nature is deeply ingrained within our genes, within our brain’s structure, and has evolved over millions of years. It is partly responsible for how we make decisions, how we manage our emotions, and it controls, unknown to us, the vast majority of what we do and think. Human nature has helped us survive and determines much of our emotions and how we think and behave.  Understanding how we are wired will help us better deal with others and better see through when they’re trying to manipulate us, take advantage of us, charm us, or otherwise. We developed extreme sensitivity so that we could better read and judge others and to this day, although we don’t realize it, we are finely tuned to register how others react, to their voice, their body language, and more. This book is an attempt to draw together the vast store house of knowledge from many different fields to describe and give examples of some laws of human nature. They are laws in the sense that people tend to react quite consistently in similar situations. Becoming aware of these laws will make you a calmer and better observer of human nature, more able to notice and decipher the subtle cues everyone emits, and become a greater judge of character.”
Key Takeaways
  1. It is important to realize that these laws of human nature impact, affect, and influence you as much as other people and by truly understanding them, they will help build your empathy, allowing you to simply see other points of view better and more clearly, giving you the opportunity to focus on what’s important – helping others and having having an impact. You will be able to train yourself to be present, to let go of preconceived notions, and to continually adapt your understanding of the people around you. This understanding will help you become more empathetic and more effective in everything that you do
  2. The Law of Irrationality – Master Your Emotional Self
    1. Realize that people often act the opposite of how they feel – someone loud and obnoxious is often insecure
    2. Emotions taint our thinking and behaviors, not allowing us to see and act in accordance with reality, leading to bad decisions, pain, and stress. By admitting and embracing this rationality we can slowly tame our emotions, become more rational, thereby making us more effective and insightful as we can align with reality, to see things as they really are and not as we wish they were
    3. The first step to tame your rationality is to admit that you are irrational. As you become more introspective, the calm inner voice will grow more confident and louder, allowing you to see things more clearly and accurately. You first recognize the biases in yourself and work towards giving yourself the space and time to think and act how you want, and not simply react emotionally
    4. The goal of rationality is not to eliminate emotion, but to channel it in order to become aware of why you are feeling what you are feeling – to take advantage of it and use it to further what you want to do
    5. You can become more rational by becoming more aware of low grade irrationality or what happens in the subconscious, and high-grade rationality (what happens in your conscious). Over time, you will be able to train your emotions so that you become be less reactive over time. You improve your rationality by first knowing yourself thoroughly – knowing your strengths and weaknesses, how you react under pressure, and when you’re flattered. Next, you must improve your reaction time giving yourself space to think and not just react instinctively. Then you must accept people as facts and not try to change them but just accept who they are, understand them, and how you have to deal with them
    6. We must learn from our mistakes. The point of memory is to not repeat mistakes but so few people take the time and energy to really dive into what caused him to err.  We have to become aware in the moment of things that make us react and dive into why we feel that way – is it a childhood trauma, something our parents told us, or why do we just react emotionally?
    7. People‘s true character and ability shine through under stress. You have to find time, space, and quiet in order to be able to think and gain perspective. Don’t think you are above stress and that it doesn’t impact you – it does!
    8. Be weary of groups as it doesn’t stimulate rationality and independent thought but rather the much deeper and more ingrained part of us that wishes to belong – leading to herd behavior
    9. Don’t think that we are in a steady path towards rationality as a species. The pendulum swings back and forth between rationality and irrationality. It is part of the cycle of human nature. Irrationality won’t always look the same but it will always come back. Improving rationality is something to be done at an individual level and not at a species level
  3. The Law of Narcissism – Transform Self-Love into Empathy
    1. We must be honest with ourselves and grow and come to love a cohesive self or risk falling into narcissism
    2. Turning your attention outwards to others rather than inwards like most people do will help you grow your empathy muscle and give others the attention they so gravely seek
    3. Shackleton in the toughest of times drew out very specific daily tasks to give everyone meaning and focus. In addition, he understood each man so well that he knew what to talk to them about, when, and how to keep them happy, their morale high and content. This empathy was literally life and death as it is for us, although it’s not as clear
  4. The Law of Role-Playing – See Through People’s Masks
    1. People hide their true feelings and intentions so you must become an expert reader in other people and at the same time learn how to play your role as convincingly and consistently as possible
    2. Milton Erickson was diagnosed with polio at a young age and to occupy his mind he observed others extremely closely and through this knowledge and pattern recognition came to see an incredible world of nonverbal cues, motions, gestures, the importance of tone of voice, and everything beyond what is simply said. Observe, observe, observe. People tell you so much with their walk, tone of voice, how they sit, their micro expressions, and more.
    3. Negative emotions leak out through body language and they must be observed and weighed more than whatever mask people put on
    4. Be authentic, humble, open minded and generous – “saintly” and above reproach
  5. The Law of Compulsive Behavior – Determine the Strength of People’s Character
    1. Gravitate to those who display strength. One best reads people’s character in stressful and difficult times
    2. Character comes from the Greek word meaning “stamped upon”. Our character is ingrained in us and is composed of our genetics, our earliest relationships and quality of attachments, and from habits and experiences. We can learn to compensate any harmful traits but for the most part they’re hard to rid
    3. People are quite bad at judging character but the most reliable way to assess someone is through their actions (people never do anything just once, actions are truer and can’t be rationalized by words), how people handle small and simple affairs, how people handle power and responsibility. Try to only work with people of strong character for those with weak character will negate all their other good qualities and will cause more headache than you want. People who are strong of character are as rare as gold and you should hold onto them is if you found treasure
    4. It is impossible to change one’s or others’ character but you can mitigate them by going deep within yourself, admitting your flaws and weaknesses, and doing all you can to strengthen them up and act in such away to emphasize your strengths and downplay your weaknesses. The goal is not to become someone else but to be thoroughly and authentically the best version of yourself
  6. The Law of Covetousness – Become an Elusive Object of Desire
    1. Realize that most people, no matter how often it is said, don’t really want truth and facts, they want their imagination lifted and their ego boosted
    2. Realize that the grass is rarely greener on the other side
    3. Learn when and how to remove yourself. You also want to be a little cold and ambiguous so people can’t get a great feel for you
    4. It is not possession but desire that drives people. By becoming a scarce commodity and playing on other’s covetousness, you can become highly desirable
    5. In the end, what you must covet is a closer relationship to reality, bringing calmness, knowledge about yourself, an understanding of what you can change and what you can’t, and being OK with both
  7. The Law of Shortsightedness – Elevate Your Perspective
    1. Learn to judge people by the breadth or narrowness of their vision and seek to surround yourself with those who can understand the consequences of their actions and have a bold vision
    2. With an elevated perspective, you will have the patience and clarity to achieve almost any goal
    3. When people’s horizon shrink to days or weeks, they lose the ability to see the consequences of their actions and they become manic
    4. 4 signs of shortsightedness:
      1. Unintended consequences (have at least one person focus solely on consequences)
      2. Tactical hell happens when you can’t back out of everyday battles to get detachment, perspective and the long-term view (strategists will always beat tacticians)
      3. Ticker tape syndrome (need to know instantly drives short-termism, avoid the noise as much as possible)
      4. Lost in trivia (know what’s most important and spend most of your time on that)
  8. The Law of Defensiveness – Soften People’s Resistance by Confirming Their Self-Opinion
    1. Learn to tame your stubbornly held positions and come to see other’s points of views and beliefs. This will open them up, making them more open to your suggestions
    2. It’s hard to ignore a man who makes you feel good. When you have valuable information and can get things done on top of it, you’re a force
    3. LBJ knew he had to rein in his more aggressive and bullying qualities in order to win over key allies and learn from them. Having one key ally near the top of the mountain can make a lot of things happen. He never asked for favors but did others favors, if his allies had any interests he would cultivate an interest in that too, he was always willing to help and work hard, knew what others wanted and needed and figured out how to make himself the gate between those things, he made it in other’s interest to hand over power to him
    4. Influence over people is often gained in the opposite way than we imagine. Put the focus on others and make them the stars of the show. Always step back and assume a subtle inferior position. Then do some small favors for them and they’ll begin helping you, expanding your influence. Bring out the cleverness of others and make them feel good when they leave you
    5. People have a self opinion and it doesn’t matter if it’s accurate. 3 universal traits: I’m autonomous, intelligent, good and decent. These affect everyone’s self opinion and playing into these and validate them make them feel good. Avoid confronting people’s self opinion.
    6. 5 strategies of master persuaders
      1. Be a deep listener and be aware of subtle nonverbal cues
      2. Infect people with the proper mood (acceptance of others unconditionally, calm, enthusiastic)
      3. Confirm their self opinion (people choose to help you)
      4. Know what people are insecure about and compliment that
      5. Use people’s resistance and stubbornness against them (channel their aggressive energy in order to make them fall on their own – use their emotions, their language, their rigidity)
    7. Praise people for their effort and not their talent
  9. The Law of Self-Sabotage – Change Your Circumstances by Changing Your Attitude
    1. Our attitudes are self fulfilling and paint everything we see, experience, learn and do
    2. See yourself as an explorer – always curious, open to new things, having weakly held convictions, you are always trying new things and want to learn
    3. See adversity as opportunities to improve and to get better, not something to be avoided. Understand that you can’t change people – embrace and enjoy who those people are and make the most of it. When you do this people, come to love you, accept you, and see you as a leader
  10. The Law of Repression – Confront Your Dark Side
    1. Embrace your dark side and integrate it into your personality. You’ll become a more complete and authentic person and radiate that to others – attracting them into your circle and influence
    2. Depression and anxiety comes from not being aware of your dark side and not letting it shine through in a positive way. By denying that side and repressing it, it only becomes stronger and comes out stronger in ways that you will come to regret
    3. Most hatred stems from envy and is a way for the subconscious to release some energy
    4. Steps to bring about and integrate the shadow:
      1. Become self aware and see the shadow (others can often see your shadow better than you can so ask them for their opinion)
      2. Embrace your shadow
      3. Show the shadow
  11. The Law of Envy – Beware the Fragile Ego
    1. You must become a master decoder of envy and those who are predisposed to being envious.
    2. People are status-seeking animals and constantly monitor their relative position in the hierarchy. People must have an adequate position to be comfortable and happy
    3. Always emphasize the role of luck in your life. Enhance your flaws in order to make yourself more relatable and to mitigate envy. As you gain power, keep humbling yourself and asking for the opinion of those below you
    4. Be wary of mass – spread the love, the relationships, and the wealth and you’ll have people pushing for you to rise rather than trying to put you down
  12. The Law of Grandiosity – Know Your Limits
    1. You must be aware of your tendencies towards grandiosity and how important that is for you. If you feel the temptation, you must mitigate this by realizing your weaknesses and how big a role luck has played, becoming more realistic and grounded
    2. Be aware of your grandiosity needs, concentrate that energy on a particular task or goal, create a dialog with reality and be open to the flaws in your plan, find appropriate challenges which test you but aren’t too much, occasionally let yourself take on huge challenges
  13. The Law of Gender Rigidity – Reconnect to the Masculine or Feminine Within You
    1. By blending in the opposite side, what you’re most lacking, you’ll become more complete, fluid, whole, and authentic, drawing other people to you as you merge the different sides of your personality.
      1. This is a far more effective tactic than trying to become a purer version of what you already have
  14. The Law of Aimlessness – Advance with a Sense of Purpose
    1. We must be open to our internal, primal traits that make us unique. They not only help set us apart and get us on a path towards mastery but also helps the community at large as it fosters diversity and helps spur creativity and innovation in others
    2. Operating with a high sense of purpose which aligns with who you are and what you want is the force multiplier – allowing you to achieve more and have a more meaningful and impactful life. Discover this sense of purpose and find as many ways to connect with it as possible – this will draw others towards you and open up opportunities that you would have thought impossible
    3. Discover your calling by going back to your roots, your childhood, the primal inclinations which set you on fire – the things which you got very enthusiastic about and couldn’t stop thinking about. Things which are so fun or easy for you are good signs.
    4. Surround yourself with as many people as possible with the deep and true sense of purpose. They will help teach you, guide you, energize you, and motivate you
    5. Have a long term goal but also build in small, shorter term goals which build up to the ultimate goal. This will keep you moving in the right direction and mitigate anxiety
    6. You must get into deep flow as often as possible in order to progress quickly and in the right direction. It takes a lot of work and is difficult as it takes sacrifice and dedication but is the only way to get there
  15. The Law of Conformity – Resist the Downward Pull of the Group
    1. Develop self awareness and the changes that occur to yourself and others when in a group. One of the greatest threats to our survival thousands of years ago was being ostracized so today fitting in and being accepted in the group is one of our greatest concerns. We fit in by accepting the norm and imitating and following the group. The danger is that we stop thinking for ourselves and simply imitate the group and lose what makes us unique and gives us power
    2. All people have evolved to see hierarchies and this gets exaggerated in groups. We lose our rationality and go with the herd, often leading to dangerous or poor outcomes
    3. You must be aware of the effect that groups have on people as individuals and the broader group dynamics – hierarchies can lead to cliques, factions, and power mongering
    4. In any group you have to understand the culture and the fact that an older company and a bigger group will likely control you rather than you control it. You also have to understand the group dynamic and the hierarchy – who is moving up and down relatively
    5. You can make factions and cliques less attractive by creating a positive, unifying, and uplifting culture that people can go all in on
    6. You must understand and be really realistic with yourself and how big of an influence the group has on you. You’re not as much of an individual thinker as you think you are. You must be able to detach yourself from the group and be a realist – this is more important today than ever
    7. Bad culture drags everyone down. You can’t focus I’m trying to improve individuals – you have to fix the dynamic. Improving the culture this will lift everyone up. When the group can face reality head on and kick-ass, that is when you have a great culture. Instill a collective sense of purpose (no matter what field, quality and excellence are key factors – money and success are byproducts). This higher purpose is rare to come by so people will go all-in and police themselves when they find it. Assemble the right team of lieutenants (avoid the petty details which cause confusion, competence and character are vital, know their roles and make sure they have complimentary skills, you must treat people equally, get rid of those who don’t fit the mold, and lead from the front), let information and ideas flow freely (frank and diversified information, open communication, transparency on how decisions were made), infect the group with productive emotions (lack of fear, courage, calm, openness to new ideas), forge a battle-tested group (group who rises in tough times and doesn’t wilt)
    8. A group willing to face reality with a great culture help rise people up, it is one of people’s most memorable experiences to be part of a group like this. It is our duty as enlightened humans to create as many such groups as possible, making society healthier in the process
  16. The Law of Fickleness – Make Them Want to Follow You (an amazing chapter on leadership)
    1. People are always ambivalent about powers and leaders. Authority is the delicate art of wielding power while making people feel like you are working for them
    2. As the leader you have to embody and practice all the traits that you would want in a leader. You must work hard, lead from the front, be fair, be consistent, courageous, wise, and calm and difficult situations
    3. As a leader be very aware of how fickle people are and how history is riddled with examples of great leaders who start showing some signs of weakness, arrogance, or whatever else which leads their people to turn on them and sometimes put them to death or ostracize them
    4. The fundamental role of the leader is to provide a far reaching vision to unite the group. We must avoid seeming petty  and our focus needs to be on others, on the culture, and the vision.
    5. Toughness and empathy are the twins pillars of leadership. They are not mutually exclusive but inextricably bound. You must have both or people will begin to lose faith in you as a leader
    6. You must be a consummate observer of people and these traits of leadership and hierarchy, coming to embody and practice them consistently in all situations
    7. Most people run away from the dangers and responsibilities of leadership but you must embrace it. This skill is increasingly rare in today’s world so the more you can run towards it, the more you’ll stand out. The essence of leadership is that when people willingly follow, you will not need force, rah rah speeches or to punish people. Your leadership style most authentically arise out of your personality and character you can be authentic, a founder, the deliverer, a visionary artist, healer, pragmatist, etc – but it must be natural for you
    8. Turn your focus outwards so that you’re always looking to help others and then you work to earn people’s respect – never assuming it will be given to you. What drives you is bringing the greatest meaning and utility to the largest group – never on your ego or selfish desires.
    9. Having a vision allows you to work backwards from the future to the present and determine the steps that you need to take in order to get there.
    10. You have to lead from the front and show early that you’re tough. Have high standards for your own work and  if there are sacrifices to be made, you have to be the first to make them, and they can’t simply be symbolic. If you take things away, make it known that it is only temporary. Be in a position where you can be generous
    11. Never overpromise
    12. Finally, we like to focus on the psychological health of individuals, and how perhaps a therapist could fix any problems they might have. What we don’t consider, however, is that being in a dysfunctional group can actually make individuals unstable and neurotic. The opposite is true as well: by participating in a high-functioning reality group, we can make ourselves healthy and whole. Such experiences are memorable and life-changing. We learn the value of cooperating on a higher level, of seeing our fate as intertwined with those around us. We develop greater empathy. We gain confidence in our own abilities, which such a group rewards. We feel connected to reality. We are brought into the upward pull of the group, realizing our social nature on the high level it was intended for. It is our duty as enlightened humans to create as many such groups as possible, making society healthier in the process.
  17. The Law of Aggression – See the Hostility Behind the Friendly Facade
    1. John D Rockefeller is the role model and story for this. He would use his will to outdo, outthink and outwork his opponents. Hostility is within every human and don’t be fooled to think anyone is too nice. Rid yourself of the denial that this doesn’t exist in people.
  18. The Law of Generational Myopia – Seize the Historical Moment
    1. Transitions can be seen over decades and seem to be universal across time and indicate that they are bigger than any one generation. It is part of human nature the pendulum swings in the trends follow
    2. We must develop generational awareness understanding how our own generation impact our thinking in view of the world and have generations overall impact people across time
    3. You must understand and honor how much the time period and generation you were born into affects you. For example, millennials care more about teamwork than individualism, and security rather than risk because of the financial crisis. If you can define the zeitgeist for each generation, you will better understand the people within it and how to work and get along with them. Taking different perspectives will help your creativity and calm you. Once you have a sense for the zeitgeist, look back in history and find a parallel. Associate yourself with heroes of the past
    4. Always work with the spirit and don’t critique or try to change it. Always evolve and adapt, don’t become a caricature of the past. Modernize your spirit, adopting your experience and perspective with some of the traits of the younger you agree with
    5. You must develop deep relationships with people from various generations
  19. The Law of Death Denial – Meditate on our Common Mortality
    1. Realize that life is short, that most people are terrified of death and have not confronted that within themselves.
    2. If you live everyday, there is more than enough time
What I got out of it
  1. Deep self-awareness is the cornerstone. Once you can face reality and admit your flaws and weaknesses, you can address them and mitigate them. As much as you can, put others before yourself, put your energy and attention on them rather than yourself

A Treatise on Efficacy

This book ties together so many recent themes for me – Werner’s effortless mastery, strategy, philosophy, psychology, and more.

A book well worth reading and re-reading. One of my all time favorites

A Treatise on Efficacy

Propaganda by Edward Bernays

Summary
  1. Edward Bernays is the father of propaganda and this book takes a deep look into how governments, corporations, “people behind the scenes” control how we think and act using Bernay’s principles. This manual of mass manipulation provides a detailed examination of how public discourse and opinion are shaped and controlled in politics, business, art, education, and science, making it an essential read for all who wish to understand how power is used by the ruling elite of our society. (I stumbled on this book after watching Century of the Self – a bit dark and disturbing but educational if you’re interested in this space)
Key Takeaways
  1. Background and Fundamentals of Propaganda
    1. Modern propaganda is a consistent, enduring effort to create or shape events to influence the relations of the public to an enterprise, idea, or group.
    2. The first mass use of propaganda was for WWI and it forever changed business and government, making public relations scientific for the first time. The “manufacture of consent” was needed in the public sphere in order to get buy in for the war and for people to sign up to fight
    3. Only through the active energy of the intelligent few can the public at large become aware of and act upon new ideas
    4. An entire party, a platform, an international policy is sold to the public, or is not sold, on the basis of the intangible element of personality
    5. The public relations expert seeks to make a gradual impression, after long research and sober planning. In the hearts of such methodical manipulators there would seem to be no streak of mad commitment, as their enterprise is not infuriating and millenial but businesslike, mundane, and rational. And yet those who do such work are also prone to lose touch with reality; for in their universe the truth is ultimately whatever the client wants the world to think is true. Whatever cause they serve or goods they sell, effective propagandists must believe in it – or at least momentarily believe that they believe in it. Even he or she who propagates commodities must be to some extent a true believer. To advertise a product you must believe in it. To convince, you must be convinced yourself.
    6. The counsel on public relations, after he has examined all these and other factors, endeavors to shape the actions of his client so that they will gain the interest, the approval, and the acceptance of the public. The means by which the public is apprised of the actions of his client are as varied as the means of communication themselves, such as conversation, letters, the stage, the motion picture, the radio, the lecture platform, the magazine, the daily newspaper. The counsel on public relations is not an advertising man but he advocates advertising where that is indicated.
    7. The whole basis of successful propaganda is to have an objective and then to endeavor to arrive at it through an exact knowledge of the public and modifying circumstances to manipulate and sway the public
    8. Father’s of propaganda – Bernays, Trotter, Le Bon, Wallas, Lippman
    9. No matter how sophisticated, how cynical the public may become about publicity methods, it must respond to the basic appeals, because it will always need food, crave amusement, long for beauty, respond to leadership. If the public becomes more intelligent in its commercial demands, commercial firms will meet the new standards. If it becomes weary of the old methods used to persuade it to accept a given idea or commodity, its leaders will present their appeals more intelligently. Propaganda will never die out. Intelligent men must realize that propaganda is the modern instrument by which they can fight for productive ends and help to bring order out of chaos.
    10. Men do not need to be actually gathered together in a public meeting or in a street riot, to be subject to the influences of mass psychology. Because man is by nature gregarious, he feels himself to be member of a herd, even when he is alone in his room with the curtains drawn. His mind retains the patterns which have been stamped on it by the group influences. Trotter and Le Bon concluded that the group mind does not think in the strict sense of the word.  In place of thoughts it has impulses, habits, and emotions. In making up its mind, its first impulse is usually to follow the example of a trusted leader. This is one of the most firmly established principles of mass psychology. It operates in establishing the rising or diminishing prestige of a summer resort, in causing a run on the bank, or a panic in the stock exchange, in creating a best-seller, or a box-office success. But when the example of the leader is not at hand and the herd must think for itself, it does so by means of cliches, pat words or images which stand for a whole group of ideas or experiences.
    11. Men are rarely aware of the real reasons which motivate their actions. The successful propagandaist must understand the true motives and not be content to accept the reasons which men give for what they do. It is not sufficient to understand only the mechanical structure of society, the groupings and cleavages and loyalties.
    12. Instead of removing sales resistance by direct attack, the propagandaist is interested in removing sales resistance. He creates circumstances which will swing emotional currents so as to make for purchaser demand. The modern propagandaist therefore sets to work to create circumstances which will modify the custom. He appeals perhaps to the home instinct which is fundamental. The interests of the client, service, product, idea, etc. and the communities which it impacts mutually interact and feed one another. The ideas of the new propaganda are predicated on sound psychology based on enlightened self-interest.
    13. Propaganda’s great enemy is inertia
    14. Continuous interpretation is achieved by trying to control  every approach to the public mind in such a manner that the public receives the desired impression, often without being conscious of it. High-spotting, on the other hand, vividly seizes the attention of the public and fixes it upon some detail or aspect which is typical of the entire enterprise. When a real estate corporation which is erecting a tall office building makes it ten feet taller than the highest skyscraper in existence, that is dramatization
    15. There is no detail too trivial to influence the public in a favorable or unfavorable sense
    16. Public relations should often be put in the hands of an outsider for the correct approach to a problem may be indirect
    17. Propaganda may be abused, it may be used to over-advertise an institution and to create in the public mind artificial values. There can be no absolute guarantee against its misuse
    18. The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society.
    19. Napoleon was ever on the watch for indications of public opinion; always listening to the voice of the people, a voice which defies calculation. “Do you know what amazes me more than anything else? The impotence of force to organize anything.”
  2. Propaganda in Government
    1. Governments, whether they are monarchical, constitutional, democratic, or communist, depend upon acquiescent public opinion for the success of their efforts and, in fact, government is government only by virtue of public acquiescence. Public opinion is the unacknolwedged partner in all broad efforts
    2. Nowadays the successors of the rulers, those whose position or ability gives them power, can no longer do what they want without the approval of the masses, they find in propaganda a tool which is increasingly powerful in gaining that approval
    3. Democracy is administered by the intelligent minority who know how to regiment and guide the masses
    4. There are invisible rulers who control the destinies of millions. It is not generally realized to what extent the words and actions of our most influential public men are dictated by shrewd persons operating behind the scenes. Now, what is still more important, the extent to which our thoughts and habits are modified by authorities. In some departments of our daily life, in which we imagine ourselves free agents, we are ruled by dictators exercising great power. Propaganda is the executive arm of the invisible government
    5. Propaganda is of no use to the politician unless he has something to say which the public, consciously or unconsciously wants to hear
  3. Propaganda in Media
    1. The media by which special pleaders transmit their messages to the public through propaganda include all the means by which people today transmit their ideas to one another. There is no means of human communication which may not also be a means of deliberate propaganda, because propaganda is simply the establishing of reciprocal understanding between an individual and a group. The important point to the propagandaist is that the relative value of the various instruments of propaganda, and their relation to the masses, are constantly changing. If he is to get full reach of his message he must take advantage of these shifts of value the instant they occur. The American motion picture is the greatest unconscious carrier of propaganda in the world today. It is a great distributor for ideas and opinions. The motion picture can standardize the ideas and habits of a nation. Because pictures are made to meet market demands, they reflect, emphasize and even exaggerate broad popular tendencies, rather than stimulate new ideas and opinions. The motion picture avails itself only of ideas and facts which are in vogue. As the newspaper seeks to purvey news, it seeks to purvey entertainment. Another instrument of propaganda is the personality.
  4. Propaganda in Business
    1. Business realize that its relationship to the public is not confined to the manufacture and sale of a given product, but includes at the same time the selling of itself and of all those things for which it stands in the public mind. To make customers is the new problem. One must understand not only his own business – the manufacture of a particular product – but also the structure, the personality, the prejudices, of a potentially universal public. Modern business must study on what terms the partnership can be made amicable and mutually beneficial. It must explain itself, its aims, its objectives, to the public in terms which the public can understand and is willing to accept. The relationship between business and the public can be healthy only if it is the relationship of give and take
    2. Big business studies every move which may express its true personality. It seeks to tell the public, in all appropriate ways, by the direct advertising message and by the subtlest aethetic suggestion, the quality of the goods or services which it has to offer. A store which seeks a large sales volume in cheap goods will preach prices day in and day out, concentrating its whole appeal on the ways in which it can save money for its clients. But a store seeking a high margin of profit on individual sales would try to associate itself with the distinguished and the elegant, whether by an exhibition of old masters or through the social activities of the owner’s wife. The public relations activities of a business cannot be protective coloring to hide its real aims. It is bad business as well as bad morals to feature exclusively a few high-class articles, when the main stock is of medium grade or cheap, for the general impression given is a false one. A sound public relations policy will not attempt to stampede the public with exaggerated claims and false pretenses, but to interpret the individual business vividly and truly through every avenue that leads to public opinion.
      1. Lateral networks, who the customer cares about impressing, is so important
    3. Modern business must have its finger continuously on the public pulse. It must understand the changes in the public mind and be prepared to interpret itself fairly and eloquently to changing opinion
  5. Edward Bernays
    1. He sold the myth of propaganda as a wholly rational endeavor, carried out methodically by careful experts skilled enough to lead “public opinion.” Consistently he casts himself as a supreme manipulator, mastering the responses of a pliable, receptive population. Conscious and intelligent manipulation, invisible governors, they who pull the wires which control the public mind, shrewd persons operating behind the scenes, dictators exercising great power, and, below them, people working as if actuated by the touch of a button – these are but a few expressions of the icy scientific paradigm that evidently drove his propaganda practice, and that colored all his thinking on the subject. The propagandaist rules. The propagandized do whatever he would have them do, exactly as he tells them to, and without knowing it.
    2. His vision seems quite modest. The world informed by “public relations” will be but a smoothly functioning society, where all of us are guided imperceptibly throughout our lives by a benign elite of rational manipulators. As the population has grown and whose members – by and large incapable of lucid thought or clear perception, driven by herd instincts and mere prejudice, and frequently disoriented by external stimuli – were not equipped to make decisions or engage in rational discourse. “Democracy” therefore requires a supra-governmental body of detached professionals to sift the data, think things through, and keep the national enterprise from blowing up or crashing to a halt
    3. He had no equal as a propaganda strategist. Always thinking far ahead, his aim was not to urge the buyer to demand the product now, but to transform the buyer’s very world, so that the product must appear to be desirable as if without the prod of salesmanship. What is the prevailing custom, and how might that be changed to make this thing or that appear to recommend itself to people? The modern propagandaist sets to work to create circumstances which will modify that custom. Bernays sold Mozart pianos, for example, not just by hyping the pianos. Rather, he sought carefully to develop public acceptance of the idea of a music room in the home – selling the pianos indirectly, through various suggestive trends and enterprises that make it de rigeur to have the proper space for a piano. The music room will be accepted because it has been made the thing. And the man or woman who has a music room, or has arranged a corner of the parlor as a music room, will naturally think of buying a piano. It will come to him as his own idea
      1. Must think of the customers’ lateral networks and how they influence the buying decisions, downstream effects…
    4. In his universe, it is pre-eminent consensus which determines what is true
What I got out of it
  1. Quite scary how this one man and his ideas impacted generations of people, companies, movements and ideas. Becoming aware of these principles can help you guard against them if needed. I think the context in which this was written is also important to keep in mind. People are rarely truly aware of what drives them to act and make the decisions that they do and, because of human nature, this is unlikely to change – although the medium may differ

Algorithms to Live By: The Computer Science of Human Decisions by Brian Christian, Tom Griffiths

Summary
  1. Studying algorithms and how they might be implemented to help us better solve every day problems. Thinking about human cognition and behavior through this computer science lens helps shed light on how we think, why we make the mistakes we make, why and how we have such incredible computational powers, and what rationality really means. We can learn how to make the best decisions given the limited knowledge, time and other resources we have and how to do it with imperfect insights all while dealing with yourself and other messy people. Many problems are intractable but these algorithms will at least give you a jumping off point to begin.
Key Takeaways
  1. Master key algorithm for getting stuff done
    1. Earliest due date and shortest processing time is the master key to determining what to work on and in what order. Work on what has the highest value when importance is divided by completion time. Something must be twice as important if it takes twice as long.
    2. If all you want to do is get through tasks and reduce your to do list, do those things you can accomplish quickest first.  There are many algorithms to follow, it all depends on what your goal is and what you want to maximize.
  2. The Optimal Stopping Problem
    1. These cases you should have two phases: a looking phase where you commit for a certain period of time (usually 1/3 of the total amount of time you’re willing to look) and then a leap phase where you take anything that’s better than what you’ve seen during the look phase
    2. If there is some objective criteria you could set, you can then create a threshold and anyone or anything above the threshold should be accepted
    3. Our time horizon or the intervals of which were looking at strongly determine how much we explore and try new things and how much we exploit – going back to well known favorites. Since the interval determines the strategy we can also determine the strategy from the interval. An overload of sure things such as sequels is a good signal of short-termism.
    4. Optimism is the best solution for regret and we should give people, things, and experiences the benefit of the doubt because we don’t know their upper bound – how good they can be – because we don’t have enough information yet. You should be willing to explore when there’s not enough information to make a reasonable conclusion. However, in real life people tend to over-explore and not know when to lean towards the optimal solution. Win – stay, lose – shift
    5. Older people tend to have fewer social connections but that’s because they have refined over decades the type of people they want to spend time with and that naturally seems to decrease over time. This ties together our explore / exploit phenomenon because younger people who have a longer time frame are more on the explore phase and older people with a more finite time frame are in the exploit phase. As you get older and switch from seeking pleasure from exploitation versus exploring, your quality of life will necessarily improve as you are going back to well-known favorites more often
  3. A | B Testing
    1. Tinkering on an extreme scale is done today by some of the world’s largest companies to see what little tweaks between two options can cause. This iteration is done over millions of times per day so that the product/service/experience is ever improving, at least maximizing what is being measured and sought after. You can use this iteration mindset to make small changes and adjustments to your routine, habits, behaviors, thoughts, and see how it impacts you and others over time
  4. Sorting
    1. Fundamental lesson learned about sorting is that scale hurts.
    2. Simply by breaking tasks or projects down into more manageable units can sorting be reduced by multiples.
    3. However, the first question should be whether it needs to be sorted at all. Efficient sorting which is unnecessary is extremely inefficient and sometimes mess and disorder is the optimal solution
  5. Cache
    1. Keeping around pieces of information that you refer to often or anticipate needing shortly at hand so you can quickly retrieve it
    2. Keep things you use often in close physical proximity so that you can get them quickly
    3. It has been found in many different domains that events that have recently happened are more likely to happen in time and the longer it goes without happening the less likely it is to happen again (Lindy Effect)
  6. Over-Fitting
    1. Over fitting is when we try to use too much data too many factors into making our decisions and they not only make things more complex but actually lead to worse predictions and decisions. If there is high uncertainty and unlimited data, paint with a broad stroke and make it simple. Going into the nitty-gritty only hurts you
    2. It’s better to be approximately right then precisely wrong
  7. Other
    1. Procrastination is often associated with laziness but it can simply be that people lose sight of the important things and are racing through their tasks. They have the right strategy for getting things done but it is the wrong metric – favoring the easy over the meaningful
    2. Be aware of context switching costs. Flow and deep work sometimes takes an hour just to warm up and get into the flow and interrupting people or getting interrupted can ruin hours worth of work or more.
    3. There is a constant tension and trade off between throughput and responsiveness. If you’re too responsive you got nothing done and if you’re throughput is all you’re maximizing you’ll never respond to anyone.
    4. Thrashing is the point when your interrupted so often and have so much to do that you get no actual work done and at this point you can step back and reevaluate and often just do whatever you can get done and not worry about the optimal way to do it.
    5. Batching tasks and having set times to do things such as only looking at emails first thing in the morning and at night is a good way to keep from being interrupted too often
    6. You can become better at predicting by knowing if you’re dealing with power laws or normal distributions and the better information you have of course the better guess you can make. That’s why we are quite good at predicting how much longer a person can live for we know the general lifespan of people
    7. Our predictions tell us a lot about who we are because they’re based on our experiences.
    8. If you can’t explain things simply you don’t understand it well enough
    9. If you can’t solve a problem, relax the constraints and try to solve an easier version of the same problem to see if it gives you any clues or jumping off points for how to solve the real problem
    10. Exponential back off is a technique you can use when things fail or you don’t know how to proceed. For example, if people cancel their plans with you last minute wait a week to reschedule. If they cancel again, wait two weeks. Then four, etc…
    11. The first and only rule of hierarchy is that the hierarchy must be preserved
    12. The innovators dream is not a eureka moment but rather a situation that makes you say, “huh, that’s funny.”
    13. Seek games in which honesty is the ultimate policy and then just be yourself – Vickers Auction – where the winning bid pays only the second highest bid price
    14. Sometimes even the optimal strategy will yield bad outcomes which is why you must focus on process over outcome
    15. Sometimes good enough is simply good enough
What I got out of it
  1. Some good techniques and thought processes for how to make better decisions

Poor Richard’s Almanack by Benjamin Franklin

Summary
  1. A compilation of some of Benjamin Franklin’s best sayings
Key Takeaways
  1. Make haste slowly
  2. Little strokes, fell great oaks
  3. The worst wheel of the cart makes the most noise
  4. Necessity never made a good bargain
  5. Beware of the young doctor and the old barber
  6. ‘Tis easy to see, hard to fooresee
  7. Hear Reason, or she’ll make you feel her
  8. Observe all men; thyself most
  9. Well done is better than well said
  10. The things which hurt, instruct
  11. Search for others for their virtues, thyself for thy vices
  12. Anger is never without a reason, but seldom with a good one
  13. People who are wrapped up in themselves make small packages
  14. A little house well fill’d, a little field well till’d, and a little wife well will’d, are great riches
  15. Where there’s marriage without love, there will be love without marriage
  16. Early to bed and early to rise, makes a man healthy, wealthy, and wise
  17. Diligence is the mother of good luck
  18. If ou would not be forgotten, as soon as you are dead and rotten, either write things worth reading, or do things worth the writing
  19. ‘Tis easier to suppress the first Desire, than to satisfy all that follow it
  20. Content is the Philosopher’s Stone, that turns all it touches into Gold
  21. Love your enemies, for they tell you your faults
  22. A long life may not be good enough, but a good life is long enough
  23. Vice knows she’s ugly, so puts on her Mask
  24. Pride breakfasted with Plenty, dined with Poverty, supped with Infamy
  25. The doors of wisdom are never shut
  26. How few there are who have courage enough to own their faults, or resolution enough to mend them!
  27. Who has deceiv’d thee so oft as thy self?
  28. Wealth is not his that has it, but his that enjoys it
  29. The use of money is all the advantage there is in having money
  30. Wish not so much to live long, as to live well
  31. Eat to please thyself, but dress to please others
  32. Wink at small faults – remember thou hast great ones
  33. Each year one vicious habit rooted out, in time might make the worst man good throughout
  34. As pride increases, fortune declines
  35. When you speak to a man, look on his eyes; when he speaks to thee, look on his mouth
  36. You may be too cunning for one, but not for all
  37. Hide not your talents, they for use were made: what’s a sun-dial in the shade?
  38. Learn of the skillful: he that teaches himself, hath a fool for his master
  39. Well done, is twice done
  40. Promises may get thee friends, but non-performance will turn them into enemies
  41. He’s a fool that cannot conceal his wisdom
  42. Reading makes a full man – meditation a profound man – discourse a clear man
  43. Many a man thinks he is buying pleasure, when he is really selling himself a slave to it
  44. He that cannot obey, cannot command
  45. The poor have little – beggars none; the rich too much – enough not one
  46. Eat to live; live not to eat
  47. The proof of gold is fire; the proof of woman, gold; the proof of man, a woman
  48. Keep conscience clear, then never fear
  49. Would you live with ease, do what you ought, and not what you please
  50. What is serving god? ‘Tis doing Good to Man
  51. Beware of little expenses: a small leak will sink a great ship
  52. He’s the best physician that knows the worthlessness of the most medicines
  53. There is no little enemy
  54. A quiet conscience sleeps in thunder, but rest and guilt live far asunder
  55. Let thy discontents be thy secrets; – if the world knows them ’twill despise thee and increase them
  56. It is not leisure that is not used
  57. If what most men admire they would despise, ‘Twould look as if mankind were growing wise
  58. Friendship increases by visiting friends, but by visiting seldom
  59. Neglect mending a small fault, and ’twill soon be a great one
  60. Dost thou love life? Then do not squander time; for that’s the stuff life is made of
  61. When the well’s dry, we know the worth of water
  62. Most people return small favors, acknowledge middling ones, and repay great ones with ingratitude
  63. Don’t judge of men’s wealth or piety, by their Sunday appearances
  64. The wise and brave dares own that he was wrong
  65. The busy man has few idle visitors, to the boiling pot the flies come not
  66. Keep your eyes wide open before marriage, half shut afterwards
  67. Praise little, dispraise less
  68. Friends are the true scepters of princes
  69. A full belly makes a dull brain
  70. A good example is the best sermon
  71. Wise men learn by other’s harms; fools by their own
  72. A wise man will desire no more than what he may get justly, use soberly, distribute cheerfully and leave contentedly
  73. Plough deep while sluggards sleep; and you shall have corn to sell and to keep
  74. He that’s content hath enough. He that complains hath too mcuh
  75. Life with fools consist in drinking; with the wise man, living’s thinking
  76. Tell me my faults, and mend your own
  77. The wise man draws more advantage from his enemies, than the fool from his friends
  78. Men take more pains to mask than mend
  79. Dine with little, sup with less: do better still: sleep supperless
  80. Many foxes grow grey, but few grow good
  81. What signifies knowing the names, if you know not the nature of things
  82. Be not niggardly of what costs thee nothing, as courtesy, counsel, and countenance
  83. We keep the vices of others in sight; our own we carry on our backs
  84. Silence is not always a sign of wisdom, bu babbling is ever a folly
  85. A pair of good ears will drink dry a hundred tongeus
  86. Many complain of their memory, few of their judgement
  87. He that won’t be cousnell’d, can’t be help’d
  88. Fools need advice most, but only wise men are the better for it
  89. Sudden power is apt to be insolent, sudden liberty saucy; that behaves best which has grown gradually
  90. Clean your finger, before you point at my spots
  91. You can bear your own faults, and why not a fault in your wife
  92. Teach your child to hold his tongue, he’ll learn fast enough to speak
  93. Who is strong? He that can conquer his bad habits
What I got out of it
  1. Friends are so important, equanimity vital, small things matter, humility above all else, moderation in all, knowledge and mastery of self