Why You Shouldn't Start a Business?

“Skin in the Game is about four topics in one: a) uncertainty and the reliability of knowledge (both practical and scientific, assuming there is a difference), or in less polite words bullshit detection, b) symmetry in human affairs, that is, fairness, justice, responsibility, and reciprocity, c) information sharing in transactions, and d) rationality in complex systems and in the real world. That these four cannot be disentangled is something that is obvious when one has…skin in the game.”

In this episode of Made You Think, Neil and I discuss Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Taleb. In this book, Taleb touches in many of the topics he’s covered in his previous work, such as virtue signaling and probability, and most of all, true risk taking.

"[...] what people resent—or should resent—is the person at the top who has no skin in the game [...]"

We cover a wide range of topics, including:

• Academia and its capability —or lack of it— of predicting real life.
• Having skin in the game and how it affects your behavior.
• How minorities impose their preferences to majorities.
• Judging a complex system by its elements.
• Sam Harris’ scalding opinion of Nassim Taleb.
• Virtue signaling.

And much more. Please enjoy, and be sure to grab a copy of Skin in the Game by Nassim Taleb.

"Not everything that happens happens for a reason, but everything that survives survives for a reason."

If you enjoyed this episode, be sure to check out our episode on Antifragile by Nassim Taleb to dive deeper into Taleb’s work, and our episode on 12 Rules for Life by Jordan Peterson, so you too can imagine the awesome podcast Jordan and Taleb could create together.

Be sure to join our mailing list to find out about what books are coming up, giveaways we're running, special events, and more.

Links from the Episode Mentioned in the show

• Nassim Taleb on Medium [01:45]
• Nat Chat [01:04] (Antifragile episode)
• Twitter [03:48]
• Uber [13:04]
• Venture Capital [15:30]
• Y Combinator [15:37]
• Startup Company [15:37]
• Hedge Fund [17:09]
• Cryptocurrency [18:16]
• Gilgamesh coin [19:00]
• Lindy Effect  [21:40]
• Virtue Signaling [24:32]
• Middlebury College [24:43]
• Statin [28:25]
• American Heart Association [31:30]
• Coca-Cola [35:20]
• Confirmation Bias [38:47]
• The Placebo Effect [38:50]
• The Most Intolerant Wins: The Dictatorship of the Small Minority by Nassim Taleb [40:29]
• Kosher Food [40:29]
• New Atheism [45:16]
• Reddit [45:26]
• Facebook [45:27]
• Starbucks [45:30]
• Dick’s Sporting Goods [46:00]
• Box Company [46:52]
• Google [56:42]
• Mutual Assured Destruction [01:02:04]
• JPMorgan Chase [01:09:00]
• Apple Inc. [01:09:30]
• Amazon [01:09:30]
• Uber [01:09:33]
• Instacart [01:09:33]
• Fat Tony [01:09:52]
• The National Football League (NFL) [01:18:36]
• Tesla [01:12:54]
• In-n-Out Burger [1:23:33]
• Chipotle [1:23:33]
• D'Souza rips apart smug leftist student over "white privilege" [1:27:30]
• Humanitarians of Tinder [01:33:17]
• Toms Shoes [01:33:45]
• Malaria nets [1:34:33]
• Sam Harris on Nassim Taleb “insufferable” quotation [1:43:10]
• The best podcast ever by Sam Harris [1:49:10]
• Russell Brand Podcast’s Under the Skin [1:49:10]

Books mentioned

• 12 Rules for Life: An Antidote to Chaos by Dr. Jordan B. Peterson [00:39] (Nat’s notes) (Neil’s notes) (book episode)
• Antifragile: Things That Gain from Disorder by Nassim Taleb [01:04] (Nat’s notes) (book episode)
• Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Taleb [02:00]
• The Black Swan: The Impact of the Highly Improbable by Nassim Taleb [02:00]
• The Bed of Procrustes: Philosophical and Practical Aphorisms by Nassim Taleb [02:00]
• Happy Accidents: Serendipity in Modern Medical Breakthroughs by Morton A. Meyers [14:05]
• Charlie Munger: The Complete Investor by Tren Griffin [26:30]
• Merchants of Doubt: by Naomi Oreskes and Erik M. Conway [34:54] (Nat’s notes) (book episode)
• Gödel, Escher, Bach: An Eternal Golden Braid by Douglas R. Hofstadter [39:34] (Nat’s notes) (book episode)
• Leverage Points: Places to Intervene in a System by Donella Meadows [52:13] (book episode)
• Hiroshima Diary: The Journal of a Japanese Physician by Michihiko Hachiya [01:01:28] (Nat’s notes) (book episode)
• Genghis Khan and the Making of the Modern World by Jack Weatherford [01:37:03]
• A History of Private Life by Paul Veyne [01:40:39]
• Waking Up: A Guide to Spirituality Without Religion by Sam Harris [01:47:35]
• Lying by Sam Harris [01:47:35]

People mentioned:

• Nassim Nicholas Taleb (Antifragile episode)
• Hillary Clinton [06:58]
• Steven Pinker [06:58] [1:35:59]
• Ayn Rand [07:54]
• Anne Hearst [24:52]
• Charles Murray [24:57]
• Aaron Levie [46:51]
• Donald Trump [01:06:40]
• Marco Rubio [01:07:22]
• Chris Christie [01:07:31]
• Jeff Bezos [01:11:58]
• Bill Gates [01:12:05]
• Mark Zuckerberg [01:12:14]
• J.K. Rowling [01:33:00]
• Alexander The Great [01:36:39]
• Jordan B. Peterson [01:41:32] (on this podcast)
• Sam Harris [01:41:32]
• Scott Adams [01:49:26]
• Russell Brand [01:49:47]
• Jocko [01:53:40]

Show Topics

01:30 – Taleb's bibliography, his previous releases. Contrasts and relations between his previous works and Skin in the Game. A greater focus in philosophy and morals, rather than the mathematical focus of his other books. Skin in the game concept for business and non-business people.

06:38 – Taleb's use of criticism of other people, perhaps partially for publicity reasons. Criticizing people at your own weight vs needless harassment. The Ayn Rand effect.

08:50 – The books’ introduction. Academia vs real life. You can’t predict the behavior of a system by studying the behavior of individual elements within the system. Emerging qualities of complex systems. Academia back-explaining knowledge that’s created practically. Skin in the game for Roman architects and medicine scientists.

14:57 – True progress is only possible when you actually stand to lose something should you fail. Defining “rent-seeking” as opposite for “skin in the game”. Different types sorts of investments and whether they constitute rent-seeking.

19:25 – The contents of the book can become a lens through which you see the world.

20:03 – Sponsors. Get a shot of Four Sigmatic Mushroom Coffee mixed with MCT oil powder from Perfecto Keto. Follow our advice, we have skin in the coff… in the game.

20:59 – You can’t judge whether something is robust, if it can survive stressors, if you’re not at risk in case it can’t. The test of time.

23:30 – Business plans and their usefulness, or usefulness for procrastination.

24:54 – Book 2: A First Look at Agency. Advice, and knowing when to listen to it. Advice that’s helpful to the person offering it, rather than who’s being advised. Incentives and metrics under judgement.

26:50 – Judging actions by their intentions, rather than their effects. Nazism vs Communism. Diets, cholesterol, weight, and its effects on health as single elements of a complex system.

35:36 – Avoiding doctors when you have low-risks health issues. Prayer and religion developing related to health, and the high risk of medical procedures. The Placebo Effect.

39:20 – Book 3: That Great Asymmetry. Ant and ant colony metaphor. Predicting a complex system’s behavior through the behavior of singular elements. A small vocal minority affecting the behavior of large groups. The minority effect on holiday greetings and restaurant choices.

45:56 – Gun regulation, and changes in policy meant for advertising. Virtue signaling and what you do out of your beliefs, versus what’s done for public recognition. Standing up for your opinions even if, or specially if, it has social consequences.

50:57 – The free market, bottom-up or top-down models. Changing the parameters of individuals will not change the parameters of the emerging system.

52:57 – Book 4: Wolves Among Dogs. The trade off between security and freedom. Working as a dog, comfortably but restrained, versus working as a wolf, with much more freedom, but less safety. Tactics big companies use domesticating their employees. English manners as a way to domesticate lower classes.

00:59:39 – Suicide bombers and Mutual Assured Destruction. Reasoning and incentives in terrorists perspective, and how to discourage them to commit suicide. Sacrificing oneself and sacrificing the whole nation.

01:02:26 – Freedom and social media. Voluntarily adopting habits of the lower class as a signal of freedom. Nassim Taleb and Twitter.

01:05:53 – Book 5: Being Alive Means Taking Certain Risks. Politicians and relatability. Feeling like a politician is a real person, or simply a scripted facade. The case for Trump and his relatability.

01:08:36 – Resentment against people at the top who don’t have skin in the game, who are not really risking anything. Economic equality and what it truly means. Unfair barriers put up to keep people in the 1% when they might not really be earning their spot anymore. Florence example, where a handful of  families has kept the power for more than 5 centuries.

01:14:38 – Peer approval, the minority effect, and real freedom.

01:17:06 – Book 6: Being Alive Means Taking Certain Risks. Between two people who are equally qualified, the person who looks less “the part” is a wiser choice, as they have had to overcome more challenges to get to where they are. Quarterbacks vs common sense. Elitism and food: steaks, fast-food, and wine. Big mansions and living away from everything.

01:27:38 – Virtue signaling. Protesting or complaining without putting action behind your beliefs. Charity that’s mostly for show and its negative consequences.

01:35:12 – History and violent events: decreasing in frequency, but increasing rapidly in intensity. War, urban violence, and the magnitude of violence. Life that isn’t covered in history outside of big, dramatic events.

01:41:26 – Book 7: Deeper Into Agency. Religion, Beliefs, and Skin in the Game. Sam Harris, Nassim Taleb, and Jordan Peterson. Religion, science, and scientism.

01:49:22 – Sam Harris’ podcast and its infamous guests.

01:50:38 – Book 8: Risk and Rationality. The last section of the book, and concepts in it that are being explored in-depth by Taleb for the first time. “Skin in the Game” as an entry point for Taleb’s work.

01:52:26 – You don’t necessarily need to know what is the reason for something, even if you know that there is a reason.

01:54:31 – Ergodicity and non-ergodicity, or assembled probability vs individual probability. Paranoia and risk reversion. Risk taking and relative risk rather than objective risk. Bathtubs’ and bullets’ potential to scale to kill people. Terrorism, gun violence and non-multiplicative risks.

02:01:35 – Ties back to Taleb’s previous work. Static and dynamics probabilities and life expectancy.

02:05:37 – Wrapping up and sponsor time! Make sure to grab your own copy of “Skin in the Game” through our Amazon sponsored link. To help the podcast maintain the freedom of the market, check out as well our sponsors: Kettle & Fire for all your delicious bone broth needs, with up to 30% OFF! We recommend Perfecto Keto’s coffee-flavored exogenous ketones. Four Sigmatic: for your mushroom coffee and all your other mushroom needs. And as always, don’t forget to check out our Support page.

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