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The Tim Ferriss Show
#695: Shane Parrish on Wisdom from Warren Buffett, Rules for Better Thinking, How to Reduce Blind Spots, The Dangers of Mental Models, and More
Sep 27, 2023
Shane Parrish, host of The Knowledge Project podcast, discusses wisdom from Warren Buffett, rules for better thinking, reducing blind spots, and the dangers of mental models. Topics include the impact of influential books, admiration for Buffett and Munger, exploring cognitive biases, the power of positioning, automatic rules for success, the importance of communication, and the value of writing in the age of AI.
01:58:46
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Quick takeaways
- Being well-positioned allows for better decision-making outcomes.
- Adopting different mental models broadens understanding and improves decision-making.
- Farnam Street built a successful business by focusing on valuable content and direct audience communication.
- Creating more surface area for people to discover timeless content is a goal of Farnam Street.
- Scrutinizing problem definition and using automatic rules enhance decision-making.
Deep dives
The importance of positioning in decision-making
One of the key insights in decision-making is that being in a strong position allows for better outcomes. Being well-positioned means being prepared to take advantage of opportunities and navigate challenges. This applies to various aspects of life, from finance to relationships. By considering one's position and making strategic choices, individuals can avoid blind spots and make more deliberate decisions.
The value of mental models in decision-making
Mental models provide alternative perspectives and ways of thinking about problems. By adopting different lenses or personas, individuals can broaden their understanding and overcome cognitive biases. Mental models help reveal blind spots and enable individuals to see problems from new angles, leading to better decision-making.
Building a business on content and advice
Building a business centered around content and advice can be challenging. In the case of Farnam Street, the goal was to learn timeless ideas from others and share them with the world to provide equal opportunity and leave a positive impact. Key decisions included building an email list to maintain direct communication with the audience and reducing reliance on external platforms. By focusing on creating valuable content and maintaining a strong connection with the audience, Farnam Street has built a successful business.
The importance of positioning and core components of the business
Being in a strong position is crucial in decision-making and business success. Farnam Street has positioned itself by delivering valuable content, including written articles, podcasts, and online courses. The business focuses on providing accessible information and helping individuals master the best ideas and insights from various fields. With an emphasis on equal opportunity and leaving a positive impact, Farnam Street has built a robust business centered on insightful content and continuous learning.
Creating Surface Area for Timeless Content
The speaker discusses their goal of creating more surface area for people to discover timeless content and master the best ideas from others. They started with a website and a podcast, which gained traction after an episode with Naval Ravikant. They also created a series of books called the great mental models, aiming to make big ideas from universities accessible outside their original contexts. They later developed a decision-making course called Decision by Design, focusing on practical tools for real-world decision making.
The Importance of Scrutinizing Problem Definition
The speaker emphasizes the significance of scrutinizing problem definition in decision-making. They share an example of having separate meetings to define the problem before jumping into solutions. By determining whether the problem statement accurately reflects the real problem, one can avoid solving the wrong problem and focus on more effective solutions. They highlight the need for the decision-maker to come up with the problem statement, ensuring accountability and better understanding of the problem. The speaker also mentions the value of exploring the 'and then what' question to assess the potential outcomes and costs of solving a particular problem.
Using Automatic Rules and Optimizing for Sleep
The speaker advocates for the use of automatic rules in decision-making to turn desired behaviors into default behaviors. They highlight the benefits of having rules to avoid decision fatigue and create consistency, such as following the Slow-Carb Diet six days a week and having a cheat day. They also discuss the concept of optimizing for sleep and reducing stress by making decisions that prioritize personal well-being over financial gains. They propose experimenting with different investment strategies, such as shifting to safer investments for a period to assess the impact on overall happiness and stress levels.
The Importance of Trust and Contracts in Business Relationships
Trust is crucial in business relationships, and the need for contracts is seen as a sign of mistrust. However, during the pandemic, the lack of advertising contracts came back to haunt the podcasting business, leading to payment disputes with advertisers. This experience highlighted the necessity of contracts in certain situations and the importance of balancing trust and protection in business dealings.
The Power of Focusing on Evergreen Content and Email Marketing
Creating timeless, evergreen content that remains relevant over time is key to building a sustainable online presence. By focusing on producing high-quality content that is useful and stands the test of time, individuals and businesses can attract and retain an engaged audience. Additionally, building and nurturing an email list is emphasized as a primary means of reaching and communicating with the audience. The email list allows for direct and effective communication, fostering a loyal following.
2.
Introduction to Shane Parrish and his Work on Mastering Wisdom and Clear Thinking
2min
4.
From High School to Intelligence Agency: Finding Inspiration in Warren Buffett and Charlie Munger
6min
Brought to you by Momentous high-quality supplements, Eight Sleep’s Pod Cover sleeping solution for dynamic cooling and heating, and AG1 all-in-one nutritional supplement.
Shane Parrish (@ShaneAParrish) is the entrepreneur and wisdom seeker behind Farnam Street and the host of The Knowledge Project podcast, where he focuses on mastering the best of what other people have already figured out. Shane's popular online course, Decision by Design, has helped thousands of executives, leaders, and managers around the world learn the repeatable behaviors that improve results. His work has been featured in nearly every major publication, including The New York Times, The Wall Street Journal, and Forbes.
Shane is the author of Clear Thinking: Turning Ordinary Moments into Extraordinary Results.
Please enjoy!
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This episode is also brought to you by Momentous high-quality supplements! Momentous offers high-quality supplements and products across a broad spectrum of categories, and I’ve been testing their products for months now. I’ve been using their magnesium threonate, apigenin, and L-theanine daily, all of which have helped me improve the onset, quality, and duration of my sleep. The Momentous Sleep Pack conveniently delivers all three in one single blend. I’ve also been using Momentous creatine, and while it certainly helps physical performance, including poundage or wattage in sports, I use it primarily for mental performance (short-term memory, etc.).
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[05:43] The Stopwatch Gang influences a D student.
[10:54] How a low-grade troublemaker gets vetted for an intelligence job.
[17:23] The impact of frequent relocation on a child.
[21:33] The benefits of a challenging education (once the tears dry up).
[31:09] From 68131-1440.blogger dot com to Farnam Street.
[36:10] An early exploration of cognitive biases.
[39:39] "Ordinary moments determine your position, and your position determines your options."
[45:55] Incisive, deliberate decision-makers.
[47:44] Defining mental models.
[50:47] The declaration of platform independence.
[52:50] A Farnam Street business breakdown.
[56:05] Scrutinizing the problem statement.
[1:03:12] The power of asking "And then what?"
[1:05:26] Setting yourself up for success with automatic rules.
[1:21:31] Doubling down on email and the evergreen.
[1:28:05] Investing with the benefit of deal flow.
[1:32:41] Thoughts on index fund investment.
[1:34:58] Factoring sleep into opportunity cost.
[1:43:33] How to make better decisions.
[1:48:10] Why should we write in the age of AI?
[1:52:08] Parting thoughts.
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For show notes and past guests on The Tim Ferriss Show, please visit tim.blog/podcast.
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Past guests on The Tim Ferriss Show include Jerry Seinfeld, Hugh Jackman, Dr. Jane Goodall, LeBron James, Kevin Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew McConaughey, Esther Perel, Elizabeth Gilbert, Terry Crews, Sia, Yuval Noah Harari, Malcolm Gladwell, Madeleine Albright, Cheryl Strayed, Jim Collins, Mary Karr, Maria Popova, Sam Harris, Michael Phelps, Bob Iger, Edward Norton, Arnold Schwarzenegger, Neil Strauss, Ken Burns, Maria Sharapova, Marc Andreessen, Neil Gaiman, Neil de Grasse Tyson, Jocko Willink, Daniel Ek, Kelly Slater, Dr. Peter Attia, Seth Godin, Howard Marks, Dr. Brené Brown, Eric Schmidt, Michael Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan Peterson, Vince Vaughn, Brian Koppelman, Ramit Sethi, Dax Shepard, Tony Robbins, Jim Dethmer, Dan Harris, Ray Dalio, Naval Ravikant, Vitalik Buterin, Elizabeth Lesser, Amanda Palmer, Katie Haun, Sir Richard Branson, Chuck Palahniuk, Arianna Huffington, Reid Hoffman, Bill Burr, Whitney Cummings, Rick Rubin, Dr. Vivek Murthy, Darren Aronofsky, Margaret Atwood, Mark Zuckerberg, Peter Thiel, Dr. Gabor Maté, Anne Lamott, Sarah Silverman, Dr. Andrew Huberman, and many more.
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