Before you can be a freak, you must learn how to Think Like A Freak. Steven Levitt and Stephen J. Dubner will make you look at the world through different eyes with this awesome text. While providing you with some funny and interesting stories to tell. Let’s begin, the first point that I noted was that when something is free people will consume more of it and think less of it. Free health care would be a great example. Most people won’t think anything of it, but the people that really need health care will have to wait longer for it. That should be enough for the mental warm-up, let’s get into the real meat of this book.
4 Big Ideas to Memorize:
- Incentives are the cornerstone of modern life. People always have something to gain as they move up Maslow’s hierarchy of needs. This holds true even when we reach self-actualization.
- Know what to measure and how to measure it, thus making the world simpler. This is brought up in countless books. Whether your changing habits, getting in shape, running a company, marketing, investing, creating, or just trying to enjoy life; know what to measure.
- Conventional wisdom is often wrong. People just like many other animals move in herds. To that respect, make sure to research and test what matters to you thoroughly.
- Correlation does not equal causality; when two things travel together, we think that one causes the other. in my mind this could be labeled as a psychological fallacy. X causes Y in our environment so often that we just live life expecting it and looking for it.
The next key point is do not be scared of saying “I don’t know.” Everyone thinks that their reputation and ego will suffer if they don’t know something when asked. It is best just to admit that you don’t know. One because you will look like an ass if the other person knows the answer. Two, any pseudo-intelligent person will understand that it is impossible to know everything.
Now we will see how economics and psychological fallacies go hand in hand. We always tie price to quality. When it comes to quality, it is only significant a fraction of the time. The rest of that it is just savvy business people realizing that it is better to go high rather than low on price points.
We also have to learn how to ask the right question. I love the example that the authors used, about the school system being broken. Now from a different lens, have parents gotten lazy and stopped giving their children the attention that they deserve? Once said question is found, find the root cause. The freak-ample that they used has to do with poop cocktails.
It is, and it isn’t as gross as it sounds. All it is transplanting healthy poop into people that don’t have any good bacteria in their tract. For years the medical community would just fill out prescriptions without looking for the root cause. Being in IT I have to live by this way of thinking. In networking, we even have seven levels that we have to check when searching for the root cause. Now, what if you want to automate the process of finding the root cause?
The Steven’s go over the gameful theory. Which is eliminating false positives in a playful way that people will not notice. The freak-ample that the book used was of a rock band making sure that the stadium was safe for the crowd. The rock band would give every venue that they went to a ridiculously extensive list of items to check.
At a certain fraction of the list, they would add something ridiculous like making sure that the band was given a bag of MnM’s with no red ones. Then when the band arrived, they only had to look for the awkward request to see if the venue followed all of the steps; saving time and money. There is a caveat to this, and that is that our inputs are never accurate. So, have someone else or a few other people keep you in check.
The book uses wine tasting as an example of this. A blind study was conducted with the “upper echelon” of wine tasters. They would consistently say that the cheap wine was just as good as the expensive one. Mind you, that these are people who dedicate their lives to being wine aficionados. Knowing that we aren’t perfect, we have to learn when to quit.
This book will teach you to quit on depressing jobs, hopeless people and relationships, and everything else that is doing more harm than good. The next step to becoming a true freak is to think like a child.
The Three Laws of Being a Child:
- Be free of assumptions and expectations. My fellow investing junkies, cough cough.
- Be curious. Curiosity killed the cat, but not the human.
- Pay more attention to your surroundings and don’t over think. The book Deep Survival covers this. When caught in life and death situations we will analyze our way into paralyzes and die. Keep an eye out for the red flags and do what makes you happy, it’s that simple.
Now that you are a real boy/girl. You have to remember to ignore your incentives. Regardless of if it is the bullshit 401k that a company is offering you or the promise of job security. Remember to live and think outside the box, while embracing the freaky side. I hope that you enjoyed this review, and may we freak again.