Two Ways to Win. No Way to Lose.

A strategy of turning a loss into gain.

Hello,

This audio instalment of Coffee&Junk is free for everyone. Listen to it on Patreon. Next week onwards audio episodes will be available only to members who belong to the Audio Listeners group on Patreon. Join today!


Back when I was in college, I was fascinated by the billionaire college dropouts like Bill Gates, and Steve Jobs.

I was foolish enough to contemplate dropping out of college myself. I actually thought that it would be cool. Tomorrow when I start a business and it becomes successful, it would feel damn good to say that I’m a successful college dropout.

It would be an interesting story to tell. This way, I thought, I’ll inspire many other future entrepreneurs to dropout as well. Yeah I was very immature!

It was only after my dad had put some sense into me that I started seeing the complete picture. “You don’t yet know what your ultimate career is going to be, but a degree would give you lots of ways to win while vastly reducing the number of ways to lose. There are lesser homeless engineers than homeless college dropouts,” my dad advised. It actually made sense. And I dropped my ideas of dropping out immediately.

But I don’t think I fully appreciated his school of thought back then. I got what he meant, but I didn’t fully grasp the overarching strategy there. Not until Scott Adams, the famous cartoonist of the Dilbert comic strip, talked about a technique to explain one of Donald Trump’s persuasion manoeuvres. The Two Ways to Win, No Way to Lose manoeuvre.


In January of 2016, Iran briefly detained ten American sailors for entering Iranian waters.

The then-candidate Donald Trump announced that if Iran didn’t release the sailors soon, he would make Iran pay for their treachery when he becomes president.

On the surface it looked like a classic Trumpish way of handling things. But if you look deeper, you slowly begin to understand that only one of two things could have happened:

Iran would have either kept the sailors in custody throughout the election, later on allowing Trump to use it as an example of why American voters needed to elect the badass Trump to deal with Iran and other future perpetrators.

Or, Iran would have released the sailors before the election, and Trump could claim it was so because of his tough talk. And therefore the American voters should definitely elect the badass Trump to deal with future perpetrators like Iran.

Two ways win for Trump. But no way to lose. What a move!

Back in the 1990s Microsoft made tremendous profit specifically because they employed this same manoeuvre. Microsoft made billions by licensing their Windows 95 OS.

Here’s how it worked. If a business that got the license for Windows 95 failed, Microsoft still got to keep all the licencing payments that had already been paid. It typically included a large upfront payment.

Or, if the business succeeded, Microsoft made even more money because the licence continued to pay out as a percentage of profits. Two ways to win. No way to lose!

This strategy can also be coupled with Confirmation Bias to make it even more effective. Take this example.

Your performance review is coming, and you know that despite your efforts the reviewer doesn’t favour your much, and that you might not make a good bonus.

Here’s what you can do. A standard tactic would be to make everybody, including the reviewer know that you think they are biased against you.

Now, only two things can happen. Your accusation of bias would either cause the reviewer to overcompensate to avoid the appearance of bias, thereby give you a lofty bonus.

Or, you don’t actually get the bonus, but now you can claim that it happened precisely because the person was biased. And, due to Confirmation Bias, others would agree with you.

If this person is actually biased, you can now rally the support of your colleagues and take it up to the higher officials.

Student protesters regularly employ this tactic when they fight against school or college authorities. But I would heavily discourage you from actually trying something like this at your workplace. Unless, you really want to sabotage your office relationships. The above example was just a thought experiment; not an advice in any way.


A good way to implement this strategy is by thinking about an upside in the downside. Invert the problem. Ask yourself, “If I lose, how can I still gain from it?”

The upside in the loss may not be huge, but this thought experiment forces you have a plan for all contingencies. This is a good hygiene in strategic planning.

Adams wrote, “When Trump dabbled in running for president in prior election cycles, he also had two ways to win and no way to lose.”

“If he didn’t get any traction in the polls, he still raised his profile and the value of his brand. In his earlier flirtations with running for president, you didn’t see him being so provocative with his policies as he was with his successful run in 2016.”

“The earlier efforts were low-risk, high-reward plays. By “losing” early in prior election cycles, he still put his name in everyone’s mind for the next time. He was literally winning by losing.” 

Two ways to win, and no way to lose is a bold step towards the path of achieving antifragility.

But in the interest of clarity, I want to acknowledge that no way to lose isn’t an absolute. Life can always find ways to trip you up. But if you are playing the odds, always try to look for situations that give you two ways to win and almost no way to lose.


Thank you for reading! And thanks to all my patrons for supporting this project. Coffee&Junk wouldn't exist without you :)

Best,
Abhishek

Why You Should Stop Trying to Follow Your Passion

Is passion really good for you, or does it make you only irrational?

Hello,

Happy Independence Day to my fellow Indians. And a very happy Thursday to others as well.

This is a video instalment from Coffee&Junk. My YouTube videos, unlike my articles, are pretty light-hearted. They’ll get delivered to your inbox every Thursday. And if you are one of the Early Spectators, you’ll get access to them 7-8 days in advance.

In this video, I talk about why you should stop trying to follow your passion if you want success and fulfilment in life.

You often hear advice from successful people that you should follow your passion. That sounds perfectly reasonable the first time you hear it. Passion is very likely to give you high energy, high resistance to rejection, and high determination as well. Passionate people are more persuasive, too.

But, hear me out. if I’m ever asked to put my money, I’ll never ever invest in somebody’s business who is following their passion.

For example, I don’t want to give money to a sports enthusiast who is starting a sports store to pursue their passion for all things sporty. This person is definitely a bad bet. They are in the business for the wrong reason.

Watch the full video to know why.

I ask a couple of questions at the end of this video. It would be really nice if you can answer them in YouTube comments, or email them to me at hellocoffeeandjunk@gmail.


Thank you for subscribing! And thanks to all my patrons for supporting this project. Coffee&Junk wouldn't exist without you.

Few of you have had trouble listening to the last audio episode. I’ve redone it. You can listen to it here.

Best,
Abhishek

A Short Introduction to Behavioural Philosophy

  
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This audio instalment of Coffee&Junk is free for everyone. If you have trouble listening here, you can listen on Patreon for free.

If you are new here, welcome to Coffee&Junk! Here we talk about Practical Life Skills (PLS). I send this email to my readers every week. If you would also like to receive it every Sunday, join the other 3,500+ readers today.


“Take the situation in which you have a lot to lose and little to gain. If an additional quantity of wealth, say, a thousand Phoenician shekels, would not benefit you, but you would feel great harm from the loss of an equivalent amount, you have an asymmetry. And it is not a good asymmetry: you are fragile.”

— Nassim Nicholas Taleb, Antifragile

“But while he does not hanker after what he has lost, he does prefer not to lose them. And this is what we mean when we say the wise man is self-content; he is so in the sense that he is able to do without friends, not that he desires to do without them. When I speak of his being ‘able’ to do this, what I am saying in fact amounts to this: he bears the loss of a friend with equanimity.”

— Seneca, Letters from a Stoic

Stoicism, more accurately, Seneca’s version of Stoicism has a lot of commonality with Taleb’s Antifragility. Both are about making yourself immune to the downsides of fate, while tremendously benefiting from the upsides.

A good way to live an intelligent life is having an emotional positioning to eliminate the sting of harm. Stoicism helps us achieve that.

But it is hard to stick to a good discipline of mental write-off when things are going well. Yet that’s when one needs the discipline the most. And that’s what Coffee&Junk is all about. Practical advice to make ourselves immune to the adverse times when they arrive. And arrive they will. Therefore, in these times of peace, we prepare for the war.


Stoicism has been practised by kings, presidents, artists, writers, and entrepreneurs. It has just a few central teachings. It sets out to remind us of how unpredictable the world can be. How brief our moment of life is. How to be steadfast, and strong, and in control of ourselves. And finally, it reminds us that the source of our dissatisfaction lies in our impulsive dependency on our reflexive senses, rather than logic.

Classical Stoicism helps in the attainment of a state of immunity from the external circumstances, good or bad, and an absence of fragility to decisions made by fate. Randomness won’t affect us because we are too strong to lose, but not greedy enough to enjoy the upside as well. Meaning that you might not remain poor, but you will not become superrich as well.

However, Seneca’s work is more seductive than others because he speaks in a much more practical way to us. He focuses on a more contemporary aspect of Stoicism—how to handle adversity and poverty, yes, but even more critically, how to handle wealth and success.

When I’m talking about Stoicism I mostly speak of Seneca’s Stoicism. You can think of it as a badass version of Buddhism. It’s less about shunning worldly pleasure and pain. It’s in fact more about avoiding pain, while lavishly enjoying the fruits of pleasure.

On a broader term, it’s about exploiting the upside of fate, while avoiding its downside, thereby making us, what Taleb calls antifragile to all kinds of externalities.

This version of philosophy is in tandem with the traits of human nature such as, ambition, greed, and pleasure. It is practical, and it is this version that guides us into living an ambitious life.

But I believe that wisdom in isolation doesn’t help us much. Also, topdown wisdoms are just like fables. Enjoyable. Good to listen to. Then we forget and move on.

Practical Wisdom, on the otherhand, is far more intelligent. Practical wisdom not only shows us the path, but also guides us in removing the obstacles from the path.

To achieve that, we take help from the works of eminent researchers such as Daniel Kahneman, Amos TverskyDaniel Gilbert, and Richard Thaler.

They’ll help us understand our shortcomings and biases, and also provide tools to avoid them, so that we can become less irrational.

Philosophy shows us the way to a better life, while Psychology helps us remove the obstacles. Their combination is called Behavioural Philosophy.

Thanks a lot for reading.


Hope you enjoyed the audio instalment. Going forward all audio episodes will be exclusive for Coffee&Junk’s Patreon supporters only. Just head over to patreon.com/coffeeandjunk and join the Audio Listeners tier.

Best,
Abhishek

Understanding Coca-Cola's Brand Strategy Using Pavlovian Conditioning

  
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This is an audio episode. Read the text, but kindly listen to the audio version as well. It contains additional content, along with some important updates. If you have trouble listening here, you can listen on Patreon as well.

And if you are new here, welcome to Coffee&Junk. Here we meditate on human behaviour. I send this email to my readers every week. If you would also like to receive it every Sunday, join the other 3,500+ readers today. My dream is to help a million people through my work.


In 1897, the Russian scientist Ivan Pavlov was studying the digestive system of dogs when he observed that a stimulus unrelated to food made the dogs salivate.

In one experiment he rang a bell just before giving food to the dog. He repeated this several times until the dog salivated at the sound of the bell alone.

No sight or smell of food was present. The sound of the bell produced the same response as the food. The dog learned to associate the bell with food.

Classical conditioning and Pavlov’s dog experiment | FOS ...

This is an example of Classical Conditioning (also known as Pavlovian or Respondent Conditioning

According to Classical Conditioning, a neutral event, such as ringing a bell (Neutral Stimulus) could be associated with another event that followed i.e. getting fed (Unconditioned Stimulus).

This association could be created through repeating the neutral stimulus along with the unconditioned stimulus, which would become a Conditioned Stimulus, leading to a Conditioned Response i.e. salivation.

Numerous studies have followed Pavlov's experiments. They have demonstrated classical conditioning using a variety of methods. This also shows the replicability of Pavlov's research. Thereby recognising it as an important unconscious influence of human behaviour.

According to Classical Conditioning Theory, everything from speech to emotional responses are simply patterns of stimulus and response.

For example, when you first see someone holding a balloon and a pin close to it, you anticipate it to burst. After this happens many times, you associate holding the pin to the balloon with the 'bang' that follows.

Like Pavlov's dogs, classical conditioning was leading you to associate a neutral stimulus (the pin approaching a balloon) with bursting of the balloon. This leads to a conditioned response (flinching, wincing or plugging your ears) to this now conditioned stimulus.


If you have been following Coffee&junk for sometime, it is very likely that you know who Charlie Munger is. He is the vice chairman of Berkshire Hathaway and Warren Buffett’s best buddy. Charlie Munger is known for his multidisciplinary thinking. He is often considered to have the smartest brain. And he is 95 years old.

Munger has mentioned Pavlovian conditioning many times over the years in his speeches. If somebody like Charlie Munger tends to take it seriously, I guess we all should.

“In Pavlovian conditioning powerful effects come from mere association. The neural system of Pavlov’s dog causes it to salivate at the bell it can’t eat. And the brain of man yearns for the type of beverage held by the pretty woman he can’t have.”

— Charlie Munger

Getting back to the subject at hand, it’s probably clear why this concept is so powerful. It practically means that it’s possible to trigger an innate biological response with a stimulus of your choice, like, for example, a brand logo. All most all brands try to implement this. For example, a brand would show friends and families in an ad to associate itself with ‘togetherness’. 

Coca-Cola's brand strategy was explained by Charlie Munger in his speech Practical Thought About Practical Thought?

You should read it in its entirety. It’s most likely the best case study you’ll ever read. Here, Munger says a couple of things worth noting.

“…we must use every sort of decent, honourable Pavlovian conditioning we can think of. For as long as we are in business, our beverage and its promotion must be associated in consumer minds with all other things consumers like or admire.”

“Considering Pavlovian effects, we will have wisely chosen the exotic and expensive-sounding name “Coca-Cola,” instead of a pedestrian name like “Glotz’s sugared, caffeinated water.”

“For similar Pavlovian reasons, it will be wise to have our beverage look pretty much like wine, instead of sugared water. And so we will artificially colour our beverage if it comes out clear.”

“And we will carbonate our water, making our product seem like champagne, or some other expensive beverage…”

— Charlie Munger


Back In 2003, back when I was a kid, Coca-Cola launched one of the most successful campaigns in India till date. It was called, Thanda Matlab Coca-Cola.

Thanda is a Hindi word which means a cool drink, and this word is ingrained in Indian culture. When guests arrive, we ask, Kuch thanda lenge yaa garam? Would you prefer having something cool or hot?

Hawkers sell cold drinks, soda, or chilled water by crying out “Thanda! Thanda!” The ad campaign used a clever twist of this familiar word to link it to Coca-Cola. Resulting in an association of coolness with Coca-Cola in the Indian minds.

This very campaign expanded the target group from the youth to the masses. This also was the first attempt to represent Coca-Cola as The Cool Drink for Everyone, not just for the urban. Pavlovian conditioning all the way!

However, Munger also notes that we should use both the techniques, that is both Classical and Operant Conditioning, if we want a lollapalooza (or extraordinary) result.

Munger says:

"And how does one create and maintain conditioned reflexes? Well, the psychology text gives two answers: by Operant Conditioning, and by Classical Conditioning, often called Pavlovian Conditioning to honour the great Russian scientist. And, since we want a lollapalooza result, we must use both conditioning techniques."


Thanks for reading!

I want to say thanks to Noel, Natasha, and other awesome patrons for supporting my work. Coffee&Junk wouldn't exist without you. Support this project by heading over to patreon.com/coffeeandjunk right now!

Best,
Abhishek

Why Punishments Don’t Always Work

Punishments alone cannot teach us the right behaviour.

Hello and welcome to Coffee&Junk. Here we meditate on human behaviour. I send this email to my readers every week. If you would also like to receive it every Sunday, join the other 3,500+ readers today. My dream is to help a million people through my work.


The job of a reward is to promote certain behaviour. But, what if we wish to discourage certain behaviour? We've talked about positive reinforcements—the carrot. But, what about the stick? 

We had touched upon the importance of disincentivising undesirable behaviour before. Here we discuss the various methods, and their implications. Let's start with Punishments.

Punishments are responses that decrease our likelihood to repeat a behaviour. For example, when rats in a Skinner Box push a lever to receive a shock instead of food, they stop pushing it.

Societal systems rely on threats and punishments to keep us in line. Despite that we keep on arriving late, spit in public, skip homework, and invest in the wrong places.

Well, that’s because punishments have some inherent problems. Unwanted behaviours reappear as soon as we remove the punishment. Unwanted behaviours aren't forgotten. They only remain suppressed. For example, we adhere to speed limits only when we are monitored. But if there's no speed limit on a road, it gives us an option to go berserk, and we usually do.

Another problem is that punishments deter us from learning the right behaviour. Punishments teach us about what not-to-do, not what to-do. This inhibits our ability to learn newer and better responses.

Punishments also lead to a variety of reactions from us. Reactions such as rage, humiliation, and feeling of helplessness. None of these are part of our learning process.

On top of that, biased punishment systems do can have adverse effects upon human psyche. We punish kids more than adults. We scold boys more than girls. We rebuke janitors more than executives. All these experiences can give the sense of a prevalent injustice in the system.

Punishments also trigger our fight or flight response. They can make us aggressive when all the exits get blocked. In some cases, they create fear of desirable behaviours. For example, fear of punishment for not doing homework can create fear of school itself.

Having said that, I do not suggest that we completely rule out punishments from incentive systems. Activities such as bullying, homicide, or larceny cannot go unpunished. But punishments alone cannot help us with behaviour modification.

So, what else should we do?

Let's say, if every time you reach office late, you have to pay $5. You will reach office on time to avoid paying $5. Thus it will strengthen the behaviour of reaching office on time. This is an example of Negative Reinforcement. It is the removal of an unpleasant experience to strengthen desired behaviour. There are two ways learning can be encouraged via negative reinforcement.

BF Skinner demonstrated its power through experiments. He placed a rat in his Skinner Box and subjected it to an unpleasant electric current. This caused it some discomfort.

As the rat moved about in the box it would knock a lever, and the electric current would switch off immediately. The rat then learned to go straight to the lever after a few times of being put in the box. This form of learning is known as Escape Learning. It is the behaviour we perform to stop (or escape from) an ongoing, unpleasant, averse stimulus. It is because of escape learning we know that we have to hit for the exit to escape from fire in a building.

Not only this, Skinner even taught rats how to avoid electric currents altogether. Skinner placed a rat in a Skinner Box with an electrified floor. A light turned on, followed by an electric current passing through the floor. The rat soon learned to find an escape, such as a pole to climb or a barrier to jump over onto a nonelectric floor. It also learned to press a lever when the light came on to stop the electric current from switching on at all.

At first, the rats responded only when the shock began. But as the pattern got repeated, the rats learned to avoid the shock by responding to the warning signal. This is known as Avoidance Learning. It is the behaviour we perform to avoid an unpleasant experience. This is what makes us run for the exit on hearing the fire alarm. We don't wait for the fire to appear.

Negative reinforcements are like punishments, yet they yield very different outputs. Punishments encourage suppressing bad behaviours. Negative reinforcements, like positive reinforcements, encourage desired behaviours. It is only by combining both of them that we will be able to change user behaviour. By reinforcing desired behaviours and punishing undesired ones.

Following are 3 useful methods of behaviour modification. They are related to changing surrounding events that relate to a person's behaviour.

1. Behaviour Extinction:

Behaviour Extinction is the process of decreasing a problem behaviour by discontinuing its reinforcements. It is easier said than done. Because humans find novel ways to get reinforcements when the natural reinforcers stop.

A whining child would double down on its whining, or find other ways to get the attention of its parent. A better extinction procedure is two fold. Parents should withhold their attention during whining, and also reward more desirable behaviours with extra attention in absence of whining. Not paying attention to the whining makes it irrelevant, and extinct.

Serious misbehaviours like bullying or theft cannot be left ignored. They need to be punished. Along with that, their positive counterparts such as being helpful, or giving away unused toys, need to be rewarded more.

2. Behaviour Shaping:

BF Skinner proposed the idea of shaping desired behaviour through successive approximation. Successive rewards should be delivered as subjects progress towards the desired behaviour.

The conditions required to receive the reward should shift each time subjects move a step closer. For example, to make someone run 5 km daily, we should start by incentivising them to just get up and run daily. After this, we incentivise them for increasing the distance run by 500 m every week, till they reach the 5 km goal.

If they fail to achieve it, we take back all their rewards, and make them start from the beginning.

3. Premack's Principle:

Premack's principle states that more probable behaviours would reinforce less probable behaviours. A variation of this is known as Token Economy. Targeted behaviours are reinforced with tokens that can later be exchanged for rewards.

For example, people who enjoy exercise usually use a daily run as a reward for getting other chores, such as getting groceries, done. Similarly, children learn to sit still in class by being rewarded to run around and make noise in recess. If they make noise during class, recess gets cancelled.

Punishments and Negative Reinforcements are crucial in designing incentive systems. A good system that discourages bad behaviour is a mix of both. Punishments alone cannot achieve this.

That's all from me today. Now it's your turn. What might be a good strategy to prevent class bullying? Can punishments and reinforcers be effectively used in that? Share your ideas by replying to this email, @coffeeandjunk or hellocoffeeandjunk@gmail.com. Looking forward to reading them!


Thank you for subscribing! And thanks to all my patrons for supporting this project. Coffee&Junk wouldn't exist without you. If you wish to back this project, head over to patreon.com/coffeeandjunk right now! I’ll appreciate any kind of support.

Best,
Abhishek

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