Business Tricks We've Learned From Gamblers, Pickup Artists, & Feynman

Sam Parr

Alright, we're live. Sean, I've got a story for you, and this story... I'm gonna take a weird take on this. I have a weird take on this, and I'm gonna appeal to all the young single men out there.

Shaan Puri

alright this is your specialty young single men let's go

Sam Parr

alright listen the story is about ed thorpe have you ever heard that name ed thorpe

Shaan Puri

sounds like a swimmer

Sam Parr

No, it does sound like a swimmer, but he's not. So, Ed Thorpe. I'm reading his biography called *Man for All Markets*. Ed Thorpe today is 91, so that means he was born in the 1940s or 1930s. Ed Thorpe grew up as a math whiz kid. He was like a prodigy at a young age and grew up in a very poor household. He didn't have a lot of money, but as a young kid, when he was about 12 or 13 years old, he got moved up a bunch of grades. He took a bunch of standardized tests, and at the time he lived in California, he got something like the highest scores in California for high schoolers when he was just 13 years old. At that time, they didn't have calculators, but they had little counting devices. He would take these tests without these counting devices because he couldn't afford them, and he still crushed it. He killed it! Eventually, Ed Thorpe got a scholarship to Berkeley, and then he went to UCLA, where he earned his PhD in mathematics. He became a professor and started down this track where, in his thirties, he was this brilliant professor. But then he did something interesting. He became interested in applying his theories to real-life situations. He was reading these academic papers and thought, "This is cool and all, but we gotta apply this stuff." His specialty was probability and statistics, and he got super interested in how he could use his theories to beat blackjack.

Shaan Puri

oh this is the gambling guy I saw this guy on tim ferriss

Sam Parr

This guy's interesting because he's done so much more than just these few little stories I'm going to tell. But basically, you could actually verify this... Blackjack is what, 51% chance the house is gonna win? Is that right? Is it like 51-49?

Shaan Puri

51 52 something like that

Sam Parr

yeah so it's a small margin but back in the sixties when he was kinda getting going he had this theory where he thought that if he saw the the cards on the table he could have a higher probability of getting 21 because he basically could count cards changing the ratio of 51% in the user's perspective so he it was 51% chance of winning the house was 49% chance so he creates this paper where he explains all of this and inevitably people are like man this is just some academic theory there's no way that you're gonna be able to do this and so thorpe is is is a fun guy and he's like we gotta prove it so he builds out this blackjack table at his house and he gets his wife to smoke cigarettes and blow cigarette smoke into his face while she's talking to him and like annoying him and then he has friends come over who like are drinking alcohol and like yelling in his face as if he's at a casino to distract him and he spends a handful of months doing this and it starts working and he's like I think this actually can work I think I can do this and he publishes this paper and all these people reach out he gets hundreds of letters but eventually he gets this one letter from this guy named manny and manny he doesn't really know it at the time but after a while ed kinda realizes that manny is basically in the mob he helped make bootlegging a thing in the twenties when alcohol was illegal and manny goes hey ed let's see if you can actually pull this off I'm gonna front you $10 and we're gonna split the winnings $10 at the time the sixties is something like $80 so it was a lot of money particularly for a professor who's making the equivalent of a $100,150,000 back then and so they go and they spend this week this weekend at a a casino in las vegas and they make $11,000 in profit and ed's like holy moly this thing works but he doesn't really wanna become like totally a professional gambler but he's really interested in proving his theories and eventually he writes a book on this and if you Google ed thor blackjack book he wrote this book in the sixties that was a massive hit and to to ed this was all just a big like fun game a way to like prove that his research wasn't just academic but it could actually be used and this book was a massive hit and it was one of the first times that academic research was like used in real life and it went straight to the masses as opposed to him publishing more papers but this meant now that he was known in the casino world in the casino world back then vegas was just getting going and so it was small enough that they all the casinos could know what ed looked like and all the dealers would know what he looks like and what his name is and so he eventually goes back at every handful of weekends and he has to wear disguise and he's but he still ends up ends up cleaning them all out and next he goes well blackjack was cool let's see if I can do this with roulette and so he goes you know roulette is a little bit unlike blackjack where I don't even know if there is necessarily at least it doesn't appear so there's a lot of skill because it's all like where the ball lands on the spinning wheel but he has this weird theory that if he can see if he can like quickly count how fast the wheel is going and where the ball starts and where it hits the wheel somehow he's able to calculate 51% in his odds where the ball is going to land and this sounds like a crazy idea right

Shaan Puri

I mean, that just sounds impossible to me. As somebody who has spent a lot of time at a roulette wheel, being able to figure out while the wheel is turning where the ball is going to land... I mean, when the ball hits, it bounces in a random direction based on the spin and the speed and everything. For somebody to do that in their head, I would have to see that to believe it.

Sam Parr

it sounds impossible right and that's what interested him is is he was a math nerd and he was really fascinated with the game of proving his theories correctly and so what he did was he took a small computer and he basically assembled the small computer and the way it worked is he would have a 2 person team and so he would be at the table placing the bet and he had have 2 people on the side and they had these little small computers and they had little buttons in their shoes and they would calculate where they thought the ball was gonna roll to and they would tap their feet in order to keep the cadence of the wheel right and it would help him predict where the ball was gonna go and that music the the the taps it kinda sounded like music would go into his his earpiece that he was wearing and he would make a bet and this was actually the world's first wearable you know like an iphone or a like a like an iwatch is a wearable this was the world's first wearable and it worked and he killed it he made a lot of money and he wrote a book on this he did it again but now we're gonna fast forward to him 10 years doing these experiments he's got some money something like a $100,000 at the time which was a lot of money for a professor and he needs to invest his money because he just doesn't want it sitting there and so he spends a few months learning everything he can about investing basically just reading books he just read lots of books and as he said he wanted to understand the math behind all of this and so he starts in investing in publicly traded companies and he loses a lot of money at first he said I had to pay my tuition to mr money market because it gets a lot of it wrong but then he discover discovers options and this part is a bit out of my expertise to explain how he does this but it involves both shorting a company and buying the company's actual stock so predicting the company's stock is going to go down while buying the stock but in doing that he studied the the the option that he was going to purchase as well as the current stock price and in doing that he was able to hedge it so he would only lose a little bit amount of money but make a whole bunch of money and for him he actually didn't look at any of the stock information as in what the company was selling so you know you have guys who like do value investing and they're like well I think that this brand is undervalued that wasn't him it was all just a math game to him but after a year or 2 it starts working and he starts making a little bit of money and so now we're in the seventies and there's another professor at his university who starts hearing that ed is now investing in stocks and he's doing quite well he tells some of his coworkers he's like I might make more of my more than my salary this year investing it's going quite well and so one of his professors has invested his money the professor's money in this small little fund called buffett associates and of course it was run by this guy warren buffett out of omaha and this professor was like hey this guy who I invested in warren he's gonna wind down his fund he's crushed it for me but he just wrote this letter saying he can't find any more good deals which in the seventies buffett actually paused investing for like 5 years he didn't want to invest because he's like I can't find any good deals right now I'm just gonna sit and do nothing I'm gonna wind down my fun and the professor goes hey look this guy is running down his fun why don't you you know he's got some free time I'm friendly with him I'm gonna invite him over to my house I'll invite you over and we'll just shoot the shit and maybe you'll have a new friend in the investing industry because you don't really know anyone else doing this I'll I'll help make the introduction buffett comes over for dinner and ed thorpe and him get along beautifully hand in hand like pots and pans they're they're really close they become great friends and they love hanging out that day and a few weeks after the the dinner the professor goes hey look ed I was kinda testing you I kinda wanted warren to like sit like kinda see what's up with you he gave a he gave a thumbs up he said you're really smart and that your ideas are good can I take this money that I got back from warren buffett and give it to you to invest and ed's like taking other people's money that's not really what I've I've been doing I I've just been doing this for my own if you guess I'll try it and so he teams up with another guy and they raised something like $5,000,000 over the course of 6 months and they have buffett's stamp of approval and so they start basically one of the very first hedge funds ever and particularly a he's a quant which is common nowadays but ed thorpe was the first quant where he didn't really look at the companies he just looked at the numbers and he killed it so over the course of 30 years he made something like 20 to 25% per year which is massive I don't know what what has buffett made do you know probably something like that but over the course of

Shaan Puri

buffett's just like 20 yeah

Sam Parr

yeah it's like 20 but over the course of like 60 years

Shaan Puri

yeah

Sam Parr

Yeah, for a lot longer. Alright guys, really quick. Back when I was running The Hustle, we had this premium newsletter called Trends. The way it worked was we hired a ton of analysts and created this sort of playbook for researching different companies, ideas, and emerging trends to help you make money and build businesses. Well, HubSpot did something kind of cool. They took this playbook that we developed and gave to our analysts, and they turned it into an actionable guide and a resource that anyone can download. It breaks down all the different methods that we use for spotting upcoming trends and identifying different companies that are going to explode and grow really quickly. So, if you want to stay ahead of the game and find cool business ideas or different niches that most people have no idea exist, this is the ultimate guide. If you want to check it out, you can see the link down below in the description. Now, back to the show. So, Ed Thorpe basically invented counting cards with blackjack.

Shaan Puri

mhmm

Sam Parr

And then he made a book on it. He invented this roulette game and the world's first wearable. All these things, by the way, eventually became illegal. They weren't illegal, or I don't know if it's illegal or against the rules, but they basically are banned in casinos because of him. He parlays all of this learning and all this experience into creating the world's first hedge fund and becomes one of the first quants. He knocks it out of the park; the guy kills it. I think he made something like $800,000,000. Then, eventually, fast forward to around 2005, he shuts down his fund because he's like, "I have enough. I don't need anymore. This has been fun while it lasted. I'm out." He's one of the few guys to just be winning, and he just says, "That's enough. I'm done." So now he's 92 years old, still does push-ups and pull-ups, and he's really into fitness.

Shaan Puri

he does not look 90 I I saw him on the tim ferriss podcast that can't have been that long ago

Sam Parr

he was 89 then on that tim ferriss podcast

Shaan Puri

like a he looks honestly like somebody's early sixties

Sam Parr

He looks great. Yeah, and here's the part where I promise I'm gonna try and weave this into advice to the young man. Ed Thorpe is so fascinating to me, and the reason he's fascinating to me is because... I don't know if you'll admit to this, you probably will if you did it. Did you ever read that book "The Game"? Did you ever read like books on how to meet women?

Shaan Puri

Not only did I read the game, but my girlfriend in high school also bought the game for me before I went to college as a goodbye gift.

Sam Parr

was that her breakup gift

Shaan Puri

it's a

Sam Parr

win between us but I was a share

Shaan Puri

We're not a "stay together," but let me help you out here. Not only did those two things happen two nights ago, I reread "The Game" - and I'm a married man! I reread "The Game" because I was like, "That book was amazing back then." I wanted to learn the style of it. I was like, "What was great about that book?" So I went back and I reread it two nights ago. It's crazy you brought it up.

Sam Parr

So, that's a great book. Most men in their thirties nowadays probably read that when they were 14. It was like the Bible because all of us nerds were like, "I desperately want to be loved. How do I be loved?" Whatever... and there was a lot of bullshit in that book.

Shaan Puri

Bro, the number of times I used the cube test... there's not a woman on Duke campus that didn't get the cube test from me.

Sam Parr

which one was the cube test

Shaan Puri

It's like a cold read where you're like, "I want you to close your eyes and imagine a cube." It's been floating in the desert. How big is the cube? If they say it's big, they're self-confident. If they say it's small, they have no ego. Is the cube see-through? Is it colored? "Oh, it's kind of see-through." Well, you don't let people in easily, but when you do, you really connect with people at a deep level. That's so me! Then you just go on and so forth about their relationships and the way they view the world. By the end of it, they're like, "This guy... this guy is gonna be in the friend zone." It's really what happened to me. But I think for better-looking people, it probably worked better than that.

Sam Parr

They are like a cat, and you're just holding a string, trying to entertain them. And they're like, "Yeah, I'm done with you." That's it.

Shaan Puri

another thing in the book cat string theory that's actually another principle they have

Sam Parr

well then this is where it gets really nerdy but one of the parts of that book and that whole movement there was a lot of bullshit in that book and in that movement but one of the parts that I always took to heart was the best way to attract others both men and women is to be an interesting person and what that means is basically people like ambitious people and being passionate about hobbies is under that umbrella of being ambitious and I remember as a kid I loved that because I'm like wait you're telling me I could just like work on myself and I'll attract others that sounds like the greatest thing ever and and and I believe it to be true as I've gotten older I've noticed I've gotten less interesting and the reason I've gotten less interesting there's a few reasons there the first is that I've developed higher expectations towards most things that I do or rather I've just developed expectations as opposed to just doing something just for fun like you do things as a kid just because you're intrigued you know like I don't know where this is gonna go but I'm just gonna I'm just gonna follow it whereas now there's expectations for everything that I do and I wanna have I'm I'm a little bit more interested in the outcome the other thing that I've noticed lately about me and why I've become less interesting is because I've been distracted with social media just like how you're typing right now as I'm talking to you it's so much easier to be distracted nowadays with twitter and slack and email and text I find myself getting so distracted and so I don't have a significant amount of like deep thought or like going deep on something it's more so like I'm being on the defense where people throw information at me and I react to it as opposed to like spending time pursuing something that interests me just because it interests me and so the reason why ed thorpe the reason why I I like reading about him and particularly for young men listening is he's kind of inspired me to just pursue more hobbies just for the sake of learning and here's an example when he was developing his roulette game he basically went and bought a old roulette table at an auction for like $500 and he just sat at home in the evening with his wife and they're like hey let's just see if we can like count this game it it was almost like what's that one board game called settlers of catan yeah you know how like people just like get into that random stuff and they're like let's just see if we can master this game it sounds fun and that's exactly how it started with him a lot of these things that became massive outcomes for him they were just like interesting little hobbies for him and they started very rudimentary have you ever read about doctor richard feynman of course so feynman was one of the guys who was important for a variety of reasons including helping make the atomic bomb and all these things and he had little like weird things about him where it's like why can dogs smell so good he's like well I asked myself that and then I just put my head close to the floor and I noticed I can smell things on the floor and like that's like and like it's like really simple ways to like prove or disprove a theory where you start at like very basic principles and you're like let's just see if this works

Shaan Puri

You know, Justin Khan used to call himself... he had some tagline for himself when he was making content. He used to say, "Hey, it's me, it's Justin, your favorite founder's favorite founder." And that was like how he always talked about himself: "Your favorite founder's favorite founder." I feel like Feynman is kind of like that. It's like *your favorite guru's favorite guru* or *your favorite thinker's favorite thinker*. It's like everybody who you love their thoughts, they love Feynman and the Feynman technique. They love all of Feynman's books and his writings. Everybody you respect respects Feynman.

Sam Parr

yeah I think tim ferris's holding company is called fineman inc or something like that

Shaan Puri

Dude, that's actually genius to just be like, "Yeah, Feynman and Feynman Associates." Just put yourself with them. Just like, "Ah yes, this is the Purion Musk Consultancy. Well, how can I help you?"

Sam Parr

Yeah, just like borrow from their credibility. But there's guys like Simon and Ed Thorpe who are now in that sphere where they just get interested in some things that seem so silly. They do it at a very rudimentary level, and it goes from level to level to level to level, but it starts at level 1.

Shaan Puri

he knows exactly like this jack smith

Sam Parr

jack smith is like that yeah

Shaan Puri

Jack Smith is one of these guys. Jack is a buddy of ours; you're really good friends with him. I think you've known him for a lot longer than I have, but he is such an interesting guy. He built a company called Vungle and sold it. His whole origin story was one of the very first podcasts on this feed, so if you go back, Jack was in there. He talked about, you know, when he was a high schooler, what he was doing—flipping things on eBay—and then how he hacked his way into an accelerator. Once he was in the accelerator, he figured out this ad tech company. The experts told him, "There's no way, son, you don't understand how the ad business works." He was like, "Yeah, that's my strength. I don't understand how this works, so when I approach it, I'm going to approach it differently." What he did was challenge the whole way the ad industry works, which was all based on CPM (cost per thousand impressions). It's like a billboard: how many people are going to see this billboard? That's how I charge you. He thought, "Well, that's kind of stupid. If I was advertising, I don't want people to just see it; I want people to buy from me or I want people to download my app. I want the action." So, he proposed, "What if we just paid for the action?" and it became CPA (cost per action) instead of CPM. He reinvented the model. In a way, that's a little bit generous; there were other people doing this, but Jack and his co-founder created Vungle and sold it for $700 million. It was really based around this mobile gaming ad network that was going to do things a little differently than how other people were doing them.

Sam Parr

he sold it for 750,000,000 when he was 29 years old quite crazy stuff

Shaan Puri

And for example, again thinking from first principles, what should the ad be? Everybody else did video ads. You would be playing a game, and it would stop. A video would take over the screen, and then you'd be like, "When can I click the X so I can get back to playing the game?" What Jack realized was that the best way to advertise a game is actually just to play the game for a second. Oh, it's about shooting the ball into this hoop? Well, let them try to shoot a couple of times. They miss, and they want to make it. They make it, and now they've got a sample. So they created an ad unit that was just a mini version of the game. That worked way better than the video ad. It was, again, many times over, just thinking from first principles: How could I do this? But now, since selling the company, he had his "Eureka" moment where he did not need to go create another company. Instead, he got really into other things. He thought, "You know, I need to buy an office chair." He goes and looks, kind of uninspired, and thinks, "Well, certainly there have been some studies on the best way to sit. So what is the best way to sit?" He'll go and read research papers about the best way to sit, and he'll test chairs. Ultimately, he ends up building this crazy ergonomic chair himself in his garage.

Shaan Puri

About 6 or 8 months

Sam Parr

did you see the chair

Shaan Puri

It looks like a dentist chair. He's laying down in this crazy position, and it's like a work chair. But at any time, if you ask him, "Hey Jack, what do you do nowadays?" he felt zero pressure, or at least caved to zero of the pressure of having some important-sounding answer. He just did what was important to him rather than what sounded important to others. So he'd be like, "I'm just, you know, just messing around." And you're like, "No, what does that mean? What do you do every day, Jack?" He's like, "Well, I'm really working on trying to build a chair. You know, I got really interested in chairs and, you know, sitting. I sit for six hours a day, and I just thought, well, why don't I sit in a better chair?" So I can start researching chairs. I've bought 52 chairs, I've been testing them, and then I've decided to build my own that's the best of each of these. That's what he'll do for one year, and then next year he'll do something completely different just off of his curiosity.

Sam Parr

And the cake for his birthday, which his wife made for him at his party, was shaped like an Amazon box. This was because he had ordered so many chairs and other things that he was interested in, that he had a room in his home just dedicated to all the boxes.

Shaan Puri

Yeah, he had a small Fulfilled by Amazon (FBA) facility in his pantry just to test out every single product.

Sam Parr

And at one point, they banned him on Amazon. They banned him for returning too much stuff because he would buy all of this to test it out. But yeah, Jack is perfectly like that. Does this resonate with you? Where you're like, "I need to just pursue more things without having a big outcome in mind?"

Shaan Puri

We haven't been talking a ton, but that's become the theme of my, I don't know, the last 12 to 15 months or so. I heard this quote; they've all said this thing on some podcast. It goes, "Too many of us live where we're doing things today for some future reward, some future payoff. I'm not doing what I want to be doing now, but I'm putting in the time, I'm putting in the work, I'm putting in the effort for some future payoff." He goes, "That's understandable. We all start there." But the day you start doing things where the thing you're doing in and of itself is the reward, that's the day you've retired. People think retirement is when you stop working, you go sit down, you chill, you do nothing. It's not that you do nothing; it's that you do the things you want to do because the act of doing them itself is the payoff. You're not sure; there might be some upside in the future, but that's not why you did it. When I heard that, I was like, "Okay, that's what I need to be doing." I don't know how I'm going to get there, and I've many times had little detours off of that where I start to do something opportunistic because, "Oh, it's going to pay off in the future." But I've just continued to bring myself back to that moment, which was, "I want this next chapter of my life to be all about doing things where the only criteria is the act of doing it has to be rewarding enough for it to have been worth it." That one criteria eliminates like 98% of the possible things I want to do because if I'm honest with myself and I say, "Well, why do I want to do this?" it's because it might make a bunch of money or it might pay off in this thing later. It could be business-related; it could be relationships-related. It could be, "Yeah, why do I want to meet this person or go to this event?" Oh, because it might lead to something. No, no, no. I'm only going to this event if the event itself is the payoff. I'm only hanging out with this person if the hangout is the payoff, not because it's going to lead to something else.

Sam Parr

But did you determine what that is? Do you determine? Have you...? Well, that's actually really hard. It's figuring out what the play is.

Shaan Puri

What I realized is it's less of a thing. So, I thought, like, you're just asking me this question. I thought it's a thing I gotta find—my thing, my new thing. That's the thing I just love to do, and I'm doing it for the sake of doing it. What I realized is it's fundamentally different. It's not a thing; it's an approach and it's a filter. So, actually, it's a question that I ask at the beginning of anything I'm going to do that day, which is: "Am I doing this for some deferred payoff, some deferred benefits, or am I doing this because I actually enjoy doing this?" And so, it changed the way I did everything. For example, with my workouts, there was a version of workouts that I did because, whatever, just bite the bullet, just do this, and it'll pay off later when you get fit. Versus, "Well, why don't I just do workouts that the workout itself is so satisfying?" Of course, if I do that, I'm going to do it more often, I'm going to do it with my full effort, and I'm going to still get the reward in the end. So, I started working with this boxing coach or playing basketball—different things that I wasn't doing before—because I was willing to settle for doing something that today kind of sucks, but in the future, maybe it's going to turn out great. I realized I had lived basically 35 years of my life with this "kind of sucks now, but oh, it's all going to pay off in the end." I realized it's a false choice. You don't have to do that. You can just filter every activity on: "Is the act of doing this going to be worth it?" Even if it's challenging, it doesn't mean everything is so happy, but is the act of doing this the reward, or am I doing this only for some future payoff? So, it became a filtering criteria, not a one thing. For example, I told you I was reading the book *The Game* the other day. Why did I do that? Why was I reading a book in the middle of the day, especially an old book that I'd already read before that had no relevance to me? Because I'm not trying to be a pickup artist or hit on women anymore, right? That's not what I was doing. But it was the thing I was most interested in at that moment, and so I did it because the act of doing it was the reward. I was most interested in it. I've done that with other hobbies, like picking up playing the piano, and I started doing other things that are all falling into this bucket. And I've never been— you can hear it in my voice—I've never been so switched on after making this sort of shift in the way I chose what to work on.

Sam Parr

And that's a very... I'm gonna say the "P" word. That's a very **privileged** way to go about it. Which is, if you hit the lottery, like maybe we have. I mean, we've worked hard, but we've gotten lucky as well. That's a very privileged way to go about it. So, I do think you have to **eat shit** for a certain period of time and also get some luck. But yeah, I'm very drawn to this way of living.

Shaan Puri

I'm not sure that that's true

Sam Parr

it's 100% true

Shaan Puri

The reason I say that is, first, whenever somebody calls you "privileged," I'm like, "That's a compliment." I think they mean it as an insult. People use it as a bag—not you in this case, but I'm saying most people. If you call someone privileged, you're trying to tear them down. I want my life to be described as one of privilege. That's the goal. You're giving me a compliment. That's like saying, "Wow, you're really good at this," or "This comes effortlessly to you," or whatever. I want my life to be described that way. That is a goal of mine. I just mean that because most people will treat that as a negative, and then they try to make themselves smaller. Right? So, a little bit of like the tall poppy syndrome. If you have the freedom to do something and you are not doing it because you're worried about how it looks or how it sounds, or how others don't have that privilege, you're wasting your privilege. I think that's a bad thing. Let me answer the other part, which is: I would say that the most successful project I've ever done, more than any of the companies I ever built or any job I ever had, has been this podcast. This podcast, from a usage standpoint, people listen to this, they like it. So, customers are happiest. Financially, it's a very lucrative product that affords a very good lifestyle. But also, just my enjoyment of it—the act of doing it. I don't do this episode for some future payoff. I do this episode because it's going to be fun to do. I enjoy this conversation. By the time we click stop, I've got my payoff. When I started the podcast, I literally wrote down that I'm going to lose money doing this. I expect that nobody will listen to this, and I'm going to do it anyway because it'll be so fun to record these episodes, talking to interesting people and learning, that it'll make it worth it. I wrote down—I mean, I have this Google Doc I'll share it—it says, "My forecast is I will lose $10,000 a year doing this. My forecast is that really nobody but my mom is going to listen to this thing, and it's still worth doing."

Sam Parr

what were the other predictions

Shaan Puri

So, I got into this position because I made a choice like that four years ago, right? I don't think... well, you gotta "eat shit" for a while before you get to go do the fun things. I don't believe that that's actually true. I know a lot.

Sam Parr

Of people... true. Think about it. Let's say you're a 40-year-old landscaper with three kids.

Shaan Puri

It is one way to do things. I know a bunch of engineers who work on projects that they are personally interested in. They build personal projects, and one goes kind of nowhere, two go kind of nowhere, but it doesn't matter. They're building up their skills and having fun doing it. Sure enough, by the third, the fourth, or the fifth project, either they have built up skills that make them highly valuable and get brought into a project that's already working, and they get paid handsomely for it, or one of their projects takes off. But the whole time, they were just doing the thing that they really liked to do. I think there is one way to win, which is to grind, eat shit, pay your dues, and work up the ladder. Pick whichever cliché you want; that is a way to win. I know several people who, from the beginning, were driven by working on things that were interesting to them. When they were working on things that were interesting, it led to good outcomes. When you work on things that are interesting, you work on them longer and harder than a person who's just doing it for a reward. You get better at it, and when you get really good at something, that's when the payoffs tend to come.

Sam Parr

Well, I believe that can be true, and also it can be true that it's more challenging logistically for certain people. For example, you're a blue-collar laborer with three kids at 40 years old. You work from 6 AM to 7 PM, and you're like, "There's just no time, and I just gotta pay the bills." I do think that it's just more challenging for many of the people listening right now. I believe you are totally right, which is we probably have a lot of college-educated, particularly college-age kids, who don't have too much responsibility, and they should lean into this. I completely believe that to be true, and I also believe it to be true that as you grow, this type of mindset gets stamped out of you. The world wants you to be vanilla.

Shaan Puri

Yeah, absolutely. Let me ask you a different question. Of the people we know that are successful, just give me a rough number: what percentage do you think got there through the grind? Doing things they didn't like that paid off in an unsexy way, and then now they work on things that are more interesting and pleasurable to them. They're driven by curiosity, they're driven by passion, they're driven by whatever. Versus people that made it by following things they were curious about. Maybe it was a bit of a lonely road for a bit. Maybe other people... maybe it wasn't a hot market, but it became hot, and they were there already, right? That happens a lot. What percentage would you say? I'm just curious how you would think about it. Is it like only 5% got successful through following their own interests fundamentally? Or do you think that it's 50/50—those who got successful following their interests versus those who followed what was more proven?

Sam Parr

If I had to guess, 60 to 70% of the people we know who we would consider wealthy enough that money doesn't really matter probably made money in a way that, looking back, they would say, "That was really hard and miserable, and I don't think I can do that again." Then, a large percentage of them, I would say only 50%, go and pursue something that truly interests them. The other 50% just do the playbook again and are miserable while earning a great living.

Shaan Puri

Yeah, so roughly, let's say 20 to 25%. You think maybe we're in the bucket that I'm talking about, which is they were just doing what's interesting to them, and that happened to become something that was very successful. Versus people who chose things that were not as interesting or not as fun for them, but they thought were going to have a payoff, and it did.

Sam Parr

And here's why Y Combinator is like the stereotypical Silicon Valley story: You go to Y Combinator... How long is Y Combinator? 8 or 12 weeks? 3 months maybe?

Shaan Puri

3 months yeah

Sam Parr

Okay, so you go with one idea, and you only have 12 weeks to decide if this is going to work or not. By week 6, they say, "Dude, this sucks. You should pivot this amazing idea you had to do credit card processing or to do something else that people want to give you money for." So they just go, "Forget it, whatever. I gotta go down that path." But that path they're signing up for is a 10-year journey or more. There wasn't too much thought put into it, and they're just like, "Man, I just gotta get a win however way I can." I only have another 6 weeks until I've got to go do demo day, so I've gotta just settle on something, move forward, and do it. I think that mentality is often what a lot of internet-based businesses are built on.

Shaan Puri

So, I think that's a little unfair to Y Combinator (YC) because, for example, I do think that this does happen. One of the things that occurs in those pivots—because I've invested in a lot of YC companies that pivot—is that if you read Paul Graham's essay, one of the things he advises heavily against is what he calls "playing startup." It's like playing house, where you sort of just try to manufacture a startup idea that you think might work or might be good. He's like, "The best way to figure out a startup idea is to scratch your own itch." Look at your own life and figure out in what place you are already living in some future that other people aren't. Then, you could build a product that would help them get there. Or, what's a pain you've discovered along the way of doing this that you could solve? Yes, they pivot quickly, and they pivot in the middle of YC, but usually, the advice is that you should pivot to something like the itch that you want scratched—the problem that you are currently having or the thing you uniquely understand because of the way you live your life versus what other people do. The biggest successes out of YC have typically been that.

Sam Parr

right I agree that that

Shaan Puri

The Airbnb guys renting out their own apartment to make money, or Brian Armstrong doing Coinbase because he lived in Argentina and dealt with the currency issues and was interested in Bitcoin. These were not ideas that fundamentally sounded good.

Sam Parr

the biggest successes I think are done that way

Shaan Puri

yeah

Sam Parr

but not the average success

Shaan Puri

I think that's exactly right. I believe the most successful people work that way, but the average or the majority are not. I think that's probably the true statement.

Sam Parr

I'd have to go look through the white-collar companies, but there's not that many 23-year-olds that know anything about payroll processing software. However, there's a lot of 25-year-olds or whatever who have created something really cool. Like our friend Jack - why did he do Vungle? I think he was curious about solving problems, but he didn't have a problem [of his own to solve].

Shaan Puri

wanted success more than he wanted

Sam Parr

he wanted to he was like this just seems like intriguing I guess like yeah let's just

Shaan Puri

Put some time in and made a shift. I would also say there's a confounding factor, which is that for a lot of the people who are our friends, the thing that they are interested in is the game. So it's not the industry that was the passionate thing; the passionate thing was playing the game of business. Can I give you two related things that came up for me? I don't know if you remember this, but when the OpenAI drama was going on, when they fired Sam Altman, one of the things that came out was maybe they have AGI internally. Everyone's like, "No, they probably don't have AGI internally," but maybe there was some breakthrough. He had gone to some conference and said there are these moments with OpenAI where you're sitting in a room and you get to see a demo, and your mind gets blown. You've seen the future; the world is not the same because of what you just saw. He goes, "That just happened about three weeks ago," and people didn't know what it was. But he was kind of just teasing a little bit. He wasn't even trying to create hype; he was just trying to say what it's like to work there. He was trying to use it for some other reason, but people took that and thought, "Man, they must have something."

Sam Parr

sam altman said that or an employee said that

Shaan Puri

Sam Altman had said that, and so people started speculating about what it is. Then these leaks happened, and they started talking about this thing called Qstar. Do you remember this? Do you remember this Qstar thing?

Sam Parr

yeah I don't know what it is though

Shaan Puri

So, Q* is... I'm not an AI PhD researcher, so I don't know exactly, but the idea is that there are different algorithms or different methods you can use to do something. Q* is a certain technique. People were like, "Oh, does Q* mean they're using either the Q technique or the star technique?" That's not what people are using today, but maybe there's something there. This thing leaks, and it's not been confirmed yet whether that was or wasn't a thing. But what ended up happening was there were a whole bunch of smart people that suddenly started sniffing around that technique. Just recently, a bunch of research papers got published saying that they're seeing amazing performance using this technique. As this guy came on, he talked about that this is actually a phenomenon that happens frequently. I'll tie this together: this guy, Robert Kwanzaa, tweeted this. I don't know this guy, but he tweeted this little story that I liked. He said, "Claude Shannon once told me that as a kid, he remembered being stuck on a jigsaw puzzle. His brother was passing by and said, 'You know, I could tell you something that would help you with this puzzle, but now I'm not gonna do it.'" That's all the brother said, but that was enough of a hint for Claude to solve the puzzle. The great thing about the hint is that you can always give this to yourself. So basically, there's this phenomenon that happens in human behavior, which is that if you knew there might be a win, you don't even need to know what the thing is. That alone will increase your probability of success.

Sam Parr

Do you want to know what else Claude Shannon did? Do you remember how I told you Ed Thorpe went to the roulette table and it required two people to be in the crowd? He was his buddy; that was the other guy. So, in fact, if you look it up, there's something called, I think, the Thorpe-Shannon principle. It's like the theory of... So, Claude Shannon, who this guy is referencing, was the one who was tapping his foot to tell Ed Thorpe, which is pretty funny.

Shaan Puri

So, the second story that follows the same principle is about Kaggle. Kaggle is this online competitive platform for solving problems, riddles, puzzles, or whatever it is. I think I don't know if it's all coding or if it's just math puzzles. This guy replied in the discussion, saying, "One of my favorite Kaggle facts is that anytime the leaderboard gets stagnant for a while in any competition, if one team suddenly makes a jump, that will automatically cause multiple independent teams to quickly reproduce the same breakthrough with no knowledge of how the first team made the breakthrough." Isn't that kind of amazing? It's like the 4-minute mile, right? What's the kind of name we ran the 5...

Sam Parr

The four-minute mile: Prior to Roger Bannister's achievement, runners were only reaching times like 4:03 or 4:04, which is quite a long distance away from 4 minutes. But when Roger Bannister broke the four-minute mile barrier, roughly 4 other runners also broke four-minute miles within about 3 months of Bannister's accomplishment.

Shaan Puri

Right, so the same thing just happened to me in one of my businesses. In one of my businesses, there was a marketing tactic or channel that we had looked at. We had even kind of dabbled with it, but we didn't exactly know how to do it. It kind of seemed like a puzzle we didn't know how to solve, so we put it on a shelf for a while. Then, I heard a whisper that somebody else was just crushing it using that channel. Now, I don't know what they're doing. I don't know the technique they're using, and I don't know how much they're crushing it. I just heard enough to know that they are crushing it. Immediately, we mobilized. That same channel, which looked kind of like a dead thing before to us, we didn't really know how to make any progress. We still didn't have any technique; nobody gave us a tool to make progress. Just the knowledge that somebody else was making progress in that same channel fired us up and got us going. We immediately found a breakthrough, and over the weekend, we did like $30 in revenue on this one channel. It reminded me of the same principle: just the knowledge that there is a solution actually increases your probability of getting to a solution. Just the knowledge that somebody else has found a solution, without telling you how at all, will increase your probability. I think that's one of the things about this podcast that should help people. It's one of the ways to use this podcast. You're not going to do exactly what any of the stories we tell on this podcast do, but just hearing other people's success—just hearing other people run a 4-minute mile—will make you want to run a 4-minute mile. We've had this with our friends too. People who are saying, "I'm going to make X amount of money in Y months." We had a friend who said, "I'm going to try to make $1,000,000 in 3 months." Just hearing that question—I didn't have that question before—got me to start thinking about ways you could do it. Then, hearing that somebody did it immediately made me want to figure out how. Even though I was not going to do any of the things that they did, it allowed me to figure out a solution that would enable me to do that. I think that's one of the most underrated learning techniques or success techniques you could have.

Sam Parr

what's that called

Shaan Puri

The MFM paradox is that you can become more successful by following somebody else, even though you don't know what they did. Just the fact that they did it can lead to your success.

Sam Parr

This is like way less cool than artificial intelligence, but similarly, when Morning Brew and The Hustle were first getting going with the newsletter business, we had the exact same thing happen multiple times. Eventually, I remember one time Austin came over after we had both sold, and I was like, "Hey, you wanna see something cool?" Then I pulled up your computer, and you pulled up mine. I know you have a document that shows everything you guys were doing per month. Let me show you mine, and you show me yours. It was the exact same thing, by the way. It was weird. We were seeing little inklings of what the other person was doing as it was happening, and we kind of replicated each other's success. It absolutely happened the same way before we started this podcast. You said, "What topics do you have? I'm feeling a little uninspired." I have to say, you win a blue ribbon today because you have completely put a beautiful bow tie on this thing that I brought you. You brought so many good, interesting tidbits to add to the story of Ed Thorpe. That was pretty good.

Shaan Puri

Well, can I leave you with one framework? I have one story. The framework is: you know when Ed Thorpe was beating blackjack or beating roulette, what's the first step that he had to do before he beats the house? What is the absolute step 0 before he even figured out how to beat the house?

Sam Parr

I don't know just how to do it at home

Shaan Puri

Believing that it could be done... right? Believing that it could be done. And this is cheesy, but it is very true. By the way, things that are cheesy but true are underrated. Smart people write off cheesy things because they're cheesy, because they've heard them before, but they haven't actually acted on it. So, their underpriced assets are things that are cheesy and true because they're ignored by other smart, ambitious people. I remember when I went to this Tony Robbins event. On the second day, there was another guy who hosted. So, the other guy starts off with a game of Simon Says to kind of warm up the audience. You just think it's a warm-up because they want you to be engaged as an audience. They want you to be active, do something interactive—a little crowd work to start. So, he starts with Simon Says. We're going to play Simon Says. Now, this is a room of about 6,000 people, so there are 6,000 people who are going to play Simon Says. He's like, "The winner gets to come on stage," or like, "Yeah, the winner gets to come on stage, and you're going to get this thing." I forgot what it was—some good prize. But again, there are 6,000 people, so, you know, whatever. Good luck. So, he starts and he says, "Simon says blah blah blah," and then he immediately gets like half the people on the first one. For example, he goes, "Alright, you guys ready to play? Stand up!" And everybody stands up. He says, "He didn't say Simon says stand up!" So, you only do the thing when he says Simon says, but if he just says an instruction and you do it without saying Simon...

Sam Parr

says you're out this guy clearly read the book the game exactly

Shaan Puri

So, he's got us on the cat string theory. We are just obeying his commands. The game starts, and half the people get out in the first round. It whittles down, and within 5 minutes, he's down to the winner. The winner gets up on stage, blah blah blah. He had the final 10 people and said, "Stay standing. You don't get to come on stage, just stay standing." Then he called on somebody. He said, "The guy who's standing, you got to the final 10. The guy next to you, when did you get out?" He's like, "I got out in like the second round." He goes, "Let me ask you something. Did you believe you were gonna win?" The guy was like, "No, I mean, so many people... it's a silly game. I don't know, I didn't even think about it." He goes, "That's interesting." Then he asked the next person, "Did you believe you were gonna win?" "No," he goes. So, he said, "Raise your hand if, when you started the game, you believed that you could win." Only like, you know, 5% of the audience raised their hand. He goes, "So, all of you thought you were competing with 6,000 people. The only competition was amongst these 50 people who actually believed that there was a way to win." And he's like, "I'm gonna leave you with two ideas. Number one, if you're gonna play the game, decide to win."

Sam Parr

that's so funny

Shaan Puri

He's like, "You don't have to win every game, but if you decide to play, you should decide to win." The second thing is that in life, you believe you're competing with a much bigger pool of people than you actually are. The majority of people aren't even playing the game. Of the people who are playing, most of them don't even believe that they can win. You are only competing with the people who actually believe that there is a way to win. So similarly, with this guy cracking blackjack and cracking roulette, that's a game I thought was impossible to crack until I read...

Sam Parr

the book I think

Shaan Puri

It's called "Bringing Down the House" or something like that. That's the other blackjack card counting book. Immediately, my mind shifted into, "Oh, blackjack is a beatable game. We can beat this game." Suddenly, I started to learn things. I began to understand how to actually beat the game of blackjack, and it compelled me into action. Alright, let's pause real quick. I gotta do the **thrill of the shill** where I'm going to give you a thrill here. I'm going to teach you something that I think is a very important principle that any founder should know, and I'm going to tell you about a company that's doing it well. Alright, so the thrill of the shill is: have you ever heard of the **law of category**? Are you familiar with this?

Sam Parr

I've not

Shaan Puri

I think it's from the book the 22 immutable laws of marketing and in that book it's talking about marketing how do you actually stand out how do you do the hard thing in business which is stand out get your brand out there get customers and get them coming to you versus you just chasing them down and hunting them 1 by 1 how do you get market pull and the law of category is a very simple principle which is that you'd rather own a category than participate in 1 if you can't be the 1st in a category you'd rather create a new category altogether and that is something that many people have done so for example I'll give you I'll give you one in the podcasting space so we're we're a podcast and this podcast started off very undifferentiated we started off just as interviews with successful people guess what that's what every business podcast is interviews with successful people how did you do it it's all past past facing how did you do it we started to stand out when me and you got on here we started going a little future facing which is hey what trends what opportunities do you see what's going on right now in the market that you think somebody could be capitalizing on so suddenly we were in a new category so how many podcasts were there that we're talking about stuff that you know opportunities and trends that you could be capitalizing on for the next 12 months versus what did you do 15 years ago successful person and even when we invited guests on we said gotta bring some ideas what opportunities do you see today now we're not just gonna ask about the thing you did in the past even further than that is you ever seen hot ones that show where the guy interviews celebrities but instead of just interviewing them they're eating hot wings while they're doing it escalating in in hotness it's the law of category that show became super popular it gets millions of views on youtube and he gets the best guest because he's the only podcast that does that he's the only show doing that he created his own category and now if you came in and you try to do a show like that guess what they would say oh it's kinda like hot ones they own that category they own that that niche and so the law of category is a very small principle which is that without taking more effort if you simply just define a new category you now have a reason to buy an rtb a reason for a customer to come use your product come use your service well the company that sponsored today's podcast wander is a great example of exactly that these guys basically said well you have luxury hotels you got the four seasons you got what's that fancy one aman that everybody's going to nowadays you got the luxury fancy hotels and then you have stay in a house like airbnb where you get the home you know you get to stay in a home multiple rooms and a kitchen and all that but it's not as luxury and turnkey and just a beautiful everything's taken care of you experience so they created a new category which is hotelified homes so luxury homes that are on par with the nicest luxury hotels but it's a house instead of being in a building in a skyscraper you get a you get a a backyard a pool a sauna you get a kitchen you get everything you want in a home but you get the guarantee that it's gonna be luxury unlike an airbnb so I think that they've done a great job as why they've grown so fast they did I think like 12,000,000 in bookings in the last 12 months because they created their own category there isn't anybody else who's really in that category where they actually manage the property and therefore can guarantee a certain quality of service

Sam Parr

great thrill pretty good shill I love the shill improve my

Shaan Puri

shill please

Sam Parr

No, I think your shill was great. So if you want to use them, go to wander.com/mfm. What do they get? I think they get $300 off their first day if they...

Shaan Puri

If you go to wander.com/mfm (that's our personal code just for listeners to this podcast), you download the app. If you do that, you get $300 off a stay. So you get $300 off and you're entered into a giveaway. They're giving away a free Wander stay. So if you're one of the people who are doing this, remember the principle that's in this podcast: if you enter, you gotta believe that you can win. Go ahead and enter, and you might win the free Wander travel thing. Check it out at wander.com/mfm.

Sam Parr

I think you said last time, "I go, you know, I'm not sure how many people are gonna do this. So if you're one of the people that actually does it, you've got a pretty good chance of actually winning." Exactly. So that's wander.com/mfm. Alright, back to the episode.

Shaan Puri

So, I have a funny story to tie this up with. People have heard of a "vicious cycle." They'll say, "Oh, that's a vicious cycle," and they'll refer to poverty as a vicious cycle. You don't have money, so you can't buy the best food or education. Therefore, you end up staying poor because you don't get the best opportunities. We've all heard of a vicious cycle, right? Well, a good thought experiment is to consider the opposite of a vicious cycle: a **virtuous cycle**. What's a virtuous cycle? A virtuous cycle, as Tony Robbins would say, is basically this: if you have high conviction that something can happen—if you believe it—you'll take a different level of action. We've all had moments in our lives where we were convinced that we could do something or that it could happen. Belief drives action. The amount of belief drives the amount of action. So, little belief will drive little action, which leads to a little result. Conversely, a lot of belief will drive a lot of action, which leads to a bigger result. And guess what? Once you see that result, it reinforces the belief. If you start with a little belief, take a little action, and get a little result, you'll think, "I knew it! I knew this wasn't going to work." This lowers your belief even more, leading to even lower action and lower results. On the other hand, if you're a heavy believer, you take a lot of action. That action will start to yield results, and your belief will say, "I knew it! I knew we could do this! I knew we'd make progress." You take even more action, and it just becomes a **virtuous cycle**. So, that is one of the things I think is most important. If you are stuck, at a plateau, or not exactly where you want to be, step zero is to somehow trick yourself into raising your level of belief that it is possible. One way to do this is to read books about other people who have already done it, talk to others who have succeeded, or imagine yourself doing it. Ask yourself questions until you are worked up into a fever of belief that "this is going to work." Because that's the only chance you have of taking enough action to actually get a result.

Sam Parr

I want to hear from the listener, the people who have made it this far, if they feel like I feel right now, which is like I want to run through a f***ing wall. You're just like... you're like a pastor right now, you know? You're like one of these black churches where you're dancing and screaming and s***, and I'm just like in the crowd dancing as well. I feel like you're...

Shaan Puri

Gonna hit me? Yeah, so now let me tell you a quick blackjack story. So I read this book and I become convinced that we could do this. I tell my buddy Trevor, "Trevor, we could do this. We could bring down the house. We can count cards. We can get rich off blackjack!" He says, "Say no more." Trevor's a believer. He's down.

Sam Parr

what age are you

Shaan Puri

**Perfect part**: A perfect trait of a partner is being down. We're, I don't know, 21 years old and we're seen in college.

Sam Parr

did you read the whole book

Shaan Puri

Read the whole book. Alright, but again, because we have a ton of belief, we find a way to take action. I'm living in North Carolina. There's no casino in North Carolina. What am I gonna do? Fly to Vegas? No, no, no. The belief drives action. The belief causes me to find a way. I realize, "Hey, in South Carolina, there's a riverboat." That boat will like boat out into international waters, and then you can gamble because it's international waters. That's the beauty of the world; in international waters, anything goes. So we drive down to South Carolina, we get on this riverboat, and we drive out. But before we do that, we spend three weeks practicing. It's the same system: you have a counter who's gonna keep count, you have a signaler who's gonna signal in the whale. So Trevor's the counter; Trevor's got the focus. I'm the communicator; I'm the signal guy. Our buddy Dan is gonna be the whale. What was your signal? The whale's job is to come over. He's a gregarious character because the trick when you count cards is you need to wait until the deck is stacked in your favor, where there are more, let's say, aces and the low cards are out. So the count is high, and then you need to vary your bet size. That's actually how you win: you bet more when the deck is hot, you bet less when it's not. But if the casino sees you varying your bet like that, they kick you out. So that's why you need two players: one guy who's counting and the guy who comes in to make the bet. He needs to start with a big bet, so he only comes in when the deck is hot. So he comes in, and we're like, "Dan, you gotta act like a drunken idiot." You're just plopping down your whole stack on this one hand, and you're just gonna double. Oh, screw it, we went to play it again. As long as the deck is hot, and when the deck is not hot, we're gonna signal you to leave.

Sam Parr

what's your signals to them

Shaan Puri

So, we have two signals. You have the signal where you're supposed to come over, which is basically me holding my arm like this. [Demonstrates posture] But I'm behind, so it's hard to do while I'm sitting down. I'm standing behind Trevor. Trevor's counting, and he has a verbal signal to me. So, you create a word for every number. For example, if the count is 1, which is a very bad count, he would just say, "Ah man," or "Alright, alright," like "one more hand." But that just signals me that the count is 1. If there was 2, he'd be like, "Oh shit, balls, balls, we got 2 balls." That's why there's 2. Then he'd be like 3, and he'd have to think from 3. We use basketball player names or whatever. We want to get the guy in when the count's like 10, 11, 12, something like that. He'd be like, "Dude, I've had a dozen chances now." So, we practiced for weeks on this. We were in our dorm room, skipping class, just practicing, practicing, practicing signals, boom, boom, boom, bets, and running simulations. We had our friend, this girl who was our friend, she was the dealer, and she would deal it out. We're like, "Every time, clean it up, this shit works." So, we drive down to South Carolina, we get on the riverboat. Dan's got his drunken tourist costume on. Trevor's the guy who's just bored; he's sitting there betting the minimum but counting. I'm the signaler, I'm Trevor's buddy. What ends up happening is the count gets hot. We get to 10, and I signal, but in the real world, conditions are a little different. Dan's not answering.

Sam Parr

to the truth different

Shaan Puri

Because he's so busy being in his drunken character, he's actually acting like an idiot. He's not paying attention to anything that we're doing. So, he's actually getting a drink, so he misses the count. It starts to drop, but it's at 8, and I'm like, "Okay, whatever, still 8, still good enough." Let's signal it; it might go back to 10. So, I signal him. Dan sees the signal and starts coming over. Now, our dorm room was kind of small, and he's farther away, so it takes a little bit of time. By the time Dan gets to the table and tries to cash in, he tries to put down the bet when the count's like, you know, 6 or something like that. He puts his money down, and they're like, "Well, we have to color it up first. We have to exchange your cash for chips. No bet on this one." So, the hand gets dealt out, and it nukes the count back down to 2. Dan's hand is visibly shaking. Oh my god, this is not good. He cashes in like $1,000 worth of chips. This is like big money for us. So, he takes $1,000 worth of chips; he's ready to bet big, but the count is now 2. Trevor's like, "Balls, man, there's balls, dude." And Dan, he's supposed to take balls; he's supposed to leave. Dan is in; he's blacked out at this...

Shaan Puri

He's not drunk and blacked out, but he's just got tunnel vision. He's so locked into his character and these stupid things that he's saying to the dealer that he's completely ignoring the signals. So, he just puts the $1,000 on, and we're both like, "Balls, balls, balls, balls!" I was like, "What's happening? Why are you betting? This is the worst time to bet!" And we just get wiped out into ants and lost all your money. We lost all of our money, and we were like, "The book made it seem a lot easier than this." Because in the... it immediately works and starts a series of events that just escalates into them being ballers. Yeah, that was... it's sort of like the game. It's kind of the same.

Sam Parr

sort of

Shaan Puri

The thing with the game... Okay, so we go back home, we're licking our wounds. We're like, "Damn, what the hell, man?" And he's like, "I'm sorry, it was harder in real life." We're like, "Alright, whatever, it's all good, man." We gotta go. The belief was still high that, hey, there's a way to use blackjack to make a lot of money. So we said, "You know what? Screw it. What if *we're* the house?" And so we decide to create an underground blackjack club at school where we'll just...

Sam Parr

Be the house. These movies go one of two ways. Now you're on option B for a great movie.

Shaan Puri

Exactly. So, we try to become the house. Now we're playing Molly's game, basically. We again start running these simulations. We're like, "This is great! The house has an edge. We're winning. This is like a no-brainer." Our friend the whole time was just like, "You guys are idiots. You've already wasted, you know, one month of time on this stupid plan number one. Now you're on stupid plan number two. This is an even dumber plan." We're like, "Dude, what are you talking about? We're the house! You ever heard about the house's edge? We can't lose! We're the house." And he's like, "Okay." So, we're again two weeks into our every night simulation. We're trying to run it, like we're typing in Excel, "How much money are we going to be winning or losing?"

Sam Parr

you're not gonna cheat you're just gonna

Shaan Puri

No, we're just gonna be the house. That's it. So he's like, "Okay, watch this." Our friend comes in and just owns us. He walks in and he's like, "Alright, yeah, I wanna bet." He bets, he loses. "Alright, bet more," he loses. And we're like, "See? Told you this could work." He's like, "Cool. Hey, give me all my fucking money back." We're like, "No, dude." He's just like, "You're gonna give me all my money back right now or..." And we're like, "What are you gonna do? Beat us up?" He's like, "No, I'm just gonna call the cops and tell them you're running a blackjack ring in your room right now. That's actually like a serious crime, and you're gonna get kicked out of school. Or you're gonna give me my $800 back." And we were like, "Oh, you win." Yeah, we handed the $800 back and we're like, "Damn it."

Sam Parr

Yeah, you didn't see the part of the scene in *Molly's Game* where she gets beat up for doing this.

Shaan Puri

And this guy just instantly pointed out the fatal flaw, which is basically, you know, this is a crime. They could at any time just bust us. We would have to move the game every week and somehow know that this guy's not going to screw us over. But every player who loses money would always have the ultimate leverage. So that's what I learned about leverage, and I learned that leverage is more important than an edge.

Sam Parr

You should have gone back to the casino. It sounds like this stupid idea actually could have maybe worked if your buddy Dan got his shit together.

Shaan Puri

The reality is that casinos... I don't know why people don't... I mean, I guess people do talk about this, but casinos use six decks and they use auto shufflers now. So, the ability for the deck to get really hot has been cut down dramatically. They basically use six decks, which smooths out the variance, and then they auto shuffle. They shuffle before you get through the whole shoe. The whole idea was that you needed to get to a point where a lot of the cards had been used. There would only be a small number of cards left, and that small number of cards would have a higher proportion of face cards for you. But that just doesn't really happen anymore. So, I don't really know where the edge is. I don't think there's an edge.

Sam Parr

This has been a roller coaster. I feel like I've got my money's worth after listening to this episode.

Shaan Puri

I should have just been learning how to code the whole time in college. I would have made a lot more money than all of my harebrained ideas.

Sam Parr

schemes to to make money

Shaan Puri

or play league of legends 1 of

Sam Parr

the 2 this was very good this was a good

Shaan Puri

episode

Sam Parr

one episode is that the pod

Shaan Puri

that's it that's the pod

Sam Parr

alright that's the pod