Author: Farnam Street

The Top 5 Episodes of The Knowledge Project #ListenAndLearn

Through conversations, we are able to learn from others, reflect on ourselves, and better navigate a conscious life.

The goal of our podcast, The Knowledge Project, is to help you think, reflect, and better understand the complexities and interconnections in the world in which we live.

If done right, listeners should walk away from episodes with a deeper understanding and a renewed sense of curiosity. Of course, not all of the conversations or guests will appeal to everyone.  And that is the point. We consciously want to explore the thinking, ideas, and methods of thoughtful people to deepen our understanding, challenge our ideas, and gain a broader perspective.

Of the 21 interviews that we published this year, these are the top five (as measured by downloads in the first 30 days):

  • #27 The Art of Letting Other People Have Your Way — Negotiation expert Chris Voss, former lead international kidnapping negotiator for the FBI and author of the excellent book, Never Split the Difference, offers some hands-on negotiation training.
  • #37 Getting Better by Being Wrong — On this episode, best-selling author and professional poker player Annie Duke and I discuss how to disagree without being disagreeable, spotting biases that sabotage our success, how to find signal in noise, and reliable decision-making models for high stakes, high-pressure situations.
  • #32 Earning Your Stripes — On this episode of The Knowledge Project, Patrick Collison, CEO, and co-founder of Stripe shares wise insights on success, failure, management, decision making, learning and so much more. Grab a pen…
  • #39 Thinking About Thinking — On this episode, I chat with Tyler Cowen, economics professor, author, and creator of the wildly popular blog, Marginal Revolution. We tackle lots of interesting topics, including tech advances, the changing labor market, and upgrading your thinking process to accommodate the information age.
  • #43 The Mental Habits of Effective Leaders — In a world that changes at a dizzying rate, effective leaders need to develop the skills to keep up. Developmental coach and author Jennifer Garvey Berger shares 3 habits to ensure continual growth, accelerated learning and deepened relationships of trust.

One episode that just missed the cut but warrants your attention is #42 The Path to Perpetual Progress with Atul Gawande.

Thanks for listening, Because of people like you sharing our show with friends, family, and colleagues, we crossed 4 million downloads this year.

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The Spacing Effect: How to Improve Learning and Maximize Retention

We are not taught how to learn in school, we are taught how to pass tests. The spacing effect is a far more effective way to learn and retain information that works with our brain instead of against it. Find out how to use it here.

“Every perception is to some degree an act of creation, and every act of memory is to some degree an act of imagination.”

— Gerald Edelman, Second Nature: Brain Science and Human Knowledge

The most important metaskill you can learn is how to learn. Learning allows you to adapt. As Darwin hinted, it’s not the strongest who survives. It’s the one who easily adapts to a changing environment. Learning how to learn is a part of a “work smarter, not harder” approach to life—one that probabilistically helps you avoid becoming irrelevant. Your time is precious, and you don’t want to waste it on something which will just be forgotten.

During the school years, most of us got used to spending hours at a time memorizing facts, equations, the names of the elements, French verbs, dates of key historical events. We found ourselves frantically cramming the night before a test. We probably read through our notes over and over, a gallon of coffee in hand, in the hope that the information would somehow lodge in our brains. Once the test was over, we doubtless forgot everything straight away.1

Even outside of formal education, we have to learn large amounts of new information on a regular basis: foreign languages, technical terms, sale scripts, speeches, the names of coworkers. Learning through rote memorization is tedious and—more important—ineffective. If we want to remember something, we need to work with our brains, not against them. To do that, we need to understand cognitive constraints and find intelligent ways to get around them or use them to our advantage.

This is where the spacing effect comes in. It’s a wildly useful phenomenon: we are better able to recall information and concepts if we learn them in multiple, spread-out sessions. We can leverage this effect by using spaced repetition to slowly learn almost anything.

It works for words, numbers, images, and skills. It works for anyone of any age, from babies to elderly people. It works for animals, even species as simple as sea slugs. The effect cuts across disciplines and can be used to learn anything from artistic styles to mathematical equations.

Spaced repetition might not have the immediacy of cramming or the adrenaline rush of a manic all-nighter. But the information we learn from it can last a lifetime and tends to be effectively retained. In some ways, the spacing effect is a cognitive limitation, yet a useful one—if we are aware of it.

In Fluent Forever: How to Learn Any Language and Never Forget It, Gabriel Wyner writes:

Spaced repetition…[is] extraordinarily efficient. In a four-month period, practising for 30 minutes a day, you can expect to learn and retain 3600 flashcards with 90 to 95 percent accuracy. These flashcards can teach you an alphabet, vocabulary, grammar, and even pronunciation. And they can do it without becoming tedious because they’re always challenging enough to remain interesting and fun.

In Mindhacker, Ron and Marty Hale-Evans explore further:

Our memory is simultaneously magnificent and pathetic. It is capable of incredible feats, yet it never works quite like we wish it would. Ideally, we would be able to remember everything instantly, but we are not computers. We hack our memory with tools like memory palaces, but such techniques required effort and dedication. Most of us give up, and outsource our memory to smartphones, cloud enabled computers, or plain old pen and paper. There is a compromise…a learning technique called spaced repetition which efficiently organizes information or memorization and retention can be used to achieve near perfect recall.

“If you wish to forget anything on the spot, make a note that this thing is to be remembered.”

— Edgar Allan Poe, Marginalia

The Discovery of The Spacing Effect

Hermann Ebbinghaus (1850-1909), a German psychologist and pioneer of quantitative memory research, first identified the spacing effect. After earning his PhD in Germany, he traveled to London. Like so many people, he found his life forever changed by a book.

The work in question was Elements of Psychophysics by the pioneering experimental psychologist Gustav Fechner. Inspired by this book, Ebbinghaus began the research into memory that would consume his career and impact all of us.

Ebbinghaus took up his new field of study with the unbridled zest of a newcomer. He didn’t believe strongly in the prevailing understanding of memory at the time. In his wish to avoid getting bogged down in theory, he made everything about experimentation. As researcher and the sole subject of his experiments, he faced an uphill battle.

His most important findings were in the areas of forgetting and learning curves. These are graphical representations of the process of learning and forgetting. The forgetting curve shows how a memory of new information decays in the brain,2 with the fastest drop occurring after 20 minutes and the curve leveling off after a day.

There is a way to slow down the process of forgetting. We need only to recall or revisit the information after we originally come across it. Going over the information later, at intervals, helps us remember a greater percentage of the material. Persistence will allow us to recall with 100% accuracy all that we want to remember.

The learning curve is the inverse. It illustrates the rate at which we learn new information. When we use spaced repetition, the forgetting curve changes:

Frequency matters. Under normal conditions, frequent repetitions aid memory. We know this intuitively. Just try to memorize this article on a single repetition. However much attention, focus, or individual ability you have, it won’t work.

Memory mastery comes from repeated exposure to the material. Ebbinghaus observes, “Left to itself every mental content gradually loses its capacity for being revived, or at least suffers loss in this regard under the influence of time.” Cramming is not an effective memorization strategy. Lacking the robustness developed in later sessions, crammed facts soon vanish. Even something as important and frequently used as language can decay if not put into use.

There are other ways to improve memory. Intensity of emotion matters, as does the intensity of attention. Ebbinghaus notes in his definitive work on the subject, Memory and Forgetting:

Very great is the dependence of retention and reproduction upon the intensity of the attention and interest which were attached to the mental states the first time they were present. The burnt child shuns the fire, and the dog which has been beaten runs from the whip, after a single vivid experience. People in whom we are interested we may see daily and yet not be able to recall the colour of their hair or of their eyes…Our information comes almost exclusively from the observation of extreme and especially striking cases.

Ebbinghaus also uncovered something extraordinary: even when we appear to have forgotten information, a certain quantity is stored in our subconscious minds. He referred to these memories as savings. While they cannot be consciously retrieved, they speed up the process of relearning the same information later on.

A poem is learned by heart and then not again repeated. We will suppose that after a half year it has been forgotten: no effort of recollection is able to call it back again into consciousness. At best only isolated fragments return. Suppose that the poem is again learned by heart. It then becomes evident that, although to all appearances totally forgotten, it still in a certain sense exists and in a way to be effective. The second learning requires noticeably less time or a noticeably smaller number of repetitions than the first. It also requires less time or repetitions than would now be necessary to learn a similar poem of the same length.

As the first researcher to undertake serious experimentation on memory and why we forget, Ebbinghaus transformed psychology as a new branch of science. His impact has been compared to that of Aristotle. Ongoing research into the spacing effect continues to support Ebbinghaus’s findings.

“There is no such thing as memorizing. We can think, we can repeat, we can recall and we can imagine, but we aren’t built to memorize. Rather our brains are designed to think and automatically hold onto what’s important. While running away from our friendly neighborhood tiger, we don’t think “You need to remember this! Tigers are bad! Don’t forget! They’re bad!” We simply run away, and our brain remembers for us.”

— Gabriel Wyner, Fluent Forever: How to Learn Any Language and Never Forget It

How the Spacing Effect Works

Let’s take a quick refresher on what we know about how memory in works, because it’s not what we think.

Memories are not located in any one part of the brain. Memories are formed in a process which involves the entire brain. If you think about your favorite book, different parts of your brain will have encoded the look of it, the storyline, the emotions it made you feel, the smell of the pages, and so on. Memories are constructed from disparate components which create a logical whole. As you think about that book, a web of neural patterns pieces together a previously encoded image. Our brains are not like computers – we can’t just ‘tell’ ourselves to remember something.

In Mastery, Robert Greene explains:

In the end, an entire network of neurons is developed to remember this single task, which accounts for the fact we can still ride a bicycle years after we first learned how to do so. If we were to take a look at the frontal cortex of those who have mastered something through repetition, it would be remarkable still and inactive as they performed the skill. All their brain activity is occurring in areas that are lower down and required much less conscious control…People who do not practice and learn new skills can never gain a proper sense of proportion or self-criticism. They think they can achieve anything without effort and have little contact with reality. Trying something over and over again grounds you in reality, making you deeply aware of your inadequacies and of what you can accomplish with more work and effort.

No definitive answer has been found to explain how the spacing effect works. However, a number of factors are believed to help:

Forgetting and learning are, in a counterintuitive twist, linked. When we review close to the point of nearly forgetting, our brains reinforce the memory as well as add new details. This is one reason practice papers and teaching other people are the most effective ways for students to revise—they highlight what has been forgotten.

Retrieving memories changes the way they are later encoded. In essence, the harder something is to remember now, the better we will recall it in the future. The more we strain, which is painful mental labor, the easier it will be in the future. There is no learning without pain. Recall is more important than recognition. This explains why practice tests are a better way to learn than opening your text and re-reading your highlights.

Our brains assign greater importance to repeated information. This makes sense; information we encounter on a regular basis does tend to be more important than that which we only come across once. Disregarding any forms of mental impairment, we don’t have trouble recalling the information we need on a daily basis. Our PIN, our own telephone number, the directions to work, and names of coworkers, for example. We might once have struggled to remember them, but after accessing those sorts of information hundreds or thousands of time, recall becomes effortless.

Some researchers also believe that semantic priming is a factor. This refers to the associations we form between words which make them easier to recall. So, the sentence ‘the doctor and the nurse walked through the hospital’ is easier to remember than ‘the doctor and the artist walked through the supermarket’ because the words ‘doctor’ ‘nurse’ and ‘hospital’ are linked. If you are asked to remember a logical sentence such as ‘mitochondria is the powerhouse of the cell’, it’s not too difficult. If those same words are scrambled and become ‘cell the house mitochondria power is of’ it’s a lot harder to remember. And if those words are broken up into nonsensical syllables – ‘th ell ce he ous hon mit odria fi of’ – retaining them would become arduous. But some researchers have theorised that repetition over time primes us to connect information. So, if you revised ‘th ell ce he ous hon mit odria fi of’ enough times, you would start to connect ‘th’ and ‘ell.’ We can demonstrate semantic priming by telling a friend to say ‘silk’ ten times, then asking them what a cow drinks. They will almost certainly say ‘milk.’ The answer is, of course, water.

Yet another theory is that of deficient processing. Some literature points to the possibility that spaced repetition is not in itself especially efficient, but that massed learning is just very inefficient. By comparison, spaced repetition seems special when it is, in fact, a reflection of our true capabilities. Researchers posit that massed learning is redundant because we lose interest as we study information and retain less and less over time. Closely spaced repetition sessions leverage our initial interest before our focus wanes.

With properly spaced repetition, you increase the intervals of time between learning attempts. Each learning attempt reinforces the neural connections. For example, we learn a list better if we repeatedly study it over a period of time than if we tackle it in one single burst. We’re actually more efficient this way. Spaced sessions allow us to invest less total time to memorize than one single session, whereas we might get bored while going over the same material again and again in a single session. Of course, when we’re bored we pay less and less attention.3

In Focused Determination, the authors explain why variety also contributes to deficient processing.

There is also minimal variation in the way the material is presented to the brain when it is repeatedly visited over a short time. This tends to decrease our learning. In contrast, when repetition learning takes place over a longer period, it is more likely that the materials are presented differently. We have to retrieve the previously learned information from memory and hence reinforce it. All of this leads us to become more interested in the content and therefore more receptive to learning it.

“How do you remember better? Repeated exposure to information in specifically timed intervals provides the most powerful way to fix memory into the brain. …Deliberately re-expose yourself to the information more elaborately, and in fixed, spaced intervals, if you want the retrieval to be the most vivid it can be. Learning occurs best when new information is incorporated gradually into the memory store rather than when it is jammed in all at once.”

— John Medina, Brain Rules

Taking Advantage of the Spacing Effect

We don’t learn about spaced repetition in school—something which baffles many researchers. Most classes teach a single topic per session, then don’t repeat it until the test.

Going over a topic once teaches very little—sometimes nothing at all, if the teacher is unengaging or the class is too long. Most teachers expect their students to take care of the memorizing part themselves. As a result, many of us develop bad learning habits like cramming to cope with the demands of our classes.

We need to break up with cramming and focus on what actually works: spaced repetition.

The difficulty of spaced repetition is not effort but that it requires forward planning and a small investment of time to set up a system. But in the long run, it saves us time as we retain information and spend less total time learning.

A typical spaced repetition system includes these key components:

  • A schedule for review of information. Typical systems involve going over information after an hour, then a day, then every other day, then weekly, then fortnightly, then monthly, then every six months, then yearly. Guess correctly and the information moves to the next level and is reviewed less often. Guess incorrectly and it moves down a level and is reviewed more often.
  • A means of storing and organizing information. Flashcards or spaced repetition software (such as Anki and SuperMemo) are the most common options. Software has the obvious advantage of requiring little effort to maintain, and of having an inbuilt repetition schedule. Anecdotal evidence suggests that writing information out on flashcards contributes to the learning process.
  • A metric for tracking progress. Spaced repetition systems work best if they include built-in positive reinforcement. This is why learning programs like Duolingo and Memrise incorporate a points system, daily goals, leaderboards and so on. Tracking progress gives us a sense of progression and improvement.
  • A set duration for review sessions. If we practice for too long, our attention wanes and we retain decreasing amounts of information. Likewise, a session needs to be long enough to ensure focused immersion. A typical recommendation is no more than 30 minutes, with a break before any other review sessions.

The spacing effect is a perfect example of how much more effective we can be if we understand how our minds work, and use them in an optimal way. All you need to learn something for life are flashcards and a schedule. Then, of course, you’re free to move on to actually applying and using what you’ve learned.

***

Members of the Farnam Street Learning Community can discuss this article here.
If you’re not a member, see what you’re missing.  

Footnotes
  • 1

    When is the last time you used a2+ b2= c2 in real life?

  • 2

    This is different than the half-life of knowledge, the process by which information in memory becomes less valuable because your understanding of the world has changed.

  • 3

    You can test this by asking yourself what your last meeting yesterday was about.

Farnam Street’s 2018 Annual Letter to Readers

Most public companies issue an annual letter to shareholders. These letters present an opportunity for the people entrusted to run the company to communicate with the people who own the company, the shareholders. In 2015, I started a similar tradition at Farnam Street. (2016 and 2017 letters are also available.)

Stewards of companies have a legal duty to do what’s in the best interest of shareholders. I feel a similar obligation to you. You trust me with something far more valuable than money: time.

For all of us, time is finite. Reading Farnam Street or listening to The Knowledge Project means you’re not doing something else. My job is to make sure your investment is getting an above-average return.

***

The Psychology of Email Lists

Our newsletter mailing list has grown to roughly 185,000 subscribers, compared to 155,000 at this time last year.

The map and the territory tell very different stories. To understand the difference, we need to understand email lists a bit better.

Email lists are the best way to reach people directly. With email, there are few barriers between the content creator and the reader. Getting into someone’s inbox is like getting into their bed: it requires an invite.

The world is full of companies that want you to sign up to their email list. These actors use pop-ups, free downloads, and other tricks to bribe you for your email. While they do this for numerous reasons, few actually concern you, the reader. They just want to sell you something.

For individuals, big email lists typically mean big egos or bigger paychecks.

Bigger egos—in the sense that the size of the mailing list is a metric by which people keep score. Sometimes this is unspoken; other times it’s fairly overt. Some comparison is natural, but there is a lot of appearance over substance going on. No one wants to be the little piggy in the straw house.

Bigger paychecks—in the sense that people use lists as a proxy for value. I’ve encountered this firsthand in 2018, while negotiating our book deals (more below). Everyone wanted to know our list size, but few wanted to know the open rate. If the list size is the map, the open rate is the territory.

The industry considers a 20% open rate to be good, for an email list of over 100,000 addresses. I think that’s terrible. It means about 20–25% of people actually open your emails, when you account for the plethora of adblockers and image loaders it means actual open rates are slightly higher than reported rates.

Our open rate used to be 35%—and now it’s about 45%. The difference is telling. A list of 150,000 with a 25% open rate reaches an effective audience of about 37.5k people per email. An open rate of 45% changes that to 67.5k per email. Clearly, not all lists are the same.

At FS, we’re not after the biggest list, just the best. We offer a one-click unsubscribe. And if it looks like you haven’t opened an email from us in a while, we will send you a few emails to see if you want to stay on the list. If you don’t engage, we’ll proactively remove you. If you miss us, you can always sign up later—and if you don’t notice, well, you’re breaking my heart.

FS.BLOG

We’re on our third or fourth iteration of domain names now.

We started with 68131 (the zip code for Berkshire Hathaway), then moved to farnamstreetblog.com and now fs.blog. While we started out as a blog or scratchpad, today we’re so much more than a blog. We’re moving our branding toward FS. Why did we move away from Farnam Street blog to fs.blog? In short, it was easier to type, available to us, and our friends at Automattic made it simple for us to switch.

We changed hosting companies this year. Our new hosts, Pressable, sped up the site. Most importantly, they freed me up to write, instead of spending hours a month on webhosting. If you’re looking for a webhost, they are the most competent and proactive we’ve come across.

Our relative ranking among websites continues to improve. Last year we were ranked among the 40,000 most popular sites in the world—out of hundreds of millions. As I write this we have moved into the top 33,000. And in the US, out of an estimated 200 million active websites, we rank in the top 11,000. That’s the top .006%, for those of us who are counting.

I hope to further refine the reading experience on the website in 2019, become a bit more brand-consistent, and better position FS to create something that outlives me.

News

I received a curious call from a reporter from the New York Times earlier this year, asking, “Why does everyone on Wall Street keep talking about you?” He found my “I don’t know” rather unsatisfying, and kept probing. The result was this profile on me. While we stayed on the most-emailed list for two full days—an eternity in the news world—the best thing about the story was that my mom doesn’t think I’m unemployed anymore.

My hometown paper also featured me in this article. Lest I get a big head, my mom pointed out that I couldn’t get ahead of “cat stops traffic” and “man walks slowly across street” to make the most-viewed stories of the day.

Events

In 2018, we offered two public Re:Think Workshops, on Innovation and Decisionmaking. We continue to limit attendance at these events to ensure a good experience for everyone. We sold out the 2019 version of Re:Think Decisionmaking in one day. Join the waiting list so you don’t miss out on future dates!

While the feedback we get is positive beyond belief, we’ll be doing a major revamp of the content in 2019 to be released in 2020.

Our two smaller events are exceptional, but they’re not for everyone. We also require that you apply to attend these events because we need to ensure we have the right mix of people.

The first, Think Weekend, is a dinner series. We meet for a Thursday–Sunday period in a warm location during winter. The days are free time, and we have an interesting series of dinner conversations.

The second is Re:Think Europe. Here we have 10 people show up for what’s been called “the most unique experience I’ve ever had.” It’s an intense period in close quarters with ten people that start out as strangers but wind up best friends. People walk away mentally stimulated and exhausted, while making tangible progress on problems they have.

The Knowledge Project #ListenAndLearn

The Knowledge Project moved away from being “the most irregular podcast in the world” to presenting a new episode about every other week—about 25 episodes this year. Our 2018 guest list included FBI hostage negotiator Chris Voss, learning expert Barbara Oakley, Stripe CEO Patrick Collison, obstacle course super champ Amelia Boone, poker pro Annie Duke, Shopify CEO Tobi Lütke, and the CEO of the JP Morgan, Amazon, and Berkshire Hathaway healthcare initiative, Atul Gawande, to name a few. (You can find the full list here.) The lineup for 2019 looks just as good.

As I write this we stand at 47 published episodes with over 4.8 million downloads. You should know that we’re not bound to bi-weekly episodes. Our only commitment is quality, so we don’t pre-commit to frequency or duration. Some of the shows will be 15 minutes and others will be four hours. We rarely edit conversations, unless it’s requested or we feel it’s important to protect the guest. To put things in perspective, only two or three instances come to mind. My assumption is that if I’m still interested in the conversation, you are too.

I know what you’re thinking: can you sit and talk for four hours with one person, with no interruptions? Yes! Our guests are exceptional people, and I’m a fanatic when it comes to listening and learning.

The Knowledge Project isn’t bound to have me as a host. In the future, we will explore having other hosts.

We guided TKP’s branding on a sharp turn for the better this year, and will continue in 2019. We invested a lot of money in these improvements—they don’t increase revenue for us but do make for a much better product and experience for you.

We’re likely to move away from sponsors to a listener-supported model in the near future. While we’ve had some great sponsors, like Metalab, I increasingly find that sponsors want things from me—really from you—that just don’t align with my principles.

Speaking of which, let’s talk about some of that stuff. I take your trust in FS and in me very seriously.

  • I am not paid by any company for any opinion or article posted on FS or in any public forum, including podcasts and Twitter. I receive free products all the time in the mail (over 200 in 2018!). If I use them and like them, I try to tell people about them—no affiliate links. If you’re wondering what this looks like in practice, I think I mentioned two things this year: Atoms and Bellroy. I wear the Atoms every day in the office, and Bellroy has been my wallet forever. It’s the same one I buy for my friends.
  • Farnam Street participates in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising commissions by linking to Amazon. Simply put, if you click on my Amazon.com links and buy anything, I earn a small commission, yet you don’t pay any extra.
  • Sponsors of our newsletter and website are not allowed to run any code that might track your internet presence. We tell them nothing about you except in broad strokes. Website sponsors operate on a percentage-of-traffic basis and do not compensate us based on page views. This reduces our incentive to increase page views and write crappy content.
  • We do not have a Facebook tracking pixel, so we’re not enabling companies to “target our audience.”
  • We don’t give out your email address to any third parties.
  • If you’re interested in sponsoring the newsletter, podcast, or website, feel free to reach out to us at [email protected] or directly to me at [email protected]

Courses

A few years ago, we started offering courses to help people with skills that make them more adaptable. We were more concerned with outcomes than income. To that end, I purchased most of the most popular online courses and took a look at how they worked, what they were selling, and how they went about improving outcomes.

Unfortunately, we didn’t learn a ton from these courses. Most university courses are theory-based, which is great but not practical. Most of the online courses offered by entrepreneurs are edu-tainment around selling stuff—like online courses. This didn’t deter us. We took a different approach, working through iterations until we hit on something that finally worked: one-on-one interaction.

If you did the homework in The Art of Focus last year, which was a daily email to me, we responded and problem-solved with you every step of the way. Most of the time it was me responding. While this wasn’t efficient or scalable, it was certainly effective. These weren’t group calls but one-on-one interaction. That was just one of the lessons that we learned about how to increase the odds people actually made changes that stuck.

Now that we know what works and what doesn’t, we can tackle a few more ambitious ideas around courses.

In our history, we’ve offered three online courses, a productivity webinar, The Art of Focus, and The Art of Reading. We’ve stopped selling two out of three of these, and will stop selling The Art of Reading in January 2019. (The Art of Focus will be available as part of the Learning Community in January, and the productivity webinar is already available to members.)

Here’s a sneak peek: we’ve  been working on a mega-course on learning for over a year. It has taken a long time to cover not only the theory behind how we learn and how your brain processes information, but how to put it into practice. The wait will be worth it! We’ll use what we learned in the previous courses to increase the odds of success for participants.

I’ve tested the concepts with a few people I’m close to, and the response I’ve gotten is nothing short of amazing. Here’s a representative sample from my testing: “Shane, no one has ever taught me how to learn. In under an hour, you changed everything from the types of questions I ask other people to dramatically increasing my ability to quickly learn…nothing will be the same again.” That’s unsolicited feedback, three months after our conversation, from a person who wanted to test the course for me and paid for it on spec. No videos, just one hour with me in a restaurant over dinner.

The Learning Community

Rest assured, we have no aspirations of running the biggest membership community on the planet, just the best. The Learning Community isn’t for everyone. Our growing Learning Community continues to collect remarkable people and includes entrepreneurs, Fortune 50 CEOs, professional coaches, athletes, GMs from all the major leagues (NFL, NBA, NHL, and MLB), students, teachers, Nobel Laureates, and bestselling authors.

The learning community isn’t about more content but better content. Not only is it a way to support what you love (FS), join our virtual reading group, get transcripts to all of our podcasts, and so much more—it’s a way to join and interact with a group of people like you, who want to get better and smarter without the shortcuts, a group that offers everything from reading recommendations to smart parenting advice. Some of my favorite moments this year, has been when someone posted questions about a book to the community forum and the author, an LC member, responded.

Importantly, if you read the website for free, it’s funded by the Learning Community. While there are some exclusives and some bonus FS content for LC members, the majority of FS content will always be free. If you find value in Farnam Street, we hope you’ll consider joining the Learning Community, or gift it to the ones you love.

Books

Last year I wrote this:

“As many of you know, we’re huge fans of mental models. The problem is that when I set out to read about mental models years ago, there wasn’t a good source of information in one place. Where could I find timeless ideas to help me learn, think, and decide?

Farnam Street has filled that void for many, but we’ve been inundated with requests to write a book about mental models. The first volume, internally dubbed Thinking Tools, will be released soon. Rather than being a version of the website, it’s a fresh start at intelligently preparing ourselves for the world. Whether readers are high school students or newly retired seniors, this well-designed book will hopefully have a place on their shelves for generations.”

I have to eat those words. And I have some other confessions to make.

Writing a book and publishing a book are two very different things. The writing was done and fully edited in May. However, then we had to learn how to actually publish a book. That’s where the time and effort really come into play. There are a lot of publishing decisions around books—everything from typeface and layout to paper and design. You have to decide on the style, not just for one book but for the planned series of 5. Then you have to decide where to print, how to sell them (it’s not as easy as sending them to Amazon), how many to print, whether you want electronic copies, audio, and a host of other things.

Let’s talk a little about the series of books that we’re publishing under Farnam Street: The Great Mental Models.

The first physical book was designed from the beginning to be a beautiful reference book. In a world of disposable books, I didn’t want this to be a book you bought and threw away. I wanted to be the last book on your bookshelf.

Just because we’re self-publishing doesn’t mean we can’t have a world-class team. Our creative director for the project, Morgwn Rimel, came by way of setting up the School of Life. We love working with Flok Design, an international design firm based in Germany. Illustrator Marcia Mihotich is insightful—we love her style. We also had a great editor, Néna Rawdah, and proofreader Karina Palmitesta.

While we self-published to maintain control over the content, thanks to the team above it will look and feel better than most traditionally published books in every way. If you’re curious as to what it looks like on the inside, you can see here and here.

There is some bad news, if you’re eager to get your hands on a physical copy. We’re only printing 3000 physical copies.

The reaction from my agent was telling.

“Shane, so let me understand this right, if you had demand for another 1k books you wouldn’t print more?”

“Not unless something changes.”

“So you don’t want to make more money.”

“Not off the physical book.”

[Two minutes of silence.]

“I’ve never heard that before.”

I don’t have an easily explainable answer to why only 3k hardcovers, so I won’t even try to explain it. Learning Community members will know about the physical copies first and get first dibs.

Why will I be able to get an audio copy before eBook copies?

Long story short: Audible came to us and said they wanted to partner with us, and offered us a lot of distribution and promotion. Helping more people with critical thinking outweighs having the physical and print books out sooner. We’re excited to work with Stacy Creamer and the team at audible.

I am hesitant to sell the print and electronic rights, because I think holding them gives us flexibility in the future. I want all the content to eventually be free, because that helps our mission of equalizing opportunity: the people who can’t afford books arguably need access to thinking tools more than the people that can. And we want to experiment with things that would have been really hard to do with a traditional publisher.

The FS brand carried the day at every meeting we had with people interested in the audio rights. There wasn’t a person we talked to who wasn’t familiar with FS, and in every room where it was pitched, people said, “I love that website.” That helps.

In short, the mental models books are coming. The first draft of the second book is almost done. The books will come out as soon as I can get them to you without sacrificing quality or distribution. As soon as we know more I’ll let you know.

A Trade Book

I signed a book deal with Penguin Portfolio for a trade book and am beyond excited to be working with the team there, especially Niki Papadopoulos. I’ve wanted to work with Niki ever since she came to one of our events four years ago. While this contract was for one book, I have four high-quality and unrelated book ideas in the queue.

Stay tuned.

Team Farnam

Perceptive readers know there is more to Farnam Street than just me. While I might be the face of FS for now, the site you are reading is increasingly about a team of people.

The team includes Rhiannon, who is a full-time staff writer and my right hand, working with me on the mental models books. Devon is our jack of all trades, doing most of our copy for courses, marketing emails, and podcast production. Bri is my part-time assistant.

Next year, two more will join the fray: one person in January to help us research, and another person in October to lead the team to the next level. I wasn’t looking for people, but the opportunity arose to hire two amazing humans, so I pounced.

Sponsorships

I want to thank our website sponsors Royce Funds, Tulco., and Greenhaven Road Capital. I’d also like to thank our podcast sponsors Metalab, HeathIQ, and Inktel. If you’re interested in sponsoring us, send me an email at [email protected]

A Better Way to Sell Your Business

If you’ve built a profitable business with a reputation for fanatical customer service, I’m interested in becoming your partner.

Through Syrus Partners, a company we started to mirror Berkshire Hathaway on a micro scale, we made several investments last year. They included Mealime and Paragon Intelligence—where my background comes in handy.

We’re looking to partner with companies that have a reputation for honest and fair dealings, consistent earnings, good returns on capital, and straightforward business models. As an investment partner, we’re not interested in flipping the business, taking control, or leveraging it up. We bring permanent capital, simple and fair deals that can close in 4–8 weeks, and a reputation for letting you do your thing. We’re always available to help with anything—our team consists of people with world-class experience in marketing, branding, sales, and technology, not to mention an extensive Rolodex. Simply put, we offer as much or as little help as you want. We want you to keep doing what you’re doing.

We’re not VC, so please no pitches for business ideas. If you’ like to explore selling all or part of your business to a trustworthy and long-term partner, send an email to [email protected] with all relevant details.

Thank you.

We continue to put one foot in front of another and reinvest the proceeds from the Learning Community to create the best content we can.

Next year we’ll get back to more variety of content. There will be a mix of deep dives on topics as well as explorations. In short, back to our roots. We lost a bit of focus on that in 2018, which is entirely on me.

There is much good to come from FS in the new year. I look forward to continuing to learn with you. Thank you for reading and supporting us.

Shane

 

 

 

 

Why Small Habits Make a Big Difference

James Clear’s book Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones explores an interesting subject, on the compounding nature of the long game. While everyone is looking for big gains—the proverbial get rich quick scheme—there is a space that’s not getting much attention.

Those who understand compound interest can make it work for them and those that don’t understand it spend much of life trying to get out from its shackles. When we think of compounding we typically think of finance and positive returns, as in “good compounding.” But compounding just reinforces what’s already happening — good or bad.  There is no judgment. And compounding works outside of finance. So while we can compound money positively and negatively, we can compound ourselves as well.

The neutrality of compounding is what makes it interesting — as we can get it work for us. If we can replace a negatively compounding habit or mental discipline with one that’s neutral or positive, we instantly get better. And if we can accelerate positive compounding, we can really see the results.

Tiny, nearly imperceptible changes can make a huge difference when you factor in time.  As the graph above demonstrates, the difference in tiny changes is astonishing.

Clear writes:

Here’s how the math works out: if you can get 1 percent better each day for one year, you’ll end up thirty-seven times better by the time you’re done. Conversely, if you get 1 percent worse each day for one year, you’ll decline nearly down to zero. What starts as a small win or a minor setback accumulates into something much more.

Habits are the compound interest of self-improvement. The same way that money multiplies through compound interest, the effects of your habits multiply as you repeat them. They seem to make little difference on any given day and yet the impact they deliver over the months and years can be enormous. It is only when looking back two, five, or perhaps ten years later that the value of good habits and the cost of bad ones becomes strikingly apparent.

When we watch people make small choices, like order a salad at lunch instead of a burger, the difference of a few hundred calories doesn’t seem to matter much. In the moment that’s true. These small decisions don’t matter all that much. However, as days turn to weeks and weeks to months and months to years those tiny repeatable choices compound. Consider another example, saving a little money right not won’t make you a millionaire tomorrow. But starting to save today makes it more likely you will become a millionaire in the future.

Our brains have a hard time intuitively understanding time, compounding, and uncertainty. All of those things conspire to work against us when it comes to habits and mental disciplines. Why choose to save $20 today when I could buy a bottle of wine and have instant pleasure? Our minds do not easily realize that $20 saved today could be $100 in the future. And if we do save the money, there is no certainty that it will compound positively, it could, after all, compound negatively and I end up with $15. Now you can begin to see why it’s easier to just live in the moment and do whatever you want.

Clear writes:

But when we repeat 1 percent errors, day after day, by replicating poor decisions, duplicating tiny mistakes, and rationalizing little excuses, our small choices compound into toxic results.

As an entrepreneur, I’m always looking for opportunities. The opportunities that interest me the most offer superior returns, low risk, and a long duration. Just as investing in companies can give you the opportunity to find all three, so does properly investing in yourself. Habits and mental disciplines are controllable, offer enormous opportunity for returns, have extremely low risk, and you can use them for the rest of your life. More importantly, they allow you to diverge from the herd and advantageous divergence is the name of the game.

Love, Happiness, and Time

How many of us regard love and happiness as a place? A box to tick off, a destination we get to? We often conceptualize these two things as goals. Is this responsible for why we are so devastated when they leave after being in our lives for a while?

What do love and happiness have to do with time?

Recently I read The Order of Time, by Carlo Rovelli. In it he writes,

We can think of the world as made up of things. Of substances. Of entities. Of something that is. Or we can think of it as made up of events. Of happenings. Of processes. Of something that occurs. Something that does not last, and that undergoes continual transformation, that is not permanent in time. The destruction of the notion of time in fundamental physics is the crumbling of the first of these two perspectives, not of the second. It is the realization of the ubiquity of impermanence, not of stasis in a motionless time.

This passage, in particular, gets me thinking. By this point in his book, Rovelli has brought me to “a world without time.” Thanks to his writing skills, I am comfortable being there. Time reveals itself to be part of the human condition, not the physical world.

Rovelli continues:

The difference between things and events is that things persist in time; events have a limited duration. A stone is a prototypical “thing”: we can ask ourselves where it will be tomorrow. Conversely, a kiss is an “event.” It makes no sense to ask where the kiss will be tomorrow. The world is made up of networks of kisses, not of stones.

Will it be more rewarding and useful to conceptualize love and happiness like time? An event, not a thing. A kiss, not a stone.

If you think of love like a stone—to be fair, we often do—it is a thing that you attain. You may have an expectation that it will persist and continue to exist. So when you and your partner fight, and it seems the love disappears for an evening, you panic. The love is gone! The thing that connects you wasn’t permanent at all. What does that say about your relationship?

If we change our thinking to love being an event, like a kiss, then a burden is lifted. It’s an event we experience with our partners many times, but not always. And then we can focus on creating the conditions that the event of love requires, even if it might not come to pass every moment of every day.

Rovelli has more to say:

On closer inspection, in fact, even the things that are most “thing-like” are nothing more than long events. The hardest stone, in the light of what we have learned from chemistry, from physics, from mineralogy, from geology, from psychology, is in reality a complex vibration of quantum fields, a momentary interaction of forces, a process that for a brief moment manages to keep its shape, to hold itself in equilibrium before disintegrating again into dust…gradually, an intricate knot in that cosmic game of mirrors that constitutes reality.

Even a stone, the most “thing-like” of things, is fleeting, its definition multilayered and dependent on my perception.

Perhaps it is useful to consider happiness the same way. It’s not something we achieve in perpetuity, an object external to ourselves, as if we could just find it and break off a chunk to keep with us forever. Its existence is bound with our ability to experience it.

“I remember one morning getting up at dawn. There was such a sense of possibility. You know, that feeling. And I…I remember thinking to myself: So this is the beginning of happiness, this is where it starts. And of course there will always be more…never occurred to me it wasn’t the beginning. It was happiness. It was the moment, right then.”

— The Hours (screenplay by David Hare)

As with love, we can reconfigure happiness into an event. It happens. It holds itself in equilibrium for a moment and then disintegrates.

Right now it is fall. Outside my window I am super lucky to witness the unrelenting biological changes that produce such spectacular leaf colours every year. It’s a moment that keeps its shape for a small part of the year. As I get older, I make sure to take the time each October to pay attention and enjoy it.

Could we enjoy happiness more if we consider it the same way? It may sound odd to say that, because who doesn’t enjoy happiness? But there seems to be an eternal struggle with happiness. When it goes, it hurts. Sometimes, when it comes back, it’s bittersweet, because we know it will go again.

The idea of time being an event, and how we experience it, relates, I think, to fundamental conceptions of happiness and love. Time, source of much of our anxiety and sadness, can be understood as a momentary holding together of a set of factors that we experience because of how we are built. I think we can consider love and happiness the same way.

Rovelli explains it this way:

And we begin to see that we are time. We are this space, this clearing opened by the traces of memory inside the connections between our neurons. We are memory. We are nostalgia. We are longing for a future that will not come. The clearing that is opened up in this way, by memory and by anticipation, is time: a source of anguish sometimes, but in the end a tremendous gift. A precious miracle that the infinite play of combinations has unlocked for us, allowing us to exist. We may smile now. We can go back to serenely immersing ourselves in time—in our finite time—to savoring the clear intensity of every fleeting and cherished moment of the brief circle of our existence.

Battling Entropy: Making Order of the Chaos in Our Lives

“Nor public flame, nor private, dares to shine;
Nor human spark is left, nor glimpse divine!
Lo! thy dread empire, Chaos! is restored;
Light dies before thy uncreating word:
Thy hand, great Anarch! lets the curtain fall;
And universal darkness buries all.”
― Alexander Pope, The Dunciad

***

The second law of thermodynamics states that “as one goes forward in time, the net entropy (degree of disorder) of any isolated or closed system will always increase (or at least stay the same).”[1] That is a long way of saying that all things tend towards disorder. This is one of the basic laws of the universe and is something we can observe in our lives. Entropy is simply a measure of disorder. You can think of it as nature’s tax[2].

Uncontrolled disorder increases over time. Energy disperses and systems dissolve into chaos. The more disordered something is, the more entropic we consider it. In short, we can define entropy as a measure of the disorder of the universe, on both a macro and a microscopic level. The Greek root of the word translates to “a turning towards transformation” — with that transformation being chaos.

As you read this article, entropy is all around you. Cells within your body are dying and degrading, an employee or coworker is making a mistake, the floor is getting dusty, and the heat from your coffee is spreading out. Zoom out a little, and businesses are failing, crimes and revolutions are occurring, and relationships are ending. Zoom out a lot further and we see the entire universe marching towards a collapse.

Let’s take a look at what entropy is, why it occurs, and whether or not we can prevent it.

The Discovery of Entropy

The identification of entropy is attributed to Rudolf Clausius (1822–1888), a German mathematician and physicist. I say attributed because it was a young French engineer, Sadi Carnot (1796–1832), who first hit on the idea of thermodynamic efficiency; however, the idea was so foreign to people at the time that it had little impact. Clausius was oblivious to Carnot’s work, but hit on the same ideas.

Clausius studied the conversion of heat into work. He recognized that heat from a body at a high temperature would flow to one at a lower temperature. This is how your coffee cools down the longer it’s left out — the heat from the coffee flows into the room. This happens naturally. But if you want to heat cold water to make the coffee, you need to do work — you need a power source to heat the water.

From this idea comes Clausius’s statement of the second law of thermodynamics: “heat does not pass from a body at low temperature to one at high temperature without an accompanying change elsewhere.”

Clausius also observed that heat-powered devices worked in an unexpected manner: Only a percentage of the energy was converted into actual work. Nature was exerting a tax. Perplexed, scientists asked, where did the rest of the heat go and why?

Clausius solved the riddle by observing a steam engine and calculating that energy spread out and left the system. In The Mechanical Theory of Heat, Clausius explains his findings:

… the quantities of heat which must be imparted to, or withdrawn from a changeable body are not the same, when these changes occur in a non-reversible manner, as they are when the same changes occur reversibly. In the second place, with each non-reversible change is associated an uncompensated transformation…

… I propose to call the magnitude S the entropy of the body… I have intentionally formed the word entropy so as to be as similar as possible to the word energy….

The second fundamental theorem [the second law of thermodynamics], in the form which I have given to it, asserts that all transformations occurring in nature may take place in a certain direction, which I have assumed as positive, by themselves, that is, without compensation… [T]he entire condition of the universe must always continue to change in that first direction, and the universe must consequently approach incessantly a limiting condition.

… For every body two magnitudes have thereby presented themselves—the transformation value of its thermal content [the amount of inputted energy that is converted to “work”], and its disgregation [separation or disintegration]; the sum of which constitutes its entropy.

Clausius summarized the concept of entropy in simple terms: “The energy of the universe is constant. The entropy of the universe tends to a maximum.”

“The increase of disorder or entropy is what distinguishes the past from the future, giving a direction to time.”

— Stephen Hawking, A Brief History of Time

Entropy and Time

Entropy is one of the few concepts that provides evidence for the existence of time. The “Arrow of Time” is a name given to the idea that time is asymmetrical and flows in only one direction: forward. It is the non-reversible process wherein entropy increases.

Astronomer Arthur Eddington pioneered the concept of the Arrow of Time in 1927, writing:

Let us draw an arrow arbitrarily. If as we follow the arrow[,] we find more and more of the random element in the state of the world, then the arrow is pointing towards the future; if the random element decreases[,] the arrow points towards the past. That is the only distinction known to physics.

In a segment of Wonders of the Universe, produced for BBC Two, physicist Brian Cox explains:

The Arrow of Time dictates that as each moment passes, things change, and once these changes have happened, they are never undone. Permanent change is a fundamental part of what it means to be human. We all age as the years pass by — people are born, they live, and they die. I suppose it’s part of the joy and tragedy of our lives, but out there in the universe, those grand and epic cycles appear eternal and unchanging. But that’s an illusion. See, in the life of the universe, just as in our lives, everything is irreversibly changing.

In his play Arcadia, Tom Stoppard uses a novel metaphor for the non-reversible nature of entropy:

When you stir your rice pudding, Septimus, the spoonful of jam spreads itself round making red trails like the picture of a meteor in my astronomical atlas. But if you stir backwards, the jam will not come together again. Indeed, the pudding does not notice and continues to turn pink just as before. Do you think this is odd?

(If you want to dig deeper on time, I recommend the excellent book by John Gribbin, The Time Illusion.)

“As a student of business administration, I know that there is a law of evolution for organizations as stringent and inevitable as anything in life. The longer one exists, the more it grinds out restrictions that slow its own functions. It reaches entropy in a state of total narcissism. Only the people sufficiently far out in the field get anything done, and every time they do they are breaking half a dozen rules in the process.”

— Roger Zelazny, Doorways in the Sand

Entropy in Business and Economics

Most businesses fail—as many as 80% in the first 18 months alone. One way to understand this is with an analogy to entropy.

Entropy is fundamentally a probabilistic idea: For every possible “usefully ordered” state of molecules, there are many, many more possible “disordered” states. Just as energy tends towards a less useful, more disordered state, so do businesses and organizations in general. Rearranging the molecules — or business systems and people — into an “ordered” state requires an injection of outside energy.

Let’s imagine that we start a company by sticking 20 people in an office with an ill-defined but ambitious goal and no further leadership. We tell them we’ll pay them as long as they’re there, working. We come back two months later to find that five of them have quit, five are sleeping with each other, and the other ten have no idea how to solve the litany of problems that have arisen. The employees are certainly not much closer to the goal laid out for them. The whole enterprise just sort of falls apart.

It reminds one distinctly of entropy: For every useful arrangement of affairs towards a common business goal, there are many orders of magnitude more arrangements that will get us nowhere. For progress to be made, everything needs to be arranged and managed in a certain way; we have to input a lot of energy to keep things in an ordered state.

Of course, it’s not a perfect analogy: We have to consider the phenomenon of self-organization that happens in many systems, up to and including human organizations. Given a strong enough goal, a good enough team, and the right incentives, perhaps that group wouldn’t need a lot “outside ordering” — they would manage themselves.

“The … ultimate purpose of life, mind, and human striving: to deploy energy and information to fight back the tide of entropy and carve out refuges of beneficial order.”

— Steven Pinker

In practice, both models seem to be useful at different times. Any startup entrepreneur who has stayed long enough to see a company thrive in unexpected ways knows this. The amount of diligent management needed will vary. In physics, entropy is a law; in social systems, it’s a mere tendency — though a strong one, to be sure.

Entropy occurs in every aspect of a business. Employees may forget training, lose enthusiasm, cut corners, and ignore rules. Equipment may break down, become inefficient, or be subject to improper use. Products may become outdated or be in less demand. Even the best of intentions cannot prevent an entropic slide towards chaos.

Successful businesses invest time and money to minimize entropy. For example, they provide regular staff training, good reporting of any issues, inspections, detailed files, and monitoring reports of successes and failures. Anything less will mean almost inevitable problems and loss of potential revenue. Without the necessary effort, a business will reach the point of maximum entropy: bankruptcy.

Fortunately, unlike thermodynamic systems, a business can reverse the impact of entropy. A balance must be struck between creativity and control, though. Too little autonomy for employees results in disinterest, while too much leads to poor decisions.

Entropy in Sociology

Without constant maintenance from individuals and dominant institutions, societies tend towards chaos. Divergent behavior escalates — a concept known as the “broken windows” theory.

Sociologist Kenneth Bailey writes:

When I began studying the notion of entropy it became clear to me that thermodynamic entropy was merely one instance of a concept with much broader applications … I became convinced that entropy applied to social phenomena as well.

One example of what happens when entropy increases unchecked occurred in the Kowloon Walled City. For a substantial length of time, Kowloon was abandoned by the government after the British took control of Hong Kong. At one point, an estimated 33,000 residents were crammed into 300 buildings over 6.4 acres, making Kowloon the most densely populated place on earth. With no space for new construction, stories were added to the existing buildings. Because of minimal water supplies and a lack of ventilation (no sunlight or fresh air reached lower levels), the health of residents suffered. A community of unlicensed medical professionals flourished, alongside brothels and gambling dens.

With no one controlling the city, organized crime gangs took over. It became a haven for lawlessness. Though police were too scared to make any attempts to restore order, residents did make desperate attempts to reduce the entropy themselves. Groups formed to improve the quality of life, creating charities, places for religious practices, nurseries, and businesses to provide income.

In 1987, the Hong Kong government acknowledged the state of Kowloon. The government demolished and rebuilt the city, evicting residents and destroying all but a couple of historic buildings. Although reasonable compensation was provided for ex-residents, many were somewhat unhappy with the rebuilding project.

Looking at pictures and hearing stories from Kowloon, we have to wonder if all cities would be that way without consistent control. Was Kowloon an isolated instance of a few bad apples giving an otherwise peaceful place a terrible reputation? Or is chaos our natural state?

Needless to say, Kowloon was not an isolated incident. We saw chaos and brutality unleashed during the Vietnam War, when many young men with too much ammunition and too few orders set about murdering and torturing every living thing they encountered. We see it across the world right now, where places with no law enforcement (including Somalia and Western Sahara) face incessant civil wars, famine, and high crime rates.

Sociologists use an intuitive term for this phenomenon: social entropy. Societies must expend constant effort to stem the inevitable march towards dangerous chaos. The reduction of social entropy tends to require a stable government, active law enforcement, an organized economy, meaningful employment for a high percentage of people, infrastructure, and education.

However, the line between controlling entropy and suppressing people’s liberty is a thin one. Excessive control can lead to a situation akin to Foucault’s panopticon, wherein people are under constant surveillance, lack freedom of speech and movement, are denied other rights as well, and are subject to overzealous law enforcement. This approach is counterproductive and leads to eventual rebellion once a critical mass of dissenters forms.

“Everything that comes together falls apart. Everything. The chair I’m sitting on. It was built, and so it will fall apart. I’m going to fall apart, probably before this chair. And you’re going to fall apart. The cells and organs and systems that make you you—they came together, grew together, and so must fall apart. The Buddha knew one thing science didn’t prove for millennia after his death: Entropy increases. Things fall apart.”

— John Green, Looking for Alaska

Entropy in Our Everyday Lives

We have all observed entropy in our everyday lives. Everything tends towards disorder. Life always seems to get more complicated. Once-tidy rooms become cluttered and dusty. Strong relationships grow fractured and end. Formerly youthful faces wrinkle and hair turns grey. Complex skills are forgotten. Buildings degrade as brickwork cracks, paint chips, and tiles loosen.

Entropy is an important mental model because it applies to every part of our lives. It is inescapable, and even if we try to ignore it, the result is a collapse of some sort. Truly understanding entropy leads to a radical change in the way we see the world. Ignorance of it is responsible for many of our biggest mistakes and failures. We cannot expect anything to stay the way we leave it. To maintain our health, relationships, careers, skills, knowledge, societies, and possessions requires never-ending effort and vigilance. Disorder is not a mistake; it is our default. Order is always artificial and temporary.

Does that seem sad or pointless? It’s not. Imagine a world with no entropy — everything stays the way we leave it, no one ages or gets ill, nothing breaks or fails, everything remains pristine. Arguably, that would also be a world without innovation or creativity, a world without urgency or a need for progress.

Many people cite improving the world for future generations as their purpose in life. They hold protests, make new laws, create new forms of technology, work to alleviate poverty, and pursue other noble goals. Each of us makes our own efforts to reduce disorder. The existence of entropy is what keeps us on our toes.

Mental models are powerful because they enable us to make sense of the disorder that surrounds us. They provide us with a shortcut to understanding a chaotic world and exercising some control over it.

In The Information: A History, a Theory, a Flood, James Gleick writes,

Organisms organize. … We sort the mail, build sand castles, solve jigsaw puzzles, separate wheat from chaff, rearrange chess pieces, collect stamps, alphabetize books, create symmetry, compose sonnets and sonatas, and put our rooms in order… We propagate structure (not just we humans but we who are alive). We disturb the tendency toward equilibrium. It would be absurd to attempt a thermodynamic accounting for such processes, but it is not absurd to say we are reducing entropy, piece by piece. Bit by bit … Not only do living things lessen the disorder in their environments; they are in themselves, their skeletons and their flesh, vesicles and membranes, shells, and carapaces, leaves, and blossoms, circulatory systems and metabolic pathways—miracles of pattern and structure. It sometimes seems as if curbing entropy is our quixotic purpose in the universe.

The question is not whether we can prevent entropy (we can’t), but how we can curb, control, work with, and understand it. As we saw at the start of this post, entropy is all around us. Now it’s probably time to fix whatever mistake an employee or coworker just made, clear up your messy desk, and reheat your cold coffee.

How Can I Use Entropy to My Advantage?

This is where things get interesting.

Whether you’re starting a business or trying to bring about change in your organization, understanding the abstraction of entropy as a mental model will help you accomplish your goals in a more effective manner.

Because things naturally move to disorder over time, we can position ourselves to create stability. There are two types of stability: active and passive. Consider a ship, which, if designed well, should be able to sail through a storm without intervention. This is passive stability. A fighter jet, in contrast, requires active stability. The plane can’t fly for more than a few seconds without having to adjust its wings. This adjustment happens so fast that it’s controlled by software. There is no inherent stability here: if you cut the power, the plane crashes.[3]

People get in trouble when they confuse the two types of stability. Relationships, for example, require attention and care. If you assume that your relationship is passively stable, you’ll wake up one day to divorce papers. Your house is also not passively stable. If not cleaned on a regular basis, it will continue to get messier and messier.

Organizations require stability as well. If you’re a company that relies on debt, you’re not passively stable but actively stable. Factoring in a margin of safety, this means that the people giving you the credit should be passively stable. If you’re both actively stable, then when the power gets cut, you’re likely to be in a position of weakness, not strength.

With active stability, you’re applying energy to a system in order to bring about some advantage (keeping the plane from crashing, your relationship going, the house clean, etc.), If we move a little further down the rabbit hole, we can see how applying the same amount of energy can yield totally different results.

Let’s use the analogy of coughing.[4] Coughing is the transfer of energy as heat. If you cough in a quiet coffee shop, which you can think of as a system with low entropy, you cause a big change. Your cough is disruptive. On the other hand, if you cough in Times Square, a system with a lot of entropy, that same cough will have no impact. While you change the entropy in both cases, the impact you have with the same cough is proportional to the existing entropy.

Now think of this example in relation to your organization. You’re applying energy to get something done. The higher the entropy in the system, the less efficient the energy you apply will be. The same person applying 20 units of energy in a big bureaucracy is going to see less impact than someone applying the same 20 units in a small startup.

You can think about this idea in a competitive sense, too. If you’re starting a business and you’re competing against very effective and efficient people, a lot of effort will get absorbed. It’s not going to be very efficient. If, on the other hand, you compete against less efficient and effective people, the same amount of energy will be more efficient in its conversion.

In essence, for a change to occur, you must apply more energy to the system than is extracted by the system.

 

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Resources:

[1] http://www.exactlywhatistime.com/physics-of-time/the-arrow-of-time/

[2] Peter Atkins

[3] Based on the work of Tom Tombrello

[4] Derived from the work of Peter Atkins in The Laws of Thermodynamics: A Very Short Introduction