Costs vs. Investments

What separates an investment from a cost?

Both costs and investments are similar. Both take away something from our present with the promise to alleviate some problem we face. And yet, we view them in entirely different light. Everybody wants to avoid or minimize costs. Nobody wishes to avoid investments. We hear quite often about cost-cutting. Have you ever heard about investment-cutting?

One of the most successful negotiation strategies is to move from the cost framing to an investment framing. Consider a salary negotiation. If the company viewed your salary as a cost, they would try to pay you the lowest possible price in the market. If you could have them view it as an investment, their focus would shift to the long-term returns that you would bring to the company.

Is there a rule of the thumb here? Most solutions to urgent, short-term problems are costs, whereas things that yield compounded returns in the long-term are investments. That chocolate-chip cookie that lifts your mood is a cost, while running 5 kilometers is an investment.

Tourist tinted glasses

In the spring of 2014, my trip to Berlin was my first visit to a European city. Indeed, it was my first visit to any country in the western world. It was a mere four-day trip, but one where every moment promised and delivered wonder.

I encountered stories from World War II, explored gigantic museums and enjoyed quirky street performances. But even the more ordinary aspects – visits to supermarkets, using the same ticket on a bus, a train and a tram, people carrying cycles into trains and even the bright shade of blue in the sky seen through Berlin’s clean air were fascinating experiences that are etched in my memory.

I have lived in Berlin for more than 2 years now. Several of those sights and sounds have become commonplace and mundane. My wonder has given way to a daily routine. But those streets, trains and supermarkets have not changed that much. It is merely the state of my mind that has.

The world is what we wish for it to be. As a tourist, we spend a large amount of time and money to travel to an exotic place. Taking all this trouble changes our state of mind and sets us up for filling every moment with wonder. But the same wonder is accessible to us without having to be a tourist. All it requires, is for us to put on our tourist tinted glasses.

There is, indeed, much wonder in every corner of the city that you have grown up in. If you don’t believe me, ask that person who flew in from half-way across the world and just asked you for directions.

How to start a meditation practice

Most people like the idea of meditating everyday, but struggle to build a daily practice. Why can so few of us meditate for just 10 minutes a day?

The problem lies with how that statement is framed – specifically the “just 10 minutes a daypart. Doing most things for 10 minutes a day is easy – listening to music, reading an article, surfing on the web and so on. But meditating for 10 minutes is hard.

Starting your weight training by hauling 50 Kg off the ground will lead to an injury and keep you out of the gym for good.  The idea of sitting down with one’s eyes closed for 10 minutes seems easy, unlike lifting large weights off the ground. But in reality, it is just as hard to do on a sustained basis. And when we fail, we give up by telling ourselves that meditation isn’t for us.

So here is an alternative. Start with the smallest amount of time that you can meditate for every single day. It could be as low as one minute or 30 seconds. If you have closed your eyes for that period, you have hit that day’s target. Anything above that is a bonus. In a couple of weeks, you could consider making your daily goal longer.

Cultivating a meditation practice is harder than the world leads us to believe. But like building muscle, the idea is to start small and work our way upwards.

How loss reveals value

Two-thirds of adults in developed nations are sleep-deprived. Why is that so?

Neuroscience professor and sleep expert Matthew Walker suggests that this is due to our lack of understanding of sleep itself. For centuries, scientists haven’t been able to provide a convincing explanation for why we actually need to sleep for a third of the day.

All of this changed in recent decades, when Walker and his colleagues studied people who were deprived of sleep. Routinely sleeping for less than six or seven hours impairs the immune system, doubles the risk of cancer and increases the likelihood of Alzheimer’s disease. Inadequate sleep disrupts blood sugar levels, blocks coronary arteries and increases the risk of cardiovascular disease, stroke and congestive heart failure. Sleep deprivation also triggers weight gain.

It turns out that sleep was silently holding all of those vital physiological processes in place. The German philosopher, Arthur Schopenhauer quoted how only loss teaches us about the value of things. Only when we studied sleep deprived people did we come to realize the value of sleep.

How do you know if an employee on your team is valuable? Wait for them to go on a long vacation. How do you know if milk suits your digestive system? Avoid milk for two months. How do you know if your Instagram account is serving you well? Stay away from it for forty days. How do you know if your work is valuable? Stop doing it, and you will be missed.

Emotional spillover

Would daily stock volatility trigger you to buy more insurance? Or if you were a loan officer at a bank, approving long-term loans, would the stock market influence your decisions?

Tom Y. Chang and his colleagues investigated how Chinese insurance sales and bank loan approvals were influenced significantly by daily stock volatility. They found how 1 standard deviation in daily volatility had a significant (5-6%) influence in both of these activities.

If you asked those professional bankers or the people who purchased those policies, I’m sure that they would agree that this is absurd. And yet, even without their conscious knowledge or will, the emotions they feel as they follow stock performance spills into other important decisions in their lives. Psychologists call this phenomenon emotional spillover, and its influence is shown to be largely unconscious. In common speak, we also know them, quite loosely, as moods.

Our lives today is filled with stimulation – stock market performance, 24×7 breaking news, social media notifications and several other high frequency online updates. The surges and the troughs in the emotions they make us feel unconsciously and invariably spill into the other domains of our life.

Every notification brings with it a hidden emotional cost. The question we ought to be asking more frequently is if that cost is worth it?


Barking orders at somebody is to lead by authority. Leading with your team is to lead by influence.

Laughing at somebody is to mock them. Laughing with somebody is to create or share a good moment.

Teaching at a class is to enforce obedience. Teaching with somebody is to learn and solve interesting problems together.

The difference between “at” and “with” is enrollment. When enrollment is absent, authority is forced to fill the vacuum.

Inspiration: Seth Godin’s work


Who is an eco-terrorist?

Who do you think an eco-terrorist is? The answer might surprise you.

The psychologist Dan Gilbert mentions how our response to a particular threat is often disproportional to its magnitude. For instance, we have spent more money and effort on combating terrorism, which accounts for less than 0.05% of global deaths, and doesn’t represent an existential threat to humanity. Whereas climate change is a far graver crisis that can actually drive the species to extinction, but has been largely neglected in comparison. Why is that so? Why does the Prime Minister of the world’s largest democracy still declare terrorism as humanity’s biggest threat?

Gilbert points out how the human brain isn’t particularly good at math or statistical analysis. We do not crunch numbers on the risks we face before reacting to them. Instead, our brains are good at responding to threats of a certain kind – such as the idea of an evil person hiding in the dark with a weapon, who is out there to get us. Terrorism is vivid, specific, immediate and triggers our brain’s emotional response. Climate change is the opposite. It is slow, will happen far in the future and is not caused by individuals, but by collective action. Just say the words terrorism and climate change aloud. Which term causes a bigger reaction within you?

To fix this problem, Gilbert mentions how we have exactly one feasible recourse – to frame climate change as the type of threat that we instinctively respond to. In other words, we ought to deliberately make climate change sound more like terrorism. The folks behind the “extinction rebellion” movement may actually be onto something.

This brings us back to the term eco-terrorist. Who is an eco-terrorist? Ideally, it is a person or a politician who denies climate change and worsens the crisis through dishonest rhetoric and bad policy. The world in the not-so-distant future, would view Americans as eco-terrorists, given their disproportionate CO2 emissions and their lack of will towards fixing the climate crisis.

But alas! The term eco-terrorist, thus far, has been used precisely by the people who are on the wrong side of this problem. Climate deniers often dub environmental activists as eco-terrorist. The perpetrators of one of humanity’s gravest existential threats have called their opponents “terrorists”.While they may choose to feign ignorance on environmental matters, they know a thing or two about human psychology.

So here’s what you and I can do. Given that we know about climate change and terrorism, we need to change the rhetoric. We need to call out the real eco-terrorists in this crisis.

Inspiration: Dan Gilbert’s conversation with Chris Anderson

Human Intuition vs. Statistical Machines

Lewis Goldberg was flabbergasted by the results of his experiment. How could a simple algorithm perform better than the excellent doctors that had trained it?

Goldberg was a psychologist who wished to study how experts made decisions. Back in the 1970’s, He interviewed some radiologists to find out how they diagnosed stomach X-rays. The doctors looked for 7 signs – the size of the ulcer, the shape of its borders, the width of the crater and so on. The doctors then studied how these signs appeared in different combinations, and through years of training and practice, concluded whether the patient had cancer or not.

Goldberg wished to build an algorithm that mimicked the doctors’ clinical diagnosis. As a starting point, he gave equal weights to all the 7 signs. He was skeptical whether this would work, but he wanted a starting point. He then gave a bunch of X-rays to the doctors for their diagnosis and fed the details from these X-rays to the machine. He asked the doctors to rate each X-ray on a seven point scale ranging from “definitely malignant” to “definitely benign”. Unknown to the doctors, he also slipped in some duplicates into their piles.

The results? Goldberg’s rudimentary algorithm was extremely good at predicting the doctors’ diagnosis. In fact, it outperformed the best doctor in the training set. How could this be? How could an algorithm be better than the group of doctors that trained it?

A closer look at the doctors’ diagnosis revealed some inconsistencies. The physicians widely disagreed amongst themselves – while one doctor would diagnose an X-ray as malignant, another would produce the opposite diagnosis. More surprisingly, the doctors even disagreed with their own diagnosis on the duplicate X-Rays about 20% of the time. On the other hand, the simple algorithm was ruthlessly consistent.

The doctors were not incompetent – they came up with the rules for diagnosing X-rays, which are documented in medical textbooks and eventually fed to the algorithm. They were just not as consistent as the machine was in applying those rules. In more than 200 similar experiments, clinical diagnosis (done using expert intuition and judgement) was compared to statistical diagnosis (done by applying a procedure, like an algorithm). Till date, there has been no study where clinicians have outperformed statistical methods.

The doctors’ only folly was that they were human. Human brains are creative, observant, and intelligent. But they are not consistent. In fact, one can argue how a completely consistent machine (like a computer) cannot possess intelligence. The very randomness that gives us our creativity and intelligence takes away our ability to make statistically correct decisions.

With subjective decisions, ones that need creative problem solving, our brains continue to be our best bet. But when it comes to objective, statistical decisions, where the same, well-established rules ought to be followed with ruthless efficiency, the algorithmic models that mimic human judgement are often superior to humans themselves.

Inspiration: The Undoing Project – Michael Lewis, Thinking, Fast and Slow – Daniel Kahneman


Rhyming with the familiar

Most radical changes are not embraced, and most “disruptors” are not successful. Change happens on the margins – the boundary between the familiar and the unknown.

Changing one’s diet is hard. Our favourite cuisine is often fixed by the age of 20, and our diet rarely changes once we are 30. And yet, several dietary movements – veganism, keto, Atkins, gluten free, low carb, you-name-it – sweep through our culture.

Dig a little deeper, and you can see how they push at the margins. Keto dosa is made from flour from ground almond. Vegans use almond milk, soy milk, oat milk and cashew milk as substitutes for dairy products. Supermarkets now stock soy and plant based meats and fish of various varieties.

None of those substitutes are made of anything closely resembling the original ingredients. But how similar they are depends on whom you ask. Ask a meat lover, and she would tell you how plant based meat tastes nothing like the real deal. But ask a vegan and he would swear by his soy based burger. Cheese lovers would never tolerate cashew cheese on their pizzas. But someone with lactose intolerance will tell you how you can’t tell the difference.

We don’t embrace change itself, but the stories that accompany this change. When that change rhymes with the familiar, ironically as it may seem, people who embrace the change will point to whatever is familiar, while people who do not will point to the differences.

More to be grateful for

As AJ Jacobs drank a cup of delicious coffee, he mentioned how he was grateful to everybody who made it. His son bluntly pointed out how the people Jacobs was thanking weren’t actually hearing those words.

Jacobs realized that his son was right. So he went over to the coffee store to thank his barista. But then, he realized that he must also thank the designers of his coffee mug – the cardboard cup, its lid and its sleeve. Before he knew it, Jacobs was on a year-long expedition to thank everybody who made his cup of coffee possible – from miners in Minnesota who made the steel in his coffee grinder to coffee growers in Colombia. He wrote about this gratifying experience in his book, Thanks a Thousand.

When a friend gifts you some pottery, she gives you the hours it took for her to craft it. But she also gives you the thought and the effort that she poured into it. Further, she shares with you a part of her skill as a craftsperson – the number of hours that went into learning pottery and creating a thing of beauty that sits on your desk. We value personal gifts because along with the gift, somebody shares with us a part of themselves.

There is always more to be grateful for than what meets the eye.


Up close and personal

“Email is the future”, they once said,
“Everybody should use it to stay ahead.
It travels like magic through the sky
from Delhi to Damascus in the blink of an eye.”
Which email, pray tell, with its lightning pace,
Can tell me the expression on the sender’s face?

“IM can solve that”, they then retorted,
“With smileys, pleasant and faces contorted,
You could also share a picture of your choice,
And hear snippets of your loved one’s voice.”
But I could not converse for an entire hour
Just with snapshots of when I am happy or sour.

“Get on a video call”, they said, “It is dandy!
Just need to keep your smartphones handy
To hear each other’s voice, see each other’s hair,
As though they were standing right there!”
That’s great, let me hug you. Your perfume smells haunting,
Oh no! High tech, once again, has left me wanting.

Convenience is great. Work-from-home is fantastic,
But it is meaning we crave, not experiences plastic.
Technology is best used when it does enable
Two people to seat themselves across a table
To discuss 5G, VR, holograms, all the latest craze
And how they still fall short of good old face-to-face.

Choice of restaurant

Of two Italian restaurants at a street corner, both bustling with people, which would you pick? A large one with 50 items on its menu, including pizza, pasta, risotto and lasagna, or a small one with just 6 items, all pizzas?

The answer, of course, depends on what you are looking for. If you crave for regular Italian cuisine, you should pick the large restaurant. The food there is likely to be pretty good, and indistinguishable from most other successful Italian restaurants in your city.

If you want a different experience, head to the pizzeria. Since its owners have committed to make just these 6 pizzas, they cannot afford to have them taste like regular pizzas. Their competitors across the street already serve those and 44 other dishes. They would need to make their 6 pizzas unique. And when you eat them, you would either love them or hate them – there is no room for middle ground.

Businesses with smaller menu cards are usually the ones that stand apart.

The speed of a to-do list

Do you have items on your to-do list that sit there forever?

Little’s law can shed some light on this problem. Instituted by John Little, a University professor in operations research, the law itself is simple. It states that

Average response time = Number of items in queue / Throughput

Let us consider a couple of examples to unpack that equation. The average waiting time at a hospital, with a queue of 9 patients and a throughput of thirty patients per hour would be 9 / 30, or 0.3 hours (18 minutes). On your to-do list of 9 items, say you tackle things at a rate of 3 items per day, the average response time for a task is 3 days.

As you can see, the law itself is highly intuitive. But let us consider some of its broader implications. As humans, low response time motivates us. A team which has a moving to-do list is likely to make more progress overall. The satisfaction of striking things off a list keeps us going. But items that stay on the list forever do the opposite. They drain our motivation. So our main goal is to reduce response time. This goal has two simple implications:

1. Keep the number of items in the queue to a small number, thereby reducing the numerator

2. Keep each item small, thereby increasing throughput and the denominator

Although this seems obvious, we often have the opposite tendencies. When a project slows down, the manager’s immediate impulse is to throw more items into the to-do list, expecting it to move faster. Under pressure, they are also likely to make each item more substantial. Alas, both these measures only slow their team down further.

Few things motivate us like forward motion. On a long trek in the mountains, one of my group leaders mentioned how the key to sustain momentum is to take smaller steps. By doing so, we go farther in the long-run.

As if you would teach it

Do you have problems retaining what you learn?

Reading an article or watching a video often gives us a feeling of deep understanding. But in the process, we are merely following what we are looking at, and are unable to recall it a week later.

It is popular knowledge that teaching something helps us learn it better. The Feynman Technique outlines how this could be done. But this technique works like eating healthy. While most of us know how good it is, its implementation is harder. Teaching is hard work. Besides, to teach something you need a generous student.

But try out this experiment. When you read an article the next time, read it as if you were going to teach it to somebody else. Now observe your approach towards the article. Does something change? Do you pay greater attention to it? Do you try and better organize its ideas in your head?

The very intention of teaching something changes our approach towards learning it. Of course, if you are lucky enough, you could actually follow through with the teaching part. If not, just summarizing it in a notebook just as you would teach somebody else would help as well.

The levers around us

Give me a lever long enough and a fulcrum on which to place it, and I shall move the earth – Archimedes.

We’ve all learnt about levers in school. They are force multipliers. With a lever whose load arm is 5 times as long as the effort arm, one can lift a rock weighing 50 Kg with just 10 Kg of force.Leverage

But the word “leverage” applies to several other situations.

Consider a manual process that needs to be performed every single time. Once that process is automated, you are saved of that manual labour for eternity. The leverage behind automation is what has flooded our lives with inexpensive goods since the Industrial Revolution.

A good night’s sleep offers great leverage. 8 hours of restful sleep multiply productivity in the 16 hours that follow it.

The old Chinese proverb about teaching a man to fish points to yet another form of leverage. Training in most organizations is neglected – this is often short sighted. Andy Grove, one of Intel’s founders, illustrates this with some simple math.

Training is, quite simply, one of the highest-leverage activities a manager can perform. Consider for a moment the possibility of your putting on a series of four lectures for the members of your department. Let’s count on three hours preparation for each hour of course time – twelve hours of work in total. Say that you have ten students in your class. 

Next year they will work a total of about twenty thousand hours for your organization. If your training efforts result in a 1 percent improvement in your subordinates’ performance, your company will gain the equivalent of two hundred hours of work as a result of the expenditure of your twelve hours. 

What other levers can you find around you?

An idea is merely a seed

As a kid, I bought a book titled “Learn Sanskrit in 30 days.” That book was my initiation into the world of click-bait. I bought it immediately and started reading it. Needless to say, my fascination lasted all of about one hour. I still don’t know much Sanskrit.

The reason self-help books get a bad rap is because they promise shortcuts. The message they send out is, “It is easy! If X,Y and I could do it, why can’t you?” It isn’t that those books have bad ideas – most of them have good ones that charm the people who read them for a couple of months. But then, they come to terms with how difficult it is to get to the promised land and get disillusioned.

Ideas are like trees. They start as a seed and mostly grow underground until the first shoot surfaces. It takes several weeks of careful nurture for a tree to grow into a slender and healthy plant. Similarly, an idea starts off as a seed in our head. It takes time for this idea to seep into our bones and muscles. It takes daily practice for it to squeeze into our routines and our unconscious actions. It takes deliberate effort over a long period for us to embody the idea. Of course, all of those difficult parts are duly edited out of that 100 page self-help book.

Knowing an idea isn’t the same as living and breathing it, just as a seed isn’t the same as a tree. Besides, how much credibility do we give somebody who promises us a fully grown tree in in 30 days?

Can you draw a bicycle?

Gianluca Gimini, an Italian artist, had a childhood memory. His classmate was asked to draw a bicycle in front of the entire class. He couldn’t, and the class laughed at him. Bicycles are ubiquitous devices. Its simple mechanisms are plain to see. Anyone could draw a stick diagram from memory. Right?

Rebecca Lawson, a cognitive psychologist from the University of Liverpool wanted to test just that. She gave a bunch of people a simple frame with a seat and a handlebar, and asked them to complete the rest of the bicycles. The vast majority couldn’t draw a schematic that would actually function. The resulting diagrams are interesting.

Annotation 2019-10-06 212231.jpg
Rider beware!

When Lawson repeated the same experiment while letting participants look at a real cycle, they made far fewer errors. Her experiment points to a tendency of our brain to think that we know more about the outside world than we really do. Our brains tend to use the world as “outside memory”, to save us from storing huge amounts of information. But at the same time, it gives us illusions of competence, which led to Gimini’s classmate’s public humiliation.

Lawson’s bicycle experiment, among many others, reveals our tendency to be overconfident creatures. As a rule of the thumb, we know less about things than we think we do.

If this applies to drawing bicycles, what else can this be true of? What about smartphones? With the world’s information literally at our fingertips, do we end up feeling even smarter than we should? It turns out that we do.

PS: Gimini asked a few people to draw bicycles and rendered their visions in 3D, considering the artist that he is.

Source: The Science of Cycology: can you draw a bicycle?

Step outside your shoes

One fish asks another, “How is the water?”. To which the other fish replies, “What is water?”.

Like most stories involving talking animals, this parable illustrates human behaviour. It refers to our inability to extricate ourselves from the circumstances that we have come to believe as normal – our inability to take the outside view.

Unless we live abroad, we assume that everything that happens in our culture ought to be the norm. Almost nobody believes that they speak with an accent in their native tongue – accents are for foreigners. We are unable to discern the influence of the things we consume everyday in our lives, unless we stop using them for a prolonged period. The best way to understand what your smartphone does to your state of mind is to go without a smartphone for a month. The best way to find out how your rice based diet makes you feel is to go low-carb for a month.

Taking the outside view helps us understand the world more objectively. We are able to see solutions to our friend’s obvious problems because we are able to step outside their personal situation. That is also why companies hire external consultants. Long breaks and vacations lead to epiphanies because they help us step outside of our daily routines.

All the world is a stage, and all its men are merely players, said William Shakespeare. We play several roles in our lives – of a child, a student, a teenager, an intern, a professional, a boss, an executive, a life partner, a parent, a grandparent and so on. And yet, to perceive the world for what it is, we need to take the outside view – one that helps us realize how we are merely actors and that those are merely the roles we play.

Anchored to the status-quo

Both Jack and Jane have $5 million. Who is the happier of the two?

The answer depends on where they started from. If Jack had $1 million and won 4$ million in a lottery, while Jane started with $10 million and lost $5 million in a financial crisis, he would be a lot happier than she is. It isn’t the amount of wealth that makes people happy. It’s the deviation from the status-quo.

For better or for worse, people are anchored to the status-quo. When you seek to make any change, the status-quo would be an anchor you would drag along, unless you can free yourself of it.

Leaders bring the bad news

Just like doctors do.

As they feel pulses, and listen to their stethoscopes, doctors are usually the first to know about the bad news. The moment they do, it is their duty to inform the patients regardless of how difficult the task is.

The stereotypical leader exudes positivity and marshals her team through difficult times while keeping the morale up. Regardless of the difficult times the team faces, she keeps up a sunny disposition and inspires the team to follow her lead. But that stereotype has some problems.

Just like a doctor, the leader has her finger on the pulse of the team. The moment she knows that something is wrong, she needs to acknowledge it and let the team know. Similar to patients, her team on the ground experiences the symptoms of the problem first hand. Despite that, if the leader contrives to maintain a sunny disposition, the team usually sees through it. Such a leader’s actions are neither authentic nor courageous. Soon afterwards, the team stops respecting her.

It is common tendency for leaders to hide bad news from their team, even as they try and address problems. It is hard work to bring the bad news. But like doctors, good leaders are bound by their duty to bell those cats.

Inspiration: The Hard Thing about Hard Things – Ben Horowitz