On: good and bad procrastination, the mathematics of happiness and more
This issue was first published in my biweekly newsletter.
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Today’s Snapshot
- The opportunities you miss out on are as important as those you pursue
- Principles can serve as a guiding light in a dark tunnel
- There is good and bad procrastination
- The mathematics of happiness
- 5 life-changing habits
1-On Opportunity cost
Netflix is now worth close to $200 billion.
Now imagine if you had the money, and could have bought it for $50 Million.
Would you have bought it?
In 2004, Blockbuster was making $5.9 Billion in annual revenues.
At the time, only 4% of American homes had broadband internet, so video streaming was not yet mainstream.
By 2010, 68% of homes had broadband, and video streaming was poised to take off.
That same year, Blockbuster filed for bankruptcy.
Ten years earlier, in 2000, Blockbuster had turned down the opportunity to acquire Netflix for $50 Million.
That was just three days’ worth of revenue for Blockbuster at the time.
Twenty years down the road, Netflix is now worth close to $200 Billion.
This is not just a Blockbuster story.
There are many examples of companies that missed out big because they failed to evaluate the opportunities they were faced with:
-In 1998, Yahoo turned down the opportunity to acquire Google for $1 Million.
Just four years later, in 2002, Yahoo tried to buy Google for $3 Billion, but Google refused the offer, and Yahoo eventually walked away (by the way, Google was only asking for $5 Billion-it’s now worth more than $1.5 Trillion)
-In 2004, Google offered to buy Friendster for $30 Million, but Friendster founder and CEO Jonathan Abrams turned down the offer.
Instead, he took a $15 Million investment from a few venture capital firms.
A few months later, Abrams was ousted as CEO.
As the VC firms were more interested in pursuing growth than fixing Friendster’s existing issues, their customers grew frustrated and left.
This eventually lead to the demise of Friendster.
A few takeaways:
-Opportunity cost is not just the loss of potential gain when an opportunity isn’t seized. It’s also the loss of gain when we decide to pursue one opportunity instead of another.
-In the case of Blockbuster, the company could have chosen to invest in Netflix or offer a bit more money to acquire it instead of competing with.
-In the case of Friendster, the company could have sold to Google or choose to focus on fixing its existing problems instead of chasing after growth.
2-On the importance of principles
By definition, principles are the fundamental truths or beliefs that guide us in making decisions and ultimately the actions that follow.
Although not always, principles are mostly adopted or developed based on prior experiences and knowledge.
A few basic examples of how principles might work :
-When J,K and L happen, usually M follows
-If event X happens, then I respond by taking action Y
-When I am faced with situation A, I will respond with behavior B
Principles are important because they provide us with a framework for making decisions.
Instead of making decisions based on emotions or impulse, principles help us make decisions that are consistent and inline with our values and beliefs.
Principles also help us to deal with recurring events and conditions effectively.
For example, if we value honesty, and have a principle to always tell the truth, we will tell the truth even when it is difficult to tell the said truth in that situation (let’s say when the truth doesn’t benefit you or doesn’t point a positive picture)
In return, when being principled, we will be more than likely to build trust and credibility with others for instance.
When we act consistently with our principles, we also can build a reputation for being reliable and trustworthy (if those principles are in alignment with the common good or not evil).
Finally, principles can help us stay safe and get ahead in different aspects of life.
For instance:
1- If you worked for a couple of startups before, and noticed that there were times when owning equity in some of the companies provided great rewards, and other times when the opposite happened (e.g loss on equity value, your salary was cut), while your friends at bigger companies had raises, you can draw conclusions from those events and build principles based on those experience to maximize your upside in different times.
When you start observing similar circumstances play out, you can move accordingly (from startups to bigger companies or vice versa)
2-If you have lived in places where wars happened before or studied history and are aware of some of the factors or variables that usually lead to war, then when you observe and notice the same variables or similar ones play out, you can seek refuges in places that could be deemed safer.
These are multiple ways to see principles at play.
To learn a bit more about principles, I would recommend this podcast episode with Ray Dalio (he has written extensively about principles-how to develop and use them).
3-On the bad type of procrastination
I used to believe that procrastination was bad.
However, the are two distinct types of procrastination: good procrastination (waiting for the right moment) and bad procrastination (being lazy).
Good procrastination can allow us to consider more possibilities, different ways to accomplish goals and come up with more creative ideas
It is common among creative thinkers and great problem solvers.
Here is an example of good procrastination at work:
In a sociology study, 2 groups of college students were tasked with coming up with a business proposal to replace a convenience store that was shutting down on their campus.
The first group started working on this task right away.
The second was told to just play video games and procrastinate.
Their business proposals were then evaluated by independent raters.
The group that procrastinated came up with proposals that were 30% more creative than the ones who proceeded with the task right away.
The right type of procrastination allows you to engage in divergent thinking.
So what causes bad procrastination?
One of the most pervasive viewpoint about bad procrastination is that it results from a lack of energy and/or motivation.
But this not a complete view of the later.
Although I will admit that if there is no intrinsic motivation to solve a problem or accomplish something, bad procrastinating will prevail and set you behind.
Lack of energy or motivation could be a significant contributor to why one procrastinates.
Bad procrastination can also result from pervasive stress and anxiety that could stem from a lack of clarity or other things.
When you are anxious, it’s hard to take action on the next thing you are supposed to do.
You spend time circling through what if scenarios instead of taking action on the most immediate thing you can do to make progress.
Thus trying to reduce or address your anxiety can help overcome procrastination.
4-On a formula for happiness
Happiness is mostly about practicing detachment than getting what we want or think we want.
There is a simple equation to illustrate this:
Extent of happiness = What you have/What you want
One way of increasing the yield of this equation is to reduce the denominator of the equation (the wants).
Basically when you appreciate what you have or decide that you don’t want much, you will be happier than when you want more of a thing or situation.
I would add though that needs are different from wants.
I think that if you lack what you need, it could definitely affect your happiness in a negative way.
For instance, if you need food or shelter or medical care, and don’t have access to them, then you are most likely to be unhappy.
On the other hand, if you already have access to enough food that is relatively good in the region you reside in, then wanting more or ‘better’ food you have seen elsewhere can contribute to being less happy.
You can learn more about this concept from this podcast episode.
5-On 5 habits that will transform your life (in 3 months)
Although these habits are simple, they are not necessarily easy.
One tip on building a new habit is to focus on consistency over perfection.
And don’t beat yourself up if you can’t get them right right away, because it takes at least 21 days to build a new habit.
Here are the 5 habits you should develop (in no particular order):
- Wake up before 7:00 AM
This gives you time yo work on yourself and your own dreams/side projects.
Alternatively, if you have kids, it can give you time to take care of yourself before you have to take care of the kids.
- Read a few pages and take notes
Reading and taking notes is important because it trains to not consume information passively.
When you write down some notes, you can resort to them without needing to go look for it from the original source, which can be time consuming.
- Exercise at least 3 to 4 days/week
Exercising is not only a great way to keep you healthy, it’s also a great remedy for anxiety, low motivation and at times depression.
- Spend ~30 minutes Praying and Meditating
These days, it’s hard for most of us to spend time with ourselves, conscious and undistracted.
This leads to us suppressing our inner voice, and alienating who we truly are.
Taking some time alone either praying, if you are a believer, or meditating if you are not (or both) is a great way to reconnect with your subconscious.
- Start writing daily: keep a thought journal, create content, etc…
Writing teaches you to be a good communicator. When you write, you think of the best ways to convey your message in a clear and concise way.
