Abhi’s Newsletter Vol 10: Asymmetric Bets

Take Asymmetric Bets 🎲

We rarely come across bets with unlimited upside and capped downside. Human brain is wired in such a way that we often side with capped downside. For instance, imagine you are in grad school, and are working on an excellent app concept. Imagine that the app has showed immense promise, but it is nowhere close to making money. Interestingly, you just landed a job with McKinsey. McKinsey! surely, right?

Erik Torenberg suggests that perhaps you should take the other option. For instance, if you give up McKinsey there is a limited downside. There is a good chance that you will be able to crack it again. However, if your app concept grows big, sky is your limit.

Erik suggests, we should take such asymmetric bets on the side of unlimited upside. Especially the young! He implies, that you can accumulate optionality through the skills you gain, knowledge you acquire, and the unique experiences you undergo. 

Key takeaway is that risk taking brings with it, its own optionality. You should embrace it! 

Brilliant piece by Erik here 

Slouching lobsters and dominance hierarchy 🦞

Did you know that Lobsters slouch when they are defeated in a dominance fight with another Lobster? They also stretch their posture and walk all puffed up when they win! The incredible thing is, the hormone that regulates this behaviour in Lobsters is Serotonin. The same hormone that regulates mood, and social behaviour in humans. This commonality between humans and lobsters dates back between 350 and 600 million years!

Research suggests direct link between levels of serotonin in our brains and our dominant hierarchy position. People with higher serotonin levels are more likely to attain better status, easier access to resources and generally higher positions on the social fabric. People with higher levels of serotonin are also more resistant to aggression, anger, and anxiety.

Surprisingly, just change in our posture i.e. standing up straight with our shoulders straight, can have a positive impact on serotonin levels in our body and possibly our success. 

This is rule 1 in Jordan Peterson’s brilliant – 12 rules of life, “stand up straight with your shoulders straight”.

This is one of my all-time favourite talks. 

The personality crossover 🎭

You may be an introvert or an extrovert. According to Dr Brian Little, we all routinely cross the border into the the other side. This is often to support a critical life goal. For instance, an Introvert leader may still engage in public speaking to communicate effectively. Also, an extrovert can work independently if he or she has no other choice (pandemic pun intended). 

Our personalities are more malleable than we think. One thing to watch out for is to avoid protracted crossover. A protracted crossover can affect people negatively. It can even cause anxiety and depression. Therefore, whenever you have a crossover between introversion and extroversion, take time to recuperate. For instance, if as an introverted leader you have had to do public speaking, spend some time meditating or journaling afterwards. Also, if as an extrovert, you have been working independently, socialise in an alternate way. This is a very nuanced but powerful advice!   

Watch Dr Brian Little’s incredible talk here

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Abhinandan