Think Like a Freak

Think Like a Freak: The Authors of Freakonomics Offer to Retrain Your Brain by Steven D. Levitt & Stephen J. Dubner



OVERVIEW

In Levitt and Dubner's first books they applied the scientific method and an economic style of thinking to solve all kinds of problems. After those books were released, they received countless letters and emails from readers with other problems for the authors to solve.

Instead of trying to answer each and every question they thought it might be better to teach anyone how to solve problems, how to "Think Like a Freak."

Think Like a Freak has nine chapters for their nine principles of problem-solving. I'll summarize a few below, leaving the rest for you to read in the full book.


The Three Hardest Words in the English Language

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For most people, the three hardest words to say are not I love you but I don't know. This is a shame because until you can admit what you don't yet know, it's virtually impossible to learn what you need to. This is in line with Nassim Taleb's theory of an Anti-Library.

Complex problems often have complex solutions. These solutions are usually assembled with facts, along with judgment, and a guess to how things will play out in the future.

With these complex problems, it can be very hard to pin a particular cause on a given effect. Yet politicians, business leaders, sports pundits, and stock market gurus all tell us that they know how the future will unfold.

But they don't.

Countless studies have shown that "experts" making predictions are no more likely to be accurate than random chance.

Smart people love to make smart-sounding predictions, no matter how wrong they may turn out to be. This is because the people making these wild guesses can usually get away with it. 

If someone makes a wild-sounding prediction and it comes true they will be heavily rewarded. However, if it doesn't come true their predictions will quickly be forgotten. 

When bad predictions are unpunished, what incentive is there to stop making them?

The People to Avoid

Dogmatists: The most deadly attribute for someone who is bad at predicting is dogmatism. Dogmatism is the unshakeable belief that they know something to be true even when they don't. This is over paired with massive overconfidence. A deadly combination: cocky plus wrong.

Ultracrepidarianists: Just because you're good at something doesn't mean you're good at everything. Ultracrepidarianism is "the habit of giving opinions and advice on matters outside of one's knowledge or expertise."


Think Like a Child

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When it comes to generating ideas and asking questions, it can be a really good idea to think like a child. Kids may ask silly or simplistic questions but they are also relentlessly curious and relatively unbiased.

Kids are not afraid to share their wildest ideas.

There's an economic concept called "free disposal." The ability to get rid of any excess inputs. So... think like a child. Brainstorm as many ideas as you can, even outlandish ones. Don't judge or inhibit any ideas. Later, you can go back and sort idea the feasible ideas from the list.

As long as you can tell the difference between the good and bad ideas, simply don't act on the bad ones.

Children also aren't afraid to state the obvious. When children are introduced to a problem they are more willing and able to ask a question that an insider would never dare to ask.

Think Small

Thinking like a child means thinking small. Every big problem has been thought about endlessly by the smartest people in the world. If the problem still exists, generally speaking it means it's too hard to be cracked in full.

Here are four reasons to think small:

  1. Small questions less asked and less investigated. They are virgin territory for true learning.
  2. Big problems are usually a mass of intertwined small problems. You'll have more success dismantling one small piece than failing at the full problem
  3. Change is hard, but your chances of triggering change on a small problem are larger than on a big one.
  4. Thinking big requires speculation. By thinking small the stakes are smaller but you can be more sure you know what you're talking about.

Have Fun

Thinking like a child also means having fun. 

Kids aren't afraid to like the things they like... Kids are in love with their own audacity, mesmerized by the world around them, and an unstoppable in their pursuit of fun.

As people get older, they lose this ability to have fun. Much of the business world is completely allergic to fun. Maybe there's a fear that having fun means you aren't serious.

In looking at highly successful people, raw talent is overrated. People because excellent at their craft by endlessly practicing their skills.

If you love your work, then you'll want to do more of it. When you you do more of it you get better at it. The better you get at it, the more you'll want to do of it. It's a virtuous cycle. 

When you're heavily engaged in your work, you'll run circles around other people even if they are more naturally talented. 

Designing the Right Incentive

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People respond to incentives. It's the core principle that a Freak lives by.

Understanding the incentives of all the players in a given scenario is fundamental in solving any problem. This is something discussed in The $100 Startup by Chris Guillebeau.

Money is the most obvious incentive but there are many non-financial incentives. The key to finding the right incentive is to put yourself in someone else's shoes to find out what matters to them.

  • Some people may want to be liked by others, other people may want just not to be hated.
  • Some people may want to stand out in a crowd, others would rather blend in.

By understanding what a person wants, you can design an incentive just for them. The power of nonfinancial incentives is discussed in Social by Matthew D. Lieberman.

Steps to Create the Right Incentive:

  1. Figure out what people care about, not what they say they care about.
  2. Incentivize them on the dimensions that are valuable to them but cheap for you to provide.
  3. Pay attention to how people respond; if their response surprises or frustrates you, learn from it and try something different.
  4. Whenever possible, create incentives that switch the frame from adversarial to cooperative.
  5. Never, ever think that people will do something just because it is the "right" thing to do.
  6. Know that some people will do everything they can to game the system, finding ways to win that you never could have imagined. If only to keep yourself sane, try to applaud their ingenuity rather than curse their greed.

How to Persuade Someone

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One of the hardest things in the world is to persuade someone who doesn't want to be persuaded. 

Understand How Hard persuasion Will Be - And Why

Smart people will especially hard to persuade, but not because their ideas are well thought out.

Smart people are used to being right and therefore have greater confidence in their knowledge, regardless of what side of an issue they are on. But being confident you are right is not the same as being right. 

The first step is to understand that your opponent's opinions is likely based less on facts and logic than on ideology and herd thinking. Of course, if you were to suggest that to the person they would deny it. People behave according to biases they can't even see. As Daniel Kahneman wrote: "We can be blind to the obvious, and we are also blind to our blindness." 

Step 1: It's not you, it's me

Your argument may be factually indisputable and logically airtight but if it doesn't resonate for the recipient, you won't get anywhere.

Your argument doesn't matter. It's all about how someone receives your argument. 

Step 2: Don't pretend your argument is perfect

There are no perfect solutions. If you make an argument that promises all benefits and no costs, you opponent will never buy it-nor should they.

If you paper over the short-comings of your plan, that only gives your opponent reason to doubt the rest of it. 

Step 3: Acknowledge the strengths of your opponent's argument

The opposing argument almost certainly has value - something you can learn from and use to strengthen your own argument.

This may seem hard to believe because we're so invested in our own point of view, but remember: we're blind to our own blindness.

Additionally, an opponent who feels his argument is ignored isn't likely to engage with you at all. 

Step 4: Keep the insults to yourself

Most people don't take criticism well. And negative information about a person can weigh very heavily on them.

Name calling will make you an enemy, not an ally, and if that's your objective, then persuasion is probably not what you were after in the first place.

Step 5: Why you should tell stories:

Stories are much more than the sum of it's parts. Stories resonate with us.

Stories also appeal to our inner narcissist. We think of what we would do in the situations provided.

And finally, stories are really good at capturing our attention and therefore really good for learning. 


The Upside of Quitting

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Winston Churchill famously said: "Never give in, never give in, never, never, never-in nothing, great, small, large or petty."

Sometimes quitting can be the best move you can make.

There are three major forces that keep us from quitting:

Force 1: We've been told for centuries that quitting is a sign of failure

Force 2: The sunk-cost fallacy. This is the belief that after all the time, or money, or effort you've put into a project that it would be counterproductive to quit and you might as well see it through.

Force 3: Ignoring opportunity costs. Concrete costs are much easier to see and understand. 

The chapter challenges the notion that quitting is bad.

Resources are not infinite. You can't work on everything at one time.

You'll never be able to solve tomorrow's problem if you aren't willing to abandon today's dud.

Quitting also isn't a total loss. Failure can provide valuable feedback. For more on overcoming failure, read The Obstacle is the Way by Ryan Holiday.

Quitting is at the very core of thinking like a freak. It's important to quit on things that aren't worth it so that you have the fortitude to tough it out on the things that are truly necessary.

By quitting you learn what is worth letting go and what is not. 


Where to Buy

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Buy the book on AmazonBarnes and NobleBAM, or just Google it. (I receive no kickback or commission for these links or summaries. See my disclosure for more.)

Even more great stuff in the book:

  • How Takeru Kobayashi dominated the Coney Island Hot Dog Eating Contest
  • How to identify the root cause of an issue

  • Barry Marshall and Robin Warren taught like a freak to create a good cheap ulcer medication when everyone else said it couldn't be done

  • A crash course on the best way to incentivize people

  • The difference between declared and revealed preferences

  • And much, much more!

 

Erik Cianci