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RyanHoliday.net - Meditations on strategy and life
Blog

The Course

When you first begin as a strategist, you hold the faulty assumption that foresight means predicting what happens next. Of course, though it sometimes does, more often than not, the proper plan is proven wrong before it is proven proper.

There are plenty of opportunities to undermine yourself along the way. To have doubts. To want to turn back. To disavow the instincts that brought you here. They say that the market bottoms out when the last bull finally blinks and throws in the towel.

So you may beat yourself up when it doesn’t work out exactly as you envisioned. You forget that the timeline could be a year or five years or longer. Groundwork can suddenly pay off without expectation. It can look very bad before it ever starts to look good – or worse it can look like nothing, like you did nothing at all.

What you need to develop is the quiet confidence that Seneca called euthymia—”the belief that you’re on the right path and not led astray by the many tracks which cross yours of people who are hopelessly lost.” You’re after something elusive and rare and critical: to not be shaken. If you can accept that your strategy will almost certainly “feel wrong” at some point, you’ll be less likely to ditch it at the critical moment. In fact, you’ll come to know this test as a positive experience that exercises your tolerance for dissonance.

May 25, 2010by Ryan Holiday
Blog

Their Logic

In the preface to The Hollywood Economist, Edward Jay Epstein tells the story of why newspapers still report box office numbers. The journalists who put them together are well aware that ticket receipts make up just a small fraction of the average movie’s revenue. They know, for example, that the numbers are highly relative—different movies have different splits with different theater chains and distributors and even then, studios rarely take home anything over 40% of the money earned theatrically. Not to mention that domestic and international gross, which although conveniently rolled into one, don’t go into the same coffers. They know that the results are juiced by p&a spend, but still get compared head to head with movies that didn’t have any.

Yet newspapers continue to report what are little more than bragging rights. Why?

The answer is that newspapers can only report on what is happening right now. By the time the other revenue streams trickle in—ones that studios are reluctant to disclose—nobody cares how much money a movie made. Not only that, but movies contribute millions of dollars in newspapers advertising and an immediate scorecard is nice fodder for next week’s ad copy. #1 Movie in America, etc.

So what seems like cluelessness is actually very logical. Newspapers are responding perfectly to the incentives that the inclinations of their readers and the industry converge to create. And for the most part, any effort to ‘fix’ this anachronism would fail unless it changes the root cause of the issue – which in this case is an innate feature of the human attention span.

Many things are like this. What seems like an easily resolved inefficiency is actually a deeply rooted, consistent response to the conditions of the market. You just have to be humble and open minded enough to spot these native operative paradigms. To understand why people behave this way, the assumptions need to be traced back to their founding sources. Not only for the sake of sympathizing with the culture, but to figure out what can be changed and what can’t.

Unfortunately, this is why bloggers analysis fails so spectacularly. As outsiders, they’re cut off from the peculiarities of the terrain – and they are too foolish and self-absorbed to to bother finding it out for themselves.

It’s easy to learn enough about an industry to know that, say, the box office numbers don’t tell you much. Pointing it out isn’t helpful. What’s difficult is to develop a wide and empathetic understanding of the sources that created these conditions. This is the position that makes change or action possible. Because the solution will not be obvious. It will not be an “aha!” moment. And if you feel like you have one, you’re probably still in the easy phase.

May 12, 2010by Ryan Holiday
Blog

Staying Sober

“When I walk into a casino there is a soundtrack in my mind. I am hearing all those cool Rat Pack, Dean Martin and Sammy Davis songs and…it just feels like everything’s swinging, everything’s hip and it’s all gonna go my way. Ring-a-ding-ding. Cha-Ching. You know?” Gabe, Gambling Addict. Intervention.

A gambling addiction can be seriously debilitating in that it can leave you in financial ruin and lead to mental health problems and possibly substance abuse. Places like DayHab Gold Coast Rehab off support to those going through this and battling other addictions. Gabe gambles four days a week, up to 12 hours a day. He has lost over $500,000 in the last six years. His addiction is fed by the soundtrack delusion—in fact, he’s crippled by it. It’s the song the starts slow and melodic and rises up into the Second Act. The worse things get, the more he needs it—the more it divorces him from the reality and the awfulness of his situation.

He’s a nice example because of the contrast. The casino is a shitty Indian casino two hours outside Los Angeles. He’ll never be in the Rat Pack and it’s objectively not going his way. But the truth is that the fallacy is much more insidious. And we’re all addicted to it.

The best way to stay sober: practice your contemptuous expressions.

May 4, 2010by Ryan Holiday

“If you only read the books that everyone else is reading, you can only think what everyone else is thinking.” - Murakami

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