All Things Risk: Poker, Mental Training, and Performance
Ben Cattaneo and Chris Sparks discuss what to do when things go wrong, why we are all mental athletes, the importance of mental training, and Davos.
Audio recording below (1h13m). Full transcript following.
Podcast Transcript
Note: transcript slightly edited for clarity.
Chris: Think about this in terms of psychological capital, that you're really dialed in to recognize those moments, and to go after them, and at the same time to notice, to note the days that you don't have it, that you're not making good decisions, and to limit your downside and to prioritize recovery, because a poor decision wipes out a lot of really good decisions, and the results of any given day really don't matter.
Ben: That's Chris Sparks up next on the All Things Risk podcast.
Welcome, and welcome back to the All Things Risk podcast. I'm Ben Cattaneo, your host, and it hasn't been that long. This is our second episode in three days, and I wanted to get this one out for a while. It was recorded before the Coronavirus lockdowns, and I didn't want to wait another week, because it's such a great conversation, and now is a wonderful time to release this conversation. My guest is Chris Sparks. Chris is a professional poker player. He was among the top twenty ranked poker players for online poker in the world. And it is this experience of making just an exponential number of decisions that Chris has taken and applied and applies to help people in their work and for their personal growth. And if you've listened to a couple of our previous episodes with Annie Duke and with Alec Torelli, you will know that poker is a game that mimics life, because it involves decision-making under uncertainty.
And Chris has taken what he's learned in poker and his academic background, which by the way is in marketing and psychology, and founded a company called The Forcing Function, which is dedicated to empowering the next generation of entrepreneurship. And in this episode, Chris shares a wealth of very useful techniques to improve performance and deal with uncertainty, that even though we recorded this before the pandemic right now are incredibly useful. And they include decision-making techniques, what to do when things go wrong, why we are all mental athletes and the importance of mental training, what the World Economic Forum in Davos looks like, which Chris had just returned from when we recorded this, and a ton more of great things. So let's get into it. Here is Chris Sparks.
Chris, welcome to the All Things Risk podcast. It's a pleasure to have you on, and love talking about the parallels between poker and life and all that good stuff. This is going to be a lot of fun, I'm sure.
Chris: Super excited to be here, Ben. Thanks.
Ben: So to kick things off, would be great to get a little bit of your background as to who you are, what you do. And I'm always curious, like, how did . . . How does somebody become a professional poker player? How does that happen?
Chris: That's, yeah. It's a funny one. I always like to say you become a professional poker player when you just stop working. It's . . . There's a lot of people who label themselves as such. It's not necessarily a label that means that someone is successful, it just means that that's the primary way that they spend their time. For me taking the plunge somewhat happened because I was just more successful at it in terms of economically than I was at other things. The quick background that I'll give, I've always been a games player. I was really into, you know, Real-Time Strategy games, card games growing up. And stumbled upon poker just from, you know, my other game's friends saying, "Hey, there's this other game you can play, but you can actually make money at it." And you know, this was when I was sixteen or so, so real money was playing in five thousand person freeroll tournaments, right? Entering for free, where a first prize might be a hundred bucks. But you know, it was a lot of money at the time. And I would stay up all hours of the night, twelve hours straight, trying to win that.
And kind of the big transition happened when I entered college. You know, so much of luck is timing and market cycles. And as I start college, poker is on TV all the time. So this is 2004. Chris Moneymaker has just won the World Series of Poker. Hole card cams are a thing, making poker . . . Taking poker from one of the least interesting things to watch to one of the most interesting. At least, you know, at the time, if you were a millennial male. And if you wanted to spend time with other guys in the dormitory, in the frat house, what you did on weekends was play poker. And so just my natural gaming background gave me a big edge in these games, and I started to very quickly become relatively successful. You know, paid off my tuition pretty early. Started off playing tournaments. Had some early five-figure scores there, won a large seven thousand person tournament right after I graduated for $135,000. And then decided to transition into playing cash games.
So the difference between a cash game and a tournament—obviously a tournament you put down one buy-in and then you compete over a prize pool, where the majority of the prize pool is at the top. A cash game you are betting the money in front of you. You call it "table stakes." You can only bet what you have in front of you, and so you can get up and walk away at any given time. The primary advantage of playing cash games is that because you have an immediate realization, versus playing for a very top-heavy power-law prize pool, that you can have more consistent earnings. And especially at the time I was playing online, I started off playing twenty-four to thirty games at a time, which means I was having thousands of decisions per hour.
Ben: Holy cow, that's—
Chris: And you get in quite a lot of experience in a short period of time, where you had, you know, my generation of players . . . You know, by the time I was twenty-three, I had played more hands of poker than guys who had sat in their casino their entire lives. And so I mean, that's really the key to improvement speed in anything, is the tightness of feedback loops, where I'm making a decision and I'm getting immediate feedback thousands of times per hour on whether the decision I made was correct, in terms of . . . You know, the result was within the range of possibilities that I had projected.
So this kind of goes on during college. It paid tuition, but you know, I'm a Midwest guy, I had always wanted to make television commercials and so never really considered going pro. I accepted a job with Ford Motor Company out of college, and again the luck of timing. Joining the auto industry in the year of 2008 was not the best time, and the week before I was supposed to start Ford goes on a government-mandated hiring freeze. So I'm sitting in Detroit, don't know anyone. All of the sudden I have all this free time. I was a bit of an over-achiever in college. And so, hey, well this hobby that paid my tuition, what would it look like if I did this all the time? And so all of a sudden poker became an eighty-hour a week job for me, and I started what my annual salary would have been on a monthly basis. From that, I parlayed into a consultancy, where I coached other players who were up and coming, as well as an investment arm where I would find promising players and back them. You know, I covered their downside in exchange for a percentage of their winnings.
I move out to Los Angeles into kind of a co-working house with four other high-stakes professional players, and before you know it 2011, I'm ranked in the top twenty online players in the world for cash games. Fast-forwarding a little bit, April 2011, the day we call Black Friday, online poker is shut down by the Feds. That's a whole story in itself. Money laundering, bank fraud, all that stuff by the sites. I have half of my net worth seized, get some of it back three years later, and the journey since then has kind of been a wandering of, "How can I apply all these lessons that I learned on the way to becoming one of the world's best poker players to helping others?" I'm very passionate about empowering entrepreneurship, helping more people put things into the world. I also really enjoy working with active investors, who make up a big part of my clientele along with company executives. You know, what are the commonalities behind making excellent decisions with imperfect information? That's essentially what poker was.
So I got back into poker. Kind of got lured out of an early retirement in 2017, and so I kind of split my time 50/50 these days between my consultancy, The Forcing Function, and playing high stakes poker online.
Ben: Wow. There's a lot there. And I guess before we dive into some of this stuff, what did you want to do or be when you were growing up? Did you . . . Clearly online poker is a new career, so perhaps you did have some inkling that this was some option that . . . Did you have any other dreams or ambitions or things that you wanted to do with your life?
Chris: Yeah. I would say if I had a thread that ties everything that I've done together, it's understanding people. I've always been very fascinated by people, what makes us tick, and particularly the way that we make decisions. So my dream from basically when I graduated high school through to the point that I decided that maybe I should pursue this whole poker thing full-time, was I wanted to make television commercials. So all of my college involvement, internships, the job that I took at Ford (being one of the largest advertisers in the world) was all geared towards I want to make commercials for TV. I find the medium so fascinating, and how do you convey a message through the visual medium that causes people to alter their behavior subconsciously, essentially. You know, it's like TV commercials are essentially brand advertising. You're reminding the customer that you exist, and you're associating your brand with some intangible value, right? You can see every commercial as a mini-movie in that the brands are interchangeable. There's some sort of value as family, or friendship, or success, or trustworthiness, character. Then you just kind of stick in your brand at the end and you create that association, whereby buying our product you will achieve this intangible value in your life.
And I found the mechanisms behind that so fascinating. And you know, naturally translated into what I was doing at the poker table, where playing a poker hand is telling a story that you get the other player to . . . You kind of nudge them into making decisions that are beneficial for you. And so, yeah, I've always found this idea of what makes us tick, how do we make decisions, how do we behave and how do we get others to behave in ways that are beneficial to us incredibly fascinating.
Ben: Yeah. What did you study when you went to college?
Chris: I called it "consumer behavior."
Ben: Okay.
Chris: Essentially it was a double major of marketing and psychology.
Ben: Okay.
Chris: And I found the psychology courses imminently more useful than all the business courses. I don't know if . . . Other than the capstone courses where you're debating Harvard cases, I don't know if many of those courses really had any usefulness. Sorry if any college students or out of state alumna are listening to this. It's just that by the time someone makes it into a textbook, particularly when it comes to marketing, it's overrated. I don't find that many of those old principles kind of hold water. It was kind of interesting. When I went into the startup world, you know, I joined a company full-time as their marketer because I wanted to see what it's like on the inside. Well, you can only learn some lessons through experience. You know, what are the actual problems that a quickly-growing business solves. And I naively thought that having a four-year degree in marketing would be good preparation for that, and quickly realized that I knew nothing. But it's good to learn that early on.
Ben: Yeah. There's a lot of good stuff there, and we can dive into a few things, but one of the areas that I thought we could explore a little bit here is when you mention you like the idea of stories and how our brains work and those kinds of things. And that's a really interesting set of tools and expertise that I think you developed, and conversely you also . . . Poker is a, as far as I understand it, a very mathematically-driven game. Right? There's odds of having a successful hand, and so you've got to apply some sort of logical, rational, calculated reasoning, but the same time you've just talked about how our brains work and our psychological traps, and those kinds of things. That's a very powerful combination of those two types of skillsets. I'm wondering if you could talk about that a little bit more, around how you apply those two things in the game of poker, and then perhaps we can talk about how you apply those skills in the work that you do with your clients?
Chris: Absolutely. So at a high level, poker is a game of equities. And so where probabilistic thinking, where mathematics comes into play in poker, is knowing what your chances of winning the hand are at any given time. The problem is humans are the big blind spot in the system, and it's a large unknown variable that you have to solve for. And so it doesn't help to know what your chances of winning the hand are if you have no idea what your opponent has, because success is relativistic. You know, you don't need to have a great hand, you just need to have a hand that's better than your opponent's. And keeping in mind that many situations in poker are very, very close. Where someone might write it down to a coin flip, but you're actually fifty-five percent to win. And pushing those edges. You know, recognizing them. And over millions of hands in a lifetime, those edges add up to millions of dollars. And so being the calibration that occurs all happens on the psychological side, where you're constantly using, you know, Bayesian-type calculations to determine what your opponent is trying to accomplish. What is their current state of mind? What is the story that they're telling, and does it make sense?
Right? So in poker we have the concept of a range. You know, Richard Feynman has this classic story where he's listening to another scientist's idea and he's creating a visual model in his head, and he's adding on all the pieces. Right? He has a ball, and he adds fuzz onto the ball, and he adds spikes onto the ball. And at a certain point the ball falls to the floor, because the story doesn't add up. One of the pieces of the model that he's building is inconsistent. And that's essentially what you're doing as a poker player. Both when you're bluffing, when you're trying to get your opponent to fold, thus, you know, "I have a stronger hand than you," but also when you're feigning weakness. That you have a strong hand and you're trying to draw them in, is you're creating a story that is consistent. And so a range is you have all of the hands that your opponent could have, and that range narrows as the hand goes on. Right? You have these compounding probabilities.
So I raise pre-flop from a certain position, and that limits the number of hands that I could have down. And then the flop comes, and I either bet or I check or I raise. And then the turn, and then the river, and you have all of these adding probabilities up, and the story that I'm telling, like, needs to be consistent. Right? A hand that I'm representing needs to remain on the ball in that range that I can have, given the decisions that I made throughout that hand. And so this understanding of stories and how we construct them, how they remain consistent, is really critical in poker, because if you're able to tell a good story you can get your opponent to do what you want them to do. You can get them to fold on demand. You can get them to call when they shouldn't. And you kind of manipulate their perception.
You know, one of my favorite models for decision-making is the OODA Loop.
Ben: Okay.
Chris: So the part of the OODA Loop is Orient. Right? You observe, orient, decide, act. Then so orienting means you're constantly taking your models of the world, your maps, and matching them up to the territory. But if you're someone who's able to control the narrative, your opponent's model is continuously out of date. And so in OODA terms you get inside of their loop, in that they're acting on an incorrect model of the world. The way that they think things are was true maybe five minutes ago, but it is no longer the case.
A classic scenario in poker is you bluff them, you bluff them, you bluff them, and then you anticipate when they're going to counterpunch you when you've already adjusted to quote/unquote "tighten your ranges" so that you're much more likely to have it next time, just at the point that they react. Right? You anticipate their reaction, and you're already there. You're a level ahead of them. You know that they're going “rock” eventually, and you've already changed to “paper.”
It's really kind of cool from a game-theoretic perspective, that this ability to tell as well as read stories, and the nuance in between the lines gives you a large edge in any pursuit where there's someone on the other side of the trade.
Ben: Okay. There's a lot of good stuff here, and it's deep as well, and very . . . Your words are very measured, so you can tell they come from experience. But for those people who are listening maybe and that either don't play the game of poker . . . I mean, this is really cool stuff. So how did you learn to do that? Particularly with online poker, right? Because you don't see your opponents, and . . . And maybe that, that might be an interesting place to start. You perhaps aren't in front of them and maybe not reading body language, and maybe that's helpful. I don't know. Is that . . . Let's maybe start there. Is the fact that you're able to iterate a number of hands online, do you consider that to have been an advantage in your development of these techniques?
Chris: A hundred percent. I mean, intuition is just internalized experience, and so if you've seen a certain number of hands you become very attuned to the signal, rather than the noise. Classic consciousness studies say we're taking in millions of bits of information but we're only consciously aware of a couple dozen. And so imagine, you know, these days I'm playing twelve games at a time, and so I have seventy players who I'm actively keeping track of their state of mind, but of all the things that are happening on the table, right, all these hands that are taking place simultaneously, only a few things actually matter. But having the right mental models in place allows you to be attuned to, "What are the things that are happening that actually affect your decision, and what is just noise?" And that's where amateurs go astray in poker and in any pursuit, is that they're attuned to the wrong information. Online is an interesting case, because as you said you can't see the players, right? So an important piece of information is gone.
When I'm sitting across from a person at a poker table, I not only have character things that I can use to calibrate on who they are as a person, right? What they're wearing, what's their posture, you know, what's their mood? How are they talking to others? What are the topics of conversation? What are they drinking? There's like so many factors that are in play. But not seeing someone, having that source of information cut off, does not mean that there's not still someone else on the other side of the screen. Right? It's . . . There's just a technological intermediary that's blocking us, but I can still suss out aspects of their personality, or their state of mind. It's just a little bit more noisy. So, the speed with which they bet. What they type into the chatbox. What their screen name, what their avatar is. And primarily their patterns. And so I can make a large adjustment to my model of the player seeing them playing a single hand in a way that's super unorthodox. So if they play a hand very passively, I can update my model of them as someone who's likely to play passive in similar situations. And vice versa. If I see someone who's taking an unnecessary risk, they're bluffing in a spot where I'm unlikely to fold, I can assume they're going to perform the same way in similar situations.
And the meta-advantage there is once I know they have a tendency, I nudge them into those situations where I understand their tendency. I multiply that edge. And so that's a key thing that a lot of people miss when they shift from live play to online play, is all the signals are still there, you just have to dig a little bit deeper. You still have that advantage of recognizing the pattern and exploiting it.
Ben: Okay. And how do you nudge someone into . . . Or, based on their tendencies?
Chris: So imagine that we're playing a hand.
Ben: Okay.
Chris: The two of us, Ben. And the last hand that we played . . . I'm going to oversimplify here. We got to the river. All of the draws have missed, and you make a big bluff, and I call it. Right? Say I just happen to have a big hand, and I was trapping. Right? So I call you. You feel a little bit dumb because you made a big bluff into me, and I had it. And you re-buy in. And so I'm already thinking about how are you going to adjust in the future
Ben: Okay.
Chris: And so I'm using the information I have about you to predict how you're going to adjust. Right? So in that scenario certain player types are going to tighten up. Right? "I just looked silly in front of people making this big bluff, they're going to think I'm a bluffer, thus I'm going to wait until I have a hand." And so I can take advantage of that, one, knowing that the next time you make a big bet you're more likely on average going to have a hand, but also that you're going to shrink back from ambiguous spots. Right? If it's close, I know that I more often than not can pick off the pot. That's one reaction you can have. Another reaction you can have . . . This would be more of a level one reaction, is, "Oh, now I'm down, I'm losing, I just made a big bluff, I gotta get that money back, I gotta show him." And so now I know you're going to be a little bit more risk-seeking due to loss aversion. I'm sure listeners are familiar with that literature.
And so I'm going to try to set you up to bluff again, sort of keep the ball in the air, give you opportunities by under-playing my hand. Right? Seeming that I'm a little bit weaker than I actually am in order to encourage you to put more money into the pot to think that you can take it away. But my response to this singular instance is completely contingent on my read of you as a player and how you are likely to respond to this new information.
Ben: Right. And would you say then that you've been able to . . . That reading players and their tendencies, I mean did you capture this, I guess kind of intuitively overplaying so many hands, or did you use some systems to go back and learn from hands and games of poker that you played? How did you develop a level of confidence around "I know this type," or "I know that these are the patterns that I would expect to see in this type of situation"?
Chris: Yeah. I mean, it comes over a long period of time. I've been doing this for sixteen years, played millions of hands. And so one aspect, obviously, is just when you play a lot of hands and you have an extremely tight feedback loop . . . Like I said, I can see what you had, and I can see was the hand that you had in the possibility set that I predicted, right?
Ben: Right.
Chris: If it's in that set it doesn't tell me something, but if it's outside of that set or that range, I know that one of my assumptions is incorrect. And so that acts as a kernel for me to dig into and try to identify where in the hand I misread. Right? Was it that you were playing a hand pre-flop that I didn't think you would, is it that you played the hand more aggressively or more passively than I thought? Right? Try to pinpoint where I went awry in my model.
And this is all happening in real-time. There's a great deal of off-the-table study that occurs. Right? When I talked about poker as an eighty-hour a week job, only forty hours of that is actually playing, the other forty hours of it is studying, primarily in databases. So you know, being online everything is stored. You can go back and view hands at any time. And so any time I have a hand where I'm not sure where the correct move is, I save it and I analyze it off the table.
Ben: Right.
Chris: So these days, not only are there statistical tools where I can look at population-level data and see how do people play this spot on average, that's usually a good place to start, there are also machine learning tools where you can play the hand out against an algorithm that's simulated this brute force millions and millions of hands, and see what is the game theory optimal approach. Right? Usually the right answer will be somewhere in the middle. And really I think that's the key to all decision-making, right? It's . . . People talk about this in investing as a decision journal, is every decision you make you're noting down what are the assumptions that are behind this decision at the time. Right? Every decision you're making with incomplete information. What are the gaps? What are the . . . The value of information is any information I could have that would change my decision. Noting that down at the time, and then later when you have the ability to be objective, right, you're a little bit more separated from it, say like, "What could I have known at the time which would have changed the way that I made that decision?" And that's just a continual iterative process.
Ben: Yeah. That's very cool. So a couple of directions I want to go here. And one is let's talk a bit about decision-making, let's talk a little bit about how some of these concepts apply to non-poker type of decisions. Business decisions, investment decisions, personal decisions, et cetera. I want to go there, but the other thing I want to just explore a little bit, because you have . . . You discuss an eighty-hour a week job. And I'm curious about what . . . You know, to get into the top twenty of online poker players, I'm assuming you have to do a lot of things that other players just aren't doing. And I presume that some aren't going to put those eighty hours in. But what are some of the things that you learned aside from, I guess, putting in that time, those hours, that . . . About high performance, that you were also able to apply to your other pursuits?
Chris: So many.
Ben: Okay.
Chris: I'll talk about—
Ben: Let's talk about a few, yeah.
Chris: Yeah. I mean first, the one that's really poker-specific and that connects obviously is that, you know, peak performance comes from a match of doing the right things. And so thinking about that in like founder market terms of "You are playing the right game," in that there are things that we are uniquely suited for that look like running up a wall to others, and finding ways to double down in those areas. And so, I mean that's a key to peak performance, which seems a little bit typological, is identify the areas that you have an advantage, where you already perform well, and look for ways to lean into those areas. I believe that very strongly. And so a key to becoming the best for me was only playing in the games that I could be the best.
Ben: Right.
Chris: There's a critical balance there, right? You need to be playing against better players to sharpen your own game, but knowing where your edge comes at any given time, right? That is the one thing that separates the players who are very talented from the players who make a ton of money, is the players who make the most money play in the best games. Like, you know where your edge is at any given time.
I think another thing that really separated me was just self-awareness and discipline. So I think that our level of performance is very dynamic, and so having a high level of introspection to know when you have it on a particular day, and when's the time to go after it, to back up the truck. Think about this in terms of psychological capital, that you're really dialed in to recognize those moments and to go after them, and at the same time to note the days that you don't have it, that you're not making good decisions, and to limit your downside, and to prioritize recovery, because a poor decision wipes out a lot of really good decisions, and the results of any given day really don't matter.
And then I would kind of transition there into just general peak performance, which is having the right habits, systems, and removing bottlenecks to resources, which I usually define as time, energy, and attention. And I'll just kind of do like a high-level overview of each of those five.
Ben: Yeah, please.
Chris: So I have a free workbook, which anyone who wants to download, it's at theforcingfunction.com/workbook, where I have prompts and experiments that are designed to install these into your life with all my recommendations. So feel free to check that out. I see the weapons that we have for peak performance, it all comes down to systems and habits. So, systems. Can we support what we want to do? So we have things that we're trying to accomplish. Do we have things in place that support us? And a lot of this comes down to measurement. We have something we're trying to achieve, and we know day after day whether we're making progress on it. The classic "You improve what you measure." I love the definition from How To Measure Anything that we measure to reduce uncertainty. And the more certainty or confidence we have in what we're doing, the faster we can sprint forward. So having these systems in place that we have the confidence that we're making improvements day after day.
And hopefully, that's something that comes across when I . . . You know, even if some of the examples from poker might be a little bit abstract, in terms of that's really what allowed me to create distance between myself and the field, was that every decision I made, every decision where I was wrong became an opportunity to improve. And it was that continuous improvement that allowed me to pass up other players. It was like I didn't have as much natural ability, but I worked harder than them in the lab. The other half of that is your own behavior. Is habits. Is almost all on a daily basis of the decisions and behaviors that we do are habitual. You know, we talked about this in a poker context, when people tend to follow the same patterns. Right? When we're in the same situation, we tend to take the same action. And so the two avenues we have to counter that are, one, we change our context or environment, right? We put ourselves in a context or environment that's more supportive of what we want ourselves to do. The classic is, "If you want to stop drinking, don't go to the bar." Right? Pick a context that's a little bit more supportive of what you want to do.
The avenue that I also like to attack is, "Can I relink these associations that I have, with certain thought patterns, with certain behaviors, with thought patterns and behaviors that are more beneficial?" So having these principles in place that off-source a lot of this decision-making cognitive overload, so that I can make the right decision on average more often. And then, you know, systems in place that support it in terms of I'm regularly reflecting and saying the way that I'm making decisions supportive of my overall goals. These are the things that I work on with clients to put in place to ensure that they're making progress every day, 'cause that's really the key, is to have this really long-term time preference.
And then, you know, the resources we have as an executive, I usually think of these in terms of unit of exchange, in that I'm trying to exchange, you know, one unit for two units, is time, energy, and focus. Right? Can I convert one unit of time for two units of focus?
Ben: Right.
Chris: So high-level time is, "Am I working on the right things?" Most people think in terms of, "Can I work more hours?" Or, "Can I be more efficient?" But the highest leverage point for time is just working on the things that are most important. Putting a value, you know, monetarily, if possible, on all the things that you do, and do more of the things that are a thousand dollars an hour and less of the things that are ten dollars an hour.
Ben: Sure.
Chris: It's as simple as that. It's like arbitrage.
You know, secondarily, attention. I think a lot of success in things that are, you know, very decision-oriented is being very present. To be able to ramp up intensity when the situation calls for it, and usually that comes from constraints and elimination of distractions. And so being attuned to the things that are not a top priority, and putting your blinders on so that you don't see them.
Finally is energy. I mean, and this was something that was really a call-to-Jesus moment for me, as I looked at all the other poker players and they were eating typical pizza and sandwich diets—
Ben: Right, right.
Chris: They were staying up till 8:00 AM, going out and partying, like really bad posture, not exercising. And then you would see this, because you're playing poker twelve-plus hours, that the pack starts to separate once you get to that eight- to twelve-hour mark—where the guys who have poor energetic habits, they tend to make poor decisions. And they chalk it up to getting unlucky, but it's that they just didn't have any more, right? They ran out of gas. And so I looked at . . . You know, there was a point in time early in my poker career I was eating a whole pizza and drinking a two-liter of pop and going . . . You know, that's "soda" for you guys in the UK.
Ben: "Fizzy drinks." Fizzy drinks. Yeah.
Chris: Going to bed whenever I felt like it, and I realized, "Wow. Like, I need to . . . If I want to perform like a cognitive athlete, I need to treat myself as a physical athlete." And so having a consistent schedule where I'm waking up and doing the things that put myself in the best possibility to succeed, getting a great night's sleep, exercising every day, eating the right things that make me feel good. All of these little things really add up to being able to perform. And so yeah, I was fortunate in that I had a large financial incentive where if I did not do these things it was very obvious on the bottom line, and through that process was able to identify some things that generalized to knowledge workers, to investors, that they put these same things into place in their own lives, they perform better, they make better decisions, and it shows up on the bottom line.
Ben: I love that. Particularly around that . . . Likening it to, you know, you're a cognitive athlete. And I think people that are listening to this, many of them are in knowledge work, intellectual work. And I keep saying to most of the people I have either on this podcast or people I speak to that we often . . . In the work that we do, in knowledge work, that we sometimes separate the mind/body connection, but we shouldn't. And we should integrate those two things, because as you say, if you sleep right, you eat right, you're going to perform better. And it sounds obvious, but you know, you just walk around many offices around the world and these things are treated as entirely separate things. And it's . . . I love how you talk about getting an edge through better discipline in terms of treating yourself like an athlete.
Chris: So much comes down to cultivating a sensitivity and awareness. You know, the more sample size we have, we can identify the patterns. And so you talked about a mind/body connection. You know, when I'm playing a hand sometimes I'll notice I'm sitting a certain way. You know, I've leaned in versus I've leaned back, or I have a twinge in my neck and I start to get sore in a certain area. And all of these things are sources of information that we can try to calibrate over time, but it requires cultivating this awareness in the first place.
Ben: Right.
Chris: And I think that's a big part. We talked about feedback loops a little bit. I think a big part of why feedback loops are so critical to improvement is that we become aware of where things stand, and thus our attention is drawn to, right, I call this a "forcing function." We draw our consciousness to ways that we can improve this number. But without this awareness, right, without taking a hard look at things, we aren't aware of opportunities to improve because we aren't aware that we need to improve in the first place.
Ben: When you were trying to optimize your performance as a poker player, where did you look for some of these insights that your competitors weren't looking? Cause all of this stuff is available to people . . . It comes from psychology, it comes from all types of other sources, but where did you go for this type of edge?
Chris: I've made it a habit to look at peak performances in tangential fields, and try to identify things that they're doing that might be worth trying. I think, you know, as an investor you're looking at things that can work in one market and can be imported to another market. So I was looking at, you know, professional video gamers. I was looking at chess grandmasters. I think there's a lot of literature from the military that's very useful. Where else? Believe it or not, I think a lot of decision-making is process orientation. So some of the kind of manufacturing theory of constraints work is very useful. Chefs, I think. If you look at Michelin star-level chefs, they're more process-oriented than just about anyone. I've taken a lot from there.
Really it's just looking at everyone as a potential expert. You know, some areas even now I don't consider myself to be super-knowledgeable, but I'm fortunate enough to have someone in my network who specializes there, so I'm not shy about asking them questions or even bringing them on as a partner when necessary.
Ben: Cool. This is all really great stuff. There's a wonderful study . . . I think it was maybe an article not as much as a study, but there's a piece that I quite like that's been around for a while now, but it's . . . I think the title is "Manage Your Energy, Not Your Time." Which is what you, you know, exactly what you talk about. I love the concept of arbitraging those resources. It makes a lot of sense. Really interesting to look at the world that way. There's a lot that I think my listeners can take away from some of the stuff and the things that you describe in your free book, which actually I looked at and has got loads of great stuff in it. So, really cool. Could we talk about decision-making and what you've learned and what you tell your clients about decision-making that you've learned from the poker space?
Chris: All right. I can . . . One thing that comes to mind, I like this idea of continuums. And so one continuum that I'm in favor of is confident on one end and critical on the other end. Right?
Ben: Okay.
Chris: So fully confident decision-making is “I am completely sure that I am right and I am never going to second-guess myself.”
Ben: Okay.
Chris: And you know, “this is just what I'm doing.” And the critical end of the continuum is, "I'm not really sure. I need to look into this more. I wanna ask others." And usually, being aware at any given time where you stand on that continuum is useful, but also when it can be useful to go to the extremes. So this is a big thing that I talk about in Experiment Without Limits, is you have experimental periods.
A huge problem that we have with decision-making, where it can become very willpower-draining and cause us to get stuck is that we are never a hundred percent sure about anything, and if you're waiting to be a hundred percent sure, you're waiting too long, because the way that we gain the most information is by experience. And so I'm trying to come up with models that allow me to quickly make a decision, because most decisions generally are pretty low-risk. A lot of things are reversible or you can course-correct at any given time, but then have systems in place that allow you to regularly reflect on that.
So I'll give a more tangible example. So this could be a marketing channel, right? There's three different marketing channels that you want to pursue, so for the sake of example let's say, all right, we can do some direct mail, we can do Facebook, we can do a cold call. And there's pros and cons to all of these different options. I have a spreadsheet where you can play with the numbers a little bit if you want to link to that in the show notes, theforcingfunction.com/evc, Expected Value Calculator. And the power of this exercise is that you actually identify which of the criteria are most important, or the crux. Right? What does this decision rest upon? There's usually one factor above the others that comes to be importance. And by recognizing that factor you can see where you have the most uncertainty, where you would find it the most beneficial to test some of those assumptions.
Putting that aside for the second, you use a model like this to choose, "All right. Well, all three of these options are pretty good, but based on what we know right now, let's say the direct mail seems the most promising." And the worst-case scenario, you see this in tons of organizations, is that they start down this path, but the whole time they're second-guessing themselves. Like, "Oh, well, we haven't really had any results yet. Maybe we should have gone with Facebook after all." But that's the power of these experimental periods, is you say, "All right, for the next quarter, the next ninety days, we are going to act as if we are a hundred percent confident that direct mail is the absolute best marketing channel for us, and we are going to sprint headfirst and say, "How can we get the most out of this channel?" And what that allows for is at the end of the ninety days you have this debrief, right? You're looking back, and say, "Well, what did we learn from that? These assumptions that we had in the beginning, you know, how close were they?" And essentially we say, “do we want to double down or try a different option?”
But by having that closed period where you're going to sprint and be on the fully confident part of the spectrum, knowing you're going to have a designated point where you're going to be fully critical and decided does it make sense to change completely, it allows you to fully explore the consequences of your decision and extract all the value that you can.
Ben: Right.
Chris: Where the key to decision-making is, you know, make the best decision you can with the information you have, then just proceed accordingly. So that's . . . I mean that's something that I talk about a lot with my clients, is kind of walking them through these big decisions, but also just putting the infrastructure in place that allows them to course-correct at the right time rather than continually course-correcting when it's not necessary.
Ben: Okay. So supposing you had a client that is thinking about, what you just described here as a big decision. So it could be you know, a merger or a divestment or something that's really . . . The stakes are high. You get it wrong and the impact could be quite severe. So the Expected Value Calculator, I understand that, however sometimes we might be constrained in terms of our ability to experiment. What are some of the generic steps or questions you might ask about the decision to help your client make that decision in the highest quality way?
Chris: Absolutely. I mean, I'm trying to identify what are the invalidated assumptions? So essentially, where is the most uncertainty? Any complicated decision where there's a bunch of intangibles can essentially be reduced down to some form of calibrated estimates of what do we know, and where do we not know very much? And trying to get those within some sort of range. And as I said, I think the goal of making any decision is trying to identify, what are the factors that really matter? Right? We talked about this early on in terms of signal versus noise, in that more information is not necessarily better, because it can be irrelevant.
Ben: Right.
Chris: And we can get buried in things that aren't actually part of the regression analysis. You know, they don't actually contribute to the factors that matter. And so identifying where we have the most uncertainty, identifying what are the assumptions that the model hinges upon, and ideally trying to create some sort of experiment to reduce that uncertainty. Which . . . Maybe this means going to someone in a different department and sitting down with them. Maybe this means doing some sort of customer analysis. Generally any sort of big decision, where corporations go awry is they take the inside view versus the outside view. Usually, there's some . . . You know, everything that's occurred has happened in some similar form before.
So you said a merger, right? Let's look at all mergers that are of this type. You know, taking our unique snowflake situation aside and say, "How have these mergers performed on average?" The ones that went wrong, why did they go wrong? Are there any factors that we can recognize here? It's like, once you take things to the outside view, make it a little bit more objective and say, "In general how do these mergers perform?" you kind of get the ego out of it. It allows people to be a little bit more objective, and it tends to make these ranges of estimates a little bit more compressed. You can work with them a little bit more. So yeah, I think everyone here is kind of familiar with the Fermi calculations, right, where you can reduce down . . . This originally arose to his like, "What are the chances that there is life in outer space?"
Ben: Right.
Chris: And you say, "Okay. Well, there's these number of galaxies, and each galaxy has this number of stars, and each star has this number of planets, and each planet has this percentage chance of being hospitable to life, and each time that life has sprouted it has made it past the great filter and hasn't destroyed itself." Et cetera, et cetera. But where you can take something that feels incredibly complicated and reduce it down to a series of things that are actually pretty easy to estimate and are relatively known. And so, yeah, that's kinda what I would try to guide them through, is that deconstruction process.
Ben: Yeah, that's really cool. And I believe that similar techniques can be used for personal decisions. Right? That our signal-to-noise ratio is pretty high nowadays, which is . . . I think that's where a lot of people struggle with decisions in their personal lives. But I . . . Would you similarly advocate a technique along those lines
Chris: As far as, you know, cultivating your information diet?
Ben: Yeah. Yeah. So, for example, maybe the decision is, "Should I move and accept an opportunity in another country," or something along those lines. Right? You know, you've got a lot of other factors in terms of maybe people in your life to consider. There's a lot of incomplete information, there's a lot of noise in terms of what you might be expected to do. There's a lot of online information that could be quite distracting. And so how would you go about making a decision that might be related to a personal lifestyle choice, for example?
Chris: Yeah, I feel like I might be repeating myself, and maybe that's a good thing—
Ben: Okay, okay.
Chris: In that the methodology is similar, because in the Expected Value Calculator I reference earlier, that's how I've decided every city that I've moved to, every position that I've taken. It's pretty nimble there.
Ben: Yep.
Chris: And essentially the process is the same, in that you're trying to identify what the critical factors are and gather more information on that critical factor to validate your assumptions a little bit.
Ben: Yeah.
Chris: So let's say in that scenario you gave, moving to a new city and taking a new job, right, you would need to break those apart a little bit. You know, generally any dichotomy is a false dichotomy. It's like, well, let's think about the job separately from the move. And I'm also, again, this is wherever possible, try to form some sort of experiment where you can quickly gather data.
Ben: Yeah.
Chris: In startup terms, this is the classic MVP, right? Don't go out there and spend a hundred million dollars on a product before you've validated it at the market.
Ben: Yeah.
Chris: Come up with the crummiest possible thing that you can at least see, like, "Am I thinking about this problem in the right way? Does this problem exist, and are people willing to pay?" So I mean the example that you've given . . . I'll just use a personal example that will hopefully be illustrative. So you know, when I decided to move to New York for the first time, in 2012, I had never actually been here. I mean, New York was kind of an abstraction to me. But you know, I made a spreadsheet of the different places in the US that I wanted to live, and New York came out on the top. And so I did what any rational person would do, I booked a flight for the next day and got an Airbnb for a month, and like I said with the experimental period, I was operating under the assumption for that month, that I now live in New York, and I'm going to act as if I now live in New York, and at the end of the month I'll see if I want to stick around or try somewhere else.
And luckily, it's been a huge fit. I mean I'm incredibly happy here. Every day is super interesting and fulfilling. But had the thirty days not gone as planned, I would have been, "Okay, well, what's option number two? Let's try that." And I think the power there is we take these big decisions, where there's so many unknowns, and it's much easier than we think to test some of those unknowns and you know, deconstruct what seems like a large decision into smaller component decisions. So whenever possible, you know, trying to construct these experiments in order to test. That's my average recommendation.
Ben: Love it, love it. That's great stuff. I also wanted to talk about overcoming setbacks, because obviously that happens in the game of poker. I presume there are loads of lessons that you gathered and that are applicable to the non-poker world and the work that you do with The Forcing Function. Could you talk a little bit about some strategies that you have employed when say a hand doesn't go your way and, you know, just something just goes wrong? And what do you do to overcome that and bounce back?
Chris: Yeah. It's something that I think about a lot, right, is as a poker player you're essentially professionally getting punched in the face over and over again—
Ben: Ha. Yeah.
Chris: Because short-term results are incredibly noisy, and you can play very well, and the results can go against you. Especially if you're playing in tournaments, or in the live arena, it's not uncommon for a winning player to go months or over a year of losing, but you know, still making good decisions. And you know, obviously built into that is many times you know, bad luck leads to bad decisions. That, you know, we have a hard time maintaining discipline when things are going against us. And so you know, it reduces down to—I think our biggest bottleneck once you reach a certain stage of freedom is what gets you out of bed in the morning. And you know, when you've lost six figures at the poker table, sometimes it can be difficult. And that's where habits are really key. I talk about this in the Habits and Routines chapter, is . . . You know, having the things in place where you're continually going through the motions, as if like today is going to be a great day. And today is important, so I need to set myself up for success. Keeping up with those routines, continuing to go through the motions, goes a long way for preventing yourself from digging yourself into a hole.
I talk about this as well in the Mental Game chapter in the context of a firebreak. So if anyone has ever seen you know, firefighters dealing with a large forest fire, the technology hasn't changed in thousands of years. Essentially you dig a hole around the fire. And so, if it's a giant forest fire like the ones happening in California, you're digging a very large circled hole. And the same thing applies to our own lives, is you know, whenever we have a big setback we dig a hole around it. Right? We create a firebreak so that we prevent the damage from spreading.
So you know, the habits that I've found really beneficial for getting back on the horse are some form of journaling, you know, writing about it. Getting things out of your head, where it's always less intimidating. Gratitude. You know, doing anything you can to reaffirm to yourself just all the blessings you have in your life. People, you know, situation, et cetera. And then finally like using it as an opportunity to improve, right? Seeing what you can extract in terms of lessons from it, and identifying ways to move forward as part of a regular review process. Which is a habit, as well. I always like to keep a list of activities that you know, make me feel good, that inspire me, that kind of get me going. And whenever I've had a setback, I prioritize doing these things. That, you know, self-care is not selfish. That my top priority becomes getting myself back up to a position of peak performance. You know, this is true as a poker player, where your hourly rate is dynamic. If you're playing your B game, you're losing money and you're better off staying in bed and sleeping.
It's an important thing to internalize, and it happens often as an executive, is if you're not performing, do what you can to get yourself back into a position that you're performing, because not only are you not doing yourself any favors, you're costing yourself. Right? You'd be better off just staying home. And it's an important thing to internalize, that recovery is something that should be prioritized when you've had a setback. But a lot of that comes to both having those habits in place, trusting the system, and when you have the setback, having the system to do the things that you know will make you feel better.
Ben: Yeah. That's all great advice. Really good stuff. I'd like to talk a little bit more about your The Forcing Function, and the work that you do. In terms of that work, have you gotten to a point where you've got sort of I guess a large enough sample size of, think about maybe entrepreneurs and small business owners, of areas that your clients . . . That you see struggle with more than others.
Chris: Yeah, absolutely. I think assuming someone has reached a stage of let's say productivity in that they can reliably have a level of consistent output day after day, right, having some routines and habits and systems in place. You know, that's kind of the first milestone. And that can be varying levels of messiness, right? Having worked with some of the, in my opinion, most successful executives in the world, like a lot of them would kind of refer to themselves as procrastinators or disorganized or unproductive, but they still manage to get shit done when they need to. So the assumption is you know, someone has reached this point, if not solidifying, having systems is always the first step. The commonality at that point that I see is just a failure to plan and prioritize.
I think that . . . Hopefully this has become a theme throughout the day, is that I see our lives as this continuous feedback cycle, and that we plan, right, what do we want to do. Why is that important? How are we going to do it? And then we execute, or in my words, experiment. We run head-first on what we think the best plan of attack is, and we collect data so that we can see that when we are finally free to reflect, you know, what did we learn? Was that the right move? Should we have done something different? Like, what could we have known at the time that would change that decision? And then that reflection gets fed back into the plan and completes the loop.
And so I see a lot of otherwise very high-performing executives missing two critical parts of that loop, in that they're not planning out their days, their weeks, as far as, what are the top things that they need to be prioritizing? The classic "important but not urgent" things. They tend to get sucked into the reactive, the things that are deadline-driven, that are being pulled out of them. And they're not taking the time to regularly reflect on what's working and what's not working. Really it comes down to working smarter, not harder. And that's a framing of the conversations that I have with a lot of executives, which frankly feels like cheating sometimes, in that the question is, "Hey, you said," for example, "Your priorities for this month were hiring, raising money, and finding a new product line, and I look at your calendar and you're spending you know, ten, fifteen, and five percent of your time on those three things. So, like, are they not your priorities? If they are, why are you only spending thirty percent of your time on them?"
And I always like the portfolio analogy, is the nice thing about tracking where your time is going, is you just recognize, "Oh, well that's interesting. The things that are my priority I'm not actually spending that much time on," you can rebalance your portfolio so that your schedule becomes a little bit more in alignment with what you said is a priority. And you know, that's again, a continuous, iterative process.
Ben: Yeah. I think it's interesting that you say a lot of top executives don't do that, because I think we all struggle to do that, but it's interesting that you say the top executives sometimes or often don't do that, that that's what you see. I guess you're trying to help certain people get that edge, that sort of one to three percent performance improvement that can be quite transformative.
Chris: Yeah. And I mean they're still getting things done because they do what it takes to get the things done, and it shows up insidiously in other parts of their lives, right?
Ben: Right, right.
Chris: Where again, like, success is very personally subjectively driven. Like some of the people who we think of as the most successful, we wouldn't necessarily change places with them, because of the tradeoffs and sacrifices they've had to make. And unfortunately for some of these guys it shows up in poor health, lots of stress, they don't get to see their family or kids as much as they would like, they don't really have outside hobbies. Right? And they're constantly sprinting, and as we were talking about with the poker players who fade on hour ten, you kind of see this in terms of burnout. And a lot of them go on sabbatical or take a break, or don't reach the levels that they could.
And so I'm very big on, let's create some hard stops in. "How can you get all the things you need to done and still leave the office at 5:00 PM and go see your friends and family and kitesurf and do the things that you love?" And being effective is very different from getting the things done. And so having these right systems in place, where you're spending the time on the priorities, it allows you to have time for the other things to recharge, so that the things that actually matter you're able to show up fully.
Ben: Cool. Right. We've covered a lot of ground, and I know that you've got a stop coming up. I know that you were in Davos recently, and I'm just curious what that was like and what you learned at Davos this year, what you think of the whole Davos thing.
Chris: Oh, man. I'm still consolidating the lessons. I just got back yesterday. My interest in going is you know, I'm always looking at the bleeding edge, and I'm curious what the top people are doing. So you have some of the top executives, investors all converging on this tiny ski town in the middle of winter, and I'm just curious why. And I want to peek behind the curtain and see what can be gleaned. What are these guys doing that we can learn from? And it was very interesting for me to see . . . We were talking about stories earlier. The amount of attention that these executives have put into story. The story that they are telling about the companies they're in and the stories that they're telling about their personal brand and their place within those companies, and it made me feel a little bit self-conscious at times of, "Wow, I could use some work on crafting my own story."
But then you realize that, hey, this is what . . . You know, these guys sit on these panels and go to these you know, World Series of Networking-type events professionally. And so you know, seeing this as not a setback but an opportunity that hey, here's how high the potential can go. Right? Here's where you can be if you . . . You know, some of these guys are thirty years into their career. This is the North Star that you can shoot for. As far as learning—
Ben: Yeah, I'm just . . . Just on that point, I'm a little bit wary of stories. I know it's important to . . . When you're trying to explain yourself, your company, your brand, whatever, to other people it's incredibly important to have stories, because the way we listen to stories is hardwired into our brains, and so we can kind of retain that information. But in terms of studying high performers, one of the challenges I have with stories is that the stories that get told are the ones after success happens, and so you're not necessarily getting all the information and you have this sort of survivor-bias thing going on—
Chris: Oh, yeah.
Ben: —That you, all the sudden you think that what you should be doing is doing a proper kind of control study of successful companies and individuals, and you can then distinguish the factors. So I always have this . . . I love hearing some of these inspirational kind of stories of leaders, but at the same time I'm skeptical. So I don't know if you have a . . . Just as a very analytical thinker, what you make of all that.
Chris: One hundred percent, I'm on the same page. I always talk about, "Be careful about over-generalizing from a single example." Because it's very hardwired into us to have this narrative bias. And you know, it's like I've kind of made a living on capitalizing on that, and my point is that these guys are professional storytellers, and especially when you have thirty seconds in front of someone to make that classic elevator impression, having something packaged in the right way where you're memorable, they can tell at a glance what you do, what you're about. In a word, "legibility." Right? You're understood for the brand you're trying to convey.
That's what I mean in terms of skill. Now, do I take any of that at face value? I mean, certainly not. And it's something that I think a lot about, because as maybe a listener from this conversation can tell, I think the truth is much more nuanced than can be explained in a single example. But the simple truth is like, this is the way that connections are made, that people take in lessons. And so to neglect the fabric of the way that we find meaning in the world doesn't seem like the right approach either.
Ben: Right.
Chris: And yeah, like you know, the classic biographies, the "What it takes," the "What I learned on my way to the top," not necessarily the best source of information. I always try to go to the source. And so that was my idea of going, is I had all of these preconceived notions of what happens in these places, and I thought there would be a lot to learn by using my own eyes and ears.
Ben: Yeah. Super interesting. Just as you were talking as well, it's also important not to fully buy into one's own narratives, which I think can also happen in these cases. Right?
Chris: Yep.
Ben: Cool. Any other thoughts from the Davos experience that you took away?
Chris: Yeah, so many. It's . . . I would say one that comes to mind is I hope some of these narratives converge into action. There was a lot of common vocabulary, or in the parlance, "buzzwords." That you know, a lot of passwords being exchanged back and forth. And you know, the truth is, sometimes if this narrative gets changed, it generates bottom-up demand that actually catalyzes action. And that was the thing that . . . I mean, I'm hoping to see, is do . . . We've, talking about story a lot, today, is do these stories if repeated enough alter reality? Do they lead to a difference in behavior? And the jury is still out for me. It's like, I'm skeptical. But it was very interesting to see how this convergence upon narrative has the potential at least to push some of these things that require, you know, global-level coordination forward. And that part of coordination is common vocabulary, common narrative. "Why are we all in this together?" The classic sapiens, right? We need to converge upon the same myth in order to coordinate our efforts.
It was kind of cool to see that happening at the top level, and I'm curious to see, you know, how that percolates downward.
Ben: Yeah, very cool. All right. This was awesome, Chris. I want to be respectful of your time, so we . . . I feel like I can keep talking to you for quite some time, but we probably need to wrap up. Before we do, where can people find you, follow you, learn more about the work that you do, all of that great stuff?
Chris: I mean, Ben, I can't begin to describe how enjoyable this was. And so, yeah. Thank you for being an excellent partner and for giving me the space to explore some of these ideas.
Ben: Absolute pleasure.
Chris: If things I said today were interesting, you know, I would love to continue this conversation online. You know, I'll give you a couple ideas of next steps you can do. So first you know, I mentioned my workbook called Experiment Without Limits. That's free to download on my website at theforcingfunction.com/workbook. I mentioned, you know, if you have a big decision coming up, a framework that I love . . . It's an editable spreadsheet that you can kind of customize to your own needs that I call the Expected Value Calculator. That's at theforcingfunction.com/evc. I'd also recommend, I have something that I call the performance assessment. You know, we're talking about signal and noise today. With all the stuff that's out there in terms of improving your performance, your decision-making, it's difficult to know where to begin. So this is a free quiz that I created that you can take on my website, and it will give you recommendations on how to improve your own performance and decision-making. So that's theforcingfunction.com/assessment. I'm pretty easy to get ahold of on all the major social media platforms. My handle there is @SparksRemarks.
Ben: Fantastic. Chris, this was awesome. Thank you very, very much, and wish you all the best. I love your work, I love your approach to things, and I'm sure my listeners are going to get a lot out of this.
Chris: It's been a pleasure. Thank you so much, Ben.
Ben: Thank you.
All right, I hope you've enjoyed Chris, and a huge thank-you to him for recording this and being patient with its release. Links are in the show notes as usual. Thank you all for being with us. We will be back soon with a guest that I consider to be very, very special. Stay tuned for that. Until then, and as always, don't forget: Risk is life.