Earning the Right to Take Risks - [Glue Guys, EP.50]

Never forget, people are not inherently afraid of change. People are afraid of loss. I do owe you guys. Our good friend Alex is saving the world at the Aspen Institute. And so shout out Alex Smith for thinking about the world while we just sit here and enjoy our summers.

And shout out Alex Smith for bettering himself. You know, like taking. This is an intensive, you know, week for him as he goes like, and spends time with all these other fellows and like, man, like, you know, good on, brother Smith.

I've been in those situations and I walk into a room with people. Waste. Usually when I walk into a room like that, I'm, I'm not, I'm the dumbest guy in the room, which I'm okay with. And I actually prefer that. But it's intimidating when you go in there with PhDs and CEOs and I don't really know what would you do? I was a quarterback for many years. Okay. You know, I was a basketball player. You know, how, how that work out for you. But you know, you learn to enjoy that. So I'm proud of my, my brother for stretching himself.

Yes, sir. Yes, sir.

And so today I had a topic I was on top of my mind. We often talk about risk. Right. Taking a big swing in life. And all of our guests, you know, to, to a person has, has risked something to make it big. And so, you know, I loved our conversation with Steve Kerr last week.

Yeah.

Where it's, it's easy, you know, sitting here with multiple titles and say, oh, this is the path. This is the path.

Yeah. Right.

So, you know, as, as my good friend Michael Dunleavy says, the winners write the history books.

Right.

And so it's easy to pontificate when you've IPO'd and when you're working for a top notch VC and you know, you've won championships and you're hosting a Glue guys podcast. And so I want to ask a question of you. When is it worth swinging big versus kind of standing pat?

Oh, okay. I like that.

All right, cool. You get, you get what I'm saying?

100%.

Always prudent to swing for the fences. Even though regardless of what the what, what the what the what the risk is. So walk me through, you know, the times where you swung big and the times that you stood pat. That actually that was the best, the best course of action.

Yeah. Oh, it's a great question. All right. So I think I actually, I think that I have real views on this topic that may or not be right, but I think that they are like Strong, you know what I'm saying? Like, this is. I'm glad we're talking about it. So I think my headline is you have to earn the right to swing big. Okay? And I think that some of the standing pat using air quotes is like, I think like putting in the work that earns you that right. So what do I mean by that? I think that if you kind of take swing big to its logical extreme, you could be doing it as like a kid. Maybe you should drop out of high school, you know, and like, go start a company, you know. And even the people that are the biggest proponents of like, take risk, take risk, take risk. Very few people are like, don't finish high school. You know what I'm saying? Right. Like, and you can imagine it's sort of like those, those people, like, they're, they're sort of like, you have to get some level of foundational education before you go out and take risk. Even like the people that we lionize as risk takers, you know, in the startup world, like, they dropped out of college and usually from a pretty good college. Do you see what I'm saying? Like, they had built up a lot of educational background and pedigree, frankly, even of like, hey, like, you know, I dropped out of mit, I dropped out of Harvard, or whatever. So anyway, I think to answer your question, maybe to get it started, I think that you gotta create some downside protection for yourself through your education. I think before you swing big and, or, sorry, in the work context, I think that. And everyone has a different definition of what downside protection is, right? And again, it's staying in the work context. It's sort of like, can you make sure that you're going to be okay regardless of how the big swing turns out? And so, Shane, I think the reason that I'm generally more of a proponent for people to take bigger swings when I'm talking to them is usually they're pretty smart, right? And usually they underestimate the value of like, their brain in the downside case. It's not like your brain goes away in the downside case, right? If you swing big and it doesn't work, usually you can like, go and get yourself employed or, you know, get yourself going. And it's like, I think that, I think people basically undervalue their ability to create a good downside case through their brain, you know, and so anyway, that's the conversation starter.

Like, how do you even, like, assess that? How can, how can someone who's our listener out there assess, like, what is the potential of my brain to protect against downside. Like, you don't know until, you know.

Let's use dollars as some analogy to, you know, your brain's ability to produce downside protection. Right. Just for a second. I think so. One thing is sometimes when people evaluate a big risk, they sort of like, they're like, it's either going to work or. Or if it doesn't work, I, like, go to zero. I have no job, and I, you know, my savings only lasts me this long or something. And I. So I think one practical thing is like, be realistic about how much money you'll make if you go do this new thing, and it doesn't work. So if you're thinking about going from a steady income to a startup with a lot less cash potential, right. I think that, like, if you go to the startup and it fails, it's not that you never earn again, it's that you don't earn a lot of cash for a few years, right. And that you then go get employed again. And so I think one thing is like, be realistic about what your alternative is, you know. But I guess maybe the other thing, Shane, so maybe the big thing would be like, don't catastrophize. It's not like you go somewhere and then all of a sudden you like, lose all of it. So maybe to tell a story, okay, I'll make this more real for you. When I was leaving kkr, I was very nervous about leaving because I was like, well, if I go there, if I go to Instacart and it doesn't work effectively, like, how much money have we saved and, like, how long will it last, you know, if I go do this?

Because you're married and Mary's three kids.

Yeah, Right. Yeah. All this stuff real.

This is much different than fresh out of college. I'm gonna go work for a startup.

Okay?

So real life implications here.

Totally 33 years old, like, all that stuff. And so the first round of it where I was like, oh, I shouldn't go was I was like, we don't have enough money to cover us the rest of our lives. I can't, like, retire right now. Like, this is not something that's going to work. And so if I go take this risk and it doesn't work, we. We don't have the ability to just, like, cover ourselves. Like, you, Shane, have earned the right now through your NBA career, your speaking, all that. Or like, presumably if you don't earn anymore, like, you'll probably be okay. Right? Whereas, like, that was not the case for us at that age. So I was very worried. And then I think that what became helpful, and this is why I think it's more practical. I think the answer of like, well, wait a second, if I go do this thing at Instacart and it doesn't work first, I'm probably not going to do it for 10 years and have it not work. Like, if you really walk through the logic, why would I be there for 10 years? And like, it's zero. Like I probably would have left before then. So it's not a forever decision. The next thing is, even if I can't replicate my current job, could I replicate 50% of that earnings when I come back? I think that was helpful too because it's like I was originally being like, well, I just like wouldn't have a job anymore, you know, and it's like, well, I don't know, you probably get some job, you know, so those things help because then all of a sudden it's like, well, I have some upside. And the real downside I have is I don't get to work with these people who I really like and care about. And I might have like real downside risk in my like earnings potential, you know what I'm saying? But I guess. Can I flip it to you for a second on this? When you are playing, right. When you're playing, how do you think about big risks or big swings? Right. Because you're playing in the league, you certainly have a defined amount of time that you can play.

Yep.

How did you think about leaving teams, signing contracts, all these things when you were playing?

Well, I like what you said about you have to earn the right to take risks.

Okay.

And this is a message that I, you know, my high school coach and coach AAU basketball this summer. So teaching young people how to play the game of basketball is a little bit different than how I learned.

Right.

And I tell a player, the most important thing you can learn in, in basketball as a young player is the fundamental question of basketball. Knowing to pass, know when to shoot.

Yeah. Okay.

That is the most fundamental decision that you have to learn if you want to advance, if you want to play, if you, if you want to just be a decent basketball player, you don't, that you don't play.

Okay.

And so I watching film with young guys who come in and they may jack a three point shot after, after zero, you know, zero or one pass or take a crazy shot, I say, my man, what is the fundamental question that you have to answer? Do you know when to pass, know when to shoot? Okay? And so you got to understand now, the best players on our team, okay, the seniors, upperclassmen, the guys who've done this for many years, if they take that shot, I'm probably not going to yell at them because they have, because they have earned the right to take that shot. Even though it's a bad shot. Okay? Even though it's a bad shot, I can live with that because I know what I'm getting elsewhere on the court and I can talk to them and they say, yeah, my bad, my bad, coach. But as a young player trying to establish yourself, I understand you're trying to expand your game, okay? And that's what every young player wants to do. They want to expand their game. I want to show the coaches I can do this, but you have to show, know that you've earned the right to, to even try to do that.

Right?

And so like, I knew, you know, as a, even, even as a, as a number six draft Pat.

Yeah.

In the NBA coming in, there was a lot of draft capital and I had a big Runway to sort of fail. Okay?

Yeah.

And so that made a huge.

You want a guaranteed deal, Shane, when you joined, when you got into league, okay?

So when I signed, you know, for, you know, a lottery pick, draft capital, I had three years guaranteed, you know, really four years. And so, look, I knew that there was a lot on the line for the gm, for the coach, for me to succeed, right? And so as a result, you get a lot of leeway. All right? I played 40 minutes a night. I could take crazy shots if I wanted to. I didn't. But I knew that if I was a 25th pick in the draft, if I was a second round pick, my Runway is much shorter. My ability to be able to expand my game and do things that maybe I think I can do in my own mind but others haven't seen yet. That is very, very, very limited. And so I tell my young guys, if you're going to take that shot, you better make it.

Yeah.

If you don't, you're coming sitting next to me on the bench. And so you're, as a basketball player, you're always sort of taking stock of like, how much leash do I have?

Right?

What can I get away with?

Yeah, what can I get away with?

What's crazy, right? So, you know, number one pick in the draft, Cooper Flag. If he comes in a game and he jacks 25 shots in his first game, no one's going to bat an Eye. Because he's earned that. That right.

Right.

Now if the first pick of the second round comes out and does that, we got a problem. We got a problem. And so, you know, understanding when to swing big in basketball means when can I do things that maybe I know that no one else knows about?

Yeah. One big question is, did you think about, like, having a shelf life of earnings time where you're like, okay, I gotta. Even if it's not the team I exactly want to play for, I gotta make sure I can make a certain amount of money because my. The likelihood of my heaviest earnings years are to be in this next 15 years. Yeah, right. That's the big question. Like, did you think about that when you were playing?

My only goal when I played ravi, I had two goals. One was to play 10 years and the other was to walk away before they kicked me out or asked me to leave.

Yeah.

And I knew if I satisfied both those things that I would be able to do whatever I wanted after basketball.

But, dude, that's so good, Shane, in that, like, now I'm gonna ask my small question a second. But like, dude, it's such a perfect embodiment of your inputs, philosophy, genuinely. Because, like, dude, that is a big, important life thing. And on the big important life thing, you're like, nope, I trusted the inputs. I have the right inputs. If I have these two inputs, like, I'll be fine. I will just tell you, dude, like, I am not nearly as. I historically have not nearly been as disciplined as you on, like, no, it's all good. Like, if I just do the right things, like, we're gonna be fine. I absolutely, you know, would think about, like, I gotta have a certain number.

You know, like, well, no, I had a number. I had 10 years. And so I knew, like, no matter what role I played, if you play 10 years in the NBA, if you're around for 10 years, yeah, you'll be fine. Journeyman. You need your journeyman for 10 years.

Okay, okay, I buy that.

You're gonna, you're gonna make enough money and, and have enough cachet to.

To.

To have some freedom. Okay, okay, so 10 years was the number. It didn't matter, like, what, what my role was. It really wasn't. And the other fact, the other part of that is I wanted to walk away before they asked me to leave.

And is that for pride or is that for something else? Like, by the way, like, I, I would want that too. I just, like, why was that so important?

Because that shows I had control over my career.

Yeah.

And again, I had. I've earned the right to do that.

Yeah. Yeah, totally. So good. Yeah.

I've earned.

Right.

And so 100 and so, like, we're saying the same things. And so it was. It's. I kind of backed into. If I do these two things, then you know what? I've had a successful career. It wasn't about championships. It wasn't about starting. It wasn't about points. It wasn't about any of that. Literally. It was. If I play 10 years and I am able to walk away when I want to walk away, man, I had a hell of a run. I've had a hell of a. So, like, when I tell young, you know, young players, I said, man, that.

That's.

That's your goal. You know, the goal is avoid, ruin, stay in the game, dude.

It's so good.

And excuse yourself at the table when you. When you want to. And then I promise you, you will live a happy life and you'll. You'll be fulfilled by your career.

Okay, now, second question. Much more tactical on, like, risks, standing pat versus big risks. I would imagine that when. Okay. My mental model would be like, you're guarding Kobe. Okay. And you're like, this dude is a beast. I gotta pay attention to every single percentage. I'm only gonna play the percentages. You know what I'm saying? Like, I'm going to. I'm. I'm not gonna. I'm not gonna go anywhere other than just where the numbers tell me to go to push him. Yep. I would imagine that there's some people that you would be guarding where you're just like, I'm better than this guy. Right? Like, it's not about me. No. Okay. But like, what about before or the NBA? Like, what about where it's just like, listen, like, I'm just going to lock this guy. I'm not do. It's not about the percentages or anything like that. It's just like, I'm going to go for everything. In this case, I'm going to. Now do you see what I'm saying? Like, I'm going to play the screens differently. Did you ever take a different risk approach, particularly on defense, when you just knew you were the best?

No.

Huh?

I always play. I all like, to me, playing it safe. And that's. You know, this is where this question comes from. Me playing playing it safe was totally trusting the numbers.

Yeah. Okay.

Because the risk was that I knew better than the math, which I knew was not possible.

Yes.

So swinging big in that standpoint is I know what, I know what the numbers say about Kobe, but you know what? I, I got a hunch and I'm gonna swing and I'm gonna do something again that no one knows but me.

Yeah.

And it's, it's gonna work out. Now you can do that, but it better work.

Yeah, totally.

And so you know, I would a better analogy for my career was when I played for the Memphis Grizzlies when we had the change in, in coaches with Hubie Brown.

Yeah.

And my rookie year, I got drafted six who played for this, you know, Sydney Low led Grizzlies. And I was a two guard that year because our, our shooting guard Michael Dixon got hurt. I played 40 minutes a night. I averaged the most points I, I did in my career my first year.

Right.

If you saw my points per game graph, it goes down, straight down in a linear fashion every year. Like, like no one does that. What a crazy career.

Right.

And so the second year, and so my murky year, I was running pick and roll. I was coming off screens, I was doing like all these things that I thought like an NBA shooting guard, small forward would do.

Right.

And that's, that's how I worked. And I'm like, yeah, that's a natural progression. Everything was progressed that way my entire career. I did that at Duke. Okay. I'm gonna do in the NBA. I'm gonna be a 15 to 20 point scorer. Well, QB Brown had different plans. So we fire our coach, Sidney Lowe after an 08 start. This my second year, Hubie Brown comes in and instills an entirely different offense.

Okay.

And at this point we got two guard west person. So I move back to the small forward. While in this offense, the only thing that the small forward does is space. He post pass cuts and spaces to the corner. Okay. So if anything like my, my role shrunk.

Yeah. Yeah.

And I never dribbled and I never ran pick and roll. And in we ran a very kind of like cookie cutter offense where it was predicated just on where the ball is and it depends on, you know. And so it was, it was very paint by numbers offense. And the three, the small forward just did not have a role. And so at first it was very frustrating because I'm used to running pick and roll. I'm used to shooting ball. I'm used to doing all these things. And I felt like I was, I was kind of put in a box. And so the swing would have been for me to say, you know what, Hubie? No, I'm Going to show you that.

Yep.

No, I can, I can do this and I'm gonna run pick and roll and I'm gonna do all these things and I would look like an. Because I'm, I'm like, totally. I'm zigging when the team is zagging and I'm doing my own thing. And yeah, if, if I would have hit doing those things, totally huge surplus. But like, yeah, if I didn't, I'm not going to play. Yeah, right. And so what's the name of the game? Play 10 years, right?

Yeah, yeah.

Avoid Ruin. So my mindset shifted into, you know, not really do the safe thing, but just be excellent in this role.

Yeah. Okay. So, so this is fascinating. Oh, I, I, I was thinking of a bunch of stuff when you were talking, and I think that there are good lessons in here. So one thing that I do think about back to like, earn the right to take the risk. Right. If they take that as a theme, one thing that actually matters financially, to do that is to, like, keep your lifestyle below your earnings. Yes. Right.

Avoid ruin.

Avoid ruin. Exactly what you just said. Right. Because, you know, I've, I've seen people that make a bunch of money, a bunch of money and they're stuck. They can't do anything other than what they're doing. And frankly, they have brought in a ton of risk in their life because if they get fired, they got a big problem, you know, all of a sudden their life is different. And I think that that's the exact opposite of the person that lives well below their means. Right. Who has for sure avoided ruins. Because then one, they can be opportunistic if they want, you know, they find something they like, good, let's go. Or if, God forbid, something happens professionally, get fired. Like, they're okay, you know, they're not like all of a sudden having to go and move into the basement. So that's one thing which is I do think tactically, like, earning the right to take risk. Oh, go ahead, Shane. You were going to say something.

Can you think about that the same way with opportunity? Can you say you got to live below your opportunity level?

Yeah, can say more. I, maybe.

But what do you think instead of like, okay, financial room, we all get that.

Yeah.

Is there opportunity ruin? Can you spend all of your capital and kind of live, you know, kind of take swings above your opportunity, if that makes any sense. I don't know if I'm making sense.

But no, no, I, I, I actually.

Think I get with your opportunistic ruin. Can you swing so big that. That you know, you don't make half the money like you.

Yeah, yeah, yeah.

Before, but like, you just don't get a shot anymore.

Yeah, I think you can. I would say there's a couple things though. Like, one, if you make them, you can bounce back. And maybe this is informed a little bit where I live. I do think Silicon Valley is like more okay with failure than some places. I actually think that's like. Right. So I think I'm probably biased positive on this. Like, it might be different in other geographies. It probably is. But one is I think you can make bounce back here from most mistakes other than a mistake of integrity. You bounce back, you have a mistake of integrity, you have a real problem. And so I do think, like, you can't make those. And I think then you really do eliminate any downside protection because there's. People just won't touch you. I do think, Shane, if you fail a lot, you know, like, and you fail a lot big, I think people at some point be like, look, you don't treat other people's capital the way you should. You know what I'm saying? And like, give an example. Like, I think that, look, I was surprised that Adam Newman got another shot after we work. Yeah. I think that there was enough disdain for like investors capital. Right. That it was surprising to me that he got another, you know, shot at another startup. Right. And so I think to your point, I'm like, people going really big, you know, I. That to me that had a chance to be the opportunity. Ruin. Right?

Yeah.

But the other thing that I was thinking about when you were talking is there's this great Peter Thiel quote, which is I think the fundamental thing people misunderstand about risk. And he's always saying this. He's like, the greatest risk is to not take any risk at all. People assume that staying the same actually doesn't have risk. And it's like, no, no, it actually does. And just to make it real in my job, right. If I'm like a decent investor in other sectors before AI stuff comes along, right. You could totally imagine, like, oh my God, there's new game on the field. Like, let me just, like, I don't know how to do that. Let me just like stick to my knitting. You know, I got this dude that is ruin in my job. Ruin. But you could easily imagine being like, oh, no, no, I got. That's the safe place. Like, no, that is the play that is for sure destined for failure. And if you think about it. Like, think about you if you never learned to shoot threes, right? If you would have just been like. I mean, I don't know what your game was like when you were in high school.

Okay, but back to the basket, you know?

Yeah, but like, back to the basket, six, eight. Dude, you know, play like that. I remember being at Duke when you, like, started shooting threes, right? I remember. I think it was sophomore. Maybe it was your junior year. I don't know.

Sophomore. Yeah, sophomore.

Anyway, so I wasn't there. I was a senior in college, but senior, high school. But, like, that was, like, a big deal when you, like, brought that into your game. I mean, can you imagine if you hadn't. If you had just tried to be like, no, like, I'm gonna. I'm gonna stay back to the basket. I mean, would you have played in the NBA for three years? No.

Yeah. No, I wouldn't have made it. Wouldn't have made it.

Like, I don't know. That was probably a risk then to, like, go and try to start doing something differently.

So protecting your position actually mean evolving?

Yes, yes. Right.

So protecting your position actually means I have to get up off this. This my spot in the couch. I think do something to protect what I've built to this. This point, Right?

Yeah, I think so. And I think that, to me is like, this is what's so interesting. Like, there's this super fascinating point of view that I forget. Oh, this? I read this. It was in the Elon Musk book. Walter Isaacson wrote a book on Elon Musk. And by the way, like, by the way, Shane, the other day, my kids told me that they had started. They had, like, read that book on, like, their Kindles. I was like, really? Like, you know, and it was kind of cool for them to, like, have read a book that I've read that, like, they, you know, like, anyway, and so the interesting thing on them, Walter Isaacson's point in this is, like, Elon Musk seems like he's just, like, seeking risk everywhere, right? His point is, like, he's actually incredible at, like, eliminating risk. Like, what he actually does when he starts one of these companies is he systematically goes through, okay, if we're going to achieve what we need to achieve, I got to, like, knock out each of the things that prevents it. I have to go and eliminate the risk. And so one of the points of view that's kind of counterintuitive is, like, sometimes the people that we think are the most risk seeking are actually just, like, the Most aware of the baseline risk of staying stagnant.

Yep.

Right. And they're actually almost risk averse. Like, oh, my God, I got to get rid of that. I gotta. I gotta solve that problem. But they just see risk everywhere, you know, and they go and, like, eliminate it. So I've always thought that's kind of cool, too.

That makes. I mean, that's what I try to do as a defender when I'm guarding the best guys in the world. I had the data. And, you know, for the basketball enthusiasts out there and in your pickup games, you know, the worst thing that you can ever do to a player that you're guarding is allow him or her to get to the basket or follow them. All right. If you're shooting three throws.

Right.

Why? Because the three throw and the dunk slash, layup drop by the rim is the easiest shot to hit.

Right.

Universally.

All right.

Whether that's YMCA ball or that's. That's the NBA.

Right.

So, like, Elon, I had to eliminate that shot.

Yeah.

And, you know, any shot besides the three throw or the. The dunk slash, you know, two foot, three foot shot, I can live with. I've already eliminated the two most dangerous shots for me as a defender, so I. I get that. And that again, that was the. That's the safest thing for me to do, is to eliminate those two things, except everything else that may or may not happen.

Yeah. And I was thinking about this actually in relation to, you know, Alex. Do you remember when Alex was telling us the story of the play where he got hurt? And he described. He was like. I kind of knew that the COVID that the way we were blocking it wasn't right. You know what I'm saying? Like, he had it in the back of his mind and he's like. But, you know, effectively, like, I didn't want to, like, upset the apple cart and be like, we got to change. Like, you know, gosh darn it, we have to change this. Whatever you think about that, and it's like, oh, my gosh, like, what if. So the risk there was actually staying the same. The risk was, like, run the play rather than being dynamic enough to use what he saw to, like, you know, do that. It's like, well, that. That created a lot of risk for this man's health. And. And so I. I think that. I think that I don't know what it is in everyone's life, but I do think that people tend to overestimate the safety of being the same. Yeah. I think that because they Assume the world stays the same. And it's like, no, dude. Like, I don't. I think the world changes a lot.

But, you know, I always come back to this in my. My life coach shout out Jim Kachalka. He always says this. He goes, shane, never forget, people are not inherently afraid of change. People are afraid of loss.

Oh, say that. Give me. Give me some more details on that.

So, you know, people talk about, okay, you gotta. You gotta change your ways. And in a vacuum, change is not inherently scary. Okay? The ramifications of what happens if I change from the status quo and I lose something, I lose stat. I lose earning power, I lose my job, I lose my social status. That is what freaks people out. And so that is. That's a. It's a very human core instinct that change. People change. We've evolved for centuries, right? That's a part of our DNA. We're always changing. But when we start to think about the ramifications of losing whatever it is we think that change will bring, that. Nope, I'm not changing. I'm staying the same. I'm staying the same. So, like, you know, think about Blockbuster.

Yeah, right?

Blockbuster saw Netflix coming down the pipe, and, you know, they said, you know, no one's gonna. No one's gonna, like, get their DVDs by mail. They want to go to the. The store, and they want to. They want to, you know, search the aisles and get the movie they want. You know, they could have changed. You know, they couldn't. They could have bought Netflix. They could have nipped Netflix in the Buddha, but they were scared of losing who they were. Right? They were scared of losing their culture, whatever, and they got disrupted. So, you know, I think about that a lot when thinking about risk, thinking about change. You know, am I not changing because I'm. Because I'm more enthralled about the upside, or am I more worried about what I might lose?

Okay, so. Okay, so question for you then. I. In my. Like, thinking about you, particularly in basketball, but actually not just in basketball, I actually think you're pretty analytical about loss. Meaning, like, if you're doing the right stuff and something goes against you. You seem actually very sanguine about it. You know what I'm saying? Like, let's say we were playing blackjack, and you, like, lost money, but you, like, played it the right way, you doubled on the right stuff. You. You see what I'm saying? You were playing in a shoe where, like, there was. You thought there was going a lot of high cards, but they Showed up for the other people at the table, not you. Right. I actually think you'd be like, relatively sanguine about having lost like the money. I think about like the Kobe games where you're guarding him and he goes off, right? But you're like, look like the Michael Lewis article talks about this, like, where you're like, look like one of the games he goes off, he's not like, you changed your strategy. You're like, look like, you know, I'm doing the best, I'm doing what I'm supposed to do. So do you think that you do you have to train yourself to be like, more okay with loss, you know, than we are naturally inclined to be? Or are you naturally like that?

The great Sam Hinkey taught me a really important lesson about, about process. And this was in no stat All Star, but we talked about this all the time. And he said, I'm much more concerned about what should have happened than what actually happened.

Oh, I like that. Okay. I like that.

Oh, I'm much more concerned. I'm much more concerned about what should have happened given the situation versus what actually happened. In basketball. Like, you really can't control whether a guy makes or misses a shot, right? That there's, there's a randomness, a luck involved. Obviously the better shooters like Steph Curry, they're going to make more than the, the non shooters, right. And so the ability to affect that is not that great on, in any individual shot. But as a defender, I can influence where that shot is taken and in the grand scheme of things, where that person takes that shot, all right? Will determine over the long run how many times he makes that shot. And so it's really an amazing metaphor for life to be process focused, to be obsessed about what should have happened versus what actually happened now. Like, look, you're probably, you're saying, Shane, like you don't care about what happens. No, of course I care. But I can detach myself from anything if I knew the process was fair, right. If I, you know, I'm writing a book now and if I spent three hours writing and I'm putting thoughts on paper and it's been, this is, this is how I want to write the book and it comes out and it's a terrible chapter, like, that's okay. Like, this is my process. Maybe I gotta think about my process. But like, it's, it's a byproduct of process. And so it's, it's really liberating to be able to buy into that and be like, look, we did the right things. We followed the recipe, all right? We just, like, you know, we let it. We let the steak cook for, you know, two minutes longer than it should have, but we follow the recipe, you know, that shit happens. And so that was one of the best lessons that Sam taught me. To think probabilistically and be okay. And be okay when things won't go your way. If the process was the right one.

I think that I am, like, more okay with loss on than I think some people are. Right. And I think the reason for that is I try to establish, like, the baseline, like, what, what really matters is pretty low. Like, does Avni still love me? Are the kids happy and healthy? You see what I'm saying? Like, kind of like I want to be able to say, like, no matter what happens, like, hopefully it's not like that stuff. And so I actually am pretty. Honestly, I don't think I'm actually that great at dealing with, like. Like something if it's personally a problem, you know what I'm saying? Professionally, I think I'm pretty good because, like, I can compartmentalize the thing that is like, oh, that's the thing that actually counts. But I do think I'm probably. I probably wear stress too much when it's personal rather than professional. But anyway, the thing, Shane, one of my most, like, contrarian things that I say is that I believe is a little bit of, like, focus on what matters, not just what you can control. And so it's like the opposite, right? Because, like, a lot of times just, like, focus on what you can control. And I'm kind of like, no, like, if something matters, like, even if it's not obviously within your control, like, go try to change it. And I think that the underlying logic for that is sometimes we might have more ability to change things than we think. You know, we might underestimate what we can change. And so, like, I think that one of the things I take some pride in, if someone's like, well, that's not going to happen, I'm like, well, have we tried? Like, did. Did you even like.

Yeah, give me, give me an example. Give me example of that at Instacart.

Yeah, okay. Okay, cool. So I think at Instacart, an example would be, like, from a long time ago. From a long time ago. Very nerdy. But, like, the grocery market is such. Where Instacart, you are more likely to use it if we have the grocer that you want to shop from. Okay. Grocery is a more concentrated market. Than people realize. Meaning that, like, the top 15 grocers in the country make up 80% or so of the volume of groceries. Okay.

And very brand loyal.

Very brand loyal, exactly. Like in Florida, you know, often It's Publix. In St. Louis, it's Schnooks, like, whatever it might be. But anyway, so we actually, like, we don't control what those 15 companies do. Especially 10 years ago, I'm like, are they gonna get on instacart or not? You know what I'm saying? And so it's very easy to be like, look, like, we just gotta sign the partners we can sign. And so if there's 300 grocers in the country, and 15 of them are the ones that are the most concentrated make up 80, but the other 285 are kind of, like, ready to sign up with us. You could just imagine us spending a lot of time on, like, the 285. Right. Because it's like, look, that's what we control. These other 15, like, they're. They got big things going on. Yeah. I think sometimes what I'd advocate for is like, no, we still have to spend time on the 15. What is the new creative thing that we're doing to get one of those 15? Any movement on one of those 15 is worth, like, 20 of those other ones. So even though it's low likelihood, even though it's, like, unclear, like, what is the plan on one of those 15? Like, what about this? What about this? What about this crazy idea? What about this? And I think that that can be frustrating sometimes because people are like, well, people like progress. They want to move forward, you know? And, like, I think. I'm not sure I'm right. I just think that my nature sometimes is like, well, if that's the thing that matters, are we sure we've done everything to bring it out. So that's an example.

Well, you know, you bring up a great point, and we haven't discussed this at all. Upside.

Yeah. Right.

And like, yeah, good point. You know, like, I will. I will take a chance.

Anything.

I will bet on anything. If the payoff is worth the risk.

Yeah.

You know what I'm saying? Like, when you talk about, you know, taking risk, like, that is always the. The metric in the back of all of our minds is like, yeah, but, like, if there is a percentage chance where this pays off and it. 10x's or whatever, like, it's. It's worth it. Right. And so, you know, maybe as. As important as assessing what you have to lose is, you know, obviously what you have to. What you have. We're, you know, we're loss averse, you know, as, as people, obviously. So it's much, much more enticing to thinking about what you stand to lose versus what you have to gain. Right?

Yeah. Yeah. That's such a. Yeah. I mean, it's almost so obvious. I can't believe we haven't talked about it. And I don't mean that against you. I just more mean, like, of course, I mean, Right. Yeah. It's like, to do what? Like, there's this great Bezos quote which is like, he's like, people have like a baseball mentality. Even the big swing is like, from baseball. Right. He's like the thing you have to remember. He says it's about business, but it's also about your life. Right. Like, he's like, in baseball, like, if you. The best thing happens, you hit a grand Islam, you score four runs.

Yep.

He's like, in business or like, in life, the best thing happens, you can score a thousand runs. Like, remember, like, it's not capped. You know, this is a crazy example, Shane, but like, you scored like an infinite number of runs by like going and making sure Heidi wanted to be your wife. Yeah. Right. Same thing with me, with Avni. Like, I don't know, like, what level of risk was willing to be taken on to bring that on? Like.

Yeah, everything.

Yeah. You know, but I think that to your point, like, a lot of times we probably. This is actually really interesting. I'm so happy you said it. Like, a lot of the art of like venture capital is thinking hard about what could go right, you know, like.

Different than private equity.

Yeah.

And VC are complete opposites in private equity. You're like, oh, shit. Competitor might disrupt us the market, you know? You know, you're always looking at like roadblocks. But vc, just the opposite. Right.

What can I think that, you know, And I'm sure our private equity listeners would say, like, no, no, we think I'm an upside too. And like, yes, they do for sure. But I think that mathematically, to make it real, like you said in a big PE fund, I think you basically, like, you really don't want to lose money on any of the investments. It just like mathematically makes it very difficult. And if you do you want to lose like only a little bit in venture, it is expected that you'll lose money on a lot of the investments. And so. But to your point, on the what could go right, like, it's hard, like you know, there was this, like, I think that people take Uber for a second. Like, I think the first reaction to Uber is like, well, wait a second, they might get like crushed by the taxi market. It's hard to think about this now, you know, but like, wait a second, there's like an enormous lobby. Like, you can't even. The taxi market lobby is going to prevent you from like being able to share someone's car. And it's like very easy to imagine, like, there's, how is this going to work? And the people that really thought about Uber in terms of like the risk reward, they're like, yeah, true, that might happen, but you might have a world where nobody owns a car. You think about true, like, what could go right? Like, we're not there, you know, but like, if they're like, ride sharing really works. Yeah, you know, like not nobody, but like, way, way, way fewer people own cars other than the people providing, like the. You know what I'm saying? And then those people might have gotten even, like, man. And actually, in fact, maybe nobody owns a car because it gets too autonomous, because they're thinking about like waymo, even from 10 years ago. And like, that's just like a different way of thinking about the world in terms of like, well, what's that company worth if it's the company that provides rides to everyone and no one owns a car and all the cars are autonomous, you don't even have to pay the drivers.

Yep.

And that is like a real reframe of like, how do you think about things? And I do think some level of that in your day to day life, especially as you evaluate potentially big risks, is really valuable of the think deeply about what could go right. So maybe one theme, like, earn the right to take risk, two, like, keep your lifestyle low. And three, make sure you think deeply about what could go right. Those do feel like some lessons.

Well, how do you get there, though? You live in Silicon Valley, so that, that is the pervasive thought.

Yeah, right.

What could go right? Yeah, what is the potential? It's tantalizing to think of what, you know, I'm from, I'm, you know, humble, you know, Michigan, just the Midwesterner guy.

Just, just, you know, assembly line mentality.

Assembly line mentality. You know, I'm thinking, God, what could go wrong here? Let's just keep this line moving here, you know, so how do you get there? How do you get there if you're not in that environment? And, and can we teach people to take risk? Or how should people Think about it. And I know you had a great reframe there for our listeners out there. So that's great for a vc but.

I know, I know.

Help me out, Robby. Help me out.

You know Shane, it's so funny you say it because I think I just reread Sam Walton's book and by the way, if anybody hasn't read it, Made in America read it so good. Yeah, but you know, he's like a product of the depression and you could easily imagine somebody like who like product of the depression just being like dude, I'm just trying to stay afloat here. Like we went through something terrible.

Yep.

And he ended up being like very, very, very risk seeking and very willing to like try things and fail. Like didn't worry about being wrong, whatever. So I think the first thing though, I guess I'd say for me like it is way easier for me to have taken any risk because like my parents created a baseline of like it was just going to be okay. You know what I'm saying? Like that is, and that is just like a gift that was given that I had nothing to do with. I think the way to teach people though to take risk is to be more objective. You got to be more Shane Battier when it comes to evaluating the upside and downside. You have to see reality clearly. You can't let your loss aversion or frankly maybe on the other side you're like ego of wanting the thing to do. You see what I'm saying? Like you have to, you have to be objective in the way that you evaluate it. And so I do think the discipline of like evaluating risks is probably something where like you, you, you need to have a framework for evaluating them that is.

Consistent.

Yeah, consistent, auditable. You know what I'm saying? Like I actually think everyone's gonna call me like an AI maxi. I think that like if you don't have a friend to talk to about it, I think you putting it into chat GPT of like I'm dealing with this situation right. Using GBT5. I'm dealing with this situation right now. Here's how I see the upside and the downside. Can you help me think about whether I'm being objective about the upside and downside here? I don't know. I wouldn't, you know, if we're talking about looking at it objectively.

That'S a gift, right? Feedback is a gift. You know, I just remember, I think it was Tony Robbins who said this. I saw one of his special somewhere and it stuck with me, he said, you know, when people know when people change, when the pain of staying the same is greater than the pain of what could happen with some change.

Oh, I like that. I like that. I also think this might be the first time we've quoted Tony Robbins, which is pretty good.

That's the only Tony Robbins quote I know.

You know, Shane, I got one more. I got one more to help people on this. Okay? And this is a big shout out to Mike Dunleavy. Mike D. Okay? My boy.

Our boy.

Okay. Which is this theme. Nobody cares. And I'll tell you why. I'll tell you why this matters. Big shout out. I hope Mike D is listening right now. But I think there's this huge thing that people have when they think about taking risks. Like, what are people going to say?

Yeah, right.

What are people going to say? And I think the real answer is nobody cares. Nobody cares. Nobody cares about your, Nobody's thinking about your life like that. They're thinking about their own life. And so it, to the extent you have any in a unwillingness to do something because you're afraid of what someone's going to say, just. Mike D. Nobody cares. Nobody cares. Right. Like, I think that that is such an important thing as we think about trying to teach people to take more risk is at the very least, don't worry about what anybody's gonna say. Cause they don't care. They're not thinking about you. They're thinking about themselves.

Yep. There's a great political cartoon that I saw one time. And it's like what your brain thinks and it's you in the middle of a crowd and everyone has, you know, iPhones out, like record you and the next one is the reality and it's, it's you in the middle and everyone's looking at the skies, looking at their own phones, you know, pointing over there, looking at everywhere but yourself. Guy listeners, like, have faith. Like, you're rubbish.

Right?

No one probably cares. All right? Your family or your close friends.

I, I, I, I think that that is probably the most liberating thing that you could have is that just like nobody is thinking about it. Just nobody cares, you know, I, I, I think that if I could give one lesson to somebody, it would be that because then it's like, cool. Like if you don't want to do it, don't do it, but don't have it. Be whatever. Like I truly. Shane, I, I've always thought about this for you, which is that like, I think that like in being embarrassed is like A really hard emotion. You know what I'm saying? Like, it's like, so we're all proud. We all, like, want to, like, pop our chests out. You know what I'm saying? And I always think about this as it relates to, like, you when you were sitting in the finals, you know, like, for the first time, getting the first DNP CDs. And we've talked about it all the time, but the biggest thing that I think about there is, like, your ability in that moment to not let embarrassment, like, bring you down. You know, like, it sucks. All of a sudden, like, it's on fucking tv, you know, like, it's. It. I don't know. Like, I would imagine that was. It's not just that you're not contributing. It's also that it's, like, very public. You know, if tomorrow I get, like, the equivalent of benched at Sequoia, like, I don't know. Does anybody really know? Yours is, like. It's so public. And so I think that shows a lot of mental strength to have, like, not been embarrassed in that moment, you know? And I don't know, I'm curious, like, did you feel that at all? Was that an emotion that even, like, ran through your head?

I was much more hurt because I felt that people who previously believed in me no longer believed in me.

Yeah, I didn't.

I didn't care. Like, when you're in professional sports, like, you know, you get all the trolls on social media, and you're. You're kind of used to the bad articles about you, and. And, hey, this. We should trade this guy for this guy. And so, like, you. You develop a. A thick armor. So when that happened, when I was told, like, hey, we don't need you tonight, it was more like, man, like, I. I used to be the guy that you always counted on, and I'm not anymore. So it was much more. It was much more that. But, like, you know, I think I thank my parents for this, and my parents were not, you know, learned people. They didn't have, you know, deep talks with me about. About life philosophy. But one of the things my mom was. Was great at, she said, just, just be the best you can be and never let basketball define who you are as a person.

Right.

And so I always had a great awareness of basketball is what I do. It's not who I am.

Yeah.

And that's really hard. It's really hard, especially for these young guys coming up now in professional sports and the social media and their identity is. Yeah, it, you know, it is the sport.

Yeah.

And so being able to separate what you do from who you are allows you to, to just step back a little bit and say, okay, what's real, what's not and what what, you know, what can I control? What, what can I not?

There's this great when you said this, there's this amazing Paul Graham essay. It's called keep your identity small. And it is, it's not about basketball but it's exactly the same point which is effective. Like things that you have as like your identity, they actually prevent you from evolving and changing because you have to protect like this thing, you know what I'm saying? And so his point is like look like anything you have in your identity is effectively like as your stated identity or you know, implied identity. You're basically not going to change that. You're going to defend that at all costs. This is why political arguments are actually tough. If you identify as like one political party, you kind of end up in like a weird contortion of stuff that you like. Right? Because you know, it's like, well whatever the party says and like the party has different goals than you might, you know. And so I think again like if you were like I'm not going to shoot threes because I'm a back to the basket player that have been a terrible identity to have and it would have really prevented you. One of the guys I admire most, future glue guys guest, is Brett Taylor who is the chairman of OpenAI and the Co founder of this company Sierra. And it's actually quite amazing because he's this incredible leader. But he started out as just as like a engineer and he's an amazing engineer. Amazing engineer. But I think over time he sort of, I think has lived this like Paul Graham idea of keep your identity small. Like because he at some point thought like the only way to solve problems was through like being a great engineer. And then he learned over time like he went from that at some point became a cto is like, well actually my job now is not to like be a great engineer, it's to like empower the people around me to solve the problems and to make sure that I have people that can do it. Then he became the co CEO of Salesforce which is like a, like a sales job. Right. But again he was sort of like, I'm not like a, I'm not a tech person. You know, I am just like a business person and I, there's why can't I learn how to do sales? And now he's a Tech founder, and it uses all of his different things, but he's sort of. And it's not. And by the way, being even an exec versus a founder has identity, you know, And I think he is somebody who, like, he's like, don't let an ossified version of yourself prevent you from becoming the next version of yourself. And I think that is, like, so good on your point on identity. And it reminds me of these players and, you know, all this stuff, because the more that you identify with something, like, I try to keep the identity of, like, something beyond, like, I hope to be a good dad, a good husband, and a good friend. Other than that, like, what do I really need in my identity? You know, I put in my identity that I'm supposedly smart all of a sudden, then I'm, like, too proud to ask a question. Right. You know, because it's like, well, shit, what if they don't think I'm smart anymore? So you actually really have to be careful.

My identity is, again, always be the. The dumbest person in the room. All right? And. And I'm definitely the dumbest guy on this podcast.

That is definitely not true.

That isn't any. I'm proud of, you know?

Have you. Did you hear Cooper Flag's mom's quote about this?

No.

It was great. She was like, we always told Cooper that if you find your. If you find that you're the best guy in the gym, it's time to find a new gym. Yeah. And I thought that was, like, really cool, you know, it explains, you know, why he, you know, kind of entered college early. It explains why he left college pretty quickly, you know, But I was like, that's a cool attitude, you know, for that person. And it's something I think that's good for all of us to keep in mind.

Again, it's safety versus spreading your wings and, you know, nothing. Nothing great. You know, my other favorite quote is, you know, there's never been a great story that says, so I went home after dinner, went to bed, right?

Yeah, totally, totally. So I had dinner and then I went home.

Yeah, no great story. Said never.

I think, you know, Shane, on that. That's so funny. Like, my version of that is not nearly as good as yours. But it's always like, you know, the only thing that makes a story interesting is, like, the ups and downs and the, like, mistakes, right? Oh, there's no fun if you're not like, well, what happens then? But I really like your, you know, no great story begins with. So I had dinner and then I went home. Like, speaks to your Everything in moderation, including moderation.

Remember kids, nothing good happens after 2 2am okay.

You know, one of my theories on this, Shane, is that two things. One, I think that at the ATM after 2am they should make you do a math problem. Like kind of like two parts, like one. Like, are you sure you need to take this? Just go home, you know, like, kind of like. And then you should. I think you should have to do like a somewhat complicated math problem to get the money out at that point.

That's good. That's a good business idea.

You know the other thing, I think that same thing should be on your phone. Like when you're calling somebody after 12am There should be some mechanism like, are you sure? Are you sure, you sure you want to do this? Like, you know, do. Do this wordle real quick before you, you know, do this sudoku puzzle before you make this call.

Yep. So we're. I know we're. We're hypocrites here. So, you know, no, great story started with so I went home after dinner. But also, you know, nothing good happens after 2:00am okay.

There's a lot of time between dinner and 2:00am Shane.

Exactly. Just be efficient. Just be efficient with your time, Sam.