📚 Unreasonable hospitality, Racecar growth framework, Studying classics, Too smart for Mensa!

Berkshire Hathaway 2023 Letter + a lot more for the curious YOU

Hi and welcome to the post #149.️

I just finished reading “Unreasonable Hospitality” and I highly recommend it. Its core message caters to those in the service industry, but the way Will Guidara & team build their approach is useful for a much wider audience. A couple of snippets from the book:

One of my favorite questions to ask was, “What’s the difference between service and hospitality?” The best answer I ever got came from a woman I ended up not hiring. She said, “Service is black and white; hospitality is color.” “Black and white” means you’re doing your job with competence and efficiency; “color” means you make people feel great about the job you’re doing for them.

Sometimes magic is just someone spending more time on something than anyone else might reasonably expect.

Going forward, this book is a mandatory read for anyone in my team if they are even remotely involved in customer experience or org building.

For today’s post, here’s the lineup:

As usual, I love to curate this spread for you curious folks. I hope you like it. If you do, hit the ❤️ at the start or end of the post to show your love. 

Let’s jump right in.

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🚗 Racecar Growth Framework

Lenny & Dan Hockenmaier collated the Racecar Growth Framework as a starting point for any team working on GTM and growth strategy.

As Lenny puts it: I encourage you to use this as a source of inspiration for your growth ideation. When you’re developing a new growth strategy, or struggling to come up with tactical ideas, start here.

Here’s the snapshot capturing the details:

Source: Lenny’s newsletter post

Most of the inputs including the tactical ideas are self-explanatory. Their examples help think of them in actionable terms. 

One part that I would like to highlight (for you & for me) is the role of lubricants: 1) Increase conversions, 2) Increase retention, 3) Increase brand awareness, 4) Increase activation / customer success and 5) Increase prices. 

These are part of the ‘dirty work’ one needs to do to keep the momentum going. I have to understand the last one better, though.

PS: Lenny’s post seems to be for Paid subscribers only. However, substack seem to be testing a feature to unlock such posts on a one-off basis. Try that and experience it in full. Or there is a lighter version of that available on Reforge as well.

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🤖 Consumption is Production

Dror Poleg posits in “God, AI, and the Scalable Class” that most people no longer need to work. Our survival depends on convincing them it's ok to do something else.

I think we're in the midst of a more profound change. People want to do other things with their time because the economy needs them to do other things. We simply no longer need so many people to do what we previously considered to be "work." Instead, we need to do two other things:

1. Consume. But in a way that generates signal and input that can guide further production (and consumption); and

2. Do whatever they want and, somehow, uncover new jobs that will become important.

His “students for life” example about Israel’s ultra-orthodox minority was a discovery for me.

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🔭 Studying Classics

Source: Noah Smith’s post.

If the above question intrigues you, Noah Smith has written a brief post covering his point of view. 

We expect different things from physicists and philosophers. We mainly expect physicists to produce functional devices and well-evidenced theoretical insights that are easy to communicate, learn, and apply. We expect philosophers to help us think about complex problems that usually have no definitive, verifiably “correct” answer. The former requires simplicity, the latter requires nuance and depth.

Very interesting! Comments on this post will give you more food for thoughts, if Noah’s ideas are not sufficient.

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🤹 Profile: Dwarkesh Patel

“The future belongs to those who prepare like Dwarkesh Patel” answered many questions that pop up every time I listen to Dwarkesh’s podcast. He is so well researched and that shows up in his guest list and the confidence he shows in asking deep questions. 

This brief post gives a glimpse into his journey & what goes behind those long episodes. Here’re a couple of noteworthy snippets from the post:

“Most of the prep I do just doesn’t end up being useful because I’ll have read a random thing that never came up in the conversation. But some of the things I end up reading, even randomly on my own time, lead to interesting conversations.”

And I learnt a new concept - “Pareto Frontier”

A “Pareto Frontier” describes an optimal state in decision-making processes where you can't improve one aspect without compromising another. Imagine a scenario where you’re trying to balance two competing objectives, like quality and cost. The Pareto Frontier represents the set of all points where you achieve the best possible balance between these objectives. It’s finding the sweet spot where you get the most quality for the least cost — and any move away from this point means you'll either sacrifice quality or increase cost.

Acquired Podcast and now this - there is a rise of interest in well-researched content projects. Folks like Dwarkesh are showing that focused effort can help achieve significant smart on a topic to help bring out the best of real experts. 

Tyler Cowen does this, he has years of experience pursuing his academic interests, passions and curiosity. I just subscribed to his “Marginal Revolution” newsletter and it shows the width of interest & sources Tyler is interested in. I find something interesting every once in a while, worth subscribing if you’re not too particular about getting something useful in every email.

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📜 Berkshire Hathaway 2023 Letter

I’m not into reading shareholders letters (yet). Still, some good ones find their way for reasons other than understanding company performance & shareholder discussion.

The latest one from Berkshire Hathaway is one such case. This is the first one in the post Charlie world. Warren wrote this to highlight the role he played all these years:

In the physical world, great buildings are linked to their architect while those who had poured the concrete or installed the windows are soon forgotten. Berkshire has become a great company. Though I have long been in charge of the construction crew; Charlie should forever be credited with being the architect.

I liked this letter for the way it story-tells the performance of one of the most impactful organizations out there.

Sample this:

In visualizing the owners that Berkshire seeks, I am lucky to have the perfect mental model, my sister, Bertie. Let me introduce her.

For openers, Bertie is smart, wise and likes to challenge my thinking. We have never, however, had a shouting match or anything close to a ruptured relationship. We never will. 

Furthermore, Bertie, and her three daughters as well, have a large portion of their savings in Berkshire shares. Their ownership spans decades, and every year Bertie will read what I have to say. My job is to anticipate her questions and give her honest answers. 

Bertie, like most of you, understands many accounting terms, but she is not ready for a CPA exam. She follows business news – reading four newspapers daily – but doesn’t consider herself an economic expert. She is sensible – very sensible – instinctively knowing that pundits should always be ignored. After all, if she could reliably predict tomorrow’s winners, would she freely share her valuable insights and thereby increase competitive buying? That would be like finding gold and then handing a map to the neighbors showing its location.

Bertie understands the power – for good or bad – of incentives, the weaknesses of humans, the “tells” that can be recognized when observing human behavior. She knows who is “selling” and who can be trusted. In short, she is nobody’s fool.

So, what would interest Bertie this year?

Another one:

Beyond that, we have learned – too often, painfully – a good deal about what types of insurance business and what sort of people to avoid. The most important lesson is that our underwriters can be thin, fat, male, female, young, old, foreign or domestic. But they can’t be optimists at the office, however desirable that quality may generally be in life.

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🧠 Too Smart for Mensa!

There are worlds where a high Mensa score makes a difference. I do not live in those, or at least I believe so. Anne Kadet did a fun investigative piece covering our world’s high IQ societies. I expected these to look like hangout places of geeky nerdy people. I was surprised by what Anne’s research tells us.

A couple of snippet from the post:

But here's what I didn't understand. What do super smart people get from joining a club for super smart people? Sure, there's the bragging rights, but if you're smart enough to get into a high IQ society, you're probably smart enough to understand that flaunting your IQ is simply not acceptable behavior these days. People will just think you're insecure, or clueless.

What do high-IQ society members have in common? Perhaps an experience of struggle, suggests Mr. Arndt. For the typical person who does well in school and enjoys a smooth career, intelligence isn't an issue one way or the other. "If you were successful in your job," he says, "Why would you even take an IQ test?"

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🗞️ Light reads & videos

Some interesting blogs & videos from not so usual topics of interest.

1. What It’s Like to Staff the Home of a Billionaire

A few years into my private-chef career, I became more aware that there’s a line, and it’s best for everyone if that line isn’t crossed. But it gets blurry for sure. Say you’re on a yacht with your principal and they had a few tequilas, and then they’re like, “Oh, come on. Join us.” Ultimately, you have to remember that you are there because they’re paying you. It’s a job. They’re not your friend. Obviously, you need to share compassion and empathy. Sometimes your boss needs you to be a shoulder to cry on. But in the back of your mind, you still need to know that there’s quite a clear boundary. I’ve had housekeepers come to me saying, “What’s going on with my principal? One minute, they’re really open with me. Then, as soon as their friends come over, I’m just the staff.” But I think if you remember from the beginning that you’re there to do a service, you won’t get offended later on.

2. How I Fell for an Amazon Scam Call and Handed Over $50,000 

It was my brother, the lawyer, who pointed out that what I had experienced sounded a lot like a coerced confession. “I read enough transcripts of bad interrogations in law school to understand that anyone can be convinced that they have a very narrow set of terrible options,” he said. When I posed this theory to Saul Kassin, a psychology professor at John Jay College of Criminal Justice who studies coerced confessions, he agreed. “If someone is trying to get you to be compliant, they do it incrementally, in a series of small steps that take you farther and farther from what you know to be true,” he said. “It’s not about breaking the will. They were altering the sense of reality.” And when you haven’t done anything wrong, the risk of cooperating feels minimal, he added. An innocent person thinks everything will get sorted out. It also mattered that I was kept on the phone for so long. People start to break down cognitively after a few hours of interrogation. “At that point, they’re not thinking straight. They feel the need to put an end to the situation at all costs,” Kassin said.

3. Harvesting ‘true cinnamon’: The story of the Ceylon spice

Then in 1658, the Dutch (allied with the Kandyan kingdom in Sri Lanka) took control of Sri Lanka’s coastal belt after a series of battles with the Portuguese, and established a cinnamon monopoly by exploiting the Salagam community to supply the spice to meet the growing demand of the European market. Governor Rijckloff van Goens Jr, ruling from 1675 to 1680, referred to cinnamon as the “bride around whom all of us danced”.

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✨ Everything else

1. The process of making a seamless seal stamp. A Japanese seal stamp that costs over $1000 each. Insane attention to detail. (via arun.js)

2. Fun fact: words "lord" and "lady" descend from old english words that mean "bread-guardian" and "bread-kneader", respectively!! Check the tweet by olivia__ms for more. (via Trivia Mafia)

3. Transformation of pencils to beautiful artwork. The work is intricate and looks more beautiful in the colors. (via Dense Discovery)

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That's all for this week, folks! 

I hope I've earned the privilege of your time.

Please leave a comment or hit the ❤️ at the start or end of the post to show your love. It’s highly helpful & encouraging.

Pritesh