The Exchanges

Q I really want to dive into that whole learning process. Before I do, just from a practical perspective, how long did you stay at the agency and then what happened in the creation of Farnham Street after that?

A I was there 15 years. I started Furnham Street while I was there doing my MBA. Originally, it was six eight one three one dash 14 40 dot blogger dot com, which we don't own that domain again, but for your listeners, that might make sense, right? Six eight one three one is a zip code for Berkshire Hathaway. 1440 is the unit number and Q at Plaza. And the reason I chose that is I didn't want to password protect a website, and I figured nobody's going to type in a string of digits to get to a website. But that was really just to keep track of what I was learning and interconnect. Things, right? You could use hyperlinks, and so I could connect ideas. I started going back through a lot of the original literature and going direct to the source, which is something that'll probably come up over and over again in this conversation, but high quality ideas often originate when you have high quality inputs, and getting to better inputs was definitely a blessing in university. I don't need to read the summary anymore. I can read what Kahneman's writing and Tversky and All these guys and read directly from Munger. I don't need to read a summary of Munger. And I felt like that that was a really good way to spend my time. But of course the website was anonymous because working in an intelligence agency, you're not exactly allowed to have a public profile. And it was just for me. But then, you …

AI assessment note: “I was there 15 years. I started Furnham Street while I was there doing my MBA.”

Q Before I move on from reading, there's this notion of you're reading something, there's knowledge, you want to apply it, and that's the way that you can really internalize it. How do you go about digesting what it is you're reading at the time, whether it's a book or an article, so that you really can internalize the lesson?

A Yeah, so what I tend to do is if I'm really trying to learn from a book, I do something I call the blank sheet approach, which is I take a sheet of paper, grab the book, and I write down everything I know about the topic before I even open the book and start reading, almost like a mind map. And then I'll start reading, I'll read the first chapter, and then after the end of that, I'll add to my mind map, and I'll connect ideas on the mind map from what I just learned in the book. And I'll write a one or two sentence summary of that Chapter usually in the book itself. And then often, cause you don't sit down and read for like six hours. So what I'll do the next time I pick the book up is I'll look at the mind map and I've had two different colors of ink, right? So let's say I use blue for the original one that I come up with. Red is the first chapter. Then I'll use black for the next chapter, but I'll review it before I read the next chapter. And the reason that I want to review it is not only spaced repetition, but it's priming my brain with the scaffolding I need for the next chapter. Already. And that allows me to digest a lot quicker, retain a lot longer. And then at the end, you get these one page summary sheets of the book where you can go back and you can actually see your knowledge build up over time. So you're getting positive reinforcement about what you're learning. So…

AI assessment note: “I do something I call the blank sheet approach, which is I take a sheet”

Q So take me through that path. You come out of college, you take this job in intelligence right into nine 11. And so what were those circumstances that put you into either leadership position or decisions that you had to make that you weren't prepared to?

A Just necessity. The world changed for intelligence agencies literally overnight. And we went from this obscure agency in Canada with no sign outside to all of a sudden there's a sign, there's funding, we have people. I think we ended up growing from 400 or 500 when I started to, I think, well over 2000 when I left. It was just rapid, rapid ascension of you have to do jobs that you're not prepared to do because that's what your country needs of you and how can you complain, right? There's troops in theater that are risking their lives and you're sitting behind a computer or trying to do your best and somebody's asking you to do something and you don't quite know how to do it. You can't just throw your arms up and say, I have no idea. So you become Incredibly resourceful, and as we've institutionalized a lot of that over the last two decades or so, that probably wouldn't happen again today, but that level of the authority that you had to make decisions back then at such a young age was amazing, and I would say overall incredibly successful for the agencies.

AI assessment note: “Just necessity. The world changed for intelligence agencies literally overnight.”

Q Do you use the same application with articles? So much of what people are reading now are from blogs or whatever's online.

A Yeah, you could totally do it with blogs, but it would be different, right? Because blogs tend to be sometimes all over the place, different topics, different subjects. I think what you would want to do is just have core themes that you're consuming information about, whether it's productivity or a specific discipline. And then have those pages available to you. You also don't want to put them on the computer. You want a pen and paper. So I think that if you had them at your desk, you could totally make it work for online reading. But the way that I had sort of designed it was for what is the most optimal way that I can think of to read a book and extract the lessons from it.

AI assessment note: “Yeah, you could totally do it with blogs, but it would be different”

Q What models do you use or practices to use in managing your team to, to effectuate that balance?

A We're always thinking about the map and the territory and stats don't tell the full story and what is it we're trying to create over the long term. So, you know, our, our particular page view count on a month, we don't even look at it month to month, but that is a map and it's definitely not representative of what we're trying to accomplish. We try to do projects that have no immediate payoff. So no first order positive payoff, but second, third, fourth order, positive payoffs. Our book series is a great example of that, which is The great metal models, and we're trying to give everybody the big ideas they would have learned in university, distilled into a practical and easy to apply way. However, the flip side of that is like, that is a lot of our time, a lot of our effort, publishing books is not for the faint of heart, especially when you're doing, we're working with amazing contractors, but we're still doing all the design, all the printing, all the shipping, all the storage, the warehouse. A former book distributor basically went bankrupt in March. You're dealing with all these things that take away from anything in the short term because we're trying to do something that creates a body of work for people in the world that is easily accessible because we want to help equalize opportunity and thinking across the globe. And that is sort of a second, third, fourth order benef…

AI assessment note: “We're always thinking about the map and the territory and stats don't tell”

Q Well, I don't know. What's the first thing that pops into your head, or why'd you say it was an interesting time?

A I was in military pride, so we moved Everywhere. So the first school that I ended up going to two years in a row was grade 10 and 11. So every year was a new school. There was one time where I switched schools internally within the same city and we stayed in the city, but every other time it was just a move and it was, we were always on the go. And that has pros and cons to it. One of which is you become a bit gregarious and you can make friends easily. The con being you have a hard time getting close to people because you know, at the end of the year, you're going to move away. And so being vulnerable and being open with people becomes more of a challenge. And luckily I met an amazing group of friends in high school and we became lifelong friends and that's been remarkable.

AI assessment note: “I was in military pride, so we moved Everywhere. So every year was a new school.”

Q Knowing everything you do about the, call it the mental models of how markets work, and areas of inefficiency, and how hard it is, how have you thought about your own investing, and you could break it down, and just what you're looking at in terms of your, call it, deal flow?

A Yeah. I mean, that's super interesting. And the way that I originally thought about this was through a mutual friend of ours, Brent Beshore, and looking at buying private businesses and blue collar spaces. And I think that there's a lot of opportunity there. And I explored that for a couple of years really in depth and never got comfortable sort of pulling the trigger and then ended up making a whole bunch of technology investments right before the pandemic, which paid off really well, I think. But That was a lot of luck. And it was just a lot of going where I felt comfortable and where I understood stuff or where I could find people to partner with. And I'm still looking for blue collar businesses. I think there's huge opportunities in that space to sort of help those businesses with the knowledge that we bring to the table. The flip side of that is it's a tough industry. It's super competitive. You got to compete with people like Brent, who's super smart and it's getting harder and harder, especially now with the pandemic. Right. You would think that there'd be more opportunities and we've approached a couple businesses and tried to inject equity and it's not as easy as that. So it's definitely boots on the ground and see you in the trenches.

AI assessment note: “looking at buying private businesses and blue collar spaces... ended up making a whole bunch of technology investments”

Q Yeah. So as you change that trajectory or started to, how did that play out through high school and college?

A We all get put on this trajectory, right? So you're born in a certain country to certain parents. You have no control over any of that. Your parents have a certain socioeconomic status. You don't have any control over that. You get opportunities based on all of that. And then at some point you just take control of your own trajectory. Might not be as high as other people's, but you control the slope to a large extent. And I think for me, it started to dawn on me in grade eight that I controlled my slope and nobody was going to control it for me. And it's a slow sort of realization, but I was in grade nine. I had three rules, which was, I need to know where you are at all time, no drugs and no sex in the house. And those were my rules. And I don't know if I was ready for those rules, but I certainly grew into them very quickly. That was a lot of freedom to have. And when you get that much freedom, your life can go in a lot of different directions. And what I really realized then was my peer group is going to make a huge difference in the amount of trouble I get into and the grades I get in school and all that I can do in life. And I hung around with a guy named Kevin Sharp in grade nine. Who introduced me to computers, and that just kept me out of trouble for the next three, four years.

AI assessment note: “I hung around with a guy named Kevin Sharp in grade nine. Who introduced me”

Q And so what'd you do with that insight?

A Oh, I started following people around the organization. I mean, I was already working long days, and then I started showing up at meetings. I wasn't invited And back then, you could do that, and you could just sit in, and I approached people, and I started walking through my thinking with them, and just asking them to specifically poke holes in it, people that I respected in the agency, and I felt like I was getting a little bit better, but it wasn't working, and then you end up Googling, and you start reading, and then I did an MBA. I was hoping that that would help me, and of course, I did that full-time while working full-time, because you couldn't get time off then. And I got introduced to Charlie Munger around that time again. I think I was acquainted with him earlier, but I had never really paid attention to him. And then the world started to make sense. You got to consume information at the time that you need it. And I think I wasn't ready for it earlier. Same information. I was like, oh my God, this guy makes decisions for a living. He thinks the world's interconnected. That's been my experience. Like you can't do only one thing. You're always affecting all of these other things when you do one thing. And I He's a very logical thinker, and that appealed to my computer science brain, and I just started devouring all of what he wrote, and then went on this quest to try to…

AI assessment note: “I started following people around the organization. I mean, I was already working long days”

Q All right, we're going to keep going here. What's your biggest investment pet peeve?

A Projected earnings. The inevitable hockey stick. We're just catering to what people expect, right? Like we're in the process of taking a company or doing an RTO, so a reverse takeover, and going public with one of our private investments, and just seeing the way that the investment bankers make you fit into a mold of what they want to see. And then a lot of the companies that I admire don't necessarily fit that mold. Berkshire Hathaway doesn't really pay their board members. Shopify has, I think, six board members and not 12. Constellation, a lot of practitioners on the board, and you just look around and you start seeing these things, and the companies that I admire don't always fit into these boxes, and yet you get nudged at every twist and turn to fit into these boxes and check all these boxes.

AI assessment note: “Projected earnings. The inevitable hockey stick.”

Q How do you go about the process of deciding what you're going to have on?

A Oh, that's easy. I just follow my curiosity. Like I'm literally all over the map and I'll get on themes. Like in the sixties, we did this big kick on relationships and sex and all of these things that we had just never talked about before. The blog is really about cognitive tools and the podcast is really about helping you explore life and life is all of these interconnected things. Hey, I've never really had a conversation with somebody who wasn't a partner on sex. And all of a sudden I'm interviewing like a sexual therapist and we're talking about armpit sex, which is actually a thing. And I'm just like, oh my God, the world is crazy. And I think that that's awesome because I get this platform where I can talk to people about all these different subjects that I'm not scared to look like an idiot. And I really just want to learn about all these different things. There's so many amazing people out there. And as a What is it you know about the world that I should know now? Or what is it you know that's gonna help me do something or just help me understand the fabric of reality better?

AI assessment note: “Oh, that's easy. I just follow my curiosity.”

Q What's most surprised you in your learnings from the podcast?

A Just that I can be interested in so many things. Like, I think kids have helped me do this too, but I'm so Curious about so many things. Like, I want to talk about music, and I want to talk about wine, and I want to talk about what it's like to run a restaurant, and I want to talk about sex, and I want to talk about relationships, and I want to talk about risk and investing, and I want to talk with people who are breaking into computers or defending against that, and I just really enjoy the variety of people that I get to talk to and seeing some of the patterns in There's exceptional responses and exceptional people, and I just think we're putting together the highest quality source of knowledge in a non-specific domain. It's not about investing. It's not about, I mean, we cover that a lot with some of the best people in the world, but it's not necessarily about that. It's sort of like, remember that Forrest Gump quote, you never know what you're going to get. It's just like a box of chocolates. I think that's the podcast, right? Like one day it's going to be venture capital investing at the seed stage. The next day it's going to be a fortune five CEO. And the next day it's going to be Esther Perel talking about infidelity or relationships. I love that though, right? Because life is all of those things. And if you can find a high quality source of information that becomes super…

AI assessment note: “Just that I can be interested in so many things.”

Q Are there tools or techniques that you've developed that help you bridge that gap between seeing the world as it is working versus how you'd like it to, or you think it should?

A We think the world should be fair and just, and we think it should agree with our sense of fairness and justice, and it doesn't always line up that way, right? So a lot of us just spend so much time effectively pushing against this headwind instead of getting a tailwind. I think that if we just stop thinking about how it should and shouldn't work, which is an opinion-based approach, and we start seeing more objectively, well, this is how it does work. That allows us to get a better sense and make better decisions and get better sort of information about what we're trying to accomplish. And there are people out there who are going to do things that we don't think they should do. And we're going to do things that other people don't think that we should do. And I think should is just a really weird way to sort of choose and think about things like think about how often people say, I can't do that. And they can't do it because they don't want to do it. It's not because they can't actually do it. They're choosing not to do it, but just those wording nuances change how you interact with yourself and they change how you see the world. And I think it's really important that we own our role in that, which is the world's not going to work the way that I want it to. I need to be able to see the instances where it's not working in the way that I want it to and not get stuck banging my head…

AI assessment note: “just stop thinking about how it should and shouldn't work”

Q I had a couple other things I want to ask you about. The first is the most obvious, which is like, you mentioned that you're struggling with a book, and it just doesn't seem like struggling in terms of filtering and putting information down. What is this book that you've been thinking about?

A I don't want to talk about that yet, because I don't want to get in trouble, especially if I don't end up writing it. I think we all have to think through a lens of opportunity cost, and I really want to write a book, and there's also a, it's a pandemic. At the end of the day, I got to take care of my kids. I got to take care of my parents. I gotta take care of my family, and anything that gets in the way of that is just gonna fall down, and it's not gonna be a super high priority, and my kids aren't in school at the moment, so it's a lot more challenging in some ways, and we're just adapting and doing the best we can. Same as work. Furnham Street, I gotta keep things going, and if people aren't always available or doing everything that we need to be done, I mean, the buck stops with me, whether it's taking out the garbage or Making sure that we follow up when we say we follow up. I want to make sure that happens. And those things are really important to me before I take on other projects. With that said, I'm probably about 30% done the book. I just haven't found a lot of time to go back to it. And I think that I want to get back to that. It just hasn't enabled itself when all these other things are mental health of my kids right now is way more important than writing a book. And I think that if I don't end up writing the book, I don't end up writing the book and I won't regret…

AI assessment note: “I don't want to talk about that yet, because I don't want to get in trouble”