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The Optimal Blend of Luck and Skill in Competition (And at the 2019 CrossFit Games)

The CrossFit Games just wrapped up, and – with the large numbers of competitors from national champions increasing the field from 40 athletes to ~150 in both the male and female divisions – a series of aggressive cuts were added to the competition this year.

The field was quickly whittled down to 10 athletes with about half of the competitors being cut from the field after the completion of each of the first six events.

This has resulted in some controversy in the CrossFit community, as many perennial podium contenders and fan-favorite Instagram celebs did not make it into the top 10 athletes that completed the majority of the events over the weekend.

While I think that some people are upset about not getting to see their favorite athletes compete, I think that most people who are upset are reacting to the addition of more “luck” into the outcome of the event.

The results of all sports and games are dictated by some blend of luck and skill.

People find games that rely almost entirely on luck to be tedious and unfulfilling (Candy Land). 

[That said, people do seem to love gambling on Super Bowl Squares, which is totally insane to me.]

Within most sports that people watch and compete in, they prefer there to be an outcome that is mostly dictated by the skill of the competitors but that has enough of an element of luck or chance that there is potential for both suspense and surprise relative to the final result.

While everyone loves a Cinderella story, an underdog, and a come-from-behind victory, these narratives are only compelling if there is a framework in which the “better” players usually win by virtue of their skill and their better use of resources.

If there is too much chaos in outcome, it’s difficult to build narrative, and our instincts of meaning-making are flouted.

We want to see stories that make sense. We want to see hard work rewarded. We want to see up-and-comers have surprising performances and “level up.”

If there’s too much luck, the outcomes of the event dissociate from the narratives we build to understand and follow sport, and it becomes less fulfilling and exciting to follow.

However, in “real life,” luck is a huge part of any sort of success. While most podcasts and articles detailing the life stories of business owners, athletes and creatives focus on their upbringing, their work ethic and their moment of surprising insight, we never see the countless businesses that were bit too late or a bit too early, musicians who never got a break, athletes who suffered a debilitating injury early in their career, people passed over for promotions based upon office politics, victims of discriminatory hiring practices, and people born in areas with no economic opportunity. [I ranted about it on the podcast recently, though.]

We don’t want sport to imitate life too much, though.

We like sport to have clear rules, and we like those rules to weight things heavily towards the skill of the competitors in terms of dictating outcomes.

We like the outcomes in sport to be mostly dictated by skill, with just enough luck to keep things interesting.

In the CrossFit Games, luck has historically played a role not just in terms of the happenings on competition day (Did you come down with a virus leading into competition? Did you get a judge holding you to a different standard than the rest of the field? Did your opponent rip their hands on their first rope climb?), but also in terms of the selection of the events.

While athletes understand that they have to be “good at everything” in order to succeed, most athletes could easily draw up a “best case scenario” for themselves and a “worst case scenario” for themselves in terms of programming. 

In order to get better as a CrossFit athlete, your goal is often to train such that the set of “worst case scenario” programs becomes smaller and smaller, since weaknesses are punished harshly based upon the scoring of the sport.

So, I think that many of the people who are upset about the changes are upset about the addition of “more luck” into the programming since now it is not just the events themselves that dictate the outcome, but the order in which they are released.

This changes the dynamic of the scoring even more – weaknesses are already punished more than strengths are rewarded. But, in the past, athletes have been able to mount exciting comebacks from early mistakes or poor performances. Now, however, a bad event sends people home early in the competition.

If you watch the post-Games, press conference, you can see Dave Castro react somewhat aggressively to questions about the cuts. 

How does Dave think about the role of “luck” in testing?

I would guess that Dave thinks of the test of the CrossFit Games as something more akin to “real life” testing rather than “sport” testing.

Meaning: do you have the capacity to deal with anything that comes your way, whether or not you’ve prepared for it or whether or not you think it’s “fair”?

Based upon this, early cuts, event selection, and other factors are irrelevant – the fittest are those who are able to handle whatever is thrown at them.

And, in fact, an important part of the testing is the ability to respond to the psychological adversity of a changing landscape and unknown events – and still perform at an elite level.

Those who are not up to the task are not just “victims of bad luck,” but have also demonstrated a lack of preparation, a tendency to wilt under pressure, and a propensity for making costly errors in high-stakes situations.

Mat Fraser, Tia-Clair, and CrossFit Mayhem would have probably each won their respective divisions almost no matter how the event was structured – provided it looks anything like what we consider to be “The Sport of Fitness.”

The rest of the podium and the athletes making each of the cuts would have probably changed based upon the order of the events.

So, what is the role of the CrossFit Games? Is it to find the fittest?

What is the optimal balance of luck and skill in terms of dictating the outcome?

Will athletes be willing to devote as much energy and as many resources to training if the outcome of their season is further decoupled from things over which they do have control?

My biggest concern is that – while the fittest will almost certainly figure it out and be fine regardless of the structure of the season, the qualification process, and the cuts at the CrossFit Games – those who are on the margins of different ability levels will become overly frustrated at the lack of clarity surrounding what the sport looks like.

For the long-term health of the sport, we don’t just need to “find the fittest,” we need to also have an ecosystem of athletes, events and sponsors that are all bought in. It seems that the transition to Sanctionals will likely push in that direction. But, there are a lot of “role players” in the competitive CrossFit landscape, in their experiences can’t be discounted. 

While Tia is probably the CrossFit Games champion in just about every imaginable scenario, she needs to have 150 other athletes to compete against who are almost as good as her in order to make the sport compelling. If too many of those athletes throw in the towel because their experience at the highest level is too chaotic and they are treated as second-class citizens, then the sport as a whole loses out on the talent pool necessary to make the competition exciting and develop future talent.

Why Everyone Recommends Reading…Even Though Books Don’t Work

Most people have a vague notion that they should be reading more.

That successful people nearly universally recommend reading as crucial to their accomplishments.

That there’s information out there explaining how to do just about anything that you want to do – not just in books, but in full-length university level classes available for free as well as via entrepreneurs selling their expertise and their systems through their on online businesses.

Anecdotally, I’ve found reading and attending seminars to be one of the best investments of my time, and I’m constantly updating how I run my businesses and how I operate as a coach based upon information that I pull from books, articles, podcasts, and courses.

However, it seems pretty obvious that reading is a really bad way for people to absorb information. (I think I’ve recommended Andy Matuschak’s excellent article on “Why Books Don’t Work” previously in my newsletter.)

What gives?

I think we’re seeing a bifurcation of the population.

For the folks with the cognitive habits necessary to integrate abstract information from books and lectures into their actual work, reading is one of the best possible uses of their time.

For others, it’s boring and results in very little behavioral change.

One of the biggest challenges in learning is the “transfer problem” – someone can seemingly learn information in one context and even do well in activities like testing, recall, etc. but completely fail to execute on the new information in the context of their actual skill being practiced.

We see this all the time in our coaches at SLSC. We will discuss a concept in our coaches meetings like understanding how faulty hip stability patterns can result in certain types of technique flaws in squatting. We will go over a variety of examples – watching videos and breaking down clients’ movement, having coaches demonstrate the movement flaws, having coaches come up with theoretical cues and hierarchies for making corrections, and writing progressions on the board for corrective exercises and future re-assessment protocols.

We have a lively discussion and everyone is engaged. People offer insightful comments and relate the material to their own experiences coaching.

Then, as soon as someone is struggling with a squat in an actual coaching scenario, coaches default to their standard advice of random ankle mobility drills and stretching the hamstrings – completely ignoring all of the more nuanced and more effective material that we’ve discussed in our meetings.

While this does drive me nuts, it’s an example of the transfer problem in action.

Taking insight and knowledge from one area and applying it in another – especially an area in which you have ingrained habits and behaviors – is shockingly difficult.

In Andy’s article, he discusses the necessary meta-cognition for people to be able to process information that they’re reading effectively and get around the transfer problem:

Unfortunately, these tactics don’t come easily. Readers must learn specific reflective strategies. “What questions should I be asking? How should I summarize what I’m reading?” Readers must run their own feedback loops. “Did I understand that? Should I re-read it? Consult another text?” Readers must understand their own cognition. “What does it feel like to understand something? Where are my blind spots?”

These skills fall into a bucket which learning science calls “metacognition.” The experimental evidence suggests that it’s challenging to learn these types of skills, and that many adults lack them. Worse, even if readers know how to do all these things, the process is quite taxing. Readers must juggle both the content of the book and also all these meta-questions. People particularly struggle to multitask like this when the content is unfamiliar.

So, why do successful people seemingly read all the time – and recommend that others do the same?

I think we are seeing another example of selection bias as well as the aforementioned bifurcation.

Those who have the cognitive habits necessary to integrate information that they read into their actual practices are probably much more likely to be successful for many reasons. I imagine that this type of metacognition tracks with other “positive” traits like intelligence, conscientiousness, and expertise.

If you are an expert, you probably had to have a certain amount of intelligence and conscientiousness to achieve your expertise. Then, once you’ve achieved expertise, you have a much more detailed map of your subject matter and can more easily test new information against your map of the world and integrate it into your actual day-to-day actions.

Based upon this, those who develop the cognitive habits necessary to integrate new information can hit a “runaway” threshold where they are able to access constant streams of new skills, techniques and insights through reading and rapidly level up. Why wouldn’t they want to spend all of their time reading if they are immediately getting better at their chosen craft?

However, the portion of the population that struggles to integrate new information ends up stagnating and is not able to learn and iterate as rapidly resulting in a dynamic of “haves” and “have nots” where the information rich get more and more information rich.

I know some folks with expertise in education and learning read this blog. How – if at all – can we teach meta-cognition (assuming that we have an at least moderately motivated individual looking to learn)?

Or is it simply better to rely on prestige and social copying? Is this what companies mean when they are doubling down on culture? The most effective way to translate behavior through an organization is not documentation, policy and procedure – but rather execution and signaling by high status individuals and constant feedback.

Prestige and Why it’s Beneficial to Blindly Copy Successful People

Humans do a lot of things that really drive me nuts – like just totally copying the behaviors of people whom they admire, regardless of whether or not they make any sense.

At The Granite Games a few weeks ago, for example, there was an athlete who was almost a carbon copy of Dani Speegle. It kind of creeped me out, especially when they were talking within a few yards of each other as athletes moved in and out of the warm-up area.

I was like, “What are you thinking? Do you feel shame when you are within a few feet of the person that you’re copying? Or joy? What’s up with this”

Within fitness, athletes will often copy all aspects of an athlete’s training who they admire – and plenty of elite athletes make decent money by simply posting their own programming online behind a paywall. However, the training of the elite rarely makes sense for the weekend warrior with a full-time, stressful job and a history of back injuries.

This rampant, filterless copying extends from a person of prestige to just about anything they touch – regardless of whether or not it’s related to their field of expertise – which is why athletes are great for endorsing not just shoes, but cars, watches, and, of course, underwear.

This copying is present in the entrepreneurial space as well, and was the impetus for my recent podcast on survivorship bias which I recorded when I just couldn’t take another person claiming that the secret to their success is their morning journaling routine.

I recently read a book called “The Secret of Our Success” by Joseph Henrich after reading an article on the Scholar’s Stage blog.

The book focuses on the process of cultural evolution that has shaped human behavior.

One of the most salient points has to do with the emergence of complicated processes in hunter gatherer tribes for detoxification of edible plants, choosing where to hung in order to maximize the likelihood of encountering prey, and prevention of toxicity in pregnant women.

Individuals in the cultures that have these processes and rituals cannot explain the reasoning for them in a sense that we would consider “scientific,” but many of these superstitions, while seemingly arbitrary, do actually impact outcomes.

For example, if any of the stages of cassava preparation are skipped in preparation of the “bitter” version of the root, people who eat it will slowly develop cyanide poisoning over years.

Based upon this, it is beneficial for humans to copy their traditions from elders and more prestigious members of their society rather than tinkering with them on their own.

While an individual may think that a ritual “doesn’t make sense” or is “inefficient,” they take significant risk by breaking from that tradition since it likely came from a complicated, emergent process of tinkering and iteration.

In various game theoretical models, it is actually more beneficial on average for people to simply copy the strategies of the most successful individuals rather than attempting to understand or modify what they are doing.

I have much more empathy for the tendency of people to blindly copy “success” without really understanding what’s going on than I used to.

I also better understand the phenomenon of people being “famous for being famous” – or, as is more common in a lot of industries, famous for some stroke of luck or insight and then unreasonably elevated to expert status despite the relatively low quality of their actual knowledge or recommendations.

Once you hit a tipping point where enough people are paying attention to you, you’ve reached an entrenched status as an “expert” even if you’re incompetent.

And, from a big picture perspective, most people are probably better served by blindly copying successful people rather than trying to become experts themselves and understand all the intricacies of what advice matters and what doesn’t.

There are also theoretically market forces at play that can lend further weight to advice offered by prestigious individuals.

If people are more successful following a given “influencer’s” advice, that influencer will potentially gain more traction – whereas people offering unhelpful advice will largely lose their influence over time.

However, I don’t see this play out in real life most of the time. It seems that appealing to people’s built-in faulty cognitive strategies of conspiracy theory and magical thinking is much more effective for creating influence than actually offering helpful information.

We can probably split the market into people who actually want to take action on things like starting a fitness program, becoming a better athlete, or growing their business – and those who want to pretend that they might someday like to do one of those things.

The influencer market for the latter is much larger, and that market is much more susceptible to fuzzy thinking and bad advice.

So, for a lot of prestigious individuals, their platform is based upon some initial success through combination of luck and skill (although even many skilled and knowledgeable people are unable to articulate what they are actually doing in their field), then maintaining their position of status through aspirational people continuing to pay attention to them. Many of those people are not actually serious about changing their lives through fitness or entrepreneurship, so they pay more attention to lame hacks and advice that panders to magical thinking – and can even judge people harshly for explaining the actual nitty gritty details of their real fitness routine, their real nutrition program or the actual trade-offs they have to make to operate a successful business. 

And that’s why we got a bunch of moronic memes about morning journaling.

Management Fluff for an Eager Market

Seth Godin recently posted a podcast that caused me to mildly flip out in the first thirty seconds. Check it out here: “Of course they cheated”

“Management is done with power and authority – compelling others to do what we need them to do when we need them to do it. Leadership, on the other hand, always involves voluntary compliance. It always involves people eagerly following the leader.”

I’m a huge Seth fan, but this is the type of thing that I can see entrepreneurs mis-interpreting far and wide. A lot of people start their own business based upon their discomfort with the conventional structure of their industry, a frustration with how they see their bosses running their company, and a desire for autonomy and self-direction.

These types of people will often improperly map their own experiences with bad managers onto how they run their organizations. I should know since I did the same thing for the first several years of owning South Loop Strength & Conditioning.

They remember having their ideas squashed, they remember their leaders behaving badly and destroying the culture of their organization, and they remember having their projects micro-managed into oblivion by a short-sighted boss who is all trees – no forest.

So, Seth’s message railing against management as a coercive discipline based upon power, oppression and hierarchy tends to land with a market eager to hear it: entrepreneurs escaping the daily grind and striking out on their own.

These people love the idea of “leadership” rather than “management.” These people love the idea of “build it and they will come” rather than “sales funnels.” A lot of them are artisans, and they want to think about the big picture way in which their ideas are going to transform their industry, and they also love getting lost in the craft of doing their work.

But, what happens when they do actually have other people who they have to lead? What happens when they need to know their numbers in order to make strategic decisions?

Big picture inspirational blue sky ideation doesn’t help. Being really good at your specific craft (coaching, graphic design, copywriting) doesn’t help.

What does help? Knowing that management is a skill at which you can improve, and building a systematic way in which you run your organization and build relationships with your people – something like having regular one-on-ones with all employees, giving them consistent, non-emotional feedback on their performance (both positive and negative), and understanding how to organize the tasks of your business such that other people (besides yourself) can do them.

I think what Seth is really getting at here is the difference between “role power and relationship power.” Every hierarchical relationship has some sort of implicit threat associated with it. If you don’t do your job, you get fired. If you don’t pay your taxes, you go to jail.

However, relying on this threat to get things done is often only successful in very short-term scenarios (like call centers where employee churn is extremely high). Instead, good managers work on building relationships and offering consistent, high-quality feedback to improve performance. Through these relationships, they can create a space for employees to excel, since most people really do want to do a good job.

While this may be what Seth means by “leadership,” I don’t think that’s what most of the people who are listening think he means. They think he means “starting with why” and mission, vision and values statements.

What they really need to do, though, is just have consistent one-on-ones with their employees.

The Value of Knowing Your Numbers

Since some point last October, I’ve been on a mission to connect all of the different pieces of software that we use at SLSC so that we have “one source of truth” for our client numbers.

When we first started, I was very diligent about tracking and following up with all of our leads and new clients as they were getting started. I would also create and pull reports on a pretty consistent basis to see how the business was tracking.

As complexity was introduced into the system through different pieces of software (like e-mail automation through InfusionSoft, scheduling through Acuity Scheduling, etc.), it became more and more difficult to actually track what was going on.

At some point, the friction to actually pulling all of our numbers became so great that we stopped doing it with any consistency.

Around the same time, we had reached a stage of growth where just about everything was constantly breaking – from front desk employees not doing their job duties, to lack of follow-up from coaches doing consultations with prospective new members, to disastrous logistics management and coaching during classes.

While I would certainly advise any business to know their numbers, it was very obvious to me where our business was broken and what we needed to prioritize fixing. Even if we did have detailed numbers of all of the stages of our funnel, I don’t know that we would have prioritized things too much differently based upon that.

However, as we started to right the ship and fix our broken processes, I started to realize how little our staff understood about the actual underlying mathematics of how a CrossFit gym operates.

If you see a gym with pretty full classes and understand that each member is paying somewhere in the ballpark of $200/month, it can seem like the gym is killing it.

However, it’s easy to miss the constant churn of members, the significant drop-offs in the onboarding funnel between someone coming in for a consult and making it to the third month of their membership, and the constant rising costs through increased property taxes, increased minimum wage, increased need for meetings with more staff, and the standard yet still never pleasant unexpected repair and maintenance expenses.

Knowing our numbers was not so much about dictating our decisions as far as what aspect of the business we would prioritize or which part of our lead funnel was the leakiest – instead, it was about giving our staff perspective on how unbelievably difficult it is to get people to commit to training in the first place – and how difficult it is to keep them around once they do commit.

Given our location in a highly transient downtown area, we do have a unique challenge relative to many other CrossFit gyms in terms of how many members move away on a monthly basis – although we do have the luxury of quite a few people moving into our neighborhood as well.

While many gyms would be happy to add 5-10 new members per month, we often need to add 5-10 members per month just to replace our members who moved away – not even counting the other members who quit for other reasons.

Based upon this, I’ve doubled down on having an accurate process for pulling and sharing our monthly numbers that is also low-friction, since manually pulling and editing multiple spreadsheets on a weekly basis in order to review for our meetings is simply not going to happen.

I’ve been learning to code with formal help from my friend Kori as well as informal help from John and Griffin – and whoever else I periodically text with questions about setting up a server or some sort of opaque error message.

Over the last eight or nine months, I’ve set up the following situation:

•All of the pieces of software that we use at SLSC to manage clients (InfusionSoft, Zen Planner, SmartWaiver, Square and Acuity Scheduling) dump their information into relational databases in Airtable – and all behavior is associated with a unique client record. 

Most of this was done through Zapier – and other pieces of it were done through little web apps to work around Zen Planner’s lack of an API.

•Airtable views of clients in various stages of our onboarding process are regularly reviewed during meetings so that coaches are aware of how their people are doing – and where we are losing people in the process of onboarding them.

•I wrote – with Kori’s help – a Web Data Connector that pulls data from Airtable into Tableau in order to create visualizations of our lead funnel, including total conversion numbers, coach conversion numbers, and general members gained and members lost dashboards showing how our membership is tracking over time.

•These dashboards are embedded on my own site at www.southlooptools.com so that staff can access them and review them on their own if they wish to.

This has been a huge learning project in terms of my own lower intermediate-level abilities to write software. While I’m not really an expert in anything, I’ve learned pieces of Rails, Python, JavaScript, SQL and Apache system administration to make all of these different pieces of the puzzle work.

While this project is not quite done – there’s still several dashboards I would like to create as well as several edge cases in the way that the data is pulled that need to be cleaned up – I feel like we actually have something that is working close to how I envisioned it.

While there is a sense of accomplishment based upon that, I have no idea of this is going to actually make a material impact on our business.

My hope is that – through regular review of the numbers and an understanding of how and when people drop off – we are able to give staff clear goals and get more buy-in from them in terms of taking ownership of creating a world class gym.

If you’re not taking a look under the hood regularly, it is difficult to understand how flakey people are, as well as how many people will quit at the drop of a hat based upon one bad customer service interaction or some sort of inconvenience in terms of their ability to get to the gym.

I also hope that having these numbers handy allows us to zero in on problems in our business and increase our growth since we are still short of where we need to be to have the financial stability to aggressively pay off our debt while still reinvesting in our facility and paying our staff a living wage.

When we opened SLSC seven years ago, I never imagined that my days would be spent writing code and leading meetings, but it turns out that’s what it takes to run a small business – so here I am.

The Role of Religion in Preventing Right Wing Radicalization

I’ve made it a point to attempt to read and listen to more opinions from ends of the political spectrum that I tend to disagree with.

As someone who grew up in punk and hardcore and has historically been quite left-leaning, I get pretty excited when I can find a conservative voice that allows me to see what I would consider to be a reasonable “other side” to a lot of political arguments.

For this reason, I regularly read Ross Douthat’s work in the New York Times.

In a recent column – called “The Faults Beyond our Algorithms” – Douthat makes the argument that the radicalization of young men by YouTube recommendations is not just due to the effectiveness of these algorithms at generating clicks and view time.

In order for the recommendations for conspiratorial and alienated viewpoints to resonate with an audience, there must be a need that these more extreme view points fulfill.

Douthat argues that the removal of traditional values and social structures is key to the creation of this of a “disaffected conspiracy theorist” shaped gap in American society.

Given my recent reading and enjoyment of Bowling Alone – a detailed dive into the decline of social capital in American society – I’m pretty convinced by Douthat’s reasoning.

As we remove more and more of the pieces of our culture that give people a sense of belonging, we likely create opportunities for more and more people to search for meaning in all the wrong places (like YouTube rabbit holes of conspiracy thinking).

It’s difficult to tease out how many of the potentially radicalized folks would have participated in “more wholesome” institutions than YouTube recommendation k-holes, but it’s not hard to imagine that – on the margins – there are potentially quite a few people who would have found a sense of belonging in their local community that would have precluded them from being so vulnerable to “suggested videos.”

A more traditional leftist argument would likely focus on economic inequalities and the crippling debt that many folks are burdened with as they graduate from college as primary causal factors for the tendency of people to seek to “blow up a rigged system” and gravitate toward all kinds of sketchy red pill ideologies.

This inequality certainly plays a role in creating frustration, anger and alienation on which demagogues can capitalize, but I have historically underrated the role of tradition in filling the social gap that is now occupied by conspiracy videos and trolling in Reddit comments.

The Popularity Ratchet In Music & Venture Capital

One of my favorite people to listen to is Marc Andreessen.

You can thank Marc for the creation of the web browser, and you can also blame him for the spread of social media via his venture capital firm’s investment in Facebook.

In a recent interview with Brian Koppelman, Marc applies his understanding of complex systems and markets honed through years of venture capital investing to more creative fields like music and film.

On the surface, one might think that “business and investment” is different from “music and art,” but there’s a shocking amount in common between trying to be the next billion dollar start-up and trying to be a rock star.

There’s quite a few similarities between the success of a fintech app disrupting a bloated incumbent in the financial industry and an up-and-coming Soundcloud rapper.

Both require an insight into a coming wave of cultural change, a product that resonates deeply with a target market, and a healthy dose of luck and timing.

In art, music, and technology, technical operators often experience frustration that the “best product doesn’t win.” Musicians almost universally prefer Megadeth to Metallica based upon technical chops, songwriting, and innovation, but Metallica is a much more popular band (much to Dave Mustaine’s chagrin).

The start-up world is littered with failed technologies that were just before their time or were superior technologically to the eventual “winner” in a market, but that never quite resonated with consumers.

Instead, what matters is creating “flywheel” effects where the interest generated in your product or your art is leveraged to further meet consumer demand – especially since, once you have the flywheel spinning, you are able to continually lean on the continued consumer interest and feedback from your market to iterate and outpace competitors who are looking to also own some market share.

In the case of a start-up, this means that you are trying to solve an unsolved problem in a way that resonates with a market who experiences some sort of pain point or latent desire in such a way that – through the introduction of your product – you kick off a feedback loop where users start aggressively using your product and demanding more features to further help them solve their problems.

If you strike the balance correctly of listening to feedback while understanding that users often don’t know exactly what they want, you can continue to innovate in a way that resonates with a market that already knows and trusts you through the use of your service.

In music, it’s a bit more difficult to think about “solving a problem” for a target market.

Instead, musicians need to resonate with an identity such that their fans can say something about themselves by displaying their fandom of a specific artist. Most people don’t latch onto a band because they like the music (although that does matter). They latch onto a band because they like what being a fan of that band says about them.

As Seth Godin has said, “The Beatles didn’t invent teenagers.”

It’s more important to tap into either a latent cultural identity (typically frustrated by the existing paradigm in music – ie thrash metal and death metal reacting against the theatrics of posturing of hair metal in the 80s or bebop opening up entire new paradigms of jazz improvisation and breaking out of the stuffy big band structure) or to fully embrace an orthodoxy and appeal to connoisseurs and otaku (those with obsessive interests in a specific subdomain) in niche subgenres like grindcore, acid house, or d-beat.

In both business and art, those who win big are often solving their own problems or expressing their own identity – they just happen to tap into larger cultural forces that are coalescing around them at the same time.

And, through their success and exposure they are simultaneously both better to understand their audience and their market – as well as shape the conversation through their own output as they become culturally influential with the groups that have built their identity around either a specific genre or technology.

Bowling Alone and the Decline of Social Capital

In my continuing quest to better understand the desire for social connection that afflicts most people (this is a partial joke about my own disagreeable nature), I recently read a book called Bowling Alone based upon multiple recommendations from disparate sources.

In this book, Robert Putnam makes a pretty compelling case that American social capital has been steadily declining for decades. The two main culprits, he argues, seem to be longer commutes and television. (Keep in mind that this book was written before the explosion of social media).

As someone who has repeatedly written with concern about the effects that social media has had on the way that we relate to both other human beings and the ideas that other human beings have, I found it very interesting to read something written just a few years before Facebook was created and long before algorithmic curation and newsfeeds became the norm for social networks and content aggregators.

With any complicated phenomenon, it’s extremely challenging to create causal explanations through epidemiological data and survey responses, but Putnam is fairly careful in terms of how he explains things – offering many caveats and alternative explanations for his conclusions, as well as some more detailed explanations of his statistical processes in the appendix.

While each innovation in media seems to bring out Luddites railing against the potential unintended consequences – from the printing press, to radio, to television, to e-mail, to social media – that doesn’t mean that each of those groups haven’t had valid critiques. We often find, though, that the juice is in fact worth the squeeze when introducing new technologies. The introduction of the printing press probably did impact the overall ability of the population to memorize important cultural stories and it probably did introduce a sense of information overwhelm that resulted in people going “wide” on a lot of topics rather than “deep” on a few culturally agreed upon classics. But, we’d rather have a lot of different ideas from different authors than sitting around reciting the Iliad yet again – and that’s a fine trade-off to make.

If I overlay Putnam’s arguments with my experiences both as a relatively anti-social person and as a person with a leadership position in a small-ish organization in which I’m trying to create higher degrees of social capital, I can say that I’ve seen and felt an overall decline in engagement and willingness to “participate.”

In Putnam’s arguments, he blames commuting – both due to the time spent traveling as well as the fracturing of the community that one engages with, since an individual can now belong to three geographical communities for home, work, and hobbies/children’s activities as opposed to all of those taking place in the same region – as well as television – due to the very low transaction cost ability to stay home instead of engaging in the broader community – as the two major causal factors for the decline in social capital.

If I think about the difficulties of trying to either get myself to attend a social event or to get others to attend something like a gym outing or a heavy metal concert, I think that the low transaction cost of staying home coupled with the high mental transaction cost of going out (despite some improvements in transportation efficiency due to ride-sharing, etc.) may be a key factor in terms of the continued decline in engagement.

Note that this is all wild speculation and I have no business talking about any of this stuff with any authority since I’ve basically read one book on it lol.

Increased at-home entertainment options – from things like Netflix, smartphones, and social media – make it really easy to elect to stay home. And, in fact, staying home is often a much more engaging experience – even if it may not provide us with the same level of retroactive fulfillment as heading out into the world.

Imagine going to an amusement park.

Most of the time, you’re hot, waiting in a line, surrounded by obnoxious people, feeling crowded, and overpaying for snacks. But, the brief thrills that you get from the rides (the “peak experiences” of the trip) are exciting enough and salient enough in your memory that it’s worthwhile for many people to make the trip.

However, your moment-to-moment experience would be much more positive staying at home and watching Netflix rather than waiting in line for 30 minutes to spend $15 on a terrible piece of pizza at Great America. Sometimes, we seemingly prioritize the satisfaction of our future self’s memories over the immediate comfort of our current selves.

The options and connectivity presented to us by the internet also create a sense of overwhelm with the various obligations, FOMO and event invites that we all receive. We also receive fewer individual invitations to participate in social activities, since a lot of outreach occurs through Facebook event invites, group texts, and e-mail blasts.

Additionally, we are also concerned with curating our digital image on social media, and we know that almost everything we do will be documented in some form or another through Instagram stories and group pics. This creates a pressure for everything to be “extra fun” – which can also make things overwhelming since we may not feel up to dressing up and putting on a show for the cell phone.

This all combines to create a high mental transaction cost for engaging in social commitments, since we have to make dozens of decisions to filter through all of our options and prepare ourselves to be documented – even though the physical transaction cost getting somewhere has likely been reduced through the omnipresence of ride-sharing.

On an individual level, then, it’s easy to see how the access to easy, low friction entertainment that promises a steady level of comfort in Netflix and social media can overwhelm the high activation energy needed to attend a social gathering, a concert, or an optional community meeting.

Putnam discusses TV watching and categorizes individuals into those who either passively turn on the television whenever they are home versus those who only watch TV when they have actively chosen to follow a specific show. It seems that the negative effects on social engagement of television are more pronounced in the first group of passive television consumers.

The causality of something like this is likely complicated – and I would hypothesize that behavior here potentially tracks with a personality trait like conscientiousness – meaning, those who tend to be organized, structured, and better at controlling impulses are much less negatively affected by the presence of a low-friction entertainment option like television. (See also: junk food)

Still, I think that we are likely to see a bifurcation of negative effects on engagement that is further exacerbated by things like smart phones, social media, and Netflix.

Those who are better able to organize their time and control their attention are likely to disproportionately reap the benefits of easy access to information and culture facilitated by the internet – and others are more likely to end up disengaged from their communities, engaging in flame wars on Facebook, and deciding not to vaccinate their children because of YouTube.

To be clear, I also don’t think it’s totally fair to “blame” social media per say for this bifurcation or this continued trend of decreasing social capital.

This was very clearly a trend that has been in place for decades.

That, however, doesn’t mean that new innovations aren’t integral to the continuation of that trendline.

Think of something like Moore’s Law: “the number of transistors on a circuit doubles every two years.” In order for the trend to continue, researchers and companies need to keep on innovating and keep on packing in those transistors. This isn’t some natural phenomenon that plods along indefinitely – and the rate of doubling has in fact slowed in recent years.

Similarly, the decline in social capital likely requires continued innovation that further facilitates people staying home feeling overwhelmed – and further disconnected from their communities.

Consolidating Fitness Markets

As a high school leftist, I would have looked down upon my current self with contempt based upon the fact that I give significant mental energy to the dynamics of markets and how they improve the quality of life for both business owners and consumers.

The market for CrossFit gyms has been consolidating over the last few years in the United States – meaning that many original gyms are closing or being purchased by other groups, and many of the gyms that started after the wave of initial success circa 2012 are limping along and occasionally shuttering their doors.

What’s going on here?

Some gyms are collapsing under the weight of the debt that they took on to finance their growth, others are noticing members churning out faster than they can replace them – resulting in a settling point of monthly cash flow that is below what makes it worthwhile to continue operating, some have pivoted business models to focus on Facebook marketing and 6 week challenges as opposed to “forging elite fitness,” and others have owners who have badly burned out from years of stress and chaotic hours with minimal financial reward.

While this happens, some of the gyms that “do things well” are getting stronger based upon flywheel effects where they are able to leverage their membership and cash flow to reinvest in their business and their staff – thus making the gap between them and the rest of the market even greater.

So, gyms that are coming on the market now are competing with even more established businesses with a significant head start – which makes the start-up costs to get involved in the market much higher since the expectation of the consumer has been elevated significantly.

Since boutique fitness in a brick and mortar location is a pretty low margin business, taking on significant debt to finance the growth of a new location is a pretty risky proposition (I should know since we did this at SLSC).

However, the introduction of these well-financed competition creates some interesting dynamics, since these businesses compete away marginal clients from pre-existing gyms – often while operating with business models that are not sustainable over the long term.

This is not something like the battle between Uber and Lyft where venture capitalists placed huge bets on the eventual profitability of each fraction of a percentage point of marketshare in a future with autonomous vehicles and layers of businesses built atop the logistical infrastructure developed to facilitate ride-sharing.

Instead, many of these folks are amateur investors who enjoy fitness and think it would be fun, cool and fulfilling to own a gym. (No knock on these folks, since I totally get it – we took money from some of them, as well).

I do have concern for the future of the boutique fitness industry, though, since so many gyms are operating with unsustainable business models.

What happens to the “big players” in the market that eventually close down since they’re unable to generate enough of a margin due to constant competition from competitors who aren’t subject to normal market dynamics based upon significant investments of amateur capital?

What happens to the new gyms that take on huge debt to get going but will never generate enough of a margin to pay it back?

How does this serve the clients who want to be coached by professionals – but the structure of the fitness industry doesn’t allow for enough revenue to support paying a living wage to coaches?

How do owners of boutique fitness businesses set up their businesses to be stable over time when they have to coach classes and work with clients for 30+ hours per week to generate enough revenue to pay themselves and keep the lights on?

I wish this problem statement was leading to some sort of clever and insightful solution, but all I can do for now is frame the problem.

When to take down Chesterton’s Fence

At a recent “nerd meet-up” that I attended, one of the participants asked how we explain what we are doing to peers, co-workers, girlfriends, etc.

I responded that I tell people I am going to a “nerd meet-up.”

Anyway, I’ve recently forced blog reading (and guitar-playing) back into my schedule after neglecting both for years, and, by reengaging with online content, I’ve also found myself attending real-life events based upon people who engage in online content. Funny how that works out.

The topic of the most recent Chicago Rationality meet-up was the Chesterton’s Fence principle – which is not only defined on Wikipedia, but is a key aspect of the regulation of wikis across the land:

The quotation is from G. K. Chesterton’s 1929 book The Thing, in the chapter entitled “The Drift from Domesticity”:

In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, “I don’t see the use of this; let us clear it away.” To which the more intelligent type of reformer will do well to answer: “If you don’t see the use of it, I certainly won’t let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it.”

Another piece of reading for the discussion was from Scholar’s Stage on the value of tradition and how many traditions have second and third order effects that are optimized for something that may not be obvious from a surface-level examination of the tradition. Couple that with James Scott’s Seeing Like a State (and the associated essay from the Cato Institute) – which chronicles all kinds of failures and unintended consequences as governments attempt to make the goings-on of their citizens “legible” to things like censuses, tax collectors, and urban planning commissions – and you’ve got yourself a libertarian stew.

As someone who tends to disregard tradition and conventional wisdom, I find it useful to be reminded of heuristics that value tradition and “the way things have been done” over simply wiping the slate clean and starting over.

I tend to default more to the “pot roast heuristic” – as stated on Mindful Mornings:

A mother was preparing a pot roast for her family’s Easter meal while her young daughter helped. Knowing her daughter was very curious, the mother explained each step. As she was preparing to put the pot roast in the oven, the mother explained, “Now we cut the ends off of each side of the meat.” As young children often do, the daughter asked, “Why?” The mother thought for a moment and replied, “Because that’s the way it’s done. That’s how your grandma did it and that’s how I do it.”

Not satisfied with this answer, the young girl asked if she could call her grandma. The young girl called and asked, “Grandma, why do you cut the ends off the pot roast?” Her grandma thought for a moment and said, “Because that’s the way it’s done. That’s how my mom did it and that’s how I do it.”

Still not satisfied, the young girl called her great grandma, who was now living in a nursing home. “Great grandma,” she said, “Why do you cut the ends off the pot roast?” Her great grandma said, “When I was a young mother, we had a very small oven. The pot roast wouldn’t fit in the oven if I didn’t cut the ends off.”

So, how are we to make decisions? If we encounter a fence, how shall we decide its worth? Do we take it down? Go around it? Identify as “fence people” and hate all people who don’t have a fence? Or, sit upon it – forever neutral and uncommitted?

Based upon our discussions during our “nerd meet-up” and my own impulses, I would propose asking several questions and weighting the responses to decide what to do with the fence (or tradition).

Is the tradition an iteratively created response to a complex system? There’s a big difference between a rule or tradition that is top-down created by a state or government agency (like the confusing mess of dietary recommendations related to cholesterol levels and heart-disease risk that have created all kinds of negative consequences such as people replacing traditional foods with the even more dangerous trans fats) vs traditions that are iteratively arrived at over time through some sort of selection process (like the complex cassava preparation process detailed in the Scholars Stage article that removes the cyanide from the food and makes it edible). If a tradition or rule is “evolved” – meaning it was iteratively created potentially in response to selection pressure in a complex system, we should weight it more positively.

Is this a one-way door or a two-way door? This concept was popularized in one of Jeff Bezos’s letters to shareholders:

Some decisions are consequential and irreversible or nearly irreversible—one-way doors—and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that—they are changeable, reversible—they’re two-way doors.

When interfering with complex systems, we often want to make small, reversible changes based upon initial feedback. In a business, for example, it’s often better to gradually implement policy changes in small groups to test them out before rolling out to large cohorts of customers or employees.

In the case of a fence in the woods, for example, we could try going around it and see what happens before taking it down.

Are you hopelessly iterating to a local maxima? This is a common problem in A/B testing methodology. You can iterate on a website and squeeze every drop of conversion out of the button placement, headline, and bullet points – but you may have much more success by speaking to customers and figuring out how to solve a problem that they don’t even know how to articulate that they have.

If you think about the concept of “trying to find the highest peak,” you could come up with a decision-making algorithm that requires you to always take steps in directions that are either neutral or higher than your current elevation. If you were to get to the top of a small hill, the algorithm would require that you stay on top of that hill, since each step that you take would, in fact, decrease your elevation – even if there were a huge, mountainous peak just a few yards away from that hill.

Traditions and processes can sometimes lock us into local maxima and we need to be willing to discard them in order to find a higher peak.

Will there be second order consequences to removing the rule or tradition?

Sometimes it’s not just about the rule or tradition itself – there may be significant second and third order consequences to adjusting a significant part of a complex system.

I’ve put algorithmic social media feeds on blast before for not just hijacking our attention but also making us into the kind of people who have our attention hijacked. I doubt anyone designing those algorithms had a serious concern that they would be modifying the brain chemistry of billions of people as they tried to increase engagement on their platforms. But, nonetheless, here we are.

Benedict Evans has one of the best articles on the web on second order consequences in relation to the future of autonomous driving. It’s not just about truck drivers and cab drivers who may have their jobs replaced nor is it just about the people whose lives will be saved that would have otherwise died in auto fatalities – what happens to the auto insurance industry? What happens to the space currently used for parking? What happens to greenhouse gas emissions?

Not all of these second and third order consequences require or deserve a value judgment – it’s just crucial to recognize that adjusting part of a complex system will have a variety of unintended consequences that can be both positive and negative.

Is the rule or tradition caused by inertia and/or entropy?

I’ve set up and built a lot of different systems to operate South Loop Strength & Conditioning – and I don’t necessarily do a great job of maintaining them. We have e-mail nurture sequences, Zapier integrations, and data tracking and Airtable that have all gotten quite jumbled as we’ve fixed bugs, added software, and scaled our business. There’s a lot of duplications of previous work or things that used to make sense based upon the scale that we used to be operating at and simply need to be removed or cleaned up.

There’s also redundancy layers added to account for likely errors and to create a sort of ad hoc QA/QC process as we’ve added more employees.

As we work on cleaning up our systems, it’s not always obvious what is essentially inertia and overgrowth and what is a functional stopgap or QA/QC process – especially since I often don’t remember how or why I set things up, nor did I used to do a very good job of documenting our processes.

Is the rule or tradition a spandrel attached to a more valuable rule or tradition?

Many times traditions or rules are created and other things come along for the ride. Religion (to this skeptical atheist – just putting my cards on the table, not intending to create value judgment) seems to be full of cultural spandrels.

It seems obvious to me that the social rituals, moral codes, and sense of transcendence that most religions create for people are an adaptive trait. To give an extreme example, it seems that taking phenobarbital and wearing sick Nikes may not be a tradition worth saving.

I’m sure there are other questions to weight when deciding whether or not to remove a traditional fence, but these are the ones that come to mind for me in my decision-making processes. Any others that I missed?