Are You Making These Two Mistakes?
The Amplified Impact Podcast
July 24th, 2023
In this episode, I’ve got something intriguing to discuss…the root causes of mistakes we make in life.
We all know there are countless ways to screw up in our personal lives, businesses, investments, you name it.
But if we were to break down those mistakes to their core, they all come down to two fundamental things.
I got some interesting feedback on this topic when I tweeted about it, but after pondering, journaling, and soul-searching, I still stand by these two foundational root causes.
The ultimate goal here is to improve your judgment, make better decisions, but also execute with excellence.
If you can align those two factors, you’ll become unstoppable.
Keep that in mind, and remember that it’s okay to make mistakes; that’s just part of the journey.
TWEETABLE QUOTE:
“When it comes to making mistakes, what I’ve seen is that there’s really only two types of mistakes – those foundational errors. It boils down to errors of judgment or errors of execution.”- Anthony Vicino
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Episode Transcript:
Anthony Vicino [00:00:00]:
Hey, yo, what’s up, everybody? Welcome back to the podcast. Today, I want to talk about something kind of interesting, which is that in all the infinite different ways there are to make a mistake in our life, whether that’s in our personal life, it’s in our business, it’s investing, it’s like, whatever, there’s there’s countless millions and millions of ways that we can screw up. But if you were to take each one of those mistakes, those errors, and boil them them down to their root cause, in my experience, from what I’ve seen, it all comes down to one of two things that really led to that mistake. And I tweeted about this recently. I got a lot of feedback, a lot of comments from people who suggested other root causes. And as I looked at those, I gave them time. I sat with them. I tried to unpack them.
Anthony Vicino [00:00:44]:
I journaled on them. I still come to the conclusion that despite those other suggested root causes, even those continue to boil down to these two fundamental first principles. And I think that’s really what we’re trying to get to here, which is first principle thinking. And this is something that elon musk is very popular for talking about as a key reason for his success in tesla with SpaceX and all his other businesses is because they operate from a position of first principle thinking. Which is how do we distill down the complex situation that we’re contemplating contemplating? And get down to what are the foundational truths of the scenario, the situation. And from there build back up. Because when you do that, what you realize is that there’s actually been a lot of second order, third order assumptions baked into a lot of our expectations around a problem. And when we can just get rid of all that extra baggage, maybe that history has put on top of it, and we can get down to the first principles and say, okay, what are the actual truths of this situation, like the underlying physics of the problem, and then build back from up there.
Anthony Vicino [00:01:57]:
We can come to some new, more intriguing solutions that others maybe didn’t look at because they were operating from a skewed premise, like a skewed initial premise. And if your starting point is skewed, then that is obviously going to affect your ultimate destination, which is you might have heard the plane analogy and I’m going to butcher this one. But it’s the idea that for every one degree of error on takeoff for an airplane, it equates to something like a thousand miles of missed target over the course of a thousand miles traveled. So, for instance, this is probably not technically accurate, how I’m describing it to you, but the trajectory of truth is what we’re after here. If I take off from La. And I’m aiming for Ohio, right, there’s a particular trajectory that if I take off and go and make no other course correction, let’s assume we can’t make course corrections. So we need to just fire the shot and then it needs to hit the target like a mortar. Right? Then for every one degree that we’re off on our initial fire, by the time it reaches Ohio, it’s going to be thousands and thousands and thousands of miles away from the target.
Anthony Vicino [00:03:06]:
So this is where the precision of our takeoff point matters a lot. And so this is the idea of getting down to those first principles. Okay? So when it comes to making mistakes, what I’ve seen is that there’s really only two types of mistakes those foundational errors. It boils down to errors of judgment or errors of execution. Now, errors of judgment is interesting because they’re inevitable in the sense that we’re operating with imperfect information in a chaotic world. We can take the information, we can calculate probabilities, but probabilities are just that. They’re just a probability of an event occurring, not a surety. And so because we operate in this world with happenstance and luck and serendipity and risk and probability curves, we can never know for certain that an action is going to lead to an outcome.
Anthony Vicino [00:03:59]:
We can infer that it’s likely based off of our actions or the information that we have, but we can never really know. And so this is where errors of judgment occur, is that because we’re operating with limited information, we have to make a judgment call and inevitably we’re going to be wrong. And that’s not necessarily a bad thing. If the decision making process that we went through was sound and this is something that Charlie Munger talks about, how you can have all the information, you can make the best judgment possible, you can still get it wrong and that’s okay. The converse is also true. You could have all the information, you can make a qualitatively bad decision and be right. And that does not make the decision a good decision. Right.
Anthony Vicino [00:04:45]:
The outcome does not dictate whether the decision or the input was good. And that’s a really important thing that we have to learn how to distinguish, is that sometimes things happen despite our best efforts, despite what the probability of occurrence was. So if you make a bad decision but you don’t get burned, that doesn’t make it a good decision. A good example of this is playing Russian roulette. There’s a one in six chance that you’re going to blow your brains out. So if you play the game, chances are good, better than not that you’re not going to shoot yourself in the head. Does that mean it’s a good decision to play the game? No, because the upside to winning the game can by definition never be greater than the potential downside. Potential downside being game over.
Anthony Vicino [00:05:35]:
Right. So that’s as bad as an outcome can get. Whereas what’s the absolute best outcome that you can get from playing a game like that? Money relationship? I don’t know. But you can’t get more life, right? So you’re trading something of infinite value for an infinite downside. Not a good decision. That’s the first type. And errors of judgment are excusable in the sense that because we don’t have perfect information, we need to do the best that we can with what we have. If you wait until you have perfect information, by definition you’re looking through the rear view mirror.
Anthony Vicino [00:06:07]:
You have hindsight. That’s why they say hindsight is 2020, right? And you can’t wait until that moment because then the opportunity has already passed. So you have to make imperfect decisions, which leads to errors of judgment. The second type of error is an error of execution. So regardless of what we decide, how we execute on that is largely going to impact the result that we get. You can make a bad decision and execute it with excellence and in a lot of times still get to the desired result, right? A bad plan is better than no plan if it’s executed with excellence. Right? Now when I think about errors of execution, especially within our teams, as we’re hiring and training and trying to build out these rock stars around us, is that errors of judgment are inevitable. Our goal is to increase and improve our quality of decision over time so we can have more wisdom, we can have better judgment, right? Because judgment, as Naval Ravikant says, is in an age of infinite leverage, the most important skill where we put our time and our energy and how we apply that because we have so much leverage through code, through media, through capital, through labor, we need to be very intentional about where we place that lever.
Anthony Vicino [00:07:20]:
But when it comes to errors of execution, there’s really no reason that you shouldn’t be able to execute at your highest ability. And this is the game of constantly playing up to your capacity. If you can execute something at this level, let’s say at a 90% level, then it’s inexcusable for you to ever perform it up to 60%, barring some extenuating circumstance. And this is why sports are so interesting in a lot of ways, is because we know that all of these players are capable of playing at 100%. Like they’re all the best of the best of the best, and yet the ones who continually win or rise to the top, who are the superstars, are the ones who are always executing at their capacity. You might have some guys who some games, they just kill it and they’re playing at 100%. They could be a superstar, but they’re just inconsistent with how they execute. So their average is more around to 60, 70%, which is still way, way better than your average human walking on the street.
Anthony Vicino [00:08:19]:
But when it’s compared to other superstars who are able to show up and perform at 95% every single time, then that 95% is going to win out. And so when it comes to these two types of errors. I look at execution errors as being more unforgivable in a sense, because it’s just a matter of doing what you already are capable of doing and you’ve proven that. And so it’s just a matter of executing fundamentals with excellence and that will ultimately get you to your result. Now of course, life is hard and there’s a lot of things that get in way and makes it difficult. Like we’re emotional psychological beings and that can impact our ability to execute. But in my experience, if we could just execute the things at the level that we are already capable of executing them at, and that largely is a matter of effort, more so than anything else, just putting in more effort to execute at your ability, then you would get very, very far in life. And so when I look at these two types of errors, errors of judgment, errors of execution, judgment errors are forgivable.
Anthony Vicino [00:09:18]:
If we’re continually improving and the quality of the decision is sound, errors of execution are inexcusable. We shouldn’t be making those mistakes, we shouldn’t be fumbling the ball, we shouldn’t be missing the layup, we shouldn’t be missing the free throw. Of course we are going to miss them on an occasion, but reducing the misses over a long enough time period is what separates the superstars from just the average. So those in my experience, and I might be wrong, I’m open to hearing what you believe might be some other types of errors that might be also foundational. But these two for me are really kind of what it all boils down to, like errors of judgment. What should we do about this thing and then regard of how you decide and how did you execute on it? Did you execute poorly or did you execute well? And if you can get those two things lined up where you have good judgment and good execution, you’re going to be unstoppable. So that’s the goal, at least in a perfect world. So good luck with that.
Anthony Vicino [00:10:13]:
Anyways, appreciate you guys being here. We’ll catch you tomorrow. Thanks as always for popping in. Until tomorrow. Until next time. Whenever you tune in again, stay hyper focused, my friend.
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