EP. 004: Business Nerd Confronts Viral Youtube Comedy Failure

0:00 Hello everybody. Welcome back to Second

0:02 Opinion with Dr. Dub. I am Dr. Dwayne

0:05 Layman, Doctor of Business

0:06 Administration with a focus in public

0:09 policy. And today we've got a live one

0:11 here. This is Steven He. You might know

0:14 him from the Asian Dad uh comedy sketch

0:17 series. And what we're going to do is

0:19 we've got a much shorter video than what

0:22 I've been putting out. Um this one here

0:25 is about 6 minutes. Um we're going to

0:27 have a very quick overview. This is from

0:30 the Driven podcast. Um, so we're going

0:34 to go and first we're going to watch his

0:36 story. We're going to do a little bit of

0:38 a summary and then I'm going to walk

0:40 away with the lessons. Now, what I'm

0:42 actually going to cover here is uh this

0:44 is called How Not to Lose Your Ars in

0:48 Business or what the heck does a

0:50 business nerd know about comedy. Now, I

0:53 just want to state up front here, little

0:55 disclosure. Um, my education cost

0:59 roughly $160,000 total from no degree

1:02 all the way up through doctorates. So,

1:04 that got the bachelor's, that got the

1:06 MBA, they got the DBA. Um, but you're

1:10 like, that's a lot of money. What are

1:12 you going to get out of it? Uh, what

1:13 you're going to get out of it is not

1:15 losing multiple six figures by talking

1:18 to someone like me. Not me. I don't

1:20 consult. Uh but we're going to go over

1:23 some lessons here and then you can

1:25 probably apply a lot of these lessons to

1:26 your life. Uh and think of of ways where

1:30 um you might have gone down a bad road

1:32 and some of these things might get your

1:34 juices thinking. And if those don't

1:36 work, I've got some thoughts after the

1:38 end of one really good takeaway. You

1:40 know my mantra, uh if you read a book,

1:42 you watch a movie, uh documentary, you

1:45 take a class, have two solid takeaways.

1:48 I've got three for you here. Um, two of

1:51 them kind of run together, but I think

1:53 they're the solid takeaways, even if you

1:54 don't catch all the other stuff, which I

1:55 think is interesting. But before we get

1:57 started, let's go ahead and listen to

1:59 the story here. And I promise I've got

2:01 the the the volumes actually kind of set

2:04 this time. And we're also not going to

2:06 do a 4hour split video this time. I

2:09 promise you, we're actually going to get

2:10 through this one. All right, here we go.

2:13 Let's let's hear Stephen He uh and his

2:15 story about possibly the worst

2:18 experience uh that he has ever had in

2:20 business.

2:22 >> What was the kind of like in retrospect

2:25 you made?

2:25 >> Oh yeah, that's a big one. THAT'S A BIG

2:27 ONE.

2:28 >> AND HOW MUCH?

2:30 >> It cost me multiple figures. Wow.

2:33 Wow. It was and a big lesson possibly

2:36 the single biggest in content creation.

2:39 I'm still about it.

2:40 >> I'm just going to say I love the fact

2:42 that you can lose multiple six figures

2:45 and you're like, you know what, it was a

2:47 lesson. Uh, I did want to interject here

2:49 because, you know, I do, if you want to

2:51 watch the video in its entirety, uh,

2:53 start to finish, please go to their

2:54 podcast, please subscribe, uh, please

2:56 watch it. But, and this is just a clip,

2:58 I think, of their their entire

2:59 interview. Uh, but there's the the old

3:01 lesson of the um either GE uh sorry, it

3:05 might have been IBM there. These stories

3:07 run together um where somebody made a $9

3:09 million mistake and the board asked the

3:12 president uh are you going to fire the

3:13 person responsible? And he said, "Why am

3:15 I going to fire them? I just spent $9

3:17 million training them." So, but I love I

3:21 love his attitude here.

3:23 a lot of people. This was a show that I

3:26 had put two years of work into and a lot

3:29 of my personal

3:32 and um you can get an NBA crash entire

3:35 channel by over

3:38 it was an absolute disaster

3:41 of business at the time. But I feel like

3:42 I had to go through

3:44 >> and I love the fact there that he he

3:47 correctly identifies this was a business

3:49 problem. Um, this is sort of what I

3:52 didn't know this when I started watching

3:53 this. I just saw uh the title which was

3:56 um changed my mindset and my channel

3:59 dropped and I saw Stephen He like I know

4:01 that his channel dropped 80%.

4:04 Like the guy's famous, you know, he's

4:06 YouTube famous, internet famous, Tik Tok

4:08 famous, Instagram famous, the guy's

4:09 famous. Uh what happened here? Um but I

4:12 love the fact he even identifies it's

4:14 not just a lesson, it was a business

4:15 lesson. Um and I think from listening to

4:18 him, he took the right lessons away. I

4:20 think he talked to somebody uh with some

4:22 business background, somebody in

4:23 business, somebody uh who's sort of done

4:25 this before. So, he took something good

4:27 away from this.

4:29 >> So, I was on a huge I was making

4:32 sketches and they were above 10.

4:36 >> I could only dream

4:38 that I had to go 10 millime

4:45 my whole money behind it's going to

4:46 become huge. And so I did it. I spent

4:48 two years of my time and I made the show

4:50 that on paper to everything.

4:53 I had nine of the biggest Asian

4:55 creators. I had bigger than I've ever

4:57 done. I had all these increas

5:02 thought would bring success. And two

5:03 years later

5:05 we uploaded

5:07 >> and just think you got all the talent.

5:10 You're you're thinking you might be the

5:12 next Kings of Comedy. By the way, if you

5:13 haven't seen Kings of Comedy, uh one of

5:16 the greatest comedy uh uh compilations

5:19 of of of comedians ever assembled. Um so

5:22 yeah, you're you're bringing all this

5:24 together, man. You you you've got the

5:26 energy, you've got the views, you're

5:28 ready to go, everything seems fine and

5:31 >> it% of my dragged up to about 20% of

5:36 what we did at the time.

5:37 >> So it was just the loss of it. Yeah.

5:40 Yeah. Hang the idiot, not just himself.

5:44 >> Well, I spent the next six months

5:45 studying. I can tell you why.

5:47 >> I can tell you why.

5:49 >> He did the right thing here. Um he

5:52 didn't go on, you know, and just just

5:54 take a few weeks off or disappear for a

5:56 couple years. He sat down for 6 months.

5:59 Um it sounds like he went through a mini

6:02 MBA. Uh and it might be one of the

6:04 reasons that he really, you know, once

6:06 this happens, you're really you're just

6:08 you're going, "What the hell?"

6:10 um like th this is your livelihood.

6:11 You're you're just seeing your rising

6:13 star ju just crater. So yeah, I can

6:17 understand. I'm sure he probably reached

6:19 out to a lot of people to try to figure

6:21 out what the heck. I mean, just imagine

6:24 he did this, it doesn't do well. He's

6:26 already crushed and then he sees

6:27 everything else go down and the the

6:29 psychological toll and his motivation to

6:31 do his other work that he's used to.

6:33 Math's just got to be hard because he's,

6:34 you know, he's still got to make money.

6:35 He's still got to keep going. Um, and

6:37 he's seeing those drop off 80%.

6:40 Um, yeah. Yeah. 6 months at least.

6:44 >> I was really disappointed that the next

6:46 it was the only thing focusing how the

6:48 hell this happen

6:50 the way I thought postmortem

6:52 >> and I think I do. What that show was not

6:56 a sketch. It was 12 minutes each. It was

6:58 a scripted narative. It had different

7:00 characters. It was a different genre. It

7:02 was still not a sketch like a minute

7:04 sketch. I did not have my favorite

7:06 characters in it. I do my favorite

7:08 classification

7:10 a little too after after I saw the

7:14 plummet.

7:14 >> I asked people and I looked at

7:19 >> he talked to people. Granted, this would

7:22 have helped two years prior, but he

7:24 talked to people and and he got some

7:27 honest answers. This is the key. A lot

7:29 of people they go in their own heads.

7:31 they just they lock up um you know and

7:34 and they hide. They're it's embarrassing

7:36 to to lose money, to lose fame, to lose

7:39 space. It's very embarrassing. Um and it

7:42 takes a strong person to reach out when

7:44 they failed and and try to figure out

7:47 what went wrong and not just cave in on

7:50 themselves, uh blame themselves. Um you

7:53 know, just because you can also just

7:54 think, well, the market changed. I'm I'm

7:56 just I I did all this right when I'm you

7:59 know my 15 minutes of fame is over. Um

8:01 he's doing the right thing here.

8:03 >> The audience asked us all and I think

8:05 the greatest perspective that made me

8:08 understand that that performance

8:09 performance was

8:11 >> the audience subscribed for sketch

8:15 that's why there

8:17 and I thought that was entirely

8:19 different expecting the same result. So

8:21 the metaphor the story we're coming up

8:23 with so much it makes it instantly clear

8:25 that it makes me look stupid is I don't

8:28 I gadget

8:30 >> no I'm just I I get this off of face my

8:33 hair here but it it doesn't mean you're

8:34 stupid. This has happened to so many

8:37 creators. It's happened to it's happened

8:40 to directors. You know a hot shot

8:41 director comes out with a movie and the

8:44 next five movies just just uh what

8:47 what's the what's the Gen Z? They're

8:49 mid, right? Okay. Um, you know, it's

8:52 sometimes you're hot, sometimes you're

8:54 not. Uh, not everyone has a hot hand.

8:56 You know, that's sort of a a myth. You

8:58 know, like basketball, they've got a hot

9:00 hand. Um, and and you can you can beat

9:03 yourself up and you can think I I it was

9:05 my fault. Um, yeah, it's your fault, but

9:08 you know, it's it's it's something to

9:09 blame, but it doesn't mean you're

9:10 stupid. But let's go back a bit here

9:13 that I came up with that just makes it

9:14 instantly clear. It makes me look really

9:16 stupid is I am I make

9:21 computer

9:28 and then one day I open my door with 100

9:30 million people outside my door and go

9:31 guess what we sell avocado toast now.

9:34 >> And then I turn around why was my sales

9:36 down.

9:37 >> That's the perspective I learned.

9:39 >> Yeah. I I made a completely new that

9:41 wasn't did not process did not have fan

9:43 base but I don't I expected to have the

9:46 same as the mess up

9:50 insightful I think a lot of creators

9:52 want to branch out you know they're

9:53 getting maybe burnt out on the same is

9:56 there for doing that again

9:59 >> and just to just to note here this is

10:01 one of the hard things about being a

10:02 musician if you're going to be a

10:04 musician because you love making music

10:05 you love singing songs realize that when

10:08 you go on tour and if you have a hit. If

10:10 you're lucky enough to even be a one-

10:11 hit wonder, you will be singing that if

10:14 you if you want to keep making money and

10:16 going on tour and playing locations and

10:18 they're going to get smaller maybe over

10:20 time if you're, you know, not Aerosmith

10:22 or or Foo Fighters, you're going to have

10:24 to sing that same song for the rest of

10:27 your life. And if you're not ready for

10:28 the grind that is music, um you know

10:31 that that's there are bands that just

10:33 could not take the grind and they just

10:35 they sputter and burn out. That's

10:37 exactly what he's talking about here

10:38 with with any type of greater

10:40 >> that you could have tweaked that you

10:41 thought would give you a better chance

10:42 of success.

10:44 100%

10:46 lessons.

10:47 >> Would I change anything? Absolutely not.

10:49 Because because of what makes me and I

10:51 wear those great

10:56 but going forward

10:59 going forward should I do anything like

11:00 that?

11:04 I would do 10% and this I learned from

11:07 so many companies from like Microsoft

11:09 remember

11:12 from practically the biggest business

11:16 process of jumping and realiz

11:18 >> now granted um when the the the

11:22 >> the iPod came out that was a pretty big

11:25 turn. This was a computer company and

11:27 they they released a music player. um

11:31 when their previous product, the Newton,

11:33 if any of you remember the Apple Newton,

11:35 was an absolute abject failure. And so

11:39 they were setting themselves up for yet

11:41 another failure. Um you know, and it was

11:44 really Steve Jobs just, you know, just

11:47 pile drove that through with design uh

11:51 was the only reason that really took

11:52 off. Had it been uh done under uh the

11:55 CEO from Pepsi, probably wouldn't have

11:57 gone.

11:58 be be gentle on yourself because some

12:01 gummies have taken wild pivots um that

12:03 did work out and change the world. It

12:06 just is rare. It just is super rare.

12:09 >> Nobody buys avocado

12:12 toast. If I want to take another um

12:14 market then I have to still be me and

12:18 deliver the heat the experience

12:21 and then give them uh like a 10%

12:24 addition taking away something and

12:26 that'll take many many many tries it

12:28 might different I might add 10% in

12:32 runtime I might add it in cast I might

12:33 add it in and none of them work but if

12:36 I'm lucky one will work and that's why I

12:37 further further and if you look at a

12:39 path where if you turn 10% each time

12:40 you're going to end up productm That's

12:43 the way I look at the new market.

12:46 >> Oh,

12:48 we're going to go back. Yeah, crash

12:50 crashed his entire entire channel. Just

12:54 just just ruined it. So, let's switch

12:57 over here. So, I have some notes on this

12:59 and um how all of this was avoidable,

13:02 the lessons that he could have taken

13:04 away. I don't know the exact lessons he

13:06 got or who he talked to. Um but we

13:08 certainly have some here. So, let's

13:10 review his situation. Again, we're

13:12 putting up a couple AI notes. Doing it a

13:15 little bit different this time. Um,

13:17 actually, if we go down here, you see

13:19 I'm actually doing a little APA 7. I

13:20 wanted to uh site some of the sources

13:22 because I'm going to be looking at some

13:23 academic sources. Um, you know, kind of

13:26 taking a real business school look at

13:27 this and then turning those into life

13:29 lessons. So, taking taking some of it

13:32 out of my expertise with his story, um,

13:34 and and seeing, you know, how you can

13:37 avoid these things in your life. So,

13:39 let's uh let's have AI do a reading. And

13:42 yes, I did fix the volume this time.

13:47 >> Steven, he says his worst financial

13:50 decision in retrospect was sinking two

13:52 years of work and multiple six figures

13:54 of personal money into a high production

13:57 show that flopped and then appeared to

13:59 drag his whole channel down by roughly

14:00 80% in performance. His diagnosis after

14:04 months of postmortem,

14:05 >> yep,

14:06 >> is that the show wasn't the short punchy

14:08 sketch format his audience had

14:10 repeatedly subscribed for. So, he

14:12 effectively launched a new product while

14:14 expecting old product results.

14:16 >> Right?

14:17 >> In context, the core lesson is about

14:19 audience contract and format

14:20 consistency. Platforms and viewers both

14:24 learn what you are and sudden genre

14:26 shifts can get treated like you've

14:27 stopped delivering the thing people came

14:29 for. analysis. The channel crash, he

14:33 describes, is likely a mix of lower

14:35 click retention on the new format, plus

14:37 the platform relearning who to serve the

14:39 videos to once the established

14:41 >> Yeah, that's the thing, too. Once you're

14:44 you start messing too hard with that

14:46 algorithm, um, the algorithm can drop

14:48 you like a bad habit. The nightmare of

14:51 everyone on YouTube, the absolute

14:52 nightmare is that the algorithm just

14:55 doesn't love you anymore. And so you can

14:57 go from number one uh hero to zero

15:01 pretty quickly. That is absolutely true.

15:03 >> Pattern breaks. His practical fix is a

15:06 10% pivot strategy. Keep the

15:08 recognizable Steven He experience then

15:11 iterate small additions runtime cast

15:14 structure and only lean harder into the

15:17 direction that proves it can hold the

15:18 audience.

15:20 >> Now I'm going to disagree a little bit

15:22 on the 10%. Um, I think the 10% is

15:26 actually a little high. A 10% pivot is

15:30 massive. Um, a 10% pivot can represent a

15:36 completely new product. Um, it would,

15:39 you know, it it's you can 10% yourself

15:43 out of business. Um, you know, it was it

15:46 was far more than 10% for Netflix to go

15:49 from sending DVDs to streaming. um you

15:52 know that that that's a much larger

15:54 pivot. That's one of those ones where

15:55 you could destroy your business like the

15:57 iPod or take off and you know go to the

16:00 moon as they say. Um but 10%'s rather

16:03 large for if you're for instance if

16:06 you're an athlete um you are not looking

16:09 to do 10% pivots um or or stretching

16:13 yourself 10%. You don't go to the gym

16:15 and just keep adding 10%. That's not big

16:20 when you're small, but once you're

16:22 you're getting up there in weights, 10%

16:25 is a large increase um over time. It's

16:29 you're you're going if you keep 10%ing,

16:32 you are going um at at a at a at a a

16:36 scale of logarithmic change away. Uh

16:39 that 10% gets larger each time you pivot

16:42 away. And so you're pivoting further and

16:44 faster as you go. Um, and there's a

16:46 reason I would say a 3% pivot. Max 1 to

16:50 3% is actually what you want to pivot.

16:52 Um, not only for this, but I think the

16:56 viewers of Stephen He um, probably don't

16:59 watch every single video of his. Um, you

17:01 know, with that short form format, he's

17:02 one of those that comes up occasionally

17:04 in the stream, maybe even playing some

17:06 old ones. I would say most of the

17:08 viewers probably u, you know, the the

17:11 fans that absolutely loved and liked

17:13 every single one. Yes, they may have

17:14 seen um north of 85% uh but a lot of

17:18 others may have only seen 30% of his

17:20 videos. So, if you're pivoting 10% a

17:23 month or even, you know, 10% a video or

17:25 just 10% a month by the time the next

17:27 video rolls around for that 30% viewer,

17:30 you're you're way way past where they're

17:33 used to. Um and so I would say much

17:36 smaller than 10%. Let's go into some of

17:38 the lessons here. So, I'm going to break

17:40 this up. Here's what we've got. We've

17:42 got and I don't know sizes apparently.

17:49 Hey, all fixed. There we go. Um, we have

17:52 a couple specials here. So, we're going

17:54 to do MBA lessons. We're going to do

17:56 some psychology lessons. We're going to

17:58 do some sociology lessons. We're going

18:00 to hit some behavioral economics. I just

18:02 wanted to hit that early. We didn't

18:04 really have to. I thought I'd throw it

18:05 in there. And then uh my special corner

18:07 of of my takeaways once you kind of know

18:10 these things um and kind of giving

18:12 somebody going to that ground truth and

18:14 and the I think the things you could

18:15 take away that were also key lessons

18:17 here that would lead you to these other

18:19 things. Um you don't have to be an MBA

18:21 to figure some of the stuff out if you

18:23 just take a few few key things and maybe

18:25 learn one tiny little lesson. Um he went

18:29 away for 6 months to do a postmortem.

18:31 I'm going to tell you a better way to do

18:32 that and avoid the situation entirely or

18:34 at least know what you're getting into

18:36 as you're getting into that situation.

18:37 So, let's start with the MBA lessons

18:40 that does not pop down in a way I like.

18:43 So, we'll start here with some brand fit

18:45 and we'll get the AI reading a little

18:48 bit of this and then I'm going to cut in

18:50 after each one of these. So, uh this is

18:52 called brand extension fit typicality

18:54 and and I'm versing this. This is not

18:56 these authors brand dilution. A lot of

18:58 you might know brand dilution. Uh, think

19:00 of Chanel selling phones. Um, think of

19:03 Ben and Jerry's suddenly selling pizza.

19:05 You're diluting the brand. You're trying

19:07 too many things. You're going in too

19:08 many areas. You're trying to pop this on

19:10 to you're just slapping your name off on

19:14 anything. Um, it would be as though, you

19:17 know, suddenly um Apple were to buy, you

19:20 know, cuz we're he brought up Apple. So,

19:22 it'd be like Apple buying um uh one of

19:24 those those uh uh mug companies uh that

19:27 sell water bottles and suddenly they

19:29 started releasing Apple water bottles

19:31 and they had Apple shoes and Apple this

19:33 and I think that was a if you guys heard

19:35 the rumors about an Apple car. Um brand

19:38 delution. Too many too many things. Uh

19:41 Samsung kind of gets away with that. Um

19:44 they there's everything from Samsung

19:46 hospitals to Samsung funeral homes in

19:48 South Korea. Uh, but Samsung tries to be

19:51 everything to everyone all the time. And

19:54 you know, suddenly you'd have an Apple

19:55 washer and dryer. I'm sure there'd be

19:56 people that buy it. Um, you can you can

19:58 see sitting Well, I I actually did move

20:01 it from the from the last I have an

20:02 Apple Vision Pro sitting over here. Uh,

20:05 I mean, it's it's on brand. It's let's

20:07 just say it's on. I like it. But, um,

20:10 you start getting into too many things

20:12 and people start asking what what are

20:14 you? Are you just some multinational

20:16 conglomerate? At this point, you're a

20:17 proctor in camp. Um, you know, Proctor

20:20 and Gamble does not sell Proctor and

20:21 Gamble products. They sell brands. They

20:23 sell things like Tide or Dawn or and

20:26 those might not even be their brands.

20:27 I'm just saying they you don't you don't

20:30 sell the the conglomerate things. Um,

20:33 Google has a problem with this. They

20:34 Google likes to slap Google on

20:36 everything. And the Google brand um is

20:38 getting away from where they call, you

20:39 know, googling something as a verb. And

20:41 I think they're in danger of of putting

20:43 that. But let's go through this here.

20:44 Here's where he made the mistake of what

20:47 his brand was.

20:49 Definition. Consumers tend to evaluate a

20:52 new offering more positively when it

20:54 feels like a credible extension of what

20:57 the parent brand already stands for.

20:58 That is high perceived fit typicality.

21:02 Low fit increases confusion and weakens

21:04 attitude transfer.

21:05 >> Yep.

21:06 >> How to use it properly? Treat a new

21:08 format like a brand extension. Preserve

21:11 core cues the audience associates with

21:13 the parent brand. Signature characters,

21:15 punchlines, pacing. Pilot test with

21:18 smaller releases and expand only after

21:20 you see evidence of fit. Views,

21:22 retention, satisfaction.

21:24 >> Test, test, test.

21:25 >> How it was used improperly here. In the

21:28 transcript, he assumed 10 m people show

21:30 up every upload, then delivered a

21:33 substantially different product.

21:35 12minute narrative versus 3minut sketch,

21:37 different characters, missing signature

21:40 punchlines as a major launch, i.e. a low

21:43 fit extension introduced at maximum

21:45 scale. See, he was the same person, uh,

21:48 but his comedy was completely different.

21:50 Um, it's it's like if suddenly, um,

21:54 Andrew Dice Clay decided that he was

21:57 going to do a clean a clean type of

22:00 comedy um, and he was going to start

22:02 doing the hot pocket jokes or dad jokes

22:05 or things like that. It's not his brand.

22:07 I'm not saying it wouldn't have been a

22:08 smart choice uh, maybe to extend his

22:10 career, but it wasn't his brand. And so

22:13 when you get used to how someone is when

22:16 they when they show up and they act

22:17 completely differently, it's going to

22:18 throw you off. You know, it's it's this

22:20 is true in life as well. If you

22:21 completely change your brand, um you

22:24 know, you can throw off, you know, um

22:26 you show up to work one day with a toup

22:29 pay just out of the blue, people are

22:31 going to act weird around you because

22:33 they don't they're not really sure

22:34 what's going on till they figure out

22:35 what's going on. Um suddenly you have a

22:37 French accent and you're from Alabama.

22:40 they're they're going to have questions.

22:44 Um and and so that that's really what

22:46 this is speaking to is that um he was

22:48 stretching too far too fast, changing

22:50 too many of the core things that made

22:52 him identifiable immediately to his

22:54 audiences. Um you know people form

22:57 heruristics in their heads and so you

23:00 know they everyone puts things into

23:02 buckets and so his comedy was this is

23:04 what his comedy is. This is how long it

23:06 is. This is what he does. This is the

23:08 punchline. Um these are the these are

23:11 the the you know emotional damage was

23:14 one of his his signature lines. Uh

23:16 little did he know that not using things

23:18 like that is about to give him emotional

23:21 damage. Um sad to say like you don't you

23:24 don't like to see people who are

23:25 enthusiastic and want to try and do

23:27 things just be like it's it's hard to

23:29 watch the world crush somebody's dreams

23:31 like that. Um it's just amazing. He's

23:34 got this this uh stamina and and

23:37 motivation and positive attitude. I'm

23:39 sure it didn't feel that way when he

23:40 took the six months to look at what the

23:42 heck happened. Um but yeah, that that's

23:45 absolutely Let's go to the next one. And

23:48 you guys will recognize this from my

23:49 last three videos. I think in every

23:51 single video I've talked about exploring

23:54 versus exploiting. If you haven't,

23:56 you're free to take the 5 and 1/2 hours

23:59 to watch the last three

24:03 videos, but sorry I don't cut these

24:05 things out here, so it's going to be a

24:07 little live. Um,

24:09 explore versus exploit. And what we have

24:12 here is Steven was exploring

24:16 and he went from from 0% exploration to

24:20 100% exploration. Um, so let's let's

24:24 have the AI cover this and then we'll

24:25 talk about it a little bit.

24:28 >> Definition. Organizations and creators

24:30 must balance exploitation, refining what

24:33 already works and exploration,

24:35 experimenting with novel options.

24:38 Overweaiting exploration can impose

24:40 shortrun costs and destabilize

24:42 performance.

24:43 How to use it properly? Run exploration

24:46 as a portfolio. Yes,

24:47 >> keep the reliable core format shipping

24:50 exploitation while allocating bounded

24:52 reverse.

24:53 >> I'm going stop there. So, it's one of

24:54 the things that I I think

24:57 he he said he would make 10% changes. I

25:00 don't I think you can make even smaller

25:03 changes. You can start you can very

25:05 slowly evolve the core product, but if

25:07 you wanted to go to episodic,

25:09 run small tests of that completely

25:12 separate from what you're doing. Um, the

25:16 idea for instance, Apple has, to my to

25:20 my knowledge, I could be completely

25:21 wrong, Apple has never sold a computer

25:24 in a regular store. I don't mean like a

25:26 computer store, but they you can't you

25:29 can't go uh and buy a full iMac

25:33 somewhere. They that they may have

25:34 changed, but back in the day, um, you

25:36 didn't go to Target to buy those things.

25:39 You can go buy iPads and all that stuff

25:41 now, and I'm sure they have the MacBooks

25:42 back here. Um but when they started

25:45 selling the iPod, they realized um they

25:48 really wanted to be directly in front of

25:49 people and so they need a different

25:51 sales strategy than um you had the

25:55 computers which were selling with the

25:57 think different. The iPod though was

26:00 marketed completely separately. you had

26:03 these vignettes of of silhouettes on

26:07 colorful backgrounds and then the white

26:09 cables of the the headphones uh always

26:13 with somebody and on their hip was the

26:15 iPod. So they they didn't just add a

26:19 product, they create a separate product

26:21 category and they treated it as a

26:23 different category. And so I'm I'm a

26:27 little different off here. run the

26:28 experiments as a portfolio outside of

26:31 the cash cow. I always tell people, do

26:35 not kill your cash cow. Leave the cow

26:38 alone. Don't try to get more out of it

26:40 or less out of it. If the if the cow is

26:43 already producing record amounts of

26:45 milk, don't mess with it. Go get a

26:48 different cow. Go try goats. Go do

26:51 something else. Do not mess with your

26:52 cow. And then you have the freedom and

26:54 runway to then explore. You can have

26:58 failures over here and you're not

27:00 endangering your cash cow.

27:02 >> Experiments exploration which is

27:05 basically the academic version of his

27:06 later 10% pivot

27:08 >> sort of. Yeah.

27:09 >> How it was used improperly here. He

27:11 shifted heavily into exploration. Two

27:13 years of build major release without

27:16 protecting the exploitation engine that

27:18 maintained channel momentum.

27:20 >> The bet was not staged and the

27:21 opportunity cost was enormous. Not just

27:24 that, if you really think about this, I

27:26 mean,

27:28 and I I know one of these other topics

27:29 can get to it, but when you're two years

27:32 into a into a build, that might be the

27:35 time if you're uh you want a sneak peek.

27:39 You don't want to you don't want to have

27:40 this two-year buildup in complete

27:42 secrecy and just drop it on people. Um,

27:45 now you can have a buildup so that the

27:48 expectations exceed what you're going to

27:50 release. Um, so for instance, people

27:52 were very excited about the rumors again

27:54 with the Vision Pro. Um, very excited,

27:57 very excited, very excited. And then

27:58 when they mentioned it and hinted it and

28:00 then it came out and they're excited,

28:02 it's getting ready. And then the the

28:04 audience heard the price like $3,500,

28:07 $3,600.

28:09 Theo

28:11 from the audience was you just felt like

28:14 the the the the recoil because Apple

28:19 already sells very expensive products

28:21 and people just just fell out. People

28:24 just fell out like I'm sorry you said

28:27 what? Um and you turned excitement into

28:30 disappointment. But I think in his case,

28:33 um, having a buildup, having having some

28:35 things, maybe some behind-the-scenes

28:37 things, testing them out, doing short

28:39 runs, not going for an entire episodic,

28:42 not going for 12 minutes, maybe doing a

28:44 little five minutes here. It would be

28:46 like if slightly like

28:49 double length and comp compilations of

28:52 chit. Those of you who have who have

28:54 been on on YouTube and and the and

28:56 Instagram and all this, you'll see chit

28:58 has been everywhere. and they took a

29:01 dumb joke that took off with a joke

29:03 about a purse and just blew up. Um, and

29:07 it, you know, little sketch comedy

29:09 group, just a little sketch comedy

29:11 group. Um, and now they're sort of doing

29:13 a little bit of character building and

29:15 they're they're expanding, but they're

29:17 not they're always calling back to the

29:20 previous content so that you feel

29:22 connected with what they're doing. And

29:24 so they're slowly moving into episodes

29:27 when it was these sketches that were

29:29 sort of like spaced out and you were

29:31 like, "Okay, it's the same it's the same

29:33 world. It's the same people and there's

29:35 a little bit more stories and there's a

29:36 few more things and then they started

29:38 connecting a few of the pieces very

29:40 slowly." Um, and I think they've done

29:42 that very well. Um, I don't know what

29:44 their view numbers are. It's it's

29:46 certainly they're they're they're off of

29:48 the initial hype uh uh cycle. So, you

29:52 know, their views now are going to be a

29:54 little less they're going to be a little

29:55 more organic and less viral. Uh, but

29:58 yeah, it's it's very hard to make that

30:00 transition and build up for two years

30:03 and multiples of six figures, you know,

30:06 that that's a lot that's a lot to ask

30:08 from explore exploit. You need to you

30:10 make the explore smaller, more frequent,

30:13 and keep keep the exploit going strong.

30:16 Let's go into some It's probably going

30:18 to do this to me again. No, it did not.

30:20 psychology lessons. So, uh, we're gonna

30:24 How does this affect someone? I'm not

30:27 imputing this to to to Stephen himself,

30:30 but how can this affect somebody um with

30:33 the audio? You know, what what could he

30:35 have thought about his audience

30:37 specifically um in in in this happening?

30:42 >> Definition. People interpret new

30:44 information using pre-existing mental

30:46 frameworks, schemas.

30:48 >> Yep. When content strongly mismatches an

30:50 activated schema, comprehension and

30:52 evaluation can suffer because the

30:54 audience has to re-encode what this is

30:56 in real time.

30:57 >> Yep.

30:58 >> How to use it properly? Activate the

31:00 audience's existing creator schema,

31:03 thumbnail, title cues, familiar

31:05 structure, recurring comedic beats. Then

31:08 introduce novelty gradually so the new

31:10 elements can be assimilated instead of

31:11 forcing a hard reclassification.

31:14 How it was used improperly here. He

31:16 trained an audience schema for a short,

31:18 punchy sketch and then delivered

31:20 episodic narrative comedy with different

31:22 pacing and fewer familiar cues, making

31:24 viewers do extra cognitive work before

31:26 they even get to is this funny?

31:29 >> Yeah. And so there you've got these

31:31 these setup expectations

31:34 uh when when you start creating

31:36 heristics in your audience. Um you know,

31:39 it's like Jim Gaffin and the Hot Pocket

31:42 Joke. He knows that his go-to joke is

31:46 hot. All he has to do is the hot pockets

31:49 and he's got you and he can bring you

31:51 in. He's also known for dad jokes and

31:54 things like that. If he suddenly

31:56 switched to Andrew Dice Clay,

32:00 he's not known for having a a a really

32:03 blue sketch. So even putting in a couple

32:07 words or or something would be massive

32:09 for his audience because they have to

32:11 figure out like

32:13 you want to know if he's losing his mind

32:15 on on stage. You like is he okay? Is is

32:19 is he having an episode? Is he about to

32:21 like drop down and foam with them out

32:23 like what is going on? And it shocks

32:26 people when you don't meet their

32:28 expectations. And if you start

32:30 stretching and introducing new things,

32:33 the one thing you can do is you can

32:35 train your audience or your customers to

32:38 expect little surprises. You the new

32:41 things are coming. Going back to Apple.

32:45 Oh yeah, one more thing.

32:49 Steve Jobs trained audiences and it was

32:53 if there was one or there wasn't one.

32:55 And it sort of went on the the

32:58 gamblers's addiction of random rewards

33:00 that you didn't always get one more

33:02 thing, but when you got it, it was like,

33:06 and I was even an Apple fanboy then, but

33:09 people lost their minds at one more

33:11 thing. People dropped everything. It

33:14 It's one of those They talk about food

33:16 being slap your mama. So good. It was

33:18 one of some slap your mama stebs has one

33:22 more thing. And and so you can you can

33:25 build that into your audience as well to

33:27 expect something new. That's sort of

33:29 what for instance the the the the Chit

33:32 show has kind of I don't know the

33:34 official new I just call it the chit

33:35 show. Chit always has something new and

33:39 you know something's going to twist and

33:41 you know something's going to be wild

33:42 and they keep going in a different

33:44 direction each time. Every time it's a

33:47 different direction

33:49 and so you're you're used to it. You're

33:50 waiting for it, but you're not getting

33:52 tired of it when you overdo it. And I

33:56 again, I hate dogging people, but you

33:58 people get sort of tired of it in mite

34:00 Shyamalan kind of way where you're

34:02 you're becoming formulaic and you're

34:04 just it's always the every presentation

34:08 is one more thing. It it doesn't hold.

34:12 Then you're now you're this is when

34:14 you're killing the cash cow. Um, so

34:17 let's go on to processing fluency.

34:21 And I've got to scroll two windows here

34:23 because where I have it reading from and

34:25 where you're reading from are two

34:26 separate things.

34:29 Definition. Stimuli that are easier to

34:31 process. More fluent familiar structure,

34:34 prototypical cues, repeated patterns

34:36 tend to feel more pleasant and earn more

34:38 favorable judgments. How to use it

34:41 properly? Keep fluency anchors stable.

34:44 Recognizable characters, signature

34:46 punchline cadence, predictable payoff,

34:48 and add novelty in small increments so

34:51 the audience's processing stays easy

34:53 while you evolve the product. How it was

34:56 used improperly here. He increased

34:58 novelty and complexity, longer

35:00 narrative, new cast dynamics, different

35:03 genre conventions while removing fluency

35:06 anchors, favorite characters, famous

35:08 punchlines. So higher production value

35:11 didn't translate into higher enjoyment.

35:14 Yeah, it's it would be as though I said,

35:16 you know, I really want to grow this

35:18 channel. So, uh I'm really gonna I'm

35:21 really going to put put a lot of uh u of

35:25 youth words into it. And suddenly, this

35:28 is the Skibbidity 67 hour with Doctor D.

35:33 All of you are going to go, "What the

35:36 hell is wrong with him?" And you'd be

35:39 you'd be right. I actually know what

35:40 those words mean. That doesn't make it

35:42 better. That's not it's not how I

35:44 normally talk to you. It's the one

35:46 reason I I'll give you a good fluency

35:48 anchor here. Do you know what a good

35:49 fluency anchor is? I've I'm I'm four

35:53 episodes in. Um but I I've done shows

35:56 before and for you know one of the

35:58 things I used to do I I always think of

36:00 my clothing. So in any media that I've

36:02 ever done uh it was always clothing. I

36:04 used to do a lot of outside. So I would

36:07 always be wearing sunglasses and I

36:08 realized I'm always wearing sunglasses.

36:10 So when I started making my first inside

36:12 videos, I realized and I I did a

36:14 recording and I looked at it and I go

36:19 something something's wrong here. Like

36:22 that's it's something's wrong. Well,

36:25 first okay, the sound it's quieter and

36:28 I'm like you're looking at my eyes.

36:31 Nobody ever sees my eyes. I'm always

36:34 wearing I'm always outside. I always

36:35 have dark glasses. Suddenly I can see my

36:38 eyes. It doesn't look like the other

36:40 videos. And it's the one reason why in

36:42 this video I left my hoodie on. So, I

36:45 have a shirt. I have a shirt that I wore

36:48 to work today. It's a little wrinkly,

36:50 but it's it's cotton. It's supposed to

36:52 be a little wrinkly. I specifically

36:55 left on my hoodie. I don't even have my

36:58 window open like I have for for everyone

37:00 else, but I have my hoodie on. I might

37:02 shock you guys if suddenly I show up and

37:04 I've got a suit and tie on or I'm

37:06 wearing a fedora. Uh, I think it was a

37:09 little a little odd. I forgot to wear my

37:11 glasses and then I wondered why I had a

37:13 headache after the last four hours of

37:15 reading from a computer screen, which I

37:17 can I can read without the glasses.

37:20 That's not the point. It's that if I'm

37:22 going to establish something for uh

37:25 people to get used to. It's what they're

37:27 going to expect. It's why when you you

37:29 view certain creators, they will wear

37:32 the same clothes or the same type of

37:33 clothes or they will have the same

37:35 backgrounds or they will uh start doing,

37:37 you know, at some point I may change the

37:39 background. I may want want this to look

37:41 a little better. It's going to throw you

37:44 off and you won't know why. It's because

37:46 if you become a viewer of anything, all

37:50 of these things start forming heristics

37:53 in your brain of what to expect. When I

37:56 start watching Dr. do. I'm expecting a

38:00 little red tint because I've got an LED

38:02 up here. I've got the hoodie. I've got

38:04 the glasses. I've got a not quite dark

38:06 background that just looks like just

38:08 sitting in his home office. These are

38:10 things that you're getting used to. If

38:11 suddenly, for instance, I come back and

38:13 this video that you see down here in the

38:16 bottom right is suddenly up and to the

38:20 left and it's it's just going to throw

38:22 you off. You're going to be used to

38:23 seeing videos in a certain way. And

38:26 unless I make changes very slowly to

38:28 that or you know if if you're a dying

38:32 business or the views just never pick

38:34 up. You you do you do a a YouTube for a

38:37 year and you're just not getting over

38:39 like 10 viewers which can happen. Like

38:41 hey not this this one may not do any

38:44 better. Who knows? At some point things

38:46 take off a little slower. Um you know

38:49 it's like they say it's it's hard going

38:50 from one to 100. It's harder going from

38:52 100 to a th00and. It's harder. Uh but it

38:54 gets easier. The the 1 to 100 is harder

38:57 than the 100 to a,000 is harder than the

39:00 th00and to the 10,000. Um but things

39:02 just don't happen. And so you can try to

39:05 juice up what you're doing. If you're

39:06 running a small home business and things

39:08 aren't taking off, you're you can throw

39:10 in a a curveball. Stephen, he was

39:14 getting 10 million views per video.

39:19 you can't go up like at that point your

39:22 competition really is Mr. Beast. Um, and

39:26 so you are you're on a knife's edge of

39:28 when you go too far it will fall off,

39:32 not take off like exceeding 10 million

39:36 that you know that's that's harder. It's

39:38 it's it's you're you're asking for for

39:41 something that's already pressing up

39:42 against the ceiling to to do something

39:45 different. Um, and that's where the

39:47 these fluency anchors really start to

39:49 matter. Like for the few people that are

39:51 watching my videos right now, um, it's

39:52 it's not a big thing. Of course, people

39:54 later will if they like this, they will

39:56 go back and watch the videos that

39:58 they're watching. Now, I've done that

39:59 before. Um, you know, it's like the old

40:01 MKBHD. You go see like this little kid

40:04 reviewing phones. And it's a very it's

40:06 very different. It's not the kind of

40:07 channel you would want to watch. You

40:09 want to watch MKBHD. Now, when you watch

40:12 this kid, you're like, "Oh, I wouldn't

40:14 have watched that.

40:16 But it changed slowly over time and he

40:18 learned

40:20 with Stephen. He he was there and his

40:23 his fluency anchors were were were were

40:26 set in stone. And because he didn't

40:29 already make multiple types of videos,

40:31 he was kind of locked in. So, one of the

40:33 things he could have done was not do

40:34 that from the beginning. Even though he

40:35 saw videos taking off, he could have

40:37 kept the odd video out a little bit just

40:40 to keep keep the door from closing on

40:42 him. just to just to keep that there and

40:45 say, "No, I'm I'm not allowing that door

40:47 to close and becoming uh siloed into

40:50 this one thing." So, that's one thing he

40:51 could have done a little bit, but it's

40:53 very hard to do. Once you see something

40:54 working, you lean into it.

40:57 Now, let's go into some sociology here.

41:03 We're going to move much faster. So, I'm

41:05 going to let most of this read because I

41:07 really want to get to the end on what

41:08 I've got here. I really did want to keep

41:10 this to a single hour. I I will not be

41:13 able to do five days a week if I do more

41:15 more than an hour.

41:18 >> Definition preferences and what counts

41:21 as good valuable are shaped within

41:23 social fields. Cultural capital

41:26 recognized competence style legitimacy

41:28 helps actors succeed in a field and

41:31 audiences interpret works using field

41:33 specific.

41:33 >> By the way, when they say actors, they

41:36 don't mean like stage actors or film

41:38 actors. that they mean people people in

41:40 the world acting

41:42 >> codes.

41:44 How to use it properly?

41:46 If you want to move into an adjacent

41:48 field, for example, from sketch comedy

41:50 to episodic narrative, you typically

41:52 accumulate legitimacy and translation

41:55 bridges over time, collabs, hybrid

41:58 formats, and repeated signaling that

42:00 teaches the audience the new code.

42:02 >> That's the exploration

42:03 >> how it was used improperly. Here he

42:05 attempted a rapid repositioning without

42:07 first building the audience's shared

42:09 interpretive code for the new field. So

42:11 viewers applied the wrong code expecting

42:14 the sketch field and judged the work as

42:16 a mismatch rather than an evolution.

42:18 >> Yeah. And he he mentioned that he felt

42:21 it made him feel stupid. Um I think if

42:24 you kind of look at it, it's not only

42:26 that it he audience may have felt duped

42:29 and that was certainly not his

42:31 intention. If that was his intention,

42:33 yeah, he should feel stupid, but I don't

42:35 think that was his intention. So, the

42:37 the audience came in, it's it's like if

42:39 you suddenly uh came in, I think there

42:42 was a um if you watch the movie Man in

42:45 the Moon with Andy Kaufman, um and

42:47 people wanted him to play his character

42:49 from Taxi. Um, and he got mad and so he

42:53 just had a had a book play on a record

42:56 or he read a book or something something

42:58 like that because he wanted to do

43:00 something different and it actually made

43:02 the audience angry because anger always

43:07 and this is one of what you're going to

43:08 hear me say this a lot. Anger and rage

43:11 and all of those negative emotions

43:14 always come from unmet expectations. And

43:17 anytime you uh lean into setting an

43:22 expectation with somebody, and this

43:24 could be your romantic partner, this

43:26 could be your co-workers or your boss or

43:28 your children. When you set an

43:30 expectation and break it, there's where

43:34 the negative when they have an

43:35 expectation and that expectation is not

43:38 met, you break trust. You you make anger

43:41 and things. And so this is exactly what

43:42 this is is going into uh with field

43:45 theory here is in the world um you are

43:50 creating these social fields and

43:52 cultural capital over time that is

43:55 giving you those things as uh being

43:57 recognized of having competence and a

43:59 style and being legitimate. A comedian

44:02 has established they are legitimately

44:04 funny. And so you if you break that

44:07 expectation,

44:08 you break all of that too. you're no

44:10 longer funny or stylish or competent.

44:13 Um, so that's that's really what that's

44:15 going to Let's go to the next one here.

44:17 This is this is really good stuff.

44:21 >> Definition audiences are gratification.

44:24 >> They choose media to satisfy specific

44:25 needs. For example, quick diversion,

44:28 mood management.

44:29 >> So quick here just like this is about

44:32 the these two sociology is about the

44:34 audience. Um, you know, audiences are

44:39 coming to YouTube and Instagram shorts

44:41 for a reason. They want a specific thing

44:44 back. And so, that's what it's actually

44:45 listing. So, let's go back over this

44:47 >> definition. Audiences are active. They

44:50 choose media to satisfy specific needs.

44:53 For example, quick diversion, mood

44:55 management, social sharing, identity

44:57 reinforcement.

44:58 Media compete with other ways to meet

45:00 those needs. How to use it properly?

45:04 Identify the core gratifications your

45:06 audience reliably seeks from you. Then

45:09 ensure any new format still delivers

45:11 them or clearly signals a new

45:13 gratification to a new segment before

45:15 scaling the change.

45:16 >> Y how it was used improperly here. The

45:20 audience subscribed for a specific

45:21 gratification 3inut comedy sketch per

45:25 his own postmortem. But the new show

45:28 offered a different gratification

45:29 profile episodic narrative. He expected

45:32 the same need satisfaction with a

45:34 different delivery system.

45:37 >> And that speaks to some of those

45:39 gratification points. So, if you know

45:41 what your audience wants to do with the

45:44 product that you're giving them, for

45:45 instance, sending someone a a a 30

45:49 second sketch or a three minute sketch,

45:53 you know, or a short or a GIF, you know,

45:56 it it's it's part of that social sharing

45:58 and identity reinforcement of inroups

46:01 with your friends. You both like these

46:03 jokes. You you share this type of of

46:05 content with each other. What is your

46:07 audience supposed to do with a with a

46:10 12minute episode? You know, it's a

46:13 narrative. It's people acting. You're

46:15 not riffing like like comedy is very

46:17 much riffing like I am. Like I knew what

46:19 the notes are. I knew the basic points

46:20 and the beats. And I've done this

46:22 before. I've actually this I've sort of

46:24 been down this road many times. This is

46:26 a new show, but it's not new to me. And

46:28 so I sort of know the beats of what to

46:30 hit that work for me. It doesn't mean

46:32 I'm good at it. It just means I know how

46:33 to hit those. Um, and when you go to

46:36 acting and you've got a script, you're

46:37 gonna act very differently than than

46:39 read, you know, memorizing a script or

46:41 anything like that. So, it it I can do

46:45 this very well. I can get get up and rip

46:47 all day long. But, as you've seen the on

46:49 the few times I've read, I'm not a good

46:52 live narrator. Um, I would not be a good

46:55 actor on stage. I would not be good

46:58 giving a a presentation. I can I can

47:01 speak in front and I'll have my notes,

47:04 but I will mostly riff that. That's

47:06 that's what I do. And what he did was he

47:08 took an audience that ex expected that

47:10 and his whole demeanor changed and

47:13 suddenly his identity which was tied to

47:15 their identity through a little bit of

47:17 parasocial changed and they couldn't

47:20 share and they didn't get the quick

47:22 diversion. Now they've got this they got

47:24 Netflix they've got a Netflix episode

47:27 here. They've got a they've got an

47:28 episode of the Brady Bunch, you know,

47:30 that's you know, 12 minutes without

47:31 commercials. Um, you know, that that's

47:33 what they're dealing with. And so, you

47:35 know, it's it's handing that, you know,

47:37 it's like, "Oh, my cheesecake is here.

47:39 My cheesecake is here. My cheesecake is

47:40 here." And you sit down and it's like th

47:44 this this looks good, but I didn't want

47:48 fish. I I want cheesecake. I'm sure the

47:51 fish is wonderful, but I I have my heart

47:56 set on this. and that when they see his

47:57 video, that's that's what's happening

47:59 here. Um, and their needs that are not

48:01 being met and that's where the

48:02 frustration and that's also for those

48:04 even though the algorithm did change.

48:07 It's also why the audience didn't

48:08 respond because once they got burned,

48:11 they didn't want to click another video

48:12 like uh I had a bad experience last

48:15 time. I don't want to repeat that.

48:17 Scroll past. And so the algorithm is

48:20 also the the even if it's just a few

48:22 extra people scrolling past, the

48:24 algorithm is feeling those people scroll

48:26 past. Um and that can happen in in life

48:29 too. That can happen to a small

48:30 business. One bad hiccup, one bad

48:32 experience, you know, putting in mixing

48:35 up your baking powder and baking soda in

48:38 your recipe and suddenly it's just a

48:40 constant drop off. And then if you're

48:42 using something like Yelp or Google Maps

48:44 and they see the traffic drop off, you

48:46 just start falling in the rankings. like

48:47 it doesn't take a lot uh in in in

48:50 today's world. All right, let's go to

48:53 the sunk cost. Now, most of you know

48:55 what a sunk cost fallacy is. It's it's

48:57 pretty common, but let's go over it

48:59 anyways and and kind of go into his uh

49:01 the issues he was dealing with. Now,

49:04 >> definition, people show a greater

49:06 tendency to persist with an endeavor

49:08 after investing time/money/effort

49:11 even when those past costs are

49:12 unreoverable and should be irrelevant to

49:14 the forward-looking choice.

49:16 how to use it properly. Stage

49:19 investments, cheap tests first. Set

49:22 explicit kill criteria before spending

49:24 big and make go/nowgo decisions using

49:27 marginal expected value, future cost,

49:30 benefits, not past spend.

49:32 >> Why do you think I don't edit these

49:34 videos?

49:36 Why do you think I've got basically a

49:38 three camera setup? You know, I'm

49:40 sitting here. I've got I got a little

49:41 bit of software. This none of this is

49:42 new to me. I don't have fancy

49:44 transitions. I have the camera. I have

49:48 YouTube. I have my notes. Why do you

49:51 think I have it set up? This Why also do

49:53 you think I have the the notes prepared?

49:55 I don't have like a a PowerPoint. um

49:57 this low low production value over here

50:01 because until there's an audience um and

50:05 any type of monetization that would come

50:08 of this um me going out and I've done

50:12 this before um I've actually created

50:15 green screens way back in the day I used

50:18 to back before

50:21 podcasts exist um there was real audio

50:26 and shock wave and I and a few others

50:29 would uh belong to a sort of game

50:31 collective where um if I don't know if

50:34 any of you would possibly remember what

50:36 Planet Fortress was way back in the day.

50:39 Um you could have your own website if

50:42 you were kind of known in the community.

50:43 They'd give you a website and most

50:45 people would create a website, write

50:47 about the the type of game that they

50:49 followed. kind of like this is like um

50:53 it's like the the the the old west

50:55 version of of Twitch or something like

50:58 that. There was no there was no YouTube

51:01 and I started getting into video and so

51:03 this is on dialup. People had to

51:05 download and watch these videos. Um but

51:07 I had I had a a computer with a nice uh

51:10 uh card to do uh video work. It did

51:14 enough processing that I could set up a

51:15 green screen. And so I actually got a

51:17 board with lights behind it that would

51:19 glow behind me that would actually do an

51:21 outline and on top of it I would put the

51:24 game behind me. And so I was someone who

51:27 liked to review maps of games. So map is

51:29 basically a world that players go into

51:31 and play and they would often play the

51:33 same ones. So I would go into these maps

51:36 and I would take screenshots of

51:38 different places and it was sort of a

51:39 capture the flag. So you had one a team

51:42 would have a defense and an offense and

51:44 the defense is protecting and the

51:45 offense is trying to get through. And so

51:47 I would take different positions and

51:50 talk about where you'd want to put your

51:52 player and where you'd want to do

51:53 things. I would stand up against the

51:55 screen. I put a lot into it and it was

51:57 fun. And back in the day I I got to say

52:00 I was probably the most except for like

52:02 you know I uh uh Justin TV or or

52:06 something like that. I was the most

52:08 popular video guy online

52:12 there w that wasn't a lot of people

52:14 number of people actually watching these

52:15 was like 3,000 like it wasn't a lot of

52:18 people and there was no money in this

52:21 and yet you know this is before G4 TV

52:24 even existed when they tried to do this

52:26 and make make a TV version of internet

52:29 video before YouTube took off. So this

52:32 really goes into having all that

52:35 experience yet I'm on a

52:39 one two three camera setup. That is why

52:44 everything is this is this new show is

52:46 exploration not exploitation.

52:51 The equivalent of what Stephen he did is

52:55 let's say I really believe I'm doing so

52:58 good at business being being a being a

53:02 guy who uses his business mind and so

53:05 I'm going to do this because I'm using

53:07 my business mind and I'm going to quit

53:09 my day job. That's basically what he

53:13 did. You don't want to do Don't kill

53:16 your cash cow. Have a little common

53:18 sense. That's why we're talking about

53:21 sunk cost fallacy here. And that's

53:24 that's where

53:26 getting into a two-year project when

53:28 you've never even tried it once.

53:31 Throw together a 12minute sketch that's

53:34 dumb, has no real script, has no real

53:36 sets. Make it look overly dumb. Lean

53:38 into the dumbness of it. Lean into lean

53:41 into behind the scenes of your normal

53:43 sketch. Do your normal sketch and then

53:45 break character. like and you're just,

53:47 you know, he could have done something

53:48 like that where he's like, what is it?

53:50 Line and then like your line is

53:53 emotional damage. Oh yeah. And then he

53:55 comes back in like he could have played

53:56 that and tried the longer sketches and

53:59 done a few things. And if that failed

54:01 and all he lost was a few views and

54:03 they're like, "Oh, he's he's silly." And

54:06 he just went back. No harm, no foul. You

54:08 know, he could have done things like

54:09 that. getting in two years, multiple six

54:13 figures,

54:14 man. He He could have done it with $50

54:17 and a couple friends that didn't mind

54:19 being on camera and being a little

54:21 famous and they could have hidden behind

54:23 cameras or something like that. He this

54:26 could have been workshopped so much. And

54:28 this is true in all of business. Before

54:30 you go and and spend your life savings

54:33 selling Mary Kay or Tupperware or an

54:36 MLM, here's an idea. before you get into

54:40 your MLM, try try something. Go to the

54:42 store, buy the thing you want to sell or

54:45 the whatever. And then just try to sell

54:48 it to strangers. Not your friends, not

54:50 your family, not your workplace. Try to

54:52 actually f go to strangers, knock on all

54:55 your neighbors doors, ask them like,

54:56 "Hey, I was thinking about selling this.

54:58 Would you want to buy this from me?"

55:00 That sounds painful, doesn't it?

55:03 Well, that's what you're getting into.

55:05 You know, workshop these, try them out.

55:08 If you're good at it, great. Go forward.

55:11 Start start taking more explor uh

55:13 exploratory steps at it and then you're

55:15 going to build something up. Um but

55:17 don't think that you're going to be the

55:19 schwarma king of DC. Like I love my

55:23 schwarma in DC. You give me my falafel

55:25 and my schwarma. But I'm like, you know,

55:28 I made some at home and um yeah, I just

55:32 I I do this little thing with sour cream

55:34 and I did this thing and I go out there

55:36 and I don't know anything else about

55:38 that business and I just sell sell my

55:41 house, sell my car and I'm going to have

55:43 a food truck. What do you think's going

55:46 to happen?

55:48 Exactly. Pro I'm probably not going to

55:50 be on on, you know, Shark Tank with with

55:54 Dr. introduce schwarma recipe like

55:56 that's not that's not going to be a

55:58 thing that's going to I'm going to I'm

56:00 going to fail I'm going to fail badly um

56:03 because there's so much more to it I

56:04 didn't you know I could you could try

56:06 those things out go to a state fair it's

56:08 like ah hey I don't see any schwarm say

56:10 you guys mind if I try to try like I'm

56:12 going to do a one day booth can I do

56:13 like a one day booth and I'm going to

56:16 make them ahead of time sell them till

56:18 I'm out fold up my table and my my my

56:22 umbrella and I'm going to go

56:24 You can workshop about anything in this

56:27 world. Um, do not sell it all and go

56:31 out. That's why they they say, you know,

56:33 uh, uh, they'll, it's kind of a myth,

56:34 but lottery winners going broke. It's

56:36 usually because they take their entire

56:37 millions and then invest all of it in

56:39 something really dumb. That's a failure.

56:40 They do this, but with their entire

56:43 lottery winnings, and then they're

56:44 actually in bankruptcy. Like, that's

56:46 what happens. So, let's go a little

56:48 further. We've got prospect theory. This

56:50 is our last one here. Prospect theory is

56:52 a little different, but it's about it's

56:54 about how you think about these things.

56:56 One of my favorites. I'm a huge fan of

56:58 Conoran Tverki as well as Richard

57:01 Thaylor and Sunstein. Sunstein, I love

57:03 your work as well.

57:06 >> Definition. People evaluate the outcomes

57:09 relative to a reference point. Losses

57:12 typically feel larger than equivalent

57:13 gains and decision weights can distort

57:15 how people respond to risk.

57:17 >> Fear,

57:17 >> especially around gains versus losses.

57:20 How to use it properly? Choose a

57:22 reference point that reflects learning,

57:24 not a 10m views baseline.

57:26 >> Cap downside with small bets and avoid

57:29 all or nothing moves that turn normal

57:31 variance into psychologically perceived

57:33 catastrophe.

57:34 >> Yeah.

57:35 >> How it was used improperly here. His

57:38 reference point was sustained viral

57:39 performance every upload. So the

57:42 underperformance was experienced as a

57:44 major loss. The initial big swing

57:46 strategy implicitly overweighted the

57:48 upside while underweing the probability

57:50 of audience algorithm rejection.

57:55 >> If your child is not a straight A

57:58 honoral student, I'm not saying they

58:01 shouldn't apply to Harvard. I think

58:04 everyone should. If you've got the money

58:05 for the tuition,

58:08 you you shoot that basketball. You you

58:10 go for it. Go long, slugger. go along.

58:16 Do not put every hope and dream and

58:18 don't don't say, "Okay, well, where did

58:20 you apply?" I applied to Harvard. Where

58:22 else? Oh, nowhere else. I'm getting into

58:24 Harvard. Oh, boy. The pain of that loss.

58:29 That person may never go to college.

58:32 There are plenty of great colleges. In

58:34 fact, it's detrimental to most people to

58:37 go to an Ivy League college. Um they're

58:41 so used to being the big fish in their

58:43 school, the smart one, the the winner of

58:46 debates and speeches and valadictorian.

58:48 They are now going into a pool of people

58:52 who are except for a few of those

58:54 people, everyone else will be smarter

58:56 and they've already been there for

58:58 several years. They are getting in to

59:00 the deep end that they're not prepared

59:02 for. And so even if you get in like the

59:06 again not meeting expectations, you

59:09 expect I'm a winner and I go here

59:12 because I'm a winner, but I go here and

59:16 my professor just gave me a C and told

59:19 me that I do not spend enough time

59:21 reading and do not ever show up in his

59:23 class again until I've actually read the

59:25 entire book and understood it. And then

59:28 also the other reference books that I've

59:29 got those as well.

59:32 Suddenly they're not a winner. And the

59:33 pain of that loss can be soul crushing

59:37 because the expectation was set. It's

59:39 not the oh oh we should feel sorry for

59:43 the the Harvard kids. It's hard to

59:45 explain. I do. I do feel sorry for those

59:48 kids because their expectations have

59:50 been set so high. the emotional pain of

59:55 just being

59:56 crushed

59:58 and suddenly feeling that imposttor

1:00:00 syndrome of I really do not belong here.

1:00:04 You know how if you if you know and you

1:00:08 have you're honest with your child and

1:00:10 you're like hey you're a great student

1:00:12 but I really think you should take a

1:00:14 couple years at community college

1:00:16 explore what you want to do first. if

1:00:18 you still want to go, you know, you

1:00:21 still got the application. I don't know.

1:00:22 Maybe Harvard says no the second year.

1:00:24 If so, I mean, you can. I guess I guess,

1:00:29 you know, take your shot and and suffer

1:00:31 the slings and arrows of great

1:00:33 misfortune, but

1:00:36 it's it's not the it's not the prize you

1:00:38 think it is. Um, if if your expectations

1:00:42 are that you're always going to be

1:00:44 number one, um, same with these other

1:00:47 big swings. take a big swing, but do it

1:00:49 in such a way that you're not crushing

1:00:51 all of your expectations and you put all

1:00:52 of your dreams into this one tiny little

1:00:54 basket. So, now we're coming to Dr. D's

1:00:58 special corner. And by the way, under

1:01:00 here, just cuz I'm going to flip

1:01:02 through, I actually do have,

1:01:05 if any of you, you can you can rewind

1:01:07 this, that's going to be the YouTube we

1:01:09 just watched. And there are the actual

1:01:12 papers that you can go and look them up

1:01:15 yourself. Some of them are actually not

1:01:17 too bad to read. I would suggest just

1:01:19 read the abstract. You don't have to

1:01:21 read the just read the abstract. You're

1:01:22 like, "Oh, that's interesting." You can

1:01:24 actually learn what they really tested

1:01:25 for, what they really wrote about.

1:01:27 Always fun to do. You don't have to be

1:01:29 an academic. Like, it's like it's like

1:01:32 getting a free college course without

1:01:34 having to read the book. It's like you

1:01:36 read the abstract. It's supposed to be

1:01:38 written for regular humans to read,

1:01:39 unlike the rest of the paper, which is

1:01:41 not read written for regular humans to

1:01:42 read. Um, and then if you still have

1:01:44 questions about it, just ask AI. Simple

1:01:46 as that. Dr. D special corner. Okay.

1:01:51 What are the lessons that Stephen He had

1:01:54 that you need as well? Have friends who

1:01:56 are willing to be honest and tell you

1:01:59 no. For instance, take a look at Elon

1:02:02 Musk and his idiotic Twitter ideas.

1:02:04 There is a reason that every single

1:02:06 brand decided to leave and he has

1:02:09 destroyed everything that was

1:02:12 potentially good about it and and lost

1:02:14 so many you know there's people there

1:02:15 now for the AI u but he didn't have to

1:02:18 he alienated a brand when the social

1:02:20 narrative was that they were like okay

1:02:24 we okay everyone calm down

1:02:28 he actually might be able to fix it and

1:02:30 then instead he did all of the worst

1:02:32 things and then up. So, everyone around

1:02:35 and the reason he did that is everyone

1:02:38 around him kisses his ass and nobody can

1:02:40 tell him no. Um, and now he couldn't get

1:02:43 a friend to tell him no. Get a friend

1:02:46 that can tell you no. If you have nobody

1:02:49 around you who has told you no in a

1:02:51 while, I feel sorry for you. You are

1:02:54 going to live a life of pain and misery

1:02:57 when you hit a brick wall. And they're

1:02:59 just going to keep coaching you on and

1:03:01 coaching on. They're going to be such

1:03:02 sick offense until you crash headlong

1:03:05 into a wall. You know,

1:03:08 some people in this world could have

1:03:10 been told no.

1:03:12 Pete, did anyone? Someone should have

1:03:14 said, "Hey, buddy,

1:03:17 maybe you shouldn't do that." Do you

1:03:20 think he had anyone around him in his

1:03:23 crew that said no? Of course he didn't.

1:03:27 That's just a story that happens again

1:03:29 and again and again. But it does play

1:03:30 out on the smaller scale with the rest

1:03:32 of us. Have people around you who don't

1:03:35 need to have buttholes around you, but

1:03:38 you can have people who are honest with

1:03:40 you. And they may not be like, "No,

1:03:42 that's stupid." They might not say that

1:03:43 to you, but they're like, "I I don't I

1:03:46 don't get your idea." Like, "It's it's

1:03:48 not connecting with me. It's not it's I

1:03:50 don't I don't get it." You know, have

1:03:52 those people around. Number two, and you

1:03:54 can do this in your entire life with any

1:03:56 project you want to do. You can even do

1:03:58 this before you cook dinner with a new

1:04:00 recipe. Do a premortem. Steven did a

1:04:04 great job here. He did a postmortem. And

1:04:07 there's nothing wrong with doing a

1:04:10 postmortem.

1:04:11 He goes

1:04:13 spent six months, talked to people,

1:04:18 did reading, reviewed.

1:04:22 The key is what I got up here

1:04:26 that you know how long these notes

1:04:27 actually took me a little AI making sure

1:04:30 I got it got the actual sources and

1:04:32 actually documented those for me and

1:04:34 then cleaning up the formatting and all

1:04:35 of that. You know how long this this

1:04:37 whole thing took me? 10 minutes.

1:04:40 10 minutes.

1:04:42 What a premortem does. So post-mortem,

1:04:46 afteraction, postmortem doesn't mean

1:04:48 anything bad happened, but if you want

1:04:49 to review an afteraction report, um,

1:04:52 same thing if if if a hospital has a

1:04:54 mass casualty event, they're going to do

1:04:56 a post. What do we do right? What do we

1:04:57 do wrong? What can we do better next

1:04:59 time? Uh, police, same thing. What do we

1:05:01 do right? What do we do wrong? What can

1:05:02 we do better next time? A lot of times

1:05:04 when it's public, people aren't very

1:05:06 free to speak, unfortunately. So, they

1:05:08 kind of suck when they do them. uh in in

1:05:10 in government unfortunately um people

1:05:13 don't like to be people don't like to

1:05:15 admit what they really did wrong. Um I I

1:05:18 could name a certain um large national

1:05:21 organization that recently did a

1:05:24 post-mortem on their performance. Uh I

1:05:28 believe the year was 2024 and overall

1:05:31 most people believe that they just

1:05:33 couldn't be honest with themselves. And

1:05:36 that's a problem. If you're going to do

1:05:38 a post-mortem, be honest with yourself.

1:05:41 Because if you're going to do a

1:05:42 premortem, you need to be you you got to

1:05:45 get rid of the stars in your eyes when

1:05:46 you do these. A premortem says, "Okay,

1:05:49 let's assume it it it fails spectac

1:05:52 everything go it spectacularly fails."

1:05:55 Let's pretend that. Now, let's go over

1:05:58 why. Okay, it failed. Okay. Okay. Well,

1:06:01 if it fails, then maybe

1:06:06 on every day we filmed, someone else was

1:06:08 sick and so it pushed our schedule. Or,

1:06:11 oh, what if the audience doesn't

1:06:12 respond? Well, and then what you can do

1:06:15 is once you've done those things like

1:06:17 what what this this would have been a

1:06:18 premortem. If we just would have said,

1:06:21 oh, it's horrible and it wrecked the

1:06:22 whole channel. Why would that have

1:06:23 happened? And then we explain this say,

1:06:25 okay, well, there's a big format change

1:06:28 that could fail with the audience.

1:06:30 there's no connection to the characters

1:06:31 that could fill with the audience. And

1:06:33 what they might have done is said,

1:06:34 "Okay, let's start adding a few. Let's

1:06:37 start let's take the time down. Let's

1:06:39 take the budget down. Let's take the

1:06:41 characters down. Let's connect some more

1:06:44 of the jokes and and rain this thing

1:06:46 back in." That's what would have

1:06:48 happened. Um, and if Stephen had done

1:06:51 that little bit and had instead of 6

1:06:54 months after two years before had taken

1:06:56 had this idea and said, "I'm going to

1:06:58 take 6 months talk to professional

1:07:00 friends about this who are going to be

1:07:02 able to tell me no or who are neutral

1:07:03 and are not my friends. I'm going to

1:07:05 talk to professionals." Um, like this

1:07:08 was 100% avoidable by just talking it

1:07:11 out, writing some notes, having a

1:07:13 meeting. Ah, whiteboards everywhere. I

1:07:15 said his the cost to him for this was

1:07:19 more than my entire doctorate of

1:07:21 business administration.

1:07:23 It would have been it would have taken

1:07:24 more time. It would have been cheaper

1:07:26 for Steven to pay for a doctorate of

1:07:30 business administration

1:07:33 and then know than to have this failure.

1:07:37 when you start scaling things like that,

1:07:41 a phone call, you know, it it would have

1:07:44 at least served a phone call. And if

1:07:46 someone's like, if someone is if you go

1:07:48 into one of those meetings, you're like,

1:07:49 "Okay, I know a friend. He does

1:07:50 business. Let's talk about it." It's

1:07:51 like, "Oh, yeah, you're great. You're

1:07:53 the" And you get a hype, man. Okay, that

1:07:56 conversation's throw that conversation

1:07:58 in the trash. Treat it like the ice

1:08:00 cream it is. It was fun. It tasted good,

1:08:03 but it's absolutely worthless to what

1:08:06 you need. and g talk to somebody that

1:08:09 that has a level head does not you win

1:08:11 lose or draw. It's not gonna affect

1:08:13 them. You you could completely lose your

1:08:15 career does not matter to them. Um and

1:08:17 is just willing to give you advice and

1:08:19 and talk straight and also kind of

1:08:21 understand your industry a little bit

1:08:22 like that would also help. So you know

1:08:24 you like Stephen said he talked to other

1:08:26 creators. This would be the time to to

1:08:28 do that that premortem. I'm like you

1:08:31 know I don't really I don't know what's

1:08:34 wrong but I'm feeling something's wrong.

1:08:35 What do you think? That's a good way to

1:08:36 do it. I It feels like something's off.

1:08:40 What do you think is off? Like I feel

1:08:42 it. You're giving them permission. What

1:08:44 do you think's off about this? Do this

1:08:46 with your friends. The next time you

1:08:48 have an idea that's big and you want to

1:08:49 try something, just just tell us like,

1:08:53 "Hey, Sally, is this

1:08:56 something? I don't know. Something feels

1:08:58 off. What do you What do you think's off

1:09:00 about it?" And they're going to go,

1:09:01 "Well, is it the this or is it the

1:09:03 this?" and they're starting to be honest

1:09:05 with you. And it's not that they're

1:09:08 dogging your idea, but everyone's going

1:09:10 to do things differently and think some

1:09:12 things are going to strike them, but

1:09:15 they don't want to upset you. They don't

1:09:16 want to offend you by by telling you

1:09:19 necessarily no, but you can encourage

1:09:20 that from people.

1:09:22 And the last one before we wrap this up,

1:09:27 sunk cost success magnets. Now, I'm just

1:09:30 going to kind of read here because I

1:09:31 think I did an okay job. Just like Mark

1:09:34 Zuckerberg, you have this one really

1:09:36 good idea, the Facebook, and you float

1:09:40 through buying up other people's good

1:09:41 ideas like Instagram and WhatsApp.

1:09:45 But whether it's the Facebook phone or

1:09:47 the metaverse or llama AI, you never

1:09:50 catch lightning in a bottle again. Your

1:09:52 mistake, you think you're raw genius

1:09:55 produced the million billion dollar idea

1:09:57 when in reality, you're just in the

1:09:59 right place at the right time and really

1:10:02 lucky.

1:10:03 and you happen to be good enough to

1:10:05 carry it out. I'm not going to put put

1:10:08 poo poo the talent just because

1:10:10 someone's lucky. It's still requires

1:10:12 talent to execute. So that doesn't mean

1:10:15 you're like a genius idea guy.

1:10:20 I think everyone likes to quote Edison.

1:10:22 Found a thousand different ways to not

1:10:25 make a light bulb. Oh, that's just

1:10:26 persistent. You just But nobody likes to

1:10:28 talk about his failed attempt to run DC

1:10:30 current nationally. Now, his company

1:10:32 electrocuted a damn elephant to scare

1:10:34 Americans away from AC, which was which

1:10:36 is in nearly every home in the world

1:10:38 now. I think there's some DC and like

1:10:41 small villages um on on unac solar or

1:10:46 wind. I think even wind has to be I'm

1:10:49 not even sure about that. But the

1:10:50 world's AC everywhere regardless of the

1:10:53 different plugs and different countries

1:10:54 in Europe and all that, they're all AC.

1:10:57 the electro an elephant because his his

1:11:00 head was so far up his ego and people

1:11:03 won't tell people no because Edison's

1:11:05 the genius. Zuckerberg's the genius.

1:11:08 Musk is the genius. Whoever the hell

1:11:11 block ran Blockbuster was geniuses. You

1:11:13 can't tell them no or that they're

1:11:15 making a mistake at Blackberry.

1:11:19 You can't tell people no and they're

1:11:21 making a state mistake and you've got

1:11:22 this weird goofy AI pin that blows up on

1:11:25 people's chest and they also go out of

1:11:27 business. Like it happens again and

1:11:30 again and again. What helps? Have people

1:11:34 who will tell you no. And don't assume

1:11:37 everyone else is dumb.

1:11:40 Who says, you know, you might be a

1:11:42 psychotic monster for electrocuting

1:11:44 elephants

1:11:45 or Elon Musk would take the advice. He

1:11:49 could let that sunk cost him. Anyways,

1:11:53 that's my time. I almost made it to an

1:11:56 hour. It was shorter. It's guys, it's

1:11:59 technically a shorter show. That's an

1:12:01 improvement. And I was 10%, right? No

1:12:04 big changes. 10%.

1:12:06 That's not too bad. Normally a a a six

1:12:09 minutee video would have been a a

1:12:11 six-hour follow-up for me. I think we

1:12:13 covered some interesting stuff here.

1:12:14 Little more academic, but I think I

1:12:17 think the two big takeaways have people

1:12:19 around you who will be honest with you

1:12:21 and think about things

1:12:25 failing before they fail. And then you

1:12:27 have to think about things and also

1:12:29 sweep up the mess. Anyways, Dr. Doo

1:12:32 here. I appreciate you all. Thank you

1:12:35 for watching and I will see you next

1:12:37 time. Bye now.