M&Ms: Misjudging Trends

An actual post pandemic trend that's not a fad on the 83rd edition.

After the Jet acquisition, Walmart HR tried to take alcohol away from us in the office, and we rebelled.

It became such a big deal that articles and news stories were written about it. And HR decided to relent and walk it back. But to be fair, Walmart does not allow alcohol anywhere for their employees. And can you imagine a Walmart employee in a store trying to help someone under the influence?

So why should we be allowed this "perk" in the office?

Our rebellion makes it sound like we were drunks at Jet, but we weren't. In fact, I never really saw anyone drink in the office unless it was at the company happy hour on Thursdays, or after 5 P.M. Still, even people who didn't drink at the happy hour rebelled at the idea of having alcohol taken away. Heck, even I, a self-proclaimed hater of "fake benefits" from startup and Big Tech culture, was getting into it.

Why would smart people rebel at something as dumb as having alcohol taken away?

This is because we perceived alcohol in the office as a "benefit." And you've never seen people rebel, like when they feel a perceived benefit is taken away.

In the Psychology of Human Misjudgment, Charlie Munger says:

"The quantity of man's pleasure from a ten-dollar gain does not exactly match the quantity of his displeasure from a ten-dollar loss. That is, the loss seems to hurt much more than the gain seems to help.

...man frequently incurs disadvantages by misframing his problems.

He will often compare what is near instead of what really matters. For instance, a man with $10 million in his brokerage account will often be extremely irritated by the accidental loss of $100 out of the $300 in his wallet."

After the Jet acquisition, most of us were making a lot of money. And Walmart was treating us pretty well. They treated us well because they desperately wanted to retain us to help modernize its legacy technology.

But at that moment, all we could think about was the alcohol being taken away.

This is not just loss aversion; it's bigger than that. Munger calls it Deprival-Superreaction Tendency; he explained it further:

"Moreover, if a man almost gets something he greatly wants and has it jerked away from him at the last moment, he will react much as if he had long owned the reward and had it jerked away. I include the natural human reactions to both kinds of loss experience—the loss of the possessed reward and the loss of the almost-possessed reward—under one description, Deprival-Superreaction Tendency."

This brings us to the stubborn pandemic trend of remote work, a benefit for many and something some employers are now struggling to take away.

This week, the social media company, Snap threatened to fire people if they didn't return to the office. This has become a convenient way to let people go when you don't have the guts to find low performers and fire them.

Dare on Twitter talking about this “layoff by return to office” phenomena.

But despite all this, remote work is growing, not shrinking. Remote work for office workers was hovering around 43.9% this summer, and it's climbing.

Bloomberg on back to work.

Unlike many other post-pandemic trends like:

- home gyms

- crypto and NFTs

- baking bread at home

- adopting an unreasonable amount of animals

...remote work seems like it's here to stay.

And, of course, you and I can deduce that this trend is here to stay simply because it is a benefit for most people. Back when I sent my teams to be fully remote, it meant I didn't have to take a one-hour train ride each way every day. And neither did they. I quickly realized we were going to get used to this, this is now the future.

And although employers like Snap threaten to fire people if they don't return to the office, I predict it will have almost no impact on the trend itself.

That is because, as we saw earlier, the trend's alignment with human psychology gives it its power—good luck taking this benefit away now.

This Deprival-Superreaction Tendency is so strong that even animals exhibit it. I'll give you one more story from Charlie Munger since I have been reading a lot of his stuff lately, and it's so good. Charlie says,

"we once owned a tame and good-natured dog.

There was only one way to get bitten by this dog.

And that was to try and take some food away from him after he already had it in his mouth. If you did that, this friendly dog would automatically bite. He couldn't help it. Nothing could be more stupid than for the dog to bite his master. But the dog couldn't help being foolish. He had an automatic Deprival-Superreaction Tendency in his nature.

Humans are much the same as this Munger dog. A man ordinarily reacts with irrational intensity to even a small loss, or threatened loss, of property, love, friendship, dominated territory, opportunity, status, or any other valued thing."

This remote work trend being real, has many implications outside of just office work. It has unresolved consequences for commercial real estate, cities, travel, common areas, residential real estate, globalization, the work force and so much more long-term.

While the jury might be out on some of the other trends we are experiencing today, if they are real, I am confident in placing my small bets on remote work getting bigger. And just as importantly I am learning to rely on human psychology.

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Two Articles: Learning to tolerate, More than just tech moats.

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I ran into this study that says the ability to tolerate, especially opposing political views, is linked to cognitive ability.

To bring up Charlie Munger again, in the same speech in the "Psychology of Human Misjudgment," he addresses how bad it can be if we are not tolerant.

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In the latest edition of

Next Small Things

Chao Lam

writes that Big Tech has more than just tech moats in response to my article last week.

It was a good read.

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Two Memes: Don’t visit other places to make them angry, drawing clocks.

I can attest from visiting many times that the Europeans do not enjoy ice as much as us Americans do.

God forbid they catch you putting some in wine.

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Technically, this answer wasn’t wrong.

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A small update from me:

I want to give a shout-out to you! And all of my friends that read this newsletter. I am grateful to have you here.

I have been at this, making friends online and "audience-building" stuff for about a year now. And I am still shocked at how incredible the internet is.

Last week I sent out, first in this newsletter, then in a tweet, that I would run a webinar on newsletters. And that I was trying to fill 15 slots of our latest cohort of the Newsletter Launchpad.

That is the only promotion I did.

And this week, over 70+ people signed up for the webinar live/recordings.

It's amazing, especially for an awkward and introverted engineer like me.

Maybe for some people, marketing and sales come easily, but to me there is nothing easy about it. I'm grateful that I get to learn and do it, and its really cool that it’s working.

And truthfully, it is only possible with readers like you on here. People who help amplify my stuff even when they aren't the target audience. Thank you.

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As always, thank you for reading.

-Louie

P.S. you can reply to this email; it will get to me, and I will read it even if I cant always reply to all of them.