Tyler Cowen Talent

Will Bachman 0:03
Hello, and welcome to Umbrex presents. We are here today with Tyler Cowen. We’re talking about his book, talent, how to identify energizers creatives and winners around the world. I’m your host will Bachman and welcome to the show. Tyler. It is great to be with you.

And Neil, let’s bring Tyler on the show.

Tyler Cowen 0:30
Hello, thank you all.

Will Bachman 0:33
So Tyler, I would like to start with a social norm. I’d like to propose when I want this to be a fun conversation for you. So I’d like to propose that if I ask you a question that is boring, or that if you’ve answered before, that you just tell me, and normally this would be rude, but you just say let’s skip that question. What do you say?

Tyler Cowen 0:52
Maybe I’ll ask you a question back. If that happens, that is perfectly

Will Bachman 0:56
fine. So you could say that’s skip, that’s boring or skip. I’ve written a Bloomberg column on that. So let me start with a question. So a couple observations in your recent econ talk with Russ Roberts, you told him that in writing talent, you did read a bunch of articles, but you didn’t find that many books on talent identification. Another observation is, when I went to business school, I took zero courses and even had zero individual classes on how to interview or how to identify talent. As an economist, what’s your model of why talent assessment has been relatively neglected?

Tyler Cowen 1:42
A great deal of talent assessment is an art rather than a science. So there are books on talent, but they tend to be very thin in terms of content. And what you learn from the median book on talent is zero. So I set out with the practitioner, Daniel gross venture capitalist, and I have a philanthropic role myself in spotting talent. And we were taking the lore of Silicon Valley but adding academic research to it and adding experience from management and academia and other areas and trying to produce like the book on talent. What which single book should you read, to figure out how to think about talent?

Will Bachman 2:25
What institutions historically, let’s say before the 20th century, were particularly good at identifying talent.

Tyler Cowen 2:35
I’m struck by how well the Florentine Renaissance did and identifying talent. It’s over a span of a few centuries, but you have Dante you have Machiavelli, you have Boccaccio, you have Leonardo, you’ve Michelangelo, you’ve bought a Celli, you have Galileo, even in one region that you know, had 60 to 80,000 people, maybe 100,000 People at its population peak. So it was a competitive process. There were a lot of individual patrons, you could get glory from identifying talent. That to me was arguably the peak of the Western world for identifying and mobilizing talent. And it was hundreds of years ago, we’re not doing as well as they did. What does that say about us?

Will Bachman 3:15
That’s really interesting. I was wondering if you might talk about the arts or music, and we’re perhaps whaling ships or military or the Jesuits, you blogged about a book on the Jesuits recently. Any thoughts on other sorts of institutions outside the arts that have been good historically?

Tyler Cowen 3:35
Well, those are all good examples that you say. I think identifying American business talent in the Midwest, through the core part of the 20th century is another very good example that would be outside the arts, I think we’ve done a remarkable job of that. China, and more recently, they’re moving backwards at the moment. But identifying CEO talent in a world where basically no one had an MBA, the educational backgrounds people had were irrelevant. They almost certainly didn’t come from wealthy families, and finding plenty of Jack Maas, who could actually run companies and take them to high levels. That would be another example. India today is the single hottest blossoming talent spot in my opinion. And it may be Indians who are leaving India in many cases. But I view India today as like Central Europe in the early to mid 20th century, just fantastic things happening. The region itself is not in every way doing well. But people they are really motivated to build a better lives for themselves.

Will Bachman 4:37
Are companies under investing in spotting talent overseas? Particularly, I mean, obviously multinationals are but what about smaller companies?

Tyler Cowen 4:46
This is changing rapidly. Five years ago, I would have given you a definite yes. But with the pandemic and work from a distance. We have so many small companies, nonprofits, even just say you You’re an author, and you need for someone to do the graphics for your graphic novel, the chance that you’ll hire someone in Indonesia or the Philippines is much higher than it was just a few years ago. So we are fixing that. But it’s harder to evaluate talent in other countries, you don’t have the common cultural background, you’re not sure what questions to ask, it’s harder to interpret the references they might be able to give you. But I think this trend still has a long, long, long way to go. Basically, talent is evenly distributed around the world, but opportunity is not. And that means you can arbitrage I

Will Bachman 5:34
know, many of the listeners of this show our independent professionals, many of them folks that were at management consulting firms, and have now set up as as independent professionals. And we’ve seen this trend increasing over the last 10 to 15 years of both more people going into that space as well as more companies being open to it. And I, I have a very rudimentary understanding of the coasts theory of the firm, but I think it’s what it would predict as transaction costs go down, it’s easier to find people and bring them in, it’s easier to plug them in. How do you see that trend evolving of companies, bringing in independent professionals, at least as part of their talent strategy?

Tyler Cowen 6:20
I think what a lot of companies need to do is exist to invest more in their pre existing networks of soft contacts. So if you just wake up in the morning and say, I want to hire a smart person in India, I mean, great, you might succeed. But who is it that you have who can recommend smart people in India, and who are the smart people in India who already know who you are. And if you’re going to be very good at this, you need to have smart people in India now already knowing who you are. So in any given day, investing more in those pre existing contacts, it will never seem like a priority. But if you think of talent is the number one factor probably driving the success of your venture. It’s something everyone is going to start to do more of.

Will Bachman 7:04
So say a little bit more about that. How would someone get started on that of building, you know, some talent scouts or some some people that can help them navigate in different geographies around the world?

Tyler Cowen 7:16
Well, just an example, I run a purely philanthropic venture called emergent ventures, India. But we do also give grants to people doing for profit companies. And if we just advertised in Indian newspapers, we would be swamped by all kinds of pleas for money. But in fact, I’ve written a blog in English, of course, for 20 years now, I hired an Indian person who is well connected in India, on the blog, in the podcast, I tried to put in material relevant to India. So people in India know to some extent who I am. And I don’t try to make this material too simple or too accessible. I deliberately wanted to serve as a kind of filter. So we don’t ever advertise emergent ventures, India, that’s on purpose. But we get quite a few good applications from India, because some people there already know who we are. And that has worked for us. But it’s a very indirect roundabout strategy. It’s not trying to reach people to directly it’s counting on the smartest people to take step one in the game is finding out who you are.

Will Bachman 8:22
So in the book, you kind of focus in in on the you can almost start immediate race with the interview process. Let’s back up a little bit to the place where let’s say you’ve posted a job and you mentioned if you posted it in India, you get many, many applicants. Let’s say you’ve posted a job and you get 600 applicants for a role. What’s your thoughts around screening those applicants before you get to the interview process? What are your tips on that?

Tyler Cowen 8:52
Well, it’s really going to depend on the sector and the context. So if these are people with established track records, I put really a lot of weight on the established track record, that basically behavior in demonstrated preference dominate over talk or rhetoric. A lot of the problems I work with are with quite young people who really don’t have established track records. The feature that I think is undervalued is simply people who started some project of their own at a very young age, no matter what it was, how weird or trivial it might be, I don’t care weird or may even be better. I’m not very interested in people’s grades. Often to me, those can be kind of negative. They over signal conscientiousness. And if you’re looking for entrepreneurs, again, this depends on the job, right? You want people who both can work on their own but understand how they fit into a team. So simply having initiated things and stuck with them, I put higher weight on compared to credentials.

Will Bachman 9:57
Okay, so forth. Someone beyond kind of the idea of you know, very junior people. Let’s say you’re hiring for some mid career hiring a controller, you’re hiring a director of marketing, and you have five 600 applications? How would you think about doing that screening process? I mean, if you spend a minute on every one, it’s going to take you 10 hours to go through them. So what kind of rules of thumb would you suggest for that initial screening phase,

Tyler Cowen 10:31
the pre existing soft network is very important. Who do you have that is in your company, or you work with in some fashion, who knows those people and can speak credibly about them. So I found that to be by far, the highest yield way of approaching a problem where there’s a large number of potential applicants. And it’s also a signal that the candidate knows enough about you to grasp what you’re doing and fit in. So I think if you’re just staring at a bunch of eaters and degrees, where people went to school, I don’t think you’re going to do better than anyone else. I don’t think there’s a special secret to doing well, in that process. I would stress the focus of our book is a more unstructured kind of hiring, where you’re hiring individual people for particular roles. And often you’re not dealing with 600 candidates. But again, I would use soft connections to winnow down that field as much as you can.

Will Bachman 11:28
Yeah. What are your thoughts about looking for, you know, on a signal, so you talked about that a bit already, of what, what we’ve what I found when looking for people for project opportunities, and figuring out who would be a good consultant for a project, it’s looking at someone who has given some honest signal of interest in that topic or credibility. So you have two individual candidates, and they’re both, you know, supply chain people, and one is a podcast with 100 episodes on supply chain. Even if you haven’t listened to the show, they’ve given some evidence that they really care about that topic, and perhaps know more about it. What are some of your thoughts around looking for honest signals? When you’re evaluating talent before you get to the interview stage?

Tyler Cowen 12:17
That’s very consistent with my emphasis of looking for people who have started something on their own right. That’s one of the very best signals. A question I like to ask during interviews is simply what are the open tabs on your browser right now? It’s not a question anyone is prepared for. It’s very hard to fake because you could ask the person to talk about those open tabs, but it tells you how do they spend their time? What do they read? What are they engaged with? Who are they communicating with? And from that, you get some sense of their honest signals. Most questions you can answer in a somewhat fake way, you sort of prepared, you’ve told your story, you have something very prepackaged. Maybe you as an interviewer won’t learn a lot from hearing that pre packaging, but a flat out question like What is it you do? I find the answers highly informative most of the time.

Will Bachman 13:10
Let’s talk about the broader interview process. So you listed as one of your top books that you recommended on the blog, working backwards about Amazon, which gets into the Amazon interview process. So beyond just the single interview, that you go into a lot of depth in the book about conducting sort of the broader organizational process for passing someone from one to one and making a collective decision? What are some of your thoughts around the best ways to structure that entire process?

Tyler Cowen 13:47
In a lot of companies, there are too many layers of know. I’m often skeptical of how human resources departments approach decisions. They are, of course, absolutely necessary. But they’re often more loyal to their own processes than to the company. Again, it depends what kind of job you’re hiring for. If you’re looking just for conscientiousness, which is the case in a lot of jobs, some measure of intelligence, and conscientiousness. I think it’s fairly hard to improve on the standard practices of today’s top companies. But if you’re looking for people who in some way, have the potential for promotion, or who will be team leaders or idea generators for your company, I like to test writing skills in particular, and also just how people address questions they’re not prepared for. But I take clear writing to be a sign of clear thinking. And I’m very impressed by companies such as both Amazon and stripe that emphasize writing skills and memos.

Will Bachman 14:49
It’s interesting that you mentioned that one thing that that we’ve done when hiring an Umbrex is giving people a practical exercise us after, you know, people that have passed through the interview round giving a practical exercise. So in some cases, if it’s an extensive one, it’ll be a paid exercise. So for example, when we hired a content marketing manager, we actually had paid the person we paid three candidates to do a kind of diagnostic of our current content, write some recommendations, what are the gaps and so forth? What, and one time when I helped a client, hire a plant manager, we had multiple candidates, do a walk through the plant and then write up their observations. Current state, what would they recommend for future state? What are some of your thoughts around, develop, you know, kind of that practical exercise, a written exercise, some kind of take home exam, not sort of just a general exam, but something specific, that shows the person doing real work,

Tyler Cowen 15:55
an actual task is always best when you can do it. And if you look at areas that are very, very good at judging talent, I mean, take something like chess, which is not a job sector. But how do you judge the talent of a chess player? Well, you play a game of chess with them, right? There’s not really going to be anything better than that you could look at their earlier games, how well they had done. So insofar as you can approach that model that you have the time and money, it virtually always dominates the alternatives.

Will Bachman 16:26
What are some of your thoughts around onboarding talent to make sure they get accelerated quickly. So when I was when I, I was I was in the Navy for five years. And when I first arrived to my nuclear submarine, just like every new enlisted sailor and officer, I was giving about 100 Page stick under pages of Paul card, right, every watch that I was gonna have to qualify for. And it was either, you know, each page would have a dozen signatures of either you had to observe something, explained something, simulate something or do it under instruction. rarely have I seen companies taking that sort of structured approach. And it was so helpful, because it empowers you to know what’s expected. What’s your thoughts around onboarding talent, and helping them understand what is expected in the role.

Tyler Cowen 17:17
But I direct a nonprofit which has close to 200 employees, not the same as the companies you’re talking about. But what I found works is to introduce a person to a fairly large number of different individuals, and just give them some open time for unstructured interaction. That if you give people written text, they don’t really believe it, they become numb rather quickly. They’re really looking for someone to tell them how things actually work. And if you have a healthy culture, you want someone to do a fair amount of that sort of off the record things you can’t quite say as boss, that will actually give the person a sense, what am I expected to do? What are the ground rules here, and you don’t always know who will be the best person. So we’ll kind of almost like a speed dating exercise, where they get to meet a fair number of different people in the company. This, of course, has been much harder with pandemic. It’s one reason why I think work from a distance doesn’t always work. But I found that’s what often works best.

Will Bachman 18:20
What are your thoughts around evaluating the talent that you currently have in the company, and the the best ways that you’ve seen of doing regular talent assessments?

Tyler Cowen 18:35
Investing exon day in high levels of trust, I think it’s a bit like the soft network on any given day. It doesn’t feel like it’s an emergency to do this. But if people trust you, they will come forward with either improvements or their problems. And you will learn much more about how they’re doing. So rather than to focus on the exercise of the mid year or the annual evaluation, yes, of course, that’s important. But what is it you can do now and it feels like nothing is wrong, so that people working for you trust you more, I think that to be the priority most of the time.

Will Bachman 19:16
One question that you regularly post on marginal revolution about the what I’m reading now, so the books that you’re reading, I haven’t seen you provide a list of the newsletters or sub stacks you subscribe to. And I can intuit some of them that because you talk about Ted joy or Matt Iglesias or Scott Alexander but what’s what’s the list of sub stacks or newsletters that you subscribe to?

Tyler Cowen 19:40
Well, there’s very few of them. I think you just mentioned them all. You said Ted Jaya, of Scott Alexander, Matt Yglesias, I get Noah Smith. Possibly that’s all of them. So it’s not the main way I consume contact substack I would rather speak with actual humans, including those people than selves, whom you know I spend time with, and go around and travel, and read books and history, rather than substack. Now, that’s only me, I’m not saying it’s the right way to do it. But I find a lot of substack to be quite repetitive.

Will Bachman 20:15
Okay, so you brought up travel. So I wanted to ask you about that. You wrote a fantastic book about how to find a good place to eat. And I think it’s economist gets lunch. And you travel quite a bit, what are some of your tips kind of analogous to your book on how to find a good ethnic restaurant? What are some of your tips on how to travel and really learn the culture and what a place is about?

Tyler Cowen 20:46
My main tips are pretty simple. First walk a lot. That’s possible, almost everywhere, not everywhere. Even places that are not in guidebooks, try to speak to a broad range of people. One nice thing about being interested in food, is you end up talking to people who are not wealthy and well educated, but maybe who run restaurants or who cook for you. Go to places that appear to have no main attractions, go to places you think you wouldn’t possibly be interested in. And just go there with an open mind. Another tip I would give I never used to give this but the world has moved away from it. And that is buy a physical guide book in advance and read it. People rely too much on the internet when they travel. And I find that a very constricting experience. So just get a good stupid old guide book for wherever, and read it in advance. And then listen to music of where you’re going, read some novels, fiction, whatever, and just absorb it. Don’t over plan your day. Walk, walk, walk.

Will Bachman 21:48
My, my favorite professor in college was John stilgoe, Professor of Landscape history. And he says when he gets invited to go give a talk to alumni around the country, and they always ask them, Oh, would you like to see some local site? He always says, Yes. Take me to the town dump.

Tyler Cowen 22:08
Yeah. I love to go see infrastructure.

Will Bachman 22:13
Yeah. What about? How do you ever going to reach out to people that may be your readers or people that you know, or people to that live in that area to connect with them to kind of walk you through a factory or kind of show you behind the scenes somewhere?

Tyler Cowen 22:32
I do this a great deal. This gets back to the soft network point, I might just mention on the blog or on Twitter that I’m going somewhere and not ask for help. If you ask for help, you often get worse responses than if you don’t ask for help. And then filter what you receive. And I think I’m at the point where almost anywhere in the world, I can say I’m going there. And I’ll end up with some number of very smart people who will help me talk with me. And that’s highly rewarding. It’s one of the best things about travel. And it’s not something I build on a given day. But if you’re just there in the market of ideas for many years, again, building out your soft network. You’ll meet interesting people who can help you in all kinds of ways. And for some of you it may be people you hire, for me personally, it’s at times been people I ended up giving money to philanthropically.

Will Bachman 23:24
Yeah. Tell us tell us a story about a place that you you went to that you’ve met someone I think you’ve talked about Ethiopia on the blog. But but but tell us a bit more about someone that you’ve helped philanthropically that you’ve met on one of your travels.

Tyler Cowen 23:38
Well, before the pandemic, my wife and I, my wife grew up in Soviet Union, we went to Ukraine, and went to Kyiv. And we met up with a Ukrainian American economist, named Timothy, who ended up supporting him and gave him a grant to write on economics and Ukrainian. And he ended up being named as the economy minister for those olanski cabinet with at that time, that had been freed up, and now he’s one of the people running logistics in Ukraine for for the war. So that’s a connection and a grant that I feel has had a significant impact. And by going to Ukraine, and being in touch with him, which again, happened spontaneously, more or less, but he had been reading things I was writing, and decided he wanted to do a version of that in Ukrainian. That was, again, power soft networks. And he has an amazing talent.

Will Bachman 24:35
I’m curious if there was an idea about talent that was maybe too radical or not sufficiently supported by the evidence that you’ve thought about including in the book, but you decided at the end to exclude

Tyler Cowen 24:51
I’m never sure What’s radical. But But here’s an idea that’s not in the book that I was reluctant to put in the book, that there really are a lot of cases When successful small ventures are a bunch of people who are a lot like each other. So you look at early PayPal, they’re all nerds. They all love Lord of the Rings. You have Peter Thiel, your reed Hoffman, you have Elon Musk. They’re different personality types, but in some way, they’re cut from the same bolt of cloth. And it’s become unfashionable to just come out and say, Well, some things work really well, when the people are just a lot like each other. I don’t think it’s a radical idea. I think a lot of the world would just accept it straight up. But it’s not in the book. And sometimes not always, by any means. It’s true.

Will Bachman 25:36
You talk about status quo bias, and how you Americans are moving less frequently moving geography less frequently. How do you think about your own potential status quo bias and just challenge it? Do? You’ve been blogging on marginal revolution for 18 years? You’ve been a professor at George Mason for a while. Do you have some kind of periodic process where you think, is this still the right decision for me?

Tyler Cowen 26:07
I’m always trying to start new projects. So I think it’s now seven years ago, I started Marginal Revolution University. That’s YouTube videos. It’s now the number one economics education site on the internet. It’s zero revenue, zero ads. It’s all philanthropic giving away for free, fast grants was a project I started with Patrick Collison. That was to very rapidly funneling money to biomedical researchers. That involves a big fundraising and managerial commitment on my part, we funded anti COVID research now it’s about $60 million. We sent out most of it over the span of just a few months. I podcast conversations with Tyler, I think it’s four years old, I couldn’t say it’s new anymore. To me, it still feels new. So I’m happy in my current job, I think I live in the best part of America. My non complacency will take the form of new projects, and emergent ventures and working more with talent and co authoring with Daniel gross, who’s a private sector venture capitalist, that, for me, is another new collaboration, new project. So that’s what I tried to do. I don’t doubt that in some key ways I fail miserably. I’ve lived in the same area for over 30 years. But I do try to be on the road a third to a half of my time. So that would be my partial remedy there. Do I still listen to The Beatles and Beethoven? I do. And in a way, that’s terrible, right. But they’re really good. I also still buy new music.

Will Bachman 27:40
You talk about quite a bit about finding a mentor, and that’s guidance. Give me an example of one of your mentors. And what’s the interaction like, you know, does the person have you, you know, walk to the museum with the person, let’s say, let’s find an art mentor. Give an example of an art mentor, for example, you walk through a museum together, do they just tell you what galleries to go to do they help give you context on different artists, like give me a little bit of that granular detail of what it’s like for you working with one of your mentors.

Tyler Cowen 28:15
An art mentor could be another collector who collects in the area that you do, and you go see their collection, you talk about individual pieces, how they think about collecting what they’ve done to find pieces. An art mentor could be a dealer who’s selling you art. Obviously, there’s potential conflict of interest. But good dealers will try to educate you and not just try to trick you. They want you to learn more and be more interested. So you feel more confident about spending money on art. There’s always someone who knows more about a thing than you do. Unless the thing maybe is yourself. So there are always mentors, you can find a lot of people want to mentor are great at it. You should have a lot of mentors who are younger than you are. I have a number of tech mentors, my co author Daniel gross, he’s 30. He’s from the world of tech, he ran, you know, machine learning at Apple in his mid 20s. So I learned an incredible amount about Daniel not only about talent, but also just about the world of tech. So you should never stop with this process. Never let up. What makes ideas vivid to you is other human beings, not only reading them in books.

Will Bachman 29:23
He talked about cracking cultural codes. I was wondering if you could give us an example of a cultural code and what it’s like to crack it. And is it something that can be articulated in words? Or is it more like learning a foreign language? Like you couldn’t just tell someone here’s the cultural code to Spanish you have to learn Spanish? Or, or is it’s more like here’s the key to understanding this culture to give us an example of a cultural code that you’ve cracked.

Tyler Cowen 29:53
I don’t think you ever finally crack a cultural code you just get a bit further. So I like to travel for Reasons of business, but also pleasure. I’ve been to a little over 100 countries, very, very often, I’m interviewing people from other countries, I do find it’s a big help. If I’ve been to that country, it’s easier for me to bond with them. I can talk to them about the culture, or the music or the cinema, or the cities or something. When you’ve been to someone’s culture, you often get a better sense, when are they simply being too polite, because they don’t know what you expect of them. And you want to get out of that equilibrium. When people are too polite to you too deferential, it’s very hard to figure out what’s really going on in their minds. And if you don’t know anything about their world, odds are they’re just going to stick with being too polite. I find this has happened a lot, especially when I’ve caused with Nigeria. And Nigerians can be wonderfully polite, that’s a nice thing, great. But if you’re evaluating them for fellowship, it’s not what you want. You want to hear how their actual thoughts are running. And if you can show that you understand something about Nigeria, I don’t even mean that you’ve cracked any code, you have a much better chance of getting through that wall. I’m doing what will be my sixth trip to India in August. I’m going to an event, but I have multiple motivations. And I think just showing the people from India, I talked to that I care about their their country, their cultures, their religions, their food, whatever. That’s very valuable.

Will Bachman 31:34
You talk about one of the most high leverage things we can do is to raise someone’s ambition. Could you walk us through a example of how you’ve done that maybe kind of play back a conversation you’ve had with an emergent ventures winner, where they were shooting for x? And you What did you say to get them thinking about shooting for x squared? Like what kind of what were the words that you would use to help raise someone’s ambition?

Tyler Cowen 32:03
Well, there’s one emergent ventures winner we had, he has started an online writing company. And I think at the beginning, he had the sense that online, he could work with some number of people and simply earn enough money to live from, and that this would be better and going out and getting a job. This fellow is extremely bright, super personable, has the right look for what he wants to do. Just comes across well, and I just told him, Look, I know a lot of people who are super successful, and you can do better than they can do like you are more talented. And this person, he did not get good grades in school, he went to an okay, but not top undergraduate institution. A lot of his friends, like they were very smart people, but they weren’t, like major educational successes. And I just said to him, I know all these other people, like you can beat them, you can do it like, and I spent some time with him. And I think he just saw that in conversations over dinner things. He said, I genuinely thought were really smart. And I wanted to spend more time with him. And now this is a very valuable business he has, I’m not sure of the exact valuation, but it’s some number of millions, which is like really pretty high. And I think he’s 2526 Now, and that just told him like, Hey, don’t think locally, you know, think globally, just you can do this, the kind of arbitrary pronouncement on my part, but it seems it worked.

Will Bachman 33:30
It did I think I think I know you’re referring to and that is a fantastic course that he that he leaves. Yes. And we actually had his business partner on the show here.

Tyler Cowen 33:41
Oh, great, great. Yeah.

Will Bachman 33:45
Fictional portrayals? So there’s a lot of movies about TV, on TV and movies and TV, about police, about attorneys about doctors. You wrote a kind of an ode to big business, but there’s few Fictional portrayals that I’m aware of that actually give a sense of what it’s like to be in business, at least in terms of TV and movies, and not too many novels that I can think of, but I might not be looking at the right ones. Why? What do you think that’s true? And why do you think that’s the case?

Tyler Cowen 34:23
I’m fairly sure it’s true. Maybe, you know, Coppola’s Tucker movie would be one counter example. But that’s super rare. Look, a lot of businesses routine. It’s boring. It’s not as simple good versus evil story. Spider Man movie, Sal. There’s a villain. With big businesses in a movie, it tends to be the villain. I understand why that’s the case. But it’s easier to do than to have the business person be a hero. Heroes are Peter Parker and James Bond and Michelle Yeoh and Okay. This is one reason why The public doesn’t respect business enough media doesn’t treat business very well.

Will Bachman 35:05
Okay, so follow up on that. In terms of business journalism, so much of it is just this kind of surface exterior view of the business world. It’s like earning results or mergers being announced. And so rarely do you see Business Journalism talking about what it’s like to actually be inside a company? You know, what’s it like to go through a successful ERP implementation? Or, you know, what PE firms look like, look for when they’re doing commercial due diligence, or, you know, how firms are optimizing their supply chains with Lean principles. Why do you think that is?

Tyler Cowen 35:45
I think that’s a tough one, because there’s so much negative coverage, businesses are reluctant to give access, because they’re afraid the person will take what they see and twisted into something negative. And to be clear, sometimes the actual story is negative, right? So if they don’t let you in, there are plenty of writers journalists columnist who have a lot of access to what’s going on in particular businesses, but they’re not able to write about it, because it was given on the basis of confidence. So I don’t know how to solve that trust problem, it would require a very different world than the one we live in.

Will Bachman 36:23
Let’s talk about management consulting for just a minute. People like to make fun of consultants, sometimes with justification. But nevertheless, organizations do continue to pay consultants quite a bit of money in McKinsey charges in the neighborhood of 150 to $200,000 a week for a team of an engagement manager plus two or three people. I can think of a few different kind of reasons of ways that consultants add value. And I’m curious to hear your reaction or your model of it. So I’ll list a few. And I’m like to hear your reaction. So one is, you know, justifying a decision that the board has already made a year that a lot. Another one is offloading blame for cost cutting, for example, three is the butterfly. So you know, bringing in ideas from outside from other companies for the industry, for it’s just a roving reporter. So sometimes it’s so hard in a company for the senior leadership to actually know what the frontline is saying, and they don’t have communication. And sometimes you just need a mirror to provide an outside perspective. But those are some ideas, what’s your mom was an economist of the value that management consultants provide and why they continue to, you know, be able to charge the fees they do.

Tyler Cowen 37:40
I agree with all of those, obviously, the variance of consultants is quite high. But if a consultant gives you one good idea, the value of that idea can be enormous. And I think another factor is that consultants embody ideas in living human form. And what makes ideas vivid and meaningful to people getting back to an earlier point is for a human being to tell you that idea. And that sounds silly. But even if the idea on the surface seems fairly trivial, like all you know, make sure your workers have high morale or you need to look more at this process, it might seem obvious, but just to have people tell you something in life is one of the most valuable services they can render. So if you look at say, how religions work? Well, yes, there are some people who are converted, like by DVD, or through YouTube videos. But so so often when people undergo a religious conversion, it’s because they met and admired another person with that idea. And then it became real to them. And good management consultants are living embodiment of their ideas in a way that only they can succeed in making vivid. So I would say the value of ideas underpins the whole enterprise. But of course, there are many bad or useless consultants. Overall, the sector to me seems underrated, I have to say,

Will Bachman 39:04
I’m glad to hear that. What would you say about as an economist, are you able to give any insights into the relative ability of management and kind of a country level? Are is management just better in some countries than others?

Tyler Cowen 39:23
Management is clearly better in some countries than others, but it does change over time. So a lot of British companies have become much more Anglo American rather than British in the old 1960s 1970 cents, where you could try to make a phone call in the country, you know, wouldn’t necessarily work. That’s a big change. So British business went from best in the whole world in the 19th century, to being often fairly mediocre. And now again, it’s high variance, but a lot of it is quite excellent. Indian business, parts of it are transforming itself to become I’m far more productive Chinese business, obviously. So it is fluid, that at a point in time, I am convinced through there are national cultures to business. And it’s hard to simply break them by a mere act of will

Will Bachman 40:15
say a little bit more on that, like what in terms of what countries would you say right now strike you is doing particularly well and which ones are in kind of the more development stage.

Tyler Cowen 40:27
At the risk of sounding too patriotic. I’m super bullish on American business. I think it fits our national character very well. I would be very long southern England and Ireland, also, and Sweden. So I think we’re at a moment where true fluency in the English language is worth much more than it had been. You have a lot of National Business Cultures. I was just in Denmark, obviously a successful country. Their five biggest businesses all date from the 1920s or earlier, and that works for them. But Denmark is not Sweden. So I think one has to know and internalize that when thinking about Danish business, Denmark, one of the best countries to live or work in write. But it is really not like the American business scene. They are not that good at generating new dynamic companies that might change. This is all fluid. A country that right now I worry about its business scene is Germany. They have potential to do much better. I don’t yet see them doing it.

Will Bachman 41:35
There is an organization you’ve probably heard of called thinker’s 50 That creates a series of lists of the top 50 thinkers in the world on different topics. And it occurred to me recently was to come up with one’s own personal thinker’s 50 of you know what, not so much the what some outside organization says but what are 50 thinkers that have impacted you? What would some of the people on your thinker’s 50 be?

Tyler Cowen 42:04
Patrick Collison, Peter Thiel and Marc Andreessen Daniel gross, they would be some of them. Increasingly people who are not academics. Magnus Carlsen is a big influence on me, the chess player, as a marketer, as a Career Strategist, as someone who has embodied excellence, and actually a few different areas for briefly he was world number one in fantasy football. Now, how can you be world number one in fantasy football, slow chess, and rapid chess all at the same time. And now he’s a very good poker player. So I study Magnus his career and try to learn from it. He’s not only in my top 50, he’s in my top 10. And he never seems to lose his equanimity. And that’s important for what I do, it’s probably important for a lot of you. He for me is a real role model in that manner. So many other top chess players are brilliant, but at some point, they lose their temper, they screw up, they make bad personal decisions. We have never publicly seen Magnus do that ever, even though he’s been in the spotlight Since what age 1314. And he’s by far the most famous person in Norway. And he still always has kind of kept on message but in a way that is sincere, unbelievable.

Will Bachman 43:22
I am often just astounded by your productivity and and it seems almost superhuman. So it seems like you watch a ton of movies every year. You watch a lot of you’ve been talking a lot about television shows you read four or five books a day. You’re also creating, you know, emergent ventures and teaching. Could you walk us through your schedule for a typical week? What what does a week look like for you when you’re waking up? And how do you allocate your your time?

Tyler Cowen 43:55
Let’s assume that I’m at home, right? Because that makes a big difference. I get up every morning at the same time. Might be quarter to seven, give or take. Not late but not super early. I start working and thinking right away. I go through my Twitter feed my email. I actually still read paper newspapers. I try to have it so every morning I write Saturday, Sunday Christmas day, my birthday, I don’t care if they said all physically possible that morning I am writing something, a column a blog post a book, whatever. If you write every morning you will get better writing and you will get feedback on what you’re writing. There’s always a lunch I like for that to be at the same time at noon. I love to have lunch with smart people and talk with them and engage. I’m on WhatsApp and email throughout. I don’t manage interruptions. I would say I tried to turn interruptions to my advantage. I don’t recommend that for most people I should add but for me it has worked well for me afternoons can be teaching can be meetings. can be giving a talk or lecture somewhere, it could be anything in an afternoon. But typically in an afternoon, I’m not writing that much. Any spare time in an afternoon I’m reading, I take a break for exercise. ideal time for that would be between three and four. But that’s highly flexible. I like to eat an early dinner, then they get back to reading, maybe I’m writing again. And I just don’t stop till I go to bed. At like, 1111 30 I sleep well, every night, our daughter is grown, she now has a granddaughter, that’s great. But I’m not, you know, full time raising kids. By the things I do. Externally, my wife likes to do with me. And she’s fairly independent minded. In some ways being married to me, it’s hard, because I’m so obsessive. But I do spend a lot of time with my wife talking with her. We’ll go out to eat or exercise together or go see a movie. And you know, rinse and repeat. Just do it. I don’t really watch much TV. Most of it, I find a waste. I will watch major public events like a presidential debate. But maybe over the course of a year like there’ll be two TV shows I watch and like watch through no more. It’s just a lot of time, and I can’t do it faster than other people can do it.

Will Bachman 46:16
Talk about writing a lot. Our last guest on this was a Thiago forte talking about his new book, building a second brain is all about personal knowledge management. How do you keep all of the writing that you’ve done? Do you have a kind of an Evernote system? Or do you save it as a Word document? Or how do you keep that so that you can go back and refer to your past thinking,

Tyler Cowen 46:40
I don’t really keep it or refer back to it, I have no system. I do write things in either Microsoft Word or Google Docs. Like I have to use something. But I have no method of referencing or you could say marginal revolution, my blog, which has a search function. That’s like my personal encyclopedia. And I use that sometimes, but I have no methods. I just write keep on writing. If it’s important, I hope I remember it. Or I can ask other people like hey, what can I say on that? Actually, someone will know.

Will Bachman 47:11
You’ve talked on your blog about not drinking alcohol, and that that influenced me. So I was like a social drinker. But a couple years ago, I stopped drinking alcohol. Thinking that yeah, it was a overall not a positive cost benefit analysis. Did you never drink alcohol? or at what point did you stop? And how’d you to make that decision?

Tyler Cowen 47:32
Well, when I was younger, I would say maybe I would have a total of half bottle or bottle of wine a year, which is very small quantity. And I certainly very much enjoy red wine. But I would rather be more productive and not have that slight buzz or feeling of wanting to be more sociable, whatever it gets you I just want to be more focused and be working at a higher pitch. So that’s been zero alcohol for I don’t know, the last 15 years, maybe 20 years. And I just don’t see a compelling reason to do it. So some people love some amount of drinking don’t want to give it up. I’m happier, you know as zero. So it’s worked for me, I would say. But keep in mind my work schedule. There’s never a point where my day ends and I go to doing something else. Like I’m always gets getting back to work. And I want to be doing that like super refreshed and vital. So no alcohol.

Will Bachman 48:34
When I ask you a question about interviewing in terms of one thing to look for is that it’s even in the subtitle the book looking for energizers. So that kind of character of relentlessness of resourcefulness. There’s an 800 year old essay message to Garcia about sending someone into Cuba to go send a message to Garcia and the person doesn’t ask like, Okay, what’s gonna see his last name? What’s his address? How do I find him? When does it have to get there? He just takes care of it and does it? What some of your thoughts around screening for that relentlessness or resourcefulness, someone that you can just trust it will go get it done.

Tyler Cowen 49:17
If it’s an older person, obviously look at track record above all else. And if you need to put more time into interviewing references. But those people they tend to already be capitalizing there full market value. So a lot of what I’m doing is looking for much younger people without much of a track record, who have that relentlessness. And I tried to get them talking about their weird interests and whether or not it shows up there. That’s what I thought I found is the most successful way to date to get some sense of their resourcefulness. How strong is their weird interest?

Will Bachman 49:57
Say a little bit more about that. So what are some of the questions that you’d have Baskin, how would you dive into that?

Tyler Cowen 50:02
Well take someone like, you know, Peter Thiel, when he was very young, you know, he could tell you the name of any character in Lord of the Rings. And you might think, well, that’s silly. But no, it wasn’t silly. It’s a sign of being obsessive and involved and really caring, and wanting to figure out some world as a world in and of itself. And those same talents. Peter later replied, to venture capital judging talent. He’s maybe the greatest talent judge we have. So I like to just get people talking. I’ll say like, what’s your favorite book, favorite movie favorite anything? And then ask them questions about it. So if someone really likes Star Wars, I’ll ask them. Well, Yoda, did he give good advice? Was he a good judge of talent. And when the people have no real response to that, I get worried. A lot of those people can be excellent employees for some fashions to be clear. But in terms of being the truly resourceful, relentless people, somehow they’re watching this movie, which is their favorite. And it’s not occurring to them to keep on asking those questions, talk about those questions with their peers. So to get them off prep, something they really care about, see how deep their knowledge of it is. That’s what I tried to do. But again, a track record when you have it beats anything.

Will Bachman 51:19
Yeah, I mean, Yoda was not very successful at convincing Luke not to quit his training,

Tyler Cowen 51:24
right? And he never realizes, like, who’s going to turn bad, right? He never sees impending danger. He has these vague platitudes. But I’m not concerned with evaluating the answer. So if someone says, Well, Yoda is brilliant, because by the time you get to Episode 19, it’s all falling into place. It’s really the level of detail in their answer that impresses me not whether I agree with them.

Will Bachman 51:50
What advice do you have for parents, for developing talented kids? You’ve talked a lot about encouraging about weirdness and looking for people with deep interests. What are some of your advice to parents,

Tyler Cowen 52:04
by the time your kid is 12, or 13, they will not let you influence them much more than you have, right. So you want to make a concerted effort to introduce them to your talented friends in non threatening ways. But with real free time for chat, your friends who have different professions, different kinds of interests, bring them by let them eat your 13 year old, bring them to dinner, have some kind of function, do that as much as you can. Because they are willing to let those people influence them. Those people are not a threat to control them. You’re a threat to control your kid. And your influence is already there, which is great. But like you’re done, so handed over can’t pass the baton to your friends.

Will Bachman 52:45
What’s your objective function? So 10 or 20 years from now? What what are you hoping to accomplish?

Tyler Cowen 52:53
If people say about me, well, that guy, he was an information billionaire, I will be happy. In fact, my aspiration is to be an information trillionaire which may not be possible. But there’s no trillionaire right now, but there are information billionaires. And you can be richer than people who are, you know, US dollar billionaires. So if people if I can continue that, and to some extent to have it recognized, I’m happy, you know, at least providing I have my health and my family is doing well.

Will Bachman 53:28
Say more about that. What does it what does it look like to be an information billionaire,

Tyler Cowen 53:32
I want to learn as much as I possibly can about the topics that interests me, which are pretty broad, but they do have their limits. So I want to learn about economics, history, social science, travel, language, culture, food, how things work, business, political science, World Affairs, the future president past course of history, those are kind of my interests. But there’s a lot of things like, Do I want to learn how to build a sailboat like That’s great. A lot of people are into that. It’s not my thing. I’m never going to try. It’s a distraction for me. But the areas I mentioned, those are more or less my areas.

Will Bachman 54:10
Fantastic. Well, Tyler, thank you for this time today. i Hi, I loved your book talent. It was very helpful to me, and I’m going to be implementing it. I like the set of questions on questions to ask. Thanks very much for being on the show today.

Tyler Cowen 54:27
Thank you. And if any of you out there, have a follow up question, do feel free to email me I try to respond to all emails. Maybe I succeeded 98 rather than 100%. But my email is online. And well, very nice to meet you. Thank you for being such a careful and close reader of some of the things I’ve done.

Will Bachman 54:44
It’s been a pleasure. Thank you.