The Advantage #06: When Thinking Gets Cheaper, Luck Gets Designed, and Focus Gets Sharper

Welcome Note:

Thanks for tuning into the sixth episode of The Advantage. A short, weekly note where I share what I am working on, something worth watching, a lesson from history, and one practical edge you can try right away.

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What I am Working On: A Fortune Article

The real promise of AI isn’t fewer jobs, it’s cheaper thinking

This one was pretty cool for me. I have been a reader of Fortune for nearly 30 years, long before I was a founder or CEO, back when I was just trying to understand how businesses actually worked. So while this was not the cover (which is still on the bucket list), having an essay published in Fortune was a huge honor.

The article "The real promise of AI isn’t fewer jobs, it’s cheaper thinking" itself is an argument for why AI is being misunderstood. Most companies measure it as an efficiency tool, when in reality, it is collapsing the cost of high-quality thinking. I introduce a framework I call Synthetic Human Intelligence Hours to explain why early ROI misses the point and why the real gains compound quietly over time. Quick heads-up: the piece is behind a paywall. I know that is not ideal, but Fortune is an exceptional publication and well worth supporting if you value thoughtful, long-form work like this.

Worth Watching

Quick intro:
This week’s Worth Watching is a 45-minute talk from Rory Sutherland, Alchemy: The Surprising Power of Ideas That Don't Make Sense. Rory is the Vice Chairman of Ogilvy and a great original thinker on how progress actually happens. Not to mention a very entertaining presenter. In this clip, he explains why many smart, disciplined, and highly driven people unknowingly design their lives to minimize luck. They aren’t careless. They are just too optimized.

What I loved about it:
I’m a Type A person. You can probably tell that from how I think and write. That is exactly why I loved this video. It reminded me that being hyper-focused and organized, without leaving room for serendipity, quietly limits the ways luck can creep in.

Rory describes two fundamentally different modes of operating. One is efficient, predictable, and optimized. The other is exploratory, imperfect, and probabilistic. He uses a simple metaphor to distinguish them. Shopping at Walmart versus shopping at TJ Maxx.

Walmart is certainty. You know what you want, where it is, and how long it will take. TJ Maxx is different. You don’t know what you’re looking for. The value comes from wandering, scanning, and stumbling onto something you didn’t know existed.

Most high performers design their lives like Walmart. Clear goals. Tight calendars. Minimal slack. That discipline works. But when it crowds out exploration, it narrows the range of possible outcomes.

The mental model that clicked for me is Designed Serendipity. Not chaos. Not a lack of focus. But deliberately leaving room for chance encounters and inputs that can’t be justified in advance.

Here is my 20-second recap if you don’t have the full 45 minutes:

• There are two modes of progress. Exploitation is about getting better returns from what you already know. Exploration is about increasing your exposure to what you don’t. Most people understand this intellectually. Emotionally, they overvalue exploitation because it feels productive and defensible.

• Optimization quietly shrinks optionality. When every hour must be justified in advance, you kill activities where value only becomes obvious in hindsight. Reading broadly, wandering conversations, and travel without an agenda often look inefficient right up until they change your trajectory.

• Serendipity is not accidental. Luck is not evenly distributed. People who encounter more ideas, more people, and more environments create more chances for upside. You can’t plan the outcome, but you can design the conditions.

• The most important outcomes are usually retrospective. When you look back on the moments that mattered most, many weren’t part of a master plan. They came from being in motion. They came from being exposed to the unexpected.

If you are highly driven, this is not a call to loosen standards. It is a reminder that life is always a balance. When you look back over your own story, notice how little of what mattered most was actually planned.

Pro Move: You do not need to watch it. Put it on like a podcast and listen while you walk or drive.

Lesson From History: When Toyota Went To The Grocery Store for Ideas

What Happened: In the 1950s, Taiichi Ohno stopped looking at other car factories for efficiency. He looked at American supermarkets. He obsessed over the shelves: they were only replenished after a customer removed an item. The empty space was the trigger. Toyota adapted this logic into the Kanban system. Instead of "pushing" production based on shaky forecasts, downstream demand triggered upstream work. They didn't just optimize the assembly line; they treated car parts like boxes of cereal.

Insight behind it: True breakthroughs rarely come from optimizing within your vertical. They come from importing a proven mechanic from a foreign ecosystem. It is easy to get into a trap of rejecting this because it looks distracted rather than disciplined. They call that focus. Which is not a bad thing, but too much focus can become self-imposed blindness.

Modern application: Stop hoping for luck and build a systematic "curiosity engine." Require leaders to hunt for cross-industry patterns monthly or at least quarterly, not annually. One borrowed concept, one concrete test. Be ok with failure, but move quickly. Remember: If your inputs match your competitors’, your strategy will too.

Practical Edge: Price Decisions by Opportunity, Not Effort or Cost

Why it works: Most people evaluate tasks based on effort and/or cost. How hard is this? How expensive is it? Can I do it myself?

That framing misses the real tradeoff. The true cost of doing something is not the effort or cost required, but what you give up by doing it. Every hour spent on one task is an hour not spent elsewhere.

I grew up on a ranch in southern Arizona, where self-sufficiency was a point of pride. We fixed our own fences, painted our own buildings, and handled our own repairs. Being a jack-of-all-trades was not a strategy; it was a way of life. There is very little a rancher cannot fix with a pair of pliers and some baling wire. But nothing ever stays fixed for long. Over time, I realized that this mindset, while admirable, was also a constraint. We were busy all the time, but rarely moving meaningfully ahead.

Reading The Almanack of Naval Ravikant, a collection of writing and interviews from Naval Ravikant, helped cement that shift and gave me language for it. None of these ideas are new. What Naval does exceptionally well is force honesty around tradeoffs and remove the moral weight we often attach to effort.

The data supports it:
Economists call this opportunity cost; the value of the best alternative you forgo when you choose something else. Closely related is comparative advantage. Even if you are capable at many things, total value increases when you focus on the work where your relative advantage is highest and outsource the rest.

Naval summarizes the rule cleanly:

“Set and enforce an aspirational personal hourly rate. If fixing a problem will save less money than your hourly rate, ignore it, or hire someone to do it.”

He has said he mentally prices his time at $10,000 an hour, not as a billing rate, but as a filter. At that level, only work that is truly important, uniquely suited to him, or long-term and compounding survives. The number is not the lesson. The forced tradeoff is.

How I use it:
I do not walk around telling myself my time is worth some dramatic figure. That misses the point. And I never tell my wife, I can’t do something because it is “below my hourly rate”. I simply say “Yes, dear.” The point is to use it as a mental model, not as a firm rule.

I run a simple comparison. If I can pay someone $40/hour to do a job they do better and faster than I can, and I spend the same time doing work only I can do, the math is obvious. Even if what I do does not immediately make money, it compounds in a way that painting a wall never will.

That is why I no longer paint. Not because I can’t. Because it is far better leverage for me to hire someone who enjoys it, is skilled at it, has the proper tools, and frees me to focus elsewhere. This belief update happened well before I had money. It came from realizing that time, effort, focus, and skill are very scarce resources. Far more scarce than money.

The true cost of something is often the opportunity it displaced.

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