TRIGGERnometry - Mike Driver on the Entrepreneurial Mindset and the Futility of Predictions

00:00:00.000 Hello and welcome to Trigonometry. I'm Francis Foster. I'm Constantin Kissinger.

00:00:09.140 And this is a show for you if you're bored of watching people on the internet having arguments

00:00:13.640 over subjects they know nothing about. At Trigonometry, we don't pretend to be the experts,

00:00:18.860 we ask the experts. Our brilliant guest this week is a serial entrepreneur, Mike Driver.

00:00:24.520 Welcome to Trigonometry. Good morning, thanks for having me.

00:00:27.120 Yeah, it's good to have you here. You've given away the time of the day that we record the show at, so now people know how to chase us down. Good.

00:00:34.760 No problem.

00:00:35.280 Yeah, well, we opened you the joke.

00:00:37.860 It's like you're set, mate. All over again.

00:00:41.600 Yep, it's exactly the experience I have every night.

00:00:45.120 Now, we obviously know and love you, but tell everybody who hasn't seen you before, who are you, what do you do, what's your background, what's your story, how are you in the seat that you find yourself in now?

00:00:56.220 Shall I start at the beginning?

00:00:57.280 Yeah.

00:00:58.180 So I'll start.

00:00:59.060 I'll go back.

00:01:00.360 I went to university, came out of university in 1991.

00:01:08.500 I made the mistake of studying economics, and I made the further mistake of taking up

00:01:14.740 a PhD in game theory.

00:01:16.480 It's unfinished, and if any of you want to pop back up to Manchester and have a go at

00:01:20.140 it, then you welcome to.

00:01:21.480 So I came out of, I was persuaded to drop that game theory.

00:01:26.100 Well, I was actually approached by my supervisor

00:01:29.840 who told me there were only a few people in the world

00:01:32.120 who understood game theory, and I wasn't one of them.

00:01:35.460 What is game theory, just so?

00:01:37.640 Well, a lot of people relate game theory

00:01:40.020 to the film A Beautiful Mind, Russell Crowe, John Nash.

00:01:43.580 But actually, what got my interest in game theory

00:01:45.960 was John von Neumann formulated game theory

00:01:50.300 to try and solve poker.

00:01:51.480 he failed and he was a terrible poker player and he lost a lot of money at it which basically

00:01:57.320 summarizes my experience in the field the very latest version of game theory which you might

00:02:04.600 be aware of was Yanis Varoufakis who we both know well Yanis felt it was a good idea to try and use

00:02:11.160 game theory to negotiate with the European Commission the European Union I think that

00:02:17.380 he was particularly unsuccessful and I think you could probably ascribe most of that the fact that

00:02:21.580 game theory doesn't work in negotiation which which somewhat undermines its uses I think at all

00:02:27.880 so so so left there I was persuaded out of that by a friend of mine who'd come back from the

00:02:35.240 Caribbean where he'd been selling timeshare and he said we should start a business so I said oh

00:02:41.060 good what are we going to do and he said we'll sell photocopiers now I didn't even know what a

00:02:46.460 photocopier look like at this time I'd never seen one I knew they existed in concept but I didn't

00:02:51.560 really know what one was but you know anything was better than an academic career and uh so we

00:02:56.860 started selling photocopiers we we would uh we had a uh a tiny little room about the size of

00:03:02.420 your studio I've given away the size of the studio don't give the location because then we're truly

00:03:08.080 screen. We had one desk, one phone, and a rented brown Hyundai pony. I don't know if you've ever

00:03:16.900 seen a brown Hyundai pony. I don't advise it. But they were eight quid a day. We had two grand.

00:03:24.880 We had the serviced office. This is how we started off. And we literally used to collect 50 compliment

00:03:29.280 slips from office buildings in the morning. And we would call those compliment slips in the afternoon.

00:03:33.400 we didn't have a reseller agreement to sell any photocopiers if we were lucky enough to sell a

00:03:40.920 photocopier we had to go to somebody who was far more experienced than us who had a reseller

00:03:44.920 experience reseller agreement and who would extract the maximum profit from us and that's

00:03:50.420 how we started off somehow by hooker by crook we grew that business over the next 14 years

00:03:57.240 went from just the two of us to 300 people

00:04:00.740 covering the whole of the UK,

00:04:03.020 largest independent in the UK.

00:04:05.040 We really ended up being a technology company,

00:04:07.560 end-to-end document management,

00:04:09.200 scan archive, retrieval, print, all this stuff.

00:04:12.360 And we sold that,

00:04:13.580 we sold part of that to private equity in 2006.

00:04:17.640 So I had then what the Americans call a liquidity moment.

00:04:23.720 Which when you're from a background 0.79

00:04:26.060 which wasn't particularly wealthy, is quite nice.

00:04:30.240 I stayed in the private equity world for a little while.

00:04:35.300 The best description I can give you,

00:04:37.120 lovely, lovely gentleman.

00:04:38.640 I mean, these are lovely human beings.

00:04:41.700 Basically, he went to very, very expensive schools

00:04:44.060 and weren't quite intelligent enough

00:04:45.860 to get a job at Goldman Sachs.

00:04:47.420 And the best description I can give you...

00:04:48.920 Sounds like me.

00:04:50.860 The best description I can give you of private equity

00:04:53.180 is they couldn't find a coconut on Coconut Island.

00:04:55.240 So lovely human beings, no idea about business.

00:04:59.540 So I eventually left that business and I decided that it would be a good idea because it was something, again, that I knew absolutely nothing about to go into investment banking or corporate finance.

00:05:14.220 When I'd been selling my business, quite often your options for who can help you sell a business, the advice people give you to sell a business is someone from PwC, KPMG, Deloitte, or EY.

00:05:27.220 Maybe I shouldn't have said all four of those things.

00:05:30.580 What I would do is I would sit opposite those guys, and I would think, two questions, really.

00:05:36.120 What have you ever done, and can I trust you?

00:05:38.740 and the answer to those questions would normally be not very much and probably not yeah so i had

00:05:45.580 the idea is could we start a business that was providing unconflicted advice to entrepreneurs

00:05:50.720 so that's essentially what i do now started that business um and over the last eight years or so

00:05:57.700 um we have helped uh probably 77 businesses either sell or raise funds so we've sold over

00:06:07.620 two billion pounds worth of entrepreneur-ly owned businesses.

00:06:12.620 So a little niche providing unconflicted

00:06:15.860 and honest advice to entrepreneurs.

00:06:18.060 So I probably met with more entrepreneurs, I imagine,

00:06:24.600 than most people who are sane.

00:06:27.080 So I meet 70, 80 entrepreneurs every year

00:06:29.500 for the last eight years.

00:06:30.620 There'll be 70, 80 businesses, two or three directors.

00:06:33.240 So I've met literally thousands of entrepreneurs.

00:06:36.380 let's start with that because one of the most fascinating things I ever heard you talk about

00:06:39.740 was the entrepreneurial mindset. A lot of people kind of look at videos on the internet and go,

00:06:45.000 oh, how can I become an entrepreneur? And you have a totally different take on what makes an

00:06:50.600 entrepreneur. Well, I do. And yeah, I'm going to sort of invalidate an entire industry here,

00:06:55.760 I think. But I don't think you can actually decide to become an entrepreneur. I think the

00:07:00.380 only way you could decide to become an entrepreneur if you could invest in a time machine. I'll

00:07:05.040 explain why. So in all of the conversations I've had with entrepreneurs, I always ask the same

00:07:12.200 question. I've been very suspicious of where entrepreneurialism comes from. I think it might

00:07:15.940 be epigenetic. So I always ask the same question, is what did you do when you were a kid for work

00:07:22.940 and did you have any challenges or problems when you were younger? And invariably, entrepreneurs

00:07:27.620 will have had difficulties and challenges in their younger years. And the one thing you can

00:07:33.420 guarantee they would have done it they have hustled like crazy when they were kids they would

00:07:36.540 have you know for instance when i there's the guy who does the paper round i was the guy who marked

00:07:40.880 up the papers before you got in to do the paper round because an extra fiver to be had for marking

00:07:45.180 the papers up did you i used to sell porn mags at school the new war yeah we used to buy them cheap

00:07:52.480 and then because we went to a school and this was in the days of the internet we used to sell them

00:07:55.840 off for massive markups to you obviously have some entrepreneur we managed to combine both things

00:08:00.760 the trauma and the entrepreneurial thing at the same time, which is quite nice.

00:08:04.340 Sorry, just spoke something. I mean, carry on. Apologies, yeah.

00:08:07.120 Yeah, well, you learn something new every day about your business partner.

00:08:12.000 The closest thing I would relate entrepreneurialism to is actually anorexia.

00:08:18.500 Okay, so the latest thinking about anorexia is it's epigenetic,

00:08:22.680 and epigenetic means that circumstances of the environment

00:08:25.620 cause certain genes to be expressed that wouldn't have otherwise or overexpressive genes.

00:08:34.820 In anorexia, obviously, it's the suppression of appetite which the environment and the

00:08:41.040 circumstances cause. And we're seeing a rapid increase in incidence of anorexia. At the same

00:08:47.380 time, we're seeing a rapid increase in the prevalence of social media, social media bullying

00:08:51.460 and so on and so forth being the adversity perhaps

00:08:54.200 that causes the expression of the gene.

00:08:57.040 And I suspect that something very similar happens to the entrepreneur.

00:09:01.720 It would make sense for entrepreneurialism to be epigenetic.

00:09:05.420 You only want some people to be entrepreneurial.

00:09:08.060 If everybody was entrepreneurial, it would be chaos.

00:09:11.040 Yeah, absolutely.

00:09:11.920 So, yeah, I think in terms of the industry itself

00:09:17.000 or the industry of self-help books,

00:09:21.000 how I made it you know the base yeah I basically summarize the how I made it books is is I went to

00:09:26.440 this news agent to buy my lottery ticket that that is about the similar a similar amount of

00:09:31.140 information that you will get from from a story about how somebody made it the only real way to

00:09:35.360 become an entrepreneur would be to invent a time machine travel back in time and traumatize yourself

00:09:40.240 at the age of 11 and then I think you've got so so so I don't think it's something you can learn

00:09:46.680 I think it's something that is inherent.

00:09:50.060 And that sounds a little bit unusual,

00:09:52.820 but it does explain quite a lot of behaviors of entrepreneurial people.

00:09:59.620 It feels more like a compunction.

00:10:02.020 It feels like you haven't got any choice.

00:10:04.360 It explains why people carry on,

00:10:06.460 even though they've made fantastical amounts of money,

00:10:08.880 which you often...

00:10:10.080 They've had the liquidity moment.

00:10:11.460 They had the liquidity moment, 1.00

00:10:12.820 and they're stupid enough to start another business 1.00

00:10:14.640 and do it all over again. 1.00

00:10:16.120 but it also more subtly and more importantly explains a mode of behaviour which is essential

00:10:27.140 in entrepreneurialism and does not really manifest in other walks of life and this is

00:10:33.960 essentially a way to deal with an unknown future. So the future isn't predictable

00:10:41.720 because we lack sufficient information.

00:10:46.280 The future is not predictable because it is unimaginable.

00:10:51.460 So how do you learn to deal with a future that you cannot predict?

00:10:57.940 Now, what most people do is they try and narrow it down

00:11:01.340 to forecasts and models and all of those kinds of things,

00:11:04.320 which, you know, the future is waiting around the corner

00:11:08.500 with a baseball bat for those guys who are carrying the model.

00:11:10.720 You need to find a way to adapt to the unknown.

00:11:14.740 What entrepreneurs do is something I call serial redundancy.

00:11:18.800 So serial redundancy is a mode of behaviour where a way of looking at it would be little bet poker.

00:11:25.800 So you don't bet all of your money on one good idea.

00:11:31.160 You trial and error, trial and error, trial and error, never bet your whole stack,

00:11:36.280 never risk all of your capital so that when your opportunity comes along,

00:11:40.420 the product that works whatever it is you get after it you know you've tested the market the

00:11:47.220 market says yes and then you take the risk so it's it's controlled risk it's not it's risk

00:11:51.840 management um more more than more than is risk taking and that that that mode of behavior is

00:11:57.700 common across pretty much all of the entrepreneurs that that I've met and I think it's unusual that

00:12:03.340 that a cross-section of people from every background from every race from every different

00:12:10.940 part of the country and every different part of the world would all follow a very similar pattern

00:12:14.620 would all follow a very similar mode of behavior and I think that traces back to them being faced

00:12:21.060 with challenges the challenges in youth might have been positive challenges by the way but usually

00:12:25.080 it will have been stress and that's very Darwinian if you think about it you need stress in a system

00:12:32.900 for a system to progress it's interesting you say that i remember i'm a big fan of basketball

00:12:37.740 and i remember watching a few coaches in america discussing uh how they scout players and one of

00:12:44.980 them said i i never i never pick a player from a house with two cars in other words if the parents

00:12:51.640 were wealthy the child isn't gonna have the drive that it takes to really be so determined to fight

00:12:58.660 through the injuries, to compete at that level, to not get comfortable once they get to a certain

00:13:03.520 stage and just to keep going. And I think a lot of what you're talking about actually applies to

00:13:08.140 sport quite a lot as well. A lot of the people who make it to the very top in sport seem to be

00:13:12.260 coming from that kind of place. Well, I think it's the other comparison I'd make with sport

00:13:17.600 is the thing that you need to be very comfortable with as an entrepreneur is the word no.

00:13:22.160 as comedians we hear that a lot both from promoters and audience i i was i was looking

00:13:31.500 before i came today and i was looking back at last 25 years and i reckon i've probably done

00:13:37.400 6 000 face-to-face meetings in in the last 20 25 years selling something service or products or

00:13:45.560 or solution or business or whatever it might be and my hit rate in those 6 000 meetings is

00:13:51.800 probably about 20%.

00:13:53.620 Now, that sounds okay.

00:13:55.120 Four nose for one, yes.

00:13:56.920 But actually, to set those 6,000 meetings in the first place

00:14:01.060 probably took 600,000 contacts.

00:14:05.260 Wow.

00:14:06.040 That makes your success rate, or my success rate, not yours,

00:14:09.760 I'm sure more than 0.2% of people laugh at your jokes when you're in a...

00:14:14.600 Not on this podcast, anyway.

00:14:17.380 So that leaves me with a success rate of about 0.2%.

00:14:23.820 What's even more interesting, if you kind of take it to the next level, if you think

00:14:30.020 about negotiation, which is an interesting topic at the moment, if you actually look

00:14:35.060 at those 0.2% of times that I have been successful, within the negotiations, I mostly lose.

00:14:42.560 You mostly lose until someone says yes.

00:14:45.200 so you lose the little battles along the way and eventually someone says yes so if you actually

00:14:49.540 look at the the actual times that the actual conversations where you have come out on top

00:14:55.520 they're a tiny fraction of the 600,000 times that you attempted to speak to somebody so you're

00:15:00.900 hearing no uh at almost pathological level um and I always say that that winning is easy

00:15:08.820 yeah I know how to lose yeah and that that's one of the ways I would define that

00:15:13.620 the entrepreneur isn't somebody and we we see survivorship bias we see the winners and we see

00:15:19.880 them being very good at winning actually most of us we get here because we're very good at losing

00:15:23.920 it's fascinating that you say that and you're talking about the mindset because the average

00:15:29.360 person wouldn't be able to hear no that many times without thinking do you know what this isn't for

00:15:35.240 me i just don't have it in me whereas the entrepreneur or somebody who is truly dedicated

00:15:40.640 to what they want to do will push through.

00:15:42.860 It's like the story of Mark Ruffalo,

00:15:44.200 who went years when he started out

00:15:45.860 without him getting an audition,

00:15:47.400 living in his car, all the rest of it.

00:15:49.480 But it's that design, the determination to push through

00:15:52.040 that really sets the successful people apart in many ways.

00:15:56.360 And also, in a way,

00:15:58.400 Mark Ruffalo probably had some contemporaries.

00:16:01.920 Yeah.

00:16:02.400 People who never made it.

00:16:05.180 And the entrepreneurial world

00:16:07.120 has thousands and thousands and thousands of people

00:16:10.540 who never make it. Actually, we all owe them a debt of gratitude. They're the people that we

00:16:16.880 should be thanking, really, because we are statistical anomalies. That's what we are,

00:16:21.860 really. We're not something that can be constructed. We're something that emerges

00:16:27.720 from continued interactions in the economy. Most people fail, and we've got those people to thank.

00:16:33.100 We can never be sure. And one of the most interesting subjects, I think, you really

00:16:37.400 don't want to think about it because you most entrepreneurs think but let me give you three

00:16:42.920 categories of entrepreneur there's those that make it by dint of being you know fantastic business

00:16:49.940 people huge amount of empathy a huge amount of understanding of their market remarkable in every

00:16:57.340 way fantastic human beings okay so that's that's the first category the second category will be

00:17:03.120 those that make it by dint of having an awkward personality.

00:17:07.780 And the third category would be the lucky.

00:17:11.040 We all think we're in the first category.

00:17:13.280 The reality is we're in some combination of the above.

00:17:17.440 And what's difficult for most entrepreneurs to reconcile

00:17:22.280 is separating the luck and the skill,

00:17:25.820 which is difficult, I think, in all walks of life.

00:17:29.320 And you see very often where people have been very, very successful

00:17:32.360 in one business, and they're not very successful in the next.

00:17:36.140 Now, they just might be unlucky in the second business,

00:17:38.600 but they might have been lucky in the first business.

00:17:40.640 But we all think we're in category one.

00:17:43.460 That thing about the book and the nose.

00:17:44.760 I'm in category one.

00:17:46.200 First of all, can I just say,

00:17:47.440 I love the way Mike was talking about we

00:17:49.160 as if you and I have had our liquidity moment.

00:17:51.540 Our liquidity moment is a couple of years off, Mike,

00:17:53.960 with this show.

00:17:55.660 We're almost not having to pay for ourselves anymore.

00:17:58.220 I know, I know, I know.

00:17:59.820 We're progressing.

00:18:00.440 Advertisers will be flocking after this.

00:18:02.380 Yeah, absolutely.

00:18:04.440 I think PwC and EY want to get on board now.

00:18:07.940 Exactly.

00:18:08.600 They want a trigonometry sponsorship.

00:18:12.180 Let me ask this, because on the no thing,

00:18:14.400 it's interesting because I remember doing some research on this.

00:18:17.620 I was doing kind of like a personal development course at one point,

00:18:20.380 and they were talking about this Eastern European guy,

00:18:23.000 I can't remember which country he's from,

00:18:25.780 who was a psychologist who was brought in

00:18:29.100 to deal with people at the time when call centers had just emerged,

00:18:33.100 like cold calling people on the phone.

00:18:35.800 And they were having literally approach anxiety to the phone

00:18:39.620 because it was very uncommon in those days

00:18:41.940 for someone to just call you out of the blue and start selling you something.

00:18:44.980 So these people would pick up the phone, call someone up, 1.00

00:18:47.820 and the reaction would be, get fucked. 0.99

00:18:50.280 It's pretty much straight away, right? 1.00

00:18:52.080 So he was having to deal with them.

00:18:53.660 What he did is he got them to go out and make ridiculous requests of other people,

00:18:57.420 like go to McDonald's and order a pizza

00:18:59.860 or go to a Chinese restaurant and order a burger

00:19:02.860 or something like that.

00:19:04.160 And he managed to train them out of having that negative reaction

00:19:08.100 by just continually exposing them to that.

00:19:11.620 And I think that resilience, it can be learned

00:19:14.260 in terms of being able to kind of take and know so many times.

00:19:19.420 Whether people necessarily want to put themselves in that position

00:19:22.680 is obviously a different story, right?

00:19:24.900 Can it be learned?

00:19:25.680 I think he's taught them something slightly different

00:19:28.560 to what the call centre is asking them to achieve.

00:19:31.340 So what they've done is they've learnt to get over

00:19:33.580 the initial embarrassment of speaking to a complete stranger.

00:19:37.520 It probably helps to be doing that in a group of other people

00:19:41.040 who are getting over the initial embarrassment

00:19:42.980 of speaking to a complete stranger.

00:19:45.020 I don't think what he is able to teach them,

00:19:47.280 and this probably goes back to what I was talking about before,

00:19:50.680 he's not able to teach them to have the necessary empathy

00:19:53.780 to convert that person that they've got over the embarrassment of talking to to convert them into

00:20:00.260 whatever the call to action is for the for the phone call i guarantee no matter how many psychologists

00:20:05.940 or how successful he was about getting him over the initial hurdle of the embarrassment there

00:20:10.420 will have been 20 of people who or smaller even but 20 of people is the usual number who would

00:20:16.760 have been able if you had the sufficient empathy if you like to to to convert that phone call into

00:20:21.920 a sale or whatever the course of action is. So I don't think he was necessarily teaching

00:20:26.620 them an entrepreneurial skill. He was teaching them a useful life skill. Don't be embarrassed

00:20:32.200 when you ask somebody a really annoying and stupid question. You two seem to have. 1.00

00:20:37.600 We've got it now.

00:20:39.620 We keep getting slammed.

00:20:41.180 I know. I know. I know. Mike, we were talking about the mindset of an entrepreneur and you

00:20:47.300 you related it to trauma how much of it do you think an entrepreneur has a desire for control

00:20:53.380 and how much of it do you think stems from control because you will compare it to anorexia

00:20:58.200 i used to work in a girl's school my girlfriend's a psychologist and she used to work in a center

00:21:02.220 for teenagers with eating disorders and she's i remember her explained to me about anorexia

00:21:06.880 it's about control it's about controlling your portion size it's feeling in a world where you're

00:21:11.380 surrounded by chaos but you can control this one thing yet that makes you feel more secure in

00:21:16.340 yourself do you think entrepreneurs being an entrepreneur comes from that in that I have my

00:21:21.020 business I can control this I can control that I can control these elements of it I think it could

00:21:26.600 be that okay that is definitely one possibility I think that will possibly be for a number of

00:21:32.420 entrepreneurs what I think it more likely to be is that people are uncontrollable so so I think I

00:21:39.620 think I go back to what I said before about it not feeling like a choice that

00:21:44.480 most people who who become entrepreneurs who go on to do this sort of thing

00:21:49.160 they've had jobs along the way and the moment that they are told to do

00:21:53.300 something they feel that's like deep-seated desire not to do it yes

00:21:59.060 because so I probably go the other way but I take your point on the on the

00:22:08.300 control side that we tend we tend to be control freaks you know we do tend to we do tend to you

00:22:15.000 have to a really interesting example of somebody who isn't an entrepreneur in my opinion because

00:22:23.060 literally because he is displayed not having any control free careers Luke Johnson I don't know if

00:22:29.660 You've seen recently the Patisserie Valerie situation where they've discovered a 94 million 0.64

00:22:40.600 pound hole in the accounts.

00:22:43.160 Now, a true control freak entrepreneur will be able to tell you the margin in every chocolate

00:22:50.140 cake that he sells, let alone how much money he's got in the bank account to the nearest

00:22:54.600 94 million.

00:22:56.240 So it's interesting.

00:22:57.920 Luke Johnson wrote the entrepreneur column in the back of the Sunday Times.

00:23:01.920 Going to be in trouble now, aren't I?

00:23:04.060 Which is very interesting.

00:23:05.780 And this goes to what I was saying about the future being unimaginable.

00:23:12.180 When he was sat comfortably writing his missives about entrepreneurialism in the Sunday Times,

00:23:18.540 he had no way of forecasting that next year the accountants would find a £94 million hole

00:23:24.980 in the accounts of his business um so so i i think the control is a necessary element of

00:23:33.320 entrepreneurial behavior but i think the thing that shoves you into it is is actually the

00:23:38.420 inability to submit to control if that makes sense so it's in the same and how much of that

00:23:44.140 is distrust in systems because i remember that my dad was a solicitor and he um he went into local

00:23:50.820 government because he believed it was safe and it was stable and that would provide him with

00:23:54.320 regular employment. My father, for no fault of his own, lost his job. And I always remember him

00:24:00.100 coming to pick me up when I was 15 and him saying, I've lost my job. And we were going back and there

00:24:06.100 was no way of paying for things. And my mum ended up going back to Venezuela for a bit and being in 0.89

00:24:12.920 this episode of chaos. And me realising at the age of 15, oh, there is no safety. There is no

00:24:19.440 safety net. It's all illusory in many ways. Do you think entrepreneurs have a distrust of

00:24:25.080 those particular systems as well, where they feel, you know what, no one's going to have my back.

00:24:29.180 I've got to do it for myself. Yeah, well, I think what most people still perform is a delusion

00:24:34.640 of control. It doesn't really exist. I think what most entrepreneurs, and they might not even

00:24:41.280 be able to elucidate it, but what they instinctively feel, and we've evolved over millennia

00:24:48.280 instinct and humility as a way of dealing with a lack of control, as a way of dealing

00:24:53.940 without being able to control the future. And I think what pretty much all entrepreneurs

00:25:00.480 do is they instinctively realise is that they cannot control the future. So to take your

00:25:05.360 unfortunate situation, if you like, you had the opposite of redundancy. Your father had

00:25:11.740 all these eggs in one basket in a job that ultimately he had no control on the desk of

00:25:18.540 the destiny of if you like he had he had everything on red yeah the ball lands in black and here you

00:25:24.960 are yeah in the situation you're at I think what entrepreneurs instinctively realize is is there's 0.97

00:25:30.200 always a chance um that it can go to shit I remember we I remember we first got we first 0.87

00:25:38.200 to do a private equity and my first i was forced then to to produce a budget and a forecast 0.94

00:25:43.080 is something that i'd always avoided previously and uh i was asked by the guy from pwc you know 0.99

00:25:50.820 what's this cost line here 50 000 pound a month and i said well it's for the shit 0.99

00:25:58.080 watch it well i said the shit that we don't know what it is yet yeah take it out you know take it 0.99

00:26:05.140 Yeah. So what you were, what your situation was, is you were, strangely, you were optimised. 0.99

00:26:11.600 Yeah.

00:26:11.820 Yeah.

00:26:12.360 Optimisation is really bad. You know, nature doesn't optimise. Evolution doesn't optimise.

00:26:17.960 The only way evolution progresses is by mutation. You know, optimisation is an evolution that we call this act.

00:26:26.180 So you had everything on red. It came up in black.

00:26:29.100 And what an entrepreneur instinctively realises is never to put everything on red.

00:26:32.640 Yeah.

00:26:32.800 Yeah. And that goes back to what before I was talking about, serial redundancy and how you give yourself multiple points of failure.

00:26:40.100 And the way I describe it is what an entrepreneur does actually isn't even necessarily coming up with a great idea.

00:26:47.880 What they do is they fall over opportunity. So I say stay alive to fall over opportunity is a really good examples of this.

00:26:54.960 So take Amazon, for instance. Amazon's online retail business is debatable whether that's even profitable.

00:27:01.660 I would say that if you were to factor in the way they pay the staff, so stock-based

00:27:06.020 remuneration, it possibly isn't even profitable, which would be a surprise to most people.

00:27:10.740 Wow.

00:27:11.440 Now, what they do have is a very, very profitable web hosting business called AWS.

00:27:17.900 Now, AWS, they fell over, okay?

00:27:20.640 They built the web hosting facility, the Amazon Web Services, for their own business in order 0.98

00:27:30.580 to sell you shit that they can't make any money on the internet and then one day they wake up and 0.96

00:27:34.220 go christ we could sell this to other people now that is a hugely profitable business that bezos 0.99

00:27:40.920 never came up with it he never thought to himself i'm going to go he said i'm going to go and be the

00:27:45.740 everything store he never said i'm going to go and uh you know have have this cloud business that's

00:27:52.240 going to be the most successful the cloud didn't even exist when he started off so i think that

00:27:56.580 what entrepreneurs do is they stay alive long enough to fall over opportunity and again what

00:28:03.040 we do afterwards is we meet normal human beings and normally human beings want rational explanations

00:28:08.220 for things so rather than say oh it just fell on me you know and it was there and I thought oh wow

00:28:13.860 you know let's do it well I started off with this strategy I wrote this business plan I mean it's

00:28:20.160 all hindsight bias and post hoc yeah it's such an interesting point Mike because a mutual friend

00:28:24.840 of ours actually tells a story about jack d the famous comedian here in the uk yeah uh who has

00:28:29.280 this very sour dour personality uh and apparently uh this was he was struggling as a comedian he

00:28:35.480 really wasn't having much head not getting very far and uh with the kind of normal character like

00:28:41.080 a normal comedian and then one day he got so fed up with the whole comedy world and with comedy and 0.98

00:28:46.780 how he was doing that he turned up at this gig and he was like you know what fuck it i'm just 0.95

00:28:50.660 going to one last time i'm just going to do this last gig and he was really angry and kind of 0.98

00:28:55.800 frustrated and that frustration is what he brought to the stage and suddenly he found himself doing

00:29:00.600 really well like he stumbled onto this thing and it's fascinating because i think what you're

00:29:06.520 talking about really is in some ways the power of resilience as well which is you keep going

00:29:11.380 until something falls in your lap it's interesting uh there's a there's a book called anti-fragile by

00:29:18.180 and Asim Taleb, who we've both met at Kilconomics.

00:29:22.140 He actually goes one step beyond resilience.

00:29:24.280 So he talks about things that exhibit convexity

00:29:26.420 and things that exhibit convexity

00:29:27.960 are things that benefit from stress.

00:29:30.020 So it's not just being able to withstand the stress,

00:29:32.520 it's the stress actually,

00:29:34.780 the stress in the system actually improves your performance.

00:29:38.240 And I would go as far as to say

00:29:39.920 that all of the no's that you get

00:29:42.740 as an entrepreneur is convex to no's

00:29:45.100 for what a better way of putting it,

00:29:47.080 is you actually get better you you don't think to yourself uh oh my god i'm a terrible human

00:29:52.200 being everyone hates me you think i just need to be a little bit better yeah what did i get

00:29:56.980 wrong in that conversation what could i have said differently what didn't i understand about that

00:30:00.680 person and and so you are benefiting from what what other people would see well certainly the

00:30:06.860 majority of humans would see as stresses but you're getting better as a result of interacting

00:30:11.160 with those stressful situations

00:30:13.320 you're improving every day

00:30:14.700 but you can't continue

00:30:17.220 to improve interestingly

00:30:18.480 if you don't

00:30:21.220 survive so the most important thing

00:30:23.200 is to avoid ruin

00:30:24.060 if no one had laughed at Jack Dee

00:30:26.380 when he became a sour faced guy

00:30:28.560 that's it, he's done, he's gone

00:30:30.920 he's not in the game anymore and who knows

00:30:33.280 if he hadn't said

00:30:34.860 this is the last time, if he said this is the second

00:30:37.200 to last time and sour faced hadn't

00:30:39.160 worked maybe a different personality would have made

00:30:40.900 the next time and I think that's what also what defines it defines an entrepreneurial mindset

00:30:46.820 yeah we're almost congenitally incapable of saying this is it I'm not doing it again

00:30:51.280 it's a bit like comedians yeah yeah it's very much like comedians except entrepreneurs don't

00:30:56.580 pretend to be left wing I think I might be the only one that ever has

00:31:01.380 Mike um at what point does resilience and all these amazing qualities and getting through it

00:31:10.740 And working hard.

00:31:11.880 At what point does that tip into self-delusion?

00:31:14.180 Because we've all met that person who talks a great game

00:31:16.600 and I'm using a metaphor of comedy

00:31:18.680 and then gets up on that stage and you're like,

00:31:20.380 oh my God, mate, you need to cut it now. 0.88

00:31:25.120 Look, I think I'll probably go back,

00:31:26.940 the answer to that question,

00:31:27.780 I'll go back to the people who don't make it.

00:31:29.660 And it's probably the same in comedy

00:31:32.620 as the same as entrepreneurialism.

00:31:34.740 You're actually riding off the backs of the people

00:31:36.620 who never made it.

00:31:37.820 you know you need all the if everybody who stood up on stage who decided they were funny was funny

00:31:42.660 it'd be a very crowded stage wouldn't it so so we're all kind of right so i i think i think you

00:31:48.240 get you get two things the people who try and make it as an entrepreneur you get the people

00:31:53.120 who just try it doesn't work out and they go back to doing a normal job and all that kind of thing

00:31:58.560 and that's great but what you get at the other end which is probably i think i think sort of

00:32:03.360 where you're aiming at is something they call acquired psychopathy and I was asked I think

00:32:10.600 I was asked a question recently at a show uh a kill economic show where where somebody said

00:32:16.520 why do people in the UK or people in Europe sell their businesses and people in the United States

00:32:25.580 just keep going and my answer was we're not psychopaths you know so you get an English guy

00:32:30.640 a German guy or whatever and you know he can pay the kids school fees he can he could buy a nice

00:32:36.980 house in Spain and drive a decent car and put enough money away you know I'll take that you

00:32:43.800 know he probably starts again but he you know he's relatively balanced in the way he thinks

00:32:48.160 you know in America no they want to take over the world you know and not only that is they

00:32:55.020 want to remake the world into something that that they recognize and I think we

00:33:00.460 see that with there's a controversial point for you with somebody like Bill

00:33:04.000 Gates and what the Gates Foundation is doing in Africa at the moment is that

00:33:09.660 really helping? Many many scholars there's a book called The Tyranny of

00:33:14.400 Experts if you want to sort of it's kind of current this with the kind of

00:33:18.600 controversy around comic relief lately but if you want to research this a

00:33:23.880 a little bit more there's a really interesting book by William Easterly called the tyranny of

00:33:27.280 experts really what we should be giving to people in developing countries is freedom

00:33:34.280 and what we shouldn't be doing is imposing western solutions from western companies

00:33:40.520 pretty much all those solutions that you'll find that Mr Gates recommends will be coming from

00:33:46.620 people like Monsanto you know you have to you have to have certain pesticides certain crops

00:33:51.400 and you become beholden to the West.

00:33:54.260 You might make some initial progress,

00:33:56.240 but you become beholden to the West.

00:33:58.740 And what we really need to do,

00:33:59.720 and it's far more difficult to do,

00:34:01.660 because the conduit of, if you like,

00:34:03.660 of aid is much easier when you've got a despot.

00:34:08.680 Yeah.

00:34:09.360 Yeah?

00:34:10.060 Now, what we really should be doing,

00:34:12.060 and we have proved to be spectacularly bad at,

00:34:14.300 is formulating freedoms

00:34:16.020 where people can start their own businesses

00:34:18.060 and make their own way in a society.

00:34:22.760 And that's obviously much harder.

00:34:24.360 So I think you get this thing at the very top end

00:34:27.100 where people become literally trying to remake the world

00:34:32.100 in a way that they perceive it to be right.

00:34:36.020 And that may or may not be helpful to the rest of us.

00:34:39.380 All right, well, we can wrap up the entrepreneurial section

00:34:41.580 by saying if you're not already an entrepreneur,

00:34:43.880 don't even try it.

00:34:45.300 And if you are an entrepreneur, 1.00

00:34:47.280 know you're probably a fucking psychopath so we can just leave it there but we started just there 1.00

00:34:52.660 talking about some stuff that's a bit different and I've always really enjoyed listening to you 1.00

00:34:57.640 talk about different ideas because you have a very counterintuitive set of ways of thinking

00:35:03.780 about stuff so you've mentioned in the past that the way we think about everything is wrong

00:35:07.980 or maybe misguided or that we you know what is it that we kind of don't get about how the world

00:35:14.520 is or what to be in your opinion. Well let's take politics which is an interesting example at the

00:35:19.760 moment. So people think or have thought for many many years that the battleground is this left

00:35:27.000 v right which you see you know to some greater or lesser degree across the world. See I don't

00:35:36.080 agree with that at all. I think the real battleground that we face now is between command

00:35:41.080 and control technocrats on one side and adapt and survive emergence on the other. So I think

00:35:49.960 we might be the least perceptive and most dangerous people who ever lived. I mentioned

00:35:58.580 before about the educational institutionalization of hubris above humility. We believe, if we

00:36:10.460 think rationally, that we can understand and therefore

00:36:15.340 control and predict everything.

00:36:20.280 This is a delusion.

00:36:22.280 We live life forwards into mystery,

00:36:25.040 saying I said before about the future being unpredictable.

00:36:29.700 It's unpredictable not because we can't understand enough

00:36:32.860 about what's going to happen.

00:36:34.080 It's unpredictable because what's going to happen

00:36:36.060 is literally unimaginable.

00:36:39.120 A good example, should I do an example of that?

00:36:40.840 Yeah, of course, yeah, absolutely.

00:36:42.180 The example of that is, I'm quite sure how old you guys are, but...

00:36:46.500 Acting aged 28 to 30.

00:36:50.100 So is this what you put on your Tinder account?

00:36:52.600 Or do we have a Tinder account?

00:36:54.880 I want to talk about internet dating as being a good example of something which has changed the world,

00:37:04.500 which is being completely unimaginable.

00:37:06.640 So when I first started looking to date people of the opposite sex, one would go to a public house and drink. 0.82

00:37:16.700 And that would be the circumstances whereby you would overcome your fears without the help of an Eastern European psychiatrist. 0.67

00:37:25.160 I'd walk up to people for the members of the opposite sex. 1.00

00:37:28.940 When you said the word Eastern European, I thought you were going to take it in a wholly different direction, Mike.

00:37:34.180 This was the 80s.

00:37:35.580 I would have loved it if hearing every

00:37:37.960 Wetherspoon says an Eastern European Psychiatrist

00:37:40.340 going, now you must approach

00:37:41.940 woman. She is open

00:37:44.080 to receive. You don't need alcohol.

00:37:47.320 So you see, you've got

00:37:48.100 a set of circumstances, if you like, where you

00:37:49.980 meet people. And the

00:37:51.760 advent of Tinder, at that point,

00:37:54.340 it's not like you were unable

00:37:56.000 to predict it. You didn't have, it's outside

00:37:58.180 the realm of possibilities. The internet didn't

00:38:00.220 exist. Berners-Lee hadn't done the

00:38:02.160 first HTML page or whatever

00:38:04.300 he did. And I don't know if he had dating in mind. He probably had porn in mind when

00:38:09.360 he invented the internet. To me, as the pre-internet person, the concept of Tinder would be completely

00:38:19.580 alien as to be impossible to predict. Whereas the thing is, apparently now, the internet

00:38:27.440 is where the majority of people meet.

00:38:30.900 So they are meeting and basing their initial contact

00:38:36.280 on a completely different set of criteria

00:38:38.680 to the drunken criteria that we based it on in the 80s,

00:38:42.480 which was definitely helpful to certain people.

00:38:47.060 That's very diplomatic of him.

00:38:49.800 But if you look at the way people meet now,

00:38:53.620 they meet through a different set of criteria.

00:38:56.080 But what's actually the outcome of that? The outcome of that is new relationships. The outcome of new relationships is a whole different and new set of human beings who couldn't possibly have existed prior to the Internet.

00:39:11.020 So, and that is going to create an entirely different society that couldn't have existed because these people will be the people who make the progress in medicine or, you know, turning, you know, sunlight into effective, whatever they do into effective power.

00:39:28.240 and they will take us forward or backwards.

00:39:30.420 The future dictator of the world will be in this population of people

00:39:34.280 who could not have existed without Tinder.

00:39:37.900 And that is completely and utterly unpredictable.

00:39:43.060 Sorry.

00:39:43.760 No, no, no, because I was going to say, it just sparked something in me

00:39:46.300 because I was reading about how the nightclub industry said

00:39:48.860 that their business model has been really badly affected by Tinder

00:39:52.400 because in our generation, the only reason you really went to a nightclub

00:39:56.120 was to try and get laid. 0.98

00:39:58.240 But now, you just go online.

00:40:00.080 So why go to a nightclub?

00:40:01.400 Bars and pubs and pubs and pubs.

00:40:02.660 I used to go just for dancing, to be honest.

00:40:04.840 I read an article where the stats,

00:40:07.540 someone argued that the stats in the NBA

00:40:09.400 on away wins in the basketball

00:40:13.740 had steadily increased.

00:40:15.680 So the stats for scoring away from home had increased.

00:40:19.680 And they put down to the fact

00:40:21.020 that the players didn't go to nightclubs anymore

00:40:22.660 because they didn't need to.

00:40:24.140 Really?

00:40:24.640 So they wouldn't go to a nightclub before the game.

00:40:26.160 they wouldn't drink a load of champagne

00:40:28.740 or whatever they get down them in the nightclub

00:40:31.920 and they were better the next day.

00:40:33.780 So there may be some...

00:40:36.740 So why do we feel the need to predict then?

00:40:39.640 If predictions don't actually work, as you say,

00:40:42.860 and they're essentially a fallacy,

00:40:44.080 why do we feel the need to predict?

00:40:45.900 Why do people get paid so much to predict?

00:40:49.360 Fear.

00:40:50.920 Okay, so the delusion that somehow

00:40:54.920 And this comes down to what we're trying to do is we're trying to classify, we're trying to categorise, we're trying to model the future.

00:41:09.700 So we put things in categories, we classify things, and then we model in order to be able to predict what happens in the future.

00:41:16.860 And we do that because we're afraid, because people don't like to think that they don't know what's coming around the corner.

00:41:22.760 I mean, in this country, that could be described as a middle-class malaise.

00:41:28.760 So you see it really in the way middle-class parents want to educate their kids with an inch of their lives.

00:41:38.140 I sold a business a few years ago.

00:41:42.440 One of the guys who's in the investment company that bought the business

00:41:46.060 was explaining to me that his nanny needed to speak Mandarin

00:41:51.600 because his wife would be speaking French

00:41:55.380 and he would possibly speak English,

00:41:57.900 but he wasn't sure whether he was going to speak English at home yet

00:42:00.540 because the children would obviously get the English at school yet.

00:42:03.380 So he was considering whether to learn another language.

00:42:07.180 And speak to his children in a non-native language.

00:42:10.020 You can't bollock your kid in a non-native language. 1.00

00:42:12.920 My mum's native tongue is Spanish.

00:42:15.180 When she was angry at me, it was always Spanish that she went to. 1.00

00:42:18.780 And so you're familiar with many, many Spanish swear words.

00:42:21.120 Yes, I am.

00:42:21.860 Yeah, yeah, yeah.

00:42:22.420 The first words I ever learned were,

00:42:24.360 ¿Qué coño estás haciendo? 1.00

00:42:25.480 Which means, what the vagina do you think you're doing? 1.00

00:42:29.880 I don't think it's going to work over here. 0.97

00:42:31.620 No, no, it doesn't work grammatically.

00:42:34.040 In fact, this podcast will probably not be broadcast now you've said that.

00:42:38.480 Oh, no, mate.

00:42:39.260 This podcast, what we've said so far is entirely acceptable

00:42:43.100 within the remits of what we do here.

00:42:45.900 But we do need to be able to make decisions, though, Mike, right?

00:42:49.580 About the future.

00:42:50.480 Like, we need to be able to make electoral decisions.

00:42:53.140 We need to be able to make negotiating decisions.

00:42:55.280 We need to be able to try and have some idea of the future,

00:42:59.220 paths that are available to us

00:43:01.300 so that we can choose between them, right?

00:43:03.020 So how do we do that in a world

00:43:04.520 where we recognize that what you're saying is true?

00:43:08.240 There's no such thing as certainty.

00:43:09.960 And I think that's where you start from.

00:43:11.580 You start from a position where, I mean, a really good example of this is the current debate that we're having at the moment or not having at the moment in this country, which is between Remain and leave.

00:43:25.400 One of the things that I think is, and I've been fairly ambivalent on this, I'm probably the only person who initially sat on the fence.

00:43:32.360 and one of the things i've noticed with with remain uh the remain argument is that nearly

00:43:39.700 half the population seem to have become experts in economics business negotiation that is so true

00:43:47.720 and uh and and they are absolutely certain um and there is there is certainly and there can be no

00:43:56.960 argument that we do not know the path that will be followed if we stay. There is uncertainty in

00:44:05.180 staying. Whether there is more uncertainty in staying or more uncertainty in leaving is a

00:44:10.160 matter for debate. But it is completely remiss to imagine that there is some certainty in a European

00:44:17.100 Union. And look, you know, we're not allowed to have a debate where those people who want to leave

00:44:25.000 are able to elucidate a leave argument on the basis of economics or on the basis of some flaws

00:44:33.680 that they perceive in the European Union. They've all been tarred with a certain brush, you know,

00:44:39.640 which is really disappointing. But I think it's a really good example where you have nearly half 1.00

00:44:44.580 the population, and I'm probably doing most of them a disservice, but certainly the vocal

00:44:48.840 elements of the Remain campaign, who are absolutely certain of something.

00:44:53.420 And I think if both sides

00:44:55.620 were a little bit more open to the uncertainty of either course of action,

00:45:01.540 it might have been a little bit less divisive. It's interesting you say that

00:45:05.180 because Francis and I both voted Remain. Because we're good people.

00:45:08.100 There we go. That's a recurring joke on the show that pisses off most of our viewers.

00:45:12.620 but now people have started to demand it yeah yeah we get comments yeah we get twitter comments

00:45:17.480 saying when are you going to start selling t-shirts we say i voted remain because i'm a

00:45:21.200 good person no no well the the sell of remain is it is is it is you you you are immediately imbued

00:45:26.800 with moral moral superiority to the leave people so so you know i i understand why that's a popular

00:45:32.060 yeah so so so we both voted remain but we are both increasingly uncomfortable at just how

00:45:39.360 polarizing this issue has been and how certain people are that what they're saying is like I'm

00:45:43.980 at the point where I voted remain in the first referendum but I feel like given that we're

00:45:49.060 sliding away from what the people actually voted for if there was a second referendum I may well

00:45:54.140 vote to leave and to support that decision and what you've said has given me so much

00:45:59.500 kind of understanding of my own view because I've always felt that it's an issue that's not clear

00:46:06.420 It's an issue on which there are no guaranteed outcomes.

00:46:09.860 And the idea that, you know, I voted Remain,

00:46:12.420 but the idea that I knew what was going to happen

00:46:15.120 and I know what's going to happen if we don't leave 0.87

00:46:17.980 and I know what's going to happen if we leave is ridiculous.

00:46:20.380 I have no idea what's going to happen.

00:46:21.900 I think there's incredible cognitive dissonance on the Remain side.

00:46:29.040 There is, without a doubt, the euro is an incredibly flawed mechanism.

00:46:34.600 You know, you can't have a single currency without fiscal union.

00:46:39.320 You can't have fiscal union without political union.

00:46:42.420 And is political union even something that could ever happen?

00:46:46.220 I very, very much doubt it.

00:46:48.080 So you've got a currency which has benefited Germany at the core,

00:46:51.760 impoverished the southern states and led to incredible unemployment

00:46:57.100 and the complete annihilation of the Greek economy,

00:47:00.480 although it is coming back now which is testament to the resilience of the Greeks who are absolutely

00:47:08.160 fantastic but but that you know there is a flaw right at the heart of the European project and yet

00:47:16.020 nobody you know very rarely will anyone accept yes well okay we want to stay but we realize that

00:47:23.820 we're we're only safe because we've still got the pound so so if maybe if someone on the remainer

00:47:29.400 side say we want to stay but we can guarantee we'll never give up the pound and we'll always

00:47:33.320 be slightly addended to the European project that might have been a little bit of a better

00:47:38.240 promotery tool than to say if you don't vote to remain then you're a racist which I think

00:47:45.820 hasn't helped at all. So I exactly agree with you. It is not clear either way and anyone who

00:47:56.600 is aware of history that goes back further than 1939 probably isn't that optimistic about

00:48:03.980 a union of countries lasting forever because they never do they always break up and how much of it

00:48:12.140 is do you think people just want to buy into an easy narrative and then go I do this I vote remain

00:48:18.140 therefore this means this this and this whereas it takes time and it takes the ability to sit and

00:48:24.360 reflect, which is what you've done.

00:48:28.140 The more you reflect, the more complicated the issue becomes.

00:48:32.180 The more you try and learn about a subject, the harder it becomes almost to be certain.

00:48:37.240 And that's, I think, the issue, isn't it?

00:48:39.000 I think the European Union contains some great opportunities.

00:48:44.480 The ability to go and work in other countries for young people in the UK is a great thing.

00:48:51.360 but it contains an awful lot of flaws. I mean, I go back to cognitive dissonance. You look at,

00:48:59.100 say, Mr. Juncker, who is President of the European Commission. So Mr. Juncker, previously

00:49:05.220 Prime Minister of Luxembourg, previously Finance Minister of Luxembourg. So I saw a lovely graph

00:49:11.580 and you look at the amount of tax-avoiding businesses and the amount of tax-avoiding

00:49:19.400 business who's registered in Luxembourg and the amount of tax that is, you know, revenue that's

00:49:27.680 funneled through Luxembourg at a low tax, in a low tax environment. And it's nothing when Mr.

00:49:34.560 Juncker started as finance minister. And by the time we get to today, Luxembourg is one of the

00:49:40.580 biggest facilitators of tax avoidance in the world. So it's quite difficult. Obviously the

00:49:49.460 Remain argument has sold moral superiority to those people who bought that side of the argument.

00:49:54.860 The reality is there's some pretty unsavory details within the European Union itself and

00:50:02.520 certainly if you look at the way Luxembourg, the Netherlands and Ireland have benefited from

00:50:11.320 having, shall we say, useful tax regimes for multinationals, it does make you wonder. I often

00:50:19.900 say about tax avoidance is it's best envisaged as a massive pile of premature baby monitors.

00:50:32.340 So you know when a baby is born prematurely

00:50:36.460 and they put the baby in this lovely thing

00:50:39.060 and it keeps them alive.

00:50:41.080 So every time one of the big four

00:50:42.780 facilitates a tax avoidance scheme in Luxembourg,

00:50:45.880 we've got less of them.

00:50:47.460 So I tried to imagine a beach on the Caribbean,

00:50:50.080 a hole on the beach in the Caribbean

00:50:51.560 that's been filled with essential medical equipment.

00:50:55.140 And that's what tax avoidance,

00:50:57.940 notice I'm not saying evasion,

00:50:59.320 that's what tax avoidance facilitates.

00:51:01.580 Now, Jean-Claude Juncker at the top, there is an incredible amount of circumstantial evidence, although he denies it, to say that in some way he facilitated the removal of essential medical equipment from our hospitals and our society, and it passed through Luxembourg, was never taxed, and the corporates concerned now have large cash piles in the Cayman Islands or where they have them.

00:51:29.440 instead of us spending that money on essential services in the UK.

00:51:33.640 So it's not straightforward.

00:51:36.300 I think that's such an important issue as well.

00:51:38.260 Like I think 10 or 15 or 20 years from now,

00:51:40.240 we're going to look back on the tax structures around the world

00:51:46.100 that allow these things to happen.

00:51:47.760 And we're going to go, how is that even possible?

00:51:50.340 You know what I mean?

00:51:50.820 Like this idea that people can just put billions of pounds away into these places

00:51:56.680 and not pay any tax at all on it,

00:51:58.440 that the Russian oligarchs can just stash all their money in this place without paying any tax

00:52:03.900 on it. We're going to look back on that and go, how was that even possible? Well, we might look

00:52:09.040 back even more credulously because what we then hear is, how do we pay for it? If somebody wants

00:52:17.280 a particular project or somebody wants to do something useful in society, all we hear from

00:52:22.180 politicians is, oh, well, you know, there's priorities. How do we pay for it? Well, I meant

00:52:27.540 there is enough money. If we just collected the taxes that are on the statute, if we collected

00:52:33.600 the taxes on products and services that are sold in this country in the correct manner,

00:52:38.840 we don't need any new laws. There is enough money for us to do all the things that we'd love to do

00:52:45.040 to help people less fortunate. But I think it's even more important than that. So human beings,

00:52:54.880 I think human beings are

00:52:57.900 classical economists would have

00:52:59.940 as neoclassical maximizers 1.00

00:53:02.040 okay, that's bullshit 0.99

00:53:03.460 what we are, we're Darwinian competitors 0.99

00:53:06.160 yeah

00:53:06.700 a lot of explanation of the Brexit

00:53:09.820 vote here, so what

00:53:11.820 what

00:53:12.080 Remainers tend to think is if

00:53:15.460 these people get richer, who are very rich

00:53:17.640 get richer, but these people come up a little bit with them

00:53:20.040 then everybody should be happy

00:53:21.480 or what the Darwinian competitor

00:53:23.740 theory says, actually, I want you down here. I'm competing with you. I'm not looking at my

00:53:30.620 nominal. There's a lot of evidence for this, actually, that inequality essentially makes

00:53:35.500 people at the top and at the bottom feel less good about themselves, be more unsafe, have more

00:53:41.900 mental health problems, et cetera, because we're competing with each other. What that Darwinian

00:53:46.180 competitiveness that we have does is it pushes money profits up the pyramid to the people at the

00:53:54.400 top that's just how it is we compete with each other and those people at the top uh you know

00:53:59.400 what they want to do and what they are doing is they pull the ladder up when they get there they

00:54:02.740 pull the ladder up and they want to keep other people the people at the bottom from getting up

00:54:06.340 to the top of where they where they are and the history of man uh since since we you know walked

00:54:12.320 out the bush or climb down for the tree is more feudalism than it is democracy. So there

00:54:19.460 is a serious side to it. The whole point of taxing the people at the top is to get the

00:54:23.720 money going the other way. And you want to get this circular motion. So it's not that

00:54:28.340 you don't want inequality or in some way that you're going to stamp inequality out. What

00:54:34.440 you want is the people at the top not to stay at the top. And if they do stay at the top,

00:54:38.480 they have to work very hard to stay there and you want this this opportunity in this this circularity

00:54:43.360 this circular flow uh and if you don't tax the people at the top what will they do they will do

00:54:50.780 what people have done is they will pull a ladder up and establish their feudal empire so so it's 0.84

00:54:56.300 actually it goes to much more than just having money to buy shit it goes to getting that hedonic 0.61

00:55:03.420 treadmill going, where we have a society, where we have that movement, opportunity of movement 0.97

00:55:08.800 for everybody. If we don't tax people, the people at the top will stay. If we tax people too much,

00:55:13.860 they'll stop working. So you have this, what you have, going right back to the beginning,

00:55:20.220 if you like, where I said the battle between, isn't really between the right and the left.

00:55:25.200 The right and the left both hold untenable views about the economy. So the right say that by all

00:55:32.680 of us acting in our selfish interest the the perfect solution will somehow pop out of a

00:55:38.660 benevolent society yeah well that's clearly unlikely and we end up with the the feudal

00:55:45.180 situation what the left say is that somehow they will change us into into our human nature into

00:55:51.400 becoming benevolent that's not going to happen either no no so so we have to accept both we have

00:55:56.220 to get both things working so look competing with each other profit is going to go up to the top

00:56:01.300 government taxes correctly, not too much, not too little, and it injects that money into the base

00:56:06.460 of the pyramid to give opportunities to people to get up to the top of the pyramid. And if you

00:56:10.860 stop doing that, I don't think we need new taxes. I think we have sufficient taxes. We just need to

00:56:16.380 collect them. So which ones are we not collecting then? Well, what we have, interestingly, is we

00:56:21.920 have in the revenue, we have tax inspectors, tax collectors, and so on and so forth.

00:56:29.640 all we need to do is we need to fund the difficult cases yeah so the difficult cases so we need to

00:56:36.040 look at everything that was done in Luxembourg so there's a recent leak of all the tax avoidance

00:56:42.160 that was done we need to unpick that is it legal I'm going to say much of it isn't legal you know

00:56:46.920 because it has a barrister's opinion because it was approved by a big four account it doesn't

00:56:51.220 mean it's legal so we just need to fund the revenue to chase the difficult people what the

00:56:57.740 revenue tends to do as we all would is go after easy wins so we need to go after the tough stuff

00:57:03.160 so we need to go after apple we need to go after google we need to go after the uh starbucks we

00:57:09.140 need to go after the big conglomerates and say okay well you you know this is this is your tax

00:57:14.000 arrangement is it legal and we need to tax people we need to tax businesses for the sales of the

00:57:20.560 products and services they make in this country and that doesn't happen at the moment do you think

00:57:24.320 there's ever going to be an inclination to do that though because i mean there's there's there's a

00:57:28.820 part of me who is incredibly suspicious how much of the government is tied into you know these big

00:57:33.820 corporations i'll give you an example it always seems to be that a person who's in government

00:57:38.320 they're a minister they then retire and then they take a cushy job as an advisor at one of these big

00:57:43.020 companies earning a lot of money and you think well that's not direct corruption but is it

00:57:48.880 indirect well the revolving door is is very pernicious and there's there's some ideas there's

00:57:55.700 people had some ideas around how you do this one of the ideas that i had recently was uh anything

00:58:01.500 that you earn above a certain amount five years after you leave government is paid back to the

00:58:05.780 treasury so so i absolutely agree with you but uh i i think it's is it's not it's not in the

00:58:14.880 discourse you know it's not it we're not particularly in the public discourse is it we

00:58:18.620 seem to have had our our our discourse guided towards looking at something else and you guys

00:58:25.240 have had some experience with this lately we're looking at what they call rights yeah so we're

00:58:29.820 focused more on rights and I just think that humans humans want a lot more than just to be

00:58:36.860 consumers with rights you know we need we need much so that we're creative we're nurturing people

00:58:41.960 We need some more connection to each other.

00:58:45.720 We need more ownership.

00:58:47.120 We need businesses.

00:58:48.100 We need a patch of land.

00:58:49.820 We need community.

00:58:51.040 We need faith.

00:58:52.660 We need many, many things which seem to have been substituted by,

00:58:58.800 and I'm not, this isn't having the argument about whether these rights should or shouldn't exist,

00:59:04.640 but it just seems to me that they seem to have taken a primacy in the discourse,

00:59:07.720 whereas the things that have nourished us as humans for millennia

00:59:11.980 seem to have almost disappeared from the discourse.

00:59:15.400 But what these things require is ownership.

00:59:19.300 And I think where we seem to be going is that we have a society

00:59:24.460 which is being pushed towards consumerism.

00:59:28.760 So you become a consumer rather than an owner.

00:59:32.560 And I think it's very interesting when you talk about the discourse,

00:59:35.960 We talk about what, you know, what your distrust, if you like, of politicians is, is everybody thinks it, but nothing is being done about it.

00:59:45.860 We don't read about it so much.

00:59:47.600 We don't see it in too many places.

00:59:49.160 Why is that?

00:59:50.140 Why are we focused on one certain set of considerations and not these at least equally important considerations?

00:59:59.140 That's why we started the show is we're trying to have conversations about things that a lot of people think but aren't able to express.

01:00:05.460 And we're going to try to bring down the government from the inside.

01:00:08.300 I don't think they need your help.

01:00:13.420 They did a fantastic job all on their own.

01:00:16.200 But listen, Mike, it's been an absolute pleasure to speak with you entirely expectedly, I should say.

01:00:21.440 The last question we always ask is what's the one thing that no one's talking about that we ought to be talking about?

01:00:26.980 Well, I think I probably hit the nail on the head.

01:00:30.680 Very modest and humble.

01:00:32.340 Yeah, I think I smashed that out of the box.

01:00:34.540 Yeah.

01:00:34.940 Oops.

01:00:35.400 Can you edit?

01:00:36.580 Anton, you get that out, won't you?

01:00:38.620 No, just basically that we're losing the things

01:00:41.340 that give us a sense of belonging,

01:00:44.300 that give us a sense of meaning.

01:00:47.920 Does anyone talk about meaning anymore?

01:00:51.120 Everything's valued, isn't it?

01:00:52.760 Jordan Peterson talks about meaning quite a lot,

01:00:54.720 which is not a fan.

01:00:56.520 No.

01:00:56.720 Look at your face.

01:00:58.600 Look at that.

01:01:00.000 He does talk about meaning, though.

01:01:01.720 Say what you like.

01:01:02.240 Yeah, I think not in a way that I particularly relate to.

01:01:09.440 He's obviously got an audience, but I think, yeah, no, he's not for me.

01:01:15.200 Well, on that triggering note.

01:01:17.860 This is going to be terrible, the comments on it.

01:01:20.800 Follow Mike on Twitter.

01:01:22.640 He always tweets and retweets interesting stuff.

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01:01:31.600 and click that bell button next to subscribe button

01:01:34.160 so that you know when the video is released.

01:01:36.900 Thank you very much for watching

01:01:37.780 and we will see you in a week from now.

01:01:39.200 Absolutely, and also as well,

01:01:41.060 YouTube have a lovely little habit of unsubscribing people.

01:01:44.700 If you could please check that you're subscribed

01:01:46.580 and if you have been unsubscribed,

01:01:49.180 give us a tweet and we will complain to YouTube

01:01:51.900 and they will ignore us.

01:01:53.040 But anyway, guys, thank you very much

01:01:55.280 and we'll see you next week.

01:01:56.620 Bye-bye.

01:01:58.820 We'll be right back.

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TRIGGERnometry - May 05, 2019

Mike Driver on the Entrepreneurial Mindset and the Futility of Predictions

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