Raw Data By P3 Adaptive
Protect the Spots with NO Bulletholes, w/ Adam Harstad
Adam Harstad is BACK!Listen Now:
Adam Harstad is one of the few guests that have been on with us twice! And we could have him on 100 times and still not cover everything to discuss (or debate in many cases). This time around, we cover some pitfalls that data people fall into including cognitive bias and how people behave in the face of uncertainty, how these traps can be applied and avoided in life and in data, and we do throw in some Fantasy Football talk! Adam is, after all, a key member of the Football Guys Forum!
References in this episode:
Rob Collie (00:00:00): Hello, friends. Today, we have The Return of the Revenge of Adam Harstad. Now, it's a little bit of a dangerous game as a podcast host to deliberately bring on a guest that you know is going to repeatedly tell you politely, but repeatedly, that you're wrong. And that is definitely what Adam does. He is a very sharp, very intelligent, and very polite contrarian. The first time we had him on as a guest, he caught me completely off guard. This time, of course, I knew what to expect. We like to say that you don't sharpen one's edge using Nerf. You want to be pushed, you want to be tested, and he does not disappoint. So of course this time around, one of my secret, or not so secret, motivations was to beat him at his own game, even just once or twice.
Rob Collie (00:00:50): But true to the philosophy, steel sharpens steel, and I did start to hold my own a little bit better near the end. He is of course, a football writer and analyst by trade, and we did talk about some football stuff. But really, even then, it's all about uncertainty. The entire conversation in one form or another comes down to, how do we behave ourselves rationally in the face of an uncertain future? And this is really something that's completely apart from analytics, because the vast majority of analytics and business intelligence does work on certainty and having confident and borderline omission mastery of the things that you know are happening.
Rob Collie (00:01:32): When you lack that kind of certainty and confidence about the things that are already happening, naturally, that is a tremendous disadvantage, and filling that void makes all the difference in the world in terms of business and in the competitive world. Which is, of course, where P3 earns its keep, it's where we make our money, it's where we provide value. Even in the places where the analytics and BI industry get into things that are actually predictive, usually that prediction is at a very micro level, "Will this particular customer enjoy seeing this other piece of content? Is this particular customer a flight risk? Will we lose them in the next six months?" It's very micro. It's very narrowly bounded.
Rob Collie (00:02:13): But so much of the human experience, so much of life is not like that. "Should I take that job in the other city or not? How should I invest my money? What go was into a good marriage?" Most of human life consists of making decisions like that in the face of an uncertain future. So in some sense, these sorts of things are squishy, they're not analytical in the strictest sense of the word. And at the same time, there is a chance, there is the opportunity to behave ourselves intelligently in this space. And I'm pretty sure that whenever we bring Adam on, that's the kind of thing we're going to be talking about. It is central to life.
Rob Collie (00:02:51): And what could be better than speaking with someone very intelligent about something as important as life. So let's get into it.
Announcer (00:03:00): Ladies and gentlemen, may I have your attention please?
Announcer (00:03:04): This is the Raw Data by P3 Adaptive Podcast, with your host, Rob Collie. Find out what the experts at P3 Adaptive can do for your business. Just go to P3adaptive.com. Raw Data by P3 Adaptive is data with the human element.
Rob Collie (00:03:25): Welcome back to the show Adam Harstad. So Adam, when you were first here, you told us that your family has a saying, "Harstads try new things."
Adam Harstad (00:03:34): Yes they do.
Rob Collie (00:03:35): Fortunately for us, that's not exclusive. You don't just do new things, you're willing to come back and do something that you've already done. There's different forms of this statement. And if something is new, does that mean that you necessarily have to try it?
Adam Harstad (00:03:47): Well, I think you're overlooking the fact that you can never stand in the same stream twice. You can go back and you can go to the same river and you can stand in it, but the river's changed, it's a new river.
Rob Collie (00:03:55): Oh my gosh. Yeah. That's it. End of episode. Deep thoughts by Adam Harstad. You're right, we're definitely not the same stream today. I'm glad that you decided to come back and stand in our stream, so to speak. You have kids, right? Is the timing right? Did you watch the TV show, The Penguins of Madagascar?
Adam Harstad (00:04:15): I have not. I'm familiar with The Penguins, but we have not watched The Penguins. No.
Rob Collie (00:04:19): There's a Penguins episode that's called The Return of the Revenge of Dr. Blowhole. They had this villain on multiple times on the show over time, and so they just go ahead and lean into the return of the revenge. It's a dolphin, porpoise played by Neil Patrick Harris. And The Return of the Revenge of Dr. Blowhole is one of the greatest and most genius things I've seen on any screen ever. It is worth looking up. We'll make sure that we link it. But anyways, this is the return of the revenge of Adam Harstad.
Adam Harstad (00:04:50): I have an article that I do every year, at the same time every year called Revisiting Preseason Expectations. So the first time I did Revisiting Preseason Expectations, and then the second time I called it Revisiting Revisiting Preseason Expectations. I think we're at year nine, so it's Revisiting Revisiting Revisiting Revisiting Revisiting Revisiting Revisiting Revisiting Revisiting Preseason Expectations.
Rob Collie (00:05:11): Have you ever wanted to like use like scientific notation or exponents or something to represent this?
Adam Harstad (00:05:16): Not yet. Hopefully, Footballguys doesn't get sick of me. I'm there long enough that I get that urge.
Rob Collie (00:05:22): It's coming. It's coming. So I really enjoyed our first conversation. I felt pushed. I've recovered since then, I'm back on my feet. So we bring you back on, have you push our brains a little bit? Are you down for that?
Adam Harstad (00:05:35): Sure. Whatever. I'm willing to try new things.
Rob Collie (00:05:37): That's right. That's the #credo. We talked a little bit in the intervening time over Twitter, direct messages, which are just the most substantive thing that can be exchanged between human beings. There are a couple things we talked about that we might be interested in getting into, and let's talk about common myths or fallacies or traps that people fall into. And as we bounce back and forth on Twitter, you got into talking about a number of behavioral economists. This sounds delicious. You mentioned that there's one person who underpins your entire fantasy football dealing with uncertainty. Who is the hero on the Mount Rushmore of Adam Harstad?
Adam Harstad (00:06:22): Really, it's a story that has two main characters. And when I got into fantasy football writing, it was 2013, I believe, and a guy named Daniel Kahneman was really hot at the time. He'd done a couple TED Talks, he'd written a book up called Thinking Fast and Slow. Daniel Kahneman is a psychologist who was awarded the Nobel prize in economics, the only non economist to win it, I believe. And he was awarded this for his research on cognitive biases, which are all of these ways that we think we're behaving optimally, but there's these bugs in our mental operating system.
Adam Harstad (00:06:57): And he and his colleague, Amos Tversky spent decades just meticulously cataloging all of the different bugs in our operating software that they could find. And I was really enchanted with this idea, this heuristics and biases program. And I thought, "This is something I can bring to fantasy football. It's something that I can write about and I can educate people on all of these biases, and we can all work together to overcome these biases and become like this Superman who has transcended our operating system limitations into like the platonic ideal fantasy football players." So that was where I started.
Rob Collie (00:07:32): We would be making the world a truly better place there, right?
Adam Harstad (00:07:35): Absolutely, absolutely.
Rob Collie (00:07:35): Fantasy football would be like utopia.
Adam Harstad (00:07:38): And the big him with that is that, really, it doesn't work. And Daniel Kahneman says it doesn't work in the introduction to his book, Thinking Fast and Slow, where he's detailing a lot of these. He says, "I don't have any illusions that this is going to help people overcome their biases. Because one of the biases I found is that you can't see your biases in yourself." It's called the bias blind spot. If I teach you about a bias, you're going to see it in everybody else and be convinced that it doesn't affect you at all. It's easy to spot in everybody else.
Adam Harstad (00:08:06): And he said his goal with the book wasn't really to improve decision making so much as it was to improve the quality of our conversation about decision making, that his aim was mostly just to improve the quality of the conversation around the water cooler. Sometime around there, I'm not even really sure when, I discovered a guy named Gerd Gigerenzer and I didn't know this at the time, but-
Rob Collie (00:08:26): Is that a real name?
Adam Harstad (00:08:27): Yes. Gerd Gigerenzer. Gigerenzer seems like something that Gerd Gigerenzes, but I don't know what Gerd Gigerenzing is-
Rob Collie (00:08:34): Or Renzes at giga scale.
Adam Harstad (00:08:37): Maybe. Maybe. Anyway, he is a top-notch Gigerenzer, he can Gigerenze like nobody's business. So I stumbled upon him and I didn't know the backstory at the time. But apparently, Gerd Gigerenzer is the arch nemesis of Daniel Kahneman. It's Montagues and Capulets. There's this huge running feud between the behavioral economists who are all about nudges and heuristics and biases and how to make better decision making given the limitations of our software. Gigerenzer's position is that, "Look, you're calling these flaws in our operating system, but they're not really flaws so much. Sometimes they're adaptive, sometimes they're useful. And in a lot of cases, in cases of extreme uncertainty, a lot of times these heuristics, these simple rules of thumb will actually outperform stunningly complex models. They are investment strategies."
Adam Harstad (00:09:26): And he's back tested all of these extremely complicated investment strategies about how to allocate your funds. And he finds that the strategy that performs best is one-over-n where if you want to invest in n different funds, you put one-nth of your money in each one, you just do it evenly. And it's very simple heuristic, and it's outperforming all these staggeringly complex. And typically, the more complex and uncertain a system is, the more simple rules of thumb can outreform staggeringly complex ones. Whereas the more limited a system is, the more complex you want your models to be.
Adam Harstad (00:10:01): If you're modeling chess, you can have a very, very complicated model because there's an unfathomable number of different possible board states, but it's clearly known how you get from one to the other. The rules of the game are very well known. If you're modeling the stock market, you can't really have these super complex models because you've got a super complex model, and all of a sudden, somebody in a wet market somewhere in China catches a disease, and all of a sudden the entire world that you modeled no longer exists, you're operating in a completely different world that you never even imagined.
Rob Collie (00:10:33): Yeah, they're in that market, they're like, "Hey, I'm going to grind up this bat and I'm going to snort it."
Adam Harstad (00:10:40): I read an interview with Gerd Gigerenzer on the Harvard Business Review called Instinct Can Beat Analytic Thinking. I've probably linked to that more than anything else, and I revisit it every year and I go back over it. And it was really useful for me. First of all, because it gave me new knowledge. I didn't know that the simple rules of thumb could be so adaptive and so useful. And also because it gave me permission to be lazy, which is what I was always looking for. Because coming up with very complex models is complex, coming up with simple rules of thumb as much simpler.
Adam Harstad (00:11:12): And it doesn't mean it's necessarily easy because you need safeguards. Anybody can come up with a simple rule, it's hard to come up with a simple rule that's actually good and useful. And you need to test it and you need to expose them to this level of investigation and curiosity. But at the end of the day, I write about fantasy football and I'm competing in a space with people who have very complex models. Like, CeeDee Lamb is a wide receiver, he gets drafted for the Dallas Cowboys and the of Dallas Cowboys already have two very good wide receivers and Amari Cooper and Michael Gallup. And people with complex models. Now, have to say, "How can I fit CeeDee Lamb into this offense? How am I going to distribute the ball among all of these different receivers? How are things going to work out? I don't see the path from here to there."
Adam Harstad (00:11:56): My simple rule is, if a guy's good, he's going to get the ball. Very simple rule, tested. You can demonstrate it over years. And so then my question is, is CeeDee Lamb good? Yeah, I think he is. He's going to get the ball. Somebody asks me, "How is he going to get the ball when they have those other receivers there?" I don't know. But over time, I call it the Dr. Ian Malcolm hypothesis, and I always post a picture of like Jeff Goldberg shirtless from Jurassic Park, "Life finds a way." I don't know if the other guys on the team are going to get injured, I don't know if just the team's going to throw the ball a zillion times and the passing pie is going to expand. I don't know if somebody's going to get traded, somebody's going to get cut, but over time, good players get theirs.
Adam Harstad (00:12:35): This is a simple rule of thumb that bears out over and over again.
Rob Collie (00:12:39): It's so funny. I have such complicated feelings about this feud you're talking about. First of all, I tend to just love it when academics get like really, really, really upset at each other, because it's just so absurd. It's just like next level absurdity and I love some good absurdity. A couple of ivory tower Denisons screaming, insults at each other, but neither one of them dares come down out of the tower. At the same time though, this Gerd fellow, the Gigerenzer, the Renzer, as his friends call him, he seems almost like anti ivory tower. I've been on this whole arc in my life where growing up, I would've been on in my teens and 20s and maybe even into a little bit in my 30s, I would've been on team Kahneman.
Rob Collie (00:13:23): Do other people want to pronounce that Kahneman ever? Because I've heard people talk about Kahneman, I'm just not sure if they're the same.
Adam Harstad (00:13:28): Yeah. I have no idea how it's actually pronounced. So if I'm mispronouncing anybody's name and you happen to hear this, I apologize. I'm doing my best.
Rob Collie (00:13:35): Well, and that's how it is. If you read a lot of things and you're not in the presence of other human beings to discuss these things verbally, pronunciation is actually really, really, really tricky. To be engaged in any intellectual affairs, especially increasingly in the remote world, is to have no idea how these things sound out loud. I have no idea.
Adam Harstad (00:13:56): Yeah. I think to some extent, this tendency to mispronounce complicated words is probably a good sign of intellectual curiosity. It's somebody's reaches exceeding their grasp.
Rob Collie (00:14:07): I've just been around a lot of people in my life who always seemed to know the proper pronunciation because they went to the right schools and all these sorts of things. I always felt like this blue collar hick in their presence when I would say something like, "I will not use that German word schadenfreude or whatever because I have no idea.
Adam Harstad (00:14:23): You got it right, that was right on.
Rob Collie (00:14:25): I'm still not going to confidently use it.
Adam Harstad (00:14:26): If it makes you feel better, I think I was 20 when I learned that subtle, I thought there were two different words, subtle and sub-tle. And I thought that they both meant the same thing, until I was 20 and I realized, "Oh yeah, that's the same word."
Rob Collie (00:14:40): I was playing a game of Trivial Pursuit when I was 12 against my parents. The answer that they gave to a question was something clue related, and they go, "Colonel Mustard." And I go, "No you're wrong, it's Colonal Mustard." I was so excited that they were wrong.
Adam Harstad (00:15:03): Being wrong is not a big deal, being confidently wrong, that's when things start to get a little bit dicey.
Rob Collie (00:15:07): Yeah. I was like, "In your face." It was brutal. I have another pet theory of mine, which is that assholes ruin everything. On the one hand, I've come around to almost like this post intellectualism. The idea that these formulas and all you do is stand out there at your chalkboard and do a Beautiful Mind things, and you predict what your neighbor is going to eat for dinner tomorrow night. That's a very comforting world view for nerds in particular. We might not grow up with the best social skills, we might not be the most popular, but we're like, "Fools. We know all. We have the formula."
Rob Collie (00:15:48): And it turns out that that mindset runs rampant through tech. And it does not really reliably survive contact with the real world. It turns out that the real world is, if you want to talk about it in terms of math, what you've been hinting at, the real math behind all of this is so complicated that no human being could ever navigate it. If you wanted to have a truly mathematical model, it's beyond what we can do. Turns out that sometimes these simple heuristics absolutely outperform your illusion of certainty, your illusion of control. And so when I have come to this point in my life where I believe these sorts of things, I think I would be pretty firmly on team Gigerenzer in this feud.
Rob Collie (00:16:30): At the same time, I'm aware of the fact that there's were people of multiple different mindsets who would seize on this and take the wrong conclusion from it. "Yeah. See, I told you analytics never worked. It doesn't even make sense to look at the data. Just use your gut." No, that's not right.
Adam Harstad (00:16:48): I hesitate to say I'm really on team Gigerenzer. He's been more useful for me just because he justifies tendencies that I already had. I don't want to do all of that hard work when I can do something simple that gets me to the same place anyway. But I think a lot of the criticisms of him are very fair too. It's been said that he has zero constructive agenda, which is probably true. In that respect, I relate to him because I sit on the sidelines, throwing bombs. Other people do hard work and say, "Oh yeah. But you made this mistake here. And did you consider this?" And I'm not really contributing. I think it's an important role, but also I don't think it's the sort of role that endears you to anybody.
Adam Harstad (00:17:25): I think at some point, he gets a little strident and he overstates his case and he's trying to find things that fit his argument rather than fitting his argument to reality. I enjoy both, and I am grateful for having read and encountered both. I definitely consider and incorporate insight from both. I just think as a practical matter, in terms of how I approach things, I tend to be more of a simple rules of thumb guy, that's more of my wheelhouse.
Rob Collie (00:17:55): Yeah. And I guess even for me, I'm not really on, as you've described it, I'm not really on team Renzer either. It's the other mindset run amok that really bothers me. There's application of good thinking and good models. Clearly, I'm on that team. That's our business. But when it comes to predicting the future in particular, when it comes to predicting macro events of the future, I think that there's an academic tendency of hubris that these things re a lot more foolproof than the actually are. And that's where I think there needs to be someone like Gigerenzer running around calling that complacency. I think it's a useful role.
Adam Harstad (00:18:39): I wonder too how much of that is selection bias though? From my experience in the fantasy football space, there are people who are very, very certain and there are people who are very, very uncertain. And if you are just casually exploring the space, you're much more likely to run into one of the people who are very, very certain because certainty sells. Their reach is bigger. It gives this false impression about how certain the typical person is in that space just because the most certain voices are the loudest. And I wonder if there's not something to that in academia too. The studies that you hear about say, "This definitely exists and it's awesome, and nobody's ever heard of it or thought of it ever before, and this will change how the world works."
Adam Harstad (00:19:22): And the studies that you don't hear about are the ones that come out and say, "This might possibly have an effect, but it's a small effect. But on the margins, it might matter a little bit. And maybe we should be behaving slightly more in this manner just to account for the possibility of it."
Rob Collie (00:19:37): I think it was Fineman, one of the Fineman father, son physicists, I think he explained why he never voted. And he said his two candidates example. You have one candidate for office that says, "This is a very complicated set of problems facing our country. Little sound-bity answers aren't going to do it. We actually have to work on this. We have to think about it. We have to get the right experts working on it in developing approaches for it and choosing and testing between those and all of that."
Rob Collie (00:20:04): And then you got the other candidate that says, "No, I know exactly what we should do. Damn it, we should just do this, this really simple thing that everybody can understand." The public's going to vote for that second candidate every single time when we need the first candidate. He just said, "Nope, I'm out. I'm not playing."
Adam Harstad (00:20:24): I'm actually glad you mentioned that because we were talking about not knowing how to pronounce things. And I have a couple good Fineman anecdotes and I've never actually heard his name said out loud.
Rob Collie (00:20:32): You know what, don't take it from me.
Adam Harstad (00:20:36): If we're mispronouncing it, we mispronounce it the same way.
Rob Collie (00:20:39): It might be Fineman. I forget how it's spelled, to be perfectly honest, which is why... I might be adding a syllable in there just to do it. It might be just Fineman.
Adam Harstad (00:20:47): Well, I come from the hobby that gave us Brett Favre, spelled F-A-V-R-E, but pronounced F-A-R-V. But he had another one of mine. He tells a story about how his dad taught him early on the difference between knowing something and knowing the name of something. That's actually one of Gigerenzer's critiques of the heuristics and biases program. So there's this cognitive bias called loss aversion that says, "If you have something and you lose it, that'll hurt twice as much as if you don't have it and you gain it that feels good." Losses hurt twice as much as gains.
Adam Harstad (00:21:20): And it's one of the most robust and replicable findings in the field that there's certain situations where it can go away and there's some discussion about what it be causes it and what mitigates it and what the underlying mechanism is but that gets lost because they found this effect and they slapped the name loss aversion on it. And now people think they know it, but really, they just know the name that was given to it. You could call it whatever, you could call it extra feel bad losing this. You don't understand it, you've just observed an effect and given it a name, and that's different than having a model for why, why is it doing that? What purpose did this serve? What purpose does it not serve?
Adam Harstad (00:21:59): That's one of the criticisms, is that there's a tendency to find a bias, name a bias, move on. Pretty soon, you wind up with a theory that explain everything and predicts nothing.
Rob Collie (00:22:09): Yeah. This is rampant in the medical community. There's so many things running around that's just names. There's not even any attempt. Like chronic fatigue syndrome. "Oh yeah. It's basically like this lump dismissal of all those people that are always, always, always tired, always low energy. Something's clearly wrong with them, and we don't know what it is. But by slapping a name on it, chronic fatigue syndrome, now we can stop paying attention to it." And that's exactly how that was treated, and basically still to a large degree is. And there's so many things like this.
Rob Collie (00:22:40): Like when we're in the course of trying to get something diagnosed for one of us or for one of our kids or whatever, and there's this moment where you start to smell it. You're like, "Oh, this diagnosis is one of those things where they gave a name to the thing they don't understand," as opposed to, "No, we actually found the cause." There are some diagnoses that are actually very mechanically specific, we understand what's going on here. There's a whole host of them that aren't.
Adam Harstad (00:23:01): Right. I think the field knows it. And there'll be some cases where they'll say, "This diagnosis means this." It could be one of like three possible causes, and depending on the possible cause, you treat it differently. But yeah, that's basically all the DSM is, "These are names that we attach to symptoms and here are some things that might work or might not depending on what the cause is, but we don't know the cause just here are some names that we attach to symptoms."
Rob Collie (00:23:24): The sinister part of it though is that, like you were saying earlier, being given something is sometimes an excuse to be lazy. These terms, they do tend to be a little bit of a dead end in the mystery. I've encountered two very, very, very, very different flavors of medical professionals in my life. There are the ones who are curious and the ones who are just there to apply the flow chart. Heaven help you if you're in the flow chart person's office and you fall off the flow chart. At that moment, they basically kind of make it your fault. I could really go off on some of these biases in the medical community. You really want your doctors to be intellectually curious, and a large percentage or not.
Adam Harstad (00:24:09): I'd push back on, even limiting that to the medical community. I think if you look at every profession, there are probably some professions that lend themselves more to diagnosis by flow chart. I'd imagine plumber probably does better with flow charts because it's a very simple mechanical system whose causes and effects are very well understood. But fantasy football, there's a lot of flowchart thinking versus curiosity. And I think anything where uncertainty exists, where there's this fog of uncertainty around the edges, you're going to see that same dichotomy between the flowchart approach versus the detective Sherlock Holmes type approach.
Rob Collie (00:24:44): Well, I'm going to push back a little bit on your pushback.
Adam Harstad (00:24:46): Please do.
Rob Collie (00:24:47): Not in a binary sense. I would say that on average, the average plumber I've encountered is a little bit more intellectually curious and willing to go off the edges of the flow chart than the average physician. And this is particularly funny when you consider the reputation that doctors very much want to have as being the smart ones. Relative to the expectations and the image that's projected, I think the medical industry might be the champion in this space. But again, you've got to consider the context and that's the thing that's particularly frustrating, especially when the stakes are that high, as something like your health. To me, it's probably the most egregious industry for this.
Adam Harstad (00:25:25): It's definitely one, I think, where stakes are the highest. I think one of my big core beliefs is that people are people. You compare populations like Germans versus Americans, doctors versus plumbers. I think a lot of times, we like to categorize that, we talk about bugs in our faulty operating system. And one of these bugs is this burning desire to categorize that everything, and especially to affiliate ourselves with one group or another group. But I think at the end of the day, people are people. What's the famous old article about something like, who'd go Nazi?
Adam Harstad (00:25:57): Where a writer was talking about, I'll go to cocktail parties and I'll think like if The Third Reich happened here, which of these people would go Nazi and which of these people will wouldn't. They're comparing like the same tendencies and thought. We in America think we're better because we did not go Nazi, but that's really because we weren't in that situation. I think if you put a group of people in a similar context, you're going to get similar results. In that respect, again, most of my pushback is just that I always feel uncomfortable isolating tendencies or habits to a certain subgroup when I really think that most of these flaws, most of these conditions are really endemic just to humanity and to the human condition.
Rob Collie (00:26:38): You said people are people and I'm like, "Ah, damn it. I'm going to have that Depeche Mode song in my head the rest of the day. And I'm trying to flush it out, trying to flush it out. And then you came back to it and said it again, and now I'm done. Why is it, Adam, that you and I should get along so awfully?
Adam Harstad (00:26:52): I don't know. I think the real question to hear is, why doesn't everybody get along awfully with me?
Rob Collie (00:26:58): Oh, come on. I find you very pleasant. You don't agree ever a single thing that I ever say, but I know that now and I had you back anyway.
Adam Harstad (00:27:08): It's like I said, I'm a bomb thrower, I have zero constructive agenda. I'm willing to own that. I don't know why anybody really gets along with me, but apparently people do.
Rob Collie (00:27:19): I find you very thoughtful at the same time. Non-thoughtful bomb throwers, not a lot of use for them around my campfire. Gigerenzer serves a purpose.
Adam Harstad (00:27:31): If that was not a verb, we could make that a verb. To gigerenze is to stand on the sideline throwing bombs.
Rob Collie (00:27:37): See, I actually think Gigerenzer has a constructive purpose. I just think that for whatever reason, his personality prevents him from leaning into it.
Adam Harstad (00:27:45): Anything can be useful. Even people without a constructive purpose can still be used to construct events, it's just what you choose to do with what's handed to you.
Rob Collie (00:27:54): He checks runaway complacency, he checks runaway hubris. I think that's a very, very valuable thing, especially in academics, because a lot of times as an academic, you spend all of your time in that bubble, isolated from the actual reality. Even leaving Microsoft and going out into the real world felt like leaving the eco dome to me. I couldn't believe what it was actually like out there. We sat around all the time and talked back at Microsoft about how the world out there works, how we should build software. Now, things have changed at Microsoft.
Rob Collie (00:28:32): Microsoft's increasingly, their software is instrumented, so they know exactly how it's being used at all times. But back then, we didn't have that benefit. So we had to build software. We had to tell the world the way it was going to operate. It was just so silly for a bunch of people in their mid-20s who'd never even smelled the real world. I got out into the wild out here, and I was like, "Whoa, I can't believe it." For example, Adam, this will be a really interesting thing for you. Back at Microsoft, I often had lots to do with data import functionality into various apps. So you're going to import some data from a different source into Excel, for instance.
Rob Collie (00:29:10): Well, a really simple question. What order should you put that menu in? There's different kinds of data sources, there's databases, for instance, there's web pages, and then there's like XML files, but then there's also text files, like CSV files, comma separated value files, tab delimited files, and things like that. Well, we always put databases first because those were the best. Those were the best, most robust, most real data sources. Those are the professional data sources. So of course those go first. And the least professional data sources, the text files, would always go last.
Rob Collie (00:29:48): Now, this error has been since corrected, but I get out into the real world and I see no, one's got a database that they're allowed access to, it's all text files, it's all exports. Everyone's exporting, exporting, exporting, exporting from all of these various systems and then dumping that data into their spreadsheets. And I was just sitting just laughing so hard. A decade of having this exactly wrong in the sequence. Nothing crystallizes the experience of inside the dome versus outside the dome quite it like that. It's like any environment.
Rob Collie (00:30:23): When you're in academics and you have the academic incentives pushing on you at all times, the person who goes out there slumming on the street isn't going to get funding. They're not going to get their grants, they're not going to get published. But we need them, we need them out in the streets. We need them getting their hands dirty.
Adam Harstad (00:30:37): I like how you anticipated my pushback there that I was going to say, "Is this an academia problem or is this a human problem?"
Rob Collie (00:30:43): Yeah, I'm getting better. My stead Harstad armor and my reactive armor that moves around. I'm getting there.
Adam Harstad (00:30:51): Yeah. I'll say, until this year, 100% of what we did was all just CSVs. Because it's the one thing everybody has. Everybody's got a different whatever, but no matter what you're using, you can get it in CSV. And now we got a fancy system where we can just copy and paste directly from a spreadsheet and dump it into our back end. Somebody built us a fancy projection uploader, and now we're living large.
Rob Collie (00:31:12): Man, that's awesome. I want to see that, just out of curiosity. I've marveled a little bit, and for a long time actually, about the football guy's site and how interconnected everything is. In articles, a player's name is very often hyperlinked, and there's so much structure interplaying between all of these unstructured, paragraphs of texts are fundamentally unstructured. These are things that are not easy to do. You even have a master data problem. How many different ways can you spell D'Onta Foreman's name? At least three. With and without apostrophe. Do you have the apostrophe? Do you have a space instead of an apostrophe or do you just truncate the apostrophe and leave it out?
Rob Collie (00:32:00): Now, somewhere, there needs to be a master universe of player IDs so that when someone's talking about D Onta Foreman, you can connect that with D'Onta Foreman, the different spellings. And even in my efforts, back when I was really heavy into all of this in the early 2000s, just consolidating all the information I was getting from various sources and aligning like player names, or hell, even just aligning team names-
Adam Harstad (00:32:28): Yeah. Or the abbreviation, the team abbreviations.
Rob Collie (00:32:31): Yeah. This is a problem that in our world is called master data management. Master data management tends to happen within a single enterprise. This system over here has this ID for a customer, but this other system over here has the same customer identified differently. In the football world, it's not within one enterprise, it's on the wild, wild internet.
Adam Harstad (00:32:52): If you're curious, our CMS, it's pretty ancient at this point, our content management system, that's handling a lot of that on the backend. And I think getting that upgrade is one of our priorities. But we have to do a bunch of work rounds. You mentioned D'Onta Foreman. Any player with apostrophes in their name, you have to spell it without apostrophes, and then the CMS will recognize it and put apostrophes in and hyperlink it. But if you put the apostrophes in, CMS won't recognize it because the apostrophes break it.
Rob Collie (00:33:17): Interesting.
Adam Harstad (00:33:18): And then like juniors, Odell Beckham Jr, you just have to put Odell Beckham and then it will append the junior. But if you put the junior yourself, it'll come out as Odell Beckham Jr. Jr.. There's still some clutches there that we're working on bringing up to date.
Rob Collie (00:33:33): That sounds like something that you would exploit. Pretty soon we'll be having the revisiting, the revisiting, the revisiting, the Odell Beckham Jr. Jr..
Adam Harstad (00:33:40): Yeah. I don't know. I was about to say I don't know how to get CMS to append more than one junior at a time. It might be something to look into.
Rob Collie (00:33:47): SQL injection something. You'll figure it out. I think that's been, you mentioned it as being ancient, but that problem was, another way to say it is ahead of the curve. There was a solution in place for Footballguys for a very difficult problem a long time ago, and it showed. A data professional, I was always impressed with that.
Adam Harstad (00:34:06): Well, I think you'll understand too. When I say that a lot of it is organizational philosophy. At Footballguys, and it's one of the reasons I really enjoy being at Footballguys, is everything we do always has a clear vision, we're trying to make the customers' life easier, are trying to help the customer. Which seems like a pretty basic thing, but a lot of businesses, especially fantasy businesses, start out in their purposes to show how smart they are. You'll write long articles, making low percentage calls, and then you can point back to them later and be like, "Look, I called this one. Nobody else was calling it."
Adam Harstad (00:34:37): And it's about managing your own brand creating a name for yourself. Whereas Footballguys from the beginning has always been a very low ego company. It's about, "Is this going to help the customer? Is this not going to help the customer?" And so we'll do some things that are not really industry standard, we project kick and punt returners, which I think something like one or 2% of fantasy leagues actually use those projections, but for the leagues that use it, this is a very big value add, but there's other standard article types like the Sky's going to smash projections or in DFS daily fantasy sports.
Adam Harstad (00:35:12): When that first came out, there were a lot of sites that are saying like, "We guarantee you, you're going to get a positive return or your money back." And we had a lot of conversations about, "We can't guarantee a positive return." Clearly they're hoping that they'll get more people get a positive return and not ask for a refund than get a negative return and ask for a refund. That's clearly the calculus there, but we had a lot of philosophical discussions about what happens if we're operating in a world where everybody was following it, our advice? It would be impossible for us to guarantee a positive return. I've worked for various organizations throughout my life and I'm sure you have as well and you know the difference between a really functional culture and ethos versus just a toxic or maybe not even toxic, but just not pointed in the right direction.
Rob Collie (00:35:57): Even at Microsoft, I worked on so many different teams, that you might as well consider them different companies. There was some background similarity, of course, but there were some functional teams and there were some dysfunctional ones. You learn the difference.
Adam Harstad (00:36:11): I've said that I think this is the first job I've ever had where I've never once gotten the impression that my boss wishes I was just a little bit more of a sociopath. And every other time I'll say something like, "Oh, hey, my kid's in a play, I want to go see it." And they'll be like, "Oh yeah, sure. Of course, family comes first, but you really need to see it. Do you really want to see it, because you could stay here and work?" And I never get that impression there, it's always like, "Absolutely family comes first, no qualifiers. I don't wish you loved your family less and loved your work more."
Rob Collie (00:36:42): That's great. One of the things that our company is that I've felt a lot of pressure over the years. Some of it direct, but I think most of it just unconsciously like this devil sitting on my shoulder that says, "You really can't run a business and be humane. You're so naive, Rob." But we've leaned into it and said, "Okay, we're going to remain humane, we're going to be good people, we're going to do good human things." I'll get on all hands meetings and say, "Look, there's two standards that I try to hold myself to, it's be a good human and a good CEO." You have to do both and it's hard. It's hard to do both at the same time sometimes.
Rob Collie (00:37:21): But what I've discovered is that it's not as hard as everyone would want you to believe, it's this paper wall that they painted to look like concrete, "You can't go through that wall, you just scratch it." It's like, "Really? That was it?" Now, of course, a big part of the problem them in the world, I think is the real power exists at great distance from the problem. Once a company, for instance, is publicly traded, now, it's just pure chasing return, your company as a security is only returning 10% annually, and this other one over here is returning 15% annually, what are you going to do about it?
Rob Collie (00:37:59): And the CEO or whoever that pushes back and says, "No, we have a really good thing going here. We're doing really good things for the world and for our people," well, they get replaced because the shareholders are in charge. They don't want to hear about Adam Harstad's kids play. Being privately held, I think is a big, big, big part of being able to still do both. We've proven to be very successful. I think we still pretty clearly have a no sociopath rule.
Adam Harstad (00:38:28): It's good. I have nothing against sociopaths. Sociopaths are people too, but-
Rob Collie (00:38:32): People are people.
Adam Harstad (00:38:33): Right. I don't want to give non-sociopaths the impression that I wish that they were sociopaths.
Rob Collie (00:38:40): Let's not engage in absolutely base discrimination against sociopaths. They have feelings. Wait.
Adam Harstad (00:38:48): Since this is the cognitive bias episode, supposedly. I think a lot of this goes down to hyperbolic discounting, which is basically the idea that we wait short term gains more than we wait long term gains. The closer something is to us, the more we wait it. And to some extent, the time discount is rational. I would rather have $100 today than $100 a year from now because I can take that money and invest it and there's expect deposit returns.
Adam Harstad (00:39:16): But when you use a hyperbolic discounting system, it's characterized by things like preference reversals, where you'd make a trade today, and two days from now, you'd make the opposite side of that trade. It's not consistent over time. I get how hard it is to be ethical and to invest in the long term because you always see like, hey, there's these short term gains to be had, "Hey, if I overwork my team here, I'll get this extra productivity for the next two weeks." And you don't really look at, "Well, but then I'm going to lose productivity the two weeks after that as they recover from the burnout and as I give them a time to rest, or maybe I don't give them a time to rest and now I've got higher employee turnover and I've got to replace that."
Adam Harstad (00:39:56): All you see are those short term gains staring you in the face and everything else is future use problem.
Rob Collie (00:40:02): Yeah. And there's not a lot of thinking about future.
Adam Harstad (00:40:04): You screw that guy.
Rob Collie (00:40:06): Yeah. I seriously, Have you seen the Calvin and Hobbs homework time travel strip?
Adam Harstad (00:40:11): Mm-mm (negative).
Rob Collie (00:40:12): It seems like they're up your alley. They're sitting around, Calvin has to do his homework and he's really pissed off about it, so he goes, "Oh you know what, it's six o'clock right now, eight o'clock me is going to have the homework done. So let's just travel to eight o'clock and get the homework and come back." Right you are. So they build the time machine, they go to eight o'clock Calvin, and eight o'clock Calvin is sitting like, "I don't have the homework." He's like, "I'm supposed to already be done. Seven o'clock Calvin was supposed to do the homework.
Rob Collie (00:40:43): So they both agree at that moment that seven o'clock Calvin is the real villain, and they jump in the time machine to go get seven o'clock Calvin. Awareness of these things isn't some panacea that solves them. I agree with that. But a lot of these things are by significant degrees retrainable. Really simple example, we talk about being good to your future self-in our training. In our training programs when we're instructing people on how to use Power BI, make this a very, very, very explicit theme, is that the original tool for analyzing this, for analyzing data just like standard spreadsheets and stuff, they're not 100% responsible for this, but they are fertile ground for you to learn the habit of neglecting future you.
Rob Collie (00:41:29): And there are things in Power BI that might take an extra minute or two to set up than they would in a normal spreadsheet. And yet, from that point forward, the next time you need to do that thing, it's instantaneous payoff. You don't need to do any work whatsoever. You can retrain yourself to be a bit better to your future self as soon as you start to think of your future self as a construct, you just introduce that player into your mind space, into your game. I have seen it, I can change my own behavior in the present by going, "Oh, future me is going to be really pissed off." Eight O' Calvin is not going to understand the actions of six o'clock Calvin.
Adam Harstad (00:42:12): Yeah. And I think, again, this is where I hesitate to call myself purely a Gigerenzer, because I think knowing these biases is useful, even if you can't stop yourself from having them, even if you can't even make yourself aware that you have them, you can build systems, you can build basically safety nets that automate a lot of behavior where this bias would normally kick in. And basically, just take the decision away from yourself too. Was it Odysseus who was going to sail past the sirens and he knew that everybody who heard the sirens cast himself into the sea?
Adam Harstad (00:42:45): So he had his crew chain him to the mast so then they're sailing past the sirens, trying to cast himself in the sea, he can't because he's chained to the mast. And I think having that knowledge that anybody who hears the sirens cast himself into the sea is useful only if you're going to take that extra step and create that system that takes the decision, takes the agency away from you in situations where that's going to be a problem.
Rob Collie (00:43:08): On our previous conversations, did I mention to you the Charlie Munger essay?
Adam Harstad (00:43:13): You might have.
Rob Collie (00:43:14): I think this would be an interesting one. You know how you send me links and I don't read them? It's time to reverse that, I'll send you a link and then you cannot read it. But I think actually you might, I don't know, I give you a lot of credit. You have a higher chance of reading the thing I send you.
Adam Harstad (00:43:28): Always follow the links. The fun stuff always happens in the links.
Rob Collie (00:43:31): Really?
Adam Harstad (00:43:32): Life hack, always follow the links.
Rob Collie (00:43:34): What if I attach a PDF instead of sending you a link?
Adam Harstad (00:43:38): That's fine.
Rob Collie (00:43:38): Okay. That'll work? So Charlie Munger is Warren Buffett's right hand man. He had this, I think it was originally like a college graduation speech or something, but it's an essay now. So it's about these sorts of biases and things like that. He's using it, for him, this isn't without agenda. He lives by these principles and by awareness of them and he uses it in his business all the time. And so this is a very actionable essay, even just the very, very, very first of these categories of misjudgment that he identify. It'd be pretty interesting, I think, to see if his categories, one to one align to things in these other guys work, Kahneman, or Kahneman or whatever, if basically Munger is rediscovering in parallel the same things or-
Adam Harstad (00:44:32): He might not be rediscovering. I know the investment community is a big fan of the work of the behavioral economist, and they were one of the first communities to really embrace that probably because there were huge sums of money on the line for being right.
Rob Collie (00:44:46): Rediscovering or parroting, whatever. I eagerly await your review of this.
Adam Harstad (00:44:51): Sure. Fire away.
Rob Collie (00:44:52): The very first one in this essay has had a lot to do with how we've constructed our company and it's just like this overwhelming power of incentives. He has a great way of saying, he is like, "I've always been like in the 90 plus percentile of my age cohort at all points in my life, in believing in the power of incentives. And yet, every year I discover something that shows me that even I wasn't in enough on my own thing, the thing that I believed the most." There's something I think that comes back to what you were saying earlier, was it the hyperbolic?
Adam Harstad (00:45:25): Hyperbolic discounting. Hyperbolic discounting.
Rob Collie (00:45:28): Even if you are the most calculating Machiavellian person in the world, if you take a long enough timeline, I think you end up coming back around to things that in certain lights might seem altruistic because what's really good for you long term, is that everyone around you is also happy. We did something that consulting firms don't usually do, we implemented very, very, very aggressive and valuable incentive plans for all of our consulting team in addition to the base salary. It's been phenomenal. There are certain adjustments we've made to that incentive program, like the way the formula is calculated, it's not subjective, it's 100% mathematical.
Rob Collie (00:46:11): There's no human jet in how much the bonus check is each month. We made changes to that formula that have increased revenue that year, but we can look at it, we can look at the two different trajectories and go, "Yep. That was like a 30% difference in revenue. Just that one little tweak to the incentive program." I don't even remember all those other, I tend to digest nonfiction, I read like the first thing and go, "Okay, I'm going to go off and act on that." But even he and his essay emphasizes this as important as the rest of them combined.
Rob Collie (00:46:42): Offline I'll send you this essay. We'll also link it, Luke. I'm sure we've linked it before on the podcast because it's one of my favorite things that I've read one 10th of, but it's pretty cool.
Adam Harstad (00:46:51): I was about to say, better to read a 10th and understand it than read the whole thing and not.
Rob Collie (00:46:56): Yeah, I completely agree. That's also part of our trainings too, is there's this line we draw in the training and say, "Look, everything above this line, up until this certain point in the training, we really, really, really need you to understand all of that really well. Everything after this, we don't want you to be scoring yourself because you'll tend to remember the things you didn't understand at disproportionate weight to the things that you did. Here's the line at which we really want you to hold yourself and ask us questions and hold yourself to a solid understanding. The rest of this, everyone's mileage is going to vary in terms of how much they understand in their first exposure to it, but that's okay."
Rob Collie (00:47:32): Again, all these things learned from experience over the years, training people and talking to them later about how they felt about it and stuff. You learn, you adjust.
Adam Harstad (00:47:41): Or you don't and you perish.
Rob Collie (00:47:42): Yeah, we haven't done that yet. We've come close once, long time ago, and we learned a lot and changed a lot.
Adam Harstad (00:47:50): There's this philosophy that people will look to successful companies and they'll try to draw lessons from those successful companies. They'll say, "Oh, Amazon does this. Amazon's worth billions of dollars. Let's do that because Amazon does it." And they're trying to learn lessons from companies that did not fail, which makes some plausible intuitive sense. If you don't want to fail, do what companies that didn't fail. But in reality, all you can say about Amazon is they didn't discover the thing that will definitely kill your company, so maybe let's look at some companies that did fail because they did discover that thing. Let's see what they did and let's make extra sure not to do that.
Adam Harstad (00:48:27): And that's survivorship bias. The famous example is there were fighter planes in World War II and they were coming back and the general said like, "Oh, we can put a little bit extra armor on these fighter planes, but only a little bit, because otherwise they're too heavy and they won't fly right. So we're going to look at the planes that come back and we're going to look at where all the bullet holes are and we're going to put that extra armor right there." And a mathematician called Abraham Wald said, "No, this is a terrible idea. Put the armor where the bullet holes aren't because if a plane comes back and it's got bullet holes, a bunch of bullet holes on the wing, all you know is that a plane can survive being shot in the wing a bunch of times."
Adam Harstad (00:49:02): "If a plane comes back and there's no bullet holes in the fuselage, this doesn't tell you that my planes are never getting hit in the fuselage, it tells you that the planes that are getting hit in the fuselage are aren't coming back."
Rob Collie (00:49:12): Finally. Finally, Adam, I have you. These were not fighters, these were bombers.
Adam Harstad (00:49:17): Bombers? Okay.
Rob Collie (00:49:18): Yes. There we go. All right. Podcast adjourn forever. We're going to end on a high note. I know why this is fresh in your mind because there's a tweet recently that Twitter had the foresight to tell me that you would like to tweet, and it's a picture of exactly it's the bomber with the red dots all over it in certain areas. When you see that picture of where all the bullet holes are, the planes have come back with bullet holes here, if you just look at that diagram, it's like, "Oh my gosh, you know what, they never ever, ever hit the cockpit. And they never hit the engines. It's crazy. Can you believe that they never hit the cockpit or the engines?"
Adam Harstad (00:50:03): Have you ever seen, I don't know if this is way out of left field, there's an old cult sci-fi movie called Cube and the basic idea is a bunch of people get dropped into this giant cube. It's made up a bunch of different rooms, it's like Rubik cube, but it's like 27 by 27. And some of the rooms are completely safe and some of the rooms are just absolute death traps. You step in the room and all of a sudden like the floor turns into lava or the air gets filled with poisonous gas. And I did a whole fantasy football article about that. It was Canadian, it's a cheesy Canadian sci-fi movie.
Adam Harstad (00:50:37): And the idea is like, if you're going to go into the cube and you have this time to prepare, maybe you want to stand at the exit and interview people as they come out and be like, "What were the worst rooms you saw?" And you can gather all this data and you fill up your notebook and then you go into the cube and you have a choice between two rooms. And one of the rooms is like, everybody comes back, says, "Man, this room is a total hellscape, we barely got out with our lives." And the other room you look and there's no data in your book about it. You're like, oh, "Hey, yeah, I don't have anything about this room."
Adam Harstad (00:51:03): Go into the first room, go into the hellscape, because all that means is that the people who went into that room never came out and told you about it.
Rob Collie (00:51:11): Counterintuitive. But again, I'd heard that story about the bombers in World War II so many times, but I'd never seen the diagram.
Adam Harstad (00:51:20): Oh, it's stark. I'm surprised it took a mathematician to point it out, because it's one of those things where once you see it, you can't unsee it, but also it hard to think about before I knew about this, I probably would've reached that same conclusion because people are people.
Rob Collie (00:51:32): Yeah. It's the power of visualization. You've got all these different planes, all these different places with holes in them, but until you superimpose all of them on one plane, it doesn't just leap out at you like, "Look at the vulnerable spots. The engines, the cockpit, of course, it's not chance that there's no holes there."
Adam Harstad (00:51:52): The lesson is, don't take marriage advice from people who are happily married, get marriage advice from people who are miserable in their marriage or whose marriages have failed. Don't get business advice from successful companies, get business advice from companies that went under and say, "Hey, what killed your company? Let's not do that." Take parenting advice from terrible parents not from good parents. It's the old Anna Karenina principle that every happy family is alike, every unhappy family is unhappy in its own way.
Rob Collie (00:52:19): This is one of my favorites as well, the only way to be happy is to avoid all of the myriad possible failures. And so that means if you avoided them all, that means that you're just like all the other happy families, you have a lot in common. But everyone else has this unique set, this unique combination of the things they didn't avoid. I feel bad doing this because we're just switching roles here, but obviously we're overstating this, failed companies are often failed because the leader had no self-awareness.
Adam Harstad (00:52:48): They need some level of introspection.
Rob Collie (00:52:50): And they wouldn't be able to tell you anything interesting, but they'll more than likely tell you it wasn't their fault.
Adam Harstad (00:52:55): You don't necessarily have to listen to them, but if you get like a forensic anthropologist who's studying the ruins of their culture, they can probably figure out what went wrong.
Rob Collie (00:53:06): I think I'd want to go look for the companies that almost failed and then didn't, that might be my favorite group to talk to. Those are hard to identify because most companies that almost fail don't like to talk about it. Let's do just a little bit of football talk.
Adam Harstad (00:53:21): Sure.
Rob Collie (00:53:21): And talk about my own biases and everything. I have what passes for a heuristic, which is, we don't know anything. What happens in an NFL season is fundamentally unknowable. Position yourself to take advantage of that fluctuation, swing for the fences and keep swinging. And I had so many opportunities this year to draft Cooper Kupp, and I knew things were changing. It should have been right in my heuristic wheelhouse, new quarterback, new capabilities could be an outlier situation. Take the Rams, take the Rams receivers. No, boring, says my priors. Boring, boring, boring Robert Woods and Cooper Kupp.
Rob Collie (00:54:04): Those aren't world beaters, those are the singles in the baseball metaphor. They've always been singles, they're dependable, but I don't like the dependable singles. That's not how I construct my teams at all. Boomer bust. At this point, if we redrafted, there'd be people very, very rationally taking Cooper Kupp number one overall, which is just absolutely jaw dropping. It's like one of the best examples of we know nothing that I can come up with. And I didn't take him, not once.
Adam Harstad (00:54:35): I'm in a unique place in the industry. I'm the only guy I know of who's doing this, although it's possible that other people are doing it and not advertising the fact, especially in DFS, where I think a lot of people try to keep their edge as a secret. But for Footballguys, I do a lot of work on player upside, because it's basically that idea that you're talking about, that the singles aren't really getting you that much closer to the win. If you're not first, you're last right, unless you're in a league that has graduated payout structures. But for the most part, everybody who's not first place, lost.
Adam Harstad (00:55:05): So you want to take risks that have that disproportionate payout. And one of the things I consistently find is that in terms of upside, we really don't know who has asymmetric upside. Basically upside is a function of expectations. The higher we are on a player, the higher their upside is. And there are guys who we aren't as high and who have that disproportionate upside, and it's tempting to think that we can identify who they are in advance. You thought that, "Oh, Cooper Kupp clearly is not the guy with this upside." But we really can't.
Adam Harstad (00:55:37): In terms of asymmetric upside, there are some indicators, having a high yards per touch average, yards per catcher, yards per carry, does tend to indicate a little bit more upside and weekly variance. Let me distinguish upside from variance. A lot of people say upside and what they mean is asymmetric upside, which means there's a higher ceiling, but there's not a lower floor. And when I talk about it, I try to be very careful to distinguish that really what I'm talking about is variance, that the guys who have a higher ceiling also have a lower floor and I'm very skeptical of claims to identify asymmetric upside.
Adam Harstad (00:56:10): But even this symmetric upside, this variance, Cooper Kupp didn't really hit on any of them, he wasn't especially touchdown dependent before now. He doesn't have an especially high yards per reception average, he doesn't operate in an area of the field that tends to lend itself to disproportionate fantasy scoring. And people like you said, they don't really respect the amount of variance that there is just naturally that everybody has. Who has league winning upside? Everybody has league winning upside. We can try and distinguish this guy might have a tiny bit better chance of hitting that than this guy, but the variance is way larger than anybody wants to expect.
Adam Harstad (00:56:47): One of my rules, I do one redraft league a year, which is where you draft your players every year, and it's against the other people on Footballguys staff. So these are fantasy experts who've been playing for decades and have a lot of experience and they're tested and they're proven, I don't do any of that. I'm team heuristics, I don't do player projections, I don't draft a lot of leagues, I don't have any edge. And so my strategy is always, I draft the guys that they don't like. If normally Cooper Kupp is going in the fifth round of drafts and he falls to me in the sixth round, sure, I'll take Cooper Kupp.
Adam Harstad (00:57:20): I don't love Cooper Kupp, I don't hate Cooper Kupp, I'm just going to take whatever value falls to me. Then it just so happened that Cooper Kupp was one of the guys that fell to me and I'm just demolishing them all in that league. And of course, I trash talk nonstop about like, how does it feel to be beaten by the guy who drafts off of ADP? How much work did you guys put in the off season? This is my only league. My prep work was 30 minutes before the draft kicked off. How is this even possible?
Rob Collie (00:57:46): I have this image of you painted up like William Wallace with your sword. You raised the sword to the sky and you say, "Gigerenzer."
Adam Harstad (00:57:56): Yeah. I talk so much trash. It's funny, I tend to think that I'm relatively unassuming and people might not expect that of me, but fantasy football's supposed to be fun, dude. Why are you doing it?
Rob Collie (00:58:06): Yeah. You need villains.
Adam Harstad (00:58:07): Yeah. I view myself as a hero and everybody else is a villain. Their perspective on that might be different, but I think you need heroes.
Rob Collie (00:58:14): I tend to view myself as a villain, it's fun. You want to take down the villain. We have a guy who's leading our league, our work league, our 14-team work league right now. He's undefeated, I don't think he's ever played before. And oh, he has taken the villain mantle. It was like it was made for him, he was like, "Oh, I put this on, oh, it fits so nice." He's doing really well. It's going to be a real shame when I beat him and knock him out of the playoffs.
Adam Harstad (00:58:38): But see, that's my thing, that's why I view myself as a hero because it makes the league more fun for everyone. If you beat that guy, it's going to be so much more fun because he did all that trash talking. That's all I want. At the end of the year, all I want is a good story. Win, lose, whatever, I just want something that tells me that the time I spent on that was worthwhile, that I got something from that I will take with me going forward. Winning tends to be more fun, but as long as I get a good story, it was a successful year.
Rob Collie (00:59:09): Yeah. I like the story, but I wait the story about equal to winning, it's not like 90/10, it's 50% story and 50% winning. Let's be clear. I still can't tell myself that, "Oh yeah. I'm just one of many in the running here." No, no, no. That's my trophy.
Adam Harstad (00:59:26): You do know that fantasy football is about 50% skill and 50% luck though, right?
Rob Collie (00:59:31): It is.
Adam Harstad (00:59:31): Because when I win that's skill, and when I lose that's the luck. So that's 50/50.
Rob Collie (00:59:35): Oh, I see. I see. It's about 50/50. It's like the chances of a hole in one are 50/50, either it goes in or it doesn't. It is like that.
Adam Harstad (00:59:43): It's true.
Rob Collie (00:59:44): There's a lot of things break down to 50/50. It's the magical heuristic. Uh, whatever, it's 50/50. I don't know, I just thought that the Kupp was probably and Cordarrelle Patterson. Journeyman, not even a single, he hasn't even been a dependable single ever, and now Atlanta's like, "Well, let's try using him. We don't have anybody else."
Adam Harstad (01:00:09): Yeah. I don't fall in love with anybody, I just get whoever falls, and some of my coworkers will joke that I'm basically letting everybody else draft my team, which to some extent is true, I'm drafting the guys that they don't want. But the key thing here is I'm drafting the guys that they don't want at a discount. So basically, I'm letting them give me extra draft picks. I'll trade you my fifth rounder for your sixth rounder. That's what's happening when they let a fifth rounder fall to the sixth.
Rob Collie (01:00:37): Well, so it's a combination of them and consensus, right?
Adam Harstad (01:00:40): I'm going off ADP.
Rob Collie (01:00:42): So you're like wisdom of the crowds against the other 11 people in your league who let those people slide?
Adam Harstad (01:00:50): But I try to do an idealized version of ADP that's the sense of the market at this moment. If I'm in a league in Footballguys staff, quarterbacks always fall further than they do in more casual leagues. So I mentally adjust for that and I say, "Well, ADP says this is a good deal." But knowing the market that I'm actually in, really I would expect him to go later. But I'm basically just letting them give me, they're upgrading my draft picks, they're giving me a third rounder for my fourth round pick. They're giving a fourth rounder for my fifth round pick.
Adam Harstad (01:01:21): And I don't think I am better at them at identifying who's going to hit and who's going to miss, but I think if you give me enough extra draft picks, I can probably beat you.
Rob Collie (01:01:30): Just like Belichick, except he can't draft a receiver apparently. So the way to defeat you or to really handicap you to the greatest degree is to always give you the first pick.
Adam Harstad (01:01:42): Yeah. When I'm drafting at the turn and when I'm in another league, this is one of those strategies that doesn't scale. Obviously, if you're in a league where everybody's following it, then your chances of winning are one in 12. At that point, everything's pure luck. But that's the nice thing about Footballguys League is everybody has an opinion. There's nobody who's on the fence about players, everybody has their list of guys that they like, so that there do tend to be big deviations between expected draft position and actual draft position, which means there's usually a lot of bargains for me to scoop up on the way back.
Rob Collie (01:02:14): Someday all of us that engage in this game, this silly yet very addictive and enjoyable game, maybe we should be picking financial securities instead. Maybe we should bring this same game like, "I don't have any particular opinion about which of these software firms is going to dominate their market, but we're just going to do that one over end thing."
Adam Harstad (01:02:34): Yeah, no, just dump it all on index funds. I say all the time that my approach to fantasy football is basically just, I dump everything into index funds, which-
Rob Collie (01:02:42): That doesn't sound fun.
Adam Harstad (01:02:43): Well, it's fun for me. The expected returns just as good and the fees are lower. You're going to spend 300 hours this off season grinding tape and coming to opinions and I'm going to spend 30 minutes before the draft just downloading the app and checking the player list. And we both have about the same expectation of success.
Rob Collie (01:03:02): Okay. What we really need to do is create some fantasy league where we actually use real money and draft real stocks so that we can draft against each other. We need to be able to use that to harvest a method. We need use the market pricing, the ADP, the index fund against the people in our league who are making specific decisions. So we need to find a way that we can zero-summit like that and take our friends real money. That doesn't sound very good. Let's not do that.
Adam Harstad (01:03:29): Just make it an auction. Let everybody else overpay. That's the key, don't fall in love with anything, just go where the value is.
Rob Collie (01:03:36): Yeah. I agree. And take Cooper Kupp.
Adam Harstad (01:03:40): Yeah. Who I did not love. He was there and it's the five, six turn and I'm looking at it and I'm like, "I guess, Cooper Kupp." But just to show how none of us knows anything, my next pick, after that, I was looking at wide receivers and I'm like, "I want another wide receiver here." And the sharp two guys on my board were Michael Thomas of the Saints and Deebo Samuel of 49ers. And I'm like, "I want a league winner, and I think that Michael Thomas can be a league winner." Deebo Samuel at this point he's a known commodity, there's no asymmetric upside there. And of course, Michael Thomas is not going to play it down this year, and Deebo Samuel is like a top 10 wide receiver.
Rob Collie (01:04:14): Oh, I did have one question for you. A year is just long enough for memory to fade just the right amount, are we having more injuries to key players this year than usual?
Adam Harstad (01:04:25): I don't think so.
Rob Collie (01:04:27): You don't think so? God, it just seems like we are. And I think I say this every year though. We need like an overall variance score for a year.
Adam Harstad (01:04:35): The only year I can think of that was especially bad for injuries was 2015, was a terrible year for running backs, just famously bad. It's sometimes referred to in the industry as the RV apocalypse, just because everybody got hurt, and then a lot of people drew lessons from that. They didn't view that as statistical noise, they viewed that as trend. And for years after that, a lot of people thought, "Oh, investing in running backs a fool's errand, look what happened in 2015." Rather than saying, "Okay, but what happened in 2014? What happened in 2013? What happened in 2012?"
Rob Collie (01:05:11): It helped launch Zero RB.
Adam Harstad (01:05:13): Which has been around for a long time. I have to say, it's started 20, 30 years ago, really. as long as fantasy football's been around and running backs have been as popular, it's been called do the opposite or upside down drafting, but that particular Zero RB article was the right piece in the right place at the right time, and it just captured the imagination and took off.
Rob Collie (01:05:38): Well, next year, I'm switching to ADP contrarianism.
Adam Harstad (01:05:42): Yeah. Draft ADP followers. That's what I call it.
Rob Collie (01:05:44): All right. Well, that's it.
Adam Harstad (01:05:46): I don't know if draft ADP followers is the best fantasy strategy. In fact, if you have 1,000 fantasy football strategies, I think it's very unlikely that this is the number one or the number two or the number three, but it is the strategy that I am most convinced is positive EV. If you drafted a million leagues using this strategy, I would guarantee you, on pain of death, that you would finish the year with a winning record.
Rob Collie (01:06:11): Or your money back.
Adam Harstad (01:06:12): Yeah. I don't give guarantees like that lightly, but it's a mathematical certainty provided two basic assumptions. The first assumption is that players drafted higher are better in expectation than players drafted lower, which seems trivially true. You can go through the effort of proving it, but it's true. And then the second assumption is that players who have higher variants in their ADP are just as good or better than players who have lower variants in their ADP. And that one's a little harder to prove, but I've looked at it enough to feel confident that probably that's the case.
Adam Harstad (01:06:44): And if those two assumptions are true, I could walk through the mathematical proof that draft ADP followers is a plus EV strategy. And it's perfect for lazy people like me who want to do the minimum amount of work possible.
Rob Collie (01:06:56): In your pro-football reference t-shirt. Pretty slick, pretty slick. Any just advice for a new habit that people can acquire and the way that they think about things that would be most impactful?
Adam Harstad (01:07:07): One thing I work on a lot is it's tempting in society, and I think it might be a uniquely American pathology to view everything as a zero-sum competition, that my wins are necessarily somebody else's losses and somebody else's wins are necessarily my losses, that the pie is fixed and we're all fighting for the same pie and we want the biggest piece possible, and that has to come from somewhere else. It's very tempting and easy to see the world that way, when in reality, most of the time, unless you're in a situation like football where the rules are fixed and there's very little uncertainty.
Adam Harstad (01:07:53): Football is definitely a zero-sum game, what's good for one team is bad for another, but in the real world where the possibilities are not so constrained, it's usually not zero sum. Fantasy football, we've been competing for attention, for audience, for market share. One way we could do that is we can trash other sites and we can say, "Oh, we're the best. We're better than these other people, we're going to steal market share from somewhere else." That's a zero-sum approach. And the other way to do that is say, "Hey, fantasy football is really fun, let's show everybody how fun fantasy football is. Let's let that market grow leaps and bounds, rising tide lifts all boats." And that's the non-zero-sum solution.
Adam Harstad (01:08:31): And fantasy football over the last 20 years has experienced massive non-zero-sum growth where everybody's doing better today than they were 20 years ago. And in all areas of my life, I try to look at it through that lens. And sometimes it's conscious effort where it's very tempting to say, "I want to do something that's good for me," and it's going to come at the expense of someone else, where if I often reframe it and say, "I want to do something that's good for someone else." And often this will redouble to my benefit as well. That's not necessarily why I'm doing it, but the pie is not fixed.
Rob Collie (01:09:04): Well, I'm super, super, super tempted to skewer you with your own sword and say, "Well, but Adam, people are people and this isn't just an American thing now, is it?" But I think you're right.
Adam Harstad (01:09:14): Yeah. Well, everybody's a function of their context. And I think the context is uniquely American there.
Rob Collie (01:09:20): So we need to change the Depeche Mode's song, People Are People, but context matters.
Adam Harstad (01:09:25): Context always matters.
Rob Collie (01:09:26): I will be rewriting the lyrics today. I won't sing it because I can't sing, but I'll definitely rewrite the lyrics. Adam, thank you so much. Really appreciate you coming, especially on such short notice. This was a hastily scheduled, urgently scheduled, and I appreciate your flexibility.
Adam Harstad (01:09:40): Well, if there's one thing you should know, it's that I'm not going to prepare either way.
Rob Collie (01:09:44): Well, you've come to the right place. Thanks man. Much appreciated. Have a good one.
Adam Harstad (01:09:49): Awesome.
Announcer (01:09:50): Thanks for listening to the Raw Data by P3 Adaptive Podcast. Let the experts at P3 Adaptive help your business. Just go to p3adaptive.com. Have a data day.
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