Po Bronson is a former Silicon Valley journalist for TIME, the New York Times, and Wired. He was the creator of the $treet, a television show on FOX that starred Jennifer Connelly, and author of “TOP DOG: The Science of Winning and Losing.” Bronson tries to distill why Wall Street promotes male analysts, even though women do a better job. He shares his intuitions on how a woman will be successful in business.
Bronson then tries to answer these quirky business-related questions:
– Why is home field advantage just as relevant in diplomacy and deal-making as it is in sports?
– How can the shape of entrepreneurs’ hands be just as revealing as their business plans?
– What does Italy’s domination of the packaging business have in common with the Harvard-Yale football rivalry?
The conversation then finishes with sociology as Bronson helps explain why younger siblings are more competitive than first-borns. He thinks that parents praising their children affects their competitiveness. Find out more about Po Bronson at www.pobronson.com.
Po Bronson has built a career both as a successful novelist and as a prominent writer of narrative nonfiction. He has published six books, and he has written for television, magazines, and newspapers, including The New York Times and The Wall Street Journal, and for National Public Radio’s Morning Edition.
Po Bronson’s book of social documentary, “What Should I Do With My Life?”, was a #1 New York Times bestseller and remained in the Top 10 for nine months. His first novel, “Bombardiers,” was a #1 bestseller in the United Kingdom. His books have been translated into 19 languages.
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ANNOUNCER: Welcome to Creating Wealth with Jason Hartman! During this program Jason is going to tell you some really exciting things that you probably haven’t thought of before, and a new slant on investing: fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self-made multi-millionaire who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it! And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.
JASON HARTMAN: Welcome to the Creating Wealth Show! This is your host, Jason Hartman, and thank you so much for joining me today. We’ll be back with today’s guest or segment in just a moment.
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JASON HARTMAN: My pleasure to welcome Po Bronson to the show! He’s a former Silicon Valley journalist for Time, The New York Times, and Wired Magazine, and author of Top Dog: The Science of Winning and Losing. Po, welcome. How are you?
PO BRONSON: I’m doing very well, thank you very much.
JASON HARTMAN: Good, good. And you’re coming to us today from San Francisco, is that correct?
PO BRONSON: Yeah, beautiful day here in San Francisco.
JASON HARTMAN: Excellent. Tell us a little bit about the science of winning and losing. It appears that you have possible debunked what Malcolm Gladwell was promulgating as this 10,000 hour theory.
PO BRONSON: You know, even watching the Olympics right now, you’re seeing people who are going up against each other, and both of them have 10,000 hours in contest after contest. Now, surely that helped them get there, but it may not decide who wins and loses. And I feel like actually my work on this is not necessarily completely contradicting Gladwell’s and Ericsson’s 10,000 hour work. I suppose there’s other work contradicting exactly how many hours you need to do. But it’s really additive. It’s looking at about 80 other factors that affect performance under stress and pressure, from politics to court rooms to business negotiations to financial trading to sales relationships, and in different industries, as well as in sports, as well as in the fine arts, from music to baroque musicians to Renaissance painters—competition is everywhere.
It’s on TV, and on reality shows, and we feel it in our lives, and we really have this dual perspective on it, right? To say someone is competitive—if you’re looking at TV, and you’re looking at the Swedish cross country skier who did an amazing 18 second come from behind victory sequence there, you would say, her competitiveness was a thing to salute. But if we were to [unintelligible] saying that woman over there, she’s really competitive, we would be kind of saying she has a personality disorder. We’d be saying, she can’t turn it off, she drags people into the sense of social comparison that no one wants to be dragged into, but you can’t—cares about winning and losing when we, the social context deems it inappropriate to care. And so, we make a distinction between adaptive competitiveness and maladaptive competitiveness. And in adaptive competitiveness, it’s healthy to have competitive skills, and a recognition of when to turn it up, and also a recognition of when to turn it down. We were inspired actually by the Ancient Greeks, who when they created the Olympics, they came out of the—it was a religious festival.
And the Ancient Greeks believed—and they had all these games, chess and checkers and bones and contests, it was part of their culture. They believed in the highest spiritual virtue called something called aretas, kind of rhymes with gravitas. Now, aretas was this notion that you become your truest self, and you discover your greatest capacities, through competing. And not just physical strength, but cunning, and intelligence, and honor. You discover these things—not that competition bred immoral behavior, but that it taught moral behavior. And we wanted to redeem this notion, this positive, adaptive notion of competitiveness, in a society where we do see a lot of examples in sports of people cheating, or in business, of corruption, where we see this connection between the bad outcomes in competition, and we want to resurrect the noble side of competition.
JASON HARTMAN: Very interesting! I mean, so many different parts of competition, and so many things are competitive, as you said. Now, does your work primarily deal with—and you mentioned it at the beginning, and that’s why I ask—being under pressure in a competition? Or just, all competition is pressure, I guess. But is it more like the heat of the moment type of stuff, when you mentioned athletics, the court room, making a trade right on the spot, versus overall winning in life, for example?
PO BRONSON: Well, it’s a really great questions. Religious philosopher James Carse makes a distinction between finite games and infinite games. And finite games would be like sports, or a day of trading on Wall Street, you know, where there’s an opening bell and an ending bell. Or an opening whistle, at the tipoff, and a final horn. Infinite games is life. Life is an infinite game. To schoolchildren, going to school year after year, even though you get the summers off, and breaks, it feels like an infinite game—that you’re always getting compared to other kids, you’re always a little ahead, or a little behind, and it never ends. It goes on and on and on as far into the future as you can possibly see.
And each infinite games and finite games create quite drastically different kinds of stress, and they require different kinds of stress decompression. Infinite games require you to rest and recuperate during the game itself. Finite games allow you to hug it out, go have a beer to recuperate afterwards. So, finite games can get very intense. Infinite games, you have to let it be sort of a low simmer. And one thing interesting that comes out of this shows that women may be better designed, on average, than men, for infinite games—for very long-term stresses. One of the surprising factors that pops out is in the educational sector, where in a hot house, competitive, private schools, and this is actually research from all around the world, from Trinidad and Tobago, and China, and England, and American South charter schools; it shows that actually girls do better than boys in those types of schools. Girls do better in those types of schools uniformly. But boys, and if they’re one of the best, it’s fine. But if they’re not one of the best—if they’re anything but the best—they actually would learn more if they went to a less competitive school.
JASON HARTMAN: Why is that? I mean, what do you attribute that to?
PO BRONSON: It’s because of the long-term stress of always comparing yourself to some other kid who’s an A or an A+ student, and you just cannot get over it. It’s every day, and it just kills you. The real answer’s not to go to a less competitive school. The real answer is to understand how you must turn the healthy competition. Competitiveness is the ability to turn off that sense of comparing oneself to others, which is something that the boys aren’t as good at. They’re always comparing themselves to others, and unable to turn off, it creates more psychological stress, and tears down their ego.
JASON HARTMAN: Very interesting. Now I gotta just stop you there, and ask you something. From a social perspective, or especially a dating and love oriented perspective, I think most of us would agree, both genders, that females tend to be more competitive, and if you will, I’m going to use the word caddy. It’s surprising that you’re saying they can turn it off, in this way. But maybe you disagree with me on my statement.
PO BRONSON: No, I wouldn’t disagree at all. But women have social domains where they compete, and then don’t compete over at all who’s the best mother, who has the best shoes, whose kid has done this and that. And it is exhausting for them, too! But they do turn it down too. What men are good at is like, washing dishes, and then turning that into a sport, all of a sudden. And then making it a blood sport for about 15 minutes, and then the dishes are all done, and they have a beer and hug it out and they’re done, and they let it go. And women are definitely, on average, and not true of all women or all men in any way, but will keep that sort of ember alive, and let it be a slow burn, and not completely put it out. But they’ll never totally turn it up either. The slow barbing, and the implicit, and the kind of simmering backstabbing thing, is never an all-out war. It’s always kind of a gradual thing, and that pace of it is something that they can handle, while with the boys, it has to be more outright. And really feel like a verdict on them. Boys are very good at pretending they’re somebody else, and then competing within that personality. It’s like at school; you can’t pretend to be LeBron James in the backyard playing basketball when you’re at school. When you’re at school—that’s your grade. Your actual grade is very, very threatening to the boys.
JASON HARTMAN: Yeah. You did an interesting part about Wall Street, and you found that women tend to be better traders than men; however, why are there so many fewer of them? And, well why are they better? What makes them better, too?
PO BRONSON: Well yeah. So it’s not actually traders. It’s financial analysts. It’s—we’re talking about stock analysts, the ones who are delivering every quarter the earnings projection for company after company, and this is a longitudinal study over 25 years, looking at 3 million analyst predictions. And they’re looking at every risk factor for every company, trying to determine, how is it really going to shake out? What does the future really hold for this company, and that company, and that company in this sector? And it turns out that if you had a hedge fund where you bet on female financial analysts and you bet against male, you’d make a lot of money.
Female financial analysts are 8% more accurate than men. They’re very good at judging the risks that a company is dealing with. Men tend to be overly optimistic. Men are not as good at, or to give them a superiority of their own, you might say that men are very good at ignoring the odds. Women are good at judging the odds. And you see this in quite a few spheres. And unfortunately, women are not hired at the rate that they should, because they do the analyst job better than men do, but that isn’t necessarily trading itself. Women tend to be—[unintelligible] says that if a woman tells you to sell a stock, you should really sell a stock. And that that’s one of the things about male financial analysts; is where they’re weakest is in telling someone to sell a stock. They can maybe pick a growth stock, or something that’s gonna go up, or a value stock, but they’re not as good at telling you when to get rid of it. And that’s something that female financial analysts do better. There’s similar studies of this, where female CFOs tend to keep companies from getting in trouble. Male CFOs tend to get them into deals that are far more aggressive, which sometimes pay off, and sometimes don’t. Same as women on the audit committee. Women due tend to moderate the risk that a large organization will take, and that could be an advantage or a disadvantage, depending on what industry you’re in.
JASON HARTMAN: But it’s fair to say that women are more risk-averse?
PO BRONSON: Right, but it turns out not to be risk-averse as much as they’re risk-accurate. They’re not scared of risk—they in fact accurately see just how much risk is there, and they don’t want to waste time with losing. So, a good example is, in politics, it’s always been an issue to get women to run for larger political office. They’ll run for school boards plenty, but they tend not to run for higher office much of the time. And people assumed they were just risk averse; they didn’t want to lose, didn’t want to waste their time with this stuff. And what they found though, in a much more careful analysis, is that when the odds of winning a political contest are below 20%, all of the candidates are men.
When the odds get above 20%, when they reach about 30%, women start jumping into the political races. And in fact, at that point, they jump in more than men do. Women are highly sensitive to the odds; men sort of again, ignore the odds. They run for political office for different reasons, regardless of whether they really think they can win. Women don’t want to waste time with losing, again. And this has been helpful in understanding, like when you’re up against an incumbent. In other words, they’re always going to find a female financial candidate—now the smart people are saying, we’re not gonna get a woman to run as an incumbent, since the odds of winning now are only 8%. Let’s put our energy over here in this other race, where incumbent is gone, and it’s an open seat.
JASON HARTMAN: So you said that there were 80 or so different characteristics that determine the winners and the losers, right?
PO BRONSON: Yeah. From genetics to physiology to mental traits to science of teams and team trades, yeah.
JASON HARTMAN: Okay, so tell us about some of these, if you would.
PO BRONSON: Well, let’s just take something for fun. Let’s look at early childhood. We know there is such a thing as sibling competition, and wonder well, does that help you, really? All that competition with your sibling? And it does, in fact. Actually, those who grow up with siblings do learn competitive skills. What’s more fascinating is actually by order of birth. While oldest siblings do get more time and energy from the parent, and then they end up being 1% smarter, on average, and do well in life, it’s the youngest siblings that have the best competitive skills. Because to compete out there in the real world just when you’re a kid, it means there’s always gonna be someone that can read better than you, draw better than you, that can hit a baseball better than you, and you want to quit!
The embarrassment of being next to these people and being compared is very hard! And—but this is something that younger siblings are used to their entire life. They grew up in a world where there was always a big brother or sister who could take what they want whenever they wanted, and who was better at everything than them. And they learned to not let that stop them. And so, here we are with some interesting manifestations, if you look at what’s going on. There’s snowboarding events, and mobile skiing events, and these types of adventurous sports. Younger siblings are twice as likely to be doing those types of sports than older siblings, or in baseball. Major League baseball; there’s been 350 pairs of brothers to play Major League baseball, in the history of the game. Younger brothers are twice as likely to steal a base as older brothers. They become risk takers, because they have to compete with their older siblings from birth.
JASON HARTMAN: Okay. So, what about only children, then?
PO BRONSON: Yeah, so, the question what do you do with the only children—what do you do if you were an only child, or if you have an only child—you know, one of the factors that really matters is—another one is actually group-based play. So if you have an only child, it’s important to get them playing in groups, not just in pairs. When you do pair-based play, we’re talking about pre-school aged kids, and profound effects. Pair-based play, for anybody, tends to be very, usually kind of polite, and there’s a lot of turn taking. Group-based play tends to—they tend to play games, compete a lot. They have to learn to be loud to be heard. You can be different than everybody else, you don’t have to feel like you’re the same. And so you’re allowed to be better than others in a group structure. In a pair-based structure, if you’re better than the other person, if kind of…it destroys the relationship itself. So those who grow up playing at pair-based play learn to sort of deemphasize competition, and those who grow up on group-based play tend to learn this. So, group-based play is really important for only children.
Roughhousing with parents is also really important; that can replace, and in many ways even improve upon, what someone might do with their siblings, if they did have siblings. And the best thing about roughhousing with the parent—which is actually natural; parents do this with their kids up to the time they’re about 10 years old. We don’t know why we do this. You know, pillow fights that are fun, hiding behind the curtains to say boo, all this kind of stuff, wrestling on the couch—it actually teaches kids to get aroused, to have fun, in kind of an intense mood, but to back away once it gets rough. It’s right up to the line, when you almost can’t take it anymore, like when it’s too much tickling, that’s right when the parent backs down. Or should back down. And this simulates for people who are later in life as competitors, this simulates competing really hard, but never breaking the rules. It’s people who didn’t have roughhousing—
JASON HARTMAN: One sec. So the take-home on—the roughhousing thing, I get that. That’s a very good point. What’s the take-home on the only children, though? Yes—I mean, are they—they should share, and learn to play nice. I mean, I sort of got that—
PO BRONSON: Everybody wants that. But really—
JASON HARTMAN: But who wins and loses? That’s the title of the book.
PO BRONSON: You want—only children need group-based play. Don’t invite just one kid over. Invite two kids over. After pre-school, make sure they’re playing in groups with other kids, not just—and this can become inevitable, a child at the age of three, who’s spending one-third of his time playing groups, and two-thirds playing in pairs—by the age of five or six, will be spending 76% of his or her time playing in pairs, and only 16% playing in groups.
JASON HARTMAN: What does that show us about who wins and loses? Because that kid—I mean, you’re giving parenting advice, and that’s great, but I’m curious how—
PO BRONSON: —group-based play learn to have proper competitive skills, and they can win.
JASON HARTMAN: Okay.
PO BRONSON: And those who grew up doing pair-based play are really polite; they can’t win.
JASON HARTMAN: So that falls really into the team dynamic that you mentioned. So, in order to win, it’s important to be able to work on a team. Is that kind of your point?
PO BRONSON: That’s a whole different kind of thing. No—the group-based play is often not really team-related thing; it’s often a lot of boasting and jockeying. Being on a team is a different vector, actually. And one of—there is this sort of egalitarian notion of teams that you’re all equal, and you’re all empowered—
JASON HARTMAN: And everybody gets a participation trophy.
PO BRONSON: Right. But the science says that that’s not what works—that actually, role clarification—role differentiation and role clarification on a team, really helps a team. It’s important to not all be the same. Be allowed to be different, and if they know their role on a team—and this is true for everything from sports to hospital emergency rooms and how they’re staffed, and how people know how to handle hospital, medical emergencies, and what their roles are. You can improve performance by improving clarification of what roles each person is supposed to do. And it’s important to understand that again, this egalitarian notion of teams—it doesn’t quite acknowledge the role of stars. Stars are really important, because what stars do to a team is not just perform, but they—you have to work with them every day, and they push people around them to get better. And they improve the overall performance of the team significantly.
JASON HARTMAN: So in other words, that idea of—I own a real estate company, for example, as another business I have. And so, the idea of having the superstar sales agent is good for the rest of the team, because it inspires the rest of the team? Is that…it’s a role model, right?
PO BRONSON: It’s [unintelligible], they also have to live up to that person’s work ethic, and that person’s expectations. Yeah. A lot of the time says, even in real estate, yeah, that stars are really important on a team. And you know, all of this—like at universities, it’s [unintelligible] where they studied this stuff. That having an all star research immunologist raises the productivity—the research productivity of the other immunologists at the university by 35%. You go back to, like, Chicago Bulls basketball, Scottie Pippen got really good, because he had to practice every day with Michael Jordan, and go up against him, and it made him really good. The stars play this rule on a daily basis with their teams.
JASON HARTMAN: What about though the potential for envy that’s created? I mean, in certain cases, that does make the team less effective and less cohesive, right? When there’s someone that’s above all the others, and everybody gets jealous?
PO BRONSON: Well, they do look at this really carefully.
JASON HARTMAN: And with siblings, I’m sure that happens with siblings too. But go ahead.
PO BRONSON: Right. And what they’re looking for is whether it feels justified. So, if a star is getting paid, you know, four times as much as the others, but it feels justified, because they really do that work, then it’s fine. It’s actually great. If people resent it because [unintelligible] it’s not earned, and they’re getting paid four times as much and only doing twice as much work, then people resent it, and it does undermine. People have to buy into the differentiation of the roles. If they don’t buy into it, then we won’t succeed.
JASON HARTMAN: Okay yeah, so buy in, and thinking that it’s fair. That all makes sense.
PO BRONSON: The whole notion of harmony on a team is a really really powerful idea we have. They did these studies of orchestras around the world. And they found that the better an orchestra sounds onstage, the worse the relationship drama is offstage. And what happened is, people grow up—the best orchestras are composed often of the best musicians, and those best musicians grew up wanting to be soloists, not wanting to be part of an orchestra. But they had to learn to do it. But it’s not necessarily their character trait, but that’s what makes the orchestra sound really great. And they’ve had to learn to do it. But it turns out that the idea that team harmony drives results—it seems to be actually the other way around. Really good results tend to make the team happy, and drive team relationships.
JASON HARTMAN: You know what’s interesting as I’m listening to you, Po? This is a great testament as to why socialism and communism just doesn’t work.
PO BRONSON: Well, absolutely. Collectivists, or capitalist notions—they did these studies, and to be honest, I’m thinking of one where they did Japanese versus American teams were doing these negotiation tests, right? And they give them these—it’s a very common paradigm been used in social science the last 30 years. Big team negotiation takes a week to do it, and they found that the Japanese teams were so focused on good team harmony, and that the Americans gave the lip service to that, but they really just wanted to win. So what happened was, they hit difficulty in the middle of the week. And this is where the Japanese insistence on team harmony led them to refuse to change tactics, refuse to call out the people who weren’t doing very well, to not embarrass them, and literally could not change, and could not reverse what was going wrong. While the American teams wanted to have team harmony, but not to the point—they weren’t going to go down with the ship. So if the ship was going down, they were willing to break the harmony and say, you’re not doing well enough, and you shouldn’t be the boss. We need to change how we’re doing it. And to allow that discord allowed them to pivot and do really well on these tests. And there can be such a thing as too much harmony in team-based, in teamwork.
JASON HARTMAN: Yeah, I agree with you. I definitely agree. Someone’s gotta be the leader, someone’s gotta be the star, and it’s not all egalitarian. I would definitely agree with you. So, what’s going on in Silicon Valley, nowadays? If we change the subject just a minute before you go. Do you report on it anymore, or is that all—
PO BRONSON: Yeah, I still follow it very closely. I’m not writing for anybody on it. But I can’t escape it. I run this workplace of 10,000 square feet, 80 writers there, all freelance writers, and we have a hotbed of startups in the building, and all of my friends work at startups in Silicon Valley where they work at Google or Facebook or Twitter, and what we have is another remarkable boom time going on. With it being honestly kind of unclear what is really coming out of this. But there is no doubt that Facebook’s huge, and that Google is really growing; that Apple’s got billions upon billions of real revenues, right? So a lot of real sales here that’s going to—doesn’t feel like it’s left the dot com boom, or it doesn’t feel like it’s ready to bust, but there are hundreds of apps and software programs everywhere. You can’t imagine them, any of them succeeding. So, but, it—you know, it still cranks on, kind of like it always did. Again, it’s a culture of MBAs and engineers, doing their stuff, and what we are seeing in San Francisco—real social backlash to the cost of housing, and causing people trouble.
JASON HARTMAN: Yeah, very interesting, very interesting stuff. So, what’s next for you?
PO BRONSON: I’m taking a break, because that’s what I learned from this book: is to compete hard, and then to rest and recuperate. And it’s helped me learn that that’s my best competitive style. And the other thing is, I’m turning 50 soon, and I promised myself when I was 32 that I was going to go off and use non-fiction to study the world. And when I was 50 I was going to come back and start writing novels again. And so I turn 50 soon, so we’ll see if that happens.
JASON HARTMAN: Good for you! That’s awesome. The website is www.pobronson.com. Of course, book’s available on Amazon.com. Do you want to mention any of your other titles, Po?
PO BRONSON: What Should I Do With My Life was a #1 New York Times bestseller. Nurture Shock, our other most recent book, New Thinking About Children, was a New York Times bestseller for nine months. And they’re also available at www.topdogbook.com. You can follow us on Facebook or Twitter.
JASON HARTMAN: Fantastic. And your personal website, www.pobronson.com. Thanks so much for joining us today, Po!
PO BRONSON: Thank you.
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ANNOUNCER: This show is produced by the Hartman Media Company. All rights reserved. For distribution or publication rights and media interviews, please visit www.HartmanMedia.com, or email [email protected]. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, or business professional for any individualized advice. Opinions of guests are their own, and the host is acting on behalf of Empowered Investor, LLC. exclusively.
Transcribed by David
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