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Skin in the Game

Skin in the Game
By Mustafa Sultan • Issue #15 • View online
Hello friends,
I’m often criticised by my friends. Apparently I’m a flip flopper. I change my mind too much, especially when giving advice.
In fact, I’ve been caught giving one piece of advice, followed by giving the exact opposite advice days later.
Sometimes I do a cautionary check before giving advice. “What did I say last time?”.
Why do I give such bad advice? Malice? No. Stupidity? Maybe.
Most likely though, it’s because I have no skin in the game.

Skin in the game means trusting people who have something to lose. It simultaneously explains:
  • Why doctors are more skilled than economists
  • Why some attempts to discredit Trump do the opposite
  • Why I give such bad advice
🍋 Socialism
After the ‘08 financial crisis, the British government (read: taxpayer) paid £500bn in a bank rescue package.
This led to uncomfortableness—
Lemon socialism: privatise the profits and socialise the losses
It was a slap in the face to see bankers continue to enjoy large bonuses despite having caused so much harm.
They felt entitled to profit heavily in the upswing, but turned to us during the downswing ('too big to fail’). They had no skin in the game. They couldn’t lose.
This gives an interesting divide in jobs. Those in which people have skin in the game, and those in which they d0n’t.
Jobs with skin in the game:
Doctor, nurse, surgeon, engineer, lawyer, artist, investor
Jobs without skin in the game:
Banker, politician, economist, bureaucrat, journalist
Trump 👶
During Trump’s campaign, detractors would bring up his bankruptcies as evidence against his character. It did the opposite.
…they also failed to realise that, by advertising his episode of bankruptcy and his personal losses of close to a billion dollars, he removed the resentment people may have had toward him. There is something respectable in losing a billion dollars, provided it is your own money.
Nassim Taleb, Skin in the Game
No matter your opinion of Trump, there’s no doubt that he feels real. He’s not from the Eton/Oxbridge PPE factory (or whatever the US equivalent is).
People with skin in the game have scars. Far from a detriment, these scars inspire respect.
People without Skin in the Game
I have a friend with a legitimate medical condition. He was once denied an exam seat near the restroom because it didn’t follow protocol.
Bureaucrats and administrators, by definition, have no skin in the game.
Generally, people who work with others on a micro (personal) level have skin in the game. Those who are several rungs detached and work on ‘bigger picture’ (macro) stuff have less skin in the game.
An economist can sit at their desk and write theory after theory with no chance of testing (falsifying) any of it.
Macroeconomics, for instance, can be nonsense since it is easier to macrobull***t than microbull***t—nobody can tell if a theory really works.
Nassim Taleb, Skin in the Game
A journalist can write article after article, with no repercussions for misleading people — just a pat on the back for driving page views.
A doctor on the other hand, has a lot of skin in the game. They receive constant feedback from their decisions and are held accountable by their patients, their own conscience and professional bodies. A bad doctor rarely lasts.
The Problem with Doctors 🥼
In my own experience, advice from people who have skin in the game is much more candid, actionable and productive.
In most clinics I sit in, I ask the consultant for advice. I’ve asked many consultants what it takes to become academically excellent. Those without skin in the (academic) game say something like this:
You’ve got loads of time! Don’t worry, just have fun! Gee I miss my medical school days.
When I asked Prof Neil Sebire (skin in the game: >700 papers, H-index 88, >32,000 citations) he said this:
“When you’re in your career, nobody cares that you tried really hard. Nobody cares that you worked really hard and were up all night. What matters is: Where’s the publication? Where’s the presentation? Where’s the grant application? Where’s the actual demo of the software you can give?
Too many people spend a lot of time, but they never quite finish anything. If you write a paper and you get it 95% finished, it’s the same as 0. It’s either published or it isn’t.
Whatever you’re doing, try and make it much more binary. What is the intention of this thing you’re doing? Until that’s finished, delivered, done — you haven’t done anything.
What I'm Spending Less Time On 🕰
These books are my version of an airport page-turner. I also think they’ve been incredibly helpful in my life. But do any of these people have skin—in the game they claim to teach?
Atomic Habits by James Clear, self-help guru
The 7 Habits of Highly Successful People by Stephen Covey, self-help guru
How to Win Friends and Influence People by Dale Carnegie, self-help guru
Who I'm Trying to Learn From 📖
Examples of books by people with skin in the game:
Principles: Life and Work by Ray Dalio, founder of Bridgewater Associates, manage $160bn of assets
Shoe Dog by Phil Knight, founder of Nike
What it Takes: Lessons in the Pursuit of Excellence by Steven Schwarzman, CEO of Blackstone Group, manage $140bn of assets
Rules for Radicals by Saul Alinsky, activist — spent his life campaigning for poor communities. Heavily influenced Obama.
For more skin in the game 👇
#013 The Story of QuitGenius: Medical Student to Y Combinator, 1 Million Users and Silicon Valley — Dr Sarim Siddiqui Co-Founder and Head of Product
What are your thoughts? Perhaps you completely disagree with me. Would love to hear about it.
All the best,
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Mustafa Sultan

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