The Power of Simplicity as a Catalyst For Growth [Podcast Ep. #15]

Transcribed from the episode audio by AI, so it may contain mistakes.

Ravi0:18Welcome to the Motivated Life podcast. I'm Ravi Raman. On today's episode, I'll be speaking on a topic that matters a lot, and it matters a lot to anyone who's looking to create more prosperity in their work or also in their life without simply putting in more effort. I'm going to talk about the principle of simplicity and how oftentimes in our life, by being simple, we allow ourselves to thrive. And I'll share examples from various aspects of life where this principle seems to play out. And I'll really challenge you to think about how you can focus more on the essential things in your life that seem to be generating the best outcomes, the best results.

And while at the same time dropping away some of the activities that are taking a lot of time, but not really going anywhere. So again, I hope you enjoy this episode. And if you do feel free to share this podcast with your friends. Okay, let's jump in. Let's talk about moving beyond the Pareto principle. And let's talk about the curious benefit of being simple, as opposed to simply working harder when it comes to progressing in our work and in our lives. Now, being simple isn't easy.

It's often harder, at least in the beginning. The benefits, however, are worth the initial effort. And what I'd like to do on this podcast is share a simple concept that might change how you think about your business, your health, your relationships, and life in general. This principle will be tricky to implement, but the results will speak for themselves. And not to set the expectations too high, but I believe that the idea I'm going to share with you really does have something to it. The idea is all about getting more out of less.

This is not a new idea, and people have referred to it in the past as the Pareto principle, also known as the 80-20 rule, which states that most of the outputs in life are generated from a minority of inputs. This is generalized to imply that about 80% of the results tend to come from 20% of the activities. Now, when you think about simplification and productivity, what do you think about? Well, most people think about trimming the fat, reducing the slack, and doing just as good with less effort, less activity, and less inputs.

Now, achieving such an outcome would be a great result, wouldn't it? For example, if you worked 40 hours a week and you got a certain result, imagine if you worked 30 hours a week and got the same result, or even if you worked 30 hours a week and got a slightly lesser result but saved a whole bunch of work, that would be a good thing, right? Now, what I'd like to open your mind to is the idea that we can do even better. Now, what if you could, by doing less work, not only achieve the same outcome, but actually a much better one?

By doing far less than you thought, not just doing the same, amount of effort, or slightly less, but far less. Now, that's the idea I want to talk about today. The idea of getting more out of less. Think about it as Pareto's principle taken to an extreme. To help get your mind around this concept, I'd like to share a few examples of how this principle plays out in life already. And I'm going to share examples from the worlds of finance, business, and also nature. And through these examples, I hope you will see.

That this idea has a lot of truth to it. If you look closely at any aspect of life, less is so often more To start, let's talk about how to be wealthier by doing less. Now, an example that's striking me to me is when we look at the world of wealth and finance, we start seeing that there are very few markets or sectors of life where there's a greater incentive to create ways to build wealth. And what we have in the world of wealth and finance is the best and brightest people in the world spending a ton of energy all trying to figure out ways to make more money by taking bigger risks, actively trading and even going so far as to build computers from the ground up just to save microseconds off trade times.

Now, there's a whole lot of activity going in to figure out ways to get better financial returns. And I think this is fascinating because it's a great place to look and see, well, if less is more, does this apply to the world of finance? Because if it doesn't, well, we'll definitely see that, right? Well, when we look at the wealth-building games that people play, we see something that's really interesting. There have been numerous studies that look at the performance between actively and passively managed investments. And the verdict is very clear.

Passively managed investment funds have significantly higher returns than actively managed funds despite the lack of effort that goes into a passively managed fund. That's why they're called passive. In fact, in any given year, between 83 and 95% of active money managers fail to beat their benchmarks. Now, that's pretty amazing. You have money managers who are using every tool at their disposal to beat their benchmarks. And yet 83 to 95% of people fail to beat their benchmarks in any given year. And just think about all that wasted time and effort and money.

The passive index funds, on the other hand, They just invest in a predefined selection of stocks. They rebalance occasionally, and that's it. Very simple and effective. Now, sure, investing in mutual funds isn't the only way to build wealth, but it does provide a striking example of how less is more. And it's worth paying attention to. In the world of finance, it's definitely worth doing far less, picking your asset allocation, deciding how much you can save and investing in some passive vehicles that will grow wealth for you as opposed to actively trading.

So that's just one example of how in the world, specifically in the world of wealth building and finance, less is far more. Now let's look at the world of business and how it's possible to actually grow a business by working less. So I recently got paddle boards and I got paddle boards for my family, and with these boards, they're from a company called Tower paddleboards, we got a free book. And I found that interesting. Why would I get a free book with my order of two paddle boards that were shipped to me?

Well, the book was by the company founder, and it turns out the founder, Stephen Rstole, has been an entrepreneur and has started a few companies, and he's a very driven individual, clearly. But his book is a unique book because it's called the five-hour workday. And the premise of the book is not that we should be lazy. Well, the author, the founder of the company, who's the author of the book, is not lazy, obviously. However, Stephen, the founder of Tower Paddleboard, saw that there's a better way to get results in business.

And it had nothing to do with working harder. It had everything to do with working smarter. And what he saw was that when his team members were happy, when they were living great lives, they ended up more creative, productive, they were better at serving customers, and they were more insightful at work. So he performed an experiment. And for three months, he switched his entire company to a five-hour workday, five days a week, dropping a 40-hour week to a 25-hour week. In fact, what's fascinating, he did not change their pay.

In fact, he increased their pay in spite of the fewer hours worked. And he increased their pay by giving them a cut of company profits. Now, you might wonder what happened. Now, optimists would think that the experiment would have resulted in just a steady level of business growth, despite the fewer hours worked. So this was what an optimist would think. Now, this would equate to getting the same output from fewer inputs, work fewer hours, get similar output, not a bad result. That's an optimistic view of what would happen.

Now, if you're a pessimist or a doubter, you would probably think that going from a 40-hour work week to 25 hours would drop your business, though you might not expected to drop it that much, but you would expect to get fewer outputs from fewer inputs. Now, this isn't a bad result as long as your business is profitable. And it's not a bad result if you really care about giving employees back time in their days. However, this is not what actually happened. What happened was the business absolutely took off.

Employees were super happy. Now, that part should be obvious. They got a pay cut, they got a pay increase. And and a cut in hours. And so they were very happy. What wasn't expected was that customers also were super happy. Not only were they happy with the products they received, they were very happy with the quality of their customer service, and they were inspired by the ethos of the company in believing in creating a great work environment where their employees were happy, and that actually ended up driving their business.

customers told their friends about this great company that sold great products, and the business boomed in spite of working much fewer hours. So this would equate to getting vastly more output from fewer inputs. Now, business growth continued for a while, for several years. In fact, the company was even backed by Mark Cuban and Shark Tank. Now, since the book was published three, four years ago, the company has switched back to an eight-hour workday, but only during the off-season. They stick to a five-hour workday during the peak summer months when their business is busiest.

And they simply did the switch back to a summer-only five-hour work day because employees actually wanted to work more. They wanted to be part of a team that was really growing fast and was together. And so the company listened to their employees and ended up switching back to a eight-hour workday in the off-season, five hours during the peak months. Now, I find this fascinating, that a company can grow so much in spite of working less. Tower paddleboards is not alone. Other companies, for example, Basecamp, a software company, has long been a proponent of having a sane work week where instead of working a typical 60-plus-hour workweek, They cap their work week at 40 hours a week, and all summer, they take Fridays off.

For four months during the summer, no one works on Fridays. And in spite of having a more sane work week, with Fridays off all summer long, Basecamp has been one of the faster-growing private tech companies around. It's apparently very profitable and has great employer retention. and great customer satisfaction for their products. So we've looked at two different worlds, the world of wealth and the world of business, and we've seen how less is actually more. We can trade less and build wealth faster. We can work less and have companies still grow.

In fact, grow faster. Now, I want to look at one other zone of life, and this part I want to look at is nature. Now, I don't know if you're into gardening or you're into permaculture or anything like that. I personally don't have a green thumb. But I grew up doing a lot of gardening. And my mom is one of the best gardeners around. And I grew up working in our large garden in our home on most weekends and during most evenings when it was during the growing season.

Now, for some reason, I never picked up the skill. But one thing I learned is that micromanaging plants is a surefire way to kill them. and I recall a conversation several years ago with my mom after attempting to grow a vegetable garden in the backyard of my new home and I was complaining to my mom I was complaining to her that my kale, my carrots, my potatoes, they just wouldn't grow. My succulents were wilting and I really wanted to know what the issue was. And my mom gave me some great advice.

She said, water them every now and then. don't do anything else. Just let them be. Now, it turns out there was a lot of wisdom in what my mother told me, because in hindsight, I was overwatering, stepping all over the raised beds, and I was simply getting in the way of letting nature do what it does best, which is grow stuff. And the truth is, we can grow a lot more by doing less. In fact, just Google permaculture, and you'll start discovering an entire movement of people that are taking, up what I would call lazy gardening.

Now, lazy gardening is all about getting more out of less. By being smart about positioning plants as part of the natural ecosystem, you start discovering that the waste products of one plant will nourish another plant. You'll realize that you can water less, fertilize less, mulch less, weed less, by simply being smart about positioning of plants and then letting nature to do what it does best, which is grow and thrive. A lot less work with a lot less bound, with a lot more bounty from a garden.

I mean, there are, if you Google lazy gardening and permaculture, you'll even see examples of people who are able to grow a tremendous amount of food in a relatively small space without putting in the amount of work you would expect. So in conclusion, I don't have time to talk about all aspects of life and how the principle of getting more out of less can apply. However, it's clear that there is something powerful about allowing a few vital inputs to do their magic and not smothering a good thing with a ton of extra activity that will just get in the way of life doing what it does best, which is grow.

And I hope this topic has inspired you to think and rethink Pareto's principle. You don't need to settle for just getting the most out of a few inputs. You can actually aspire to get far more out of the few things you put into a project. And I hope that you're inspired to think about how you can simplify some aspects of your life and simplify for the sake of allowing growth to occur in a much more natural and abundant way. To wrap this up, I'd like to leave you with a couple questions to think about.

The first question is what's an area of your life perhaps it's your career, or your health, or a business you're building? What's an area of your life that would benefit from more abundance with less effort? Second question is what are you doing right now in this area of your life? Think about all the inputs and actions that are taking place, all the effort you're putting in. Third question what inputs, what actions seem to be yielding the most fruit? Just think about that for a second. What inputs, what actions seem to be yielding the most fruit?

And lastly, how might you spend more energy on those few inputs that are yielding the most fruit and save energy by stop doing things that just don't seem to be leading anywhere? So think those questions over and do your best to just apply them into your career, into your life, into your business, and see what starts to unfold for you. See if like so many other people and as nature seems to reveal, see if you can really be far more simple and yet still prosper and grow in the process.

I hope this podcast inspires you to be more simple and to understand that sometimes it's by being even more simple that we can thrive more than we ever imagined. If you enjoyed today's episode, please share it with your friends. It would mean a lot to me if you helped get the word out about this podcast. With that, I hope to see you next time. Take care.