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The Profile: Wall Street’s secretive dealmaker & the man who makes founders cry
Good morning, friends.
Today, we have something different (and exciting) to kick off the new year. As many of you know, one of my favorite books in 2018 was New York Times best-seller Atomic Habits by James Clear. I asked James to write a guest post for The Profile on how we can transform our loose New Year’s resolutions into something more meaningful — a lifestyle of effective habits. Below is James’ post. I hope you enjoy. Feel free to send him feedback here.
How to Turn Your New Year's Resolutions into Habits That Last
Frederick Matthias Alexander, the Australian movement practitioner and founder of the Alexander Technique, spent many years analyzing the habitual movement patterns of the human body and considering how to change and adapt them. At one point, after many years of study, Alexander remarked, "People do not decide their futures, they decide their habits and their habits decide their futures."
A new year is upon us and with the start of 2019, many people are thinking about their future and the New Year's Resolutions they would like to follow. It is a natural time to consider who we want to become. Nobody has control over the future, of course, but in this short piece, I would like to make an argument that aligns with Alexander's remark: it is more likely that you can successfully shape your desired future if you transform your New Year's Resolutions from goals to habits.
This is a topic that has been on my mind in recent years. I have been writing about the science of habits and human behavior at jamesclear.com for the better part of a decade and I have spent the last three years writing a book called Atomic Habits, which was released a few months ago and is now a New York Times bestseller.
In this article, I would like to share three key insights from my writing and research that will allow you to translate your goals into habits that last.
Insight #1: Focus on the identity rather than the outcome.
The majority of New Year's Resolutions are outcome focused. That is, they are centered on achieving a particular result.
— Fitness. "I want to lose 20 pounds."
— Writing. "I want to write a book this year."
— Self-Care. "I want to take care of myself and sleep 8 hours each night."
The first step to translating these goals into long-term habits is to focus on the identity you need to build rather than the outcome you want to achieve. Take whatever goal you are trying to accomplish and ask yourself, "Who is the type of person that could achieve that goal?"
— Fitness. Who is the type of person that could lose 20 pounds? Maybe it's the type of person who doesn't miss workouts. Or the type of person who cooks dinner at home each night.
— Writing. Who is the type of person that could write a book? Maybe it's the type of person who writes every day.
— Self-Care. Who is the type of person that could get 8 hours of sleep? Maybe it's the type of person who says "No" to most requests rather than saying yes to everything. With fewer obligations, they can begin to prioritize sleep.
These adjustments in language may seem subtle at first, but they achieve something important: They shift your attention from the outcome and toward a lifestyle. Now your attention is not fixated on losing 20 pounds, but on making dinner at home each night. New goals don't deliver new results. New lifestyles do. And a lifestyle is not an outcome, it is a process. It is a series of habits. For this reason, it is often more effective to pour your energy into the habits that precede your desired results rather than focusing on the results themselves.
The truth is, most of your outcomes are a lagging measure of your habits. Your net worth is a lagging measure of your financial habits. Your weight is a lagging measure of your eating habits. Your knowledge is a lagging measure of your learning habits. You get what you repeat.
Insight #2: Scale your habit down to the easiest level.
Once you have translated your New Year's Resolution from an outcome-based goal to a habit-based lifestyle, you can utilize the second insight: scale your habits down to a stunningly easy level.
You want to perform the smallest action that reinforces your desired identity. In Atomic Habits, I refer to this as the "Two-Minute Rule,” which essentially says that a new habit should take two minutes or less to do. Of course, if you're feeling good on any particular day, then you are welcome to do more, but the most important thing is to master the art of showing up—even if it's in a small way.
— "Write every day" becomes "Write 1 sentence."
— "Practice yoga 4 days a week" becomes "Take out my yoga mat."
— "Read 50 books each year" becomes "Read for 1 minute."
Building habits that are so small sounds silly at first. "What is taking out my yoga mat going to do? That's not going to get me in shape."
But here's what people often forget: A habit must be established before it can be improved. You have to make it the standard in your life before you can worry about making it better. Master the art of showing up. Reinforce this new identity. Make it your new normal. There will be plenty of time for optimization once you show up each day.
Speaking of optimization, that brings us to our third and final insight.
Insight #3: Look for ways to improve by 1% each day.
This is something I cover in much greater detail in the book, but I want to share a simple explanation of it here.
Once you are doing something consistently—meditating for 1 minute each day, writing 1 sentence every afternoon—then, you can begin to look for ways to improve the process. One effective way to do this is to look for "1% improvements" within the various details of your habit.
Let's consider the habit of writing. Perhaps your habit is, "Write 1 sentence each day." Sometimes, of course, you'll have a good day and write much more than that. But even on the bad days, you're still showing up and writing 1 sentence. At this point, you can start to consider each part of the writing process and begin searching for 1% improvements.
For example, I might decide that I need to improve the opening sentences in my articles. So, I could go to the New York Times and look at the popular articles on each site and dump all of the opening lines into a spreadsheet. I could open up some of my favorite books and see how they start each chapter and add those lines to a spreadsheet as well. Then, once I have a better idea of what good opening lines look like, I can tweak my habit to become "write 1 great opening sentence each day."
And you can continue this line of thinking for other aspects of the process. Your writing habit could focus on improvements to opening lines, transitions between paragraphs, descriptions of main characters, footnotes and citations, and so on. Similarly, if you're working on a resolution related to exercise and your habit is to "Do 1 set of squats each day" you could focus on 1% improvements to foot placement, knee sleeves, breathing technique, hip mobility, and more.
The opportunities are endless and the path forward is simple. Decide who you want to become. Master the art of showing up and make a small habit your new normal. And search for endless ways to refine the details and make 1% improvements to your baseline habit. With these strategies, you have a proven toolkit for translating your New Year's Resolutions into habits that last a lifetime.
Here we go with the profiles for the week:
— The priest of Abu Ghraib [**HIGHLY RECOMMEND**]
— The self-made sandwich billionaire
— Wall Street’s secretive dealmaker
— The gangster of Hollywood
— The Uber for trucks
— The man who makes founders cry
If you enjoy reading profiles of the most successful people and companies, click here to tweet so others can enjoy it too.
PEOPLE TO KNOW.
The priest of Abu Ghraib: This is an extraordinary read that will send chills down your spine. Joshua Casteel was 24 years old when he learned he would be sent to Iraq as an interrogator in the Abu Ghraib prison — just six weeks after the torture and abuse of prisoners was made public. This story details the dilemma young veterans face between their personal participation in the war and keeping their consciences clean. This one is well worth your time.
“Every day I wonder if I have come to my breaking point.”
The self-made sandwich billionaire: The story of Jimmy John's self-made billionaire founder is a lot more entertaining than you'd think. Eccentric and straightforward, Jimmy John Liautaud opened his first store 35 years ago & built it into a sandwich empire. Today, the company has more than $2 billion in sales, but Liautaud no longer runs the show. He now answers to Roark Capital, an Atlanta-based private equity firm that bought a majority stake. Giving up control is hard — especially when your name is on 2,802 buildings of a business you no longer own.
“I built it up until I couldn’t do it anymore, and brought in a partner that I felt could help me. That’s really the story of Jimmy John’s, and here I am.”
Wall Street’s secretive dealmaker: You’ve probably never heard of private equity firm Invus. That’s because it’s essentially the family office of Eric Wittouck, a descendant of Belgian sugar barons, who now lives in Monaco (as any sugar baron descendant would). But here’s an Invus deal you have likely heard of — over 19 years, Invus put $226 million into Weight Watchers. It’s now worth $5.37 billion. In other words, Invus has made 23.7 times its money (!) But rather than show the strength of the private equity model, this story exposes some of the biggest flaws of one of the richest corners on Wall Street.
“We are not interested in playing the private equity game and recycling businesses.”
The gangster of Hollywood: In this profile, actor Robert de Niro opens up about getting a bomb in the mail, playing angry men, and denouncing President Donald Trump. “He even gives gangsters a bad name,” he says about Trump. “‘Cause a gangster will give you his word and will pride himself—or herself. He doesn’t even understand that kind of logic.”
“Being a real man is not just being a man the way you’d think.”
COMPANIES TO WATCH.
The Uber for trucks: In 2013, Drew McElroy co-founded Transfix, an online freight marketplace that uses algorithms and machine learning to give full-load shippers better prices and truck owners better routes. The company is on track to rake in $100 million in shipping charges for 2018 and remit the lion’s share of this gross revenue to people who own the vehicles. This company is poised to disrupt the $700 billion trucking industry, and there’s a lot at stake.
“I realized, Holy crap, no one is doing this. There is a clear path to changing this entire industry that isn’t that complicated.”
FROM THE VAULT.
The man who makes founders cry: Jerry Colonna has been called the “Yoda of Silicon Alley” for providing support to VCs, founders, and execs. In 2014, he launched a coaching company called Reboot, offering mindfulness training, leadership development, and $10K weekend retreats. His coaching focuses on “radical self inquiry.” In other words, he asks you a ton of questions about things you don’t want to talk about until you break down, face what you’ve been avoiding, and start crying. Colonna quotes Carl Jung, “Until we make the unconscious conscious, we will be dictated by it and call it fate.”
“He asks you the questions that you repress.”