The phrase "skin in the game" has commonly been attributed to Warren Buffet, referring to his own investment in his initial fund. But Buffet has denied this reflecting that he simply popularised the phrase.
It is said that the origin of the phrase “to have skin in the game” comes from horse racing and describes the situation where the owner of a horse competing in a race is said to have “skin” in “the game”, meaning that the owner has a lot riding on the outcome of the event.
More recently the phrase has been popularised by former trader and now popular writer Nassim Taleb, who in his latest book Skin In The Game describes it as:
"...an assessment of asymmetries in human interactions, aimed at helping you understand where and how gaps in uncertainty, risk, knowledge, and fairness emerge, and how to close them."
As with all his books, Taleb has a lot to say, says a lot about it and then takes a long time to say it... but in essence it all boils down to this:
Only
take advice from people who are already invested in the situation they
are advising you about, and where they have something to lose if you
fail as a result of following their advice.
Asymmetries & Disconnects
Taleb also counsels us to pay careful attention to the asymmetries and the disconnects:
Taleb is known for his aphorisms and here are a few on this subject:
Often in the world of business its not just about taking advice, its
more often about making decisions about who to get involved with, who to
invest your time and resources in, and who to trust.
Based on my own experiences of business I make the following observations:
[1] Just because someone looks the part doesn't mean they are...
[2] Just because someone you know and trust believes something to be true, does not make it so, it just means that they genuinely believe it to be true.
[3] Until you have clear and repeated evidence, and thus a good understanding, of someone's circle of competence watch the other guy's actions, pay close attention to the detail, specifically:
[4] You
really cannot truly know someone’s strengths and weaknesses until you
have been in action with them for an extended period of time.
[5] In a competitive world of "smoke and mirrors" always watch the other guy's feet to see his true intentions.
Return from "Skin In The Game" to: Mental Models
LATEST ARTICLES
Drop The Story - Deal With Your Demons and Transform Your Experience
Are you living your life from the stories you tell yourself? Learning how to drop the story and deal with that voice in your head can be a game changer. When you can do this you will have a powerful t…
Standing In The Gap Between No Longer And Not Yet
Standing In The Gap In Conditions Of Imposed Change. This is about imposed change and surviving a dire and desperate situation where you are stuck in a difficult or seemingly impossible set of circums…
Preparing The Ground - For Things You Can Not See
We plough the fields and scatter the good seed on the ground. The phrase "preparing the ground" is a metaphor for making the necessary preparations to create the favourable conditions for something to…
Easing The Weight Of Expectation
Don’t you often feel like you are carrying the weight of the world on your back? Our start point is understanding that the ego has a very clear idea of how things ought to be, and its intention and ex…
Coram Deo - Living In Consciousness
In you there is a dimension of consciousness far deeper than thought. It is the very essence of who you are. Coram Deo is about living in consciousness. It is a Latin phrase which literally means “to…
The Power Of Patience - Why You Need The World's Toughest Quality
Nothing in the world can take the place of patience. Patience and persistence are omnipotent. In everyday life, patience is often overshadowed by the desire for immediate results. We live in an era of…
Demonizing The Other and Personal Acts Of Compassion
What Does Demonizing The Other Mean? Demonizing the other refers to the act of portraying a group of people or an individual as inherently evil, threatening, or inferior. It often serves to justify di…
Why You Should Embrace Anomalies - The Incredible Value Of Disconfirming Evidence
Is Your Desire To Be Right Greater Than Your Desire To Have Been Right? An anomaly is a deviation from what is expected or commonly regarded as the norm. It often appears as an unexpected observation…
Amazing Grace - The Majesty And The Mercy of Freedom From Your Pain
"I once was lost, but now I am found, was blind, but now I see." The hymn and popular song "Amazing Grace" was written 250 years ago by John Newton, a former slave trader who in 1748 nearly died in a…
The Transformative Power Of Acceptance
Experience The Power Of Acceptance. This website contains about 500,000 words. You could read every single word and it wouldn't make any real difference to you. You might become better informed, but t…