No Way Out

Creating Economic and Entrepreneurial Advantage: The Value of the OODA Loop with Hunter Hastings | Ep 3

January 23, 2023 Hunter Hastings Season 1 Episode 3
No Way Out
Creating Economic and Entrepreneurial Advantage: The Value of the OODA Loop with Hunter Hastings | Ep 3
Show Notes Transcript Chapter Markers

Hunter Hastings is an economist, entrepreneur, professional marketer, a venture capitalist, and the host of the Economics for Business podcast. Enjoy this wide ranging talk about Hunter’s work, economics, complexity science, and entrepreneurship – and their respective connections to the work and theories of John Boyd.

Be sure to use the Chapters Feature on Apple and Spotify to quickly browse and navigate to segments of this episode.

//People, ideas, and things mentioned in this episode//
"Business as a Flow Requires New Management Techniques"
Entrepreneurial Self Assessment
The Adaptive Entrepreneurial Method
The Theory of Dynamic Efficiency
Wardley Mapping

//Books//
The Nature of Technology and How It Evolves  –  by W. Brian Arthur
“Fear the Boom and Bust: Keynes vs. Hayek" Rap  –  by Emergent Order
Human Action  –  by Ludwig von Mises
The Ultimate Foundation of Economic Science  –  by Ludwig von Mises
Individualism and Economic Order  –  by FA Hayek
Organizing Entrepreneurial Judgement  –  by Nicolai Foss and Peter Klein


Want to develop your organization’s capacity for free and independent action (Organic Success)? Learn more and follow us at:
https://www.aglx.com/
https://www.youtube.com/@AGLXConsulting
https://www.linkedin.com/company/aglx-consulting-llc/
https://www.linkedin.com/in/briandrivera
https://www.linkedin.com/in/markjmcgrath1
https://www.linkedin.com/in/stevemccrone
https://flowguides.org/
https://www.getflowtrained.com/

Recent podcasts where you’ll also find Mark and Ponch:

Eddy Network Podcast Ep 56 – with Ed Brenegar
The School of War Ep 84 – with Aaron MacLean
Spatial Web AI Podcast – with Denise Holt
OODAcast Ep 113 – with Bob Gourley
No Fallen Heroes – with Whiz Buckley
Salience – with Ian Snape, PhD
Connecting the Dots – with Skip Steward
The F-14 Tomcast – with Crunch and Bio
Economic...

(Note: This transcript was created using AI. It has not been edited verbatim.)

00;00;00;02 - 00;00;04;04
Intro music

00;00;04;28 - 00;00;15;28
Mark McGrath
Welcome back to No Way Out the podcast where we advance and develop the theories of John Boyd to help individuals and teams and all disciplines improve their capacity for free and independent action. I'm Mark McGrath.

00;00;16;12 - 00;00;29;12
Brian "Ponch" Rivera
And I'm Brian Potch Rivera. Today we have a fascinating guest. Hunter Hastings, host of the Economics for Business Podcast. He's here to discuss the brutal loop, a topic not commonly associated with economics.

00;00;29;29 - 00;00;43;20
Mark McGrath
That's right, Ponch. Hunter is not only an accomplished economist, entrepreneur and venture capitalist. He's also my academic collaborator on the fusion of John Boyd's concepts with entrepreneurial theory, of which the adaptive entrepreneurial model was a result.

00;00;44;19 - 00;00;56;27
Brian "Ponch" Rivera
We are thrilled to have Hunter with us today to share his insights on how John Boyd's theories can be applied to the business world and how the application of Boyd's theories through economics can help leaders make better decisions.

00;00;57;17 - 00;01;04;14
Mark McGrath
So without any further ado, let's join our conversation with Hunter Hastings. All right. Hunter Hastings, welcome to No Way Out.

00;01;05;26 - 00;01;09;13
Hunter Hastings
It's a pleasure to be here. Nice to be with you to Illustrious Warriors.

00;01;10;19 - 00;01;24;19
Mark McGrath
Well, we're glad to have you. And we're glad to flip the roles on you. I've been a guest on your podcast Economics for Business three times, and you've had Ponch on the talk about flow. So we thought we would return the favor.

00;01;26;06 - 00;01;28;23
Hunter Hastings
What's good? What goes around comes around. I appreciate that.

00;01;29;15 - 00;01;55;17
Mark McGrath
Goes around, comes around. So I guess we should start from the top. I answered a call for content that you put out for economics for business sometime, and I guess that was either mid 2020 or early 2021. And I, I said this is my chance to see if John Boyd's theories apply to the practice geological axioms of auction economics and entrepreneurship theory.

00;01;55;17 - 00;02;20;16
Mark McGrath
And thus began a fruitful relationship where we've written a paper together, we're writing another one, and. And here we are. So why don't you give us some background about, you know, where you're from, who you are, and what you've built. That caught our attention and got us both on as guests on your show and why we find you here today.

00;02;20;23 - 00;02;50;18
Hunter Hastings
Good. Well, thank you. Yes, we've we've had a fruitful collaboration and Brian's contributed a lot to it as well. I learned a ton from his his book and talking to him. So I was trying to think of a way to encapsulate the the background, your life's of flow. And we we go in many directions. I was born in the UK and I, I put the ingredients as economics, marketing and entrepreneurship.

00;02;50;29 - 00;03;29;13
Hunter Hastings
So I took a master's degree in economics from Cambridge University, which we might talk about the worst place in the world to possibly learn economics. But it was it was good on good on the CV. And they didn't have MBAs in the UK back then. I'm an old guy and so I was thinking about economics is something I could use in business while I joined the business world and in corporate marketing and quickly found out that nothing they taught me in economics had any practical application in in business whatsoever.

00;03;29;13 - 00;03;59;05
Hunter Hastings
But I enjoyed being in in marketing. I discovered later on in life that marketing is much better practice if you have an understanding of Austrian economics, we might get to that. But then I also became an entrepreneur because I, I was employee number six in a new consultancy and then I was employee number one in a new consultancy that I started.

00;04;00;15 - 00;04;24;06
Hunter Hastings
I isolated a little bit between the corporate world and entrepreneurship. I was the CEO of a company. I didn't start for a while in Silicon Valley. That was a disaster. And then I started another consultancy after that, which was very successful. We we've had a couple of good exits. I got into seed stage venture capital, which is another way to deal with entrepreneurs.

00;04;24;20 - 00;04;49;24
Hunter Hastings
When I talk about that a little bit, and now I'm working with these institute on this platform we call economics show business, which is the culmination of a lot of their experience trying to apply the principles of Austrian economics to practical business so that entrepreneurs can go through the process with more confidence and better tools and better thinking primarily.

00;04;50;23 - 00;05;18;12
Hunter Hastings
And then what you and Brian have introduced me to is the convergence and integration with a lot of the work that's going on in. I think whether you call it Boyd studies, but also the flow system that that Brian writes about and just new ways of thinking about about business. And so that's where we are today, trying to integrate all of those things to help entrepreneurs be more successful and create more value.

00;05;19;10 - 00;05;23;23
Brian "Ponch" Rivera
So, Hunter, are they new things or are they old things?

00;05;24;19 - 00;05;53;05
Hunter Hastings
Well, one of the things we believe in is recombination. So that's a great source of innovation. The Austrians understand that a lot that entrepreneurs are recombining components to create new value in new ways. There's a really interesting book by by Brian Arthur, who's not he's not an Austrian by any means, but he's Austrian, sympathetic. And he talks about the evolution of technology.

00;05;53;05 - 00;06;21;06
Hunter Hastings
And one of the things he points out is when you create a new technology, there's nothing in it that didn't exist yesterday. Right. You've just recombined things that already exist. So I think were recombining. But then the other part is thinking differently. And you can call that new if you like. But if you guys have introduced me to John Boyd and the way he thinks differently is is just compelling.

00;06;21;26 - 00;06;26;17
Hunter Hastings
And so thinking differently about recombining, maybe we can put it that way.

00;06;27;29 - 00;06;56;15
Mark McGrath
We might we might say snowmobiling or synthesis. And we'll get to that. So. So you get you go to Cambridge, you get into the business world. How did you discover, you know, Cambridge? I imagine as we've talked before, it's probably a pretty exacting orientation or upload into one's orientation. And what you're doing now is radically different from an orientation standpoint that I guess that's why, you know, it's why we're here.

00;06;56;16 - 00;07;13;29
Mark McGrath
So what was that disruption like to go from, as you say, a place that wasn't the best to learn economics that were applicable? How did that really evolve? How did that strike you and get you to, you know, take take it down to where you're at now? That inquiry.

00;07;15;01 - 00;07;48;26
Hunter Hastings
I'll give you a little bit of context. I grew up in the U.K. in, you know, the period after the war, not immediately after the war, but but in that period, Murray Rothbard said that the most intense and violent socialist revolution in the world was the U.K. after the Second World War and the what they called the Labor Party, where the Socialist Party nationalized huge chunks of the economy, health care, all of transportation, all of energy production, things like steel.

00;07;48;26 - 00;08;12;28
Hunter Hastings
We had a company called British Steel that made all of the steel. It was just it was a socialist economy in the Marxian sense that the government owned the means of production. So that's the context I grew up in, that the the economics of that was what they call Keynesian. And so Keynes went to Cambridge. I went to the lectures at the Keynes lecture hall, and I took out books from the Keynes Library and so on.

00;08;12;28 - 00;08;39;09
Hunter Hastings
So I got this intense grounding in in Keynesianism, and I found it was useless, although at the time I had that sense. But then one of the triggers was Margaret Thatcher. And if you know U.K. history, she became the prime minister in the 1980s when Britain was absolutely in the doldrums, you know, was horrible economics and no growth.

00;08;39;09 - 00;09;00;03
Hunter Hastings
And unions dominated the scene and it was the sick man of Europe, they called it. And Mrs. Thatcher came to power as the prime minister said, this is all wrong. It's absolutely all wrong. We're going to do it differently. We're going to privatize everything. She had a complete system and she was a Hayek reader and knowledgeable about Hayek.

00;09;00;03 - 00;09;39;27
Hunter Hastings
So I don't know if your listeners will know Friedrich Hayek, but he was the anti Keynesian. If you if you go on YouTube and look at the Keynes versus Hayek rap videos, it's really fun about contrasting those two ideologies or systems or methods. And he believed everything that that we believe that everybody has individual knowledge. No central planner can possibly understand that a harness that that he called his system spontaneous order that orders emerge from lots of individuals interacting together.

00;09;40;13 - 00;10;07;17
Hunter Hastings
Today we call it complexity a complex adaptive systems. But but Hayek was the first thinker about complex a system. So I started reading Hayek. And Hayek takes you to Musa's if you go backwards, and then to Menger, the founder of the Austrian school, and then you come forward to Rothbard and the people today, and you find the Musa's Institute, which is the current day safe harbor for for Austrian economics.

00;10;07;17 - 00;10;30;17
Hunter Hastings
So that's what triggered me. The other story I like to tell is the other one was my dad. So my dad was a working class guide who scraped and scrambled up the ladder to the middle class, maybe the bottom of the middle class. I mean, we weren't poor, but we weren't affluent by any means. And I'd come home from Cambridge and and tell him what I was thinking based on what the professors told me.

00;10;31;13 - 00;10;53;01
Hunter Hastings
And he I remember this very well. He took me to the window one day. We looked outside. We lived in a pretty kind of rough neighborhood and what would call a homeless person day on the streets. And he pointed out and he says, son, that person wants to do the same thing as your professors to make you equal to him, and he'll do it by dragging you down there.

00;10;53;11 - 00;11;04;15
Hunter Hastings
So he was that was that was a intellectual conversation with my father, who's uneducated but very, very smart. So I had the instinct as well as the the education.

00;11;05;14 - 00;11;27;13
Mark McGrath
So sir roll the clock forward and economics for business your project that you've built that Mises Institute which is phenomenal and you're attracting all kinds of thinkers and entrepreneurs to get in and tell their stories and have conversations with you about different things that they've done and the tools that they use and the resources that they use around the clock ahead.

00;11;28;03 - 00;11;49;13
Mark McGrath
And you put out a call for content and this former Marine officer that at the time was working on an an asset management firm says, oh, I've got just the thing for you. I've always had this. Imagine it is vision. These two theories collide and and I know it's good and you give me a shot and here we are.

00;11;49;13 - 00;12;17;15
Mark McGrath
So what was it about John Boyd when when you tie the two worlds together, when you think about everything that you've shared with us about offshore economics, which we can go on for, you know, 20 podcasts and same thing with Boyd. What was it really that caught your attention and how we could see something diffuse and collaborate and continue to advance the theoretical fusion if you will?

00;12;17;15 - 00;12;46;29
Hunter Hastings
So the core concept or one of the core concepts in Austrian economics is, is entrepreneurship, which is really, really, really a tricky thing to define, but it's the process by which value is created, new economic value, how we make progress, how lives are made better. And the entrepreneur does not exist in classical economics. They believe in an extraneous factors like technology and investment and things like that.

00;12;47;26 - 00;13;32;10
Hunter Hastings
The the process of entrepreneurship is to take a a vague concept that people are always looking to improve their circumstances. It's it's a natural inclination of the human being, muses. His famous book is called Human Action. They act to improve their circumstances. Now, somehow, the entrepreneur listens to that expression of unease, figures out a way that they could recombine to go back to a point, Brian, to to recombine resources and express them, bring them back to that person and say, hey, I've got the solution for you.

00;13;32;10 - 00;13;59;25
Hunter Hastings
Is this is this what you wanted? And that the recipient will say, yes, they'll express their desire for it by buying. I'm not buying. And that's a feedback loop. And then the entrepreneur, if they're successful, will continue to to produce that. And if they're not successful, they'll figure out something else. In complex adaptive systems theory, it's called explore and exploit.

00;14;01;01 - 00;14;27;17
Hunter Hastings
So you come along and you you introduce me to Boyd and the OODA loop, and it took me a while to understand this. It's, it's, it's not that easy, but the OODA loop is a form of entrepreneurship or entrepreneurship is another loop that entrepreneurs are observing the market and people's unease and what they want. They run that through their orientation.

00;14;28;10 - 00;14;54;16
Hunter Hastings
And I still need a lot of education from both of you of exactly how do I explain and and understand and define orientation. But this an entrepreneurial orientation we think. Right, Mark and then they decide and they they act. They decide I'm going to try to create value this way and then I act. In fact, our professors define entrepreneurship as action centric.

00;14;54;16 - 00;15;26;22
Hunter Hastings
It's not a theory, it's not a plan. It's action by action. You start the feedback loop and you observe what happens and you run it back through your orientation. Maybe you change your orientation. So you've taught me about reorientation, constant reorientation, which is really an important subject. So you you took me to this place and then Brian in his book, The Flow System explains the other loop that you can start in a lot of different places.

00;15;26;22 - 00;15;49;02
Hunter Hastings
You can start with the action and go from there. You can start with the orientation and go from there. One of the big problems of conventional economics is its statics. They call it equilibrium, so they run these mathematical models to see how things get to equilibrium. Supply equals demand, right? Price equals clearing the market and there is no equilibrium.

00;15;49;02 - 00;16;13;06
Hunter Hastings
What I don't want to Brian wrote this or somebody else did, but equilibrium is death. It's all over. When you get to equilibrium, you can't possibly want that. You want dynamics, you want flow, you want change. You want everything to be getting better all the time. So this integration of a void and the other components of the flow system and Austrian economics is, is just very, very powerful and very exciting I think.

00;16;14;07 - 00;16;25;08
Mark McGrath
Yeah. Buoyed one oh sorry parts. But yeah, one of the things that Ponch put up was a quote of Boyd saying, you get if you're looking for equilibrium, you're you're dead along. Along. Did he.

00;16;25;08 - 00;16;27;04
Hunter Hastings
Say that? Yeah. Yeah. Good. Yeah.

00;16;27;18 - 00;16;51;17
Brian "Ponch" Rivera
So until the last few minutes, this is what you triggered here. And that goes back to the the loop. And when we talk about the utility, Erik Reece, the creator of the Lean Startup, work with Stephen Blank. And I think a lot of people are aware of the lean startup and aware of Steven Blank, but from their book they actually connect the Lean Startup back to John Boyd's YouTube.

00;16;51;18 - 00;16;55;00
Brian "Ponch" Rivera
Not a lot of folks know this. And are you familiar with that at all? You've heard that?

00;16;55;19 - 00;16;57;07
Hunter Hastings
No, actually, I don't know that connection.

00;16;57;29 - 00;17;23;20
Brian "Ponch" Rivera
Yeah. So Erik Reece studied under Steven Blank at Stanford and then Erik excuse me, Steven Blank also worked on the customer development model, which is based on John Boyd's UTA loop as well. So there's a huge connection here that I don't think you knew before you came into this session today. Right. There's something else. Amy Wilkinson wrote a book several years ago called The Creator Code or this Give me the Creator's Code and I'll just read something to you real fast.

00;17;24;11 - 00;17;49;22
Brian "Ponch" Rivera
It's about startups. Elon Musk, PayPal, a lot of things going on. Silicon Valley. About ten years ago, like legendary fighter pilot John Boyd, who pioneered the idea of the OODA loop. Creators move nimbly from one decision to the next. Right? That's what you just said. So we're not alone in thinking like this. It's just bringing it all together so we can understand it better and make those snowmobiles so we can create a customer.

00;17;49;22 - 00;17;58;25
Brian "Ponch" Rivera
Right? Because I believe the purpose of a firm or an organization is to create a customer.

00;17;58;25 - 00;18;21;03
Hunter Hastings
Yeah. So let me give you a thought experiment that I did not know that connection. I've obviously read Erik Reece and Steve Blank, but I. I missed that. So thank you. So, yeah, Peter Drucker said he was a real life Austrian, by the way, born in Austria and probably met Ludwig von Mises. He said that the purpose of the firm to is to create and keep a customer.

00;18;21;03 - 00;18;55;05
Hunter Hastings
I think that's a very powerful idea and I think that's a big problem with capital, corporate capitalism, corporations these days. They've forgotten that they've got to maximizing shareholder value. It's a horrible, horrible change. Well, that's a different subject. Here's what I'm trying to think through in my mind, Brian, is what if it's the other way around? What if the job of a customer is to create a fund so customers, by having a need, somehow bring into existence a supply chain that fulfills that need.

00;18;56;11 - 00;19;21;20
Hunter Hastings
That's that's another loop and maybe in an opposite direction. I'm not sure whether you can sustain that, that mental model, but somehow it happens, right. We believe that it is the need that creates the supply chain, because if the supply chain doesn't meet a need, it collapses, it doesn't work anymore. So I used to. LOPEZ It's a fascinating way to go through that, that thinking.

00;19;22;14 - 00;19;39;07
Brian "Ponch" Rivera
Well, let's make another connection here, because John Boyd did study the Toyota production system, and there's a lot of parallels to how the brain processes things. But when we die or go a little bit deeper on what you just pointed out, control is outside, in bottom up the control of the organization is outside and it's from the customer.

00;19;39;07 - 00;19;44;04
Brian "Ponch" Rivera
So that actually reinforces, I believe, what you just said.

00;19;44;04 - 00;20;16;15
Hunter Hastings
Yeah. So the the word in Austrian economics is, is customer sovereignty. So the way that that uses put it is the entrepreneur steers the ship trying to create value, but the customer is the captain. And if they if the customer doesn't buy, then the ship doesn't go anywhere. And so, yeah, that's the the those two ideas, customer sovereignty and the, you know, the idea of external control, a very consistent.

00;20;18;22 - 00;20;27;16
Mark McGrath
It's worth noting that customers are human with an orientation that observes the sides and acts to right.

00;20;27;16 - 00;20;54;11
Hunter Hastings
Yeah. So, you know, I turn it over to you guys a little bit here, which is we're struggling to define an orientation for entrepreneurs. So there's a lot of writing that says it's a it's a mindset. You know, it's it's having no fear. It's being willing to take risk. It's being creative. It's it's trying new things. It's being able to deal with feedback loops fluently.

00;20;55;16 - 00;21;08;18
Hunter Hastings
But Marx always told me, no, you can't think of it as a mindset. It's, it's something different from that. So maybe you could speculate about what the what is orientation when it's applied to entrepreneurship?

00;21;08;18 - 00;21;16;09
Mark McGrath
Well, we used the work of Peter Klein and Nikolai Foss, Nicholas Foss.

00;21;16;26 - 00;21;17;18
Hunter Hastings
Or Nikolai.

00;21;19;02 - 00;21;19;28
Mark McGrath
Nikolai Foss.

00;21;20;08 - 00;21;20;17
Hunter Hastings
Yeah.

00;21;20;17 - 00;21;50;20
Mark McGrath
And they talk about me this, you know, always thinking there's this black box, like there's this black box where our observations, our decisions and our actions come from. And the more I write, the more I progressed on the path of, of, of studying Russian economics. And in the further I would get into digging on, on Boyd and seeing things on flow in capital markets or unfold rather in capital markets.

00;21;51;27 - 00;22;28;28
Mark McGrath
I kept realizing that orientation was sort of the operating system that each individual has, be they the sovereign consumer or a collection of of humans as a firm or a team or a company. And the alignment of those operating systems is what would get a customer to buy something or subscribe to something or become become part of something, or in other words, connect with connector, align with the mission of of a team or a company.

00;22;30;16 - 00;22;56;29
Mark McGrath
And it's all very much human decisions of humans deciding to do things and coordinate action with other humans. Because, as you say, it all comes down to action and means has taught us that all economic phenomena is the is the result of human choices and decisions and actions. But that is, as Musa said, you know, man acts to improve his condition.

00;22;56;29 - 00;23;19;05
Mark McGrath
Man, man has this uneasiness, this felt uneasiness. If he's called, he puts on a long sleeve shirt today or if it's really cold or put on a fleece. But all that evaluation, all that understanding of what needs to be done, where does that occur? Well, Black Box is a great term, but really the Boyd term would be that that's all occurs in my my orientation.

00;23;19;05 - 00;23;42;09
Mark McGrath
So my experience of growing up in the UK or going to Cambridge or being in the Marine Corps or whatever, all that's uploaded into this operating system that shapes how I see things as, as time advances, as time unfolds. I'm into your point and I think this is a really big mes this John Boyd Bridge and why we were able to connect on this is.

00;23;42;09 - 00;24;18;21
Mark McGrath
And by the way, Dave Snowden said the other day when we talked with him, John Boyd was talking about dynamic and things always in the state of flux and also moving that the world and universe were dynamic. Well, we know that Jesus's opening line in the ultimate foundation of economic science is quoting Heraclitus. Everything is in a state of flux and in the entrepreneurial action judgment, everything is all occurring through constant, constant, constant flux.

00;24;19;15 - 00;24;24;20
Mark McGrath
So I think the dynamic connection is really a big it's really a big thing, too.

00;24;25;22 - 00;24;48;00
Hunter Hastings
Yeah, it's fundamental. I as I said, conventional economics has always been static. So comparative statics, static situation versus that situation. And the whole idea of, of the dynamic approach who, what to do, Soto's dynamic efficiency, Brian's flow system that that's the big change is dealing with those dynamics.

00;24;48;00 - 00;25;25;06
Mark McGrath
Yeah that's the when that's another book worth worth talking about you know the theory of dynamic efficiency by Hayes was worth it de Soto Dynamic efficiency as you read that first chapter and you look at those tables with paradigm and paradigm B, you know that you know the entrepreneurial paradigm with sort of the classical paradigm. It's ironic. It's the same publisher of Francis thing as science strategy and War and the same general theme of having these tables explaining like the two paradigms and the consistencies between what they're saying is amazing.

00;25;25;06 - 00;25;48;06
Mark McGrath
You have one coming at it from a scientific fighter pilot, complex, adaptive systems point of view. And then you have has this worth of De Soto coming at the same exact conclusions from from an economics professor with I guess his area of contribution has been around monetary theory and the business cycle and banking and money and things like that.

00;25;49;00 - 00;26;19;28
Mark McGrath
But it's amazing that they basically say the same thing from two different from two different vantage points. And there's tremendous value to take out of that to learn because it is so differentiated. Most people don't think about these things. They they don't they have that static. They have that classical mindset, that static equilibrium pursuit mindset, not an acceptance that we're we're dealing with VUCA.

00;26;19;28 - 00;26;26;19
Mark McGrath
We are complex adaptive systems ourselves and that everything is change and change is constant.

00;26;26;19 - 00;26;49;00
Brian "Ponch" Rivera
Hey, Mark, there's a saying by I think it's Dave Snowden and I'm going to get this wrong potentially, but for anything to scale, it must work in other domains by other people. So what I think is happening by identifying the likeness across these domains is we we're finding what scales. Right. And I think that's really important here is repeats and nature repeats within humans.

00;26;49;28 - 00;27;02;04
Brian "Ponch" Rivera
We have scaling capability now, right? It's not bounded by anything. So I think that's why John Boyd's work can be found in any domain, any anywhere we look right.

00;27;02;04 - 00;27;11;13
Mark McGrath
Just like economics. Yeah. I mean, everything is human action. So. Yeah, go ahead.

00;27;11;23 - 00;27;41;24
Hunter Hastings
Mark. Mark reminded me of one thing that goes back to your first question, Brian, is the inside one of the insights in De Soto is what he calls the creation of new knowledge. So what entrepreneurs do is create new knowledge. It didn't exist before. It's it's an act of creativity. And that is the dynamic contribution, creating new knowledge, seeing opportunities that nobody else has ever seen before.

00;27;42;06 - 00;27;48;07
Hunter Hastings
And that's that's the the miracle of the loop, right? You you create new knowledge.

00;27;49;08 - 00;28;21;13
Mark McGrath
Well, it also reinforces the point that the Austrians make. Entrepreneurship is not limited to just business. Anybody can undertake something like Boyd, for example, coming up with energy maneuverability theory, creating new knowledge or coming up with the aerial attack study or coming up with OODA, you know, creating, creating new knowledge in an I mean, we can describe is it fair to describe that as entrepreneurship, too, because he's bringing something novel and new into the world to challenge existing assumptions?

00;28;23;08 - 00;28;49;20
Hunter Hastings
Yeah, absolutely. I personally a little bit uncomfortable with De Soto's definition of entrepreneurship that says, you know, everybody acts entrepreneurial all the time because you're dealing with an uncertain future. That's the standard human condition here. I've always thought of entrepreneurship as an application then in business, but that's certainly what he says. An intellectual entrepreneurship is is very much part of that.

00;28;50;00 - 00;28;58;17
Hunter Hastings
You keep sending me these publications to the Marine Corps, and there's all kinds of entrepreneurship. And then there always. What's your favorite so far?

00;28;58;25 - 00;29;05;00
Mark McGrath
What would you say of those of those publications? Was the what's the takeaway been so far from this?

00;29;07;00 - 00;29;34;26
Hunter Hastings
Well, the the the publication about learning is the there's the one that's most directly applicable there. And that, you know, there's there's another part of the OODA loop and Austrian economics and De Soto that is learning that you you can acquire new knowledge, you can apply it in new ways. You can get a reaction from the marketplace, which gives you more new learning.

00;29;34;26 - 00;30;17;12
Hunter Hastings
And it's perpetual learning. And that's I certainly I respond to that very, very positively now. But I can think back in times in my life that you weren't supposed to perpetually learn. You're supposed to take the stuff in. And that was it, right? It applies forever. And, you know, I can think of two instances that the economics department and Cambridge University and the Catholic Church once once you've got it, that's it doesn't change but perpetual learning is is I mean, it's a very energizing and empowering kind of a concept for anybody in any situation, even the Marines that.

00;30;18;00 - 00;30;37;18
Brian "Ponch" Rivera
Hey, Hunter, I want to touch on one of the documents, the Marine Corps Marine Corps put out recently about information and information. We think about it's information to be narratives, stories that people are telling to disinformation, misinformation. Mark and I have been talking a lot about the physical, moral and mental space that's or where war is actually happening now.

00;30;37;18 - 00;30;57;18
Brian "Ponch" Rivera
And all of us, you know, with the advancement of technology, social media and whatnot, but from an economic standpoint, can you talk a little bit about the how narratives drive behaviors of humans, that information is coming from from the outside environment?

00;30;57;18 - 00;31;45;12
Hunter Hastings
Yeah, it's actually a book by I think it's Robert Shiller called Narrative Economics, which it's his proposal there. It has a guy holding it up. So his proposition is that's how that's how we work. It's how we think. It's how trends develop, which is a narrative or a story. My friend Steve Denning published a book about management as a narrative, and we're big believers in the idea of of purpose as a way to drive a company if everybody is aligned around the same purpose, which is some variation of the creation of value.

00;31;45;12 - 00;32;20;03
Hunter Hastings
But we're all trying to create value. So what's what's the story that we have to tell ourselves to do that as a company? How can we all share the same story? How can we all figure out our roles in the story without without getting into conflict with with other role players? I think this is definitely a room for narrative of and it's the the problem with the metaphor is stories end and I think we have to tell a perpetual story of perpetual learning.

00;32;20;03 - 00;32;47;25
Hunter Hastings
So you've got to figure out how to how to fit that into the idea of narrative. But certainly, you know, dynamics and the the fact of language. So the other thing that is necessary to make the story work, make the purpose work, make the phone work is common language. And that's really, really, really hard. Right? If we don't have a common language, we all hear a word set and we take some different meaning from it.

00;32;48;11 - 00;33;12;14
Hunter Hastings
So narrative is a way to package up those words and all get the same, the same meaning from. So I think of narrative as a, as a, an element of dynamics. But I've just been reading about Wardley mapping and now he says a map maps better than a narrative. So I'm I'm looking at that visualization rather than verbalization.

00;33;12;14 - 00;33;12;29
Hunter Hastings
That's another way.

00;33;13;00 - 00;33;31;25
Brian "Ponch" Rivera
I agree. You give us a map. We can have many conversations. It's a lot easier to navigate than it is. And Mark knows is from being a marine and actually having had this conversation with Mark, when when we do have a map, there's so many things that we have contextually, right? We can see things. We have anchor points, we have movement, but we don't have that.

00;33;31;25 - 00;33;50;03
Brian "Ponch" Rivera
When we listen to a story, when we're navigating with our ways in our car. Right. We just hear the story that the app is telling us. And we lose human capability. We lose awareness of where we actually are. So the mapping aspect of this is absolutely critical. It's orientation, right? Are we oriented the right way?

00;33;51;05 - 00;34;15;07
Mark McGrath
I like to I'm following on that. And I will turn it over to Hunter what he thinks. But I've always tried to describe OODA Loop as a map of how the orientation functions versus OODA Loop as a process or as a tool that can be used in certain scenarios. And when you look at it as a map and we know a map of visualization in the map and the terrain, not all is match.

00;34;15;07 - 00;34;52;15
Mark McGrath
But when we look at it that way, we can learn that it's not a simple process. It's actually something very complex to describe what your very complex adaptive system, human computer is is doing on a on a continuous, ongoing basis. And when you do have that visualization of it that way, I think it elevates the understanding of what not only not only Boyd was trying to get across, but then you can easily talk about Austrian economics and entrepreneurship and any other any other discipline so long as humans are involved.

00;34;52;15 - 00;34;59;19
Mark McGrath
But that that's that's the visualizations purpose, I think is really for.

00;34;59;19 - 00;35;26;16
Hunter Hastings
Yeah, I think it it gets me into philosophy that, you know, human beings need a beginning and an end. We need to understand the the big bang because we can't figure out infinity. And our narrative needs to have a conclusion that we've got to lose that. So complex adaptive systems theory and the OODA loop. Take us to a different place, which is this perpetual learning place is no beginning in this no end.

00;35;27;12 - 00;35;54;27
Hunter Hastings
And the the fascinating thing in complex adaptive systems and also Boyd is is emergence and to understand emergence, you've got to lose cause and effect. But, you know, Aristotle and Kant and all of those folks tell us cause and effect is the way the mind works. You can't you can't think without causing and effect. So that it's it's fascinating.

00;35;54;27 - 00;36;21;24
Hunter Hastings
But I think your Boyd was such a polymath path and he delved into quantum physics and he delved into philosophy and he delved into thermodynamics and he talked about economics. It's the the multi-discipline narrative of it, if that's a word, is is what is what powers the loop. It's as you say, it's not just economics. It's it's it's life.

00;36;21;24 - 00;36;30;09
Hunter Hastings
It's everything, it's progress, it's physics. It's so I know that it doesn't answer your question, but the OODA loop is a very, very complex.

00;36;30;14 - 00;36;31;00
Mark McGrath
Very good.

00;36;31;08 - 00;36;34;22
Hunter Hastings
Idea. And the more you think about it, the the deeper you get into it.

00;36;35;23 - 00;36;58;13
Mark McGrath
When when Ponch and I were in the archives in December, in Boyd's archives, and it really reinforces what you just said. I mean, he was pulling from everywhere and you look at that with I think we've discussed that epistemology graphic that Jeff Richards puts out about all the inputs over 20 years that really influenced the final version of Loop as we know it.

00;36;58;13 - 00;37;18;16
Mark McGrath
We only say it's the final version because he died the next year. Dave Snowden on episode two really drove the point. It would have been interesting to see had John lived longer, you know, he never would have left it static in that depiction. He would have continued to to evolve it and grow as we've tried to do with with economics.

00;37;18;26 - 00;37;38;15
Mark McGrath
But one of the things that we definitely found was somebody had sent him an article by Hayek, which was, I believe, an excerpt from The Fatal Conceit, and it had a note on it. You know, make sure you read this. I know that Richard's in his book certain to win about the theories of John Boyd as a reference to Hayek.

00;37;39;03 - 00;38;09;22
Mark McGrath
And if I could have a time machine, I would go back and I would. We've gone through all of his books and articles, everything that he had. And I've never seen me this and I've never I've never seen any of those Austrian thinkers. But you start to wonder what if it would have been so interesting to get Boyd's opinion of human action, because they were saying such similar such similar things in arriving at the same conclusions from different from different starting points.

00;38;11;03 - 00;38;43;22
Hunter Hastings
Yeah. So one of Hayek's books is about psychology and what we'd call neuroscience today. He was a real pioneer in that field. It's called the sensory Order, I think, and he has this construct of the map and the model and it's it's very much orientation and the OODA loop. So the map is as we grow up, we're babies, we are orienting ourselves to the world.

00;38;43;22 - 00;39;06;06
Hunter Hastings
We learn things, we develop a map that's, that's, that's what we go forward with. That's our orientation. And then as new information comes in, we have new experiences we create these new models. Hey, maybe this this works differently than I've been told. I've got to I've got to figure out this new model and then I've got to integrate it with my map.

00;39;06;26 - 00;39;36;08
Hunter Hastings
So I think Hayek and Boyd are saying exactly the same thing and that in that construct they didn't have the same words, didn't have a common language, but they did have a common outlook. And you know that Hayek's theory, even though he was not a trained neuroscientist, holds up pretty well in today's world of neuroscientific research. And what the brain and what is the mind and how does it all work.

00;39;36;08 - 00;39;40;23
Hunter Hastings
So that's that's very consistent. Hayek and Boyd, I think.

00;39;42;28 - 00;39;45;03
Mark McGrath
We speak in ponchos language. I can see it.

00;39;46;05 - 00;39;54;28
Brian "Ponch" Rivera
Oh, yeah, yeah. No, this is fascinating. You know, I was looking forward to this conversation because it's I don't know if you know this, but my undergrads in economics.

00;39;55;15 - 00;39;58;13
Hunter Hastings
So what doesn't make you a bad person?

00;39;59;03 - 00;40;22;17
Brian "Ponch" Rivera
No, it doesn't make me a bad person. I was confused for about the first 15 years of coming out of college, and I'll say that that's why I became an aviator. Right. But a lot of great lessons from the you know, the Chicago School. And I studied under Zebra at the University of Colorado. So it's fascinating to transition from that world into fighter aviation and an MBA and everything we're doing today.

00;40;22;17 - 00;40;33;24
Brian "Ponch" Rivera
Right. But all right. So so for those of you that are out there, don't hold the fact that I have an economics degree. It's still very valuable. Very, very valuable. Well, one.

00;40;33;24 - 00;40;58;11
Mark McGrath
Of the segue into what we're you know, what we're continuing to develop and work on is Hunter and I have a friend that's a professor and pair violent, who's whose work is worth reading for those that are interested in. And for an entrepreneur ship. But we had a discussion with him about changing intense structures in how intense structures change.

00;40;58;22 - 00;41;29;12
Mark McGrath
And I want to read I want to read John Boyd's definition of top of of strategy, because I think that there's a there's a there's a connection there, but a strategy is defined as a mental tapestry of changing intentions for harmonizing and focusing our efforts as a basis for realizing some aim or purpose in an unfolding and often unforeseen world of many bewildering events and many contending interests.

00;41;29;12 - 00;41;45;05
Mark McGrath
And as I is as I listen to that, I thought and I'm more I think about that and I think about the work we've done so far in the work we're continuing to do. BE When you hear that Hunter, I mean, and we and we and we think about what others are saying in the space from the economic side of the House.

00;41;45;05 - 00;41;53;03
Mark McGrath
I mean, the connection seems to me to be pretty clear in clearing up more and more every day.

00;41;53;03 - 00;42;21;22
Hunter Hastings
Yes. So when you introduce me to that, the the phrase mental tapestry, that was that was completely new, a completely new way to think about strategy. And I try to get my head around that that I, I had a conversation with someone who introduced me to Eric Shawn the other day, and we talked about that. He quoted in his book The Art of Strategy, which integrates Sun Tzu and and Boyd and Wardley.

00;42;21;22 - 00;42;52;12
Hunter Hastings
And what are the ways you can interpret mental health? The mental tapestry is you're running a company, you've got customers, you've got other stakeholders, you've got employees, you've got some things that are in the R&D labs waiting to be produced. You've got some things that are in the the industrial and commoditization stage. As broadly would put it. You've got some things that are in the middle and you've got to figure out the strategy that combines all of those.

00;42;52;12 - 00;43;17;04
Hunter Hastings
And the tapestry idea is really powerful. I think that I interpret that as, you know, lots of bits and pieces that are that are what we would call and components, I guess, that have to come together. But they've got to create a single picture. It's a dynamic picture changing over time. It's moving from left to right. But that idea of a mental tapestry is is very, very powerful.

00;43;17;06 - 00;43;33;07
Hunter Hastings
I kept thinking about it since you introduced me to it. Now we have to develop it ourselves, I think. Right. Because he wrote that. But then he didn't tell you how to think about it as a business person or an entrepreneur. I don't maybe. Brian, this is what's the next paragraph after that?

00;43;34;17 - 00;43;54;19
Brian "Ponch" Rivera
Well, you just made me think about innovation. We have to have a common anchor point, right? We have to have a common way to phrase what's going on around us. Otherwise we'll shoot each other down. It's not a good thing. So that mental tapestry is you have to construct the reality that's outside your aircraft. 100 miles, 50 miles, 200 miles around you.

00;43;55;08 - 00;44;15;15
Brian "Ponch" Rivera
You have to you have to build it in here and it has to be shared across multiple people. Otherwise, you know, when we communicate while flying, those words don't mean anything. So we have to have those common anchor points and that's what Simon Morley has done. So if you go imagine John Boyd staying alive and meeting Simon Morley to talk about mapping, that'd be insane, right?

00;44;15;22 - 00;44;37;11
Brian "Ponch" Rivera
Because that commonality between what we did with Bullseye, we called it Bullseye and fighter aviation. And it's just a common reference point that allows us to make decisions autonomously. The connections are insane between fighter aviation and Morley mapping, and I'm just going to throw it back to you, Hunter, because I'm confused at the moment.

00;44;37;11 - 00;45;04;15
Hunter Hastings
Well, the the the anchor point in Wardley map for business is a customer need so that that's a very Austrian concept right that everything starts from the customer need and it's even subjective value. So he talks about customer needs like, like confidence and using a system that a technologist might be, might be building. And so this idea of subjective need as an anchor point.

00;45;04;15 - 00;45;25;05
Hunter Hastings
So thanks for introducing that concept is, is the way economics works that everything is geared towards meeting a subjective need. Now what's the subjective need? Well, the only person who knows that is the person who has that need. It's it's in their mind. It's in their in their head. They might not even ever be able to communicate it.

00;45;25;05 - 00;45;50;07
Hunter Hastings
And the entrepreneur has to figure out how to do that. So that's the entrepreneur's anchor point. They've got to assemble the reality, to use your words, that that meets that need a very, very challenging concept. But boy, a very useful way to think about it. So the anchor of the anchor point makes a lot of sense. I can't visualize flying at 600 miles an hour with my anchor point, but I can imagine as an entrepreneur.

00;45;51;21 - 00;46;26;00
Mark McGrath
I posted one of the things that we found in the archives was on a napkin. If you recall, it was it said the definitely a dynamic agent, a medium that harmonizes tactical actions with changing strategic intentions and focus is them to realize the strategic aim. Share Punkt. And then in the comments you put Hunter. Hunter wrote that customer value that's the SharePoint that that's that's the the value for customers.

00;46;26;00 - 00;46;30;13
Mark McGrath
That's what we're all aiming to in our team, our firm, our company.

00;46;31;23 - 00;46;36;01
Hunter Hastings
Yeah. The harmonizing agent I think somebody called it. Right. That's what.

00;46;36;10 - 00;46;36;19
Mark McGrath
Yeah.

00;46;36;22 - 00;46;37;21
Hunter Hastings
That Yeah.

00;46;37;25 - 00;47;05;08
Mark McGrath
That's what we. Yeah. On a napkin again. We found out on like I might have been napkin I think it might have been a paper towel in the Boyd archives and in the pictures on it. I put up about a month ago. I mean, it's just amazing. Yeah. And then what what a singer says is that it's a focusing agent that naturally produces an unequal distribution of effort as a basis to generate superiority in some sector by thinning thinning out others.

00;47;05;08 - 00;47;32;18
Mark McGrath
So a medium to realize superior intent without impeding initiative of many subordinates. Hence a medium through which a subordinate initiative is implicitly connected to superior intent. So you could see intent or the purpose back to back to me is this and even even Boyd that that purpose directs action per the purpose of caring for customers or helping clients.

00;47;32;18 - 00;47;36;12
Mark McGrath
Those purposes drive.

00;47;36;12 - 00;48;10;27
Hunter Hastings
Yeah, let me let me try something else out on you. It's made me think I'm doing some research now into, into the, the current state of capitalism that that gets a lot of criticism from young people especially. And one of the problems is this focus on maximizing shareholder value, which is not customer value. It diverts the efforts from the attention and the investment patterns inside corporations for a narrow few, which are not the not the customer.

00;48;10;27 - 00;48;22;07
Hunter Hastings
So is that a square punctured a badge? Fair point. But it's it's focusing effort in a bad way. Is that can I think like that or is that square punk is always good?

00;48;23;10 - 00;48;53;16
Brian "Ponch" Rivera
I think you could think like that the think about it this way if if our focus is wrong but it is our focus point, we can still implode on you know, implode as an organization. So we're going to reach that equilibrium faster. Right. And that's what we don't want to do. So what's interesting is going back to what we talked about toward a production system and controllers outside and bottom up, you can think of a shareholder as being part of the organization rather than external to it, right?

00;48;53;16 - 00;49;29;12
Brian "Ponch" Rivera
Because a lot of times employees are shareholders as well. So if you put the OODA loop around them or a boundary around them, then externally it has to be outside the wall of that boundary. That's your control, that's your customer. They can't be your shareholder. But again, going back to if your boundary of your OODA loop, which is also known as a markham blanket, if you put that blanket around the shareholder or exclude the shareholder, then I think that's a bad thing because you're going to reach some type of equilibrium early.

00;49;29;12 - 00;49;44;21
Mark McGrath
I, you know, Blockbuster probably never thought they were wrong that they were know that's thing right because that's just said you could have a bad you could have an orientation the judgment of whether it's bad you know when you're when you're doing it you probably don't think that way, right?

00;49;45;07 - 00;49;54;02
Brian "Ponch" Rivera
Yeah. And that's called competency. Competency induced failure. Right. You're so good at what you know, not what you don't know. Right. And that's how they imploded.

00;49;54;02 - 00;50;15;23
Hunter Hastings
Yeah. You know, it's a well dissected case. One of the ways to think about it is that they had the wrong business model, that the right the right customer need, you know, watching movies at home, they had a reasonably good way to to deliver that. They actually had a lot of the research about streaming and sound like that.

00;50;15;23 - 00;50;35;00
Hunter Hastings
They understood it, but their business model was so dependent on the revenue stream, especially late fees that year, they couldn't they couldn't get out of their business model. So competency and just value, I like that term that they were competent enough. They just had the wrong business model.

00;50;35;00 - 00;50;43;13
Mark McGrath
And it's not what you don't know that could get you in the trouble. It's what you're absolutely certain of that turns out not to be true or connected.

00;50;43;13 - 00;51;14;11
Hunter Hastings
Well, on the Wardley map, also. Yes, yes, inertia. And you know, as we study business management techniques, we've been talking about dynamism. One of the things that's happened today coming out of the business schools, in the business literature and Shawn like that is is we're locked into old methods of management in a world that has totally changed. So the digital revolution has totally changed how you how you make money and how you serve customers.

00;51;14;28 - 00;51;45;10
Hunter Hastings
And there's more and more customer sovereignty, right? I've got more control over my consumption in the in the digital world. But we're using old methods to manage companies, the hierarchies and the divisions and the command and control and, and kind of thing. Now, some of broken out. You could look at Google and Microsoft done a great job I think under Satya Nadella but that say that's an inertia problem or I'm not sure how to describe it but you know maybe they know it's wrong.

00;51;45;10 - 00;52;00;10
Hunter Hastings
They know that the way they run these companies is wrong, just doesn't work. But they can't they can't break out from it. So that's that's another if you run an odor loop, you'd break out, right? You get the feedback and you you'd reorient it. They're not doing that.

00;52;01;15 - 00;52;36;14
Mark McGrath
Yeah. Well, I mean, a lot of the thinkers that were speaking about, you know, Boyd in high tech and in Mises were reviled in their own times. And a lot of their impact has been realized after their deaths. And they never got the credit in their own lives, which is, you know, the mission that we're on with Boyd here on on on the note with no way out in the work that punch and I do and then tying it to the work that you do to advance the ideas of the, you know, Austrian economists and to keep developing them.

00;52;36;14 - 00;52;57;21
Mark McGrath
That's the other thing that we all have to realize is that these these things are all open. Nothing's set in stone because the nature of the universe being followed all uncertain, complex, ambiguous. Everything's in a state of change. And we have to continue to. This is I love the term that you use perpetual learning. If you stop learning, you die or or as Boyd would say, and where the title comes from, there's no way out.

00;52;57;27 - 00;53;18;00
Mark McGrath
You know, there's there's there's no way out of the continuous loop of reorientation unless you can make entropy go away, mathematical imprecision go away. Quantum uncertainty, you can't make those things go away. So you've got to keep that state of perpetual learning. Otherwise you become static and vulnerable.

00;53;18;00 - 00;53;53;22
Hunter Hastings
Yeah, I've just been reading about entropy in economics, trying to understand that. And Nicholas, what's your Jessie Rogan? I think that's Jessica Rogan. Anyway, he wrote a whole book about about the linkage between that between thermodynamics and economics and the economic processes, a entropic process. It produces waste. It goes from order to disorder. Over time, the free energy becomes bound energy.

00;53;53;22 - 00;54;26;00
Hunter Hastings
And that's a useful way to look at that economics. So this multidisciplinary continues. But I want to go back to one of your point. I think about Usher in economics. Mark is brand new. Yes, it started in 1871 with Carl Manga, but we're in the birth of it and I think you guys have the same view about about Boyd system of thinking it wasn't highly adopted to begin with but boy it's it's beginning to be and people are beginning to understand we're at the very beginning.

00;54;26;00 - 00;54;43;28
Hunter Hastings
We're still in the genesis phase and more and more people understand it will find more and more applications will get better and better understanding. And it's it's exciting. It's not that not that these folks won't recognize, it's just that the time scale is different.

00;54;43;28 - 00;54;47;20
Mark McGrath
I was like to say, learn this stuff before your competitors do.

00;54;49;21 - 00;55;18;17
Hunter Hastings
Well, that's and they are going to learn so then you've got to keep ahead of them. Right. It's competition is what produces progress. That's that's another piece of economics that is not. Well discussed. You know, people think about competition as a negative. It's red in tooth and claw. It's creative destruction. And the opposite is the case. Competition is what keeps growth and dynamism going, because you do something somebody looks at and said, Boy, that's good.

00;55;18;17 - 00;55;35;03
Hunter Hastings
I can do it even better or cheaper or faster, and the world gets better and your competitive advantage has been eroded away, if you think of it from that direction. But on the other hand, the world is a better place. So competition, this is one of the great tools.

00;55;35;03 - 00;56;04;18
Mark McGrath
What are some so you've interviewed a lot of entrepreneurs and you've heard a lot of stories and you've told a lot of stories through economics for business, which we'll link to and we'll have people people tune into, you know, what are some of the patterns, if you will, patterns of entrepreneurship, if you were going to make a brief patterns of entrepreneurship and use examples of, you know, what you know, avoid what you know, abortion, economics, what are some of the things that you've seen entrepreneurs do that you've interacted with?

00;56;05;05 - 00;56;11;15
Mark McGrath
That would be good examples to show those those patterns of entrepreneurship?

00;56;11;15 - 00;56;38;06
Hunter Hastings
Yeah, we've had 200 episodes of the Economics Business Podcast. About 100 of them have been with entrepreneurs at different stages of their entrepreneurial OODA loop life. One that comes to mind that I really liked was a fellow called Herman Morris and he was in the nail salon business. So here a him and his wife, very accomplished people just coming out of corporate America.

00;56;38;06 - 00;57;05;01
Hunter Hastings
They'd been responsible for, you know, billions of dollars in revenue and assets and so on. And they're looking for a business. His wife had an interest in nail design. You know, how do you how do you paint good nails and what's the creative aspect of it? And so they decided we can open a salon it was right here in San Diego and they they looked at around all the salons and said, I can do it better than that.

00;57;05;13 - 00;57;35;14
Hunter Hastings
So they made a nicer environment, they had higher technology and, you know, informational TVs on the wall and all kinds of innovations. And they did really, really, really well. So to Brian's point, they said, well, how do we scale this? We'll open ten of these or we'll buy a chain or maybe we'll franchise. And so they opened a second one in a different location and they found it's a bit harder to run two than one, especially in two different locations.

00;57;35;14 - 00;58;03;09
Hunter Hastings
And maybe this is not the right way to scale. So they looked around at the value map in the industry and they found a lot of people in the salon business who weren't very well trained in actual in actual nail design and personal service and things like that. B were not trained in, in running a business. You the panel of a of a salon and real estate management and all that kind of thing, hiring.

00;58;04;02 - 00;58;32;10
Hunter Hastings
And so he developed a whole new strategy, which he calls educate the industry. So he started a YouTube channel. His wife makes videos on a regular basis. So now there are hundreds of videos about everything to do with running nail salons. And he takes a piece of that. He sources high quality product none toxic, you know, green well produced kinds of products.

00;58;32;21 - 00;58;53;02
Hunter Hastings
And that's what he sells at a premium to to salon owners who've learned how run a salon from his his YouTube channel. So that struck me as a a perpetual learning and completely reorienting from I'm running a salon to I want to figure out how to run a chain of salons. Now I'm not going to do that. I'm going to franchise it now.

00;58;53;02 - 00;59;13;29
Hunter Hastings
I'm not going to do that. I'm going to in in invest in educating the industry. So that that seemed to me to be ooda looping and perpetual learning and his intent remained the same right to make to make a profit by serving customers in the nail salon industry. So that that was what came to mind.

00;59;14;19 - 00;59;41;02
Mark McGrath
What I love about that Hunter and thanks for sharing that with us is that it reinforces what Brian and I say literally every day, all these days. And then why everybody can do this, everybody's doing this, everybody can understand this and improve their capacity for free and independent action, whether they're flying fighter jets or whether they're owning it, owning a nail salon in an entrepreneurial journey like the one you just described.

00;59;41;02 - 00;59;59;09
Mark McGrath
I mean, everybody does this. They're all subject to the same universal forces and the same laws of human nature. So that's a that's a great. And that Herman was not a fighter pilot, correct? There he was not a no.

00;59;59;09 - 01;00;02;04
Hunter Hastings
I think he came out of the financial services industry like you did.

01;00;02;04 - 01;00;07;15
Mark McGrath
Mark Yeah. So that's another Survivor joke. It's good to hear.

01;00;07;21 - 01;00;08;21
Hunter Hastings
Yeah, yeah.

01;00;09;26 - 01;00;14;09
Mark McGrath
That's awesome. What's up? Oh, go ahead.

01;00;15;01 - 01;00;43;04
Hunter Hastings
But I was going to say we've come across a lot of stories like that and it's very inspiring to to talk to these these entrepreneurs just to give another another entrepreneur, James Kent, who he also was in a different industry, wanted to have free and independent action, as you said. And he decided to start an apparel company, and he calls it the the patriotic Patagonia.

01;00;44;05 - 01;01;07;25
Hunter Hastings
So Patagonia makes wonderful outdoor apparel, but it's woke. And he said, Well, we can have the outdoor apparel without being woken. Well, will be patriotic. And so he's got Made in America product, he's got liberty kinds of messages in his designs. But one of the things I remember him doing is to get started. He didn't have a store, he didn't have a website.

01;01;07;25 - 01;01;49;19
Hunter Hastings
He did pop up retail and he tried lots of different venues and he found out that his best venue was gun shows. So that that was unintentionally he went there accidentally. You said this T-shirt stall and he sold T-shirts and had a huge audience and people loved it and, you know, got into good conversation with customers. And he built from there is a very successful apparel business but that that kind of discovery it's so energizing and the feedback loop was people loved his stuff at at gun shows not just the product but also the positioning.

01;01;49;19 - 01;01;51;20
Hunter Hastings
So that that seemed to be another.

01;01;53;04 - 01;02;14;21
Mark McGrath
When you think of the entrepreneurs that you've taught, you know, but you see about 100. How many of them were not you're not not assuming a family business or anything. How many of them what percentage would you say were out of the out of the corporate world or out of the military or something like that? Like not not the you know, not the fifth generation of X business.

01;02;14;21 - 01;02;19;13
Mark McGrath
How many of them come from sort of the the main oh lord way of things?

01;02;19;13 - 01;02;49;13
Hunter Hastings
All of them. All of them. They yeah, they there's there's two forms of the people who start out being entrepreneurs. So we just gave up our Entrepreneur of the Year award to Victor Cha, who was a a young man in New York who's he's developed a electronics device industry that he gets custom made in China. So he was flipping Pokémon cards and in college and he just got pencils.

01;02;49;13 - 01;03;14;16
Hunter Hastings
He said, Boy, I can buy these cheap and sell them at a higher price and I'm making a profit. And he learned how to do that. And then he started selling other things on Etsy and eBay and so on. One of the successful ones was was consumer electronics that he resold and then he decided, well, I'm going to China, go to the source and find out what what things are over there.

01;03;14;16 - 01;03;38;22
Hunter Hastings
So he went to trade shows and he made some deals, said that he could sell over here. Now he's doing custom manufacturing, is designing his own products and having them made in China and shipping them here. And he's building a big business called Infinite Quartz wireless charging but he started he had no idea was going to be an entrepreneur is flipping Pokémon cards but he kept going and kept going and kept going kept going through the loop, kept learning.

01;03;38;22 - 01;03;44;02
Hunter Hastings
Perpetual learning is absolutely victor all the way. And he's, again, very, very successful. It's a great story.

01;03;44;29 - 01;03;48;26
Mark McGrath
Well, constantly, constantly reorienting.

01;03;49;15 - 01;03;54;10
Hunter Hastings
Yep, yep. And he'll be doing something different next year, bigger and better.

01;03;55;21 - 01;04;17;26
Mark McGrath
It's amazing. Know there's never it's always interesting. I think the one I heard recently that really reminded me a lot of this we're talking about Graziano once I thought the story was interesting and reinforced a lot of of what we talk about. So we'll look forward to hearing your episode with Eric too. We're not comes out.

01;04;17;27 - 01;04;57;10
Hunter Hastings
Yes that'll be out in a couple of weeks. We've recorded it. We have to edit it and everything but that and that's a great example of what Brian was saying. I never contemplated that combination. Sun Tzu, plus John Boyd, plus Simon Wardley. And you introduced me to it and I read the book and Eric was wonderful in his discussion I just opens your mind it's but the the idea is that of strategy as a mental tapestry or Sun Tzu talks about purpose that that unites people he talks about leading without you know without rules and without coercion.

01;04;57;10 - 01;05;10;27
Hunter Hastings
And just all of these ideas come together in a beautiful way. So I'm so delighted to learn about what you two guys do and learn. Boyd And have you instruct me because it takes a while to to learn it all.

01;05;12;15 - 01;05;15;11
Mark McGrath
Well, we'll keep our we'll keep at it. What do you say, Brian.

01;05;16;09 - 01;05;25;04
Brian "Ponch" Rivera
Well, I think a good measure of success is if we can get Steve Denning to talk about the little loop, which is is not going to be easy.

01;05;25;04 - 01;05;28;04
Hunter Hastings
I can certainly put you two together. These. Oh.

01;05;28;23 - 01;05;33;22
Brian "Ponch" Rivera
I know, Steve. He helped us. He helped us out with our book and then promoted it. So I better.

01;05;33;23 - 01;05;36;01
Hunter Hastings
Yeah, that's right. There's a forward from him, right?

01;05;36;03 - 01;05;38;00
Brian "Ponch" Rivera
Yeah, yeah, yeah, yeah, yeah.

01;05;38;15 - 01;05;39;26
Hunter Hastings
You know, I can work on him.

01;05;40;22 - 01;05;50;23
Brian "Ponch" Rivera
Yeah. I think that would be a great measure of success with this podcast and with your help, is seeing him talk about the loop rather than just telling him about it. I want to see him talk about it.

01;05;51;07 - 01;05;55;06
Hunter Hastings
Okay, I. I'll see if I can plant that seed.

01;05;55;06 - 01;05;56;25
Brian "Ponch" Rivera
Okay? Don't tell anybody. All right. Well.

01;05;57;05 - 01;06;35;19
Mark McGrath
Okay, as you say, and we'll we'll wrap this up. But as you say, you know, this stuff is still new. And there's a lot of a lot of wide open space be explored and expanded upon. And that's that's the mutual mission that the that we have with no way out. And in that you have with economics for business and you know the other work that that the punch and I do so it's a great we'll keep our we'll keep building this snowmobile and helping helping those that are open to perpetual learning because it's critical to adapt and thrive.

01;06;36;28 - 01;06;45;17
Hunter Hastings
Good. Well, thank you for the work you do. It's it's inspiring and educational and it's perpetual learning. So I appreciate it very much.

01;06;46;16 - 01;07;00;16
Mark McGrath
Thanks, honey. That's all for today's episode of No Way Out. We hope you enjoyed the conversation and learn something new. Check out the show notes for links to the people, ideas and things we discussed in the episode we. Want to thank you for listening and we'll see you next time.

01;07;00;23 - 01;08;08;26
Outro and music

Introducing Hunter Hastings
Hunter’s Path from Economist to Entrepreneur
New Ways of Thinking About Business
Keynes vs. Hayek: A Battle of Orientations
How Hunter’s Dad Explained What He Was Learning at Cambridge
Collaborating to Combine Boyd’s Ideas with Economics, Entrepreneurship, and Value Creation
Equilibrium is Death
Orientation as an Individual Operating System
Finding What Scales
How Narratives Drive Behaviors, from an Economic Standpoint
Wardley Mapping and Visualization
The Multiple Disciplines that Power the OODA Loop
Hayek and Boyd, a Common Outlook without a Common Language
Strategy as a “Mental Tapestry”
Competition Produces Progress
Entrepreneurial Reorientation and Perpetual Learning