The Rational Side of Delayed Gratification

Delaying gratification is not an absolute concept, it is a rational wisdom based on certain backgrounds; how to choose? Ultimately, it is a game of interests and values. How to delay gratification? The author of the following article explains it to us. Let's take a look.

Delayed gratification, Zhang Yiming often mentioned this concept. Later, many celebrities also began to emphasize it on social media and regarded it as a habit, but everyone had different understandings.

for example:

• A young girl said that delay has a good effect on weight loss, and you should not eat too much on a daily basis so that you can lose weight.
• A small boss said that one has to look at the long term when doing things. It doesn’t matter if the business doesn’t grow now. The foundation is solid and it will definitely grow next year.
• A working person said that if you want to smoke, don’t smoke; if you want to shop, don’t buy; if you are impatient, hold back; delay is the way to control desire.

Maybe you have had this thought too.

However, if you think about it carefully, you will find that it has many loopholes. Weight control is a matter of daily accumulation. If the business does not grow this year, it may die before next year. If you don’t buy the things you like now, they may be gone tomorrow.

What to do, the delay fails?

No, in most cases, our understanding of this word is at the "inspiration level", and we have not really thought deeply about its specific application scenarios and the true meaning behind it.

1. What is delayed gratification?

Psychological definition: a decision-making orientation that is willing to give up immediate satisfaction for more valuable long-term results, as well as the self-control ability demonstrated while waiting.

That is, voluntarily postponing or giving up present, smaller gratifications for the sake of long-term, greater benefits.

There is a classic case:

In the 1960s, Walter Mischel, a psychology professor at Stanford University in the United States, designed the famous candy experiment, which later became known as the candy effect.

Dozens of children sat in a classroom with their favorite candies on the table. The researchers set three rules:

"Eat the candy immediately and you won't get any reward; wait until the researcher comes back before eating it and you will get a piece of candy as a reward; if you can't wait for the researcher to come back, you can press the bell and the researcher will return immediately, and you can eat the candy but you must give up the chance to get a second piece."

The study found that the few children who were willing to wait had a higher probability of successful career development in the future. Later, people began to focus on cultivating the habit of delayed gratification in themselves and their children.

But, here comes the problem.

Have you noticed that in this experiment, "delayed gratification" informed the "rules of the game" in advance, and these rules are certain ; in real life, when we do something, we don't know whether there will be any gains in the future, or even where the rules are.

for example:

People are advised not to buy a house too early, as life as a house slave will be very difficult. Buying a house in middle age will allow you to delay gratification and bring happiness. However, you listened to your friend and the house prices keep rising every year. Ten years later, you still cannot afford a house.

So, by definition, delayed gratification has two overlooked conditions, namely "scope of certainty" and "focusing on life-cycle benefits rather than immediate benefits."

1. How to understand the scope of certainty?

Everyone will associate certainty with something, for example, writing is certain, starting a business and building a brand is certain, and doing self-media is also certain. But why do these things become uncertain in the end?

In fact, just like knowledge, everyone will be blinded by certainty, and it is difficult to come up with an uncontroversial analysis. According to philosophical understanding, there are three important reasons for this:

1. Different types of certainty, easy to confuse
2. Full of unexpected value, hard to grasp
3. There are two dimensions: "determined at the moment" and "determined after a long time"

If we apply it to business activities, determination itself is to find patterns within certain boundaries, and to determine the cause and effect.

for example:

On a track, once you find the why (goal, concept) part of your mind, you will know why you should do it, and this is called "cause" .

Who are we competing with, who are we truly serving, and what kind of interactions do we have with customers? These questions can be big or small, deep or shallow, to follow the "results" . The two are in a closed loop.

However, finding these is not enough, you also need to measure the revenue efficiency over the entire life cycle.

2. What is life cycle benefit?

In simple terms, it means the amount of money contributed by a user during the period of time from the beginning to the end of a life or an event.

How should we consider the business value within the cycle? In financial management, there is a concept called the Discounted Cashflow Model, and the calculation formula is:

Present value = (E0CF1)/(1 + r) + (E0CF2)/(1 + r)2+…….

I think this is the best way to explain it.

What is present value? The present value is the amount of money that a certain amount of money in the future would be equivalent to today if it were calculated at a certain interest rate.

for example:

You deposit money in a bank for three years with an interest rate of 3%. After three years, you can get 10,927.27 yuan. So, how much should you deposit? The answer is 10,000 yuan, which is the present value.

What determines present value? Cash flows and R, and N, where R represents the discount rate, which means the risk of the cash flows, and n represents the length of the delay.

The reason for depreciation is that if it involves inflation, if you have a deposit of 10,000 yuan now, it may seem like you will earn a few hundred yuan more in three years, but in fact it will not have much effect.

Some people may say, why not just say how much money you have now? Why make it so complicated? What do you think delayed gratification means?

Delay is investing in the future. Investment is sacrificing current cash flow and time costs in exchange for the expectation of future cash inflows.

for example:

There are two types of people around me who are engaged in self-media. One type is good at systematizing content, optimizing it for publication, making it into courseware for consulting companies, and using it in their own training camps. They are very suitable for delayed gratification. The other type is whose content does not have the above characteristics and is more for immediate satisfaction.

It is worth noting that at present, there is a kind of slippery marketing in the market that is often confused with this concept.

In the clothing field, the shopping guide will not sell you a mink coat, but will encourage you to invest. This may sound comfortable, but it is not an investment behavior because it will not generate cash flow for you in the future, but will have a higher depreciation rate.

Back to the issue of buying a house, should we buy it now or in the future?

From a market perspective, it is difficult to grasp the overall ups and downs of the real estate industry. At best, we can only judge "inflation" and "present value depreciation rate."

From a certainty perspective, if you think you can make more and faster money now than you will in three years, you should enjoy yourself and buy a house as soon as possible; if the future present value is higher than the current value, then you will make money slowly and the value will depreciate, not only will you have more places to spend money, but you will also find it difficult to make a down payment.

Like:

Why did you think that 10,000 yuan was not expensive five years ago, but now you think it is expensive? The main reasons are "inflation" and "cash depreciation rate". Your efficiency in making money is not as high as it was in the past, and you have more places to spend money, which leads to this situation.

but:

Doctors are obviously different from other ordinary workers. The older some experts are, the more efficient they are in making money. Their efficiency in making money can completely offset the pain caused by depreciation and inflation, and they are more suitable for delayed gratification.

Whether the child chooses the second piece of candy depends entirely on his or her inner threshold. The higher the threshold, the stronger the tolerance, and the lower the threshold, the more impatient he or she is. There is no way to accurately estimate the threshold, after all, everyone has a different critical point.

In a nutshell, for things that you think are worth delaying gratification, you need to stand at the "certain result" target point and calculate the present value. Is the present value after delay greater, or is the present value of immediate enjoyment greater?

However, this can only be regarded as seeking certainty based on self-goals and benefit measurement, which is looking inward.

We all do this on a daily basis, but why is there still a "high probability" of failure? The key is that you don't look forward and examine the entire life cycle from an external perspective.

2. Two Delayed Gratification Frameworks

I often use two frameworks to measure the market value component of what I do and decide whether to delay gratification accordingly.

1. Product life cycle

Internet people are no strangers to this concept, which was first proposed by Raymond Vernon, a professor at Harvard University in 1966 in his article “International Investment and International Trade in the Product Cycle”.

He believes that the entire process from the time a product is prepared to enter the market to the time it is eliminated and exits the market is determined by the production cycle of demand and technology, and is the economic life of a product or commodity in the market.

That is, your business, during market circulation, will be affected by consumer demand, level, method, and the market structure of other factors, causing the product to go from prosperity to decline.

It is mainly divided into four cycles:

1. Introduction
2. Growth
3. Maturity
4. Decline

During the introduction stage, a product has just entered the market and is not well known, and there is obviously no demand; the growth stage means that product quality has greatly improved, market competition is fierce, and sales and profits are gradually increasing.

The characteristics of the mature stage are that the market demand tends to be saturated, there are few potential customers, and sales begin to slow down from rapid growth. Competition intensifies and promotional expenses increase during this stage. Customer behavior in the decline stage has changed, and they begin to gradually shift from original products to new products.

For example:

WeChat public accounts were established in November 2012 and have been developed for 10 years. Which stage do you think it is in? Was it easier to do it 5 years ago or now? Obviously, after the explosion of short videos, the graphic and text track has been declining rapidly, which is obviously a recession period.

If you are still running your own media, the previous approach will no longer work. Although the market has a long-tail effect, users' requirements for content quality have generally increased, which directly makes monetization more difficult and gives you fewer opportunities for upward development.

Therefore, you can only delay gratification and do things slowly, starting from the perspective of "confirming the results", and measure whether you can achieve the expected goals after 2 or 3 years, and further subdivide them in the sub-sectors.

What does it mean?

In other words, are there any peers in your field using the same method? Can you iterate based on product methods, content, and operational efficiency to create greater value for users?

In addition, you can also adopt the method of combination competition, but in a very mature track, no matter how innovative the form and techniques are, the money-making model remains unchanged and someone must have verified it. The short video track is different.

For example:

Tencent, ByteDance, and Alibaba have all entered the short video market, and the head effect has been obvious after six years of development; but in the subdivided fields, it does not mean that there is no room for growth. If the business can make up for the shortcomings of the giants, it may still receive support.

Then, compared with the pictures and texts, there is an obvious opportunity dividend trend, and the "present value" is greater.

Tang Binsen once clearly mentioned in an interview that if the market has a dividend effect, then we should believe in the short-term value and invest heavily in advertising to create volume and sell through voice. If there is no dividend, we should advertise less, make good products and be patient with the present.

Therefore, the product life cycle model allows me to clearly understand what stage and ecological niche I am currently in within the industry and in my niche, and whether my present value is high or I am suitable for delayed gratification.

2. Boston Matrix (BCG Matrix)

This concept was proposed by the Boston Consulting Group in the United States in the 1950s. It mainly analyzes market share. Friends who are familiar with it may know that this model divides the market into stars, cash cows, problems and dogs according to "growth rate" and "market share".

• Star products (high growth, high market share)
• Problematic products (high growth, low share)
• Cash products (low growth, high share)
• Dog products (low growth, low share)

The "star type" and "dog type" are the easiest to understand. The former belongs to the introduction period, with dividends everywhere and high money-making efficiency. The latter belongs to the recession track. For example, it is obviously difficult to grow for public accounts now, with a small market share and a strong competition in content strength.

The problem type is in the growth stage, and the product market rate is relatively low. At this time, you must persist and move forward with your eyes closed, changing while persisting , because when the market is on the rise, there is room for adjustment and the serfs can still stand up and sing.

For the "cash cow" market, there is hardly much growth. However, if the product has a high market share, should we adopt the attitude of immediate gratification or delayed gratification?

My opinion is that cash cows are more suitable for making profits, squeezing out the last glass of milk from them before the entire market goes into recession, and putting long-term plans on the next track.

In general, I mainly use the product life cycle to look at the market position of the business, and use the Boston Matrix (BCG Matrix) to examine the efficiency of making money.

There must be a reason behind everything that happens. Although Zhang Yiming advocates "delayed gratification", those years were actually the time when he made a lot of money.

3. What causes delayed discounts?

If "delay" only means pain, then "satisfaction" only exists in theory and cannot be realized. In other words, what factors cause us to give up easily during delay?

1. Imagination

In the marshmallow experiment, the willingness to wait depended on the degree of desire, but it soon became clear that all children were eager for the second lesson on what determines our self-control when it comes to candy.

Through repeated observations, Michel concluded that the secret lies in attention. Children can divert their desire by covering their eyes, playing hide-and-seek, and singing.

Sangil Arthur Lee, a psychologist and postdoctoral fellow at the University of California, Berkeley, once made a metaphor about fantasy discounting.

as follows:

If you find $5, would you rather give it to yourself when you are in school or when you are remarried? People tend to get richer as they age, and $5 means more to you when you are 10 than when you are 45.

Moreover, the uncertainty of the future does not make us believe that there will be a future. All this can be attributed, at least in part, to the "imagination level."

Whether we are a company boss or an individual, when we think about problems that have not yet occurred, they are often abstract. This is different from reality, which has emotional feelings and requires more specific considerations.

Therefore, if "imagination" and "reality" do not match, or the degree of match is too different, your delayed gratification will most likely be discounted.

2. Values

In his new book, What We Owe the Future, philosopher William MacAskill raises the question of how far into the future we should delay gratification.

He gave an example.

Imagine that you threw a glass bottle on the trail while hiking and it broke. If you don't clean it up in time and it is covered by heavy snow, the next time a child hikes up the mountain, they may step on it and get severely cut by the glass.

But you have come a long way. Will you go back to clean up? Does it matter to you if your child gets cut? Will it happen in a week, a year, or five years?

Sangil Arthur Lee believes that when we stand far away and look back at the past, the discount rate based solely on time is incredible.

We should attach equal importance to the well-being of future humans and contemporary humans, and not discount the future, or at least keep it higher than the risk rate.

In other words, the degree to which we imagine something is irrelevant to our values. If your values ​​​​suggest that you should pay more attention to it, you will have higher expectations for future goals, and you will also pay attention to every detail in the present.

In other words, if your values ​​no longer make you willing to stick to something over time, you will most likely give up slowly.

These values ​​include many dimensions, such as the investment of time in things, the measurement of significance, and whether the money is recovered.

like:

Many big entrepreneurs insist on doing charity every year, not because it can bring in money, but because there is a sense of responsibility flowing in the value, and this responsibility forces them to move forward.

Therefore, "imagination" determines the degree of desire for something, and "values" determine whether you are willing to go further . This is why it is said that values ​​determine destiny.

4. How to maintain delayed gratification

So how should we truly delay gratification in our daily lives? I think it can be divided into two aspects.

1. Large delay

The ancients said, those who do not plan for eternity cannot plan for the moment; those who do not plan for the overall situation are not qualified to plan for a region ; when a general fights a war, he has a sense of the overall situation and never focuses on a single pool. Although a pool may seem large, it is not worth mentioning in the overall situation.

First of all, you need to look further ahead, know where your goal is, and then make a step-by-step plan based on your goal.

For example, fitness:

On the premise of healthy eating, you know that the "definite result" is to lose weight, set a big goal, how much weight to lose in a few months, and then break the goal into short-term tasks, such as 10 sets of push-ups, 3 kilometers of running, and 20 minutes of equipment training every day, and rest when the time is up.

If you implement it every day and train regularly, you will naturally see weight loss by the time the deadline comes.

Therefore, feasible delayed gratification is not achieved overnight, but rather a two-phase cycle process of breaking down large delays into small satisfactions, with countless small satisfactions driving progress.

If you only focus on the big goal and keep emphasizing "tolerance and delay", enthusiasm and morale will be greatly affected. Although the principle is simple, it is difficult to truly understand and integrate it into your thoughts.

The same applies to business. It takes time for the ice to freeze three times and it takes time for a city to be built. If the business you are doing has passed the maturity stage and is still a skinny product, you can only set goals, build a strong fortress, and make progress day by day.

2. Small Satisfactions

Mark Murphy, author of Hard Goals, is dedicated to studying how the brain works.

According to him, a hard target is an achieved target where we can project current costs into the future and future benefits into the present, but you cannot estimate future costs.

This means not putting off until tomorrow what you need to do today, because market conditions and your own inner thresholds change over time.

like:

The goals you set at 27 may be very different from the goals you set at 30; when starting a business, just because you think there is still a blue ocean in the market now does not mean it will still exist in two years.

The best approach is to move forward in iterations.

Everyone has the same amount of time, and as long as the general principles and values ​​are correct, it all depends on execution when it comes to implementing them every day. You may even do more than before, because there is a "practice makes perfect" aspect to it.

Secondly, according to his research, in team work, daily satisfaction not only affects behavior and performance, but also mobilizes more energy, thereby driving efficiency.

That is to say, if the goal is not achieved, it may lead to frustration and reduce motivation. We must think about how to ensure the completion of small goals to promote a positive cycle.

How to set effective satisfaction? Locke (1968) believes in "Towards a Theory of Task Motivation" that there are three principles.

1. Clear and easy to understand
2. Challenges to complete
3. Commitment Feedback

Clarity is important when achieving small goals. Too much complexity in a task can lead to stagnation. Clear and specific matters can prevent confusion during execution.

The goal is based on the 80% conservative principle and the 20% challenging principle. This will not only expand the boundaries of ability but also help to complete the task. Every achievement will help to establish one state or another.

Commitment feedback is very important. We know that quantitative change will lead to qualitative change. If the direction of quantitative change is wrong, there will be no hope . If the expected satisfaction does not appear in time, we cannot delay it. We must stop and work backwards from the end to the beginning to see if what we are doing is in the right direction.

If the building is about to collapse, you still have to run. If you firmly believe that the "delay" direction is correct, stick to it and remain resilient, and be satisfied with little by little. Otherwise, it will be easier to succeed.

To summarize:

• Delayed gratification is based on “scope of certainty and lifetime benefits.”
• The discounted cash flow model looks at the "ability to make money", the product life cycle looks at the "business location", and the Boston Matrix looks at the "efficiency of making money".
• Taking a comprehensive look, is present value higher or delayed gratification higher?
• Imagination determines the degree of desire for the future, and values ​​determine whether delays are discounted and how far you can go.
• When a general fights a war, he has a sense of the overall situation, focuses on long-term goals, and pays small satisfactions by emphasizing iteration and positive feedback.

Delayed gratification is not an absolute concept, it is a rational wisdom based on certain backgrounds; how to choose? Ultimately, it is a game of interests and values.

Author: Wang Zhiyuan

WeChat public account: Wang Zhiyuan