Episode 179: Gamifying Life and Beyond - Yu-kai Chou

Yu-kai Chou is an Author and International Keynote Speaker on Gamification and Behavioral Design. He is the Original Creator of the Octalysis Framework, and the author of Actionable Gamification: Beyond Points, Badges, and Leaderboards. He is currently Founder Partner/Chief Creation Officer of The Octalysis Group, and Chief OP Mentor of Octalysis Prime, a Gamified Mentorship Platform.

Yu-kai has been a regular speaker/lecturer on gamification and motivation worldwide, including at organizations like Google, Stanford/Yale/Oxford, LEGO, Tesla, IDEO, BCG, Turkish Airline, the governments of UK, Singapore, South Korea, Kingdom of Bahrain, and many more. His work has empowered over 1 Billion users’ experiences across the world.

Formerly, he was the Head of Creative Labs & Digital Commerce for HTC, working on pioneering VR technologies. He was also Chief Experience Officer for Decentral, working on blockchain experiences with the Cofounder of Ethereum, Anthony Di Iorio.

Yu-kai was one of the earliest pioneers in Gamification, starting his work in the industry in 2003. In 2015, Yu-kai was rated #1 among the “Gamification Gurus Power 100” by RISE, and was also awarded the “Gamification Guru of the Year” Award in 2014, 2015 and 2017 by the World Gamification Congress and the Gamification Europe Conference. He has helped a variety of companies, from seed stage startups to Fortune 500 companies such as LEGO, Uber, Volkswagen/Porsche, Sberbank, eBay, Fidelity Investments, AIG Japan, Verizon, and more. His work has been featured in Forbes, The Wall Street Journal, Business Insider,The World Journal, PBS, NBC, and many more.

Audio Title: Ep179 - Yu-kai Chou
Audio Duration: 01:16:35
Number of Speakers: 2 

[00:00:00] Intro: Welcome to the Heroes of Reality Podcast, a podcast about the game of life and the hero's journey we all experience. Let's jump in with our host, Dylan Watkins, as he introduces today's guest.

[00:00:17] Dylan Watkins: Do you ever wonder, what does it take to motivate the player and the experience you're creating? How do you create the habits that you want inside the user of the application you're building? Well, on this podcast today, I have Yu-kai Chou, he is the author and international keynote speaker on gamification and behavioral design.

He's also the original creator of the Octalysis Framework, one of my personal favorite frameworks, and the author of Actionable Gamifications, Beyond Points, Badges, and Leaderboards. He is currently the founder, partner chief creator, officer of the Octalysis Group, and chief OP mentor of the Octalysis Prime, a gamified mentorship platform.

So without any further delay, I'd like to welcome, Yu-kai.

[00:00:55] Yu-kai Chou: Hello.

[00:00:56] Dylan Watkins: Hey, brother. How are you doing?

[00:00:58] Yu-kai Chou: Great. How are you?

[00:01:00] Dylan Watkins: I'm awesome. I'm super excited to get you on to the podcast and wrap a view. As someone who, you know, is self-declared human-centric designer and designs all types of experiences, primarily in virtual reality and transformational design, you have one of my favorite frameworks, which is the Octalysis framework and I'm, you know, really excited to have you on and just learn a little bit about your journey that got you to create the framework.

[00:01:24] Yu-kai Chou: Yeah. I think the beginning starts in 2003, so almost 20 years ago when, I was very, very heavy gamer and I played a lot of Diablo 2 at the time. And at one point, my friends started quitting the game and moved on to other games, so, I quit too. And then I felt extremely empty. I felt like, wow, I spent thousands of hours accumulating better gear, leveling up, getting gold, making my in-game character super strong. And when I quit the game, it's just like, well, seems like I have nothing. So, I was in that transition period between quitting games starting a new game.

And I just felt, you know, why can't there be a game where number one, people like a lot of people are playing, but number two, people can't quit like that. So, I realized, hey, that's actually the, like the game of life, my life. If I was my own RPG character, of course, I wouldn't just be idling in town, walking back and back from doing nothing, which is what a lot of people do just sit there and watch TV. I'd be going out, killing monsters, getting experience, learning skill points, building alliances, doing quests.

And so, back it up, by the way, I was still in high school, and I thought, well, most people among my peers, they're still – they're playing this game, but they don't know this yet. So, they're – if I go out and start leveling up, at one point, maybe when they graduate college, they're like, hey, I'm playing this game, I should probably go out and start leveling up to go to level two. and at that point, I would be level 26, maybe. So, eventually I could, because you know, success is snowballed, right? So, I thought eventually, I could be the strongest player on my server.

So, I started converting my whole life into the game. What's interesting is that, before, everything with school for extracurricular activity, all those things, I did the bare minimum to achieve my acceptable results, right, if I had to be an A student, I made sure it's 90%, not 91 because that 1% is wasted, right? And so I did a bare minimum to hit all my milestones, and then I stop and I go play games.

But when I saw everything as a game, of course, you're not going to do the bare minimum. You want to thrive and be awesome, all of those things. So, eventually, I don't want to go through a long list of things I did in high school, but eventually, you know, things went – I did everything really, really well, it’s like 98%, 99% student went to state competitions in a variety of things like chess valley, rose string, quartet music, got me to UCLA. And then I started my first business first year of college, because that felt way more like a game starting a business, because it's about, you know, you have an objective, you have obstacles, and you have your current resources, and it's about utilizing your current resource to overcome the obstacles to hit objectives, right?

And that's, you know, that feels like a game and that's like business, much more so than, you know, filling out like – memorizing a lot of information regurgitating on a piece of paper. In fact, most work is like that, most people's work is the same thing as a game structure, as opposed to just memorization.

And so, I started my first business, and they're all themed in terms of gamification, how do you turn your life into a game? How do you live a life that's about again, leveling up and improving your skills, building alliances? So, one startup led to another, and now, we're off to 2012, when I stepped down as a CEO of a gamification company, called Virology, so, someone else took over as CEO, we raised a little over a million dollars there.

And then at that point, the year I got married, I'm like, hey, looks like there is this industry of gamification that's booming. And you know, companies are raising VC funding. but the things they're talking about doesn't seem to be very strong, I mean most of them just feel like gamification just means applying points and badges on to your boring experience and suddenly it's fun.

And, you know, as gamers, we know that games are not fun because there's points and badges, right? It's the strategy component, the competition, the collaboration, the unpredictability and all of those things with storytelling. So, I was like, well, this industry's booming, a lot of my money is going into it, but I think most people don't understand it.

So, I thought, you know, I have at that point, nine years of experience in learning about this and researching about it. So, I started to – start sharing on my blog, yukaichou.com, what I've learned and some thoughts. And this is where I published the Octalysis framework, and it’s Octalysis because of the combination of the word octagon and analysis. And that was picked up very quickly. So, within a year, it was organically translated into 16 different languages, and that's when I got invited to speak about, and teach about this at places like Stanford, like Oxford, Yale, Tesla, Uber, IDO, Lego, all of those places, and it led to a book and all my other endeavors.

[00:06:06] Dylan Watkins: It's incredible, man. And, I mean, you look at it, it's a very simple, elegantly done explanation of human motivations, right? Because you're talking about gamification, what is the gamification? You're talking about the simplistically breaking down, what drives humans to go and do stuff and points and levels and badges are just these, you're talking about external motivators that don't really do much for us as a whole, because you want that experience to be motivating.

Now, let me ask you, when you started to put this stuff together, you're talking about starting gamifying your life, started treating your life like a video game and all this stuff, like, when you started to make the framework, did you start to lay that out, across like a whiteboard, or did you start to do, like, did you start gathering those pieces together? Because the way that you have it structured, like white hat versus black hat and across the board, I feel like it's a very well – is there anything that you left out of the framework that you couldn't find a way to fit it in?

[00:06:57] Yu-kai Chou: Yeah. So, a lot of people have asked me about the process of creating this framework and, you know, I've had, people who had PhDs in psychology for decades tell me that the framework actually answers a lot of things that wasn't answered in the psychology space yet.

And if you go to Google Scholar, you'll see about 2000, PhD thesis, academic journals, applying the Octalysis into all these industries. So, I have to say I'm very lucky, blessed to, you know, have a tool that I created, just to be fun and useful to stand so strong in the industry. But the process I made, like some people ask me, oh, did I spend many, many years doing this and whatnot? And I'd say that, to be honest, it's probably the result of three sit downs.

But it's across like one or two years, so it's like one sit down, I drew an octagon, and it was used for something else for like, for business optimization. And then there's another sit down, I was analyzing a variety of games that are very different, but, you know, my mother was addicted to Farmville at the time, and that was very curious to me, there's Diablo 3 and StarCraft, and there was also Candy Crush. So, those are some games that I looked into and why are they so different and why some games, people, can be super addicted to, for six months and they just don't want to touch it ever again, disgusted by it, and then why some games people can play for decades and it's still enjoyable. So, eventually, I came up with the framework.

And I want to say that, there's actually a good reason why studying games actually produce a good framework about human motivation, psychology, because if you look at most psychological studies, right, behavioral science, it's usually a professor with a classroom of like, let's say 2200 students, and then they're divided by half and then they'll have a delta, like there's, one half would have a small change than the other half, and they see if one half of the room behaves a little differently than the other half. It's like, hey, this delta, this change, changes behavior, right? And it's not even a hundred, like everyone changes their behavior, it's like, oh, this group, like it's 64% does it, and the other side is only like 51%. So, you know, it's not even across the board.

And if this can be replicated across different classrooms, then suddenly it's scientifically proven. Now, if you look at a game, each game is like a petri dish of hundreds of thousands, or hundreds of millions of test subjects, voluntarily changing their behavior based on the design, you can observe, hey, what game adds a little more scarcity, how people change their behavior, once it adds a bit of unpredictability, how people change their behavior.

So, just by observing games and being very self-aware, and pattern recognition, and creating that, I think that's how the Octalysis was born, and that's why it's so far, it's been – so I'll also say that, because one of my framework is to turn my life into a game, like the six steps to turn your life into RPG game. I think there's a lot of, rhyming with what your show and what you guys are doing. And one of it is figuring out initial stats, what your build is, just like a game, you figure out if your high intelligence or strength and whatnot, and that will help you decide if you want to be a wizard or a warrior.

So I have a few high level strengths, in terms of association between things that are disconnected, pattern recognition, empathetic intelligence. So, a few things that allow me to create frameworks and models, so, I actually have a fun goal in life, which is to create about a hundred different models and frameworks.

I think I'm about 35 right now, but again, I think Octalysis is by far the strongest one.

[00:10:35] Dylan Watkins: Wow. Okay, there's so much to unpack from that. So, one of them being is the gamification of life. Do you carry around a staff book or anything now, do you have like a backhand pocket where you like pull out an app, and you kind of like update the app or anything? Is there anything that you currently carry to gamify life with?

[00:10:50] Yu-kai Chou: I use a few gamified to do lists, I use Habitica and Water Drink to stay productive. I tend to – I do all my exercise with VR actually, yeah, Thrill of the Hunt, probably the best workout game if you played that, the Thrill of the Fight – yes, sorry, Thrill of the Fight. that one always gets me out of breath and like within a 10-minute workout. And, yeah, so, I do a lot of that. And so, when you think about gamification, there's two types; one is like the overarching, your life is the game and you're living this framework, you make decisions based on that game. And then there's like daily tactical stuff, which is, how do you get yourself to be more productive, on a day to day basis, and how do you keep score up what you're doing?

And so, the tools are the tactical part, and then there's the high level framework, of living your life and making decisions.

[00:11:53] Dylan Watkins: Yeah. And it's one of the things I noticed is, it's very hard to be both the dungeon master and the player in the game of life. And so being able to switch between those two roles where you switch and you're like, oh yeah, I'm changing my stats, I'm updating my things. And then you're like, okay, player, now you're on a diet and, no more carbs for the rest of your life. You're, ah, you are switching that player role, which is creating that motivation or creating that incentives or creating, you know, creating that pattern, to actually get you to take those steps forward is a challenge because you could be, you know – would be a sadomasochistic dungeon master? I'm not too sure how that would look.

[00:12:30] Yu-kai Chou: Yeah, I think that's very good insight. It actually is much easier to create a gamified platform for other people than yourself. And just a few small clarifications, so white hat motivation, so, Octalysis is an octagon, right, so the top of the Octagon is white hat motivation, and that makes people feel powerful, in control, they feel good, but there's no sense of urgencies that people procrastinate. And the bottom of the octagon is the black hat motivation core drive, so it makes people feel urgent, obsessed, even addicted. But in the long run, if that's the only motivation, it could leave a bad taste in your mouth because you feel like you're not in control of your own behavior, so people might drop out.

And so, what's unique is that, it's really, really hard to apply black hat motivation on yourself. So core drive is lost in avoidance, right? That's a punishment and core drive scarcity of patience, which is basically withholding something you really want for yourself. And so, how do you design an experience where you put a reward that you want it so much, you're willing to do everything it takes to get it, yet still withhold it from yourself, right, very, very hard.

And then last one is, how do you create a punishment where you're so scared of being punished, that you'll do anything possible to prevent this punishment, but know that you have the integrity to actually execute yourself if you fail, right? It's just really, really – you’re just going to be like, eh, I think I'm not really going to part my thousand dollars if I don't work out today, and then that crumbles.

So, usually, you want to find a game master to help you enforce the design rules that you created.

[00:14:02] Dylan Watkins: Yeah. And that's one thing that I've noticed, I've seen for myself, like in terms of gaming, because I'm obviously very deep into the gamification of selves, like, I'll set quarterly goals, I'll meet with someone that's dear to me, go okay, here's my rules, here's my punishments, here's this, here's my credit card, here's the giant stick to go beat me with, I'll be back, you know?

And so, I find to be. you know, fascinating about that and what I liked about that, what you talked about, and I want to address it because it's one of the things that we got connected because I covered some of your work in some short form content online, and what you talked about was an amazing way to get people to transform is you need black hat gamification to take that fearful, jump, to move out from comfortability, into taking that step forward.

But then if all that you had was black hat and pain and pain and pain, then it feels terrible. So, then you switch it to white hat, which is meaning and purpose and, you know, big vision that keeps you going for the long haul. So black hat to take the fearful jump, and then white hat to stop you from burning out and keep you on that progress, right, which is, you're stacking those two pieces together, which I thought was absolutely brilliant one of my favorite things that I've seen happen.

Is there any other stacks, Octalysis stacks that you've seen combining together that are effective, that have a synergistic effect?

[00:15:19] Yu-kai Chou: Yeah. So, right now, we've only been talking about the white hat versus black hat, but there's also what called left brain versus right brain core drives, which, you know, left brain is left side of the octagon, right means right for the right side of the octagon.

It doesn't geographically mean that it's on the left versus right of the brain. But the left brain core drives symbolically mean – it connects to the logical brain, right brain core drives symbolically connects to the emotional brain. So, what's interesting is that the left brain core drive deal with extrinsic motivation, things you do for a reward purpose, or a goal, that you may not enjoy the activity itself. So, once you obtain the reward, you hit your goals or you get used to the reward, becomes stale, you stop doing the activity, whereas right brain core drives are things that you enjoy doing to the point that you're even willing to pay money, just to experience it.

And even if you lost all your progress the next day, you would still want to do this activity today because that's how we measure our quality of lives, right, how much time we spend on things you just enjoy. So, for instance, cord drive five is social influence relatedness. You know, a lot of times, a lot of people sit middle school, high school, they hang out with the same two or three friends for sometimes three, four hours every single day. And there's no reward, right? No badge, no progress bar, no achievement, no tokens, but people just enjoy that, it's evergreen, right?

And in fact, a lot of working professors look back fondly to those days that, hey, I wish I could be in those days where just like, hang out with my friends and do nothing all day long. Core drive seven is unpredictability and curiosity. So, you know, an example I give a lot is, if, you sit there and you press a button for four hours straight and you're guaranteed a paycheck, that's kind of boring, right, that's like a job at a factory. Most people don’t like it. But if you sit there and you press a button for four hours straight and maybe you'll get a paycheck, maybe you won't, maybe you'll even lose money, suddenly that's casino gambling, and a lot of people like, right?

And so, it doesn't make sense, same behavior, one you're guaranteed to pay out, the other, you're actually most likely going to lose money because that's how the casino makes so much money. But our brains prefer the latter because we're paying for the intrinsic experience of the thrill of gambling. Like maybe I'll win, maybe I'll win. It's not necessarily for the reward, it's for the experience.

And so, if you look at core drive seven unpredictable curiosity, that's on the right bottom of the octagon. So, it's intrinsic in black hat, which means our brain enjoys it, but we feel out of control. So, a good example is this, let's say you want to go to bed at 10 PM, but then you start binge watching Netflix until four in the morning, right, again, your brain enjoys it, watching the show is very intrinsically enjoyable, it's a lot of curiosity, but there’s black hat, we fell out of control, we wanted to go to bed at 10, we couldn't.

So, when you look at the Octalysis, and this is just the face value, the layer, one of it, you can start thinking about, all right, how to use extrinsic motivation to create justification or hook people into the experience because people think they're too busy for some fun. So it's like, hey, you get some kind of reward or status grow in it, so, they get hooked in, and black hat drives urgency to jump in, to take immediate action. And then, when they're in the system, use intrinsic motivation to get them to enjoy every step of the way, so, it's more intrinsically fun and enjoyable while having this white hat feeling of, you feel like you're in control, and you feel like a personal, wellbeing in the system.

[00:18:23] Dylan Watkins: Okay. By the way, I love that you just add the pocket, you're like core drive seven is this, core drive three is this, just like, I can feel you just got – you basically map on the back of your brain of how it all works. I didn't really understand – you're talking about left versus right, was actually, it's almost like, from understanding, you're talking about the things that more of like, I don't want to say achievement, but you're talking about intrinsically motivating versus extrinsically motivating. Is that kind of what you mean by that?

Like, it just naturally feels good versus some sort – ?

[00:18:53] Yu-kai Chou: Yeah. So, extrinsic motivation are things like maybe the task is boring, right, but when you tell them, hey, if you do this boring task a thousand times, we'll give you points, we'll give you price, we'll give you money, we'll give you status.

You'll be like a recognized member of the community. These are all extrinsic motivation. The activity itself did not become more enjoyable. It's just that you're doing it for the reward or you'll get healthier, right, or you will, find the love of your life, right? Those are all extrinsic goals.

Whereas, the right brain core drive, intrinsic motivation, you don't really care. You just want to experience it. You don't think about goals at all. And so, like I said, if you lost all your progress the next day, you would still want to play basketball with your friend today or play this this little game. So, it's not about the game, it's about the experiencing.

[00:19:38] Dylan Watkins: Yeah. It almost reminds me a bit of The Hero's 2 Journeys, right? And so, this is obviously a hero's framework and all that stuff. The Hero's 2 Journeys, you know, I set out for the holy grail, but along the set out for the holy grail, along the way, it's not really the holy grail that's really the thing that people care about, it's the personal transformation that happens along the way, so, it's who you become along the journey that's actually the most rewarding, even though you really do want that, you know, holy grailed prize, the girl, the money, the glory, you know, it's the actual, the person you become. So, is that kind of the intrinsic –

[00:20:11] Yu-kai Chou: A bit more on that side, but if you did it just for the transformation, that's still for extrinsic, but, you do it because The Hero's Journeys is just so much fun, like, you’re like fighting demons and dragons and you don't care if you're growing or leveling up or getting money or the princess, you just want to kill monsters. Instead of saying – instead of doing – instead of saying, do this boring thing a thousand times, and you'll have a gain, you just say, it's no longer boring, it's so much fun, you do it for free and you do it for no gain.

[00:20:43] Dylan Watkins: Got it. So it's making that habit loop pleasurable, right? And then you're just enjoying that, that journey, right?

[00:20:49] Yu-kai Chou: Yeah. So, good design would be first tackling those right brain core drives, give people core drive three, empowerment of creating feedback, which is about meaningful choices, autonomy self-expression, core drive five, social influencing relatedness, which is making things more collaborative, competitive, more social appreciation, gifting, and core drive seven unpredictable curiosity, so, that's basically, giving people the life of surprises, Easter eggs, mystery box experiences.

[00:21:15] Dylan Watkins: Got it. And what’s interesting to me you're talking about too, is, you're jumping around a bit is, you know, there are certain ones that you're talking about, that don't matter if you don't care about the game, if you don't care about the experience or whatever the things, if there's nobody inside there, if you're in a multiplayer experience and there's nobody else in there, and you don't care about the communities, the levels and the badges and all that stuff, doesn't seem to matter at all, unless you can actually, identify with the tribe and identify with the community, is that part of that connection?

[00:21:44] Yu-kai Chou: And I think part of what you were bringing up earlier, was about easy fun, I think you –

[00:21:50] Dylan Watkins: I was about to, yeah, yeah, yeah.

[00:21:52] Yu-kai Chou: We’ll call this – keys to fun ride. So, easy fun, is really about core drive three at seven, so, a power to create feedback and as well as unpredictable curiosity, so easy, fun is like, whatever, when you're playing with Legos, you're playing with bricks or you're drawing something, there's no way you could lose, by playing you’re winning. And so, doing it by itself is fun, right, and the unpredictability is just absorbing curious content.

And, you know, when games – in game design, when you want to equal the playing field and remove the skill curve, you add randomness to it. I don’t know if you ever played a Super Smash Bros, but you know, my friend and I, we were really competitive, we trained all day long back in college. And so, when we play, we turn off all random elements, right? It's the final destination, which is the stage that has nothing in it. We have no items, and then we just, it's all about skill. But when we have like friends or cousins show up, they don't know how to play the game very well, they're just going to – that's when we turn on all the randomness, because that equalizes the playing field right now, they can just get this hammer, and kill everyone.

And it's a lot of fun, a lot of laughter that makes it – that turns it from, hard, from skill based, hard fun, which is more extrinsic, to, you know, laughter based like unpredictable social fun, which is easy fun.

[00:23:02] Dylan Watkins: Yeah. And you're switching out achievement for the collaboration and it's almost that blue turtle shell effect from, you know, so that it's about keeping it exciting and interesting because otherwise, if it paces away, it'll tend to snap it, right? And when you're talking about this hard fun, right, and hard fun is usually, generally, can be unenjoyable, but how do you make hard, fun, pleasurable? Like, how do you do that?

[00:23:26] Yu-kai Chou: So, hard fun is mostly about extrinsic motivation, it's about goal orientation, right, you're trying to get to the goal. And there's different types of players, some players, you know, the moment they feel like this game is really hard, they feel demotivated, and they quit. For me, I look back in my life and all the games that I became really good at, are the games where on day one, I just sucked, I just get destroyed by people. And it lights up a fire in me, I’m like, I have to like practice all day long to get better at it.

So, I'm very obsessed with, and this is about a combination between core drive six, scarcity and patience scarcity of patience, scarcity being like, because it's hard, it makes you care more, if it's so easy, it's abundant, you don't care, but because it's scarce, it's not easily available. you suddenly want it more.

But, if you actually go get it, it leads to core drive two development accomplishment, which you feel accomplished right. Then that's the thing about hard fun. It's hard, but once you overcome it, you have this feeling of fear of – which is the feeling of triumph over difficulty. And that sometimes feels even more meaningful than just doing some easy, fun stuff.

[00:24:30] Dylan Watkins: Got it, because there's that feeling of transforming your identity and belief into yourself, of, I can do the difficult, right, or I can, that self-efficacy that has that benefit. What do you think is the most common misused or misappropriated piece of the Octalysis framework? What is something that people usually normally get wrong?

[00:24:56] Yu-kai Chou: I think most people still just default to what we're talking about. They just try to add extra motivation design to boring activities, so, it's like, you have a game, right, the game's really boring, and since you play this boring game for a lot, for like a thousand times, you can get all these rewards in bets, makes no sense. Like I said, you want to start off making the game itself fun to play with the right brain core drives. And then, once it's fun to play, then say, hey, play the fun game for a thousand times, you achieve a lot. Then you could get all these rewards, and it makes a lot more sense.

The other thing is, I think there's a danger these days with this trend of data-driven design. And data driven design is very sophisticated, intelligent, right? It's like, hey, we don't know the answer, so, we look at the data and we just do what works, but the problem of data driven design is that, because black hat motivation drives urgency, whenever you're too data driven, you play too close attention to the data, you're always going to do more black hat. So, it's like, hey, we realize once we put a torture break in the experience that this is like, you have to wait 10 hours before you can come back and play more, right?

Suddenly, everyone is coming back 10 times a day, like obsessively to pay more money and to tell them about their friends. So, let's do more of that. So, the experience gets more and more black hat. And one of my more extreme – I use extreme examples because it’s memorable. This is why dictators, tyrannical dictators love black hat motivation, core drive lost and avoid it, they're like, hey, it looks like, if we threaten to kill people and actually kill some people in their families, people all change their behavior, they complying. So, based on the data, right, based on data driven design, we should do this a lot more, right? And so, while you'll see the data work out for you, as a human being, we intuitively know that people are not happy in this country, a lot of them will try to escape the country. Some would even want to band together to overthrow this tyrannical government.

And this is what a lot developers are doing these days, they’re like, hey, look, this is making money, let's do more. And, when you look at, for instance, World of Warcraft, you look at the original version World of Warcraft classic, right, it's not about creating short term behavior. It's like – it's not like let's test a little bit. Let's create a – they're just like, hey, we made money from the last project, let's just create a dream, let's create a world where it's like, it's vast, there's all these races, all these things. And then later on, they got in more trouble because it became more of a CFO culture., it's like, hey, if we're going to invest this much money into the game, how can we make it back in a quarter, right?

And so there's looking at data and then you no longer have epic, great experiences in the game. It's all just about, and this is all the free to play stuff – you might just see Diablo Immortal and all that stuff, which is like, it's all about getting people to just come back obsessively and spend more money, but people don't feel great when they play the game.

[00:27:38] Dylan Watkins: And that's that burnout, you're taking a look at that short term gain, right? So, it's the same issues that we have in the game of business, is that a CEO comes in, his, you know, perks are associated with something about the goals, and so, he'll do some sort of black hat motivation to spike sales so that he can get his purse and get his money, which will ultimately, you know, upset the clients that will tank over time.

I have a kind of sort of very recent relative example that happened to me, just, two days ago. And it's not – I don't think it was intentional, but it made me – it reminded me of what we're talking about. I was at Costco. And I went inside Costco and had these big, old thing of fireworks, really those, you know, those giant fireworks things. And I was like, oh, this is – and it was like, it was like $30. I was like, what? I'm like, this is like $150 firework, it was just amazing. I'm like, Costco's in the game, I'm down, let's do this, right.

And of course they're doing ball, so, I went and got it, I brought it over to my wife's – like my wife’s family's house, and we were there and we're like, oh, we start to light them, they're not lighting. I’m like, why aren’t they lighting, what's going on here, they're not lighting. And I go to pick it up, and I pull on it, and it pops, it's a little popper. They have – all of these are poppers, they're all in the shapes, there’s big ones, there's like triangle ones, they all look like fireworks. All of them look like fireworks, but it got me to purchase it, because I looked at the shape, I looked at the design, I looked at everything, and I'm like, wow, somebody made a whole bunch of money, but it put that bad taste in my mouth. So, like the social credit of the Costco in my mind went down a peg, right, but somebody made millions of dollars because of that.

And it's very like – and I wasn't the only one that got tricked, but I could tell that, like that, I don't know if that was intentional or unintentional or data driven design, where they said a lot of people buy this without thinking about the fact that they don’t really –

[00:29:27] Yu-kai Chou: To them, it's a great success, they made a lot of money. They might be encouraged to do way more of that because of the way they suggest that.

[00:29:34] Dylan Watkins: Oh, man. Boo.

[00:29:35] Yu-kai Chou: Yeah. And even gamers make this mistake, especially young ones. They'll think that because they have to keep going back to the app three times a day, they think they're having fun, but they're actually not having fun. They're like, oh, I must be addicted to it, like, I am addicted to this, so it must be a lot of fun, and they don't have the sophistication to understand that sometimes you're not having fun. It's just that you don't want your crops to die, you don't want your army to like to sit there idle and be a waste, right, you don't want to lose all these resources, and therefore you feel you're compelled to go back, but it's not because you're enjoying the experience, it’s because the game design forces you to go back.

But I also want to make it very clear that just because we turn this black hat motivation, doesn't mean it's necessarily bad itself. So, a lot of people voluntarily put themselves in black hat motivation, just like I said earlier, right, how to be your own game master. They use black hat motivation to get themselves, to go to the gym more often, eat healthily, you know, which is why sometimes, you know, we pay our gym trainers to call us losers, you know, the harsh ones, right. We're doing pushups, and like, you're trash, but not – feels bad, but then you're okay because you thank them to pushing you harder than you could yourself.

And so, what people don't like is when, marketers, employers, governments, educators, use a lot of black hat to get us to do things we don't want, like, buy things we don't need, work overtime without proper competition, get manipulated. And a lot of people still do the activity, because again, this stuff is obsessive, but the moment they can run away and escape this, they will want to. So, loyal customers leave, employees join competitors, sometimes children run away from home, if the parenting strategy is do black hat, but if it's a goal people already want to do, like, for instance, like let's say I was always wanted to donate to a charitable foundation, anyway, like I hear them on the radio, I always wanted to, it's white hat, right? There's no urgency. If I turn out, will feel happy about myself, but I don't do it.

And then suddenly it said, hey, we have a generous donor, so with the next two hours, if you donate, that donor will match what you put in. So, there's suddenly the scarcity, I have this urgency, like, I have to do something in two hours, and it really motivates me to go and donate to this charity, really quickly, right?

So it does use black hat, makes it a little bit uncomfortable, because I have to stop what I'm doing and go do this right now, but I'm okay with it because I already wanted to donate to the charity. So, black hat is fine if it like pushes us to just, like you said, get us into an uncomfortable situation that we always wanted to go to, but it was just when we're too white hat, we just want to be in our comfort zone.

[00:32:04] Dylan Watkins: There's no reason to leave because you don't have that, like the uncomfortability makes you want to move, and in terms of it could be, I'm going to miss on this deal, or I'm not going to have as much impact, or there's opportunities about to go by, and that's that scarcity.

[00:32:19] Yu-kai Chou: Yeah. And I think that's the hero’s journey, right, that they’re getting – some things have to change to create a shock in the system like, oh, wow. I can't live my comfortable life anymore. I have to step out. And, you know, the framework is also, there's the reluctant to take the lead, right? It's like, oh, but it's so uncomfortable, I still like my comfort life, and then sometimes you need a mentor that's core drive five, social influence to say, hey, you know, you really got to do it. Sometimes the mentor has to die before you're like, oh, now I really got to be a hero.

[00:32:43] Dylan Watkins: Dude, you’re totally on point. And what it makes me think about is like, what's the first thing, the first step of the hero's journey, is the hero joins the journey.

It generally speaking, it's the refusal of the call. And so, hey, here's an opportunity. And like, no, I'm good. I'm at my house, right. And then what happens? Like, you know, some people bomb Luke Skywalker’s house and this family dies. He goes, well, I guess I have to go now, right, it sets them off on that journey.

Have you taken a look at the hero's framework, right, and seen how the Octalysis framework and the gamifications lay around the arch? Have you seen it at all? Have you tried that?

[00:33:15] Yu-kai Chou: Yeah. So, not a full study of what you mentioned, but I am aware and familiar with the hero's journey itself. So, the Octalysis framework is all about behavior motivation, right, it's about, if you can define the desired action, it's about what motivates people to do it. And so, you could match all those steps in terms of what motivates them. And like I said, what's interesting is the initial call to action is usually something happens to the hero, right? And so, it's like, oh, war broke out and the hero suddenly wants to list to the army, like captain America, all those things.

So, there are things where it's like sometimes, it’s epic meaning and calling, like I want to change the world. And, so what's interesting about epic meaning and calling is that, it's white hat, right? It makes you want to do something, it makes you excited about this is that, it doesn't have the urgency to actually go do it, so, therefore you need some black hat in terms of, oh, sometimes it’s unpredictable curiosity, right? I don't want to say that's a huge journey, but Alice in the Wonderland, she fell into the rabbit hole because of curiosity, right, and so, there's that curiosity that drives people forward, you know, take the red pill or the blue pill.

Like oh, wow. Like, honestly, Neil had no idea what he's getting himself into. It's pure just curiosity, and scarcity, it’s mysterious, it's like very exclusive seeming, and I don't know what it is, so I'm going to join this because he’s bored of his is his life, right? And so, therefore this new exciting world drives him. So, that's core drive. So, like I said, our brains enjoy being out of control, it suck into that. So, you can kind of trace, you know, what are the patterns of the hero’s journey, what core drive tends to motivate people to take it, is the feeling of accomplishment or growth, is the feeling of ownership. Now, you take personal identity, right? I am now a hero because I'm the chosen one or whatnot, right. I'm the one the universe destined to balance the forces of good and evil, right? And so, there's the identity component, there's the social component. There's all these core drives that come into place to, get the hero to take their next steps.

[00:35:21] Dylan Watkins: How does the identity component relate to the gamification of the Octalysis framework?

[00:35:26] Yu-kai Chou: Yeah, so core drive four is ownership possession, and it has a few components. It has a component of collecting like digital goods, currencies, Pokemons, whatnot, but it also has this – also more abstract things. Like if you invest a lot of time to customize your Facebook profile, Dropbox folder, your LinkedIn profile, you feel more attachment, hence ownership over the experience. And even if a new technology that's supposed to be better, come out, you don't want to switch because you know that one doesn't understand you, this one does, this one – so that attachment to a product experience is ownership too.

And then we move to what we're talking about, which is the identity thing. When you feel like you have an identity, you're more likely to take that action. So, if you tell kids to say, hey, try to stand there as long as you can, they can't stand for very long, but if you say, hey, pretend you are a guard at the Queens palace, and that you can realize they can stand there for much, much longer, just by installing identity, right?

With my parenting, I teach my twin daughters, you know, I'll teach them like, hey, you're part of the Chou family, and so Chou family, you're supposed to do this, like Chou family – so, they tell me like, oh, why are the other kids, they don't have to be honest or whatever. It's like, well, because they're not part of the Chou family, you are part of the Chou family, right, so it’s installing that thing.

Just like, I know Game of Thrones, not so popular after the last season, but it's like the Stark, right, you're a Stark, and you behave this way, you’re a Lannister, you have to always be pay your debts. So, people kind of have this identity for their family. And so, it changes their behavior. And we can see that in, you know, in the hero's journey too, when sometimes, you know, some top lines people just say, you're the chosen one, you're the hero. It's like, okay, I'm the hero, I guess I have to do some heroic things, I guess, right? And then, yeah, and sometimes they're just thrown into it.

[00:37:09] Dylan Watkins: How old are your twin daughters right now?

[00:37:11] Yu-kai Chou: They're four and a half, and it was crazy, it’s Symphony and Harmony, that's their names. They have drastically different personalities since the first 10 minutes in the hospital.

[00:37:22] Dylan Watkins: Wow. I don't know why, but I giggle when I think of the idea of if Harmony is the overly aggressive one. I don't know if that's the case of not.

[00:37:30] Yu-kai Chou: It’s the opposite, Symphony has always been loud and needs an audience and wants to communicate and talk. And Harmony just likes to chill and be by herself and do her things. So their names actually kind of reflect – I wouldn't – I don't know how much to attribute that to identity, like your name is Symphony, so therefore, you're louder. because they were literally doing that like, the first day in the hospital. but you know, from the behavioral science of subconscious priming, like once they understand what those words mean, it would actually, change some of their behavior.

[00:38:05] Dylan Watkins: Do you, like have you run experiments, have you talked about one framework about, you know, instilling an identity in them? Is there other things that you've, you know, I mean, been able to, gamify experiences for your daughters as they're coming up? Because I mean, they’re at that age of just totally adopting the things. Is there anything that you've tried with them that you've seen?

[00:38:25] Yu-kai Chou: There are actually probably a lot of things in the Octalysis framework with them. I think one thing that I do that might not be into like, most families don't do it, I want to – I want to help them build thicker skin and not be self-conscious and not be snowflakes, right.

So, I actually do this training with them, I'm like, okay, if someone tells you something you don't like to hear, then you just say, you know, use the Chinese word, it’s like, okay, thanks. You just smile to them and say, okay, thanks, because if you don't lose your temper, you can never lose, right? So, I'll practice them, I'll say, all right, ready? I'm going to say, Symphony, you are so ugly, you're stupid, you're worthless. And then they'll just say, okay, thank you. Okay, thanks. Okay, thanks.

[00:39:05] Dylan Watkins: Yeah. Oh, that’s so –

[00:39:10] Yu-kai Chou: Yeah. So, I want to make sure that when people around them call them these names or whatever, they don't – it doesn't hurt them for a week, you know?

[00:39:17] Dylan Watkins: That's so good, man. I mean, we are very – I think one of the things that we do lack in a lot of us, is resilience, and thick skin, and, you know, like not taking things personal, I think is a big thing in this day and age. At some point, just putting it out there, I could totally see at some point you doing, Octalysis for parenting. I could totally.

[00:39:38] Yu-kai Chou: I've been asked about that a lot.

[00:39:39] Dylan Watkins: Are you? Oh, my God, that'd be so amazing. But that's, I mean, that's beautiful. So, then, so, you're looking at thicker skin and you're kind of like seeing, okay, what can I do to kind of prime them, to kind of get them ready at these formative ages? That's great. Is there anything else that you do in areas for advice for parents?

[00:39:57] Yu-kai Chou: Very interesting, I get lots and lots of things. I tend to give them like simple frameworks, like, what's useful and what's useless. I tell them you want to do useful things, not useless things. So, I'll say like, moping on the corridor is useless, right, and you want to do useful things. So, communicating, talking is useful. So, it's like, giving them simple framers to go by and I can tell them, hey, look, you can sit there and have a tantrum for the next 20 minutes and be useless, or you can come here and I can comfort you, up to you.

Like, do you want to choose to do useless things or useful things? And then, you know, they'll usually like realize, okay, sitting there for 20 minutes is pretty useless and they'll come to me so I can actually comfort them, but I usually want to give them that first, I don't want them to be like, oh, because they're – and I usually actually use the language, like, don't pretend to be pathetic, like you're, you know, you are in a good family, you have parents who love you, you have the most amount of resource of all our family ancestors. Like, like by far, you are in a good scenario, so don't pretend that you have a sad life or – you know, even when they say like, oh daddy or mommy, you hate me or whatever, I say, no, no, no, I do love you. Don't say that. I say, hey, you're not supposed to lie. Don't lie when you know it's not true.

[00:41:20] Dylan Watkins: I love it. I love it. Okay. So, shifting gears just a little bit here, one of the things that I've noticed that comes up a lot, right, is, the misuse of talking about black hat frameworks and getting people to do things and having them not feel good. We've seen a lot of interesting things happen in the crypto space, right, I know you have some experience there, I don't know how much you want to talk about in that area, but you know, what have you seen in the crypto space, that in terms of gamification that you like, oh, that's a great use case, or that's not a great use case. What are tropes? What are trites? What stands out to you?

[00:42:01] Yu-kai Chou: Yeah. So, first of all, yeah, when I wrote my book, I wasn't aware of this cryptocurrency or I was, aware of crypto, but not like NFT, web3 space in general, but then apparently my book became a – some people say it's a must read in this space and I started getting a lot of invitations to do consulting advisory on that. I have my own NFT project called Metablox, right now. So that's the disclaimer in itself. But when I start seeing especially the NFT space, you know, it kind of are those eight core drives on steroids. It's just like all this, you know, the discord activities with the white list, and the scarcity components, like, you know, there's all like, oh, there's only 8,000 of these NFTs and there's 50,000 people in Discord, so, everyone needs to fight, and they have to do all these things, like you have to go invite all these friends, do marketing and it's like, oh, so what's the reward?

The reward is not that you get a free NFT, the reward is, you get to be on the white list, so, you get the right to purchase their product at full price. That's the reward of doing like, basically like working as an employee for them, you get the right to pay them money for their full product, right? It's pretty intense.

And so, there's a lot of like, exuberance, a lot of projects are dishonest. But I like to go back to the foundational stuff, just like when we talk about gamification, right? A lot of people talk about gamification, but there's a lot of fluffy things and you want to go back to what's the core, what works. And in my evaluation, the core technology, the blocking technology of being able to create unique, serial keys for a digital asset, a digital item, I think it's very valuable. So, my example is this. you know, I wrote a book, I sold about a hundred thousand copies, a little over a hundred thousand copies, and those copies we called them copies, right, they're all fungible, so, what that means is, people just want the knowledge, the text, right?

So, the eBooks just does good, the audiobooks did good, it doesn't matter if they trade books, it's just fungible, it's like the knowledge, but in my life, I've signed about, I think about 200 or 300 books, and those are non-fungible, that's a unique copy, a unique version of books. So, even if people trade those signed books, they're not the same. They're a little bit different. I write something different, I address their name personally, and it creates a more unique relationship with the author, or with the musician, right, or with the artist. It has that uniqueness to it.

Now, is it worth $5 million? Probably not, but it has a unique value there to make something more scarce and hence, more meaningful. So NFTs are important because of that scarcity, but also that meaning and purpose, you know.

Example I gave a lot is, I have a friend in Denmark, he has a very old and broken rugged couch, and there's no utility nor cosmetics to the couch, but he shows it greatly because it used to be owned by Winston Churchill. And he believes that Winston Churchill is a war hero. So to him, it's invaluable, the meaning and history behind it. And so for some people, the NFT is like, the meaning is the influencer who promotes it like, oh, this is like the Biebercoin. It's like, hey, I love Bieber so Biebercoin is valuable. And so that's the meaning.

And then finally there's community core drive five, so that's code drive six, one and five. If my friend is the only person who likes Winston Churchill to him, the couch is as valuable, but he can't sell it to someone else. But if there's a community of a hundred thousand people who all believe Winston Churchill was a hero, then he can probably sell it to someone else to sell to someone else.

And so I think it's important to say the foundational technology is useful, but the marketing, the financial world on top of it may or may not be at least justified. Just like the dot com era, right? Dot com bubble burst. I keep mentioning this, dot com did not fail. Dotcom, the technology was strong and still is growing, and people used it. It was the exuberance and financing, right? People realize, whoa, this website is not worth $10 billion. It's only worth $100 million. So everyone sells and sometimes they oversell it goes bankrupt.

But it's pretty amazing that a website itself is worth $100 million, right? And so we know that the website that survived through the dot com crash nowadays, they're some of the most valuable assets in the whole world. So I think it's important to separate the foundational technology and what it enables to the, you know, the financing, the investors, the marketing, and all that stuff. And I think it's good to build value on the strong foundations while creating a protection against all the fluffy stuff.

[00:46:39] Dylan Watkins: I mean, it makes such a really good point on this is because a lot of people, they look at the market – and I've noticed that unless you've actually are in this space, people have like a pre biased to their own information, right? So most people that are against VR – the only people I ever find out that are against virtuality are the people that haven't tried it, right? And then usually people that are against crypto are the ones that aren't in it, right? And so you have a pre bias to this information, right?

But then when you start to get into it, you kind of figure out what – the difference between, I think VR and I think crypto is virtual reality has this inherent value of embodied consciousness being inside the space, taking away anywhere, any place, anyone. While the crypto side, the NFTs and all of that is simply that it's the contract that has this non-fungible token, that if you can be creative with the use case of it, it can actually have a really deep impact. But people are looking at the currency itself being valuable. And it's kind of like the, what you're talking about, is there a deep meaning and purpose? Is there something inherently valuable inside of it? Is the loop powerful? Is it valuable to me? Or what does that look like?

Or is it mostly what people are doing, which is these social trades. The only reason why I'm going to buy this is because I think I can sell it for seven. If I bought it for five, I think I can sell it for six. If I can buy it for eight, I think I can sell it at nine. And that seems to be where the big dot com plus failing is, is that most people are trying to say, I'm only buying this because I think I can sell this at a higher value versus the inherent object in of itself, it's valuable to me. And even if I don't sell it, I'd be happy.

[00:48:09] Yu-kai Chou: Yeah. That removes speculation, right? I think the true value of something to you is, well, would you buy it if you know you couldn't sell at a higher price? And that's how much it's worth to you. But if you buy it at – like, if you can never buy it a higher price, you would only buy it for like a thousand dollars, but then you buy it at 50,000, it's probably because you think you can sell for 100,000 to someone else. But at the end maybe everyone just thinks it's worth 1,000 if they can never sell it.

[00:48:37] Dylan Watkins: Okay, COVID toilet paper, man. Yeah.

[00:48:39] Yu-kai Chou: Yeah. And what's interesting is the crypto stuff, there is that epic meaning in the first place, which is that decentralization. I'm sure you heard about this term, right? And this happened right after the financial crisis in 2008. And it's like, oh, well, we don't trust the government. We don't trust big banks that get bailed out. So, you know, we want this peer-to-peer network that runs our money and our currency.

You know, right now cryptocurrency is still a very frictiony experience. It's not a smooth experience. But back in the day, 10 years ago, it was even worse, right? And you know, there's all this controversy of people using it for black market stuff. You know, China's batting it all the time anyway. And there's all this regulation. And it's so hard to use. There's no tools available. And what carries forward is the core drive of an epic meaning to like, they really think this will change the world. And I think in some places, it really is a serious thing. Like I heard, like right now in China, they have some money problems. So a lot of people said they couldn't withdraw monies from their bank. The money they deposited. And what's crazy is that they want to go travel to protest, right? But then suddenly they saw their health status, it all says they have positive COVID. So they're not allowed to leave. They're quarantined.

Literally the government can just – because of COVID, the government now has a switch to say, now, no one can protest or complain because now you all have COVID out of the blue. And like even one guy says, my father went to check his bank account and he couldn't withdraw money. And suddenly my status is COVID, must be COVID. So I can't even do anything for my father anymore.

And so a government can literally just do that if they wanted to, right? This is where if your money is on a decentralized network, then no one entity could just say, no, we're going to just do this to you guys.

[00:50:28] Dylan Watkins: Yeah. And that's that empowerment. And we seem to be going to the thing where we centralize to gather power, right? But the problem is whenever you centralize, gather power, then corruptions in the system. And so we're trying to decentralize our powers just so that we have autonomy, right? Because what we call – we all want autonomy, mastery, progress, right? Those are things that are inherently valuable. So that's what it sounds like, autonomy over your own income, which is – but at the same time you have these issues where these whales are coming in and they're manipulating the market, supposedly, going in the system and being able to push things around.

[00:50:59] Yu-kai Chou: Yeah. And some things are just funny, doesn't make sense, right? It's like decentralization doesn't necessarily mean it's less like democratic because the, you know, the government's token in a lot of models, right? The rich people have more votes, right? Like in our current economy or democracy, like imagine if billionaires have more votes than normal people, like they have like they have a million more votes than you do, right? It's kind of weird. But in this economy, everyone has one vote. So if you're billionaire, you are even poverty, doesn't matter. You have one vote.

But in the crypto world for most how governments, if you're the rich guy in the system, you get to choose how networking votes. And, you know, they justify that it's not necessarily all evil. They justify it and say, hey, but because they've invested so much in this system, the ecosystem, they care about more, they have more at stake, right? If you just put in one cent, like why would you have the say of changing the whole network when someone has put their whole life savings into it, right? So it's not completely like malicious in a sense, but it also is kind of weird how it's – decentralization has epic meaning, call it, but it's not necessarily democratic. It's decentralized, but not democratic per se.

[00:52:08] Dylan Watkins: Yeah. And we're refining the system to try to try to optimize. And I think as we solve one – you can't invent the plane without inventing the plane crash. You can't invent the crypto without the crypto crash, right? There's there stuff that comes along with it.

[00:52:23] Yu-kai Chou: And that's true. People who invented planes invented plane crashes. I never thought about that.

[00:52:27] Dylan Watkins: Oh yeah. Somebody on a podcast said to me once.

[00:52:29] Yu-kai Chou: In fact, the plane crash is invented first before the plane was fully invented.

[00:52:33] Dylan Watkins: Yeah, that's true. That's very true. Like you discovered something, right? Arms. Some broken arm from a Wright brother or something. Where do you see? Okay, so where do you – okay. You've been deep in the virtual reality, right? You've been deep in crypto, right? You're deep in gamification. I mean, obviously you got a lot of depth. Where do you see all this going? Where do you see the merger of – because there's this whole like warfare. Virtual reality is the metaverse, right? And then there's crypto people. Crypto's the metaverse. And there's this whole thing, right? And then without getting into the whole …

[00:53:05] Yu-kai Chou: You know what's the craziest thing? A lot of the Web 3people, they were just so excited about the term, the metaverse. I think a lot of people were. And even there's this podcast with the Web3 founders, they changed their name to the Metaverse Podcast. And one single company ruined it all by changing their name to reflect that they are the metaverse, right? And then suddenly everyone's like, whoa, this is different from the metaverse I met because the metaverse I thought would be open, decentralized, right? There's a lot of freedom. There's privacy, right, and anonymity. But now this one company that supposedly is now what people believe is the metaverse, it's very closed, controlled. It's, you know, people say there's a lot of spying so they can serve you ads, all that stuff.

So a lot of people say like, yeah, we're not doing meta – like, so now I hear people use the term, like, you know, we're doing stuff in the so called metaverse. They no longer say we're doing stuff in the metaverse, which is kind of funny because it's a tainted word now. But I do think in the future, a lot of these trends will emerge, right?

So people probably heard about interoperability, which is, you know, you play a game, you get these angel wings, you carry these angel to another game, and then, you have the status potentially. That's what Metablox worked on. You can take the status, you go to your real life location to your restaurant and say, hey, you have these angel wings in the game, you're a VIP. Or hey, because you've come to this location, you'll get a powerful sword in this game. So everyone knows who sees your sword knows you went to Miami and did this trip. So I think there's inoperability. Inoperability becomes again, it's still a while away. It becomes possible because of blockchain technology. If it's on the same chain, you can kind of transfer over – there's technology nowadays that's building things that are connecting different chains, too.

However, there's still the difference between open and close. Some people call them federations in the metaverse. So some people, many metaverse terminologies are around the place I like there's one metaverse, there's different like federations or kingdoms. And what it is, is almost like passwords. The technology makes it possible to cross the border, but there's rules. Like if you go to this company's metaverse, right, they say, hey, these items come in, these items cannot. These, you have to pay a fee, right, to come in. And so some things have to be left at the border and some things you can take in and some things you can take out. So in some places there's open metaverses where everything goes and you can do whatever you want or it's based on democracy or tokenomics, government tokens.

So I see a world where these things are all interconnected. But then it's about rules and policies to say, you know, what comes in, what comes out. What can you take here? Of course it's still far away because they said right now the challenge is most developers are building their own thing, right? It takes all this effort to build for someone else's stuff also. But I think once there's enough interest and gain to connect with other platforms and there's partnerships come available, I think that's going to be more and more prominent in the future.

[00:56:05] Dylan Watkins: I mean, that's the hope. But you also look at that, for example, interoperability. I mean, Apple's great at that. In the Apple ecosystem, interoperability, it's amazing. You can text across there. Yeah. But you try to bring anything that's not Apple and it is a hard shutdown. There's a walled garden of just straight stopping you from it. So then that's a tricky bit, because you're right, because everyone can kind of build their own systems, their own applications. And unless you're actually connecting – Roblox is a giant metaverse of kinds, right? But it's also only within inside that its own applications.

But what you're saying is because you can use the cryptocurrency, the chain, you know, the cryptocurrency itself, you can pass things through the chain or maybe you can actually, you know, you can use something like OpenSea or whatever it might be to be able to actually use the chain to kind of move across platform to platform.

[00:56:52] Yu-kai Chou: Yeah. So a lot of things are on the Ethereum blockchain, and Facebook slash Meta actually uses Polygon now, which is what Metablox is on too. So when it's on Ether these assets, right, potentially can cross over, and then there could be technology in the future, I think sometimes of working it, where there's something called Solana, it's totally different blockchain, but then potentially it can also transfer over. So now what you own in one place, your identity, right, your avatar, your inventory and your achievements can carry from one place to another.

And I think that's actually really interesting because if we had that, maybe I'll never even go into the gamification space, because remember, the reason why I started was because I lost all the things I accumulated when I quit. But imagine if I could take my characters to new games and new places, then maybe I'd never find the reason to turn my own life into a game.

[00:57:44] Dylan Watkins: There's a young Yu-Kai out there who's going to be robbed of the opportunity to do what you did, man. But like, new problems, new opportunities going through this. And I mean I do want to just – because this is one thing I've seen you do. And I thought was interesting, because you have Metablox, right? This NFT, crypto metaverse, I don't – hopefully that's not a derogatory term, of what you're actually building, right? And I thought that was fascinating when I heard you're doing that. I was like, wow. I was very curious to see. Do you want to talk just a little bit about what Metablox is and what about it excites you?

[00:58:16] Yu-kai Chou: Sure. So like I said, when evaluated, what makes NFTs valuable, it's about scarcity, meaning in community, right? The thing with scarcity with NFTs is still that yeah, there's only like what 5,000 NFTs for this batch, right? But you still have to trust developers because they can issue more batches if they want. Hey, let's do 10,000, let's do 200,000 more. So it's almost like the US government where they just print out more fiat money, right, US dollars if they wanted to. So you have to trust developers. And then the meaning and purpose, most of places they have to kind of do storytelling. They have to create meaning because most NFTs are created from scratch. Like virtual land, you have to say like why this land is useful. Virtual characters, you have to use storytelling.

And so Metablox, what it is is combining real world places with real life memories. So we thought about, okay, what's truly scares me in the real world. Well, it's gold and real estate. But gold is still fungible, right? My gold, your gold, we trade, it's the same thing. But real estate is not. Like my home, your home. Even if it's exact same dimensions, it's positioned a little differently, different neighborhood. You know, I had my memories, maybe I have my twin daughters of mine. You graduate from school and yours, but not. And so these are non-fungible.

So what we're doing is we're turning locations in the real world into NFT. So we start off San Francisco, Miami, Singapore, and New York, and coming up in like a few days actually. And then LA, coming soon. So people can own these NFTs. But that's just the scarcity part. The most important part was the meaning. And that's the real world, real life memories part. Our actual purpose statement is to preserve humanity's most important memories onto the blockchain. So my co-founder who is at Google, he said, one day he got an email from Google saying that they'll start charging for Google Photos, right, and he realized, oh, all this stuff is on a single server.

Thirty years later, you know, Google could shut it down. Dropbox could shut their service down. Google Photos, Google Drive, they could possibly go out of business or our grandchildren just might not want to pay for like our Google Photos forever, right? What, you know, do you want to pay for your grandfather's photos for the rest of your life? In which case, you might lose all your memories. And so we thought, okay, the fundamental uniqueness of the blockchain technology is decentralized. Theoretically, it could preserve something forever.

So we wanted to preserve humanity's important memories onto the blockchain. So it's not a single server. So the way to do that is people own this NFT real estate, right, in the real world. And the way to level it up and generate, what we call metarent, and get resource is that you have – you or other people who have experienced, they should submit memories that are related to this location. Now, some memories are just personal, like, oh, I have my newborn child. Some memories are like, oh, this is where Steve Jobs meet Steve Wosniak right? It's very impactful worldwide. And based on how strong the memory is, it levels up the property and then generates more digital currency there.

And so basically take that scarcity, meaning, and then we build a community over it. And what I like about our community is that it's all around memories, right? So people talk about, you know, again, having like life, having kids, death, you know, they're trying to remember their disease loved ones. Bonds, oh, this is where I proposed to my wife. And so you see all these things that are interesting and what's unique is we're trying to look into timeless valley. So we know 10 years from now, people might not be playing the same NFT games, right? Actually very unlikely. Ten years from now, people might not like the same NFT animals, but we're guaranteed that 10 years from now, people will still care about their important memories in the real world and also the places that they could still go to today.

And so we take these two timeless things. We can merge them and it becomes what we call like a landmark, right? Landmark is basically you take a physical location and view it with important memories for humanity. And we know from museums to circle sites of landmarks, that the longer time goes, the more valuable these things become. So we're really trying to create a timeless type of experience for people. And that's the foundation of Metablox. There's all this AR stuff. We want to do loyalty programs, adventures,. Scavenger hunts, but that's the foundation.

[01:02:30] Dylan Watkins: That's awesome, man. And what I like about that is you – I mean, you took the aspects of what makes people want to buy in terms of scarcity. And you're basically, you're starting at these different cities that allow you to kind of build out a city. So it's not too much, right? And it has natural scarcity built into it. You're taking something that the number one thing that people love more than anything is themselves . And so you're creating the memories, the families and the photos, and you're taking that epic meaning and purpose. And you're combining that together with the scarcity that – and I like that. And then you're also able to kind of move through the different cities as you start to progress through that system, which is brilliant.

So you have the meaning, you have the ownership, you have the scarcity, you know. I don't know if you have any unpredictability. I don't know if you've got any slot machines inside of there at all, but I know you have …

[01:03:21] Yu-kai Chou: So far, no. You can look at the different tiers. I mean, it's already existing. It's not like you open a mystery box, but the NFTs in a city will have between tier one to tier five. Tier five would be more expensive and generate more MetaRent. But they're predefined. It's based on how close they are to landmarks in the city. And so that was a decision, right? It's not about being like inexpensive areas. It's not about randomness. It's about like, hey, they're close to landmarks, so therefore they're higher value in our value system. But one thing that's unique is we also don't go around telling people in the community like, hey, buy this because you're going to get rich or, you know, when moon, we never mentioned that. We said, hey, you know, this is the long-term vision. We believe we can improve humanity. And we believe we invest in the concept that over time builds value. But if you're just trying to get rich, you know, soon, this is not your project. Do it because you believe in the vision. You want to preserve your memories to the next generation.

So we are doing this very slow push. And so far, you know, the project has – we have enough REM to run for two years without – if we don't mint any more NFTs, but we're seeing like every month we're actually minting more than our costs. So I think we're definitely going for the long haul. And, you know, it's funny because we're doxed, right? So both of us have a reputation for 10, 20 years. And it's very weird because people do say like, oh, we want crypto projects because we don't trust the government. We don't trust big banks. So we're going to trust these three anonymous developers that have this whole project and we're going to give them like a lot of money. It's just really weird, right?

[01:04:56] Dylan Watkins: Well, that's the challenge of like, you're like, okay, so the crypto community, they love a whole bunch of money and they love being anonymous. And it's like, there is an issue there when you take people and you have all of this opportunity and you have no accountability, it can cause – and you're right, you're doxed.

[01:05:13] Yu-kai Chou: And it's literally YouTube comments, but with a lot of money involved, like, you can say whatever you want, no consequence, no accountability, but then you can get money from people.

[01:05:23] Dylan Watkins: That's brutal. So then, so for you, like what's your – with Metablox and what you're doing, like what's the Holy Grail vision, right? If you roll this forward to 5, 10 years in the future, what does that look like to you?

[01:05:35] Yu-kai Chou: Yeah. So besides preserving humanity's memories, we think there's a lot of things. Like we want to be a beacon between the digital metaverse to the physical world. So like I was talking about what we want to do is we want to have, let's say people are playing these games – well, first of all, there's the AR perspective. Like you can walk down a city and if you have AR glasses, you can see like, oh, I want to see the most inspiring memories in this city or most heartwarming memories in this neighborhood. Right. So they pop up. You might be able to also see people's NFT projects. Like you see their board aids peep out the window, or they see a Star Atlas space shuttle hovering above the building. So it's really ingrained like real life experience.

But like I said, let's say in the digital metaverse, you have these angel wings and then you go to physical location in the world like San Francisco, go to a bar, and they see either through smart watch, AR glasses or phone check, and they're like, oh, you have these angel ones from the game, so you're a VIP coming for free, right? Or the other round, like you go to Singapore and you do this Jet Ski trip. And then when you Jet Ski, you upload the memory there. Then you get the special sunglasses that you can bring to the metaverse.

So in the metaverse everyone knows that, hey, you have those sunglasses, so you must have been to Singapore and done this, right? So we want to allow people to have more adventure in the real world. We want to make sure that it's not just a profile you show people, but it actually becomes a lifestyle. Like now to play this game, instead of going to digital world, you are also, you're doing things in the real world. Like people are going to different cities and with other, we call them neighbors, with other neighbors going to different cities, doing more adventures together, uploading new memories. And this is how you play the game and level up.

So in the long run, we want to create adventures that we're like – Pokemon Go has a lot of ups and downs and controversy and all that stuff. But one thing that almost everyone agrees that they like about it is that it got people to go out, right? And so we want to create that, but instead of trying to raise little pets to battle, we want people to go out and create memories. And that's how you level up your game economy.

[01:07:36] Dylan Watkins: Well, I love that too because again, if you reflect on the Octalysis, right, what you're talking about is that people want an excuse to go out and do something, right? They feel good once they're out there, but they're kind of comfortable at their house, right, I'm sitting home, you know, doing my thing here, you know, click on the computer, but going out with friends with an epic call, a meaning, purpose, getting out there, making friends, and also having that connection with other people, right, where you're in it and you're all going through it together, which I think is, I think is awesome.

So then you're going to turn this from not only just a NFT kind of, it points on a map of the city to actual geo cached locations of each of these cities with say augmented reality or whatever, what other new technology comes out so that people can actually go to those physical locations and be able to say, oh, wow, this is a geo cache of my memories of what's going on here. And this is a more valuable location because people are contributing by actually putting their memories inside of this geolocation, right? So it's a collaborative, you know, memory making machine.

[01:08:37] Yu-kai Chou: Yeah. And I think AR is probably like three, four years away. You know, it's not mature yet, but you know, like Apple, Meta, all these companies are like double downing on AR technology. So I'm sure we'll see more adoption for it.

[01:08:52] Dylan Watkins: Yeah. What for you is – I mean, preserving the world's memories, which is I think is incredible. Since we are a society of amnesia, we have a tendency forget as time goes on here. What do you think is the dragon? What's the most difficult thing for you to overcome on this journey that you don't, you know, it's going take a transformation to be able to do it?

[01:09:14] Yu-kai Chou: I think at least what I'm – what we're seeing right now, the tough thing is the crowded getting rich market, right? And so we're just focusing on fundamental values with like, don't join us if you want to get rich. And then there's all these other projects. What they do is they raise a lot of money and they say, join us because you can get rich in four months and if you join and you invite your friends, we'll give you a free Tesla and we'll give you all these things, right? And so it really makes the market very – so it's almost like you're a student and you're like – and everyone in your class is cheating on a test, right? And you're the only one that's not cheating. Right. And you feel like it's very hard to do well in that environment now. The play, the bet is that over time when people graduate and they're looking for a job, because you actually studied, you can actually – you're the one that actually qualified to get a job. And everyone that just cheated on their test. So they actually will not get a job. So those projects just die, I guess, explode.

It's a long-term play, but I think as we're just executing, building, and we are about long-term meaningful projects, right? We talked about, you know, we like to be more like a safe haven as opposed to be exciting, like sensational product right now. Just like historical sites and landmarks, right? They stand the test of time. And they're very valuable, but they're not sensational. They're not your daily like Instagram. So we're focusing on that and our play is that because we're committed, we have long history of execution and our model stands very strong, we think that in the long term, whoever's with us in the project will all end up benefiting a lot.

[01:11:07] Dylan Watkins: That's awesome. Yeah. It's just so funny because I just pictured, like, I don't know why, but, you know, I pictured like, you know, you're sitting there trying to teach people like the good practices, right? And next to you is like a girl in a bikini, just throwing hundreds of dollars of bills at people, right? And it's like, it's not – because it's like, well, yeah, but they're promising I'm going to get rich overnight. So I should give my money to them.

[01:11:28] Yu-kai Chou: You know, one of the earlier examples that's always cracking me up is GoDaddy, right? So GoDaddy's marketing is not like, oh, our servers are more secure. You know, we have all this. They literal is like, hey, it's very cheap to reserve domains with and we have hot girls. We have like …

[01:11:45] Dylan Watkins: Yeah.

[01:11:47] Yu-kai Chou: That's why you want to trust your whole website, you know, your whole platform on their servers because they're cheap and they have hot girls.

[01:11:55] Dylan Watkins: Dude. It it's so funny because even though we know we're being manipulative, people, oh, I like hot girls.

[01:11:59] Yu-kai Chou: I mean even the name, like GoDaddy, right? What kind domain? What kind of like infrastructure server company calls himself to GoDaddy, right?

[01:12:06] Dylan Watkins: It's like Namecheap or something that's like, oh, okay. You know.

[01:12:11] Yu-kai Chou: A Namecheap is also like a cheap player, right? So it's actually, it's cheap without the sex sales part. But, you know, like Bluehost is one that just sounds like, you know, your infrastructure name, right? Media Temple, I guess it hosts media there. Like media company should be there. But GoDaddy is just like – it's like some girl cheering for like a sugar daddy or something.

[01:12:36] Dylan Watkins: Base human things versus long term rewards, right, which is great. And I love the fact that you're setting expectations for the people that join your cause. Say, look, we're not going to get you rich overnight. Memories are one of the most important things that we could ever have, you know. And, you know, the loss of memories is one of the most painful things. I know, like if anybody's ever lost their phone, you know, they're like, oh my memories, everything, you know, that pain.

[01:12:58] Yu-kai Chou: Yeah. And, you know, what's crazy like before 2000, like people had a lot of like physical photos, right? You go to grandma's home, you see this – after 2000, everything's digital. And like I said, any company can show like, Viddler. I don't know if you know this, but Viddler used to be a big video hosting site alongside Vimeo, like it's YouTube and then Vimeo, Viddler. Gary Vaynerchuk hosted all his videos on Viddler and then one day they decided like, we're going to change our model. We're only going to do B2B. So all the B2C was shutting down. You have one month, I think, just one or two months, to export all of your videos. And I didn't get that email. So literally all my videos were gone. Like I don’t know, 50 to a hundred videos I made over the years gone because they shut it down. They wanted to.

[01:13:44] Dylan Watkins: That's almost like – I almost feel like that's, I want to say abuse, but it almost seems like that should be illegal to be able to just rip people's memories away, have some sort of standards in practice to just – because you lose all of that stuff. That's so painful.

[01:13:58] Yu-kai Chou: Yeah. Well, I'm pretty sure somewhere I clicked I agree to the terms of service that says they can do that.

[01:14:03] Dylan Watkins: Oh, those terms of service. Yeah. Oh, oh, oh. By the way, our mutual friend says, what's up.

[01:14:13] Yu-kai Chou: Hi. CK is a good friend from back in college, UCLA, he go way, way back. He's a good guy.

[01:14:20] Dylan Watkins: Yeah. A good friend of mine. And I've known him for about 10 years in this.

[01:14:23] Yu-kai Chou: If he's still watching because he said that I think over an hour ago now.

[01:14:27] Dylan Watkins: Sorry, CK. I didn't see you, buddy. My bad. We're in flow here. This has been amazing. I know you were a bit under the weather and you agreed to come on. So I have absolute appreciation for you taking the time, even though you were under weather and you could have been doing other things. So thank you. If people want to find out more about Metablox or the Octalysis framework or any of that stuff, how do they find out more about it?

[01:14:57] Yu-kai Chou: Yeah, I'll first say that I'm not necessarily under the weather, but under the virus. Yeah, two days ago I probably wouldn't have been able to do this. But, yeah, it's a good thing I have three vaccine shots and I think I took it decently. Yeah, so to discover my work, the main place is yukaichou.com. But if you Google gamification X gamification framework, you should be able to find it in the top two, three results. yukaichou on Twitter is a good way to reach me too. And then that will usually lead to whatever you're looking for. Metoblox.co, which the NFT company. Octalysisprime.com, which is the education platform with 900 videos I made to teach you about all the stuff I'm talking about. Octalysis Group, which is my consulting design company, if you're a big corporation and you want us to design things for you. Yeah. But yukaichou.com, central place. And then from there, your hero journey begins.

[01:15:52] Dylan Watkins: Oh, solid segue. Beautiful. Yu-kai, it's been an absolute honor and pleasure. Thank you so much, brother. I appreciate all the good work you're doing, the inspiration, the dedication, the gamification. Absolute pleasure. So thank you for coming on. Appreciate your time. Have a blessed, beautiful day, my friend. And I'll see you on the other side.

[01:16:09] Yu-kai Chou: Thank you. See you.

[01:16:11] Dylan Watkins: Bye now.

[01:16:14] Outro: Thank you for listening to the Heroes of Reality Podcast. Check out HeroesofReality.com for more episodes. While you're there you can also take the hero's quiz to find out what kind of hero you are, or if you have a great story and want to be on the podcast, tell us why your hero's journey will inspire others. Thank you for listening. See you on the other side.