"Why I Choose a Cleaner Who Charges 50 Yuan for 1 Hour Instead of 40 Yuan"

This article is Lu Canwei's 153rd original piece.

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Opportunity Cost

I believe many people are familiar with this term, but in reality, when making decisions, they may not consider it. How to judge your opportunity cost seems to lack a methodology for calculation.

If you think I have found a formula to measure opportunity cost, then you are mistaken; I have not discovered how to measure it, as everyone's definition of opportunity cost is inconsistent.

As someone with almost zero household skills, I basically hire a cleaner every week; otherwise, my home would be a complete mess. Previously, when I lived in Shanghai with friends, the cleaner would take two hours for an 80-square-meter place, and the fee was around 40 per hour.

Now, for my choice, I live alone in Guangzhou in a place half the size. Theoretically, I should be able to find a decent cleaner at the same cost, but I have tried several cleaners without finding a suitable one. Some would complain about the cat hair while cleaning (perhaps thinking I couldn't understand Cantonese), some used a wire brush on non-stick pans, and others would leave the Dyson unused, insisting on using lint rollers to remove a bit of hair.

Later, I happened to chat with a friend who told me where she found her cleaner, and I discovered that it costs 50 per hour. Actually, for two hours, it’s only 20 more, which isn’t enough to buy a large iced Americano. However, humans are strange creatures; we always feel uncomfortable.

At that time, my mental calculation was like this: the area is only half of what it was before, and it’s surprisingly more expensive. It’s not just about the money; I felt the cost-performance ratio was low. I thought, if I feel unhappy, then so be it; it’s better than continuing to gamble on blind boxes, which are just a bit more expensive.

Eventually, I did feel that this cleaner was much more responsible than the previous ones; it seemed I had good luck this time, like drawing an SR. If I had directly tried a few more channels or raised my budget initially, would I have avoided the opportunity cost of those trial-and-error attempts?

First, I judged based on past "experience" and set an expectation, which was a baseline of 40. My psychological tolerance was at this point, especially since the area was only half of what it used to be. As I read in "Scarcity," I fell into a narrow-minded mentality, similar to why people say to invest spare money; when your principal is limited, you become hesitant to try anything.

Then I insisted that my conclusion was correct, so who was wrong? Not me; it was just bad luck. Therefore, I didn’t seek other channels to try because I was convinced that the next one would be better.

Choice Rights

Now, let’s step back and look at the issue. Suppose there are two people with the same abilities; why can some earn 40 while others can only earn 50? You could say that the person earning 50 is luckier, but if we assume luck is part of ability, are there any other differentiators?

It’s choice rights. If someone has the ability to earn 50 but only earns 40, then from the outcome perspective, she doesn’t have the option of 50, so she can only take 40. Whether it’s due to her insufficient ability, lack of channels, bad luck, or other reasons, we can collectively say that this person’s overall ability is not as strong as the other.

We often see people in the workplace who are very capable but struggle compared to those who slack off daily. However, if you observe closely, you may find that these capable individuals handle colleague and superior relationships much better than those who are merely skilled, possibly having an advantage in resource acquisition, such as persuading leaders to allocate more resources to projects.

Thus, our abilities are not just about a specific professional skill but rather a composite ability. For example, you might be technically proficient but struggle with clients. You can manage clients but fail to handle your team. The era we live in is no longer one where you write code, I handle clients, and he manages projects, believing we all have a bright future.

In this era, interdisciplinary knowledge integration is essential to enhance your competitiveness. For instance, many people say they want to make money, but how do we make money? Most people suggest finding a good project, joining a rapidly growing company, or discovering some mysterious numbers in the stock market.

In social economics, there is a well-known model called the supply-demand model, where pricing is determined by supply and demand. Therefore, you need to find a large market that allows for flexible pricing. If you only look for a large market, like the recent education and training industry, it is indeed a massive market, but it cannot set flexible prices because the pricing power is not in your hands but with regulatory authorities.

The automotive industry is a large market currently in a flexible pricing phase. Who knows if Tesla will sell cars for under 200,000 or if Xiaomi will produce a car for 100,000? That’s why you see major companies venturing into car manufacturing; even Evergrande has transformed its health company into Evergrande Auto, despite the automotive business accounting for less than 1%, and we still can’t see what the car looks like. Another car manufacturing company with hundreds of employees consuming millions of snacks is also not worth mentioning since we haven’t seen any cars.

Of course, just having this isn’t enough. If you are just another supplier like everyone else, you cannot achieve flexible pricing, so you need to become a scarce supplier. Spend some time thinking about this issue, and I believe you will reach a different conclusion.

I feel like I’ve digressed a bit, but an important aspect of our decision-making is choice rights and expectations. If I only have 80 yuan, then I can only look for a 40-yuan cleaner. If I have 100 yuan, then I can choose whether to go for a 40-yuan cleaner or a 50-yuan cleaner.

Another example: Meituan was recently heavily fined due to its "choose one from two" monopoly policy. Why is there a need for antitrust? If you look at Meituan’s financial reports, you will find that its revenue capacity has significantly increased over the past two years, and its stock price has been continuously rising.

Under the "choose one from two" policy, Meituan’s merchants can only choose Meituan, meaning they have to give up their choice rights. According to the delivery commission I previously saw, it was around 21% (based on my memory). Once a monopoly is formed, what if this commission increases to 30% or 40%? Based on current financial report data, the average order value is around 42 yuan (I seem to be unable to achieve delivery freedom...), then we can only become the ones who pay for the discounts.

The consequence of monopolizing merchants is that the vast team of delivery riders also loses their choice rights. Currently, Meituan does not directly cooperate with riders but does so through third-party companies. As for how these third-party companies reduce costs, Meituan doesn’t care. I saw data that by the end of 2020, Meituan had 9.5 million riders, most of whom do not have five social insurances and one housing fund, which is one of the main reasons Meituan can achieve large-scale profitability. Is it possible to continue increasing profits? Remember the article about riders trapped in the system? Companies can continuously optimize path algorithms to compress delivery times, allowing them to generate more revenue in the same timeframe.

Probability

I remember seeing an example about how to choose your partner, known as the 37% rule. Mathematicians refer to this type of problem as the "Optimal Stopping Problem," and the answer is 1/e, approximately 37%. For instance, if you hope to get married before 30, and you meet 30 people between the ages of 20 and 30, what would be the best choice for marriage? According to this calculation, you would take 30/2.71828, so you must give up the first 11 no matter how good they are, and decisively choose anyone better from the remaining ones.

In probability statistics, there is a concept called prior probability, also known as basic probability, which refers to the probability of occurrence that has been verified in our past statistics. Many of our decisions are based on the probabilities of occurrences derived from our historical experiences, just like the 40-yuan case I mentioned earlier, which led to a significant waste of opportunity cost.

I remember ten years ago I attended a True Fund investment conference (I should have kept Xu’s business card back then), and during a speech, there was a guest who left a deep impression on me. At that time, the entire entrepreneurial circle was influenced by lean startups, with examples like Dropbox and Airbnb being highly praised. However, this guy spoke about the I Ching, yin-yang, and the eight trigrams in front of hundreds of people. My thought at the time was, “Is this person brainwashed?”

In the past two years, I have interacted with many seniors, all of whom have more experience and qualifications than I do, and I found that they also prefer to talk about principles rather than techniques. I have been deeply influenced and have started reading books like the Analects.

Why is this the case? From a probability perspective, when we are young and just entering society, the people and things we encounter are limited. However, we turn small data validations into large data conclusions, leading us to believe that our perceived world is accurate, only to be repeatedly proven wrong. As we begin to encounter more and more things, our data models change, and the world we see becomes different.

Another thing is that the experiences we go through have increased. In the past, we might have thought of things as just 0 and 1, explainable by logic. However, as we encounter more experiences, we find that some things cannot be explained logically, yet we still wish to control and manage them. As a result, some people start to use philosophy, Buddhism, Taoism, and other disciplines different from everyday subjects to explain these matters.

Even great physicists like Newton, Einstein, and Yang Zhenning began to acknowledge the creator and theology in their later years.

So, does knowing probability allow us to better control our lives? I believe everyone has heard the saying that we know many truths, yet we still struggle to live well. I clearly know that the probability of a coin flip is 50/50, but we still feel that after getting heads 7 times in a row, the next flip must be tails, and we often bet against our own understanding.

Brain 1 and Brain 2

In "Thinking, Fast and Slow," it is Brain 1 that controls us, not Brain 2. Brain 1 is more like our instinctive decision-making, while Brain 2 is more rational but often slacks off and doesn't work. Thus, we frequently make decisions that align with our human nature, such as wanting to lose weight but still eating delicious food, or wanting to exercise but preferring to lie in bed.

A friend of mine suddenly quit smoking. He said he thought about it and realized smoking had no benefits, so he quit. Why is it that sometimes we want to solve certain issues but can't stick to it, only to suddenly figure it out one day? It's because we have allowed Brain 1 to understand the matter.

Another example I saw was also about quitting smoking. A guy who never smoked asked his dad, who loved smoking, what was good about it. His dad couldn't answer right away and told him not to smoke when he grew up. The son agreed but asked his dad not to smoke either. His dad promised, and from then on, he never smoked again until he passed away.

When we look at problems, we need to seek a deeper understanding so that we can help Brain 1 comprehend. It's like telling a child that studying is important; if you can't explain it in a way they understand, they will struggle to grasp it.

When we were young, there was a classmate who loved going to internet cafes and even skipped class to do so. I never skipped class (my underlying reason was that I was poor; internet cafes were too expensive back then). Later, his dad did something memorable: he directly stopped his classes and gave him money to spend the night at the internet cafe. After a week of playing, he found it boring and never skipped class again, although he would occasionally join us for some fun.

We have heard many truths but fail to understand them, leading us to repeat the same decisions. So, is there a way to solve this problem? The answer is yes.

We need to learn to be alone, spend more time thinking, kick our capable but lazy Brain 2 into action, and find explanations that even a simple-minded Brain 1 can understand. This way, we can change our perceptions, which is what is referred to as cognitive upgrading.

In conclusion,

Even after saying all this, when I transferred money to my aunt, there were still some discomforts.

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