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Mental Models 104 - Bear Or Bull? | George Mack | Modern Wisdom Podcast 253

George Mack is a writer and a growth marketer. If you imagine your mind as an operating system, mental models are apps that you can install to give yourself extra functionality and improved decision making. Expect to learn about our brand new game Bear Or Bull, how you can use anchoring to get laid, why numeracy is a superpower, whether remote working is a blessing or a curse and much more... Sponsor: Get Surfshark VPN at https://surfshark.deals/MODERNWISDOM (Enter promo code MODERNWISDOM for 83% off and 3 Months Free) Extra Stuff: Follow George on Twitter - https://twitter.com/george__mack Get my free Ultimate Life Hacks List to 10x your daily productivity → https://chriswillx.com/lifehacks/ To support me on Patreon (thank you): https://www.patreon.com/modernwisdom #mentalmodels #georgemack #bullish - Listen to all episodes online. Search "Modern Wisdom" on any Podcast App or click here: iTunes: https://apple.co/2MNqIgw Spotify: https://spoti.fi/2LSimPn Stitcher: https://www.stitcher.com/podcast/modern-wisdom - Get in touch in the comments below or head to... Instagram: https://www.instagram.com/chriswillx Twitter: https://www.twitter.com/chriswillx Email: modernwisdompodcast@gmail.com

George MackguestChris Williamsonhost
Dec 3, 20201h 8mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:0015:00

    What's fascinating about Bezos,…

    1. GM

      What's fascinating about Bezos, he's very similar to Musk in the sense that he has one guiding principle that every decision goes through. So for Bezos, it's just, "If it can enhance the customer experience, let's do it." Rather than, like, profit margin, it's just long-term, long-term, long-term. "Will this enhance the customer experience?" So he says this example of, "10 years from now, will people say to me, 'I want slower deliveries and a higher cost?'" And he's like, "No, no, nobody's ever gonna say that to me. They're always gonna say, 'I love the fact that it arrives next day. I love how cheap it is.' Therefore, I double down on that." And then Elon Musk, for as complex as an individual as he is, as intelligent as he is in how much he understands, every decision goes through, "Will this get me nearer to Mars or not? It's yes or no." And it's very, like, crazy how somebody as complex, sophisticated, and nuanced as that has just one guiding thing that shapes every single decision. At the scale they're at, the, uh, decision you have to make is just, "Will this enhance customer experience, or will this get me nearer to Mars? Yes or no?"

    2. CW

      Ladies and gentlemen, welcome back. I am joined all the way from Dubai by the man himself, Mr. George Mack. How are you?

    3. GM

      I'm not too bad. I'm not too bad. How are you?

    4. CW

      I'm well. How could we not be well on the 25th floor, this beautiful Dubai Marina apartment? There's worse places to do a podcast, isn't there?

    5. GM

      Yeah. It's a contrast to Newcastle and Manchester, right? Strong contrast.

    6. CW

      Or Skype.

    7. GM

      Yeah, and, or Skype, yeah.

    8. CW

      The year of Zoom finished up in Dubai. So yeah, not, not bad. Big year, 2020. A lot of stuff's happened. What's some of the main insights that you've realized in 2020?

    9. GM

      Oh, it's a good, that's a good question. Um, I was thinking obsessively about remote work and the effect that that has on location. Which, I mean, even the fact-

    10. CW

      (laughs)

    11. GM

      ... that we're here right now is qui- quite a good little A/B test of that. Um-

    12. CW

      Yeah.

    13. GM

      Proof's in the pudding. But it's gonna be very, very interesting 'cause we were saying, like, "Are you bullish or bearish on people moving," particularly out of the UK, because the UK has very poor weather. Um, and for me at the minute, I've been thinking if I move abroad, what, what would the checklist be, or if I want to work remote? And as long as it has good weather, good time zone, and, like, relatively good economic, social activity, what does the UK have that, that... You know what I mean? Like, the UK, for me, is only viable for a few months of the year, and it's gonna be very interesting to see how many people leave en masse, or if they do leave en masse.

    14. CW

      Mm. And I think as well, that's probably not just gonna be for the UK. Everyone thinks the place that they grew up, unless it's unbelievably good-

    15. GM

      Yeah.

    16. CW

      ... is probably a bit crap.

    17. GM

      Yeah.

    18. CW

      You know, everyone's disparaging about their hometown, even if your hometown was Dubai Marina.

    19. GM

      Mm.

    20. CW

      'Cause it's just what you're used to.

    21. GM

      Mm-hmm.

    22. CW

      It's not cool or different anymore. So yeah, I wonder whether you're going to get mass swapping of populations from different countries.

    23. GM

      I think once you've opened that door, even though I do think it will, sort of pendulum will swing back to more and more office-based stuff. Once you've opened that door, there's some people who are gonna refuse to go back.

    24. CW

      Mm-hmm.

    25. GM

      So it's a very, very interesting time to be living through. And whether, 'cause you've got two thought processes that run in your head. You've got obviously A, vaccine comes out and things go back to normal, but even then you've potentially got B, which is you have mass migration at levels you've never seen before. Like, I was chatting to somebody in the property business, and they said when COVID happened, they expected everything to come tumbling down. But actually they had the busiest two months that they've ever had. It was like the equivalent of a year. 'Cause I've got this idea that I've been thinking about, which is you have throughout childhood, you've kind of got very clear events. You've got primary school, you've got year one, you've got year two, or grade one, grade two. And then you go, in the UK, you've got GCSEs, you've got A-levels, you've got your degree. But then in adulthood, all you've basically got is house, marriage, kids, death.

    26. CW

      (laughs)

    27. GM

      But I think that COVID-

    28. CW

      Are those the, those are the three big ones? (laughs)

    29. GM

      ... COVID's now an event that exists, like, there's people who are like, "Oh, pre-COVID," and then post-COVID.

    30. CW

      Mm-hmm.

  2. 15:0030:00

    Mm-hmm. …

    1. GM

      interesting/nuanced Coca-Cola's business is via classical conditioning. So they ha- they used, he talks about in the speech, of you want something that never has a negative feedback loop, you want something that can never have negative classical conditioning. So with... A good example of, of that or maybe even negative operant conditioning is you start drinking the drink, and the more you drink it, the more sick you get of the drink.

    2. CW

      Mm-hmm.

    3. GM

      But Cola removes all sort of taste memory. It's built to remove all taste memory, so people can drink it like water and just keep ingesting it, keep ingesting it. So that's part of one of his principles for how it can become so big, is that you can never get sort of a negative operant conditioning loop going, or a negative classical conditioning loop going, so it's just constant positive reinforcement. And then he breaks down, okay, using classical conditioning, using operant conditioning, do we go for a hot drink or do we go for a cold drink? And he basically looks at the world, going back to numbers, looks at the world and says, "It's much easier to provide something that cools people down, therefore go for a cold drink, because on average, people want something that cools them down rather than heats them up." And they, people will drink Coca-Cola in the morning.

    4. CW

      Mm-hmm.

    5. GM

      But hot drinks, people tend to drink o- at certain periods, whereas the cooling effect people then associate, y- so when you're hot and you drink Coca-Cola, you have that cooling effect, you associate it with something positive.

    6. CW

      Mm-hmm.

    7. GM

      So it's just fascinating, that, seeing all these principles intertwine, and he even gives examples with the trademark and with the, um, the almost changing the recipe as ways where Coca-Cola almost fucked up, but their business model is so good-

    8. CW

      Mm-hmm.

    9. GM

      ... based on these mental models and these principles, that they still are getting there/have got there.

    10. CW

      Do you think... How much of this do you think was thought through, and how much of it is emergence and luck?

    11. GM

      Good question. Good question. Well, he argues that you could have thought it through. And I guess that's why he invested in the business.

    12. CW

      'Cause he's post-kalking the shit out of it.

    13. GM

      He is post-fucking- kicking the shits about it. But his basic argument is, is these elementary principles still exist-

    14. CW

      Mm-hmm.

    15. GM

      ... so even now, like, let's say for example, you were sitting down and trying to come up with certain ideas. Using those fundamentals-

    16. CW

      Yeah.

    17. GM

      ... will still be incredibly... Whether you can come up with Coca-Cola, obviously there's so much luck involved, um, and there's so... I mean, you gotta l- you've gotta go through the whole talk and you see how much nuance there is to the ways of thinking about it-

    18. CW

      Mm-hmm.

    19. GM

      ... but I would say those elementary principles of mathematics, um, stuff like, that you shouldn't avoid. He was saying, like, "We should always avoid letting people have our trademark, letting people do this." Um, classical conditioning, operant conditioning. If you actually then begin to look at so many different brands-

    20. CW

      Mm-hmm.

    21. GM

      ... you just see these fundamental principles beneath them.

    22. CW

      Mm-hmm. One of the interesting stories that I heard about Coca-Cola was, I remember the world's first portable water distillation unit, about three times the size of a refrigerator, and they were trying to look at different ways to get clean water. It was this philanthropist guy, engineer, and they were looking at different ways to get it to people, and they were thinking, like, "How on earth are we supposed to deliver something like this, of this size, to the backwaters of Africa, to places where there's no roads?" And as they're there, they're sat outside of a little kiosk café, you know, like, a classic sort of, uh, Third World café type thing that's just plastic chairs, and they looked, and it's got Coca-Cola branding above it. They're like, "Coca-Cola has access to give people Coke-"... where they can't get clean water.

    23. GM

      Mm-hmm.

    24. CW

      Um, and that really is just notoriety. It's interesting when you think about that, when you really zoom out and you realize that the world isn't that big. It's massive from an individual perspective, but from a market perspective, like there's only one Coca-Cola. Pepsi are also big, and there's other drinks brands that are large, like Red Bull and stuff, but no one's Coca-Cola.

    25. GM

      Mm-hmm.

    26. CW

      And there's only seven billion people. There, there, you can't ... There's no room for another Coca-Cola until you kill that one off. You couldn't have two running in parallel, but you could imagine another universe in which there's an earth with 35 billion people on. Is there room for competition then, do you know what I mean?

    27. GM

      Mm-hmm.

    28. CW

      Um, but yeah, that's, that's interesting. One of the mental models that we haven't spoken about yet is anchoring.

    29. GM

      Yeah.

    30. CW

      And I'm a big fan of anchoring, and I was reading not long ago, uh, about ... It was from Rob Henderson's newsletter about how people can use anchoring to get laid. So can you explain what anchoring is first? And then I'll, uh ...

  3. 30:0045:00

    Do you think Amazon…

    1. GM

      a- soon as you get to a certain age, that's just almost unfathomable for most people. So offering that pre-built in would be very, very interesting.

    2. CW

      Do you think Amazon should be broken up? Is it too big?

    3. GM

      Fuck knows. Like, I think, um, one of the fascinating ones is sort of John, John Rockefeller's, uh, biography. And you begin to learn about that, like, how they, they, um, they broke up his businesses.I think because of the power law distribution, they're gonna end up where they own everything. But what's interesting from this Charlie talk, he says when you go through the inversion list, one of the things... so stuff you should avoid is to avoid envy. And he says that the psychology textbooks, if you go through them, there's, there's nothing on envy, right? Which is crazy, because in the Bible, it's like one of the first things, "Thou shalt not envy," and how big of a thing envy is. And he says the way to kind of get around envy is to deserve it, so people are a lot less resentful if you have like a world-class quality product. So he says, um, in here, "Third, with such- with so much success coming..." So when he's talking about Coca-Cola's thing. "... we must avoid bad effects from envy. Given a prominent place in The Ten Commandments, because envy is so much a part of human nature, the best way to avoid envy recognized by Aristotle is to plainly deserve the success we get. Therefore, we will be fanatic about product quality, quality of product presenta- presentation, and reasonableness of prices, considering the harmless pleasure it will provide." And Amazon have kind of done that. So they've still got a lot of envy, a lot of resentment, a lot of hatred, but nobody's boycotting them, and the-

    4. CW

      From people, from people who are messaging off phones charged by wires they bought on Amazon.

    5. GM

      Exactly. And then, and then they're going onto Twitter or they're going onto Instagram, uh, complaining about it on an AWS server, right?

    6. CW

      (laughs)

    7. GM

      So it's, um... That, that's the thing about Amaz- Everybody I know who resents Amazon for like the tax side of things and how much they're monopolizing everything still uses them. So it's kind of... Yeah, I, I don't know. It's a very interesting question.

    8. CW

      I've watched a really... We both have watched some interesting Amazon documentaries over the last few months, and I started to see just how beastly their operation is, and you realize that there's probably going to come a point pretty soon where that growth and the amount of impact that they have, especially when they start to ramp up automated delivery, perhaps with drones or with driverless cars, that you'd be able to do a one-hour delivery, remote, warehouse to customer, without anyone intervening.

    9. GM

      Well, the craziest thing about, um, Amazon is that AWS was, or still is, m- profitable, as profitable or more profitable than Amazon, and nobody really knows what AWS is. So that's another business that they own.

    10. CW

      What is Amazon Web Service again?

    11. GM

      Amazon Web Service. So anybody... Almost like Netflix, for example, will use Amazon Web Service, so you can imagine the amount of bandwidth that they, they, they flow through, right?

    12. CW

      (laughs)

    13. GM

      So... And that, that's Bezos again. What's fascinating about Bezos, he's very similar to Musk in the sense that obvi- I think people can get so complex with it, and I understand why, but... And obviously these two are geniuses that not everybody can imitate or mimic, but he has one guiding principle that every decision goes through. So for Bezos, it's just, "We just care about the customer." That's all. "If it can enhance the customer experience, let's do it," basically. If you look at every decision Amazon make, if you go back through the book, um, uh, The Everything Store, every decision he makes is, "Will this enhance the customer experience?" Rather than like profit margin, it's just long-term, long-term, long-term. "Will this enhance the customer experience?" So he says this example of, "Ten years from now, will people say to me, 'I want slower deliveries at a higher cost'?" And he's like, "No, no, nobody's ever gonna say that to me. They're always gonna say, 'I love the fact that it's arrived next day. I love how cheap it is.' Therefore, I double down on that." And then Elon Musk, there's an interview on Lex Fridman's show where... I've forgot who it is that worked with him, and he said that Elon Musk, right, for as complex as an individual as he is, as intelligent as he is, and how much he understands, every decision goes through, "Will this get me nearer to Mars or not? Yes or no?" And it's very like crazy how somebody as complex, sophisticated, and nuanced as that has just one guiding thing that shapes every single decision, whereas a lot of us are like, "Uh, I've got this part of my life, I've got this part of my life, I've got this interest, I've got this." Whereas for those two, at the scale they're at, the amount of decision you have to make is just, "Will this enhance customer experience or will this get me nearer to Mars? Yes or no?"

    14. CW

      Well, it makes for... When you've got a chaotic world with an awful lot of different decisions, you need a simple guiding principle.

    15. GM

      Mm-hmm.

    16. CW

      And I wonder whether in a world with far too much stimulation, um, people with poorly defined goals, goals that they've adopted from their family, from their culture, from what they think they should want, it's not surprising that people struggle with decision-making, because the single guiding principle that they have isn't theirs, and there's 40 of them.

    17. GM

      Yeah, yeah, yeah. It's very important.

    18. CW

      They have... They're being pulled in a million different directions, which comes back to direction over speed, right? Or just have a direct.

    19. GM

      Mm-hmm.

    20. CW

      Before you even think about speed, just get a direction.

    21. GM

      Mm-hmm.

    22. CW

      Um, and yeah, that's a... that's a really interesting insight. I, I, I wonder how people can try and find a guiding principle in their life. You know, because it's too trite to say, "Oh, just do what makes you happy," you know? Like, you just sit and masturbate at home all day or-

    23. GM

      So maybe that's your guiding principle, right? Yeah.

    24. CW

      Fanta-... That would work, yeah.

    25. GM

      Yeah.

    26. CW

      Um, what else have you got for us?

    27. GM

      So this is one I've, I've made up. I don't think we've been through it before. We may have done. Um, so it's called opportunity costs blindness, so OCB, a play on sort of OCD, um, where... This is really hard to explain without experiencing it, but just how blind we are to the amount of opportunity cost there is. So often when I've found... I mean, I've not, I've not had that many relationships, but when you're in a relationship, it's either them or single, them or single, them or single. And it's so hard to actually realize that it's them or single or eight billion other people you haven't been with.

    28. CW

      (laughs)

    29. GM

      So, it's so... But it's so hard to know the opportunity. Same with jobs, like we'll, we'll know certain people where they're miserable in a job and it's either, okay, job-... or leave job, an unemployed job, or le- uh, leave a job at a... So there's only one opportunity cost, but they forget how much there is, 'cause it's like the law of large numbers. I think we really struggle, or I really struggle, to just comprehend how much else exists when you can only see the options that are available to you. And you only realize that in hindsight when you go, "Fucking hell, I was, like, in this job for four years, and I was, like, having this argument with my boss every single day in the shower. How much now I'm in this other opportunity, like, how laughable that was and how serious I took that," because you don't even comprehend the amount of opportunity out there. So I think almost having a filter of, "I, right now, do not... I'm... I've got such opportunity-cost blindness. I cannot even fathom how much opportunity there is out there."

    30. CW

      Mm-hmm.

  4. 45:001:00:00

    Mm-hmm. …

    1. CW

    2. GM

      Mm-hmm.

    3. CW

      Like, I thi- I, I think there's very few people-

    4. GM

      Well, I'd rather talk about myself. I, 'cause I always feel like as soon as I, you start talking about somebody else, you don't know them as well as yourself.

    5. CW

      Mm-hmm.

    6. GM

      Whereas at least I know me very well. And I think that you, you can easily be in a situation where you give other people advice and you're just so detached from it. You see it, like, so much online and I just think it's a bit...

    7. CW

      What mental model do you wish that you could implement more?

    8. GM

      Oh, that's a better question. Um, leverage. Leverage, 'cause I'm a workaholic by trade. Like, like, so, like, my, when I was like 11, my dad bet me I couldn't do 10 kick-ups with a football. I then spent five years training five hours a day, doing kick-ups with a football. If anything, it was a great fit-

    9. CW

      To do 10?

    10. GM

      To do 10, no, no-

    11. CW

      Five hours to get 10 kick-ups?

    12. GM

      I got, I got a lot better, I got a lot better at it. Um, so I started, that came as a little mini job when I was younger. But that taught me, like, power of working hard and growth mindset. So it was super valuable in that respect. But it also means that I will then try and do 100 responsibilities and I won't understand necessarily the power of leverage as much. So having more people working for you, having more code working for you, having more media working for you, is a, uh, an unbelievable tool that I'm only beginning to wrap my head around.

    13. CW

      What was that quote that you gave me about l- lazy people make the best employees, because they'll find shortcuts to do work?

    14. GM

      Yeah. Exactly. So you, that, that's the part, like, I, I've said this before. If I could, you know, talk about friends and family, I wouldn't give them, like, any advice or that side of things, 'cause it's so nuanced to them. The only thing I'd say is get working knowledge of Zapier, 'cause if you have, if you have-

    15. CW

      (laughs)

    16. GM

      If you have... And the reason why is because of leverage and automation.

    17. CW

      Shout out to Zapier.

    18. GM

      I think Zapier, if you, if, again, going back to government stimuluses, if Zapier said, "We will pay for your five-day leave to learn Zapier," if the government said that, the value to the economy would be un- The amount of people who right now are going on emails, copying something, putting it in a Google Sheet, or going from a Facebook ad and putting it into a different document. All Zapier is, is every major app connected. And this isn't a sponsorship, by the way, I do this for free.

    19. CW

      Yeah.

    20. GM

      Connected. I genuinely think if you taught people that no-code skill, the ability to automate things and almost become like a, like a developer of 18 months in, like, the space of three days, the productivity for the economy would be amazing. And the first time you have a Zapier thing that works for you, and you can just see this flowing. Like, we could be, like, now I've got Zaps running, it's the best thing ever. I know once our chat's done, it's gonna have taken 100 people from different Facebook ads and it's already automated and sent them an email. Whereas previously, I'd have to go in, get the CSV, send that. So Zapier, for me, in terms of an applied mental model of leverage, is the best thing for somebody who can't code.

    21. CW

      That's interesting. That is really, really interesting. I, um, I like... I was taught this from my first ever boss of events company, is outsourcing. And I know that Naval's a, a big fan of if something costs you less than your hourly rate to do it, then either outsource it or just throw it away. Um-

    22. GM

      So, yeah, that, I think that's a great nuanced point, if it's the hourly rate type things. But sometimes I will see it with certain businesses that I work with, where they outsource too much and then they become, they become foreign to it, and they just trust people who say they're experts at it.

    23. CW

      Mm-hmm.

    24. GM

      Like one of the best D2C guys I've met, this guy called Danny Book on Twitter, he said to me, he went into direct to consumer and decided to do all the ads himself. Obviously he outsources, like, learning, and he does hire consultants to come in and train them. But he said, "This is the most fundamental part of the business. I'm not outsourcing it." Whereas I've seen so many other businesses just like, "This is the most fundamental part of our business. Boom, pass it over there." So it's really interesting, like how that balance between outsourcing, but also how do you not get bullshitted by the people you've outsourced to. So you almost need a enough base level knowledge. And maybe that's, like, n- applied mental models for, like, knowing basic numeracy, so when they say certain things to you, you can check things off. But that's an issue that Charlie talks about, uh, that you need these fundamental mental models in place. 'Cause if you do outsource, you need to be able to have enough knowledge of that field to be able to call bullshit-

    25. CW

      Mm.

    26. GM

      Otherwise, you can just ... somebody can sound smart and just trick you. (exhales)

    27. CW

      I wonder how many people lie on the side of the spectrum where they outsource too much, versus how many lie on the side of the spectrum-

    28. GM

      Good question.

    29. CW

      ... where they do too much. I would say, based on my experience, more people are on the latter, and that might be a selection effect from the type of friends that I've got. But workaholics, people from a classic working class background, um, they will tend to look to save money-

    30. GM

      Mm-hmm.

  5. 1:00:001:08:17

    That's not great. Uh,…

    1. GM

      in the UK, the government NHS is the largest buyer of fax machines in the world, how backwards they are, I, I reckon even I, with a bit of HTML and five hours on Code Academy could probably hack into it. So, I'm pretty bearish on that unless they bring the best people in. So, I still think it's gonna be a shit show for a while yet.

    2. CW

      That's not great. Uh, Brian Rose for London mayor, bear or bull?

    3. GM

      Massive bull. Yeah, massive bull.

    4. CW

      Are you?

    5. GM

      Yeah, massive bull.

    6. CW

      Are you really?

    7. GM

      I don't know. Well, I think he's like-

    8. CW

      Is he paying you off?

    9. GM

      ... I think he's third favorite, and, um, I know you're probably a bear. I, I mean, I, yeah, I don't really have an opinion. I'd probably say bull.

    10. CW

      Kanye 2024, bear or bull?

    11. GM

      Bear because he'll have to be... If he could win Republican or De- Democrat, then I'm, I'm a bit bull 'cause then he might do a Trump, but I think he'll have to be Independent, and I don't just don't see that happening anytime soon.

    12. CW

      Yeah. The thing about Kanye is that going on Rogan and getting asked hard questions and then sitting in silence for 30 seconds-

    13. GM

      Yeah.

    14. CW

      Like I, I, so many people are seduced by artistic capacity in one domain and presuming that it means genius across them all. Like, there's not that many polymaths out there, and-... that, that kind of, like, bizarrely, they're quite easy to spot. Like, you hear Eric speak and you're like-

    15. GM

      Yeah, yeah, yeah.

    16. CW

      The, he'll, he'll move seamlessly from cephalopods to classical Latin music to, like, complex physics, to whatever. Stephen Wolfram, you'll hear him move between crazy different areas. It comes back to that kind of blagging it mentality.

    17. GM

      Fashion's very easy to blag as well. Like, fashion is-

    18. CW

      Built on trends, yeah.

    19. GM

      ... it's, it's built on blag, it's built on reflexivity, it's just how people react to things. So, yeah, I, I listen to that Rogan thing and it, my mind is a pendulum of "Genius, madman."

    20. CW

      (laughs)

    21. GM

      And it would just, it would just swi- it would just switch like that.

    22. CW

      Back and forth.

    23. GM

      So it's so hard to say, right? But it's so hard to not be successful at the same time.

    24. CW

      Uh, bear or bull? Sex robots.

    25. GM

      Um, personal or, or on a society level?

    26. CW

      (laughs) Well, y- may- give, give us both of those.

    27. GM

      Um, I mean, probably, probably bull, I think, I- is the way it ends up, uh, as costs go down. The only thing that I can see ... the only thing that happens potentially before then is the printing viruses, I think is probably inevitable. So whether we get-

    28. CW

      Oh, okay, so you get a virtual sexually transmitted infection-

    29. GM

      No, no, no, I just think we could get-

    30. CW

      ... from this sex robot.

Episode duration: 1:08:17

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