December 29, 2012

Lots of Small, Affordable Bets

In reading Frans Johansson’s The Click Moment, a book about positioning yourself such that skill collides with luck, his thinking on purposeful bets, inspired by Peter Sims, is especially resonant as go about doing my dreams.  Two key takeaways:

Point #1:  Remarkable things happen when we place lots of bets.  According to Dean Keith Simonton, a professor of psychology at UC-Davis, the chance of a scientist writing a groundbreaking paper (based on the number of citations) was directly correlated to the number of papers that the scientist has written.  “We tend to believe that the number of groundbreaking papers a scientist publishes should be correlated with how smart or experienced the scientist is,” write Johansson, “but there is little evidence of this. On aggregate, no  matter how much [scientists] try, their chance of success remains the same across all the papers they publish.  Simonton called it the equal odds rules. Scientists have the best chance of writing groundbreaking papers when they publish a lot, no matter when that happens in their career.”

Point #2:  Dream big, but ‘do’ small.  Because the “probability of success doesn’t correlate with the amount of resources invested in an idea or project, it makes sense to drive down the size of our bets, which allows for more iterations, and therefore more shots to get things right.”  He also prescribes calculating an “affordable loss” — if bets put your organization or career or a relationship in jeopardy, then downsize the bet.

To raise your odds of success, make lots of small, affordable bets — fine advice for dreamers and disruptors.

You might also like…

  • Rear view of a little school children raising their hands in the classroom

    Ashley Masters | Raises Her Hand

  • GirlLux_FaceofGirlLux

    Melissa Ovard | Why I (Really) Started Girl Lux

  • swimming pool

    The problem when you aren’t in pain

  • rsz_wadofcash

    Mamak Charepoo | Making Music with Money