20 x 1 = 20
&
1 x 20 = 20
The lie you’ve been told is that the order of events doesn’t matter. You’ve been told that if you have the same inputs and outputs then it’s all the same. But this is a lie. The sequence and order of events matter a great deal and if your perspective isn’t the right one then you’ll lose.
Numbers, Numbers, Numbers
Being logical isn’t the same as thinking a problem through
Imagine you are doing some Christmas shopping. You buy 20 different items from Amazon.com for £1 each. Before you know it you have 20 deliveries organised. For the next two weeks you’re being visited on random days and at random times by delivery drivers. Some packages go missing, some items are damaged and some packages get sent to the Post Office, because you’re not home to receive something.
The alternative option could have been to visit the high street and buy the same 20 items for £1, but get all the shopping done in one fell swoop.
To the bureaucrat know-it-all with a spread sheet; £1 x 20 spent on Amazon is exactly the same as spending £20 x 1 on the high street. But anyone who has actually thought the problem through can see that the two situations are completely different. It turns out that the Amazon buying experience is much better when you buy a small number of items, rather than a large number of items in one go.
From this above example we can gather that numbers don’t tell the whole truth when the human experience is involved. But we can go one step further.
It turns out that numbers can fool you into thinking that humans are irrational, when actually the numbers show how rational we really are.
Here’s a typical thought that know-it-alls and people on the side lines seem not to be able to get past:
Say that you have 100 entrepreneurs, 30 of these entrepreneurs (or 30%) succeed and become millionaires. 1 becomes a billionaire. 69 fail. “This means that it’s just a numbers game, therefore if you want to become a billionaire, just try 100 times!”
The problem with this is that a static view of the world (that fools can’t seem to get past) is not the same as a dynamic view of the world. Again, the sequence of events matters!
The fact is that:
If you fail 2 or 3 times as an entrepreneur, then you will most likely end up as a failure, bankrupt and demonised by prospective sources of capital.
In other words, you will have lost the game. It’s Game Over.
And this is precisely why you should never listen to people who are being logical and not thinking. Founders of new companies should be more concerned about surviving, while most know-it-alls give advice as if the founder has already succeeded.
Survival Mode Is Not The Same As Succeeding Mode! (“I cnt code, I hvnt started a biz, Im not rich, but plz listen to my advice ’bout ur biz”)
There are two states in a startup. You’re either default dead (profit < expenses) or default alive (profit > expenses).
These two states of being require two completely separate game plans and strategies.
If you’re default dead then:
- You may wish to not raise a ton of capital and risk killing your business for good.
- You may need to employ radical ways of acquiring more customers
- You may need to focus on your one product / feature / service and really nail it before making more products / features / services.
- You may need to concentrate on your core users rather than expanding immediately to more markets and “disrupting” them.
If you’re default alive then:
- You might want to supercharge your business with angel / VC money
- You may want to nail your distribution channel and make it as efficient as possible
- You may want to expand your product / feature / services
- You may want to start exploring different markets.
This simple fact is missed by most. And this is the reason so many new founders get fed the wrong advice by know-it-alls who haven’t ever even founded a company.
What’s worse though is that a lot of founders start to listen to the BS advice instead of following their gut which could have lead to a successful business.
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