07 Jun This May Be the Biggest Mistake an Entrepreneur Can Make
Our greatest fear is uncertainty. We will do anything to avoid it, including lying to ourselves and trying to pretend that we can work around it by creating certainty through decisions that are based on the illusion of probability.
On any given day we are all making decisions based on probabilities. You decide to take an earlier flight because it will decrease the likelihood that you’ll be late for a meeting. You decide to invest in blue chip stocks because they are more likely to weather an economic downturn. These are all well-considered decisions to balance the odds in your favor. You do it, I do it, we all do it; all the time. As entrepreneurs we become experts at making fast decisions that weigh out the probabilities of success.
However, while probabilities can help us understand and cope with anticipated scenarios, they do nothing to mitigate uncertainty. And the biggest mistake you can make when contemplating starting a business or introducing a disruptive innovation is to confuse probability with uncertainty. That’s because uncertainty is the absence of probability. Uncertainty is what happens when all the rules are broken. I often joke that while chess is game of near infinite probabilities, a game of chess with a three-year-old is a game of uncertainty because at any time the rules can change. A king in check can leave the room and refuse to come back until the board changes!
The same applies to your life as an entrepreneur and innovator. No matter how hard you try to play life’s numbers game the one thing you can be most certain of is that something will always come along that you could never have predicted to undermine your best thought out plans or to present an unimagined opportunity. Uncertainty wreaks havoc because it follows no rules. To paraphrase John Lennon, uncertainty is what happens when we’re busy making other plans.
“…the biggest mistake you can make when contemplating starting a business is to confuse probability with uncertainty.”
Don’t get me wrong, I’m not suggesting that betting on probability is always wrong. As I said, we do it daily. And it’s usually right when we apply it to the more mundane aspects of our companies and our lives. I have a balanced financial portfolio. I have insurance for health, life, property, professional liability, and an umbrella policy to cover everything else. I weigh the odds constantly in many aspects of my life. It’s common sense.
But the trap we masterfully construct for ourselves, when we make every decision based on probability, consists of two illusions. The first is that we fool ourselves into believing that we know all of the existential factors involved in how the bet will play out. The second is that we are always in control of these factors because we know how likely they are. We’re wrong on both counts. Innovation does not conform to probability; it breaks the rules that made it improbable.
In fact the only things we get to control are our own ambitions and our reactions when those ambitions are threatened. And this is where it gets really interesting for an entrepreneur. If you set your ambitions high enough probability no longer applies. By definition, the risk will be too great to be supported by a probabilistic view of the world. Look, you’ve been there and you know what this feels like. Your convinced of a certain path but everyone around you is shaking their head in disbelief while they mutter, “That’s the most ridiculous idea I’ve ever heard of!” under their breath.
So, does that mean you throttle back on your ambitions? Only if you’re willing to give up on them.
I don’t care who or what you use as a role model for greatness, in every case what you’ll find when you look closely at the path taken to achieve greatness is that a ridiculously uncertain bet was made that nobody in their right mind would have placed by betting strictly on the numbers. That’s because greatness always falls well outside of the normal bounds of what is possible, and probability only applies to the realm of the possible. If it didn’t the ambition wouldn’t be great, it would be ordinary.
The Sum Of Our Fears
One of my favorite examples was that Einstein agreed to give half of his Nobel prize award money to his first wife, Mileva Maric, as part of a divorce settlement. But he did this in 1919. That’s two years before he was awarded the Nobel prize in 1921 for his work on relativity. Was that a probabilistic view of the world? Only for Einstein. Anyone else would have thought it patently uncertain and pretty much ridiculous!
“…the sum of your fears should never be greater than the sum of your dreams and ambitions.”
History is littered with people who reached for the impossible. They bet on what everyone believed was totally uncertain and unachievable. I’ve worked with hundreds of these high achievers and what they all have in common is that they refuse to compromise their ambitions and react to every setback as fuel to double down on the future. From Lincoln, to Jobs, Churchill to Winfrey, the impossible was never a matter of probability, it was a matter of an immutable commitment to an ambition.
On the other hand, if you’re going to bet on what’s likely then admit that you’re willing to settle for what’s ordinary because you’re unable to deal with uncertainty. In other words, the sum of your fears should never be greater than the sum of your dreams and ambitions.
The lesson here is a simple one; we buy into an illusion when we buy into a probabilistic view of the world and apply it universal to everything we do. What we are really buying into is a guarantee of the ordinary. While ordinary may be perfectly acceptable in some cases, it is totally unacceptable for those cases where we dare greatly and dream boldly. I’d suspect if you’ve read this far you’re dreaming boldly.
So, if greatness is what you’re after, if nothing less than achieving your boldest ambitions and realizing your wildest dreams is what you’re aiming for, set aside the probabilities, or at least limit them to your 401K. Accept that bold dreams require you to place bold bets that have no odds, which will not make sense to anyone other than you. And then make a contract with yourself to never let go of that ambition and to react to the challenges and derailments of uncertainty as a means to simply redirect you back onto the track of your ambitions.
Ordinary and probable or bold and uncertainty? I don’t see much of a choice there. Do you?
Tom Koulopoulos is the author of ten books and founder of the Delphi Group, a 25-year-old Boston-based think tank and a past Inc 500 company, which focuses on innovation and the future of business. He is also an adjunct professor at the Boston University Graduate School of Management, an Executive in Residence at Bentley University, the past Executive Director of the Babson College Center for Business Innovation, and a frequent keynote speaker. The late Peter Drucker once said of his writing, that it challenges not only the way you run your business but the way you run yourself. Tom’s latest book is The Gen Z Effect: The Six Forces Shaping The Future of Business.
This post was originally published on Inc.com.
The opinions expressed herein or statements made in the above column are solely those of the author and do not necessarily reflect the views of WTN Media