You hear it on Shark Tank all the time. “The market for xyz is millions of dollars. If we can get just 5% percentage of that market, we will make millions.” The sharks roll their eyes. What’s wrong with this logic?
The problem with this line of thinking is what I call the “fractional fallacy.” Basing projections for success on acquiring a small fraction of a large market, sounds great. But it is flawed logic.
The size of the market, and the idea that you only need to penetrate that market in a small way to succeed oversimplifies the challenges of starting a business. It ignores the fact that any new business idea has multiple variables. The size of the market isn’t the only thing that matters. In fact, it may be one of the least important considerations for initial success.
First, the product must be needed and wanted. These two variables tend to be binary. Either the product is desirable or it is not, at least for widespread adoption. And this may be the hardest aspect of starting a new business to predict.
Success relies on a number of variables that align in a way that the customer places value in what you have to offer. Then, and only then, is the market size relevant. If no one wants what your making, the billions of dollars flowing in the overall market is irrelevant.
All of My Failures Are Due to Self-Inflicted Expectations
Einstein said that the most powerful force in the universe is compound interest. But I think he got it wrong. The most powerful force is – time. It impacts everything we do. And the older we get the more we see it’s effects.
Take for example, the cost of products. Order a birthday cake today and you’ll be surprised how thin it is. They just aren’t as tall as they once were. The price of the cake hasn’t changed. So why the short cake? Inflation. As the cost of goods increases over time, either the price of the product has to increase, or you have to get less of it. With cakes, for the same $20 today, you get less cake than you did twenty years ago.
Without the long term perspective of time, no one would notice. But those of us that have been around a while can’t be fooled.
So which is the force, inflation or time? Both. But as strong as inflation and interest are, they have a small impact in any one period. But add the force of time, and the effects of these other factors are magnified, or compounded, quickly.
Fail Fantastically. Succeed Spectacularly. Nothing in between matters.
You will know it’s the right thing, when your willing to fail trying to do it. If it isn’t worth pouring everything you’ve got into it, regardless of whether you win or lose, it isn’t worth pursuing.
Find something you believe in, and then go all out for it.
Are you bored? You know the solution. Life is too short to waste time. Start that project, business, or trip you have been putting off. Inertia is the primary impediment to success. You have to start to finish. Why aren’t you starting?
If your bored, you simply aren’t taking enough risks.
Everybody has ideas. In fact, many people have new good ideas everyday. And that’s a problem when it comes to making something a success.
The difference between great entrepreneurs and the ones that never really get much off the ground, is being able to say “no” to good ideas. Focus on ten tasks, and you’ll get ten partially done projects. Choose one thing to focus on, and you’ll be able to apply all of your energy to make that one thing successful.
To combat “idea fatigue” I have developed a system called – Good Idea? Great Idea? When I have an idea I am interested in pursuing I ask a couple people that I respect whether it is a good idea or a great idea. If they agree that it is a good idea, I throw it out. I only spend time pursuing things that pass the great idea test. Everything else gets left on the table.
Say no to good ideas. So the great ones can succeed. #takerisksbeyou
Without a goal, you can’t score.
– Casey Neistat
At least not a defined one.
50 years ago, if you wanted to succeed you graduated high school, went to college, and got a job at a large company. That was then.
Today there is no defined path to success. There are thousands of ways to be successful. Large companies, small companies. Start your own business. Work from home. Follow your dream. Live in a van traveling the world. The options are endless. There is no clear path. Anybody can be the next Steve Jobs, Beyonce, or Anybody they want to be. #takerisksbeyou
What’s the most powerful force in the universe?
According to Albert Einstein – Compound interest. He said “compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” The difference is savings that time makes is amazing, no matter what the amount, my advice is always – start saving as early as possible. Even a five year head start can result in a 50% difference is how much the savings can grow to over the years.
Once you realize that you have time to fail, everything becomes possible. Thinking you need a bigger house, faster car, more money, all right now, will rob you of the opportunity to take risks. It will deny you the chance to do what you need to do to succeed, which is to try something so crazy you are sure to fail first.
That’s how you learn to succeed. Setting your eyes and goals on things that require you to fail first, just to get the chance to succeed. Be patient. Fail often.
Failure is a prerequisite to success.