Diversification of Opportunity

In the early 1900s, Thomas Edison’s factory that housed the majority of his many inventions and projects was destroyed by a fire. At age 67, it contained his life’s work. The next morning, while searching through the rubble, Edison told his son, “There is great value in disaster. All our mistakes are burned up. Thank God we can start anew.”

Three weeks later, Edison delivered the first phonograph, an invention he spent over 50 years trying to perfect. The next year his company, which later turned out to be General Electric, did $10 million in revenue. Edison ended up accumulating nearly 2,400 patents in his lifetime.

Edison’s most referenced quote is probably when he said, “I have not failed. I’ve just found 10,000 ways that won’t work.” These days it’s almost become cliche to preach the value in failure. It’s by far the biggest rallying cry in Silicon Valley’s start-up culture. But I don’t see this as a simple case of enduring a disasterous situation. I think the key ingrediant here is the power of having the correct expectations and giving yourself enough opportunities to succeed.

Jason Zweig had a tweet this week that captures this line of thinking perfectly:

When you’re young you assume that everything in life will just work out somehow. All of your plans and milestones will occur right on schedule. Every interviewer asks the same terrible question to their prospective employees — “Where do you see yourself in 5 years?” Young people are the only ones who assume that the answer to this question is going to be exactly how things will actually turn out.

Once reality sets in and you see how the real world actually works you begin to realize that nothing ever goes as planned. Most people will tell you that life isn’t fair, but it’s also so random that there’s more luck involved in where we end up than most people are willing to admit.

Nearly every success story is accompanied by a lucky break. Apple got bailed out by a loan from Microsoft in the late-1990s. Without it they may not have become the largest publicly-traded company in the world. Coca-cola was created when someone accidentally added carbonation to medicinal syrup. Pfizer was working on a drug for high blood pressure when they accidentally created Viagra. Play Doh was originally supposed to be a wall paper cleaner. Toothpaste didn’t take off as a regularly used product until someone added bubbles so people could get the sensation that it was doing something to their mouth.

But people also have the ability to create their own luck by continuing to show up over and over again to try to gain a seat at the table. Dilbert creator Scott Adams talked about the importance of a diversification in opportunities in an interview with James Altucher last year:

The fact is if you try one thing once, probably things aren’t going to go your way. Because the odds of any one thing working, even if you do everything right, is about ten percent. But if you did a thousand things and every one of them had a ten percent chance of working, you’re pretty close to a guarantee that something’s going to work.

It’s counterintuitive, but low expectations can actually be a good thing if used with the right frame of mind. If you go into every situation with expectations that the sky is the limit, it’s highly likely that you’re going to be severely disappointed when you have the inevitable bad break. The power of realistic expectations is that your goals won’t get derailed at the first sign of trouble. One of the reasons people give up on their goals so easily is because they put too much pressure on themselves. You absolutely have to follow the process over outcomes mindset to play the long game.

My own career path is full of twists and turns I never would have expected. Many of my biggest breaks have come from jobs I didn’t get. Other jobs worked out because I was in the right place at the right time and took advantage of the opportunity. I never would have expected any impact on my career by starting this blog. I went in thinking anything that comes from it would be icing on the cake. Had my expectations been higher going into it I probably would have given up on it during the first year or so when no one was reading my stuff.

You can’t control if or when you’ll get a lucky break. But you can always improve your odds of success by continually giving yourself enough opportunities.

 

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  1. Andrew Lynch commented on Sep 21

    Excellent post. I completely agree with what you’ve said.

    The other thing to remember is that people are so quick to celebrate failure these days — it’s seen as such a positive — that I think some people forget that the goal is still to succeed. Failure is not the end goal, it should just be a step along the path towards success. And sometimes failing really sucks. It’s hard, it’s painful, and it can be emotionally draining. It’s only a good thing if you learn from it, and use it to move towards future success.

    • Ben commented on Sep 21

      Great point. Peter Thiel makes this point in Zero to One. It’s not just about failure, it’s about learning from it, but if you can avoid failure, that’s not bad either.

  2. mikedariano commented on Sep 21

    What about the humble post it note? I thought that was the creme de le creme example of accidental discoveries. Nice post Ben.

  3. Alessandro Mazzola commented on Sep 21

    Great post Ben!
    The secret is not be right, but to keep to be right.
    Everything in our life looks like a symphony and we can intercat with them. The difference between a right choice and a right process is that the second resonates better than the first.
    We are all musicians!

    PS Please remember my last invitation email, tk.

    Best Regards!

  4. James Yaworski, CFA commented on Sep 22

    Ben, congrats on the move to Ritholtz! I hope you’ll continue to blog and provide us with your great insights. Best of luck!

  5. Jim Haygood commented on Sep 22

    ‘My own career path is full of twists and turns I never would have expected.’

    Evidently. Today when I saw the MarketWatch headline “One of Wall Street’s best-read bloggers is joining Josh Brown at Ritholtz”, I knew it was you before clicking on the article.

    Big congrats!

  6. drc commented on Sep 22

    hey ben
    congrats and best wishes at the new gig.

    curious how does diversification of opportunity reconcile w the point of view that one should play towards their strengths? maybe one should just diversify within the strength areas?