Don’t Suffer Unnecessarily, Reversion to the Mean, Build the Right It

1. A Little Philosophy: Don’t Suffer Unnecessarily

Seneca and Epicurus lived around 300 years apart, had different philosophies and come from different parts of the world.

Both are telling us the same thing.

Perhaps it’s an uncomfortable conversation we need to have with our friend. And we play out the conversation over-and-over in our head, imagining the worst case scenario; it turns into a screaming match and we imagine losing a friend.

More often than not, the situation plays out completely different than how we imagined. The whole time we were stressing, suffering and living in a place of anxiety and fear. When in reality, it was always going to be fine.

As Seneca said: We suffer more in our imagination than we do in reality.

We build things up to be worse than they actually are in; and in the process we suffer more than in necessary.

Inversely, when we imagine things will be better than they become, we’re let down and disappointed when things don’t go the way we imagined.

Seneca and Epicurus would advise us not to imagine - either good or bad outcomes. Be present in any moment and remember that we can only control the things we can control.

2. A Little Luck: This is one of the most important lessons I have learned when studying Luck and Skill.

Reversion to the mean is simply this: extreme outcomes will even out over time.

A sport example: The Basketball legend, Lebron James, has a three-point average of 34.5% - which means he makes around 3 out of every 10 attempts from the three-point line.

Lebron’s worst ever streak was 19 consecutive misses. This would be an example of an extreme outcome. Although, if we go off his averge of 34.5%, he should have made at least 6 of those attemtps.

But as we know, that’s not how skill and luck work. Sometimes we get a lucky streak. Sometimes, like Lebron, we get an unlucky streak.

As time goes on, Lebron will always revert back to his average outcome of nailing 3 out of 10 attempts at a three-pointer.

The 19 misses is an unlucky streak and you could bet with confidence that Lebron’s next 19 attempts will improve and probably be closer to his average.

The same would be true if he were to make 19 consecutive three-pointers. It would be a lucky streak and would slowly revert back to his average.

The only way to increase his average of 34.5% will be to increase his skill over time.

This is true for investors investing in companies, picking stocks, throwing three-pointers. Your skill level will determine your average outcome - however, sometimes you get a lucky streak - good or bad.

But overtime it will always revert to the mean.

3. A Book Recommendation: The Right It - Build the right ‘it’, before you build ‘it’ right. By Alberto Savoia

This book is for any entrepreneur who has tried to build a product or service without validating there is a market of people who will pay you for it.

I speak to a lot of first time entrepreneurs who want to build a completely polished version of their product without testing with a smaller, cheaper, crappier version.

This leads to higher startup costs, lost time, less customer feedback (the most important) and more heartbreak if it doesn’t work.

We naturally applied this type of thinking with Partnar.io - I was reaching out to potential customers on Linkedin with only a one page website and a six page deck.

I was gathering market feedback from real customers. Everyone was giving us really good responses and saying things like “when it’s built, we’ll sign up.”

However this isn’t real validation.

So I sent them an invoice for $5,000 and said if you join now and pay for 12 months up front you’ll get 30% off.

Two customers paid the invoice.

This is validation - the product is the right ‘it.’

When you get real customer validation, then you can go and build the right it. 

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Thanks for reading,

Ryan Elliott

PS. Sorry there was a little break in the emails. I’ve been busy building Partnar.io - check out our new website.