Capitalogix

Is Luck Something You Create?

I just shared an updated article on the difference between Skill and Luck. 

Serendipitously, this article showed up in my feed from 2012. Instead of updating it, I want to share it as I wrote it, because it's still relevant, and it might lose some of its magic if I update it.

So, here it is: 

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Title: Some Thoughts On Whether Luck Is Something You Create

Date: November 3rd, 2012

Doing the same things, the same ways, has predictable results.  Sometimes, it is important to do things differently.

Here is a photo of me at the National Society of Black Engineers' Professional Development Conference, where I had the opportunity to present and participate in several panel discussions.

That is me, the Mitchell brothers, and Steadman Graham

I'm neither black, nor an engineer, and they aren't traders; so why would they ask me to present... and why would I say yes? 

Value is often added at the edges. Likewise, good things often happen when you travel outside your comfort or habit zone.

I gained a lot from the experience. For example, I had a discussion with a nuclear physicist who talked about how they use computer simulations to model the effects of a nuclear explosion. That gave me great ideas about how to measure the effect of a particular trading system or algorithm on a market.

Luck does favor the prepared. That conversation could just as easily have been me simply saying 'hello,' shaking hands and moving on to the next person. To some extent, the ability to take advantage of opportunities comes from the intent to find them.

Is Luck Something That You Can Maximize, Or Would You Consider It Random?

It's possible that luck is both random and something you can maximize.

Here is an example.  Many people consider the stock market to be random. Nonetheless, there are groups of people who consistently beat the market and trade profitably. How is that possible?

To explain, let's examine the decision to purchase Apple Computer stock. Regardless of whether that decision was based on gut instinct, fundamental analysis, or a technical chart pattern ... whether the price moves up or down the moment after that purchase is for the most part random.

However, if you make 10,000 trades over time, then your ability to make and keep money is about how you manage risk and opportunity. At that point, your system is not necessarily random. Consequently, it is something that you can improve.

Transform Results By Getting Un-Stuck.

Improvement means getting better and different results.  And, as you already know, it doesn't make sense to continue to do the same thing, yet expect different results.  So, a key skill is learning to recognize when things are "stuck" in a rut.

The trouble with many "ruts" is that you don't know you're in one, while you're in one. Consequently, it often takes a different perspective to become aware of new possibilities, opportunities, or best next steps.

Implications.

The interesting thing that this implies is that those opportunities were always there ... they just weren't there for you in your current state of awareness.

Similarly, recognize that many of the processes that we rely on limit our "luck" or opportunities precisely because they limit our choices. When this is done consciously it can be helpful.  However, when it's an unconscious act, it can be dangerous.

In general, you can categorize many tools as either being multipliers or diminishers. Neither one is good or bad in and of itself.  The trick is to recognize that you have a choice and that not choosing is still a choice.

_______________

I think it holds up. What do you think?

 

How Long Do You Have Left?

We only have a limited time on this earth - and a lot of it is taken by frivolous activities. 

How much time do you think the average millennial spends on their phones ... or a baby-boomer sits in front of the TV?

The answer is a lot.

via dailyinfographic

Nine years in front of entertainment devices - another 10.5 years spent working.  You get the idea.

If you have goals you want to accomplish, aspirational travel, and lifestyle plans - this really puts the idea of finding and living your passion in perspective. 

Do you have the time to waste it?

VisualCapitalist put together a chart projecting longevity based on 2020 mortality rates.

 

via visualcapitalist
 

I turned 60 this July, so I only have 20 years left, according to this calculator.   I expect more!

There are some interesting statistical facts in this; for example, an average American baby boy can expect to live until 74 ... but if that boy turns 21, his life expectancy jumps to over 75. 

While these numbers seem pretty high, there are two things to consider. First, COVID heavily reduced these numbers because mortality rates went up. That likely won't continue (though it will likely continue to affect your insurance premiums and pension benefits). 

Also, remember that these numbers are based on 2020 averages, which likely differ from you (specifically considering your race, income, location, etc.). These numbers also don't take into account expected medical and technology advances, etc. 

Finally, I think Purpose is one of the most important catalysts of longevity. People often die when they retire ... not because they're done working, but because they're done striving. 

If you're not growing, you're dying!

Three Word Strategies

A few years ago, I shared a presentation called Mindset Matters that I had given to a small mastermind group.

Recently, I  have revisited that content in more detail and with finer distinction.  It’s become an integral part of my goto presentations and our company dialogue. 

One of my core beliefs is that energy is one of the most important things we can measure.  I believe it so strongly I paid Gaping Void to put it on my wall.

 

via GapingVoid

It means exactly what it sounds like - but also a lot more.

Energy affects how you feel, what you do, and what you make it mean.  That means it is a great way to measure your values, too.  Consequently, even if you don’t recognize it, energy has a lot to do with who you hire and fire.  It affects where you spend your time.  Ultimately, it even affects the long-term vision of your company or life. 

If something brings profit and energy, it is probably worth pursuing. 

In contrast, fighting your energy is one of the quickest ways to burn out.  Consequently, figuring out who and what to say “no” to is an important way to ensure you stay on the path and reach your goals.

Here is a video I made about the importance of Mindsets.

via @howardgetson

Three Word Strategies.

I believe that words have power.  Specifically, the words you use to describe your identity and your priorities change your reality. 

First, some background.  Your Roles and Goals are nouns.  That means “a person, place, or thing.” Let’s examine some sample roles like father, entrepreneur, visionary, etc.  They are all nouns.

Your goals are nouns, too.  For example, (for us) amplified intelligence, an autonomous platform, and a sustainable edge are all nouns. 

How you create or achieve them is done with verbs.   So, your strategies are verbs.

Examine your default strategies.   They define an action you take.  Examples include: connect, communicate, contribute, collaborate, protect, serve, evaluate, curate, share … and love.  On the other end of the spectrum, you could complain, retreat, blame, or block (but that wouldn’t be productive).

People have habitual strategies.  I often say happy people find ways to be happy – while frustrated people find ways to be frustrated.  This is true for many things.

Said a different way, people expect and trust that you will act according to how they perceive you act.

Meanwhile, you are the most important perceiver.

Another distinction is that our nouns and verbs range from timely to timeless. “Timely” words relate to what you are doing now.  They relate to your situation or perceived challenges or opportunities.  Meanwhile, “Timeless” words are chunked higher and relate to what you have done, what you are doing, and what you will do.

The trick is to chunk high enough that you are focused on words that link your timeless Roles, Goals, and Strategies.  When done right, you know that this is part of what makes you … “You”.  

My favorite way to do this is through three-word strategies. 

These work for your business, priorities, identity, and more. 

I’ll introduce the idea to you by sharing my own to start. 

Understand.  Challenge.  Transform. 

The actual words are less important than what they mean to me. 

What’s also important is that not only do these words mean something to me, but I’ve put them in a specific order, and I’ve made these words “commands” in my life.  They’re specific, measurable, and actionable.  They remind me what to do.  They give me direction.  And, they are a strategy (or process) that creates a reliable result.

First, I understand because I want to make sure I know all sides before I take action.  For me, it is about seeing the bigger picture.  It creates a golden thread from where I am to the bigger future possibility that I want.  Then, I challenge situations, people, norms, and more.  I don’t challenge to tear down.  I challenge to find strength … to figure out what to trust and rely upon.  Finally, I transform things to make them better.  Insanity is doing what you always do and expecting a different result.  This is about finding where small changes create massive transformations.  It is about committing to the result rather than how we have done things till now.

If I challenged before I understood the situation, or if I tried to transform something without properly doing my research, I’d be shooting from the hip ... and I’d likely cause more damage than good. 

Likewise, imagine the life of someone who protects, serves, and loves.  That produces a ripple in the world.  Now, compare that to the life of someone who loves, serves, and protects.  The result is likely very different.

The order matters!

I’ve set daily alarms on my phone to remind me of my three words.  I use them when I’m in meetings and to evaluate whether I’m showing up as my best self. 

You can also create three words that are different for the different hats you wear, the products in your business, or how your team collaborates. 

Finding Your Three Words 

Like recipes, your three-word strategy has ingredients, orders, and intensities.  The optimal ingredients, order, and intensities might change as you use your words. 

For example, when my son was just getting out of college, one of his words was “contented” because he was focused on all the things he missed from college - instead of being appreciative of what he had.  Later, his words switched to “grateful” and then “loving”...  each an evolution that paired with his journey. 

Remember, your words should be actions.  They should be things you do, ... not just words that describe you.  You can also see that in my son’s words.  As he grew, the word became a calling to the actions he wanted to approach life with, instead of a reminder of the feelings he longed for. 

Once you learn how to create and use these simple three-word strategies, you can use them everywhere. 

What are your words?

The Beatles New Song ... And Where AI Art Fails

Have you listened to the new Beatles song?  It took almost 50 years and new technology to create.

How did this happen?  An AI system, made by Peter Jackson, uncoupled the vocals from the piano on a poor-quality tape demo from the 70s.  The result – a song that would have never seen the light of day was able to bring John Lennon back from the dead to release new music for a new generation. 

You can listen to it here.

 

via The Beatles

Was it a touching tribute and closure to an extraordinary legacy?  Does it qualify as AI "art"? 

We are seeing a surge in creativity due to the rise of generative AI. 

People are doing amazing things with AI ...  and it's making entrepreneurship accessible to a new group of people.

AI is exciting, but it is also scary.  I would argue that it is a net positive.  However, there are also clear drawbacks (and potential risks).  For example, there are the obvious ones like deepfakes, art being stolen and fed into models without consent, etc.  But, there's one that many aren't talking about...

It's a lack of nuance or understanding of art. 

Here is an example of using generative AI to improve a famous art piece.

 

@Soncharm

In my opinion, the creator completely missed the point when they tried to improve Nighthawks by Edward Hopper. 

The truth is that I don't know their intent or thought process.

However, Nighthawks is famous for a reason.  It shows a patron, presumably at a late-night diner, with a desolate urban streetscape outside.  To the right audience, it embodies the isolation of a 24-hour modern society and big cities, and the hidden changes of the 20th century.  It is a poignant composition and one of the most famous American art pieces. 

Lost in the power of Generative AI, this X (Twitter) user transformed the piece by running it through an art processor multiple times. 

First, he had AI parse the image and write a description of it.  Then, he had it regenerate the image from the description.  The setting became light.  He thought he could make it better, so he moved people outside.  He parses a description again and creates a new image again.  He did this several times. 

The result is what you see — a beautifully created composition lacking any depth. 

The AI did its job; the human did not. 

A better prompt or a more artful process would have had a better result. 

But is it art?

Once created, art is in the eye or mind of the perceiver.  So, should we care who or what creates it?

Here are some other questions worth pondering.  Is AI at its best when it's amplifying human intelligence - rather than replacing it?  Or ... is the goal simply to amplify intelligence?

The Universe often gives you increasingly painful chances to learn a lesson. 

What do you think we're supposed to take from this?

It's That Time Of Year ...

It is that time of year again. We are in the midst of our annual planning for 2024.

If you haven't started planning for your business (or yourself), now is a great time to start.

The best place to start is to analyze where you are and where you've come from. I like to begin annual planning by reviewing the past year and looking back at where we were three years ago (in order to note direction, progress, and new capabilities). 

Then it is time to look forward.

The process is relatively straightforward. We start by deciding what the company's three highest priority goals are. With those goals as the base, each department (and manager) creates a big three representing what they can do to reach the company's big three. From there, we dive into quarterly rocks, SMARTs (goals that are specific, measurable, actionable, relevant, and timed), as well as the explicit tactical steps it will take to accomplish what we set out to achieve. We use the Entrepreneurial Operating System (EOS) to plan and execute our meetings. 

The meetings are going well. There is a lot of back-and-forth idea sharing, negotiating, and priority setting.

We've gotten a lot better at dialogue - but for many years, what we thought was a dialogue was often multiple monologues. 

The disconnect (or misconnect) was because the participants had fundamental beliefs, at a higher level than we were discussing, that were at odds with each other. 

I shot two videos that I think help teams get to alignment.

Thinking About Your Thinking

The first video discusses several techniques to enhance your decision-making. 

One of the ideas is something called "Think, Feel, Know." It explains that you have to deal with superficial thoughts before getting to deeper feelings. Then, you must deal with those feelings before you get to "knowing." 

Another technique discussed in the video involves adding time to look for "insights" after working on something. Those insights are often the seeds for something greater.

Chunking Higher

The second video is about how to chunk high enough to start from a place of agreement. Exploring distinctions from there is relatively easy.

I'll add one more concept for good measure ... Start with the end in mind. Alignment happens in stages. To get aligned on what to do next, you first have to get agreement and alignment about where you are and where you want to go.

With that said, another important component of meaningful communication is a shared understanding of a common language. Words can mean different things to different people. Simply agreeing on a "word" is different than agreeing on a common meaning.

To summarize these concepts:

1. Make sure you have a common language
2. Begin with the end in mind
3. Start with the highest level of agreement
4. Make distinctions from there

Hope that helps. 

Skill Versus Luck: A Sustainable Competitive Advantage

In 2016, I wrote a variation of this article focused on trading ... but it's even more relevant today as I spend more time talking with entrepreneurs and AI enthusiasts. 

There are many lucky people in the business world.  Perhaps they made a good decision at the right time – and are now on top of the world.  There's nothing wrong with luck.  But, the goal is to make sure your success isn't predicated on it.  Why?  Because you might get lucky once, but it's unlikely you'll get lucky every time. 

Luck favors the prepared ... and those who understand the difference between skill and luck. 

First, let's talk about luck.  Think about a nationwide coin-flipping contest.  Initially, each citizen is paired up with another for a contest.  The winner goes on to the next round.  Think how many rounds you would need to win to be City Champion, State Champion, Regional Champion, etc. 

At the end, someone would have won many coin-flip contests.  Assuming they didn't cheat, they were lucky ... but does the winner have an edge?  If so, what could it be? 

If you followed the contest from beginning to end, I'm sure you could imagine the finalists doing articles or interviews about how their mindfulness practice gives them an edge ... Or, the law of attraction .... Or, how the power of prayer is the difference. 

Meanwhile, sometimes, the most straightforward rationale provides the best explanation.  Somebody had to win that contest – and luck was the reason.

 

Finding The Edge

Likewise, just because a product or business makes money doesn't prove it has an edge.  For example, at OpenAI's Developers Conference last week, they announced several new models and internally created tools that cannibalize or obsolete many tools or businesses built on their platform.  Meanwhile, they also announced several new models and tools that will help create new businesses.  But, the app developers who have been made redundant are out of luck. 

I saw the same thing with the rush of .com companies in the late '90s.  The ones that made it are now the underpinning of a new era, but they climbed out of a sea of failed businesses that might have even been better businesses - they were just unlucky (e.g., Betamax vs. VHS). 

Simply relying on whether something is profitable NOW means you have both the chance that you have an edge - and also that you got lucky.
 
If it isn't just a matter of winning, how do we know if we're skillful?  In trading, we would call this alpha.  We are searching for clues to help find systems with an edge ... or at least have an edge in certain market conditions.

Unfortunately, I can't give you the one rule to follow to identify skill vs. luck, but it's much easier to find the answer if you're asking yourself the question. 

Internally, we've built validation protocols to help filter lucky systems and systems that can't repeat their results on unseen data.  

It is exciting as we solve more of the bits and pieces of this puzzle.

What we have learned is that one of the secrets to long-term success is (unsurprisingly) adaptability. 

What that looks like for us is a library of systems ready to respond to any market condition - and a focus on improving our ability to dynamically select the systems that are "in-phase".  The secret isn't predicting the future, but responding faster - and more reliably - to changing environments. 

From a business perspective, this looks like being willing to adapt to and adopt new technologies without losing track of a bigger 'why' like we talked about in last week's article. 

A Practical Example

When we first wrote on this, one of Capitalogix's advisors wrote back to see if they understood the coin-flipping analogy.

The odds of flipping a coin and getting heads 25 times in a row is roughly 1-in-33 million. So if we have 33 million flippers and 100 get 25 heads in a row, statistically that is very improbable.  We can deduce that group of 100 is a combination of some lucky flippers, but also that some have a "flipping edge."  We may not be able to say which is which, but as a group our 100 will still consistently provide an edge in future flip-offs.

Well, that is correct.  If we were developing coin-flipping agents, that would be as far as we could go.  However, we are in luck because our trading "problem" has an extra dimension, which makes it possible to filter out some of the "lucky" trading systems.

Determining Which are the Best Systems.

There are several ways to determine whether a trading system has a persistent edge.  For example, we can look at the market returns during the trading period and compare and contrast that with trading results.

This is significant because many systems have either a long or short bias.  That means even if a system does not have an edge, it would be more likely to turn a profit when its bias aligns with the market. 

You can try to correct that bias using math and statistical magic to determine whether the system has a predictive edge. 

It Is a Lot Simpler Than It Sounds.

Imagine a system that picks trades based on a roulette spin.  Instead of numbers or colors, the wheel is filled with "Go Long" and "Go Short" selections.  As long as the choices are balanced, the system is random.  But what if the roulette wheel had more opportunities for "long" selections than "short" selections?

This random system would appear to be "in-phase" whenever the market is in an uptrend.  But does it have an edge? 

One Way To Calculate Whether You Have An Edge.

Let's say that you test a particular trading system on hourly bars of the S&P 500 Index from January 2000 until today. 

1. The first thing you need is the total net profit of the system for all its trades.  
2. The second thing you need to calculate is the percentage of time spent long and short during the test period.
3. Third, you need to generate a reasonably large population of entirely random entries and exits with the same percentage of long/short time as your back-tested results (this step can be done many times to create a range of results). 
4. Fourth, use statistical inference to calculate the average profit of these random entry tests for that same test period. 
5. Finally, subtract that amount from the total back-tested net profit from the first step.

According to the law of large numbers, in the case of the "roulette" system illustrated above, correcting for bias this way, the P&L of random systems would end up close to zero … while systems with real predictive power would be left with significant residual profits after the bias correction.

While the math isn't difficult … the process is still challenging because it takes significant resources to crunch that many numbers for hundreds of thousands of Bots. 

The good thing about RAM, CPU cycles, and disk space is that they keep getting cheaper and more powerful.

Conclusion

It is relatively easy to measure the wins and losses (and luck versus skill) of trading systems.  It can be complicated, but ultimately, it's just math.  The logic of the example also applies to adopting technology, starting a business, or transforming from a product-based to a platform-based business model, etc. 

In most situations, the secret is to figure out what data is incumbent to your industry as well as what data you're creating.  Figure out how to analyze it.  Figure out how to do that consistently, autonomously, and efficiently.  Then ... test. 

It's not sexy, and it's not complicated. 

We live in a ready, fire, aim era.  The speed of innovation is staggering, and the capital and energy needed to create an app or start a business is less than ever before ... and a bias for action is powerful. 

Luck and a bias for action will take you further than most - but it still won't take you far enough. 

So, I'll leave you with the question... 

If you're reading this, you've almost certainly been lucky ... but have you been skillful?

The Difference Between Gen Z And Millennials

I had friends in town for today's Cowboys game against the Giants. If you care, it was a massive win.

We discussed the difference between Gen Z and Millennials on our way back from dinner last night. 

During the conversation, my youngest, Zach (who is 30), called to tell me that his face had been sewn back together after a rugby game. 

Wonderful. 

But, it was a great chance to hear his opinion about the difference between Gen Z and Millennials. 

I'm paraphrasing, but he stressed that the main difference was that he lived through a transition of technologies that they didn't experience. 

For example, he is old enough to remember cassette tapes, floppy discs, boomboxes, and more. His first computer was an old-school Mac with a black-and-white display (how primitive). 

So, though he didn't see the prior shifts that I did (like the invention of the color TV), he is still aware of the shift between the "old world" and the "new world" ... and how radical the difference was. 

Meanwhile, Gen Zers were raised with the technology we see today as their only reality. 

As a result, they're much more immune to how awkward or cringy it is to share their entire life online, hopping from instant gratification to instant gratification. 

 

via blackbear

We hear a lot of doom and gloom from (and about) Gen Z - which isn't new. The younger generations are always derided ... in part because they're young.

Nonetheless, GenZ still believes the future is bright. 

What do you think about Gen Z? And, what differentiates them from Millennials? I'm curious.

Revenge Of The Nerds: 5 Years later

AI is Hot!

In 2018, the local news did a brief story about Capitalogix - centered around finding tech talent ... and how hard it can be. 

It has only become harder since then. In part because of the growing demand for tech talent ... and in part because success today requires a higher level of mathematical, statistical, and innovative problem-solving talent than ever before.

And that's only part of the reason that I'm proud of our team!

The robots aren't coming for our jobs.  We're creating the robots, the AI, and the automation. 

The secret to great AI is that it still has a heartbeat. 

Here's the article. You can watch the video below. 

via NBC DFW

We are always hiring.

It's not enough to invest in the right ideas or technologies. You have to invest in the right people as well. 

"Standing still is moving backward ... so you don't only need new technology, you need a new level of data scientists –  a new level of professional that can think about what's possible, rather than how to do what we want to do right now."

Even though we've got an incredible edge now. I recognize that edges decay faster than ever. The trick is to stay ahead.  

I can predict that the future is bright ... And I know that the best way to predict the future is to create it.

Onwards!

Treat Your Business Like A Football Team

We're now midway through the Cowboys Season, and despite injuries plaguing the team, we just had a fantastic 43 - 20 victory over the Rams. 

At every game, I run into this guy, and every game he wears a different creative, and well-thought-out costume.  He sits on the 50-yard line. He wears Ferragamo shoes and a nice watch.  For his day job, he is the Head of Psychiatry at a well-known hospital in the area.  Yet, something about this game captures his imagination.

Jerry Jones does a lot right in how he builds his "Disney Ride."  But this post will focus more on what the coaches and players do. 

I'm regularly surprised by the levels of innovation and strategic thinking I see in football.

Football is something I used to love to play.  And it is still something that informs my thoughts and actions.

Some lessons relate to being part of a team, while others relate to the coaching or management side of things.

Some of these lessons stem back to youth football ... but I still learn things watching games – and even more, from watching Dallas Cowboys practices at The Star. 

Think about it ...  even in middle school, the coaches have a game plan.  There are team practices and individual drills.  They have a depth chart, which lists the first, second, and third choices to fill certain roles.  In short, they focus on the fundamentals in a way that most businesses don't.

The picture, below, is of my brother's high school team way back in 1989.

 

To re-state, most businesses are less prepared for their problems than an 8th-grade football team.  Now, that might sound offensive to some of you – but if you think about it ... it's pretty accurate. 

Losing to an 8th Grade Team

I shot this video right before the COVID-19 shutdown.  I encourage you to watch it.  I think it's 3 minutes well spent.

 

Football teams think about how to improve each player, how to beat this week's opponent, and then how to string together wins to achieve a higher goal.   

The team thinks of itself as a team.  They expect to practice.  And they get coached.

In addition, there is a playbook for both offense and defense.  And they watch game films to review what went right ... and what they can learn from for use later.

Contrast that with many businesses.  Entrepreneurs often get myopic ... they get focused on today, focused on survival, and they lose sight of the bigger picture and how all the pieces fit together. 

The amount of thought and preparation that goes into football - which is ultimately a game - is a valuable lesson for business. 

What about when you get to the highest level?  If an 8th-grade football team is equivalent to a normal business, what about businesses that are killing it?  That would be similar to an NFL team. 

Let's look at the Cowboys. 

Practice Makes Perfect

How you do one thing is how you do everything.  So, they try to do everything right. 

Each time I've watched a practice session, I've come away impressed by the amount of preparation, effort, and skill displayed.

During practice, there's a scheduled agenda.  The practice is broken into chunks, and each chunk has a designed purpose and a desired intensity.  There's a rhythm, even to the breaks.

Every minute is scripted.  There's a long-term plan to handle the season ... but, there was also a focus on the short-term details and their current opponent.

They alternate between individual and group drills.  Moreover, the drills run fast ... but for shorter time periods than you'd guess.  It is bang-bang-bang – never longer than a millennial's attention span.  And they move from drill to drill – working not just on plays, but also on skillsets (where are you looking, which foot do you plant, how do you best use your hands, etc.).

They use advanced technology (including advanced player monitoring, biometric tracking, and medical recovery devices ... but also things like robotic tackling dummies and virtual reality headsets). 

They don't just film games, they film the practices ... and each individual drill.  Coaches and players get a cut of the film on their tablets as soon as they leave.  It is a process of constant feedback and constant improvement.  Everything has the potential to be a lesson. 

Beyond The Snap

The focus is not just internal, on the team.  They focus on the competition as well.  Before a game, the coaches prepare a game plan and have the team watch tape of their opponent in order to understand the tendencies and mentally prepare for what's going to happen.

During the game, changes in personnel groups and schemes keep competitors on their toes and allow the team to identify coverages and predict plays.  If the offense realizes a play has been predicted, they call an audible based on what they see in front of them.  Coaches from different hierarchies work in tandem to respond faster to new problems. 

After the game, the film is reviewed in detail.  Each person gets a grade on each play, and the coaches make notes for each person about what they did well and what they could do better.

Think about it ... everyone knows what game they are playing ... and for the most part, everybody understands the rules and how to keep score (and even where they are in the standings).  Even the coaches get feedback based on performance, and they look to others for guidance. 

Imagine how easy that would be to do in business.  Imagine how much better things could be if you did those things.

Challenge accepted.

And, in celebration of a Cowboys win ... here's me doing a cartwheel.  I'm sure my body will feel great tomorrow ...

 

The Power of One Data Point

I love statistics.  But I also recognize how easy it is to be tricked by data.

Here is an example illustrating how factually accurate statistics can be misleading without proper context. 

Take a quick look at this chart showing Robotics funding in July 2023.

  

 

If you look at that chart, you might conclude that Pittsburgh is a Mecca of innovation in robotics.  Carnegie Mellon is there.  That makes sense, right?

However, there's an immediate red flag ... it's only for the month of July 2023. 

So the question becomes ... why? 

Turns out, that entire number is essentially the result of a single check to Stack AV to recapitulate what was Argo.  Argo is a Ford and VW-backed autonomous vehicle startup, and Stack AV is the founders' new self-driving startup. 

One significant move skewed the scale so strongly that it trumped major countries' expenditures that month. 

There's often an issue about not having enough data to be statistically significant.  Another common issue is confusing coincidence with causality.

This isn't meant to undermine the effect of one data point on a chart.  For example, think about Taylor Swift's impact on the economy.  Taylor's Eras Tour has already netted more than $100M but also reportedly has had a $5B impact on the economy.

Cincinnati reported that Taylor Swift's Concert Tour brought $90M to their city in two days.  Her 60,000 attendees pushed the city's hotels to 98% occupancy rates.  Beyond that, her concert-goers also consumed the city's restaurants, bars, tourism, and retail. 

Here is a different example of accurate data leading to an unusual conclusion, At a Genius Network meeting this week, the creator of OsteoStrong and the X3 bar spoke about people's misconceptions about fitness and workouts.  One point, in particular, caught my attention.  He claimed that most people only get stronger as a direct result of their workouts about ten times in their lives.  This isn't true of competitive athletes or weightlifters - but the average gym goer.  Why? His logic was you only get stronger when you take your muscle to failure, past its previous limits.  Most people rarely work out to exhaustion and don't keep track of their best.  They often stop one rep - or even half a rep - before there's a meaningful improvement. 

A good lesson for life. 

As entrepreneurs, we've all seen people get the "one big break" or the "one domino" that led to success.  The goal is often to be good enough that you only have to get lucky once.

While one data point can ruin a statistic, it can also change your life. The power of an inflection point. 

Hope that helps.