Be prepared for probabilistic outcomes

If we compress the entire cosmic timeline, starting with the Big Bang, into one calendar year, we realize that humankind is still in its infancy.

We evolved from apes as late as 11:52 PM - just 8 minutes before the end of the year!

Once we get over this shock, we realize that the universe (as we know it) would not have existed but for a precise sequence of events that unfolded over 13.8 billion years.

Chemistry, biology, and physics laws had to be delicately balanced to make our Solar System just so.

There are many counterfactuals to this sequence of events.

Had the asteroid that killed off all the Dinosaurs hit the earth a millisecond later or a millisecond earlier, we might not have existed.

If two hydrogen and one oxygen atom were not fused, today, earth might be a dry wasteland.

Had Chimpanzees evolved differently, today homo sapiens might have been in cages, eating bananas and flinging feces at each other.

A mere millisecond of deviance in the copulation habits of our parents and you and I might have been different genders… who am I kidding? You and I would not even have existed.

We don’t acknowledge that all of this is based on probabilities.

Instead, we go through our lives believing that things are predetermined - they happened precisely how they were intended to. This is hindsight bias.

This deludes us into the illusion that we have complete control over our uncertain world.

This sense of false control leads us to overlook risk from probabilities.

This is how Nassim Taleb describes the risk from probability. I paraphrase it here

Is it possible to lose all your hair in one day? Only if you shave it all off.

Is it possible to lose all your money in one day? Yes.

Yet, we underplay the probability that we might lose all our wealth in one day of a stock market crash.

This is the story we tell ourselves.

Let’s say there’s a 77% chance of profit for a financial investment. Our brain lazily equates the 77% chance of success to 100%. When, in fact, a 77% chance of profit also means that there is a 23% probability of loss.

We cannot ignore these odds of failure. But we do.

Maybe underestimating the downside keeps us from becoming nervous wrecks. Yes, it’s unlikely that all misfortunes will happen to us all together on the day of our big presentation to the CEO - Zoom will crash, we will forget our script, the PowerPoint file will get deleted, and we will spill coffee over our laptop right before the meeting.

But the probability of one of these events happening is not zero.

How do masterful presenters handle this? They don't worry. They prepare.

If you believe the probability that something might go wrong, you can come up with hundreds of solutions - prepare a joke, carry multiple backups, keep the laptop charged, carry two laptops, have printouts, or record the presentation beforehand!

The problem is that we prepare only when we consider the thought that things might go wrong!

The same logic applies to even good things.

Once we accept that the unexpected happens all the time, we can open ourselves up to both downsides and upsides and stay ready for anything.

Take the example of Nathaniel Whittemore. In April 2020, he was stranded unexpectedly in London because of the ash cloud from an Icelandic volcano eruption. Whittemore realized that he was not the only social entrepreneur twiddling his thumbs in London after attending the Skoll World Forum on Social Entrepreneurship. Within 36 hours, Whittemore had organized the TEDxVolcano conference, with 200 attendees, world-class speakers, including eBay’s first president Jeff Skoll, and a livestream watched by 10,000 people.

Life is nothing but a series of probabilities. Matt Haig says it best in The Midnight Library.

“At the beginning of a game, there are no variations. There is only one way to set up a board. There are nine million variations after the first six moves. And after eight moves there are two hundred and eighty-eight billion different positions. And those possibilities keep growing. In chess, as in life, possibility is the basis of everything. Every hope, every dream, every regret, every moment of living.” - Matt Haig

So the TL:DR from today's article is this. Don't overlook probabilities - both good or bad. Either way, be prepared for both and ready for anything.

Thanks for reading! See you next week.

Each week, I share practical ideas on marketing strategy and self-mastery, not taught in the B-school here.