The Cult of Success
The cult that is the modern day success coaching industry can oftentimes be more harmful than beneficial to those unfortunate enough to fall for scams and unrealistic promises. This is a big-money business that is meticulously designed to prey on the mindsets of vulnerable people in order to keep its engine running. While I do believe in the merits of personal development and striving for a better version of yourself, falling wallet first down into an endless hole of courses, seminars or even videos and audiobooks can leave you out of both time and money. Remember, the gurus you see providing guidance online will not come running to your aid once you quit your day job only to discover that your dreams didn’t work out as you had so desperately wished for.
The Formula
Now I certainly don’t claim to be an expert on the matter but I think it’s fair to say that thinking critically instead of going with emotions or gut feelings is what will serve you best in the long term. Not only does this apply to managing your finances, but also your health, education and many other aspects of your daily life. In this post, I would like to suggest a simple formula that you can use to help your critical thinking process when it comes to evaluating opportunities. It is an oversimplified yet effective formula that you can use for measuring a project or idea’s chance of success and here it is presented to you dear reader, in all its glory:
Chance of success = ((Solution to a given problem ^(Ability to scale))*Sustainability)/Risk
It may look complicated, but the mathematical principles of the equation are not even that important; the core elements of the equation are the pieces of information that you should be focusing on. The equation itself, when read in plain English, states that success is defined by a solution's ability to scale exponentially and reproduce itself over a period of time. It's basically a 4 dimensional analysis of an item's ability to increase in the fields of both space and time. Finally, the quality of this relationship is balanced against an underlying perception of risk. If this seems a bit overwhelming, then let’s break these elements down into bite size pieces, shall we?
Problem
What is the problem at hand? Is this a small, niche problem or a large global one. The larger the problem the more lucrative the rewards for solving it will be.
Solution
What solutions are required to fix the problem? Why is this not already fixed? Is there a lack of awareness or interest in this topic? Does the technology not exist yet? Is the issue too expensive to solve?
Scalability
Fixing a small problem will bring small rewards. Offering a solution to a larger problem brings far larger rewards. Can the solution scale? Can it be automated? What is the potential reach if implemented efficiently? Are there other customers or industries that can benefit from this solution?
Sustainability
How long can this last for? What are the resources involved?
Risk
What risks are involved? What is the counter argument for not attempting this endeavour?
Example
The easiest way to envisage this formula in action is to take a well known use case. Take Amazon for example. What was the problem? People were too damn lazy to leave their house to buy a book. Jeff Bezos solved this by bringing the books to the people. Did this scale? Yes, not only did it scale, it took on a whole other form and opened up many more markets, but in essence this was built on the same principle. As for sustainability, people still need to buy things, so as long as the prices and services are good, business keeps going, day after day. Were there risks? Of course there were, the internet bubble popped and many companies disappeared overnight but the solution Amazon had found to a problem people didn’t even know they had yet was what kept them in the spotlight and let them grow to where they are today.
Application
So now that you have this simple formula under your belt, you can put on your critical thinking cap and apply this formula as an evaluation tool for your investments. Take cryptocurrencies for example. If you have been putting a disproportionate amount of capital into projects that solve no problems, are too niche to scale or are simply unsustainable, then maybe it’s time to reallocate your resources. Does your project offer a long term global payment solution or is it a small niche card swapping protocol. Are you involved in a complex yet robust decentralised operating system that looks set to revolutionise banking services or are you gambling on animal related jokes? Using your critical thinking skills and applying them to the formula should help you inventorise your investment allocations.
Conclusion
Success, in my opinion, is the efficient management of space over time. Your solution’s space should grow over time and have in-built features to keep this growth sustainable. A good project should also have analysed its risks as should any investor looking to support its growth.
If this post was helpful to you in anyway then please let me know by dropping a comment below. Stay tuned as I am looking to follow up on this post with an article discovering the relationship between time and money.
Image sources: Pexels.com
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