TMBA UPDATE: last month one of the new TMBA interns helped to jump start sales at a struggling e-commerce domain we own. For 7 months it had been averaging $1,950 monthly. Last month we generated $9,300 in sales. We’ve decided to host a private webinar on this topic, share the domain name with attendees, as well as some of the things we are doing to increase our traffic and conversions. For reasons that’ll be apparent to you when you hear the content, I can’t publish this stuff on my blog. The offer will only be sent out on my mailing list which you can get on on the sidebar or at the end of the post. If you are already on the list, expect an email regarding “e-commerce webinar” within the next month.
Today I am excited to share with you an article from one of my favorite bloggers, Sebastian Marshall. I encourage you to subscribe to his blog and start checking out his articles in the morning. If you are anything like me, you’ll find his thoughts will improve your life. I’ve spoken with Sebastian a few times on the phone and exchanged a bunch of useful emails. There’s a lot on his site if you want to get to know more, just let me say: I wish more people were like him. The Equal Odds Theory has played a HUGE role in my thinking since he put it on my radar. That’s why I asked him to share it with you today….
The equal-odds rule changed my life.
I found a summary of an obscure academic book called, “Creativity in Science: Chance, Logic, Genius, and Zeitgeist.” You know, standard thick academic title. Most people have never even heard of it.
But there’s one concept in there that’s amazing: the equal odds rule.
The equal-odds rule says that the average publication of any particular scientist does not have any statistically different chance of having more of an impact than any other scientist’s average publication. In other words, those scientists who create publications with the most impact, also create publications with the least impact, and when great publications that make a huge impact are created, it is just a result of “trying” enough times. This is an indication that chance plays a larger role in scientific creativity than previously theorized. 
Okay, that’s some dense text right there. But the lesson is worth it.
The most successful scientists consistently produced a ton of work, and the majority of it made no impact.
Business is like that too, especially playing with new marketing and sales channels. Most attempts at a new channel won’t produce a return.
That means you go in with your eyes open and make regular attempts, knowing that most won’t work. If you want to have successful campaigns, you need to do a lot of campaigns. Which means doing a lot of unsuccessful campaigns.
Equal-Odds also confirms a strange thing most writers have seen – it’s really hard to predict which pieces are going to blow up and get popular. To my surprise, “We don’t get out of bed for less than $10,000 per day” was one of the most popular I wrote.
I’m not sure why. It’s a nice post, but I’ve written better. Maybe the picture of the cute girl? I don’t know. But from writing every day, I’ve been consistently surprised with what gets popular, and consistently surprised that other posts don’t.
So, the lesson from equal odds – release a lot of work, because it’s hard to predict what’s going to hit beforehand.
That alone is pretty empowering, but you can ratchet it up even further by paying attention to expected value (EV).
When I was a teenager, I made some decent money playing cards. I really fell in love with poker and I studied the math side of the game and the psychology side of the game.
The key to being a winning poker player is to make actions with a positive EV.
For instance, if the pot is $100 and you’ve got to put in $20 to call, you should do it if you estimate your chance of winning to be 20% or greater.
This is kind of obvious when you think about it, but a lot of people get it wrong. A lot of people like winning hands, and they take bets where they’re likely to win the hand but wind up losing money overall.
An example. Texas Hold’em. You get two cards. Ace-Jack offsuit is a consistent money loser in full-handed games, for almost everyone.
Most people don’t realize this, because Ace-Jack wins most of its hands. The problem is it tends to win small amounts and lose big amounts.
What’s this got to do with Equal Odds? Well, Equal Odds says your chance of getting a significant result is largely a function of how much you try. Then you add in EV, which says that if your cost to play is low and your payoff is high, you’re going to do well.
Then you combine them…
Have you ever emailed Steve Jobs or Larry Ellison? I have. No reply. But I have swapped correspondences with a couple top journalists, top economists, and Mark Cuban answered a question I asked him.
The cost of emailing someone to reach out to them is low. It takes 5-10 minutes if you already know about them, and under 30 minutes even if you have to do some research. Most of the time you do this, you won’t get a result. But rarely, you’ll make a good connection.
Jobs and Ellison are busy guys. Quite low odds there. But there’s a lot of interesting people you can drop a line to who might reply. The downside? A bit of lost time. If you do this instead of watching TV or playing video games, there’s no real downside.
The same is true with writing reviews, critiques, or essays and trying to spread them around.
The same is definitely true with becoming an early adopter. Whenever you see a new technology released that’s free or cheap to try, try it out. For instance, Dan here recommends Market Samurai. Have you played with it yet? There’s a free trial that doesn’t require a credit card, so you’ve really got no excuse not to play with it if you ever do any writing, blogging, or business online. Or if you think you’d want to someday. Or if you could bring some of this to your current employer and ask if they’ll give you some kind of compensation if you can add new marketing duties and bring in new revenues for them.
Oh yeah, that’s another one. Asking people for money in exchange for doing new things tends to be low downside and high upside. The Expected Value is quite high – a “no” answer costs you nothing. A “yes” gets you paid.
Ask for a raise if you’re salaried. The Expected Value? Quite high.
Equal Odds says that if you want to have successful and influential campaigns, you’ve got to put a lot of things out into the world. Expected Value says that if you minimize your cost and downside while going for things that have a payoff you want, you stand to gain by all of your actions.
When you combine the two? Then you’re regularly producing new stuff and occasionally something pays off big time.
Final thought: Once you find something that pays off a lot, double down on it repeatedly. For some damn fool reason, most of us don’t do that… so when you’ve got a winning system, go with it repeatedly. Godspeed.