The opportunity cascade

We look at opportunities and feel many things. One common reaction is excitement with fear. The joy of feeling something new combined with the fear of the unknown.

To be able to make use of the opportunity we need to overcome the fear and embrace the excitement. One way to do that would be to look at an opportunity not as a single occurrence but a beginning. Kevin Kelly calls it an opportunity cascade. One door will open many doors, which will open many more doors.

As for overcoming the fear, we already know that there is a way.

Dealing with anxiety by overcoming a human folly

We all suffer from anxiety at many points in our life. It may be to a different degree depending on the cause of anxiety or on the person dealing with the anxiety. It is an unwanted but unavoidable feeling. Some do well to equate anxiety with irrational fears. In this post I am going to discuss one technique which works quite effectively. But before doing that let’s discuss a human folly: loss aversion.

In Sway: The irresistible pull of irrational behaviour by Rom & Ori Brafman, I was exposed to a fascinating human folly. The best way to explain this is through an example:

Prof. Bazerman’s Harvard MBA class starts with an auction. The prize is a $20 note. Rules: everyone can bid, increment is $1 and the second-highest bidder pays as well. Thus, in short, the second highest bidder is the loser.

As you would expect till about a bid of $16 many students participate in the auction but then by $18 there are only two people remaining, highest and the second-highest. A winner and a loser.

Till now students were in the auction to win but at this point, no one wants to lose. So the bid quickly spirals up beyond $20. As the prices climbs higher, the rest of the students roar with laughter.

From a rational perspective, the obvious decision would be for the bidders to accept their losses and stop the auction before it spins even further out of control. But it’s easier said than done. Students are pulled by both the momentum of the auction and the looming loss if they back down. The forces in turn feed each other – commitment to a chosen path inspires additional bids, driving the price up, making the potential loss loom even larger.

So the students continue bidding to a record of $204. All these years that Bazerman has conducted this auction he has never lost a penny.

The lesson? We, humans, are susceptible to care more about losses. Had the students stopped bidding at $21, the winner would have lost $1 and the loser $20. But in the case of the record of $204, the winner lost $184 and the loser $203.

As an observer, this seems completely irrational to us but at the time the student’s weren’t focusing on the prize, instead they were focusing on the loss: the shame of losing a simple bid. If you think about this for a second, you will realise that this human folly of loss aversion manifests itself in our everyday lives all the time.

One of the suggested ways of overcoming this irrational sway is to look at our situation from a larger perspective. If the students had stepped back for a moment and thought hard about where the bid is headed, they would have realised that it’s not something worth pursuing.

Of course doing this is hard because at that moment all you can think about is the loss. But as the Brafman brothers explain:

Our natural tendency to avoid the pain of loss is most likely to distort our thinking when we place too much importance on short-term goals. When we adopt the long view, on the other hand, immediate potential losses don’t seem as menacing.

So you may wonder what is this to do with anxiety. Well, we’ll get to that in a moment.

Imagine that you are driving to meet someone very important. The time and place for the meeting had been fixed quite some time in advance. When you are about 30 minutes from the place your car breaks down. A punctured tyre. You look at the watch and realise you have an hour before the meeting. All charged up you start fixing your car so that you can finish soon and drive to the meeting in time. It takes you 25 minutes to fix the tyre. Now you have 35 minutes to the meeting and you are about 30 minutes away. Although 5 spare minutes is plenty of time, all the time while driving you will be anxious. You will think about all kinds of situations that may never happen, what if you reach late? will he find your excuse of a punctured tyre too trivial? what would make for a substantial excuse? will your first impression ruin it all? will you lose that business deal? how will you answer your boss?

All through this process you are anxious. With the clock moving forward, your anxiety only increases. But what is it that you are thinking about really? You are thinking about a loss. You are worried about losing that impression which you could have made or that business deal that you could have got or your value in front of your boss because of a failed deal.

The problem is that your chances of failure have increased as compared to your chances of success. But because the human tendency to avoid losses, you will magnify the chances of failure. This will soon put you in the same loop as the students who were bidding for the $20 note. You will get more anxious thinking about the loss, that will make you think about greater losses which will in turn make you more anxious. In the process you may run over traffic lights or miss out on the correct turn you were supposed to make on the highway. Your potential losses will only increase.

The technique I am going to suggest to dealing with anxiety is simple: Think about gains and not the losses. Think about success and not the failure. Think about the positives and not the negatives.

And to aide you in the process, you can use the Brafman brothers suggestion to help you think about the positives: step back and look at the larger picture.

If you calmed down (step back) and did not worry about the loss of the business deal (bigger picture)  then you will be able to focus on the driving. It could mean that you may reach there in 25 minutes, instead of 30 minutes, a good 10 minutes in advance (positive). It will get you that good first impression (gain), the business deal and your boss’ praises (success). The potential gains may not be as high as the potential losses but stepping back will help you think about the gains. And, more importantly, thinking about the gains will certainly make it less likely to causes the losses. Where as thinking about the losses will only make it more likely cause the losses.

This technique can be applied to any situation in which you feel anxious. Worried about what will happen if you don’t get the grade you need to? Think about what will happen if you do get a better grade. Worried about what will happen if you don’t get paid this week? Well, what if you get paid double this week. Worried about what will happen if you did not finish the project in time? Think about what praises you may get if you finish it before time.

Loss aversion is a strong force, overcoming that may just become easier if you jump to do the exact opposite: gain seeking.

What if you could control the drive within you?

Anything you do gets done faster and produces better results if you have the drive to do it. A drive that pushes you, that sets new limits and that forces you to seek new sources to power yourself.

When you see someone with that drive within themselves, you can immediately recognise it. They have a different persona: they are brimming with confidence, they bring great enthusiasm to the table and they make a difference to the people around them. Their work is a source of inspiration to their peers or to the generations to follow.

There may be many reasons for why you have the drive to do what you do. It may be because that thing is on your to-do list, or it might be something that you have wanted all your life, or anything in between. The drive might exist because of some fear that has been troubling you or because of that anxiety which you find unsettling. It could stem from a desire to take revenge or simply because of an inspiration to do something for your loved one.

Whatever may be the reasons, having the drive to do something is a powerful tool to be able to leverage. Not only does it give you an edge over your competitor but it also gives you a lot more pleasure in what you do. It makes you feel that the effort you put in to doing something is worth it. That drive enables you to overcome the pain to experience the joys.

Now here’s the million dollar question:

What if you could control your drive, turn it up when you want?

I don’t claim that I have the answer and to be frank, it will be hard to convince me that there is only one answer. Each individual will have their methods to crank up ‘the drive’ they possess. And I think it is good to have more than one absolute way of being able to create a powerful force within you which will help you achieve your goals.

I certainly have my multiple ways of generating that drive for myself. One that I would like to talk about today is the method of raising the bar or the method of trivialising the achieved.

Here is how it works: Say you have just achieved X and have now you set yourself a new goal Y. You can now generate that drive to do Y by reflecting upon your previous achievement, X. You find ways of convincing yourself why Y, if achieved, will be a bigger achievement than X. That is a perfectly sound reason for you to push yourself to achieve Y. At the same time you may also find aspects of X which you can consciously trivialise because now you have the skill/confidence to be able to do X again. For Y though, you will need new skills and extra confidence. Another reason for why you should go after Y given X has been achieved.

The drive generated by this method can be as strong as you want it to be. You will have to put in the effort to better reason for Y over X.

The biggest advantage of this method is that it can set in to motion a machine that generates ‘a drive’ for you. All you need to do is make sure you fuel it up when necessary. Fuelling the tank up shouldn’t be that hard, after all it is a simple trick that you consciously play with your own mind.