“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” — Archimedes.
The Greek polymath didn’t say this in jest. He knew that the right tools could amplify his strength a millionfold and give him the leverage to physically displace the earth.
Leverage exists outside the realm of physics and mathematics too.
For a stock market investor, leverage is borrowed funds that generate substantially larger returns than the interest to be repaid. For a software engineer, leverage is an application that gets sold for billions of dollars. For an author, leverage is a book that appears on the New York Times Top 10 Bestsellers.
You build leverage when you find and work on a moonshot — a single decision that removes 100 other decisions.
The more moonshots you work on, the higher your chances of real success, which is the freedom to do what you want, when you want. Even if one of your moonshots pays off, it could yield a thousandfold returns.
Most of us know this. It’s why we keep hunting for that single ticket that guarantees our journey to the Promised Land of riches, fame, and comfort. Getting into a renowned college, investing in funds that promise twice the returns of the stock exchange, writing a book that catapults us to fame.
But about 99.99% of such actions don’t pay off. Why? It’s because of a question we don’t ask ourselves.
While choosing which moonshots to work on, we simply ask what’s the likelihood of getting what we want and what rewards lie on the other side. But in an insightful blog post, Scott Young highlighted that we forget to ask ourselves a crucial question:
What happens if I achieve less-than-ideal results? What happens if I fail?
The Hazards of All-or-Nothing
“Go big or go home” is a glorified adage today. Plan B is for losers. Burn your boats. Shoot for the moon. It’s all or nothing.
It’s great if you get it all. But what happens if you don’t? If you didn’t go big and have to go home, will you return with something? Or will you return so broke that you risk losing your home? If you miss the moon, will you land on the roof? Or will you fall into the abyss below?
Here are some scenarios to consider.
Say you want to get into a good school. You can prepare for a common entrance test like SAT. Even if you miss the cut to get into Harvard, a good SAT score means you can get into other renowned schools. Thus, you can fall back on Plans B and C.
But if you study full-time for a year to apply for a specific civil service exam, what happens if you don’t make the cut? Will other institutes consider the score? If they don’t — probably because the subject is too specific — you’ve effectively spent a year to get a score you can do nothing with now.
Likewise, consider a book you write.
If the top publications don’t accept your manuscript, you can still reach out to other publications. And if nothing works, you can self-publish. Then, you can use the lessons you learned to write a better book, repeat and refine the process. Each attempt gets you one step closer to your ultimate goal.
But assume you spend two years writing a book in a field that has just one publisher in the field. The publisher gets pitched 500 manuscripts each year and selects only two. This means the success rate is 2/500 or 0.4 percent. And your manuscript is too specific for any other publisher to even consider.
In other words, there is no prize for coming third. All you can do is wait another year before competing with 499 other writers, and pray that luck favors you.
According to Scott, when the likelihood of success is dismally low and you cannot follow a Plan B, you have to wonder whether the effort is worth it, even if the positive outcomes could potentially change your life.
It’s better to take moonshots where you don’t score a zero if you come second or third, or even fail. Life doesn’t change for better or worse in a single moment, even if it appears so. Every change is a result of taking opportunities, failing, learning, and trying again. Each time you do, you get closer to succeeding.
How to Make Risky Decisions
A better way to choose the moonshots to work on is not to ignore the odds of failing to achieve Plan A, but to consider the benefits of those odds. And Scott’s risky-decision-evaluation model makes it simpler to do this.
When you want to evaluate a tough decision, here are four steps to follow:
1. What is the baseline likelihood of success?
What are the chances of people succeeding at the activity you want to pursue? You can find this data in statistical reports.
For instance, the typical acceptance rate at Harvard is 4.5%. In the above example of publishing a book in a specific niche, it’s 0.4%. And if I want to get published in the New Yorker, the odds are 1 in 40,000, or 0.0025%.
2. What information do you have that makes you different from the average competitor?
How capable are you to reach the average cutoff score to get into Harvard? What edge do you hold over 498 other first-time and published authors to get your book manuscript approved?
When it comes to submitting to the New Yorker, what edge do I hold over tens of thousands of other writers? Do I know an editor personally? Can I stand out in the slush pile? Even if I have remarkable credentials and write a draft that rivals Anna Russell’s, it’s impossible to answer “yes.”
It’s easy to feel overconfident here. After all, the easiest person to fool is yourself. But this bias can get a lot worse if we don’t rein it in, which is why we must remain brutally honest with ourselves.
3. What are the outcomes for less-than-ideal results?
What happens if you don’t get into Harvard? Or you don’t clear the entrance exam for the civil services test? Or your manuscript doesn’t get accepted?
These are these less obvious questions we often don’t ask because of the Good Vibes Only mindset. We want to “think positive thoughts only.” But if you ask yourself this important question, you can make Plans B and C, and turn what seems like a bad bet into a good one.
If my article doesn’t get accepted by the New Yorker, I can list out 10 other reputed publications where the chances of acceptance are higher than the roll of a dice.
4. What are the emotional and financial costs of going forward?
The worst thing that could happen for me is that my draft gets rejected by everyone. But since I enjoy writing and I know a few publications that are almost guaranteed to accept the draft, writing the article is still an enjoyable activity.
But the people who spent a year studying for the civil services exam, or spent two years writing the manuscript, can’t say they had fun. On the contrary, they’ll feel defeated and miserable.
When you vet all your decisions through this model, you get a realistic idea of where you stand. As a result, you can choose the moonshots where the payoffs of failure are higher.
If you succeed, you get outsized returns. If you fail, you can still use what you have somewhere else. And even if you fail (like having to shut your startup), you’ve built meaningful connections that you can leverage for your next venture or to find a better job.
All You Need to Know
Leverage doesn’t come from doing more things right. It comes from doing more of the right things. It comes from zeroing in on one decision that renders 100 others useless, and putting in the effort to make it succeed.
Such actions make you valuable to your manager, partners, customers, and audience. By applying the four-step model, you can invest more time and energy in them and walk away from high-effort low-reward scenarios.
it’s futile to be a pessimist who sees every success as a result of luck. It’s equally futile to be a blind optimist who ignores the odds of failure. It’s better to be a pragmatist, who accounts for the odds, mitigates risks, and takes away something good from every situation.
All successful people are pragmatists. It’s how they write their own luck. You can do it too. Simply think deeply over your decisions, because your decisions impact your actions and the quality of your life.