SUCCESS IS ASYMMETRY

Success in life is about asymmetry. It is about identifying the correct possibilities, that niche that will give you your advantage to the crowd. It’s about constantly expanding your knowledge into places that no one else dares to go. Informational asymmetry. Knowledge asymmetry. Risk/Reward asymmetry. Skewness in outcomes. Thinking outside the box and being not influenced by other people: Success is doing what the failures won’t do.

For instance, in trading, success is about finding asymmetries in the risk/reward profile of your actions. It is about risking little and going for the money, over and over again. Day after day. This way you have a statistical long-term advantage and even if you are right only once every three times, your skewness provides you with sudden boosts in your equity. So: Risk a little and make a lot. Or, risk a lot and go for the jackpot.

Success in life is about identifying opportunities that others do not see. How come that quite often people look at a given business and they say “I could have done that, too. It was so obvious.” Well, of course it is always easy in hindsight. However, to take action at the precise time, when things look the worst and are emotionally loaded, takes alot of courage and discipline. And training yourself to think in a forward-looking way, having visions of the future, stepping away from the crowd and looking at what you can sell them tomorrow, is not something average-Joe can do. It takes a visionary, someone who thinks outside the box, who can step aside, have a look at the top and laugh at the madness of crowds and be confident that it will work. Plus, it takes freedom. Freedom, not in the ordinary sense that we know  today; But to make freedom in your thinking and to expand on the ideas that you have. Quite often, we are so restrained from the people around us that we do not allow ourselves to grow. Perceptional Asymmetry.

The ancient Mexicans thought that there is this process of domestication. That only as a child we are completely free (and we have a huge smile on our face). Once we grow up, we get society’s values pressed up ourselves. And because most of the time we want something from other people and we have to live with them together, we have to comply. Suddenly, you have to act this way; You cannot act that way. You are not allowed to just jump up and down when you want to, there are unwritten norms. It is not polite to just stand around and laugh at the others. The limits of other people’s thinking are suddenly your limits and it takes an immense amount of power to break through them. In fact, if you are hyperactive, doctors will make sure to drug you up so that you see the world just as they do. And quite often, you could even say that there are local territorial belief systems, which you need to comply with.

Imagine being born in a small village as a young and attractive lady. After a while it is explained to you that it is completely normal for you to get married at the age of 14 (and you should be proud of it). It is also completely normal to spend the rest of your life in that village and serve the others. No freedom for you, no dreams, no career, no growth. If you do not agree - domestication is the same for people, as it is for dogs: through the feelings of pain and pleasure.

I have always restrained from wasting immense sums of money at clubs or cafés and have always wondered about this Incentive Asymmetry. The reason is that I was always wondering: Who is the guy taking all that money? Where is the face behind this system here? Who is providing the value, the service? While I am chilling here, someone has worked his ass off identifying an opportunity, organizing a system of delivery, teamwork, service etc. and right now is getting paid for it. Funnily, most people never think about this side of business and just happily spend their money where their friends do. It is more of a social phenomenon, but it is still serving values (though the coffee you are drinking might not be the most important one).

When it comes to selling products, it is all about informational asymmetry. How are we to play our cards if we do not know the profile of the values of the other person. We have to guess, we have to test. “Can I offer you a discounted washing machine with your PC? Would you like French fries with that?” Well, only if you give them to me for free, because I put very little value on your additional junk food. On the other hand, in some cases I have no idea how much the production cost of the product is (for instance how much it costs my internet provider to give me a 50mbps line per month). In this case, my perception is formed from the initial offer by the seller and I have to assume that this is based on some kind of reasonable calculation. Strange, how there is always a 50% discount + bonus scheme when I sign up today with a one year contract.

After all, success is just that – having an asymmetrical way of thinking and having the courage to go where the crowd does not dare to go. Through this lense, life suddenly seems so simple.