Volume Negates Luck Ep 267

Summary Notes


In a candid discussion, the host emphasizes the importance of understanding probability and volume in achieving business success. He illustrates this through mentoring sessions with his 18-year-old neighbor, who is navigating the initial hurdles of entrepreneurship. The host argues that consistent effort and increasing volume can negate the role of luck and skill, as high volumes improve the odds of success, thereby increasing 'luck.' He stresses that the journey to success is often hindered by unrealistic expectations of immediate wealth and an unwillingness to persevere through initial failures. The host encourages embracing the learning process and persistence, suggesting that long-term dedication to skill development through repeated practice is the key to overcoming obstacles and achieving desired outcomes in business.

Summary Notes

Understanding of Probability

  • Success in growth and scaling is linked to a strong grasp of probability.
  • Probability refers to the likelihood of an event occurring.
  • Calculating risk in investments requires understanding probability outcomes.
  • Business owners must assess the probability of getting a return on marketing investments.
  • High volume of actions can diminish the role of luck.

"And so one of the key differences that I see with people who are successful and do grow and do scale is that they have a firm understanding of probability, all right?"

This quote emphasizes that a key characteristic of successful individuals is their solid understanding of probability, which is critical for making informed decisions.

"If you are a business owner, you have to gamble on marketing and assess the probability that you will get a return on that investment."

This quote highlights the importance for business owners to evaluate the chances of earning back their investment in marketing efforts, which is a practical application of understanding probability.

Volume Negates Luck

  • Volume of actions can reduce the influence of luck in outcomes.
  • People often use the term "luck" when they do not understand probability.
  • High volume leads to predictable outcomes based on probability rather than chance.
  • Understanding the relationship between volume and probability can lead to more strategic decisions.

"And what's interesting is that volume negates luck, all right? So if you can put that in your brain, volume negates luck."

This quote introduces the concept that increasing the number of attempts or actions (volume) can decrease the reliance on luck by making outcomes more predictable through probability.

"But if I were to say, hey, for every 100,000 emails I send, I get 1000 back. And from 1000 that I get back, I know that I'm going to close 500 of those people on a deal. That's not realistic math. I would probably close a lot more than that. But the point is. But if I explain that math to you, I'd be like, is that luck that I closed 500 deals? You'd probably be like, no, that's just probability."

This quote illustrates how high volume can lead to a higher number of positive outcomes, demonstrating that success in this scenario is due to probability and not luck.

Negating Skill with Volume

  • Volume can also compensate for a lack of skill, especially when starting out.
  • Beginners in any field are not expected to have high skill levels.
  • Volume allows for learning and improvement over time, potentially leading to success despite initial lack of expertise.

"You can also negate skill, which is a byproduct of the volume. All right, so let me dive into that. Let me unpack that for a second. So let's say you suck, right? Because you're brand new and of course you would suck. Because why would you be good? Because you've never done this before, whatever it is, right?"

This quote suggests that engaging in a high volume of activity can make up for a lack of skill, particularly when someone is new to a task or field, by providing more opportunities to learn and succeed.

Expectation vs. Reality in Success

  • Social media creates unrealistic expectations of immediate success.
  • Younger individuals often believe they should be millionaires within their first year.
  • This assumption leads to discouragement when immediate success is not achieved.
  • The unwillingness to accept initial failure or a learning curve prevents many from succeeding.
  • Ego can hinder the acceptance of being unskilled at the start.

"You're supposed to suck. You're not supposed to be good, right?"

This quote emphasizes the normalcy of not being good at something when you first start. It challenges the false expectation of immediate success.

"And so that's what stops 99% of people from being successful, because they are unwilling to suck, right?"

This quote highlights that the inability to tolerate initial failure is a major barrier to success for most people.

The Role of Volume in Overcoming Luck and Skill Gaps

  • To negate luck and build skill, one must persist through a high volume of attempts.
  • Using cold calling as an example, it's suggested that 1,000 calls might yield one deal.
  • Even after 5,000 calls without success, the advice is to continue and improve, not to give up.
  • Persistence over time, such as a year or more, is necessary to develop proficiency.
  • Improvement is gradual and can be seen in smaller milestones before closing a sale.

"It should take you about 1000 cold calls to get one deal, right?"

This quote sets an expectation for the volume of work needed to achieve a single success, illustrating the importance of persistence.

"Do another 5000. Because the thing is, eventually it will be unreasonable for you to suck anymore, right?"

This quote advises continued effort beyond initial failures, suggesting that with enough repetition, success becomes inevitable due to skill development.

Measuring Progress Beyond Binary Outcomes

  • Progress should not be measured solely by the binary outcome of closing a sale.
  • There are many small skills and improvements that lead up to the first big success.
  • Recognizing incremental progress is crucial for sustained effort and eventual success.
  • The first deal or dollar is the hardest to earn because it requires learning many small skills.
  • People often give up too soon, after learning only one skill or none at all.

"And so you have this binary measure of progress, which is I either closed a sale or I didn't close the sale, when in reality, there's tons of bricks on the bridge on the way to getting the first dollar over, right?"

This quote criticizes the simplistic view of progress as either sale or no sale, advocating for recognition of the many steps leading up to a sale.

"And most people learn one skill or don't learn a skill and then think up, this isn't for me."

This quote points out a common mistake where individuals abandon their effort after minimal progress, not recognizing the cumulative nature of skill acquisition.

Call to Action for Business Owners

  • The speaker addresses business owners who want to scale their businesses significantly.
  • An invitation is extended to those aiming to grow their businesses to multi-million dollar levels.

"Mosey Nation, real quick. If you are a business owner that has a big old business and wants to get to a much bigger business, going to 5100 million dollars plus, we would love to talk to you."

This quote serves as a direct call to action for business owners listening to the podcast, offering assistance in scaling their businesses.

Commitment to Business

  • The speaker emphasizes the importance of commitment in the business of wholesaling real estate.
  • They suggest that success in the industry is not a matter of the industry's existence but the individual's skill.
  • Skill acquisition is highlighted as the key to success, and it is achieved through volume and experience.

"And so I told him that the only way that I would give him my blessing for him to quit is if the, and if he could convince me that the entire industry of wholesaling real estate had disappeared."

The quote underlines the speaker's belief that the industry's presence is a given, and the focus should be on personal development within the industry rather than questioning the industry's viability.

The Role of Skill and Volume

  • Skill is identified as the differentiating factor between individuals in the real estate market.
  • Volume of work is directly correlated with skill improvement.
  • The more one engages in the activity, the more skilled and 'luckier' they become.

"And so I said, the only thing that separates you from what you want is skill. And the only way to acquire that skill is volume, right?"

This quote explains that skill is the barrier to achieving goals and that consistent effort and practice are essential for skill development.

Understanding Probability in Business

  • The speaker touches on the concept of probability in business and investing.
  • They explain that successful businesspeople understand the probabilistic nature of success.
  • The idea of an early success being a statistical outlier is introduced, potentially skewing future expectations.

"But the big picture is that people who invest, people who do business at larger scale, just understand probability, right?"

The quote indicates that a grasp of probability is integral to operating effectively at a larger scale in business.

The Impact of Early Success

  • Early success can potentially be misleading and affect one's perception of effort and results.
  • The speaker considers the scenario of achieving success on the first try and its psychological impact.
  • They suggest that an early win might lead to unrealistic expectations and a misunderstanding of the typical effort required.

"How much do you think that messes him up? A ton maybe, or probably even more than working really hard to get there."

This quote reflects on the potential negative consequences of an early success, suggesting it might disrupt the understanding of effort and reward.

The Psychological Challenges of Success and Failure

  • The speaker discusses the psychological aspect of dealing with success and failure.
  • They highlight the challenge of attributing success to one's actions when it may be due to luck.
  • The concept of 'sifting through no's' is introduced, meaning one must persevere through rejections to achieve the next success.

"You might have just hit the gold nugget way too early in the cycle, and now you got to sift through a lot more no's to get to your next one."

The quote speaks to the reality that initial success might not be easily replicated, and continued effort and resilience are necessary to find subsequent successes.

The Learning Curve for Beginners

  • The speaker reflects on the learning curve for those new to an industry or business.
  • They acknowledge that beginners may not fully understand the concept of long-term probability and effort.
  • The speaker implies that experience is the best teacher for grasping these concepts.

"It just reminded me of how when people are starting out, they don't understand the concept of l..."

This incomplete quote suggests that there is a concept critical to business success that beginners often do not grasp, likely referring to the ideas of probability and volume discussed earlier.

Probability and Success

  • To increase the chances of success, you must increase your attempts or volume of effort.
  • Persistence is key; many people do not continue their efforts long enough to achieve success.
  • A consistent and long-term approach can lead to mastery and financial success.

If you want to become lucky, if you want to have probability on your side, you simply increase n, increase the number, increase the volume, and eventually you will strike gold.

The quote emphasizes the importance of increasing efforts (referred to as "n") to improve the odds of achieving success.

And so I was like, cool. Well, your first three weeks are wasted that you weren't doing it the right way.

This quote underlines the idea that incorrect efforts can lead to wasted time, but it's a part of the learning process.

Perspective on Learning and Time Investment

  • Learning new skills takes time, and unrealistic expectations can lead to disappointment.
  • Investing time in developing skills can be more beneficial than traditional education paths.
  • Long-term commitment to learning can result in significant skill acquisition and financial success.

Do you feel like it'd be reasonable for you to have a top 1% income in the United States after one month of learning a new skill?

The quote challenges unrealistic expectations about the speed of achieving high levels of success.

If you do this for four straight years... do you think it would be reasonable that you'd be able to close one deal a month by the end of that?

This quote suggests that a four-year commitment to skill development could lead to consistent success.

Work Ethic and the Journey to Success

  • Success and skill development are compared to building a bridge, requiring consistent effort and the right strategy.
  • Many people give up too soon, before completing their "bridge" to success.
  • The process of skill development is continuous and requires adding "bricks" (skills and experiences) until the goal is reached.

Keep laying the bricks, keep laying the bricks all the way across the bridge from where you are to where you want to be.

The quote uses the metaphor of laying bricks to describe the continuous effort required to achieve success.

And the only way to do it is more. And that is how you'll get better at the skill that gets the dollar across the bridge.

This quote reinforces the idea that practicing and increasing efforts is the only way to improve a skill that leads to financial gain.

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