Estimate business failure odds: The blind odds test.
To estimate business failure odds more honestly, write your gut number before anyone else's can reach you. Then send a fact-only description to two people who have run a business. Finally, average the three numbers and note how far your mood moves your own.
Write your number first, then the facts.
First, answer privately: out of 100 businesses exactly like yours, how many close within two years? Do not look anything up. Then describe your business in one paragraph under 150 words. Say what it sells, who buys, what it costs, where it happens and how much you'd invest. Also leave out words like "scary" or "exciting."
How to estimate business failure odds with outside help.
Next, send the paragraph to two people who have run any business. Ask both the same question in the same words. However, never tell them your number, because a number said first drags theirs toward it. In short, this outside view exercise only works blind. As a result, you can estimate business failure odds without passing your fear along.
Reading the page of five numbers.
When replies arrive, write the three numbers and average them. For example, if you wrote 70 and they wrote 35 and 45, the three add up to 150. So the average is 50. Then write a fifth number: what you'd say if you felt angry instead of afraid. If you worry about the chances my business will fail, that gap shows how easily your mood moves your number.
Estimate business failure odds tonight in one sitting.
Write your gut number out of 100 on paper, then draft your 150-word fact-only paragraph.
Send it to two business owners with the identical question, and keep your own number to yourself.
From the book.
Now look at the page: your own number, their two, the average and your angry number. The gap between your number and theirs isn't all feeling, because they don't know everything you know about your plan. But some of it is, and now it's written down where you can see it. If your angry number sits a long way from your first one, that distance is worth noticing too, because it tells you how easily your gut number moves when your mood does.
I Want to Start a Business but I'm a Coward, chapter 2: Afraid people see different odds
Questions about estimate business failure odds.
How do I estimate business failure odds without my fear steering it?
Write your gut number first, then ask two business owners blind. Average all three numbers.
Why must both people get the same question?
Because asking about failure and survival are different questions. You would get two numbers you cannot compare.
What does the angry number show?
It shows how far your gut number moves when your mood does.
Read the whole chapter.
This lesson covers one section of chapter 2, “Afraid people see different odds”. The book goes further, with the full evidence, the stories and every exercise.
Lessons in this chapter.
- 01 Fear distorts sense of time: The Oslo airport lesson.
- 02 Should i trust my fear: What the calm stranger missed.
- 03 Fear vs anger risk taking: Why feelings bend numbers.
- 04 Estimate business failure odds: The blind odds test.
- 05 Wisdom of the crowd within: Why averages beat picking.
- 06 Limits of emotion research: What it can't say about you.
- 07 Ask business owners for advice: Fixes for common snags.