If you missed the earlier posts in Dave’s series on decision making, check out part one and part two.

- Naomi

There are things you can do to increase your odds - once you know what they are in the first place.Welcome to part three in this series of posts designed to help you decide what to focus on when every project or task you have seems equally important and equally pressing.

In the last post we talked about our first “tiebreaker” – considering the impact of a project on your goals. This is what helps you figure out whether doing X will actually move you forward a lot, or just a little. That alone can help you sort out what should be on the front burner as opposed to the back burner.

Today we’re going to talk about probability, or how likely it is that the thing you hope will happen will actually happen. (Naomi wanted me to talk about that probability and odds as the first topic in the series, but I think she’s just angling for a Vegas trip.)

So, let’s talk about making choices based on the odds.

First off, it can be really, really hard to look at odds objectively.

There’s an old phrase you hear a lot when it comes to buying lottery tickets: “Somebody has to win, it might as well be me.” It’s a way to feel better about the purchase by imagining the probability of winning is healthy.

Some people say that phrase as an equivalent to “What the hell, I might win. You never know”, and laugh if they don’t. Other people say it thinking “I think there’s a really good chance I will this time!” and feel crushing disappointment when they don’t.

When we want a certain outcome, when we’re emotionally attached to it happening, we can let that attachment get in the way of accurately assessing the chance that it will actually happen.

Now, in some cases, this can work in your favor. If you really believe you can make something happen, you can put some crazy effort in and tilt the odds in your favor. Happens all the time. The underdog is an archetype for a reason.

In other cases, you believe it has a good chance of happening even though you don’t understand the odds. You just think “This time will be different” though you’re not really looking at what will have to happen to make it different. You go in thinking you have a pretty good chance and it blows up in your face.

Let’s talk about how to keep it from blowing up in your face.

Let’s start with looking at the natural odds.

Natural odds are the chances that your project will give you the result you want without doing anything differently than you would be doing now.

If you’re considering getting more traction in social media for example, and you already have a pretty good base, then your natural odds of growing it more rapidly are pretty good. You have a foundation, you have experience, and you have a lot of existing connections.

Odds are good that if you focus on this, you will get the results you want in the timeframe you’re hoping for.

If you have the same goal but you are starting from nothing – you just opened a Facebook account today – that’s a different story.

  • If you are already well-connected in the real world, and you’re a bit of a social butterfly, and you know how to work a crowd, your natural odds are still pretty good. Especially if you aren’t intimidated by learning a new platform. You can take all your offline assets and use it to fuel some fairly rapid social media growth.
  • If you are not well-connected and you’re socially awkward and you have trouble with learning curves, your natural odds are lower. That doesn’t mean you can’t succeed – it just means the deck is currently stacked against you. You are probably looking at slower growth, so you might not want to think the probability of fast growth is on the table.

So it’s not just about “is this outcome possible?” but about “is this outcome probable based on all the circumstances around it?”.

So when you’re trying to figure out whether you should create a new product, or pay for a website redesign, or, start a new revenue channel, you have to look at your expectations as well as what you’re bringing into the situation.

There are things you can do to increase your odds – once you know what they are in the first place.

The thing to keep in mind when you’re deciding if a project is worth focusing on right now isn’t just whether it will work or not, but how long it is likely to take to “work” the way you want it to.

If you want to build a list of 2,000 people from scratch, you can do that. You can call that almost a 100% probability.

If you want to do it in 6 months, that probability goes down relative to your resources and assets.

Once you look at that fact, you can ask yourself if there’s anything you can do to push your odds up, but you’ve got to know – realistically – where you stand right now.

You also have to know where you’re counting on luck to help you win.  We see this a lot in people who jump in hoping things will all work out. (Again, that can happen, if you have enough creativity and hustle.)

The greatest way to increase your odds is to stretch out your timeline (shoot for those 2,000 people in 12 months) or reduce your requirements (try for 1,000 in 6 months).  That flexibility can open up a lot of other opportunities and avenues for you.

But sometimes you can’t know the odds.

There are times when it’s easy to see a difference in the odds of success.

We, for example, run classes all the time.  So deciding to create a new class is a known quantity and we have back data to help us.

The last time we opened up Your Next Six Months, the upgrade option where we give feedback on your business plan sold out really fast.  When we reopen it with a much bigger list, we know it will sell out again.

But if we decided to do something new – launch a television channel or a $10,000 program or a live event in Mexico – we don’t know the odds of success there.  It’s a bit of a crapshoot.

If you’re in the starting phases of your business, everything’s a crapshoot.

So how do you handle that situation?

Reduce your “number” demands on the project and focus on good execution.  Maybe you want to get 2,000 people on your list and 5,000 Likes on Facebook and $4,000 in new sales.  And you’re starting from scratch, or near enough from scratch.

In that case, ask yourself what the odds are that you can execute on those things well right now, regardless of the number.  Forget about the number and focus on growth.

The numbers will come when the numbers come.

If you know you have a better chance of getting list growth started than sales traction, at least get that going now and put it on the front burner.  You may be terrified of list building but you have a good friend who is a Facebook master who can help you get started on that.

You may not know the odds, but you might know the relative odds based on what you’re good at and what resources you have access to.

And if you truly don’t know the relative odds, then there’s no wrong choice.  And you can just pick something.  (I flip coins on things like this more than you might imagine.)

Now, go read part 4 in this series.

We hope you’ll join us.

All my best,
Dave

Like what you’re reading here? There’s more in The Letter. It also comes with some pretty fun marketing courses. Get it all for free today.

About the author: Dave Navarro joined IttyBiz in 2011, and is in charge of doing the stuff nobody else knows how to do. Learn more about him here.

If you missed part one in Dave’s series on decision making, you can read it here. - Naomi

needle2We’re continuing our series on decision making for all of you trying to figure out what to focus on for your next six months of the year.

As we said yesterday, choosing what to do NEXT is not the easiest decision to make when everything seems equally important. So today we’re going to give you the first question you can ask to start making one choice seem a little more desirable than the others.

Now, in the full class, we’re going to walk you through an exercise to help you sort and organize those 100 things so you can start with a more manageable number, like 10 or so.

So for the moment let’s imagine you had that handful of potential things you could be focusing on, so we can start looking at the upsides and downsides of each one and finally make a call.

Question #1 – How big an impact will this actually make?

The answer to this question has a lot to do with your particular short-term goals at the moment.

If your goal is to get money coming in as soon as possible, then you’re going to be looking at impact on sales. If your goal is to get the embarrassing parts of your website cleaned up so you can close that loop and get some peace of mind, that’s a different kind of goal. If you’re just looking to cross some things off a list so you can feel like you’ve got momentum on your side, that’s yet another goal.

Your goals are your goals. They don’t always have to be about short-term money, but ultimately you’re in business to get your venture to a certain income level, so even getting some peace of mind can help you along that path.

But whatever objective you’re after, you should look at the thing you’re considering putting your time into and ask how much it will actually move the needle towards “done” on your real goals.

This helps you from geting caught up in all kinds of emotional investment about what you “should” be doing now and lets you make a more rational decision on what will actually leave you feeling happy at the end.

We see a lot of students in a scenario like this: They want to get their short-term cashflow up and they’re stuck in a swamp of indecision. A typical email says something like:

“My list only has 500 people on it and I haven’t finished my product yet. I need to get my list growing through SEO and social media and redo my website so it looks more professional and do a teleseminar with someone to raise my visibility and get a really good list incentive up and do guest blogging to get more traffic to my site so I can make more money.”

(pause for breath)

“And I don’t know how I’m going to make it happen fast enough!”

Here’s how you can use the “impact” question in a situation like this:

If the goal is short-term sales, then this question puts a lot of these things on the back burner.

  • Getting significant SEO and social media traction in 60-90 days is usually a tall order if cash flow is the goal.
  • Doing a teleseminar may or may not have a lot of potential for money, though it might give you exposure. Which may or may not transform into sales in the short term.
  • Redoing the website might increase short-term sales, but generally that’s only going to happen IF you have sizeable traffic coming in AND your improvements lead people to things you’re actively selling now.
  • Same with your list incentive.

In this scenario, the biggest impact for getting money in the door would probably be finishing the product and selling it to the 500 people currently on the list. Everything else is likely to have a much smaller impact.

Does that mean you should choose the project with the biggest impact?

Not necessarily. There may be other factors that actually make the highest-impact choice your least ideal option.

We’ll discuss those in the next few posts in this series.

In the meantime, this question can at least help you figure out the relative “worth” of all of your different ideas, directions and projects so you have something to work with.

It’s kind of like buying cars. You may be looking at five cars and you don’t know enough about each one to know which one to choose, but at least getting their gas mileage ratings gives you something realistic you can use as you’re considering things.

So think about the impact any potential idea has for your goals. You’ll often find that something you just HAVE to do will have a lower impact than you believed it would, and something uninspiring you’ve been putting off actually has ten times the impact potential.

But you don’t know until you know. Start knowing. The decisions will come easier.

Now go read part 3 of this series.

All my best,

Dave

Like what you’re reading here? There’s more in The Letter. It also comes with some pretty fun marketing courses. Get it all for free today.

About the author: Dave Navarro joined IttyBiz in 2011, and is in charge of doing the stuff nobody else knows how to do. Learn more about him here.

[Naomi's Note: Dave will be writing on the blog for the next few days. So enjoy a pleasant little productivity series that starts right ... about ... now.]

Think about what you're willing to trade off on to get this other things that you want.Some decisions are easy to make. I’d love to say that the easy ones are in the majority, but we both know they’re not. (If decision making was simple and easy, we wouldn’t have any clients.)

This is especially true when it comes to the decisions that make you money. Those tend to be the ones where the stakes feel particularly high, especially when you need your ittybiz to not be so itty in a hurry. There’s only so much of you to go around, so what do you work on next?

How do you know if you’ve made the right decision?

How do you know if you’re on track to make more money or grow your business?

How do you know if you’re going to regret your choices or not?

That’s what we’re going to talk about over the next few posts in this series. At the end of it, you’ll be a lot better equipped to make decisions quickly and confidently.

Let’s begin.

First of all, let’s put the idea of a “right” decision aside for a moment.

Looking for the “right” decision is an all but guaranteed path to staying stuck for a long, long time. The “right” decision is a bit of a myth, partially because it’s a pleasant thing to believe in and partially because of confirmation bias.

If you do something and it turns out well, you look back and say “I made the right choice there.” That’s confirmation bias. If it turns out rotten, you tend to say “I should have chosen a different option.” But that kind of thinking is based on how things turn out at the end, which has little to do with your decision.

A quick example: You’re choosing between two houses in two different neighborhoods. They both have their pros and cons, and there’s no clear-cut winner. So you choose Neighborhood A.

If, a few years later, your property value goes way up because someone decided to build a school nearby, that had nothing to do with your initial decision. But you still feel like you made a great decision, even though what you really had was a lucky break.

If you chose Neighborhood B instead, and your property value stays the same, you may find yourself looking back and saying “I should have bought the other house. I made the wrong decision.”

But did you make the wrong decision?

Or are you just not happy with the result?

Right Decisions Versus Reasonable Decisions

When two (or more) options seem to have a relatively balanced set of pros and cons, or there are enough unknowns that you don’t see a clear-cut choice, you are officially out of Right Decision Territory.

One decision doesn’t beat another. They all have potential upsides. So, when it comes down to it, you’re really facing making a reasonable choice. When all things are relatively equal, you don’t really have a metric to help you choose one thing over another. All choices are reasonable.

If you’re looking to make more money, you have a lot of reasonable ways to spend your time doing things like:

  • Building your list so you will have more people to sell to
  • Improving your sales pages so more people will convert to customers
  • Growing your social media presence so more people know who you
  • Adding more products or services so there are more things for people to buy
  • Launching something in a big way
  • Making quiet changes to your website to increase click-through and conversion
  • Increasing the amount of content you create
  • Revamping your website so you look more professional

All of those things are reasonable. All of these things may feel like things you HAVE to do.

And all things being equal, it can feel impossible to make a decision.

So how do you decide?

You make them less equal.

The trick to deciding is to start asking specific, answerable questions that make one decision more reasonable than the others.

When you buy a car, you don’t just walk onto a car lot and say “These three cars look good. How do I decide?” You look at each car and ask yourself which details are more important to you, what trade-offs you’re willing to accept, and then you decide.

Maybe you decide that you’re willing to pay a little more for one car because it has better gas milage. Maybe you decide that you’ll take the car with fewer features because it has fewer miles on the engine. But you chew on the details, and you think about what you’re willing to trade off on to get this other thing that you want.

You don’t think “But I need the car that has the best gas mileage, AND the fewest miles on the engine AND the most features!” You know you’re going to have to compromise on one thing to get the other thing that you want more.

When it comes to bigger decisions in life or business, for whatever reason people stop asking those questions.

They say “But I need to get more products up AND get my list growing AND get more Facebook traction AND get my sales pages redone AND …”

… and then they’re stuck, because all of those things feel IMPORTANT and NECESSARY. Equally so.

… and they stay stuck because each of those things has an attractive payoff. Equally attractive. (Well, at least on the surface.)

The way to get unstuck is to start looking at a number of different details that help you figure out what kind of payoffs and trade-offs go along with each option, the same way you’d compare the features of the car.

Over the next few posts, I’ll take you through those details so you know how to compare one option to another. And that’s what helps you see one decision as not so equal anymore.

In the meantime, here’s your homework.

Take a few minutes and write down some of the decisions you’re struggling with in your business – the things that fall into the “I have too many things I think I SHOULD be doing and I can’t pick which one” category.

You can start with five of them, just to get the ball rolling.

Then read part two of this series.

Start with five things – write them down right now. We’ll take it from there.

All my best,
Dave

Like what you’re reading here? There’s more in The Letter. It also comes with some pretty fun marketing courses. Get it all for free today.

About the author: Dave Navarro joined IttyBiz in 2011, and is in charge of doing the stuff nobody else knows how to do. Learn more about him here.