December 29, 2014 by Liberty
People like to think about things in a linear progression.
People plan their careers expecting to get a certain percentage raise every year. They plan out their portfolio with a certain percentage gain every year. They expect small improvements to happen regularly or they expect small problems to creep up regularly. People expect for standing up to slowly become a chore as the years creep on. Life doesn’t cooperate with these expectations.
On the positive end, career plans are usually complete crap. There is no rational way to predict a certain percentage income gain because there is too much unpredictability in the matter. Sure, it would make sense to expect a 3% raise every year if you got 1% one year and 5% the next year but it’s never even close to that simple. One year you may get a promotion knocking you up 20% in a single day. The next you might lose your job resulting in a 100% loss. The odds of the unpredictable happening can’t be accounted for. This goes with many common expectations people have.
On the negative end you might think about those slow pains showing up as you age. Those are what most people expect. People rarely plan for the less predictable medical problems that come up like getting hit by a bus or discovering a disease. Suddenly, those slow predictable pains are a rather poor estimation of the problems you’re going to be suffering from.
This tendency to linearize everything leads to many common human miscalculations.
I’m going to make the assumption that all my readers have already become comfortable with the fact that they’re never going to be a rock star. (Sorry guys.)
Millions of people spend their lives working with this dream in mind. Most people, however, understand this is a bit of a hopeless situation. The odds of success are similar to the odds of playing the lottery (but at least the lottery doesn’t cost you hundreds of dollars for a new amp.)
Most of the people involved in this understand this but they often get the idea that the potential benefits make up for the costs. They believe that it may be unlikely to happen but the wild success is worth the possibility of failing. Then, of course, they see the linear possibility. I can virtually hear the aging rockers saying, “If we just keep grinding it out we’ll get our big break.”
That’s linear thinking trying to masquerade as logic again. Grinding is a linear idea. Putting the same effort in consistently is no more effective than buying a lottery ticket every week.
The vast majority of potential rock stars are dramatic failures. The average salary of all potential and successful rock stars may be high but the median of this crowd doesn’t even make enough money to live off of. The rock stars make such a dramatically large income that the average looks way more attractive than it actually is (because few people are lucky enough to even get near the average income.)
The classic assumption about those successful rock stars is that they’re the best suited to please the audience. They’re the best balance of talent, marketability, and tons of other factors. That would suggest a grind it out approach might work. You could keep increasing your talent, marketability, and other skills and someday make it big. The factor that is often left out is luck.
The odd truth is that your favorite rock star may only be notable to you because he or she lucked out and had a good performance one night when a producer was at the bar. The best potential rock star in history may have just missed the producer by two minutes. These unpredictable factors stack on each other in a way that has a huge impact on everything in life.
Linearizing The Non-Linear
Some of the biggest problems that people have in life come from trying to predict something that’s completely unpredictable.
You can’t predict how much you’re going to make next year. You can’t predict your portfolios changes. You can’t predict whether or not you’re going to be a rock star. You can’t predict whether or not a storm is going to blow your house away to OZ. Statistically, you may be able to predict a bus running you down but you can’t predict the unknowns.
(Of course, some things are reasonably predictable. This isn’t an indictment on logic, just the poor usage of it.)
Does that mean you shouldn’t try and predict certain things?
Of course not. It just means that you should understand the risks you’re taking when you make your decisions. You can predict that your portfolio will grow 5% a year but never forget that your whole portfolio can disappear overnight. When you consider that possibility it’s a whole lot easier to keep a portion of your money diversified. By accepting 5% average as fact you’re making a mistake that could risk everything.
With your rock career, you may be able to increase your audience by 5% a year but that’s not a given. It’s hopeful thinking at best. (Better hope polka doesn’t take the kids by storm.)
Government is particularly devious at predicting unpredictable economic factors.
Some of the most dangerous problems with trying to predict non-linearities come from government. Individuals making poor decisions can cause major individual problems. Major structures making poor decisions can cause major structural problems.
On Making That Rock Career Work – Or Anything Non-Linear
Your rock stardom chances are not linear. That doesn’t mean that you can’t create a statistically significant career off of your rock music (or anything non-linear for that matter.)
In every non-linear career a large pool of candidates are competing to gather a whole audiences attention. They’re competing to please a statistically average audience. Take note of how virtually all music sounds the exact same these days (at least in particular radio genres.) The big production companies have found the correct balance to mildly please a large audience.
As an independent artist (or whatever you are,) it’s virtually impossible to reach that audience. You don’t have the connections. You don’t have the money. You don’t have the people backing you up.
That all being said, the statistically average audience doesn’t exist, just individual people. Individual people don’t necessarily prefer the statistically average music. They have individual preferences that you can cater to significantly better than any big company could. (They also have individual preferences that you can’t cater to better than a big company.)
This all comes down to working within a niche.
Working within a niche doesn’t eliminate the non-linearity in the situation but it dramatically reduces the competition in that curve. That reduced competition means the required investment is also reduced. That allows you to manage some more linear (or more non-linear) opportunities with your extra time. That makes everything a lot less risky.
While we all like to think that there is some linearity to our lives, it’s rarely that simple. Make your decisions with non-linearities in perspective to protect yourself from getting the worst end of it when you least expect it. Keeping track of these non-linearities can help you make the smartest decisions in difficult situations.
Do you want to know how to live better without waiting for the government’s permission? That’s what this blog is all about. Be sure to follow it and check out the piles o’ piles o’ archives.