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Statistics and inspiration

A friend of mine made a lot of money investing in cryptocurrency, so I want to trade cryptocurrency too.
Steve Jobs, Bill Gates, Mark Zuckerberg, Travis Kalanick all dropped out of college and built started companies that became immensely successful, so I'll drop out out of college and start-up too.
A friend of mine followed a ketogenic diet and successfully lost weight, so I'll follow it too.
Someone I know did their MBA and now earns a lot of money, so I'll do an MBA too.

How often have you made decisions like this? How often have you come across advice that takes this line of argument?

In my case, very often.

It isn't wrong to make decisions in this manner. But only as long as we fully understand what we are doing.

Given the extreme nature of the examples that I have picked, it is easy to think that you won't fall into the category that follows this line of thought in order to make their decisions. But what if the examples weren't so subtle? Consider this:

In 2014, Thomas Royen, a retired German statistician, solved a puzzle that had stumped mathematicians for decades. Called the Gaussian correlation inequality, it involves the probability of a random point lying in overlapping shapes and is one of those seemingly simple mathematical ideas that is devilishly hard to figure out.

Yet the mathematics community was skeptical. Royen published his proof, which was not formatted in the standard way, in an obscure journal where he sat on the editorial board. So many simply assumed that Royen’s work was just another of the many false proofs that had emerged over the years.

Eventually, two other mathematicians restructured Royen’s paper, published it on and his work was recognized, but it could have easily been lost for another generation. “I am not so talented for ‘networking’ and many contacts.” Royen said dismissively, but his apathy points to a larger problem. Innovating is not just about ideas, but communicating them.

Or this:

Kenzie and Harris were recently married. They had both dropped out of Brigham Young University and were working at the Apple store in downtown Salt Lake City. On the side, they were recording music covers and posting them on YouTube and Vine.

They had enough money in savings to live on a year, so they quit at Apple to make a run at becoming professional musicians. Every day, they would post Vines. For several months, their work went mostly unnoticed. They had a few thousand followers tops.

Then, everything changed. They posted a Vine that immediately went viral. The next day, they were contacted by some of the top Viners as well as agents who gave them contracts. They were now Ramen Profitable, had amazing connections, and on their way to making an amazing career as musicians.

Kenzie and Harris wouldn’t have had their breakthrough if they didn’t start as amateurs. They had some raw talent. But more than anything, they were willing to put themselves out there over and over and over. Quantity became quality. And then they put something out that people loved.

It is very easy to pick an instance, follow the thread of actions that led to that instance, and draw a conclusion. It forms a very compelling and coherent story.

Yet, if you take it to a statistician, he will laugh you off his office, and maybe offer you some money for tea and biscuits for going to the trouble.

In order to please a statistician, you will have to take several such examples and draw the conclusion from the outcome that occurs nine out of ten times.

When we look at such examples and make decisions, it isn't rational. We are merely inspired by the possibility and believe that we can achieve that same possibility (or avoid it, depending on what the outcome is).

If we were to make a rational decision, we would seek out the statistician instead.

Which brings me to what we do after we have made the decision.

It is quite boring to be a statistician and seek out enough examples to make a statistically significant decision (one with minimal error). Not to mention prohibitively time consuming and resource incentive.

So, we opt to get inspired instead.

Once we do, we should stop kidding ourselves that we have made a rational decision and instead figure out everything that we need to do to reach the outcome that we think we will achieve. And this doesn't mean doing exactly what the subject of our example (our inspiration) has done, but in cases completely the opposite.

Be inspired, but think for yourself. Or be statistical and follow what the majority is doing. Don't mix them up.

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