In “Fooled by Randomness” Nicholas Taleb writes about how important it is to factor in rare and unlikely events. He explains how many traders can be mega-successful, bringing in hundreds of millions in a couple of years - but finally “blowing up” (loosing more than double or three times all the money they ever made in one deal) and being put out of business for life - just because they acted based on “this is so unlikely to happen that I can take the risk”. He said it’s kind of playing Russian roulette with a 1000-shot revolver, being offered one million to play it. So it’s 999 to one that you’ll be a millionaire after you pulled the trigger, but if you catch that one bullet you’re dead.

Now let’s say there’d be a gameshow like this once a month on TV.

Chances are, with just 12 episodes a month - every candidate would be a millionaire and nobody would get shot for the first couple of years. So it wouldn’t be that difficult to argue that these people “have what it takes” and all kinds of positive traits would be attributed to them because of the successful outcome.

Even though this is a bit of an extreme example, I think this also is a good explanation for what happened during the dot-com bubble. (”I know nothing about this internet business - but look at Peter and Fritz and Robert, they bought stocks and they also know nothing but they’re getting rich from it!” - this is kind of like: look, the other candidates all went out with a million dollars, none of them with a bullet in their head).

I think specially to small entrepreneurs, big changes (like a crisis) are a blessing in disguise, and you just have to see through it and act fast.

With all those “new churches” - like “The Secret” - I’m sometimes flabbergasted by this, although it just shows the power of great storytelling.

Fascinating and thought provoking post. Your comment about people looking for meaning in their lives prompted me to reflect on this aspect in our business. There is a certain “spiritual” aspect in what we do and that seems to strike a chord with our clients. I probably don’t emphasise this enough in copy etc.

Interested in your comments about cycles and will check out the book you recommend. Any comments on things like the Elliott Wave Theory and Bob Prechter’s “Socionomics”? Regardless of what you think about it as a market forecasting tool, it’s the aspects of “social mood” (as Prechter calls it) that I find fascinating and most relevant for marketers.

Thanks for the post. Certainly got my brain cells working on a Saturday morning!

Kevin Francis