4 LIFE CHANGING LEARNINGS 2020 .

 

NEERAJ MAHAJAN

Hi, I am Neeraj Mahajan and this is the last piece on my learning 2020 series. I will end it today and it may be longish. You may read it in parts to stay interested. Here are the last few ideas:

MEDIOCRISTAN

Mediocristan is the tyranny of the collective, the average, the predictable, the routine, the obvious. It is a place that has no outlier or extreme success so as to say.  Some key properties of Extremistan are viz:

1. Non Scalability

2.Typical member is mediocre

3.Winner gets a small share of the pie.

4.Subject to gravity

5.Height and weight of most.

6.You know what's going on.

Most things fall in the above category. Risk-taking, convex tinkering, thriving in uncertainty are absent in Mediocristan. There isn't any gain from positive black swans. The central idea of Mediocristan is that one focuses on averages, pennies as there are no outliers here. The randomness has been completely sucked out of the system. This is the supreme law of Mediocristan The Turkey problem is the perfect fit here as the unsuspecting bird is well fed daily until one day on Thanksgiving it is slaughtered. It has no idea what will happen. This is normal in Mediocristan. And its opposite is Extremistan. It doesn't mean you are safe in Extremistan. In fact, it is the opposite.

EXTREMISTAN

This is the world of outliers, the tyranny of the individual. The properties of extremistan are

1. Scalability

2.No averages either there are dwarfs or giants.

3.Winner takes all.

4.Profits/losses from black swans

5. Income, wealth, relations belong here.

6.You can't know what's going on.

7. There is no gravity.

Most money matters reside here. While a few individuals in a typical economy, industry, control the bulk of its market, wealth, success, money, and predominate by virtue of it, while the rest, the millions, struggle. Ditto in social relationships. Hardly one or two relations are meaningful, the life anchors, while we may know multitude. They are insignificant.

The world is becoming dangerous and also exciting in so far there is a tectonic shift to extremistan.  You either win really big or perish. There are no averages here. It defies laws of gravity. This is a scary reality of Exremistan. If we aspire to riches,  we can't ignore this reality. As an entrepreneur, don't venture till you have an edge big time. Hone it, try to understand and see things more clearly. Leverage Optionality by trial and error. Take small risks. Experiment to disconfirm, not to confirm. This can avert black swans. Never make haste unless it kills. In relations and possessions invest in things that last. Win big to reign in Extremistan.

The Confirmation Bias

This is potent as we act to confirm and reinforce what we already know. As most of our vision is deluded and knowledge wrong, we invite negative black swans. Unlearning what we know is the most difficult for the inferential part of our brain as it mandates a rejig which it loathes. The right kind of rigor/ Stoic mindset can be very handy here. Let us study, procrastinate, disconfirm, and keep our brain subsystems in check, always.

The Lindy Effect

This robust Lindy heuristic says, if anything non-perishable has survived for n years, it will be there in the future for approx the same no. of years. It assists like a guide in decision-making as you wager your future in an uncertain, random world albeit tiny though. There are scores of businesses lying dead by the roadside or teetering on their brink for their time is passe. LPs, cassettes, tape recorders, VCRs, Click cameras were gizmos I enjoyed growing up but they are extinct. Combustion engines are on their way out, the cars will most likely survive in a new avatar but hundreds of OEMs will be decimated in the shift.  Kodak, Kolkata world's oldest 176 years Studio Bourne and Shepherd, National VCRs giants of Matsushita lie buried in the cemetery. This is Lindy at work.

We can leverage all things Lindy. The Internet has been around for more than 2 decades, has created On demand Economy, The Passion Economy, and is ever-expanding.  In its incipiency, building on the internet is a low cost, exponential in its audience reach, and futuristic. If we have a product/service/passion, there was no better time in history to take it viral. Lindy will surely help.

As always many thnx for reading me

PHOTO CREDIT BY  NGUYEN ON UNSPLASH.

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