How Obsession with Options Can Blind You to Opportunities

One of the first steps in your personal emancipation is to realize that the world is full of options, and the few things currently in front of you are not the only from which to choose.  But there is a difference between options and opportunities.

Options are theoretical.  Opportunities are actual.  Options are statistical probabilities.  Opportunities are singular, concrete instances.  Options can always be added on, and the option set can always grow as an aggregate bundle, so there is no urgency or scarcity in options.  Opportunities are temporary and cannot be aggregated.  Each is too unique and cannot be replicated.

The finite nature of each individual opportunity can be scary.  It feels more comforting to stay in the abstract world of options than to jump in to a real opportunity, which immediately reduces the set of theoretical other options.

Options thinking can be useful to gain some big picture long term perspective, but it’s a dangerous mindset too because it can blind you to opportunities or limit the ways you can gain from them.  Here are three of the downsides to thinking about options instead of opportunities.

Too Good for That

Because options are a giant aggregate of all possible activities, the field will always look better than a specific, individual opportunity.  When you know that the field is available to you (in theory) real actions always seem a little less glamorous.  The problem is that the field is not available to you.  Your life isn’t like gambling.  You can’t pick the field.  You have to settle on specific actions.  Grumpiness can result when you do specific things but obsess about keeping your options open.  You’ll always think you’re too good for whatever you’re doing and never fully throw yourself behind it.  This will, paradoxically, further limit your options as those around you will tire of your attitude of superiority and belief that, if you wanted to, you could be doing something better.  It keeps you from entering in to the moment and doing your best work.

Myth of the Perfect Path

The purpose of options is to be able to choose one or more at some point.  But after spending a lot of time expanding your theoretical option set towards this end pressure can begin to build.  When you finally do choose something specific, you’d better get it right.  Options thinking can make you so aware of opportunity cost (or in many cases, imagined, theoretical opportunity cost) of foregone activities that it puts an unbearable burden on whatever you do choose to be perfect.  This short-circuits the best of all human learning techniques, trial and error.  No trial occurs when error is so feared.  The endless keeping of options open in search for the perfect assumes too much about your ability to know all variables – including your own changing desires and interests – and deprives you of one of the best discovery tools, failure.  All this stress about choosing the mythical one true path leads to another problem.

Paralysis by Analysis

The ceaseless break-down comparisons, the cost-benefit analyses, the consideration of these seemingly weighty matters can itself become an activity so consuming it prevents you from all others.  You can become bogged down in a quagmire of strategic planning and never take the definite actions necessary to achieve anything.  The real problem is that inaction is also an action.  Not choosing is a choice.  Waiting, watching, thinking on the sidelines has a cost that’s even higher than the cost of choosing an imperfect opportunity.  When you take opportunity B it means you can no longer take A or C.  That’s the cost.  But the benefit is you get whatever goodness is to be had from B, and the self-knowledge of how well B suits you.  Even if you fail at it you gain something.  When you get stuck analyzing all three options you not only miss out on A and C, but you forgo the benefits of B as well.

Expanding your options set can be intoxicating.  For a time, it feels so fast paced and exciting.  I could do anything!  Why would I do this one thing when I could keep entertaining all the possible things I could do in my mind?

It’s alright to play with your options and expand them and think about them from time to time.  But you’ve got to put options in their place as subordinate statistical playthings when compared to opportunities.  Options don’t change the world or the holder of them.  Actions do.

The Opposite of the Crowd

More than one successful investor has advised to observe what everyone believes and do the opposite.  When people are optimistic, be a pessimist.  When people are pessimistic, be an optimist.  When confidence is high and prices are rising, sell.  When confidence is low and everyone is running for the hills, buy with confidence.

I was considering this advice and trying to decide what the current sentiment is.  Are people optimistic or pessimistic?  Are they buying or selling?  I can recall a few epochs in my life where it was very clear.  In the ’90’s everyone was elated about tech investments and day-trading was everywhere.  Then the bubble popped and things cooled down as people become cynical about software companies and the internet.  In the early-mid 2000’s optimism was everywhere again.  The Dow would only ever go up.  Houses were a can’t-lose proposition.  Everyone became a real-estate speculator with pride. After ’08 there was a period of pessimism, but it didn’t seem to last all that long.

For the last several years it’s hard to identify clear optimism or pessimism.  There are a few sectors – like Silicon Valley and the VC world – that seem to be flying high, but overall there is a lot of indecision and indifference.  If you were trying to do the opposite of the crowd right now, it’d be pretty hard to discern what to do.  Everyone is cautious and confused.

Rather than thinking only in terms of pessimism and optimism we can broaden our lens and possibly identify an answer.  To behave opposite an indecisive crowd is to be decisive.  Now is the time to be definite.  Now is not the time for waffling and over-analysis.  Identify an opportunity, develop a theory, and act on it with definite purpose.  In this environment the consequences of failure are not all that bad, and there is a huge competitive advantage to decisive action because hardly anyone is taking it.

When to Take Action

I’m highly action biased.  I get the frustration of identifying a problem or having a new idea and wanting to do something about it, good and hard.  I believe jumping in with both feet as soon as possible is always preferable to lots of analysis.  Still, there are times when the best thing to do is nothing.

This is particularly true when the problem is a grand one that affects all of society.  Just because you realize that there is something wrong with X system or process doesn’t mean there is an obvious and immediate action to take.  The realization is the first, often most powerful but also most fleeting step.  It’s easy for action biased people to get antsy and want to do something quick.  Start a campaign, write an article, launch an organization, etc.  Often though there is no clear vision, understanding of causal factors involved, or strategy.

Our culture is one that provides social rewards for any kind of action.  If you say you’re doing something to alleviate poverty, people congratulate you no matter how stupid or useless or even counter-productive your efforts might be.  Volunteering is deemed noble and effective, whether or not it’s either of these things.  The obsession with nonprofits and vilification of win-win for profit activities further incentivizes blind action.  Start a club.  Host a fundraiser.  Do something!

The most profound improvements in the world are typically born out of many years of following the initial identification of a problem deep down the rabbit hole.  Those who see something they don’t like and jump to do something come and go, as do the effects of their efforts.  Those who internalize the problem – let it steep, let it alter the way they think, pursue an in-depth understanding of the problem and knowledge of tried and untried solutions, and only act when the idea they hold is one that doesn’t just suggest but demands action – are typically the ones who best solve it.

There are a lot of dysfunctional beliefs and institutions around us.  Discover them.  But when it comes to action if you feel the itch ask yourself exactly what kind of action you want to take and why.  Do your ideas demand action?  That specific action?  Will you be unable to sleep without taking that specific action?  More importantly (and much harder) ask if the solution you have in mind can be obtained within the context of a for-profit business model.  If not, the odds that it will work are incredibly low.  If a solution is real, it will create value.  Non-profits can create value, but it’s much, much harder to know if they are and far too easy for them to do the opposite.  If the solution is political it’s almost assuredly going to do more harm than good.  If the goal is good feels, launch a nonprofit effort or lobby politicians.  If the goal is effectiveness, try as hard as you can to discover a way in which your ideas can generate a profit.

Until action is clear, and clearly value-creating, let your ideas direct you to further understanding.  Channel your hunger to act towards the act of learning more.  When the time is right and the idea is ripe you’ll know.

What Liberal Arts Education Misses

I’m a big fan of liberal arts education.  Not in the classical sense of churning out dutiful citizen soldiers, but in the modern sense of a broad exploration into the humanities rather than a narrow vocational specialization.

The dichotomy between learning for “work” and learning “for its own sake” is ridiculous.  All meaningful learning has an end desired by the learner, whether to have fun or gain knowledge that helps earn money or both.  Liberal arts education is incredibly valuable as a tool to sharpen thinking and broaden the mind.  Despite all the names given to the disciplines therein, it all really boils down to the master discipline of philosophy.  Philosophy is valuable if for no other reason than that we all have a philosophy whether we want to or not.  It’s either examined or unexamined, and we are better at achieving our goals and ends if we examine our philosophy.

Still liberal arts education has a huge, gaping hole.  It’s not that it doesn’t teach enough hard skills or vocational specialization.  One could argue those are something that could be learned on top of a liberal arts foundation for those who want to master a particular skill.  Yet it is true that liberal arts education often makes it hard for individuals to bridge this gap between general critical thinking and particular ways they might apply it to create a meaningful life and career.  The missing piece is something a little more concrete than liberal arts but a little more abstract than vocational skill.  It’s an understanding of value creation.

Value creation is the only thing that matters when it comes to involvement in commercial life.  This is where philosophy meets action.  This is where theory meets practice.  An entirely pragmatic practitioner who only performs tasks may find herself flustered with limited career options just as easily as an abstract theorist who doesn’t know how to concretely practice his ideas.  The pragmatist misses the fact that it’s not just getting your hands dirty that brings career success, but creating value for others, which may or may not correlate to how many hours you work or how much you master a particular skill.  The theorist misses the fact that all the clear thinking in the world about the nature of people and the universe won’t put bread on the table unless they can translate it into something of value to others and exchange with them.

A truly powerful liberal arts education would include learning value creation.  What it is, and more importantly, how to do it.  The thing about value creation that differs from other things learned studying liberal arts is that it cannot be learned by intellectual examination alone.  You have to do it.  You have to enter the messy marketplace and bump into other humans with unique goals and desires and find a way to bring something of value to exchange.  If philosophy begins with ‘know thyself’ then working for pay is one of the most philosophical activities possible.  Getting others to voluntarily part with their resources because you can create something they value more will reveal more than you can imagine about yourself, your desires, habits, and unknown abilities you never would have guessed are valued by others.

It shouldn’t stop with merely performing the action.  Reflection and dissection of what’s happening will take you to the next level.  All the best entrepreneurs are deeply philosophical people.  They don’t merely work and try stuff and suddenly get lucky when people value something they created.  The analyze why, how it might be made better, what fundamental causes brought about success, etc.  They get to know whether their key value was the big idea, the management and execution, the network of talent, the sales job, or some combination.  This allows them to replicate success by focusing on the areas with highest return.

Philosophy is known for thought experiments, but the market is where its field experiments take place.  The most powerful liberal arts education is one that includes the study and practice of value creation.  This could mean digging into ideas in the humanities while simultaneously working at a company and trying to make it and yourself more money, not just as a practical but a philosophical exercise.  I’ve never understood people who’ve studied for decades but never entered the marketplace to exchange.  Perhaps it’s a carry-over from the Greek’s high-minded condescension towards merchants, but an attitude that treats value creation as beneath contemplation is impractical and illogical.

This passion for theory and big ideas and liberal arts combined with the thrill of value creation in the marketplace is what animates Praxis and what gets me up and working every day.  I’ve gotten to the point where I do not have any way to distinguish work from study.  In the office I’m as likely to be reading Seneca as going over an expense report.  I see both as equally important for my long term success and happiness.

We don’t need Plato’s philosopher kings.  The worst thing is to confer the use of force upon smart people who leave the production to others.  We could use more philosopher merchants who constantly examine themselves and seek to understand the world while testing their ideas in the voluntary marketplace of goods and services; who imagine a better world and then go out and create it themselves.

Problems with the Ideas/Action Dichotomy

It is possible to have ideas without action.  It is not possible to have action without ideas.

In my personal habits I am a very action biased person to the point of impatience and occasional recklessness.  Yet in the bigger scheme I place far more importance on the role of ideas over action, theory over practice.  Not because I think theory without practice is good, but because I know action without ideas is impossible.  Thinkers can not act.  That’s a tragedy.  But actors can never not think.  If they believe they are just acting and not philosophizing they’re simply doing bad philosophy.

All action is based on theory.  My friend Steve Patterson summed this up nicely:

“Human action is an expression of philosophy. Every decision we make is inescapably framed and guided by our ideas about the world. Sometimes these ideas are clearly communicated by our actions; we write a book or create meaningful art. Other times, our ideas are so silent we aren’t even aware of them; they become a kind of subconscious framework for our actions.”

When you act you do so because you have ideas about your present condition, beliefs about a preferable future state, and beliefs about how the action will bring it about.  Those who brag about acting over thinking are admitting to taking actions based on unexamined ideas.

There are two main ideas underlying all action, and both need to be examined.  The first is an idea about an end state one wants to reach.  The second is a theory of causality about what will bring that end state.  An end state that is actually bad, or that the actor wouldn’t actually enjoy if they reached is is troubling.  It’s the dog that catches the car.  Many activists or “doers” imagine they want what they are chasing but they have not put any difficult, disciplined philosophical work in to examine their desired end, and to get to know themselves and see if it’s truly a desirable state.

Theories of causality are even less examined.  So many well-intentioned people imagine a better world.  Even if they’re sure they’d want to get there, many lose patience with theorizing and want to just do something.  Doing something can be an integral and valuable part of forming a theory of how to get there the way experiments help shed light on physical phenomena.  But if the actor doesn’t regularly stop to theorize, incorporate experience as feedback, adjust causal assumptions, and repeat, the action is useless or worse.

In our society you get points for doing something.  If what you want is noble and you’re doing something, you’re applauded.  Never-mind that you may lack any understanding of physical, economic, or social realities that can cause your action to result in nothing or even the opposite of your goal.

It is for this reason that I cringe when I hear people praise either ideas or action at the expense of the other.  In fact, I think the only camp that really does this are the activists.  The thinkers talk about the importance of ideas, and many may be too fearful or lazy to do any real-world testing, but they don’t typically claim that action is worthless.  The self-proclaimed doers often vociferously vilify philosophizing  as a waste.  They do not realize that their denunciation is simultaneously an announcement that they are acting on unexamined and often bad ideas.  By decrying philosophers they don’t separate themselves from philosophy, they just become bad philosophers.

Practice without theory is not an option.  For this reason it is incumbent on all action-biased people to engage ideas with ferocious seriousness.  Ideas not acted upon may be sad, but action not contemplated can be utterly disastrous.

Think clearly; think boldly; think big and you can achieve big results.

Agere sequitur credere.

Floating Downstream is Not an Accomplishment

“Tell me something you’ve accomplished.”

A friend said he always has trouble getting an answer to this question.  People think and think, and are unable to come up with an accomplishment.  He probes a little.  He asks if they graduated from high school.  Everyone says yes.  He asks why they didn’t mention that.  “I just didn’t really think of it I guess.”  They didn’t think of it because they didn’t accomplish it.

To accomplish something implies a goal, a series of willful actions, and a resulting effect.  It implies a conscious challenge or obstacle, and conscious effort to overcome it and reach the desired end.  High school is nothing like this for almost everyone who stumbles through.

Most people don’t really choose to go to high school.  It’s just sort of the default.  Most people don’t really fight hard to graduate.  It just sort of happens.  In fact, it requires more conscious effort to not go, or not graduate.  Schooling is, for the student, mostly a passive process.  It’s something that happens to them and around them.  They get poked and prodded and punished and rewarded as they’re corralled through the maze.  Many go through the whole experience half-asleep.  If you don’t actively resist, you get spit out with a diploma at the appointed time.

No wonder people don’t think of graduating high school when asked to share something they’ve accomplished.  The ability to alter your world and drive cause and effect is empowering.  It’s hard to forget when you’ve generated something desired.  Children don’t take any special pleasure in things that just happen to them; they delight in things they cause.  Randomly give a baby a toy and they might enjoy it, but there’s no comparison to the beaming pride on their face when they finally reach a hard-to get object after repeated attempts.

For many, the chances to really accomplish something are few until they are released from the pretend world of schooling and into the wider world.  No wonder many struggle with a low sense of self-worth, or high demand for externally provided direction.