009 - Collateral Benefit

Good morning, Asheville. Today is Thursday, October 31st. Happy Halloween. At the time of recording, it's about 60 degrees, gonna get up to a little over 70. But I am not a weatherman. I'm a podcaster, sales marketing guy. My name is Tony Bertaccio. I'm your host of this, the AVL daily Pod. Making it. In Asheville, we look at business stuff, we look at what to do in the wake of Helene, we look at stories and optimism in the aftermath here. And so answering a question today on how to think about what to do. And there are two considerations that I want to flag when attempting to, to weigh different options, way different concepts, ideas, strategic choices that you could make as a business owner on what to do. The first is this concept. I spend like about an hour in it. In this program, I have the entire entrepreneur. And the concept is expected value. And so at the highest level, you can use math to inform what strategic decisions you should make. And so the math is quite simple, quite rudimentary, but can be very helpful. So if you're weighing out three ideas, you might calculate a couple different variables and multiply them all together. So option one, the best case outcome is X. The likelihood that that outcome is experienced is Y. You multiply those two numbers together and you have an expected value which is almost always it's smaller than the best case. Best case scenario, right? That is the simplest version of attempting to quantify qualitative decision making that I'm aware of. You can increase the complexity of an expected value equation however you would like. So you can then say, how much effort would it take to implement the plan? And then what expected or what likelihood is it that this comes out? Effort is a great proxy, right? Like, or a great thing to account for. Because if you end up working super hard and it's still a low likelihood that the outcome you want is possible, how does that compare to something with a very light lift and a high likelihood that a smaller outcome is possible? Well, now we have math and we can begin to assess them again quantitatively. And so when considering, like, should I take out this loan? Should we pivot to this idea? Should we look at breaking our lease? You now have a math way of looking at multiple options against each other. And what you're looking at is the value when you do the multiplication, the final value, the largest one, has the highest likelihood of success by whatever metric you're quantifying. So it might be revenue that might be. Might be anything, but typically revenue. So expected value shows up. Then I had this concept yesterday in office hours with my community that I never said out loud before and I never really. I think it might have been original. And the idea is collateral benefit. It was a riff off of the idea that, you know, there's word called. There's a concept called collateral damage where you are attending to do one thing and you damage a bunch of other stuff in the effort that you had towards the one thing. And what I want to have you consider is when making strategic choices, I would hedge towards actions that have the highest collateral benefit, blast radius. So what does that mean? Practically hard to say. I don't know your exact situation. But collateral benefit, as it showed up yesterday was with this artist in the community. Rather than just do doing emails back and forth with interior decorators, where you're attempting to build relationship with interior decorators in private, you might offer some sort of public stage where you could have conversation with this particular interior designer, ask questions about how they make choices on how they think about houses. And now there's benefit to the art community that this artist operates in. There's benefit for brand and prestige for the designer generally. And there's an increased blast radius of benefit. Like there's a bunch of good that could happen because this conversation is more public than it perhaps needed to be or could have been. And so when weighing options, there is a very quantitative mathematical approach, which is expected value. And then there's this little bit of like playing with the art and the serendipity of the thing and attempting to make sense of a very qualitative concept which is, you know, the potential of unknown benefits arising because of this action. So I'll leave you those two ideas. Business owners who are thinking about what to do now, you can think about it mathematically, you can think about it based on feel. But I do advise getting into action. Let me know what you need. Let me know if you have questions here to help. And until next time, take care and be good to people.