Friday, August 2, 2013

How To Harness The Power of Numbers

How To Harness The Power of Numbers

Dharmesh Shah

Founder and CTO at HubSpot

Many people give up on a dream – or don't even get started – because they're intimidated by the size of the effort involved.

Want to launch a business? It can sound too hard if you think about the thousands of tasks and decisions and steps involved. Want to finish a marathon? It can sound too hard if you consider the hundreds of miles of training you'll need to run. Want to write a book? It can sound too hard if you think about the tens of thousands of words you'll need to write.

That's the negative power of numbers. Fortunately, there's a way to harness the power of numbers on your side – and all it takes is a simple shift in perspective.

The Power of Quantity

Check out this passage from Andre Agassi's autobiography, Open:

"Every ball I send across the net joins the thousands that are already covering the court. Not hundreds. Thousands. They roll toward me in perpetual waves. I have no room to turn, to step, to pivot. I can't move without stepping on a ball…

Every third ball… hits a ball already on the ground, causing a crazy sideways hop. I adjust at the last second, catch the ball early, and hit it smartly across the net. I know this is no ordinary reflex. I know there are few children in the world that could have seen that ball, let alone hit it…

My father says that if I hit 2,500 balls each day, I'll hit 17,500 balls each week, and at the end of one year I'll have hit nearly one million balls. He believes in math. Numbers, he says, don't lie. A child who hits one million balls each year will be unbeatable."

The difference in perspective is simple yet incredibly powerful. Instead of thinking, "There's no way I could ever hit a million balls…" Agassi thinks, "There's no way I can lose if I hit a million balls."

The Power of Ratios

Or consider what Buffer founder Joel Gascoigne calls "Ratio Thinking":

I think we all understand that we might not get a 100% success rate on everything we do. In fact, in most cases it is far lower. For myself, I think I have struggled to fully comprehend this.

I've heard the idea of a ratio for success many times. I think perhaps the best description I've come across what Jim Rohn describes as the "law of averages":

"If you do something often enough, you'll get a ratio of results. Anyone can create this ratio."

Once I fully understood this, it made everything much easier. As soon as I accepted that the whole world works in ratios, that's when it became easier. Knowing that success happens in ratios allowed me to go ahead and send that email, without worrying about not getting a response, about 'failing'.

According to Joel, the law of averages is the perfect example that persistence is a crucial trait for anyone who wants to succeed in a major way.

I use the power of numbers when I make angel investments. I know every company I invest in won't succeed. So I do no real due diligence (in most cases, I don't even meet with the founders or schedule a call), don't make follow-on investments, don't serve on advisory boards or have official involvement… either I like the founders or I don't, and either I like the idea or I don't (which is largely irrelevant because the idea will undoubtedly change as the company evolves.)

Why? My real constraint is time. I'm maniacally obsessed with helping build HubSpot into a success story – that's where all my time goes. So I optimize for my time, not for some theoretical magnitude of outcome. And I know that the numbers are on my side. On average, angel investments do pretty well (given a large enough portfolio). I accept that some investments will do well, others won't… the key is to keep investing in new Internet/software startups and let the power of numbers play its role. Note: I have now invested in over 40 companies.

(And, of course, let the power of investing in really, really smart entrepreneurs play its even more important role.)

The Power of Application

All you have to do is put the real power of numbers to work.

Say you want to deliver a killer presentation. Instead of taking an intimidated, defeatist approach by thinking, "Oh, man, I'll need to rehearse my presentation at least ten times before I'll be any good… there's just no way…" flip it around and think, "All I have to do is rehearse my presentation ten times and I'll be awesome!"

Think positively and focus on an awesome outcome, an outcome that is inevitable when all you need to do is take the right number of steps.

Hundreds of steps? Maybe. Thousands of steps? Maybe. Who cares? When you take the right number steps success is almost inevitable.

Or say you want to recruit an awesome designer for your startup. Maybe you've found you have to contact twenty potential candidates to get two interviews, and that typically one of those two interviews results in an offer. And half the people you make an offer to will accept.

All you have to do is make connection with 40 designers. You're not guaranteed to find an awesome designer, but there's a decent chance.

And if your ratio improves, don't rest on your laurels. Aim higher. Move on to bigger targets. Your ratio may fall again… but that's okay since the quality of investor has improved.

The Power of One

Every journey, no matter how long, is still made up of individual steps. Don't fall into the trap of thinking quantity matters more than quality. Don't fall into the trap of assuming your current ratio is set and can't be improved. Never mail it in. Never go through the motions.

Even though you know you'll sometimes fail, don't let that knowledge cause you to put in less effort.

The true power of quantity is only as good as the quality of each individual task. The true power of ratios is only as good as the quality of each success and each failure.

Whatever journey you undertake, work hard to make every step a great step. Then the power of numbers will truly be on your side.

What do you think? Any other examples of where the power of numbers can help you?

Edited by: Lawyer Asad

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