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The difference between gambling and running a business

May 28, 2009

Business = gambling.

That’s what I overheard yesterday as I took time off in a cafe in between meetings. Someone remarked that the odds of you hitting the jackpot in a sweepstakes is one in a million. He argues that the number of people who truly succeed in business is roughly the same. Therefore he concludes that there is no difference between business and gambling.

It made me smile a little. Its like saying that because the odds of scoring a goal in the last 10 minutes of a game is the same as the odds of finding an extra slice of cheese in your deli sandwich, therefore a goal = a slice of cheese.

Yeah it’ll sound like you’ve had a few too many but hey, who says you need logic to make sense of things. 🙂

So taking my Spockian logic hat off and putting my fuzzy logic hat on, I think I know what the dude was trying to say. That if gambling is evil and if business is the same as gambling, then business is evil. Simple.

And the reason I was smiling? The conversation took place at Starbucks, a business, and these two dudes were happily drinking coffee at a place of evil and giving the proprietor money to “gamble”. 😀

But framed differently, this apples-to-mangosteens comparison may not be totally dumb. I have to admit, there’ve been times when I felt its better to gamble in a casino than get into certain businesses. Hey if you’re gonna lose your shirt, why not do it in style. Its less back-breaking, you get to lose the same amount of money, and you get hot chicks climbing all over you while you’re at it.

To be completely honest, I think hard work, that reason why “business is not gambling,” can be overrated by well-meaning folksy wisdom. Fact: many discoveries happen not as a result of hard work. They happen because some odd tourist stumbled and fell on it while searching some dinky backlane for a washroom. That’s how stars get discovered in slums and how internet ideas get found. You might say its rare but I say it happens more often than we think.

I think this needs to be said because timing, accidental or otherwise, can do more to influence success than months of meticulous planning and search.

So I’ll say yes, GENERALLY you can assume that planning + hard work will turn your business into more than just a game of chance. However, you will also recall a piece of hard reality – that most businesses that fail ARE businesses that people worked very hard to develop. They fail not because they gambled on a random bet but because of a variety of things – bad timing, bad judgement, lack of funds, unexpected swings in government policy, price of oil, whether North Korea will bomb South Korea. Things that sometimes even the best brains cannot predict or avoid.

So, in spite of all the preparation and hard work, business success is and has always been unpredictable in my opinion and sometimes, depending on the circumstance, a win in a game of blackjack can be equally likely given the odds.

No, really.

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5 Comments leave one →
  1. May 28, 2009 9:47 am

    the curse of being too smart , is giving excuses ..

    “smart people” will always think why they shouldn’t do this and that …etc etc
    “how to start a business? i got a family ? i am too old for this ? what if it fails ? business is EVIL ? business and gambling?” bla bla bla for me .

    that is why as you grow older , you will realized alot of dumb people are quite rich ..and the smarter ones back in high school are just ordinary people …

    so , that 2 dudes in starbucks are just too smart 🙂

    Yup, a simple minded boss, knowing his limitations, will hire sharp brains to be his bulldogs. Many Asian billionaires do this. Money over minds.

  2. May 28, 2009 12:44 pm

    In business it’s 70 % hard work (planning, research, setting up, etc) and 30% luck for success.
    In gambling it’s 80% losers and 20% winners, which is talking about statistics only. No work involved.

    That’s funny logic. 😀

    From a winners/losers perspective, business can also claim 80% losers, 20% winners because of external factors that can blow a hole in your ship even if you work very hard. If people had a choice between working hard for 80:20 or to gamble for the same 80:20, I’ll bet my sweet ass they will avoid the hard work because its still 80:20. Path of least resistance… 🙂

  3. May 28, 2009 9:12 pm

    Life is all about gambling. Perhaps “trying ur luck” is a better term. If you go out and find job, it’s trying ur luck. If you let go of your current job and join the new one, again, that’s trying ur luck. If you stop eating in ur regular eating place, and try the new place…again, it’s trying ur luck.

    So it’s all about trying ur luck. The only difference here is the worst possible damage such “trial” can bring. 🙂

    Gambling is uncertain. Life is uncertain. That much they have in common. What we try to do is have fun amid that uncertainty. If the amount of fun exceeds the discomfort of uncertainty, then life with all its gambles is great. 🙂

  4. May 29, 2009 8:25 am

    Yeah. Here’s some sourgrapes logic.

    Smart people know too well there’s more to life than just making money. Just leave it to the dumb-asses to accumulate all that headache and heartache. Old king Solomon himself found out it wasn’t worth all that hype. Actually it became a burden. See what happens to Bill Gates? He’s having more headache now trying to give it away. There are fellas who come to him saying, “Hey! Why you give him so much? What about me?”

    Be happy, enjoy what you have, what you love doing. Stay away from gambling & business.
    😀 😀 😀

    If I were Bill Gates, I would retire after making my first billion (my dad better not read this. 🙂 ). The headache is not worth it, as you rightly say. And I agree, there seems to be a threshold of wealth after which the happiness curve fall thru the floor. If you’ve too much money, you’re miserable. If you have none, you’re miserable too. The middle path – that works for me.

  5. May 29, 2009 4:51 pm

    dude ,

    first billion ain’t middle path …that is top 50 out of 6.5 billion people already..lol

    Only 50 billionaires in the world? And I thought there are 100 billionaires just in Monaco alone.

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