You Don’t Make it Rain By Carrying an Umbrella

Two years, 9 months, 1 week, 5 days and 21 hours after I set up WordNerd it went BOOM!!

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It was the moment when the challenge to make sure there was money left at the end of the month became the challenge to manage multiple deadlines and stay on top of everything – while still getting some sleep and eating three meals a day if at all possible.

All the hours of hard graft, worrying and hoping that everything would work out have paid off. I don’t want to jinx things by speaking too soon but I think it signifies the end of the start-up phase and the beginning of the growth phase. And it’s very exciting!

Carrying on from my last blog A Steep Learning Curve I wanted to share something that I’ve learnt by applying economics to my business…

Causation vs. Correlation

Just to remind you, ‘causation’ means that one event causes another to happen, ‘correlation’ means two things happening at the same time. To read more about causation / correlation have a look at this entry on Wikipedia, I’m going to keep things nice and simple.

You don’t make it rain by carrying an umbrella

There’s a positive correlation between people carrying umbrellas and rain – more people carry them on wet days. There’s also a causal relationship between wet weather and people carrying umbrellas, the bad weather ’causes’ people to carry them.

causation versus correlation

But the relationship isn’t causal in the other direction, it isn’t people carrying umbrellas that makes it rain and it’s important to recognise the difference.

[According to Sod’s Law it’s actually far more likely to rain if you don’t have an umbrella with you!].

Doing the things that cause success

Success indicators

There are lots of “indicators” of a successful business person – it might be their car, the number of Twitter followers they have, how many fancy holidays they go on or a high income (depending on how you define success) – so there’s a correlation between those factors and success but you can’t assume causation.

Being wealthy means you can afford a Bentley but putting a Bentley on your credit card doesn’t make you wealthy, it actually makes you very poor! Asking your mum to take on multiple personas and leave comments on your blog doesn’t make your blog popular – but a popular blog will have lots of comments on it.

Confusing correlation and causation

People who claim to be selling overnight riches (snake oil salesmen and sellers of one-size-fits-all marketing usually accompanied by a claim to be a best-selling author you’ve never heard of), often confuse the two I think, they look at the indicators then assume causation and apply a formula for success based on spurious beliefs.

People who are successful have lots of Twitter followers, buying followers doesn’t create the same effect, just like buying an online medical degree doesn’t turn you into a doctor and copying marketing techniques based on causation that doesn’t exist isn’t going to help much.

Work hard at the right things

In my desperation to build a business and succeed I’ve spent a fair bit of time and money on marketing that I wish I hadn’t, not that any learning is ever wasted. When I look back at the things I signed up for it seems that a lot of them were confusing correlation and causation, and assuming that by copying rich people you’d become rich yourself.

But what you have to copy is the things they did to become successful.

The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will

– Vince Lombardi

When I look at what I think of as successful people, the common factors I see are: hard work, passion and not giving up and that’s the model I follow.

Richard Branson could probably charge a £500k appearance fee (he’s so nice I bet he doesn’t) but that doesn’t mean that by charging £500k you or I will turn into Richard Branson: correlation not causation.

Future blog topics

I knew there was a reason I spent five years studying economics (it took a VERY long time to work out what it was), I’m finding is useful now I’m self-employed so I may write some more posts that link the two. If you’ve got any ideas for topics please let me know.

Feel free to ask any questions or leave a Comment.

Thanks for reading.

Sally

3 thoughts on “You Don’t Make it Rain By Carrying an Umbrella

  1. Great blog once again Sally! The part that really resonated with me, as a relatively new business owner is the, at times, swamp of information, promises, advice, coaching & “if you just do this” there is out there for business owners. I am slowly learning that this is generally another time wasting, money zapping, procrastination tool that takes me away from my business. I know that it is there if I need it but that as you rightly say pure hard work, pure gut instinct, pure determination will get you there & with a few more pennies in your pocket!

  2. Thank you Lucy, that’s very kind of you – and lovely to read : )

    I think you’re right, it’s hard to know what’s worth doing and what’s helping someone else grow their business rather than yours! That’s what I believe. The shortcuts are tempting but I’m not sure they really work. My aim was always to grow gradually and have solid foundations so I assumed things would be slow and steady. It turns out that when you hit a tipping point you start growing exponentially, it’s amazing. Another lesson learnt.

    I hope things are good with you.

    Sally

  3. Pingback: You Won't Believe These Marketing Techniques - WordNerd

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