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