Make your own luck

On Making Your Own Luck
Ziya G. Boyacigiller
This presentation was created and given by Ziya
Boyacigiller who was leading Angel Investor and a loved
mentor to many young entrepreneurs in Turkey. We have
shared it on the web for everyone’s benefit. It is free to
use but please cite Ziya Boyacigiller as the source when
you use any part of this presentation. For more about
Ziya Boyacigiller’s contributions to the start-up Ecosystem
of Turkey, please go to www.ziyaboyacigiller.com

On Making Your Own
Luck…
Ziya G. Boyacigiller

Make Your Own Luck
12 PRACTICLE STEPS TO
TAKING SMARTER RISKS IN
BUSINESS
by Eileen C. Shapiro & Howard H. Stevenson
(with occasional additions by ZGB )
Note – this presentation
uses animation, therefore
you are advised to view in
the Slide Show mode.

The Test
How often do you bet on behalf of
others or for yourself?
a) Many times a day
b) Once or twice a day
c) Several times a week
d) Several times a month
e) Several times a year
f) Very rarely
g) Almost never – I make it a policy not to gamble

The Answer Key…
 a, b, c :
  EVERY ACTION IS A BET !
 d, e, f :
  are only the biggest or most uncertain actions
bets?
 g :
  you will discover a new way of looking at
your life and business…

“Human actions are
always rooted in a
forecast of those
actions.”
Alan Greenspan
Retired Chairman of the U.S. Federal Reserve

We are forced to make
“bets”…
 Your company is the price leader in its category. You see
a way to boost your bottom line by raising prices. Should
you do it?
 You’ve been disappointed with your performance review
and bonus. Should you quit?
 You have found a new building for your company at a
great price in a run down neighborhood. Should you buy
it?
 You have interviewed a candidate for an important job.
Should you hire her?

…when we don’t know everything
we would like to know.
Therefore, you can conclude that success or
failure hinges on dumb luck.
But, great decision makers (including Bill
Gates and Warren Buffet) don’t depend
on luck. They make their own luck.
And now you too can learn how to this.

Sketch a Flow Chart of the
Key Components of a Bet
Intent Action Result Satisfaction
DESIRED RESULT
PREDICTIONS
ABILITY TO PREDICT WELL

Predictive Intelligence
 All human actions are based on intent…
 But not all humans are good at
predicting…
 PI is the level of how able each of us is
to act in the face of uncertainty to bring
about desired results

… and your PI level can be improved 

Build Your Predictive Intelligence
The OOPA! Process
(Gambler’s Dozen)
Orient & Organize
1. The Big Goals: What future
am I trying to create?
2. Upside/Downside: Will this
gamble be worth playing for
me?
3. Jump Bets: Do I need to make
a radical shift now?
4. Campaign Plans: Who/What
will I need and how will I get
them?
5. Implicit Strategy: How much
magic will my current bets
require?
6. Plan B: What’s the best I could
do if my existing plan gets
blocked?
Predict & Act!
7. Predict Maps: What’s the
future space I’m betting
into?
8. Wallpaper Jujitsu: What
are my best “left-side”
bets?
9. Risk Splits: How much
risk can I shed or shift?
10. Point of Action: What’s
the “it” I’m betting on?
11. Domino Effects: Will I be
locked into a tight set of
follow-on bets?
12. Game Over: How will I
know when to call it quits?

Four Requirements to
Apply OOPA! Successfully
1. Cover all the steps,
(OK not follow the same sequence)
2. Write down your thinking for each step.
(Rough notes, or sketches are OK – but put your bets down
specifically, on paper)
3. Go fast, especially for the first step.
(First, use seconds or minutes for each step – then refine if
necessary – use more time for more important decisions)
4. Remember that the sole purpose of this
process is to bet better.
(OK not to achieve perfection…but make the effort!)

Orient & Organize
1. The Big Goals:
What future am I trying to create?
You are stranded
on a deserted
island.
If you could choose
one person to be
with you, who
would it be?

The Big Goals:
“100 Marbles”
In any situation,
you have a
limited set of
resources to
place at risk –
time, money,
reputation,
effort…
How do you want to bet your 100 marbles?

The Big Goals:
Application
1. Focus on an area, and
make a quick Laundry-
List of objectives.
2. Pick the Lead-Dog that
will move you in the
direction that will give
you the most
satisfaction at the end
(use value scan).
3. Look from the future
back to where you are
now, and Prune any
extraneous options.
---
---
---

Orient & Organize
2. Upside/Downside:
Will this gamble be worth playing for me?
Should I invest my 100 Marbles?
(All or how much should I invest?*)
(Values and perspectives differ –
J.C. Fields contest & Philadelphia…)
Your option is not to
invest your marbles
and to wait for a
more favorable
situation…
2. Downside: How much can I
afford to lose if all goes badly?
DO NOT get wiped-out!
(Which assets am I risking, and how
much of each?)
3. Who controls the rules?
1. Upside: How much can I
gain if all goes well?
* Read Fortune’s Formula for more insight…

Orient & Organize
3. Jump Bets:
Do I need to make a radical shift now?
Jump Bets have 2
characteristics:
1. Disruptive – upsets your
plans, not comfortable
(being wrong is right – look for
lateral paths– betting is a forward
activity, based on current
predictions not past…)
2. Narrow Window of
Opportunity
3. Ask yourself if later on you
will say:
“I wish I had…”
4. Verify what you can fast;
and then act quickly!
• Neon Clues:
Story of assigning engineers
to new product line…
• Fuzzy Clues:
Story of GE about to sell the
company…

Orient & Organize
4. Campaign Plans:
Who/What will I need and how will I get them?
1. Core Allies:
Your values and interests
align with theirs
YOUR
VALUES
&
INTERESTS
Your goal is to
convince them
to share their
marbles with
you…
2. Possibles:
Situationally, your
values and “wants”
overlap with theirs
(Use empathy to understand
them and win them over, use
negotiation to make deals)
3. “Null-Set”:
You have no overlap, in
fact your values and
interest may conflict
with theirs

Orient & Organize
5. Implicit Strategy:
How much magic will my current bets require?
People think bets they are
placing (strategy) will get
them to a desirable
outcome,
when “real bets” they are
placing (“implicit strategy”)
are leading them
someplace else…
They will need a lot of magic
to get them anywhere
close to a satisfactory
outcome.

Implicit Strategy:
Hope is not a strategy!

Implicit Strategy:
1. Identify the currency of the “bet”s
• Poker  chips
• Companies  cash
• Military  soldiers
• Weight  calories
1. Quantify using currency to
identify where the real bets are
(i.e. lower confidence level)  Do
sales model plus P&L spreadsheets
with assumptions and confidence
levels.
2. Test the bets & use Focused
Creativity to improve the odds of
winnings
• Do you depend on skill/knowledge or
luck (confidence level)?
• Can you take a series of smaller
bets (with higher confidence level),
rather than one big bet (strategy
map)?
• Can you eliminate causes of failure
in advance?
? ?
?
?

Orient & Organize
6. Plan-B:
What’s the best I could do if my plan gets blocked?
Develop a Plan-B
before you need it!Fire
Safe
House
Plan-A:
Reduce
Probability
Plan-B:
Reduce
Seriousness
•Eliminate matches
•Use automatic fuses
•Do not store flammables
•Fire extinguisher
•Fire exit
•Smoke alarm
Is
Risk= (P x S)
low*?
* Use Pareto principle to prioritize risks

Predict and Act! Skills
Betting analogy helps us to think about the
predictions we’re making,
about key factors outside our control
before placing our wager (act!).
This focuses us on disciplined forecasting of the
factors that will have the biggest impacts on
future outcomes. (PA! skill)
We will now focus on how to determine the
potential options and choosing which to pursue.

Predict & Act!
7. Predict Maps:
What’s the future space I’m betting into?
1. Smart bettors
reject the notion
that higher
returns always
entail higher
risks.
2. We need to go
fast…
3. Predict Maps
helps us to do
these.
Relative Uncertainty
LOW HIGH
RelativeImpact
LOWHIGH
Range of potential returns
on our bets, including both
potential future gains and
losses…
Risk of betting on the
wrong side of a prediction,
which occurs when you
think a factor is going to
move in one direction, and
it moves in the other…

Predict Maps:
 Wallpaper Zone:
Like the wallpaper,
factors often ignored, but
can be very powerful.
rat hole
zone
ant colony
zone
wild card
zone
wallpaper
zone
LOW HIGH
RelativeImpact
LOWHIGH
 Ant Colony Zone:
Like ant colonies, many of
these seemingly unimportant
factors put together can
create substantial
advantage.
 Wild Card Zone:
These predictable factors can
work massively in your favor
– or against.
 Rat Hole Zone:
A hole you’d rather not be
in…

Predict Maps:
rat hole zone
How many troops?
300 or 600?
ant colony zone
British will fight as
trained
Will wear red
uniforms
wild card zone
 Don’t know when
exactly
By land or sea?
wallpaper zone
 British attacks, very
soon, imminent
Targets: Lexington or
Concord
LOW HIGH
RelativeImpact
LOWHIGH
Using wallpaper and ant colony
factors, Americans beat
British… They also shifted
risks in wild card by using
signaling with lanterns.

Predict & Act!
8. Wallpaper Jujitsu:
What are my best “left-side” bets?
 Wild Card Zone has factors
outside your control
 Wallpaper Zone has factors
within your control. It is less
risky (and easier, and
effective) to leverage these
to move towards your goal.
 Use lateral thinking to
create:
 new wallpaper factors, or
 revise existing wallpaper
factors
 At the end, use empathy to
test for traps (understand
others’ motivations and
thinking).
wild card
zone
wallpaper
zone
LOW HIGH
RelativeImpact
HIGH
Understand the world from
the other side’s point of view
well enough to make
intelligent predictions about
what they are likely to do next
and under what conditions…

Predict & Act!
9. Risk Splits:
How much risk can I shed or shift?
You’re in New York one day, or Hong
Kong, or Istanbul. You come
across a street game in which a
player is tossing a coin. He has
just tossed 10 times in a row
straight heads.
He invites you to bet on the next toss
of the coin at even odds, and
indicates that you can choose how
much money to bet.
He tosses the coin in the air.
What bet do you call?

Risk Splits:
Navigating the right side of the Prediction Map is a fact of
life, in business as well as out.
The key is to ways to structure bets that reduce the risk of
taking the wrong side of the wager, in two steps:
1. Decompose the situation to understand the uncertainties
and potential costs  decide if you have to play, or even
want to play.
2. If we decide to bet, restructure the wagers to reduce or
redistribute as much of the risk as we can (unless we are
getting a disproportionate reward for the risks we are
taking).

Risk Splits:
Outcomes – Odds - Consequences
2. You win if
you bet tails
1. You win if
you bet
heads
3. Dealer’s
choice
4. Dealer’s
choice.
Will use sleight-of-hand to switch coins
Will not use sleight-of-hand to switch coins
This coin
is
weighted
for heads
This coin
is
weighted
for tails
Odds ?

Risk Splits:
It’s easy to see bets in hindsight, of course,
because by then the uncertainties are resolved,
and the Wild Cards are wild no more.
Uncertainty Grid gives you the opportunity to
manage risks, before your know the answer.
Ask for each quadrant:
“If I could tell you now, for certain, that in a
year this will be the situation you will be in, what
bets would you then wish that you had made
now?”
and take 5-10 minutes to answer this..

Predict & Act!
10. Point of Action:
What’s the “it” I’m betting on?
 Intent  Prediction  Action
 OK to go in any order, as long as all three are
verbalized.
 Most people go, more easily,:
Action  Intent  Prediction
 Do these steps – be disciplined:
1. Write each step on a slide.
2. Check for consistency between these 3 slides,
3. If you find inconsistency, redo your bets and
redo the slides to reflect your new plans.

Point of Action:
Iridium “It” – Action (Content of It)
 Customer purchases Iridium service and also the phone.
 Iridium service covers all parts of the globe, including places not
covered today – ships, oil rigs at sea, remote locations (Arctic,
Amazon)
 Allows cross-border communications between countries with
conflicting telecoms standards (roaming)
 Iridium phones need direct line-of-sight from phone to satellite;
often don’t work in buildings, under trees, or in dense urban
locations,
 Can fit phone with special oversized antenna to help with this
problem,
 Base phone is 7” (18cm) long (without antenna) and 1 pound
 Price to purchase phone is $2200-$3400
 Usage fees, $2-$7 per minute (can’t reduce this cost in future
due to satellite capacity)

Point of Action:
Iridium “It” – Intent (What Outcomes and Why)
 Outcomes we want to achieve:
 Sign on 50,000 customers per month in 1999 (=600,000 in total)
 Even with slippage, sign on at least 400,000 customers in total by
end of 1999
 Value of these outcomes to us:
 Breakeven volume is 400,000 subscribers,
 Loan contracts require us to have at least 52,000 subscribers by end
of March 1999
 If we can hit at least 400,000 subscribers by end of 1999, we can go
it alone or sell external sources on another round of financing.

Point of Action:
Iridium “It” – Predictions (Forecasts and Confidence Levels Odds)
 Core predictions, satellite based mobile phones:
 Satellites will be best way to provide worldwide mobile service,
 People in business, military need cross-border coverage,
 Our service competes with outrageous hotel charges or no service at all,
 Future satellite phone market: 12 million users by 2002 and growing,
 400,000 user in 1999 viable since 400,000 is small percentage of market.
 Environmental scan, ground-based vs satellite-based mobile phones:
 Ground-based mobile coverage growing fast everywhere
 Cross border problem diminishing – GSM becoming single European standard
with 150 million subscribers predicted for 1999
 Ground-based mobiles work indoors and in dense urban areas – Iridium don’t
 Much cheaper usage fees for local calls – 9-11cent per minute – and
international call to/from most locations
 Competition has much smaller and less costly handsets – Motorola StarTec in
1998 at 4 “ long, 3 ounces, $600 before discounts,

Predict & Act!
11. Domino Effects:
Will I be locked into a tight set of follow-on bets?
Two quick tests:
1. Does the bet you are about to take
involve a known and consistent
sequence of steps?
2. Can significant resistance be expected
to the results you are trying to
achieve (and who has the negotiating
power)?

Predict & Act!
12. Game Over:
How will I know when to call it quits?
You are invited to a buffet – most wonderful
food and drinks…
You can eat and drink as much as you like, and
stay as long as you wish.
However, you cannot take any food away with
you when you leave, and you cannot come back.
When do you call it quits?

Game Over:
How will I know when to call it quits?
PROFILE SATISFACTION
WITH RESULTS TO
DATE
PREDICTION
ABOUT RESULTS OF
NEXT ROUND, SAME
GAME
INTENT
FOR NEXT
ROUND/KIND OF
RESULT NOW DESIRED
A?B?C?
HIGH LOW MORE
TO GAIN
MORE
TO LOSE
WANT
MORE OF
SAME
WANT
OTHER
THINGS
1 X X X A
2 X X X A
3 X X X B
4 X X X B
5 X X X C
6 X X X C
7 X X X C
8 X X X C
A= STAY, B= GET OUT OF THIS, GET BACK IN OTHER, C= GET OUT OF THIS TYPE

Make your own luck

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