{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"The Turkey Problem","description":"As we\u2019re seeing with the Covid-19 crisis, assessing risk and responding when things go wrong are critical skills for entrepreneurs. The problem is, this is very hard for us to do. We\u2019re wired to think tomorrow will be the same as yesterday\u2014until something happens that we didn\u2019t see coming and we\u2019re snapped into a new reality.  Normalcy bias A challenge we all confront is normalcy bias. This is a view that\u2019s hard-wired into us, that tomorrow will look a lot like yesterday did. Thinking like this serves us well 99% of the time. We all operate with a set of basic operating assumptions that create the foundation of our normalcy bias This is the foundation of how we view the world around us; it\u2019s how we decide things like what\u2019s possible and what\u2019s impossible. It guides our day-to-day decisions, which then become automatic. We create a narrative about the world around us and repeat it in our heads. We flip the light switch, and the lights turn on. Before long, we can\u2019t imagine a world where we flip the switch and the light doesn\u2019t turn on. Don\u2019t assume tomorrow will be the same You don't have to identify the 1% of the time when normalcy bias doesn\u2019t serve you. Rather, examine your assumptions about things that fall outside of your control and ask yourself: Are you assuming those things will always be OK?  One thing that\u2019s helped me be successful as an entrepreneur (and survive several of these economic macro-shocks that we\u2019re experiencing) is that I\u2019m really suspicious of my own biases\u2014and especially my normalcy bias. I\u2019m constantly looking for new information or data to disprove the running narrative in my head that tomorrow will be fine because yesterday was. We watched the largest quarantine in human history unfold in the Wuhan Province months ago\u2014yet most of us ignored it because it didn\u2019t fit with our narrative about pandemics. The narrative from previous pandemics is that the world makes a big deal about them and they don\u2019t end up affecting us. The \u2018turkey problem\u2019 Author and philosopher Nasim Taleb calls normalcy bias the \u201cturkey problem.\u201d He writes: \u201cA turkey is fed for 1,000 days by a butcher, and every day confirms to the turkey and the turkey\u2019s economics department and the turkey\u2019s risk management department and the turkey\u2019s analytical department that the butcher loves turkeys, and every day brings more confidence to that statement. But on day 1,001, there will be a surprise for the turkey\u2026\u201d The more time goes by, the more anything can feel \u201cnormal.\u201d  I have a friend who works at a derivatives desk at a major financial institution. She graduated and started her career in 2008, the first year of the bull market. The market\u2019s been going nonstop ever since. Because she\u2019s never seen a downturn, she assumes things will always be fine. Recognize what\u2019s in your control (and what\u2019s not) Entrepreneurs, especially, need to be able to see the complexity in the world around them that most others take for granted. They need to anticipate where those systems may fail. Like the Stoic philosophers teach, you want to recognize what is in your control and what is not. Try to expand the boundaries of what\u2019s in your control and examine your assumptions about what\u2019s not. Be on lookout for things that contradict the narrative You have to look specifically for things that could prove your narrative wrong. You have to be looking for information that\u2019s not necessarily what you want to hear and doesn't fit the narrative you have in your head. We watched the largest quarantine in human history unfold in the Wuhan Province months ago\u2014yet we ignored it because it didn\u2019t fit with our narrative about pandemics. Our narrative, from previous pandemics, is that they don\u2019t pan out even as the world makes a big deal about them. You can still act When these types of events happen, entrepreneurs can get stymied into inaction. No matter what situation you find yourself in, there\u2019s always some action you can take now\u2014even if it\u2019s merely putting a plan together. A friend of mine had a physical products business in town that got overextended. He borrowed money to buy his partner out. He hit this huge cash crunch and the business was collapsing around him. It was slow motion train wreck. I told him, \u201cYou can still do something\u2014but you have to move fast. You have inventory that you can turn into cash. If you wait, your choices narrow.\u201d Links: Influence, by Robert Cialdinihe Full show notes: https:\/\/smith.substack.com\/the-turkey-problem ","author_name":"Smith Sense","author_url":"http:\/\/smithsense.com","html":"