Chances of success not only in finance
The title can be a bit confusing in relation to, what will appear in this post. I was motivated to create it becouse of various articles about the probability to get a success. It is not about any specific success. It will be about how to estimate the probability of it. How to count chances of success.
A bit of math
I often read that the chances of success in such and such activity are high, small or medium. Actually, it doesn’t tell us anything – it means something completely different to different people. However, some numbers would be necessary to show this phenomenon. However, sometimes you can read, that the probability of success is 2%, 5%, 10% etc. How to interpret it and what does it actually mean? Imagine, that we are talking about business. The 10% probability of geting success means nothing less than, that in 10 out of 100 attempts will be successful. To show it simply, if a business is established, it should not go bankrupt once in 10 times (by the way, it is probably a very demanding business). The chances of success – now it’s already clearer.
Where did this data come from
A question is, how the probability of these successes is calculated. It can be relatively easily to do. For example, if you work in a large corporation, the average probability of becoming its CEO is 1/1550 (0.0645%). It was calculated in such way, that the average number of CEOs was divided into the average number of all employees. How is this number interpreted? If you would work 1549 more times (having the appropriate competences) – from mathematical point of view you should become the boss at least once. The reality, of course, is not so simple, because it’s just math (although in one of my previous posts I wrote, that math is the most important thing). You can read it at the link:
In fact, by working 1549 more times, you can become CEO 2, 3, 4 more times. However, there may, that you never become one time. This is how probability works.
So when will we be successful?
But now to the point. Let’s ask the question, that I actually wanted to ask at the very beginning. How many trials do we have to do in order to be THEORETICALLY successful. Imagine, that the probability of success in some business is on level 5%. This means, that if you start this business 100 times, it will be successful in 5 cases. Following this line of thinking. By starting this business 20 times (of course in the same conditions) we will achieve success. Lets count 5% = 0.05.
0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0, 05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 + 0.05 = 1 which theoretically means certainty of success.
If the probability of success is 20%, you will be successful after theoreticaly 5 tries.
The reality is complicated
The subject seems simple, but life is more complicated (what a discovery). There are many objections to this calculation. First of all, the very probability of events may not be true. It is only a probability, so as described above, it may not actually happen. The presented structure is only a demonstrative model for a specific situation. And finally, the most important thing. The fact that everyone will theoretically run a business in the same way is just a theory. People differ not only in personality traits, but also in education, knowledge and, finally, experience, and this can give completely different results. And the most important thing that plays rule – hard-working.
At the end
However, the model presented here is only a model. In principle, it should be like – but it may never actually happen. So we have to be aware of how it should work in reality. I hope this post will shed some light on the activity of achieving success.
Below there are some my other posts, that I invite you to read: