Wynn-ing Ways Email 2 of 45: Knowing the Odds

Asymmetrical information

That’s a fancy way to say you have knowledge others don’t.

Having asymmetrical information is money, power, advantage.

I used to think that was the most crucial information—the secret stuff. Leverage.

The problem with that type of information is it is perishable. Once others have it, it loses potency.

Before I get back to my encounter with Steve Wynn, let’s explore information and decision making.

We all have an unspoken hope to get the inside information that propels us to success.

This is not the way!

Instead, having a decision-making process that drives your business has more value than asymmetrical information. Over the long run, a decision-making process will improve over time and give you confidence in the face of uncertainty.

Facing uncertainty is more common than getting ahold of a secret to trade on. Therefore, leave the secret chasing to others. Let’s instead understand how good decisions are made.

So here we go…

Have you ever heard of Frank “Lefty” Rosenthal?

He wasn’t part of the Outfit, but he knew those guys.

He is another Vegas legend who changed the face of the strip.

He was a mover and shaker in the sixties and seventies. On Lefty’s website, he considers Wynn #2 in top operators after Jackie Gaughan, who was, by the way, Steve Wynn’s mentor.

Few can say that Robert DeNiro portrayed them in a movie, but Lefty can.

Lefty was the real-life inspiration for Ace Rothstein in Scorsese’s Casino (This series may feel like a Scorsese movie between the cast of characters and the length of the emails).

At the pinnacle of his career, Lefty was running the Stardust (the Tangiers in the movie), the Fremont, the Marina, and Hacienda casinos for the Chicago Outfit. This was back in the day when the Stardust was THE place to stay.

Before Siegfried and Roy went to the Mirage, Rosenthal got them to the Stardust by giving them his wife’s Rolls Royce.

While Lefty was a convicted felon and regularly hung out with mobsters, his specialty was handicapping or odds making. Some say he was the best handicapper ever.

He started as a kid in the bleachers of Wrigley Field, making bets with Cubs fans.

He also made Book (facilitated illegal sports bets) he did it different.

Lefty knew if the basketball floor had just been waxed or if the star player had just found out his girlfriend was pregnant. In short, he made money in games of chance by knowing more about the possibilities than the others. Perhaps some of that looks like asymmetrical information, or inside trading, sort of, but it was how he used it to inform his understanding of outcomes.

Lefty didn’t bet on every game, just the ones he knew he had advantages in winning.

Out of the dozens of football games or hundred college basketball games on any weekend, he would bet on one or two. Ones where he knew the other oddsmakers had gotten the line wrong.

When Lefty was first put in charge of the Stardust, he set out to make it better, more profitable. He wasn’t one to let the status quo get in his way.

He was the first to open up a sportsbook inside a casino. Now every casino has one.

While he had a lot of latitude, he was told by the owners that the poker room was off-limits to him because it was a lock on a million dollars a year.

“The first time I strolled into the Stardust card room, my first impression was, the California Board of Prisons had arranged a tour for death row inmates from Alcatraz. That first impression wasn’t too far off. We could have been a safe haven for the FBI’s 10 most wanted. Every hustler, scammer and desperado had their space, and the rent was free. The dealers, floor men, and card room shift bosses were in with the scam. The only square guy in the room was the Card Room Manager, Meyer Goldberg, and he was in the twilight of his career, surrounded by teams, gangs, and “holdout artists.”

      ~Lefty Rosenthal

He didn’t listen. It took him eighteen months to turn the poker room around. While everyone was happy with the status quo, he wasn’t. He saw a reality where the poker room was a safe place for poker players free of skims and scams, and guess what…

more profit.

Five times more.

His expertise in gambling and understanding of the odds allowed him to see past the status quo and put the pieces in place to make things better. It was hard; he had guys who were OK with putting your head in a vice telling him to leave it be. He took the risk — knowing the reward.

Those who learn how to build advantage and systematize its accumulation will create a bigger and bigger lead. That’s the secret to getting it to work for you over time. That means building a system that works with cumulative advantage.

The status quo may not. Are you prepared to buck the trends and create your vision?

Where others are happy with the dodgy poker room, you do the work to clean it up and make it better?

Professional poker players understand that it is the system of playing poker that wins tournaments not having asymmetrical information. If you want a career and to accumulate wins in a tournament, you need a plan.

Pro poker and publishing are similar. Just like a poker player with a bigger stack of chips, they can push their advantage further when they have the upper hand. The best players also know when to wait out others until the cards are going their way again.

 In the beginning, a player needs to build their stack (bankroll).

In a hold-um tournament, you start with your entry fee. Let’s say 1000 dollars. By the end of the tournament, the last players will have a hundred thousand dollars because they have wiped out one hundred opponents. The winner of the contest will get everyone else chips-Winner takes all writ large. A big part of building advantage is conserving your chip advantage until they can leverage it more.

There is a fixed number of hands to be played. Just like you have a set number of launches to leverage.

Annie Duke is a professional poker player with over 4.2 million in winnings, playing no-limit hold-em. She is now an author with some of the best writing on decision making.

I’m currently reading her latest book, How to Decide.

To be a real pro, you need to know how the game is played, the probability of your hole cards given what you can see in the community cards, the ability to read people’s behavior, etc.

Asymmetrical information rarely exists. At the highest level of Poker, the players are math geniuses and experts in behavioral psychology. The tournament winner has to play hundreds of hands to win. Essentially, you need to have a reliable decision-making system that can deal with uncertainty.

This brings me to three points:

  1.    As the CEO of your publishing business, you need a decision-making system
  2.    Your business needs to be a system the optimizes your advantages when they are present and conserves your advantage when your chances of winning are low.
  3. You need to have the right expectations for the ebbs and flows of your business.

We will address the points above this season and give you some ways to think about how you’ll make future decisions and design your business system.

Annie has taken what she has learned around poker tournaments and shares how you can use poker strategies to become a better decision-maker.

If you want to go into the poker rooms and not get chewed up, you need to know how the room works. Have an eye for people like Lefty. To be a winner, you need to see when you can accumulate advantage and when it should be conserved.

There is an old poker room saying, If you look around the table and don’t see a sucker, you’re the sucker.

Hands of play

Professional poker players don’t try to win every hand. They try to make the most of what they have for that hand. It’s a combination of your stack (existing capital), the cards dealt, and the players you’re playing against.

Most times, the player fold. They are doing the minimum to stay in until they act. The small percentage of times that the conditions are correct.

For authors, we are going to have a set number of launches. In early rounds, the focus needs to be on getting to breakeven. Without a recovery of your investment plus a profit, you’re never going to be able to earn a living from writing.

We have two stacks we want to build: our reader stack and our capital stack.

In every round, you need to gain as many of the right readers as possible and hold on to them.

My observation of the state of play is that many authors are optimized for collecting the worse type of readers. Or maybe a better way of putting it is they are not segmenting their audiences enough and optimizing marketing for transactional readers.

Here are a couple of ways of thinking about what you’re optimizing for in a launch. By focusing on rank, you might stack promotions that target discount readers. Those that join your list are discount readers. Then you build a lookalike audience off of this list to get paid traffic based on the traits of bargain shoppers. A system of feedback loops optimized to concentrate on the transactional and value-driven.

Now, look at your organic sign up. The winning hand. Rather than thinking about how unfortunate it is that you don’t get more of these, think of your book as a filter qualifying the prospect. This is someone that bought your book and took the risk to sign up—a winning hand.

How do you play it?

Do you just throw this nice black hundred-dollar chip into the pile of overused dirty one-dollar chips?

No, it’s special. It is worth 100 of the others.

While most authors may segment that organic reader differently, they don’t have a conservation strategy. Is your treatment of an organic reader go something like this;

Email 1: Hi, I’m the author. Here is some free stuff.

Email 2: Did you get your free stuff? I love my (dog/cat /parakeet)

Email 3: Here are more books to buy from me

Dump to weekly deals newsletter

Is that how you want to be treated?

No!

I want the hotel owner to send me on a pirate adventure looking for a lost treasure in a hotel just about to blow up (watch the Steve Wynn Video).

I want to feel special and part of something.

In the beginning, you’ll only have one name on that organic list. That’s how it starts. Then it’s two, then ten, then one hundred.

A list of one hundred organic names you’ve nurtured is the list used to generate a paid traffic through a lookalike audience. An advertising campaign based on that audience inviting prospects into your story world is a cumulative advantage leverage point.

You’ve worked hard to stay in the game and build up your stack, and now you’ve been dealt pocket aces. Sure, it’s a winning hand, but if you misplay it, you’ll leave chips on the table.

Think like Lefty. Look for where the odds are in your favor. An organic sign-up is your edge; now, how do you leverage it or, at a minimum, not lose it.

Joe

P.S. Are you already blurring reality and fantasy?

If not, can you think of one way to bring your story world into the real world for your readers?

It can be something small like guest blogging characters or using a tool like a survey or a messenger bot to bring your characters to life.

Start with something small and test to see the interest level. As you move forward, you can exert your creative control and integrate things into your story that later can be used in promotions, launches, or newsletters.

Think of your hobbies and how they can connect with your story world. Are your books the basis of a game? Do you write mysteries and like to geocache? The injection of fun makes it engaging.

The wait is over Wynn-ing Ways Email 1 of 45

 

I’m excited to have you join me on this journey.

At a minimum, your participation will get you thinking about why you run your publishing business the way you do. You may find this material a transformative guide to achieving your publishing business’s full potential.

I ended 2020 with the three-part Tragedy of the Commons Series.

In that series, I introduced the concept of how it is “natural” for the individual users of a shared resource to put self-interest first and use more and more of a resource until they destroy the resource.

The resource pool we discussed was attention.

While you may be respectful of the resources, others aren’t, and it’s a common resource.

 The bull elephants (Amazon, Facebook, Google) aren’t respectful.

Using digital marketers’ tactics makes you look like an attention hacker-not respectful, even if that’s not your intention.

Despite what you do, others may destroy the attention you seek.

While they may have more to lose as their business is selling attention, those of us also using the commons will suffer as well.

I then touched on how holistic ranchers have used a counter-intuitive approach to restore the natural environment.

What if we could build a sanctuary for those we seek to connect with?

In this series, I’ll share some more stories to illustrate ways to think about your publishing business and attract readers naturally.

When done right, you become a refuge for your readers.

A place where they can get respite from those trying to exploit their attention.

A place where they can be with those like them. I’ll be drawing on the concepts of Advantage.

The crazy thing is the primary location for this set of stories in Las Vegas.

Is there any other place in the world where more has been done to audaciously grab your attention and trap you?

If there is, let me know, so I never go there.

Next time you’re in Vegas, stand on the Strip, and observe the gaudiness of the lights. With everyone trying to do the same thing with signage, it becomes hard to see a single location distinctly. Each casino becomes part of a larger noise that you block out.

From that audacity and the movers and shakers of Vegas, we can learn what to do and what to avoid.

Let’s get started…

I want to share with you a conversation I had with Steve Wynn.

If you’re not familiar with Mr. Wynn, I’ll give you a quick synopsis.

In 2014, they ranked Wynn #17 on Harvard Business Review’s top 100 performing CEOs globally. His estimated net worth is $3.1 billion. They ranked him #278 in 2020 on Forbes’ wealthiest people list. He has been inducted into the Casino and Gambling Hall of Fame and has had other accolades.

Steve took over his father’s bingo parlor business after his father’s death. It came with $350,000 in gambling debts. Over his storied career, Mr. Wynn changed the landscape of Las Vegas. He built the Mirage, Treasure Island, Bellagio, Wynn, and Encore on the Strip and several casinos across the United States and Asia.

But it was at the Beverly Hills Hilton I spoke with him.

A room full of investors and influential people all trying to get his attention.

I spoke up and…

Steve Wynn stopped and talked to me about his plans for the future.

Me!

He stopped, and the entire pack of followers stopped with him while he talked directly to me.

Before I go any further, let me provide some clarity about what you’ve signed up for. This isn’t your regular email newsletter where I randomly send you stuff to keep you engaged until the next time I need to sell you something.

There is no way to sign up for this newsletter, and you opted in to be here.

You are part of a select group that is seeing a different way of growing your publishing business.

This season one of my emails for authors. It’s titled …

Wynn-ing Ways: How a Properly Designed Business System Creates a Competitive Advantage.

Get it?

There will be three tracks I will be weaving through the emails;

◆         Business Systems

◆         Personal Development

◆         The Market

You’ll get 45 emails over the corresponding weeks, over 35,000 words, several thought experiments, thorough research, and a solid chunky nugget of knowledge for application in every email. We will begin exploring your business system.

All of this ties to my quest to craft a resilient, sustainable business system for authors that converts your creativity into reader delight, investor delight, and cold hard cash.

An advantage accumulator.

A novel author’s business system sounds interesting, doesn’t it?

Oh, and one more thing…

In the end, I’ll share the data with you.

Those that stick around will learn the ins and outs of using long-form narrative to create community, engage, entertain, and educate you.

Enjoy the ride. Then I’ll show you how I built it.

Consider this your license to steal these ideas and apply them to your brand.

What I’m offering here isn’t secret and if everyone applies it to their business won’t result in another golden goose slaughtered.

The reason these ideas are lasting is they are built on creating a personal connection with your reader.

I’ll take a few emails to share some stories. I’ll bounce between them to set the context, and then we’ll spend the rest of the season unpacking the concepts moving from the higher-level abstraction down through strategy and into some tactics.

Now back to me talking with one of the richest men in the world…

To understand why Steve Wynn would stop to talk to me and the context of the conversation, we need to go back to 1994.

My dad and I went to Las Vegas. This was our first trip, just him and I.

I had only been to Las Vegas once before. We went there as a family to meet some aunts and uncles and stayed at the Flamingo because my uncle got us all a deal.

On that trip, the Old Man (dad) said we need to see the Mirage.

Walking through the lobby of the Mirage, I was awestruck. I’d seen nothing like it in my life. Sure outside was a volcano, but inside was a jungle, white tigers, the biggest fish tank I’d ever seen outside of the Shedd Aquarium. It was Amazing, palatial, decadent. I was in love…

The Old Man had been going out to Vegas since the nineteen-fifties.

He was OLD SCHOOL, and this place impressed even him.

A guy that did business on a golf course gambled, smoked cigars, drank vodka.

Vegas was built for guys like my dad and Sinatra – OLD SCHOOL.

Frank Sinatra first appeared at the Desert Inn in 1951, but it was the Sands where he held court and transformed Las Vegas from a western cowboy town to a glamorous city where the rising middle class could spot celebrities.

The Old Man once paid twelve dollars to see the Rat Pack perform at the Sands Hotel’s Copa Room.

My Old Man had seen it all, and he had stayed at all these places when they were the IT casino.

On this trip, I was going to Las Vegas with my father, and we were going to stay at the Mirage.

The Old Man was at the top of his career, and I was just out of University.

Reflecting on this time, I realize how little I knew. How limited I was by bias, ego, and blind spots.

Not that I’m not today, but more then.

I know how much more I don’t know, and that lack of knowledge is dwarfed further by my ignorance of what I don’t know that I don’t know.

I digress…

Even then, I had a natural affinity for seeing connections. I was making those connections or at least storing things away to associate with others later.

For example, an experience in 1994, a conversation in 2001 all leads to revelations and insights in 2021, but at that point and time, I wanted to learn from the master how to navigate the flashy world of Las Vegas.

At that time, if you stayed at Steve Wynn’s Mirage, you could golf at the Dunes.

Now, if you’re not familiar with Las Vegas’s history, Steve Wynn was a guy changing the scene and making moves. I’ll introduce you to a few more movers and shakers in upcoming emails.

Wynn was backed with money from junk bond king Michael Milken. He had moved from downtown, where he had turned the Golden Nugget from a cowboy sh*thole into a place people wanted to be seen in. Now he was on the strip with a never-before-seen hotel called the Mirage.

He had even lured Siegfried and Roy from the Frontier with a custom-designed theater.

Steve Wynn was redefining Las Vegas.

Wynn had just opened Treasure Island. It was “family-oriented,” so while it was the newest hotel, we would not stay there. While we were family, this was about a father and son golfing and gambling.

We were the Mirage, not Treasure Island.

For the grand opening of Treasure Island, Wynn blew up the Dunes hotel tower. It was very theatrical and tied to the live-action pirate ship fight in front of Treasure Island.

Treasure Island was also the first hotel to have a Cirque du Soleil show. Now every hotel has one.

How spectacular was the event?

Wynn made a TV show that aired on NBC. You can see it here.

Go to 4:20 in the video and watch it.

This quote stands out

“To me, it’s more than a hotel. It’s a gateway between reality and fantasy.”

And yes, that is Steve Wynn in the video.

Think about that for a moment.

In a business based on a compulsive habit like gambling, he had this vision.

It wasn’t until later, when I spoke with him, I understood why he was doing what he was doing and the level of strategy he employed.

I had seen that video back in the day. It played regularly on the in-house TV channel at the Mirage. It wasn’t until I went back to research for this email season that I watched it with a critical eye and was sensitive to what Wynn was saying.

Gambling pays the bills, but you still need to get people in the door to gamble. Sure, you can monkey with the odds payouts and perks, but competitors can quickly mimic you.

As an author, it can feel like you’re a casino on the strip where every other author is trying to apply the same strategies to get readers in the door.

They are.

While this is the golden age of content creation, it doesn’t change the fact that the completion is stiff and the stakes are high.

I’m not positioning authors against each other. This is the competition for attention.

The competition is layered.

How do you break readers away from boredom and the dopamine triggers of Facebook, Instagram, and Tik Tok?

These platforms want to hold eyeballs there, so they create more attention inventory.

What they do to make their platform sticky makes it harder for you to convert.

Next is the digital marketers and funnel builders trying to teach everyone how to find attention and convert it as quickly as possible.

While what they sell may be called “secrets,” they’re not. However, they do create more and more people applying the same tactics.

Within publishing, you face more and more authors looking to use advertising to stay top of mind. The result is everyone paying more for the deteriorating asset of attention.

What is the solution?

Make your brand the place to gather as a community.

If you agree with the premise, I set out in the Tragedy of the Commons series. Then there is a unique opportunity to use your community as a sanctuary from attention abusers.

As a guest of the Mirage, I felt special. I was at the most prestigious hotel on the strip. Sure there was Ceasars, but it was older and a different vibe. I tied my identity to where I was staying. If I gambled while I was there, it would bet at the Mirage.

There is a natural attraction to places where attention is respected and trust is built. The right people will congregate, and they will find others like them that appreciate what experience you’ve created. Oh, and they’ll buy your books as well.

Like Steve Wynn, focus on the experience. Create a gateway between reality and fantasy, something I refer to as blurring the lines between your story world and reality. If I were to distill this into a call to action, it would be CREATE CUSTOMER DELIGHT.

Now we’re nowhere near done with this Steve Wynn story. I promised that I would share with you when I talked with him in Beverly Hills, but not in this email.

This email is weighing in at over 2300 words, and there is so much to weave together. I’ll leave you thinking of how your brand and community is a refuge for your readers and a place where.

Joe

PS: In later emails, I’ll be diving into Ray Dalio.

Ray managed a colossal hedge fund and wrote the book Principles. His view on how the economy works align with systems thinking. I suggest that you take the time to watch this 30-minute video to get a picture of the ocean that your fish swims in. Understanding his ideas of “everything is a machine” and “cycles” will serve you as a publisher and understanding the global economy.

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