We confuse a lot of things for risk.
When looking back over my career, I made choices not based on assessing risk but eliminating ambiguity.
What I mean by a decision to eliminate ambiguity is that in a quest for certainty, I mistake the confidence of a decision for certainty in an outcome.
If I make a quick decision and am confident in it as the best decision, I feel like I’ve made a good decision, and that will lead to a good outcome.
All I’ve done is reduced my anxiety about deciding. In most cases, there is nothing that my decision has done to reduce risk or improve the probability of the best outcome. I’ve just quelled my emotions.
If you’re like me, this is a shortcoming that will need to be resisted in your big decisions.
Let’s turn our attention to risk.
As a new author, you risk time and money to see if you can create a full-time career out of writing. Let there be no mistake. This is a risky proposition.
The odds are against you.
If you haven’t written a book, then your chances of completing it are about 20%. Of those that get published (self or otherwise), only 2.5% make any regular money.
There are more millionaire authors today because there are just more published authors.
The probability of success hasn’t changed, just the population that probability is applied against.
The result is there are more successes and more failures.
“Stop it, Joe. You’re bumming me out! Why can’t you just help me succeed and stop it with all this bad news?”
I share the ugly truths to help you succeed and not be duped into focusing on your drive rather than your short game.
I can help by developing an author risk model—a mental model for thinking about the associated with being an author.
Author Risk Model
This is a mental model to help you comprehend how time, risk, skill, and talent play out when used deliberately.
Here is how I think about risk and reward as an author.
There is a spectrum of success from somewhere above JK Rowling and George Lucas at the top of reward to you losing everything you have today in pursuit of becoming a full-time author. This is the risk-reward (Y) axis.
The X-axis is time. Time plays an interesting function in an author’s career. As you’ll see as you read on, you’ll see time is on your side.
You can limit the downside by what you’re willing to risk in this pursuit. What is at risk is capital and your time. The conundrum is that to get more time, you’ll need more funds to survive until you attain success. I’ll dive deeper into this later when I speak specifically about time.
Talent is the intercept.
Talent may be a given for some, and it has weight early in the career. Talent in my mental model sets the intercept point of the graph. You move from there over time and get exposed to more success or risk. The aim is to use your talent, skill, and luck to produce content and gain an audience.
Continuous skill improvement sets the upper limit of success.
Skill improvement and experience happen over time. You only can get better over time by practicing and improving your craft. This creates the opportunity for someone with “less talent” to surpass a more talented person through skill improvement and production.
Luck lifts the risk threshold
It is through a decision-making system that you eliminate the trap doors of bad luck. While there is no way to eliminate that risk, improving probabilities on positive outcomes narrow the band. I illustrate this in the reduction of the pink area in the picture.
Maximization versus rationalization
This idea is that we spend an enormous amount of time and brainpower rationalizing the outcome of a decision into our world view after the result rather than spending an equal amount of time before the decision to maximize the probabilities of the outcomes we seek.
The “floor of failure” can be raised in the model by maximizing probabilities over the long term through upfront decision making and planning.
Time increases the probability of success. The longer your career goes, the more time you have to improve skills, widen opportunity through positive outcomes, produce content and amass an audience. The problem is that this requires capital and the shortage of money increases your urgency.
We know it takes three to five years for most businesses to get to break even. For authors, this is the time it takes to build your core audience and develop a backlist. The more you focus on the short-term fast-break versus the long-run career, the riskier your business becomes.
Plan for doing this for a long time. If you plan to put out a couple of books a year for three to five years, that’s six to fifteen books you’ll need to self-fund. I estimate that with no paid marketing or advertising, that’s six to thirty thousand dollars over a three to five-year period.
Does that number shock you?
If it does, then you have a more expansive risk zone than you need to have.
But I don’t have that kind of money to invest. Then this may not be the business for you. What and where authors invest their funds is interesting to me.
Which author has a better chance of success, the one willing to throw a $1,000 course on a credit card or the one that doesn’t because they are practicing patience to save $10,000 to invest in a proper three book launch?
Big drive or short game?
You already may be behind the eight ball if you have unrealistic expectations that you’re going to build a $100,000 a year business with no up-front investment.
The positive path is to plan for three to five years of development and know that the time is spent solely on creating content, building an audience, improving skills, and optimizing probabilities through decision-making.
My hope is now, with my rudimentary visual model, you can look at how you can lift the success ceiling and floor through a focus on skill and luck optimization. Talent is a given. You have it, or you don’t. That being said, my experience and model show that talent is just one part of the equation.
Until next week,