Very interesting, a good book to read. It is even better to watch it together with "Underlying Logic: The Unchanging Behind the Change".
Teacher Liu Run has a very strong ability, that is, he can explain a complicated matter clearly in very simple language. This book mainly uses mathematics to describe the underlying logic of business.
In terms of starting a business, the success rate is very low. Only 2% of companies can survive 10 years, and most start-up companies die in about 2 years. If we take this 2% success rate as the basic success rate, the success rate of outstanding entrepreneurs, people with financing, and people with large company backgrounds will be much higher than 2%, let’s assume it is 20%, then how about such people? What about increasing the success rate on the basis of 20%? Do the right thing and keep doing it. For a business with a 20% success rate, the probability of two consecutive failures is 80%*80%. Conversely, the success rate of at least one of the two times is 1 -64% = 36%. Then doing it three times in a row becomes 1-51.2%=48.8%. The more times you do it, the greater your chances of overall success.
And we can grow in the process of starting a business. The second time is definitely better than the first time. Let’s assume that the success rate increases by 5% each time, and the highest increase is 50%. How many times do we need to start a business to be successful? It takes ten times, and the overall success rate can reach more than 99%.
Overall success rate = 100% - (100% - base success rate) ^ number of attempts. This is the "Formula for Entrepreneurial Success".
How should I put it, knowing this probability, I think most people should not start a business. Because entrepreneurship rarely has the opportunity to come 3 times. Often one ends up having to work for years to support the family. This is not a case of borrowing. If you borrow too much when starting a business, it is very likely that you will not be able to maintain your family.
Well, back to the book, in addition to applying it to the probability of entrepreneurship, this book also talks about how to use addition, subtraction, multiplication and subtraction to look at the company's financial report. This part is very exciting, I recommend you to read the original book. Anyway, I found it amazing.
In the end, I want to share a story in the book, which is a true story. It's about game theory.
The British Broadcasting Corporation (BBC) once did a program called "Golden Balls" (Golden Balls). In this show, after some competition, the only two remaining contestants will compete for huge prize money. The host will give each player two golden balls, one with "Split" written on it and the other with "Steal" written on it. choose one. Different choices of two people will lead to different results.
▶If you both choose "Equal Split", the two people will share the bonus equally.
▶If they both choose "Take All", both of them will have nothing in their hands.
▶If one person chooses "Split Evenly" and the other chooses "Take All", the person who chooses "Take All" will take all the bonus, while the person who chooses "Split Evenly" will get nothing.
So, would you choose "split equally" or "take all"?
This is really a test of human nature: if both choose "Equal Divide", it is good for both of them in terms of morality and interests; It is of course better to take them all away; but if the other party thinks the same way, everyone will get nothing.
Let's put aside these questions about human nature and understand the game from a mathematical point of view.
For A and B themselves, choosing to take all is the optimal strategy. But when two people choose this way, the overall return is the lowest. It is obvious that scoring two candidates is the best strategy, but in the end most people choose to take it all and lose both? This is human nature, and seeking to maximize individual interests is the weakness of human nature. The golden ball game is a game that tests human nature.
In the first episode of the Golden Globe Game, after many rounds of competition, there were only two players, Nick and Abraham, who did not know each other, and the bonus in the bonus pool had accumulated to 13,600 pounds.
Everyone is curious: Will they, like the previous players, follow human nature and follow mathematical laws, slide from the best result to the bad Nash equilibrium?
The finals begin. The host said: "You can have a short exchange before making a choice of 'split' or 'take all'."
Nick immediately said, "I'll take 'Take It All'."
Abraham was stunned. He never expected that Nick's first words would be to tell himself that he would "take it all". He originally thought that Nick would use a clever method to convince himself that he would definitely choose "Equal Split". Because choosing "Equal Split" at the same time is the best result. Only when two people choose "Equal Split", can they beat the game designer and get the bonus.
Nick went on: "But, I promise you, if you choose 'split,' I'll give you half when I get the money. But if you choose 'take all,' we'll all go home empty-handed."
At this time, the audience laughed because it was so incredible. The host also kindly reminded Abraham: "This guarantee has no legal effect."
Abraham said, "I know, I know." Then he said to Nick, "Let me give you another option. Why don't we all choose 'Equal Split'?"
Nick said firmly, "No. I'll take 'all'. I promise, if you choose 'split', I'll give you half of the bonus later."
Abraham was cornered, and he said to Nick, "You made a promise to me, but first I have to tell you what the promise means. My father once told me that if a person doesn't keep his word, , is not worth being called a human. Such a person is worthless, worthless."
Nick replied: "I agree. Therefore, I must choose 'take it all'. I also promise that I will share the bonus with you in the future."
Abraham was about to break down, yelling, "If I take 'take it all' too, we'll lose everything. If we end up empty-handed, you're an idiot! You're an idiot, yes. "
The host announced: "Please choose."
Abraham's hand hesitated for a second on the "take all" golden ball, but finally chose "deuce". For him, this may be the best choice.
Then, Nick also opened the golden ball he chose. Guess what that golden ball is? It turned out to be "evenly divided"!
No one expected that Nick, who firmly said that he would choose "take it all", chose "equal share" in the end, which is really surprising!
Because the two finally chose to "split evenly", they really split the bonus equally and returned with a full reward.
Nick used a set of unconventional game strategies, so that the two sides finally kept the best result of (50, 50), and did not slip to the bad Nash equilibrium of (0, 0).
What is this unconventional game strategy?
Nick actually doesn't believe in Abraham, human nature can't stand the test sometimes. Many players try to prove that their own humanity is glorious, while at the same time assuming that the opponent's humanity is also glorious, which is too difficult. How can there be good people in this world? You're a "good guy," but there's a good chance you'll meet a "bad guy." What you have to learn is not to assume that the other party is a "good guy", but how to deal with "bad guys".
And the best way to deal with the "bad guy" is to corner him and let him make the choices you want for his own good.
Let me tell you what happened next.
After the show, Abraham said in an interview that he had never met his father at all, and that his mother raised him alone.
In other words, he was lying.
That is to say, he wants to trick Nick into choosing "Equal Split" and he chooses "Take All".
That said, he could be a "bad guy".
We may never be able to exhaust those subtle human natures, nor can we see them clearly. What we can do is to use good mechanisms and strategies to make a person voluntarily become a "good person" or have to become a "good person", regardless of whether a person's human nature is inherently good or evil.
When we design some products, can we also design some good mechanisms and strategies to make people voluntarily become a "better" person, or have to become a "good person"?