So I make a deal. In exchange for my continued silence they let me do something radical. For one race only, they are going to allow me to change my bets during the race.
There’s twenty runners. I put fifty pound down on each horse. Then I get out my binoculars and watch. As the lead runners come around the final bend I whisper to my personal bookie. He switches all of my money onto the lead horse, which fortunately, wasn’t the favourite. I’ve just multiplied my one thousand into many, many thousands, all thanks to the ability to change the horse that I was backing while the race is running.
I’ve written before about the man with many paths. It’s based on an idea from B.H. Liddell Hart’s biography of US Civil War phenom William Sherman:
“To the irresistibility of this progress Sherman’s flexibility contributed as much as his variability of direction. Moving on a wide and irregular front—with four, five or six columns, each covered by a cloud of foragers—if one was blocked, others would be pushing on.”
The kernel of the idea is that a strategy with many paths that head in a similar direction is superior to the strategy with only one path. Why? Because if one path becomes blocked, we can switch emphasis to another, which means we can leapfrog over obstructions and make near-perpetual progress.
Consider the horse-racing scenario above. Would you ever not make money from your bets if you could change them during the race? No way. You’d wait to see who took and held the lead, then switch all your assets to them at the moment when they are certain to succeed. That’s how the idea of many paths works. In the beginning, you back all options or pathways equally. Then, as time progresses, you see how each one fares, removing resources from the ones which flounder, and reinforcing the ones that seem to thrive.
We can approach our lives and career like this too. Yes, it’s good to increase our optionality. If you’re an entrepreneur, it’s good to be testing five or six potential ideas at once. But this optionality is useless if we don’t exploit it. If we can’t go from backing a selection of horses to putting our money on the one that is steaming ahead, we’ll never reap the rewards that optionality offers us.
Optionality without the ability (or willingness) to capitalise is redundant. We have to explore many paths and then shove all our weight behind the one that looks most promising. It’s a cycle really. Increase optionality, double down on the most promising option until it’s yield tapers off. Increase optionality, double down. Increase optionality, double down.