“If there was an epidemic, that definitely would make people accept vaccines. I wouldn’t hope for that, of course, but if you wanted people to love vaccines, an epidemic would remind them how magical they are.” — Bill Gates
“150 people die every year from being hit by falling coconuts. Not to worry, drug makers are developing a vaccine.” — Jim Carrey
At least you won’t get blamed if something goes wrong.
It turns out that we don’t need an abundance of caution. We need appropriate caution. They’re different things. Abundant caution is wasted.
Things like ripe avocados and morel mushrooms are terrific to have in abundance. By definition, though, abundant caution is not only more than we need, it’s more than is helpful. Because we get hooked on the feeling.
We can always make a risk ever smaller. But the cost is that we will increase other risks.
Please don’t avoid appropriate caution. It matters to you and to the community. But seeking reassurance and peace of mind by trying to drive risk to zero doesn’t get you either one of them.
Connection, possibility and forward motion are tools for resilience and a healthy life.
This week’s concept: Unit EconomicsWhat is it: Unit economics is the amount of additional revenue minus the additional costs for each additional unit of product sold. Unit economics does not take into account fixed costs (costs that need to be spent no matter how many units are sold) like rent, wages, etc. To properly find out your unit economics, first come up with the definition of “an additional product sold”. For example, in a SaaS company, it might be an additional person using the software while a restaurant would be an additional dish sold. Next, it is to determine the revenue and cost of each additional product sold. The revenue of each unit is usually easier to determine. It can be made more complex but more accurate by taking into account the retention rate of a customer or the probability of a customer repurchasing your product. This will help you calculate your customer lifetime value – the amount an average customer will pay you over the entire lifetime of interacting with your company. The cost can be more complicated to determine as this will depend on the cost structure of your product. This is any cost that can be attributed to getting an additional sale – the average marketing costs, the costs of producing an additional unit, the costs of delivery etc. Once all that is determined, you can find how much each additional unit will bring into your business – the unit economics of your product.
Why it is important: If you want to run a profitable business (and I hope you do), you will need to know how many units you have to sell to breakeven, i.e. the number of products you have to sell such that the fixed costs are offset. Without calculating the unit economics of each of the products you are selling, you could actually be offering products that are hurting your business. An example of this could be certain dishes in a restaurant where although on a per dish basis is profitable, when you take into account the marketing costs to acquire the customer, it might actually have be negative in terms of unit economics. Related topics I will cover in future weeks:
GullahGUH-luhPart of speech: nounOrigin: American English, unknown
1A member of a black cultural community living on the coast of South Carolina and nearby islands.
2The Creole language of the Gullah, having an English base with elements from various West African languages. It has about 125,000 speakers.
Examples of Gullah in a sentence “Jess was lucky enough to be able to visit Gullah heritage sites on her visit to the Carolinas.” “I am interested in studying all Creole languages, but I am most interested in Gullah.”
I hope you’re having a wonderful week. Here are 3 ideas, 2 quotes, and 1 question to consider as you head toward the weekend.
3 Ideas From Me
“I rarely have good ideas. To overcome this limitation, I think about one topic (like habits) for an unreasonable amount of time. Then, I revise, revise, revise until only the best stuff remains. It’s slow, but it works. You can either be a genius or you can be patient.”
“You can attract luck simply by sharing your work publicly.”
“For a few weeks, I started each morning by writing “What do I actually want?” at the top of a blank page. It’s surprising how useful it is to keep asking the same question. Each time, my answer became more precise. Once I knew what I wanted, I turned it into action steps.”
2 Quotes From Others
Author John Shedd on taking risks:
“A ship is safe in a harbor, but that is not what ships are built for.”
Source: Salt from My Attic
A Buddhist saying on the ineffectiveness of anger:
“Holding on to anger is like grasping a hot coal with the intent of throwing it at someone else — you are the one who gets burned.”
Source: paraphrased from the work of Buddhaghosa in Visuddhimagga IX, 23