The quest to randomness
Around 1940-s RAND Cooperation take the heed and produce one of the earliest important manuscript. Can you bet what was in it? Just a pile of RaNdOm NuMbErS. Yes! Maybe you didn’t get me correct, It was a large list of Random Numbers, 1 Million random numbers. To cut a story short, after careful observation of such numbers they realized they were not purely random, therefore they named them pseudo-random. Well, anyone can ask, “Ammm… why did they do that? Is it impossible for someone to guess numbers continually and get the list?” Well, here is the simple answer, for small chunks of numbers it’s easy to assume randomness exist, but when the process repeated a thousands, a ten thousands, a hundred thousand or a million times, suddenly a patterns or trend start to emerge regardless of how random it seemed to be at the first place. Let us try it this way, If someone is going to toss a coin and ask you how many will be head and how many will be tail? Well, we both know this is a random action, BUT yet still predictable, the intriguing part is that, if the coin will be tossed two times, you can really be wrong many times, but if the toss is to be done 10 times you can score close to answer if you just bet 5 head and 5 tails, when the number of toss move to 100 or 1000 you will be more and more close to answer by bet 50 tails and 50 heads or 500 heads and 500 tails. So, what happens to the randomness? Though tossing a coin being a random action by itself, unless you are a wizard or demi-god, its really rare to toss 100 consecutive heads of coin. You might be probably wondering thyself, “What the heck does this writer tries to pull?” Here is the pseudo-summary to the paragraph, Nature itself is really bad at producing random results and parallel to that its highly effective at producing patterns. And by saying nature, that simply includes me and you. Don’t forget, we are digging the gambler’s secret.
From pigeons to mankind
Let’s starts with pigeons, just little cutie birds. You collect two groups of pigeons, isolate them each on cage and put a white paper with black dot at the middle, a target. For the first group, every time a pigeon click a dot once, you immediate reward them with some food. Fortunately, they figure out the pattern with time, that for them to have food they just have to click the dot once and proceed with routine. Then you decides to do otherwise for the other group, you just gave them food on random basis, let say when a pigeon click once you gave them food, then next time you wait till five, then three, then seven and so on. Guess what happens?! The pigeon get confused and start to click the dot compulsively, endlessly every time its needs food even if food is no longer provided on the basis of dot clicking. With such experiments, one of the famous psychologist of 1950-s, Dr. Skinner, was able to train a pigeons to accurately target more than 10,000 targets in 45 minutes. One can obviously ask, “So, what does this implies bro.?, this whole pigeon thing sound a bit absurd to me? And by the way, I’m not a damn pigeon” Well, similar sort of experiment was repeated to rats, rabbits, dogs and ironically kids and the results were all the same, subjects behaviors were simply reinforced by reward mechanism which indicate consistent pattern and when the consistency collapse subjects develop irrational compulsive behavior which makes zero sense. If that is the case, we as human we constantly naturally search for that routine which will optimize and settle the results we are looking so, in such a quest we continuously or subconsciously leave traceable marks which can guide an analyst a clear clue on what the hell was going on in our minds. Up to this point, let us dive into the gambler mind.
The gamblers bread
Now what will happen if we blend the above paragraphs and create few gambling rules which will assist us toward the game, here are some,
1st, Though the game is seems to be random for each entry, we can still get close to correct results if we allow the game to role-out for a sufficient long time.
2nd, In such a case its not about wining or losing an isolated slot but rather its all about how will you manage to reach to the end of the game which will give you a maximum possible count in order to align with your probabilistic view.
3rd, Since human are naturally conditioned to be motivated by positive results, loosing in consecutive entries can be naturally painful, therefore its very essential to manage our the risks and expectations for each gamble.
4th, At the mid of the process its common to encounter other players who think they are luckier, smarter and better in some ways whom don’t fit in our way of gambling, the key here is not to dump or adjust or strategy but rather to stay calm, till the end of the game since we both don’t know what the future hold.
5th, If we reach to the end of gambling and loose or gain more than what we started with, its not the time to celebrate but rather the time to analyze our behavior and emotional reactions during the game.
Well, you can add more guidelines with respect to your interpretations from the above paragraphs, but here is a thing, the rules above are not designed to guarantee 100% positive result during gambling process but rather will distinguish you from other gamblers who approach the game with the deterministic or ideal views that somehow they can predict what will happen to the game. Now let us use some of gemstones from gamblers mindset and twist them to business environment.
Business case for randomness
You haven’t start a business but you already have 50 pages of fancy business plans, market projections for the next 5 years and great product story which nobody has ever used. Hahah… Its funny how most of us approach the market with our myopic predictive views. Reality is, most of your projection, plans and stories are mostly like to turn into a nightmare within few months, this can sound a little bit UN-motivational but its the cruel reality not given in public. So, what if we adopt the gamblers approach toward the market, if that so a gambler will represent a businessman, and the game will represent a market, so let us play!, as gamblers we don’t know how and when market will react to our product or service positively, in such sense its very important to lower our expectations and manage risks we are ready to incur. In addition to that, the other key is not to persuade customers and make sells but rather how do you retain the acquired customer. With such inputs, this kind of business approach requires time, in order to accumulate sufficient capital and reliable networks to accomplish the targeted milestones. But sometimes this approach is little bit boring and slow therefor most of startups opt for what I call tin-tiling approach which involve crazy approximations with no attachment with market reality. With all being said, its up to the players to choose the rules of the game, however we can conclude by nailing down a fact that, a random market can still yield consistently profitable result if approached with the right mindset.