What I'm Thinking About
Because of the way my brain works, I can get obsessed quickly. Always have.
If you didn't see last week's edition, you won't know that I'm currently reading Taleb's Fooled by Randomness. This isn't the first book of his I've read — The Black Swan and Skin in the Game being the other two, which I absolutely loved. And they do, of course, touch on some of the things in Fooled by Randomness. The book is a wonderful exposé and philosophy on how we work, and how we falsely correlate successful outcomes to certain inputs after the fact.
Needless to say, all my thinking last week and this week is on the topic of luck and randomness. In my life. In my business. In other people's lives and businesses.
And this book, for me, is akin to taking some kind of hallucinogenic — an enlightening experience. Because whilst I was broadly familiar with survivorship bias and other human biases — I'd read Kahneman, for instance, on Thinking, Fast and Slow, amongst other books on probability, game theory and the social sciences — the thought experiments off the back of this book have really allowed me to analyse the luck vectors in my own life. And brutally dissect my past, my present, and correct for this kind of biased thinking in the future.
Should be required reading for anyone who wants to be an entrepreneur. Much more so than any of the mundane guru books.
What I'm Experimenting With
I'll seek forgiveness from you now, because probably every section today is somehow related to my reading of this book. So no worries if you want to close this tab and come back again next week if you don't fancy reading a 37-year-old's book report.
My experimentation this week — although admittedly poorly executed, and perhaps wrongly executed (to be determined) — has been to try to create my own generator from this book. When I got to the section about generators, specifically the Monte Carlo generator, I immediately, probably naively, went to Claude to see if I could build my own. Because let's face it, I wouldn't be able to code it on my own, nor would I have the mathematical smarts to run it in a spreadsheet. From a thought-experiment point of view, though, very, very helpful.
Here's what it looks like. I've run it here on a made-up business Mr Jones Imports & Exports.
Mr Jones runs a small import business. Thirteen quotes sent, two container contracts won, one buyer who never paid. That's his whole evidence base. Left is every assumption he's making. Right is what eight thousand versions of his next year look like.
The dice on their own. Every one is a guess and the labels say so. Thirteen data points is all the conversion rate rests on. Twice is the sample size the book warns about.
What I really got out of this was a thorough assimilation and comprehension of our human fallibility, our naivety and our optimism in our businesses, careers and/or investments.
So broadly speaking, what is a Monte Carlo generator?
MIT defines it like this: a Monte Carlo simulation is "a statistical technique used to model probabilistic (or 'stochastic') systems and establish the odds for a variety of outcomes". There are multiple types, they write, "used in fields from particle physics to engineering, finance and more" — the EPA has been running them since the nineties to assess health risks from things like smog exposure.
(Source: Peter Dizikes, "Explained: Monte Carlo simulations", MIT News, 17 May 2010.)
Put in plain terms: it doesn't tell you what will happen. It tells you what could have happened, and how often.
I did several rolls of the dice based on my current situational inputs, reaching a conclusion that I arguably had a lucky month in August 2026. I played the month out twenty thousand times. The August I actually had sits in the top 2% of them.
The August I actually had sits in the top 2% of scenarios.
My first thought was: Mr Barton, you're not as clever as you think you are.
And then I immediately saw how exposed I am. Across different areas of what I do.
Prior to looking at my August through the Monte Carlo lens, I was attributing my success to my abilities and skill. And now I understand that those are solely prerequisites to even have a chance, not inputs for outcomes. Without sharing too many details, there was a lot to do with skill — the execution when I landed the opportunity, and the preparation I'd done on previous things that allowed me to apply that skill. But the luck part was this opportunity coming across my desk in the first place. Which I was probably misattributing to smarts.
Would I have done anything differently? No. My August was all about keeping an open mind, and in order to have such an open mind in August, I needed to somewhat embrace naivety.
Facing the brutal facts is very much a September, back-to-school type of job.
So, spending an hour or so intricately looking at the probabilities of my outcomes across the next month, I was able to face the brutal facts. And really get an idea of just how crazy one has to be to have a go at bootstrapping a business. Which is no bad thing to be cognisant of.
And I always come back to this maxim from Good to Great, which I've shared multiple times today already and in past editions of Iterations — the Stockdale Paradox: "You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time, have the discipline to confront the most brutal facts of your current reality, whatever they might be."
And yet this exercise really helped. Whilst the mathematics is probably wrong, it got me to spend an hour facing my brutal facts. And then allowed me to think: okay, these are the brutal facts — how might I make my odds more favourable? If that is even possible.
What I'm Watching
Naturally, I continued my Wes Anderson theme and watched The Life Aquatic with Steve Zissou.
What can I say? Beautiful, stunning, funny — pick your superlative. I don't purport to be a film critic, so I won't wax lyrical about the film. I'd just say: if you're a person like me who needs and has to have weekly creative input, then watch it.
What I'm Reading
See the sections above — What I'm Thinking About and What I'm Experimenting With.
No changes from last week. Still reading the brilliant and fascinating Fooled by Randomness, as you might have guessed.