University of New South Wales
Sydney, NSW 2052, Australia

©2018 by Science of Innovation Lab.

Gambling is good for business

August 20, 2016

I’m terrible at gambling. But roughly every six months I forget this fact and manage to find myself inside a casino, ready to win big.

 

Recently, I found myself at a roulette table in the middle of a winning streak. I had doubled my money in the previous 15 minutes and was experiencing that smug winner’s glow.

I’m a scientist who prides myself on my ability to think critically. The rational part of me knew I should walk away. I knew the streak couldn’t last. But foolish heads prevailed and another 15 minutes later… my final chips were dragged away from me by the dealer, signalling the end of my night.

 

I had ignored the fundamental principle of gambling… The house always wins!

 

Casino owners are smart. They are in the business of making money, not losing it. That’s why every game is designed to have odds that favour the house. This means, that while you may win big early on, the longer you play, the more likely you are to lose.

 

Innovation is often compared to gambling. The outcome of any innovative venture is unknown. Therefore, innovators need to take risks, which may or may not pay off for them in the long run.

 

In some ways, innovation is like gambling. But with one critical difference… The odds are in the favour of the innovator.

 

This means that the more bets you place, the greater the chance of success.

 

A large amount of research has demonstrated this to be true. Professor Dean Keith Simonton from the university of California has conducted a number of studies revealing that the greater the level of creative output, the greater the chance of success.

 

There are many famous “creative geniuses” who exemplify this idea. Shakespeare wrote 37 plays and 154 sonnets. Einstein published 248 scientific papers. Bach composed over 15000 pieces of music and Picasso produced 15000 pieces of art. In each case, only a tiny fraction of what they produced went on to make a significant impact.

 

The importance of creative output also extends beyond the fields of science and art. A study of patented inventions by Dr John C Huber found that amongst full-time inventors, those with the most patents were also those whose patents were judged to be the most significant.

 

Many Silicon Valley based tech companies are beginning to realise the importance of maximising creative output to increase the odds of success. Jeff Bezos, Amazon CEO and founder, is famous for doubling the amount of experiments that Amazon runs every year. Amazon now runs thousands of experiments each year, many of which involve new products and services. As a result, they are regarded as one of the most innovative companies in the world and are rapidly moving towards total world domination.

 

There are obviously many factors that increase the likelihood that an innovation will be successful. Innovation doesn’t need to be like throwing darts blindfolded. But no matter how perfectly you approach the innovation process, you can never confidently predict whether your innovation will succeed.

 

At the end of the day, if you want to become a great innovator, you should focus on being prolific. The more you innovate, the greater the chance of success.

 

Just remember… the odds are in your favour.

 

 

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