Misfit Entrepreneur February 2024 - 390: Lessons For Hannah - The Cobra Effect

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Misfit Entrepreneur 28: Lessons for Hannah - Life

Dave Lukas - Lessons for Hannah

390: Lessons For Hannah - The Cobra Effect

Hello Misfit Nation! Welcome to another edition of "Lessons for Hannah!"

Many years ago, I introduced a new format that alongside our regular episodes called “Lessons for Hannah.” Hannah is my daughter and one of the main inspirations for the Misfit Entrepreneur. I wanted to have a place where she could go and learn from her daddy and his Misfit friends throughout her life….even after I am gone. If you haven’t listened to the first episode of "Lessons for Hannah," I urge you to as it gives some more background and tells the amazing story of how Hannah came to be in our lives.

Lessons for Hannah are short, very useful, and sometimes comical lessons, that I want to share with you and give to Hannah to help in your lives. Because I want Hannah to have these for her life, I’m going to speak as though I am talking directly to her. These episodes are a lot of fun and if you think there is a lesson that we should include in these episodes, please don’t hesitate to send it over to us at [email protected]. We’d love to share it.

This week’s Lesson for Hannah

Hannah,

I came across an old principle the other day that was born of something that happened when Britain ruled India a long time ago. It’s called the Cobra effect.

The Cobra Effect comes from an effort by the British government to reduce the population of Cobras in Delhi, India during their colonial expansion in the country. The cobras were a threat and killed more and more people as the colonization and population grew in the county. What did they do? Well, the British offered a bounty for every dead cobra. Because much of India at the time had little of means and the pay was good, people started breeding cobras to kill them and collect bounties. When the British found out that they were essentially getting scammed, they ceased the program, but the problem was people had now bred all these cobras. So, what did they do? They released them into the wild increasing the Cobra population to higher levels than before the program started!
This is classic example of when an attempted solution to a problem ends up making the problem worse than it was originally. And it is a great lesson that can be used in life and business.

Here are my key takeaways for you from the story.

Unintended Consequences: The Cobra Effect illustrates how well-intentioned actions can have unintended and counterproductive consequences. In this case, the policy designed to reduce cobras ended up increasing their population. Many people do things without thinking them through leading to unintended consequences whether in business or relationships. And in today’s world, “stopping and thinking” is becoming more and more rare – but those that develop the habit of doing so have an advantage.

Incentives Matter: Another key lesson is that incentives play a crucial role in human behavior. When people see an opportunity to gain from a certain action, they are more likely to take that action, even if it goes against the original intention. This is very important for business or if building a company as the way you approach the market needs to be strategic and make sure you aren’t harming your success vs. helping it with how you incentive customer to work with you.

Short-Term Thinking: I noted this some before, but sometimes, quick fixes or short-term solutions can backfire in the long run. In the case of the Cobra Effect, the government's focus on the immediate goal of reducing the cobra population led to a failure to consider the broader implications of their policy and created more havoc in the end.

Adaptability: The story also is a good lesson in adapting. People are often resourceful and adaptable. When faced with new incentives or constraints, they can find creative ways to navigate them, sometimes in ways that weren't anticipated. In life, you want to adapt and find opportunities in ethical ways and should do everything you can to do so. Just beware that others will take advantage in unethical ways. Don’t go along with them and be on guard for it.

Actions Have Ripple Effects: Whether you realize it or not, your actions in life have ripple effects and impact a lot more than just yourself. The Cobra Effect serves as a reminder that understanding these complexities is crucial when making decisions, but you also cannot let it paralyze you. Just be aware that decisions have consequences, good and bad, and be prepared to deal with both.

Develop Your Flexibility: When faced with the Cobra Effect or similar situations, it's important to be flexible and willing to make changes in response to shifting circumstances. Recognizing a mistake and taking corrective action is a very important skill for life.

Hannah, the Cobra Effect serves as a great lesson about the unintended consequences of well-intentioned actions and the importance of carefully considering incentives, adaptability, and long-term thinking when making decisions whether in business, or other areas of life. Understanding the lesson will serve you well, especially when making big decisions, and help you in success and personal growth.

I love you,

Dad

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Best Quote

"The Cobra Effect illustrates how well-intentioned actions can have unintended and counterproductive consequences."

Many people do things without thinking them through leading to unintended consequences whether in business or relationships. And in today’s world, “stopping and thinking” is becoming more and more rare – but those that develop the habit of doing so have an advantage.

In life, you want to adapt and find opportunities in ethical ways and should do everything you can to do so. Just beware that others will take advantage in unethical ways. Don’t go along with them and be on guard for it.

Be aware that decisions have consequences, good and bad, and be prepared to deal with both.

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