Asymmetric Thinking

You don't need to win often—just correctly; design small‑downside, open‑ended‑upside bets and keep collecting convex payoffs.

The Promise

After this chapter, you'll understand what an asymmetric bet is, see real examples of how people use them, and design at least one small asymmetric bet you can make in the next 3 months.

What Asymmetric Thinking Means

Most people try to be right all the time. Asymmetric thinkers focus on being positioned well when they're right.

The difference:

An asymmetric bet is one where:

You don't need to win often. You just need to win big when you do.

Real Examples

Example 1: The Side Project

Tom worked as a developer. He spent 20 hours building a small tool that automated invoice reconciliation for freelancers. It cost him a weekend. If it failed, he lost a weekend. If it worked, it could generate passive income forever.

It worked. After 6 months, it was making $2,000/month. He'd invested 20 hours and got back thousands of hours of future income. That's asymmetric.

Example 2: The Skill Investment

Sarah spent $500 and 40 hours learning video editing. If it didn't work out, she lost $500 and 40 hours. But if it did work, she could:

The downside was $500 and 40 hours. The upside was potentially $10,000+ and a new career path. Asymmetric.

Example 3: The Relationship Bet

Mike spent 2 hours a week helping a successful entrepreneur with small tasks—no pay, just learning. If it didn't work out, he lost 2 hours a week. But if it did work, he could:

After 6 months, the entrepreneur offered him a job that paid 3x his current salary. Asymmetric.

How to Spot Asymmetric Opportunities

Asymmetric bets usually have these traits:

  1. Low cost to try: You can test it without risking ruin. Time, money, or both are small.
  2. High potential upside: If it works, the return is 10x, 100x, or unlimited.
  3. You can learn from failure: Even if it fails, you learn something useful.
  4. You control it: Success doesn't depend on someone else saying yes or perfect timing.

If something has 3 out of 4 traits, it's probably an asymmetric bet worth trying.

What's NOT asymmetric:

The Barbell Strategy

To make asymmetric bets, you need a barbell strategy:

This way, you can afford to lose on the bets without ruining your life. And if one hits, it can change everything.

Example: Emma made $60,000/year. She kept her job (safe base) but spent 10 hours a week on a side project. After 8 months, the side project was making $3,000/month. She could quit her job and focus on it full-time, or keep both and accelerate faster.

The key: she never risked her survival. She always had a safe base. That let her take smart risks.

How to Size Your Bets

Asymmetric bets should be sized so that:

Time bets: Spend 5-10 hours per week on experiments. If you work 40 hours, that's 2-4 hours. If you work 60 hours, that might be too much—reduce your main work first.

Money bets: Spend 5-10% of your income on experiments. If you make $50,000/year, that's $2,500-5,000. If you make $100,000, that's $5,000-10,000.

Both: Most bets require both time and money. A side project might cost $500 and 50 hours. A course might cost $1,000 and 40 hours. Make sure you can afford to lose both.

The rule: if losing would keep you up at night, the bet is too big. Make it smaller.

When to Double Down, When to Cut

Once you make a bet, you need to know when to keep going and when to stop.

Double down when:

Cut when:

The goal isn't to be right. It's to stay in the game long enough to catch a big win. That means cutting losses fast and doubling down on what's working.

Building a Portfolio of Bets

Don't put all your experimental time/money into one bet. Spread it across 3-5 bets at once.

Example portfolio:

Total: 45 hours and $1,700. If you work full-time, that's about 1-2 months of experimental time and a small portion of savings.

Most will fail or be mediocre. One might hit. That's enough.

As you learn, you'll get better at spotting bets. But you'll never be perfect. The key is to keep playing small hands until you catch a big one.

From Idea to Action

This week, design your first asymmetric bet:

  1. Brainstorm 5-10 ideas: Things you could try that have low cost and high potential upside. Don't filter yet—just list them.
  2. Score each idea: Rate each on a 1-5 scale for:
    • Low cost (1 = expensive, 5 = cheap)
    • High upside (1 = small return, 5 = huge return)
    • Learnable (1 = learn nothing if it fails, 5 = learn a lot)
    • Controllable (1 = depends on others, 5 = you control it)
  3. Pick the top 2-3: The ones with the highest scores.
  4. Size the bets: How much time and money will each cost? Can you afford to lose it 10 times?
  5. Start with one: Pick the easiest one to start. Don't overthink it. Just begin.

Example bets to consider:

Remember: the goal isn't to be right. It's to position yourself so that when you are right, you win big. Start small. Stay in the game. Let one big win change everything.