Amitabh Bachchan is unarguably the biggest star of Bollywood – the Hindi film industry. He got his big break in the 1970s because he agreed to play the role that a lot of other more popular actors had passed on. It was the era when the Indian film industry mostly made romantic movies. No actor wanted to spoil their “romantic hero” image, and so they passed on the role of an angry protagonist in the movie “Zanjeer”. But Bachchan took the role and made it his own.
And over the next 20 years, Bachchan made a slew of hits and became a superstar. The most recognized Indian film actor ever.
But the Indian film industry was still nascent and unprofessional. Movies were made without scripts being ready. Without proper funding and distribution in place. So when Bachchan was over the age of 50, and meaty action hero roles were harder to come by, he decided to improve the industry itself. To bring professionalism to it. To make it run a little like Hollywood.
He started his own company to make movies: Amitabh Bachchan Limited Corporation (ABCL). He hired his top executives not from the movie industry, but from other well run corporations. And in the first year, the company made a huge profit of a whopping 15 crore rupees!
But that was the only year it did well. Within 2 years, Amitabh Bachchan and his company both were bankrupt. The idea of modernizing the industry was timely, Bachchan was the right person to execute it, he had built a good team, and yet they failed. Why?
Because Bachchan and ABCL became over confident. In their second year, they decided to fund 15 movies together. That’s not all, they decided to become an all-in-one entertainment company. They ventured beyond movie making and distribution business. They ventured into building television software, to making audio cassettes and CDs, to managing other celebrities, to event management.
They spent crores getting the rights to host the Miss World pageant in India. Which was a colossal loss making event for them!
The losses started piling up. Their balance sheets showed a hole of over 30 crore. Bachchan himself put his house worth 12 crore on mortgage. And soon had to file for bankruptcy because they could not make payroll. Their goal was to become a 1000 crore revenue generating company before the year 2000 – and grow 10x in 3 years. Unfortunately, they lost it all in 1.
Bachchan was cursed with the bias that many smart successful entrepreneurs are cursed with: when you are great at one thing, you think you will be great at every other thing you do too.
Dunning-Kruger meets Amitabh Bachchan
In social psychology, they’ve given a name to this bias: illusory superiority. It’s a condition that makes a person overestimate their abilities.
But here’s the rub: all of us suffer from this bias!
Professors David Dunning and Justin Kruger ran a series of experiments that show this. 93% of people who drive cars say they are above average drivers. The bottom 10% of test givers routinely guess that they would be in the top 33% of the class – before they get their results back. 42% of software engineers rate their skills as being in the top 5%!
The worst thing? People are blissfully unaware of their incompetence. The worst driver does not think or know that she is the worst driver. Her lack of knowledge and experience make her unable to surmise that she is bad.
So how can you fix this? How can you not fall prey to the Dunning-Kruger effect?
The antidote to Dunning-Kruger effect
The only way to not overextend yourself and get a false sense of your abilities is to become aware of your limitations. How? There are two questions that you should ask while you’re still in the planning stages of your goal:
- What don’t you know?
- What if you are wrong?
The first question keeps you striving to improve. And the second question makes you reduce and manage your risks. Together, they help you avoid doing crazy things.
What if this advice is wrong too?
These 2 questions can have an unwanted consequence. It can make you too conservative. Too afraid to act. Because it gives you a valid excuse to procrastinate: you need more information to not be wrong. So what can you do?
You have to balance the two. You have to learn from Jeff Bezos.
In his annual letter to shareholders, Bezos says that there are two types of decisions.
- Type 1 decisions are not reversible, and you have to be very careful making them.
- Type 2 decisions are like walking through a door — if you don’t like the decision, you can always go back.
- The problem comes from confusing the two.
In an earlier letter to his shareholders, Bezos had also taught:
“Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.” – Jeff Bezos
So figure out if the decision can be reversed. If reversible, be fast. If irreversible, be sure.
Bachchan’s second innings
When it was rockbottom and creditors were hounding at his doors and the media was writing about his failures, Bachchan had a moment of clarity. He asked himself: what does he know how to do well?
“I looked at the options before me and evaluated different scenarios. The answer came pat – I know how to act.” – Amitabh Bachchan
Amitabh Bachchan walked all the way to the house of Yash Chopra – a film producer. And asked him for a job. Any acting job.
Yash Chopra’s “Mohabbatein“ was a huge hit that gave wind to Bachchan’s second innings as an actor. Soon he received an offer to host “Kaun Banega Crorepati” and a slew of other ad offers. And Bachchan took all of these jobs and paid all his creditors back (even though he didn’t have to, as he was protected by the bankruptcy courts.)
- Beware of the superiority illusion. You don’t know what you don’t know. So always push yourself and ask: what don’t you know yet?
- The way to not overextend yourself is by constantly asking yourself: what if you’re wrong?
- Ask for help to get out of the hole. Don’t let embarrassment of past failures hold you back.