Why do people see opportunity earlier than others?

One thing that is interesting to notice is the idea that an opportunity is not always equally obvious to everyone. Two people could be looking at the same exact situation; one person could find a way to make money off the opportunity, make something, or find any way of getting ahead, and the other person sits there and watches, not even realizing the opportunity at hand. 

This does not mean one person is necessarily smarter than another; it mostly comes down to the idea of what people know, what their past experiences are, and what they know to look for. 

One quick example you can look at is investing. Someone who has grown up hearing about stocks and learning it is probably more likely to recognize an investment opportunity earlier than someone who hasn’t looked into the world of investing at all. The same thing happens in internships, jobs, and honestly, so many other things it’d take me an hour to list them all. The bottom line is that opportunity is not always about what is available; it’s sometimes about if you can recognize the opportunity. 

Exposure

A big part of seeing opportunity comes from one main thing: exposure. Growing up in a household where my family invested a lot and always talked about it, I am now more likely to understand investing and become part of it early, unlike many others. Even at school, many of the guys in my fraternity are now just beginning to invest and learn, something I did freshman year of high school, giving me a 6-year advantage over them already. 

An opportunity may be available to every person, but if only one person knows it and sees it, they are the one who can prosper, while others don’t. This is a pretty big and important difference.

Let's look at another example. Think of two college students studying business. One student knows the ins and outs of investment banking, consulting, internships, networking events, and how early recruiting starts. The other student may be just as capable but does not learn about those things until months later. By the time the second student sees what is available, the first student used that time period to prepare and get ahead. 

Who you know can change WHAT you know

I'll be honest, I'm a big believer in the idea that at this point in life, who you know is more important than what you know, especially in business. One example I think of: say there is an older guy than you who you were friends with from school, and he's looking to hire someone. There are two candidates: you and some other guy. Some other guy may know a lot but may have some faults when it comes to talking or being around a lot of people, especially to the guy hiring. When it comes to you, there is already a friendship established; you may not know as much as the other person, but that doesn’t mean you can't learn it in a speedy manner. Since the person hiring also knows they enjoy being around you and you listen to them, that automatically gives you a better look. 

Now, to add on, people usually think of networking as something to get you a job, but it also goes further than that. The people immediately around you can influence what information reaches you in general. A friend may tell you about an upcoming internship. Someone in an organization might introduce you to a career path you never thought about. A professor might recommend a program. A family member might tell you how to invest. 

None of this guarantees success, but they put certain opportunities on your radar, giving you an informational advantage. In economics, information is value. The earlier you know something, the more time you have to act on the opportunity. This can be with a stock, a career, a business idea, or almost anything else. 

Having an opportunity and being able to take it are two different things

Here's another important part of this. Seeing an opportunity does not automatically mean you can take advantage of it. Let's go back to my investing example from earlier. Say someone does know about a certain investment opportunity that could do very well. Knowing about it is one thing. Having the money to back it up and take the opportunity is another. The same goes for internships. Having an internship is great, but what if it's unpaid? Someone who needs to make extra money over the summer may not be able to take the opportunity. 

Someone might want to start a business with a great idea, but might not be able to afford the initial cost, while someone who is able to take a bigger risk with a fallback would take the opportunity at hand. Opportunity is much bigger than just knowledge; it depends heavily on resources at the same time. 

This idea complicates everything. Sometimes you look at someone successful and would think they took advantage of an opportunity. While this might be true, they would have had to be in a position where taking the opportunity would need to be possible in the first place, a hard point to get to with any opportunity at hand. 

How does experience play a role?

“Practice makes perfect.” A quote you have probably heard a million times. The more you do something, the easier it becomes to notice things someone new might miss. A person who follows stocks daily might notice if a company is undervalued. Someone who has worked in restaurants or food service might notice why certain items are promoted at a certain time compared to others. Someone who has been involved in an organization might recognize what makes people want to join it. The bottom line is that experience gives you patterns to compare things to. 

At first, everything is new. Eventually, you get to the point where you begin thinking about how you have seen something or noticed something; A good example of this is forex trading. After years of looking at the market, you get into a rhythm. It's still not easy, but much easier than at the start. The more you understand how things work, the more connections you can make later on in life, whether it's for a job, an idea, or anything else. 

Risk + Opportunity

Back to this idea of risk, even if two people recognize the same opportunity, they might react completely differently. One person may take the chance right away, while the other shies away because it is too risky. Neither person is wrong. Every opportunity comes at you with some level of uncertainty. Investing money can result in a loss. Starting something can fail. Taking up an internship can mean you lose the chance at another. Choosing one career path means closing the doors on others, at least at the time. 

People also have different levels of risk they are comfortable taking. Some are more open to certain levels of risk. Part of that comes from your personality, past, and experiences, but a big part of it comes from a person's situation. It is much easier to take a financial risk when losing the money won’t necessarily harm you in any way. 

Small advantages. Are they worth it?

One thing I always wonder about is how one opportunity can lead to another. How do these small advantages build on one another? 

I believe that small advantages do help and are important personally. Think about it. Someone learns about investing early. They start investing. Because they invest, they become more interested in businesses and markets. The interest then goes further and pushes them to do more with it, maybe joining an organization or doing something to show their knowledge in a way that no one else does. None of these steps seem massive by themselves, but they build on each other slowly. The earlier the process starts, the more time those advantages have to grow. 

It's similar to compounding in investing. A small advantage early on can become much larger over time because every new experience creates another chance to learn something, meet someone, or discover another opportunity. Freshman year, I learned about Nvidia; at the time, the stock was worth about $250. After the 10 to 1 split and all that time, that 250 is now worth about 2,180 dollars. 8.7x return. Someone who didn’t know at the time wouldn’t have had the opportunity to invest in the stock; on the other hand, someone who did know and had more money than me would have had the opportunity to make much more than me, it all falls back to the idea of risk, experience, and recognition of opportunity. 

Can you learn to see opportunity?

I honestly believe, yes, you can. 

Anyone can learn to find the opportunity at hand, but you need to realize you cannot control every opportunity you are exposed to, and everyone starts and is at a different place; but with that said, you can make yourself more likely to notice opportunity when they appear. 

One way I can say to find these opportunities is by curiosity. Talk to people outside your circle. Learn about things you do not understand. Ask people how they got to where they are. Pay attention to businesses around you and how they work. Read things and do them even if it isn’t your classwork. I honestly feel like I do more work outside the class than work for my classes. Sometimes the most useful way to learn is by trying. You have a small question? Ask someone, ask Google. It's all right in front of you, but you never take the chance. Once you begin to use your tools in the right way, it makes everything a lot easier. 

The economics of Opportunity

Opportunity is interesting because it shows how economics goes beyond money. 4 main things are just as important, if not more important than money: information, time, connections, and experience. 

The people who recognize opportunities early often have a big combination of these things. That does not mean success is predetermined or that someone who starts later cannot catch up. If you know where to look and what to do, it can make a major difference. Even though I'm still young and figuring out life as I write this, one of the best things someone can do, especially young people, is to expose themselves to as much as possible. You may not know what you want to do yet; I barely do, but new experiences give you new ways of looking at the world. Honestly, sometimes the biggest advantage is not getting an opportunity before everyone else; it’s being able to recognize that it is an opportunity in the first place. 

“Dreams stay on the pillow until you do something about them”