The biggest mistake is often thinking you know something. This is a bit paradoxical because you can’t be successful in business without an over abundance of confidence. So you have to be confident and questioning at the same time. This is actually why entrepreneurs see opportunities where other people don’t. But it’s also why they can assume the market will love their product when it doesn’t.

Almost everything we do in life has unintended consequences. It would be pretty egotistical to assume otherwise. We’d have to be omniscient. Given that we’re not, it makes sense to expect (and look for) the unintended consequences of our decisions. But this works in two ways. Sometimes the consequences are negative, and you want to limit them as much as you can. But sometimes they are positive and you want to exploit them.

I was reminded of this when I read a CNN article on the 25th anniversary of the first frequent flyer program. These programs were started to encourage customer loyalty. But they’ve grown into a $4 billion revenue source because airlines sell points to other companies who use them for their customers to earn tickets (and other things).

Example: My wife and I are leaving in a couple days for two weeks in Europe (I make no promises as to how that will affect my blogging schedule). We’re flying business class both ways, staying at 4 star hotels for a week in London and a week in Paris. Included are breakfast, ground transportation and some other coupons offering free tote bags and shopping discounts. None of that is costing us a penny – all miles. I’m a platinum member of American Airlines yet I probably fly less than 10,000 miles a year.

How did this happen? I buy as much as I can for the business and personal on a credit card which gives me miles (of course I pay it off in full every month or the interest would wipe out the gains). I doubt that American Airlines considered this 25 years ago when they started the program.

[Side bar - if you're going to Paris] One thing I just learned about which we did pay for – a Paris museum pass. $50 for 3 days – it not only gets you discounted admission but NO WAITING IN LINE. You have to buy a rail pass also (we’re taking the chunnel) and you have to buy them in North America before you go.

Takeaways:

• Take the approach that you’ll make the best decision you can with what you know and you’re sure it will have unintended consequences.
• Be on the look out for the consequences you don’t expect.
• The consequences can be positive as well as negative.

[tags] business mistakes, frequent flyer, Paris [/tags]