"Two roads diverged in a wood, and I—I took the one less traveled by, and that has made all the difference." - Robert Frost
Change is accelerating. Uncertainty is increasing. And today, more than ever, we need to focus our time on opportunities that will benefit our lives.
What if you could accurately assess the value of an opportunity, compare it with other opportunities, and choose the one most likely to bring you success? That's leverage. We need to identify these opportunities before they slip away. Understanding how opportunity works will help you make better decisions about where to focus your time and resources.
But the term "opportunity" is abstract, and everyone has a different definition of what it means. So in this article, we'll break it down so you can better capitalize on opportunities in your life.
The Facets of Opportunity
Opportunities are all around us. But they're often hidden from our awareness.
Like facets on a diamond, having multiple definitions of "opportunity" allows the word to sparkle with more clarity and precision. This helps you better consider and predict which opportunities are best for accomplishing your goals.
In other words, you'll have an accurate map of how to best invest your time.
Here are three key facets of opportunity.
1. The Origins of Opportunity
The word "opportunity" first came into use in the 14th century. It comes from the Latin word "opportunus," which is derived from the two Latin words "ob" and "portus."
"Ob" means toward, to, or in the direction of. "Portus" means a port or harbor. Thus, opportunus meant a favorable time to move towards a port or harbor.
Consider the implications of missing an opportunity to dock your ship. You're afloat at sea, unable to find shelter and unload your cargo as quickly as possible. Storms could leave you shipwrecked, and you'd be exposed to ocean raiders or pirates. Not good.
Opportunities, then, are a window of time during which an action must be taken to achieve a desired outcome. They're time-sensitive.
A couple of centuries ago, not being able to dock your ship in a harbor could lead to severe consequences, possibly life or death. In modern times, opportunities aren't as life-threatening, but are still crucial for creating desired outcomes in your life.
Some opportunities are so fleeting that they can be gone in the blink of an eye. Others may last for years. Either way, they require quick thinking and decisive action.
2. Weigh the Potential Value of Every Opportunity
An opportunity is potential value.
By value, I'm referring to the possibility of fulfilling your needs, accomplishing goals, and avoiding the loss of something.
We face opportunities every day. Depending on what matters most to you, you might have the opportunity to buy a new car, start a new business, build a relationship, or improve your health. Your values dictate which opportunities you choose.
Eben Pagan contributes to this definition in his book, Opportunity, by defining it as "the heart of entrepreneurship."
An opportunity, in an entrepreneurial context, involves finding ways of producing value in the economy. Marketing and sales attempt to persuade an audience about the potential value the company offers. And the product or service aims to actualize this potential value into tangible results.
It's important to remember that not all opportunities are created equal. Some are worth pursuing, while others are not. The opportunities that have a greater "potential value" are more worthwhile investments.
3. Opportunity is Arbitrage
Arbitrage is the process of taking advantage of a price difference between two or more markets.
For example, you might buy a stock or commodity in one market and then sell it in another market at a higher price.
You're buying low and selling high with a high level of certainty.
Arbitrage is a common practice in the financial world, but it can also be used in other areas of life.
For example, you might arbitrage your time. By working in a low-paying job for a short period of time, you can gain skills and experience that will allow you to get a higher-paying job in the future. This provides you with a career advancement opportunity, especially if you have less experience.
Or you might arbitrage your location by living in a cheaper area. You can save money and then invest it in a business or real estate venture in the future.
The key to successful arbitrage is to spot an opportunity where you can leverage short-term costs (investment of time and resources) to generate long-term value.
What's Your Definition of Opportunity?
The better we understand the concept of opportunity, the more precisely we can analyze, estimate, predict, explain, and decide which opportunities are best.
Several people view opportunity as a matter of "luck." They believe that opportunities are largely contingent on external factors outside of their control.
There's truth to this. But luck is not a reliable strategy for success. It's disempowering to wait around for conditions to be perfect. Instead, view opportunities as something YOU can generate. Actively look for ways to produce value and utilize the potential value that exists around you.
You can only benefit from luck if you're prepared for opportunities. This is something you have control over, and requires you to be proactive.
Audit your definition of opportunity. Are you waiting for favorable conditions before you take action? Or are you generating your own options?
By understanding the different facets of opportunity, we can better utilize our time to create potential value and accomplish our goals. Opportunity is all around us. It's up to us to find it.
Want to learn more about leveraging opportunities? Check out our article: The Importance of Opportunity Cost and Making Wiser Decisions.