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Comment by fnbr | Hacker News Reader

Sam Altman has given a speech a few times (I heard it most recently in "How to Start a Startup") where he uses the same equation, but adds luck, where luck is a random variable going from 0-1000:

    Startup = idea * execution * product * team * connections * money * luck

I think that's a very accurate assessment of the situation. You need to work hard, have a good team, etc., etc., but without luck, you won't be successful.

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I think luck has two meanings. One is the traditional sense, when you buy a lottery ticket and you end up $1M richer. That's luck by pure chance. Luck on the other hand can be more deterministic and people still call it that. For example you start a chain of events that end up hugely in your favor. If you don't know what caused it, you might call it luck, but in fact you put yourself on the course to make that happen.

For me the other meaning of luck is when opportunity meets potential/preparedness. If you are 100% capable of going live next day and you bump into a reporter it's much more likely that they will feature you. And you can put yourself into situations when it's more likely to meet reporters if that's what you think need next. From the outside it will still look like "oh Zifffify was so lucky that they got featured on XY".

One phrase I really liked was "success is preparedness plus opportunity". In that case, the equation would be...

prepareness = idea * execution * product * team * money

opportunity = connections * random-chance

success = preparedness * opportunity

I like this breakdown too. If we want to add luck, random-chance as * ( 1 + random-chance ) where it can be anything between -1 and 1. It can be both negative or positive or no effect at all.

I think luck here is referring, mainly, to risk taking - a giant corporation is not going to be the company on something that has a 0.5 probability of happening, but a startup might.

For instance: All these startups around self-driving vehicles. There's a non-zero chance the publics current unsettledness swings to full on majority disapproval, leading to gov't regulation killing self driving cars.

You can set yourself up to maximize the chance of that not happening, but but you cannot bring the probability to zero. Hence, these startups all rely on being "lucky".

Meaning, unlike what I felt you are implying in your comment here, startups are often and in many variables betting on probabilities that they are not in control of, aka luck in the exact same sense as a lottery ticket.

Given it's all multiplied it doesn't matter if the luck is from 0-1000 or 0-1, it has the same effect on the outcome.

a * (b * 1000) = (a * 1000) * b

Sorry, I hate bad maths, I realise it is just trying to imply that luck is more important, but in that case it should be * luck^n.

But luck in [0,1] would even make less sense as luck^n (as it goes to 0), while as luck in [0,1000] could scale a successful startup by the factor of up to 1000.

It doesn't matter if you're comparing "0.001" success to "1" success or "1" success to "1000" success.

What I meant by 'n' was a weighting. I wasn't clear.

Let's say you have 4 factors a, b, c, d.

If we are summing them then we can just sum them straight:

score = a + b + c + d

If we want to place more importance on some of them we weight them, with (constant) weights w, x, y, z by doing this:

score = w * a + x * b + y * c + z * d.

If it's a multiplicative relationship however then we multiply straight:

score = a * b * c * d

If we tried add weighting in the same way:

score = w * a * x * b * y * c * z * d

Then all we've done is scale the previous score by (w * x * y * z) which is constant, so hasn't actually affected any ranking.

To weight a multiplicative relationship requires the weights to be exponents:

score = a^w * b^x * c^y * d^z

The scores can be in [0..1] or [1..N], the increased weights still increase relative power of the input parameter.

If you take logs it's clear why.

log(score) = w * log(a) + ... + z * log(d) which is our weighting when summing again, and log is monotonic (proof of which is left to the reader), log(S1) < log(S2) implies S1 < S2.

Edit: Fixed formatting, it thinks * is italic.

How does it have the same impact on outcome? You're talking about the associative property of multiplication but he's saying the luck factor can either reduce your success to 0 or multiply the outcome of your endeavor by 1000. It obviously does have an impact (note: the results of .9 * .9 * 1000 and .9 * .9 * 1 are different numbers).

They're different numbers, but it makes no difference in terms of how far along the possible scale you are.

If I score money as 0-1 and luck as 0-1000, then I have a possible overall score out of 1000.

If I score 0.3 on money and 600 on "luck" then I've scored 180 out of 1000, or 18%.

Or if both are 0-1 then I'd have scored 0.3 and 0.6, and overall scored 0.18 out of 1, which is still 18%, it's just the absolute number that has changed.

But the absolute number isn't important in a scale which doesn't have meaningful units.

I understood the absolute number to be of significance as the goal (eg. the absolute number is however many millions $ you'll make as outcome). But point taken, I don't think this was thought through :)

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