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Comment by a_d | Hacker News Reader

Business writing suffers from an epidemic of post-fact rationalization. Looking back, it is trivially easy to parse out whether something someone said was “insightful wisdom” or “useless”. I am continually amazed by the scope and depth of this hindsight bias disease.

While this author tries to make a point that bezos is a good writer, I am afraid that this is just riding a wave of bezos worship (like Elon worship, Jobs worship, Buffett workship, [‘name successful business person, preferably, billionaire’] worship) — after bezos’ company is seeing good results.

I wish more business writing was devoted to 1) suggesting ways so that people have their own original thoughts 2) Discussing merits of strategies before they become successful 3) Discussing problem solving frameworks 4) early days of companies when they weren’t successful etc. I believe learning about the first 100-300 days of companies would be very instructive. Someone should write a book about that :-)

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One of the best books I read last year was "The Halo effect"

https://www.amazon.com/dp/B000NY128M/

It talks about exactly this issue: If company A is successful, we explain it by saying that the management is absolutely brilliant, if company B does the exact same things but is failing, we explain it by saying that management are totally incompetent.

It's a major cognitive bias which renders most "business press" articles totally worthless.

The solution, obviously, is to gather a large amount of data and do some rigorous analysis.

People have tried to do this but the general conclusion is that there are no real simple rules that a business can follow to always succeed despite our eager desire for simple explanations.

I personally refer to this as the "Marissa Mayer problem." To me the real mark of success and brilliance is not just succeeding once, its succeeding multiple times. Jumping on the Google or Amazon rocketship and doing well there, while there is something to be said about the fact that you didn't screw it up, doesn't necessarily mean that you are brilliant. She went to Yahoo, and while she did a decent job putting lipstick on a pig, I think it showed that she is a mere mortal and not a genius.

What is impressive about Amazon IMHO is that they have succeeded in multiple businesses. One could argue that they are all under the halo of "ecommerce" but what was just a bookseller spread into virtually everything sold online, reshaping distribution networks, moving into groceries, content, etc.

To be fair to Mayer, I don’t think anyone could have saved Yahoo.

She presided over a (mostly) graceful decline which allowed a reasonable end to the company.

She wasn’t some genius but I never understood why she was considered that by some anyhow: she’d previously shown solid competency not amazing insight.

In a recent NYT interview, here's what she had to say about that: "[T]iming is everything... Yahoo’s offerings could consume hours a day, and trying to regain that moment in time was really hard... regaining that contextual relevance that was afforded to Yahoo in 1999 and the early 2000s was difficult."

I love that book. Short anecdote: back in 2006 I was lucky to get an early copy through a high-flying management consultant. The book basically rips into everything that is wrong with management consulting — but for some reason this person was completely unaffected by this book and kept praising it. After talking for a few minutes, it dawned on me: this person hasn’t read the book! ha ha.

Anyway after reading the book I thought phil rosenzweig was a genius and this book ought to be more popular.

Yeah reminds me of one of Buffett's sayings "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.". Perhaps illustrated by Eddie Lampert who used to be considered a genius ("first Wall Street financial manager to exceed an income of $1 billion in a single year"), taking over Sears which hasn't gone great (stock from ~$100 to $2.3).

Re post-fact rationalization, while Bezos and Buffett were successful before having a fan base they also remained successful for a long time after. It's going to be hard to find discussion of "merits of strategies before they become successful" as the people with brilliant strategies will probably already be successful to an extent.

Though in Buffett's case he used to lose money in the stock market as a kid - he bought his first stock at age 11. He only really started winning there after reading The Intelligent Investor at 19. He kind of started writing his letters around 27.

The issue isn't fan clubs.

The issue is successful companies are riding such a tidal wave of money and good will you can never tell if they're successful _because_ of X, or successful _in spite_ of X.

For example, the stock price of GE rose 4000% in the 1980s when Welch introduced Rank and Yank [1]. Does that mean it was a great policy - or was there some other change responsible for the rise, while Rank and Yank had a neutral or even negative effect?

[1] https://en.wikipedia.org/wiki/Vitality_curve

This feels like the issue with reproducing research in the softer sciences.

From my understanding businesses operate by optimizing over some gradient similar to gradient decent. Correlation or causation is really not the objective (but can be helpful to optimize over).

The "rank and yank" or 20-70-10 rule was always Big News™ where I grew up (Capital District of NY): GE's global HQ, R&D, etc was all there - along with lots of other business divisions (turbines, chemicals, etc)

It's really a secularization/inversion of [true] "Puritan thinking" - whereas the Puritans were worried about whether they stood or fell before God in their faith, belief, and practice, the pervasive inversion/misapplication of that line of reasoning into the secular world brings you the general New York & New England (Welch was born in MA; GE is HQ'd in Schenectady NY) mentality of:

- know where you stand

- rank others

- excessive competitiveness

It even show[s|ed] up in loads of college classes where grading would often enough be done on strict bell curves - didn't matter if you earned an "A", if you were the lowest scorer, you could easily be given an "F" (or "D")

Yeah it's pretty hard to tell as a bunch of factors are mixed up and interact. I kind of know the deal with Buffett - he did well partly due to strategy and partly due to being very smart and working very hard. The letters to shareholders are kind of an after effect.

Also he's changed strategy over the years as the low hanging fruit in the areas he's operated in have disappeared.

We all already know that PowerPoint makes us stupid and that the written word is an unsurpassed tool for developing and communicating structured thought, and while Amazon’s success has made Bezos’ insistence and practice of this more prominent, it’s still praiseworthy in the increasingly illiterate world in which we live.

Incidentally, for what it’s worth, Gassee was a tech executive himself before many of us, myself included, were even born. He’s not just a pundit.

I strongly agree. I'd like to see more honest conversation about the problems people face when building a business. I'd like to see more honesty about failure. I'd also like to see more transparency about the amount of personal conflict that tends to come up when building a business. This sums up my views:

----------------------------

Recently, I exchanged some email with my friend Colin Steele, currently CTO of TypeZero and formerly CTO of RoomKey.com. We discussed another startup that had failed, and he wrote:

It’s sad and disheartening. I think few people understand how amazingly difficult it is to start a new business, and run it successfully. Drama, people, and personalities, seem to have an outsized role in how these things crash and burn. There needs to be some codification of best internal practices for creating startups, like Steve Blank’s book “4 Steps To The Epiphany,” but for the culture; a co-routine that runs alongside “customer development” — call it “culture development” or something.

I agree wholeheartedly, and would also add that more public discussion of the difficulties would help startup culture. I would make an analogy to the history of divorce in the United States. The divorce rate rose for much of the twentieth century, and it peaked in the 1970s and 1980s. Since then there has been more public discussion about what makes marriages strong. You can see the trend reflected on television shows: neither Leave It To Beaver nor the Brady Bunch mentioned the difficulties of marriage, and that was the era when the divorce rate was rising the most. Modern sitcoms talk endlessly about the difficulties of marriage. Couples still face drama and conflict and personality, but the public discussion seems to have granted people the vocabulary they need to address their problems, and the divorce rate has come down. Popular awareness helps. At the very least, books and movies can help explore the important reality that startups are not easy.

https://www.amazon.com/Destroy-Tech-Startup-Easy-Steps/dp/09...

If you read the stories of self-made billionaires they strikingly have a lot in common. Also all the following billionaires had troubled times and if you read their stories, you will see how they overcame them.

From the books I've read about the following self-made billionaires so far (Peter Thiel, Elon Musk, Yvon Chouinard, Jeff Bezos, Warren Buffett and Charlie Munger) the most important things I've found they have in common are that:

They avoid competition, think long-term, and don't copy others foolishly.

Longer explanation:

-They break down the world to the fundamentals, the essential, the Feynman method. When Musk wanted to build SpaceX everyone thought he was crazy. But when he broke it down to the raw costs for space shuttle manufacturing, the typical costs were too high and he saw opportunity. Many people tend to learn complex abstract concepts without truly understanding the building blocks or learning trees that it took to get there. There can be times when someone calculated incorrectly but everyone took it for granted and it became the status quo of knowledge. I believe these are one way to access the secrets in plain sight. Question everything.

- They focus on the long game like the power of compound interest. They operate with a vision of what the future might look like 10 years down the road, and then they work backwards to create that vision. Did they see the future, did they just build it before anyone else, or both?

- Most of the billionaires I've read about had humble beginnings. Yvon Chouinard used to sleep in his van. Elon Musk couch surfed during his worst times. Jeff Bezos started out in his garage and made tables from doors.

- All of them have very strong beliefs. They are not swayed by what everyone else is doing which is how most, even big companies fail. Peter Thiel mentions mimetic theory, basically that people copy each other, even companies, and that's how you get competition. Buffett indirectly talks about it too. ExxonMobil hires a fertilizer expert and then all the other oil companies start hiring a fertilizer expert even if they don't really know why Exxon hired one in the first place. Or how big companies (GEICO) can lose focus of their circle of competence by getting distracted by what everyone else is doing and creating inferior copycat products - which eventually leads to value loss of their core competency and what actually drives value for their customers.

I think that's one thing that makes them all special. They all took different routes to get where they are. To be tacky, they didn't follow someone else's road, they created their own.

- They didn't do it alone. All those people knew how to build and lead a great team. If they didn't, they found someone who could.

Books I'm getting this info from:

Seeking Wisdom: From Darwin to Munger by Peter Bevelin

Let My People Go Surfing: The Education of a Reluctant Businessman by Yvon Chouinard

Zero to One by Peter Thiel Conspiracy by Ryan Holiday

Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future by Ashlee Vance

The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone

> Jeff Bezos started out in his garage and made tables from doors.

I was under the impression that Bezos founded Amazon after he graduated from Princeton and had worked for a hedge fund for a few years. Wikipedia also says that his parents invested an estimated $300,000 into Amazon. I would hardly call that humble beginnings.

The list of the 15 richest people in America also include the two Koch brothers (inherited their wealth), three Waltons (inherited their wealth), and plenty of people with Ivy League educations who earned their wealth but did not have humble beginnings.

You seem to have drunk a little bit of the kool-aid the comment you're responding to is talking about. I suggest spending some time reading about people who are NOT billionaires (and some less high profile billionaires) and you will see that there are plenty of poor people with the traits you describe and plenty of rich people without them.

1. Humble and humility, more as a mindset. Even if it wasn't, according to the book, Bezos was very frugal in the beginning.

2. My list was for self-made billionaires.

3. I like reading about self-made billionaires because as an entrepreneur- why wouldn't you want to learn from the best? At the same time, I don't want to be a billionaire if that's the kool-aid you're referencing.

I grew up in poverty and love reading about poverty because I want to learn more about the circumstances that affect my reality today. Why can some people like my mom work 60 hours a week at $10/hr and never become a millionaire or even afford to retire? While others can? I wish I knew. Poor decisions? Poor environment? Or both?

I haven't met any billionaires but I've met many self-made millionaires who literally built their way from nothing. In my experience, most of them built their wealth over years or decades. It's very hard to build something from nothing overnight.

If there's anything I learned from reading self-made billionaire stories- it's simply better decision-making. Can't do much about a poor environment but at least you do have control over the decisions you make.

How many stories have you read about people who tried to become self-made billionaires and ended up broke?

The idea that predicting the future, humble beginnings, and strong beliefs are key to getting rich is pretty funny. It also sounds like a recipe for being a penniless misanthrope left wondering where everything went wrong.

You’re really buying into the PR effort of these billionaires.

I don't know how to become a billionaire but I do believe that the key to getting rich isn't rocket science but simple mathematics at least in the United States today.

Don't live outside your means. Don't get in debt. Don't risk things you can't afford to lose. Everything else is compound interest and mathematics.

"Whenever a really bright person who has a lot of money goes broke, it's because of leverage... It's almost impossible to go broke without borrowed money being in the equation. We should never risk something we have and need for something we don't need. You only have to get rich once."

Edit: Sorry, I am completely wrong. That sounds reasonable in an equal society but what happens in an unequal society where the odds are stacked against you and you can't even save with a full-time job? What happens when you can't afford an education? What happens when you're run over by a car and can't afford your medical bills? When your job is outsourced to a third-world country? I unfortunately don't know the answer to that. I wish I knew.

I think you've properly identified many of the traits that can lead to success.

I think the danger here is seeing a list like yours and assuming that's all that's going on or that somehow it's a simple recipe that you follow and after 30min at 375F in the oven: you're a billionaire! Truth is that I think your list isn't fundamental; these are secondary, perhaps emergent, traits which have deeper origin.

When you break down the world into fundamentals: you still need to do that correctly, if you misunderstand what you see, you'll not take correct action. If you take the time, but really can't see the forest for the trees, you'll fail. Your strong beliefs can help you defy less insightful naysayers, but also prevent you from seeing the actual errors of your ways, too. In short, I'm going to bet that if you look at a broad swath across people with varying wealth levels, you'll find many people of whom you can attribute many of those traits... only that the traits served each individual more or less kindly.

I think at each step in your list, the key distinguishing feature is that each "billionare" in question was able to correctly assess the context of the point in light of the goal of advancing their self-interest. Being able to correctly reason about the facts, opportunities, and risks in front of you and envision the correct action and execute on that action are much more important that circumstantial facts that you can see in an after-the-fact analysis.

I may sound like I'm discounting luck in all of this (right place, right time, etc), and I don't mean to... but I think there are those that want to over-play the role of luck in these things for a variety of motives. Luck is real and does help some and hinder others... but if you're lucky/unlucky you still have to be smart enough to react to the hand you're dealt in order to maximize/minimize the outcome.

I report directly to a billionaire, he is the founder and CEO.

Hasn't written a book, like most billionaires. Hence you don't see all the other ways, personas, etc.

My extrapolation based on working for him: Billionaires are, at the core, ruthless and self centered. History gets re-written by them, because that's just how it works. The role of luck and personal decisions is constantly underplayed.

And mind you, ruthless means being like a surgeon in war time. Leg comes off, don't care about your pain. Co-founder has to go after 10 years? Co-founder has to go.

I'd think, based on my sample of one, it will be hard to find a billionaire that the majority would label a "nice" person. Polite, ethical ... sure. But not nice.

I totally agree with you. Reading about some of these people made me realize that I never wanted to be like them. Every time I read about someone who I thought was a business hero: Steve Jobs, Elon Musk, Jeff Bezos- I was terrified by what I found.

I would never be able to or want to do any of the things some of those people have done to be able to achieve their goals.

The only rationalization I have for their behavior is that they have a higher mission and they won't let anything or anyone get in the way.

> If you read the stories of self-made billionaires they strikingly have a lot in common.

Yes, as a rule they were white males living in or moving to Western (capitalist) countries. Bonus points for being born into a rich family.

I know of only very few exceptions to that rule: Jack Ma and Anousheh Ansari

I don't know if they're billionaires but the book The Next Factory of the World: How Chinese Investment is Reshaping Africa by Irene Yuan Sun, has many stories of self-made Chinese millionaires.

The story that stuck out the most to me was a man whose highest education was grade school. Got a job making shoes in one of the first Chinese factories, worked his way up, and now owns a huge factory in Nigeria.

Also according to this article, Zhou Qunfei, is the world's richest self-made woman with a net worth of $7.4 billion. https://www.cnbc.com/2018/04/16/worlds-richest-self-made-wom...

Bezos famously declined to be interviewed for the Everything Store because of the narrative fallacy. Ironically in avoiding it he is probably letting it happen.

Are your really suggesting there is no value in looking at successful businesses we actually rely on and that determine the competitive landscape in multiple business domains, how they are run and who runs them, and that doing so is a disease?

OK.

If your intention is to learn how to create or identify successful companies in the future, then yes, absolutely. You want to know what is different between successful companies and failed ones.

Maybe with special focus on the companies that failed while doing everything the same as the cherished success stories.

And there are plenty of articles and blog posts & etc online all the time about such cases, I know I've read many of them. so I don't really understand why this particular article is up for particular criticism, as though JLG has a personal obligation to correct a perceived bias in the internet. The whole premise of this criticism just seems bizarre.

The value comes from learning something, but historically we get trite quips and who stroking puff pieces.

There's absolutely value in looking at these people/companies, but we need to contrast to less successful ones AND we need to stop acting like we have a clue why Jobs can be a jerk and succeed ("he won't let anyone interfere with his vision") but the jerk boss we had is a miserable failure ("he thinks he knows best and drives all the talented people away, of course he will fail").

Once people stop concluding easily disproven "lessons", I'll respect their efforts to search much more.

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