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Comment by sombremesa | Hacker News Reader

Super important to note here that this entire thing is based 100% on the feelings or sentiment of VCs.

They forgot “random dumb luck” as a character trait. Point your clown car toward what you hope is a gold mine. The character trait of dumb luck then takes over.

VCs are biased to see genius where there is dumb luck because the people without luck fail before they have a chance to be recognized for whatever other random assortment of traits they have.

It'd be interesting to see a real study of how much randomness plays a role in success. What if it is the majority? Humans want causality, and want to believe they can influence everything, but it might be far from the truth.

The "Talent vs Luck" model is such a study, and it shows that indeed randomness is the deciding factor. Sure, it's a toy model -akin to a thought experiment- but the result is an emergent property of very simple principles, like most models in mainstream economics.

https://www.businessinsider.com.au/this-study-shows-talent-i...

That photo of a poker table is quite apt. Even if you play sensibly, if you're sitting with a bunch of people who aren't, there's a fair chance one of them will hit the card he needs and beat you.

In the economy this can also happen. Consider that you might make a bet on some business because you have done good research (your estimate of the future is what it actually averages to) and it shows the business will do well. A load of random people will have varying degrees of correctness of analysis that will give them too optimistic or pessimistic estimates. The future itself is also affected by noise, and business conditions may change.

You're going to end up seeing a bunch of winners who were too optimistic about some business, but the winds changed and they won bigtime.

The starting point on distributions of talent vs success really nails it.

The best solution for randomness is to try multiple times. Unfortunately humans only have one life to live and limited capital. This is why rich kids more often end up founding successful companies - they were able to try again after their first failure(s).

For a more rational analysis on the correlation between personal traits and success in a meritocracy, the "Talent vs Luck" model provides some eye-opening results.

https://www.businessinsider.com.au/this-study-shows-talent-i...

I think, there is another factor - endurance. Luck does not come instantly, one needs to survive few lows before reaching high.

Good observation. The toy model in the paper has some obvious limits, for example it also doesn't account for accumulated capital allowing to "create your own luck" nor exploit successful events more easily.

However, neither accounting for endurance nor wealth changes the fact that luck is a main determinant of final success. Those with early luck will not need endurance to survive, and those with the longer overall run of lucky events will come on top of those with fewer lucky events.

As this is true random, I don't think endurance or even number of tries would make any difference. It's like saying continuously trying the same number at the lottery would finally give you the jackpot. That is not mathematically true, unless you try an infinite number of times.

Second lottery ticket doubles your win chance. Very true mathematically, just the probability is terribly small in general.

While I am working on my (hardware) idea, I see, that this is a marathon, not sprint. And with amount of development job done potential clients or partners take me more seriously I reach every milestone. So increasing win chance is also possible.

Sure, but is continuing on the same thing a second lottery ticket? Or is it a new lottery althogether?

I would say one idea is the same lottery, just different round. Of course, the things change a bit after every client interview or after each technical failure (parts not available anymore). But if I continue this year, in autumn luck might be very close. Something like buying 1/10 of all tickets. I bought first ticket in 2018, then wasted a year in between with hopeless e-commerce project.

In a meritocratic competition like the one in the experiment, each miss puts you behind in comparison with those that got lucky.

And if a success provides exponencial growth, any failure to win the lottery places you far behind the luckiest winners very fast.

That’s why I am trying to ignore as much as I can the fact, that don’t getting lucky ticket immediately makes me a loser. Because many of these lucky tickets aren’t in the reality that fair. A guy’s dad know another guy and voila, it’s funded! Or mom just buys one a property in really expensive city while you balance full time job and development in the evening to start your own something. Best success stories I know were not fair as an ideal lottery should be.

Or, you could try supporting the policies described in the article that increase the probability of talented people reaching their full potential.

I'm not sure why you'd have a 1/10 of the tickets. A lottery is any random event that can happen to you or the company. Not the whole startup. What we are saying here (and Turing also explained in the other comment) is that a series of random events can give you a huge benefit, leaving competition far behind. You make the lottery spin at each of these events. Random lotteries are independent in their probabilities. So you cannot artificially increase your probability to win.

The thing I dislike most about attributing success to mostly luck is that luck is almost always defined as "good luck", but there is bad luck too. Often talented, hard working people are better at maximizing the effects of good luck and minimizing the effects of bad luck. So it is not luck (good or bad), it is not talent, it is not hard work, it is all of the above.

The model in the paper accounts for that, having both "good luck" events that double the guy's income on a successful "talent" check, and "bad luck" events that unconditionally halve income.

The different runs show that luck weights a lot more than talent in the final outcome, thought there are strategies that alleviate this problem.

True.

I found the article interesting in the classification of founders that VC's see. Going from that step to making a judgement call on the desirability of characteristics seems slightly far fetched.

This is made quite clear at the end, and makes sense. They are doing this exercise for themselves and are sharing with others.

Our job as a seed stage investor is to look for brilliant entrepreneurs when their success is not yet obvious.

Yes, I find no statistical validity in this study. For example, how is the age/success relationship influenced by the fact that VCs mainly fund a certain age group?

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