Huge success in business is largely based on luck: new research
theconversation.com
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After being involved in several early stage startup companies and the usual cast of characters (individual founders, angels, boards of all sorts, investors, etc) my deeply held personal belief is that after intelligence and hard work moral/ethical flexibility is the largest single factor in individual success in business.
In virtually every scenario I've been involved in the individuals that made out 10x or greater (compared to others) did so because they were willing to do things the others were not.
I suppose one could frame it as "luck" but my experience has been "making your own luck" is frequently only moderated by your own ability or willingness to lie, cheat, manipulate, and generally be as soullessly ruthless and self-serving as possible.
Consider two people. Both graduate from a top-tier law school and join a firm as junior partners. One graduate sees nothing but tax avoision, various shady legal maneuverings, high net worth senior partner infighting and politics, etc. The other sees nothing but money, power, and opportunity.
One of the junior partners is disgusted by this and leaves the firm to go back to their hometown and start a family law practice. They settle into a decent upper-middle class lifestyle.
The other junior partner stays on, climbs the ladder, and goes on to join the top X percent of the population in income and net worth.
Both are intelligent. Both worked hard. Both are "successful". However one junior partner saw people at (arguably) their worst and was disgusted by it. The other couldn't wait to really get in the game and play...
Hypothetical simple example but virtually identical to what I've seen play out continually in business.
Given those hypothetical people, I would bet that the one who went back to his homewtown actually enjoys his life, while the other is miserable, but surrounded in gold.
If the latter takes his ball and goes home, now that's a different story.
Personally I've seen it all (to use characters from my story):
- The small town family lawyer who is miserable and feels screwed that they somehow couldn't or didn't want to swim with the sharks.
- The partner at the firm on his third divorce, with kids who won't talk to him, and living in constant worry of the various legally or morally dubious things they've done. Ulcers, high blood pressure, and substance abuse disorder included.
- The opposite of the other who's stayed in touch with "that guy from law school" who is perfectly happy and content only to look at the other and feel pity for how miserable the other's life must be (and often is).
I know all of them and it's pretty strange... Especially when someone will say "Yeah, XYZ is a great guy and good friend but you know... Don't ever trust him." -or- conversely "Yeah what happened to ABC was strange... Guy kind of flaked out. He seems to be doing ok, I guess."
We seem to be much better at measuring and discussing "success" than actual happiness.
EDIT: typo
Not surprising given how much easier it is to fake happiness than success.
Bill Gates - He admits now that he was bully and behaved badly. He was completely ruthless. Not because he was a sociopath, but because every time they had to decide between winning and morality he chose winning. Paul Allen was one of his oldest and closest friends and when he was sick with cancer in early 80s he overheard Ballmer and Gates talking about his lack of contribution and scheming to dilute his equity.
Steve Jobs - Jobs conned Steve Wozniak at the beginning and it did not stop there. According to his bio it seems that being asshole was big part of his success.
Mark Zuckerberg - His habit of doing the immoral and apologizing if getting caught started even before FB. Facemash was "completely improper" according to Zuckerbergs apology. Starting phase of FB was based on all kinds of foul play.
In my time as consultant I have seen people being very successful because they were willing to spend endless hours on boring topics, spending time with un-inspirational clients, massively exaggerating business opportunities, and trading anything in their life for success. It works. But it comes at a price.
[1] I think it was this: “Nothing in life is free, especially your time. Everything has a cost. And when it comes to your time, the cost is heavy. You can never get even one second back. You can live your life on purpose. You can spend your time on things you value. You can be who you intended to become. You can continue to progress and evolve, even after you’ve become successful and fulfilled. But the price must be payed.” Benjamin Hardy
Either do it 100% with all the consequences, or sit down, lay back and enjoy the life in whatever form you desire. I prefer the second, but I've met far too many people unable to do this on long term basis to recommend it as panacea for happy smiling world.
Good measure for me would be that hypothetical laying on the deathbed, looking back, and seeing what to be proud of, and what to regret. There are few individuals who would be literally fulfilled to go for that 100% even if they achieved nothing more, and they can and usually do get very far in life, professionally and/or monetarily. But I have the feeling most are just chasing other's idealized image of success, which may not be even real.
We all know (or at least should) how biggest regrets of those dying often look like. Don't be like them. This ain't a mistake you need to actually do to learn to avoid it.
> "A wise man once said 'You can have anything in life if you will sacrifice everything else for it.' What he meant is nothing comes without a price. So before you go into battle, you better decide how much you're willing to lose. Too often, going after what feels good means letting go of what you know is right, and letting someone in means abandoning the walls you've spent a lifetime building. ..."
(The quote within the quote is from J.M. Barrie, best known as the creator of Peter Pan.)
I still think pure luck is up there as well, maybe near intelligence. Not only do the pieces of an opportunity have to align at the right place and time, you have to be aware of them and take the opportunity (the intelligence aspect)... or fumble your way into it out of luck because the opportunity was imperceptible to mere mortals.
One of my old directors played moral gymnastics with everything and was making out like a bandit doing virtually nothing.
And while the top comment isn't wrong, it's hard to overstate the foot-dragging mentality and general "laziness" (for lack of a better word) of much of the workforce, in that they seem hardwired to make any excuse to avoid a difficult task assigned to them.
My test for this, especially with younger workers, is to ask them to lookup some information that seemingly would be on the internet, but isn't. Do they give up after a couple of web searches, do they email and wait for a response, or do they pick up the phone and try to talk to somebody right now.
There's no shortage of questionable business practices out there, but don't discount the average persons lack of ambition.
Hence, we shouldn't look to learn from top performers, but instead learn from consistent performers.
The point is that there are few lessons to be learned from lucky top performers. But that there are lessons to be learned from consistent performers.
That luck is an ingredient in top performers isn't surprising :)
Also who cares about being top performer for one or two years, instead of being a consistent performer. Which isn't as luck dependent :)
For many people, the pain of a certain kind of work goes unnoticed. They aren't stressed, and so they can succeed wildly. It could be physical labor, technical problems, dealing with people.
For the pathologically successful, the thrills come through something that most are too sensitive to handle. Think of surgeons operating on themselves, athletes who play extreme sports, artists who eagerly turn their most private thoughts into commodities, businesspeople who stay up late dreaming of ideas for exploiting the land and the people.
On some level all of these folks are monstrous - but society, where it is wise, finds a way to validate their interests to some greater benefit.
And I do see some whiplash frequently occurring with people just leaving school and coming to terms with these limitations of sensitivity, and their gradual development of some ethical center. They can't just do a good job and go home, like they thought. They can train as hard as they want, but they can't not feel the thing, and that puts them in a state of preoccupation about the problem.
The silver lining to this cloud is that someone who is both sensitive to the issues and a survivor among predators can put themselves in a position to change the rules, especially in business, because they are most aware of where the market will reward ethical behavior. It's surviving that long that's the problem.
You are quite right but most people miss the spectrum of "numbness" vs "sensitivity when it comes to analyzing their own personalities/character. I think this is a result of "Operant Conditioning" by the context/environment in which they were brought up. For example, in the environment in which i was brought up, personal morals/ethics, truthfulness, humility/humbleness were greatly stressed which has resulted in my being highly sensitive to "deviation from the ideals" in my own self and in judging others. The intellectual part of my mind knows that adhering to these rigidly are a handicap but something deep inside will not allow me to be ruthless when it is necessary. Even after educating myself by reading books on "worldly wisdom", i am still unable to breakthrough this "mental conditioning".
I think the best yardstick for "worldly success", is to look at how a person was brought up vis-e-vis "the real world" and how "flexible" he is in dealing with right/wrong and truth/lies.
you say moral “flexibility” is third but go on to describe how it’s the most important factor.
your example doesn’t fit your narrative at all. the first guy didn’t get “unlucky” and crash out, he left the game altogether without even playing!
your example is about “personal” “success”, not business success.
Are you saying every intelligent hard working Machiavelli will make it, or does luck still enter?
Luck is being in a position to take those actions in the first place. The two people in your example had a great deal of luck to be where they are in the first place.
This is why I think hard work and intelligence should be rewarded up to a point, but then after that point all we're rewarding is bad behavior.
Personally, I think a lot of this can be fixed through the tax code - making it steeply progressive so that there's less incentive to engage in shady behavior, but not so progressive that it discourages effort. Finding the balance is key. Today the US (and most of the world) is too balanced in favor or rewarding those who have acquired the most economic power.
The allure of this belief is, of course, the self-gratification that comes with not having to blame your own lack of success on yourself.
My company acts as an incubator for insurance agencies, of the many dozens we've setup, most fail, and maybe 20% succeed. What's interesting is how evident it is which ones will fail, and which will succeed within the first month of working with them.
Those that succeed demonstrate hard work, intelligence, and thoughtfulness in their work. ...and it's not easy finding those three things in one person.
Those that fail tend to have any number of personality flaws ("flaws" might be too harsh a word) that prevents them from succeeding. Many are emotional, which drives them to be very cyclic in their motivation level. Others lack the analytical skills to manage their cash flows. Some burn relationships by being consistently combative. It's honestly easy to ruin a startup - almost any major personality flaw will corrupt such a small team and alienate people.
Luck follows the laws of averages - over enough time, the good luck balances out with the bad luck - whereas hard work and intelligence are persistent. Our successful agencies have each had their own story, and been successful at different speeds, but all ultimately made it.
>The allure of this belief is, of course, the self-gratification that comes with not having to blame your own lack of success on yourself.
You've gotten this exactly backwards.
Until recently the overwhelming story (at least in the US) is that success is purely a result of your own personal effort, the self-made man who builds himself ex nihilo by the sweat of his brow and his genius. What's been happening recently is the recognition that this is, of course, ridiculous, and that many factors go into success or failure. It's not that your success or failure are entirely out of your control and your own efforts (or personality, as you seem to indicate) mean nothing, it's just that there's more to it. For example, what you describe in your post sounds like a classic case of survivorship bias in action.
The allure of this belief is, of course, the self-gratification that comes with believing you are simply superior to others and that's why you're successful. There's also much comfort in believing that bad things only happen to people who deserve it and so can't happen to me, since I'm smart and hardworking. The discomfort with acknowledging outside factors is having to admit that your success is not entirely your own doing, which is scary and hurts one's ego.
You can be extremely success without talent or hard work. But luck will always play a factor.
If luck regresses to the mean both within and between startups, then it stands to reason that the value of more iterations is limited. I think it's probably more valuable just to be able to recognize which direction you're likely to regress toward.
If winning means getting 3 heads in a row by flipping 3 coins, and you have 3 coins to flip and someone else has 1,000 coins to flip, the second person is much more likely to win.
This means that people with rich families and rich connections can afford to play the game as much as they have a taste for.
If you fail, just get a job, save up more money, then try again.
The more you fail, the more you learn, the greater the likelihood of success the next time around.
Anyone rich, or not can try again and again, it will just be harder for people who also need to figure out how to pay the bills.
If they play the VC game, returns are still extremely variable.
If they play a bigger game, then they start to be playing the same game as other players that the public can invest in (directly or indirectly) i.e. no advantage.
We see smart investors fail all the time (VC returns are highly variable, even though each VC is diversifying their risk across many investments).
All VCs together as a segment do not make enough return.
And the OP is wrong because you can only make a limited number of investments - because each takes time and most have a minimum stake. E.g. Buffett has so much capital to manage that he doesn’t invest in small businesses even if they might give 1000% return. And it disregards the problem that investors often concentrate their investment e.g. real estate mogul making a billion dollar bet with everything they own, or e.g. mom and pop putting retirement fund into one stock.
And then they read startup porn and copy Elon Musk habits to become as insanely successful as him. Or at least as Peter Thiel.
I'm with the little girl. Her dream is not less realistic than the second one, but much more meaningful.
Just look at the tv show 'the voice' and look at how many contestants they start with, and how many end up making a living out of it.
The number of people with businesses are not expressed with "thousands".
There are plenty of singers that work with bands, operas, theater companies, studios, schools, as performers, as songwriters, as backing singers and on and on. The living they make is every bit similar to the living made by a guy that owns a pest control company or a woman that owns a small bookkeeping firm.
Thanks for that comparison! With Top Chefs, most of them make a living as a chef or cook. With The Voice, most of them don't (not even as backing vocals). Why is that you think? To make a living as a chef or cook, you need to be in the top 90%. To make a living singing (even as backing vocals), you need to be in the top 0.1%.
NONE of the singers on the Voice are professionals. That's also the point of the show.
The bigger point that clearly wasn't understood is that celebrity and success aren't mutually inclusive when it comes to cooking or music. You can be a successful chef that isn't on Top Chef just as you can be a successful voice that never goes on American Idol. In fact MOST people successful in both realms will never ever be on even a local TV show.
I already agreed with you on that above.
You don't even aknowledge the point that I'm making, let alone understand or agree with it.
I think you were suggesting that only the top .1% of singers who want to make a living singing actually do. But the top 90% of chefs who want to make a living being chefs actually do. If that is the point then I completely disagree.
General entrepreneurship is severely underrated in our society for upward mobility and it's rarely praised. Not every business needs millions in financing, there's a million opportunities for people with niche skills or who come across niche opportunities from their regular day-to-day work.
Even something as boring as electricians, my uncle started an electrician company and now has 10 employees and is living quite comfortably. He built up a strong skillset, made plenty of contacts, and worked hard in his 30s to start out of his own, and now comfortably in the upper middle class.
I remember reading a book about the myths of entrepreneurship, who studied large groups businesses, and the average 'founder' isn't some child-genius out of college (like the media tries to spin) but a ~40yr old with plenty of domain experience.
A number one song earns two times as much as number two song. And a number two song earns two times as much as a number three song earns and so on.
All I need to do is sign up one or two consistently good bands to make my whole career. If I also sign up a bunch of one hit wonders, it's OK.
You see something similar in stocks. The big cap stocks are most likely to shoot way, way up. If you invest in the next bunch down, the mid cap stocks, then historically, you would not have made as much money.
It's possible that if you count the names of winners and losers, that the author is right, and there are more winners in the midcaps than the large caps.
But if you own large caps, you will own a few stocks shooting way, way up like Amazon and lots of stocks that lose a little. If you own mid caps, you might own a lot of stocks that go up a little, and only a few stocks that go down. But because of the power law, you only need to own a few stocks like Amazon in your portfolio to make more money with large caps than mid caps.
https://www.marketwatch.com/story/dont-overlook-mid-cap-stoc...
That being said, you'll never win if you don't try. One must be prepared to take advantage of opportunity ("luck") when it happens, and showing up consistently (being in the right place) is half the battle. Being smart and working hard at the right things also vastly increases one's chances.
Note the distinction between your statement about "the successful" and the topic at hand - "huge success". Success isn't a simple binary dichotomy... it is, IMO, more of a continuum. One can be "successful" without being, say, a billionaire founder of a Silicon Valley unicorn. I would argue that we should keep this in mind when talking about what goes into success. Yeah, it probably does take some "luck" to become the billionaire guy (say, Mark Cuban or Mark Zuckerberg). But becoming the owner of a successful and growing landscaping business, or car dealership in your local town, etc., etc., etc? Maybe not as much so.
That being said, you'll never win if you don't try. One must be prepared to take advantage of opportunity ("luck") when it happens, and showing up consistently (being in the right place) is half the battle. Being smart and working hard at the right things also vastly increases one's chances.
Agreed. And since what most people are really talking about when they say "luck" - which is to say chance, uncontrollable events - are outside of our control anyway, there's no real reason to even think about it. All one can do is work as hard as possible, engage in the behaviors that tend to (create|discover|capture|foster|whatever-you-want-to-call-it) "good luck" and just take the ride as far as it goes.
Cliches may be trite, but as a certain character in a certain movie once said "just because something is trite doesn't make it less true". And the old cliches "the harder I work, the luckier I get" and "luck = preparation + opportunity" still hold as far as I'm concerned.
For some people, dropping out of college and spending a few years working on a project that might pay out spectacularly is negligible. Sure, it's a few years of lifespan, but you learned some stuff and your future trajectory isn't going to be dragged down by a failure in your early 20s.
For others, one shot is all they'll ever get. If they don't get the degree and the right job out of college, the trajectory of their life will be permanently inflected downward.
Circumstances of birth have a huge impact on what chances are rational to take.
Precisely. People love to trot out Bill Gates as some business genius, but he got lucky, a lot, first by being born to wealth, then by getting the contract with IBM. Later , Microsoft got by with underhanded and shady business tactics (FUD) while clearly shipping far inferior product.
Luck is involved in getting to the top. However there is a lot of hard work required to take advantage of it. The unsuccessful often have better luck when you look close - but they don't use their luck.
In hindsight, we know what really worked was Windows and Office. It is a kind of luck to be so ahead of the curve, you can sort of coast, although it's a lot of hard work, somehow the right people falls in your lap as well as predatory opportunities (clone, buy and steal your competition).
While hobbyists and IBM scrambled, someone invested into the budding IBM PC-clone platform. This is business acumen fueled by superior technological vision and clarity (though at the same time blind).
Jobs had his own niche, catering more for end-UX and designers also ruthlessly, ironically.
They could have done _something_ with all that spare time but they rather vegged out and whiled away their time.
Like work ethic has nothing to do with it. They completely ignore that fact that there is a set of life choices that limits the downside, slowly builds the upside, and allows a person to create opportunities.
Most startups fail: they are NOT a sensible financial investment as an individual. Your poker stack is your time and the opportunity cost of a normal job. Your reward is too variable to be a sensible risk to take.
A common statistic is one success per 10 VC investment. But a VC turns down 100 startups for every one they fund, so your individual chances of success are much lower than that.
If a person only does startups then they have a very significant chance of getting $0 in return.
The kelly criterion[1] for 100x return (say 100MM after 10 years work == 5th of working life and opportunity cost of $1MM wages) and 1 in 20 chance of success (a large overestimate) says you should invest 1/25th of your pot.
For that to be sensible as an individual you could:
A. hugely reduce time invested (hard if you want outsized returns),
B. lower risk i.e. don’t take all-or-nothing VC money,
C. pool your risk with other startups (now you are a VC - hard)
D. already have millions (so 1/25th is big enough)
E. live forever (infinite dice rolls).
F. value the social outcomes of being a founder very highly (I think this is common)
G. Have some inside knowledge that changes the risks (large risk you are kidding yourself - reality shows that).
I seriously think being a founder is not a sensible financial decision, and I think it is very smart not to be a founder.
Of course this also partly explains why wealth tends to flow uphill: the rich have large nets.
Right, and one mustn't ever expect this to matter on its own. It's necessary but not sufficient. As you allude to, it's a vector - there's magnitude of work, and direction. Neither on its own is enough, you must have both aligned.
I think this is one of the more important things a successful academic career doesn't teach you. There, the correct direction for achieving success is almost entirely set for you, so all you need to focus on is magnitude of hard work. More or less, working harder directly translates to more success.
When you have to choose your own direction of work, this can be a counter productive takeaway because overly prioritising magintude of work can mean you don't focus enough on direction.
Put another way, you have to work hard, but also occasionally have to step back from the work you're doing, take a look around and get the bigger picture, and decide if you're actually working on the right thing right now.
I can point to a number of friends that tried their own thing and threw in the towel, so to speak, too early. From my view it usually boiled down to multiple bad decisions that stacked up or the inability to be realistic with how to run a company (trying to start something limited capital or domain knowledge/skill, calculated runways being too short, etc). That said, after all was said and done none of them really complained about "luck" or blamed external factors, they gave it their shot(s) and understood the risks.
Maybe a bit harsh and my opinion, but I feel like that most people that keep harping heavily on the luck argument for their failures just use it as a copout for their own incompetence. And i'm saying this as someone that understands I've been extremely lucky. If i were to fail outright tomorrow I would not blame it on anything but myself.
Luck probably plays a huge factor (maybe the ultimate factor) in building billion vs million dollar companies, but when you distill it down to something smaller you absolutely can manage your "luck" and it doesn't require getting money from your parents or having capital to try 5x times or whatever that people here keep spouting.
The problem is that the alternative is a dangerous narrative, because you can't control how lucky you are (and you don't always know your luck ahead of time), but you can control how much effort you put in.
If you go around telling people that it's basically just luck then they don't even try and then they aren't in a position to capitalize even if they are one of the lucky ones.
People also tend to focus on the billionaires, where the only way to really make it to that level is to win the "right place at the right time" lottery that a million other people who tried just as hard will lose. But far, far more people succeed in building a lifestyle business than succeed in founding a unicorn, and it's disingenuous to count all of those small successes as failures just because they're not all filthy rich.
So yes, luck is a major factor in extreme success. But effort and persistence are necessary pre-requisites to even be in a position to take advantage of the luck when it arises.
Getting hired at a small company that goes on to become a Unicorn or just being in the right place at the right time. Like getting hired a month before a big acquisition are 100% luck. However, starting a company, taking the risks and beating the odds, is not luck, its gumption and timing.
Most of the wealth in "Tech" comes from luck. There are very few Founders who maintain enough ownership to cash out big especially compared all the employees who took the right job at the right time and scored big with options or an exit...
That is part of the mental challenge of being an entrepreneur isn't it? Maybe you'll make it, and maybe you won't. Maybe your hard work will be paid back, or maybe it will all be wasted on a stupid dream.
There is only 1 way to find out.
If you make a lot of shots, you'll get some successes, and this can be a reliable path to some good outcomes in life. But founding a billion-dollar company or beating the market for a decade means making a lot of shots in a row. It's not enough to succeed at a high-risk, high-reward gamble, you have to either take impossible odds or keep putting all your winnings back into the next wager. (Less abstractly: landing funding for your company, selling the product, escaping fatal competition, refusing the buyout, and so on.)
That doesn't make "take a lot of shots" untrue advice, obviously that still improves your odds, but it has two major implications. First, taking more shots may be less effective than improving your odds or raising your wager so you don't need as many wins. Second, there's no guarantee that an individual can ever have a reasonable expectation of winning big. It seems possible that the only strategy capable of making you Bezos-level rich doesn't pay out decently inside one lifetime.
Yeah, I'm not so convinced of his music business analogy. Normally, people in the music business are quite aware of the fact that "a hit leads to another hit".
The issue is that getting a "hit" means that people are willing to give you more chances to get the next "hit".
Maybe your next song isn't as good, but, hey, we're willing to throw more marketing behind it this time. Or, you've been playing bars, but the market research shows your profitable group are tweeny girls, so you retarget your tour sites. etc.
In this instance, the fact that you once had a hit means people are more willing to apply resource to help you get the next hit (ie. music execs are sheep--aka VC's are sheep).
We think success = product excellence: how else could a product rise to a leading position in the market or to such pre-eminence unless it was better than the alternatives?
Although success is sometimes tied to product excellence, the mountain of successful products that range from mediocre to terrible shows there's often little reason or rhyme to a product's success.
There's even an element of luck here in Hacker News. Just take a look at 'Show HN' - there are many excellent projects that get no attention or traction at all. And then there a few lucky ones that suddenly take-off. There's no "wisdom of the crowds" moment that propels one project to success over another because it's more worthy or excellent - it really is random in so many cases.
- Roman philosopher Seneca
Lots of people have the same ideas about what can be successful--some idea about some underserved market or whatever. They're all working at it night and day on little to no sleep. They're all extremely smart and talented. Many of them are willing to play dirty. Only few get lucky.
What bullshit. In research, we have a zillion different words for chance or luck or stochasticity or randomness. There's a whole language for it. Citing the lack of one of the least precise terms as evidence that there's a gap that needs acknowledging is ridiculous, and the author surely knows it. I get that he's trying to sell his book, but come on.
I bought the book and found the source to the original study[1]. It actually looks like they searched for luck articles, altough in this paper he goes and talks about how different words are used for luck. I dont have time to examine further
[1] Good Night, and Good Luck: Chengwei Liu & Mark De Rond 2016
I also think things that are outside of the control of the actors are reasonably called luck. E.g., I'm in software in good part because my dad happened to get into software in the 1960s. He only got into it because his dad was well placed at a company that wanted to automate a lot of then-manual appraisal calculations, and they pulled him in to figure it all out. A couple years earlier and he'd have been too young. A couple years later and he would have been gone from his home town.
That's why Warren Buffett talks about winning the "ovarian lottery": https://www.cnbc.com/2018/05/04/warren-buffett-says-the-key-...
‘Just because you passionately believe in it, that doesn't make it a good idea’.
"The wealthier and more connected your family is, the luckier you get." - me.
No amount of hard work beats starting off with all the opportunities and plenty of OPP to work with.
Those are only the ones who have been lucky in rising to the top of tech. Look at all the athletes who have started with nothing, actors, artists, scientists.
I won't disagree that those who are well connected are starting off in a luckier position, but there are MANY examples of the lucky and lazy falling from grace.
Can I suggest you don't look at the world as a zero-sum game.
What is "OPP" in your parlance, I know a few acronyms of that, but nothing that fits.
It's not saying long term success is based on luck.
It is not saying the hugely successful companies or hugely successful people are based on luck.
It's saying a temporary 'rate of change' on success should not be confused with success.
It is saying people should not look when success fluctuates for a company or person. But before or after.
It then screws up and says "myth of meritocracy" in the last line which has nothing to do with what they are saying and confuses people.
Only after you conflate those two, you can equate success with luck.
Once you get out of SV, business success has little to do with fart apps and birds that are angry or have flappy appendages and more to do with skill, knowledge, and hard work.
The article discusses older research
https://www.tandfonline.com/doi/abs/10.1080/19416520.2016.11...
https://www.tandfonline.com/doi/abs/10.1080/19416520.2016.11...
If you were picking life directions, startup projects, etc. from such directions and projects randomly, i.e., uniformly distributed across such directions and projects and independent of everything else, then the usual, more accurately, the average (expectation) is what you should expect to get.
BUT, BUT, BUT you do NOT have to pick directions and projects this way!!!!
There are other ways to pick. Yes they are rarely done, but there is a beautiful even spectacularly good history!
The first key is, use more and hopefully better information than is usual.
Here are some such projects:
There used to be typewriters and carbon paper. Not so good. So, Xerox developed and sole a much better solution. Presto, bingo, super big success.
Typewriters remained clumsy -- with the labor, a massive economic waste. IBM developed and sold their Selectric typewriters with a little spool for "corrections". It was much better and a big success.
Typewriters were still a pain. Along came personal computers. Even with just 640 KB of memory, no hard disk, and only 8" diskettes for storage, and a dot matrix printer, they were MUCH better than typewriters. With a daisy wheel printer with a carbon ribbon, they were much better, still. They sold "like hot cakes".
It's possible to have a toothache. I got one of those: I'd gritted my teeth getting CorelDraw working with PostScript output; nice output, but I cracked two molars. On one I had a root canal procedure and a gold crown. Eventually the other one let some infection into the center of the tooth. Result: CO2 pressure; worst pain imaginable. In about an hour, the CO2 pressure was high enough to leak out via the crack, and then an hour later the pain started again. I went to the ER. About then the pain started again. The ER physician just took out a Q-tip, dipped it in a small bottle, painted my tooth, and I was OKAY!!!!! He said he used Benzocaine which is what dentists use before giving an injection and is over the counter. So I rushed to a drug store and stocked up! So, Benzocaine -- works GREAT, got to have such a sore tooth to understand the real value. Not much chance of no market for Benzocaine! Result: A few days later the pain quit. A few weeks later, the tooth was loose in its socket. A week later it was gone!
We can all see places where there is a need and some good technical work will create a great solution highly desired by the market.
Sure, about the best will be one pill taken once that cures any cancer with no side effects. All we need is the pill, and presto, bingo, a 100 X unicorn! Sure, so far after no doubt some $billions in research funding, no one knows how to make that pill. But there is progress, and on and on we will be curing cancers until we have cured all or nearly all of them. Some of the cures will be very valuable.
So find a big need; use some advanced, leading edge, partly original, difficult to duplicate or equal, technology to get a terrific solution. Tell the world. Buy a nice place in Aspen, along the Florida coast, in Maine, on Long Island (as in the Audrey Hepburn movie Sabrina), in Shenandoah, etc. and enjoy life!
So, given a problem, need a solution. Can we have any faith in technology? Hmm .... In WWII, the world learned, YES: Radar, penicillin, the proximity fuse, sonar, jet engines, code making and breaking, and The Bomb. Later the world learned from the SR-71, the Navy's nuke powered submarines, the Navy's version of GPS later done by the USAF, Keyhole, basically a Hubble but aimed at the earth, and much more. These projects were funded mostly by the US DoD, and the track record, batting average, bang for buck were terrific. In particular, the US DoD can look at a project proposed just on paper, evaluate it, go or not go, and achieve the track record. Very little luck needed!
Apparently Silicon Valley can't/won't do projects this way. So, there is an opportunity: If can find the problem, stir up the technology, and write the software, all as a small project, small team, maybe even sole, solo founder, then maybe can shop for those nice houses and no luck required!
Common? The usual? No. Possible? Yes.
Back to it!