I've enjoyed two great books that discuss this: "The Drunkard's Walk: How Randomness Rules Our Lives" (<a href="http://www.nytimes.com/2008/06/08/books/review/Johnson-G-t.html" rel="nofollow">http://www.nytimes.com/2008/06/08/books/review/Johnson-G-t.h...</a>) and "Fooled by Randomness" (<a href="http://en.wikipedia.org/wiki/Fooled_by_Randomness" rel="nofollow">http://en.wikipedia.org/wiki/Fooled_by_Randomness</a>)<p>I think people dislike talking about luck's role in our successes (but not failures) because it hints at a deterministic world view where our free will is less important than we'd like to believe.
I think part of the problem with realistically viewing one's life through this prism is the impossibility of determining what percentage of one's success is due to luck.<p>In a sense, literally everyone who is alive today is lucky. They are the product of an unbroken line of genetic material passed down for millions of years. Can you imagine? Not one of their thousands and thousands of ancestors managed to be killed before procreating!<p>In another sense, everyone alive today is lucky they weren't stillborn. Lucky they weren't claimed by SIDS or whooping cough, or a cold, or any of the various childhood afflictions we've eradicated. Everyone who wakes up tomorrow is lucky they didn't get cleaned out by a bus crossing the street, or sideswiped by a drunk driver on their way home.<p>Almost all of the "rich" people in the U.S. did not start out rich. Unquestionably, luck played a role. But how much? Who's to say that, if Michael Lewis skipped that fateful dinner, he wouldn't have gone to a frat party, met a future ballplayer, and then gone on to break the MLB steroid scandal. Or sat next to a White House intern and broken the Clinton sex scandal? or, or or. If any one of these alternate scenarios happened, he would still claim to be "lucky" to be in the right place at the right time. And, in a sense, he'd be right. But that doesn't necessarily mean he was successful <i>because</i> he was luckier than millions of other people around the world.<p>Obviously someone born today in the U.S. is much "luckier" than someone born in Somalia. Someone born into an upper-class family in Germany is "luckier" than someone born into a nomadic tribe in Algeria. Does that make the "luckier" person's success more attributable to luck? (And, as a corollary, the "less lucky" person's success less attributable to luck?) Maybe, but to what extent?
Its amazing how self-defensive some successful people can become about their socioeconomic status. An implication that luck had any more than a very minor contribution is blasphemous. Some can become outraged at the suggestion that they might own one penny that wasn't earned fair and square. Completely on their own, with no help from anybody. Not even scholarships count as help (they're earned).<p>And for some reason, admitting that one received assistance from one's parents is taboo. Just look at the Romney campaign for a prominent example:<p>"I could have stayed in Detroit like him and gotten pulled up in a car company," Romney said at the debate. "I went off on my own. I didn't inherit money from my parents. What I have, I earned. I worked hard, the American way."[1]<p>1: <a href="http://www.politifact.com/truth-o-meter/statements/2012/jan/20/mitt-romney/mitt-romney-says-he-didnt-inherit-money-his-parent/" rel="nofollow">http://www.politifact.com/truth-o-meter/statements/2012/jan/...</a>
I'm surprised by how defensive people can get about their own success. It seems to me that you can never know if your success was due to your own hard work or some lucky breaks (or, more probably, a combination of both to which you'll never know the balance).<p>It reminds me of the story about thousands of people flipping coins. Out of those thousands of people, some of them are going to flip a long string of heads. Does that mean that those people are "good" at flipping heads? Is someone who flips a string of tails "bad" at flipping heads?
"This isn't just false humility. It's false humility with a point."<p>This is why I like Lewis' writing. Liar's Poker had a huge influence on me at an influential age.<p>There's always a sense that he's playing the same game that he's writing about. And not in a George Plimpton sense. But he's often got a message to deliver that other players will not touch. The message always seems worth hearing.<p>I interpret his reference to the Berkeley study as not one that explains "luck", but of one that explains how life is role-based. People take roles and play them, as if "all the world's a stage". It is. We are all willing to go along either as the audience or in our appointed roles. What I think Lewis means to say is that the assignment of roles, the "casting" if you will, is often arbitrary.<p>I only wish Lewis had made this longer. There is so much more to say. Not only do people not like success explained as "luck" but they insist on success being attributed to "brilliance", "genius", "hard work", etc. In this case, when the cause of an effect is not clear, we are very quick to find one that suits our purposes.
I had a great time reading the following group of related books.<p>How To Beat the Dealer by Ed Thorp.<p>You might think this is lame and outdated, but it will clue you into how bond traders think. In fact, Bill Gross of pimco was so inspired by the book that he went to Vegas and became a gambler (before pimco but OTW). That book also is the holy grail for card counting. It will up your blackjack at least, and prepare you for the next book.<p>Liars Poker by M.Lewis<p>Lewis actually mentions Thorp, b/c Thorp went on to become a wildly successful trader throughout the 90s: he even called out B.Madoff as a crook in the early 90s (dude knew his finance games and clearly the SEC did not), and Thorp developed a lot of arbitrage trade strategies that are common today. All of this and more as M.Lewis clues you into wallstreet cronies and big bond trading, insider talk about salmon smith barney, and just how sketchy that industry really is ...<p>Ok now you know a few things about wallstreet and trading, now go to:<p>The Big Short by M.Lewis<p>Lewis again with an awesome breakdown of how/what of the credit bubble and various characters betting against that massive momentum as it builds. Really this book is about personal fortitude: having a vision as a trader and sticking to it, even when the rest of the world is betting against you, even when your vision implies the rest of the world is d0000med in an almost end-of-money kind of way :)<p>Now move into an interesting layer of finance, which all of us Hackers will enjoy ...<p>The Quants by S. Patterson<p>This has the making of a great movie if only hacking were interesting on film (too bad its not really like Hugh Jackman in Swordfish!). Buffet: "beware of geeks bearing formulas" ... exactly and this book is all about the buildup of these trading systems and the people behind them, the little bill gates (relative to bank-account) characters that run those giant quant funds ... And just questions on layering probability and the feasibility of trading into this complexity.<p>Read on ...
His point is essentially the one developed at length by Malcolm Gladwell in "Outliers." Namely, that great successes are almost always dependent on a uniquely fortunate set of events that the person is able to exploit well, rather than their success being the result of genius.
This reminds me of a topic the guys from the TechZing podcast talk about pretty frequently, increasing your luck surface area. Jason Roberts has a short post about it on his blog that sums it up pretty well (<a href="http://www.codusoperandi.com/posts/increasing-your-luck-surface-area" rel="nofollow">http://www.codusoperandi.com/posts/increasing-your-luck-surf...</a>). This concept has resonated with me and for the past couple of months, I've started to do things with the hopes of increasing my luck surface area.
I had this discussion with my father today and he finally conceded to me that I am partially right (he hates being wrong).
The fact that you were not born in a war torn country, the fact that you had good role models, the fact that you weren't born with a mental or physical handicap, the fact that you met your long term business partner at some random get together. Are all luck. Now that doesn't mean you should give up on all of your activities, because if you don't try at all you have a zero percent chance of success at that point. Even getting to the point where you have this work hard mindset is luck.
The point I take away is a little bit beyond just realizing that you're lucky. That's important, and the people I've met that I consider truly successful (ones I would consider as role models), generally realize this.<p>However, I think we can take this further...the only variable that we have under our control is effort. Since luck is an outside force, you might as well maximize this one variable that's still under your control so that you have the best odds.
I have gotten successful by being 'unlucky'.<p>Post my 10th Standard(10th grade) I failed to secure a seat in a good college, though I had good marks. I went to a sub par college by any measure. I met some amazingly hardworking people in the college, who were just motivated like crazy to prove to the world that going bad college doesn't change anything in life. We worked hard, very hard. Studied like crazy. I can't remember if we ever slept for more than 5 hours a day the whole year. I did great in my pre university exams.<p>During the entrance exams I got 'unlucky' again. The bus I took to the examination hall got punctured and I arrived to the hall 15 minutes late. I lost precious rank and again went into a average college. I met some great friends, we hacked in our free time. We did part time jobs in start ups. We installed modems for ISP's. I learned tons compared to other people in my age.<p>Then again due an average college I failed to get a job in a software company straight out of college. I went to a call center. I got trained to deal with sales calls, technical support, I learned to talk in American accent, I learned to work late nights, I learned how to resolve issues quickly. My other friends went to work at top software companies here in India.<p>I started coding in my spare time during the day and work in call center at the night. I got a job in a software company 9 months later. Again I got placed in a support project by being 'unlucky'.<p>I started automating stuff, hacked like crazy day and night. I got a break in another unit in the company. All my other friends went to foreign onsite locations and were seeing the world. I went to work in development project.<p>I got 'unlucky' again, I fell ill. Lost 35 kgs of weight due to a bad diagnosis of Tropical Sprue. I was put in as a back up guy for one of our client which happens to one of the largest web companies in the world today. I got back my life, and health slowly.<p>I started working like crazy again. I did stuff with and editor and a interpreter they had never seen. They were happy, they decided to hire me full time. I happened to land in a company any guy here would dream to work.<p>In this journey of getting and having chains of repeated back luck, I have gotten rich, got a little success and doing good by gods grace now.<p>If I had gotten 'lucky' at any stage. I wouldn't be where I'm today.<p>In other news, most of my friends who get tons of opportunities, chances and crazy twists of destiny in their favor are no where despite all they got today.<p>Moral of the story I learned so far: You can't win against Karma! No way! It will get to you sooner or later. So just do the right stuff and relax.
PG posted an interesting speech a while ago by Richard Hamming. It was about what makes the most successful people so successful. I really like his take on luck.<p>"I claim that luck will not cover everything. And I will cite Pasteur who said, ``Luck favors the prepared mind.'' And I think that says it the way I believe it. There is indeed an element of luck, and no, there isn't. The prepared mind sooner or later finds something important and does it. So yes, it is luck. The particular thing you do is luck, but that you do something is not."
<a href="http://www.paulgraham.com/hamming.html" rel="nofollow">http://www.paulgraham.com/hamming.html</a>
Michael Lewis meet Quora; Quora meet Michael Lewis: <a href="http://www.quora.com/Wealthy-People-and-Families/Why-dont-some-rich-people-pay-their-taxes-Is-it-just-greed" rel="nofollow">http://www.quora.com/Wealthy-People-and-Families/Why-dont-so...</a><p>The question I want answered is:<p><i>How do you optimise for luck?</i><p>I've come to the conclusion that one most work very hard on something with a scalable market value for a long period of time.<p>You continue to do this (repeatedly if need be), until you either, in order of likelihood:<p><pre><code> a) Quit
b) Die
c) Get lucky
</code></pre>
<i>How does one optimise for luck? How can one work "luckier" - not smarter (which is necessary but not sufficient for success)?</i><p>Bill Gates is a very smart man, I'm sure, but I highly doubt that he was the smartest, or the hardest working at the time he founded Microsoft (many people that run/found companies are very hard working/intelligent - but most fail).<p>If I recall correctly the founder of Digital Research and the creator of the CP/M operating system Gary Kildall (<a href="http://en.wikipedia.org/wiki/Gary_Kildall" rel="nofollow">http://en.wikipedia.org/wiki/Gary_Kildall</a>) could've become Bill Gates.<p>Apparently Bill Gates bought a clone of CP/M for ~$50K and sold it back to IBM with a blanket license for ~$100K, whilst holding onto the rights to exclusively sell to other manufacturers without IBM's permission.<p>The IBM PC blew up all the sales records, and quickly became the dominant PC platform.<p>The market was soon flooded with reverse engineered copies created by manufacturers hoping to ride the IBM wave by producing clones that were cheaper.<p>Every single one of them required an operating system that was compatible with IBM.<p>And who had the exclusive license to sell them the software IBM used?<p><pre><code> Microsoft
</code></pre>
I just want to know how does one get lucky, if that isn't such a stupid question to ask.<p>I have the feeling that anything up to some arbitrary limit (60K-150K a year) you can state that skill may probably have been a major component. But anything above that, and I'm pretty sure you are in very lucky territory. Does this make sense, or is everything mostly luck, and just a teensy bit of skill?
A quick parable: You sense a random opportunity, work your ass off, and turn it into a great success.<p>False narrative #1: This success is solely due to your hard work!<p>False narrative #2: This success is solely due to luck!<p>I haven't read ML's books (yet) but I think this speech leans too heavily on narrative #2.
Luck favors the bold. She favors those who experiment and take risks. That being said those bold experimenters aren't guaranteed luck, but they have a much higher chance of it; instead of failing 9 out of 10 times, they'll only fail 8 out of ten times.
This really surprised me:<p>> They entered the room bearing a plate of cookies. Four cookies. The team consisted of three people, but there were these four cookies. Every team member obviously got one cookie, but that left a fourth cookie, just sitting there. It should have been awkward. But it wasn't. With incredible consistency the person arbitrarily appointed leader of the group grabbed the fourth cookie, and ate it. Not only ate it, but ate it with gusto: lips smacking, mouth open, drool at the corners of their mouths. In the end all that was left of the extra cookie were crumbs on the leader's shirt.<p>I regularly have shared meals with my team and friends (mostly Brits), and this would never happen.
Luck is too broad a term.<p>I suggest that success is down to two components: alpha, and creativity.<p>Creativity is whatever value you create with your own talents and your own hard work.<p>Alpha is whatever opportunities come your way, which you need to seize to benefit from.<p>Obviously some people are just born in a better position to capture/generate alpha. And also you can work at gaining a better vantage point for seeking alpha. But seizing it still takes skill (and most of it goes unrealized), and people can be rightfully proud about that (as long as they don't confuse the alpha component with the creativity component, which would be somewhat tiresome).
A similar sentiment is expressed wonderfully tersely in Lemony Snicket's notes on Occupy Wall Street.<p><a href="http://occupywriters.com/works/by-lemony-snicket" rel="nofollow">http://occupywriters.com/works/by-lemony-snicket</a><p>There may not be a reason to share your cake. It is, after all, yours. You probably baked it yourself, in an oven of your own construction with ingredients you harvested yourself. It may be possible to keep your entire cake while explaining to any nearby hungry people just how reasonable you are.
I think this is why a lot of Hollywood actors tend to be liberal on economic issues. They may be rich and famous, but they also got the "big break" that many of their fellow actors did not get. Brad Pitt may be handsome and a good actor, but there are a lot of handsome and good actors. Only one of them got to co-star with Tom Cruise in Interview with the Vampire.
I like that talk. Well written, honest and to the point. It doesn't even involve morality. It doesn't tell you not to take the cookie because, you'll take it anyway (well, most of you anyway).<p>It just tells you not to fool yourself.
Am I the only one who initially read this as "Don't Eat Fortune Cookies," and didn't realize my mistake until going back to read the rest of the title?<p>Anyhow, it was a very great and inspiring read.
Would realizing they are lucky benefit the lucky? In the cookie experiment Lewis wrote about, the randomly appointed leader would then not take the cookie so effortlessly.
1) I don't eat the cookie, I just read the fortune.<p>2) You only get one fortune a day, so the 2nd would be a waste.<p>3) My instinct as leader would be to let the other two split it or "first come" - whichever is quickest.<p>4) Nevertheless, the 2nd "alpha" cookie always tastes better.
My success and failures in life have had nothing to do with luck. I've been both lucky and unlucky at various times, but none of them have determined my level of success over the short or long term to any significant degree.<p>At the same time I've had periods where I worked hard and was focused and passionate about what I was doing, and periods where I was not passionate, unmotivated by a crushingly poorly run organization and did not work very hard.<p>The periods where I was focused, passionate and working hard were the more successful ones, and successful enough to carry me thru the down times as well.<p>Luck may have put Michael Lewis at Goldman Sachs, but luck didn't determine his level of success. After all, his success comes from writing books, not being a goldman boy. Sure he wrote his first book about that period, but that book took a large amount of focus, passion and effort to create.<p>That said, I certainly find myself occasionally jealous of people who seemingly lucked into great success. If I'd never applied myself, and thus never had success myself, I'd probably think that luck was the actual determinant of success.<p>Edit to add:
In this post I deliberately talked about my personal experiences. I didn't make a broad sweeping statement that luck doesn't determine success or failure for everybody. However, clearly people object to the political incorrectness of not supporting the ideology that argues "luck determines success, therefore the rich should be taxed to pay us! we just weren't lucky!" Note that I did not address that argument, I just talked about my experience. But because my experience is inconsistent with the distorted view of the world, it is "politically incorrect" and thus should be kept from the eyes of others, lest they be influenced, my post has been made visually unreadable. I find this anti-intellectualism distasteful.
I don't see any luck in the "dinner" refered in the article neither in any of the examples. All those events have been predicted by the people who fight hard for building a society where those kind of events precisely became the default instead of rapes and pillages.<p>Btw, excelent movie.