IS SUCCESS LUCK OR SKILL?

IS SUCCESS LUCK OR SKILL?

People who’ve been successful generally believe their skill was paramount, though they may qualify it with a joke, as with Jeff Bezos’ comment on Amazon’s success – “half luck, half good timing, and the rest brains”.  Most other people believe there’s a lot of luck involved.

Who is right?

The Case Against Luck

  • Serial Entrepreneurs. Peter Thiel co-founded PayPal and Palantir, as well as funding Facebook, SpaceX, and LinkedIn. Elon Musk, Jack Dorsey, and Steve Jobs created several companies worth billions.  More modestly, I have co-founded or funded about ten companies each worth several millions.  As Peter Thiel himself says in his excellent book Zero to One, “If success was mostly a matter of luck, these kinds of serial entrepreneurs probably wouldn’t exist.”
  • Successful Investors. There aren’t many good examples, but the existence of Warren Buffett alone is a powerful indicator that some people have the knack of making money consistently over decades.  It’s just possible that Buffett’s billions are due to a four-leaf clover or a lucky teddy bear, or that he will crash to earth before finally quitting this mortal coil, but I rather doubt it. 
  • The Power of Action. If you believe that action can lead to results, you are much more likely to act – and attain results. Up to around 1450, nobody thought you could make money by anything other than conquest or exploitation.  In the past few centuries, individuals and companies have set out to make money deliberately through adding value to customers – by exploration, trade, inventing and making things, improving them, and providing either spectacular new products such as the iPhone or cutting the cost of a product or service by half or more, like budget airlines and fast food.

Not everyone who set out to act in this way was successful, but a lot of people were; if they hadn’t believed it possible, it wouldn’t have happened.  The personal computer, the iPod, and the iPhone were not accidents of luck. 

  • The Power of Ambition. Not just in business, but in every field of endeavour, including religion, philosophy, science, the arts, entertainment, and sport, people who are ambitious and believe in themselves are much more likely to succeed, compared to people who don’t believe they are important and don’t try very hard.  Planning to succeed does not guarantee success, but not planning or believing in your star almost certainly will not generate impressive results.

 

The Case For Luck

  • Where You Are Born. If you are born in North America or Switzerland, chances are you will have much greater opportunities than in Nigeria or Bangladesh.  Imagine also the difference between growing up in North Korea versus South Korea.  This is pure luck.  As are: 
  • The genes with which you are born. Warren Buffett nicely combines an appreciation of luck and his own skill by saying he is a “member of the lucky sperm club” and – to avoid any imputation of sexism – a winner of the “ovarian lottery”. 
  • When you were born. Peter Thiel is not a great believer in luck, but he makes an excellent point which seems to me to be the essence of undeserved good fortune – “whether you were born in 1945 or 1950 or 1955, things got better for the first 18 years of your life, and it had nothing to do with you.”  Baby boomers benefitted from a rising tide, raising all boats.  If you had been born anywhere before 1800, the odds are about 1-99 (ninety-nine to one on, a virtual certainty) that you would have been poor, and at least one member of your family would have died prematurely from malnutrition, starvation, disease, or war.  I can’t understand people who would use a time machine to go back to the past – it was nearly all unremittingly bad. 
  • I’ve observed hundreds of CEOs, and I can say without hesitation that in most cases the horse they rode – the company – and the time during the cycle of its ups and downs that they became the boss, were much more important than their inherent abilities.  Good managers often come a cropper through no fault of their own; and bad managers often fall on their feet through sheer luck and timing.  Napoleon was right – “God give me lucky generals.” 
  • My undergraduate subject was history and it’s still a passion of mine, which I’m convinced is a better training for business and investment than any analysis or business school.  It’s impossible to read history right without appreciating the huge role of luck in the fortunes of individuals, nations, and the whole universe.  And the more tumultuous and turbulent the times, the greater the sway of Lady Luck.  Individuals are important, not because they can avoid good or bad luck, but because they can exploit it with greater or lesser finesse.

 

Where I come out

I think the luck versus skill debate is very like the nature versus nurture one.  Both sides of the street are crucial; and it is the interaction of luck and skill, and of nature and nurture, that matters most.

One way or another, I’ve spent much of my last forty-five years musing on what makes for individual success.  I think the role of luck is hugely important, but if I had to put my money on just one horse – luck or not-luck – it would go on the latter.  I wouldn’t say that not-luck is skill – it’s a whole combination of events and personal characteristics.  Self-belief and self-importance is the foundation, but it is not enough.

My reading of history and of individual careers suggests that after self-belief, it is a set of personal experiences and reactions to circumstances that can be mapped quite accurately for any individual – if you look at the period of their success and what they did or did not do.  In fact, I think there is a success code or template that applies to people in any walk of life and can be identified – as in an archaeological dig, as it were, through their careers – in people of astonishing different personalities and worldviews.  There are ten success factors, and most or all of them apply to any successful person during their roller-coaster period of ascent.  They apply, for example, to Adolf Hitler up to 1939, as well as to Winston Churchill from 1939-45; and they apply as much to Bob Dylan as to Steve Jobs.

What excites me is the prospect that, though the research is based on history and therefore hindsight, it might be possible to use the map so that anyone who really wants success in any field can then see if they have the experiences and attitudes necessary for success – and if not, how to acquire them.  My ambition is to make success much more accessible, because success is not a zero sum game.

I’m currently completing my research and plan to write a landmark book on mapping success. Whether I will be successful may, of course, be purely a matter of luck.

Image credit – Pixabay

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6 Responses to “IS SUCCESS LUCK OR SKILL?”

  1. Awesome! Looking forward to buying your next book!
    Thanks Richard

  2. Please do!

    Luck and Skill interplay, no? AND 80 20 thinking helps you get lucky faster by focusing on the critical few things that generate success

  3. Richard, I am very excited about this book! Reading history became much more enjoyable for me when I started to get better at recognizing patterns and principles. Many of which you write about. I imagine that if one looked closely enough they could already identify traces of these 10 success factors in your books and blog posts. I am sure it will be a challenging, but very enjoyable book to write. I would wish you good luck, but luckily you’re already uniquely suited to this subject matter.

  4. Oh THAT was a tease Richard!

    No preview on the 8 points?

    What if – as luck would have – you have an accident and the book is no more? A least an overview blog please. Or 8?

    I promise, I will still buy the book.

  5. Definitely interested, Richard. Sign me up for that.

  6. I for one, will eagerly read the book when it comes out!

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