you should really read the book "Fooled by Randomness". There's a particular chapter: "If you're so rich, why aren't you smart?" It points out how difficult it is to look at empirical evidence, esp. if you don't know the size of a given cohort. He makes his point with stock markets. Given the huge number of people who trade in a given year, it's basically inevitable that someone will pick nothing but winners. But if you don't see the huge pool of failures, you don't realize that someone's "stock picking skillz" are no better than what you might expect, given the size of the trading population.
E.g., you're looking at a rich MBA. Say 100,000 MBAs graduate a year in the US. You still don't have enough information to know if he was any good.
Worse, say you use a pedigree: You're looking at a rich MBA from Harvard. Say they only graduate 1,000, but, because any damn headhunter will put a harvard MBA into a C-level job, 90% of the harvard MBAs stack up a ton of money. Now, knowing that he's a rich MBA tells you even less. All you really know is that richness & a harvard MBA seem to correlate, which is kind of exactly where you started :) (on the other hand, if you had a poor harvard MBA in front of you, then you'd really have something!)
Anyway, yeah. it's a really hard problem -- just as hard as finding a good programmer, imho
What would be really interesting in light of what you say is repeat performance. Also, it is not inconceivable that even random success may _cause_ repeated success as successful people tend to get more opportunities and are more confident.
What would be really interesting in light of what you say is repeat performance
Well, then you get fooled by randomness in a completely different way: You begin to believe that the ability to succeed from scratch is a much rarer skill than it actually is, because (a) only a subset of the potentially-successful people ever succeed, by whatever measure, and (b) only a smaller subset of those ever bother to try to succeed again; and (c) only an even smaller subset of subset (b) ever succeed a second time.
But you don't really need to find a serial performer. You only need to find someone who can succeed once, and there are more of the latter than there are of the former, by definition. It's no knock on Bill Gates that, having founded one incredibly successful company, he didn't quit and try to start a different one just to "prove" that he had the knack. Zuckerberg should not be ashamed that, having found himself holding one tiger by the tail, he doesn't feel inclined to shop around for a different tiger.
Those are all valid points. However, I do believe that there are patterns of success and, by definition, patterns are characterized by some sort of repetition. Looking for patterns in someone can increase the odds of finding the right person. I don't deny at all that doing this probably excludes a lot of very qualified people, most importantly it excludes me from my own startup ;-)
to the contrary, some of the High-Net-Worth individuals i've had the misfortune to interact with have a much greater interest in succeeding more than once -- especially the ones who are more self-aware than usual. I think they want to prove that the first time wasn't a fluke, usually to themselves!
I don't think "fooled by randomness" makes sense, because it presumes its conclusion. I do not believe that Warren Buffett is just a random guy who happens to always make the right stock picks. He makes the right stock picks not out of randomness but out of the opposite of randomness. (For instance he makes very few picks a decade.) While the competition to Buffett are often people who are much closer to "Random" (or would be better if they were random).
The same thing can be said for a bunch of MBAs. It is not whether they are rich or not (which can be a factor of having been born into money or not) but whether they can make it rain.
Sure, some will get lucky. But when you have a field of 100, and of those 100, 20 "got lucky" and made a pile of money once, and 1 of them might be poor, but made a small pile of money every quarter doing several different things... it is the consistency of the last guy-- the rainmaker-- that is appealing. Even if his net worth is smaller than the smallest of the 20 who "got lucky" or the dozens who may have started out rich.
So, it is his actions as a process that speak to his qualities, not the size of his wallet.
Yes, you're right. Esp your third paragraph -- having someone demonstrate that they can repeatedly succeed is the surest proof. On the other hand, you can try to analyze process, and guess at if that process can reasonably produce results -- but that's not really an easier problem.
Let me paraphrase a story from the book that addresses Buffet. Taleb compares people playing the market to people flipping coins.
If everyone in the US flipped a coin once a morning, after about four weeks, you'd expect to have maybe a thousand people who'd flipped all heads. You could go out and interview these people, find out what their 7 highly effective habits are, whatever, but you couldn't actually be sure to be learning anything about what's "really going on."
On the other hand, if after four weeks, you found that all the people who flipped straight heads were clustered around Omaha, and all reported taking their coin-flipping-lessons from one guy in the town, then it might behoove one to look a bit closer.
In both cases, you can study "process", but without an understanding of the phenomena, you might just be spinning your wheels, coming up with correlations rather than causations.
E.g., you're looking at a rich MBA. Say 100,000 MBAs graduate a year in the US. You still don't have enough information to know if he was any good.
Worse, say you use a pedigree: You're looking at a rich MBA from Harvard. Say they only graduate 1,000, but, because any damn headhunter will put a harvard MBA into a C-level job, 90% of the harvard MBAs stack up a ton of money. Now, knowing that he's a rich MBA tells you even less. All you really know is that richness & a harvard MBA seem to correlate, which is kind of exactly where you started :) (on the other hand, if you had a poor harvard MBA in front of you, then you'd really have something!)
Anyway, yeah. it's a really hard problem -- just as hard as finding a good programmer, imho