"Get lucky" is always the key - however, you can increase your "luck surface" by doing certain things (for example, you couldn't have gotten lucky if you hadn't started the company, nor if you hadn't bothered to talk to people).
...followed up a few years later with "I was wrong in my previous article and didn't go far enough. Read my part 2: Why successful founders should deliver groceries". You may get your chance to pitch a famous VC partner while you instacart/doordash.
No one ever talks about the opportunity cost of building up a "luck surface". What is the expected value of doing so? What do you have to sacrifice to do so? Is there any evidence the EV is positive, or is this just another selection bias?
Well, one extreme example is buying lottery tickets; it's the best way to expose yourself to the potential upside of winning the lottery, yet the expected value is quite negative.
That example is quite bracing, but I think it points out that there are many ways to build this 'luck surface', and the expected values of each are probably very different, and likely situational.
Expected value is really a dumb way to evaluate lottery tickets. I can't believe even supposedly good mathematicians use it.
The next dumb way to evaluate lottery tickets is to compare it with other long odds (lightning strikes, marrying your favorite actor). If you want to play along, the probability of you winning the lottery is 10000000000000x more favorable than the probability of you existing in this universe.
Buying lottery tickets is a simple framework.
The upside of winning a lottery is significantly higher than the downside of losing one (per week or per month). So do it.
The opposite is driving recklessly to save a minute of your commute. It has significantly higher downside risks than the upside of time savings. So don't do it.
A lot of lottery-bashing people make 10000x worse sub-optimal decisions in their life and yet pick trashing a lottery ticket to feel superior about their decision making ability.
Bashing on lottery tickets due to EV also really feels like it's really missing the point. Lottery tickets are a mechanism for enjoying a fantasy. Sure you could technically just pretend that you won $10^9, but there is a hard cliff from >0% to 0%. I buy lottery tickets (very very occasionally, but who cares!) because it helps me enjoy a fantasy about being radically independently wealthy.
There's no reason to hate on people for doing something that they enjoy, regardless of what the expected value is. For god's sake, I juggle! As a hobby! Can you imagine the expected return on THAT?
If buying a lottery ticket is a good idea, isn’t buying two better? How about spending everything you have on lottery tickets? Odds are the upside for you is still much larger than the downside. Maybe you’re saying that buying a single lottery ticket improves your odds of winning the lotto so much (infinitely many times in fact) that you just need one. There are a lot of lotteries in the world so.. get one of each? Also, how often should you buy one? One a week? One an hour? Maybe once a lifetime is enough, which is what I personally recommend.
It’s almost like there is another variable that determines if this is a dumb idea, and it almost always is. Maybe those math professors are on to something after all.
Buying a single $1 lottery ticket is fine. But I see people in gas stations etc. who look like they are spending a very large fraction of their disposable income on lottery tickets. People asking for "$60 of X" when they look like they make $50K a year or less. That's fucking insane and if they make 10000x worse decisions in their life it must be like putting their fingers in the electrical socket.
Yeah, I'll defend buying one lottery ticket, even a few per week, but more than that and you very quickly cross the line between "Fun Fantasy" and "Math Tax"
No. That's like flipping a coin and then saying the probability of getting heads is 1. The fact that something happened is not proof that it was guaranteed to happen.
Re-read what the GP claimed.
Given the initial conditions of the universe, the probability it might eventually lead to my own existence may well be infinitessimal, but in the context of the probability of me winning the lottery (for example), my existence is already a given.
No, what he was saying was that the probability of you winning the lottery is quite high compared to the probability of you existing in the first place. His point was that mathematicians sometimes try to contextualize these very low probability scenarios so that lay-people don't collapse them all into a single "basically impossible" bucket. They're not wrong, but it's not a useful way to think about whether buying a lottery ticket is a good idea.
I'll quote: "the probability of you winning the lottery is 10000000000000x more favorable than the probability of you existing in this universe".
That statement is categorically wrong. If you're going to consider the probability of my ever coming to existence in the first place, you need to count it as part of the probability of winning the lottery too.
If it had said "the probability of anybody winning" I would've cut it some slack (though the probability that a universe might develop with sentient beings capable of inventing lotteries is still a prerequisite in both cases).
> I'll quote: "the probability of you winning the lottery is 10000000000000x more favorable than the probability of you existing in this universe". That statement is categorically wrong.
Yup -- it was written in a universe where the poster they replied to exists, so that probability is = 1 here.
> the probability of you winning the lottery is 10000000000000x more favorable than the probability of you existing in this universe.
Is it, though? This claim ultimately hinges on the probability of life occurring in the universe, and that's pretty hard to assess given our lack of encounters with extraterrestrial life.
Once life is established and subject to evolutionary processes, I hypothesize that intelligent life is - barring some mass extinction event preventing it - just about inevitable; evolution will select for greater and greater intelligence until the local lifeforms achieve sapience (and possibly beyond even that, i.e. levels of intelligence we mere apes are incapable of comprehending).
I had an argument with my boss about this. He is a business owner and pretty successful one, and he calls the lottery a poverty tax, or a stupidity tax. If it were a game you play in Vegas, then he’d be right.
It’s my opinion that just buying one ticket, for say $2, essentially is a trivial and inconsequential amount of money that exposes you to incredible upside. Imagine if the ticket only cost a penny. At that point it’s practically free, but free exposure to life changing wealth. I don’t know if that counts as zero to 1 according to Peter Thiel, but it’s basically zero to something, for essentially nothing
What about the people who do hundreds in instant lottery, or dozens to hundreds of dollars every week for the standard games (and no, they aren't ALL pooled for a frigging office).
>there are many ways to build this 'luck surface', and the expected values of each are probably very different, and likely situational.
I agree. Something as straightforward as being known as someone who does good work, putting yourself out there somewhat (writing, speaking, etc.), basically developing a network of people who you know at least professionally is certainly a way a lot of people develop at least something of a "luck surface." It may well not produce the big win but it can certainly lead to "lucky" opportunities.
Of course, there are other options that are more like gambles that may have negative EV but if you don't play big you probably won't win big.
All the talk about building a great "luck surface" is just an attempt to deny luck: something might seem like luck, but it's really part of an intentional strategy to maximize potential value!
For any given "luck surface" strategy, you can find far more people who haven't achieved massive success using it than those who have. Some strategies are probably better than others, but those are not foreseeable in advance.
It's luck because you have no direct control over it - it happens by unpredictable circumstances.
Think of networking, and imagine every person you meet and build a rapport with as non-parametric distribution that you're randomly sampling from over time (future interactions). You have no clue if each sample is going to yield positive results, but you can increase your chance of a positive outcome overall by increasing the number of distributions (people) you're sampling from (maintaining relationships).
So much of it ends up by random chance, what else could it be but luck?
Not just getting lucky, but being ready to get lucky. If they didn't have the company or the product already, bumping into the former manager wouldn't be enough. And I think I've just given the type of advice TFA is railing about :)
There is another layer here, which is how much you increase the "luck surface" by doing certain things. Is it 10%, so you move from 1% probability to have "success" to 1.1%? Or 50% from 30 to 45%?
Increasing the luck surface sounds smart and insightful and I have been guilty to use the term quite nonchalantly myself, but without quantification and direction of the luck-surface actions, it means very little.
In the specific case discussed, apart from the "building a company" part which is admirable but kinda to be taken for granted when selling services, it sounds like walking increased their luck surface. Had he taken a Uber or gone to a different store, maybe the company won't be here (guessing). I continue to call it luck.
> you can increase your "luck surface" by doing certain things
....and your chances of being able to do those things (without severe risk of poverty and homelessness) are increased dramatically by having been lucky enough to be born wealthy, or at least upper-middle-class.
Someone once seriously proposed making the final determining decision for who gets into Harvard be based on...a random drawing. (From an oversized pool of qualified applicants.)
The idea was students wouldn't go through the rest of their life thinking they'd prevailed in a meritocracy, and had earned and deserved every bit of their future success. They'd always have to acknowledge: some of it was pure luck.
If you believe the pool of qualified candidates is much bigger than the student body for a school like this (pretty easily supportable, imo) then this is also obviously a good idea - if the primary purpose of the school is to provide a great education to any qualified individuals who exist.
I don't think any reading of the history of the ivy's and similar schools can really support the latter.
I imagined something totally different when you mentioned "a random drawing".
Perhaps they could submit 3 drawings, one of which would be randomly chosen.
All drawings would be displayed in a gallery, with a critic deciding which they like and which they dislike. A scribe would trail the critic with a notepad, writing down their critiques and informing the applicants why their drawing was declined or accepted.
It's an excellent idea for people who want to go to Harvard, and maybe even society at large, but a terrible idea for people who have gone to Harvard. And for Harvard.
And Harvard cares about the latter a lot more than it does about the former.
It essentially already is a random drawing... at those acceptance rates, you're getting admitted or rejected because the orchestra needed a flute player, or because the admissions officer was feeling gassy after lunch. Having admissions winnow down the applications to say 3x the class size and doing the rest by lottery just makes the luck factor explicit.
> ....and your chances of being able to do those things (without severe risk of poverty and homelessness) are increased dramatically by having been lucky enough to be born wealthy, or at least upper-middle-class.
While this is true, it also isn’t helpful. Play the cards you have, not the cards you wish you had.
You always gotta start somewhere. Might as well start with what you’ve got and go from there.
You’re right it’s not helpful towards the goal of becoming an entrepreneur or whatever, but I disagree that it’s not helpful at the macro level.
We should all have this basic understanding of how our society works, and how our plutocrats got to be in the position they are in. We’re fed myths that they all started from the bottom and worked hard enough and smart enough to get where they are, and you can do it too! And if you can’t, you’re just not as smart or hard working as they are. These myths serve the people in power by preserving the status quo. I believe it is helpful to remind people that we should change the status quo instead of adopting a “grindset” to get yours within it.
The elite are a super disconnected group of people. My understanding is that their children don't even have the same capacity for empathy as children from other classes. Money literally changes how humans think, such that humans with significant wealth have a different psychology. There is of course nuance but let's not pretend like moneyed people, new or old, are normal.
> My understanding is that their children don't even have the same capacity for empathy as children from other classes
I don't know. It seems like you are dehumanizing rich kids which I don't really think it's a great idea.
Sure, entitlement is a thing but it's not like rich kids don't have their own struggles
> let’s be honest many successful people work hard
> there’s also a bunch unsuccessful hard working people
The key point is that the number of unsuccessful hard working people is humongously larger than successful hard working people, so working hard does not really correlate with having success, no matter what the survivor bias tell them.
I find remarks like GP useful, to put into perspective just how mind-boggingly unfair life is. This is a different frame of thinking ("headspace") than a self-improvement seeker is in, which explains the downvotes and the "boo"ing.
Imagine a civil engineer walks into the office and asks a colleague about the plans for the new housing project, and the colleague replies that the concept of a "house" is a rich and socially constructed idea that both reflects and influnces the social zeitgeist in subtle ways and is intimately tied to notions of community and private property. They are not wrong, and the civil engineer would probably learn new things if they let the colleague finish instead of laughing them off or firing them, it's just that there is this implicit shared context in the workplace, that "house" is not a subtle idea and our job is to plan and build them not talk about their history or philosophy, that the colleague is violating or ignoring.
This is a useful analogy to understand why a remark like GP's, very useful and very true and would drive you into despairing madness and perhaps the brink of suicide if you think about it honestly and deeply, is not welcome in a thread like this. There is an implicit context in the comment section (formed haphazardly in a distributed non-explicit way, unlike that of the analogy) that you have a bunch of latent opportunities that you can take for granted and build off them to new frontiers, and that those opportunities are more or less a "critical mass", you can make them into whatever outcome you want given a fair amount of work. This is non-trivial for a huge portion of humans, and yet the self-help context always assumes it without proof, and any pushback is interpreted as doomer nay-saying or unhelpful pedantry.
I don't know why this is getting downvoted. Yes, inequality exists and it sucks, but you still need to make the best out of what you have.
Also, a lot of people seem to far overestimate the work and risk involved. This doesn't help really poor people, obviously, but the amount of people with sufficient money, backing and time that complained they'd start a company if they "only also had $20 million backing from their parents" is staggering.
People don't want to admit it involves hard work and luck - they'd rather think that Bill Gates got to where he is because of his parents (even though there are thousands/millions with similar parents and backgrounds who didn't get even close).
Because one line of thought leads to: "I couldn't do anything, the game was rigged from the start" and the other leads to "I didn't do as much as I could have done."
The game is rigged. But that merely makes it less likely that someone who's on the wrong side can succeed, not impossible. You do have to do as much as you can, with what you're given, regardless of what it is.
The real key, though, is that this tells us what we, as a society, need to change. If we genuinely value entrepreneurship and innovation, we need to create a universal safety net that lets people take risks, try things, and fail, again and again, without ending up destitute, because we know that is what leads to eventually creating a successful business.
Isn’t this what limited liability corporations help ensure?
People need a way to limit downsides, not have zero downside.
It’s like giving a student a service chance at a test to help ensure they learn the material. But giving them unlimited attempts with no risk doesn’t create the same environment.
LLCs let you avoid having personal liability for accidents, corporate malfeasance, etc. They don't let you avoid having to invest your own money into the company to try to make it go, because no one else cares enough about your idea to do so, then lose it all if it fails.
Having something like universal basic income absolutely does not reduce the risk to zero. What it does is it reduces the penalty for failure—failure which is often largely out of your hands. Rather than such failures meaning you lose your life savings, have no job, and are months/weeks/days from homelessness, they would mean you are making only the minimum needed to sustain housing, food, and clothing. For most people, particularly those of the type to try starting their own business, that still won't be enough to be happy.
The threat of death by exposure and starvation should not be what drives us to do better. We, as a society, should have moved past that already.
LLCs do provide limitations towards losing your life savings or home. They create a buffer between personal and corporate assets. I think a key difference is the benefits are targeted towards those who are trying to create value, whereas UBI is much less targeted. At least from an economic sense, LLCs seem like a much more efficient mechanism.
Sure, they prevent you losing those things if the company loses more money than it has and the creditors want to come after you personally.
They don't prevent you losing those things if you invested your life savings in the company, and you mortgaged your home to invest more. Which are both things that people trying to get companies off the ground do, especially if they don't otherwise have the means to do so.
If you're considering the primary purpose of a UBI as being encouraging entrepreneurship, then sure, they're not that efficient. I do not consider that to be its primary purpose, nor have I yet spoken to anyone who does. It is one of many, many benefits to a UBI that should be considered.
> People don't want to admit it involves hard work and luck
My favorite realization from actually playing cards. We used to play a lot of rummy on vacations as a family. Like a lot.
I kept losing. Hard. Absolutely destroyed. If only I could get this one card to complete my hand, I’d win every time. But it just wouldn’t come! I had terrible luck. Someone else always ended up winning before I got the one card I needed to make the high score and beat everyone else into submission. It was infuriating.
After a while I changed tactics. No waiting. Make a play on every play. Something, anything, with whatever cards you’ve got. Find a way to make the card you just picked up work.
Suddenly I was winning almost every game. Everyone complained how much it sucks to play cards with me. How does this kid always get exactly the perfect card!?
Now I’m banned from playing cards with family. Last time I played rummy was with my girlfriend’s family over Christmas a few years ago. They banned me immediately. Cards never come up again in conversation lol.
It really isn’t about the cards. They’re just the ingredient.
This is really visible in bridge; the hands are all random but how you play them is entirely skill.
Anyone can win with a perfect hand; the skill comes in dealing with the imperfect hands. True in life, too.
Bridge is nice that you can compensate for skill somewhat by handicapping, and the less-skilled players can still get a great hand and win sometimes. I always say "bridge is a fun game to lose" - and that's a really important part of a game you want to play.
Bridge is a weird game in that the actual play of the hand is almost unimportant. You can lose the game by playing the hand badly, but you can only win consistently in the bidding.
Which is why abstract and complicated bidding systems dominate the game, which gives it that lovely, steep initial learning curve.
There's an interesting genre of card games (President https://en.wikipedia.org/wiki/President_%28card_game%29 probably being a good representative) which are literally rigged in a way that makes the previous winner easier to win the next time and harder for the previous loser to succeed.
There is still quite some mobility, but it effectively makes for different optimal tactics within the same game as your unfair start position determines whether it's best to risk things or not, what score is achievable depending on your position, etc and IMHO it has quite some parallels with real life decision making.
To make rummy a good metaphor for this discussion, you need to modify the normal $1/point rummy gambling rules; say making gin gives you $1000 bonus from the house or something. (There's a resemblance to quiddich here, I think.) Anyway, now you have the two extreme strategies: knock if you can, which gets you a few dollars each time, or try exclusively for gin, which usually costs you money on each hand but sometimes pays off. If you're skint, the gin strategy won't work since you can't stay in the game long enough. If you're flush, the knock strategy is uninteresting because a few dollars doesn't make a difference.
Now make that bonus $10,000,000,000 and you're making some unicorns, Harry!
Now imagine you only have budget for a single round before being eliminated and some of your opponents have money to keep playing indefinitely. That would be the most accurate metaphor
It isn't quite helpful. The second half of the advice should be to tell working class people to do whatever they can to get near rich/upper-middle class people, to flatter them, befriend them, attend their parties, and sleep with them.
The more rich people around you, the luckier you get. Some rich manchild somewhere is waiting for you to be "the brains" behind something.
I'm annoyed by how true this comment has been for me. Lots of my success in life has been more about knowing the right people than about knowing the right things.
In theory, hypothetically, it could be helpful in identifying when you don't have the proper situation to make success sufficiently likely -- perhaps you want to find another path where your situation is more advantageous. OR to identify what you, unique to your circumstances, might need to do to be in circumstances to maximize your luck, that other people woudln't -- like, in this case, cultivate a relational network of wealthy people that others might have out of the box. Or find a founder partner with a different balance of advantages/disadvantages, maybe you need a partner with those networks you don't have, while you bring other things to the table.
I'm reluctant to talk about this case specifically because it is so... fraught. People get mad, in both directions.
But in theory, there is no reason identifying the challenges in your starting situation that others might not have wouldn't be helpful. Isn't all information helpful?
Identifying challenges to overcome is extremely helpful. Necessary even!
Giving up before you even start just because it’s harder for you than someone else, that part doesn’t help.
The thing here can be anything. Losing weight, running a marathon, starting a business, climbing out of poverty into the middle class. You can’t get there unless you start.
> Giving up before you even start just because it’s harder for you than someone else, that part doesn’t help.
Doesn't help with what? In general, when you have your choice of direction, choosing a direction that plays to your strength instead of a direction where you are starting out handicapped compared to competitors can certainly help with your chance of success.
If we ignore the specifics about it being about the background you were born into, I think we'd all agree taht there are some people who exist who because of personal charecteristics or even personality are ill-suited to be startup founders, and have a poor chance of success, and maybe shoudln't do it, right?
It's just when we don't ignore that we are talking about social position specifically, in America we want to believe this can't be true because of your social position, we want to believe everyone has an equal chance regardless of social position. This is an ideology though, not based on observation. An ideology that says you have to pretend it doens't matter, not even identify the challenges to overcome.
So if you know you're going to have a harder time being successful than others, and that of course most startups fail anyway, and maybe you want to try it anyway after evaluating the risk and what will happen to you if you fail, but maybe you say actually, no, I don't want to do the thing that is already very risky and I have an additional handicap for... maybe instead of being a founder I'm going to look for someone else's startup to join, or maybe I'm going to try to work at a FAANG instead -- when you say it "doesn't help", what do you mean -- it doesn't help who do what? And who would it help to do what if you were to insist upon doing it even though it will be harder for you than someone else?
You mention adjusting tactics and strategies, even goals, based on circumstances. This is what “playing the cards you have” is. You do what you can with what you’ve got.
Giving up before you start doesn’t help because it’s a shut down. You don’t even get to the part of assessing viability and weighing risk.
The point is that if you want a change on whatever dimension you choose to care about, you have to do something. What that something is depends on the cards you have. How far it can take you again depends on circumstances.
And it’s fine to not want to do things. Or see the costs and decide that kind of life is not for you. But at least you took the time to evaluate.
> Giving up before you start doesn’t help because it’s a shut down. You don’t even get to the part of assessing viability and weighing risk.
Now you're adding "before you start", who said that until you did? Ok, what if instead you've gotten to the part of assessing viability and weighing risk and then decided not to go down that path, of, say, founding a startup.
> What that something is depends on the cards you have. How far it can take you again depends on circumstances.
Right, perhaps depending on circumstances that something is not founding a startup.
I don't totally understand what we're disagreeing about. Or what you mean when you say "it doesn't help" -- help who do what?
I would say deciding your circumstances make it harder for you than others to found a startup, thus it would make more sense to join someone else's startup or look for a job at a FAANG or something instead -- could at least conceivably "help". Help you find a path that works better for you to find success. I'm not sure what you mean by your repetition that it "doesn't help", as, like, a logical a priori.
> Now you're adding "before you start", who said that until you did?
That was already in the comment your own (G)GP[1] was a reply to, so they're certainly not adding it "now."
> I don't totally understand what we're disagreeing about. Or what you mean when you say "it doesn't help" -- help who do what?
As I was going to reply to your (G)GP[1]: Help anyone with whatever it was they didn't even start on doing. Be it running a marathon or starting a company or... What does it matter? Isn't it obvious that if you never start training for a marathon, that won't help you run one? And that the same goes for starting a company -- if you never even start starting a company, then you'll never get to the point of having started a company? And the same for anything you might want to do?
What I don't understand is how anyone can honestly claim not to understand that.
___
[1]: Grandparent of your comment that I'm replying to; great-grandparent of this my reply.
It might not be helpful to the individual, but it provides a useful guideline for society - everyone is capable of doing great stuff, as long as the means for doing so are provided.
I'd bet my life on this - if every homeless person was given a place to live, recovery from addiction (if needed), mental health counceling, education and a job, a significant percentage of them would become productive members of society.
I think it is helpful. Along with the cards analogy I would say the first step is knowing what cards you have.
As an example, being upper-middle class probably gives you an advantage on networking, either family, school old mates, ex colleagues, … Which I think is quite important when starting a business.
So realizing you don’t have that since the beginning will help.
You do have to start somewhere. It's also important to know which goals are realistic relative to what position you're in.
If you're poor, do you go for the moonshot, or do you go for being middle class and then adjust your expectations once you're comfortable that you've achieved your initial goals? Going from nothing to something is more impressive than going from something to... more something.
> ....and your chances of being able to do those things (without severe risk of poverty and homelessness) are increased dramatically by having been lucky enough to be born wealthy, or at least upper-middle-class.
...and yet, all poor people know it by heart (unless they were born into a rich family that has just fallen from grace), , because it's totally true.
For more good insight: wealthy families know a lot more about how to make money when you have some money. Poor families know a lot more about avoiding the risk of being totally broke from an unlucky event, because they know they'd be totally unable to recover from it (not having the safety net of education and wealthy contacts that the upper-middle class have even when they go broke).
Somewhat true except for the fact that education isn't fixed. It's a variable that changes.
You might start with little wealth and accumulate education on your journey. Therefore in the early years when you lose wealth it's difficult to accumulate more, but over time it can become easier as you are more educated and experienced.
Having little wealth when young also allows you to live on very little - when combined with an education you can use this very nicely to say bootstrap a product.
The book "Conspiracy:
A True Story of Power, Sex, and a Billionaire's Secret Plot to Destroy a Media Empire" is a wonderful example of how what seemed to be a lucky break for Peter Thiel was actually a product of extensive preparation for an opportunity to take revenge on Gawker.
this is only true if the "unlucky" payout is not that big, so you can increase your "luck surface" without worrying about the effects for "unlucky" results, otherwise increase your "lucky surface" could increase your downside of "unluckyness"
Technology startups are naturally kind of like this. They have limited downside and unlimited upside.
However, in my life that limited downside has cost me a lot of money in opportunity costs over twenty years. I might be retired had I been able to work for money with the same energy and time I applied to my startup projects. But reality isn't quite like that, I would have been so unhappy doing that, it wouldn't have been sustainable (I tried working that hard for money for two years and it was horrible!) Those startup projects were so fulfilling and I learned so much on the journey. Even though I haven't found success yet, I haven't given up and the journey itself has been incredibly rewarding.
Solidarity, friend. Keep doing what makes you happy, keep learning every day, keep trying new things, keep meeting new people, and you're giving yourself the best odds you can get.
