luck

The Stanford Commencement Address by Bill and Melinda Gates

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Bill and Melinda Gates jointly gave a commencement address at Stanford University earlier this month on June 15, 2014. The full transcript is here, but I wanted to highlight a few notable passages:

Melinda and I have described some devastating scenes. But we want to make the strongest case we can for the power of optimism. Even in dire situations, optimism can fuel innovation and lead to new tools to eliminate suffering. But if you never really see the people who are suffering, your optimism can’t help them. You will never change their world.

And that brings me to what I see as a paradox.

The world of science and technology is driving phenomenal innovations – and Stanford stands at the center of that, creating new companies, prize-winning professors, ingenious software, miracle drugs, and amazing graduates. We’re on the verge of mind-blowing breakthroughs in what human beings can do for each other. And people here are really excited about the future.

At the same time, if you ask people across the United States, “Is the future going to be better than the past?” most people will say: “No. My kids will be worse off than I am.” They think innovation won’t make the world better for them or for their children.

So who’s right?

The people who say innovation will create new possibilities and make the world better?

…or…

The people who see a trend toward inequality and a decline in opportunity and don’t think innovation will change that?

The pessimists are wrong in my view, but they’re not crazy. If technology is purely market-driven and we don’t focus innovation on the big inequities, then we could have amazing inventions that leave the world even more divided.

The key driver to make notable change is building empathy:

If our optimism doesn’t address the problems that affect so many of our fellow human beings, then our optimism needs more empathy. If empathy channeled our optimism, we would see the poverty and the disease and the poor schools, we would answer with our innovations, and we would surprise the pessimists.

The question is: how do we build and develop empathy in others?

I like how Melinda closes the address, saying that young graduates shouldn’t be in a rush to change the world:

You don’t have to rush. You have careers to launch, debts to pay, spouses to meet and marry. That’s enough for now.

But in the course of your lives, without any plan on your part, you’ll come to see suffering that will break your heart.

When it happens, and it will, don’t turn away from it; turn toward it.

That is the moment when change is born.

Success Cannot be Measured

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Success is the strength of your heart, the power of your mind and giving of your soul.

This is a great post by Ketan Anjaria who claims that success, like other intangibles in life such as love, can’t be measured:

Real success isn’t measured by how many cars you own, how hot your startup is, or even how amazing you are at yoga.

Real success can’t be measured, just like happiness or love can’t be measured.

If you are trying to apply a metric to your success you have failed to realize one the most beautiful reasons we are on this earth.

Success to me is what you make. What you give to the world. That your thoughts, and actions and time go to building something that works for others.

We could all this reminder every once in a while.

On Luck, J.K. Rowling, and the Chamber of Literary Fame

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I had a conversation today at lunch with a lady about the role of luck in her career. We both agreed that we shouldn’t underestimate chance encounters and how certain circumstances bring us opportunities. Too often we attribute success to diligence and/or hard work, while we (strongly) discount the role of luck that played in our successes.

In this spirit, I thought this was an excellent piece by Duncan J. Watts on the discovery of J.K. Rowling’s pseudonymously published novel, The Cuckoo’s Calling:

In the real world, of course, it’s impossible to travel back in time and start over, so it’s much harder to argue that someone who is incredibly successful may owe their success to a combination of luck and cumulative advantage rather than superior talent. But by writing under the pseudonym of Robert Galbraith, an otherwise anonymous name, Rowling came pretty close to recreating our experiment, starting over again as an unknown author and publishing a book that would have to succeed or fail on its own merits, just as Harry Potter had to 16 years ago — before anyone knew who Rowling was.

Rowling made a bold move and, no doubt, is feeling vindicated by the critical acclaim the book has received.

But there’s a catch: Until the news leaked about the author’s real identity, this critically acclaimed book had sold somewhere between 500 and 1,500 copies, depending on which report you read. As they say in the U.K., that’s rubbish! What’s more, had the author actually been Robert Galbraith, the book would almost certainly have continued to languish in obscurity, probably forever.

“The Cuckoo’s Calling” will now have a happy ending, and its success will only perpetuate the myth that talent is ultimately rewarded with success. What Rowling’s little experiment has actually demonstrated, however, is that quality and success are even more unrelated than we found in our experiment. It might be hard for a book to become a runaway bestseller if it’s unreadably bad (although one might argue that the Twilight series and “Fifty Shades of Grey” challenge this constraint), but it is also clear that being good, or even excellent, isn’t enough. As one of the hapless editors who turned down the Galbraith manuscript put it, “When the book came in, I thought it was perfectly good — it was certainly well-written — but it didn’t stand out.”

I highly recommend reading the entire thing where the author discusses a social experiment about the discovery of music by unknown artists.

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Recommended related reading: Nassim Taleb on the role of luck.

A $75 Horse Bet Turns into a $1.5 Million Payoff

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A cool story of Conor Murphy, a man who used to shovel manure for a living but got lucky with a bet, and now owns his own ranch:

Mr. Murphy, 29, knew his horses well. He was able to tell which ones were on their toes and which ones needed a little more care. He also knew his way around a betting window. On a hunch, he bet $75 on five of his favorites. It was the sort of desperate stab that only a man who loves horses would make.

Nassim Nicholas Taleb on Role of Luck

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Nassim Nicholas Taleb has a new short paper titled “Why It is No Longer a Good Idea to Be in The Investment Industry” (PDF link). The concluding argument is:

To conclude, if you are starting a career, move away from investment management and performance related lotteries as you will be competing with a swelling future spurious tail. Pick a less commoditized business or a niche where there is a small number of direct competitors. Or, if you stay in trading, become a market-maker.

Felix Salmon weighs in and argues the opposite:

The professions you really want to avoid, after reading Taleb’s paper, are not financial but rather creative. Where do you find millions of people all trying to succeed against the odds? Just look at how many bands there are, how many aspiring novelists, how many struggling artists. Nearly all of them think that if they create something great, that will improve their chances of success in their field. But given the sheer number of people they’re competing against, and given the fact that the number of breakout stars in each field is shrinking rather than growing, the fact is that just about everybody with massive success will have got there by sheer luck.

Sometimes, the luck is obvious: EL James, by all accounts, is an absolutely dreadful writer, but has still somehow managed to become a multimillionaire best-selling author. Carly Rae Jepsen has a catchy pop tune, but is only really successful because she happened to be in the right place at the right time. Dan Colen might be a fantastic self-publicist, but not particularly more so than many other, much less successful artists. And so on.

Salmon is strong in his conviction that every successful musician, artist, novelist became successful mainly because of luck. I don’t agree with that premise entirely: I believe there are things you can do to sway the chances of luck helping you along the way. But that doesn’t mean hard work, confidence, and talent should be discounted.

Michael Lewis on the Role of Luck

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Michael Lewis’s Liar’s Poker and Moneyball are some of my favorite books I’ve read in the last few years. So it was with delight that I read Lewis’s commencement speech to the most recent graduating class at Princeton. The speech is worth reading in entirety, but the core of the message is: people don’t give enough credit to luck in their success. Lewis makes it clear via his life narrative, because shortly after he published Liar’s Poker:

I was 28 years old. I had a career, a little fame, a small fortune and a new life narrative. All of a sudden people were telling me I was born to be a writer. This was absurd. Even I could see there was another, truer narrative, with luck as its theme. What were the odds of being seated at that dinner next to that Salomon Brothers lady? Of landing inside the best Wall Street firm from which to write the story of an age? Of landing in the seat with the best view of the business? Of having parents who didn’t disinherit me but instead sighed and said “do it if you must?” Of having had that sense of must kindled inside me by a professor of art history at Princeton? Of having been let into Princeton in the first place?

This isn’t just false humility. It’s false humility with a point. My case illustrates how success is always rationalized. People really don’t like to hear success explained away as luck — especially successful people. As they age, and succeed, people feel their success was somehow inevitable. They don’t want to acknowledge the role played by accident in their lives. There is a reason for this: the world does not want to acknowledge it either. 

Lewis also talks about Moneyball and exploiting underlying data:

If you use better data, you can find better values; there are always market inefficiencies to exploit, and so on. But it has a broader and less practical message: don’t be deceived by life’s outcomes. Life’s outcomes, while not entirely random, have a huge amount of luck baked into them. Above all, recognize that if you have had success, you have also had luck — and with  luck comes obligation. You owe a debt, and not just to your Gods. You owe a debt to the unlucky.

If you graduated from Princeton (or any college, for that matter), then Lewis’s point should be lucid by now:

[Y]ou must sense its arbitrary aspect: you are the lucky few. Lucky in your parents, lucky in your country, lucky that a place like Princeton exists that can take in lucky people, introduce them to other lucky people, and increase their chances of becoming even luckier.

Excellent.