What has luck got to do with it?

The Relationship Between Success and Luck

Do you know what Bill Gates, Mark Zuckerberg, Larry Ellison, and Jack Dorsey all have in common? They are all dropouts. They are also extremely wealthy. So you know what that means — drop out from college, found a business, and become a multi-billionaire. Or is it? I have seen this argument several times from several people. They point a few examples of how some people made so much money by doing so-and-so, such as waking up by 3 am. But, as we shall see in a bit, to be extremely successful, you have to be extremely lucky.

In the sixties, four US teenagers were attending Lakewood, a very prestigious high school in Chicago. There was something very unique about Lakewood — it was one of the very few schools that had computers, and they also allowed their students to sometimes use the computers, which was a very great advantage for Lakewood students. These four teenagers would master computers and become software prodigies. Sadly, one of them — Kent Evans — would die in 1972 from a mountain climbing accident. The other three would go on to found one of the world’s most powerful companies — Microsoft. One of those teenagers is Bill Gates. Both Kent Evans and Bill Gates were exposed to luck, but one was a very bad luck. You could talk about other lucky events that took place which made Bill Gates extremely rich and Microsoft very big, but this is neither Microsoft’s history nor Bill Gates biography.

You could point out lucky events in the lives of those other people above, too. No doubt, these are very intelligent and hardworking people, but there are other more hardworking, and probably more intelligent, people who never get to make it to such levels. Indeed, they are not so lucky. For every Mark Zuckerberg who drops out to become a billionaire, there are many thousand others who drop out but never make it. However, you won’t know about these people because they did not make it.

This phenomenon is called the survivorship bias. We only take notice of the people who make it and ignore all the others who do not. But for you to be among the survivors, you need a substantial amount of luck; indeed, the more extraordinarily successful you are, the more luck can be attributed to your success.

The survivorship bias is stronger now more than ever. You know that friend who made it from trading cryptocurrency or forex. You know someone who had cashed out from the Gamestop and AMC saga. So you scout Reddit everyday to find your own luck. Behold, you take the first meme stock suggestion you get from Reddit and pour you life’s savings into it, and you find yourself living in penury the next day. Consider forex, for instance. Depending on the source you cite, up to 90% of traders may lose all of their money. But you don’t know who those 90% are because they don’t succeed. You only know about the 10% — the survivors.

Luck plays a huge role in education, too. Most medical schools brag about how they don’t allow their students pass even if they get 49 when the pass mark is 50. But is there really a difference between someone who scores 49 and someone who scores 50? It’s nothing but an arbitrary difference. You might never know if the person who got 50 passed by simply guessing correctly an extra question. The other person might have guessed too, but we call him a failure because he was not lucky to get the correct answer — he was not a survivor.

There is a danger that comes with being a serial lucky person. You start to think you’re smarter than the general population, and that there is a skill you possess that other people do not. It is very similar to someone who tosses a coin 10 times and gets all head. In reality, for every coin toss, the probability of getting a head or a tail is 50%. However, this person, after getting 10 serial heads, will start organising a crash course and tutorials on how to throw coins and get heads. This is similar to the few successful forex traders, stock day traders, etc, who think that, by their own special trading skills, they have become experts.

From Sportige.

I’m not discounting individual prowess of highly successful people. Indeed, you need to have an average level of skill to be successful. If Mark Zuckerberg had never learned coding, he would have never been lucky to found an internet giant as big as Facebook. As it is said, fortune favours the prepared. The more prepared you get and the more you try, the more you increase your chances of being lucky. Just try not to be arrogant enough to tag people who are not as lucky as you are as failures.



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Chisom Ogugua

I love coding, technology, entrepreneurship and medicine. I love to document my thoughts on these subjects.