4 ms·

> (and probably some luck) I'd reverse the skill and luck relationship. Success at that magnitude is almost entirely luck (and probably a little skill).

by xapata 4y ago

smsm42 4y ago
When one becomes rich because of one IPO that went right - ok, let's say it's luck. When one creates several successful businesses in a row - no, sorry, I can't say "it's just dumb luck" anymore, it's more realistic to assume there's something else involved.
- nemothekid 4y ago
  Taleb has a more succint way of putting it[1], but no it can still be luck just like hitting black in roulette several times in a row can also be luck. [1] https://mobile.twitter.com/nntaleb/status/1534172773580513280 https://mobile.twitter.com/nntaleb/status/153417277358051328...
  - Domenic_S 4y ago
    Hitting black multiple times in roulette is always luck (barring cheating). What the tweet is saying, and it seems right, is that looking at a probability graph the only way to get the billionaire-like outcome/outlier is to dramatically increase volatility, i.e. bet on long odds. If everyone went to work, maxed out their 401k, bought blue-chip stocks, and called it a day, basically nobody would have outlier net worth. But some people choose to increase the volatility of their money (buying crypto, starting a company, options trading, whatever) and as you'd expect 99.9999% of them don't get rich and the rest of them get uber-rich.
    - smsm42 4y ago
      > buying crypto, starting a company, options trading, whatever I think these activities are quite different however. Saying starting a company is the same nature of activity as betting on an extremely volatile asset ignores all the work that goes into successfully creating a working company. Surely, there's no guarantee this work will bring result - but it's still not the same as just betting on random high-volatility assets. Even options trading is not (always) just betting, and for more successful traders probably involves certain amount of knowledge in addition to luck. But I don't think describing creating a company as completely probabilistic activity makes any sense.
      - Domenic_S 4y ago
        The tweet (and me) aren't saying creating a company is "completely probabilistic", just that they're risky. Risky meaning there is an outsized chance vs. an established company that the new one doesn't exist in 5 years and the established one does (where "chance" means looking at outcomes in retrospect, not a roll of the dice). The tweet is saying that founders becoming massively rich is a natural outcome of probability distribution -- huge payoffs require either huge bets at a smaller win multiplier (less "risky") or comparatively smaller bets at a huge win multiplier (more "risky").
- Johnny555 4y ago
  Yeah, after the first successful IPO, the traveling IPO CEO has contacts at investment banks, media houses, etc and is on a first-name basis with many key analysts. That's why they keep getting brought in to help a company IPO, after you've done one, the subsequent ones are easier.
- xapata 4y ago
  Why? A good reputation and wealthy, powerful friends are very helpful. "When you're rich, they think you really know." Further, how many people were nearly identical after that first success, but then failed to continue with a second?

> (and probably some luck) I'd reverse the skill and luck relationship. Success at that magnitude is almost entirely luck (and probably a little skill).

by xapata 4y ago

> (and probably some luck) I'd reverse the skill and luck relationship. Success at that magnitude is almost entirely luck (and probably a little skill).

smsm42 4y ago

When one becomes rich because of one IPO that went right - ok, let's say it's luck. When one creates several successful businesses in a row - no, sorry, I can't say "it's just dumb luck" anymore, it's more realistic to assume there's something else involved.

nemothekid 4y ago
Taleb has a more succint way of putting it[1], but no it can still be luck just like hitting black in roulette several times in a row can also be luck. [1] https://mobile.twitter.com/nntaleb/status/1534172773580513280 https://mobile.twitter.com/nntaleb/status/153417277358051328...
- Domenic_S 4y ago
  Hitting black multiple times in roulette is always luck (barring cheating). What the tweet is saying, and it seems right, is that looking at a probability graph the only way to get the billionaire-like outcome/outlier is to dramatically increase volatility, i.e. bet on long odds. If everyone went to work, maxed out their 401k, bought blue-chip stocks, and called it a day, basically nobody would have outlier net worth. But some people choose to increase the volatility of their money (buying crypto, starting a company, options trading, whatever) and as you'd expect 99.9999% of them don't get rich and the rest of them get uber-rich.
  - smsm42 4y ago
    > buying crypto, starting a company, options trading, whatever I think these activities are quite different however. Saying starting a company is the same nature of activity as betting on an extremely volatile asset ignores all the work that goes into successfully creating a working company. Surely, there's no guarantee this work will bring result - but it's still not the same as just betting on random high-volatility assets. Even options trading is not (always) just betting, and for more successful traders probably involves certain amount of knowledge in addition to luck. But I don't think describing creating a company as completely probabilistic activity makes any sense.
    - Domenic_S 4y ago
      The tweet (and me) aren't saying creating a company is "completely probabilistic", just that they're risky. Risky meaning there is an outsized chance vs. an established company that the new one doesn't exist in 5 years and the established one does (where "chance" means looking at outcomes in retrospect, not a roll of the dice). The tweet is saying that founders becoming massively rich is a natural outcome of probability distribution -- huge payoffs require either huge bets at a smaller win multiplier (less "risky") or comparatively smaller bets at a huge win multiplier (more "risky").
Johnny555 4y ago
Yeah, after the first successful IPO, the traveling IPO CEO has contacts at investment banks, media houses, etc and is on a first-name basis with many key analysts. That's why they keep getting brought in to help a company IPO, after you've done one, the subsequent ones are easier.
xapata 4y ago
Why? A good reputation and wealthy, powerful friends are very helpful. "When you're rich, they think you really know." Further, how many people were nearly identical after that first success, but then failed to continue with a second?