Randomness, Effort, and Black Swans

Posted 7 years ago by Evan Tishuk

Seth Godin asks if effort is a myth:

I think we've been tricked by the veneer of lucky people on the top of the heap. We see the folks who manage to skate by, or who get so much more than we think they deserve, and it's easy to forget that: (a) these guys are the exceptions, and (b) there's nothing you can do about it anyway.

And that's the key to the paradox of effort: While luck may be more appealing than effort, you don't get to choose luck. Effort, on the other hand, is totally available, all the time.

Seth's post ties in with one of the key points made in Nassim Nicholas Taleb's Fooled by Randomness -- a book I recently devoured and highly recommend as a mild antidote to The Tipping Point. Taleb points out that we tend to see only the exception -- the black swan or the winner -- and are largely blind to the losers when assessing risk and probability. For example, if there was a coin flipping tournament with 1024 contestants, one guy would necessarily win 10 consecutive flips. You'd be tempted to think that he's endowed with some special gift of foresight. Heck after the 10th win in a row, the flipper might actually start to believe he's untouchable. But it's just random chance combined with a large pool of coin-fliping automata. Same goes for a lot of other luck-driven sucess stories. "I owe this success to my passion determination and vision. I am goal oriented and never take 'no' for an answer." Sounds like something an exceptional CEO might say when his company gets purchased for $70 billion? The trouble is, there are probably thousands of similar CEO's who fit the same mold and lost. You never hear about them because no one writes best sellers about Tommy Bowden people who had a good run but things never fell into place. Furthermore, this line of reasoning also casts a lot of uncertainty onto someone's track record. So what if you had 10 successful coin flips? Does that mean I should invest my life's savings on the outcome of flip 11?

I think with the gloominess of the current economic mood, it's good to be reminded that effort is something we can control and often profit from. Luck is random and not bankable (banks are hardly bankable these days). Work smarter and prepare for luck. Effort isn't a myth, and I hope karma isn't either.

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