The Only Proven Method for Success — Luck
How Google and Wall Street exemplify that patterns are illusions.
What if I told you that almost every success story you heard had been built around an illusion? That every lesson you thought you’ve learned is worthless; that the only pattern for success is randomness?
Sit tight because that’s what you’re about to read.
Suppose you’re a top trader at a Wall Street firm. You’ve spent eight years buying and selling stocks to increase the wealth of people like Bill Gates, Jeff Bezos, and Oprah. Though you’ve never met your rich investors, you know they love you. Your annual bonuses and bosses’ smiles testify to that.
You wake up one morning to attend a seminar about the influence of your mind on your investment decisions. Your plan? Leverage science to take your trading game to an even greater level.
At the end of the seminar, the economist who laid out the presentation concludes with:
“And so, my analysis of the data gathered from the last eight years involving twenty-five investors shows that there’s no such thing as ‘trading skills.’ All of your performances are completely random, and a five-year-old rolling a dice would’ve made the same numbers.”
How would you react? If you’re anything like me, you will chuckle awkwardly, waiting for the presenter to announce it was a playful joke.
Except it wasn’t.
It wasn’t just some random successful guy off Wall Street either: the presenter was Daniel Kahneman, and he’s a Nobel prize-winning economist.
Yes, Kahneman stood up one day in front of a successful trading firm's executives and explained that there’s no skill involved with trading. Zero, nothing, nada. The whole trading industry is merely a game of luck.
Later that day, one of the seminar attendees drove Kahneman to the airport. On their way there, he told Kahneman: “I have done very well for the firm, and no one can take that away from me.”
Though Kahneman’s reaction at the time was a silent smile, he noted in his book Thinking, Fast and Slow, that he thought:
“ Well, I took it away from you this morning. If your success was due mostly to chance, how much credit are you willing to take for it?”
And the trading business is only the beginning.
The illusion of understanding the pattern
We love success stories. What we love even more than success stories are insights into the patterns that generate them. Google’s success story is a perfect example.
For those who don’t know, Google came into development when founders Larry Page and Sergey Brin were fresh out of Stanford University. The two graduate Computer Scientists had an idea of a new way to browse the internet.
Their plan was simplistic, really. First, they raised some funds to start a company. Then they got to work. With every decision they’d made, they brought their company closer to becoming the king of the tech industry. Google has spread so widely that its name is now a verb we use every day to describe researching information. And every time we do Google something, the two founders get richer.
It’s easy to look at Page and Brin with admiration and imagine that every move they made must have been “the right” one. It doesn’t seem far-fetched that replicating their success is possible for anyone — why not you, right? According to Kahneman, that’s just you deluding yourself.
He continues to assert that every successful story like Google’s is nothing more than an over-simplified version of what actually happened. Why? Because the reality is too complex and often not as sexy as we want it to be — and storytellers know that.
So, they serve you a concise, coherent story and top it off with bonus takeaways, a.k.a. a “pattern” for you to follow to replicate similar outcomes — main selling points: Success and genius.
Except, there’s always more to the story than what’s told, and as they say: the devil hides in the details — which are usually dismissed. Why? Because details involve unattractive rash decisions that make geniuses look reckless when they fail and lucky when they succeed. Details also involve random external circumstances that generated unintentional breakthroughs. In other words, details emphasize the presence of luck, and as Kahneman said: “The more luck was involved, the less there is to learn.”
In the Google story, one particular lucky event stands out. It goes back to 1998.
Google founders were willing to sell their company for less than a million dollars one year after launching it. Page and Brin pitched to Yahoo but were rejected. Today, Google is worth one million times what they had tried to sell it for — yes, one million; millions. So, I repeat, Google founders actively tried to sell Google. Where’s the genius pattern in their success? Where’s the visionary decision-making?
I can hear you: Yahoo was stupid.
Maybe. But so was Google for trying to sell in the first place. It’s always easy to judge using hindsight. Predicting what will happen next month is near impossible, let alone in twenty years. The future is simply unpredictable. Esteemed math professor John Allen Paulos may have said it best: “Uncertainty is the only certainty there is.” And uncertainty is the twin of luck.
You may feel resistant to this truth, but deep down, you know luck plays a big role in every business outcome. The Yahoo deal is a good example — and not the only one.
There were other missed opportunities and rash moves along the way. There’s a whole Wikipedia page dedicated to Criticism of Google with more than thirty controversial items that reflect questionable choices waiting for you to explore; And yet, we dismiss all of it.
We prefer the story to be short, compelling, and attractive only to convince ourselves that it’s instructive and that we might learn something from it. But again, we’re deluding ourselves.
Statistician, philosopher, and former trader Nassim Nicholas Taleb calls the phenomenon of making stories sound more appealing than they actually are: the narrative fallacy. In short, the narrative fallacy arises from our obsession with seeking patterns and making sense of the world. Paradoxically, that pattern-seeking obsession decreases your chances of understanding and increases your odds of succumbing to illusion.
In Taleb’s words:
“We like stories, we like to summarize, and we like to simplify […] Where this propensity can go wrong is when it [the narrative fallacy] increases our impression of understanding.”
The illusion of understanding you get from oversimplified success stories deprived of every “unsexy” detail is nothing more than self-sabotage. You read or listen and think you get the pattern, and you’re ready to replicate it. Except, there’s no pattern. There’s only the illusion of a pattern.
When discussing Google’s own narrative fallacy, Kahneman said:
“There’s a good reason to believe that your sense of understanding and learning from the Google story is largely illusory […] Of course, there was a great deal of skill in the Google story, but luck played a more important role in the actual events than in the telling of it. And the more luck was involved, the less there’s to learn.”
So there you have it. There are no patterns; there’s only luck. So, what then can we do?
Luck is something you provoke
Luck isn’t passive. The idea isn’t to sit there and hope for the best but to provoke it. How? By rooting for the causality principle.
Causality is the mother of luck, and it boils down to one sentence: everything has a cause. Put another way: everything you do causes something to happen.
Each action you undertake flirts with luck. It’s like throwing a rock in a pond and seeing the ripples spread across the surface of the water. You can’t predict what the ripples will touch nor the extent of their reach. But you do know that something could happen. Business is like a giant pond, with thousands of people throwing rocks in it every second.
You’ll never know when the small wave you’ve caused will transform into a big one. Maybe it will fuse with another wave or grow simply because the waters will favor you. Perhaps the opposite will happen, and your ripples won’t go very far. Heck, sometimes, they won’t form at all. That’s luck in a nutshell.
Sure, you’re still hoping for the best, but you do it after you’ve thrown a rock in the business pond. Then you repeat until something happens. Chances are, you won’t provoke a tsunami like Google’s, but you’ll provoke something — and the joy of business is in agitating the water.
You can look at how Wall Street and Google agitated the pond, but it’s not necessarily a recipe for success. They have different rocks, they throw from different spots, and their waters are different from yours. Besides, as we know now, the majority of what we’ve been told of their story is merely an illusion.
So instead of wasting your time theorizing about how to create a big wave, just throw the damn rock already.
Just go out there and do the work. Then do it again. Repeat the process, and eventually, something will begin to happen — Remember the causality principle? Something will happen, and then something more. Over time you’ll end up with the only real pattern there is — your pattern.
Let’s recap and get to work
We are all in a quest for success, which makes it only natural to seek out the patterns that can get us there. Except, there are no patterns, only illusions of patterns—and luck.
Whatever you’re trying to achieve, stop looking at success stories as user guides and do the work instead — throw that rock.
At some point, you’ll get lucky. I did. I mean, you’re reading my work right now, aren’t you?