Success Equation

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The Success Equation


When it comes to the factors that lead to success, there’s a tendency in folks to discount the role of luck. We like to think we’re the complete masters of our fortune — that we can control everything that happens to us and make our own luck. But by not giving luck its due, we actually prevent ourselves from effectively managing this force so we can experience success in the long run
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My guest today has written a book on the math of success, skill, and luck. His name is Michael Mauboussin and he’s the author of The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing. Today Michael and I discuss the philosophy and math of luck, the activities in life that rely more on luck than skill, and what you can do to manage luck like a poker player in order to be more successful in life. Lots of great practical takeaways in this episode. You won’t want to miss it.
Show Highlights

    Why we discount luck when it comes to success or failure
    Why thoughtful, successful people acknowledge luck
    How philosophers and mathematicians define “luck”
    The difference between luck and randomness
    How the “Paradox of Skill” causes luck to become more important as your skill increases
    Why there will likely never be another baseball player who hits over .400 like Ted Williams
    How statisticians are able to determine how much luck and how much skill goes into an outcome
    Which sports rely more on skill and which ones rely more on luck
    Why a large sample size is necessary to figure out how much luck or skill is involved in an activity
    What poker players can teach us about managing luck and skill
    Why you should focus on processes and not outcomes
    Why football teams should go for it on 4th down
    Why hiring superstars almost always ends up being disappointing
    Why complexity makes luck more influential in an outcome
    Why cumulative advantage and power laws make it really hard to write the next big book or start the next big blog
    Why “Gangham Style” is the perfect example of luck, cumulative advantage, and power laws
    How the internet and social media has only compounded the influence of luck on success
    How understanding luck can buffer the sense of failure you might experience in life
    What you should do if you’re the underdog in a competition to inject more luck into the outcome
    And much more!

Resources/Studies/People Mentioned in Podcast

    The “Interpreter” part of our brain that ignores luck
    The Narrative Fallacy
    The Philosophy of Luck
    Stephen Jay Gould
    My podcast with Anders Ericsson on reaching peak performance
    Ted Williams
    The Pythagorean Theorem of Statistics
    Winning Decisions: Getting It Right the First Time
    Chasing Stars: The Myth of Talent and the Portability of Performance
    Regression toward the mean
    Power laws
    Music Lab experiment that shows how luck influences whether a song becomes a hit
    The Polya Urn model that shows how luck and cumulative advantage can make or break   a  book, song, movie, or website
    The Economics of Superstars

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The Success Equation has provided me a lot of food for thought since I originally read it a few months ago. The mathematical insights Michael provides about the relationship between luck and skill has caused me to re-think how I approach my business and life. It will do the same for you. Pick up a copy on Amazon and be sure to check out the Success Equation website, where you can play around with some games so you can see these mathematical theories about skill and luck in action.

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