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While the world is going nuts over Jack Ma, the man behind Alibaba.com and the face of China’s Entrepreneurship, I personally have a problem with his statement. Not because I am already 30 and have only 5 years to prove myself according to him, but also with the fact that does Jack Ma really hold the formula to tremendous success as reflected by the recent IPO.
“You are poor because you have no ambition”, another piece of advice from the person in question. So does it mean if I am hardworking, ambitious and resourceful, I would be blessed by guaranteed success? Does the fact that I am sitting here typing this article, clearly “poor”, means that I lack one of those characteristics? What about the dreaded “L word” that successful people like to talk about ? Yes, I am talking about luck.
If the formula is out there, why are we all not uber-rich?
If successful people had the guaranteed recipe of success, why are we all not mega millionaires flying in our personal jets and yachting in the Mediterranean during our vacation after reading a few books by Jobs, Buffet, or in this case Ma. Turns out successful people may not even have much of a clue themselves when they talk about success. Additionally, we tend to ignore all the hundreds who failed probably trying the same thing. Why is that? Because talking about failures does not sell books, motivational seminars and websites.
What’s wrong with listening to the advice of successful people?
Two words. Cognitive Biases.
Listening to the advice of the successful is tainted due to the existence of two biases, Survivorship Bias and Hindsight Bias. Without over complicating things, I will try my best to explain the meaning of the two terms and how it applies here.
#1 Survivorship Bias – Over Glorifying The Survivor
We have a tendency of glorifying the surviving member and assuming he must have known the right things. Alibaba.com may have been a survivor due to a complicated combination of hard work, opportunity and timing; but if someone were to go back in time and do it all over again, who knows if it were to turn out the exact way it did today. Yet, the entire world is now convinced Jack Ma knows something that others do not.
Survivorship Bias is the reason we go tizzy over Steve Jobs, the Google story and Jack Ma. We tend to ignore the failures, which might even provide us with more information and lessons than the lucky survivors.
According to psychologist Daniel Kahneman, “A stupid decision that works out well becomes a brilliant decision in hindsight.” So there is no guarantee that what worked out for Jack Ma will work for you.
#2 Hindsight Bias – I Knew it All Along
Upon massive success or failure, our perception of the past gets distorted. After acing an exam, we usually forget about the nights we stayed up worrying about the exam and instead we are convinced that we knew all along that we would do well.
Problem with Jack Ma or any successful person is that after achieving massive success, due to this bias, they get a sense of entitlement that they somehow knew they would make it. What they reveal to the general public is very much distorted by their perception. Jack Ma 10 years ago might have been a very anxious man worrying about the future of the company, but today he can stand up and say that he was confident that his idea and methods would work.
What does this all this mean? Can we ever be successful ?
First the good news: yes, hard work and looking for the right opportunities will definitely increase the chances of you being successful. Imagine life as a betting table and doing the right thing at the right time will increase the number of bets you place.
Now the tough part: this does not guarantee stellar success. You see, success is the result of a complicated formula where hard work, timing, luck, and opportunity play a part but there is a massive amount of randomness to it and the formula is fuzzy.
Let us look at our life as a probabilistic simulation as I have shown in the graph above. Under normal circumstances, no matter how hard we work or do the right things we will end up within the limits of the two dashed lines which set the upper and lower limits of your achievements.
Work very hard and your Point A will end up closer and closer to the upper limit. Waste away your life and you will be very close to the lower limit. Where you end up depends on your work aptitude as well as where you start from.
If you have extraordinarily bad luck, which is clearly an outlier event, like an earthquake or a civil war destroying your business or something, you will end up in Point C. This is an unlikely position and probably would not happen in your lifetime.
Then what about Jack Ma, how do we end up like him? You will end up at Point B due to a combination of everything good and extraordinary luck. If Steve Jobs was born in China in 1955 , no matter how much of a visionary he was, he would not have been what he became. To get to that special place, it takes more than hard work, it takes everything in the success formula to work in sync.
In conclusion, we should not go insane over the advice of Jack Ma and take it as an absolute truth and a recipe for success. On the other hand, due to the randomness of events, we should also not just give up on life. After all, hard work and consistent effort will not guarantee luck, but it will increase our chances of being lucky.